Document:

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                                                                     EXHIBIT 4.2

THIS CONVERTIBLE NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS THE
SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, OR ANY SUCH OFFER, SALE OR TRANSFER IS MADE UNDER AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

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

Date:  December 6, 2000                                            $10,000,000

      FOR VALUE RECEIVED, CELLPOINT INC., a corporation organized under the laws
of the State of Nevada (the "CORPORATION"), hereby promises to pay to the order
of CASTLE CREEK TECHNOLOGY PARTNERS, LLC or any assign registered on the books
and records of the Corporation (individually, the "HOLDER," and collectively
with the holders of all other notes of same like and tenor, the "HOLDERS") the
sum of TEN MILLION DOLLARS ($10,000,000) on September 30, 2002 (the "SCHEDULED
MATURITY DATE"), and to pay interest on the unpaid principal balance hereof for
each year (or portion thereof) that this Note is outstanding in an amount equal
to six percent (6.0%) per annum, compounded semi-annually. Interest shall be
paid semi-annually on each June 30 and December 31 on the unpaid principal
balance hereof from the date hereof (the "ISSUE DATE") until the same becomes
due and payable. Any amounts on this Note which are not paid when due shall bear
interest at the rate equal to the lower of fifteen percent (15%) per annum and
the highest rate permitted by law from the due date thereof until the same is
paid. Interest shall be calculated based on a 360-day year and shall commence
accruing on the Issue Date and, to the extent not previously paid in accordance
with the provisions hereof, shall be payable at such time as the outstanding
principal balance hereof with respect to which such interest has accrued becomes
due and payable hereunder. All payments of principal and interest (to the extent
not converted in accordance with the terms hereof) shall be made in, and all
references herein to monetary denominations shall refer to, lawful money of the
United States of America. All payments shall be made at such address as the
Holder shall have given or shall hereafter give to the Corporation by written
notice in accordance with the provisions of this Note.

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      This Note is being issued by the Corporation pursuant to that certain
Securities Purchase Agreement, dated as of the date hereof, by and between the
Corporation and the Holder (the "SECURITIES PURCHASE Agreement"). Substantially
the same notes (the "OTHER NOTES" and, together with this Note, the "NOTES") may
be issued to permitted transferees of this Note.

                                   ARTICLE I
                                  PREPAYMENT

            1.1 PREPAYMENT AT CORPORATION'S OPTION. This Note may be prepaid
in whole or in part at the option of the Corporation upon forty-five (45)
days' prior written notice to the Holder (which notice shall specify the
principal amount to be prepaid, the date of prepayment and the Aggregate
Prepayment and shall contain a representation that the Corporation has cash
on hand or available through credit facilities by the date specified for
prepayment of an amount equal to the Aggregate Prepayment) (the "PREPAYMENT
NOTICE") without the prior written consent of the Holder, by the
Corporation's payment in cash to the Holder of an amount (the "AGGREGATE
PREPAYMENT") equal to the sum of (i) the Applicable Percentage of the
principal amount being prepaid plus (ii) all accrued and unpaid interest on
such amount. The "APPLICABLE PERCENTAGE" shall be one hundred fifteen percent
(115%) for prepayments made prior to June 5, 2001 and one hundred twenty
percent (120%) for prepayments made on or after such date. This Note may be
converted in accordance with Article III in whole or in part during the
foregoing forty-five (45) day period and the Aggregate Prepayment shall be
reduced to reflect any conversions during such period. At the time of any
prepayment, the Corporation shall issue to the Holder warrants (the
"PREPAYMENT WARRANTS") exercisable for five (5) years from the date of
issuance in the form of the Initial Warrants to purchase a number of shares
of Common Stock equal to the Prepayment Coverage Amount with an exercise
price (the "PREPAYMENT WARRANT EXERCISE PRICE") equal to the Prepayment
Market Price on the date of the Prepayment Notice. "PREPAYMENT MARKET PRICE"
shall mean the lesser of (i) the average of the Closing Bid Prices during the
period of ten (10) Trading days ending on the Trading Day immediately prior
to the date of prepayment, and (ii) the Closing Bid Price on the Trading Day
immediately prior to the date of prepayment. The "PREPAYMENT COVERAGE AMOUNT"
shall equal five percent (5%) of the Aggregate Prepayment divided by the
Prepayment Warrant Exercise Price. Notwithstanding the foregoing, the
Corporation may prepay at its option only if (a) all of the Common Stock
issuable upon exercise of the Prepayment Warrants is covered by a
Registration Statement (as defined in the Registration Rights Agreement
referenced below) that has been filed (but has not necessarily been declared
effective) at the date of prepayment, (b) as of the date of the Prepayment
Notice and the date of prepayment, the Common Stock (including all Common
Stock issuable upon the exercise of the Warrants) is listed for trading on
NASDAQ or the New York Stock Exchange, (c) as of the date of the Prepayment
Notice and the date of prepayment, the Corporation has cash on hand or
available through credit facilities by the date specified for prepayment of
an amount equal to the Aggregate Prepayment, and (d) as of the date of the
Prepayment Notice and the date of prepayment, no event has occurred which
constitutes an Event of Default (as defined in Section 7.1 hereof) or which
would constitute an Event of Default with notice or the passage of time or
both which has not been cured or waived to the satisfaction of the Holders.
If the Corporation issues a Prepayment Notice and fails to pay the Aggregate
Prepayment and issue the Prepayment Warrants in full accordance with this
Section 1.1 on the date specified for

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prepayment, the Corporation's right to make prepayments pursuant to this
Section 1.1 shall immediately terminate permanently.

            1.2 PREPAYMENT AT HOLDER'S OPTION UPON FAILURE TO OBTAIN STOCKHOLDER
APPROVAL. The Holder shall have the right to require the Corporation to prepay
the Note in whole or in part from time to time on thirty (30) days' prior
written notice to the Corporation (which notice shall specify the principal
amount to be prepaid and the date of repayment) for an amount equal to the sum
of (i) one hundred twenty percent (120%) of the principal amount being prepaid
and (ii) all accrued and unpaid interest on such portion of the principal
amount, if (A) the Company's stockholders do not approve the Stockholder Matters
(as defined in Section 4(k) of the Securities Purchase Agreement) at the Next
Annual Meeting (as defined in Section 4(k) of the Securities Purchase Agreement)
or the special meeting of stockholders, as the case may be, held in accordance
with Section 4(k)(i) or (ii) of the Securities Purchase Agreement; or (B) a
Trigger Event occurs at any time on or after July 31, 2002. Notwithstanding the
foregoing, if a Trigger Event occurs at any time on or after August 31, 2002,
the Holder shall not be required to give notice to the Company under this
Section 1.2 more than two (2) days prior to the Scheduled Maturity Date and the
repayment shall be made on the business day prior to the Scheduled Maturity
Date. Notwithstanding anything in this Section 1.2 to the contrary, the Holder
shall not have the right to require the Corporation to prepay this Note under
Section 1.2(A) hereof, if the Corporation is not required pursuant to Section
4(k) of the Securities Purchase Agreement to submit the Stockholder Matters to
the Company's stockholders for approval.

             1.3 PREPAYMENT AT HOLDERS OPTION UPON AN EVENT OF DEFAULT. Upon the
occurrence of an Event of Default (as defined below) and the election by the
Holder to require prepayment, this Note shall be prepaid by the Corporation in
accordance with the provisions of Article VII hereof; provided, however, that
notwithstanding anything herein to the contrary, but subject to the Company's
compliance with Section 8.2 hereof, the Holder shall make such election in the
case of an Event of Default described in Section 7.1(f), no later than the later
of (a) ten (10 ) days prior to the effective date of the transaction that would
constitute such Event of Default or (b) fifteen (15) days after the Holder
receives notice required pursuant to Section 8.2(i) with respect to the
applicable transaction.

                                  ARTICLE II
                              CERTAIN DEFINITIONS

            The following terms shall have the following meanings:

            2.1 "CLOSING BID PRICE" means, for any security as of any date, the
closing bid price of such security on the principal United States securities
exchange or trading market where such security is listed or traded as reported
by Bloomberg Financial Markets (or a comparable reporting service of national
reputation selected by the Corporation and reasonably acceptable to Holders of a
majority of the aggregate principal amount represented by the then outstanding
Notes ("MAJORITY HOLDERS") if Bloomberg Financial Markets is not then reporting
closing bid prices of such security) (collectively, "BLOOMBERG"), or if the
foregoing does not apply, the last reported sale 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 sale price is

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reported for such security by Bloomberg, the average of the bid prices of all
market makers for such security as reported in the "PINK SHEETS" by the National
Quotation Bureau, Inc., in each case for such date or, if such date was not a
trading day for such security, on the next preceding date which was a trading
date. If the Closing Bid Price cannot be calculated for such security as of
either of such dates on any of the foregoing bases, the Closing Bid Price of
such security on such date shall be the fair market value as reasonably
determined by an investment banking firm selected by the Corporation and
reasonably acceptable to the Majority Holders, with the costs of such appraisal
to be borne by the Corporation.

            2.2 "COMMON STOCK" means the Corporation's common stock, par value
$.001 per share.

            2.3 "CONVERSION AMOUNT" means the portion of the principal amount of
this Note being converted plus any accrued and unpaid interest thereon through
the Conversion Date (unless the Holder elects in the Notice of Conversion to
have such interest paid in cash), each as specified in the notice of conversion
in the form attached hereto (the "NOTICE OF CONVERSION").

            2.4 "CONVERSION DATE" means the date specified in the Notice of
Conversion so long as the copy of the Notice of Conversion is faxed (or
delivered by other means resulting in notice) to the Corporation at or before
5:59 p.m., New York City time, on the Conversion Date indicated in the Notice of
Conversion; provided, however, that if the Notice of Conversion is not so faxed
or otherwise delivered before such time, then the Conversion Date shall be the
date the Holder faxes or otherwise delivers the Notice of Conversion to the
Corporation.

            2.5 "CONVERSION PRICE" means, (i) prior to June 5, 2001, the Fixed
Conversion Price; and (ii) on or after June 5, 2001, the lower of the Fixed
Conversion Price and the Adjusted Conversion Price determined as of the
Conversion Date. The Conversion Price shall be subject to adjustment as provided
herein.

            2.6 "FIXED CONVERSION PRICE" means Twenty-five Dollars ($25.00), and
shall be subject to adjustment as provided herein.

            2.7 "ADJUSTED CONVERSION PRICE" means, as of any date of
determination, ninety percent (90%) of the average of the five (5) lowest Volume
Weighted Average Prices during the period of twenty (20) consecutive Trading
days (subject to equitable adjustment for any stock splits, stock dividends,
reclassifications or similar events during such period), ending on the Trading
Day immediately prior to the date of determination. The Adjusted Conversion
Price shall be subject to adjustment as provided herein.

            2.8 "INITIAL WARRANTS" shall mean the warrants issued by the
Corporation to the initial Holder pursuant to the Securities Purchase Agreement.

            2.9   "WARRANTS"   shall  mean  the  Initial  Warrants  and  the
Prepayment Warrants, if any.

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            2.10. "VOLUME WEIGHTED AVERAGE PRICE" means as of any date the
volume weighted average price for the shares of Common Stock on the NASDAQ
National Market ("NASDAQ") for such date as reported by Bloomberg; provided,
however, if Bloomberg is not then reporting the Volume Weighted Average Price,
the Volume Weighted Average Price shall be deemed to be the Closing Bid Price
for that date.

                                  ARTICLE III
                                  CONVERSION

            3.1 CONVERSION AT THE OPTION OF THE HOLDER. Subject to the
limitations on conversions contained in Section 3.3 of this Article III, the
Holder may, at any time and from time to time on or after the Issue Date,
convert (a "CONVERSION") all or any part of the outstanding principal amount of
this Note, plus all accrued interest thereon through the Conversion Date (unless
the Holder elects in the Notice of Conversion to have such interest paid in
cash), into a number of fully paid and nonassessable shares of Common Stock
determined in accordance with the following formula:

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

            3.2 MECHANICS OF CONVERSION. In order to effect a Conversion, a
Holder shall: (x) fax (or otherwise deliver) a copy of the fully executed Notice
of Conversion to the Corporation and (y) surrender or cause to be surrendered
this Note, duly endorsed, along with a copy of the Notice of Conversion as soon
as practicable thereafter to the Corporation. Upon receipt by the Corporation of
a facsimile copy of a Notice of Conversion from a Holder, the Corporation shall
immediately send, via facsimile, a confirmation to such Holder stating that the
Notice of Conversion has been received, the date upon which the Corporation
expects to deliver the Common Stock issuable upon such conversion and the name
and telephone number of a contact person at the Corporation regarding the
conversion. The Corporation shall not be obligated to issue shares of Common
Stock upon a conversion unless either this Note is delivered to the Corporation
as provided above, or the Holder notifies the Corporation or the transfer agent
that this Note has been lost, stolen or destroyed and delivers the documentation
to the Corporation required by Section 9.8 hereof.

                  (a) DELIVERY OF COMMON STOCK UPON CONVERSION. Upon the
surrender of this Note accompanied by a Notice of Conversion, the Corporation
shall, no later than the later of (a) the third business day following the
Conversion Date and (b) the business day following the date of such surrender
(or, in the case of lost, stolen or destroyed certificates, after delivery of
the documentation required by Section 9.8 hereof) (the "DELIVERY PERIOD"), issue
and deliver to the Holder or its nominee (x) that number of shares of Common
Stock issuable upon conversion of the portion of this Note being converted and
(y) a new Note in the form hereof representing the balance of the principal
amount hereof not being converted, if any. If the Corporation's transfer agent
is participating in the Depository Trust Company ("DTC") Fast Automated
Securities Transfer program, and so long as the certificates therefor do not
bear a legend and the Holder thereof is not then required to return such
certificate for the placement of a legend thereon and the Holder has provided
the Company with information required by DTC relating to

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the DTC account of the Holder or such Holder's nominee, the Corporation shall
cause its transfer agent to electronically transmit the Common Stock issuable
upon conversion to the Holder by crediting the account of the Holder or its
nominee with DTC through its Deposit Withdrawal Agent Commission system ("DTC
TRANSFER"). If the aforementioned conditions to a DTC Transfer are not
satisfied, the Corporation shall deliver to the Holder physical certificates
representing the Common Stock issuable upon conversion. Further, even if the
aforementioned conditions to a DTC Transfer are satisified a Holder may instruct
the Corporation in writing to deliver to the Holder physical certificates
representing the Common Stock issuable upon conversion in lieu of delivering
such shares by way of DTC Transfer. If the Holder elects to receive in cash
interest on the principal amount being converted, such amount shall be paid to
Holder at the time of delivery of the Common Stock in accordance with this
Section 3.2(a).

                  (b) TAXES. The Corporation shall pay any and all taxes which
may be imposed upon it with respect to the issuance and delivery of the shares
of Common Stock upon the conversion of this Note (including a Mandatory
Conversion).

                  (c) NO FRACTIONAL SHARES. If any conversion of this Note would
result in the issuance of a fractional share of Common Stock, such fractional
share shall be disregarded and the number of shares of Common Stock issuable
upon conversion of the Notes shall be the next higher whole number of shares.

                  (d) CONVERSION DISPUTES. In the case of any dispute with
respect to a conversion, the Corporation shall promptly issue such number of
shares of Common Stock as are not disputed in accordance with Section 3.2(a)
above.

            3.3 LIMITATIONS ON CONVERSIONS. The conversion of this Note shall be
subject to the following limitations (each of which limitations shall be applied
independently):

                  (a) CAP AMOUNT. Notwithstanding anything to the contrary
contained herein, unless stockholder approval in accordance with Section 4(k) of
the Securities Purchase Agreement has been obtained, this Note shall not be
convertible to the extent that such conversion would result in the issuance of
more than Two Million One Hundred Nine Thousand Seven Hundred Seventeen
(2,109,717) shares of Common Stock (the "CAP AMOUNT") in the aggregate pursuant
to the conversion of the Notes and the exercise of the Warrants.

                  (b) NO FIVE PERCENT HOLDERS. Notwithstanding anything to the
contrary contained herein, this Note shall not be convertible by a Holder to the
extent (but only to the extent) that, if convertible by such Holder, such Holder
would be the beneficial owner of more than 4.99% of the shares of Common Stock.
For the purposes of this paragraph, beneficial ownership and all determinations
and calculations related thereto shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and all applicable
rules and regulations. For clarification, it is expressly a term of this
security that the limitations contained in this paragraph shall apply to each
successor Holder. The restriction contained in this Section 3.3(b) may not be
altered, amended, deleted or changed in any manner whatsoever unless the holders
of a majority of the outstanding shares of Common Stock and the Holder shall
approve such alteration, amendment, deletion or change.

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                                  ARTICLE IV
                     RESERVATION OF SHARES OF COMMON STOCK

          On the Issue Date, the Corporation shall reserve Two Million
(2,000,000) shares of the authorized but unissued shares of Common Stock for
issuance upon conversion of the Notes, and upon exercise of the Warrants and
thereafter the number of authorized but unissued shares of Common Stock so
reserved (the "RESERVED AMOUNT") shall not be decreased and shall thereafter be
increased if necessary so that at all times the Reserved Amount shall equal the
sum of 200% of the number of Conversion Shares issuable upon conversion of the
Notes outstanding, using the applicable Conversion Price and 100% of the Warrant
Shares issuable upon the exercise of the Warrants outstanding (without regard to
the limitations set forth in Section 3.3 of the Note and Section 7(g) of the
Warrant). The Reserved Amount shall be allocated to the Holders of the Notes as
provided in Section 9.4.

                                   ARTICLE V
                    FAILURE TO SATISFY CONVERSION DEFAULTS

            If, at any time, (1) a Holder submits a Notice of Conversion and the
Corporation fails for any reason to deliver by way of DTC transfer or otherwise,
on or prior to the expiration of five (5) trading days following the Delivery
Period for such conversion, such number of shares of Common Stock to which such
Holder is entitled upon such conversion (and free of any restrictive legend if
such Holder is then entitled to unlegended shares under the Securities Purchase
Agreement), or (2) the Corporation provides notice to any Holder at any time of
its intention not to issue shares of Common Stock upon exercise (including by
way of public announcement) to such Holder in accordance with the terms of this
Note (the "CONVERSION REFUSAL DATE") or (3) after the Securities and Exchange
Commission (the "SEC") has declared effective the first Registration Statement
required to be filed pursuant to Section 2(a) of the Registration Rights
Agreement, the Corporation fails to deliver certificates representing Common
Stock to the Holder free from any restrictive legend within five trading days
following the request by the Holder for removal of such restrictive legend (the
"REMOVAL DATE") (each of (1), (2) and (3) being a "CONVERSION DEFAULT"), then
the Corporation shall pay to such Holder damages in an amount equal to the
product of (x) the Damages Amount times (y) the number of Conversion Default
Days times (z) 0.01, where:

            "CONVERSION DEFAULT DAYS" means the number of days beginning and
including the Conversion Date or Removal Date or Conversion Refusal Date, as
applicable, through and including the Cure Date with respect to such Conversion
Default;

            "DAMAGES AMOUNT" means the outstanding principal amount of the Note
owned by Holder immediately prior to the occurrence of the Conversion Default
plus accrued and unpaid interest thereon as of the first day of the Conversion
Default.

            "CURE DATE" means (i) with respect to a Conversion Default described
in subclause (1) of the definition of Conversion Default above, the date the
Corporation effects the

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conversion of the portion of the Note submitted for conversion (or such earlier
date that the Holder voids the conversion as provided herein but in no event
earlier than the date the Company acknowledges in writing to the holder of the
existence of a default and the Company's intention to remedy such default; (ii)
with respect to a Conversion Default described in subclause (2) of the
definition of Conversion Default above, the date the Corporation rescinds in
writing its notice or intent not to issue shares of Common Stock upon exercise
and affirmatively agrees in writing to abide by the conversion terms of this
Note, and (iii) with respect to a Conversion Default described in subclause (3)
of the definition of Conversion Default above, the date the Company delivers
certificates representing the shares of Common Stock, free from any restrictive
legend to the extent required by the Securities Purchase Agreement.

      The payments to which a Holder shall be entitled pursuant to this Article
5 are referred to herein as "CONVERSION DEFAULT PAYMENTS." All Conversion
Default Payments shall be paid in cash within ten (10) trading days of a
Holder's demand therefore (which demand may be made at any time and from time to
time). Notwithstanding the foregoing, no Conversion Default Payment shall be
required if delivery of the applicable certificates is made within five (5)
trading days after the end of the applicable Delivery Period. If such delivery
is not made by such date, the first Conversion Default Day shall be the
Conversion Date. Upon the occurrence of a Conversion Default and at all times
thereafter, the Fixed Conversion Price shall be the lesser of (a) the Fixed
Conversion Price applicable at the time of the Notice of Conversion which
resulted in the Conversion Default and (b) the lowest applicable Adjusted
Conversion Price on any Conversion Default Day.

                                  ARTICLE VI
                             INTENTIONALLY OMITTED

                                  ARTICLE VII
                               EVENTS OF DEFAULT

            7.1 EVENTS OF DEFAULT. In the event (each of the events described in
clauses (a)-(i) below after expiration of the applicable cure period (if any)
being an "EVENT OF DEFAULT"):

                  (a) the Corporation fails to pay, when due, or within any
applicable grace period, any payment with respect to any indebtedness of the
Corporation in excess of $500,000 due to any third party (including, without
limitation, any of the Other Notes), other than payments contested by the
Corporation in good faith, or otherwise is in breach or violation of any
agreement for monies owed or owing in an amount in excess of $500,000 which
breach or violation permits the other party thereto to declare a default or
otherwise accelerate amounts due thereunder;

                  (b) the Common Stock (including any of the shares of Common
Stock issuable upon conversion of the Notes) is suspended from trading on any
of, or is not listed (and authorized) for trading on at least one of, the NYSE,
the AMEX or NASDAQ for an aggregate of ten trading days in any nine month
period;

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                  (c) the Registration Statement referred to in Section 2(a) of
the Registration Rights Agreement has not been declared effective by the 180th
day following the Issue Date or such Registration Statement (or any successor
registration statement on Form S-3), after being declared effective, cannot be
utilized by the Holders of the Notes for the resale of all of their Registrable
Securities (as defined in the Registration Rights Agreement) for an aggregate of
more than 45 days;

                  (d) after the SEC declared effective the first Registration
Statement required to be filed pursuant to Section 2(a) of the Registration
Rights Agreement, the Corporation fails to remove any restrictive legend on any
certificate or any shares of Common Stock issued to the Holders of the Notes
upon conversion of any of the Notes as and when required by this Note, the
Securities Purchase Agreement or the Registration Rights Agreement (a "LEGEND
REMOVAL FAILURE"), and any such failure continues uncured for ten trading days
after the Corporation has been notified thereof in writing by the Holder;

                  (e) the Corporation provides notice (or otherwise indicates)
to any Holder of the Notes, including by way of public announcement, at any
time, of its intention not to issue, or otherwise refuses to issue, shares of
Common Stock to any Holder of the Notes upon conversion in accordance with the
terms of the Notes;

                  (f) the Corporation shall be acquired or shall otherwise sell
or transfer all or substantially all of its assets; or the Corporation shall be
party to a merger, consolidation or similar transaction unless (i) the
Corporation is the surviving entity of such transaction; and (ii) the
Corporation's stockholders prior to such transaction hold the majority of the
votes that are entitled to be voted in elections of directors after such
transaction.

                  (g) the Corporation otherwise shall breach any material term
hereunder (including, without limitation, Article IV hereof) or under the
Securities Purchase Agreement, the Registration Rights Agreement or the
Warrants, including, without limitation, the representations and warranties (as
of the date made) and covenants contained therein and if such breach if curable,
remains uncured for more than 30 days after the Corporation has been notified
thereof in writing by the Holder or the Corporation fails to diligently pursue
the cure of such breach at any time during such 30-day period;

                  (h) the Corporation or any subsidiary of the Corporation shall
make an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business, or such a receiver or trustee shall otherwise be
appointed;

                  (i) bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Corporation or
any subsidiary of the Corporation and if instituted against the Corporation by a
third party, shall not be dismissed within 60 days of their initiation; or

                  (j) the Company shall have failed within the time period set
forth in

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Section 4(p) of the Securities Purchase Agreement to increase the number of
authorized shares of its Common Stock as provided in Section 4(p) of the
Securities Purchase Agreement.

            Upon the occurrence of any such Event of Default, at the option of
each Holder, exercisable in whole or in part at any time and from time to time
by delivery of a Default Notice (as defined below) to the Corporation while such
Event of Default continues, the Corporation shall pay such Holder (and upon the
occurrence of an Event of Default specified in clauses (h) and (i) this Section
7.1, the Corporation shall be required to pay the Holders), in satisfaction of
its obligation to pay the outstanding principal amount of the Notes and accrued
and unpaid interest thereon, an amount equal to the Default Amount and such
Default Amount shall immediately become due and payable, all without demand,
presentment or notice, all of which are hereby expressly waived, together with
all costs, including, without limitation, legal fees and expenses of collection,
and the Holder shall be entitled to exercise all other rights and remedies
available at law or in equity for the avoidance of doubt, the occurrence of any
event described in clauses (e), (h) or (i) above shall immediately constitute an
Event of Default and there shall be no cure period.

            Following the submission of a Default Notice, the Holder of this
Note shall have the right to continue to submit Notices of Conversion and to
convert this Note until such time (if any) as the Corporation pays to the Holder
the Default Amount. To the extent a Note is converted after the submission of a
Default Notice, the Default Amount applicable to the amount of the Note so
converted shall be extinguished.

            Upon the occurrence of an Event of Default or the Corporation's
receipt of any Default Notice hereunder, the Corporation shall immediately (and
in any event within one trading day following such receipt) deliver a written
notice (a "DEFAULT ANNOUNCEMENT") to all Holders of the Notes stating the
details of the Event of Default and, if applicable, the date upon which the
Corporation received such Default Notice and the amount of the Notes covered
thereby. At any time and from time to time, each Holder of the Notes may request
(either orally or in writing) information from the Corporation with respect to
the instant Event of Default (including, but not limited to, the aggregate
principal amount outstanding of Notes covered by Default Notices received by the
Corporation) and the Corporation shall furnish (either orally or in writing) as
soon as practicable such requested information to such requesting Holder. In the
event the Corporation is not able to repay all of the outstanding Notes within
five trading days after its receipt of a notice requiring such payment (a
"DEFAULT NOTICE") the Corporation shall repay the outstanding Notes to each
Holder pro rata, based on the total amounts due under the Notes at the time of
repayment included by such Holder in all Default Notices delivered prior to the
date upon which such repayment is to be effected relative to the total amounts
due under all Notes at the time of repayment included in all of the Default
Notices delivered prior to the date upon which such repayment is to be effected;
PROVIDED, HOWEVER, the foregoing shall not constitute a waiver by any Holder of
its rights to payment in full of the total Default Amount due under each such
Holder's Notes.

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            7.2   DEFINITION OF DEFAULT  AMOUNT.  The "Default  Amount" with
respect to a Note means an amount equal to the greater of:

                  (i)            V                    X     M
                        --------------------
                               C P

            and   (ii)  V   X   120%

where:

      "V" means the aggregate principal amount of the Notes being paid plus all
accrued and unpaid interest thereon through the payment date;

      "CP"  means  the  Conversion  Price in effect on the date on which the
Corporation receives the Default Notice; and

      "M" means the highest Closing Bid Price of the Corporation's Common Stock
during the period beginning on the date on which the Corporation receives the
Default Notice and ending on the date immediately preceding the trading day of
payment of the Default Amount.

                                ARTICLE VIII
                      ADJUSTMENTS TO THE CONVERSION PRICE

      The Conversion Price shall be subject to adjustment from time to time as
follows:

            8.1 STOCK SPLITS, STOCK DIVIDENDS, ETC. If, at any time on or after
the Issue Date, the number of outstanding shares of Common Stock is increased by
a stock split, stock dividend, combination, or other similar event, the
Conversion Price shall be proportionately reduced, or if the number of
outstanding shares of Common Stock is decreased by a reverse stock split,
combination or reclassification of shares, or other similar event, the
Conversion Price shall be proportionately increased. In such event, the
Corporation shall notify the Corporation's transfer agent of such change on or
before the effective date thereof.

            8.2 ADJUSTMENT DUE TO MERGER, CONSOLIDATION, ETC. If, at any time
after the Issue Date, there shall be (i) any reclassification or change of the
outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination), (ii) any consolidation, merger or acquisition of
the Corporation with or by any other entity (other than a merger in which the
Corporation is the surviving or continuing entity and its capital stock is
unchanged), (iii) any sale or transfer of all or substantially all of the assets
of the Corporation (iv) any share exchange pursuant to which all of the
outstanding shares of Common Stock are converted into other securities or
property (each of (i) - (iv) above being a "Corporate Change"), then the Holders
of the Notes shall thereafter have the right to receive upon conversion, in lieu
of the shares of Common Stock otherwise issuable, such shares of stock,
securities and/or other property as would have been issued or payable in such
Corporate Change with respect to or in exchange for the number of shares of
Common Stock which would have been issuable upon conversion

                                       11
<PAGE>

(without giving effect to the limitations contained in Section 3.3) had such
Corporate Change not taken place, and in any such case, the provisions hereof
(including, without limitation, in the case of any such consolidation, merger or
sale in which the successor entity or purchasing entity is not the Corporation,
an immediate adjustment of the Conversion Price so that the Conversion Price
immediately after the Corporate Change reflects the same relative value as
compared to the value of the surviving entity's common stock that existed
between such Conversion Price and the value of the Corporation's Common Stock
immediately prior to such Corporate Change) shall thereafter be applicable, as
nearly as may be practicable in relation to any shares of stock or securities
thereafter deliverable upon the conversion thereof. The Corporation shall not
effect any Corporate Change unless (i) each Holder of the Notes has received
written notice of such transaction at least 30 days prior thereto, but in no
event later than 20 days prior to the record date for the determination of
stockholders entitled to vote with respect thereto, and (ii) the resulting
successor or acquiring entity (if not the Corporation) assumes by written
instrument (in form and substance reasonably satisfactory to the Holders of a
majority of the principal amount of the Notes then outstanding) the obligations
of the Notes. The above provisions shall apply regardless of whether or not
there would have been a sufficient number of shares of Common Stock authorized
and available for issuance upon conversion of the Notes outstanding as of the
date of such transaction, and shall similarly apply to successive
reclassifications, consolidations, mergers, sales, transfers or share exchanges.

            8.3 ADJUSTMENT DUE TO DISTRIBUTION. If, at any time after the Issue
Date, the Corporation shall declare or make any distribution of its assets (or
rights to acquire its assets) to holders of Common Stock as a partial
liquidating dividend, by way of return of capital or otherwise (including any
dividend or distribution to the Corporation's stockholders in cash or shares (or
rights to acquire shares) of capital stock of a subsidiary (i.e. a spin-off)) (a
"Distribution"), then the Holders of the Notes shall be entitled, upon any
conversion of the Notes after the date of record for determining stockholders
entitled to such Distribution (or at maturity to the extent that the Notes have
not then been converted in full) to receive the amount of such assets which
would have been payable to the Holder with respect to the shares of Common Stock
issuable upon such conversion (without giving effect to the limitations
contained in Section 3.3) had such Holder been the holder of such shares of
Common Stock on the record date for the determination of stockholders entitled
to such Distribution. If the Distribution involves rights, warrants, options or
any other form of convertible securities and the right to exercise or convert
such securities would expire in accordance with its terms prior to the
conversion of this Note, then the terms of such securities shall provide that
such exercise or convertibility right shall remain in effect until 30 days after
the date the Holder of the Notes receive such securities pursuant to the
conversion hereof.

            8.4 ISSUANCE OF OTHER SECURITIES. If, at any time after the Issue
Date, the Corporation shall issue any securities, adjustments in the Fixed
Conversion Price shall be made as follows:

                  (a) ADJUSTMENT OF FIXED CONVERSION PRICE. If the Corporation
issues or sells, or in accordance with Section 8.4(b) hereof is deemed to have
issued or sold, any shares of Common Stock for no consideration or for a
consideration per share less than the Market Price on the Measurement Date (as
such terms are hereinafter defined) (a "Dilutive Issuance"), then

                                       12
<PAGE>

effective immediately upon the Dilutive Issuance, the Fixed Conversion Price
will be adjusted in accordance with the following formula:

            C'   =   C    x           O + P/M
                                ---------------------
                                       CSDO

            where:

            C'    =     the adjusted Fixed Conversion Price;
            C     =     the Fixed Conversion Price on the Measurement Date;
            M     =     the Market Price on the Measurement Date;
            O     =     the number of shares of Common Stock outstanding
                        immediately prior to the Dilutive Issuance;
            P     =     the aggregate consideration, calculated as set forth in
                        Section 8.4(b) hereof, received by the Corporation upon
                        such Dilutive Issuance; and
            CSDO  =     the total number of shares of Common Stock Deemed
                        Outstanding (as defined below) immediately after the
                        Dilutive Issuance.

Notwithstanding the foregoing, no adjustment shall be made pursuant to this
Section 8.4(a) if such adjustment would result in an increase in the Fixed
Conversion Price.

            (b)   EFFECT ON FIXED CONVERSION PRICE OF CERTAIN EVENTS. For
purposes of determining  the adjusted Fixed  Conversion  Price under Section
8.4(a) hereof, the following will be applicable:

                   (i) ISSUANCE OF RIGHTS OR OPTIONS. If the Corporation in any
manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Common Stock or other
securities exercisable, convertible into or exchangeable for Common Stock
("CONVERTIBLE SECURITIES") (such warrants, rights and options to purchase Common
Stock or Convertible Securities are hereinafter referred to as "OPTIONS") and
the price per share for which Common Stock is issuable upon the exercise of such
Options is less than the Market Price in effect on the Measurement Date ("BELOW
MARKET OPTIONS"), then the maximum total number of shares of Common Stock
issuable upon the exercise of all such Below Market Options (assuming full
exercise, conversion or exchange of Convertible Securities, if applicable) will,
as of the date of the issuance or grant of such Below Market Options, be deemed
to be outstanding and to have been issued and sold by the Corporation for such
price per share. For purposes of the preceding sentence, the "price per share
for which Common Stock is issuable upon the exercise of such Below Market
Options" is determined by dividing (i) the total amount, if any, received or
receivable by the Corporation as consideration for the issuance or granting of
all such Below Market Options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the exercise of all such
Below Market Options, plus, in the case of Convertible Securities issuable upon
the exercise of such Below Market Options, the minimum aggregate amount of
additional consideration payable upon the exercise, conversion or exchange
thereof at the time such Convertible Securities first become exercisable,
convertible or exchangeable, by (ii) the

                                       13
<PAGE>

maximum total number of shares of Common Stock issuable upon the exercise of all
such Below Market Options (assuming full conversion of Convertible Securities,
if applicable). No further adjustment to the Conversion Price will be made upon
the actual issuance of such Common Stock upon the exercise of such Below Market
Options or upon the exercise, conversion or exchange of Convertible Securities
issuable upon exercise of such Below Market Options. If, in any case, the total
number of shares of Common Stock issuable upon exercise of any Below Market
Options or upon exercise, conversion or exchange of any Convertible Securities
is not, in fact, issued and the rights to exercise such option or to exercise,
convert or exchange such Convertible Securities shall have expired or
terminated, the Conversion Price then in effect will be readjusted to the
Conversion Price which would have been in effect at the time of such expiration
or termination had such Below Market Options or Convertible Securities, to the
extent outstanding immediately prior to such expiration or termination (other
than in respect of the actual number of shares of Common Stock issued upon
exercise or conversion thereof), never been issued.

                  (ii)  ISSUANCE OF CONVERTIBLE SECURITIES.

                        (A)   If the  Corporation  in any  manner  issues or
sells any Convertible Securities, whether or not immediately convertible (other
than where the same are issuable upon the exercise of Options) and the price per
share for which Common Stock is issuable upon such exercise, conversion or
exchange (as determined pursuant to Section 8.4(b)(ii)(B) if applicable) is less
than the Market Price in effect on the Measurement Date, then the maximum total
number of shares of Common Stock issuable upon the exercise, conversion or
exchange of all such Convertible Securities will, as of the date of the issuance
of such Convertible Securities, be deemed to be outstanding and to have been
issued and sold by the Corporation for such price per share. For the purposes of
the preceding sentence, the "price per share for which Common Stock is issuable
upon such exercise, conversion or exchange" is determined by dividing (i) the
total amount, if any, received or receivable by the Corporation as consideration
for the issuance or sale of all such Convertible Securities (taking into account
the value of any warrants or other securities issued to the purchasers of such
Convertible Securities), plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the exercise, conversion
or exchange thereof at the time such Convertible Securities first become
exercisable, convertible or exchangeable, by (ii) the maximum total number of
shares of Common Stock issuable upon the exercise, conversion or exchange of all
such Convertible Securities. No further adjustment to the Conversion Price will
be made upon the actual issuance of such Common Stock upon exercise, conversion
or exchange of such Convertible Securities.

                        (B)   If the  Corporation  in any  manner  issues or
sells any Convertible Securities with a fluctuating conversion or exercise price
or exchange ratio (a "VARIABLE RATE CONVERTIBLE SECURITY"), then the "price per
share for which Common Stock is issuable upon such exercise, conversion or
exchange" for purposes of the calculation contemplated by Section 8.4(b)(ii)(A)
shall be deemed to be the price per share which would be applicable (assuming
all holding period and other conditions to any discounts contained in such
Convertible Security have been satisfied) if the Market Price on the Measurement
Date is assumed for purposes of this calculation to be 80% of the Market Price
on such date (the

                                       14
<PAGE>

"ASSUMED VARIABLE MARKET PRICE"). Further, if the Market Price at any time or
times thereafter is less than or equal to the Assumed Variable Market Price last
used for making any adjustment under this Section 8.4 with respect to any
Variable Rate Convertible Security, the Conversion Price in effect at such time
shall be readjusted to equal the Conversion Price which would have resulted if
the Assumed Variable Market Price at the time of issuance of the Variable Rate
Convertible Security had been 80% of the Market Price existing at the time of
the adjustment required by this sentence.

                  (iii) CHANGE IN OPTION PRICE OR CONVERSION RATE. If there is a
change at any time in (i) the amount of additional consideration payable to the
Corporation upon the exercise of any Options; (ii) the amount of additional
consideration, if any, payable to the Corporation upon the exercise, conversion
or exchange of any Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for Common Stock (in
each such case, other than under or by reason of provisions designed to protect
against dilution), the Fixed Conversion Price in effect at the time of such
change will be readjusted to the Fixed Conversion Price which would have been in
effect at such time had such Options or Convertible Securities still outstanding
provided for such changed additional consideration or changed conversion rate,
as the case may be, at the time initially granted, issued or sold.

                  (iv) CALCULATION OF CONSIDERATION RECEIVED. If any Common
Stock, Options or Convertible Securities are issued, granted or sold for cash,
the consideration received therefor for purposes of this Note will be the amount
received by the Corporation therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Corporation in connection with such issuance, grant or
sale. In case any Common Stock, Options or Convertible Securities are issued or
sold for a consideration part or all of which shall be other than cash,
including, in the case of a strategic or similar arrangement in which the other
entity will provide services to the Corporation, purchase services from the
Corporation or otherwise provide intangible consideration to the Corporation,
the amount of the consideration other than cash received by the Corporation
(including the net present value of the contribution expected by the Corporation
for the provided or purchased services) will be the fair market value of such
consideration, except where such consideration consists of securities, in which
case the amount of consideration received by the Corporation will be the Market
Price thereof as of the date of receipt. In case any Common Stock, Options or
Convertible Securities are issued in connection with any merger or consolidation
in which the Corporation is the surviving corporation, the amount of
consideration therefor will be deemed to be the fair market value of such
portion of the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Options or Convertible Securities, as the
case may be. The Corporation shall calculate, using standard commercial
valuation methods appropriate for valuing such assets, the fair market value of
any consideration other than cash or securities; PROVIDED, HOWEVER, that if the
Holder does not agree to such fair market value calculation within three trading
days after receipt thereof from the Corporation, then such fair market value
will be determined in good faith by an investment banker or other appropriate
expert of national reputation selected by the Corporation and reasonably
acceptable to the Holder hereof, with the costs of such appraisal to be borne by
the Corporation.

                                       15
<PAGE>

                  (v) EXCEPTIONS TO ADJUSTMENT OF CONVERSION PRICE. No
adjustment to the Fixed Conversion Price will be made (i) upon the exercise of
any Options or Convertible Securities issued and outstanding on the Issue Date
and set forth on Schedule 3(d) of the Securities Purchase Agreement in
accordance with the terms of such securities as of such date; (ii) upon the
grant or exercise of any stock, warrants or options which may hereafter be
granted or exercised under any employee benefit plan of the Corporation now
existing or to be implemented in the future, so long as the issuance of such
stock or options is approved in accordance with the terms of such employee
benefit plan; (iii) upon the issuance of any Notes and Initial Warrants in
accordance with the terms of the Securities Purchase Agreement; (iv) upon the
issuance of the Prepayment Warrants in accordance with the terms of the Notes;
(v) upon conversion of the Notes or exercise of the Warrants; or (vi) upon the
issuance of Common Stock pursuant to an underwritten public offering; or (vii)
upon the issuance of securities to a strategic investor (the "STRATEGIC
INVESTOR"), provided, that, in the case of subclause (vii), such sale satisfies
each of the following conditions: (A) the sale of such securities was approved
by the non-employee members of the Board of Directors of the Corporation and, in
the good faith reasonable business judgment of the non-employee members of the
Board of Directors of the Corporation, such sale of the Corporation's securities
to the Strategic Investor will further the operational business interests of the
Corporation; and (B) the primary purpose of such sale is other than a financing
arrangement.

            (c)   CERTAIN DEFINITIONS.

                  (i) "COMMON STOCK DEEMED OUTSTANDING" shall mean the number of
shares of Common Stock actually outstanding (not including shares of Common
Stock held in the treasury of the Corporation), plus (A) in the case of any
adjustment required by Section 8.4(a) resulting from the issuance of any
Options, the maximum total number of shares of Common Stock issuable upon the
exercise of the Options for which the adjustment is required (including any
Common Stock issuable upon the conversion of Convertible Securities issuable
upon the exercise of such Options), and (B) in the case of any adjustment
required by Section 8.4(a) resulting from the issuance of any Convertible
Securities, the maximum total number of shares of Common Stock issuable upon the
exercise, conversion or exchange of the Convertible Securities for which the
adjustment is required, as of the date of issuance of such Convertible
Securities, if any.

                  (ii) "MARKET PRICE," as of any date, (A) means the average of
the closing bid prices for the shares of Common Stock as reported on the NASDAQ
National Market ("NASDAQ") by Bloomberg for the five consecutive trading days
immediately preceding such date, or (B) if NASDAQ is not the principal trading
market for the shares of Common Stock, the average of the last reported bid
prices as reported by Bloomberg on the principal trading market for the Common
Stock during the same period, or, if there is no bid price for such period, the
last reported sales price as reported by Bloomberg for such period, or (C) if
market value cannot be calculated as of such date on any of the foregoing bases,
the Market Price shall be the average fair market value as reasonably determined
by an investment banking firm selected by the Corporation and reasonably
acceptable to the Holder, with the costs of the appraisal to be borne by the
Corporation. The manner of determining the Market Price of the Common Stock set
forth

                                       16
<PAGE>

in the foregoing definition shall apply with respect to any other security in
respect of which a determination as to market value must be made hereunder.

                  (iii) "COMMON STOCK," for purposes of this Section 8.4,
includes the Common Stock and any additional class of stock of the Corporation
having no preference as to dividends or distributions on liquidation, provided
that the shares issuable pursuant to this Note shall include only Common Stock
in respect of which this Note is convertible, or shares resulting

om any subdivision or combination of such Common Stock, or in the case of any
Corporate Change referred to in Section 8.2 hereof, the stock or other
securities or property provided for therein.

                  (iv) "MEASUREMENT DATE" means (A) for purposes of any private
offering of securities under Section 4(2) of the Securities Act of 1933, as
amended, the date that the Corporation enters into legally binding definitive
agreements for the issuance and sale of such securities and (B) for purposes of
any other issuance of securities, the date of issuance thereof.

            8.5 PURCHASE RIGHTS. If, at any time after the Issue Date, the
Corporation issues any Convertible Securities or rights to purchase stock,
warrants, securities or other property (the "PURCHASE RIGHTS") pro rata to the
record holders of any class of Common Stock, then the Holders of the Notes will
be entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which such Holder could have acquired if such Holder
had held the number of shares of Common Stock acquirable upon complete
conversion of the Notes (without giving effect to the limitations contained in
Section 3.3) 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.

            8.6 CONVERSION PRICE DURING MAJOR ANNOUNCEMENTS. In the event the
Corporation (i) makes a public announcement that it intends to consolidate or
merge with any other corporation (other than a merger in which the Corporation
is the surviving or continuing corporation and its capital stock is unchanged)
or sell or transfer all or substantially all of the assets of the Corporation or
(ii) any person, group or entity (including the Corporation) publicly announces
a tender offer to purchase 50% or more of the Corporation's Common Stock (or any
other takeover scheme) (the date of the announcement referred to in clause (i)
or (ii) is hereinafter referred to as the "ANNOUNCEMENT DATE"), then the
Conversion Price shall, effective upon the Announcement Date and continuing
through the Major Announcement Termination Date (as defined below), be equal,
for each such date, to the lower of (x) the Conversion Price which would have
been applicable for a conversion occurring on the Announcement Date and (y) the
Conversion Price that would otherwise be in effect. From and after the Major
Announcement Termination Date, the Conversion Price shall be determined without
reference to this Section 8.6. "MAJOR ANNOUNCEMENT TERMINATION DATE" shall mean,
with respect to any proposed transaction or tender offer (or takeover scheme)
for which a public announcement as contemplated by this Section 8.6 has been
made, the date upon which the Corporation (in the case of clause (i) above)

                                       17
<PAGE>

or the person, group of entity (in the case of clause (ii) above) consummates or
publicly announces the termination or abandonment of the proposed transaction or
tender offer (or takeover scheme) which caused this Section 8.6 to become
operative.

            8.7 NOTICE OF ADJUSTMENTS. Upon the occurrence of each adjustment or
readjustment of the Fixed Conversion Price pursuant to this Article VIII, the
Corporation, at its expense, shall promptly compute such adjustment or
readjustment and prepare and furnish to each Holder of the Notes a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Corporation shall, upon
the written request at any time of DSN:104199.3 ny Holder of the Notes, furnish
to such Holder a like certificate setting forth (i) such adjustment or
readjustment, (ii) the Fixed Conversion Price at the time in effect and (iii)
the number of shares of Common Stock and the amount, if any, of other securities
or property which at the time would be received upon conversion of any Note.

            8.8 OTHER ACTION AFFECTING FIXED CONVERSION PRICE. If the
Corporation takes any action affecting the Common Stock after the date hereof
that would be covered by this Article VIII, but for the manner in which such
action is taken or structured, which would in any way diminish the value of this
Note, then the Fixed Conversion Price shall be adjusted in such manner as the
Board of Directors of the Corporation shall in good faith determine to be
equitable under the circumstances.

                                 ARTICLE IX
                                 MISCELLANEOUS

            9.1 FAILURE OR DELAY NOT WAIVER. No failure or delay on the part of
any 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.

            9.2 NOTICES. Any notices required or permitted to be given under the
terms of this Note shall be delivered personally or by courier or sent by
confirmed telecopy, and shall be effective upon receipt or refusal of receipt,
if delivered personally or by courier or confirmed telecopy, in each case
addressed to a party. The addresses for such communications shall be:

                  If to the Corporation:

                  CellPoint Inc.
                  3000 Hillswood Drive
                  Hillswood Business Part
                  Chertsey,
                  Surrey KT 16 ORS
                  Attention:    Lynn Duplessis
                  Telecopy: 44 1 344 623 090

                  with a copy to:

                  Salans Hertzfeld Heilbronn Christy & Viener

                                       18
<PAGE>

                  620 Fifth Avenue
                  New York, New York 10020
                  Attention:  Steven R. Berger, Esq.
                  Telecopy:   212-632-5555

      If to the Holder, to the address set forth under such Holder's name on the
signature page to the Securities Purchase Agreement executed by such Holder.
Each party shall provide notice to the other parties of any change in address.

            9.3 AMENDMENT PROVISION. This Note and any provision hereof may only
be amended by an instrument in writing signed by the Corporation and all of the
Holders. The term "NOTE" and all references thereto, as used throughout this
instrument, shall mean this instrument as originally executed, or if later
amended or supplemented, then as so amended or supplemented.

            9.4 ASSIGNABILITY; ALLOCATION OF CAP AMOUNT RESERVED AMOUNT; SELLING
RESTRICTIONS. This Note shall be binding upon the Corporation and its successors
and assigns and shall inure to the benefit of the Holder and its successors and
assigns. This Note may not be transferred without the Corporation's prior
written consent, which consent shall not be unreasonably withheld. The initial
Cap Amount and Reserved Amount shall be allocated pro rata among the Holders of
the Notes based on the aggregate principal amount of Notes issued to each
Holder. 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 such
transferor's Cap Amount and Reserved Amount. Each increase to the Reserved
Amount shall be allocated pro rata among the Holders of Notes based on the
outstanding principal amount of Notes held by each Holder at the time of the
increase in the Reserved Amount. Any portion of the Reserved Amount or Cap
Amount which remains allocated to any person or entity which does not hold any
Notes shall be allocated to the remaining Holders of Notes, pro rata based on
the outstanding principal amount of Notes then held by such Holders.

            9.5 COST OF COLLECTION. If default is made in the payment of this
Note, the Corporation shall pay the Holder hereof costs of collection, including
reasonable attorneys' fees.

            9.6 GOVERNING LAW; JURISDICTION. This Note shall be governed by and
construed in accordance with the laws of the State of New York. The Corporation
and the Holder irrevocably consent to the jurisdiction of the United States
federal courts and the state courts located in the State of New York in any suit
or proceeding based on or arising under this Note and irrevocably agree that all
claims in respect of such suit or proceeding may be determined in such courts.
The Corporation and the Holder irrevocably waive the defense of an inconvenient
forum to the maintenance of such suit or proceeding. The Corporation further
agrees that service of process upon the Corporation mailed by first class mail
shall be deemed in every respect effective service of process upon the
Corporation in any such suit or proceeding. The Holder further agrees that
service of process upon the Holder mailed by first class mail shall be deemed in
every respect effective service of process upon the Holder in any such suit or
proceeding. Nothing herein shall affect the right of the Corporation or any
Holder to serve process in any other manner permitted by law. The Corporation
and the Holder agree that a final

                                       19
<PAGE>

non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.

            9.7 DENOMINATIONS. At the request of Holder, upon surrender of this
Note, the Corporation shall promptly issue new Notes in the aggregate
outstanding principal amount hereof, in the form hereof, in such denominations
of at least $25,000 as Holder shall request.

            9.8 LOST OR STOLEN NOTES. Upon receipt by the Corporation from a
Holder of (i) evidence of the loss, theft, destruction or mutilation of any Note
and (ii) (y) in the case of loss, theft or destruction, of indemnity (without
any bond or other security) reasonably satisfactory to the Corporation, or (z)
in the case of mutilation, upon surrender and cancellation of any Note, the
Corporation shall execute and deliver a new Note of like tenor and date.
However, the Corporation shall not be obligated to reissue such lost or stolen
Note if the Holder contemporaneously requests the Corporation to convert such
Note.

            9.9   [INTENTIONALLY OMITTED.]

            9.10  [Intentionally Omitted.]

            9.11 RESTRICTIONS ON SHARES. The shares of Common Stock issuable
upon conversion of this Note may not be sold or transferred unless (i) they
first shall have been registered under the Securities Act and applicable state
securities laws, (ii) the Corporation shall have been furnished with an opinion
of legal counsel (in form, substance and scope customary for opinions in such
circumstances) to the effect that such sale or transfer is exempt from the
registration requirements of the Securities Act or (iii) they are sold under
Rule 144 under the Act. Except as otherwise provided in the Securities Purchase
Agreement, each certificate for shares of Common Stock issuable upon conversion
of this Note that have not been so registered and that have not been sold under
an exemption that permits removal of the legend, shall bear a legend
substantially in the following form, as appropriate:

            THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
            REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
            SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES
            REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN
            EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE
            SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED UNDER AN
            AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
            LAWS.

Upon the request of a holder of a certificate representing any shares of Common
Stock issuable upon conversion of this Note, the Corporation shall remove the
foregoing legend from the certificate and issue to such holder a new certificate
therefor free of any transfer legend, if (i) with such request, the Corporation
shall have received either (A) an opinion of counsel, in form,

                                       20
<PAGE>

substance and scope customary for opinions in such circumstances, to the effect
that any such legend may be removed from such certificate, or (B) satisfactory
representations from the Holder that the Holder is eligible to sell such
security under Rule 144 or (ii) a registration statement under the Securities
Act covering the resale of such securities is in effect. Nothing in this Note
shall (i) limit the Corporation's obligation under the Registration Rights
Agreement, or (ii) affect in any way the Holder's obligations to comply with
applicable securities laws upon the resale of the securities referred to herein.

            9.12 STATUS AS NOTE HOLDER. Upon submission of a Notice of
Conversion by a Holder of the Notes, (i) the principal amount of the Notes and
the interest thereon covered thereby (other than any portion of the Notes, if
any, which cannot be converted because their conversion could exceed such
Holder's allocated portion of the Reserved Amount or Cap Amount) shall be deemed
converted into shares of Common Stock as of the Conversion Date and (ii) the
Holder's rights as a holder of such Notes shall cease and terminate (but only
with respect to that portion of the Notes covered by such Notice of Conversion),
excepting only the right to receive certificates for such shares of Common Stock
and to any remedies provided herein or otherwise available at law or in equity
to such Holder because of a failure by the Corporation to comply with the terms
of the Notes. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the fifth trading day after
the expiration of the Delivery Period with respect to a conversion of Notes for
any reason, then, if the Holder so elects by so notifying the Corporation within
five trading days after the expiration of such five trading day period, the
conversions shall be void and the portion of the principal amount and interest
thereon subject to such conversion shall be deemed outstanding under the Notes
and the Corporation shall, as soon as practicable, return the Notes to the
Holder. In all cases, the Holder shall retain all of its rights and remedies
(including, without limitation, (i) the right to receive payments pursuant to
Article V to the extent required thereby for such Conversion Default and any
subsequent Conversion Default and (ii) the right to have the Conversion Price
with respect to subsequent conversions determined in accordance with Article V)
for the Corporation's failure to convert the Notes.

            9.13 OBLIGATION TO CURE. If the Corporation is prohibited from
issuing shares of Common Stock to a Holder for any reason (other than pursuant
to Section 3.3), the Corporation shall immediately notify the Holders of Notes
of such occurrence and shall take immediate action (including, if necessary,
seeking the approval of its stockholders) to eliminate any prohibitions under
applicable law or the rules or regulations of any stock exchange, interdealer
quotation system or other self-regulatory organization with jurisdiction over
the Corporation or any of its securities on the Corporation's ability to issue
shares of Common Stock.

            9.14 REMEDIES CUMULATIVE. 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), and nothing herein shall limit a Holder's right to pursue
actual damages for any failure by the Corporation to comply with the terms of
this Note. The Corporation acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holders of the Notes and that the
remedy at law for any such breach may be inadequate. The Corporation therefore
agrees, in the event of any such breach or threatened breach, that the Holders
of the Notes shall be entitled, in addition to all

                                       21
<PAGE>

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.

            9.15 TRADING DAYS. For purposes of this Note, the term "TRADING DAY"
means any day on which NASDAQ or, if the Common Stock is not then traded on
NASDAQ, the principal United States securities exchange or trading market where
the Common Stock is then listed or traded, is open for trading.

            9.16 BUSINESS DAY. If any payment or notice is due on a day that is
not a business day (as defined) such payment or notice shall be made on the next
succeeding business day. For purposes of this Note, the term "BUSINESS DAY"
shall mean any day, other than a Saturday or Sunday or other day on which
banking institutions in the State of New York are authorized or obligated by
law, regulation or executive order to close.

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

                                       22
<PAGE>

      IN WITNESS WHEREOF, the Corporation has caused this Convertible Note to be
executed by its duly authorized officer.

                              CELLPOINT INC.

                              By:    /s/  Lynn Duplessis
                                    -------------------------------------
                                    Name: Lynn Duplessis
                                    Title:   Executive Vice President

<PAGE>

                                                                       EXHIBIT 1
                                                                       ---------

                             NOTICE OF CONVERSION

To:   CellPoint Inc.

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

      ------------------------------
      Attention:
                --------------------
      Telecopy:
                --------------------

The undersigned hereby elects to convert $____________ principal amount of the
Note (the "CONVERSION"), into shares of common stock ("COMMON STOCK") of
CellPoint Inc. (the "CORPORATION") according to the conditions of the
Convertible Note dated ____________, 2000 (the "NOTE"), as of the date written
below. If securities are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. No fee will be charged to the Holder for any conversion, except for
transfer taxes, if any.

The Corporation shall electronically transmit the Common Stock issuable pursuant
to this Notice of Conversion to the account of the undersigned or its nominee
(which is ________________) with DTC through its Deposit Withdrawal Agent
Commission System ("DTC TRANSFER").

In the event of partial exercise, please reissue an appropriate Note(s) for the
principal balance which shall not have been converted.

Check Box if Applicable:
/ /   In lieu of receiving the shares of Common Stock issuable pursuant to this
      Notice of Conversion by way of DTC Transfer, the undersigned hereby
      requests that the Corporation issue and deliver to the undersigned or its
      nominee (if applicable) physical certificates representing such shares of
      Common Stock.

                        Date of Conversion:
                                           -------------------------------------
                        Applicable Conversion Price:
                                                    ----------------------------

                        Amount of Accrued and Unpaid Interest on the Principal
                        Amount ("Unpaid Interest") to be converted,
                        if any:
                               -------------------------------------------------
                        Amount of Unpaid Interest to be paid in cash, if any:
                        Default Amount to be converted, if any:
                                                               -----------------

                        Number of Shares of
                        Common Stock to be Issued:
                                                  ------------------------------

                        Signature:
                                  ----------------------------------------------

                        Name:
                             ---------------------------------------------------

                        Address:
                                ------------------------------------------------<PAGE>

                                                                     EXHIBIT 4.3

            VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON THE
            FIFTH ANNIVERSARY OF ISSUANCE

            THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT
            HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
            AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
            OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES
            REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN
            EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE
            SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN
            AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
            LAWS.

                                         Right to Purchase 210,526 Shares of
                                         Common Stock, par value $.001 per share

Date:       December 6, 2000

                                 CELLPOINT INC.
                             STOCK PURCHASE WARRANT

      THIS CERTIFIES THAT, for value received, CASTLE CREEK TECHNOLOGY PARTNERS,
LLC, or its registered assigns, is entitled to purchase from CELLPOINT INC., a
corporation organized under the laws of the State of Nevada (the "COMPANY"), at
any time or from time to time during the period specified in Section 2 hereof,
Two Hundred Ten Thousand Five Hundred Twenty-Six (210,526) fully paid and
nonassessable shares of the Company's common stock, par value $.001 per share
(the "COMMON STOCK"), at an exercise price per share (the "EXERCISE PRICE") of
$11.40. The number of shares of Common Stock purchasable hereunder (the "WARRANT
SHARES") and the Exercise Price are subject to adjustment as provided in Section
4 hereof. The term "WARRANTS" means this Warrant and the other Initial Warrants
of the Company issued pursuant to the Securities Purchase Agreement dated
December 6, 2000 by and among the Company and the other signatories thereto (the
"SECURITIES PURCHASE AGREEMENT") and the Prepayment Warrants, if any, as defined
in and issued in accordance with the Notes, as defined in the Securities
Purchase Agreement. All references herein to monetary denominations shall refer
to lawful money of the United States of America.

      This Warrant is subject to the following terms, provisions and conditions:

      1. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
Subject to the provisions hereof, including, without limitation, the
limitations contained in Section 7 hereof,
<PAGE>

this Warrant may be exercised by the holder hereof, in whole or in part, by the
surrender of this Warrant, together with a completed exercise agreement in the
form attached hereto (the "EXERCISE AGREEMENT"), to the Company by 5:59 p.m. New
York time on any business day at the Company's principal executive offices (or
such other office or agency of the Company as it may designate by notice to the
holder hereof) and upon (i) payment to the Company in cash, by certified or
official bank check or by wire transfer for the account of the Company, of the
Exercise Price for the Warrant Shares specified in the Exercise Agreement or
(ii) upon delivery to the Company of a written notice of an election to effect a
Cashless Exercise (as defined in Section 11(c) below) pursuant to Section 11(c)
hereof for the Warrant Shares specified in the Exercise Agreement. The Warrant
Shares so purchased shall be deemed to be issued to the holder hereof or such
holder's designee, as the record owner of such shares, as of the close of
business on the date on which this Warrant shall have been surrendered and the
completed Exercise Agreement shall have been delivered and payment shall have
been made for such shares as set forth above or, if such day is not a business
day, on the next succeeding business day. The Warrant Shares so purchased,
representing the aggregate number of shares specified in the Exercise Agreement,
shall be delivered to the holder hereof within three business days, after this
Warrant shall have been so exercised (the "DELIVERY PERIOD"). If the Company's
transfer agent is participating in the Depository Trust Company ("DTC") Fast
Automated Securities Transfer program, and so long as the certificates therefor
do not bear a legend and the holder is not obligated to return such certificate
for the placement of a legend thereon and the holder has provided the Company
with information required by DTC relating to the DTC Account of the holder or
the holder's nominee, the Company shall cause its transfer agent to
electronically transmit the Warrant Shares so purchased to the holder by
crediting the account of the holder or its nominee with DTC through its Deposit
Withdrawal Agent Commission system ("DTC TRANSFER"). If the aforementioned
conditions to a DTC Transfer are not satisfied, the Company shall deliver to the
holder physical certificates representing the Warrant Shares so purchased.
Further, the holder may instruct the Company in writing to deliver to the holder
physical certificates representing the Warrant Shares so purchased in lieu of
delivering such shares by way of DTC Transfer. Any certificates so delivered
shall be in such denominations as may be requested by the holder hereof, shall
be registered in the name of such holder or such other name as shall be
designated by such holder. Prior to the earlier of the date that the Warrant
Shares may be sold pursuant to Rule 144(k) promulgated under the Securities Act
(or a successor rule) or the date of the registration of the Warrant Shares
pursuant to that certain Registration Rights Agreement, dated as of the date
hereof, by and between the Company and the other signatories thereto (the
"REGISTRATION RIGHTS AGREEMENT") , the certificates evidencing the Warrant
Shares shall bear the restrictive legend required by the Securities Act.. After
the earlier of the dates referred to in the preceding sentence, the certificates
evidencing the Warrant Shares shall not bear any restrictive legend. If this
Warrant shall have been exercised only in part, then the Company shall at the
time of delivery of such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised.

            If, at any time, a holder of this Warrant submits this Warrant, an
Exercise Agreement and payment to the Company of the Exercise Price for each of
the Warrant Shares specified in the Exercise Agreement, and the Company fails
for any reason to deliver, on or prior

                                      -2-
<PAGE>

to the fifth business day following the expiration of the Delivery Period for
such exercise, the number of shares of Common Stock to which the holder is
entitled upon such exercise (an "EXERCISE DEFAULT"), then the Company shall pay
to the holder payments ("EXERCISE DEFAULT PAYMENTS") for an Exercise Default in
the amount of (a) (N/365), multiplied by (b) the amount by which the Market
Price (as defined in Section 4(l) below) on the date the Exercise Agreement
giving rise to the Exercise Default is transmitted in accordance with this
Section 1 (the "EXERCISE DEFAULT Date") exceeds the Exercise Price in respect of
such Warrant Shares, multiplied by (c) the number of shares of Common Stock the
Company failed to so deliver in such Exercise Default, multiplied by (d) .24,
where N = the number of days from the Exercise Default Date to the date that the
Company effects the full exercise of this Warrant which gave rise to the
Exercise Default. The accrued Exercise Default Payment for each calendar month
shall be paid in cash not later than the fifth day of the month following the
month in which it has accrued.

            Nothing herein shall limit the holder's right to pursue actual
damages (but not consequential damages) for the Company's failure to comply with
the terms of this Warrant.

      2.    PERIOD OF EXERCISE.  This Warrant is immediately exercisable,
at any time or from time to time on or after the date hereof and before
5:59 p.m., New York City time, on December 5, 2005 (the "EXERCISE PERIOD").

      3.    CERTAIN AGREEMENTS OF THE COMPANY.  The Company hereby
covenants and agrees as follows:

            (a) SHARES TO BE FULLY PAID. All Warrant Shares will, upon issuance
in accordance with the terms of this Warrant, be validly issued, fully paid, and
nonassessable and free from all taxes, liens, claims and encumbrances.

            (b) RESERVATION OF SHARES. During the Exercise Period, the Company
shall at all times have authorized, and reserved for the purpose of issuance
upon exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise in full of this Warrant (without giving effect to the
limitations on exercise set forth in Section 7(g) hereof).

            (c) LISTING. The Company shall promptly secure the listing of the
shares of Common Stock issuable upon exercise of this Warrant upon each national
securities exchange or automated quotation system, if any, upon which shares of
Common Stock are then listed or become listed (subject to official notice of
issuance upon exercise of this Warrant) and shall maintain, so long as any other
shares of Common Stock shall be so listed, such listing of all shares of Common
Stock from time to time issuable upon the exercise of this Warrant; and the
Company shall so list on each national securities exchange or automated
quotation system, as the case may be, and shall maintain such listing of, any
other shares of capital stock of the Company issuable upon the exercise of this
Warrant if and so long as any shares of the same class shall be listed on such
national securities exchange or automated quotation system.

                                      -3-
<PAGE>

            (d) CERTAIN ACTIONS PROHIBITED. The Company will not, by amendment
of its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the economic benefit inuring to the holder hereof
and the exercise privilege of the holder of this Warrant against dilution or
other impairment, consistent with the tenor and purpose of this Warrant. Without
limiting the generality of the foregoing, the Company (i) will not increase the
par value of any shares of Common Stock receivable upon the exercise of this
Warrant above the lowest Exercise Price then in effect, and (ii) will take all
such actions as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this Warrant.

            (e) SUCCESSORS AND ASSIGNS. This Warrant will be binding upon any
entity succeeding to the Company by merger, consolidation, or acquisition of all
or substantially all of the Company's assets.

            (f) BLUE SKY LAWS. The Company shall, on or before the date of
issuance of any Warrant Shares, take such actions as the Company shall
reasonably determine are necessary to qualify the Warrant Shares for, or obtain
exemption for the Warrant Shares for, sale to the holder of this Warrant upon
the exercise hereof under applicable securities or "blue sky" laws of the states
of the United States, and shall provide evidence of any such action so taken to
the holder of this Warrant prior to such date; PROVIDED, HOWEVER, that the
Company shall not be required in connection therewith or as a condition thereto
to (a) qualify to do business in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3(f), (b) subject itself to general
taxation in any such jurisdiction, (c) file a general consent to service of
process in any such jurisdiction, (d) provide any undertakings that cause the
Company undue expense or burden, or (e) make any change in its charter or
bylaws, which in each case the Board of Directors of the Company determines to
be contrary to the best interests of the Company and its stockholders.

      4.    ANTIDILUTION PROVISIONS.  During the Exercise Period, the
Exercise Price and the number of Warrant Shares issuable hereunder shall
be subject to adjustment from time to time as provided in this Section 4.

            In the event that any adjustment of the Exercise Price(s) as
required herein results in a fraction of a cent, such Exercise Price(s) shall be
rounded up or down to the nearest cent.

            (a) ADJUSTMENT OF EXERCISE PRICE(S). Except as otherwise provided in
Sections 4(c) and 4(e) hereof, if and whenever during the Exercise Period the
Company issues or sells, or in accordance with Section 4(b) hereof is deemed to
have issued or sold, any shares of Common Stock for no consideration or for a
consideration per share that is less than either the Market Price on the
Measurement Date (as such terms are hereinafter defined) or the Exercise Price
on the Measurement Date (a "DILUTIVE ISSUANCE"), then effective immediately upon
the

                                      -4-
<PAGE>

Dilutive Issuance, the Exercise Price(s) will be adjusted in accordance with the
following formula:

            E'   =   E    x           O + P/M
                                ---------------------
                                       CSDO

            where:

            E'    =     the adjusted Exercise Price;
            E     =     the Exercise Price on the Measurement Date;
            M     =     the greater of the Market Price on the Measurement
                        Date or the Exercise Price on the Measurement Date;
            O     =     the number of shares of Common Stock outstanding
                        immediately prior to the Dilutive Issuance;
            P     =     the aggregate consideration, calculated as set
                        forth in Section 4(b) hereof, received by the
                        Company upon such Dilutive Issuance; and
            CSDO  =     the total number of shares of Common Stock Deemed
                        Outstanding (as defined in Section 4(l)(i) below)
                        immediately after the Dilutive Issuance.

Notwithstanding the foregoing, no adjustment shall be made pursuant to this
Section 4(a) if such adjustment would result in an increase in the Exercise
Price.

            (b)   EFFECT ON EXERCISE PRICE(S) OF CERTAIN EVENTS.  For
purposes of determining the adjusted Exercise Price(s) under Section 4(a)
hereof, the following will be applicable:

                  (i) ISSUANCE OF RIGHTS OR OPTIONS. If the Company in any
manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Common Stock or other
securities exercisable, convertible into or exchangeable for Common Stock
("CONVERTIBLE SECURITIES") (such warrants, rights and options to purchase Common
Stock or Convertible Securities are hereinafter referred to as "OPTIONS") and
the price per share for which Common Stock is issuable upon the exercise of such
Options is less than the Market Price in effect on the Measurement Date ("BELOW
MARKET OPTIONS"), then the maximum total number of shares of Common Stock
issuable upon the exercise of all such Below

                                      -5-
<PAGE>

Market Options (assuming full exercise, conversion or exchange of Convertible
Securities, if applicable) will, as of the date of the issuance or grant of such
Below Market Options, be deemed to be outstanding and to have been issued and
sold by the Company for such price per share. For purposes of the preceding
sentence, the "price per share for which Common Stock is issuable upon the
exercise of such Below Market Options" is determined by dividing (i) the total
amount, if any, received or receivable by the Company as consideration for the
issuance or granting of all such Below Market Options, plus the minimum
aggregate amount of additional consideration, if any, payable to the Company
upon the exercise of all such Below Market Options, plus, in the case of
Convertible Securities issuable upon the exercise of such Below Market Options,
the minimum aggregate amount of additional consideration payable upon the
exercise, conversion or exchange thereof at the time such Convertible Securities
first become exercisable, convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the exercise of all such Below
Market Options (assuming full conversion of Convertible Securities, if
applicable). No further adjustment to the Exercise Price(s) will be made upon
the actual issuance of such Common Stock upon the exercise of such Below Market
Options or upon the exercise, conversion or exchange of Convertible Securities
issuable upon exercise of such Below Market Options. If, in any case, the total
number of shares of Common Stock issuable upon exercise of any Below Market
Options or upon exercise, conversion or exchange of any Convertible Securities
is not, in fact, issued and the rights to exercise such option or to exercise,
convert or exchange such Convertible Securities shall have expired or
terminated, the Exercise Price then in effect will be readjusted to the Exercise
Price which would have been in effect at the time of such expiration or
termination had such Below Market Options or Convertible Securities, to the
extent outstanding immediately prior to such expiration or termination (other
than in respect of the actual number of shares of Common Stock issued upon
exercise or conversion thereof), never been issued.

                  (ii)  ISSUANCE OF CONVERTIBLE SECURITIES.

                        (A)   If the Company in any manner issues or sells
any Convertible Securities, whether or not immediately convertible (other than
where the same are issuable upon the exercise of Options) and the price per
share for which Common Stock is issuable upon such exercise, conversion or
exchange (as determined pursuant to Section 4(b)(ii)(B) if applicable) is less
than the Market Price in effect on the Measurement Date, then the maximum total
number of shares of Common Stock issuable upon the exercise, conversion or
exchange of all such Convertible Securities will, as of the date of the issuance
of such Convertible Securities, be deemed to be outstanding and to have been
issued and sold by the Company for such price per share. For the purposes of the
preceding sentence, the "price per share for which Common Stock is issuable upon
such exercise, conversion or exchange" is determined by dividing (i) the total
amount, if any, received or receivable by the Company as consideration for the
issuance or sale of all such Convertible Securities (taking into account the
value of any warrants or other securities issued to the purchasers of such
Convertible Securities), plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise, conversion or
exchange thereof at the time such Convertible Securities first become
exercisable, convertible or exchangeable, by (ii) the maximum total number of
shares of Common Stock issuable upon the exercise, conversion or exchange of all
such Convertible Securities. No further adjustment to the Exercise Price(s) will
be made upon the actual issuance of such Common Stock upon exercise, conversion
or exchange of such Convertible Securities.

                        (B)   If the Company in any manner issues or sells
any Convertible Securities with a fluctuating conversion or exercise price or
exchange ratio (a "VARIABLE RATE CONVERTIBLE SECURITY"), then the "price per
share for which Common Stock is issuable upon such exercise, conversion or
exchange" for purposes of the calculation contemplated by Section 4(b)(ii)(A)
shall be deemed to be the price per share which would be applicable (assuming
all holding period and other conditions to any discounts contained in such

                                      -6-
<PAGE>

Convertible Security have been satisfied) if the Market Price on the Measurement
Date is assumed for purposes of this calculation to be 80% of the Market Price
on such date (the "ASSUMED VARIABLE MARKET PRICE"). Further, if the Market Price
at any time or times thereafter is less than or equal to the Assumed Variable
Market Price last used for making any adjustment under this Section 4 with
respect to any Variable Rate Convertible Security, the Exercise Price(s) in
effect at such time shall be readjusted to equal the Exercise Price(s) which
would have resulted if the Assumed Variable Market Price at the time of issuance
of the Variable Rate Convertible Security had been 80% of the Market Price
existing at the time of the adjustment required by this sentence.

                  (iii) CHANGE IN OPTION PRICE OR CONVERSION RATE. If there is a
change at any time in (i) the amount of additional consideration payable to the
Company upon the exercise of any Options; (ii) the amount of additional
consideration, if any, payable to the Company upon the exercise, conversion or
exchange of any Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for Common Stock (in
each such case, other than under or by reason of provisions designed to protect
against dilution), the Exercise Price(s) in effect at the time of such change
will be readjusted to the Exercise Price(s) which would have been in effect at
such time had such Options or Convertible Securities still outstanding provided
for such changed additional consideration or changed conversion rate, as the
case may be, at the time initially granted, issued or sold.

                  (iv) CALCULATION OF CONSIDERATION RECEIVED. If any Common
Stock, Options or Convertible Securities are issued, granted or sold for cash,
the consideration received therefor for purposes of this Warrant will be the
amount received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance, grant or sale.
In case any Common Stock, Options or Convertible Securities are issued or sold
for a consideration part or all of which shall be other than cash, including, in
the case of a strategic or similar arrangement in which the other entity will
provide services to the Company, purchase services from the Company or otherwise
provide intangible consideration to the Company, the amount of the consideration
other than cash received by the Company (including the net present value of the
contribution expected by the Company for the provided or purchased services)
will be the fair market value of such consideration, except where such
consideration consists of securities, in which case the amount of consideration
received by the Company will be the Market Price thereof as of the date of
receipt. In case any Common Stock, Options or Convertible Securities are issued
in connection with any merger or consolidation in which the Company is the
surviving corporation, the amount of consideration therefor will be deemed to be
the fair market value of such portion of the net assets and business of the
non-surviving corporation as is attributable to such Common Stock, Options or
Convertible Securities, as the case may be. The Company shall calculate, using
standard commercial valuation methods appropriate for valuing such assets, the
fair market value of any consideration other than cash or securities; PROVIDED,
HOWEVER, that if the holder hereof does not agree to such fair market value
calculation within three business days after receipt thereof from the Company,
then such fair market value will be determined in good faith by an investment
banker or other appropriate

                                      -7-
<PAGE>

expert of national reputation selected by the Company and reasonably acceptable
to the holder hereof, with the costs of such appraisal to be borne by the
Company.

                  (v) EXCEPTIONS TO ADJUSTMENT OF EXERCISE PRICE(S). No
adjustment to the Exercise Price will be made (i) upon the exercise of any
warrants, options or convertible securities issued and outstanding on the date
of issuance of this Warrant and set forth on Schedule 3(d) of the Securities
Purchase Agreement in accordance with the terms of such securities as of such
date; (ii) upon the grant or exercise of any stock or options which may
hereafter be granted or exercised under any employee benefit plan of the Company
now existing or to be implemented in the future, so long as the issuance of such
stock, warrants or options is approved in accordance with the terms of such
employee benefit plan; (iii) upon the issuance of any Notes and Warrants in
accordance with the terms of the Securities Purchase Agreement; (iv) upon the
issuance of the Prepayment Warrants in accordance with the terms of the Notes;
(v) upon conversion of the Notes or exercise of the Warrants; or (vi) upon the
issuance of Common Stock in an underwritten public offering; or (vii) upon the
issuance of securities to a strategic investor (the "STRATEGIC Investor"),
provided that, in the case of clause (vii), such sale satisfies the following
conditions: (A) the sale of such securities was approved by the non-employee
members of the Board of Directors of the Company and, in the good faith
reasonable business judgment of the non-employee members of the Board of
Directors of the Company, such sale of the Company's securities to the Strategic
Investor will further the operational business interests of the Company; and (B)
the primary purpose of such sale is other than a financing arrangement.

            (c) SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company, at
any time during the Exercise Period, subdivides (by any stock split, stock
dividend, recapitalization, reorganization, reclassification or otherwise) its
shares of Common Stock into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price(s) in effect
immediately prior to such subdivision will be proportionately reduced. If the
Company, at any time during the Exercise Period, combines (by reverse stock
split, recapitalization, reorganization, reclassification or otherwise) its
shares of Common Stock into a smaller number of shares, then, after the date of
record for effecting such combination, the Exercise Price(s) in effect
immediately prior to such combination will be proportionately increased.

            (d) ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the
Exercise Price(s) pursuant to the provisions of Section 4(c), the number of
shares of Common Stock issuable upon exercise of this Warrant at each such
Exercise Price shall be adjusted by multiplying a number equal to the Exercise
Price in effect immediately prior to such adjustment by the number of shares of
Common Stock issuable upon exercise of this Warrant at such Exercise Price
immediately prior to such adjustment and dividing the product so obtained by the
adjusted Exercise Price.

            (e) CONSOLIDATION, MERGER OR SALE. In case of any consolidation of
the Company with, or merger of the Company into, any other corporation, or in
case of any sale or conveyance of all or substantially all of the assets of the
Company other than in connection with a plan of complete liquidation of the
Company at any time during the Exercise Period, then as a condition of such
consolidation, merger or sale or conveyance, adequate provision will be made

                                      -8-
<PAGE>

whereby the holder of this Warrant will have the right to acquire and receive
upon exercise of this Warrant in lieu of the shares of Common Stock immediately
theretofore acquirable upon the exercise of this Warrant, such shares of stock,
securities, cash or assets as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon exercise of this Warrant had such consolidation,
merger or sale or conveyance not taken place. In any such case, the Company will
make appropriate provision to insure that the provisions of this Section 4
hereof will thereafter be applicable as nearly as may be in relation to any
shares of stock or securities thereafter deliverable upon the exercise of this
Warrant. The Company will not effect any consolidation, merger or sale or
conveyance unless prior to the consummation thereof, the successor corporation
(if other than the Company) assumes by written instrument the obligations under
this Warrant and the obligations to deliver to the holder of this Warrant such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, the holder may be entitled to acquire.

            (f) DISTRIBUTION OF ASSETS. In case the Company shall declare or
make any distribution of its assets (or rights to acquire its assets) to holders
of Common Stock as a partial liquidating dividend, stock repurchase, by way of
return of capital or otherwise (including any dividend or distribution to the
Company's stockholders of cash or shares (or rights to acquire shares) of
capital stock of a subsidiary) (a "DISTRIBUTION"), at any time during the
Exercise Period, then the holder of this Warrant shall be entitled upon exercise
of this Warrant for the purchase of any or all of the shares of Common Stock
subject hereto, to receive the amount of such assets (or rights) which would
have been payable to the holder had such holder been the holder of such shares
of Common Stock on the record date for the determination of stockholders
entitled to such Distribution. If the Company distributes rights, warrants,
options or any other form of convertible securities and the right to exercise or
convert such securities would expire in accordance with its terms prior to the
exercise of the Warrants, then the terms of such securities shall provide that
such exercise or convertibility right shall remain in effect until 30 days after
the date the holders of the Warrants receive such securities pursuant to the
exercise hereof.

            (g) NOTICE OF ADJUSTMENT. Upon the occurrence of any event which
requires any adjustment of the Exercise Price(s), then, and in each such case,
the Company shall give notice thereof to the holder of this Warrant, which
notice shall state the Exercise Price(s) resulting from such adjustment and the
increase or decrease in the number of Warrant Shares purchasable at each such
price upon exercise, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. Such calculation
shall be certified by the chief financial officer of the Company.

            (h) MINIMUM ADJUSTMENT OF EXERCISE PRICE. No adjustment of the
Exercise Price shall be made in an amount of less than $.01, but any such lesser
adjustment shall be carried forward and shall be made at the time and together
with the next subsequent adjustment which, together with any adjustments so
carried forward, shall amount to not less than $.01.

            (i) NO FRACTIONAL SHARES. No fractional shares of Common Stock are
to be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect

                                      -9-
<PAGE>

of any fractional share which would otherwise be issuable in an amount equal to
the same fraction of the Market Price of a share of Common Stock on the date of
such exercise.

            (j)   OTHER NOTICES.  In case at any time:

                  (i) the Company shall declare any dividend upon the Common
Stock payable in shares of stock of any class or make any other distribution
(other than dividends or distributions payable in cash out of retained earnings
consistent with the Company's past practices with respect to declaring dividends
and making distributions) to the holders of the Common Stock;

                  (ii) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;

                  (iii) there shall be any capital reorganization of the
Company, or reclassification of the Common Stock, or consolidation or merger of
the Company with or into, or sale of all or substantially all of its assets to,
another corporation or entity; or

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

then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date or estimated date on which the books of the Company shall
close or a record shall be taken for determining the holders of Common Stock
entitled to receive any such dividend, distribution, or subscription rights or
for determining the holders of Common Stock entitled to vote in respect of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up and (b) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, notice of the date (or, if not then known, a reasonable estimate
thereof by the Company) when the same shall take place. Such notice shall also
specify the date on which the holders of Common Stock shall be entitled to
receive such dividend, distribution, or subscription rights or to exchange their
Common Stock for stock or other securities or property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, or winding-up, as the case may be. Such notice shall be given at
least 30 days prior to the record date or the date on which the Company's books
are closed in respect thereto. Failure to give any such notice or any defect
therein shall not affect the validity of the proceedings referred to in clauses
(i), (ii), (iii) and (iv) above. Notwithstanding the foregoing, the Company
shall publicly disclose the substance of any notice delivered hereunder prior to
delivery of such notice to the holder of this Warrant.

            (k) CERTAIN EVENTS. If, at any time during the Exercise Period, any
event occurs of the type contemplated by the adjustment provisions of this
Section 4 but not expressly provided for by such provisions, the Company will
give notice of such event as provided in Section 4(g) hereof, and the Company's
Board of Directors will make an appropriate adjustment in the Exercise Price(s)
and the number of shares of Common Stock acquirable upon exercise of

                                      -10-
<PAGE>

this Warrant at each such Exercise Price so that the rights of the holder shall
be neither enhanced nor diminished by such event.

            (l)   CERTAIN DEFINITIONS.

                  (i) "COMMON STOCK DEEMED OUTSTANDING" shall mean the number of
shares of Common Stock actually outstanding (not including shares of Common
Stock held in the treasury of the Company), plus (x) in the case of any
adjustment required by Section 4(a) resulting from the issuance of any Options,
the maximum total number of shares of Common Stock issuable upon the exercise of
the Options for which the adjustment is required (including any Common Stock
issuable upon the conversion of Convertible Securities issuable upon the
exercise of such Options), and (y) in the case of any adjustment required by
Section 4(a) resulting from the issuance of any Convertible Securities, the
maximum total number of shares of Common Stock issuable upon the exercise,
conversion or exchange of the Convertible Securities for which the adjustment is
required, as of the date of issuance of such Convertible Securities, if any.

                  (ii) "MARKET PRICE", as of any date, (i) means the average of
the closing bid prices for the shares of Common Stock as reported on the NASDAQ
National Market ("NASDAQ") by Bloomberg Financial Markets (or a comparable
reporting service of national reputation selected by the Corporation and
reasonably acceptable to the holder) ("BLOOMBERG") for the five consecutive
trading days immediately preceding such date, or (ii) if NASDAQ is not the
principal trading market for the shares of Common Stock, the average of the last
reported bid prices as reported by Bloomberg on the principal trading market for
the Common Stock during the same period, or, if there is no bid price for such
period, the last reported sales price as reported by Bloomberg for such period,
or (iii) if market value cannot be calculated as of such date on any of the
foregoing bases, the Market Price shall be the average fair market value as
reasonably determined by an investment banking firm selected by the Company and
reasonably acceptable to the holder, with the costs of the appraisal to be borne
by the Company. The manner of determining the Market Price of the Common Stock
set forth in the foregoing definition shall apply with respect to any other
security in respect of which a determination as to market value must be made
hereunder.

                  (iii) "COMMON STOCK", for purposes of this Section 4, includes
the Common Stock and any additional class of stock of the Company having no
preference as to dividends or distributions on liquidation, provided that the
shares purchasable pursuant to this Warrant shall include only Common Stock in
respect of which this Warrant is exercisable, or shares resulting from any
subdivision or combination of such Common Stock, or in the case of any
reorganization, reclassification, consolidation, merger, or sale of the
character referred to in Section 4(e) hereof, the stock or other securities or
property provided for in such Section.

                  (iv) "MEASUREMENT DATE" means (i) for purposes of any private
offering of securities under Section 4(2) of the Securities Act of 1933, as
amended, the date that the Company enters into legally binding definitive
agreements for the issuance and sale of such securities and (ii) for purposes of
any other issuance of securities, the date of issuance thereof.

                                      -11-
<PAGE>

      5.    ISSUE TAX. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

      6.    NO RIGHTS OR LIABILITIES AS A STOCKHOLDER. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a stockholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

      7.    TRANSFER, EXCHANGE AND REPLACEMENT OF WARRANT.

            (a) RESTRICTION ON TRANSFER; ALLOCATION OF CAP AMOUNT. This Warrant
and the rights granted to the holder hereof are transferable, in whole or in
part, upon surrender of this Warrant, together with a properly executed
assignment in the form attached hereto, at the office or agency of the Company
referred to in Section 7(e) below, PROVIDED, HOWEVER, that any transfer or
assignment shall be subject to the prior written consent of the Company, which
consent may not be unreasonably withheld, and to the conditions set forth in
Sections 7(f) and (g) hereof and to the provisions of Sections 2(f) and 2(g) of
the Securities Purchase Agreement. Until due presentment for registration of
transfer on the books of the Company, the Company may treat the registered
holder hereof as the owner and holder hereof for all purposes, and the Company
shall not be affected by any notice to the contrary. Notwithstanding anything to
the contrary contained herein, the registration rights described in Section 8
hereof are assignable only in accordance with the provisions of the Registration
Rights Agreement. The initial Cap Amount (as defined below) applicable to
holders of Warrants shall be allocated pro rata among the holders of the
Warrants based on the aggregate number of Warrant Shares and Conversion Shares
(as defined in the Note) issuable to each holder of Warrants. In the event a
holder shall sell or otherwise transfer any of such holder's Warrants each
transferee shall be allocated a pro rata portion of such transferor's Cap
Amount. Any portion of the Cap Amount applicable to Warrants which remains
allocated to any person or entity which does not hold any Warrants shall be
allocated to the remaining holders of Warrants, pro rata based on the
outstanding principal amount of Warrants then held by such holders.

            (b) WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This Warrant
is exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Section 7(e) below, for new Warrants of
like tenor of different denominations representing in the aggregate the right to
purchase the number of shares of Common Stock which may be purchased hereunder,
each of such new Warrants to represent the right to purchase such number of
shares (at the Exercise Price therefor) as shall be designated by the holder
hereof at the time of such surrender.

                                      -12-
<PAGE>

            (c) REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

            (d) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as provided in
this Section 7, this Warrant shall be promptly canceled by the Company. The
Company shall pay all taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the Holder or
transferees) and charges payable in connection with the preparation, execution,
and delivery of Warrants pursuant to this Section 7. The Company shall indemnify
and reimburse the holder of this Warrant for all losses and damages arising as a
result of or related to any breach of the terms of this Warrant, including costs
and expenses (including reasonable legal fees) incurred by such holder in
connection with the enforcement of its rights hereunder.

            (e) WARRANT REGISTER. The Company shall maintain, at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.

            (f) EXERCISE OR TRANSFER WITHOUT REGISTRATION. If, at the time of
the surrender of this Warrant in connection with any exercise, transfer, or
exchange of this Warrant, this Warrant (or, in the case of any exercise, the
Warrant Shares issuable hereunder), shall not be registered under the Securities
Act and under applicable state securities or blue sky laws, the Company may
require, as a condition of allowing such exercise, transfer, or exchange, (i)
that the holder or transferee of this Warrant, as the case may be, furnish to
the Company a written opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions) to the effect that such exercise, transfer, or exchange may be
made without registration under the Securities Act and under applicable state
securities or blue sky laws, (ii) that the holder or transferee execute and
deliver to the Company an investment letter in form and substance acceptable to
the Company and (iii) that the transferee be an "accredited investor" as defined
in Rule 501(a) promulgated under the Securities Act; PROVIDED that no such
opinion, letter, or status as an "accredited investor" shall be required in
connection with a transfer pursuant to Rule 144 under the Securities Act.

            (g)   ADDITIONAL RESTRICTION ON EXERCISE.

            (i) NO FIVE PERCENT HOLDERS. Notwithstanding anything to the
contrary contained herein, this Warrant shall not be exercisable by the holder
to the extent (but only to the extent) that, if exercisable by the holder, the
holder would be the beneficial owner of more than 4.99% of the shares of Common
Stock. For the purposes of this paragraph, beneficial ownership and all
determinations and calculations, shall be determined in accordance with Section
13(d) of

                                      -13-
<PAGE>

the Securities Exchange Act of 1934, as amended, and all applicable rules and
regulations thereunder. For clarification, it is expressly a term of this
security that the limitations contained in this Section 7(g)(i) shall apply to
each successive holder. The restriction contained in this Section 7(g)(i), may
not be altered, amended, deleted or changed in any manner whatsoever unless the
holders of a majority of the outstanding Shares of Common Stock and the holder
hereof approve such alteration, amendment, deletion or change.

            (ii) CAP AMOUNT. Notwithstanding anything to the contrary contained
herein, unless stockholder approval of the Stockholder Matters (as defined in
Section 4(k) of the Securities Purchase Agreement) has been obtained, this
Warrant shall not be exercisable to the extent that such exercise would result
in the issuance of more than Two Million One Hundred Nine Thousand Seven Hundred
Seventeen (2,109,717) shares of Common Stock (the "CAP AMOUNt") in the aggregate
pursuant to the exercise of the Warrants and the conversion of the Notes.

      8.    REGISTRATION RIGHTS. The initial holder of this Warrant (and certain
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Warrant Shares as are set forth in the Registration Rights
Agreement, including the right to assign such rights to certain assignees, as
set forth therein.

      9.    NOTICES. Any notices required or permitted to be given under the
terms of this Warrant shall be delivered personally or by courier or by
confirmed telecopy, and shall be effective upon receipt or refusal of receipt,
if delivered personally or by courier, or by confirmed telecopy, in each case
addressed to a party. The addresses for such communications shall be:

                  If to the Company:

                  CELLPOINT INC.
                  3000 Hillswood Drive
                  Hillswood Business Park
                  Chertsey,
                  Surrey KT16 ORS
                  Attention:  Lynn Duplessis
                  Telecopy: 44 1 344 623 090

                  with a copy to:

                  Salans Hertzfeld Heilbronn Christy & Viener
                  620 Fifth Avenue
                  New York, NY  100220
                  Attention:  Steven R. Berger, Esq.
                  Telecopy:  212-632-5555

If to the holder, at such address as such holder shall have provided in writing
to the Company, or at such other address as such holder furnishes by notice
given in accordance with this Section 9.

                                      -14-
<PAGE>

      10 GOVERNING LAW; JURISDICTION. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York. The Company and
the registered holder irrevocably consent to the jurisdiction of the United
States federal courts and state courts located in the State of New York in any
suit or proceeding based on or arising under this Warrant and irrevocably agree
that all claims in respect of such suit or proceeding may be determined in such
courts. The Company and the registered holder irrevocably waive any objection to
the laying of venue and the defense of an inconvenient forum to the maintenance
of such suit or proceeding. The Company and the registered holder further agree
that service of process upon it mailed by certified or registered mail shall be
deemed in every respect effective service of process upon it in any such suit or
proceeding. Nothing herein shall affect the right of the Company or the
registered holder to serve process in any other manner permitted by law. The
Company and the registered holder agree that a final non-appealable judgment in
any such suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other lawful manner.

      11.   MISCELLANEOUS.

            (a)   AMENDMENTS.  This Warrant and any provision hereof may
only be amended by an instrument in writing signed by the Company and the
holder hereof.

            (b)   DESCRIPTIVE HEADINGS.  The descriptive headings of the
several Sections of this Warrant are inserted for purposes of reference
only, and shall not affect the meaning or construction of any of the
provisions hereof.

            (c)   CASHLESS EXERCISE. Notwithstanding anything to the contrary
contained in this Warrant, this Warrant may be exercised at any time during the
Exercise Period by presentation and surrender of this Warrant to the Company at
its principal executive offices with a written notice of the holder's intention
to effect a cashless exercise, including a calculation of the number of shares
of Common Stock to be issued upon such exercise in accordance with the terms
hereof (a "CASHLESS Exercise"). In the event of a Cashless Exercise, in lieu of
paying the Exercise Price in cash, the holder shall surrender this Warrant for
that number of shares of Common Stock determined by multiplying the number of
Warrant Shares to which it would otherwise be entitled by a fraction, the
numerator of which shall be the difference between the Market Price per share of
the Common Stock on the date of exercise and the Exercise Price, and the
denominator of which shall be such Market Price per share of Common Stock.

            (d) TRADING DAY. For purposes of this Warrant, the term "trading
day" means any day on which NASDAQ or, if the Common Stock is not then traded on
NASDAQ, the principal United States securities exchange or trading market where
the Common Stock is then listed or traded, is open for trading.

                [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

                                      -15-
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Stock Purchase Warrant to
be signed by its duly authorized officer.

                              CELLPOINT INC.

                              By:    /s/ Lynn Duplessis
                                    ------------------------------------
                                    Name:  Lynn Duplessis
                                    Title: Executive Vice President

                                      -16-
<PAGE>

                           FORM OF EXERCISE AGREEMENT

         (TO BE EXECUTED BY THE HOLDER IN ORDER TO EXERCISE THE WARRANT)

To:   CELLPOINT INC.
      3000 Hillswood Drive
      Hillswood Business Park
      Chertsey,
      Surrey KT16 ORS
      Attention: _________________
      Telecopy: _________________

      The undersigned hereby irrevocably exercises the right to purchase
_____________ shares of the Common Stock of CELLPOINT INC., a corporation
organized under the laws of the State of Delaware (the "COMPANY"), evidenced by
the attached Warrant and [herewith makes payment of the Exercise Price with
respect to such shares in full] [hereby elects to effect a Cashless Exercise (as
defined in Section 11(c) of such Warrant], all in accordance with the conditions
and provisions of such Warrant.

      The undersigned agrees not to offer, sell, transfer or otherwise dispose
of any Common Stock obtained on exercise of the Warrant, except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended, or any state securities laws.

G     The undersigned requests that the Company cause its transfer agent to
      electronically transmit the Common Stock issuable pursuant to this
      Exercise Agreement to the account of the undersigned or its nominee (which
      is _________________) with DTC through its Deposit Withdrawal Agent
      Commission System ("DTC TRANSFER"), provided that such transfer agent
      participates in the DTC Fast Automated Securities Transfer program.

G     In lieu of receiving the shares of Common Stock issuable pursuant to this
      Exercise Agreement by way of DTC Transfer, the undersigned hereby requests
      that the Company cause its transfer agent to issue and deliver to the
      undersigned physical certificates representing such shares of Common
      Stock.

      The undersigned requests that a Warrant representing any unexercised
portion hereof be issued, pursuant to the Warrant, in the name of the Holder and
delivered to the undersigned at the address set forth below:

Dated:
                                          ------------------

                                          ------------------------------
                                          Signature of Holder

                                          Name of Holder (Print)

                                          Address:

<PAGE>

                              FORM OF ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth herein below, to:

<TABLE>
<CAPTION>
Name of Assignee              Address                             No of Shares
----------------              -------                             ------------
<S>                           <C>                                 <C>
</TABLE>

, and hereby irrevocably constitutes and appoints
_____________________________________ as agent and attorney-in-fact to transfer
said Warrant on the books of the within-named corporation, with full power of
substitution in the premises.

Dated: _____________________, ____

In the presence of

                                    Name:
                                          -------------------------------------

                                    Signature:
                                                -------------------------------
                                    Title of Signing Officer or Agent (if any):

                                    Address:
                                                -------------------------------

                                    Note: The above signature should
                                          correspond exactly with the name
                                          on the face of the within
                                          Warrant.

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