Document:

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                                 Exhibit 4.1(b)

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                          REGISTRATION RIGHTS AGREEMENT

                  This REGISTRATION RIGHTS AGREEMENT (this "Registration Rights
Agreement") entered into as of January 13, 2000, by and among the Subscribers
set forth on the signature pages hereof (each, a "Subscriber," and collectively,
the "Subscribers") and Xceed, Inc., a Delaware corporation, with offices at 488
Madison Avenue, New York, New York 10022 (the "Company").

                              W I T N E S S E T H:

                  WHEREAS, pursuant to the Subscription Agreement, dated as of
the date hereof (the "Agreement"), by and among the Company and the Subscribers,
the Company has agreed to sell and the Subscribers have agreed to purchase up to
Thirty Thousand (30,000) shares of Series A Cumulative Convertible Preferred
Stock, par value $.05 per share (the "Preferred Stock"), of the Company at a
purchase price of $1,000 per share, with such other rights and preferences as
are set forth in the Certificate of Designation, Preferences and Rights of the
Preferred Stock (the "Certificate");

                  WHEREAS, the Preferred Stock is convertible into shares of the
Company's common stock, par value $.01 per share (the "Underlying Common
Shares"); and

                  WHEREAS, pursuant to the terms of, and in partial
consideration for, the Subscribers' purchase of the Preferred Stock, the Company
has agreed to provide the Subscribers with certain registration rights with
respect to Underlying Common Shares and any shares of the Company's common stock
underlying warrants (the "Warrants") issued to the Subscribers on the date
hereof (such shares are referred to as the "Underlying Warrant Shares," and,
together with the Underlying Common Shares, the "Shares") as set forth in this
Registration Rights Agreement.

                  NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the Agreement
and this Registration Rights Agreement, the Company and the Subscribers agree as
follows:

                  1. Certain Definitions. As used in this Registration Rights
Agreement, the following terms shall have the following respective meanings, and
terms not otherwise defined herein shall have their respective meanings as
assigned to them in the Agreement:

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

                  "Filing Date" means April 1, 2000.

                  "Holder" means the applicable Subscriber and any transferee of
the Warrants, the Preferred Stock, Shares or other Registrable Securities (as
defined herein), to whom the registration rights conferred by this Registration
Rights Agreement have been transferred in compliance with Section 13 of this
Registration Rights Agreement.

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

                  "Prospectus" means any prospectus relating to the Shares as
filed with the Commission pursuant to Rule 424(b) under the Securities Act or,
if no such filing is required, any form of final prospectus relating to the
Shares included in the Registration Statement, as the case may be, at the time
the Registration Statement is declared effective by the Commission, in either
case, including all amendments and supplements to such prospectus or
Registration Statement, including post-effective amendments, and all material,
if any, incorporated by reference therein.

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                  The terms "register," "registered" and "registration" shall
refer to a registration effected by preparing and filing with the Commission a
registration statement in compliance with the Securities Act and applicable
rules and regulations thereunder, and the declaration or ordering of the
effectiveness of such registration statement.

                  "Registration Expenses" means all expenses incurred by the
Company in connection with the registration, qualification or compliance with
Section 2 of this Registration Rights Agreement, including without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, reasonable fees and
disbursements of counsel to Holders relating directly to review of the
Registration Statement and related documents, and the expense of any special
audits incident to or required by any such registration. With respect to fees
and expenses of counsel to the Holders, Registration Expenses shall include only
fees and disbursements for one (1) designated counsel for all the Holders of
Preferred Stock, which counsel shall be reasonably acceptable to the Company.

                  "Registration Statement" means any Piggyback Registration
Statement, the Shelf Registration Statement and any additional registration
statements contemplated by Section 2(b), including (in each case) the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference in such registration statement.

                  "Registrable Securities" means any Shares or other securities
issued or issuable to the Holder upon the conversion of any Preferred Stock or
exercise of the Warrants.

                  "Regulation D" means Regulation D as promulgated pursuant to
the Securities Act, and as it may be subsequently amended.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Selling Expenses" means all brokerage fees, underwriting
discounts and selling commissions applicable to the offer and sale of
Registrable Securities and all fees and disbursements of counsel for Holders not
included under "Registration Expenses."

                  2. Registration Requirements. The Company shall use its
diligent best efforts to effect the registration of the Registrable Securities
(including, without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under applicable blue sky
or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as would permit or facilitate the
sale or distribution of all the Registrable Securities in the manner (including
manner of sale) and in all states reasonably requested by the Holders under a
broad-based plan of distribution reasonably acceptable to the Holders. Such best
efforts by the Company shall include, without limitation, the following:

                           (a) Piggy-Back Registration. For so long as any
         shares of Preferred Stock, Warrants or any Registrable Securities are
         outstanding but in no event for more then two years following the
         Filing Date, if at any time when there is not an effective Registration
         Statement covering the Shares, the Company shall determine to prepare
         and file with the Commission a registration statement relating to an
         offering for its own account or the account of others under the
         Securities Act of any of its equity securities, other than a
         registration statement on Form S-4 or Form S-8 (each as promulgated
         under the Securities Act) and including any successor forms or their
         then equivalents relating to equity securities (each, a "Piggyback
         Registration Statement"), the Company shall send to each Holder of
         Registrable Securities written notice of such determination (the
         "Registration Notice") and, if within thirty (30) days after receipt of
         such notice, any such Holder shall so request in writing (which request
         shall specify the Registrable Securities intended to be disposed of by
         such Holder), the Company will cause to be included in the Piggy-Back
         Registration Statement all Registrable Securities which the Company has
         been so requested to include by the Holder, provided that if at any
         time after giving the Registration Notice and prior to the effective
         date of the Piggy-Back Registration Statement, the Company shall
         determine for any reason not to proceed or to delay registration of
         such securities, the Company may, at its election, give written notice
         of such determination to such Holder and, thereupon: (i) in the case of
         a determination not to proceed, shall be relieved of its obligation to
         include any Registrable Securities in connection with such registration
         (but not from its

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         obligation to pay the Registration Expenses in accordance with Section
         3 hereof); and (ii) in the case of a determination to delay
         registration, shall be permitted to delay registration of any
         Registrable Securities requested to be included pursuant to this
         Section 2(a) for the same period as the delay in registration of the
         other securities included in the Piggy-Back Registration Statement. The
         Company shall include in the Piggy-Back Registration Statement all or
         any part of such Registrable Securities such Holder requests to be
         registered; provided, however, that the Company shall not be required
         to include in the Piggy-Back Registration Statement the number of
         Registrable Securities held by a Holder that are eligible for sale
         pursuant to Rule 144 under the Securities Act. In the event that the
         Piggy-Back Registration Statement relates to an underwritten public
         offering, if the managing underwriter(s) determines that marketing
         factors require limitation or exclusion of the Registrable Securities
         and objects to the inclusion of the Registrable Securities in the
         Piggy-Back Registration Statement, then if the Company (after
         consultation with the managing underwriter(s)) determines to include in
         the Piggy-Back Registration Statement fewer or none of the Registrable
         Securities of the Holders, then the number of Registrable Securities of
         the Holders, to the extent permitted to be included in the Piggy-Back
         Registration Statement, shall be reduced pro-rata among such Holders
         (based upon the total number of Registrable Securities requested by the
         Holders to be included in the Piggy-Back Registration Statement);
         provided, however, that if securities are being offered for the account
         of other Persons as well as the Company, such reduction shall not
         represent a greater fraction of the number of Registrable Securities
         intended to be offered by the Holders than the fraction of similar
         reductions imposed on such other Persons (other than the Company). To
         the extent that Registrable Securities of a Holder are included in a
         Piggy-Back Registration Statement that relates to an underwritten
         public offering, the right of such Holder to have its Registrable
         Securities included therein shall be conditioned upon such Holder's
         participation in and agreement with the terms of such underwriting.
         Each Holder shall (together with the Company and such other Persons
         including securities in the Piggy-Back Registration Statement) enter
         into an underwriting agreement in customary form with the
         underwriter(s) and shall use such Holder's commercially reasonable
         efforts to prepare and provide all documents and opinions required to
         be delivered thereunder in respect of their participation as selling
         securityholders in the subject offering. In connection with the
         foregoing, the Company and the Holder's shall also comply with the
         provisions of Section 2(e) below. In the event that the managing
         underwriter(s) permits inclusion of a Holder's Registrable Securities,
         such Holder may be prohibited from selling other Registrable Securities
         for a period of time following the effective date of the Piggy-Back
         Registration Statement as required by the underwriter(s), such period
         not to exceed 90 days from the effective date of the Piggy-Back
         Registration Statement.

                           (b) Additional Registration. Not later than the
         Filing Date, the Company shall file: (i) a registration statement on
         Form S-3 with the Commission pursuant to Rule 415 under the Securities
         Act covering the Registrable Securities (the "Shelf Registration
         Statement"); (ii) such blue sky filings as shall be necessary (based
         upon the determination of counsel to the Company or counsel to the
         Holders reasonably acceptable to the Company) to enable the Holders to
         resell their Registrable Securities in such jurisdictions as they
         reasonably request in writing; and (iii) any required filings with the
         National Association of Securities Dealers, Inc., the Nasdaq National
         Market or such other exchange or market on which the Shares are traded.
         Thereafter, the Company shall use its best efforts to: (i) respond
         timely to all comments received from the Commission on the Shelf
         Registration Statement and/or any documents incorporated by reference
         therein; and (ii) cause such Shelf Registration Statement and any
         filings incorporated therein to be declared effective as promptly as
         practicable but in no event later than 60 days from the Filing Date. If
         an additional Registration Statement is required to be filed because
         the actual number of Registrable Securities exceeds the number of
         shares of Common Stock included in the Shelf Registration Statement or
         the Piggy-Back Registration Statement, the Company shall use its best
         efforts to cause an additional Registration Statement (the "Additional
         Registration Statement") to be filed and declared effective by the
         Commission as soon as possible, but in no event later than 60 days
         after the filing thereof.

                           (c) The Company and the Subscribers agree that the
         Holders will suffer damages if one or more Registration Statements
         covering all of the Registrable Securities are not filed on or prior to
         the Filing Date and not declared effective by the Commission on or
         prior to the 90th day after the Filing Date and maintained in the
         manner contemplated herein during the Effectiveness Time or if certain
         other events occur. The Company and the Holders further agree that it
         would not be feasible at this time to

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         ascertain the extent of such damages with precision. Accordingly, if:
         (i) one or more Registration Statements covering all of the Registrable
         Securities are not filed with the Commission on or prior to the Filing
         Date; (ii) after 90 days from the Filing Date, such Registration
         Statement or Statements have not been declared effective by the
         Commission; or (iii) in the event that filing of the Additional
         Registration Statement is necessary, and the Additional Registration
         Statement is not declared effective with the time periods set forth in
         Section 2(b) (any such failure or breach, being referred to as an
         "Event," and the date following expiration of the applicable time
         periods on which such Event occurs, being referred to as "Event Date"),
         and such Event is in no manner the result of action or inaction on the
         part of a Subscriber or Subsequent Holder, the Holders shall have, in
         addition to, and without limiting, any other rights they may have at
         law, in equity or under the Certificate, the Agreement or this
         Registration Rights Agreement (including the right to specific
         performance), the right to receive cash payment from the Company, as
         liquidated damages, in an amount equal to 1.5% of the Aggregate Value
         (as defined in the Certificate) of the shares of Preferred Stock held
         by such Holder plus the Aggregate Value of any shares of Preferred
         Stock that have been converted to the extent any of the Underlying
         Common Shares issued upon such conversion have not been sold (or
         previously included in a Registration Statement in the case of an Event
         arising in connection with an Additional Registration Statement), for
         each 30-day period (or portion thereof) from the Event Date until the
         applicable Event is cured. Payments to be made pursuant to this Section
         2(c) shall be due and payable immediately upon demand in immediately
         available funds. In addition to the foregoing, if at any time after 120
         days from the Filing Date, one or more Registration Statements covering
         all of the Registrable Securities have not been declared effective by
         the Commission, then upon demand of any Holder, the Company shall
         redeem all or any specified portion of the Preferred Stock held by such
         Holder at a redemption price equal to 125% of the Aggregate Value (as
         defined in the Certificate) thereof, together with all other payments
         due under this Section 2, the Certificate and the Agreement.

                           (d) If the Holders intend to distribute the
         Registrable Securities covered by the Registration Statement by means
         of an underwritten offering, the Holders shall so advise the Company.
         The Holders will have the right to select the investment bankers for
         such underwriting subject to such investment bankers being reasonably
         satisfactory to the Company. If, in the opinion of the managing
         underwriter of such offering, the inclusion of the Registrable
         Securities requested to be registered hereunder would adversely affect
         the marketing of such shares, after any shares otherwise intended to be
         included by the Company or other holders of Common Stock have been
         excluded, Registrable Securities to be included by the Holders shall be
         excluded in such manner that the Registrable Securities to be included
         shall be allocated among such Holders pro rata based on their ownership
         of Registrable Securities.

                           (e) In the event that the Registrable Securities are
         included in a Registration Statement relating to an underwritten
         offering:

                                (i) the Company and the Holders shall enter into
          such customaryagreements (including a customary underwriting
          agreement) with the underwriter(s) and take all such other actions
          reasonably requested in connection therewith in order to expedite or
          facilitate the disposition of such Registrable Securities.

                                 (ii) the Company and the Holders shall make
          such representations and warrantiesto the Holders (with respect to the
          Company), to the Company (with respect to the Holders) and to the
          underwriter(s), in form, substance and scope as are customarily made
          in secondary underwritten offerings;

                                 (iii)   the Company  shall cause to be
          delivered to the Holders of Registrable Securities included in the
          underwritten offering and to the underwriter(s) opinions of counsel to
          the Company, dated as of the effective date of the Registration
          Statement (which counsel and opinions, shall be reasonably
          satisfactory in form, scope and substance to the managing
          underwriter(s) and counsel of the Holders), addressed to the Holders
          and the underwriter(s) covering the matters customarily covered in
          opinions requested in secondary underwritten offerings;

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                                 (iv)    the  Company  shall  cause to be
          delivered, immediately prior to the effectiveness of the Registration
          Statement, a "comfort" letter from the Company's independent certified
          public accountants addressed to the Holders and the underwriter(s)
          stating that such accountants are independent public accountants
          within the meaning of the Securities Act and the applicable published
          rules and regulations thereunder, and otherwise in customary form and
          covering such financial and accounting matters as are customarily
          covered by letters of the independent certified public accountants
          delivered in connection with secondary underwritten public offerings;

                                 (v)     if an  underwriting  agreement  is
          entered into, the same shall set forth in full the indemnification and
          contribution provisions and procedures of Sections 6 and 7 with
          respect to all parties to be indemnified pursuant to such sections;

                                 (vi)    the  Company  and  the  Holders  shall
          deliver such documents and certificates as may be reasonably requested
          by the underwriter(s) to evidence compliance with clause (ii) above
          and with any customary conditions contained in the underwriting
          agreement, if any, or other agreement entered into by the Company in
          connection with such underwritten offering; and

                                 (vii)   the Holders  shall use their reasonable
          commercial efforts to timely prepare and provide all information,
          documentation and opinions addressed to the underwriter(s), in form,
          scope and substance reasonably satisfactory to counsel to the
          underwriter(s) as customarily required in secondary underwritten
          offerings.

                           (f) The Company shall make available for inspection
         during normal business hours and upon reasonable request by a
         representative or representatives of the Holders, the underwriter(s)
         participating in a proposed underwritten offering pursuant to a
         Registration Statement, and the attorney and/or accountant retained by
         such Holders or underwriter(s), customary financial and other records
         for such purposes, pertinent corporate documents and properties of the
         Company, and use its best efforts to cause the Company's officers,
         directors and employees to supply information reasonably and
         customarily requested in connection with such an underwritten offering,
         in the case of an underwriting, and, in any event, in connection with
         preparation of such a Registration Statement. The Holders (and each
         representative, accountant and counsel thereto) shall keep all
         information deemed by the Company to be "non-public" information which
         is supplied to the Holders (and any representative, accountant and
         counsel thereto) confidential unless and until such information is
         included in the Registration Statement filed with the Commission.

                  3. Expenses of Registration. All Registration Expenses shall
be borne by the Company and all Selling Expenses shall be borne by the Holders.

                  4. Registration on Form S-3. The Company shall use its best
efforts to qualify under the Securities Act for registration on Form S-3 or any
comparable or successor form or forms.

                  5. Registration Procedures. In the case of each Registration
Statement (other than a Piggyback Registration Statement) filed by the Company
pursuant to this Registration Rights Agreement, the Company shall keep the
Holders advised in writing as to the initiation of each registration and as to
the completion thereof. At its expense, the Company shall use its best efforts
to:

                     (a) Keep such Registration Statement continuously
         effective for the period ending at the earlier of the following: (i)
         twenty four (24) months after the effective date of the Registration
         Statement (as such time period is extended pursuant to Section 5A
         hereof), (ii) the time the Holders have completed their distribution of
         the Shares; or (iii) the time all of the Registrable Securities are
         eligible for distribution to the public by the Holder pursuant to Rule
         144 under the Securities Act (or any similar provision then in force)
         (the earliest of (i), (ii) and (iii) being referred to as the
         "Effectiveness Time");

                           (b) Furnish such number of prospectuses, and
         amendments and supplements thereto, and other documents incident
         thereto as any Holder from time to time may reasonably request;

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                           (c) Prepare and file with the Commission such
         amendments and post-effective amendments to the Registration Statement
         as may be necessary to keep such Registration Statement effective for
         the applicable period; cause the related Prospectus to be supplemented
         by any required Prospectus supplement, and as so supplemented to be
         filed pursuant to Rule 424 under the Securities Act; and comply with
         the provisions of the Securities Act applicable to it with respect to
         the disposition of all securities covered by such Registration
         Statement during the applicable period in accordance with the intended
         methods of disposition by the sellers thereof set forth in such
         Registration Statement or supplement to such Prospectus;

                           (d) Promptly notify each Holder of Registrable
         Securities included in the Registration Statement, counsel for the
         Holders and the managing underwriters, if any, promptly, and (if
         reasonably requested by any such Person) confirm such notice (a
         "Notice") in writing: (i) when a Prospectus or any Prospectus
         supplement or post-effective amendment has been filed, and, with
         respect to a Registration Statement or any post-effective amendment,
         when the same has become effective; (ii) of any request by the
         Commission for amendments or supplements to a Registration Statement or
         related Prospectus or for additional information; (iii) of the issuance
         by the Commission of any stop order suspending the effectiveness of a
         Registration Statement or the initiation of any proceedings for that
         purposes; (iv) if at any time the representations and warranties of the
         Company contained in agreements contemplated by Section 2(d) cease to
         be true and correct; (v) of the receipt by the Company of any
         notification with respect to the suspension of the qualification of any
         of the Registrable Securities for sale in any jurisdiction or the
         initiation or threatening of any proceeding for such purpose; (vi) of
         the happening of any event as a result of which the Prospectus included
         in the Registration Statement (as then in effect) contains any untrue
         statement of a material fact or omits to state any material fact
         required to be stated therein or necessary to make the statements
         therein (in the case of the Prospectus or any preliminary Prospectus,
         in light of the circumstances under which they were made) not
         misleading; and (vii) of the Company's reasonable determination that a
         post-effective amendment to a Registration Statement would be
         appropriate or that there exist circumstances not yet disclosed to the
         public which make further sales under such Registration Statement
         inadvisable pending such disclosure and post-effective amendment;

                           (e) Upon the occurrence of any event contemplated by
         Section 5(d)(ii) through (vii) and immediately upon the expiration of
         any Blocking Period (as defined in Section 5A), prepare, if the
         occurrence of such event or period requires such preparation, a
         supplement or post-effective amendment to the Registration Statement or
         related Prospectus or any document incorporated therein by reference or
         file any other required document so that the Prospectus thereafter
         delivered to the purchasers of the Registrable Securities being sold
         thereunder will not contain an untrue statement of a material fact or
         omit to state any material fact necessary to make the statements made
         therein not misleading;

                           (f) Make every reasonable effort to obtain the
         withdrawal of any order suspending the effectiveness of the
         Registration Statement or the lifting of any suspension of the
         qualification of any of the Registrable Securities for sale in any
         jurisdiction, at the earliest possible moment;

                           (g) To the extent applicable or otherwise required to
         enable the Holders to resell their Registrable Securities, ensure that
         the Registrable Securities subject to the Registration Statement shall
         be registered or qualified for offer and sale under the securities or
         blue sky laws of such jurisdictions as the Holder(s) or underwriter(s),
         if any, reasonably request in writing; use its best efforts to keep
         each such registration or qualification effective, including through
         new filings or amendments or renewals, during the period such
         Registration Statement is required to be kept effective hereunder and
         do any and all other acts or things reasonably necessary or advisable
         (based on the opinion of counsel to the Company or counsel, reasonably
         acceptable to the Company, of the Holders or the underwriter(s), as the
         case may be) to enable the disposition in such jurisdictions of the
         Registrable Securities covered by the applicable Registration
         Statement; provided, however, that the Company will not be required to
         qualify to do business or take any action that would subject it to
         taxation or general service of process in any jurisdiction where it is
         not then so qualified or subject;

                           (h) Use its best efforts to cause the Registrable
         Securities covered by the Registration Statement to be registered with
         or approved by the National Association of Securities Dealers,

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          Inc. as may be necessary to enable the Holders or the underwriters, if
          any, to consummate the disposition of such Registrable Securities in
          accordance with the chosen method or methods of distribution; and

                           (i) Cause all Registrable Securities included in such
         Registration Statement to be listed, by the date of first sale of
         Registrable Securities pursuant to such Registration Statement, on the
         Nasdaq National Market, The Nasdaq SmallCap Market or such other
         principal securities exchange or automated interdealer system on which
         the same class of securities of the Company are then listed or traded.

                  5A.      Suspensions of Effectiveness.

                  (a) The Company may suspend dispositions under the
Registration Statement and notify the Holders that they may not sell the
Registrable Securities pursuant to any Registration Statement or Prospectus (a
"Blocking Notice") if the Company's board of directors determines in its
reasonable good faith judgment that the Company's obligation to ensure that such
Registration Statement and Prospectus are current and complete would require the
Company to take actions that might reasonably be expected to have a materially
adverse detrimental effect on the Company and its stockholders; provided that
the Company shall diligently and expeditiously take all actions it reasonably
determines to be necessary or advisable to cause such Registration Statement and
Prospectus to be current and complete and to remove such suspension pursuant to
a Blocking Notice or the Notice described below or as a result of the
circumstances described in Section 5(d)(ii) through (vii). Each Holder agrees by
acquisition of the Registrable Securities that, upon receipt of a Blocking
Notice or "Notice" from the Company of the existence of any fact of the kind
described in the following sentence, such Holder shall not dispose of, sell or
offer for sale the Registrable Securities pursuant to the Registration Statement
until such Holder receives: (i) copies of the supplemented or amended
Prospectus, or until counsel for the Company shall have determined that such
disclosure is not required due to subsequent events; (ii) notice in writing (the
"Advice") from the Company that the use of the Prospectus may be resumed; and
(iii) copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus. Pursuant to the immediately preceding sentence, the
Company may provide such Notice to such Holder upon the determination by the
Company of the existence of any fact or the happening or any event that makes
any statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document incorporated by
reference therein untrue in any material respect, or that requires the making of
any additions to or changes in the Registration Statement or the Prospectus, in
order to make the statements therein not misleading in any material respect. If
so directed by the Company in connection with any such notice, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities that was current immediately prior to the
time of receipt of such notice.

                  (b) In the event: (i) the Company shall give any such Blocking
Notice or Notice, pursuant to Section 5A(a) or (ii) the Registration Statement
is suspended (including, but not limited to, suspensions resulting from the
delisting of the Common Stock or a stop order issued by the Commission) or
trading in the Common Stock on the Nasdaq National Market is suspended for a
period of time (excluding disruptions from business announcements that result in
any halt(s) in trading of not more than one day on each occasion) and other
suspension of trading on such market in general (each, a "Blackout Period"), the
time regarding the effectiveness of such Registration Statement set forth in
Section 5(a) and the Maturity Date (as defined in the Certificate) of the
Preferred Stock and the expiration date of the Warrants shall be extended by one
and one-half (1-1/2) times the number of days during the period (i) from and
including the date of the giving of such Blocking Notice or Notice to and
including the date when the Holders shall have received the copies of the
supplemented or amended Prospectus, the Advice and any additional or
supplemental filings that are incorporated by reference in the Prospectus or
(ii) from and including the date of such suspension to and including the date
when the Registration Statement is declared effective, as applicable. Delivery
of a Blocking Notice or Notice and the related suspension of any Registration
Statement or the occurrence of a Blackout Period shall not constitute a default
under this Registration Rights Agreement and shall not create any obligation to
pay liquidated damages under Section 2 hereof. However, if the Holder's ability
to sell under the Registration Statement is suspended for more than ten
consecutive trading days or for sixty (60) days (whether or not consecutive)
during any twelve (12) month period (an "Excess Blocking Period"), then the
Holders shall have the right to receive a 2.0% reduction in the Conversion Price
(as defined in the Certificate) of the Preferred Stock for each 30-day period
(or part thereof) following the beginning of an Excess Blocking Period until the
Excess Blocking Period terminates. In addition, if the Excess Blocking Period
continues

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for more than an aggregate of 180 days in any 360-day period, then at
Holder's option, the Company shall redeem Holder's Preferred Stock at a
redemption price equal to 130% of the Aggregate Value thereof, together with all
payments due under this Section and the Agreement.

                  6.       Indemnification.

                  (a) Company Indemnity. The Company will indemnify each Holder
whose securities are included in a Registration Statement, each of its officers,
directors, managers, members and partners, and each person controlling such
Holder within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder with respect to which registration, qualification or
compliance has been effected pursuant to this Registration Rights Agreement, and
each underwriter, if any, and each person who controls, within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, any
underwriter, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or arising out of or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by the Company of the
Securities Act or any state securities law or in either case, any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each Holder, each of its
officers, directors and partners, and each person controlling such Holder, each
such underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based
solely on any untrue statement or omission (or alleged untrue statement or
omission) that is made in reliance upon and in conformity with written
information furnished to the Company by such Holder or the underwriter expressly
for use therein. The indemnity agreement contained in this Section 6(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent will not be unreasonably withheld).

                  (b) Holder Indemnity. Each Holder will, if Registrable
Securities held by it are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors, officers, partners, and each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, each
other Holder (if any), and each of their officers, directors, managers, members
and partners, and each person controlling such other Holder within the meaning
of Section 15 of the Securities Act and the rules and regulations thereunder
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or arising out of or based on
any omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statement therein not misleading, and
will reimburse the Company and such other Holders and their directors, officers,
managers, members and partners, underwriters or control persons for any legal or
any other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
expressly for use therein; provided that no Holder shall be liable under this
indemnity for an amount in excess of the net proceeds received by such Holder
from the sale of the Registrable Securities pursuant to such registration
statement. The indemnity agreement contained in this Section 6(b) shall not
apply to amounts paid in settlement of any such claims, losses, damages or
liabilities if such settlement is effected without the consent of such Holder
(which consent shall not be unreasonably withheld).

                  (c) Procedure. Each party entitled to indemnification under
this Article (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim in any litigation resulting therefrom; provided that

                                      -60-
<PAGE>

counsel for the Indemnifying Party, who shall conduct the defense of such claim
or any litigation resulting therefrom, shall be approved by the Indemnified
Party (whose approval shall not be unreasonably withheld), and the Indemnified
Party may participate in such defense at the Indemnified Party's expense;
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 6 except to the extent that the Indemnifying Party is
materially and adversely affected by such failure to provide notice. The
Indemnifying Party shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) at any time
for such Indemnified Party; provided, however, that if separate firm(s) of
attorneys are required due to a conflict of interest, then the Indemnifying
Party shall be liable for the reasonable fees and expenses of each such separate
firm. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.

                  7. Contribution. (a) If the indemnification provided for in
Section 6 herein is unavailable to the Indemnified Parties in respect of any
losses, claims, damages or liabilities referred to herein (other than by reason
of the exceptions provided therein), then each such Indemnifying Party, in lieu
of indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities (i) as between the Company on the one hand and the Holder or
underwriters, as the case may be, on the other, in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holder or underwriters, as the case may be, on the other from the
offering of the Registrable Securities, or if such allocation is not permitted
by applicable law, in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
of the Holder or underwriters, as the case may be, on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations and (ii)
as between the Company on the one hand and the Holder on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
the Holder in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations.

                  (b) The relative benefits received by the Company on the one
hand and the Holders or the underwriters, as the case may be, on the other shall
be deemed to be in the same proportion as the proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company from the initial sale of the Registrable Securities by the
Company to the Holders pursuant to this Registration Rights Agreement bear to
the net proceeds received by the Holders from the sale of Registrable Securities
pursuant to the Registration Statement or the total underwriting discounts and
commissions received by the underwriters as set forth in the table on the cover
page of the Prospectus, as the case may be. The relative fault of the Company on
the one hand and of the Holders or underwriters, as the case may be, on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, by the Holders or by the underwriters.

                  (c) In no event shall the obligation of any Indemnifying Party
to contribute under this Section 7 exceed the amount that such Indemnifying
Party would have been obligated to pay by way of indemnification if the
indemnification provided for under clauses (a) or (b) of Section 6 hereof had
been available under the circumstances.

                  (d) The Company and the Holders agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rated allocation (even if the Holders or the underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account the equitable considerations referred to in the immediately
preceding paragraphs. The amount paid or payable by an Indemnified Party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraphs shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any

                                      -61-
<PAGE>

such action or claim. Notwithstanding the provisions of this Section 7, no
Holder or underwriter shall be required to contribute any amount in excess of
the amount by which (i) in the case of such Holder, the total price at which the
shares of Common Stock offered by such Holder and distributed to the public, or
offered to the public, exceed the amount paid by such Holder for the underlying
Preferred Stock converted into such shares of Common Stock, (ii) in the case of
an underwriter, the total price at which the Registrable Securities purchased by
it and distributed to the public were offered to the public exceeds, in any such
case, the amount of any damages that the Holders or underwriter have otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

                  8. Changes in Common Stock or Preferred Stock. If, and as
often as, there is any change in the Common Stock or Preferred Stock by way of a
stock split, stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustment shall be made in the provisions hereof so that the
rights and privileges granted hereby shall continue with respect to the Common
Stock or Preferred Stock as so changed.

                  9. Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Preferred Stock and the Shares to the public without
registration, at all times after ninety (90) days after any registration
statement covering a public offering of securities of the Company under the
Securities Act shall have become effective, the Company agrees to:

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

                           (b) use its best efforts to file with the Commission
         in a timely manner all reports and other documents required of the
         Company under the Securities Act and the Exchange Act; and

                           (c) furnish to each Holder forthwith upon request a
         written statement by the Company as to its compliance with the
         reporting requirements of such Rule 144 and of the Securities Act and
         the Exchange Act, a copy of the most recent annual or quarterly report
         of the Company, and such other reports and documents so filed by the
         Company as such holder may reasonably request in availing itself of any
         rule or regulation of the Commission allowing such Holder to sell any
         Preferred Stock or Shares without registration.

                  10. Rule 416. The Company and the Subscribers each acknowledge
that an indeterminate number of Registrable Securities shall be registered
pursuant to Rule 416 under the Securities Act so as to include in such
Registration Statement any and all Registrable Securities which may become
issuable (i) to prevent dilution resulting from stock splits, stock dividends or
similar transactions and (ii) if permitted by law, by reason of reductions in
the Conversion Price (as defined in the Certificate) of the Preferred Stock in
accordance with the terms of thereof, including, without limitation, the terms
which case the Conversion Period Conversion Price (as defined in the
Certificate) to decrease as the price of the Common Stock decreases
(collectively, the "Rule 416 Securities"). In this regard, the Company agrees to
use all reasonable efforts to ensure that the maximum number of Registrable
Securities which may be registered pursuant to Rule 416 under the Securities Act
are covered by the Registration Statement and, absent guidance from the
Commission or other definitive authority to the contrary, the Company shall use
all reasonable efforts to affirmatively support and not to take any position
adverse to the position that the Registration Statement filed hereunder covers
all of the Rule 416 Securities.

                  11. Survival. The indemnity and contribution agreements
contained in Sections 6 and 7 and the representations and warranties of the
Company referred to in Section 2(e)(i) shall remain operative and in full force
and effect regardless of (a) any termination of this Registration Rights
Agreement or any underwriting agreement, (b) any investigation made by or on
behalf of any Indemnified Party or by or on behalf of the Company and (c) the
consummation of the sale or successive resales of the Registrable Securities.

                  12. Information by Holder. Each Holder shall promptly furnish
to the Company such information regarding such Holder and the distribution
proposed by such Holder as the Company may reasonably

                                      -62-
<PAGE>

request in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Registration
Rights Agreement; provided, however, each Holder shall be given at least ten
(10) days to respond to such request. All information provided to the Company by
such Holder shall be accurate and complete in all material respects and such
Holder shall promptly notify the Company if any such information becomes
incorrect or incomplete. If such Holder does not timely provide such reasonably
requested information, such Holder shall not be entitled to the liquidated
damages contemplated by Section 2(c) to the extent that such delay in the
Registration Statement becoming effective is caused by such failure to timely
provide information unless such Holder shall be able to demonstrate to the
Company's satisfaction that such failure to timely provide did not
proportionately contribute to the event giving rise to the damages obligation.

                  13. Transfer or Assignment of Registration Rights. The rights
granted to the Subscribers by the Company under this Registration Rights
Agreement to cause the Company to register Registrable Securities, may be
transferred or assigned to a transferee or assignee together with any transfer
or assignment of the Registrable Securities, provided that the Company is given
written notice by any applicable Holder at the time of or within a reasonable
time after said transfer or assignment, stating the name and address of said
transferee or assignee and identifying the securities with respect to which such
registration rights are being transferred or assigned, and provided further that
the transferee or assignee of such rights agrees in writing to be bound by this
Registration Rights Agreement.

                  14. Representations and Warranties of the Company. The Company
represents and warrants that there are no agreements, understandings or
commitments, oral or written, between the Company and the holders of its
securities pursuant to which such holders have a right to require the Company to
register or qualify any of its securities under the Securities Act or any
applicable state securities laws.

                  15.      Miscellaneous.

                  (a) Entire Agreement. This Registration Rights Agreement
contains the entire understanding and agreement of the parties with respect to
the subject matter hereof, and may not be modified or terminated except by a
written agreement signed by the parties.

                  (b) Notices. Any notice, demand or request required or
permitted to be given by either the Company or the Holders pursuant to the terms
of this Registration Rights Agreement shall be in writing and shall be deemed
given when delivered personally, by overnight courier service or by facsimile,
with a hard copy to follow by overnight or two day courier, addressed to the
other party at the address of the party set forth at the end of this
Registration Rights Agreement or such other address as a party may request by
notifying the other in writing. Copies of all notices to the Holders or to the
Company shall be sent to the address set forth on Schedule I to the Subscription
Agreement or to such other address as the Holders or the Company, as applicable,
may hereafter designate.

                  (c) Gender of Terms. All terms used herein shall be deemed to
include the feminine and the neuter, and the singular and the plural, as the
context requires.

                  (d) Governing Law; Consent of Jurisdiction. This Registration
Rights Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware, without regard to principles of
conflicts of law or choice of law except for matters arising under the
Securities Act or the Securities Exchange Act of 1934, as amended, which matters
shall be construed and interpreted in accordance with such laws. The Company and
the Holders hereby agree that all actions or proceedings arising directly or
indirectly from or in connection with this Registration Rights Agreement shall
be litigated only in the Supreme Court of the State of Delaware or the United
States District Court of Delaware located in New Castle County, Delaware. The
Company and the Holders consent to the jurisdiction and venue of the foregoing
courts and consent that any process or notice of motion or other application to
either of said courts or a judge thereof may be served inside or outside the
State of Delaware by registered mail, return receipt requested, directed to the
such party at its address set forth in this Registration Rights Agreement (and
service so made shall be deemed complete five (5) days after the same has been
posted as aforesaid) or by personal service or in such other manner as may be
permissible under the rules of said courts. The parties hereto hereby waive any
right to a trial by jury in connection with any litigation.

                                      -63-
<PAGE>

                  (e) Severability. Notwithstanding any provision of this
Registration Rights Agreement, neither the Company nor any other party hereto
shall be required to take any action which would be in violation of any
applicable law. The invalidity or unenforceability of any provision of this
Registration Rights Agreement in any jurisdiction shall not affect the validity,
legality or enforceability of any other provision of this Registration Rights
Agreement in such jurisdiction or the validity, legality or enforceability of
this Registration Rights Agreement, including any such provision, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.

                  (f) Further Assurances. Each of the parties hereto shall
execute such documents and other papers and perform such further acts as may be
reasonably required or deemed necessary to carry out the provisions of this
Registration Rights Agreement and the transactions contemplated hereby.

                  (g) Titles. The titles used in this Registration Rights
Agreement are used for convenience of reference only and are not to be
considered in construing or interpreting this Registration Rights Agreement.

                  (h) Counterparts. This Registration Rights Agreement may be
executed in any number of counterparts, each of which shall be enforceable
against the parties actually executing such counterparts and all of which
together constitute one instrument.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -64-
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Registration Rights Agreement to be duly executed as of the date first above
written.

                                   XCEED, INC.

                                   By: /s/ Werner Haase
                                     --------------------
                                     Name:   Werner Haase
                                     Title:  Chief Executive Officer

                                   PECONIC FUND, LTD.

                                   By:   RAMIUS CAPITAL GROUP, LLC
                                   Its:  Investment Advisor

                                   By: /s/ Jeffrey M. Solomon
                                     --------------------------
                                     Name:   Jeffrey M. Solomon
                                     Title:  Managing Officer

                                   LEONARDO, L.P.

                                   By:  ANGELO, GORDON & CO., L.P.
                                   Its:  General Partner

                                   By:/s/ Michael L. Gordon
                                     ------------------------
                                     Name:   Michael L. Gordon
                                     Title:  Chief Operating Officer

                                   HTFP INVESTMENT L.L.C.

                                   By:  PROMETHEAN ASSET MANAGEMENT,
                                        L.L.C.
                                   Its: Investment Advisor

                                   By:/s/ James F. O'Brien, Jr.
                                     ----------------------------
                                     Name:   James F. O'Brien, Jr.
                                     Title:  Managing Member<PAGE>

                                 Exhibit 4.1(c)

<PAGE>

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

                               WARRANT TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                                   XCEED, INC.

                            Expires January 13, 2005

No. W-__                                                     New York, New York
                                                               January 13, 2000

FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, XCEED, INC., a Delaware corporation (together with its successors
and assigns, the "Issuer"), hereby certifies that

                             HFTP INVESTMENT L.L.C.

or its registered assigns is entitled to subscribe for and purchase, during the
period specified in this Warrant, up to 61,091 shares (subject to adjustment as
hereinafter provided) of the duly authorized, validly issued, fully paid and
non-assessable common stock, par value $0.01 per share, of the Issuer (the
"Common Stock"), at an exercise price per share equal to the Warrant Price then
in effect, subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. Capitalized terms used in this Warrant and not otherwise
defined herein shall have the respective meanings specified in Section 7 hereof.

         1. Term. The right to subscribe for and purchase shares of Warrant
Stock represented hereby shall commence on the date of issuance of this Warrant
and shall expire at 5:00 p.m., New York City time, on January 13, 2005 (such
period being the "Term"). Prior to the end of the Term, the Issuer will not take
any action which would terminate the Warrants.

         2. Method of Exercise; Payment; Issuance of New Warrant; Registration;
Transfer and Exchange.

         (a) Time of Exercise. The purchase rights represented by this Warrant
may be exercised in whole or in part at any time and from time to time during
the Term.

         (b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal executive office of the Issuer,
and by the payment to the Issuer of an amount of consideration therefor equal to
the Warrant Price in effect on the date of such exercise multiplied by the
number of shares of Warrant Stock with respect to which this Warrant is then
being exercised, payable at such Holder's election (i) by certified or official
bank check, (ii) if the Per Share Market Value is greater than the Warrant Price
(at the date of calculation as set forth below), in lieu of exercising this
Warrant for cash, by receiving shares equal to the value (as determined below)
of this Warrant (or the portion thereof being canceled) by surrender of this
Warrant at the principal executive office of the Company together with the
properly endorsed Subscription Form annexed hereto and notice of such election
in which event

                                      -67-
<PAGE>

the Company shall issue to the Warrantholder a number of shares of Common
Stock computed using the following formula:

                                Y(A-B)
                                ------
                           X =    A

         Where             X =  the number of shares of Common Stock to
                                be issued to the Holder

                           Y =  the number of shares of Common Stock
                                purchasable under the Warrant or, if only a
                                portion of the Warrant is being exercised,
                                the portion of the Warrant being canceled
                                (at the date of such calculation)

                           A    = the Per Share Market Value of one share of
                                the Common Stock (at the date of such
                                calculation)

                           B =  Warrant Price (as adjusted to the date of
                                such calculation),

or (iii) by a combination of the foregoing methods of payment selected by the
Holder of this Warrant. In any case where the consideration payable upon such
exercise is being paid in whole or in part pursuant to the provisions of clause
(ii) of this subsection (b), such exercise shall be accompanied by written
notice from the Holder of this Warrant specifying the manner of payment thereof
and containing a calculation showing the number of shares of Warrant Stock with
respect to which rights are being surrendered thereunder and the net number of
shares to be issued after giving effect to such surrender.

         (c) Issuance of Stock Certificates. In the event of any exercise of
this Warrant in accordance with and subject to the terms and conditions hereof,
(i) certificates for the shares of Warrant Stock so purchased shall be dated the
date of such exercise and the Issuer shall use its best efforts to deliver to
the Holder hereof within a reasonable time, not exceeding three Trading Days
after such exercise, and the Holder hereof shall be deemed for all purposes to
be the Holder of the shares of Warrant Stock so purchased as of the date of such
exercise, and (ii) unless this Warrant has expired, a new Warrant representing
the number of shares of Warrant Stock, if any, with respect to which this
Warrant shall not then have been exercised (less any amount thereof which shall
have been cancelled in payment or partial payment of the Warrant Price as
hereinabove provided) shall also be issued to the Holder hereof at the Issuer's
expense within such time.

         (d) Registration. The Warrants shall be numbered and shall be
registered in a Warrant register (the "Warrant Register"). The Issuer shall be
entitled to treat the registered holder of any Warrant on the Warrant Register
(the "Holder") as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in such Warrant
on the part of any other person, and shall not be liable for any registration of
transfer of Warrants which are registered or are to be registered in the name of
a fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a fiduciary or nominee is committing a breach of trust in requesting such
registration of transfer, or with such knowledge of such facts that its
participation therein amounts to bad faith. The Warrants shall be registered
initially in the name of Holder as set forth in the first sentence of this
Warrant in such denominations as Holder may request in writing to the Issuer.

         (e) Transfer of Warrant. Until such time as the shares of Warrant Stock
issuable hereunder shall have been the subject of registration and are covered
by an effective registration statement under the Securities Act, or there is
available (in the opinion of counsel to the Issuer or counsel to the Holder,
acceptable to the Issuer) an exemption from the registration requirements of the
Securities Act, the Warrants shall not be sold, transferred, assigned or
hypothecated, in part or in whole (other than by will or pursuant to the laws of
descent and distribution), and then only to registered assigns of the Holder and
thereafter only upon delivery thereof duly endorsed by the Holder or by his duly
authorized attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer. In all cases of transfer by an
attorney, the original power of attorney, duly approved, or an official copy
thereof, duly certified, shall be deposited with the Issuer. In case of transfer
by executors, administrators, guardians or other legal representatives, duly
authenticated evidence of their authority shall be produced, and may be required
to be deposited with the Issuer in its discretion. Upon any registration of
transfer, the Issuer shall deliver a new Warrant or Warrants to the persons
entitled thereto. The Warrants may be

                                      -68-
<PAGE>

exchanged at the option of the Holder thereof for another Warrant, or other
Warrants, of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of shares of Common Stock upon
surrender to the Issuer or its duly authorized agent. Notwithstanding the
foregoing, the Issuer shall have no obligation to cause Warrants to be
transferred on its books to any person if such transfer would violate the
Securities Act.

         (f)      Compliance with Securities Laws.

                  (i) The Holder of this Warrant, by acceptance hereof,
         acknowledges that neither this Warrant nor the shares of Warrant Stock
         to be issued upon exercise hereof have been registered under the
         Securities Act and have been offered and sold by the Issuer in reliance
         upon exemption from the registration provisions of the Securities Act
         and the Holder represents that such securities are being acquired
         solely for the Holder's own account and not as a nominee for any other
         party, and for investment, and that the Holder will not offer, sell or
         otherwise dispose of this Warrant or any shares of Warrant Stock to be
         issued upon exercise hereof except pursuant to an effective
         registration statement, or an exemption from registration, under the
         Securities Act and any applicable state securities laws.

                  (ii) Except as provided in paragraph (iii) below, this Warrant
         and all certificates representing shares of Warrant Stock issued upon
         exercise hereof shall be stamped or imprinted with a legend in
         substantially the following form:

                           THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
                  REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN
                  RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
                  AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
                  TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
                  ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
                  TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
                  THE SECURITIES ACT.

                  (iii) The restrictions imposed by this subsection (f) upon the
         transfer of this Warrant and the shares of Warrant Stock to be
         purchased upon exercise hereof shall terminate (A) when such securities
         shall have been effectively registered under the Securities Act, (B)
         upon the Issuer's receipt of an opinion of counsel, in form and
         substance reasonably satisfactory to the Issuer, addressed to the
         Issuer to the effect that such restrictions are no longer required to
         ensure compliance with the Securities Act or (C) upon the Issuer's
         receipt of other evidence reasonably satisfactory to the Issuer that
         such registration is not required. Whenever such restrictions shall
         cease and terminate as to any such securities, the Holder thereof shall
         be entitled to receive from the Issuer (or its transfer agent and
         registrar), without expense (other than applicable transfer taxes, if
         any), new Warrants (or, in the case of shares of Warrant Stock, new
         stock certificates) of like tenor not bearing the applicable legends
         required by paragraph (ii) above relating to the Securities Act and
         state securities laws.

         (g) Continuing Rights of Holder. The Issuer will, at the time of or at
any time after each exercise of this Warrant, upon the request of the Holder
hereof or of any shares of Warrant Stock issued upon such exercise, acknowledge
in writing the extent, if any, of its continuing obligation to afford to such
Holder all rights to which such Holder shall continue to be entitled after such
exercise in accordance with the terms of this Warrant, provided that if any such
Holder shall fail to make any such request, the failure shall not affect the
continuing obligation of the Issuer to afford such rights to such Holder.

         3.       Stock Fully Paid; Reservation and Listing of Shares;
Covenants.

         (a) Stock Fully Paid. The Issuer represents, warrants, covenants and
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this Warrant or otherwise hereunder will, upon issuance and payment in
accordance with the terms hereof, be duly authorized, validly issued, fully paid
and non-assessable and free from all taxes, liens and charges created by or
through Issuer. The Issuer further covenants and agrees that during the period
within which this Warrant may be exercised, the Issuer will at all times have
authorized and

                                      -69-
<PAGE>

reserved for the purpose of the issue upon exercise of this Warrant a sufficient
number of shares of Common Stock to provide for the exercise of this Warrant.

         (b) Payment of Taxes. The Issuer will pay all documentary stamp taxes,
if any, attributable to the issuance of Warrant Stock; provided, however, that
the Issuer shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issue or delivery of any certificates
for Warrant Stock in a name other than that of the Holder of Warrants in respect
of which such Warrant Stock is issued.

         (c) Reservation. If any shares of Common Stock required to be reserved
for issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. The transfer agent for the
Common Stock (the "Transfer Agent"), and every subsequent transfer agent, if
any, for the Warrant Stock will be irrevocably authorized and directed at all
times until the end of the Term to reserve such number of authorized and
unissued shares of Common Stock as shall be required for such purpose. The
Issuer will keep a copy of this Agreement on file with the Transfer Agent and
with every subsequent transfer agent for the Issuer's securities issuable upon
the exercise of the Warrants. The Issuer will supply the Transfer Agent or any
subsequent transfer agent with duly executed certificates for such purpose and
will itself provide or otherwise make available any cash which may be
distributable as provided in Section 6 of this Agreement. All Warrants
surrendered in the exercise of the rights thereby evidenced shall be canceled,
and such canceled Warrants shall constitute sufficient evidence of the number of
Shares that have been issued upon the exercise of such Warrants. No shares of
Common Stock shall be subject to reservation in respect of unexercised Warrants
subsequent to the end of the Term. If the Issuer shall list any shares of Common
Stock on any securities exchange or market it will, at its expense, list
thereon, maintain and increase when necessary such listing, of, all shares of
Warrant Stock from time to time issued upon exercise of this Warrant or as
otherwise provided hereunder, and, to the extent permissible under the
applicable securities exchange rules, all unissued shares of Warrant Stock which
are at any time issuable hereunder, so long as any shares of Common Stock shall
be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.

         (d) Covenants. The Issuer shall not by any action including, without
limitation, amending the certificate of incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will (i) not permit the par value, if any, of its
Common Stock to exceed the then effective Warrant Price, (ii) not amend or
modify any provision of the certificate of incorporation or by-laws of the
Issuer in any manner that would adversely affect in any way the powers,
preferences or relative participating, optional or other special rights of the
Common Stock or which would adversely affect the rights of the Holders of the
Warrants, (iii) take all such action as may be reasonably necessary in order
that the Issuer may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, claims, encumbrances and
restrictions (other than as provided herein) upon the exercise of this Warrant,
and (iv) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
reasonably necessary to enable the Issuer to perform its obligations under this
Warrant.

         (e) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.

         (f) Rights and Obligations under the Registration Rights Agreement.
This Warrant and the Warrant Stock are entitled to the benefits and subject to
the terms of the Registration Rights Agreement dated as of even date

                                      -70-
<PAGE>

herewith between the Issuer and the Holders listed on the signature pages
thereof (as amended from time to time, the "Registration Rights Agreement"). The
Issuer shall keep or cause to be kept a copy of the Registration Rights
Agreement, and any amendments thereto, at its principal executive office and
shall furnish, without charge, copies thereof to the Holder upon request.

         4. Adjustment of Warrant Price and Warrant Share Number. The number and
kind of Securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events as follows:

         (a)      Recapitalization, Reorganization, Reclassification,
                  Consolidation, Merger or Sale.
                  (i) In case the Issuer after the Original Issue Date shall do
         any of the following (each, a "Triggering Event"): (a) consolidate with
         or merge into any other Person and the Issuer shall not be the
         continuing or surviving corporation of such consolidation or merger, or
         (b) permit any other Person to consolidate with or merge into the
         Issuer and the Issuer shall be the continuing or surviving Person but,
         in connection with such consolidation or merger, any Capital Stock of
         the Issuer shall be changed into or exchanged for Securities of any
         other Person or cash or any other property, or (c) transfer all or
         substantially all of its properties or assets to any other Person, or
         (d) effect a capital reorganization or reclassification of its Capital
         Stock, then, and in the case of each such Triggering Event, proper
         provision shall be made so that, upon the basis and the terms and in
         the manner provided in this Warrant, the Holder of this Warrant shall
         be entitled, upon the exercise hereof at any time after the
         consummation of such Triggering Event, to the extent this Warrant is
         not exercised prior to such Triggering Event, or is redeemed in
         connection with such Triggering Event, to receive at the Warrant Price
         in effect at the time immediately prior to the consummation of such
         Triggering Event in lieu of the Common Stock issuable upon such
         exercise of this Warrant prior to such Triggering Event, the
         Securities, cash and property to which such Holder would have been
         entitled upon the consummation of such Triggering Event if such Holder
         had exercised the rights represented by this Warrant immediately prior
         thereto, subject to adjustments and increases (subsequent to such
         corporate action) as nearly equivalent as possible to the adjustments
         provided for in Section 4 hereof.

                  (ii) Notwithstanding anything contained in this Warrant to the
         contrary, the Issuer will not effect any Triggering Event unless, prior
         to the consummation thereof, each Person (other than the Issuer) which
         may be required to deliver any Securities, cash or property upon the
         exercise of this Warrant as provided herein shall assume, by written
         instrument delivered to, and reasonably satisfactory to, the Holder of
         this Warrant: (A) the obligations of the Issuer under this Warrant (and
         if the Issuer shall survive the consummation of such Triggering Event,
         such assumption shall be in addition to, and shall not release the
         Issuer from, any continuing obligations of the Issuer under this
         Warrant); and (B) the obligation to deliver to such Holder such shares
         of Securities, cash or property as, in accordance with the foregoing
         provisions of this subsection (a).

         (b) Subdivision or Combination of Shares. If the Issuer, at any time
while this Warrant is outstanding, shall subdivide or combine any shares of
Common Stock, (i) in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as at the effective date of such subdivision or, if the
Issuer shall take a record of Holders of its Common Stock for the purpose of so
subdividing, as at the applicable record date, whichever is earlier) to reflect
the increase in the total number of shares of Common Stock outstanding as a
result of such subdivision, or (ii) in the case of a combination of shares, the
Warrant Price shall be proportionately increased (as at the effective date of
such combination or, if the Issuer shall take a record of Holders of its Common
Stock for the purpose of so combining, as at the applicable record date,
whichever is earlier) to reflect the reduction in the total number of shares of
Common Stock outstanding as a result of such combination.

         (c) Certain Dividends and Distributions. If the Issuer, at any time
while this Warrant is outstanding, shall:

                  (i) Stock Dividends. Pay a dividend in, or make any other
         distribution to its stockholders (without consideration therefor) of,
         shares of Common Stock, the Warrant Price shall be adjusted, as at the
         date the Issuer shall take a record of the Holders of the Issuer's
         Capital Stock for the purpose of receiving such dividend or other
         distribution (or if no such record is taken, as at the date of such
         payment or other

                                      -71-
<PAGE>

         distribution), to that price determined by multiplying the Warrant
         Price in effect immediately prior to such record date (or if no such
         record is taken, then immediately prior to such payment or other
         distribution), by a fraction (1) the numerator of which shall be the
         total number of shares of Common Stock outstanding immediately prior to
         such dividend or distribution, and (2) the denominator of which shall
         be the total number of shares of Common Stock outstanding immediately
         after such dividend or distribution (plus in the event that the Issuer
         paid cash for fractional shares, the number of additional shares which
         would have been outstanding had the Issuer issued fractional shares in
         connection with said dividends); or

                  (ii) Other Dividends. Pay a dividend on, or make any
         distribution of its assets upon or with respect to (including, but not
         limited to, a distribution of its property as a dividend in liquidation
         or partial liquidation or by way of return of capital), the Common
         Stock (other than as described in clause (i) of this subsection (c)),
         or in the event that the Issuer shall offer options or rights to
         subscribe for shares of Common Stock, or issue any Common Stock
         Equivalents, to all of its holders of Common Stock, then on the record
         date for such payment, distribution or offer or, in the absence of a
         record date, on the date of such payment, distribution or offer, the
         Holder shall receive what the Holder would have received had it
         exercised this Warrant in full immediately prior to the record date of
         such payment, distribution or offer or, in the absence of a record
         date, immediately prior to the date of such payment, distribution or
         offer.

         (d) Issuance of Additional Shares of Common Stock. If the Issuer, at
any time while this Warrant is outstanding, shall issue any Additional Shares of
Common Stock (otherwise than as provided in the foregoing subsections (a)
through (c) of this Section 4), at a price per share less than the lower of (x)
the Warrant Price then in effect or (y) the Per Share Market Value then in
effect or without consideration, then the Warrant Price upon each such issuance
shall be adjusted to the price (rounded to the nearest cent) determined by
multiplying the Warrant Price then in effect by a fraction:

                  (i) the numerator of which shall be equal to the sum of (A)
         the number of shares of Common Stock outstanding immediately prior to
         the issuance of such Additional Shares of Common Stock plus (B) the
         number of shares of Common Stock (rounded to the nearest whole share)
         which the aggregate consideration for the total number of such
         Additional Shares of Common Stock so issued would purchase at a price
         per share equal to the greater of the Per Share Market Value then in
         effect and the Warrant Price then in effect; and

                  (ii) the denominator of which shall be equal to the number of
         shares of Common Stock outstanding immediately after the issuance of
         such Additional Shares of Common Stock.

The provisions of this subsection (d) shall not apply under any of the
circumstances for which an adjustment is provided in subsections (a), (b) or (c)
of this Section 4. No adjustment of the Warrant Price shall be made under this
subsection (d) upon the issuance of any Additional Shares of Common Stock which
are issued pursuant to any Common Stock Equivalent if upon the issuance of such
Common Stock Equivalent (x) any adjustment shall have been made pursuant to
subsection (e) of this Section 4 or (y) no adjustment was required pursuant to
subsection (e) of this Section 4. No adjustment of the Warrant Price shall be
made under this subsection (d) in an amount less than $.01 per share, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment, if any, which together with
any adjustments so carried forward shall amount to $.01 per share or more,
provided that upon any adjustment of the Warrant Price as a result of any
dividend or distribution payable in Common Stock or Convertible Securities or
the reclassification, subdivision or combination of Common Stock into a greater
or smaller number of shares, the foregoing figure of $.01 per share (or such
figure as last adjusted) shall be adjusted (to the nearest one-half cent) in
proportion to the adjustment in the Warrant Price.

         (e) Issuance of Common Stock Equivalents. If the Issuer, at any time
while this Warrant is outstanding, shall issue any Common Stock Equivalent and
the price per share for which Additional Shares of Common Stock may be issuable
thereafter pursuant to such Common Stock Equivalent shall be less than the lower
of (w) the Warrant Price then in effect or (x) the Per Share Market Value then
in effect, or if, after any such issuance of Common Stock Equivalents, the price
per share for which Additional Shares of Common Stock may be issuable thereafter
is amended or adjusted, and such price as so amended shall be less than the
lower of (y) the Warrant Price or (z) the Per Share Market Value in effect at
the time of such amendment, then the Warrant Price upon each such issuance or
amendment shall be adjusted as provided in the first sentence of subsection (d)
of this Section 4 on the

                                      -72-
<PAGE>

basis that (1) the maximum number of Additional Shares of Common Stock issuable
pursuant to all such Common Stock Equivalents shall be deemed to have been
issued (whether or not such Common Stock Equivalents are actually then
exercisable, convertible or exchangeable in whole or in part) as of the earlier
of (A) the date on which the Issuer shall enter into a firm contract for the
issuance of such Common Stock Equivalent, or (B) the date of actual issuance of
such Common Stock Equivalent, and (2) the aggregate consideration for such
maximum number of Additional Shares of Common Stock shall be deemed to be the
minimum consideration received or receivable by the Issuer for the issuance of
such Additional Shares of Common Stock pursuant to such Common Stock Equivalent.
No adjustment of the Warrant Price shall be made under this subsection (e) upon
the issuance of any Convertible Security which is issued pursuant to the
exercise of any warrants or other subscription or purchase rights therefor, if
any adjustment shall previously have been made in the Warrant Price then in
effect upon the issuance of such warrants or other rights pursuant to this
subsection (e). If no adjustment is required under this subsection (e) upon
issuance of any Common Stock Equivalent or once an adjustment is made under this
subsection (e) based upon the Per Share Market Value in effect on the date of
such adjustment, no further adjustment shall be made under this subsection (e)
based solely upon a change in the Per Share Market Value after such date.

         (f) Purchase of Common Stock by the Issuer. If the Issuer at any time
while this Warrant is outstanding shall, directly or indirectly through a
Subsidiary or otherwise, purchase, redeem or otherwise acquire any shares of
Common Stock at a price per share greater than the Per Share Market Value then
in effect, then the Warrant Price upon each such purchase, redemption or
acquisition shall be adjusted to that price determined by multiplying such
Warrant Price by a fraction (i) the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such purchase,
redemption or acquisition minus the number of shares of Common Stock which the
aggregate consideration for the total number of such shares of Common Stock so
purchased, redeemed or acquired would purchase at the Per Share Market Value;
and (ii) the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such purchase, redemption or acquisition. For the
purposes of this subsection (f), the date as of which the Per Share Market Value
shall be computed shall be the earlier of (x) the date on which the Issuer shall
enter into a firm contract for the purchase, redemption or acquisition of such
Common Stock, or (y) the date of actual purchase, redemption or acquisition of
such Common Stock. For the purposes of this subsection (f), a purchase,
redemption or acquisition of a Common Stock Equivalent shall be deemed to be a
purchase of the underlying Common Stock, and the computation herein required
shall be made on the basis of the full exercise, conversion or exchange of such
Common Stock Equivalent on the date as of which such computation is required
hereby to be made, whether or not such Common Stock Equivalent is actually
exercisable, convertible or exchangeable on such date.

         (g) Other Provisions Applicable to Adjustments Under this Section 4.
The following provisions shall be applicable to the making of adjustments in the
Warrant Price hereinbefore provided in Section 4:

                  (i) Computation of Consideration. The consideration received
         by the Issuer shall be deemed to be the following: to the extent that
         any Additional Shares of Common Stock or any Common Stock Equivalents
         shall be issued for a cash consideration, the consideration received by
         the Issuer therefor, or if such Additional Shares of Common Stock or
         Common Stock Equivalents are offered by the Issuer for subscription,
         the subscription price, or, if such Additional Shares of Common Stock
         or Common Stock Equivalents are sold to underwriters or dealers for
         public offering without a subscription offering, the public offering
         price, in any such case excluding any amounts paid or receivable for
         accrued interest or accrued dividends and without deduction of any
         compensation, discounts, commissions, or expenses paid or incurred by
         the Issuer for or in connection with the underwriting thereof or
         otherwise in connection with the issue thereof; to the extent that such
         issuance shall be for a consideration other than cash, then, except as
         herein otherwise expressly provided, the fair market value of such
         consideration at the, time of such issuance as determined in good faith
         by the Board. The consideration for any Additional Shares of Common
         Stock issuable pursuant to any Common Stock Equivalents shall be the
         consideration received by the Issuer for issuing such Common Stock
         Equivalents, plus the additional consideration payable to the Issuer
         upon the exercise, conversion or exchange of such Common Stock
         Equivalents. In case of the issuance at any time of any Additional
         Shares of Common Stock or Common Stock Equivalents in payment or
         satisfaction of any dividend upon any class of Capital Stock of the
         Issuer other than Common Stock, the Issuer shall be deemed to have
         received for such Additional Shares of Common Stock or Common Stock
         Equivalents a consideration equal to the amount of such dividend so
         paid or satisfied. In any case in which the consideration to be
         received or paid shall be other than cash, the Board shall notify the
         Holder of this

                                      -73-
<PAGE>

         Warrant of its determination of the fair market value of such
         consideration prior to payment or accepting receipt thereof. If, within
         thirty days after receipt of said notice, the Majority Holders shall
         notify the Board in writing of their objection to such determination, a
         determination of the fair market value of such consideration shall be
         made by an Independent Appraiser selected by the Majority Holders with
         the approval of the Board (which approval shall not be unreasonably
         withheld), whose fees and expenses shall be paid by the Issuer.

                  (ii) Readjustment of Warrant Price. Upon the expiration or
         termination of the right to convert, exchange or exercise any Common
         Stock Equivalent the issuance of which effected an adjustment in the
         Warrant Price, if such Common Stock Equivalent shall not have been
         converted, exercised or exchanged in its entirety, the number of shares
         of Common Stock deemed to be issued and outstanding by reason of the
         fact that they were issuable upon conversion, exchange or exercise of
         any such Common Stock Equivalent shall no longer be computed as set
         forth above, and the Warrant Price shall forthwith be readjusted and
         thereafter be the price which it would have been (but reflecting any
         other adjustments in the Warrant Price made pursuant to the provisions
         of this Section 4 after the issuance of such Common Stock Equivalent)
         had the adjustment of the Warrant Price been made in accordance with
         the issuance or sale of the number of Additional Shares of Common Stock
         actually issued upon conversion, exchange or issuance of such Common
         Stock Equivalent and thereupon only the number of Additional Shares of
         Common Stock actually so issued shall be deemed to have been issued and
         only the consideration actually received by the Issuer (computed as in
         clause (i) of this subsection (g)) shall be deemed to have been
         received by the Issuer.

                  (iii) Outstanding Common Stock. The number of shares of Common
         Stock at any time outstanding shall (A) not include any shares thereof
         then directly or indirectly owned or held by or for the account of the
         Issuer or any of its Subsidiaries, and (B) be deemed to include all
         shares of Common Stock then issuable upon conversion, exercise or
         exchange of any then outstanding Common Stock Equivalents or any other
         evidences of indebtedness, shares of Capital Stock (including, without
         limitation, the Preferred Stock) or other Securities which are or may
         be at any time convertible into or exchangeable for shares of Common
         Stock or Other Common Stock.

         (h) Adjustment of Warrant Share Number. Upon each adjustment in the
Warrant Price pursuant to any of the foregoing provisions of this Section 4, the
Warrant Share Number shall be adjusted, to the nearest one hundredth of a whole
share, to the product obtained by multiplying the Warrant Share Number
immediately prior to such adjustment in the Warrant Price by a fraction, the
numerator of which shall be the Warrant Price immediately before giving effect
to such adjustment and the denominator of which shall be the Warrant Price
immediately after giving effect to such adjustment. If the Issuer shall be in
default under any provision contained in Section 3 of this Warrant so that
shares issued at the Warrant Price adjusted in accordance with this Section 4
would not be validly issued, the adjustment of the Warrant Share Number provided
for in the foregoing sentence shall nonetheless be made and the Holder of this
Warrant shall be entitled to purchase such greater number of shares at the
lowest price at which such shares may then be validly issued under applicable
law. Such exercise shall not constitute a waiver of any claim arising against
the Issuer by reason of its default under Section 3 of this Warrant.

         (i) Form of Warrant after Adjustments. The form of this Warrant need
not be changed because of any adjustments in the Warrant Price or the number and
kind of Securities purchasable upon the exercise of this Warrant.

         5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the "big five" selected by the Holder,
provided that the Issuer shall have ten days after receipt of notice from such
Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection.

                                      -74-
<PAGE>

The firm selected by the Holder of this Warrant as provided in the preceding
sentence shall be instructed to deliver a written opinion as to such matters to
the Issuer and such Holder within thirty days after submission to it of such
dispute. Such opinion shall be final and binding on the parties hereto. The fees
and expenses of such accounting firm shall be paid by the Issuer.

         6. Fractional Shares. No fractional shares of Warrant Stock will be
issued in connection with and exercise hereof, but in lieu of such fractional
shares, the Issuer shall make a cash payment therefor equal in amount to the
product of the applicable fraction multiplied by the Per Share Market Value then
in effect.

         7.       Definitions.  For the purposes of this Warrant, the
following terms have the following meanings:

                  "Additional Shares of Common Stock" means all shares of Common
         Stock issued by the Issuer after the Original Issue Date, and all
         shares of Other Common, if any, issued by the Issuer after the Original
         Issue Date, except: (i) Warrant Stock; (ii) any shares of Common Stock
         issuable upon conversion of the Preferred Stock pursuant to the
         Preferred Stock Certificate of Designation; (iii) any shares of Common
         Stock issuable pursuant to or in connection with exercise of (A) any
         Convertible Security or (B) any other Common Stock Equivalent,
         outstanding on the date hereof; (iv) any shares of Common Stock
         issuable pursuant to or in connection with any business acquisitions,
         mergers, consolidations or other corporate combinations or transactions
         heretofore or hereafter undertaken by the Issuer in which the Issuer is
         the surviving entity (including, without limitation, shares issuable
         under Common Stock Equivalents that may be issued pursuant to or in
         connection with any of the foregoing transactions); (v) any shares of
         Common Stock issuable pursuant to or in connection with any stock
         option or other similar plan of the Issuer pursuant to which the Issuer
         issues Common Stock to its officers, directors and employees; and (vi)
         any shares of Common Stock issued in an underwritten public offering of
         securities by the Issuer.

                  "Board" shall mean the Board of Directors of the Issuer.

                  "Capital Stock" means and includes (i) any and all shares,
         interests, participations or other equivalents of or interests in
         (however designated) corporate stock, including, without limitation,
         shares of preferred or preference stock, (ii) all partnership interests
         (whether general or limited) in any Person which is a partnership,
         (iii) all membership interests or limited liability company interests
         in any limited liability company, and (iv) all equity or ownership
         interests in any Person of any other type.

                  "Common Stock" means the Common Stock, $0.01 par value, of the
         Issuer and any other Capital Stock into which such stock may hereafter
         be changed.

                  "Common Stock Equivalent" means any Convertible Security or
         warrant, option or other right to subscribe for or purchase any
         Additional Shares of Common Stock or any Convertible Security.

                  "Convertible Securities" means evidences of indebtedness,
         shares of Capital Stock or other Securities which are or may be at any
         time convertible into or exchangeable for Additional Shares of Common
         Stock. The term "Convertible Security" means one of the Convertible
         Securities.

                  "Governmental Authority" means any governmental, regulatory or
         self-regulatory entity, department, body, official, authority,
         commission, board, agency or instrumentality, whether federal, state or
         local, and whether domestic or foreign.

                  "Holders" mean the Persons who shall from time to time own any
         Warrant. The term "Holder" means one of the Holders.

                  "Independent Appraiser" means a nationally recognized or major
         regional investment banking firm or firm of independent certified
         public accountants of recognized standing (which may be the firm that
         regularly examines the financial statements of the Issuer) that is
         regularly engaged in the business of appraising the Capital Stock or
         assets of corporations or other entities as going concerns, and which
         is not affiliated with either the Issuer or the Holder of any Warrant.

                                      -75-
<PAGE>

                  "Issuer" means Xceed, Inc., a Delaware corporation, and its
         successors.

                  "Majority Holders" means at any time the Holders of Warrants
         exercisable for a majority of the shares of Warrant Stock issuable
         under the Warrants at the time outstanding.

                  "NASDAQ" means the National Association of Securities Dealers
         Automated Quotation System.

                  "Original Issue Date" means January 13, 2000.

                  "Other Common" means any other Capital Stock of the Issuer of
         any class which shall be authorized at any time after the date of this
         Warrant (other than Common Stock) and which shall have the right to
         participate in the distribution of earnings and assets of the Issuer
         without limitation as to amount.

                  "Person" means an individual, corporation, limited liability
         company, partnership, joint stock company, trust, unincorporated
         organization, joint venture, Governmental Authority or other entity of
         whatever nature.

                  "Per Share Market Value" means on any particular date (a) the
         closing price per share of the Common Stock on such date on the Nasdaq
         National Market, The Nasdaq SmallCap Market or other registered
         national stock exchange on which the Common Stock is then listed or if
         there is no such price on such date, then the closing price on such
         exchange or quotation system on the date nearest preceding such date,
         or (b) if the Common Stock is not listed then on the Nasdaq National
         Market, The Nasdaq SmallCap Market or any registered national stock
         exchange, the closing price for a share of Common Stock in the
         over-the-counter market, as reported by NASDAQ or in the National
         Quotation Bureau Incorporated or similar organization or agency
         succeeding to its functions of reporting prices) at the close of
         business on such date, or (c) if the Common Stock is not then reported
         by the National Quotation Bureau Incorporated (or similar organization
         or agency succeeding to its functions of reporting prices), then the
         average of the "Pink Sheet" quotes for the relevant conversion period,
         as determined in good faith by the holder, or (d) if the Common Stock
         is not then publicly traded the fair market value of a share of Common
         Stock as determined by an Independent Appraiser selected in good faith
         by the Majority Holders; provided, however, that the Issuer, after
         receipt of the determination by such Independent Appraiser, shall have
         the right to select an additional Independent Appraiser, in which case,
         the fair market value shall be equal to the average of the
         determinations by each such Independent Appraiser; and provided,
         further that all determinations of the Per Share Market Value shall be
         appropriately adjusted for any stock dividends, stock splits or other
         similar transactions during such period. The determination of fair
         market value by an Independent Appraiser shall be based upon the fair
         market value of the Issuer determined on a going concern basis as
         between a willing buyer and a willing seller and taking into account
         all relevant factors determinative of value, and shall be final and
         binding on all parties. In determining the fair market value of any
         shares of Common Stock, no consideration shall be given to any
         restrictions on transfer of the Common Stock imposed by agreement or by
         federal or state securities laws, or to the existence or absence of, or
         any limitations on, voting rights.

                  "Preferred Stock" means the Issuer's Series A Cumulative
         Convertible Preferred Stock, $0.05 par value and stated value $1,000
         per share.

                  "Preferred Stock Certificate of Designation" means the
         Certificate of Designation, Powers, Preferences and Rights of the
         Preferred Stock adopted by the Board on January 13, 2000.

                  "Registration Rights Agreement" has the meaning specified in
         Section 3(f) hereof.

                  "Securities" means any debt or equity securities of the
         Issuer, whether now or hereafter authorized, any instrument convertible
         into or exchangeable for Securities or a Security, and any option,
         warrant or other right to purchase or acquire any Security. "Security"
         means one of the Securities.

                  "Securities Act" means the Securities Act of 1933, as amended,
         or any similar federal statute then in effect.

                                      -76-
<PAGE>

                  "Subsidiary" means any corporation at least 50% of whose
         outstanding Voting Stock shall at the time be owned directly or
         indirectly by the Issuer or by one or more of its Subsidiaries, or by
         the Issuer and one or more of its Subsidiaries.

                  "Trading Day" means (a) a day on which the Common Stock is
         traded on the Nasdaq National Market, The Nasdaq SmallCap Market or
         other registered national stock exchange on which the Common Stock has
         been listed, or (b) if the Common Stock is not listed on the Nasdaq
         National Market, The Nasdaq SmallCap Market or any registered national
         stock exchange, a day or which the Common Stock is traded in the
         over-the-counter market, as reported by the OTC Bulletin Board, or (c)
         if the Common Stock is not quoted on the OTC Bulletin Board, a day on
         which the Common Stock is quoted in the over-the-counter market as
         reported by the National Quotation Bureau Incorporated (or any similar
         organization or agency succeeding its functions of reporting prices);
         provided, however, that in the event that the Common Stock is not
         listed or quoted as set forth in (a), (b) and (c) hereof, then Trading
         Day shall mean any day except Saturday, Sunday and any day which shall
         be a legal holiday or a day on which banking institutions in the State
         of New York are authorized or required by law or other government
         action to close.

                  "Term" has the meaning specified in Section 1 hereof.

                  "Voting Stock", as applied to the Capital Stock of any
         corporation, means Capital Stock of any class or classes (however
         designated) having ordinary voting power for the election of a majority
         of the members of the Board of Directors (or other governing body) of
         such corporation, other than Capital Stock having such power only by
         reason of the happening of a contingency.

                  "Warrants" means the Warrants issued and sold pursuant to the
         Subscription Agreement, dated January 13, 2000, including, without
         limitation, this Warrant, and any other warrants of like tenor issued
         in substitution or exchange for any thereof pursuant to the provisions
         of Section 2(c), 2(d) or 2(e) hereof or of any of such other Warrants.

                  "Warrant Price" means $50.10, as such price may be adjusted
         from time to time as shall result from the adjustments specified in
         Section 4 hereof.

                  "Warrant Share Number" means at any time the aggregate number
         of shares of Warrant Stock which may at such time be purchased upon
         exercise of this Warrant, after giving effect to all prior adjustments
         and increases to such number made or required to be made under the
         terms hereof.

                  "Warrant Stock" means Common Stock issuable upon exercise of
         any Warrant or Warrants or otherwise issuable pursuant to any Warrant
         or Warrants.

         8.       Other Notices.  In case at any time:

                                    (A)     the Issuer shall make any
                                            distributions  to the  holders
                                            of Common Stock; or

                                    (B)     the Issuer shall authorize the
                                            granting to all holders of its
                                            Common Stock of rights to subscribe
                                            for or purchase any shares of
                                            Capital Stock of any class or of any
                                            Common Stock Equivalents or
                                            Convertible Securities or other
                                            rights; or

                                    (C)     there shall be any reclassification
                                            of the Capital Stock of the Issuer;
                                            or

                                    (D)     there shall be any capital
                                            reorganization by the Issuer; or

                                    (E)     there shall be any (i) consolidation
                                            or merger involving the Issuer or
                                            (ii) sale, transfer or other
                                            disposition of all or substantially
                                            all of the Issuer's property, assets
                                            or business (except a merger or
                                            other

                                      -77-
<PAGE>

                                            reorganization in which the
                                            Issuer shall be the surviving
                                            corporation and its shares of
                                            Capital Stock shall continue to be
                                            outstanding and except a
                                            consolidation, merger, sale,
                                            transfer or other disposition
                                            involving a wholly-owned
                                            Subsidiary); or

                                    (F)     there shall be a voluntary or
                                            involuntary dissolution, liquidation
                                            or winding-up of the Issuer or any
                                            partial liquidation of the Issuer or
                                            distribution to holders of Common
                                            Stock;

then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
days prior to the action in question and not less than twenty days prior to the
record date or the date on which the Issuer's transfer books are closed in
respect thereto. The Issuer shall give to the Holder notice of all meetings and
actions by written consent of its stockholders, at the same time in the same
manner as notice of any meetings of stockholders is required to be given to
stockholders who do not waive such notice (or, if such requires no notice, then
two Trading Days written notice thereof describing the matters upon which action
is to be taken). The Holder shall have the right to send two representatives
selected by it to each meeting, who shall be permitted to attend, but not vote
at, such meeting and any adjournments thereof. This Warrant entitles the Holder
to receive copies of all financial and other information distributed or required
to be distributed to the holders of the Common Stock.

         9. Amendment and Waiver. Any term, covenant, agreement or condition in
this Warrant may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by the
Issuer and the Majority Holders; provided, however, that no such amendment or
waiver shall reduce the Warrant Share number, increase the Warrant Price,
shorten the period during which this Warrant may be exercised or modify any
provision of this Section 9 without the consent of the Holder of this Warrant.

         10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.

         11. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., New York City time, on
a Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m., New York City time, on any
date and earlier than 11:59 p.m., New York City time, on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:

                  Xceed, Inc.
                  488 Madison Avenue
                  New York, New York 10022
                  Attention: Werner Haase
                  Facsimile No.: (212) 758-4385

                                      -78-
<PAGE>

or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Holder shall be sent to Stroock &
Stroock & Lavan LLP, 180 Maiden Lane, New York New, York 10038-4982, Attention:
James R. Tanenbaum, facsimile no.: (212) 806-6006. Copies of notices to the
Issuer shall be sent to Akin, Gump, Strauss, Hauer & Feld, LLP, Attention:
Victoria A. Baylin, facsimile no.: (202) 887-4288.

         12. Warrant Agent. The Issuer may, by written notice to each Holder of
this Warrant, appoint an agent having an office in New York, New York for the
purpose of issuing shares of Warrant Stock on the exercise of this Warrant
pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant pursuant
to subsection (d) of Section 2 hereof or replacing this Warrant pursuant to
subsection (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such agent.

         13. Remedies. The Issuer stipulates that the remedies at law of the
Holder of this Warrant in the event of any default or threatened default by the
Issuer in the performance of or compliance with any of the terms of this Warrant
are not and will not be adequate and that, to the fullest extent permitted by
law, such terms may be specifically enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.

         14. Successors and Assigns. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors and
assigns of the Issuer, the Holder hereof and (to the extent provided herein) the
Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any
such Holder or Holder of Warrant Stock.

         15. Modification and Severability. If, in any action before any court
or agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.

         16. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

         [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                      -79-
<PAGE>

         IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day
and year first above written.

                                   XCEED, INC.

                                   By:__________________________
                                      Name:  Werner Haase
                                      Title:    Chief Executive Officer

<PAGE>

                             SUBSCRIPTION AGREEMENT
                  (To be signed only upon exercise of Warrant)

To XCEED, INC.:

         The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, (3) shares of Common Stock of XCEED, INC. and herewith (a)
makes payment of $ therefor, or (b) exercises Warrants with a Per Share Market
Value of $         . The undersigned requests that the certificates for such
shares be issued in the name of, and delivered to,            , whose address is
                                                        .

Dated: ____________, 20__    __________________________________________
                             (Signature must conform in all respects to name of
                             holder as specified on the face of the Warrant)

                              _________________________________________
                              (Address)

----------------
(3) Insert here the number of shares called for on the face of the Warrant (or,
in the case of a partial exercise, the portion thereof as to which the Warrant
is being exercised), in either case without making any adjustment for additional
Common Stock or any other stock or other securities or property or cash which,
pursuant to the adjustment provisions of the Warrant, may be deliverable upon
exercise.

<PAGE>

                                   ASSIGNMENT
                  (To be signed only upon transfer of Warrant)

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

Name of Assignee             Address             No. of Shares

Dated: __________, 20__                 _______________________________________
                                        (Signature must conform in all respects
                                        to name of holder as specified on the
                                        face of the Warrant)

                                        _______________________________________
                                             (Address)

Signed in the presence of:

_____________________________

                                       2

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