Document:

<PAGE>

                                                                   EXHIBIT 10.37

                             APPLIED MATERIALS, INC.
                           1995 EQUITY INCENTIVE PLAN
                   (SHOWING CHANGES THROUGH DECEMBER 31, 2003)

         APPLIED MATERIALS, INC., having adopted the Applied Materials, Inc.
1995 Equity Incentive Plan (the "Plan") effective as of December 7, 1994, and
having amended and restated the Plan most recently effective as of August 1,
2001, hereby again amends and restates the Plan in its entirety, effective as of
April 16, 2002, as follows:

                                   SECTION 1
                             BACKGROUND AND PURPOSE

         1.1      Background. The Plan permits the grant of Nonqualified Stock
Options, Incentive Stock Options, SARs, Restricted Stock, Performance Units, and
Performance Shares.

         1.2      Purpose of the Plan. The Plan is intended to attract,
motivate, and retain (a) employees of the Company and its Affiliates, (b)
consultants who provide significant services to the Company and its Affiliates,
and (c) directors of the Company who are employees of neither the Company nor
any Affiliate. The Plan also is designed to encourage stock ownership by
Participants, thereby aligning their interests with those of the Company's
shareholders.

                                    SECTION 2
                                   DEFINITIONS

         The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context:

         2.1      "1934 Act" means the Securities Exchange Act of 1934, as
amended. Reference to a specific section of the 1934 Act or regulation
thereunder shall include such section or regulation, any valid regulation
promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such section or
regulation.

         2.2      "Affiliate" means any corporation or any other entity
(including, but not limited to, partnerships and joint ventures) controlling,
controlled by, or under common control with the Company.

         2.3      "Affiliated SAR" means an SAR that is granted in connection
with a related Option, and which automatically will be deemed to be exercised at
the same time that the related Option is exercised.

         2.4      "Annual Revenue" means the Company's or a business unit's net
sales for the Fiscal Year, determined in accordance with generally accepted
accounting principles; provided, however, that prior to the Fiscal Year, the
Committee shall determine whether any significant item(s) shall be excluded or
included from the calculation of Annual Revenue with respect to one or more
Participants.

<PAGE>

         2.5      "Award" means, individually or collectively, a grant under the
Plan of Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted
Stock, Performance Units, or Performance Shares.

         2.6      "Award Agreement" means the written agreement setting forth
the terms and provisions applicable to each Award granted under the Plan.

         2.7      "Board" or "Board of Directors" means the Board of Directors
of the Company.

         2.8      "Code" means the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.

         2.9      "Committee" means the committee appointed by the Board
(pursuant to Section 3.1) to administer the Plan.

         2.10     "Company" means Applied Materials, Inc. , a Delaware
corporation, or any successor thereto. With respect to the definitions of the
Performance Goals, the Committee may determine that "Company" means Applied
Materials, Inc. and its consolidated subsidiaries.

         2.11     "Consultant" means any consultant, independent contractor, or
other person who provides significant services to the Company or its Affiliates,
but who is neither an Employee nor a Director.

         2.12     "Controllable Profits" means as to any Fiscal Year, a business
unit's Annual Revenue minus (a) cost of sales, (b) research, development, and
engineering expense, (c) marketing and sales expense, (d) general and
administrative expense, (e) extended receivables expense, and (f) shipping
requirement deviation expense.

         2.13     "Customer Satisfaction MBOs" means as to any Participant, the
objective and measurable individual goals set by a "management by objectives"
process and approved by the Committee, which goals relate to the satisfaction of
external or internal customer requirements.

         2.14     "Director" means any individual who is a member of the Board
of Directors of the Company.

         2.15     "Disability" means a permanent and total disability within the
meaning of Section 22(e)(3) of the Code, provided that in the case of Awards
other than Incentive Stock Options, the Committee in its discretion may
determine whether a permanent and total disability exists in accordance with
uniform and non-discriminatory standards adopted by the Committee from time to
time.

         2.16     "Earnings Per Share" means as to any Fiscal Year, the
Company's Net Income or a business unit's Pro Forma Net Income, divided by a
weighted average number of common shares outstanding and dilutive common
equivalent shares deemed outstanding.

                                       2

<PAGE>

         2.17     "Employee" means any employee of the Company or of an
Affiliate, whether such employee is so employed at the time the Plan is adopted
or becomes so employed subsequent to the adoption of the Plan.

         2.18     "Exercise Price" means the price at which a Share may be
purchased by a Participant pursuant to the exercise of an Option.

         2.19     "Fair Market Value" means the last quoted per share selling
price for Shares on the relevant date, or if there were no sales on such date,
the arithmetic mean of the highest and lowest quoted selling prices on the
nearest day before and the nearest day after the relevant date, as determined by
the Committee. Notwithstanding the preceding, for federal, state, and local
income tax reporting purposes, fair market value shall be determined by the
Committee (or its delegate) in accordance with uniform and nondiscriminatory
standards adopted by it from time to time.

         2.20     "Fiscal Year" means the fiscal year of the Company.

         2.21     "Freestanding SAR" means a SAR that is granted independently
of any Option.

         2.22     "Grant Date" means, with respect to an Award, the date that
the Award was granted.

         2.23     "Incentive Stock Option" means an Option to purchase Shares
which is designated as an Incentive Stock Option and is intended to meet the
requirements of Section 422 of the Code.

         2.24     "Individual MBOs" means as to a Participant, the objective and
measurable goals set by a "management by objectives" process and approved by the
Committee (in its discretion).

         2.25     "Net Income" means as to any Fiscal Year, the income after
taxes of the Company for the Fiscal Year determined in accordance with generally
accepted accounting principles, provided that prior to the Fiscal Year, the
Committee shall determine whether any significant item(s) shall be included or
excluded from the calculation of Net Income with respect to one or more
Participants.

         2.26    "New Orders" means as to any Fiscal Year, the firm orders for a
system, product, part, or service that are being recorded for the first time as
defined in the Company's Order Recognition Policy.

         2.27     "Nonemployee Director" means a Director who is an employee of
neither the Company nor of any Affiliate.

         2.28     "Nonqualified Stock Option" means an option to purchase Shares
which is not intended to be an Incentive Stock Option.

         2.29     "Option" means an Incentive Stock Option or a Nonqualified
Stock Option.

         2.30     "Participant" means an Employee, Consultant, or Nonemployee
Director who has an outstanding Award.

         2.31     "Performance Goals" means the goal(s) (or combined goal(s))
determined by the Committee (in its discretion) to be applicable to a
Participant with respect to an Award. As determined by the Committee, the
Performance Goals applicable to an Award may provide for a

                                       3

<PAGE>

targeted level or levels of achievement using one or more of the following
measures: (a) Annual Revenue, (b) Controllable Profits, (c) Customer
Satisfaction MBOs, (d) Earnings Per Share, (e) Individual MBOs, (f) Net Income,
(g) New Orders, (h) Pro Forma Net Income, (i) Return on Designated Assets, and
(j) Return on Sales. The Performance Goals may differ from Participant to
Participant and from Award to Award.

         2.32     "Performance Share" means an Award granted to a Participant
pursuant to Section 8.

         2.33     "Performance Unit" means an Award granted to a Participant
pursuant to Section 8.

         2.34     "Period of Restriction" means the period during which the
transfer of Shares of Restricted Stock are subject to restrictions and
therefore, the Shares are subject to a substantial risk of forfeiture. As
provided in Section 7, such restrictions may be based on the passage of time,
the achievement of target levels of performance, or the occurrence of other
events as determined by the Committee, in its discretion. Notwithstanding any
contrary provision of the Plan, each Period of Restriction shall have a duration
of not less than three years from the Grant Date unless otherwise approved by
the holders of a majority of the Shares which are present in person or by proxy
and entitled to vote at any Annual or Special Meeting of Stockholders, or unless
approved by the Committee at its discretion solely by reason of death,
Disability, Retirement or major capital change.

         2.35    "Plan" means the Applied Materials, Inc. 1995 Equity Incentive
Plan, as set forth in this instrument and as hereafter amended from time to
time.

         2.36     "Pro Forma Net Income" means as to any business unit for any
Fiscal Year, the Controllable Profits of such business unit, minus allocations
of designated corporate expenses.

         2.37     "Restricted Stock" means an Award granted to a Participant
pursuant to Section 7.

         2.38     "Retirement" means, in the case of an Employee or a
Nonemployee Director: (a) a Termination of Service occurring on or after age
sixty-five (65), or (b) a Termination of Service occurring on or after age sixty
(60) with at least ten (10) Years of Service. Notwithstanding the preceding, in
the case of any Option granted to any Employee prior to December 10, 1998,
"Retirement" means a Termination of Service by reason of the Employee's
retirement at or after his or her normal retirement date under the Applied
Materials, Inc. Employee Savings and Retirement Plan, or any successor plan.
With respect to a Consultant, no Termination of Service shall be deemed to be on
account of "Retirement."

         2.39     "Return on Designated Assets" means as to any Fiscal Year, the
Pro Forma Net Income of a business unit, divided by the average of beginning and
ending business unit designated assets, or Net Income of the Company, divided by
the average of beginning and ending designated corporate assets.

         2.40     "Return on Sales" means as to any Fiscal Year, the percentage
equal to the Company's Net Income or the business unit's Pro Forma Net Income,
divided by the Company's or the business unit's Annual Revenue.

         2.41     "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act,
and any future regulation amending, supplementing or superseding such
regulation.

                                       4

<PAGE>

         2.42     "Section 16 Person" means a person who, with respect to the
Shares, is subject to Section 16 of the 1934 Act.

         2.43     "Shares" means the shares of common stock of the Company.

         2.44     "Stock Appreciation Right" or "SAR" means an Award, granted
alone or in connection with a related Option, that pursuant to Section 7 is
designated as an SAR.

         2.45     "Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.

         2.46     "Tandem SAR" means an SAR that is granted in connection with a
related Option, the exercise of which shall require forfeiture of the right to
purchase an equal number of Shares under the related Option (and when a Share is
purchased under the Option, the SAR shall be canceled to the same extent).

         2.47     "Termination of Service" means (a) in the case of an Employee,
a cessation of the employee-employer relationship between the Employee and the
Company or an Affiliate for any reason, including, but not by way of limitation,
a termination by resignation, discharge, death, Disability, Retirement, or the
disaffiliation of an Affiliate, but excluding any such termination where there
is a simultaneous reemployment by the Company or an Affiliate; (b) in the case
of a Consultant, a cessation of the service relationship between the Consultant
and the Company or an Affiliate for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, Disability, or the
disaffiliation of an Affiliate, but excluding any such termination where there
is a simultaneous re-engagement of the consultant by the Company or an
Affiliate; and (c) in the case of a Nonemployee Director, a cessation of the
Director's service on the Board for any reason, including, but not by way of
limitation, a termination by resignation, death, Disability, Retirement or
non-reelection to the Board.

         2.48     "Years of Service" means, in the case of an Employee, the
number of full months from the Employee's latest hire date with the Company or
an Affiliate to the date in question, divided by 12. The Employee's latest hire
date shall be determined after giving effect to the non-401(k) Plan principles
of North American Human Resources Policy No. 2-06, Re-Employment of Former
Employees/Bridging of Service, as such Policy may be amended or superseded from
time to time. With respect to a Nonemployee Director, "Years of Service" means
the number of years of continuous service on the Board of Directors.

                                    SECTION 3
                                 ADMINISTRATION

         3.1      The Committee. The Plan shall be administered by the
Committee. The Committee shall consist of not less than two (2) Directors who
shall be appointed from time to time by, and shall serve at the pleasure of, the
Board of Directors. The Committee shall be comprised solely of Directors who
both are (a) "non-employee directors" under Rule 16b-3, and (b) "outside
directors" under Section 162(m) of the Code.

                                       5

<PAGE>

         3.2      Authority of the Committee. It shall be the duty of the
Committee to administer the Plan in accordance with the Plan's provisions. The
Committee shall have all powers and discretion necessary or appropriate to
administer the Plan and to control its operation, including, but not limited to,
the power to (a) determine which Employees and Consultants shall be granted
Awards, (b) prescribe the terms and conditions of the Awards, (c) interpret the
Plan and the Awards, (d) adopt such procedures and subplans as are necessary or
appropriate to permit participation in the Plan by Employees, Consultants and
Directors who are foreign nationals or employed outside of the United States,
(e) adopt rules for the administration, interpretation and application of the
Plan as are consistent therewith, and (f) interpret, amend or revoke any such
rules.

         3.3      Delegation by the Committee. The Committee, in its sole
discretion and on such terms and conditions as it may provide, may delegate all
or any part of its authority and powers under the Plan to one or more Directors
or officers of the Company; provided, however, that the Committee may not
delegate its authority and powers (a) with respect to Section 16 Persons, or (b)
in any way which would jeopardize the Plan's qualification under Section 162(m)
of the Code or Rule 16b-3.

         3.4      Decisions Binding. All determinations and decisions made by
the Committee, the Board, and any delegate of the Committee pursuant to the
provisions of the Plan shall be final, conclusive, and binding on all persons,
and shall be given the maximum deference permitted by law.

                                    SECTION 4
                           SHARES SUBJECT TO THE PLAN

         4.1      Number of Shares. Subject to adjustment as provided in Section
4.3, the total number of Shares available for grant under the Plan shall not
exceed 297,200,000. Shares granted under the Plan may be either authorized but
unissued Shares or treasury Shares.

         4.2      Lapsed Awards. If an Award is settled in cash, or is
cancelled, terminates, expires, or lapses for any reason (with the exception of
the termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem SAR),
any Shares subject to such Award again shall be available to be the subject of
an Award.

         4.3      Adjustments in Awards and Authorized Shares. In the event of
any merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, split-up, Share combination, or other change in the
corporate structure of the Company affecting the Shares, the Committee shall
adjust the number and class of Shares which may be delivered under the Plan, the
number, class, and price of Shares subject to outstanding Awards, and the
numerical limits of Sections 5.1, 6.1, 7.1, 8.1 and 9.1, in such manner as the
Committee (in its sole discretion) shall determine to be appropriate to prevent
the dilution or diminution of such Awards. Notwithstanding the preceding, the
number of Shares subject to any Award always shall be a whole number.

                                    SECTION 5
                                  STOCK OPTIONS

         5.1      Grant of Options. Subject to the terms and provisions of the
Plan, Options may be granted to Employees and Consultants at any time and from
time to time as determined by the

                                       6

<PAGE>

Committee in its sole discretion. The Committee, in its sole discretion, shall
determine the number of Shares subject to each Option, provided that during any
Fiscal Year, no Participant shall be granted Options covering more than
1,400,000 Shares. The Committee may grant Incentive Stock Options, Nonqualified
Stock Options, or a combination thereof.

         5.2      Award Agreement. Each Option shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the expiration date of the
Option, the number of Shares to which the Option pertains, any conditions to
exercise of the Option, and such other terms and conditions as the Committee, in
its discretion, shall determine. The Award Agreement shall also specify whether
the Option is intended to be an Incentive Stock Option or a Nonqualified Stock
Option.

         5.3      Exercise Price. Subject to the provisions of this Section 5.3,
the Exercise Price for each Option shall be determined by the Committee in its
sole discretion.

                  5.3.1    Nonqualified Stock Options. In the case of a
Nonqualified Stock Option, the Exercise Price shall be not less than one hundred
percent (100%) of the Fair Market Value of a Share on the Grant Date.

                  5.3.2    Incentive Stock Options. In the case of an Incentive
Stock Option, the Exercise Price shall be not less than one hundred percent
(100%) of the Fair Market Value of a Share on the Grant Date; provided, however,
that if on the Grant Date, the Employee (together with persons whose stock
ownership is attributed to the Employee pursuant to Section 424(d) of the Code)
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any of its Subsidiaries, the Exercise Price
shall be not less than one hundred and ten percent (110%) of the Fair Market
Value of a Share on the Grant Date.

                  5.3.3    Substitute Options. Notwithstanding the provisions of
Sections 5.3.1 and 5.3.2, in the event that the Company or an Affiliate
consummates a transaction described in Section 424(a) of the Code (e.g., the
acquisition of property or stock from an unrelated corporation), persons who
become Employees or Consultants on account of such transaction may be granted
Options in substitution for options granted by their former employer. If such
substitute Options are granted, the Committee, in its sole discretion and
consistent with Section 424(a) of the Code, may determine that such substitute
Options shall have an exercise price less than one hundred percent (100%) of the
Fair Market Value of the Shares on the Grant Date.

         5.4      Expiration of Options.

                  5.4.1    Expiration Dates. Each Option shall terminate no
later than the first to occur of the following events:

                           (a)      The date for termination of the Option set
forth in the written Award Agreement; or

                           (b)      The expiration of ten (10) years from the
Grant Date; or

                           (c)      The expiration of one (1) year from the date
of the Participant's Termination of Service for a reason other than the
Participant's death, Disability or Retirement; or

                                       7

<PAGE>

                           (d)      The expiration of three (3) years from the
date of the Participant's Termination of Service by reason of Disability; or

                           (e)      The expiration of three (3) years from the
date of the Participant's Retirement (except as provided in Section 5.8.2
regarding Incentive Stock Options).

                  5.4.2    Death of Participant. Notwithstanding Section 5.4.1,
if a Participant dies prior to the expiration of his or her Options, the
Committee, in its discretion, may provide that his or her Options shall be
exercisable for up to three (3) years after the date of death.

                  5.4.3    Committee Discretion. Subject to the limits of
Sections 5.4.1 and 5.4.2, the Committee, in its sole discretion, (a) shall
provide in each Award Agreement when each Option expires and becomes
unexercisable, and (b) may, after an Option is granted, extend the maximum term
of the Option (subject to Section 5.8.4 regarding Incentive Stock Options).

         5.5      Exercisability of Options. Options granted under the Plan
shall be exercisable at such times and be subject to such restrictions and
conditions as the Committee shall determine in its sole discretion. After an
Option is granted, the Committee, in its sole discretion, may accelerate the
exercisability of the Option. However, in no event may any Option granted to a
Section 16 Person be exercisable until at least six (6) months following the
Grant Date (or such shorter period as may be permissible while maintaining
compliance with Rule 16b-3).

         5.6      Payment. Options shall be exercised by the Participant's
delivery of a written notice of exercise to the Secretary of the Company (or its
designee), setting forth the number of Shares with respect to which the Option
is to be exercised, accompanied by full payment for the Shares.

                  Upon the exercise of any Option, the Exercise Price shall be
payable to the Company in full in cash or its equivalent. The Committee, in its
sole discretion, also may permit exercise (a) by tendering previously acquired
Shares having an aggregate Fair Market Value at the time of exercise equal to
the total Exercise Price, or (b) by any other means which the Committee, in its
sole discretion, determines to both provide legal consideration for the Shares,
and to be consistent with the purposes of the Plan.

                  As soon as practicable after receipt of a written notification
of exercise and full payment for the Shares purchased, the Company shall deliver
to the Participant (or the Participant's designated broker), Share certificates
(which may be in book entry form) representing such Shares.

         5.7      Restrictions on Share Transferability. The Committee may
impose such restrictions on any Shares acquired pursuant to the exercise of an
Option as it may deem advisable, including, but not limited to, restrictions
related to applicable federal securities laws, the requirements of any national
securities exchange or system upon which Shares are then listed or traded, or
any blue sky or state securities laws.

         5.8      Certain Additional Provisions for Incentive Stock Options.

                  5.8.1    Exercisability. The aggregate Fair Market Value
(determined on the Grant Date(s)) of the Shares with respect to which Incentive
Stock Options are exercisable for the first time

                                       8

<PAGE>

by any Employee during any calendar year (under all plans of the Company and its
Subsidiaries) shall not exceed $100,000.

                  5.8.2    Termination of Service. No Incentive Stock Option may
be exercised more than three (3) months after the Participant's Termination of
Service for any reason other than Disability or death, unless (a) the
Participant dies during such three-month period, and (b) the Award Agreement or
the Committee permits later exercise. No Incentive Stock Option may be exercised
more than one (1) year after the Participant's Termination of Service on account
of Disability, unless (a) the Participant dies during such one-year period, and
(b) the Award Agreement or the Committee permit later exercise.

                  5.8.3    Company and Subsidiaries Only. Incentive Stock
Options may be granted only to persons who are employees of the Company or a
Subsidiary on the Grant Date.

                  5.8.4    Expiration. No Incentive Stock Option may be
exercised after the expiration of ten (10) years from the Grant Date; provided,
however, that if the Option is granted to an Employee who, together with persons
whose stock ownership is attributed to the Employee pursuant to Section 424(d)
of the Code, owns stock possessing more than 10% of the total combined voting
power of all classes of the stock of the Company or any of its Subsidiaries, the
Option may not be exercised after the expiration of five (5) years from the
Grant Date.

                                    SECTION 6
                            STOCK APPRECIATION RIGHTS

         6.1      Grant of SARs. Subject to the terms and conditions of the
Plan, an SAR may be granted to Employees and Consultants at any time and from
time to time as shall be determined by the Committee, in its sole discretion.
The Committee may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any
combination thereof.

                  6.1.1    Number of Shares. The Committee shall have complete
discretion to determine the number of SARs granted to any Participant, provided
that during any Fiscal Year, no Participant shall be granted SARs covering more
than 700,000 Shares.

                  6.1.2    Exercise Price and Other Terms. The Committee,
subject to the provisions of the Plan, shall have complete discretion to
determine the terms and conditions of SARs granted under the Plan. However, the
exercise price of a Freestanding SAR shall be not less than one hundred percent
(100%) of the Fair Market Value of a Share on the Grant Date. The exercise price
of Tandem or Affiliated SARs shall equal the Exercise Price of the related
Option. In no event shall an SAR granted to a Section 16 Person become
exercisable until at least six (6) months after the Grant Date (or such shorter
period as may be permissible while maintaining compliance with Rule 16b-3).

         6.2      Exercise of Tandem SARs. Tandem SARs may be exercised for all
or part of the Shares subject to the related Option upon the surrender of the
right to exercise the equivalent portion of the related Option. A Tandem SAR may
be exercised only with respect to the Shares for which its related Option is
then exercisable. With respect to a Tandem SAR granted in connection with an
Incentive Stock Option: (a) the Tandem SAR shall expire no later than the
expiration of the underlying Incentive Stock Option; (b) the value of the payout
with respect to the Tandem SAR shall

                                       9

<PAGE>

be for no more than one hundred percent (100%) of the difference between the
Exercise Price of the underlying Incentive Stock Option and the Fair Market
Value of the Shares subject to the underlying Incentive Stock Option at the time
the Tandem SAR is exercised; and (c) the Tandem SAR shall be exercisable only
when the Fair Market Value of the Shares subject to the Incentive Stock Option
exceeds the Exercise Price of the Incentive Stock Option.

         6.3      Exercise of Affiliated SARs. An Affiliated SAR shall be deemed
to be exercised upon the exercise of the related Option. The deemed exercise of
an Affiliated SAR shall not necessitate a reduction in the number of Shares
subject to the related Option.

         6.4      Exercise of Freestanding SARs. Freestanding SARs shall be
exercisable on such terms and conditions as the Committee, in its sole
discretion, shall determine. However, no SAR granted to a Section 16 Person
shall be exercisable until at least six (6) months after the Grant Date (or such
shorter period as may be permissible while maintaining compliance with Rule
16b-3).

         6.5      SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the exercise price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the Committee, in
its sole discretion, shall determine.

         6.6      Expiration of SARs. An SAR granted under the Plan shall expire
upon the date determined by the Committee, in its sole discretion, and set forth
in the Award Agreement. Notwithstanding the foregoing, the rules of Section 5.4
also shall apply to SARs.

         6.7      Payment of SAR Amount. Upon exercise of an SAR, a Participant
shall be entitled to receive payment from the Company in an amount determined by
multiplying:

                  (a)      The difference between the Fair Market Value of a
Share on the date of exercise over the exercise price; times

                  (b)      The number of Shares with respect to which the SAR is
exercised.

                  At the discretion of the Committee, the payment upon SAR
exercise may be in cash, in Shares of equivalent value, or in some combination
thereof.

                                    SECTION 7
                                RESTRICTED STOCK

         7.1      Grant of Restricted Stock. Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant Shares
of Restricted Stock to Employees and Consultants in such amounts as the
Committee, in its sole discretion, shall determine. The Committee, in its sole
discretion, shall determine the number of Shares to be granted to each
Participant, provided that during any Fiscal Year, no Participant shall receive
more than 350,000 Shares of Restricted Stock.

         7.2      Restricted Stock Agreement. Each Award of Restricted Stock
shall be evidenced by an Award Agreement that shall specify the Period of
Restriction, the number of Shares granted, and such other terms and conditions
as the Committee, in its sole discretion, shall determine. Unless the

                                       10

<PAGE>

Committee determines otherwise, Shares of Restricted Stock shall be held by the
Company as escrow agent until the restrictions on such Shares have lapsed.

         7.3      Transferability. Except as provided in this Section 7, Shares
of Restricted Stock may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated until the end of the applicable Period of
Restriction. However, in no event may the restrictions on Restricted Stock
granted to a Section 16 Person lapse prior to six (6) months following the Grant
Date (or such shorter period as may be permissible while maintaining compliance
with Rule 16b-3).

         7.4      Other Restrictions. The Committee, in its sole discretion, may
impose such other restrictions on Shares of Restricted Stock as it may deem
advisable or appropriate, in accordance with this Section 7.4.

                  7.4.1    General Restrictions. The Committee may set
restrictions based upon the achievement of specific performance objectives
(Company-wide, divisional, or individual), applicable federal or state
securities laws, or any other basis determined by the Committee in its
discretion.

                  7.4.2    Section 162(m) Performance Restrictions. For purposes
of qualifying grants of Restricted Stock as "performance-based compensation"
under Section 162(m) of the Code, the Committee, in its discretion, may set
restrictions based upon the achievement of Performance Goals. The Performance
Goals shall be set by the Committee on or before the latest date permissible to
enable the Restricted Stock to qualify as "performance-based compensation" under
Section 162(m) of the Code. In granting Restricted Stock which is intended to
qualify under Section 162(m) of the Code, the Committee shall follow any
procedures determined by it from time to time to be necessary or appropriate to
ensure qualification of the Restricted Stock under Section 162(m) of the Code
(e.g., in determining the Performance Goals).

                  7.4.3    Legend on Certificates. The Committee, in its
discretion, may legend the certificates representing Restricted Stock to give
appropriate notice of such restrictions. For example, the Committee may
determine that some or all certificates representing Shares of Restricted Stock
shall bear the following legend:

                  "The sale or other transfer of the shares of stock represented
         by this certificate, whether voluntary, involuntary, or by operation of
         law, is subject to certain restrictions on transfer as set forth in the
         Applied Materials, Inc. 1995 Equity Incentive Plan, and in a Restricted
         Stock Agreement. A copy of the Plan and such Restricted Stock Agreement
         may be obtained from the Secretary of Applied Materials, Inc."

         7.5      Removal of Restrictions. Except as otherwise provided in this
Section 7, Shares of Restricted Stock covered by each Restricted Stock grant
made under the Plan shall be released from escrow as soon as practicable after
the last day of the Period of Restriction. Subject to the minimum Period of
Restriction specified in Section 2.35, the Committee, in its discretion, may
accelerate the time at which any restrictions shall lapse or be removed. After
the restrictions have lapsed, the Participant shall be entitled to have any
legend or legends under Section 7.4.3 removed from his or her Share certificate,
and the Shares shall be freely transferable by the Participant.

                                       11

<PAGE>

         7.6      Voting Rights. During the Period of Restriction, Participants
holding Shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those Shares, unless the Committee determines otherwise.

         7.7      Dividends and Other Distributions. During the Period of
Restriction, Participants holding Shares of Restricted Stock shall be entitled
to receive all dividends and other distributions paid with respect to such
Shares unless otherwise provided in the Award Agreement. If any such dividends
or distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.

                  With respect to Restricted Stock granted to a Section 16
Person, any dividend or distribution that constitutes a "derivative security" or
an "equity security" under Section 16 of the 1934 Act shall be subject to a
Period of Restriction equal to the longer of: (a) the remaining Period of
Restriction on the Shares of Restricted Stock with respect to which the dividend
or distribution is paid; or (b) six (6) months.

         7.8      Return of Restricted Stock to Company. On the date set forth
in the Award Agreement, the Restricted Stock for which restrictions have not
lapsed shall revert to the Company and again shall become available for grant
under the Plan.

                                    SECTION 8
                    PERFORMANCE UNITS AND PERFORMANCE SHARES

         8.1      Grant of Performance Units/Shares. Performance Units and
Performance Shares may be granted to Employees and Consultants at any time and
from time to time, as shall be determined by the Committee, in its sole
discretion. The Committee shall have complete discretion in determining the
number of Performance Units and Performance Shares granted to each Participant
provided that during any Fiscal Year, (a) no Participant shall receive
Performance Units having an initial value greater than $3,000,000, and (b) no
Participant shall receive more than 350,000 Performance Shares.

         8.2      Value of Performance Units/Shares. Each Performance Unit shall
have an initial value that is established by the Committee on or before the
Grant Date. Each Performance Share shall have an initial value equal to the Fair
Market Value of a Share on the Grant Date.

         8.3      Performance Objectives and Other Terms. The Committee shall
set performance objectives in its discretion which, depending on the extent to
which they are met, will determine the number or value of Performance
Units/Shares that will be paid out to the Participants. The time period during
which the performance objectives must be met shall be called the "Performance
Period." Performance Periods of Awards granted to Section 16 Persons shall, in
all cases, exceed six (6) months in length (or such shorter period as may be
permissible while maintaining compliance with Rule 16b-3). Each Award of
Performance Units/Shares shall be evidenced by an Award Agreement that shall
specify the Performance Period, and such other terms and conditions as the
Committee, in its sole discretion, shall determine.

                                       12

<PAGE>

                  8.3.1    General Performance Objectives. The Committee may set
performance objectives based upon the achievement of Company-wide, divisional,
or individual goals, applicable federal or state securities laws, or any other
basis determined by the Committee in its discretion.

                  8.3.2    Section 162(m) Performance Objectives. For purposes
of qualifying grants of Performance Units/Shares as "performance-based
compensation" under Section 162(m) of the Code, the Committee, in its
discretion, may determine that the performance objectives applicable to
Performance Units/Shares shall be based on the achievement of Performance Goals.
The Performance Goals shall be set by the Committee on or before the latest date
permissible to enable the Performance Units/Shares to qualify as
"performance-based compensation" under Section 162(m) of the Code. In granting
Performance Units/Shares which are intended to qualify under Section 162(m) of
the Code, the Committee shall follow any procedures determined by it from time
to time to be necessary or appropriate to ensure qualification of the
Performance Units/Shares under Section 162(m) of the Code (e.g., in determining
the Performance Goals).

         8.4      Earning of Performance Units/Shares. After the applicable
Performance Period has ended, the holder of Performance Units/Shares shall be
entitled to receive a payout of the number of Performance Units/Shares earned by
the Participant over the Performance Period, to be determined as a function of
the extent to which the corresponding performance objectives have been achieved.
After the grant of a Performance Unit/Share, the Committee, in its sole
discretion, may reduce or waive any performance objectives for such Performance
Unit/Share; provided, however, that Performance Periods of Awards granted to
Section 16 Persons shall not be less than six (6) months (or such shorter period
as may be permissible while maintaining compliance with Rule 16b-3).

         8.5      Form and Timing of Payment of Performance Units/Shares.
Payment of earned Performance Units/Shares shall be made as soon as practicable
after the expiration of the applicable Performance Period. The Committee, in its
sole discretion, may pay earned Performance Units/Shares in the form of cash, in
Shares (which have an aggregate Fair Market Value equal to the value of the
earned Performance Units/Shares at the close of the applicable Performance
Period) or in a combination thereof.

         8.6      Cancellation of Performance Units/Shares. On the date set
forth in the Award Agreement, all unearned or unvested Performance Units/Shares
shall be forfeited to the Company, and again shall be available for grant under
the Plan.

                                    SECTION 9
                          NONEMPLOYEE DIRECTOR OPTIONS

         The provisions of this Section 9 are applicable only to Options granted
to Nonemployee Directors. The provisions of Section 5 are applicable to Options
granted to Employees and Consultants (and to the extent provided in Section
9.2.8, to Options granted to Nonemployee Directors).

         9.1      Granting of Options.

                  9.1.1    Initial Grants. Each Nonemployee Director who first
becomes a Nonemployee Director on or after the effective date of this Plan,
automatically shall receive, as of

                                       13

<PAGE>

the date that the individual first is appointed or elected as a Nonemployee
Director, an Option to purchase 30,000 Shares.

                  9.1.2    Ongoing Grants. Each Nonemployee Director who both
(a) is a Nonemployee Director on the last business day of a Fiscal Year, and (b)
has served as a Nonemployee Director for the entire Fiscal Year which includes
such last business day, automatically shall receive, as of such last business
day only, an Option to purchase 15,000 Shares.

         9.2      Terms of Options.

                  9.2.1    Option Agreement. Each Option granted pursuant to
this Section 9 shall be evidenced by a written Award Agreement between the
Participant and the Company.

                  9.2.2    Exercise Price. The Exercise Price for the Shares
subject to each Option granted pursuant to this Section 9 shall be 100% of the
Fair Market Value of such Shares on the Grant Date.

                  9.2.3    Exercisability.

                           (a)      Each Option granted pursuant to Section
9.1.1 shall become exercisable as to 9,000 Shares on the first anniversary of
the Grant Date, as to an additional 8,250 Shares on the second anniversary of
the Grant Date, as to an additional 7,500 Shares on the third anniversary of the
Grant Date, and as to the remaining 5,250 Shares on the fourth anniversary of
the Grant Date.

                           (b)      Each Option granted pursuant to Section
9.1.2 shall become exercisable as to 3,750 Shares on the first anniversary of
the Grant Date, and as to an additional 3,750 Shares on each succeeding
anniversary until 100% of the Shares subject to such Option have become
exercisable.

Notwithstanding the preceding, once a Participant ceases to be a Director, his
or her Options which are not then exercisable shall never become exercisable and
shall be immediately forfeited, except to the limited extent provided in the
Sections 9.2.4 and 9.2.6.

                  9.2.4    Retirement of Participant. In the event that a
Participant is age sixty (60) or over and has completed at least ten (10) Years
of Service and then incurs a Termination of Service due to Retirement, the right
to exercise all or a portion of any Shares subject to his or her Options that
remain unexercisable immediately prior to such Retirement shall accrue on the
date of Retirement in accordance with the following rules. If the Participant
has less than fifteen (15) Years of Service as of the date of his or her
Retirement, fifty percent (50% )of the Shares that otherwise would have vested
during the twelve (12) months immediately following the Retirement (had the
Participant remained a Nonemployee Director throughout such 12 month period)
shall vest on the Retirement date. If the Participant has at least fifteen (15)
(but less than twenty (20)) Years of Service as of the date of the Retirement,
one hundred percent (100%) of the Shares that otherwise would have vested during
the twelve (12) months immediately following the Retirement (had the Participant
remained a Nonemployee Director throughout such 12 month period) shall vest on
the Retirement date. If the Participant has at least twenty (20) (but less than
twenty-five (25)) Years of Service as of the date of the Retirement, (a) one
hundred percent (100%) of the Shares that otherwise

                                       14

<PAGE>

would have vested during the twelve (12) months immediately following the
Retirement (had the Participant remained a Nonemployee Director throughout such
12 month period) shall vest on the Retirement date, and (b) fifty percent (50%)
of the Shares that otherwise would have vested during the second twelve (12)
months following the Retirement (had the Participant remained a Nonemployee
Director throughout such 12 month period) shall vest on the Retirement date. If
the Participant has at least twenty-five (25) Years of Service as of the date of
the Retirement, one hundred percent (100%) of the Shares that otherwise would
have vested during the twenty-four (24) months immediately following the
Retirement (had the Participant remained a Nonemployee Director throughout such
24 month period) shall vest on the Retirement date.

                  9.2.5    Expiration of Options. Each Option granted pursuant
to this Section 9 shall terminate upon the first to occur of the following
events:

                           (a)      The expiration of five (5) years or (in the
case of any Option granted after October 10, 2000) seven (7) years from the
Grant Date; or

                           (b)      The expiration of seven (7) months from the
date of the Participant's Termination of Service for any reason other than the
Participant's death, Disability or Retirement; or

                           (c)      The expiration of one (1) year from the date
of the Participant's Termination of Service by reason of Disability or
Retirement.

                  9.2.6    Death of Participant. Notwithstanding the provisions
of Section 9.2.5, if a Participant dies prior to the expiration of his or her
Options in accordance with Section 9.2.5, then (a) one hundred percent (100%) of
the Shares covered by his or her Options shall immediately become one hundred
percent (100%) exercisable, and (b) his or her Options shall terminate one (1)
year after the date of his or her death.

                  9.2.7    Not Incentive Stock Options. Options granted pursuant
to this Section 9 shall not be designated as Incentive Stock Options.

                  9.2.8    Other Terms. All provisions of the Plan not
inconsistent with this Section 9 shall apply to Options granted to Nonemployee
Directors.

                                   SECTION 10
                                  MISCELLANEOUS

         10.1     Deferrals. The Committee, in its sole discretion, may permit a
Participant to defer receipt of the payment of cash or the delivery of Shares
that would otherwise be due to such Participant under an Award. Any such
deferral elections shall be subject to such rules and procedures as shall be
determined by the Committee in its sole discretion.

         10.2     No Effect on Employment or Service. Nothing in the Plan shall
interfere with or limit in any way the right of the Company to terminate any
Participant's employment or service at any time, with or without cause. For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Affiliates (or between Affiliates) shall not be
deemed a Termination of Service. Employment with the Company and its Affiliates
is on an at-will basis only.

                                       15

<PAGE>

         10.3     Participation. No Employee or Consultant shall have the right
to be selected to receive an Award under this Plan, or, having been so selected,
to be selected to receive a future Award.

         10.4     Indemnification. Each person who is or shall have been a
member of the Committee, or of the Board, shall be indemnified and held harmless
by the Company against and from (a) any loss, cost, liability, or expense that
may be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any Award Agreement, and (b) from any and all
amounts paid by him or her in settlement thereof, with the Company's approval,
or paid by him or her in satisfaction of any judgment in any such claim, action,
suit, or proceeding against him or her, provided he or she shall give the
Company an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
Certificate of Incorporation or Bylaws, by contract, as a matter of law, or
otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.

         10.5     Successors. All obligations of the Company under the Plan,
with respect to Awards granted hereunder, shall be binding on any successor to
the Company, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business or assets of the Company.

         10.6     Beneficiary Designations. If permitted by the Committee, a
Participant under the Plan may name a beneficiary or beneficiaries to whom any
vested but unpaid Award shall be paid in the event of the Participant's death.
Each such designation shall revoke all prior designations by the Participant and
shall be effective only if given in a form and manner acceptable to the
Committee. In the absence of any such designation, any vested benefits remaining
unpaid at the Participant's death shall be paid to the Participant's estate and,
subject to the terms of the Plan and of the applicable Award Agreement, any
unexercised vested Award may be exercised by the administrator or executor of
the Participant's estate.

         10.7     Limited Transferability of Awards. No Award granted under the
Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will, by the laws of descent and distribution, or to
the limited extent provided in Section 10.6. All rights with respect to an Award
granted to a Participant shall be available during his or her lifetime only to
the Participant. Notwithstanding the foregoing, the Participant may, in a manner
specified by the Committee, (a) transfer a Nonqualified Stock Option to a
Participant's spouse, former spouse or dependent pursuant to a court-approved
domestic relations order which relates to the provision of child support,
alimony payments or marital property rights, and (b) transfer a Nonqualified
Stock Option by bona fide gift and not for any consideration, to (i) a member or
members of the Participant's immediate family, (ii) a trust established for the
exclusive benefit of the Participant and/or member(s) of the Participant's
immediate family, (iii) a partnership, limited liability company of other entity
whose only partners or members are the Participant and/or member(s) of the
Participant's immediate family, or (iv) a foundation in which the Participant
an/or member(s) of the Participant's immediate family control the management of
the foundation's assets.

                                       16

<PAGE>

         10.8     No Rights as Stockholder. Except to the limited extent
provided in Sections 7.6 and 7.7, no Participant (nor any beneficiary) shall
have any of the rights or privileges of a stockholder of the Company with
respect to any Shares issuable pursuant to an Award (or exercise thereof),
unless and until certificates representing such Shares shall have been issued,
recorded on the records of the Company or its transfer agents or registrars, and
delivered to the Participant (or beneficiary).

                                   SECTION 11
                      AMENDMENT, TERMINATION, AND DURATION

         11.1     Amendment, Suspension, or Termination. The Board, in its sole
discretion, may amend, suspend or terminate the Plan, or any part thereof, at
any time and for any reason. The amendment, suspension, or termination of the
Plan shall not, without the consent of the Participant, alter or impair any
rights or obligations under any Award theretofore granted to such Participant.
No Award may be granted during any period of suspension or after termination of
the Plan.

         11.2     Duration of the Plan. The amended and restated Plan shall be
effective as of April 16, 2002, and subject to Section 11.1 (regarding the
Board's right to amend or terminate the Plan), shall remain in effect
thereafter. However, without further stockholder approval, no Incentive Stock
Option may be granted under the Plan after December 6, 2004.

                                   SECTION 12
                                 TAX WITHHOLDING

         12.1     Withholding Requirements. Prior to the delivery of any Shares
or cash pursuant to an Award (or exercise thereof), the Company shall have the
power and the right to deduct or withhold, or require a Participant to remit to
the Company, an amount sufficient to satisfy federal, state, and local taxes
(including the Participant's FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).

         12.2     Withholding Arrangements. The Committee, in its sole
discretion and pursuant to such procedures as it may specify from time to time,
may permit a Participant to satisfy such tax withholding obligation, in whole or
in part by (a) electing to have the Company withhold otherwise deliverable
Shares, or (b) delivering to the Company already-owned Shares having a Fair
Market Value equal to the amount required to be withheld. The amount of the
withholding requirement shall be deemed to include any amount which the
Committee agrees may be withheld at the time the election is made, not to exceed
the amount determined by using the maximum federal, state or local marginal
income tax rates applicable to the Participant with respect to the Award on the
date that the amount of tax to be withheld is to be determined. The Fair Market
Value of the Shares to be withheld or delivered shall be determined as of the
date that the taxes are required to be withheld.

                                   SECTION 13
                               LEGAL CONSTRUCTION

         13.1     Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.

                                       17

<PAGE>

         13.2     Severability. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

         13.3     Requirements of Law. The granting of Awards and the issuance
of Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

         13.4     Securities Law Compliance. With respect to Section 16 Persons,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan, Award
Agreement or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.

         13.5     Governing Law. The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of
California.

         13.6     Captions. Captions are provided herein for convenience only,
and shall not serve as a basis for interpretation or construction of the Plan.

                                       18Exhibit 10.79

                              AMENDED AND RESTATED
                          CERTIFICATE OF DESIGNATION OF
                               THE PREFERRED STOCK

                                       OF

                                   INSCI CORP.

         Henry F. Nelson, being the duly elected President of INSCI CORP., a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware (the "Corporation"), does hereby
certify the following:

         1. The Corporation filed a Certificate of Designation of the Series A
Convertible Preferred Stock with the Secretary of State of the State of Delaware
on March 6, 2001 (the "Series A Designation").

         2. The Corporation filed a Certificate of Designation of the Series B
Convertible Preferred Stock with the Secretary of State of the State of Delaware
on June 26, 2001 (the "Series B Designation").

         3. The Corporation filed an amendment to the Series A Designation and
the Series B Designation with the Secretary of State of the State of Delaware on
March 31, 2003 (the "Series A and B Amendment").

         4. The Corporation filed a Certificate of Designation of the Series C
Convertible Preferred Stock of the Corporation with the Secretary of State on
September 4, 2003 (the "Series C Designation").

         5. The Board of Directors of the Corporation approved and adopted the
amendment and restatement of the Series A Designation, Series B Designation,
Series A and B Amendment and Series C Designation, attached hereto as EXHIBIT A
(the Amended and Restated Preferred Stock Designation"), pursuant to the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, and the authority vested in it by its Certificate of Incorporation, as
amended.

                                              INSCI CORP.

                                              By:    /S/ HENRY F. NELSON
                                                     -------------------
                                                       Henry F. Nelson
                                                       President

                                              Date:    December 3, 2003
ATTEST:

By: /S/ CYNTHIA RAE BOTSCH
         Name:    Cynthia Rae Botsch
         Title:   Assistant Secretary

<PAGE>

                              AMENDED AND RESTATED
                           CERTIFICATE OF DESIGNATION

                            OF THE PREFERRED STOCK OF
                                   INSCI CORP.
                                TO BE DESIGNATED

                      SERIES A CONVERTIBLE PREFERRED STOCK
                      SERIES B CONVERTIBLE PREFERRED STOCK
                      SERIES C CONVERTIBLE PREFERRED STOCK

         INSCI CORP., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), pursuant to the
authority vested in the Board of Directors of the Corporation by its Certificate
of Incorporation, as amended, and pursuant to the provisions of Section 151 of
the General Corporation Law of the State of Delaware, certifies that the Board
adopted the following resolution at a meeting duly called and held on November
__, 2003, which resolution remains in full force and effect as of the date
hereof:

         RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation (the "Board") by its Certificate of Incorporation,
as amended, the designations of the three series of preferred stock be and
hereby are amended and restated, consisting of a total of 10,000,000 authorized
shares, to be designated (i) "Series A Convertible Preferred Stock", which
consists of 2,500,000 authorized shares (the "Series A Preferred Stock"); (iii)
"Series B Convertible Preferred Stock", which consists of 4,317,040 authorized
shares (the "Series B Preferred Stock"); and (iv) "Series C Convertible
Preferred Stock", which consists of 3,182,960 authorized shares (the "Series C
Preferred Stock", and collectively with the Series A Preferred Stock and the
Series B Preferred Stock, the "Preferred Stock"), having the following rights,
preferences, privileges, qualifications and restrictions:

         (a) DIVIDEND RIGHTS.

                  (i) DIVIDENDS. The holders of the Preferred Stock shall be
         entitled to receive dividends in the manner as follows:

                           (A) SERIES A PREFERRED STOCK. The holders of Series A
                  Preferred Stock, in preference to the holders of the Common
                  Stock, shall be entitled to receive cumulative dividends, but
                  only out of funds that are legally available therefor (as
                  defined by the Delaware General Corporation Law), at an annual
                  floating rate equal to the Prime Rate of Interest (as
                  reflected in the Money Rates Table Eastern Edition of the Wall
                  Street Journal) plus 2.5% of the Series A Original Issue Price
                  (as defined below) per annum on each outstanding share of
                  Series A Preferred Stock (as adjusted for any stock dividends,
                  combinations, splits, recapitalizations and the like with
                  respect to such shares). Such dividends shall accrue and be
                  payable at the end of each fiscal quarter of the Corporation
                  in shares of Series A Preferred Stock (valued at the Series A
                  Original Issue Price, as adjusted for any stock dividends,
                  combinations, splits, recapitalizations and the like with
                  respect to such shares). The original issue price of the
                  Series A Preferred Stock shall be $1.30 (the "Series A
                  Original Issue Price").

                                      -2-
<PAGE>

                           (B) SERIES B PREFERRED STOCK. The holders of Series B
                  Preferred Stock, in preference to the holders of the Common
                  Stock and the Series A Preferred Stock, shall be entitled to
                  receive cumulative dividends, but only out of funds that are
                  legally available therefor (as defined by the Delaware General
                  Corporation Law), at the rate of 1.915% of the Series B
                  Original Issue Price (as defined below) per annum on each
                  outstanding share of Series B Preferred Stock (as adjusted for
                  any stock dividends, combinations, splits, recapitalizations
                  and the like with respect to such shares). Such dividends
                  shall accrue and be payable monthly, and, at the option of the
                  holders of the Series B Preferred Stock, shall be payable
                  either (A) in cash or (B) in shares of Series C Preferred
                  Stock (valued at the Series C Original Issue Price, as
                  adjusted for any stock dividends, combinations, splits,
                  recapitalizations and the like with respect to such shares).
                  Such shares of Series C Preferred Stock issued in lieu of the
                  cash dividend are sometimes referred to as "PIK Shares". Upon
                  any conversion of the Series B Preferred Stock, all accrued
                  but unpaid dividends on the Series B Preferred Stock shall be
                  paid immediately prior to such shares being surrendered for
                  conversion. If the holders of the Series B Preferred Stock
                  request a cash dividend, but the Corporation cannot declare or
                  pay cash dividends due to a lack of available surplus or
                  insufficient net profits for the fiscal year in which the
                  dividend is to be paid and/or the preceding fiscal year, then
                  the holders of the Series B Preferred Stock may elect to
                  receive (i) PIK Shares in lieu of the cash dividend or (ii)
                  all undeclared and unpaid dividends that accrue until such
                  time as the Corporation determines that it has sufficient
                  funds to declare and pay the dividends. The original issue
                  price of the Series B Preferred Stock shall be $67.886 (the
                  "Series B Original Issue Price").

                           (C) SERIES C PREFERRED STOCK. The holders of Series C
                  Preferred Stock, in preference to the holders of the Common
                  Stock, the Series A Preferred Stock and the Series B Preferred
                  Stock, shall be entitled to receive cumulative dividends, but
                  only out of funds that are legally available therefor (as
                  defined by the Delaware General Corporation Law), at the rate
                  of 8% of the Series C Original Issue Price (as defined below)
                  per annum on each outstanding share of Series C Preferred
                  Stock (as adjusted for any stock dividends, combinations,
                  splits, recapitalizations and the like with respect to such
                  shares). Such dividends shall accrue and be payable
                  semi-annually on September 1 and March 1 of each year, and, at
                  the option of the Corporation shall be payable either (A) in
                  cash or (B) in shares of Series C Preferred Stock (valued at
                  the Series C Original Issue Price, as adjusted for any stock
                  dividends, combinations, splits, recapitalizations and the
                  like with respect to such shares). Such shares of Series C
                  Preferred Stock issued in lieu of the cash dividend are
                  sometimes referred to as "PIK Shares". Upon any conversion of
                  the Series C Preferred Stock, all accrued but unpaid dividends
                  on the Series C Preferred Stock shall be paid immediately
                  prior to such shares being surrendered for conversion. The
                  original issue price of the Series C Preferred Stock shall be
                  $1.9396 (the "Series C Original Issue Price").

                  (ii) CONSENT OF SERIES C PREFERRED STOCK HOLDERS. So long as
         any shares of Series C Preferred Stock shall be outstanding, without
         the prior written consent of the holders of a majority of the then
         issued and outstanding shares of Series C Preferred Stock, until all
         dividends (set forth in Section (a)(i) above) on the Series C Preferred
         Stock shall have been paid or declared and set apart:

                           (A) no dividend, whether in cash or property, shall
                  be paid or declared, nor shall any other distribution be made,
                  to any holder of Common Stock, Series A Preferred Stock or
                  Series B Preferred Stock; provided, however, that no consent
                  of the holders of the Series C Preferred Stock shall be
                  required prior to the payment of any cash dividend requested
                  by the holders of the Series B Preferred Stock pursuant to
                  Section (a)(i)(B) above; and

                           (B) no shares of any Common Stock, Series A Preferred
                  Stock or any Series B Preferred Stock shall be purchased,
                  redeemed, or otherwise acquired for value by the Corporation.

                  (iii) COMMON STOCK DIVIDENDS. In addition to the dividends set
         forth in Section (a)(i)(A), (B) and (C) above, each holder of the
         Series A Preferred Stock, Series B Preferred Stock and Series C
         Preferred Stock shall be entitled to receive, when, as and if declared
         by the Board of Directors of the Corporation, out of the assets of the
         Corporation legally available therefore (as defined by the Delaware
         General Corporation Law), dividends and distributions on parity and pro
         rata with the holders of the Common Stock calculated based on the
         number of shares as shall be equal to the whole number of shares of
         Common Stock into which such holder's aggregate number of shares of
         Series A Preferred Stock, Series B Preferred Stock or Series C
         Preferred Stock, as applicable, are convertible pursuant to Section (d)
         hereof immediately after the close of business on the record date fixed
         for the determination of the holders of the Common Stock entitled to
         receive such dividend or distribution.

         (b) VOTING RIGHTS.

                  (i) GENERAL RIGHTS. Except as otherwise provided herein or as
         required by law, each holder of Preferred Stock shall be entitled to
         vote on all matters, and shall be entitled to that number of votes
         equal to the largest number of whole shares of Common Stock into which
         such holder's shares of Preferred Stock could be converted pursuant to
         the provisions of Section (d) hereof at the record date for the
         determination of stockholders entitled to vote on such matter, or if no
         such record date is established, at the date of a meeting at such vote
         is taken or any written consent of stockholders is solicited. Except as
         otherwise provided by law, by the terms of this Amended and Restated
         Preferred Stock Designation or by the provisions establishing any other
         series of Preferred Stock, the holders of shares of Preferred Stock and
         Common Stock shall vote together as a single class on all matters.

                                      -3-
<PAGE>

                  (ii) SEPARATE VOTE OF SERIES C PREFERRED STOCK. In addition to
         any other vote or consent required herein or by law, the vote of the
         holders of a majority of the outstanding Series C Preferred Stock shall
         be necessary for effecting or validating the following actions:

                           (A) any authorization or issuance of any other
                  capital stock having any rights, preferences or privileges
                  senior to or PARI PASSU with the Series C Preferred Stock;

                           (B) any amendment, alteration, waiver or repeal of
                  any provision of the Certificate of Incorporation (including
                  this Amended and Restated Preferred Stock Designation or any
                  amendment thereto) or the Bylaws of the Corporation, that
                  alters or changes or adversely affects the voting or other
                  powers, preferences, or other special rights or privileges, or
                  restrictions of the Series C Preferred Stock;

                           (C) any increase or decrease the number of authorized
                  or outstanding shares of Series C Preferred Stock;

                           (D) any reclassification or recapitalization of any
                  outstanding shares of securities of the Corporation into
                  shares having rights, preferences or privileges senior to or
                  PARI PASSU with the Series C Preferred Stock, or otherwise
                  effecting any change to the rights, preferences and privileges
                  of the Series C Preferred Stock, or any other class or series
                  of capital stock of the Corporation, which would adversely
                  affect the Series C Preferred Stock;

                           (E) any increase or decrease in the number of
                  directors constituting the entire Board of Directors;

                           (F) any redemption, purchase or other acquisition by
                  the Corporation, either direct or indirect, of any Common
                  Stock, Series A Preferred Stock or Series B Preferred Stock;

                           (G) any transaction with any party related to or
                  affiliated with the Corporation, including but not limited to
                  any transaction that would result in the repayment of a
                  stockholder loan;

                                      -4-
<PAGE>

                           (H) any action that would permit any subsidiary or
                  affiliate of the Corporation to sell or issue shares of
                  capital stock to any party other than the Corporation;

                           (I) any action that would increase the number of
                  shares of capital stock available for issuance by the
                  Corporation (x) to employees, consultants or other
                  third-parties; or (y) in connection with acquisitions; or

                           (J) any action that would result in the Corporation
                  incurring or assuming more than $3,000,000 of indebtedness in
                  the aggregate.

                  (iii) BOARD OF DIRECTORS. Notwithstanding subsections (i) and
         (ii) above or any provision to the contrary contained herein, (A) the
         holders of the Series C Preferred Stock shall be entitled, voting
         together as a separate single class, to elect two (2) members of the
         Board at each election of directors, to be designated by SCP Private
         Equity Partners II, L.P., a Delaware limited partnership ("SCP"), so
         long as SCP holds any shares of Series C Preferred Stock; (B) the
         holders of the Series B Preferred Stock shall be entitled, voting
         together as a separate single class, to elect two (2) members of the
         Board at each election of directors, to be designated by a
         representative determined by a majority of the holders of the Series B
         Preferred Stock (the "Series B Representative"); and (C) the holders of
         the Series A Preferred Stock shall be entitled, voting together as a
         separate single class, to elect three (3) members of the Board at each
         election of directors, to be designated by a representative determined
         by a majority of the holders of the Series A Preferred Stock (the
         "Series A Representative"). Each of SCP, the Series B Representative
         and the Series A Representative shall notify the Corporation in writing
         of the identities of its designees for election to the Board, which
         notice shall be conclusive evidence of the consent of such designees to
         serve as directors of the Corporation. In the event that such
         representatives fail to provide such notice, the designees currently
         serving on the Board shall be deemed to be the applicable designees. If
         SCP, the Series B Representative or the Series A Representative has no
         designee serving (or otherwise designated to serve in the event of the
         resignation, death, removal or inability to serve of a designee, as
         provided in the last sentence of this subsection) on the Board, then
         the Board shall be entitled to make the nomination for SCP, the Series
         B Representative or the Series A Representative, as the case may be,
         for which such notice was required. In the event SCP fails to hold any
         Series C Preferred Stock, the holders of Series C Preferred Stock,
         voting together as a separate single class, shall be entitled to the
         director election rights previously held by SCP. In the event of any
         vacancy arising by reason of the resignation, death, removal of a
         designee of SCP, the Series B Representative, or the Series A
         Representative (which may include a removal by the holders of the
         applicable series of Preferred Stock, with or without cause, or at the
         written request of SCP, the Series B Representative or the Series A
         Representative, as applicable) or any designees' inability to serve,
         SCP (provided SCP then holds Series C Preferred Stock), the Series B
         Representative or the Series A Representative, as applicable, shall
         notify the Corporation of its choice to fill such vacancy, and the
         Board shall appoint such person to fill such vacancy and serve until
         the next meeting of the Corporation's stockholders for the election of
         directors. The class voting rights granted to the holders of the
         Preferred Stock pursuant to this subsection (iii) shall be in addition
         to, and not in lieu of, the voting rights granted to such holders under
         subsections (i) and (ii) above. Accordingly, the holders of the
         Preferred Stock shall be entitled to vote together with the holders of
         shares of the Common Stock as a single class with respect to the
         election of those directors for which the holders of the Preferred
         Stock do not have class voting rights.

                                      -5-
<PAGE>

         (C) LIQUIDATION RIGHTS.

                  (i) Upon any liquidation, dissolution, or winding up of the
         Corporation, whether voluntary or involuntary, before any distribution
         or payment shall be made to the holders of Common Stock, by reason of
         their ownership thereof, an amount equal to (A) in the case of the
         Series A Preferred Stock, the greater of (1) the Series A Original
         Issue Price (as adjusted for any stock dividends, combinations, splits,
         recapitalizations and the like with respect to such shares) plus an
         amount equal to all accrued and unpaid dividends for each share of
         Series A Preferred Stock held by each such holder or (2) the price per
         share a holder of Series A Preferred Stock would have been entitled to
         receive had all shares of outstanding Preferred Stock and Series C
         Preferred Stock been converted into Common Stock immediately preceding
         such liquidation, dissolution or winding up of the Corporation (the
         greater of (A)(1) or (A)(2) being referred to herein as the "Series A
         Liquidation Amount"); (B) in the case of the Series B Preferred Stock,
         the greater of (1) 51.6% of the Series B Original Issue Price (as
         adjusted for any stock dividends, combinations, splits,
         recapitalizations and the like with respect to such shares) plus an
         amount equal to all accrued and unpaid dividends for each share of
         Series B Preferred Stock held by each such holder or (2) the price per
         share a holder of Series B Preferred Stock would have been entitled to
         receive had all shares of outstanding Preferred Stock and Series B
         Preferred Stock been converted into Common Stock immediately preceding
         such liquidation, dissolution or winding up of the Corporation (the
         greater of (B)(1) or (B)(2) being referred to herein as the "Series B
         Liquidation Amount"); and (C) in the case of the Series C Preferred
         Stock, the greater of (1) 200% of the Series C Original Issue Price (as
         adjusted for any stock dividends, combinations, splits,
         recapitalizations and the like with respect to such shares) plus an
         amount equal to all accrued and unpaid dividends for each share of
         Series C Preferred Stock held by each such holder; or (2) the price per
         share a holder of Series C Preferred Stock would have been entitled to
         receive had all shares of outstanding Preferred Stock and Series C
         Preferred Stock been converted into Common Stock immediately preceding
         such liquidation, dissolution or winding up of the Corporation (the
         greater of (C)(1) or (C)(2) being referred to herein as the "Series C
         Liquidation Amount"). If, upon any such liquidation, dissolution, or
         winding up, the assets of the Corporation shall be insufficient to make
         payment to the holders of the Preferred Stock of the Series A
         Liquidation Amount, Series B Liquidation Amount and the Series C
         Liquidation Amount, then such assets shall be distributed first among
         the holders of Series C Preferred Stock at the time outstanding, pro
         rata (or if the assets of the Corporation are insufficient to make
         payment in full to all holders of the Series C Preferred Stock, then
         such assets will be distributed ratably to such holders in proportion
         to the full amounts to which they would otherwise be respectively
         entitled), then to the holders of the Series B Preferred Stock at the
         time outstanding, pro rata (or if the assets of the Corporation are
         insufficient to make payment in full to all holders of the Series B
         Preferred Stock, then such assets will be distributed ratably to such
         holders in proportion to the full amounts to which they would otherwise
         be respectively entitled); and finally to the holders of the Series A
         Preferred Stock, pro rata (or if the assets of the Corporation are
         insufficient to make payment in full to all holders of the Series A
         Preferred Stock, then such assets will be distributed ratably to such
         holders in proportion to the full amounts to which they would otherwise
         be respectively entitled).

                                      -6-
<PAGE>

                  (ii) DEEMED LIQUIDATION. The following events shall be
         considered a liquidation under this Section, unless the holders of the
         Series C Preferred Stock, by majority vote or written consent, deem
         such events not to be a liquidation:

                           (A) any consolidation or merger of the Corporation
                  with or into any other corporation or other entity or person
                  (or any other corporate reorganization), resulting in the
                  stockholders of the Corporation immediately prior to such
                  consolidation, merger or reorganization, owning less than 50%
                  of the Corporation's voting power immediately after such
                  consolidation, merger or reorganization; or any transaction or
                  series of related transactions to which the Corporation is a
                  party in which in excess of 50% of the Corporation's voting
                  power is transferred, excluding any consolidation or merger
                  effected exclusively to change the domicile of the Corporation
                  (an "Acquisition");

                           (B) any transaction or a series of related
                  transactions, other than transactions involving a holder of
                  Preferred Stock, in which a majority of the voting power is
                  transferred to a third party (or group of affiliated third
                  parties) who were not previously stockholders of the
                  Corporation; or

                           (C) any sale, lease or other disposition of all or
                  substantially all of the assets of the Corporation (an "Asset
                  Transfer").

                  (iii) NON-CASH CONSIDERATION. In any of the events set forth
         in subparagraph (ii), if the consideration received by the Corporation
         is other than cash, its value will be deemed its fair market value as
         determined in good faith by the Board of Directors. Any securities
         shall be valued as follows:

                           (A) Securities not subject to restrictions on free
                  marketability covered by subparagraph (B) below:

                                    (1) If traded on a securities exchange or
                           through the Nasdaq National Market (or a similar
                           national quotation system), the value shall be deemed
                           to be the average of the closing prices of the
                           securities on such quotation system over the 30 day
                           period ending three days prior to the closing;

                                      -7-
<PAGE>

                                    (2) If actively traded over-the-counter, the
                           value shall be deemed to be the average of the
                           closing bid or sale prices (whichever is applicable)
                           over the 30 day period ending three days prior to the
                           closing; and

                                    (3) If there is no active public market, the
                           value shall be the fair market value thereof, as
                           determined in good faith by the Board of Directors.

                           (B) The method of valuation of securities subject to
                  restrictions on free marketability (other than restrictions
                  arising solely by virtue of a stockholder's status as an
                  affiliate or former affiliate) shall be to make an appropriate
                  discount from the market value determined as above in
                  subparagraphs (iii)(A)(1), (2) or (3) to reflect the
                  approximate fair market value thereof, as determined in good
                  faith by the Board of Directors.

                  (iv) NOTICE. Written notice of any such liquidation,
         dissolution or winding up (or deemed liquidation, dissolution or
         winding up) of the Corporation within the meaning of this Section,
         which states the payment date, the place where said payments shall be
         made and the date on which conversion rights as set forth herein
         terminate as to such shares (which shall be not less than 10 days after
         the date of such notice), shall be given by first class mail, postage
         prepaid, or by telecopy or facsimile, not less than 20 days prior to
         the payment date stated therein, to the then holders of record of
         Series A Preferred Stock, Series B Preferred Stock and Series C
         Preferred Stock, such notice to be addressed to each such holder at its
         address as shown on the records of the Corporation.

         (d) CONVERSION RIGHTS. The holders of the Preferred Stock shall have
the conversion rights as follows:

                  (i) OPTIONAL CONVERSION. Subject to and in compliance with the
         provisions of this Section (d), any shares of Preferred Stock may, at
         the option of the holder, be converted at any time into fully-paid and
         nonassessable shares of Common Stock. The number of shares of Common
         Stock to which a holder of (A) Series A Preferred Stock shall be
         entitled upon conversion shall be the product obtained by multiplying
         the "Series A Preferred Conversion Rate" then in effect (determined as
         provided in subsection (ii)(A)) by the number of shares of Series A
         Preferred Stock being converted; (B) Series B Preferred Stock shall be
         entitled upon conversion shall be the product obtained by multiplying
         the "Series B Preferred Conversion Rate" then in effect (determined as
         provided in subsection (ii)(B)) by the number of shares of Series B
         Preferred Stock being converted; (C) Series C Preferred Stock shall be
         entitled upon conversion shall be the product obtained by multiplying
         the "Series C Preferred Conversion Rate" then in effect (determined as
         provided in subsection (ii)(C)) by the number of shares of Series C
         Preferred Stock being converted.

                                      -8-
<PAGE>

                  (ii) PREFERRED STOCK CONVERSION RATE. The conversion rate in
         effect at any time for conversion of the Preferred Stock is as follows:

                           (A) SERIES A PREFERRED STOCK. In the case of the
                  Series A Preferred Stock, the conversion rate in effect at any
                  time for conversion of the Series A Preferred Stock (the
                  "Series A Preferred Conversion Rate") shall be the quotient
                  obtained by dividing the Series A Original Issue Price by the
                  "Series A Preferred Conversion Price," calculated as provided
                  in subsection (iii)(A) below.

                           (B) SERIES B PREFERRED STOCK. In the case of the
                  Series B Preferred Stock, the conversion rate in effect at any
                  time for conversion of the Series B Preferred Stock (the
                  "Series B Preferred Conversion Rate") shall be the quotient
                  obtained by dividing the Series B Original Issue Price by the
                  "Series B Preferred Conversion Price," calculated as provided
                  in subsection (iii)(B) below.

                           (C) SERIES C PREFERRED STOCK. In the case of the
                  Series C Preferred Stock, the conversion rate in effect at any
                  time for conversion of the Series C Preferred Stock (the
                  "Series C Preferred Conversion Rate") shall be the quotient
                  obtained by dividing the Series C Original Issue Price by the
                  "Series C Preferred Conversion Price," calculated as provided
                  in subsection (iii)(C) below.

                  (iii) PREFERRED STOCK CONVERSION PRICE. The conversion price
         for the Preferred Stock is as follows:

                           (A) SERIES A PREFERRED STOCK. The conversion price
                  for the Series A Preferred Stock shall initially be $0.11 (the
                  "Series A Preferred Conversion Price"). Such initial Series A
                  Preferred Conversion Price shall be adjusted from time to time
                  in accordance with this Section (d). All references to the
                  Series A Preferred Conversion Price herein shall mean the
                  Series A Preferred Conversion Price as so adjusted.

                           (B) SERIES B PREFERRED STOCK. The conversion price
                  for the Series B Preferred Stock shall initially be $.096980
                  (the "Series B Preferred Conversion Price"). Such initial
                  Series B Preferred Conversion Price shall be adjusted from
                  time to time in accordance with this Section (d). All
                  references to the Series B Preferred Conversion Price herein
                  shall mean the Series B Preferred Conversion Price as so
                  adjusted.

                                      -9-
<PAGE>

                           (C) SERIES C PREFERRED STOCK. The conversion price
                  for the Series C Preferred Stock shall initially be $.096980
                  (the "Series C Preferred Conversion Price"). Such initial
                  Series C Preferred Conversion Price shall be adjusted from
                  time to time in accordance with this Section (d). All
                  references to the Series C Preferred Conversion Price herein
                  shall mean the Series C Preferred Conversion Price as so
                  adjusted.

                  (iv) MECHANICS OF CONVERSION. Each holder of Preferred Stock
         who desires to convert the same into shares of Common Stock pursuant to
         this Section (d) shall surrender the certificate or certificates
         therefor, duly endorsed, at the office of the Corporation or any
         transfer agent for the Preferred Stock and shall give written notice to
         the Corporation at such office that such holder elects to convert the
         same. Such notice shall state the number of shares of Preferred Stock
         being converted. Thereupon, the Corporation shall promptly issue and
         deliver at such office to such holder a certificate or certificates for
         the number of shares of Common Stock to which such holder is entitled
         and shall promptly pay in cash (at the Common Stock's fair market value
         determined by the Board of Directors as of the date of conversion) the
         value of any fractional share of Common Stock otherwise issuable to any
         holder of Preferred Stock. Such conversion shall be deemed to have been
         made at the close of business on the date of such surrender of the
         certificates representing the shares of Preferred Stock to be
         converted, and the person entitled to receive the shares of Common
         Stock issuable upon such conversion shall be treated for all purposes
         as the record holder of such shares of Common Stock on such date.

                  (v) ADJUSTMENT UPON COMMON STOCK EVENT. Upon the happening of
         a Common Stock Event (as hereinafter defined) at any time or from time
         to time after the date that the first share of Series C Preferred Stock
         is issued (the "Original Issue Date"), the Series A Preferred
         Conversion Price, Series B Preferred Conversion Price and Series C
         Preferred Conversion Price shall, simultaneously with the happening of
         such Common Stock Event, be adjusted by multiplying the Series A
         Preferred Conversion Price, Series B Preferred Conversion Price or
         Series C Preferred Conversion Price, as applicable, in effect
         immediately prior to such Common Stock Event by a fraction, (i) the
         numerator of which shall be the number of shares of Common Stock issued
         and outstanding immediately prior to such Common Stock Event, and (ii)
         the denominator of which shall be the number of shares of Common Stock
         issued and outstanding immediately after such Common Stock Event, and
         the product so obtained shall thereafter be the Series A Preferred
         Conversion Price, Series B Preferred Conversion Price, or Series C
         Preferred Conversion Price, as applicable. The applicable conversion
         prices of each of the series of Preferred Stock shall be readjusted in
         the same manner upon the happening of each subsequent Common Stock
         Event. As used in this Section (d), the term "Common Stock Event" shall
         mean (i) the issue by the Corporation of additional shares of Common
         Stock as a dividend or other distribution on outstanding Common Stock,
         (ii) a subdivision of the outstanding shares of Common Stock into a
         greater number of shares of Common Stock (by stock split,
         reclassification or otherwise), or (iii) a combination or
         consolidation, by reclassification or otherwise, of the outstanding
         shares of Common Stock into a smaller number of shares of Common Stock.

                                      -10-
<PAGE>

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

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

                  (viii) ADJUSTMENT FOR REORGANIZATIONS, MERGERS OR
         CONSOLIDATIONS. If at any time or from time to time after the Original
         Issue Date, there is a capital reorganization of the Common Stock or
         the merger or consolidation of the Corporation with or into another
         corporation or another entity or person (other than an Acquisition or
         Asset Transfer as defined in Section (c) or a recapitalization,
         subdivision, combination, reclassification, exchange or substitution of
         shares provided for elsewhere in this Section (d)), as a part of such
         capital reorganization, provision shall be made so that the holders of
         the Preferred Stock shall thereafter be entitled to receive upon
         conversion of the Preferred Stock the number of shares of stock or
         other securities or property of the Corporation to which a holder of
         the number of shares of Common Stock deliverable upon conversion would
         have been entitled on such capital reorganization, subject to
         adjustment in respect of such stock or securities by the terms thereof.
         In any such case, appropriate adjustment shall be made in the
         application of the provisions of this Section (d) with respect to the
         rights of the holders of Preferred Stock after the capital
         reorganization to the end that the provisions of this Section (d)
         (including adjustment of the Series A Preferred Conversion Price,
         Series B Preferred Conversion Price and Series C Preferred Conversion
         Price then in effect and the number of shares issuable upon conversion
         of the Series A Preferred Stock, Series B Preferred Stock and Series C
         Preferred Stock) shall be applicable after that event and be as nearly
         equivalent as practicable.

                                      -11-
<PAGE>

                  (ix) SALE OF SHARES BELOW PREFERRED CONVERSION PRICE.

                           (A) If at any time or from time to time after the
                  Original Issue Date, the Corporation issues or sells, or is
                  deemed by the express provisions of this subsection (ix) to
                  have issued or sold Additional Shares of Common Stock (as
                  defined in subsection (ix)(B)(1) below), other than (w) as a
                  dividend or distribution on the Preferred Stock, (x) in
                  connection with a Common Stock Event as provided in subsection
                  (v) above, (y) as a dividend or other distribution on any
                  class of stock as provided in subsection (vi) above, and (z) a
                  subdivision or combination of shares of Common Stock as
                  provided in subsection (vii) above, for an Effective Price (as
                  defined in subsection (ix)(B)(4) below) less than the then
                  effective Series A Preferred Conversion Price, Series B
                  Preferred Conversion Price, or Series C Preferred Conversion
                  Price, then and in each such case the then existing Series A
                  Preferred Conversion Price, Series B Preferred Conversion
                  Price or Series C Preferred Conversion Price, as applicable,
                  shall be reduced, as of the opening of business on the date of
                  such issue or sale, to a price equal to the price paid per
                  share for such Additional Shares of Common Stock.

                           (B) For the purpose of making any adjustment required
                  under this subsection (ix):

                                    (1) "Additional Shares of Common Stock"
                           shall mean all shares of Common Stock issued (or,
                           pursuant to this Section, deemed to be issued) by the
                           Corporation, whether or not subsequently reacquired
                           or retired by the Corporation, other than: (A) upon
                           conversion of shares of Preferred Stock and (B)
                           shares of Common Stock issued or issuable by the
                           Corporation or any subsidiary to employees, officers,
                           directors or consultants pursuant to stock option
                           plans that are approved by the Board ("Incentive
                           Stock"), provided that the number of shares of
                           Incentive Stock does not exceed an aggregate of
                           30,000,000 shares (as adjusted for any stock
                           dividends, combinations, splits or similar events)
                           regardless of whether issued by the Corporation prior
                           to the date hereof.

                                      -12-
<PAGE>

                                    (2) The "Aggregate Consideration Received"
                           by the Corporation for any issue or sale (or deemed
                           issue or sale) of securities shall (i) (A) to the
                           extent it consists of cash, be computed at the gross
                           amount of cash received by the Corporation before
                           deduction of any underwriting or similar commissions,
                           compensation or concessions paid or allowed by the
                           Corporation in connection with such issue or sale and
                           without deduction of any expenses payable by the
                           Corporation; (B) to the extent it consists of
                           property other than cash, be computed at the fair
                           value of that property at the time of such issue as
                           determined in good faith by the Board; and (C) if
                           Additional Shares of Common Stock, Convertible
                           Securities or Rights or Options are issued or sold
                           together with other stock or securities or other
                           assets of the Corporation for a consideration which
                           covers both, be computed as the portion of the
                           consideration so received that may be reasonably
                           determined in good faith by the Board to be allocable
                           to such Additional Shares of Common Stock,
                           Convertible Securities or Rights or Options or (ii)
                           if no consideration is received by the Corporation,
                           be considered zero;

                                    (3) "Convertible Securities" shall mean any
                           evidence of indebtedness, stock or other securities
                           directly or indirectly convertible into or
                           exchangeable for shares of Common Stock;

                                    (4) The "Effective Price" of Additional
                           Shares of Common Stock shall mean the quotient
                           determined by dividing the total number of Additional
                           Shares of Common Stock issued or sold, or deemed to
                           have been issued or sold by the Corporation by the
                           provisions of clause (1), into the Aggregate
                           Consideration Received, or deemed to have been
                           received by the Corporation by the provisions of this
                           clause (4), for such issue or sale of such Additional
                           Shares of Common Stock; and

                                    (5) "Rights or Options" shall mean warrants,
                           options or other rights to purchase or otherwise
                           acquire shares of Common Stock or Convertible
                           Securities.

                           (C) For the purpose of making any adjustment to the
                  Series A Preferred Conversion Price, Series B Preferred
                  Conversion Price or Series C Preferred Conversion Price
                  required under this subsection (ix), if the Corporation issues
                  or sells any Rights or Options or Convertible Securities (or
                  shall fix a record date for the determination of holders of
                  any class of securities then entitled to receive any such
                  Rights or Options or Convertible Securities), then the
                  Corporation shall be deemed (x) to have issued, at the time of
                  the issuance of such Rights or Options or Convertible
                  Securities, that number of Additional Shares of Common Stock
                  that is equal to the maximum number of shares of Common Stock

                                      -13-
<PAGE>

                  issuable upon exercise of such Rights or Options or conversion
                  or exchange of such Convertible Securities upon their issuance
                  (or, in the case such a record date shall have been fixed, as
                  of the close of business on such record date) and (y) to have
                  received, as the Aggregate Consideration Received for the
                  deemed issuance of such additional shares of Common Stock, an
                  amount equal to the total amount of the consideration, if any,
                  received by the Corporation for the issuance of such Rights or
                  Options or Convertible Securities, plus, in the case of such
                  Rights or Options, the minimum total amount of consideration,
                  if any, payable to the Corporation upon the exercise in full
                  of such Rights or Options (including, with respect to Rights
                  or Options for Convertible Securities, the minimum aggregate
                  amount of consideration payable to the Corporation (other than
                  by cancellation of liabilities or obligations evidenced by
                  such Rights or Options) upon the conversion or exchange of
                  such underlying Convertible Securities), plus, in the case of
                  Convertible Securities, the minimum total amount of
                  consideration, if any, payable to the Corporation (other than
                  by cancellation of liabilities or obligations evidenced by
                  such Convertible Securities) upon the conversion or exchange
                  thereof; PROVIDED THAT:

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

                                    (2) if the minimum amount of consideration
                           payable to the Corporation upon the exercise of such
                           Rights or Options or the conversion or exchange of
                           such Convertible Securities is reduced or the maximum
                           number of shares of Common Stock issuable upon the
                           exercise of such Rights or Options or the conversion
                           or exchange of such Convertible Securities is
                           increased over time or upon the occurrence or
                           non-occurrence of specified events, other than by
                           reason of antidilution or similar protective
                           adjustments, then the Series A Preferred Conversion
                           Price, Series B Preferred Conversion Price, and
                           Series C Preferred Conversion Price computed upon the
                           original issue or deemed issue thereof (or upon the
                           occurrence of a record date with respect thereto),
                           and any subsequent adjustments based thereon, shall,
                           upon any such decrease or increase becoming
                           effective, be recomputed to reflect such decrease or
                           increase, as the case may be (provided, however, that
                           no such adjustment of the Series A Preferred
                           Conversion Price, Series B Preferred Conversion Price
                           and Series C Preferred Conversion Price shall affect
                           Common Stock previously issued upon conversion of the
                           Series A Preferred Stock, Series B Preferred Stock
                           and Series C Preferred Stock, respectively); and

                                    (3) if the minimum amount of consideration
                           payable to the Corporation upon the exercise of such
                           Rights or Options or the conversion or exchange of
                           such Convertible Securities is subsequently increased
                           or the maximum number of shares of Common Stock
                           issuable upon the exercise of such Rights or Options

                                      -14-
<PAGE>

                           or the conversion or exchange of such Convertible
                           Securities is subsequently decreased, then the Series
                           A Preferred Conversion Price, Series B Preferred
                           Conversion Price and Series C Preferred Conversion
                           Price computed upon the original issue or deemed
                           issue thereof (or upon the occurrence of a record
                           date with respect thereto), and any subsequent
                           adjustments based thereon, shall, upon any such
                           increase or decrease becoming effective, be
                           recomputed to reflect such increase or decrease, as
                           the case may be, (provided, however, that no such
                           adjustment of the Series A Preferred Conversion
                           Price, Series B Preferred Conversion Price or Series
                           C Preferred Conversion Price shall affect Common
                           Stock previously issued upon conversion of the Series
                           A Preferred Stock, Series B Preferred Stock or Series
                           C Preferred Stock, respectively, and further provided
                           that no readjustment pursuant to this clause (3)
                           shall have the effect of increasing the Series A
                           Preferred Conversion Price, Series B Preferred
                           Conversion Price or Series C Preferred Conversion
                           Price, as applicable, to an amount which exceeds the
                           lower of (A) the Series A Preferred Conversion Price,
                           Series B Preferred Conversion Price or Series C
                           Preferred Conversion Price, as applicable, or (B) the
                           Series A Preferred Conversion Price, Series B
                           Preferred Conversion Price or Series C Preferred
                           Conversion Price, as applicable, that would have
                           resulted from any issuance of Additional Shares of
                           Common Stock between the original adjustment date and
                           such readjustment date).

                  No further adjustment of the Series A Preferred Conversion
                  Price, Series B Preferred Conversion Price or Series C
                  Preferred Conversion Price, adjusted upon the issuance of such
                  Rights or Options or Convertible Securities, shall be made as
                  a result of the actual issuance of shares of Common Stock on
                  the exercise of any such Rights or Options or the conversion
                  or exchange of any such Convertible Securities. If any such
                  Rights or Options or the conversion rights represented by any
                  such Convertible Securities shall expire without having been
                  fully exercised, then the Series A Preferred Conversion Price,
                  Series B Preferred Conversion Price or Series C Preferred
                  Conversion Price, as adjusted upon the issuance of such Rights
                  or Options or Convertible Securities (or upon the occurrence
                  of the record date with respect thereto), and any subsequent
                  adjustments based thereon, shall be readjusted to the Series A
                  Preferred Conversion Price, Series B Preferred Conversion
                  Price or Series C Preferred Conversion Price which would have
                  been in effect had an adjustment been made on the basis that
                  (x) the only Additional Shares of Common Stock so issued were
                  the shares of Common Stock, if any, that were actually issued
                  or sold on the exercise of such Rights or Options or rights of
                  conversion or exchange of such Convertible Securities and (y)
                  the consideration received with respect to Additional Shares
                  of Common Stock was the consideration actually received by the
                  Corporation upon such exercise of such Rights or Options, plus

                                      -15-
<PAGE>

                  the consideration, if any, actually received by the
                  Corporation for the granting of all such Rights or Options,
                  whether or not exercised, plus the consideration received for
                  issuing or selling all such Convertible Securities actually
                  converted or exchanged, plus the consideration, if any,
                  actually received by the Corporation (other than by
                  cancellation of liabilities or obligations evidenced by such
                  Convertible Securities) on the conversion or exchange of such
                  Convertible Securities provided, however, that no such
                  adjustment of the Series A Preferred Conversion Price, Series
                  B Preferred Conversion Price or Series C Preferred Conversion
                  Price shall affect Common Stock previously issued upon
                  conversion of the Preferred Stock. In the case of any Rights
                  or Options which expire by their terms not more than 30 days
                  after the date of issue thereof, no adjustment of the Series A
                  Preferred Conversion Price, Series B Preferred Conversion
                  Price or Series C Preferred Conversion Price shall be made
                  (except as to shares of Preferred Stock converted in such
                  period) until the expiration or exercise of all such Rights or
                  Options, whereupon such adjustment shall be made in the same
                  manner provided above. If any such record date shall have been
                  fixed and such Rights or Options or Convertible Securities are
                  not issued on the date fixed thereof, the adjustment
                  previously made in the Series A Preferred Conversion Price,
                  Series B Preferred Conversion Price or Series C Preferred
                  Conversion Price which became effective on such record date
                  shall be canceled as of the close of business on such record
                  date, and shall instead be made on the actual date of
                  issuance, if any.

                  (x) PREFERRED STOCK WARRANTS. Notwithstanding anything
         contained herein, in the event that any warrants for the Series A
         Preferred Stock outstanding as of the Original Issue Date are exercised
         (a "Warrant Exercise"), the Corporation shall immediately issue to each
         holder of Series C Preferred Stock such additional shares of Series C
         Preferred Stock so that such holder's percentage ownership of the
         Corporation's Common Stock on a fully-diluted basis after such Warrant
         Exercise is equal to its percentage ownership of the Corporation's
         Common Stock on a fully-diluted basis immediately prior to such Warrant
         Exercise. The holders of Series C Preferred Stock shall be entitled to
         receive additional shares of Series C Preferred Stock pursuant to this
         subsection (x) upon each Warrant Exercise.

                  (xi) CERTIFICATE OF ADJUSTMENT. In each case of an adjustment
         or readjustment of the Series A Preferred Conversion Price, Series B
         Preferred Conversion Price or Series C Preferred Conversion Price for
         the number of shares of Common Stock or other securities issuable upon
         conversion of the Preferred Stock, or if the Preferred Stock is then
         convertible pursuant to this Section (d), the Corporation, at its
         expense, shall compute such adjustment or readjustment in accordance
         with the provisions hereof and prepare a certificate showing such
         adjustment or readjustment, and shall mail such certificate, by first
         class mail, postage prepaid, to each registered holder of Preferred
         Stock at the holder's address as shown in the Corporation's books. The
         certificate shall set forth such adjustment or readjustment, showing in
         detail the facts upon which such adjustment or readjustment is based,
         including a statement of (i) the consideration received or deemed to be
         received by the Corporation for any Additional Shares of Common Stock
         issued or sold or deemed to have been issued or sold, (ii) the Series A
         Preferred Conversion Price, Series B Preferred Conversion Price or
         Series C Preferred Conversion Price at the time in effect, (iii) the
         number of Additional Shares of Common Stock and (iv) the type and
         amount, if any, of other property which at the time would be received
         upon conversion of the Preferred Stock.

                                      -16-
<PAGE>

                  (xii) NOTICES OF RECORD DATE. Upon (i) any taking by the
         Corporation of a record of the holders of any class of securities for
         the purpose of determining the holders thereof who are entitled to
         receive any dividend or other distribution, or (ii) any Acquisition (as
         defined in Section (c)) or other capital reorganization of the
         Corporation, any reclassification or recapitalization of the capital
         stock of the Corporation, any merger or consolidation of the
         Corporation with or into any other corporation, or any Asset Transfer
         (as defined in Section (c)), or any voluntary or involuntary
         dissolution, liquidation or winding up of the Corporation, the
         Corporation shall mail to each holder of Preferred Stock at least 10
         days prior to the record date specified therein (or such shorter period
         approved by a majority of the outstanding Preferred Stock) a notice
         specifying (A) the date on which any such record is to be taken for the
         purpose of such dividend or distribution and a description of such
         dividend or distribution, (B) the date on which any such Acquisition,
         reorganization, reclassification, transfer, consolidation, merger,
         Asset Transfer, dissolution, liquidation or winding up is expected to
         become effective, and (C) the date, if any, that is to be fixed as to
         when the holders of record of Common Stock (or other securities) shall
         be entitled to exchange their shares of Common Stock (or other
         securities) for securities or other property deliverable upon such
         Acquisition, reorganization, reclassification, transfer, consolidation,
         merger, Asset Transfer, dissolution, liquidation or winding up.

                  (xiii) FRACTIONAL SHARES. No fractional shares of Common Stock
         shall be issued upon conversion of Preferred Stock. All shares of
         Common Stock (including fractions thereof) issuable upon conversion of
         more than one share of Preferred Stock by a holder thereof shall be
         aggregated for purposes of determining whether the conversion would
         result in the issuance of any fractional share. If, after the
         aforementioned aggregation, the conversion would result in the issuance
         of any fractional share, the Corporation shall, in lieu of issuing any
         fractional share, pay cash equal to the product of such fraction
         multiplied by the Common Stock's fair market value (as determined by
         the Board of Directors) on the date of conversion.

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

                                      -17-
<PAGE>

                  (xv) NOTICES. Any notice required by the provisions of this
         Section (d) shall be in writing and shall be deemed effectively given:
         (i) upon personal delivery to the party to be notified, (ii) when sent
         by confirmed electronic mail or facsimile if sent during normal
         business hours of the recipient; if not, then on the next business day,
         (iii) five days after having been sent by registered or certified mail,
         return receipt requested, postage prepaid, or (iv) one (1) day after
         deposit with a nationally recognized overnight courier, specifying next
         day delivery, with verification of receipt. All notices shall be
         addressed to each holder of record at the address of such holder
         appearing on the books of the Corporation.

                  (xvi) PAYMENT OF TAXES. The Corporation will pay all taxes
         (other than taxes based upon income) and other governmental charges
         that may be imposed with respect to the issue or delivery of shares of
         Common Stock upon conversion of shares of Preferred Stock, excluding
         any tax or other charge imposed in connection with any transfer
         involved in the issue and delivery of shares of Common Stock in a name
         other than that in which the shares of Preferred Stock so converted
         were registered.

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

         (E)      MANDATORY REDEMPTION.

                  (i) REQUEST BY HOLDERS OF PREFERRED STOCK.

                           (A) SERIES A PREFERRED REDEMPTION. Upon the prior
                  written request of the holders of at least twenty-five percent
                  (25%) of the Series A Preferred Stock, on a date that is five
                  (5) years following the Corporation's first issuance of Series
                  A Preferred Stock (the "Series A Redemption Date"), the
                  Corporation shall redeem for cash, out of legally available
                  funds, all of the issued and outstanding shares of the Series
                  A Preferred Stock.

                           (B) SERIES B PREFERRED REDEMPTION. Upon the prior
                  written request of the holders of at least twenty-five percent
                  (25%) of the Series B Preferred Stock, on March 31, 2006 (the
                  "Series B Redemption Date"), the Corporation shall redeem for
                  cash, out of legally available funds, all of the issued and
                  outstanding shares of the Series B Preferred Stock.

                           (C) SERIES C PREFERRED REDEMPTION. Upon the prior
                  written request of the holders of a majority in interest of
                  the Series C Preferred Stock, on September 1, 2009 (the
                  "Series C Redemption Date"), the Corporation shall redeem for
                  cash, out of legally available funds, all of the issued and
                  outstanding shares of the Series C Preferred Stock.

                                      -18-
<PAGE>

                  (ii) REDEMPTION PRICE OF PREFERRED STOCK. The price at which
         the Preferred Stock shall be redeemed is as follows:

                           (A) SERIES A REDEMPTION PRICE. The price at which the
                  Series A Preferred Stock shall be redeemed (the "Series A
                  Redemption Price") shall be equal to the Series A Original
                  Issue Price (as adjusted for any stock dividends,
                  combinations, splits, recapitalizations and the like with
                  respect to such shares) for each share of Series A Preferred
                  Stock plus an amount equal to all unpaid dividends which shall
                  have accrued for each share of Series A Preferred Stock so
                  redeemed.

                           (B) SERIES B REDEMPTION PRICE. The price at which the
                  Series B Preferred Stock shall be redeemed (the "Series B
                  Redemption Price") shall be equal to $10.00 (as adjusted for
                  any stock dividends, combinations, splits, recapitalizations
                  and the like with respect to such shares) for each share of
                  Series B Preferred Stock plus an amount equal to all unpaid
                  dividends which shall have accrued for each share of Series B
                  Preferred Stock so redeemed.

                           (C) SERIES A REDEMPTION PRICE. The price at which the
                  Series C Preferred Stock shall be redeemed (the "Series C
                  Redemption Price") shall be equal to the Series C Original
                  Issue Price (as adjusted for any stock dividends,
                  combinations, splits, recapitalizations and the like with
                  respect to such shares) for each share of Series C Preferred
                  Stock plus an amount equal to all unpaid dividends which shall
                  have accrued for each share of Series C Preferred Stock so
                  redeemed.

                  (iii) PAYMENT OF REDEMPTION PRICE. To receive the applicable
         Redemption Price, the holder of shares of Preferred Stock must present
         and surrender the certificate or certificates representing such shares
         (duly endorsed for transfer) to the Corporation at the principal
         executive offices of the Corporation no later than three business days
         prior to the applicable Redemption Date. The Corporation shall pay the
         Redemption Price to, or to the order of, the person whose name appears
         on such certificate or certificates as the owner thereof. The
         Corporation shall pay the entire Redemption Price on the Redemption
         Date.

                  (iv) EFFECT OF REDEMPTION. From and after the applicable
         Redemption Date, unless the Corporation shall default in providing for
         the payment of the applicable Redemption Price, all dividends on such
         shares as are accepted for redemption pursuant to this Section (e)
         shall cease to accrue, and all rights of the holders of any such shares
         subject to redemption as stockholders of the Corporation with respect
         to such shares, except the right to receive the Redemption Price, shall
         cease and terminate. Any shares of Preferred Stock that are redeemed by
         the Corporation shall be retired and shall not be reissued.

                                      -19-
<PAGE>

                           (F) WAIVER. Any rights of the holders of Series A
                  Preferred Stock, Series B Preferred Stock and Series C
                  Preferred set forth herein may be waived by the affirmative
                  vote or consent of the holders of a majority of the shares of
                  the Series A Preferred Stock, Series B Preferred Stock and
                  Series C Preferred Stock, respectively, then outstanding.

                                      -20-
<PAGE>

         IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by its President, Chief Executive Officer, Chief
Financial Officer and Secretary on December 3, 2003.

By:  /S/ HENRY F. NELSON
     -------------------
Name:    Henry F. Nelson
Title:   President, Chief Executive Officer,
         Chief Financial Officer and Secretary

                                      -21-
<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}]]