Document:

EXHIBIT 5

                             STOCKHOLDERS AGREEMENT

                            Dated as of May 10, 2000

                                  By and Among

                      COMPUTER OUTSOURCING SERVICES, INC.,

                           DB CAPITAL INVESTORS, L.P.,

                        SANDLER CAPITAL PARTNERS V, L.P.,

                        SANDLER INTERNET PARTNERS, L.P.,

                      SANDLER CO-INVESTMENT PARTNERS, L.P.

                           THE MANAGEMENT STOCKHOLDERS
                           LISTED ON SCHEDULE A HERETO

                                       and

                         THE NON-MANAGEMENT STOCKHOLDERS
                           LISTED ON SCHEDULE B HERETO
===============================================================================

                             STOCKHOLDERS AGREEMENT

          STOCKHOLDERS  AGREEMENT (this "Agreement"),  dated as of May 10, 2000,
by and among Computer  Outsourcing  Services,  Inc., a Delaware corporation (the
"Company"), DB Capital Investors, L.P. ("DB Capital"),  Sandler Capital Partners
V, L.P., Sandler Internet Partners,  L.P., Sandler Co-Investment  Partners, L.P.
(each individually,  a "Sandler Entity,"  collectively the "Sandler  Entities"),
the individuals  listed on Schedule A hereto (each  individually,  a "Management
Stockholder" and, collectively,  the "Management  Stockholders") and each of the
Persons  listed on  Schedule  B hereto  (each,  individually  a  "Non-Management
Stockholder" and, collectively,  the "Non-Management  Stockholders") (each of DB
Capital, each Sandler Entity, the Management Stockholders and the Non-Management
Stockholders is hereinafter referred to as a "Stockholder").

                              W I T N E S S E T H :

          WHEREAS, the Management Stockholders own shares of Common Stock, $0.01
par value of the Company (the "Common Stock");

          WHEREAS,  pursuant to the terms of that  certain  Securities  Purchase
Agreement dated as of April 7, 2000 (the "Securities Purchase Agreement") by and
between the Company,  DB Capital and the Sandler Entities will acquire shares of
8% Series A Cumulative  Convertible  Participating  Preferred  Stock,  par value
$0.01 per share (the "Series A Preferred  Stock"),  together  with Warrants (the
"Warrants")  to  purchase  (the  "Warrant  Shares")  Common  Stock (the Series A
Preferred  Stock,  the  Warrants,  the Warrant  Shares and the Common  Stock are
referred to herein collectively as the "Securities");

          WHEREAS,  the Company and the Stockholders each desire to grant to the
others certain rights in connection  with the Securities now or hereafter  owned
by them as set forth herein and to assume certain obligations; and

          WHEREAS,  the execution and delivery of this  Agreement is a condition
precedent to the consummation of the transaction  contemplated by the Securities
Purchase Agreement.

          NOW,  THEREFORE,  in  consideration of the mutual covenants herein set
forth and other good and valuable consideration,  the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

                                    ARTICLE I

                               CERTAIN DEFINITIONS

          SECTION 1.1 Certain Definitions.  For purposes of this Agreement,  the
following terms shall have the following meanings:

               (a)  "Affiliate"  means,  with  respect to any Person,  any other
     Person  directly or  indirectly  controlling,  or  controlled,  by or under
     direct or indirect common control with,  such Person.  For purposes of this
     definition,  "control" when used with respect to any Person means the power
     to  direct  the  management  and  policies  of  such  Person,  directly  or
     indirectly, whether through the ownership of voting securities, by contract
     or otherwise;  and the terms  "controlling"  and "controlled" have meanings
     correlative to the foregoing.

               (b) "Applicable Law" means (a) any United States federal,  state,
     local or foreign law, statute, rule,  regulation,  order, writ, injunction,
     judgment,  decree or permit of any Governmental  Authority and (b) any rule
     or listing requirement of any applicable national stock exchange or listing
     requirement of any national stock exchange or Commission recognized trading
     market on which securities issued by the Company or any of the Subsidiaries
     are listed or quoted.

               (c) "Board of  Directors" or "Board" means the Board of Directors
     of the Company or any committee thereof duly authorized to act on behalf of
     such Board.

               (d) "Capital  Stock" means,  with respect to any Person,  any and
     all  shares,  interests,  participations,  rights in, or other  equivalents
     (however  designated and whether voting and/or non-voting) of such Person's
     capital stock,  whether outstanding on the Closing Date or issued after the
     Closing  Date,  and  any  and  all  rights  (other  than  any  evidence  of
     indebtedness),  warrants or options  exchangeable  for or convertible  into
     such capital stock.

               (e)  "Change  of  Control"  means  the  occurrence  of any of the
     following  events:  (a) any  "person" or "group" (as such terms are used in
     Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
     owner" (as defined in Rule 13d-3 and 13d-5 under the Exchange  Act,  except
     that a  Person  shall  be  deemed  to have  "beneficial  ownership"  of all
     securities that such Person has the right to acquire, whether such right is
     exercisable  immediately  or only after the  passage of time),  directly or
     indirectly,  of more  than 50% of the  total  Voting  Capital  Stock of the
     Company  or (b) the  Company  consolidates  with,  or merges  with or into,
     another Person or sells, assigns, conveys,  transfers,  leases or otherwise
     disposes of all or  substantially  all of its assets to any Person,  or any
     Person  consolidates with, or merges with or into the Company,  in any such
     event  pursuant to a  transaction  in which the holders of the  outstanding
     Voting Capital Stock of the Company  immediately  prior to such transaction
     hold less than 50% of the outstanding Voting Capital Stock of the surviving
     or  transferee  company  or  its  parent  company   immediately  after  the
     transaction or immediately  after such  transaction any "person" or "group"
     (as such terms are used in Sections  13(d) and 14(d) of the Exchange  Act),
     is the  "beneficial  owner" (as  defined in Rules 13d-3 and 13d-5 under the
     Exchange  Act,  except  that a person  shall be deemed to have  "beneficial
     ownership"  of all  securities  that such  person has the right to acquire,
     whether such right is exercisable  immediately or only after the passage of
     time), directly or indirectly, of more than 50% of the total Voting Capital
     Stock  of  the  surviving  or  transferee  company  or its  parent  company
     immediately   after  the  transaction  as  applicable  or  (c)  during  any
     consecutive  two-year  period,  individuals  who at the  beginning  of such
     period constituted the Board of Directors  (together with any new directors
     whose  election by the Board of Directors or whose  nomination for election
     by the  stockholders of the Company was approved by a vote of a majority of
     the  directors  then  still in  office  who were  either  directors  at the
     beginning of such period or whose  election or nomination  for election was
     previously  so approved)  cease for any reason to  constitute a majority of
     the Board of  Directors  then in office or (d) any  transaction  subject to
     Rule 13e-3 under the Exchange Act if following such Rule 13e-3  transaction
     a Person  owns  more  than 50% of the  total  Voting  Capital  Stock of the
     Company.

               (f) "Closing Date" means May 10, 2000.

               (g) "Commission"  means the United States Securities and Exchange
     Commission.

               (h) "Exchange Act" means the Securities  Exchange Act of 1934, as
     amended.

               (i)  "Governmental  Authority"  means (i) any  foreign,  Federal,
     state or local court or  governmental  or  regulatory  agency or authority,
     (ii) any  arbitration  board,  tribunal or mediator  and (iii) any national
     stock exchange or Commission  recognized trading market on which securities
     issued by the Company or any of the Subsidiaries are listed or quoted.

               (j) "Holder" means the Person in whose name any of the Securities
     are registered.

               (k)  "Option  Agreements"  means  each of  those  certain  Option
     Agreements dated as of the Closing Date between each of DB Capital and each
     of the Sandler Entities, on the one hand, and Lonstein, on the other hand.

               (l)  "Person"  means any  individual,  partnership,  corporation,
     limited liability company, joint venture, association, joint-stock company,
     trust,  unincorporated  organization  or  government or agency or political
     subdivision thereof, or other entity.

               (m) "Registration Rights Agreement" means the Registration Rights
     Agreement,  to be dated as of the  Closing  Date to be entered  into by and
     between the Company, DB Capital Investors, L.P. and Zach Lonstein.

               (n)  "Subsidiary"   means,  with  respect  to  any  Person,   any
     corporation, association or other business entity of which more than 50% of
     the total voting power of shares of Capital Stock or other equity interests
     entitled  (without regard to the occurrence of any  contingency) to vote in
     the  election of directors or other  managing  authority  thereof is at the
     time owned or controlled,  directly or  indirectly,  by such Person and its
     Subsidiaries.

               (o)  "Voting  Capital  Stock"  means with  respect to any Person,
     securities  of any  class  or  classes  of  Capital  Stock  in such  Person
     ordinarily  entitling the holders  thereof  (whether at all times or at the
     times that such class of  Capital  Stock has voting  power by reason of the
     happening  of any  contingency)  to vote in the  election of members of the
     board of directors or comparable governing body of such Person.

                                   ARTICLE II

                               TRANSFER OF SHARES

          SECTION.  2.1  Restrictions.  (a) No Stockholder  shall sell,  assign,
pledge, hypothecate,  deposit in any voting trust, or in any manner, transfer or
dispose of any of the Securities or any right or interest therein, to any Person
(each such action, a "Transfer") except as permitted by this Agreement.

          (b)  From  and  after  the  date   hereof,   all  share   certificates
representing  Securities  held by any of the  Stockholders  shall  bear a legend
which shall state as follows:

         THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE ARE SUBJECT TO CERTAIN
         RESTRICTIONS  AGAINST  TRANSFER SET FORTH IN A  STOCKHOLDERS  AGREEMENT
         DATED AS OF MAY 10,  2000,  AS MAY BE AMENDED FROM TIME TO TIME. A COPY
         OF SUCH  STOCKHOLDERS  AGREEMENT  HAS BEEN  FILED IN THE  OFFICE OF THE
         COMPANY LOCATED AT 2 CHRISTIE HEIGHTS STREET, LEONIA, NEW JERSEY 07605,
         WHERE THE SAME MAY BE INSPECTED DAILY DURING BUSINESS HOURS.

          (c) In addition to the legend  required by Section  2.1(b) above,  all
share certificates representing Securities held by any of the Stockholders shall
bear a legend which shall state as follows:

         "THE  SECURITIES   REPRESENTED  BY  THIS   CERTIFICATE  HAVE  NOT  BEEN
         REGISTERED   UNDER  THE   SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
         "SECURITIES  ACT") OR THE  SECURITIES  LAWS OF ANY STATE OF THE  UNITED
         STATES. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
         HYPOTHECATED   OR  OTHERWISE   DISPOSED  OF  IN  THE  ABSENCE  OF  SUCH
         REGISTRATION OTHER THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
         REQUIREMENTS."

          (d)  Promptly  upon  execution  and delivery of this  Agreement,  each
Stockholder  shall deliver to the Secretary of the Company all certificates then
held by such Stockholder  representing Securities which do not have such legends
affixed  thereto as are required by Section 2.1 above.  The Company  shall cause
such  legends  to be  affixed  promptly  to each of such  certificates  and such
certificates  to be returned  promptly to the  registered  Holder  thereof.  The
Company  agrees that it will not cause or permit the Transfer of any  Securities
to be made on its books unless the Transfer is permitted by this  Agreement  and
has been made in accordance with the terms hereof.

          SECTION 2.2 Permitted Transfers.  (a) Notwithstanding  anything to the
contrary  contained  herein,  a  Stockholder  may at any time  effect any of the
following  Transfers  (each  a  "Permitted  Transfer"  and  each  transferee,  a
"Permitted Transferee"):

               (i) A  Stockholder's  Transfer of any or all Securities  owned by
     such Stockholder following such Stockholder's death by will or intestacy to
     such Stockholder's legal representative, heir or legatee.

               (ii) A Stockholder's  Transfer of any or all Securities  owned by
     such Stockholder as a gift or gifts during such  Stockholder's  lifetime to
     such  Stockholder's  spouse,  children,  grandchildren  or a trust or other
     legal entity for the benefit of any  Stockholder  or any of the  foregoing,
     provided that such Stockholder  retains voting control of the Securities so
     transferred.

               (iii) With respect to the  Management  Stockholders  prior to the
     second anniversary of the date of this Agreement,  any Transfer approved in
     advance by the Board of Directors.

               (iv) With respect to any  Management  Stockholder,  a Transfer of
     any or all Securities owned by such Management Stockholder (a) which occurs
     after the second  anniversary  of the date of this Agreement and (b) is (i)
     in any  transaction in compliance with Rule 144 under the Securities Act or
     any successor  rule or regulation;  provided,  however,  that,  without the
     consent of the Board of Directors of the Company, no Management Stockholder
     shall  Transfer an amount of  Securities  in any twelve  month period which
     exceeds the number of such  Securities  which such  Management  Stockholder
     could  permissibly  sell  under Rule  144(e)(1)  under the  Securities  Act
     (whether  or not  such  Management  Stockholder  is  then  subject  to Rule
     144(e)(1)),   (ii)  in  any  transaction   exempt  from  the   registration
     requirements  of the  Securities  Act or (iii)  pursuant to a  registration
     statement.

               (v) With respect to any of DB Capital,  any Sandler Entity or any
     Non-Management Stockholder, a Transfer of any or all Securities owned by it
     (a) to an Affiliate that has agreed in writing to be bound by the terms and
     provisions  of Section 2.1 and 2.2 to the same extent that such party would
     be  bound if it  beneficially  owned  the  Securities  transferred  to such
     Affiliate or (b) (i) in any  transaction in compliance  with Rule 144 under
     the  Securities  Act  or  any  successor  rule  or  regulation,  (ii)  in a
     transaction exempt from the registration requirements of the Securities Act
     or (iii) pursuant to a registration statement.

               (vi) With respect to any Management Stockholder,  any transfer to
     any  Person  at any  time  after  the  date on which  (x) the  Company  has
     terminated the  employment of such  Management  Stockholder  other than for
     cause or (y) such Management Stockholder has terminated his employment with
     the Company for "good reason" as defined in such  Management  Stockholder's
     employment  agreement or consulting  agreement with the Company (or if such
     Management  Stockholder does not have an employment or consulting agreement
     with the Company or such employment  agreement or consulting agreement does
     not define "good  reason",  as "good reason" is defined in Zach  Lonstein's
     ("Lonstein") employment agreement with the Company).

               (vii) A Transfer pursuant to a registered  offering of securities
     which  is  effected   pursuant  to  rights  granted  to  the   transferring
     Stockholder pursuant to the Registration Rights Agreement.

               (viii) A Transfer by a Stockholder to the Company.

               (ix) A Transfer by  Lonstein to DB Capital or any Sandler  Entity
     pursuant to any Option Agreement.

          (b) In any such Transfer referred to above in Section 2.2(a)(i),  (ii)
or (ix), the Permitted Transferee shall receive and hold such Securities subject
to the  provisions of this  Agreement as if such  Permitted  Transferee  were an
original signatory hereto and such Permitted  Transferee shall be deemed to be a
party to this Agreement.

          (c) Not later than ten (10) days  before  effecting  any  Transfer  of
Securities,  the Holder proposing to make such Transfer shall give notice to the
Company  (with a copy to DB Capital and the Sandler  Entities) of such  proposed
Transfer, specifying the method of disposition and the amount of shares to be so
Transferred.

                                   ARTICLE III

                        BOARD OF DIRECTORS OF THE COMPANY

          SECTION 3.1 Board of Directors.  (a) Each  Stockholder  agrees to vote
all of the  Securities  held  by  such  Stockholder  (to  the  extent  all  such
securities are entitled to vote) so as to elect and maintain a Board composed of
the following:  (i) two people designated by Lonstein;  provided that so long as
Lonstein is the Chief  Executive  Officer of the Company one such designee shall
be  Lonstein,  (ii)  two  people  designated  by DB  Capital  (the  "DB  Capital
Directors"),  (iii) two people  designated by the Sandler Entities (the "Sandler
Directors")  and  (iv)  three  additional  directors,  each  of  whom  shall  be
unaffiliated  with the Company,  designated  by mutual  consent of Lonstein,  DB
Capital and Sandler;  provided  that,  notwithstanding  anything to the contrary
herein, if the Chief Executive Officer of the Company has not been designated as
a director of the Company  pursuant to clause (i), (ii) or (iii) of this Section
3.1(a), then one of the persons designated as a director pursuant to this clause
(iv) shall be the Chief Executive Officer of the Company.

          (b) In the event that any director  designated by any  Stockholder for
any  reason  ceases  to serve as a  director  during  his  term of  office,  the
resulting vacancy on the Board shall be filled by a director  designated by such
Stockholder.

          SECTION 3.2 Election. Promptly upon the execution and delivery of this
Agreement,  the  Stockholders  shall  take all such  action as may be  necessary
(including, but not limited to, the removal of directors).

                                   ARTICLE IV

                                CERTAIN DECISIONS

          SECTION 4.1 Series A Preferred Stock Directors Approval. The following
acts,  expenditures,  decisions and obligations  made or incurred by the Company
shall require the prior written approval of (x) the DB Capital Directors and (y)
the Sandler Directors:

               (i) the  hiring or  termination  of any  senior  officers  of the
     Company or any Subsidiary  including,  without limitation,  with respect to
     the Company and  Infocrossing,  Inc., the Chief  Executive  Officer,  Chief
     Financial  Officer,  Chief  Operating  Officer,  President  or any  officer
     reporting  directly to the President,  or Chief Executive Officer and, with
     respect  to any  other  Subsidiary,  the  Chief  Executive  Officer,  Chief
     Operating Officer or President;

               (ii) approval of the Company's  annual  business plan,  operating
     budget and capital budget;

               (iii)  any  capital  expenditure  or series  of  related  capital
     expenditures  by the  Company  or any  Subsidiary  to the  extent  (x)  not
     otherwise  included  in the  approved  annual  capital  budget  or (y) such
     expenditure or series of expenditures would cause,  together with all other
     capital  expenditures  to such time,  the  Company's  capital  budget to be
     exceeded by $250,000 in the aggregate;

               (iv) in a single  transaction or series of related  transactions,
     the  consolidation or merger with or into, or sale,  assignment,  transfer,
     lease,  conveyance or disposal of all or substantially all of the Company's
     assets to,  any  Person;  the  agreement  to any plan of  recapitalization;
     consent to, approval or recommendation of any tender offer for any class or
     series  of  the  Company's   Capital  Stock  or  consent  to,  approval  or
     recommendation  of any Change of Control of, or action which is expected to
     result in a Change of Control  of, the  Company;  or  adoption of a plan of
     liquidation or the making of any payments in liquidation or with respect to
     the winding up of the Company;

               (v) the  authorization or creation of,  modification of the terms
     of or,  increase in the authorized  amount of any class or series of equity
     securities of the Company or the issuance or sale of any equity  securities
     or any equity  securities  which are  convertible or  exchangeable  into or
     exercisable  for any  equity  securities  of the  Company,  other  than (i)
     compensatory  or  incentive  stock  options (or any shares of Common  Stock
     issued upon the exercise  thereof) issued pursuant to employee stock option
     plans of the Company  which have been approved by the Board of Directors of
     the  Company,  (B)  issuances  of  Common  Stock  to  employees,  officers,
     directors  and  consultants  of the Company,  pursuant to employee  benefit
     plans  approved by the Board of Directors of the Company,  or (C) shares of
     Common Stock issued upon (x) the conversion of the Series A Preferred Stock
     or (y) the exercise of the Warrants.

               (vi) the making,  or  permitting  of any of the  Subsidiaries  to
     make,  any  acquisition  or  divestiture  in which the total  consideration
     exceeds $5,000,000;

               (vii) incurring,  guaranteeing or otherwise incurring or assuming
     any  obligations  or any  indebtedness  for borrowed  money or  capitalized
     leases (other than  indebtedness  of the Company to any of its wholly owned
     Subsidiaries  or of any  Subsidiary  of the  Company to the  Company or any
     wholly owned  Subsidiary of the Company)  (other than trade payables in the
     ordinary course of business) in excess of $2,500,000 in the aggregate;

               (viii) entering into any  transaction  with  (including,  without
     limitation, the purchase, lease or sale of any property of the rendering of
     or contracting  for any services)  with any Affiliate  (other than a wholly
     owned  Subsidiary)  of the  Company;  provided,  that the Company may issue
     options or shares of Common  Stock to  Affiliates  (other than wholly owned
     Subsidiaries)  of the  Company  to the  extent  such  options or shares are
     issued  pursuant to the terms of  employee  benefit  plans  approved by the
     Board of Directors of the Company; and

               (ix) increasing the number of options, shares of Common Stock, or
     other  securities  which may be granted  under,  or which are subject to or
     underlie  any  employee  benefits  plan of the  Company or any  Subsidiary,
     including, without limitation, any stock option plan, stock incentive plan,
     restricted stock plan, stock  appreciation  rights plan, phantom stock plan
     or other similar plan.

          SECTION 4.2 Certain Actions.  Each  Stockholder  hereby agrees to take
all such action as may be required to give effect to Section 4.1, including, but
not  limited  to,  the  adoption  by the Board of  Directors  of the  Company of
resolutions giving effect to such Section, and shall take all such action as may
be necessary (including the removal of directors) to cause any Person designated
by such Stockholder as a director  pursuant to Article III hereof and cause such
resolutions to be adopted.

                                    ARTICLE V

                                  MISCELLANEOUS

          SECTION  5.1 Entire  Agreement.  This  Agreement  contains  the entire
agreement  between the parties  hereto with respect to the subject matter hereof
and supersedes all prior  arrangements  or  understandings  (whether  written or
oral) with respect thereto.

          SECTION 5.2 Captions. The Article and Section captions used herein are
for  reference  purposes  only and shall not in any way  affect  the  meaning or
interpretation of this Agreement.

          SECTION 5.3  Counterparts.  For the  convenience  of the parties,  any
number of  counterparts  of this Agreement may be executed by the parties hereto
and each such executed counterpart shall be deemed to be an original instrument.

          SECTION 5.4 Notices. All notices,  consents,  requests,  instructions,
approvals and other communications  provided for herein and all legal process in
regard  hereto  shall be  validly  given,  made or  served,  if in  writing  and
delivered by personal delivery,  overnight courier,  telecopier or registered or
certified  mail,  return-receipt  requested  and postage  prepaid  addressed  as
follows:

             If to the Company, to:

                      Computer Outsourcing Services, Inc.
                      2 Christie Heights Street
                      Leonia, New Jersey 07605

                      Attention: Nicholas J. Letizia, Chief Financial Officer
                      Tel.: (201) 840-8717
                      Fax:  (201) 840-7216

              With a copy to:

                      Robinson & Cole LLP
                      695 E. Main St.
                      Stamford, CT  06904

                      Attention:  Richard A. Krantz, Esq.
                      Tel.:    (203) 462-7505
                      Fax:     (203) 462-7599

               if to DB Capital, to:

                      c/o DB Capital Partners, L.P.
                      130 Liberty Street
                      25th Floor
                      New York, New York  10006

                      Attention:  Tyler T. Zachem, Managing Director
                      Tel.:    (212) 250-8199
                      Fax:     (212) 250-7651

                With a copy to:

                       White & Case LLP
                       1155 Avenue of the Americas
                       New York, New York  10036

                       Attention:  S. Ward Atterbury, Esq.
                       Tel.:    (212) 819-8331
                       Fax:     (212) 354-8113

                if to the Sandler Entities, to:

                       c/o Sandler Capital Management
                       767 Fifth Avenue, 45th Floor
                       New York, New York  10153

                       Attention:  David C. Lee, Managing Director
                       Tel:     (212) 754-8100
                       Fax:     (212) 826-0280

               if to  any  of  the  Management  Stockholders  or  Non-Management
               Stockholders, to the addresses set forth on the books and records
               of the Company.

or to such  other  address  as any such  party  hereto  may,  from time to time,
designate in writing to all other  parties  hereto,  and any such  communication
shall be deemed to be given,  made or served as of the date so delivered  or, in
the case of any communication delivered by mail, as of the date so received.

          SECTION 5.5  Successors and Assigns.  This Agreement  shall be binding
upon and  inure to the  benefit  of the  Company,  the  Stockholders  and  their
respective heirs, devisees, legal representatives, successors, permitted assigns
and  other  permitted  transferees.  The  rights  of a  Stockholder  under  this
Agreement may not be assigned or otherwise conveyed by any Stockholder except in
connection with a Transfer of Shares which is in compliance with this Agreement.

          SECTION 5.6  GOVERNING  LAW. THIS  AGREEMENT  SHALL BE GOVERNED BY AND
CONSTRUED  AND  ENFORCED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO SUCH STATE'S CHOICE OF LAW PROVISIONS.

          SECTION 5.7 Submission to Jurisdiction. (a) Each of the parties hereto
hereby irrevocablY acknowledges and consents that any legal action or proceeding
brought with respect to any of the obligations arising under or relating to this
Agreement may be brought in the courts of the State of New York or in the United
States  District  Court for the  Southern  District  of New  York,  as the party
bringing such action or  proceeding  may elect,  and each of the parties  hereto
hereby  irrevocably  submits to and  accepts  with  regard to any such action or
proceeding,   for  itself  and  in  respect  of  its  property,   generally  and
unconditionally,  the jurisdiction of the aforesaid  courts.  Subject to Section
5.7(b),  the foregoing  shall not limit the rights of any party to serve process
in any other manner  permitted by law. The  foregoing  consents to  jurisdiction
shall not constitute  general consents to service of process in the State of New
York for any purpose  except as provided above and shall not be deemed to confer
rights on any Person other than the respective parties to this Agreement.

          (b) Each of the  parties  hereto  hereby  waives any right it may have
under the laws of any  jurisdiction  to commence by publication any legal action
or proceeding with respect to this Agreement. To the fullest extent permitted by
Applicable  Law,  each of the  parties  hereto  hereby  irrevocably  waives  the
objection  which it may now or hereafter  have to the laying of the venue of any
suit,  action or proceeding  arising out of or relating to this Agreement in any
of the courts  referred  to in Section  5.7(a)  and hereby  further  irrevocably
waives  any claim  that any such  court is not a  convenient  forum for any such
suit, action or proceeding.

          (c) The parties  hereto agree that any judgment  obtained by any party
hereto or its successors or assigns in any action,  suit or proceeding  referred
to above may, in the discretion of such party (or its successors or assigns), be
enforced in any jurisdiction, to the extent permitted by Applicable Law.

          (d) The parties  hereto agree that the remedy at law for any breach of
this  Agreement may be inadequate  and that should any dispute arise  concerning
the sale or disposition of any Shares or the voting thereof or any other similar
matter hereunder, this Agreement shall be enforceable in a court of equity by an
injunction or a decree of specific performance. Such remedies shall, however, be
cumulative  and  nonexclusive,  and shall be in addition  to any other  remedies
which the parties hereto may have.

          (e) The parties hereto agree that the prevailing party or parties,  as
the case may be, in any action,  suit,  arbitration or other proceeding  arising
out of or with respect to this Agreement or the transactions contemplated hereby
shall  be  entitled  to  reimbursement  of all  costs of  litigation,  including
reasonable  attorneys' fees, from the non-prevailing party. For purposes of this
Section 5.7(e), each of the "prevailing party" and the "non-prevailing party" in
any action, suit,  arbitration or other proceeding shall be the party designated
as such by the court,  arbitrator or other appropriate  official  presiding over
such action,  suit,  arbitration or other proceeding,  such  determination to be
made as a part of the judgment rendered thereby.

          SECTION  5.8  Benefits  Only  to  Parties.  Nothing  expressed  by  or
mentioned  in this  Agreement  iS  intended  or shall be  construed  to give any
Person,  other  than the  parties  hereto  and their  respective  successors  or
permitted  assigns,  any legal or equitable  right,  remedy or claim under or in
respect of this Agreement or any provision herein contained,  this Agreement and
all conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of the parties hereto and their respective  successors and
permitted assigns, and for the benefit of no other Person.

          SECTION 5.9  Termination.  This  Agreement  shall  terminate  upon the
happening of any one of the following events:

               (a) the voluntary or involuntary dissolution of the Company;

               (b) Each of DB Capital and the Sandler  Entities  ceasing to hold
     at least  25% of the  shares  of  Common  Stock  (calculated  assuming  the
     conversion  of the  Series  A  Preferred  Stock  and  the  exercise  of the
     Warrants) held by DB Capital or the Sandler  Entities,  as the case may be,
     on the date hereof.

          SECTION  5.10  Sunset  Provisions.  (a) On the date on which  Lonstein
ceases to hold at least 50% oF the shares of Common Stock  (calculated  assuming
the exercise of all vested  in-the-money  stock options) held by Lonstein on the
date hereof,  then the number of persons whom  Lonstein  shall have the right to
designate to serve as directors of the Company under Section  3.1(a)(i) shall be
reduced to one. On the date on which Lonstein ceases to hold at least 25% of the
shares  of  Common  Stock  (calculated  assuming  the  exercise  of  all  vested
in-the-money  stock  options)  held by Lonstein on the date  hereof,  Lonstein's
right to designate  Persons to serve as directors of the Company  under  Section
3.1(a)(i) and 3.1(a)(iv) shall terminate as of such date.

          (b) Upon the date on which DB  Capital  ceases to hold at least 25% of
the shares of Common Stock  (calculated  assuming the conversion of the Series A
Preferred Stock and the exercise of the Warrants) held by DB Capital on the date
hereof,  then DB Capital's  right to designate  Persons to serve as directors of
the Company under Section  3.1(a)(ii) and  3.1(a)(iv) and DB Capital's  right to
approve the actions specified under Section 4.1 shall terminate as of such date.

          (c) Upon the date on which  the  Sandler  Entities  ceases  to hold at
least 25% of the shares of Common Stock  (calculated  assuming the conversion of
the Series A  Preferred  Stock and the  exercise  of the  Warrants)  held by the
Sandler  Entities  on the date  hereof,  then  the  Sandler  Entities'  right to
designate Persons to serve as directors of the Company under Section 3.1(a)(iii)
and  3.1(a)(iv)  and the Sandler  Entities'  right to approve the actions  under
Section 4.1 shall terminate as of such date.

          SECTION 5.11  Publicity.  Except as otherwise  required by  Applicable
Laws,  none of the  parties  heretO  shall issue or cause to be issued any press
release  or make or cause to be made any  other  public  statement  in each case
relating to or  connected  with or arising out of this  Agreement or the matters
contained herein, without obtaining the prior approval of DB Capital, a majority
in interest  of the Sandler  Entities  and the Company to the  contents  and the
manner of presentation and publication thereof.

          SECTION 5.12 Amendments;  Waivers.  No provision of this Agreement may
be amended,  modified or waiveD  without  approval of DB Capital,  a majority in
interest  of the  Sandler  Entities,  the  Company,  66-2/3% in  interest of the
Management  Stockholders  (calculated  based on ownership  of Common  Stock) and
66-2/3% in  interest of the  Non-Management  Stockholders  (calculated  based on
ownership  of Common  Stock);  provided  that no such  amendment  or waiver of a
provision  of  this  Agreement  which  adversely   affects  the  rights  of  any
Stockholder  in a manner that does not adversely  affect all other  Stockholders
equally may be made without such  Stockholder's  consent;  provided that (x) the
Management Stockholders shall be considered as a group with the determination by
the  holders of 66-2/3% of the  outstanding  shares of Common  Stock held by the
Management Stockholders to be binding on all Management Stockholders and (y) the
Non-Management   Stockholders   shall  be   considered   as  a  group  with  the
determination by the holders of 66-23% of the outstanding shares of Common Stock
held by the  Non-Management  Stockholders  to be binding  on all  Non-Management
Stockholders;  provided,  further, that in no circumstances shall Article III or
Article IV be amended,  modified, waived or repealed without the express written
consent of DB Capital and the Sandler Entities.

          SECTION  5.13 No  Inconsistent  Agreements.  Each  Stockholder  hereby
covenants and agrees that neitheR it nor any of its Affiliates  shall enter into
any voting  agreement or grant a proxy or power of attorney  with respect to the
Securities it beneficially owns which is inconsistent with this Agreement.

                            [SIGNATURE PAGE FOLLOWS]

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.

                                      COMPUTER OUTSOURCING SERVICES, INC.

                                         By /s/Zach Lonstein
                                           --------------------------------
                                           Name:  Zach Lonstein
                                           Title: Chief Executive Officer

                                      DB CAPITAL INVESTORS, L.P.

                                         By:   DB Capital Partners, L.P.,
                                               its general partner

                                         By:   DB Capital Partners, Inc.,
                                               its general partner

                                         By /s/Frank Schiff
                                           --------------------------------
                                           Name:  Frank Schiff
                                           Title: Managing Director

                                      SANDLER CAPITAL PARTNERS V, L.P.

                                         By:  Sandler Investment Partners, L.P.,
                                              General Partner

                                         By:  Sandler Capital Management,
                                              General Partner

                                         By:  MJDM Corp., a General Partner

                                         By /s/ Ed Grinacoff
                                           --------------------------------
                                           Name:  Ed Grinacoff
                                           Title: Managing Director

                                      SANDLER INTERNET PARTNERS, L.P.

                                         By:  Sandler Investment Partners, L.P.,
                                              General Partner

                                         By:  Sandler Capital Management,
                                              General Partner

                                         By:  MJDM Corp., a General Partner

                                         By  /s/ Ed Grinacoff
                                           --------------------------------
                                           Name:  Ed Grinacoff
                                           Title: Managing Director

                                      SANDLER CO-INVESTMENT PARTNERS, L.P.

                                        By:   Sandler Investment Partners, L.P.,
                                              General Partner

                                        By:   Sandler Capital Management,
                                              General Partner

                                        By:   MJDM Corp., a General Partner

                                        By   /s/ Ed Grinacoff
                                           --------------------------------
                                           Name:  Ed Grinacoff
                                           Title: Managing Director

                                      MANAGEMENT STOCKHOLDERS

                                           /s/Zach Lonstein
                                           --------------------------------
                                           Name:  Zach Lonstein

                                           /s/Robert Wallach
                                           --------------------------------
                                           Name:  Robert Wallach

                                           /s/Warren Ousley
                                           --------------------------------
                                           Name:  Warren Ousley

                                           Name:  Joseph Germanotta

                                           /s/Tom Loudati
                                           --------------------------------
                                           Tom Loudati

                                           /s/ Ken DiSessa
                                           --------------------------------
                                           Ken DiSessa

                                           /s/Nicholas J. Letizia
                                           --------------------------------
                                           Nicholas J. Letizia

                                           /s/ Gary Lazarewicz
                                           --------------------------------
                                           Gary Lazarewicz

                                           /s/John C. Platt
                                           --------------------------------
                                           John C. Platt

                                           /s/John Stewart
                                           --------------------------------
                                           John Stewart

                                        NON-MANAGEMENT STOCKHOLDERS

                                        PRICE FAMILY LIMITED PARTNERS

                                        By: /s/Michael Price
                                           --------------------------------
                                           Name:  Michael Price
                                           Title: General Partner

                                        BENAKE, L.P.

                                         By: /s/Lynn Forester
                                           --------------------------------
                                           Name:  Lynn Forester
                                           Title: General Partner

<PAGE>
                                                                      Schedule A

MANAGEMENT STOCKHOLDERS:

   Zach Lonstein
   Robert Wallach
   Warren Ousley
   Joseph Germanotta
   Tom Loudati
   Ken DiSessa
   Nicholas J. Letizia
   Garry Lazarewicz
   John C. Platt
   John Stewart

<PAGE>

                                                                     Schedule B

NON-MANAGEMENT STOCKHOLDERS:

Price Family Limited Partners
Benake, L.P.

<PAGE>

                                TABLE OF CONTENTS

                                                                           Page

ARTICLE I  CERTAIN DEFINITIONS................................................1

       SECTION 1.1   Certain Definitions......................................1

ARTICLE II  TRANSFER OF SHARES................................................4

       SECTION 2.1  Restrictions..............................................4
       SECTION 2.2  Permitted Transfers.......................................4

ARTICLE III  BOARD OF DIRECTORS OF THE COMPANY................................6

       SECTION 3.1  Board of Directors........................................6
       SECTION 3.2  Election..................................................6

ARTICLE IV  CERTAIN DECISIONS.................................................7

       SECTION 4.1  Series A Preferred Stock Directors Approval...............7
       SECTION 4.2  Certain Actions...........................................8

ARTICLE V  MISCELLANEOUS......................................................8

       SECTION 5.1  Entire Agreement..........................................8
       SECTION 5.2  Captions..................................................8
       SECTION 5.3  Counterparts..............................................8
       SECTION 5.4  Notices...................................................9
       SECTION 5.5  Successors and Assigns...................................10
       SECTION 5.6  GOVERNING LAW............................................10
       SECTION 5.7  Submission to Jurisdiction...............................10
       SECTION 5.8  Benefits Only to Parties.................................11
       SECTION 5.9  Termination..............................................11
       SECTION 5.10  Sunset Provisions.......................................11
       SECTION 5.11  Publicity...............................................12
       SECTION 5.12  Amendments; Waivers.....................................13
       SECTION 5.13  No Inconsistent Agreements..............................13

SCHEDULE A - Management Stockholders
SCHEDULE B - Non-Management StockholdersEXHIBIT 6

                                WARRANT AGREEMENT

                                   Dated as of

                                  May 10, 2000

                                     between

                       Computer Outsourcing Services, Inc.

                                   as Issuer,

                                       and

                         the Warrantholders Party Hereto

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

                         Series A Common Stock Warrants
                                       of
                       Computer Outsourcing Services, Inc.
                  ---------------------------------------------

                                WARRANT AGREEMENT

          WARRANT  AGREEMENT  dated  as  of  May  10,  2000,  between,  Computer
Outsourcing Services, Inc., a Delaware corporation (the "Company"),  and each of
the  warrantholders  party  hereto  (collectively,  with  their  successors  and
assigns, the "Warrantholders").

                              W I T N E S S E T H:

          WHEREAS,  the Company proposes,  among other things, to issue and sell
pursuant to a Securities  Purchase  Agreement,  dated as of April 7, 2000, among
the  Company  and  DB  Capital   Investors,   L.P.  (the  "Securities   Purchase
Agreement"),  157,377 shares (the "Shares") of the Company's Series A Cumulative
Convertible  Participating  Preferred  Stock  ("Series A  Preferred  Stock") and
2,531,926 Series A Common Stock Warrants (the "Warrants"), each representing the
right to purchase one share of Common  Stock,  to be issued upon exercise of the
Warrants; and

          WHEREAS,  the execution and delivery of this  Agreement is a condition
precedent to the consummation of the transactions contemplated by the Securities
Purchase Agreement;

          NOW, THEREFORE, in consideration of the premises and mutual agreements
herein,  the Company hereby agrees as follows for the equal and ratable  benefit
of the Warrantholders:

                                    ARTICLE I

                                   DEFINITIONS

          Section 1.01. Definitions.

          "Affiliate"  of any  specified  Person  means  (i) any  other  Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common  control  with such  specified  Person or (ii) any other  Person who is a
director  or  executive  officer  (A)  of  such  specified  Person,  (B)  of any
Subsidiary of such specified Person or (C) of any Person described in clause (i)
above. For the purposes of this definition,  "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly,  whether through the ownership of voting securities,  by
contract  or  otherwise;  and the  terms  "controlling"  and  "controlled"  have
meanings correlative to the foregoing.

          "Agreement"  means this Warrant  Agreement as amended or  supplemented
from time to time.

          "Board of  Directors"  or "Board"  means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such Board.

          "Business Day" means each day that is not a Saturday,  Sunday or other
day on which  banking  institutions  in New  York,  New York are  authorized  or
required by law to close.

          "Cashless Exercise Ratio" means a fraction,  the numerator of which is
the excess of the Current Market Value per share of Common Stock on the Exercise
Date  over  the  Exercise  Price  per  share  as of the  Exercise  Date  and the
denominator  of which is the Current  Market Value per share of the Common Stock
on the Exercise Date.

          "Capital  Stock" of any Person  means any and all  shares,  interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.

          "Common  Stock" means the Common Stock,  par value $.01 per share,  of
the Company.

          "Current Market Value" per share of Common Stock or any other security
at any date means (i) if the security is not registered  under the Exchange Act,
the value of the  security,  determined  in good faith by the Board of Directors
and certified in a board resolution, or (ii) if the security is registered under
the Exchange Act, the average of the daily closing bid prices (or the equivalent
in  an  over-the-counter  market)  for  each  Business  Day  during  the  period
commencing  15  Business  Days  before  such date and ending on the date one day
prior to such date,  or if the security has been  registered  under the Exchange
Act for less than 15 consecutive  Business Days before such date, the average of
the daily closing bid prices (or such  equivalent)  for all of the Business Days
before such date for which daily  closing  bid prices are  available;  provided,
however,  that if the  closing  bid price is not  determinable  for at least ten
Business Days in such period,  the "Current  Market Value" of the security shall
be determined as if the security were not registered under the Exchange Act.

          "ETG  Earnout  Shares"  shall mean any shares of Common  Stock  issued
subsequent  to the date of the  Securities  Purchase  Agreement  pursuant to the
terms of the Asset  Purchase  Agreement  dated as of December 16,  1998,  by and
among  the  Company,  COSI  Acquisition  Corp.,   Enterprise  Technology  Group,
Incorporated   and  certain   stockholders  of  Enterprise   Technology   Group,
Incorporated  as  amended  from time to time,  (including,  without  limitation,
Sections 3.3 and 3.4 thereof).

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "Exercise  Date"  means,  for a given  Warrant,  the day on which such
Warrant is exercised pursuant to Section 3.04.

          "Holder" means the Person in whose name a Warrant is registered on the
Warrant Registrar's books.

          "Issue  Date"  means  the date on which  the  Warrants  are  initially
issued.

          "Officer"  means the  Chairman  of the Board of  Directors,  the Chief
Executive  Officer,  the  Chief  Financial  Officer,  the  President,  any  Vice
President, the Treasurer or the Secretary of the Company.

          "Person"  means  any  individual,   corporation,   partnership,  joint
venture,  limited liability company,  association,  joint-stock company,  trust,
unincorporated  organization,  government or any agency or political subdivision
thereof or any other entity.

          "Preferred  Stock",  as applied to the  Capital  Stock of any  Person,
means  Capital  Stock of any  class or  classes  (however  designated)  which is
preferred as to the payment of dividends,  or as to the  distribution  of assets
upon any voluntary or  involuntary  liquidation  or  dissolution of such Person,
over shares of Capital Stock of any other class of such Person.

          "Securities" means the Warrants and the Warrant Shares.

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

          "Securities  Purchase Agreement" has the meaning assigned to it in the
recitals hereto.

          "Series A  Preferred  Stock"  has the  meaning  assigned  to it in the
recitals hereto.

          "Shares" has the meaning assigned to it in the recitals hereto.

          "Subsidiary"  of  any  Person  means  any  corporation,   association,
partnership or other business  entity of which more than 50% of the total voting
power of shares  of  Capital  Stock or other  interests  (including  partnership
interests)  entitled  (without  regard to the occurrence of any  contingency) to
vote in the election of directors,  managers or trustees  thereof is at the time
owned or controlled, directly or indirectly, by (a) such Person, (b) such Person
and one or more  Subsidiaries of such Person or (c) one or more  Subsidiaries of
such Person.

          "Uniform  Commercial Code" shall mean the New York Uniform  Commercial
Code, as in effect from time to time.

          "Warrant" has the meaning assigned to it in the recitals hereto.

          "Warrant Certificates" mean the registered  certificates issued by the
Company under this Agreement representing the Warrants.

          "Warrant  Shares"  mean the  shares  of  Common  Stock  (and any other
securities)  for which the  Warrants are  exercisable  or which have been issued
upon exercise of Warrants.

          Section 1.02. Other Definitions.

        Term                                            Defined in Section

 "Cashless Exercise"                                          3.04
 "Company"                                                    Preamble
 "Exercise Price"                                             3.01
 "Exercise Rate"                                              4.01
 "Expiration Date"                                            3.02(b)
 "Stock Registrar"                                            3.07
 "Stock Transfer Agent"                                       3.05
 "Warrantholder"                                              Preamble
 "Warrant Registrar"                                          2.03

          Section  1.03.  Rules of  Construction.  Unless the context  otherwise
requires:

               (i) a defined term has the meaning assigned to it;

               (ii) an  accounting  term not  otherwise  defined has the meaning
     assigned to it in accordance with generally accepted accounting  principles
     as in effect from time to time;

               (iii) "or" is not exclusive;

               (iv) "including" means including without limitation; and

               (v) words in the  singular  include  the  plural and words in the
     plural include the singular.

                                   ARTICLE II

                              WARRANT CERTIFICATES

          Section 2.01. Form and Dating. The Warrant  Certificates shall each be
substantially in the form of Exhibit A hereto,  which is hereby  incorporated in
and expressly made a part of this Agreement.  The Warrant  Certificates may have
notations,  legends  or  endorsements  required  by law,  stock  exchange  rule,
agreements to which the Company is subject,  if any, or usage (provided that any
such notation,  legend or  endorsement is in a form  acceptable to the Company).
Each  Warrant  Certificate  shall be dated the date that it is  executed  by the
Company.

          Section 2.02. Execution and Countersignature.  Two Officers shall sign
the Warrant Certificates for the Company by manual or facsimile signature. If an
Officer whose signature is on a Warrant  Certificate no longer holds that office
at the time the Company issues the Warrant Certificate,  the Warrant Certificate
shall be valid nevertheless.

          Section 2.03. Warrant Registrar.  The Company shall maintain an office
or agency where Warrants may be presented for registration of transfer, exchange
or  exercise  (the  "Warrant  Registrar").  The Warrant  Registrar  shall keep a
register  of the  Warrants  and of their  transfer,  exchange or  exercise.  The
Company  may have one or more  co-registrars.  The  Company  may act as  Warrant
Registrar.  The term Warrant Registrar includes any  co-registrars.  The Company
shall initially serve as Warrant Registrar in connection with the Warrants.

          The Company shall enter into an appropriate  agency agreement with any
Warrant  Registrar not a party to this Agreement.  The agreement shall implement
the provisions of this  Agreement  that relate to such agent.  The Company shall
notify the  Warrantholders  of the name and  address of any such  agent.  If the
Company fails to maintain a Warrant Registrar, the Company shall act as such.

          The Company may remove any Warrant  Registrar  upon written  notice to
such Warrant Registrar and to the  Warrantholders;  provided,  however,  that no
such removal shall become  effective until (1) acceptance of an appointment by a
successor as evidenced by an appropriate  agreement  entered into by the Company
and such successor Warrant Registrar and delivered to the  Warrantholders or (2)
notification  to the  Warrantholders  that the  Company  shall  serve as Warrant
Registrar  until the  appointment  of a successor in accordance  with clause (1)
above.  The Warrant  Registrar may resign at any time upon written  notice.  The
Company and the Warrant  Registrar may deem and treat the Person in whose name a
Warrant  Certificate  is  registered  as the  absolute  owner  of  such  Warrant
Certificate for all purposes  whatsoever and neither the Company and the Warrant
Registrar shall be affected by notice to the contrary.

          Section 2.04.  Warrantholder  Lists.  The Company shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Warrantholders.

          Section 2.05.  Transfer and Exchange.  The Warrants shall be issued in
registered form and shall be  transferable  only upon the surrender of a Warrant
Certificate  for  registration of transfer and in compliance with the provisions
of this Agreement.  When a Warrant is presented to the Warrant  Registrar with a
request to  register a  transfer,  the  Warrant  Registrar  shall  register  the
transfer as requested  if the  requirements  of Section  8-401(a) of the Uniform
Commercial  Code are met. When  Warrants are presented to the Warrant  Registrar
with a  request  to  exchange  them for an equal  number  of  Warrants  of other
denominations, the Warrant Registrar shall make the exchange as requested if the
requirements of Section  8-401(a)(1) and (2) of the Uniform  Commercial Code are
met. To permit  registration  of  transfers  and  exchanges,  the Company  shall
execute Warrant Certificates at the Warrant Registrar's request. The Company may
require  payment  of a sum  sufficient  to pay all taxes,  assessments  or other
governmental  charges in  connection  with any  transfer,  exchange  or exercise
pursuant to this Section 2.05.

          Subject  to the  restrictions  set forth in this  Section  2.05,  each
Warrantholder  may at any time and from time to time freely transfer its Warrant
and the Warrant Shares in whole or in part. No Warrant has been, and the Warrant
Shares at the time of their issuance may not be, registered under the Securities
Act,  and,  except  as  provided  in  any  separate   agreement   providing  for
registration  rights,  nothing herein  contained  shall be deemed to require the
Company to so  register  any Warrant or Warrant  Shares.  The  Warrants  and the
Warrant  Shares are issued or issuable  subject to the provisions and conditions
contained  herein,  and every Holder of a Warrant or Warrant Shares by accepting
such Warrant or Warrant  Shares agrees with the Company to such  provisions  and
conditions,  and  represents  to the Company that such Warrant has been acquired
and the Warrant  Shares will be acquired  for the account of such  Warrantholder
for  investment  and not  with a view  to or for  sale in  connection  with  any
distribution thereof.

          Except as  otherwise  permitted  by this  Section  2.05,  each Warrant
(including each Warrant issued upon the transfer of any Warrant) and all Warrant
Shares shall be stamped or otherwise imprinted with legends in substantially the
following form:

                  (a)  "THIS  SECURITY  HAS  NOT  BEEN   REGISTERED   UNDER  THE
         SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES  ACT"),  OR THE
         SECURITIES  LAWS OF ANY  STATE  OR  OTHER  JURISDICTION.  NEITHER  THIS
         SECURITY NOR ANY  INTEREST OR  PARTICIPATION  HEREIN MAY BE  REOFFERED,
         SOLD, ASSIGNED, TRANSFERRED,  PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
         OF IN THE ABSENCE OF SUCH  REGISTRATION  OR UNLESS SUCH  TRANSACTION IS
         EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

                  IN CONNECTION  WITH ANY  TRANSFER,  THE HOLDER WILL DELIVER TO
         THE COMPANY SUCH  CERTIFICATES AND OTHER INFORMATION AS THE COMPANY MAY
         REASONABLY  REQUIRE  TO CONFIRM  THAT THE  TRANSFER  COMPLIES  WITH THE
         FOREGOING RESTRICTIONS" and

                  (b) "THIS WARRANT IS ALSO SUBJECT TO TRANSFER RESTRICTIONS SET
         FORTH IN A SECURITIES  PURCHASE  AGREEMENT,  DATED AS OF APRIL 7, 2000,
         AMONG THE  COMPANY  AND THE OTHER  PARTIES  REFERRED  TO  THEREIN  (THE
         "SECURITIES PURCHASE AGREEMENT").  THIS WARRANT MAY BE TRANSFERRED ONLY
         IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN SUCH SECURITIES PURCHASE
         AGREEMENT AND THE WARRANT AGREEMENT" and

                  (c) "ALL  WARRANTS  AND ALL  WARRANT  SHARES  RECEIVED  BY THE
         WARRANTHOLDERS  UPON  EXERCISE OF THE  WARRANTS  WILL BE SUBJECT TO THE
         TERMS AND  CONDITIONS  INCLUDING  CERTAIN  TRANSFER  RESTRICTIONS  OF A
         STOCKHOLDERS  AGREEMENT DATED AS OF MAY 10, 2000, AS AMENDED, AMONG THE
         COMPANY  AND  THE  VARIOUS   STOCKHOLDERS  OF  THE  COMPANY,  AND  EACH
         WARRANTHOLDER  AGREES TO BE BOUND BY THE TERMS AND  CONDITIONS  OF SUCH
         STOCKHOLDERS  AGREEMENTS AS SUCH STOCKHOLDERS AGREEMENTS MAY BE AMENDED
         FROM TIME TO TIME"

          Transfers of Warrants and Warrant  Shares are subject to  restrictions
as provided in (i) Section 6.5 of the  Securities  Purchase  Agreement  and (ii)
that certain  Stockholders  Agreement  dated as of May 10, 2000 as amended among
the various  stockholders  of the  Company.  Prior to any  transfer or attempted
transfer of any Warrants,  the Holder of such Warrants shall give 10 days' prior
written notice (a "Transfer  Notice") to the Company of such Holder's  intention
to effect such transfer, describing the manner and circumstances of the proposed
transfer,  and, if requested by the Company,  obtain from counsel to such Holder
who  shall be  reasonably  satisfactory  to the  Company,  an  opinion  that the
proposed  transfer of such Warrants may be effected without  registration  under
the  Securities  Act.  After  receipt of the Transfer  Notice and  opinion,  the
Company shall,  within five days thereof,  so notify the Holder of such Warrants
and such Holder  shall  thereupon  be entitled to  transfer  such  Warrants,  in
accordance with the terms of the Transfer Notice.  Each Warrant issued upon such
transfer  shall bear the  restrictive  legends  set forth  above,  unless,  with
respect to the legend in  paragraph  (a) above,  in the opinion of such  counsel
such legend is not required in order to ensure  compliance  with the  Securities
Act. The Holder of the Warrants giving the Transfer Notice shall not be entitled
to transfer  such  Warrants  until receipt of notice from the Company under this
Section 2.

          Section  2.06.  Replacement  Certificate.  If a  mutilated  Warrant is
surrendered  to the  Company  or if a  Warrantholder  claims  that  the  Warrant
Certificate  has been lost,  destroyed or  wrongfully  taken,  the Company shall
execute a replacement  Warrant  Certificate if the requirements of Section 8-405
of the Uniform Commercial Code are met, such that the Warrantholder (i) notifies
the  Company  within  a  reasonable  time  after  he has  notice  of such  loss,
destruction  or  wrongful  taking and the Company  does not  register a transfer
prior to  receiving  such  notification,  (ii) makes such request to the Company
prior to the  Warrant  being  acquired by a  protected  purchaser  as defined in
Section 8-303 of the Uniform Commercial Code (a "protected purchaser") and (iii)
satisfies any other reasonable  requirements of the Company.  If required by the
Company,  such  Warrantholder  shall furnish an indemnity bond sufficient in the
reasonable  judgment of the Company to protect the Company from any loss that it
may suffer if a Warrant is  replaced.  The Company may charge the  Warrantholder
for its expenses in replacing a Warrant  Certificate.  Every replacement Warrant
is an additional obligation of the Company.

          The  provisions of this Section 2.06 are exclusive and shall  preclude
(to the  extent  lawful)  all other  rights  and  remedies  with  respect to the
replacement of mutilated, lost, destroyed or wrongfully taken Securities.

          Section 2.07.  Outstanding Warrants.  Warrants outstanding at any time
are all Warrant  Certificates  executed by the Company except for those canceled
by it,  those  delivered  to it for  cancellation  and those  described  in this
Section  2.07 as not  outstanding.  A Warrant  does not cease to be  outstanding
because an Affiliate of the Company  holds the Warrant.  A Warrant  ceases to be
outstanding if the Company holds the Warrant.

          If a Warrant  Certificate  is replaced  pursuant to Section  2.06,  it
ceases to be outstanding  unless the Company  receives proof  satisfactory to it
that the replaced Warrant Certificate is held by a protected purchaser.

          Section 2.08. Cancellation. The Company at any time may cancel Warrant
Certificates which have been surrendered for registration of transfer, exchange,
exercise or  cancellation.  The Company and no one else shall cancel all Warrant
Certificates  surrendered for  registration of transfer,  exchange,  exercise or
cancellation.  The  Company may not issue new  Warrant  Certificates  to replace
Warrants Certificates that have been exercised or Warrants which the Company has
purchased or otherwise acquired.

                                   ARTICLE III

                                 EXERCISE TERMS

          Section  3.01.  Exercise.  Each Warrant  shall  initially  entitle the
Holder thereof,  subject to adjustment  pursuant to the terms of this Agreement,
to purchase one (1) share of Common  Stock.  The exercise  price (the  "Exercise
Price") of each Warrant is $0.01 per share.

          Section 3.02. Time of Exercise; Separability. (a) Subject to the terms
and conditions  set forth herein,  the Warrants shall be exercisable at any time
and from time to time on any Business Day on or after the Issue Date.

          (b)  No  Warrant  shall  be  exercisable   after  May  10,  2007  (the
"Expiration Date").

          (c) The  Shares  and the  Warrants  will be  separably  transferrable,
subject to compliance with applicable securities laws, on the Issue Date.

          Section 3.03. Expiration. A Warrant shall terminate and become void as
of the earlier of (i) the close of business on the  Expiration  Date or (ii) the
date such Warrant is exercised.  The Company shall give notice not less than 90,
and not more than 120, days prior to the  Expiration  Date to the Holders of all
then  outstanding  Warrants to the effect that the Warrants  will  terminate and
become  void as of the  close of  business  on the  Expiration  Date;  provided,
however,  that if the Company  fails to give notice as provided in this  Section
3.03,  the Warrants will  nevertheless  expire and become void on the Expiration
Date.

          Section 3.04.  Manner of Exercise.  Warrants may be exercised upon (i)
surrender  to the  Warrant  Registrar  at its  office  of  the  related  Warrant
Certificate,  together  with the form of election  attached  thereto to purchase
Common Stock duly filled in and signed by the Holder thereof and (ii) payment to
the Company,  of the Exercise  Price for each  Warrant  Share or other  security
issuable upon the exercise of such Warrants then  exercised.  Such payment shall
be made (i) in cash or by certified or official  bank check payable to the order
of the  Company or by wire  transfer  of funds to an account  designated  by the
Company for such  purpose or (ii)  without the payment of cash,  by reducing the
number of shares of Common Stock  obtainable  upon the exercise of a Warrant and
payment  of the  Exercise  Price in cash so as to yield a number  of  shares  of
Common Stock upon the  exercise of such Warrant  equal to the product of (a) the
number of  shares of Common  Stock  issuable  as of the  Exercise  Date upon the
exercise of such  Warrant (if payment of the  Exercise  Price were being made in
cash)  and  (b) the  Cashless  Exercise  Ratio.  An  exercise  of a  Warrant  in
accordance  with  the  immediately  preceding  clause  (ii) is  herein  called a
"Cashless Exercise".  Upon surrender of a Warrant Certificate  representing more
than one  Warrant in  connection  with the  Holder's  option to elect a Cashless
Exercise,  the  number of shares of Common  Stock  deliverable  upon a  Cashless
Exercise  shall be equal to the number of shares of Common Stock  issuable  upon
the exercise of Warrants that the Holder specifies are to be exercised  pursuant
to a Cashless Exercise multiplied by the Cashless Exercise Ratio. All provisions
of this Agreement  shall be applicable  with respect to a surrender of a Warrant
Certificate  pursuant  to a Cashless  Exercise  for less than the full number of
Warrants represented thereby. Subject to Section 3.02, the rights represented by
the Warrants shall be exercisable at the election of the Warrantholders  thereof
either in full at any time or from time to time in part and in the event  that a
Warrant  Certificate is  surrendered  for exercise of less than all the Warrants
represented  by such  Warrant  Certificate  at any time prior to the  Expiration
Date, a new Warrant  Certificate  representing  the remaining  Warrants shall be
issued.

          Section  3.05.  Issuance of Warrant  Shares.  Subject to Section 2.06,
upon the surrender of Warrant Certificates and payment of the per share Exercise
Price or  election of a Cashless  Exercise,  as set forth in Section  3.04,  the
Company  shall issue and cause the transfer  agent for the Common Stock  ("Stock
Transfer  Agent") to countersign and deliver to or upon the written order of the
Warrantholder  and in  such  name  or  names  as the  Holder  may  designate,  a
certificate or  certificates  for the number of full Warrant Shares so purchased
upon the exercise of such  Warrants or other  securities or property to which it
is  entitled,  registered  or  otherwise,  to the Person or Persons  entitled to
receive the same  (including  any  depositary  institution  so  designated  by a
Warrantholder), together with cash as provided in Section 3.06 in respect of any
fractional   Warrant  Shares  otherwise   issuable  upon  such  exercise.   Such
certificate or  certificates  shall be deemed to have been issued and any Person
so designated  therein shall be deemed to have become a Holder of record of such
Warrant Shares as of the date of the surrender of such Warrant  Certificates and
payment of the per share Exercise Price or election of a Cashless  Exercise,  as
aforesaid;  provided, however, that if, at such date, the transfer books for the
Warrant  Shares  shall be closed,  the  certificates  for the Warrant  Shares in
respect of which such  Warrants are then  exercised  shall be issuable as of the
date on which  such books  shall next be opened and until such date the  Company
shall be under no duty to deliver  any  certificates  for such  Warrant  Shares;
provided further,  however,  that such transfer books, unless otherwise required
by law, shall not be closed at any one time for a period longer than 90 calendar
days.

          Section  3.06.  Fractional  Warrant  Shares.  The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants. If more
than  one  Warrant  shall  be  exercised  in full at the  same  time by the same
Warrantholder,  the number of full Warrant  Shares which shall be issuable  upon
such exercise shall be computed on the basis of the aggregate  number of Warrant
Shares which may be purchasable  pursuant thereto.  If any fraction of a Warrant
Share would,  except for the  provisions  of this Section 3.06, be issuable upon
the exercise of any Warrant (or specified  portion  thereof),  the Company shall
pay an amount in cash equal to the Current  Market Value per Warrant  Share,  as
determined  on the day  immediately  preceding the date the Warrant is presented
for exercise, multiplied by such fraction, computed to the nearest whole cent.

          Section 3.07.  Reservation of Warrant Shares. The Company shall at all
times keep  reserved  out of its  authorized  shares of Common Stock a number of
shares of Common Stock sufficient to provide for the exercise of all outstanding
Warrants.  The registrar for the Common Stock (the "Stock  Registrar")  shall at
all times until the Expiration Date reserve such number of authorized  shares as
shall be  required  for  such  purpose.  The  Company  will  keep a copy of this
Agreement on file with the Stock  Transfer  Agent.  The Company will supply such
Stock Transfer Agent with duly executed stock  certificates for such purpose and
will itself provide or otherwise make available any cash which may be payable as
provided in Section 3.06.  The Company will furnish to such Stock Transfer Agent
a copy  of  all  notices  of  adjustments  (and  certificates  related  thereto)
transmitted to each Holder.

          The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants shall,  upon issue, be fully paid,  nonassessable,  free of
preemptive  rights,  free from all taxes and free from all  liens,  charges  and
security interests with respect to the issue thereof.

          Section 3.08.  Compliance with Law.  Notwithstanding  anything in this
Agreement  to the  contrary,  in no event shall a  Warrantholder  be entitled to
exercise  a Warrant  unless in the  opinion of  counsel,  the  exercise  of such
Warrants is exempt from the registration  requirements of the Securities Act and
such  securities are qualified for sale or exempt from  qualification  under the
applicable  securities laws of the states or other  jurisdictions  in which such
Holders reside.

          Section 3.09 Obtaining Stock Exchange Listings.  The Company will from
time to time take all action which may be necessary so that the Warrant  Shares,
immediately upon their issuance upon the exercise of Warrants, will be listed on
the NASDAQ National Market or such other of the principal securities  exchanges,
markets and automated  quotation systems within the United States of America, if
any, on which other shares of Common  Stock are then listed.  In the event that,
at any time during the period in which the Warrants are exercisable,  the Common
Stock is not listed on any principal  securities or exchanges or markets  within
the United  States of America,  the Company  will use its best efforts to permit
the Warrant  Shares to be designated  PORTAL  securities in accordance  with the
rules and regulations adopted by the National Association of Securities Dealers,
Inc.  relating to trading in the Private  Offering,  Resales and Trading through
Automated Linkages market.

          Section  3.10 No  Dilution  or  Impairment.  The  Company (a) will not
permit the par or nominal value of any Warrant Shares issuable upon the exercise
of Warrants to exceed the amount payable  therefor upon such exercise,  (b) will
take all such  action  as may be  necessary  or  appropriate  in order  that the
Company  may validly and  legally  issue  fully paid and  nonassessable  Warrant
Shares on the exercise of the  Warrants  from time to time  outstanding  and (c)
will not take any action which results in any adjustment of the Exercise Rate if
the total number of shares of Common Stock (or other securities)  issuable after
the action  upon the  exercise  of all of the  Warrants  would  exceed the total
number of shares of Common Stock (or other  securities)  then  authorized by the
Company's  Certificate of Incorporation and available for the issuance of shares
of Common Stock (or other securities) upon such exercise.

                                   ARTICLE IV

                             ANTIDILUTION PROVISIONS

          Section 4.01.  General.  The number of shares of Common Stock issuable
upon the exercise of each Warrant (the "Exercise Rate") is subject to adjustment
from time to time upon the  occurrence of the events  enumerated in this Article
IV. The Exercise Rate shall initially be 1.0000.

          Section 4.02.  Adjustment for Common Stock  Dividends.  If the Company
shall  hereafter  pay a  dividend  or  make a  distribution  to  holders  of the
outstanding  shares of Common Stock in shares of Common Stock, the Exercise Rate
in effect at the opening of business  on the date  following  the date fixed for
the  determination  of  shareholders  entitled to receive such dividend or other
distribution  shall be increased by multiplying such Exercise Rate by a fraction
of which the numerator  shall be the sum of the number of shares of Common Stock
outstanding at the close of business on the Common Stock Record Date (as defined
in Section  4.07) and the total number of shares  constituting  such dividend or
other  distribution and the denominator  shall be the number of shares of Common
Stock outstanding at the close of business on the Common Stock Record Date fixed
for such determination,  such increase to become effective immediately after the
opening of business on the day  following  the Common Stock Record Date.  If any
dividend or  distribution of the type described in this Section 4.02 is declared
but not so paid or made,  the  Exercise  Rate  shall  again be  adjusted  to the
Exercise Rate which would then be in effect if such dividend or distribution had
not been declared.

          Section  4.03.  Adjustment  for  Issuances of Common  Stock,  Options,
Warrants,  Rights and  Convertible or  Exchangeable  Securities.  If the Company
shall issue, sell or distribute any shares of Common Stock  (including,  without
limitation,  any ETG Earnout  Shares,  which such ETG Earnout  Shares  shall for
purposes of this Section 4.03 be deemed issued for no additional  consideration)
or offer or issue, sell or distribute options,  rights or warrants to any Person
entitling  them to  subscribe  for or purchase  shares of Common Stock or issue,
sell or distribute convertible or exchangeable  securities which are convertible
or  exchangeable  for shares of Common Stock, in each case, at a price per share
less than  $14.61,  the  Exercise  Rate shall be adjusted so that the same shall
equal the rate  determined  by  multiplying  the Exercise  Rate in effect at the
opening of  business  on the date  immediately  prior to such sale,  issuance or
distribution of shares, options, rights, warrants or exchangeable or convertible
securities by a fraction of which the numerator shall be the number of shares of
Common  Stock  outstanding  at the close of business on such date plus the total
number of additional shares of Common Stock to be issued, sold or distributed or
subject  to such  options,  rights,  warrants  or  exchangeable  or  convertible
securities for  subscription or purchase and of which the  denominator  shall be
the number of shares of Common  Stock  outstanding  at the close of  business on
such date plus the number of shares of Common Stock which the aggregate offering
price of the  total  number of shares  of  Common  Stock to be  issued,  sold or
distributed  or subject to such options,  rights,  warrants or  exchangeable  or
convertible  securities  would  purchase  at a price of $14.61 per  share.  Such
adjustment shall become effective  immediately  after the opening of business on
the day following the issuance,  sale or distribution  of such shares,  options,
rights, warrants or exchangeable or convertible  securities.  To the extent that
shares of Common  Stock are not  delivered  pursuant  to such  options,  rights,
warrants or  exchangeable  or  convertible  securities,  upon the  expiration or
termination of such options,  rights,  warrants or  exchangeable  or convertible
securities  the Exercise  Rate shall again be adjusted to be the  Exercise  Rate
which would then be in effect had the adjustments  made upon the issuance,  sale
or  distributions  of  such  options,   rights,   warrants  or  exchangeable  or
convertible  securities been made on the basis of delivery of only the number of
shares of Common Stock  actually  delivered.  If such shares,  options,  rights,
warrants  or  exchangeable  or  convertible  securities  are not so issued,  the
Exercise  Rate shall again be adjusted to be the Exercise  Rate which would then
be in effect if such date fixed for the  determination of shareholders  entitled
to receive such shares, options, rights, warrants or exchangeable or convertible
securities  had not been fixed.  In  determining  whether  any shares,  options,
rights,  warrants or exchangeable or convertible  securities entitle the Holders
to  subscribe  for or  purchase  shares of Common  Stock at less than $14.61 per
share, and in determining the aggregate  offering price of such shares of Common
Stock,  there shall be taken into  account any  consideration  received for such
options,  rights, warrants or exchangeable or convertible  securities,  with the
value of such consideration,  if other than cash, to be determined in good faith
by the Board of Directors and the amount of any exercise  price or  subscription
price  required to be paid upon  exercise of such options,  rights,  warrants or
exchangeable or convertible securities.

          Section  4.04.   Adjustment  upon  Subdivision,   Reclassification  or
Combination of Common Stock. If the outstanding  shares of Common Stock shall be
subdivided or reclassified  into a greater number of shares of Common Stock, the
Exercise  Rate in effect at the opening of business on the day following the day
upon which such  subdivision  or  reclassification  becomes  effective  shall be
proportionately  increased, and, conversely, if the outstanding shares of Common
Stock shall be combined  into a smaller  number of shares of Common  Stock,  the
Exercise  Rate in effect at the opening of business on the day following the day
upon which such combination becomes effective shall be proportionately  reduced,
such increase or reduction,  as the case may be, to become effective immediately
after the  opening  of  business  on the day  following  the day upon which such
subdivision or combination becomes effective.

          Section 4.05. Adjustments for Mergers, Consolidations, etc. In case of
any  consolidation of the Company with, or merger of the Company into, any other
corporation,  or in case of any merger of another  corporation  into the Company
(other than a merger that does not result in any  reclassification,  conversion,
exchange or cancellation of outstanding  shares of Common Stock of the Company),
or in case of any sale,  conveyance or transfer of all or substantially  all the
assets  of the  Company,  the  Holder  of each  Warrant  shall  have  the  right
thereafter,  during the period such Warrant shall be  exercisable  in accordance
with its terms,  to exercise such Warrant for the kind and amount of securities,
cash and other property receivable upon such consolidation,  merger,  conveyance
or transfer by a holder of the number of shares of shares of Common Stock of the
Company into which such Warrant might have been exercised  immediately  prior to
such  consolidation,  merger,  conveyance  or transfer,  assuming such Holder of
shares of Common Stock of the Company failed to exercise his rights of election,
if any,  as to the  kind or  amount  of  securities,  cash  and  other  property
receivable upon such  consolidation,  merger,  conveyance or transfer  (provided
that, if the kind or amount of securities,  cash and other  property  receivable
upon such consolidation, merger, conveyance or transfer is not the same for each
Common  Share of the Company in respect of which such  rights of election  shall
not have been  exercised  ("nonelecting  share"),  then for the  purpose of this
Section  4.05  the kind and  amount  of  securities,  cash  and  other  property
receivable  upon such  consolidation,  merger,  conveyance  or  transfer by each
nonelecting  share shall be deemed to be the kind and amount so  receivable  per
share by a plurality of the nonelecting  shares).  Such securities shall provide
for  adjustments  which,  for events  subsequent  to the  effective  date of the
triggering  event,  shall be as nearly  equivalent as may be  practicable to the
adjustments  provided  for in this  Article  IV.  The above  provisions  of this
Section  4.05  shall  similarly  apply to  successive  consolidations,  mergers,
conveyances or transfers.

          Section  4.06.  Other  Events.  If any  event  occurs  as to which the
foregoing  provisions  of this  Article IV are not  strictly  applicable  or, if
strictly  applicable,  would  not,  in the good faith  judgment  of the Board of
Directors,  fairly and adequately protect the purchase rights of the Warrants in
accordance  with the essential  intent and principles of such  provisions,  then
such Board of Directors  shall make such  adjustments in the application of such
provisions, in accordance with such essential intent and principles, as shall be
reasonably necessary,  in the good faith opinion of such Board of Directors,  to
protect  such  purchase  rights  as  aforesaid,  but in no event  shall any such
adjustment  have the effect of decreasing  the Exercise  Rate or decreasing  the
number of Warrant Shares issuable upon exercise of the Warrants.

          Section 4.07.  Certain  Definitions.  For purposes of this Article IV,
the following term shall have the meaning indicated:

          "Common  Stock Record Date" shall mean,  with respect to any dividend,
distribution or other  transaction or event in which the holders of Common Stock
have the right to receive any cash, securities or other property or in which the
Common Stock (or other  applicable  security) is exchanged for or converted into
any  combination  of cash,  securities  or other  property,  the date  fixed for
determination of shareholders entitled to receive such cash, securities or other
property  (whether  such date is fixed by the Board of  Directors or by statute,
contract or otherwise).

          Section 4.08.  Deferral of Certain  Adjustments.  No adjustment in the
Exercise Rate shall be required unless such adjustment would require an increase
or decrease of at least 1% in such rate; provided, however, that any adjustments
which by  reason  of this  Section  4.08 are not  required  to be made  shall be
carried  forward  and taken  into  account  in any  subsequent  adjustment.  All
calculations  under this  Article IV shall be made by the  Company  and shall be
rounded to fourth decimal place.  No adjustment need be made for a change in the
par value or no par value of the Common Stock.

          Section 4.09. Officers Certificate; Notice of Adjustment. Whenever the
Exercise Rate is adjusted as herein  provided,  the Company shall  promptly file
with the Warrant Registrar an Officers'  certificate  setting forth the Exercise
Rate after such  adjustment  and setting  forth a brief  statement  of the facts
requiring such  adjustment.  Promptly after  delivery of such  certificate,  the
Company shall  prepare a notice of such  adjustment of the Exercise Rate setting
forth the adjusted  Exercise Rate and the date on which each adjustment  becomes
effective and shall mail such notice of such  adjustment of the Exercise Rate to
each  Warrantholder  at  such  Warrantholder's  last  address  appearing  on the
register of Warrantholders  maintained by the Warrant Registrar for that purpose
within 20 days of the effective date of such adjustment. Failure to deliver such
notice shall not affect the legality or validity of any such adjustment.

          Section 4.10. Right to Delay Issuance of Incremental  Common Stock. In
any case in which this  Article IV  provides  that an  adjustment  shall  become
effective immediately after a Common Stock Record Date for an event, the Company
may defer until the  occurrence  of such event issuing to any holder of Warrants
exercised  after such Common Stock Record Date and before the occurrence of such
event the  additional  shares of Common  Stock  issuable  upon such  exercise by
reason of the  adjustment  required  by such  event over and above the shares of
Common  Stock  issuable  upon  such  exercise   before  giving  effect  to  such
adjustment.

          Section  4.11.  Treasury  Shares  Disregarded.  For  purposes  of this
Article IV, the number of shares of Common Stock at any time  outstanding  shall
not include  shares held in the treasury of the Company.  The Company  shall not
pay any dividend or make any  distribution on shares of Common Stock held in the
treasury of the Company.

          Section  4.12. No Adjustment  for Certain  Issuances.  Notwithstanding
anything to the contrary set forth herein,  this Article IV shall not apply, and
no  adjustment  to  the  Exercise  Rate  shall  be  made  with  respect  to  (A)
compensatory  or incentive  stock  options (or any shares of Common Stock issued
upon the exercise thereof) issued pursuant to employee stock option plans of the
Company which have been  approved by the Board of Directors of the Company,  (B)
issuances of Common Stock to employees,  officers,  directors and consultants of
the  Company,  pursuant  to  employee  benefit  plans  approved  by the Board of
Directors  of the  Company,  or (C)  shares  of  Common  Stock  issued  upon the
conversion of the Series A Preferred Stock.

          Section 4.13. Notice of Certain Adjustments. If the Company shall take
any action requiring an adjustment to the Exercise Rate pursuant to this Article
IV, then the Company  shall  cause to be filed with the Warrant  Registrar,  and
shall cause to be mailed to all  Warrantholders  at their last addresses as they
shall appear in the Warrant Register,  at least 20 Business Days (or 10 Business
Days in any case specified in clause 4.02 or 4.03 above) prior to the applicable
date hereinafter  specified,  a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution,  rights or warrants,
or, if a record is not to be taken,  the date as of which the  holders of shares
of Common Stock of record to be entitled to such dividend, distribution,  rights
or warrants are to be  determined  or (y) the date on which a  reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is
expected  to  become  effective,  and the date as of which it is  expected  that
holders of shares of Common Stock of record shall be entitled to exchange  their
shares of Common Stock for securities,  cash or other property  deliverable upon
such  reclassification,  consolidation,  merger,  sale,  transfer,  dissolution,
liquidation or winding-up.  Failure to give the notice  required by this Section
4.13 or any defect  therein  shall not affect the  legality  or  validity of any
dividend, distribution, right, warrant, reclassification, consolidation, merger,
sale transfer, dissolution, liquidation or winding-up, or the vote upon any such
action.

          Section 4.14.  Adjustment to Warrant Certificate.  The form of Warrant
Certificate  need not be changed because of any adjustment made pursuant to this
Article IV, and Warrant  Certificates issued after such adjustment may state the
same Exercise  Price and the same number of shares of Common Stock issuable upon
exercise of the  Warrants as are stated in the  Warrant  Certificates  initially
issued pursuant to this Agreement. The Company,  however, may at any time in its
sole discretion make any change in the form of Warrant  Certificate  that it may
deem appropriate to give effect to such adjustments and that does not affect the
substance of the Warrant  Certificate,  and any Warrant  Certificate  thereafter
issued or countersigned,  whether in exchange or substitution for an outstanding
Warrant Certificate or otherwise, may be in the form as so changed.

          Section  4.15.  Certain Tax Matters.  Notwithstanding  anything to the
contrary set forth  herein,  for federal  income tax  purposes  (but not for any
other purpose of this Warrant  Agreement),  any adjustments to the Exercise Rate
made in respect of any ETG Earnout  Shares shall be treated as an  adjustment to
the purchase price of the Warrants.

                                    ARTICLE V

                                  MISCELLANEOUS

          Section  5.01.  Persons  Benefiting.  Nothing  in  this  Agreement  is
intended or shall be  construed to confer upon any Person other than the Company
and the  Warrantholders  any right,  remedy or claim  under or by reason of this
Agreement or any part hereof.

          Section  5.02.  Rights  of  Warrantholders.   Holders  of  unexercised
Warrants are not entitled to (i) receive dividends or other distributions,  (ii)
receive notice of or vote at any meeting of the  stockholders,  (iii) consent to
any action of the stockholders,  (iv) receive notice of any other proceedings of
the Company, (v) exercise any preemptive right or (vi) exercise any other rights
whatsoever as stockholders of the Company.

          Section 5.03. Amendment. Any amendment or supplement to this Agreement
shall  require the written  consent of the  Warrantholders  of a majority of the
then outstanding Warrants.  The consent of each Warrantholder  affected shall be
required  for any  amendment  pursuant  to which  the  Exercise  Price  would be
increased,  the  Exercise  Rate  would be  decreased  (other  than  pursuant  to
adjustments  provided herein) or the  antidilution  provisions in Article IV are
altered in a manner which adversely affects the  Warrantholders.  In determining
whether the  Warrantholders of the required number of Warrants have concurred in
any direction, waiver or consent, Warrants owned by the Company or by any Person
directly or indirectly  controlling or controlled by or under direct or indirect
common  control  with the  Company  shall be  disregarded  and  deemed not to be
outstanding.  Also, subject to the foregoing,  only Warrants  outstanding at the
time shall be considered in any such determination.

          Section 5.04. Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail addressed as follows:

                           Computer Outsourcing Services, Inc.
                           2 Christie Heights Street
                           Leonia, New Jersey 07605
                           Attn:  Nicholas J. Letizia, Chief Financial Officer

                           with a copy to:

                           Robinson & Cole LLP
                           695 E. Main Street
                           Stamford, CT  06904
                           Attention:  Richard A. Krantz, Esq.
                           Tel:  (203) 462-7505
                           Fax:  (203) 462-7599

          The Company by notice to the Warrantholders  may designate  additional
or different addresses for subsequent notices or communications.

          Any notice or communication  mailed to a Warrantholder shall be mailed
to the  Warrantholder  at  the  Warrantholder's  address  as it  appears  on the
Company's  records and shall be sufficiently  given if so mailed within the time
prescribed.

          Failure to mail a notice or  communication  to a Warrantholder  or any
defect  in  it  shall  not  affect  its   sufficiency   with  respect  to  other
Warrantholders.  If a notice or  communication  is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.

          Section 5.05.  Governing Law. THIS AGREEMENT AND THE WARRANTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT  GIVING EFFECT TO  APPLICABLE  PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT  THAT  THE  APPLICATION  OF THE  LAWS OF  ANOTHER  JURISDICTION  WOULD BE
REQUIRED THEREBY.

          Section  5.06.  Successors.  All  agreements  of the  Company  in this
Agreement and the Warrant Certificates shall bind its successors.

          Section 5.07. Multiple  Originals.  The parties may sign any number of
copies of this Agreement. Each signed copy shall be an original, but all of them
together  represent the same agreement.  One signed copy is enough to prove this
Agreement.

          Section 5.08.  Table of Contents The table of contents and headings of
the Articles and Sections of this Agreement  have been inserted for  convenience
of reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.

          Section  5.09.  Severability.  The  provisions  of this  Agreement are
severable,  and if any clause or  provision  shall be held  invalid,  illegal or
unenforceable in whole or in part in any  jurisdiction,  then such invalidity or
unenforceability   shall  affect  in  that  jurisdiction  only  such  clause  or
provision,  or part  thereof,  and shall not in any manner affect such clause or
provision  in any other  jurisdiction  or any other  clause or provision of this
Agreement in any jurisdiction.

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

                                            COMPUTER OUTSOURCING SERVICES, INC.

                                             By:/s/ Zach Lonstein
                                                --------------------------------
                                                Name:   Zach Lonstein
                                                Title:  Chief Executive Officer

<PAGE>

                                 WARRANTHOLDERS

                                    DB CAPITAL INVESTORS, L.P.,

                                        By:   DB Capital Partners, L.P.,
                                              its General Partner

                                        By:   DB Capital Partners, Inc.,
                                              its General Partner

                                        By:  /s/Frank Schiff
                                           --------------------------------
                                           Name: Frank Schiff
                                           Title:   Managing Director

                                      SANDLER CAPITAL PARTNERS V, L.P.

                                         By:  Sandler Investment Partners, L.P.,
                                              General Partner

                                         By:  Sandler Capital Management,
                                              General Partner

                                         By:  MJDM Corp., a General Partner

                                         By  /s/ Ed Grinacoff
                                           --------------------------------
                                            Name:  Ed Grinacoff
                                            Title: Managing Director

                                      SANDLER INTERNET PARTNERS, L.P.

                                          By: Sandler Investment Partners, L.P.,
                                              General Partner

                                          By: Sandler Capital Management,
                                              General Partner

                                          By: MJDM Corp., a General Partner

                                               By  /s/Ed Grinacoff
                                                 -----------------------------
                                                 Name:  Ed Grinacoff
                                                 Title: Managing Director

                                       SANDLER CO-INVESTMENT PARTNERS, L.P.

                                        By:  Sandler Investment Partners, L.P.,
                                             General Partner

                                        By:  Sandler Capital Management,
                                             General Partner

                                        By:  MJDM Corp., a General Partner

                                             By  /s/ Ed Grinacoff
                                               -----------------------------
                                               Name:  Ed Grinacoff
                                               Title: Managing Director

                                      PRICE FAMILY LIMITED PARTNERS

                                          By:   /s/ Michael Price
                                             -------------------------------
                                             Name:  Michael Price
                                             Title: General Partner

                                      BENAKE, L.P.

                                          By:   /s/ Lynn Forester
                                             -------------------------------
                                             Name:  Lynn Forester
                                             Title: General Partner

<PAGE>

                                                                       EXHIBIT A

                      [FORM OF FACE OF WARRANT CERTIFICATE]

          THIS  SECURITY HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF
1933, AS AMENDED (THE "SECURITIES  ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER  JURISDICTION.  NEITHER THIS  SECURITY  NOR ANY INTEREST OR  PARTICIPATION
HEREIN MAY BE REOFFERED,  SOLD, ASSIGNED,  TRANSFERRED,  PLEDGED,  ENCUMBERED OR
OTHERWISE  DISPOSED  OF IN THE  ABSENCE  OF SUCH  REGISTRATION  OR  UNLESS  SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

          IN  CONNECTION  WITH ANY  TRANSFER,  THE  HOLDER  WILL  DELIVER TO THE
COMPANY SUCH  CERTIFICATES  AND OTHER  INFORMATION AS THE COMPANY MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

          THIS WARRANT IS ALSO SUBJECT TO TRANSFER  RESTRICTIONS  SET FORTH IN A
SECURITIES PURCHASE AGREEMENT,  DATED AS OF APRIL 7, 2000, AMONG THE COMPANY AND
THE OTHER PARTIES  REFERRED TO THEREIN (THE  "SECURITIES  PURCHASE  AGREEMENT").
THIS WARRANT MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED
IN SUCH SECURITIES PURCHASE AGREEMENT AND THE WARRANT AGREEMENT.

          ALL WARRANTS  AND ALL WARRANT  SHARES  RECEIVED BY THE  WARRANTHOLDERS
UPON  EXERCISE  OF THE  WARRANTS  WILL BE  SUBJECT  TO THE TERMS AND  CONDITIONS
INCLUDING CERTAIN TRANSFER RESTRICTIONS OF A STOCKHOLDERS  AGREEMENT DATED AS OF
MAY 10, 2000, AS AMENDED,  AMONG THE COMPANY AND THE VARIOUS STOCKHOLDERS OF THE
COMPANY (THE  "STOCKHOLDERS  AGREEMENT"),  AND EACH  WARRANTHOLDER  AGREES TO BE
BOUND  BY THE  TERMS  AND  CONDITIONS  OF SUCH  STOCKHOLDERS  AGREEMENT  AS SUCH
STOCKHOLDERS AGREEMENT MAY BE AMENDED FROM TIME TO TIME.

<PAGE>
No. [  ]

                          SERIES A COMMON STOCK WARRANT
                                       OF
                       COMPUTER OUTSOURCING SERVICES, INC.

          THIS CERTIFIES THAT [ ], or its registered  assigns, is the registered
holder of Series A Common Stock Warrants (the "Warrants"). Each Warrant entitles
the holder thereof (the  "Holder"),  at its option and subject to the provisions
contained  herein and in the Warrant  Agreement  referred to below,  to purchase
from  Computer  Outsourcing   Services,   Inc.,  a  Delaware  corporation  ("the
Company"),  one (1) share of Common Stock,  par value of $.01 per share,  of the
Company  (the  "Common  Stock")  at the per share  exercise  price of $0.01 (the
"Exercise  Price") or by  Cashless  Exercise  referred  to below.  This  Warrant
Certificate  shall  terminate and become void as of the close of business on May
10,  2007  (the  "Expiration  Date") or upon the  exercise  hereof as to all the
shares of Common  Stock  subject  hereto.  The  number of shares  issuable  upon
exercise of the Warrants  and the  Exercise  Price per share shall be subject to
adjustment from time to time as set forth in the Warrant Agreement (as defined).

          This  Warrant  Certificate  is issued under and in  accordance  with a
Warrant  Agreement dated as of May 10, 2000 (the "Warrant  Agreement"),  between
the Company and various Warrantholders party thereto (the "Warrantholders"), and
is subject to the terms and provisions  contained in the Warrant  Agreement,  to
all of which  terms  and  provisions  the  Holder  of this  Warrant  Certificate
consents by  acceptance  hereof.  The Warrant  Agreement is hereby  incorporated
herein by  reference  and made a part  hereof.  Reference  is hereby made to the
Warrant Agreement for a full statement of the respective rights,  limitations of
rights,   duties  and  obligations  of  the  Company  and  the   Warrantholders.
Capitalized  terms used but not defined herein shall have the meanings  ascribed
thereto  in the  Warrant  Agreement.  A copy  of the  Warrant  Agreement  may be
obtained for inspection by the Holder hereof upon written request to the Company
at 2 Christie  Heights  Street,  Leonia,  New  Jersey  07605,  Attention:  Chief
Financial Officer.

          Subject to the terms of the Warrant  Agreement,  the  Warrants  may be
exercised in whole or in part (i) by  presentation  of this Warrant  Certificate
with the  Election  to  Purchase  attached  hereto  duly  executed  and with the
simultaneous  payment of the Exercise  Price in cash (subject to  adjustment) to
the Company for the account of the Company or (ii) by Cashless Exercise. Payment
of the Exercise  Price in cash shall be made by certified or official bank check
payable to the order of the  Company or by wire  transfer of funds to an account
designated by the Company for such purpose.  Payment by Cashless  Exercise shall
be made  without the payment of cash by reducing the amount of Common Stock that
would be  obtainable  upon the exercise of a Warrant and payment of the Exercise
Price  in cash so as to  yield a number  of  shares  of  Common  Stock  upon the
exercise  of such  Warrant  equal to the  product of (1) the number of shares of
Common Stock for which such Warrant is  exercisable  as of the Exercise Date (if
the Exercise Price were being paid in cash) and (2) a fraction, the numerator of
which is the excess of the Current Market Value per share of Common Stock on the
Exercise Date over the Exercise  Price per share as of the Exercise Date and the
denominator  of which is the Current  Market Value per share of the Common Stock
on the Exercise Date.

          As  provided  in the  Warrant  Agreement  and subject to the terms and
conditions  therein set forth, the Warrants shall be exercisable at any time and
from time to time on any Business Day after the Issue Date;  provided,  however,
that no Warrant shall be exercisable after May 10, 2007.

          As provided in the Warrant Agreement,  the Exercise Rate is subject to
adjustment upon the happening of certain events.

          The Company may require  payment of a sum sufficient to pay all taxes,
assessments  or other  governmental  charges in connection  with the transfer or
exchange  of the  Warrant  Certificates  pursuant  to the  terms of the  Warrant
Agreement,  but not for any  exchange  or  original  issuance  (not  involving a
transfer) with respect to temporary  Warrant  Certificates,  the exercise of the
Warrants or the Warrant Shares.

          Upon  any   partial   exercise  of  the   Warrants,   there  shall  be
countersigned and issued to the Warrantholder  hereof a new Warrant  Certificate
representing those Warrants which were not exercised.  This Warrant  Certificate
may be  exchanged  at the  office of the  Company  by  presenting  this  Warrant
Certificate   properly   endorsed  with  a  request  to  exchange  this  Warrant
Certificate  for  other  Warrant  Certificates  evidencing  an equal  number  of
Warrants.  No fractional  Warrant Shares will be issued upon the exercise of the
Warrants,  but the  Company  shall pay an amount  in cash  equal to the  Current
Market Value per Warrant  Share on the day  immediately  preceding  the date the
Warrant is  exercised,  multiplied by the fraction of a Warrant Share that would
be issuable on the exercise of any Warrant.

          All shares of Common  Stock  issuable by the Company upon the exercise
of the Warrants  shall,  upon such issue,  be duly and validly  issued and fully
paid and non-assessable.

          The Warrantholder in whose name the Warrant  Certificate is registered
may be deemed and  treated by the Company as the  absolute  owner of the Warrant
Certificate for all purposes whatsoever and the Company shall not be affected by
notice to the contrary.

          The  Warrants do not entitle  any  Warrantholder  hereof to any of the
rights of a stockholder of the Company.

          This  Warrant  Certificate  shall not be valid or  obligatory  for any
purpose until it shall have been countersigned by the Company.

                                    COMPUTER OUTSOURCING SERVICES, INC.

                                        By:
                                           --------------------------------
                                           Name:
                                           Title:

Attest:

-------------------------------
Name:
Title:

DATED:

<PAGE>
                   FORM OF ELECTION TO PURCHASE WARRANT SHARES
                 (to be executed only upon exercise of Warrants)

                       COMPUTER OUTSOURCING SERVICES, INC.

          The    undersigned    hereby    irrevocably    elects   to    exercise
__________________  Warrants to acquire shares of Common Stock,  par value $.001
per share, of Computer Outsourcing Services,  Inc., (i) at an exercise price per
share of Common Stock of $0.01 (subject to adjustment as provided in the Warrant
Agreement)  or (ii) through  Cashless  Exercise  and  otherwise on the terms and
conditions  specified  in the Warrant  Certificate  and the  Warrant  Agreement,
surrenders this Warrant Certificate and all right, title and interest therein to
Computer Outsourcing Services,  Inc. and directs that the shares of Common Stock
deliverable  upon the exercise of such  Warrants be  registered or placed in the
name and at the address specified below and delivered thereto.

          Check method of exercise:

          Exercise at $0.01 per share of Common Stock  (subject to adjustment as
provided in the Warrant Agreement): ___

          Cashless Exercise: _____

Date: _______________________, ____

----------------------------------------------------(1)
(Signature of Owner)

(Street Address)

-------------------------------------------------------
(City)    (State)   (Zip Code)

Signature Guaranteed by:

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

Securities and/or check to be issued to:

Please insert social security or identifying number:

Name:

Street Address:

City, State and Zip Code:

A new Warrant Certificate  evidencing any unexercised  Warrants evidenced by the
within Warrant Certificate is to be issued to:

Please insert social security or identifying number:

Name:

Street Address:

City, State and Zip Code:

--------------------------
(1)  The signature must correspond with the name as written upon the face of the
     Warrant Certificate in every particular,  without alteration or enlargement
     or any change whatever,  and must be guaranteed by a national bank or trust
     company or by a member firm of any national securities exchange.

<PAGE>

                            ASSIGNMENT FORM

To assign this Warrant, fill in the form below:

I or we assign and transfer this Warrant to

(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably  appoint      agent to transfer this Warrant on the books of the
Company. The agent may substitute another to act for him.

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

Date:                                    Your Signature:
     -------------                                      -----------------------

-----------------------------------------------------------------
The  signature  must  correspond  with the name as written  upon the face of the
Warrant  Certificate in every particular,  without  alteration or enlargement or
any change whatever,  and must be guaranteed by a national bank or trust company
or by a member firm of any national securities exchange.

<PAGE>

                                TABLE OF CONTENTS

                                                                           Page

ARTICLE I  DEFINITIONS........................................................1
         Section 1.01.  Definitions...........................................1
         Section 1.02.  Other Definitions.....................................3
         Section 1.03.  Rules of Construction.................................4

ARTICLE II  WARRANT CERTIFICATES..............................................4
         Section 2.01.  Form and Dating.......................................4
         Section 2.02.  Execution and Countersignature........................4
         Section 2.03.  Warrant Registrar.....................................4
         Section 2.04.  Warrantholder Lists...................................5
         Section 2.05.  Transfer and Exchange.................................5
         Section 2.06.  Replacement Certificate...............................7
         Section 2.07.  Outstanding Warrants..................................7
         Section 2.08.  Cancellation..........................................7

ARTICLE III  EXERCISE TERMS...................................................8
         Section 3.01.  Exercise..............................................8
         Section 3.02.  Time of Exercise; Separability........................8
         Section 3.03.  Expiration............................................8
         Section 3.04.  Manner of Exercise....................................8
         Section 3.05.  Issuance of Warrant Shares............................9
         Section 3.06.  Fractional Warrant Shares.............................9
         Section 3.07.  Reservation of Warrant Shares.........................9
         Section 3.08.  Compliance with Law..................................10
         Section 3.09  Obtaining Stock Exchange Listings.....................10
         Section 3.10  No Dilution or Impairment.............................10

ARTICLE IV  ANTIDILUTION PROVISIONS..........................................11
         Section 4.01.  General..............................................11
         Section 4.02.  Adjustment for Common Stock Dividends................11
         Section 4.03.  Adjustment  for Issuances of Common Stock, Options,
                        Warrants,  Rights and Convertible or Exchangeable
                          Securities.........................................11
         Section 4.04.  Adjustment  upon  Subdivision,  Reclassification
                        or Combination of Common Stock.......................12
         Section 4.05.  Adjustments for Mergers, Consolidations, etc.........12
         Section 4.06.  Other Events.........................................13
         Section 4.07. Certain Definitions...................................13
         Section 4.08.  Deferral of Certain Adjustments......................13
         Section 4.09.  Officers Certificate; Notice of Adjustment...........13
         Section 4.10.  Right to Delay Issuance of Incremental Common Stock..14
         Section 4.11.  Treasury Shares Disregarded..........................14
         Section 4.12.  No Adjustment for Certain Issuances..................14
         Section 4.13.  Notice of Certain Adjustments........................14
         Section 4.14.  Adjustment to Warrant Certificate....................14
         Section 4.15.  Certain Tax Matters..................................15

ARTICLE V  MISCELLANEOUS.....................................................15
         Section 5.01.  Persons Benefiting...................................15
         Section 5.02.  Rights of Warrantholders.............................15
         Section 5.03.  Amendment............................................15
         Section 5.04.  Notices..............................................15
         Section 5.05.  Governing Law........................................16
         Section 5.06.  Successors...........................................16
         Section 5.07.  Multiple Originals...................................16
         Section 5.08.  Table of Contents....................................16
         Section 5.09.  Severability.........................................16

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