Document:

<PAGE>   1
                                                                     EXHIBIT 4.6

                                                                  EXECUTION COPY

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR OTHERWISE. THIS ADJUSTMENT WARRANT SHALL
NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. THE SECURITIES ARE "RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED
EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM.

                         COMMON STOCK ADJUSTMENT WARRANT

No. A2

              To Purchase Shares of $.01 Par Value Common Stock of

                              PLATO LEARNING, INC.

         THIS ADJUSTMENT WARRANT (the "ADJUSTMENT WARRANT") CERTIFIES that, for
value received, WESTGATE INTERNATIONAL, L.P. (the "INVESTOR") is entitled, upon
the terms and subject to the conditions hereinafter set forth, at any time on or
after the date hereof and on or prior to 5:00 p.m. New York City Time on July
16, 2003 (the "TERMINATION DATE"), but not thereafter, to subscribe for and
purchase from PLATO LEARNING, INC., a Delaware corporation (the "COMPANY"), a
number (if any) of shares of Common Stock of the Company determined in
accordance with Section 3 hereof (the "ADJUSTMENT SHARES"). The "EXERCISE PRICE"
is $.01. The Exercise Price and the number of shares for which the Adjustment
Warrant is exercisable shall be subject to adjustment as provided herein. This
Adjustment Warrant is being issued in connection with the Common Stock
Investment Agreement dated as of July17, 2000 (the "AGREEMENT") entered into
between the Company and the Investor. Any capitalized terms used but not defined
in this Adjustment Warrant shall have the meaning specified in the Agreement.

         1. Title of Adjustment Warrant. Prior to the expiration hereof and
subject to compliance with applicable laws, this Adjustment Warrant and all
rights hereunder are transferable, in whole or in respect of the right to
purchase any part of the Adjustment Shares, at the office or agency of the
Company by the holder hereof in person or by duly authorized attorney, upon
surrender of this Adjustment Warrant together with (a) the Assignment Form
annexed hereto properly endorsed, and (b) any other documentation reasonably
necessary to satisfy the Company that such transfer is in compliance with all
applicable securities laws.

<PAGE>   2
         2. Authorization of Shares. The Company covenants that all shares of
Common Stock which may be issued upon the exercise of rights represented by this
Adjustment Warrant will, upon exercise of the rights represented by this
Adjustment Warrant and payment of the Exercise Price as set forth herein will be
duly authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue or otherwise
specified herein).

         3. Exercise of Adjustment Warrant for Adjustment Shares.

         (a) Definitions.

         "ADJUSTED SHARE PURCHASE PRICE" means 110% of the Share Purchase Price.

         "ADJUSTMENT NUMBER" means 26,709 in the first six (6) Adjustment
Periods, and 17,806 in the seventh (7th) and final Adjustment Period.

         Subject to Section 3(c), "ADJUSTMENT PERIOD" initially means the period
starting on the 120th day following the Closing Date and ending on and including
the 30th calendar day thereafter; and subsequently shall mean each of the six
(6) succeeding 30 day periods. No Adjustment Period may commence until the
proceeding Adjustment Period is completed in accordance with this Agreement.

         "ADJUSTMENT SETTLEMENT DATE" means, for a particular Adjustment Period,
the second trading day immediately following the end of such Adjustment Period.

         "CPB" means the Closing Bid Price of a Share of Common Stock on the
Principal Market on a particular day.

         "EFFECTIVE REGISTRATION" shall mean that all registration obligations
of the Company pursuant to the Registration Rights Agreement and the Agreement
have been satisfied, such registration is not subject to any suspension or stop
order, the prospectus for the Initial Shares, the Warrant Shares issuable upon
any exercise of the Initial Warrant and for the Adjustment Shares issuable upon
the exercise of this Adjustment Warrant is current and deliverable, and such
Initial Shares, Warrant Shares and Adjustment Shares are listed for trading on
the Principal Market and such trading has not been suspended for any reason, and
none of the Company or any Subsidiary is subject to any bankruptcy, insolvency
or similar proceeding, and no Interfering Event (as defined in the Registration
Rights Agreement) exists.

         "SET PRICE" means, for a particular Adjustment Period, the average of
the five (5) lowest CBP's occurring during the fifteen (15) final trading days
during such Adjustment Period.

         (b) Adjustment Share Calculations. Subject to Section 3(c) and Section
5.4 of the Agreement, the number of Adjustment Shares (if any) issuable in
respect of a particular Adjustment Period shall be calculated immediately
following the close of the Principal Market on the final trading day of such
Adjustment Period, using the following formula:

# of Adjustment Shares = Adjustment Number x (Adjusted Share Purchase Price -
Set Price)

                                      -2-
<PAGE>   3
                                                    (Set Price)

         Promptly after performing such calculation for each Investor on the
final trading day of such Adjustment Period, the Company shall deliver its
written calculations to each Investor by facsimile.

         At 10:00 a.m. New York City time on the Adjustment Settlement Date
relating to such Adjustment Period, the Company will deliver to each Investor
the applicable number of Adjustment Shares at the offices of KKWC (each such
event being a "FILL-UP CLOSING"). Each party will comply with the Fill-up
Closing conditions specified in the Agreement. Notwithstanding the foregoing,
there shall be no Fill-up Closing relating to, and no Adjustment Shares shall be
deliverable in respect of, an Adjustment Period in which the Set Price of the
closing of the Principal Market on the last trading day of such Adjustment
Period equals or is greater than the Adjusted Share Purchase Price.

         (c) Effective Registration During Adjustment Period.

    (i) If at any time during an Adjustment Period there shall be a lack of
    Effective Registration, each Investor may at its option either (x) waive the
    lack of Effective Registration, in which case the Adjustment Period will
    continue uninterrupted with respect to such Investor in accordance with the
    other provisions of this Section 3, or (y) by written notice to the Company
    (delivered no later than 24 hours after actually receiving written
    notification from the Company of such lack of Effective Registration) elect
    to suspend such Adjustment Period with respect to itself (a "SUSPENSION
    NOTICE").

    (ii) If an Investor elects pursuant to subsection (i) above to suspend a
    particular Adjustment Period and Effective Registration is subsequently
    re-established either before or after the scheduled end of such Adjustment
    Period, then such Investor may, at its option, elect either (x) to treat
    such Adjustment Period as tolled for the duration (however long) of the lack
    of Effective Registration, such that the first full day of Effective
    Registration following delivery of the Suspension Notice shall be treated as
    and deemed to be the next day of that tolled Adjustment Period, or (y) to
    treat such Adjustment Period as having never commenced, such that the first
    full day of Effective Registration following delivery of the Suspension
    Notice shall be treated as and deemed to be the first day of the Adjustment
    Period interrupted by the lack of Effective Registration. Each Investor
    shall have two (2) trading days after receiving written notice from the
    Company of the re-establishment of Effective Registration to make such
    election.

    (iii) Nothing in this Section 3(c) shall limit each Investor's right to be
    eligible to receive Adjustment Shares or immediately available funds in
    respect of seven (7) separate Adjustment Periods. There cannot be more than
    one Adjustment Period at one time.

         (d) Remedies. If the Company fails to deliver the specified number of
Adjustment Shares to an Investor within 3 trading days of the time and at the
place specified in this Section 3, then such Investor may, without reducing its
other rights at law or in equity, but

                                      -3-
<PAGE>   4
shall not be obligated to compel the Company to issue the Mandated Acceleration
Shares (as defined in, and as specified, in the Registration Rights Agreement).

         (e) Adjustments. The number of Adjustment Shares shall be appropriately
adjusted to reflect any stock split, stock dividend, recapitalization or similar
event so that the Investors receive the same economically equivalent value of
Adjustment Shares as they would in the absence of such event.

         (f) Miscellaneous. The Adjustment Shares shall upon delivery to the
Investors be fully-paid, nonassessable, shares of Common Stock, free and clear
of all liens and encumbrances and duly eligible for trading on the Nasdaq
National Market System or if the Common Stock is not quoted thereon, on such
exchange or market (which for purposes of this Agreement shall mean the New York
Stock Exchange, the American Stock Exchange or the Nasdaq Small Cap Market) upon
which the Common Stock is principally traded or quoted (in either case, the
"PRINCIPAL MARKET").

         4. Non-Certificated Shares. In lieu of delivering physical certificates
representing the Adjustment Shares, provided the Company's transfer agent is
participating in the Depository Trust Company ("DTC") Fast Automated Securities
Transfer ("FAST") program, upon request of the Adjustment Warrant holder, the
Company shall use its best efforts to cause its transfer agent to electronically
transmit the Adjustment Shares to the Adjustment Warrant holder by crediting the
account of Adjustment Warrant holder's prime broker with DTC through its Deposit
Withdrawal Agent Commission ("DWAC") system. The time periods for delivery
described in the immediately preceding paragraph shall apply to the electronic
transmittals described herein.

         The term "TRADING DAY" means (x) if the Common Stock is listed on the
New York Stock Exchange or the American Stock Exchange, a day on which there is
trading on such stock exchange, or (y) if the Common Stock is not listed on
either of such stock exchanges but sale prices of the Common Stock are reported
on an automated quotation system, a day on which trading is reported on the
principal automated quotation system on which sales of the Common Stock are
reported, or (z) if the foregoing provisions are inapplicable, a day on which
quotations are reported by National Quotation Bureau Incorporated.

         5. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the issuance of the
Adjustment Shares

         6. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Adjustment Warrant shall be made without
charge to the holder hereof for any issue or transfer tax or other incidental
expense in respect of the issuance of such certificate, all of which taxes and
expenses shall be paid by the Company, and such certificates shall be issued in
the name of the holder of this Adjustment Warrant or in such name or names as
may be directed by the holder of this Adjustment Warrant; provided, however,
that in the event certificates for shares of Common Stock are to be issued in a
name other than the name of the holder of this Adjustment Warrant, this
Adjustment Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the holder hereof; and provided
further, that the Company shall not be required to pay any tax or

                                      -4-
<PAGE>   5
taxes which may be payable in respect of any transfer involved in the issuance
of any Adjustment Warrant certificates or any certificates for the Adjustment
Shares other than the issuance of a Adjustment Warrant certificate to the
Investor in connection with the Investor's surrender of a Adjustment Warrant
certificate upon the exercise of less than all of the Adjustment Warrants
evidenced thereby, and the Company shall not be required to issue or deliver
such certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.

         7. Closing of Books. The Company will at no time close its shareholder
books or records in any manner which interferes with the timely exercise of this
Adjustment Warrant.

         8. No Rights as Shareholder until Exercise. Subject to Section 13 of
this Adjustment Warrant and the provisions of any other written agreement
between the Company and the Investor, the Investor shall not be entitled to vote
or receive dividends or be deemed the holder of Adjustment Shares or any other
securities of the Company that may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Investor, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, or change of stock to no par
value, consolidation, merger, conveyance or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the
Adjustment Warrant shall have been exercised as provided herein. However, at the
time of the exercise of this Adjustment Warrant pursuant to Section 3 hereof,
the Adjustment Shares so purchased hereunder shall be deemed to be issued to
such holder as the record owner of such shares as of the close of business on
the date on which this Adjustment Warrant shall have been exercised.

         9. Assignment and Transfer of Adjustment Warrant. Subject to Section
15(b), this Adjustment Warrant may be assigned in whole or in part by the
surrender of this Adjustment Warrant and the Assignment Form annexed hereto duly
executed at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered holder hereof
at the address of such holder appearing on the books of the Company); provided,
however, that this Adjustment Warrant may not be resold or otherwise transferred
except (i) in a transaction registered under the Securities Act of 1933, as
amended (the "ACT"), or (ii) in a transaction pursuant to an exemption, if
available, from registration under the Act and whereby, if requested by the
Company, an opinion of counsel reasonably satisfactory to the Company is
obtained by the holder of this Adjustment Warrant to the effect that the
transaction is so exempt.

         10. Loss, Theft, Destruction or Mutilation of Adjustment Warrant. Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of any Adjustment Warrant or stock certificate
representing the Adjustment Shares, and in case of loss, theft or destruction,
of indemnity reasonably satisfactory to it, and upon reimbursement to the
Company of all reasonable expenses incidental thereto. Upon surrender and
cancellation of such Adjustment Warrant or stock certificate, if mutilated, the
Company will

                                      -5-
<PAGE>   6
make and deliver a new Adjustment Warrant or stock certificate of like tenor and
dated as of such cancellation, in lieu of this Adjustment Warrant or stock
certificate.

         11. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a legal
holiday.

         12. Effect of Certain Events. If at any time while this Adjustment
Warrant or any portion thereof is outstanding and unexpired there shall be (i) a
sale or conveyance of all or substantially all of the Company's assets or (ii) a
transaction (by merger or otherwise) in which more than 50% of the voting power
of the Company is disposed of (collectively, a "SALE OR MERGER TRANSACTION"), in
which the consideration to be received by the Company or its shareholders
consists solely of cash, and in case the Company shall at any time effect a Sale
or Merger Transaction in which the consideration to be received by the Company
or its shareholders consists in part of consideration other than cash, the
holder of this Adjustment Warrant shall have the right thereafter to purchase,
by exercise of this Adjustment Warrant and payment of the aggregate Exercise
Price in effect immediately prior to such action, the kind and amount of shares
and other securities and property which it would have owned or have been
entitled to receive after the happening of such transaction had this Adjustment
Warrant been exercised immediately prior thereto, subject to further adjustment
as provided in Section 13. Notwithstanding the above, a Sale or Merger
Transaction shall not be deemed to occur in the event the Company is the
acquiring entity in connection with an acquisition by the Company.

         13. Adjustments of Exercise Price and Number of Adjustment Warrant
Shares.

         The number of and kind of securities purchasable upon exercise of this
Adjustment Warrant and the Exercise Price shall be subject to adjustment from
time to time as follows:

         (a) Subdivisions, Combinations and other Issuances. If the Company
shall at any time after the date hereof but prior to the expiration of this
Adjustment Warrant subdivide its outstanding securities as to which purchase
rights under this Adjustment Warrant exist, by split-up, spin-off, or otherwise,
or combine its outstanding securities as to which purchase rights under this
Adjustment Warrant exist, the number of Adjustment Shares as to which this
Adjustment Warrant is exercisable as of the date of such subdivision, split-up,
spin-off or combination shall forthwith be proportionately increased in the case
of a subdivision, or proportionately decreased in the case of a combination.
Appropriate proportional adjustments (decrease in the case of subdivision,
increase in the case of combination) shall also be made to the Exercise Price
payable per share, so that the aggregate Exercise Price payable for the total
number of Adjustment Shares purchasable under this Adjustment Warrant as of such
date shall remain the same as it would have been before such subdivision or
combination.

         (b) Stock Dividend. If at any time after the date hereof the Company
declares a dividend or other distribution on Common Stock payable in Common
Stock or other securities or rights convertible into Common Stock ("COMMON STOCK
EQUIVALENTS") without payment of

                                      -6-
<PAGE>   7
any consideration by holders of Common Stock for the additional shares of Common
Stock or the Common Stock Equivalents (including the additional shares of Common
Stock issuable upon exercise or conversion thereof), then the number of shares
of Common Stock for which this Adjustment Warrant may be exercised shall be
increased as of the record date (or the date of such dividend distribution if no
record date is set) for determining which holders of Common Stock shall be
entitled to receive such dividends, in proportion to the increase in the number
of outstanding shares (and shares of Common Stock issuable upon conversion of
all such securities convertible into Common Stock) of Common Stock as a result
of such dividend, and the Exercise Price shall be proportionately reduced so
that the aggregate Exercise Price for all the Adjustment Shares issuable
hereunder immediately after the record date (or on the date of such
distribution, if applicable), for such dividend shall equal the aggregate
Exercise Price so payable immediately before such record date (or on the date of
such distribution, if applicable).

         (c) Other Distributions. If at any time after the date hereof the
Company distributes to holders of its Common Stock, other than as part of its
dissolution, liquidation or the winding up of its affairs, any shares of its
capital stock, any evidence of indebtedness or any of its assets (other than
Common Stock), then the number of Adjustment Shares for which this Adjustment
Warrant is exercisable shall be increased to equal: (i) the number of Adjustment
Shares for which this Adjustment Warrant is exercisable immediately prior to
such event, (ii) multiplied by a fraction, (A) the numerator of which shall be
the Fair Market Value (as defined below) per share of Common Stock on the record
date for the dividend or distribution, and (B) the denominator of which shall be
the Fair Market Value price per share of Common Stock on the record date for the
dividend or distribution minus the amount allocable to one share of Common Stock
of the value (as jointly determined in good faith by the Board of Directors of
the Company and the Adjustment Warrant holder) of any and all such evidences of
indebtedness, shares of capital stock, other securities or property, so
distributed. For purposes of this Adjustment Warrant, "FAIR MARKET VALUE" shall
equal the 10 Trading Day average closing trading price of the Common Stock on
the Principal Market for the 10 Trading Days preceding the date of determination
or, if the Common Stock is not listed or admitted to trading on any Principal
Market, the average of the closing bid and asked prices on the over-the-counter
market as furnished by any New York Stock Exchange member firm reasonably
selected from time to time by the Company for that purpose and reasonably
acceptable to the Holder, or, if the Common Stock is not listed or admitted to
trading on the Principal Market or traded over-the-counter and the average price
cannot be determined as contemplated above, the Fair Market Value of the Common
Stock shall be as reasonably determined in good faith by the Company's Board of
Directors with the concurrence of the Holder. The Exercise Price shall be
reduced to equal: (i) the Exercise Price in effect immediately before the
occurrence of any event (ii) multiplied by a fraction, (A) the numerator of
which is the number of Adjustment Shares for which this Adjustment Warrant is
exercisable immediately before the adjustment, and (B) the denominator of which
is the number of Adjustment Shares for which this Adjustment Warrant is
exercisable immediately after the adjustment.

         (d) Merger, etc. If at any time after the date hereof there shall be a
merger or consolidation of the Company with or into or a transfer of all or
substantially all of the assets of the Company to another entity, then the
Adjustment Warrant Holder shall be entitled to receive upon or after such
transfer, merger or consolidation becoming effective, and upon payment of the
Exercise Price then in effect, the number of shares or other securities or
property of the Company

                                      -7-
<PAGE>   8
or of the successor corporation resulting from such merger or consolidation,
which would have been received by Adjustment Warrant Holder for the shares of
stock subject to this Adjustment Warrant had this Adjustment Warrant been
exercised just prior to such transfer, merger or consolidation becoming
effective or to the applicable record date thereof, as the case may be. The
Company will not merge or consolidate with or into any other corporation, or
sell or otherwise transfer its property, assets and business substantially as an
entirety to another corporation, unless the corporation resulting from such
merger or consolidation (if not the Company), or such transferee corporation, as
the case may be, shall expressly assume in writing the due and punctual
performance and observance of each and every covenant and condition of this
Adjustment Warrant to be performed and observed by the Company.

         (e) Reclassification, etc. If at any time after the date hereof there
shall be a reorganization or reclassification of the securities as to which
purchase rights under this Adjustment Warrant exist into the same or a different
number of securities of any other class or classes, then the Adjustment Warrant
Holder shall thereafter be entitled to receive upon exercise of this Adjustment
Warrant, during the period specified herein and upon payment of the Exercise
Price then in effect, the number of shares or other securities or property
resulting from such reorganization or reclassification, which would have been
received by the Adjustment Warrant Holder for the shares of stock subject to
this Adjustment Warrant had this Adjustment Warrant at such time been exercised.

         (f) Exercise Price Adjustment. In the event that the Company issues or
sells any Common Stock or securities which are convertible into or exchangeable
for its Common Stock or any convertible securities, or any Adjustment Warrants
or other rights to subscribe for or to purchase or any options for the purchase
of its Common Stock or any such convertible securities (other than shares or
options issued or which may be issued pursuant to (i) the Company's current or
future employee, director or bona fide consultant option plans or shares issued
upon exercise of options, Adjustment Warrants or rights outstanding on the date
of the Agreement and listed in the Company's most recent periodic report filed
under the Exchange Act (ii) strategic corporate alliances not undertaken
principally for financing purposes, (iii) arrangements with the Investor
(including for the issuance of Delay Shares and Mandated Acceleration Shares, as
such terms are defined in the Registration Rights Agreement), or (iv)
acquisitions of other entities by the Company) at an effective consideration or
exercise price per share which is less than the Exercise Price then in effect.
The Exercise Price in effect immediately prior to such issue or sale shall be
reduced effective concurrently with such issue or sale to an amount determined
by multiplying the Exercise Price then in effect by a fraction, (x) the
numerator of which shall be the sum of (1) the number of shares of Common Stock
outstanding immediately prior to such issue or sale, plus (2) the number of
shares of Common Stock which the aggregate consideration received by the Company
for such additional shares would purchase at such Exercise Price then in effect;
and (y) the denominator of which shall be the number of shares of Common Stock
of the Company outstanding immediately after such issue or sale.

         For the purposes of the foregoing adjustment, in the case of the
issuance of any convertible securities, Adjustment Warrants, options or other
rights to subscribe for or to purchase or exchange for, shares of Common Stock
("CONVERTIBLE SECURITIES"), the maximum number of shares of Common Stock
issuable upon exercise, exchange or conversion of such

                                      -8-
<PAGE>   9
Convertible Securities shall be deemed to be outstanding, provided that no
further adjustment shall be made upon the actual issuance of Common Stock upon
exercise, exchange or conversion of such Convertible Securities.

         The number of shares which may be purchased hereunder shall be
increased proportionately to any reduction in Exercise Price pursuant to this
paragraph 13(f), so that after such adjustments the aggregate Exercise Price
payable hereunder for the increased number of shares shall be the same as the
aggregate Exercise Price in effect just prior to such adjustments.

         In no event shall the Exercise Price be adjusted to a number smaller
than the par value per share of the Company's Common Stock.

         14. 9.99% Limitation.

         (a) Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock that may be acquired by the Investor upon
exercise pursuant to the terms hereof shall not exceed a number that, when added
to the total number of shares of Common Stock deemed beneficially owned by such
holder (other than by virtue of the ownership of securities or rights to acquire
securities (including the Warrant) that have limitations on the Investor's right
to convert, exercise or purchase similar to the limitation set forth herein),
together with all shares of Common Stock deemed beneficially owned (other than
by virtue of the ownership of securities or rights to acquire securities that
have limitations on the right to convert, exercise or purchase similar to the
limitation set forth herein) by the holder's "affiliates" (as defined Rule 144
of the Act) ("AGGREGATION PARTIES") that would be aggregated for purposes of
determining whether a group under Section 13(d) of the Securities Exchange Act
of 1934, as amended, exists, would exceed 9.99% of the total issued and
outstanding shares of the Company's Common Stock (the "RESTRICTED OWNERSHIP
PERCENTAGE"). Each Holder shall have the right (w) at any time and from time to
time to reduce its Restricted Ownership Percentage immediately upon notice to
the Company and (x) at any time and from time to time, to increase its
Restricted Ownership Percentage immediately in the event of the announcement as
pending or planned of a Major Transaction (as such term is defined in the
Investment Agreement).

         (b) The Investor covenants at all times on each day (each such day
being referred to as a "COVENANT DAY") as follows: During the balance of such
Covenant Day and the succeeding sixty-one (61) days (the balance of such
Covenant Day and the succeeding 61 days being referred to as the "COVENANT
PERIOD") such Investor will not acquire shares of Common Stock pursuant to any
right (including the exercise of the Warrant) existing at the commencement of
the Covenant Period to the extent the number of shares so acquired by such
holder and its Aggregation Parties (ignoring all dispositions) would exceed:

     (x)  the Restricted Ownership Percentage of the total number of shares of
          Common Stock outstanding at the commencement of the Covenant Period,

     minus

     (y)  the number of shares of Common Stock owned by such holder and its
          Aggregation Parties at the commencement of the Covenant Period.

                                      -9-
<PAGE>   10
         A new and independent covenant will be deemed to be given by the holder
as of each moment of each Covenant Day. No covenant will terminate, diminish or
modify any other covenant. The holder agrees to comply with each such covenant.
This Section 14 controls in the case of any conflict with any other provision of
the Transaction Documents.

         The Company's obligation to issue Shares of Common Stock which would
exceed such limits referred to in this Section 14 shall be suspended to the
extent necessary until such time, if any, as shares of Common Stock may be
issued in compliance with such restrictions.

         15. Compliance with Securities Laws. (a) The holder hereof acknowledges
that the Adjustment Shares acquired upon the exercise of this Adjustment
Warrant, if not registered (or if no exemption from registration exists), will
have restrictions upon resale imposed by state and federal securities laws. Each
certificate representing the Adjustment Shares issued to the Holder upon
exercise (if not registered or if no exemption from registration exists) will
bear the following legend:

         THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS, BASED ON AN OPINION LETTER OF COUNSEL SATISFACTORY TO THE
COMPANY OR A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.

         (b) Without limiting the Investor's right to transfer, assign or
otherwise convey the Adjustment Warrant or Adjustment Shares in compliance with
all applicable securities laws, the Investor of this Adjustment Warrant, by
acceptance hereof, acknowledges that this Adjustment Warrant and the Adjustment
Shares to be issued upon exercise hereof are being acquired solely for the
Investor's own account and not as a nominee for any other party, and that the
Investor will not offer, sell or otherwise dispose of this Adjustment Warrant
except to the other Investor, to an affiliate of either Investor or to an entity
or fund which has the same principal investment adviser as either Investor on
the condition that such transferee agrees to be bound by Section 3.12 of the
Agreement. Upon exercise of this Adjustment Warrant, the Investor shall, if
requested by the Company, confirm in writing, in a form satisfactory to the
Company, that the Adjustment Shares of Common Stock so purchased are being
acquired solely for the Investor's own account and not as a nominee for any
other party, for investment, and not with a view toward distribution or resale.

         (c) Neither this Adjustment Warrant nor any Share of Common Stock
issued upon exercise of this Adjustment Warrant may be offered for sale or sold,
or otherwise transferred or sold in any transaction which would constitute a
sale thereof within the meaning of the Act, unless (i) such security has been
registered for sale under the Act and registered or

                                      -10-
<PAGE>   11
qualified under applicable state securities laws relating to the offer an sale
of securities, or (ii) exemptions from the registration requirements of the Act
and the registration or qualification requirements of all such state securities
laws are available and the Company shall have received an opinion of counsel
that the proposed sale or other disposition of such securities may be effected
without registration under the Act, such counsel and such opinion to be
satisfactory to the Company.

         (d) Investor recognizes that investing in the Adjustment Warrant and
the Adjustment Shares involves a high degree of risk, and Investor is in a
financial position to hold the Adjustment Warrant and the Adjustment Shares
indefinitely and is able to bear the economic risk and withstand a complete loss
of its investment in the Adjustment Warrant and the Adjustment Shares. The
Investor is a sophisticated investor and is capable of evaluating the merits and
risks of investing in the Company. The Investor has had an opportunity to
discuss the Company's business, management and financial affairs with the
Company's management, has been given full and complete access to information
concerning the Company, and has utilized such access to its satisfaction for the
purpose of obtaining information or verifying information and have had the
opportunity to inspect the Company's operation. Investor has had the opportunity
to ask questions of, and receive answers from, the management of the Company
(and any person acting on its behalf) concerning the Adjustment Warrant and the
Adjustment Shares and the agreements and transactions contemplated hereby, and
to obtain any additional information as Investor may have requested in making
its investment decision. The initial Investor in this Adjustment Warrant is an
"accredited investor", as defined by Regulation D promulgated under the Act.

         16. Miscellaneous.

         (a) Issue Date; Choice Of Law; Venue; Jurisdiction. The provisions of
this Adjustment Warrant shall be construed and shall be given effect in all
respects as if it had been issued and delivered by the Company on the date
hereof. This Adjustment Warrant shall be binding upon any successors or assigns
of the Company. This Adjustment Warrant will be construed and enforced in
accordance with and governed by the laws of the State of New York, except for
matters arising under the Act, without reference to principles of conflicts of
law. Each of the parties consents to the exclusive jurisdiction of the U.S.
District Court sitting in the State of City of New York in the State of New York
in connection with any dispute arising under this Adjustment Warrant and hereby
waives, to the maximum extent permitted by law, any objection, including any
objection based on forum non conveniens, to the bringing of any such proceeding
in such jurisdiction. Each party hereby agrees that if the other party to this
Adjustment Warrant obtains a judgment against it in such a proceeding, the party
which obtained such judgment may enforce same by summary judgment in the courts
of any country having jurisdiction over the party against whom such judgment was
obtained, and each party hereby waives any defenses available to it under local
law and agrees to the enforcement of such a judgment. Each party to this
Adjustment Warrant irrevocably consents to the service of process in any such
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such party at its address in accordance with Section 16(c).
Nothing herein shall affect the right of any party to serve process in any other
manner permitted by law. Each party waives its right to a trial by jury.

                                      -11-
<PAGE>   12
         (b) Modification and Waiver. This Adjustment Warrant and any provisions
hereof may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is sought. Any
amendment effected in accordance with this paragraph shall be binding upon the
Investor, each future holder of this Adjustment Warrant and the Company. No
waivers of, or exceptions to, any term, condition or provision of this
Adjustment Warrant, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such term, condition or
provision.

         (c) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Investor or future holders hereof or
the Company shall be personally delivered or shall be sent by certified or
registered mail, postage prepaid, to the Investor or each such holder at its
address as shown on the books of the Company or to the Company at the address
set forth in the Agreement. All notices under this Adjustment Warrant shall be
deemed to have been given when received.

         A party may from time to time change the address to which notices to it
are to be delivered or mailed hereunder by notice in accordance with the
provisions of this Section 18(c).

         (d) Severability. Whenever possible, each provision of this Adjustment
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Adjustment Warrant is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect the validity, legality or enforceability of any other provision of
this Adjustment Warrant in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Adjustment
Warrant shall be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been contained
herein.

         (e) No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Adjustment Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the Adjustment
Warrant Holder against impairment. Without limiting the generality of the
foregoing, the Company (a) will not increase the par value of any Adjustment
Warrant Shares above the amount payable therefor on such exercise, and (b) will
take all such action as may be reasonably necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable
Adjustment Warrant Shares on the exercise of this Adjustment Warrant.

                                      -12-
<PAGE>   13
         IN WITNESS WHEREOF, the Company has caused this Adjustment Warrant to
be executed by its officers thereunto duly authorized.

Dated: July 17, 2000

                                          PLATO LEARNING, INC.

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

Agreed and Accepted
this 17th day of July, 2000

WESTGATE INTERNATIONAL, L.P.
By:      ELLIOTT INTERNATIONAL CAPITAL
         ADVISORS INC.

         Attorney-in-Fact

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

                                      -13-
<PAGE>   14
                               NOTICE OF EXERCISE

To:      PLATO LEARNING, INC.

(1)      The undersigned hereby elects:

         (A) to purchase          shares of Common Stock of PLATO LEARNING, INC.
pursuant to the terms of the attached Adjustment Warrant, and tenders herewith
payment of the Exercise Price in full, together with all applicable transfer
taxes, if any.

         (B) in a "cashless" or "net-issue exercise" for, and to purchase
thereunder,        shares of Common Stock, and herewith makes payment therefor
with         Surrendered Shares.

(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:

                        -------------------------------
                        (Name)

                        -------------------------------
                        (Address)

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

(3) Please issue a new Adjustment Warrant for the unexercised portion of the
attached Adjustment Warrant in the name of the undersigned or in such other name
as is specified below:

                        Other Name:
                                   ---------------------

                                             ---------------------------------
                                             (Name)

------------------                           ---------------------------------
(Date)                                       (Signature)

                                             ---------------------------------
                                             (Address)

                                      -14-
<PAGE>   15
                                 ASSIGNMENT FORM

              (To assign the foregoing Adjustment Warrant, execute
                   this form and supply required information.
            Do not use this form to exercise the Adjustment Warrant.)

         FOR VALUE RECEIVED, the foregoing Adjustment Warrant of Plato Learning,
Inc. and all rights evidenced thereby are hereby assigned to

                                                whose address is
------------------------------------------------

                                                               .
---------------------------------------------------------------

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

                                         Dated:                ,
                                               ----------------

                         Holder's Signature:
                                            -------------------------

                         Holder's Address:
                                            -------------------------

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

Signature Guaranteed:
                     ------------------------------------------

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Adjustment Warrant, without alteration or enlargement
or any change whatsoever, and must be guaranteed by a bank or trust company.
Officers of corporations and those acting in an fiduciary or other
representative capacity should file proper evidence of authority to assign the
foregoing Adjustment Warrant.

                                      -15-<PAGE>   1
                                                                    EXHIBIT 4.1

                          REDOX TECHNOLOGY CORPORATION

              DESIGNATION OF RIGHTS, PRIVILEGES, AND PREFERENCES OF
                           CONVERTIBLE PREFERRED STOCK

Pursuant to the provisions of Section 151 of the Delaware General Corporation
Law, REDOX Technology Corporation (hereinafter, the "Corporation") hereby adopts
the following Designation of Rights, Privileges, and Preferences of Convertible
Preferred Stock (the "Designation").

FIRST: The name of the Corporation is REDOX Technology Corporation.

SECOND: The following resolution establishing a series of Convertible Preferred
stock designated as the "Convertible Preferred Stock" consisting of Ten Million
(10,000,000) shares, $0.001 par value per share, was duly adopted by the Board
of Directors of the Corporation on July 1, 1996 in accordance with the
certificate of incorporation, as amended, amended, of the Corporation and the
corporation laws of the state of Delaware.

     RESOLVED, there is hereby created a series of preferred stock of the
     Corporation to be designated as the "Convertible Preferred Stock"
     consisting of Ten Million (10,000,000) shares, $0.001 par value per share,
     with the following powers, preferences, rights, qualifications,
     limitations, and restrictions:

     1. Liquidation

          1.1      In the event of the voluntary or involuntary liquidation
               (whether partial or complete), dissolution, or winding up of the
               Corporation, the holders of the Convertible Preferred Stock shall
               be entitled to be paid out of the assets of the Corporation
               available for distribution to its shareholders, whether from
               capital, surplus, or earnings, an amount of cash equal to One
               dollar ($1.00) per share plus all unpaid dividends previously
               declared thereon to the date of final distribution. No
               distribution shall be made on any Common stock or other series of
               Preferred stock of the Corporation by reason of voluntary or
               involuntary liquidation (whether partial or complete),
               dissolution, or winding up of the Corporation unless each holder
               of any Convertible Preferred Stock shall have received all
               amounts to which such holder shall be entitled under this
               subsection.

          1.2      If on any liquidation (whether partial or complete),
               dissolution, or winding up of the Corporation, the assets of the
               Corporation available for distribution to holders of Convertible
               Preferred Stock shall be insufficient to pay the holders of the
               Convertible Preferred Stock the full amounts to which they would
               otherwise be entitled under Section 1.1, above, the assets of the
               Corporation available for distribution to holders of Convertible
               Preferred Stock shall be distributed to them pro rata on the
               basis of the number of shares of Convertible Preferred Stock held
               by each such holder.

                                     - 1 -
<PAGE>   2

     2. Voting Rights

          The Convertible Preferred Stock shall be voted with the Common stock
          of the Corporation and with each other series of Preferred stock as a
          single class and shall not be entitled to vote as a separate class,
          except to the extent that the consent of the holders of Convertible
          Preferred Stock, voting as a class, is specifically required by the
          provisions of the corporation law of the state of Delaware, as now
          existing or as hereafter amended.

     3. Subordination

          Any payment of any dividend or any redemption hereunder shall be
          subordinated to payment in full of all Senior Debt as defined herein.
          "Senior Debt" shall mean the principle and premium, if any, and
          interest on all indebtedness of the Corporation to any financial
          institution, including, but not restricted to, (i) banks, whether
          currently outstanding or hereinafter created, and whether or not such
          loans are secured, (ii) any other indebtedness, liability,
          obligations, contingent or otherwise of the Corporation to guarantee
          endorsement of the contingent obligation with respect to any
          indebtedness, liability, or obligation whether created, assumed, or
          incurred by the Corporation and after the date of the creation of the
          Convertible Preferred Stock, which is, when created, specifically
          designated by the Corporation as Senior Debt, and (iii) any refunding,
          renewals, or extensions of any indebtedness or similar obligations
          described as Senior Debt in sub-paragraphs (i) and (ii) of this
          subsection.

     4. Dividends

          4.1      The Corporation shall pay to the holders of the Convertible
               Preferred Stock out of the assets of the Corporation at any time
               for the payment of dividends at the times and in the amounts so
               declared by the Board of Directors of the Corporation and in the
               manner prescribed in this Section.

          4.2      The holders of the Convertible Preferred Stock shall be
               entitled to receive dividends, if any, as may be declared from
               time to time by the Board of Directors, provided that there are
               Corporation funds legally available for the payment of such
               declared dividends. The Convertible Preferred Stock shall not
               have any preference as to dividends.

          4.3      Any payment of dividends declared and due under this Section
               with respect to any shares of the Convertible Preferred Stock
               shall be made by means of a check drawn on funds immediately
               available for the payment thereof to the order of the holder of
               such share(s) at the address for such holder of record shown on
               the stock records maintained by or for the Corporation, which
               check shall be mailed by United States Postal Service first-class
               mail, postage pre-paid. Any such payment shall be deemed to have
               been paid by the Corporation on the date that such payment is
               deposited in the United States mail as provided above, provided
               that in the event that the check or other medium by which any
               payment shall be made shall prove not to be immediately
               collectible on the date of payment, such payment shall not be
               deemed to have been made until cash in the amount of such payment
               shall actually be received by the person entitled to receive such
               payment.

                                     - 2 -
<PAGE>   3

          4.4      Registration of transfer of any share of the Convertible
               Preferred Stock on the stock records maintained by or for the
               Corporation to a person other than the transferor shall
               constitute a transfer of any right which the transferor may have
               had to receive any accrued but unpaid dividends as of the date of
               transfer, whether declared or undeclared, and the Corporation
               shall have no further obligation to the transferor with respect
               to such accrued but unpaid dividends. Any shares of Convertible
               Preferred Stock represented by a new certificate issued to a new
               holder shall continue to accrue dividends as provided in this
               Section.

     5. Conversion

          5.1      Each share of the Convertible Preferred Stock is convertible
               into Common Stock of the Corporation, par value $0.00005, (the
               "Common Stock") at the times, in the manner, and subject to the
               conditions provided in this Section.

          5.2      Each share of the Convertible Preferred Stock may be
               converted at any time at the election of the holder of the
               presentation and surrender of the certificate representing the
               share, duly endorsed, with written instructions specifying the
               number of shares of the Convertible Preferred Stock to be
               converted and the name and address of the person to whom
               certificate(s) representing the Common Stock issuable on the
               conversion are to be issued at the principal office of the
               Corporation.

          5.3      Each share of the Convertible Preferred Stock shall be
               convertible into Common Stock of the Corporation at the rate of
               Five (5) shares of Common Stock for each share of Convertible
               Preferred Stock (the "Conversion Rate"). The Conversion Rate
               shall be subject to adjustment pursuant to Section 5.4, below.

          5.4      In order to prevent dilution of the rights granted
               hereunder, the Conversion Rate and liquidating voting rights
               shall be subject to adjustment from time to time in accordance
               with this subsection.

               (a)  In the event the Corporation shall declare a dividend or
                    make other distribution on any capital stock of the
                    Corporation payable in Common Stock, options to purchase
                    Common Stock, or securities convertible into Common Stock of
                    the Corporation shall at any time subdivide (other than by
                    means of a dividend payable in Common Stock) its outstanding
                    shares of Common Stock into a greater number of shares, or
                    combine such outstanding stock into a smaller number of
                    shares, then in each such event, the Conversion Rate in
                    effect immediately prior to such combination shall be
                    adjusted so the holders of the Convertible Preferred Stock
                    shall be entitled to receive the kind and number of shares
                    of Common Stock or other securities of the Corporation which
                    they would have owned or have been entitled to receive after
                    the happening of any of the events described above, had such
                    shares of the Convertible Preferred Stock been converted
                    immediately prior to the happening of such event or any
                    record date with respect thereto; an adjustment made
                    pursuant to this subsection shall become effective
                    immediately after the effective date of such event
                    retroactive to the record date for such event.

                                     - 3 -
<PAGE>   4

               (b)  If any capital reorganization or reclassification of the
                    capital stock of the Corporation, consolidation, or merger
                    of the Corporation with another Corporation, or the sale of
                    all or substantially all of its assets to another
                    corporation shall be effected in such a way the holder of
                    Common Stock shall be entitled to receive stock, other
                    securities, or other assets with respect to or in exchange
                    for Common Stock, then as a condition of such
                    reorganization, reclassification, consolidation, merger, or
                    sale, lawful adequate provisions shall be made whereby the
                    holders of the Convertible Preferred Stock shall thereafter,
                    subject to prior redemption by the Corporation, have the
                    right to acquire and receive on conversion of the
                    Convertible Preferred Stock such shares of Common Stock,
                    other securities, or other assets as would have been
                    issuable or payable (as part of the reorganization,
                    reclassification, consolidation, merger, or sale) with
                    respect to or in exchange for such number of outstanding
                    shares of the Corporation's Common Stock as would have been
                    received on conversion of the Convertible Preferred Stock
                    immediately before such reorganization, reclassification,
                    consolidation, merger, or sale. In any such case,
                    appropriate provisions shall be made with respect to the
                    rights and interests of the holders of the Convertible
                    Preferred Stock to the end that the provisions hereof
                    (including, without limitations, provisions for adjustments
                    of the Conversion Rate and for the number of shares issuable
                    on conversion of the Convertible Preferred Stock) shall
                    thereafter be applicable in relation to any shares of Common
                    Stock, other securities, or other assets of the Corporation
                    thereafter deliverable on the conversion of the Convertible
                    Preferred Stock. In the event of a merger or consolidation
                    of the Corporation with or into another corporation or the
                    sale of all or substantially all of its assets as a result
                    of which a number of shares of Common Stock of the surviving
                    or purchasing corporation greater or less than the number of
                    shares of Common Stock of the Corporation outstanding
                    immediately prior to such merger, consolidation, or purchase
                    are issuable to holders of Common Stock of the Corporation,
                    then the Conversion Rate in effect immediately prior to such
                    merger, consolidation, or purchase shall be adjusted in the
                    same manner as though there were a subdivision or
                    combination of the outstanding shares of Common Stock of the
                    Corporation.

               (c)  No adjustment shall be made in the Conversion Rate of the
                    number of shares of Common Stock issuable on conversion of
                    Convertible Preferred Stock (i) in connection with the offer
                    and sale of Convertible Preferred Stock; (ii) in connection
                    with the issuance of any Common Stock, other securities, or
                    other assets on conversion or redemption of shares of
                    Convertible Preferred Stock; (iii) in connection with the
                    issuance of any share of Common Stock, other securities, or
                    other assets on account of the anti-dilution provisions of
                    this Section; (iv) in connection with the purchase or other
                    acquisition by the Corporation of any capital stock,
                    evidence of its indebtedness, or other securities of the
                    Corporation; or

                                     - 4 -
<PAGE>   5

                    (v) in connection with the sale or exchange by the
                    Corporation of any Common Stock, evidence of its
                    indebtedness, or other securities of the corporation
                    including securities containing the right to subscribe for
                    or purchase Common stock or Convertible Preferred stock of
                    the Corporation.

          5.5      The Corporation covenants and agrees that:

               (a)  The shares of Common Stock, other securities, or other
                    assets of the Corporation issuable on any conversion of any
                    shares of Convertible Preferred Stock shall be deemed to
                    have been issued to the person on the Conversion Date, and
                    on the Conversion Date, such person shall be deemed for all
                    purposes to have become the record holder of such Common
                    Stock, other securities, or other assets.

               (b)  All shares of Common Stock or other securities which may be
                    issued on conversion of the Convertible Preferred Stock
                    will, on issuance, be fully paid and nonassessable and free
                    from all taxes, liens, and charges with respect to the issue
                    thereof. Without limiting the generality of the foregoing,
                    the Corporation will, from time to time, take all action as
                    may be requisite to assure that the par value of the
                    unissued Common Stock or other securities acquirable on any
                    conversion of the Convertible Preferred Stock is at all
                    times equal to or less than the amount determined by
                    dividing the par value of a share of Convertible Preferred
                    Stock by the number of shares of Common Stock or other
                    securities issuable on conversion of such share.

               (c)  The issuance of certificates for Common Stock or other
                    securities on conversion of the Convertible Preferred Stock
                    shall be made without charge to the registered holder
                    thereof for any issuance tax in respect thereof or other
                    costs incurred by the Corporation in connection with the
                    conversion of the Convertible Preferred Stock and the
                    related issuance of Common Stock or other securities.

     6. Redemption

          6.1      Subject to the requirements and limitations of the
               corporation laws of the state of Delaware, the Corporation shall
               have the right to redeem the shares of the Convertible Preferred
               Stock on the following terms and conditions.

          6.2      The shares of the Convertible Preferred Stock are subject to
               redemption by the Corporation at any time after issuance pursuant
               to written notice of redemption given to the holders thereof on
               not less than Thirty (30) days, specifying the date on which the
               Convertible Preferred Stock shall be redeemed (the "Redemption
               Date"). The Corporation may redeem a portion or all of the issued
               and outstanding shares of Convertible Preferred Stock, provided
               that, in the event that less than all of the outstanding shares
               of Convertible Preferred Stock are redeemed, such redemption
               shall be pro rata determined on the basis of the number of shares
               of Convertible Preferred Stock outstanding.

                                     - 5 -
<PAGE>   6

          6.3      The redemption price for each share of Convertible Preferred
               Stock shall be One dollar ($1.00) per share plus any accrued but
               unpaid dividends, if applicable, on such share as of the
               Redemption Date (the "Redemption Price"). The Redemption Price
               shall be paid in cash.

          6.4      Redemption of the Convertible Preferred Stock shall be made
               in the following manner:

               (a)  The Corporation shall notify the transfer agent of the
                    Corporation's Common Stock (the "Transfer Agent") of its
                    intention to redeem the Convertible Preferred Stock. Such
                    notice shall include a list of all holders of the
                    Convertible Preferred Stock outstanding as of the most
                    recent practicable date and a statement of the number of
                    shares of the Convertible Preferred Stock to be redeemed and
                    the manner in which the Redemption Price is to be paid. At
                    least Ten (10) days prior to the date that written notice of
                    redemption is given to holders of the Convertible Preferred
                    Stock, the Corporation shall make appropriate arrangements
                    with the Transfer Agent for the delivery of funds and/or
                    Common Stock necessary to make payment of the Redemption
                    Price for all shares of Convertible Preferred Stock redeemed
                    by the Corporation.

               (b)  On the Redemption Date, all shares of the Convertible
                    Preferred Stock subject to redemption shall be automatically
                    redeemed unless earlier converted pursuant to Section 5,
                    above. The holder of any shares of the Convertible Preferred
                    Stock so redeemed shall be required to tender the
                    certificates representing such shares, duly endorsed, to the
                    Transfer Agent in exchange for payment of the Redemption
                    Price and reissuance of the balance of the Convertible
                    Preferred Stock not otherwise converted or redeemed. On such
                    surrender, the Transfer Agent shall cause to be issued and
                    delivered a check with all reasonable dispatch to the holder
                    and/or the holder's designatees or assigns.

               (c)  Following the expiration of a period of Thirty (30) days
                    following the Redemption Date, the Transfer Agent shall
                    provide to the Corporation a complete accounting of the
                    Convertible Preferred Stock redeemed and a list of all
                    shares of Convertible Preferred Stock remaining unconverted
                    and not returned to the Corporation for redemption. The
                    Corporation shall pay all costs associated with establishing
                    and maintaining any bank accounts for funds deposited with
                    the Transfer Agent, including the costs of issuing any
                    checks.

     7. Additional Provisions

          7.1      No change in the provisions of the Convertible Preferred
               Stock set forth in this Designation affecting any interests of
               the holders of any shares of Convertible Preferred Stock shall be
               binding or effective unless such changes shall have been approved
               or consented to by the holders of Convertible Preferred Stock in
               the manner provided in the corporation laws of the state of
               Delaware, as the same may be amended from time to time.

                                     - 6 -
<PAGE>   7

          7.2      The shares of Convertible Preferred Stock shall be
               transferable only on the books of the Corporation maintained at
               its principal office, on delivery thereof duly endorsed by the
               holder or by his duly authorized attorney or representative or
               accompanied by proper evidence of succession, assignment, or
               authority to transfer. In all cases of transfer by an attorney,
               the original letter of attorney, duly approved, or an official
               copy thereof, duly certified, shall be deposited and remain with
               the Corporation. In case of transfer by executors,
               administrators, guardians, or other legal representatives, duly
               authenticated evidence of their authority shall be produced and
               may be required to be deposited and remain with the new
               certificate representing the shares of Convertible Preferred
               Stock so transferred to the person entitled thereto.

          7.3      The Corporation shall not be required to issue any fractional
               shares of Common Stock on the conversion or redemption of any
               share of Convertible Preferred Stock.

          7.4      Any notices required or permitted to be given to the holders
               of the Convertible Preferred Stock under this Designation shall
               be deemed to have been duly given if mailed by first-class mail,
               postage prepaid, to such holders at their respective addresses
               appearing on the stock records maintained by or for the
               Corporation, and shall be deemed to have been given as of the
               date deposited in the United States mail.

IN WITNESS WHEREOF, the foregoing Designation of Rights, Privileges, and
Preferences of Convertible Preferred Stock of the Corporation has been executed
this Second day of July, Nineteen Hundred Ninety-Six.

ATTEST:

----------------------------------
Richard Szymanski
Secretary and President

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

STATE OF TEXAS                  )
                                :ss
COUNTY OF HARRIS                )

On July 2, 1996, before me the undersigned, a notary public in and for the above
county and state, personally appeared Richard A. Szymanski, who being by me duly
sworn, did state for himself the he, Richard A. Szymanski, is the President and
Secretary of REDOX Technology Corporation, a Delaware corporation, and that the
foregoing Designation of Rights, Privileges, and Preferences of Convertible
Preferred Stock of REDOX Technology Corporation was signed on behalf of such
corporation by authority of a resolution of its Board of Directors, and that the
statements contained therein are true.

                                       WITNESS MY HAND AND OFFICIAL SEAL

                                       -----------------------------------------
                                       NOTARY PUBLIC

                                     - 7 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}]]