Common use of Terms of Warrants; Exercise of Warrants Clause in Contracts

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder shall have the right, which may be exercised commencing at the opening of business on August 25, 1998 and until 5:00 p.m., Pacific time on August 24, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of the Company, or (ii) in the manner provided in the first paragraph of this Section 5. Upon such surrender of Warrants and payment of the Exercise Price the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued pursuant to the provisions of this Section. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates shall then be disposed of by the Company.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Warrant Agreement, and compliance with any applicable law, the Warrant holder registered Holder shall have the right, which may be exercised commencing at the opening of business on August 25, 1998 and until 5:00 p.m., Pacific New York City time on August 24, 2008 the Expiration Date to receive from the Company the number of exercise each Warrant for fully paid and nonassessable Warrant Shares which non-assessable Common Share(s) of the Warrant holder may at Company upon the time be entitled to receive on exercise of such Warrants each Warrant and payment of the Exercise Price (as hereinafter defined) then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrantseffect. A Warrant may be exercised upon surrender to the Company at its the principal office of the Warrant Agent of the certificate or certificates evidencing the Warrants Warrant to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be guaranteed by a bank or trust company having an office or correspondent in the United States or a broker or dealer which is a member of a registered securities exchange or the National Association of Securities Dealers, Inc., and upon payment to the Warrant Agent for the account of the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A Price as adjusted as herein provided, for each of the number of Warrant Shares in respect of which such Warrants are Warrant is then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check check, payable to the order of the Company. In the alternative, or (ii) in each Holder may exercise its right to receive Warrant Shares on a net basis, such that without the manner provided in exchange of any funds, the first paragraph Holder receives that number of this Section 5Warrant Shares otherwise issuable upon exercise of its Warrants less that number of Warrant Shares having a fair market value equal to the aggregate Exercise Price that would otherwise have been paid by the Holder of the Warrant Shares. Upon such surrender For purposes of Warrants and the foregoing sentence, “fair market value” of the Warrant Shares shall be the Current Market Price of the Warrant Shares on the date immediately preceding the date of payment of the Exercise Price as determined by the procedures set forth in Section 11(e). The exercise of Warrants by Holders of beneficial interest in Global Warrants shall be effected in accordance with this Warrant Agreement and the procedures of the Depositary therefor. If on the day which is 60 days prior to the Expiration Date, the Current Market Price of one Common Share is greater than the Exercise Price, the Company shall within 5 business days thereafter cause to be given to the Warrant Agent and cause the Warrant Agent to give to each Holder written notice stating that on the Expiration Date the Warrants will be deemed to have been exercised by the Holder pursuant to the net exercise provisions of this Section 7 and the Company will, in accordance with this Section 7, issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, Holder a certificate or certificates for the full number of full Warrant Shares issuable upon such exercise, as calculated in accordance with this Section 7, unless the exercise Holder elects, by written notice provided to the Company no less than 5 business days before the Expiration Date, to have those Warrants held by it not exercised, in which case such Warrants shall become void and all rights thereunder and all rights in respect thereof shall cease as of such Warrants together with cash as provided time. The Company, in Section 11; PROVIDEDits sole discretion, HOWEVER, that if may require any consolidation, merger or lease or sale of assets is proposed Holder to be effected by surrender the Company as described in subsection (m) Warrants. Subject to the provisions of Section 10 8 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaidprovided above, the Warrant Agent shall thereupon promptly notify the Company, and the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause shall promptly transfer to be delivered the full Holder of such Warrant Certificate a certificate or certificates for the appropriate number of Warrant Shares issuable upon or, if required by this Warrant Agreement, other securities or property (including any money) to which the exercise of Holder is entitled, registered or otherwise placed in, or payable to the order of, such Warrants name or names as may be directed in writing by the manner described in this sentence Holder, and shall deliver such certificate or certificates representing the Warrant Shares and any other securities or property (including any money) to the person or persons entitled to receive the same, together with an amount in cash in lieu of any fraction of a share as provided in Section 1113. Such Any such certificate or certificates representing the Warrant Shares shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record Holder of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be immediately exercisable, at the election of the holders Holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued issued, and the Warrant Agent is hereby irrevocably authorized to countersign and to deliver the required new Warrant Certificate or Certificates pursuant to the provisions of this SectionSection and of Section 4 hereof, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrant Certificates duly executed on behalf of the Company for such purpose. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled cancelled by the CompanyWarrant Agent. Such canceled cancelled Warrant Certificates shall then be disposed of by the Warrant Agent in a manner satisfactory to the Company. The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all monies received by the Warrant Agent for the purchase of the Warrant Shares through the exercise of such Warrants. The Warrant Agent shall keep copies of this Warrant Agreement and any notices given or received hereunder by or from the Company available for inspection by the Holders during normal business hours at its office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Warrant Agreement as the Warrant Agent may request.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder each Holder of Warrants shall have the right, which may be exercised commencing at on or after the opening of business on August 25, 1998 Issue Date and until 5:00 p.m., Pacific time New York City time, on August 24the Expiration Date, 2008 to receive from the Company upon the delivery of written notice, which may be provided via e-mail or facsimile, the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect (as defined below) for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific New York City time, on August 24, 2008 the Expiration Date shall become void and all rights thereunder and all rights in respect thereof under this agreement Agreement shall cease as of such time. No Except as may be set forth in Section 12, no adjustments as to dividends in respect of dividends, interest or other income on or from any Warrant Share (or any other securities, property or other consideration for which a Warrant may become exercisable in accordance with this Agreement) will be made during the term of a Warrant or upon exercise of a Warrant. The price per share at which Warrant Shares shall be purchasable upon exercise of Warrants (the Warrants“Exercise Price”) shall be equal to $4.19, subject to adjustment pursuant to Section 12. A Warrant may be exercised upon surrender to at the office or agency of the Company at its maintained for such purpose, which initially will be the principal office of the certificate Warrant Agent at Xxxxx Fargo Shareowner Services, 0000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxxxx, XX 00000 of the Warrant Certificate or certificates Certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in (the “Election to Exercise”) properly completed and signed, and upon payment to which signature shall be guaranteed in accordance with the Company of the exercise price (the 'Exercise Price") which is provisions set forth in the form Warrant Certificate, together with payment of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercisedExercise Price. Payment of the aggregate Exercise Price shall be made (i) in cash or in United States dollars, by certified or official bank check payable or by wire transfer of immediately available funds to an account designated in writing by the Company. Upon surrender of a Warrant Certificate representing more than one Warrant, the number of shares of Common Stock deliverable shall be equal to the order number of shares of the Company’s Common Stock issuable in respect of those Warrants that the Holder specifies are to be exercised. All provisions of this Agreement are applicable with respect to an exercise of a Warrant Certificate for less than the full number of Warrants represented thereby. Upon exercise of one or more Warrants represented by Warrant Certificates, or (ii) the Warrant Agent shall make an entry in the manner provided Warrant Register to reflect such exercise and, upon such entry, such exercised Warrants shall no longer be deemed to be outstanding or valid or obligatory for any purpose, other than with respect to the right of the Holder to receive the Warrant Shares and other amounts, if any, due upon exercise. The “Exercise Date” for a Warrant shall be the date when all of the items referred to in the first immediately preceding paragraph are received by the Warrant Agent prior to 5:00 p.m., New York City time, on a Business Day and the exercise of this Section 5the Warrants will be effective as of such Exercise Date. Upon If any items referred to in such surrender paragraph are received after 5:00 p.m., New York City time, on a Business Day, the exercise of the Warrants to which such item relates will be effective on the next succeeding Business Day. In the case of an exercise of Warrants and payment on the Expiration Date, if all of the items referred to in such paragraph are received by the Warrant Agent at or prior to 5:00 p.m., New York City time, on the Expiration Date, the exercise of the Warrants to which such items relate will be effective on the Expiration Date. As soon as practicable after each Exercise Price Date for a Warrant, and in any event within three Trading Days after the Exercise Date, subject to the provisions of Section 6 hereof, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder Holder, and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the holder Holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11Warrants. Such certificate or certificates shall be deemed to have been issued and any person Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise PriceDate. The Warrants shall be exercisable, at At the election of the holders thereofCompany with the consent of the holder of record of the relevant Warrant Shares, either Warrant Shares may initially be issued in full or global form (the “Global Shares”). Such Global Shares shall represent such of the outstanding Warrant Shares as shall be specified therein and each Global Share shall provide that it represents the aggregate amount of outstanding Warrant Shares from time to time endorsed thereon and that the aggregate amount of outstanding Warrant Shares represented thereby may from time to time be reduced or increased, as appropriate. Any endorsement of a Global Share to reflect any increase or decrease in part and, the amount of outstanding Warrant Shares represented thereby shall be made by the registrar for the Warrant Shares. Each Warrant shall be exercisable only in whole. In the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise Warrants evidenced thereby at any time prior to the date of expiration of the WarrantsExpiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued issued, and the Warrant Agent is irrevocably authorized to countersign and to deliver the required new Warrant Certificate or Certificates pursuant to this Agreement, and the provisions Company, whenever required by the Warrant Agent, will promptly supply the Warrant Agent with Warrant Certificates duly executed on behalf of this Sectionthe Company for such purpose. Holders of Warrants will be able to exercise their Warrants only if 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 in which the various Holders of Warrants or other persons to whom it is proposed that Warrant Shares be issued on exercise of the Warrants reside. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the CompanyWarrant Agent. Such canceled Warrant Certificates shall then be disposed of by the Warrant Agent in a manner consistent with the Warrant Agent’s customary procedure for such disposal and in a manner reasonably satisfactory to the Company. The Warrant Agent shall account promptly to the Company with respect to Warrants exercised. The Warrant Agent shall keep copies of this Agreement and any notices given or received hereunder available for inspection by the Holders during normal business hours at its office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Agreement as the Warrant Agent may request.

Terms of Warrants; Exercise of Warrants. Each Adelphi Warrant entitles the registered owner thereof to purchase one share of Common Stock (as adjusted), at a purchase price per share of $2.72 (the "Exercise Price") at any time from the first anniversary of the effective date of the Registration Statement relating to such initial public offering until 5:00 p.m. New York City time, on the date six years from the effective date of such Registration Statement, (the "Expiration Date"). The Exercise Price and the shares of Common Stock issuable upon exercise of Adelphi Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 6 of this Agreement. Subject to the terms provisions of this Agreement, the Warrant holder each Holder shall have the right, which may be exercised commencing at the opening of business on August 25as set forth in such Adelphi Warrants, 1998 and until 5:00 p.m., Pacific time on August 24, 2008 to receive purchase from the Company (and the Company shall issue and sell to such Holder) the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share shares of Common Stock determined by the Company's Board of Directors specified in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price oragent, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as Adelphi Warrants, with the form of election to dividends will be made upon exercise agent, of the such Adelphi Warrants. A Warrant may be exercised upon surrender to the Company at its principal office of the certificate or certificates evidencing the Warrants to be exercised , with the form of election to purchase on the reverse thereof attached thereto duly filled in completed and signed, and upon payment to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A , as adjusted as herein providedin accordance with the provisions of Section 6 of this Agreement, for the number of Warrant Shares in respect of which such Adelphi Warrants are then exercised. Payment of the aggregate such Exercise Price shall may be made (i) in cash or by certified or official bank check payable to the order of the Company, or (ii) in the manner provided in the first paragraph company. No adjustment shall be made for any dividends on any shares of this Section 5stock issuable upon exercise of an Adelphi Warrant. Upon such each surrender of Adelphi Warrants and payment of the Exercise Price as aforesaid, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder Holder of such Adelphi Warrants and (subject to receipt of evidence of compliance with the provisions of Section 9 of this Agreement) in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the holder such Holder may designate, a certificate or certificates for the number of full Warrant Shares issuable so purchased upon the exercise of such Warrants Adelphi Warrants, together with cash cash, as provided in Section 11; PROVIDED7 of this Agreement, HOWEVER, that if in respect of any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of fractional Warrant Shares otherwise issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11surrender. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a the holder of record of such Warrant Shares as of the date of the surrender of such Adelphi Warrants and payment of the Exercise Priceexercise Price as aforesaid. The rights of purchase represented by Adelphi Warrants shall be exercisable, at the election of the holders Holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants if and Adelphi Warrant is exercised in respect of fewer less than all of the Warrant Shares issuable purchasable on such exercise at any time prior to the date of expiration of the Warrantsexercise, a new certificate evidencing the remaining Adelphi Warrant or Warrants will be issued pursuant to the provisions of this Section. All Warrant Certificates surrendered upon exercise of Adelphi Warrants shall be canceled by issued for the Company. Such canceled remaining number of Warrant Certificates shall then be disposed of by Shares specified in the CompanyAdelphi Warrant so surrendered.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder shall have the right, which may be exercised commencing at the opening of business on August 25December 4, 1998 and until 5:00 5: 00 p.m., Pacific time on August 24December 3, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24December 3, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of the Company, or (ii) in the manner provided in the first paragraph of this Section 5. Upon such surrender of Warrants and payment of the Exercise Price the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five two business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued pursuant to the provisions of this Section. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates shall then be disposed of by the Company.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the each Warrant holder Holder shall have the right, which may be exercised commencing at the opening of business on August 25, 1998 and any time until 5:00 p.m., Pacific time New York City time, on August 24the third anniversary of the Issuance Date, 2008 to receive purchase from the Company the number of fully paid and nonassessable Warrant Shares which that the Warrant holder Holder may at the time be entitled to receive (the "Exercise Quantity") on exercise of such Warrants and payment of the Exercise Price (as defined below) then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific New York City time, on August 24the third anniversary of the Issuance Date, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement Agreement and the Warrant Certificates shall cease as of such time. No adjustments as to dividends will be made upon exercise If the date on which the Warrants expire (i.e., the third anniversary of the WarrantsIssuance Date) shall not be a business day, the Warrants shall expire on the next succeeding business day. A Warrant may be exercised upon surrender to the Company at its principal the office of the certificate Warrant Agent designated for such purpose of the Warrant Certificate or certificates Certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be guaranteed in accordance with the Medallion Signature Guarantee Program by a bank or trust company having an office or correspondence in the United States, or a broker or dealer which is a member of a registered securities exchange or the National Association of Securities Dealers, Inc. (together, in the case of a Non-Surviving Combination (as defined below), with such other documentation required to be delivered by holders of Common Stock before such Holders are entitled to receive consideration in respect of their shares), and upon payment to the Warrant Agent for the account of the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, Price for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of the Company. The Company shall have the right to accept personal checks, or (ii) in its sole and absolute discretion at any time and from time to time; provided, however, that payment of the manner provided in Exercise Price for any Warrant Shares shall not be deemed to have been made until such personal check has been collected and such funds credited to the first paragraph Company's account. Subject to the provisions of this Section 5. Upon 7 hereof, upon such surrender delivery of Warrants Warrants, delivery of required documents and payment of the Exercise Price Price, the Company (or the surviving entity in the case of a Non- Surviving Combination) shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and Holder in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the holder Warrant Holder may designate, a certificate or certificates for the number of full Warrant Shares (or other cash or property to which the Warrant Holder is entitled) issuable (or deliverable) upon the exercise of such Warrants together with cash as provided in Section 1113; PROVIDEDprovided, HOWEVERhowever, that if after the first public announcement that any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (me) of Section 10 12 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants Warrants, delivery of required documents and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five ten business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 1113. Such certificate or certificates (or such other cash or property) shall be deemed to have been issued (or delivered), and any person so designated to be named therein shall be deemed to have become a holder Holder of record of such Warrant Shares (or such other cash or property) as of the date of the surrender of such Warrants Warrants, the delivery of required documents and payment of the Exercise Price. The Subject to the provisions of this Agreement and the Warrant Certificates, the Warrants shall be exercisable, at the election of the holders Holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued issued, and the Warrant Agent is hereby irrevocably authorized to countersign and to deliver the required new Warrant Certificate or Certificates pursuant to the provisions of this SectionSection and of Sections 3 and 4 hereof, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrant Certificates duly executed on behalf of the Company for such purpose. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the CompanyWarrant Agent. Such canceled Warrant Certificates shall then be disposed of by the Warrant Agent in a manner satisfactory to the Company. The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all monies received by the Warrant Agent for the purchase of the Warrant Shares through the exercise of such Warrants. The Warrant Agent shall keep copies of this Agreement and any amendments hereto and notices given or received hereunder available for inspection by the Holders during normal business hours at its principal office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Agreement as the Warrant Agent may reasonably request. The Warrant Agent shall, from time to time, as promptly as practicable, advise the Company of (i) the numbers of Warrants delivered to it in accordance with the terms and conditions of this Agreement and the Warrant Certificates, (ii) the instructions of each Holder of the Warrant Certificates evidencing such Warrants with respect to delivery of the Warrant Shares or other cash or property to which such Holder is entitled upon such delivery, (iii) the delivery of Warrant Certificates evidencing the balance, if any, of the Warrants remaining after such delivery, and (iv) such other information as the Company shall reasonably request. Warrant Holders, as such, shall not be entitled (i) to receive any dividends in respect of such Holder's Warrant Shares, or (ii) to vote, or to receive notice of any meeting of the Company's stockholders, or otherwise exercise any rights of, or to receive any notices delivered to, Holders of Common Stock until such Holder surrenders certificates representing such Holder's Warrants to the Warrant Agent, pays the Exercise Price and delivers all other required documentation, all as set forth in this Agreement and the Warrant Certificates, and the Warrant Shares in respect of such Warrant are issued to such Holder.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Warrant Agreement, the each Warrant holder shall have the right, which may be exercised commencing at from the opening date of business original issuance of the Warrant Certificates pursuant to the terms of this Warrant Agreement and prior to 5:00 p.m. New York City Time, on August 25December 21, 1998 2006 (the "Expiration Date"), to exercise each Warrant and until 5:00 p.m., Pacific time on August 24, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares shares of the New Common Stock which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the aggregate Exercise Price then in effect for such Warrant Sharesshares of the New Common Stock. In addition, prior to the alternativedelivery of any shares of the New Common Stock that the Company shall be obligated to deliver upon proper exercise of the Warrants, the Warrant holder may exercise its rightCompany shall comply with all applicable federal and state laws, during the Exercise Period, rules and regulations which require action to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined taken by the Company's Board of Directors in good faith. The closing price referred Each Warrant, when exercised, will entitle the holder thereof to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average purchase one share of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the New Common Stock is then listed.. at the Exercise Price. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 the Expiration Date shall become void and all rights thereunder and all rights in respect thereof under this agreement Warrant Agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office the Warrant Agent Office referred to in Section 20 (the "Warrant Agent Office") of the certificate Warrant Certificate or certificates Warrant Certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof (the "Exercise Notice") duly filled in and properly completed and signed, which signature shall be guaranteed by an "Eligible Guarantor Institution" as defined in Rule 17Ad-15(2) promulgated under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and upon payment to the Warrant Agent for the account of the Company of the exercise price of $34.16 (the '"Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A ), as adjusted from time to time as herein provided, for the number of each Warrant Shares in respect of which such Warrants are Share then exercised. Payment of the aggregate Exercise Price for all shares of the New Common Stock being exercised in respect of a Warrant shall be made (ia) in cash United States Dollars or (b) by certified or official bank check for United States Dollars made payable to the order of "RCN Corporation". In lieu of payment of the aggregate Exercise Price as aforesaid and subject to applicable law, the holder of a Warrant may elect to receive from the Company a number of shares of the New Common Stock equal to the "Spread" by indicating such election in the Exercise Notice delivered by such Warrant holder. The "Spread" shall, subject to Section 14, be paid by the Company by delivering to such Warrant holder a number of shares of the New Common Stock equal to (a)(i) the product of (x) the current market price per share of the New Common Stock (as if the date of receipt of the Exercise Notice to the Company) multiplied by (y) the number of shares of the New Common Stock underlying the Warrants being exercised, or minus (ii) in the manner provided in product of (x) the first paragraph Exercise Price, multiplied by (y) the number of this shares of the New Common Stock underlying the Warrants being exercised, divided by (b) the current market price per share of the New Common Stock (as of the date of receipt of the Exercise Notice to the Company). Subject to the provisions of Section 5. Upon 8, upon such surrender of Warrants and payment of the aggregate Exercise Price Price, the Company shall issue and cause to be delivered with all reasonable dispatch promptly to or upon the written order of the Warrant holder and in the such name of or names, as the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, a certificate or certificates for the number of full Warrant Shares shares of the New Common Stock issuable upon the exercise of such Warrants together with cash as provided in Section 1114; PROVIDEDprovided, HOWEVERhowever, that if any consolidation, merger or lease or sale of assets Fundamental Transaction (as defined in Section 12(h)) is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a there is pending any tender offer or an exchange offer for shares of the New Common Stock of the Company shall be madeStock, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued pursuant to the provisions of this Section. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates shall then be disposed of by the Company.event

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the and subject to compliance with all applicable legal requirements, each Warrant holder shall have the right, which may be exercised commencing at any time during the opening period from (and including) the date of business on August 25, 1998 and this Agreement until 5:00 p.m., Pacific time Philadelphia, Pennsylvania, time, on August 24the date which is ten years after the date of this Agreement (such period being herein referred to as the "Exercise Period"), 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative, the The Warrant Shares issued to a Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealersfully paid, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faithnonassessable and subject to no preemptive rights. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 the expiration of the Exercise Period shall become void void, and all rights thereunder and all rights in respect thereof under this agreement Agreement shall cease as of such time. No adjustments as During the Exercise Period, each Warrant holder may exercise, at any time or from time to dividends will be made upon exercise time and in its sole discretion, some or all of the Warrants. A Warrants represented by its Warrant may be exercised upon surrender Certificates by (i) surrendering to the Company at its principal office of the certificate or certificates evidencing the Warrants to be exercised such Warrant Certificates with the form Form of election Election to purchase on the reverse thereof Purchase attached thereto duly filled in and signed, and upon payment (ii) paying to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, Price for the number of Warrant Shares in respect of which such Warrants are then being exercised. Warrants shall be deemed exercised on the date (the "Exercise Date") Warrant Certificates representing such Warrants are surrendered to the Company accompanied by the Form of Election to Purchase and payment of the Exercise Price for such Warrants is received by the Company. Warrant Shares in respect of which the Warrants are exercised shall be deemed issued on the Exercise Date, and the Person in whose name the certificate representing the Warrant Shares is to be issued shall be deemed the holder of such Warrant Shares as of the Exercise Date for all purposes. Payment of the aggregate Exercise Price by the Warrant holder shall be made (i) in cash or by certified or official bank check payable to the order of the Company, Company or (ii) in by wire transfer of immediately available funds. In addition to the manner provided in rights of the first paragraph holders under the preceding provisions of this Section 5. Upon such surrender Section, each holder shall have the right, in lieu of Warrants and payment of paying the Exercise Price in cash, to instruct the Company to reduce the number of shares of Common Stock thereafter eligible to be purchased by such holder upon exercise of Warrants held by it in accordance with the following formula: P N = --------- ( M - E ) where: N = the number of shares of Common Stock to be subtracted from the number of Warrant Shares purchasable upon exercise of such holder's Warrants; P = the aggregate Exercise Price which would otherwise be payable in cash for the shares issuable upon exercise of the Warrant; M = the last reported sale price of the Common Stock before the date of such exercise; and E = the Exercise Price on the date of such exercise. Subject to the provisions of Section 7, upon the exercise of any Warrants, the Company shall issue and cause to be delivered with all reasonable dispatch as soon as reasonably practicable (but in any event within ten Business Days) to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the Warrant holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon pursuant to the exercise of such Warrants together with cash as provided in Section 11; PROVIDEDsuch other property, HOWEVERincluding cash, that if any consolidation, merger or lease or sale of assets is proposed to which may be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, deliverable upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11exercise. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of If fewer than all of the Warrants represented by a Warrant Shares issuable on such exercise at any time prior to the date of expiration of the WarrantsCertificate are exercised, a new certificate evidencing the remaining Warrant or Warrants not exercised will be issued pursuant by the Company at the Company's expense to the provisions holder of this Sectionsuch Warrants as soon as reasonably practicable (but in any event within ten Business Days). All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates shall then be disposed of by the Company.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the each Warrant holder Holder shall have the right, which may be exercised commencing at on or after the opening original date of business on August 25, 1998 issue of the Warrants (the "Issue Date") and until 5:00 p.m., Pacific time New York City time, on August 24June 30, 2008 2007 (the "Expiration Date"), to receive from the Company the number of fully paid and nonassessable Warrant Shares which that the Warrant holder Holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price (as defined below) then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal Subject to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes next paragraph of the foregoing sentencethis Section, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 the Expiration Date shall become void and all rights thereunder and all rights in respect thereof under this agreement Agreement and otherwise shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. The initial price per share at which Warrant Shares shall be purchasable upon exercise of Warrants (the "Exercise Price") shall be $.01. The number of Warrant Shares for which a Warrant may be exercised is subject to adjustment as provided in Section 12 hereof. A Warrant may be exercised upon surrender to at the office or agency of the Company at its principal maintained for such purpose, which initially will be the corporate trust office of the Warrant Agent in New York, New York, of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be guaranteed by a participant in a recognized Signature Guarantee Medallion Program, and upon payment to the Warrant Agent for the account of the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A , as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the Exercise Price may be made, in the sole discretion of the Holder, in the form of any of the following: (a) cash or a check or bank draft in New York Clearing House funds, (b) by the surrender to the Company for cancellation of a portion of the Warrants held by a Holder representing that number of unissued Warrant Shares having a Current Market Value equal to the aggregate Exercise Price of the Warrant Shares being obtained or (c) by the surrender of the applicable Warrant and without the payment of the Exercise Price in cash, for such number of Warrant Shares equal to the product of (1) the number of Warrant Shares for which such Warrants are exercisable with payment in cash of the Exercise Price as of the date of exercise and (2) the Cashless Exercise Ratio or (d) by any combination of (a), (b) and (c) above. For purposes of this Agreement, the "Cashless Exercise Ratio" shall equal a fraction, the numerator of which is the excess of the Current Market Value of the Common Stock on the date of exercise over the Exercise Price Per Share as of the date of exercise and the denominator of which is the Current Market Value of the Common Stock on the date of exercise. An exercise of a Warrant in accordance with the immediately preceding sentences through the surrender of Warrants and not with cash 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 Warrant Shares deliverable upon a Cashless Exercise shall be made (i) in cash or by certified or official bank check payable equal to the order number of Warrants that the Company, or (ii) in holder specifies is to be exercised pursuant to a Cashless Exercise multiplied by the manner provided in the first paragraph Cashless Exercise Ratio. All provisions of this Agreement shall be applicable with respect to an exercise of a Warrant Certificate pursuant to a Cashless Exercise for less than the full number of Warrants represented thereby. "Exercise Price Per Share" means the Exercise Price divided by the number of Warrant Shares for which a Warrant is then exercisable (without giving effect to the Cashless Exercise option). Subject to the provisions of Section 5. Upon 6 hereof, upon such surrender of Warrants and payment of the Exercise Price Price, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder Holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the holder Warrant Holder may designate, designate a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 1113; PROVIDEDprovided, HOWEVERhowever, that if any consolidation, merger or lease or sale of assets and subsequent liquidation of the Company is proposed to be effected by the Company as described in subsection (mk) of Section 10 12 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be madehave been made and not terminated, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five three days, other than a Saturday or Sunday or a day on which banking institutions in the State of New York are not open for business days ("Business Day") thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 1113. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders Holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued issued, and the Warrant Agent is hereby irrevocably authorized to countersign and to deliver the required new Warrant Certificate or Certificates pursuant to the provisions of this SectionSection 7 and of Section 3 hereof, and the Company, whenever required by the Warrant Agent, will promptly supply the Warrant Agent with Warrant Certificates duly executed on behalf of the Company for such purpose. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled cancelled by the CompanyWarrant Agent. Such canceled cancelled Warrant Certificates shall then be disposed of by the Warrant Agent in a manner consistent with the Warrant Agent's customary procedure for such disposal and in a manner reasonably satisfactory to the Company. The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all monies received by the Warrant Agent for the purchase of the Warrant Shares through the exercise of such Warrants. The Warrant Agent shall keep copies of this Agreement available for inspection by the Holders during normal business hours at its office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Agreement as the Warrant Agent may request.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder shall have the right, The initial exercise price per share at which may be exercised commencing at the opening of business on August 25, 1998 and until 5:00 p.m., Pacific time on August 24, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares which shall be purchasable upon the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment (the "EXERCISE PRICE") shall be equal to 110% of the Exercise Price then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at of one share of Common Stock as of the time Escrow Release Date (as defined below) for such Warrant. On its respective Escrow Release Date, each Warrant shall be initially exercisable for that number of exercise shares of Common Stock equal to: 0.15 times the number of shares of Common Stock outstanding on such date on a fully diluted basis (after giving effect to the aggregate Exercise Price exercise of all options, warrants and rights to acquire Common Stock and the conversion of all convertible securities for the maximum number of shares of Common Stock obtainable whether or not such options, warrants or rights are then exercisable or vested and whether or not such convertible securities are then convertible) divided by 150,000; provided, however, that such calculation shall not give effect to issuances of Common Stock made prior to the Escrow Release Date if such issuances would otherwise not have been paid by the Warrant holdercaused an adjustment pursuant to Section 11 hereof. For purposes of the foregoing sentencethis paragraph of Section 6, "fair market valueFAIR MARKET VALUE" of the Warrant Shares shall mean be (i) if the Common Stock is in reported on an interdealer quotation system, the over-the-counter market last reported sales price, per share or if there is no reported sales price, the average of the last bid and not in The Nasdaq National Market nor ask per share, of the Common Stock on any national the trading day immediately prior to the Escrow Release Date, (2) if the Common Stock is listed on a securities exchange, the average of the per share closing bid price on prices of the 30 Company's Common Stock for the five consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised so listed immediately prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of the CompanyEscrow Release Date, or (ii3) in if the manner provided in the first paragraph of this Section 5. Upon such surrender of Warrants and payment of the Exercise Price the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shallis not so reported or listed, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued pursuant to the provisions of this Section. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled reasonably determined by the Company's Board of Directors, as supported by an opinion of a nationally recognized investment banking firm. Such canceled Warrant Certificates shall then be disposed of by the Company.The term "

Terms of Warrants; Exercise of Warrants. Subject Each Warrant entitles the holder to purchase shares of Common Stock at an “Exercise Price” of $ per share (the “Basic Subscription Privilege”). Additionally, there is an oversubscription privilege with respect to unsubscribed shares (the “Oversubscription Privilege”). No fractional shares will be issued. Reference is hereby made to the Shelf Registration Statement relating to the registration of shares of Common Stock filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, on or about , 2005 and the prospectus supplement to be filed with the Securities and Exchange Commission under the Securities Act of 1933 on or about , 2005 (collectively the “Prospectus”) for a complete description of the Basic Subscription Privilege and Oversubscription Privilege, the Rights Offering, and the terms of this Agreement, the exercise of the Warrants. A copy of the Prospectus has been provided to the Warrant holder shall have Agent, receipt of which is hereby acknowledged. The Rights Offering and the rightexercise of the Warrants will be conducted in the manner and upon the terms set forth in the Prospectus, which may be exercised commencing at the opening of business on August 25, 1998 is incorporated herein by reference and until 5:00 p.m., Pacific time on August 24, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then made part hereof as if set forth in effect for such Warrant Sharesfull herein. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m.the expiration date set forth in the Prospectus, Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement Agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its the principal corporate trust office of the certificate Warrant Agent referred to in Section 12 (the “Warrant Agent Office”) of an exercise form to exercise the Warrants duly filled in and signed, together with the shares of Common Stock, by physical delivery of certificates evidencing Common Stock or certificates transfer of Common Stock through DTC, as applicable, evidencing the Warrants to be exercised with (the form of election to purchase on the reverse thereof duly filled in and signed, “Tendered Shares”) and upon payment to the Warrant Agent for the account of the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Price for each Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are Share then exercised. Payment of the aggregate Exercise Price shall be made in U.S. dollars by (i) in cash check or by certified bank draft drawn upon a U.S. bank or official bank check postal, telegraphic or express money order payable to the order of the Company, Warrant Agent or (ii) wire transfer of immediately available funds directed to American Stock Transfer & Trust Company, c/o Chase Manhattan Bank, ABA No. , Credit Account No. ,. The Exercise Price for all Warrants which have been exercised and the related Tendered Shares shall be held in escrow in a separate account by the manner provided Warrant Agent. Warrant Agent shall notify the Company by telephone before the close of business on each business day during the period commencing five (5) business days after the mailing of the Prospectus and ending at the expiration date (a “Daily Notice”), which notice shall thereafter be confirmed in the first paragraph writing, of this Section 5. Upon such surrender (i) number of Warrants which have been exercised pursuant to both the Basic Subscription Privilege and payment of the Exercise Price Oversubscription Privilege on the Company shall issue day covered by such daily notice, and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, a certificate or certificates for (ii) the number of full Warrants which have been exercised pursuant to both the Basic Subscription Privilege and the Oversubscription Privilege for which defective exercises have been received on the day covered by such daily notice, and (iii) the cumulative total of the information set forth in clauses (i) through (ii) above. At or before 5:00 p.m., New York City time, on the first trading day following the expiration date, Warrant Shares issuable upon the exercise of such Warrants together with cash as provided Agent shall certify in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed writing to be effected by the Company as described the cumulative total through the expiration date of all the information set forth in subsection clauses (mi) through (ii) above and the number of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock to be outstanding after giving effect to such exercises. Warrant Agent shall also maintain and update a listing of holders who have fully or partially exercised their Warrants, holders who have transferred their Common Stock and their transferees, and holders who have not exercised their Warrants. Warrant Agent shall provide the Company or its designees with such information compiled by Warrant Agent pursuant to this paragraph as any of them shall request. The Company may request each of its shareholders to provide the Company additional information regarding its ownership of Common Stock if, as a result of such exercises, there would be a risk that they would become a “5% Stockholder,” as such term is defined in Article Fifth of the Company shall be made, upon such surrender Company’s Certificate of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11Incorporation. Such certificate or certificates shall be deemed to have been issued and If any person so designated to would be named therein shall be deemed to have become a holder at risk of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued pursuant to the provisions of this Section. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates shall then be disposed of by the Company.becoming

Terms of Warrants; Exercise of Warrants. Each Adelphi Warrant entitles the registered owner thereof to purchase one share of Common Stock (as adjusted), at a purchase price per share of $2.72 (the "Exercise Price") at any time from the first anniversary of the effective date of the Registration Statement relating to such initial public offering until 5:00 p.m. New York City time, on the date six years from the effective date of such Registration Statement, (the "Expiration Date"). The Exercisustment upon the occurrence of certain events, pursuant to the provisions of Section 6 of this Agreement. Subject to the terms provisions of this Agreement, the Warrant holder each Holder shall have the right, which may be exercised commencing at the opening of business on August 25as set forth in such Adelphi Warrants, 1998 and until 5:00 p.m., Pacific time on August 24, 2008 to receive purchase from the Company (and the Company shall issue and sell to such Holder) the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share shares of Common Stock determined by the Company's Board of Directors specified in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price orsuch Adelphi Warrants, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at Company, or its principal office duly authorized agent, of the certificate or certificates evidencing the Warrants to be exercised such Adelphi Warrants, with the form of election to purchase on the reverse thereof attached thereto duly filled in completed and signed, and upon payment to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A , as adjusted as herein providedin accordance with the provisions of Section 6 of this Agreement, for the number of Warrant Shares in respect of which such Adelphi Warrants are then exercised. Payment of the aggregate such Exercise Price shall may be made (i) in cash or by certified or official bank check payable to the order of the Company, or (ii) in the manner provided in the first paragraph company. No adjustment shall be made for any dividends on any shares of this Section 5stock issuable upon exercise of an Adelphi Warrant. Upon such each surrender of Adelphi Warrants and payment of the Exercise Price as aforesaid, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder Holder of such Adelphi Warrants and (subject to receipt of evidence of compliance with the provisions of Section 9 of this Agreement) in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the holder such Holder may designate, a certificate or certificates for the number of full Warrant Shares issuable so purchased upon the exercise of such Warrants Adelphi Warrants, together with cash cash, as provided in Section 11; PROVIDED7 of this Agreement, HOWEVER, that if in respect of any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of fractional Warrant Shares otherwise issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11surrender. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a the holder of record of such Warrant Shares as of the date of the surrender of such Adelphi Warrants and payment of the Exercise Priceexercise Price as aforesaid. The rights of purchase represented by Adelphi Warrants shall be exercisable, at the election of the holders Holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants if and Adelphi Warrant is exercised in respect of fewer less than all of the Warrant Shares issuable purchasable on such exercise at any time prior to the date of expiration of the Warrantsexercise, a new certificate evidencing the remaining Adelphi Warrant or Warrants will be issued pursuant to the provisions of this Section. All Warrant Certificates surrendered upon exercise of Adelphi Warrants shall be canceled by issued for the Company. Such canceled remaining number of Warrant Certificates shall then be disposed of by Shares specified in the CompanyAdelphi Warrant so surrendered.

Terms of Warrants; Exercise of Warrants. Subject No Warrants of any series shall be exercisable unless notice is given to the holders thereof, by the Company at the Company's sole discretion, that Warrants of such series may be exercised (the date of such notice being referred to as the "Trigger Date"). Such notice (the "Trigger Notice") shall be given by the Company as provided in Section 12 of this Agreement, shall be accompanied or preceded by a prospectus covering the registration of the Warrant Shares under the Securities Act of 1933, as amended, and shall include (i) the number of Warrant Shares issuable upon exercise of each Warrant of such series, (ii) the price to be paid for each Warrant Share issuable upon exercise of Warrants of such series (the "Exercise Price"), (iii) the expiration date for Warrants of such series (which shall be selected by the Company in its sole discretion, but which shall be a date no less than 14 Business Days after the date of mailing of such Trigger Notice)(the "Expiration Date") and (iv) such other terms and conditions as the Company in its sole discretion may impose. No Trigger Notice may be given by the Company and no Warrants will be exercisable by holders unless the Warrant Shares are registered under the Securities Act of 1933, as amended. From and after the giving of the Trigger Notice with respect to a series of Warrants until the close of business on the Expiration Date set forth therein, each Warrant holder shall have the right, subject to the terms of this Agreement, to exercise the Warrant holder shall have Warrants of that series as of a specified date (the right, which may be exercised commencing at the opening of business on August 25, 1998 "Effective Date") and until 5:00 p.m., Pacific time on August 24, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares (together with any Warrants of an Unexpired Series that are issuable in respect of such Warrant Shares) which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the The Exercise Period, Price for each series of Warrants is anticipated to receive Warrant Shares be based on a net basis, such that, without discount from the exchange market price of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in prior to the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average Trigger Date with respect to Warrants of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may bethat series. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price Each Warrant of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant series not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 the Expiration Date for that series shall become void and all rights thereunder and all rights in respect thereof under this agreement Agreement shall cease as of such time. No However, any such non-exercise of a Warrant of a particular series shall not have any effect on a Warrant of any Unexpired Series. Save as expressly provided otherwise in this Agreement, no adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its the principal corporate trust office of the certificate or certificates Warrant Agent referred to in Section 12 (the "Warrant Agent Office") of a form of election to exercise duly filled in and signed, which signature shall be guaranteed by an "eligible guarantor" as defined in the regulations promulgated under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), together with the shares of Common Stock evidencing the Warrants to be exercised with (the form of election to purchase on the reverse thereof duly filled in and signed, "Tendered Shares") and upon payment to the Warrant Agent for the account of the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Price for each Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are Share then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash United States dollars or (ii) by certified or official bank check payable to the order of the Warrant Agent. The Exercise Price for all Warrants which have been exercised and the related Tendered Shares shall be held in escrow in a separate account by the Warrant Agent. Not later than the [______] Business Day following the Expiration Date, the Warrant Agent shall inform the Company and the Company shall issue a press release indicating the number of Warrants which have been exercised and the number of shares of Common Stock to be outstanding after giving effect to such exercises. The Company will request each of its shareholders to provide the Company written notice by the close of business on the [______] Business Day thereafter if, as a result of such exercises, there would be a risk that they would become a "5% Stockholder," as such term is defined in Article Fifth of the Company's Certificate of Incorporation. If any person would be at risk of becoming a 5% Stockholder as a result of such person's exercise of Warrants, the number of Warrants exercised by such person may, at the sole discretion of the Company and its tax counsel, be automatically, and without any further action by such person, reduced to the number of Warrants which would cause such person's ownership of Common Stock to be less than 5% or (ii) such number in excess of 5% as the manner provided Company and its tax counsel shall determine in their sole discretion. The Company will notify the first paragraph Warrant Agent of the number of Warrants deemed exercised by each such person. In addition, notwithstanding the other provisions of this Section 5. Upon such surrender Agreement and the Warrants, the Company may limit the exercise of Warrants by pre-existing 5% Stockholders and payment shall give notice to such holders of such limitation no later than [______] and any Warrants held by such person will be subject to such limitations. The Warrant Agent shall hold all Tendered Shares until after the Expiration Date. No sooner than the close of business on the [______] Business Day following the Expiration Date, the Warrant Agent shall promptly return certificates representing the Tendered Shares (and related Unexpired Warrants) to the holders of those shares, pursuant to the written instruction of such holders. Not later than the close of business on the [______] Business Day following the Expiration Date, the Company shall give notice to the Warrant Agent of the shares of Common Stock (and related Unexpired Warrants) to be issued upon exercise of Warrants, the Exercise Price for such Warrants shall be delivered to the Company and the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the name of the Warrant holder, or, upon satisfaction pursuant to the written instruction of the transfer requirements in Section 4, such other names as the holder may designateholder, a certificate or certificates for the number of full Warrant Shares (and related Unexpired Warrants) issuable upon the exercise of such Warrants together with cash as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 8 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein the holder thereof shall be deemed to have become a holder of record of such Warrant Shares (and related Unexpired Warrants) as of the date Effective Date. The Warrant Agent shall promptly return to the holders the Exercise Price (without interest) for any Warrants which the Company shall have determined may not be exercised, as provided above. In addition, if the Board of Directors of the surrender Company determines at any time that the exercise of Warrants of any series will cause an unreasonable risk of an "ownership change" or an unintentional result on the "ownership change percentage," the Board of Directors may terminate such Warrants, even if a Trigger Notice has been given with respect to such Warrants or if the Effective Date or Expiration Date for such series has occurred, and the Exercise Price for any Warrants of such Warrants and payment series which have been received by the Warrant Agent shall be promptly returned to the holders of the Exercise Pricesuch Warrants, without interest. The holders of any Warrants shall be exercisable, at free to exercise all or any portion of their Warrants. Failure to exercise Warrants of one series shall not affect the election Warrants of any unexpired series. The Warrant Agent shall keep copies of this Agreement and any notices given or received hereunder available for inspection by the holders of the holders thereof, either in full or Warrants during normal business hours at its office. The Company shall supply the Warrant Agent from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect with such numbers of fewer than all copies of this Agreement as the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued pursuant to the provisions of this Section. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates shall then be disposed of by the CompanyAgent may request.

Terms of Warrants; Exercise of Warrants. The initial exercise price per share at which Warrant Shares shall be purchasable upon the exercise of Warrants (the "Exercise Price") shall be equal to $1.00 per share. Each Warrant shall be initially exercisable for one share of Common Stock. Subject to the terms of this Agreement, the each Warrant holder shall have the right, which may be exercised commencing at from the opening date issuance of business on August 25, 1998 and the Warrants until 5:00 p.m., Pacific New York City time on August 24February 22, 2008 2004 (the "Exercise Period"), to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific New York City time, on August 24February 22, 2008 2004 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office office, which is currently located at the address listed in Section 13 hereof, of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be guaranteed by a participant in a recognized Signature Guarantee Medallion Program and such other documentation as the Company may reasonably request, and upon payment to the Company for the account of the exercise price (Company of the 'Exercise Price") Price which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or (ii) by certified or official bank check payable to the order of the CompanyCompany in New York Clearing House Funds. Subject to the provisions of Section 5 hereof, or (ii) in the manner provided in the first paragraph of this Section 5. Upon upon such surrender of Warrants and payment of the Exercise Price Price, the Company shall issue and cause to be delivered with all reasonable dispatch to and in such name or upon the written order of names as the Warrant holder and in the name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, designate a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 1110; PROVIDEDprovided, HOWEVERhowever, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (mi) of Section 10 9 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five two business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 1110. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued pursuant issued. The Company may assume that any Warrant presented for exercise is permitted to the provisions of this Sectionbe so exercised under applicable law and shall have no liability for acting in reliance on such assumption. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled cancelled by the Company. Such canceled Warrant Certificates The Company shall then be disposed keep copies of this Agreement and any notices given or received hereunder available for inspection by the Companyholders with reasonable prior written notice during normal business hours at its office.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Warrant Agreement, the each Warrant holder shall have the right, which may be exercised commencing at from the opening date of business the original issuance of the Warrant Certificates and prior to 5:00 p.m. New York City Time, on August 25June 21, 1998 2012 (the "Expiration Date"), to exercise each Warrant and until 5:00 p.m., Pacific time on August 24, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares shares of the Common Stock which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the aggregate Exercise Price then in effect for such Warrant Sharesshares of the Common Stock. In addition, prior to the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange delivery of any funds, the Warrant holder receives that number shares of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in that the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchangeCompany shall be obligated to deliver upon proper exercise of the Warrants, the average Company shall comply with all applicable federal and state laws, rules and regulations which require action to be taken by the Company. Each Warrant, when exercised, will entitle the holder thereof to purchase one share of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, at the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price orExercise Price, in each case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. as adjusted from time to time as herein provided. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 the Expiration Date shall become void and all rights thereunder and all rights in respect thereof under this agreement Warrant Agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the WarrantsNO WARRANT OR ANY SHARES OF COMMON STOCK RECEIVED ON EXERCISE OF A WARRANT MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED EXCEPT (A)(1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OF FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) TO AN INSTITUTION THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT, (3) IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PURSUANT TO RULE 144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM. WARRANTS AND THE SHARES OF COMMON STOCK RECEIVED ON EXERCISE OF A WARRANT MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED THEREBY. A Warrant may be exercised upon surrender to the Company at its principal office the Warrant Agent Office referred to in Section 20 (the "Warrant Agent Office") of the certificate Warrant Certificate or certificates Warrant Certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof (the "Exercise Notice") duly filled in and properly completed and signed, which signature shall be guaranteed by an "Eligible Guarantor Institution" as defined in Rule 17Ad-15(2) promulgated under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and upon payment to the Warrant Agent for the account of the Company of the exercise price of $25.16 (the '"Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A ), as adjusted from time to time as herein provided, for the number of each Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price for all shares of the Common Stock being exercised in respect of a Warrant Certificate shall be made (ia) in cash United States Dollars or (b) by certified or official bank check for United States Dollars made payable to the order of "RCN Corporation". In lieu of payment of the aggregate Exercise Price as aforesaid and subject to applicable law, the holder of a Warrant may elect to receive from the Company a number of shares of the Common Stock equal to the "Spread" by indicating such election in the Exercise Notice delivered by such Warrant holder. The "Spread" shall, subject to Section 14, be paid by the Company by delivering to such Warrant holder a number of shares of the Common Stock equal to (a)(i) the product of (x) the current market price per share of the Common Stock (as of the date of receipt of the Exercise Notice by the Company) multiplied by (y) the number of shares of the Common Stock underlying the Warrants being exercised, or minus (ii) in the manner provided in product of (x) the first paragraph Exercise Price, multiplied by (y) the number of this shares of the Common Stock underlying the Warrants being exercised, divided by (b) the current market price per share of the Common Stock (as of the date of receipt of the Exercise Notice by the Company). Subject to the provisions of Section 5. Upon 8, upon such surrender exercise of Warrants and payment of the aggregate Exercise Price Price, the Company shall issue and cause to be delivered with all reasonable dispatch promptly to or upon the written order of the Warrant holder and in the such name of or names, as the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, a certificate or certificates for the number of full Warrant Shares shares of the Common Stock issuable upon the exercise of such Warrants together with cash as provided in Section 1114; PROVIDEDprovided, HOWEVERhowever, that if any consolidation, merger or lease or sale of assets Fundamental Transaction (as defined in Section 12(f)) is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a there is pending any tender offer or an exchange offer for shares of the Common Stock of the Company shall be madeStock, upon such surrender exercise of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five two business days thereafter, issue and cause to be delivered the full number of Warrant Shares shares of the Common Stock issuable upon the exercise of such Warrants in the manner described in this sentence together with any cash as provided in Section 1114. For purposes of this Warrant Agreement, a "business day" means any day other than a Saturday, Sunday or a day on which banking institutions in New York City are authorized or obligated by law, regulation or executive order to close or remain closed. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares shares of the Common Stock as of the close of business on the date of the surrender exercise of such Warrants and payment of the aggregate Exercise Price. No fractional shares shall be issued upon exercise of any Warrants in accordance with Section 14. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part (in whole shares of the Common Stock) and, in the event that a certificate Warrant Certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares shares of the Common Stock issuable on such exercise at any time prior to the date of expiration of the WarrantsExpiration Date, a new certificate Certificate evidencing the remaining Warrant or Warrants will be issued promptly issued, and the Warrant Agent is hereby irrevocably authorized and directed to countersign and to deliver the required new Warrant Certificate or Certificates pursuant to the provisions of this SectionSection 7 and of Section 5, and the Company, whenever required by the Warrant Agent or under this Warrant Agreement, will supply the Warrant Agent with Warrant Certificates duly executed on behalf of the Company for such purpose. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled cancelled by the CompanyWarrant Agent. Such canceled cancelled Warrant Certificates shall then be disposed of by or at the Companydirection of the Company in accordance with applicable law. The Warrant Agent shall (x) advise an authorized representative of the Company as directed by the Company by the end of each day on which Warrants were exercised (i) the number of shares of Common Stock issued upon exercise of a Warrant and the number of Warrants exercised, (ii) delivery of Warrant Certificates evidencing the balance, if any, of the Warrants after such exercise of the Warrants represented by each Warrant Certificate and (iii) such other information as the Company shall reasonably require and (y) concurrently pay to the Company all funds received by it in payment of the aggregate Exercise Price. The Warrant Agent shall promptly confirm such information to the Company in writing. The Warrant Agent shall keep copies of this Warrant Agreement and any notices given or received hereunder available for inspection by the holders of the Warrants during normal business hours at the Warrant Agent Office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Warrant Agreement as the Warrant Agent may request.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder shall have the right, which may be exercised commencing at the opening of business on August 25December 30, 1998 and until 5:00 5: 00 p.m., Pacific time on August 24December 29, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24December 29, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of the Company, or (ii) in the manner provided in the first paragraph of this Section 5. Upon such surrender of Warrants and payment of the Exercise Price the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five two business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued pursuant to the provisions of this Section. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates shall then be disposed of by the Company.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the each Holder of a Warrant holder shall have the right, which may be exercised commencing at any time or from time to time (i) prior to the opening Expiration Time in the case of business a Series A Warrant, and (ii) on August 25or after the Stockholder Event and prior to the Expiration Time in the case of a Series B Warrant, 1998 and until 5:00 p.m., Pacific time on August 24, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In If the alternative, Stockholder Event has not occurred on or before the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value Stockholder Event Deadline (as defined below) at in Section 11), each Holder of a Series B Warrant will have the time of right to exercise equal such Warrant for cash prior to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is Stockholder Event as provided in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such timeSection 11. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised prior to the Expiration Time upon surrender to the Company at its the principal office of the Warrant Agent of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be guaranteed by a bank or trust company having an office or correspondent in the United States or a broker or dealer which is a member of a registered securities exchange or the National Association of Securities Dealers, Inc., and upon payment to the Warrant Agent for the account of the Company of the exercise price (the '“Exercise Price"”) which is set forth in the form forms of Warrant Certificate Certificates attached hereto as Exhibit Exhibits A and B as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Warrants may be exercised on a book-entry basis in any manner acceptable to the Warrant Agent. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of the Company, Company or (ii) if at any time after the earlier of (a) the date the Registration Statement is filed pursuant to the Investor Rights Agreement and (b) May 1, 2005, any Holders are unable to exercise their Warrants for Warrant Shares pursuant to an effective Registration Statement or an available exemption from the registration requirements of the Securities Act (during any time other than the first ten business days of a Blackout Period, as such term is defined in the manner provided Investor Rights Agreement), then through the surrender of senior debt securities of the Company having a principal amount equal to the aggregate Exercise Price to be paid (the Company will pay the accrued interest on such surrendered debt securities in cash at the first paragraph time of surrender notwithstanding the stated terms thereof). Subject to the provisions of Section 5 of this Section 5. Upon Agreement, upon such surrender of Warrants and payment of the Exercise Price the Company shall will issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the Warrant holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 119; PROVIDEDprovided, HOWEVERhowever, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof8 of this Agreement, or a tender offer or an exchange offer for shares of Common Stock of the Company shall will be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five two business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 119. Such certificate or certificates shall will be deemed to have been issued and any person so designated to be named therein shall will be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued issued, and the Warrant Agent is hereby irrevocably authorized to countersign and to deliver the required new Warrant Certificate or Certificates pursuant to the provisions of this SectionSection and of Section 3 of this Agreement, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrant Certificates duly executed on behalf of the Company for such purpose. All Warrant Certificates surrendered upon exercise of Warrants shall will be canceled cancelled by the CompanyWarrant Agent. Such canceled cancelled Warrant Certificates shall will then be disposed of by the Warrant Agent in a manner satisfactory to the Company. The Warrant Agent will account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all monies received by the Warrant Agent for the purchase of the Warrant Shares through the exercise of such Warrants. The Warrant Agent will keep copies of this Agreement and any notices given or received hereunder available for inspection by the holders during normal business hours at its office. The Company will supply the Warrant Agent from time to time with such numbers of copies of this Agreement as the Warrant Agent may request.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder shall have the right, which Warrants may be exercised commencing at any time after the opening date hereof and prior to the close of business on August 25the Expiration Date. Each Warrant, 1998 when exercised in accordance with the terms hereof and until 5:00 p.m., Pacific time on August 24, 2008 upon payment in cash of the exercise price of $.01 (as adjusted pursuant to receive Section 12(m)) per share for the Common Stock (the "Exercise Price") will entitle the holder thereof to acquire from the Company (and the number Company shall issue to such holder of a Warrant) one fully paid and nonassessable non-assessable share of the Company's authorized but unissued Common Stock (subject to adjustment as provided in Section 12). No cash dividend shall be paid to a holder of Warrant Shares which issuable upon the Warrant holder may at the time be entitled to receive on exercise of Warrants unless such Warrants and payment holder was, as of the Exercise Price then in effect record date for the declaration of such dividend, the record holder of such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office the Register Office of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, and upon together with payment to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable for each Warrant Share issuable upon the exercise of such Warrants. Subject to the order of the Company, or (ii) in the manner provided in the first paragraph provisions of this Section 5. Upon such 7, upon surrender of Warrants and payment of the Exercise Price Warrant certificate or certificates, the Company shall issue and cause to be delivered deliver with all reasonable dispatch dispatch, to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the Warrant holder may designate, a certificate or certificates for the number of full Warrant Shares issuable or other securities or property to which such holder is entitled hereunder upon the exercise of such Warrants together with Warrants, including, at the Company's option, any cash payable in lieu of fractional interests as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 1116. Such certificate or certificates shall be deemed to have been issued and any person Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Company may issue fractional shares of Common Stock upon exercise of any Warrants in accordance with Section 16. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part (provided that Warrants shall be exercisable in multiples of 5,000 Warrants unless all of the Warrants evidenced by a particular certificate are being exercised) and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time on or prior to the date of expiration of the WarrantsExpiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued issued, and the Company will duly execute and deliver the required new Warrant certificate or certificates pursuant to the provisions of Section 4 and this SectionSection 7. All Warrant Certificates certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates certificates shall then be disposed of by in a manner satisfactory to the CompanyCompany and in accordance with any applicable law. The Company shall account promptly in writing with respect to Warrants exercised and all monies received for the purchase of the Warrant Shares through the exercise of such Warrants. In the event that the Company shall purchase or otherwise acquire Warrants, the Company may elect to have the Warrants canceled and retired.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the each Warrant holder Holder shall have the right, which may be exercised commencing at 9:00 a.m., New York City time, on the opening of business on August 25Issuance Date, 1998 and until 5:00 p.m., Pacific time New York City time, on August 24the second anniversary of the Issuance Date, 2008 to receive purchase from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder Holder may at the time be entitled to receive (the "Exercise Quantity") on exercise of such Warrants and payment of the Exercise Price (as defined below) then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific New York City time, on August 24the second anniversary of the Issuance Date, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement Agreement and the Warrant Certificates shall cease as of such time. No adjustments as to dividends will be made upon exercise If the date on which the Warrants expire (i.e., the second anniversary of the WarrantsIssuance Date) or the date on which they became exercisable (i.e., the Issuance Date) shall not be a business day, the Warrants shall expire or become exercisable, as the case may be, on the next succeeding business day. A Warrant may be exercised upon surrender to the Company at its principal the office of the certificate Warrant Agent designated for such purpose of the Warrant Certificate or certificates Certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be guaranteed in accordance with the Medallion Signature Guarantee Program by a bank or trust company having an office or correspondence in the United States, or a broker or dealer which is a member of a registered securities exchange or the National Association of Securities Dealers, Inc. (together, in the case of a Non-Surviving Combination (as defined below), with such other documentation required to be delivered by holders of Common Stock before such Holders are entitled to receive consideration in respect of their shares), and upon payment to the Warrant Agent for the account of the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, Price for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of the Company. The Company shall have the right to accept personal checks, or (ii) in its sole and absolute discretion at any time and from time to time, provided, however, that payment of the manner provided in Exercise Price for any Warrant Shares shall not be deemed to have been made until such personal check has been collected and such funds credited to the first paragraph Company's account. Subject to the provisions of this Section 5. Upon 7 hereof, upon such surrender delivery of Warrants Warrants, delivery of required documents and payment of the Exercise Price Price, the Company (or the surviving entity in the case of a Non-Surviving Combination) shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder Holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the holder Warrant Holder may designate, a certificate or certificates for the number of full Warrant Shares (or other cash or property to which the Warrant Holder is entitled) issuable (or deliverable) upon the exercise of such Warrants together with cash as provided in Section 1113; PROVIDEDprovided, HOWEVERhowever, that if after the first public announcement that any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (me) of Section 10 12 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants Warrants, delivery of required documents and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five (5) business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 1113. Such certificate or certificates (or such other cash or property) shall be deemed to have been issued (or delivered), and any person so designated to be named therein shall be deemed to have become a holder Holder of record of such Warrant Shares (or such other cash or property) as of the date of the surrender of such Warrants Warrants, the delivery of required documents and payment of the Exercise Price. The Subject to the provisions of this Agreement and the Warrant Certificates, the Warrants shall be exercisable, at the election of the holders Holders thereof, either in full or from time to time-to-time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued issued, and the Warrant Agent is hereby irrevocably authorized to countersign and to deliver the required new Warrant Certificate or Certificates pursuant to the provisions of this SectionSection and of Sections 3 and 4 hereof, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrant Certificates duly executed on behalf of the Company for such purpose. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the CompanyWarrant Agent. Such canceled Warrant Certificates shall then be disposed of by the Warrant Agent in a manner satisfactory to the Company. The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all monies received by the Warrant Agent for the purchase of the Warrant Shares through the exercise of such Warrants. The Warrant Agent shall keep copies of this Agreement and any notices given or received hereunder available for inspection by the Holders during normal business hours at its office. The Company shall supply the Warrant Agent from time-to-time with such numbers of copies of this Agreement as the Warrant Agent may request. The Warrant Agent shall, from time-to-time, as promptly as practicable, advise the Company of (i) the numbers of Warrants delivered to it in accordance with the terms and conditions of this Agreement and the Warrant Certificates, (ii) the instructions of each Holder of the Warrant Certificates evidencing such Warrants with respect to delivery of the Warrant Shares or other cash or property to which such Holder is entitled upon such delivery, (iii) the delivery of Warrant Certificates evidencing the balance, if any, of the Warrants remaining after such delivery, and (iv) such other information as the Company shall reasonably request. Warrant Holders, as such, shall not be entitled (i) to receive any dividends in respect of such Holder's Warrant Shares, or (ii) to vote, or to receive notice of any meeting of the Company's stockholders, or otherwise exercise any rights of, or to receive any notices delivered to, Holders of Common Stock until such Holder surrenders certificates representing such Holder's Warrants to the Warrant Agent, pays the Exercise Price and delivers all other required documentation, all as set forth in this Agreement and the Warrant Certificates, and the Warrant Shares in respect of such Warrant are issued to such Holder.

Terms of Warrants; Exercise of Warrants. The initial exercise price per share at which Warrant Shares shall be issuable upon the exercise of a Warrant (the "Exercise Price") shall be equal to $0.01 per share of Common Stock. Each Warrant shall entitle the Holder thereof, subject to and upon compliance with the provisions of this Agreement, to purchase from the Company one share of Common Stock, subject to adjustment pursuant to the terms of this Agreement. Subject to the terms of this Agreement, the Warrant holder each Holder shall have the right, which may be exercised commencing at on the opening of business on August 25, 1998 date that the Warrants have been issued and delivered to each Holder pursuant to Section 2.02 and shall continue until 5:00 p.m., Pacific New York City time on August 24the later of (i) September 2, 2008 2006 and (ii) to the extent that any Transfer Restricted Securities (as defined in the Registration Rights Agreement) remain outstanding on September 6, 2006, ten Business Days after the effective date of a registration statement under the Securities Act with respect to the Warrant Shares issuable upon the exercise of the Warrants, but no later than September 2, 2007 (the "Expiration Date"), to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder Holder may at the time be entitled to receive on exercise of such the Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative, the Warrant holder each Holder may exercise its right, during the Exercise Period, right to receive Warrant Shares on a net basisbasis (a "Cashless Exercise"), such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its the Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) Current Market Price at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" Holder of the Warrant Shares shall mean (i) if Shares. If the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations Warrants are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific New York City time, on August 24the Expiration Date, 2008 they shall become void and all rights thereunder and all rights in respect thereof under this agreement Agreement shall cease as of such time. No adjustments as to dividends Dividends will be made upon exercise of the Warrants. A Warrant may The Holders will only be exercised upon surrender able to the Company at its principal office of the certificate or certificates evidencing the exercise their Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash by means of a cashless exercise or by certified or official bank check payable (ii) if any registration statement under the Securities Act relating to the order Warrant Shares is effective or 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. No Holder may exercise any Warrant to the extent that, immediately following such exercise and upon receipt of any Warrant Shares issuable upon such exercise, such Holder would either (i) become or be included in any 13D Person that is the single largest holder of voting power represented by the Company's capital stock (or otherwise become the single largest holder of the Common Stock) (the "Shareholder Limitation"), or (ii) beneficially own (as such term is defined in the manner provided in the first paragraph of this Section 5. Upon such surrender of Warrants and payment 13(d)(3) of the Exercise Price the Company shall issue and cause to Exchange Act) or be delivered with all reasonable dispatch to or upon the written order included in any 13D Person that beneficially owns in excess of 4.9% of the Warrant holder and voting power represented by the Company's capital stock (or otherwise beneficially own in the name excess of 4.9% of the Warrant holderoutstanding Common Stock) (the "4.9% Limitation") after, orin either case, upon satisfaction of giving effect to such exercise (the transfer requirements in Section 4, such other names Shareholder Limitation and the 4.9% Limitation are collectively referred to herein as the holder may designate, a certificate or certificates for "Exercise Limitations"). The determinations of the number of full Warrant Shares issuable shares that (i) constitute 4.9% of the outstanding Common Stock or voting power and (ii) are held by the largest holder will be made in reliance upon the information contained in publicly available filings made with the SEC unless the Company is aware that such information is incorrect and has made the correct information public, to the extent material, and disclosed such information to the Holders at the time of any such proposed exercise. In order to facilitate compliance with the foregoing, each Holder will be required to make a representation that it and its affiliates will comply with the Exercise Limitations immediately after the exercise of such Warrants together with cash as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale Warrant and receipt of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for any shares of Common Stock of the Company shall be made, issuable upon such surrender of Warrants and payment exercise. Notwithstanding the Exercise Limitation, however, a Holder may exercise any Warrant that would otherwise cause such Holder to hold Warrant Shares in excess of the Exercise Price as aforesaid, the Company shallLimitations if, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full such excess number of Warrant Shares issuable upon (the exercise of "Excess Shares"), such Warrants in Holder (i) irrevocably covenants to the manner described in this sentence together with cash as provided in Section 11. Such certificate or certificates shall be deemed Company to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of sell such Warrant Excess Shares as of within 10 days after the date of exercise and (ii) confirms that it has, on or prior to such exercise date, entered into a binding arrangement to sell the surrender Excess Shares within 10 days after such exercise date either (a) in a regular way transaction on a national securities exchange (or the principal market where shares of Common Stock are then traded) or (b) to one or more persons that are not "affiliates" (used herein as defined in Rule 144 promulgated under the Securities Act) of such Warrants and payment Holder ("Third Parties"), each of whom represents for the benefit of the Company that, upon purchase of the applicable Excess Shares, such Third Party, together with its affiliates, will not be the beneficial owner of a number of shares of Common Stock in excess of the Exercise PriceLimitations. In addition, such Holder shall agree to vote the applicable Excess Shares only in accordance with the recommendations of the Board of Directors of the Company or any Third Party that has agreed to purchase such shares, if any record date for a vote of the Common Stock is established for any day between the exercise date and the consummation of the sale of the applicable Excess Shares. The Warrants shall be exercisable, at the election Exercise Limitations will cease to have any force and effect upon consummation of the holders thereofUtility Spin-Off, either in full or from time if, on the date that is 14 days after delivery to time in part andthe Company of a request by the Required Holders to such effect (which request may be given no more than once during any 180-day period), the Company shall not have delivered a certificate to the Holders stating that the removal of the Exercise Limitations would, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all good faith judgment of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the WarrantsCompany, a new certificate evidencing the remaining Warrant not be consistent with applicable regulatory or Warrants will be issued pursuant to the provisions of this Sectionother legal requirements. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates shall then be disposed of by the CompanySECTION 4.02.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the each Warrant holder Holder shall have the right, which may be exercised commencing at the opening of business on August 25the Exercise Date and ending at the close of business on the Expiration Date (such period, 1998 and until 5:00 p.m.the "Exercise Period"), Pacific time on August 24, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder Holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Sharesthe manner provided below. In the alternative, the Warrant holder Each Holder may only exercise its right, right during the Exercise Period, to receive Warrant Shares Period on a net basis, such that, without the exchange of any funds, the Warrant holder Holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" Holder of the Warrant Shares shall mean (i) if had the Common Stock is Exercise Price been paid in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may becash. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 the Expiration Date shall become void and all rights thereunder and all rights in respect thereof under this agreement Agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A In order to exercise all or any of the Warrants represented by a Warrant may be exercised upon Certificate, the Holder thereof must (i) surrender for exercise the Warrant Certificate to the Company at its principal the office of the certificate or certificates evidencing Warrant Agent at its New York corporate trust office, and (ii) deliver to the Warrants to be exercised with Company at the office of the Warrant Agent the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be a medallion guaranteed by an institution which is a member of a Securities Transfer Association recognized signature guarantee program, and upon payment to the Warrant Agent for the account of the Company of the exercise price (the 'Exercise Price") , which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment For purposes of this Section 4, the fair market value of the aggregate Exercise Price Warrants shall be made determined as follows: (iA) in cash or by certified or official bank check payable to the order extent the Common Stock is publicly traded and listed on the Nasdaq National Market or a national securities exchange, the fair market value shall be equal to the greater of (1) the difference between (a) the average closing price as quoted on the Nasdaq National Market of the Common Stock for each of the 10 trading days immediately prior to the exercise date (or, if the Common Stock is listed on a national securities exchange, the average closing price as reported on such national securities exchange during such 10-trading-day period) and (b) the Exercise Price, and (2) zero; or (B) to the extent the Common Stock is not publicly traded, or otherwise is not listed on a national securities exchange, the fair market value shall be equal to the value per share as determined in good faith by the Board of Directors of the Company, or (ii) in the manner provided in the first paragraph of this Section 5. Upon such surrender of Warrants and payment of the Exercise Price the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants Certificates and payment of the Exercise Price as aforesaidprovided above, the Warrant Agent shall thereupon promptly notify the Company, and the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause shall promptly transfer to be delivered the full Holder of such Warrant Certificate a certificate or certificates of Common Stock for the appropriate number of Warrant Shares issuable upon or other securities or property (including any money) to which the exercise of Holder is entitled, registered or otherwise placed in, or payable to the order of, such Warrants name or names as may be directed in writing by the manner described in this sentence Holder, and shall deliver such certificate or certificates representing the Warrant Shares and any other securities or property (including any money) to the person or persons entitled to receive the same, together with an amount in cash in lieu of any fraction of a share as provided in Section 1112 hereof. Such Any such certificate or certificates representing the Warrant Shares shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder Holder of record of such Warrant Shares as of the date of the surrender of such Warrants Warrant Certificates and payment of the Exercise Price. The Warrants shall be exercisableexercisable commencing on the Exercise Date, at the election of the holders Holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer part. If less than all the Warrants represented by a Warrant Certificate are exercised, such Warrant Certificate shall be surrendered and a new Warrant Certificate of the Warrant Shares issuable on such exercise at any time prior same tenor and for the number of Warrants which were not exercised shall be executed by the Company and delivered to the date of expiration of Warrant Agent and the WarrantsWarrant Agent shall countersign the new Warrant Certificate, a registered in such name or names as may be directed in writing by the Holder, and shall deliver the new certificate evidencing the remaining Warrant or Warrants will be issued pursuant Certificate to the provisions of this SectionPerson or Persons entitled to receive the same. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the CompanyWarrant Agent. Such canceled The Warrant Certificates Agent shall then be disposed of account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all monies received by the CompanyWarrant Agent for the purchase of the Warrant Shares through the exercise of such Warrants. The Warrant Agent shall keep copies of this Agreement and any notices given or received hereunder by or from the Company available for inspection by the Holders during normal business hours at its office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Agreement as the Warrant Agent may reasonably request.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder shall have the right, which Warrants may be exercised commencing at any time after the opening date hereof and prior to the close of business on August 25the Expiration Date; provided, 1998 however, that holders of Warrants will be able to exercise their Warrants only if the exercise of such Warrants is exempt from the registration requirements of the Securities Act, and until 5:00 p.m.the Warrant Shares are qualified for sale or exempt from qualification under the applicable securities laws of the states or other jurisdictions in which such holders reside. Each Warrant, Pacific time on August 24when exercised in accordance with the terms hereof and upon payment in cash (or by tendering the Notes, 2008 as provided in the next succeeding paragraph) of the exercise price of $3.00 (as adjusted pursuant to receive Section 11(n)) per share for the Common Stock (the “Exercise Price”) will entitle the holder thereof to acquire from the Company (and the number Company shall issue to such holder of a Warrant) one fully paid and nonassessable share of each of the Company’s authorized but unissued Common Stock (subject to adjustment as provided in Section 11). No cash dividend shall be paid to a holder of Warrant Shares which issuable upon the Warrant holder may at the time be entitled to receive on exercise of Warrants unless such Warrants and payment holder was, as of the Exercise Price then in effect record date for the declaration of such dividend, the record holder of such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office the Register Office of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, and upon together with payment to the Company of the Exercise Price for each Warrant Share issuable upon the exercise price (of such Warrants. To the 'Exercise Price") which is set forth in the form extent any holder of a Warrant Certificate attached hereto as Exhibit A as adjusted as herein providedsurrenders with such Warrant any Note then held by such holder, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment holder shall be deemed to have paid that portion of the aggregate Exercise Price for all Warrant Shares then exercised equal to 100% of that portion of the Accreted Value (as defined in the Indenture) of such Note that the holder thereof directs the Company to accept as payment of such aggregate Exercise Price, which Note shall be made (i) in cash or cancelled and not reissued. To the extent the Accreted Value of such tendered Note is greater than the aggregate amount of the Exercise Price for all Warrant Shares then exercised paid by certified or official bank check payable surrender thereof, the Company shall deliver a new Note to the order tendering holder thereof, in accordance with the provisions of the CompanyIndenture, or (ii) dated the date of the original issuance of the tendered Note, in the manner provided in face amount which bears the first same proportion to the face amount of such tendered Note immediately prior to such redemption as the unredeemed portion of the Accreted Value of such tendered Note bears to the Accreted Value of such tendered Note immediately prior to such redemption. At the time of the issuance of the Warrant Shares pursuant to the exercise of the Warrants by any holder, the Company shall pay all accrued and unpaid interest on any Note of such holder cancelled pursuant to this paragraph up to but excluding the date of this Section 5such issuance. Upon such surrender In lieu of Warrants and payment of the Exercise Price pursuant to the preceding paragraph, the Warrant holder shall have the right to require the Company to convert the Warrants, in whole or in part and at any time or times (the “Conversion Right”), into Warrant Shares by surrendering to the Company the certificate or certificates evidencing the Warrant to be converted with the form of notice of conversion on the reverse thereof duly filled in and signed. Upon exercise of the Conversion Right, the Company shall deliver to the Warrant holder (without payment by the holder of the Warrant of any Exercise Price) that number of Warrant Shares which is equal to the quotient obtained by dividing (x) the value of the number of Warrants being exercised at the time the Warrants are exercised (determined by subtracting the aggregate Exercise Price for all such Warrants immediately prior to the exercise of the Warrants from the aggregate Current Market Price (determined pursuant to Section 11(f)) of that number of Warrant Shares purchasable upon exercise of such Warrants immediately prior to the exercise of the Warrants (taking into account all applicable adjustments pursuant to Section 11) by (y) the Current Market Price of one share of Common Stock immediately prior to the exercise of the Warrants. Subject to the provisions of Section 8, upon surrender of the Warrant certificate or certificates, the Company shall issue and cause to be delivered deliver with all reasonable dispatch dispatch, to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the Warrant holder may designate, a certificate or certificates for the number of full Warrant Shares issuable or other securities or property to which such holder is entitled hereunder upon the exercise of such Warrants together with Warrants, including, at the Company’s option, any cash payable in lieu of fractional interests as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 1113. Such certificate or certificates shall be deemed to have been issued and any person Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Company may issue fractional shares of Common Stock upon exercise of any Warrants in accordance with Section 13. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time on or prior to the date of expiration of the WarrantsExpiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued issued, and the Company will duly execute and deliver the required new Warrant certificate or certificates pursuant to the provisions of Section 4 and this SectionSection 7. All Warrant Certificates certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates certificates shall then be disposed of in a manner satisfactory to the Company and in accordance with any applicable law. The Company shall account promptly in writing with respect to Warrants exercised and all monies received for the purchase of the Warrant Shares through the exercise of such Warrants. In the event that the Company shall purchase or otherwise acquire Warrants, the Company may elect to have the Warrants canceled and retired. The Company shall keep copies of this Agreement and any notices given or received hereunder available for inspection by the Companyregistered Warrant holders during normal business hours and upon reasonable notice at the Register Office.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder shall have the right, which may be exercised commencing at the opening of business on August 25December 30, 1998 and until 5:00 5: 00 p.m., Pacific time on August 24December 29, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24December 29, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of the Company, or (ii) in the manner provided in the first paragraph of this Section 5. Upon such surrender of Warrants and payment of the Exercise Price the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 11; PROVIDEDprovided, HOWEVERhowever, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five two business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued pursuant to the provisions of this Section. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates shall then be disposed of by the Company.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder shall have the right, which Warrants may be exercised commencing at any time after the opening of business on August 25, 1998 date hereof in whole and from time to time in part until 5:00 p.m., Pacific time p.m. (ET) on August 24February 23, 2008 (the "Expiration Date"). Each Warrant, when --------------- exercised in accordance with the terms hereof and upon payment in cash of the exercise price of $22.448 per share (the "Exercise Price") will entitle the -------------- holder thereof to receive acquire from the Company (and the number Company shall issue to such holder of a Warrant) one fully paid and nonassessable share of the Company's authorized but unissued Common Stock (subject to adjustment as provided in Section 11). No cash dividend shall be paid to a holder of Warrant Shares which issuable upon the Warrant holder may at the time be entitled to receive on exercise of Warrants unless such Warrants and payment holder was, as of the Exercise Price then in effect record date for the declaration of such dividend, the record holder of such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office the Register Office of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, and upon together with payment to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Price for each Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are Share then exercised. Payment In lieu of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of the Company, or (ii) in the manner provided in the first paragraph of this Section 5. Upon such surrender of Warrants and payment of the Exercise Price pursuant to the preceding paragraph, the Warrant holder shall have the right to require the Company to convert the Warrants, in whole or in part and at any time or times (the "Conversion Right"), into shares of Common Stock by surrendering to the Company ---------------- the certificate or certificates evidencing the Warrant to be converted with the form of notice of conversion on the reverse thereof duly filled in and signed. Upon exercise of the Conversion Right, the Company shall deliver to the Warrant holder (without payment by the holder of the Warrant of any Exercise Price) that number of shares of Common Stock which is equal to the quotient obtained by dividing (x) the value of the number of Warrants being exercised at the time the Warrants are exercised (determined by subtracting the aggregate Exercise Price for all such Warrants immediately prior to the exercise of the Warrants from the aggregate Current Market Price (as defined in Section 11) of that number of Warrant Shares purchasable upon exercise of such Warrants immediately prior to the exercise of the Warrants (taking into account all applicable adjustments pursuant to Section 11) by (y) the Current Market Price of one share of Common Stock immediately prior to the exercise of the Warrants. Subject to the provisions of Section 8 hereof, upon surrender of the Warrant certificate or certificates, the Company shall issue and cause to be delivered deliver with all reasonable dispatch dispatch, to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the Warrant holder may designate, a certificate or certificates for the number of full Warrant Shares issuable or other securities or property to which such holder is entitled hereunder upon the exercise of such Warrants together with Warrants, including, at the Company's option, any cash payable in lieu of fractional interests as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 12 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11. Such certificate or certificates shall be deemed to have been issued and any person Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Company may issue fractional shares of Common Stock upon exercise of any Warrants in accordance with Section 12 hereof. The Warrants shall be exercisableexercisable on or prior to the Expiration Date, at the election of the holders thereof, either at any time in full whole or from time to time in part (in whole shares) and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on exercise of such exercise certificate at any time prior to the date of expiration of the WarrantsExpiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued issued, and the Company will duly execute and deliver the required new Warrant certificate or certificates pursuant to the provisions of Section 4 and this SectionSection 7. All Warrant Certificates certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates certificates shall then be disposed of in a manner satisfactory to the Company and in accordance with any applicable law. The Company shall account promptly in writing with respect to Warrants exercised and all monies received for the purchase of the Warrant Shares through the exercise of such Warrants. In the event that the Company shall purchase or otherwise acquire Warrants, the Company may elect to have the Warrants canceled and retired. The Company shall keep copies of this Agreement and any notices given or received hereunder available for inspection by the Companyregistered Warrant holders during normal business hours and upon reasonable notice at the Register Office.

Terms of Warrants; Exercise of Warrants. Subject to the --------------------------------------- terms of this Agreement, the each Warrant holder Holder shall have the right, which may be exercised commencing at on or after the opening of business on August 25, 1998 Exercisability Date (as defined below) and until 5:00 p.m., Pacific time New York City time, on August 24the six-month anniversary of the Exercisability Date (the "Expiration Date"), 2008 to receive from the Company the --------------- number of fully paid and nonassessable Warrant Shares which the Warrant holder Holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price (as defined below) then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) abovetogether, if trading in the Common Stock is not reported by The Nasdaq Small Cap Marketapplicable, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of the Company, or (ii) in the manner provided in the first paragraph of this Section 5. Upon such surrender of Warrants and payment of the Exercise Price the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash payable as provided in Section 11; PROVIDED, HOWEVER, that if 13 hereof and any consolidation, merger dividends or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash distributions payable as provided in Section 1114 hereof. Such certificate If the Exercisability Date is on or certificates prior to December 31, 2001, the Holders shall then be deemed entitled to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of receive from the date of the surrender Company (on exercise of such Warrants and payment of the Exercise Price. The Warrants shall be exercisablePrice then in effect for such Warrant Shares) (together, at if applicable, with cash payable as provided in Section 13 hereof and any dividends or distributions payable as provided in Section 14 hereof) (a) 20,654,360 Warrant Shares (in the election of the holders thereof, either in full or from time to time in part and, aggregate) (with each Warrant being exercisable for 1.153846 Warrant Shares)/2/ in the event that a certificate evidencing Warrants is exercised the Adjustment Event (as defined in respect of fewer than all of the Warrant Shares issuable on such exercise at any time Merger Agreement) has not occurred prior to the date Exercisability Date or (b) 17,900,445 Warrant Shares (in the aggregate) (with each Warrant being __________________ /2/ These numbers shall be adjusted in the final Agreement and Warrants in order to reflect that at the Effective Time such aggregate number, when taken together with the shares of expiration Parent Common Stock issuable to holders of Company Stock in the Merger, shall equal 35% of the Warrants, shares of Parent Common Stock on a new certificate evidencing fully diluted basis (excluding the remaining effect of the Algos Warrants as if no Adjustment Event had occurred). exercisable for 1.000000 Warrant or Warrants will be issued pursuant Shares)/3/ in the event the Adjustment Event has occurred prior to the provisions of this SectionExercisability Date. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by If the Company. Such canceled Warrant Certificates Exercisability Date is after December 31, 2001 and on or prior to June 30, 2002, the Holder shall then be disposed entitled to receive from the Company (on exercise of by such Warrants and payment of the CompanyExercise Price then in effect for such Warrant Shares) (together, if applicable, with cash payable as provided in Section 13 hereof and any dividends or distributions payable as provided in Section 14 hereof) (a) 12,786,032 Warrant Shares (in the aggregate) (with each Warrant being exercisable for 0.714286 Warrant Shares)/4/ in the event the Adjustment Event has not occurred prior to the Exercisability Date or (b) 11,015,658 Warrant Shares (in the aggregate) (with each Warrant being exercisable for 0.615385 Warrant Shares)/5/ in the event the Adjustment Event has occurred prior to the Exercisability Date. If the Exercisability Date is after June 30, 2002 and on or prior to December 31, 2002 (the "Ultimate Expiration Date"), the Holders shall ------------------------ then be entitled to receive from the Company (on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares) (together, if applicable, with cash payable as provided in Section 13 hereof and any dividends or distributions payable as provided in Section 14 hereof) (a) 5,966,815 Warrant Shares (in the aggregate) (with each Warrant being exercisable for 0.333333 Warrant Shares)/6/ in the event the Adjustment Event has not occurred prior to the _____________________ /3/ These numbers shall be adjusted in the final Agreement and Warrants in order to reflect that at the Effective Time such aggregate number, when taken together with the shares of Parent Common Stock issuable to holders of Company Common Stock in the Merger, shall equal 40% of the shares of Parent Common Stock on a fully diluted basis (excluding the effect of the Algos Warrants and after giving effect to the Adjustment Event as if it had occurred).

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder each Holder shall have the right, which may be exercised commencing at on or after the opening date of business on August 25, 1998 original issuance thereof and until 5:00 p.m., Pacific time New York City time, on August 24September 7, 2008 2010 (the "Expiration Date"), to receive from the Company the number of fully fully-paid and nonassessable Warrant Shares which the Warrant holder Holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price (as defined below) then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal Subject to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes next paragraph of the foregoing sentencethis Section, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 the Expiration Date shall become void and all rights thereunder and all rights in respect thereof under this agreement Agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. The initial price per share at which Warrant Shares shall be purchasable upon exercise of Warrants (the "Exercise Price") shall be $.0001, subject to adjustment. A Warrant may be exercised upon surrender to at the office of the Company at its principal maintained for such purpose, which initially will be the office of the Company in Arlington, Virginia, of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be guaranteed by a participant in a recognized Signature Guarantee Medallion Program, and upon payment to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A , as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of the Company, (ii) by tendering Warrants in compliance with Sections 2, 3 and 4 hereof having a fair market value equal to the Exercise Price or (iii) with any combination of (i) or (ii). For purpose of clause (ii) above, the fair market value of the Warrants shall be determined as follows: (A) to the extent the Class B Common Stock is publicly traded and listed on the Nasdaq National Market or a national securities exchange, the fair market value shall be equal to the difference between (1) the Closing Bid Price (as defined below) of the Class B Common Stock on the date of exercise and (2) the Exercise Price; or (B) to the extent the Class B Common Stock is not publicly traded, or otherwise is not listed on a national securities exchange, the fair market value shall be equal to the difference between (1) the Current Market Value (as defined in Section 10(d)) of the manner provided in Warrant Shares issuable upon exercise of such Warrant and (2) the first paragraph of this Section 5Exercise Price therefor. Upon such surrender of Warrants and payment of the Exercise Price Price, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder Holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the holder Holder may designate, designate a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 1112; PROVIDEDprovided, HOWEVERhowever, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (mk) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five three days, other than a Saturday or Sunday or a day on which banking institutions in the State of New York or the Commonwealth of Virginia are not open for business days ("Business Day") thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 1112. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders Holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued pursuant issued, and delivered to the provisions exercising Holder. Similarly, in the event that a certificate evidencing Warrants is delivered in payment of this Sectionthe Exercise Price of the Warrants at any time prior to the date of the expiration of the Warrants, and the fair market value of the Warrants evidenced by said certificate is greater than the amount of said Exercise Price, a new certificate evidencing the remaining Warrant or Warrants not applied to such Exercise Price will be issued, executed and delivered to the exercising Holder. All New Warrant Certificates surrendered upon exercise of Warrants shall be canceled cancelled by the Company. Such canceled Warrant Certificates The Company shall keep copies of this Agreement available for inspection by the Holders during normal business hours at its office. The "Closing Bid Price" for a share of Class B Common Stock on each Business Day means: (A) if the Class B Common Stock is listed or admitted to trading on any securities exchange, the closing price, regular way, on such day on the principal exchange on which such security is traded, or if no sale takes place on such day, the average of the closing bid and asked prices on such day, (B) if the Class B Common Stock is not then be disposed listed or admitted to trading on any securities exchange, the last reported sale price on such day, or if there is no such last reported sale price on such day, the average of the closing bid and the asked prices on such day, as reported by a reputable quotation source designated by the Company or (C) if neither clause (A) nor (B) is applicable, the average of the reported high bid and low asked prices on such day, as reported by a reputable quotation service, or a newspaper of general circulation in the Borough of Manhattan, City of New York, customarily published on each Business Day, designated by the Company. If there are no such prices on a Business Day, then the market price shall not be determinable for such Business Day.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder shall have the right, which may be exercised commencing at the opening of business on August 25, 1998 and until 5:00 p.m., Pacific time on August 24, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised at any time on or after 180 days from the date of original issuance thereof upon surrender to the Company at its the principal office of the certificate Warrant Agent of the Warrant Certificate or certificates evidencing the Warrants Certificates to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be guaranteed by an "eligible guarantor" as defined in the regulations promulgated under the Exchange Act and upon payment to the Warrant Agent for the account of the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A , as adjusted as herein provided, for the number of each Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in the form of cash or by a certified or official bank or bank cashier's check payable to the order of the Company. Subject to the provisions of Section 9 hereof, or (ii) in the manner provided in the first paragraph of this Section 5. Upon upon such surrender of Warrants and payment of the Exercise Price Price, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the Warrant holder may designate, a certificate or certificates for the number of full whole Warrant Shares issuable upon the exercise of such Warrants together with any cash which may be payable as provided in Section 1117 hereof; PROVIDED, HOWEVER, provided that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 14 hereof, or a tender offer or an exchange offer for shares of Common Stock Shares of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days two Business Days thereafter, issue and cause to be delivered to the registered holder thereof or any person so designated to be named therein the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with any cash which may be payable as provided in Section 1117 hereof. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the aggregate Exercise Price. The Warrants No fractional shares shall be exercisable, at issued upon exercise of any Warrants in accordance with Section 17 hereof. deliver the election of the holders thereof, either in full required new Warrant Certificate or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued Certificates pursuant to the provisions of this SectionSection and of Section 4 hereof, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrant Certificates duly executed on behalf of the Company for such purpose. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the CompanyWarrant Agent. Such canceled Warrant Certificates shall then be disposed of by the CompanyCompany in accordance with applicable law. The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all monies received by the Warrant Agent for the purchase of the Warrant Shares through the exercise of such Warrants. The Warrant Agent shall keep copies of this Agreement and any notices given or received hereunder available for inspection by the Warrant holders during normal business hours at its office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Agreement as the Warrant Agent may request.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder shall have the right, which Warrants may be exercised commencing at any time after the opening date hereof and prior to the close of business on August 25the Expiration Date. Each Warrant, 1998 when exercised in accordance with the terms hereof and until 5:00 p.m., Pacific time on August 24, 2008 upon payment in cash of the exercise price of $.01 (as adjusted pursuant to receive Section 12(m)) per share for the Common Stock (the “Exercise Price”) will entitle the holder thereof to acquire from the Company (and the number Company shall issue to such holder of a Warrant) one fully paid and nonassessable non-assessable share of the Company’s authorized but unissued Common Stock (subject to adjustment as provided in Section 12). No cash dividend shall be paid to a holder of Warrant Shares which issuable upon the Warrant holder may at the time be entitled to receive on exercise of Warrants unless such Warrants and payment holder was, as of the Exercise Price then in effect record date for the declaration of such dividend, the record holder of such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office the Register Office of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, and upon together with payment to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable for each Warrant Share issuable upon the exercise of such Warrants. Subject to the order of the Company, or (ii) in the manner provided in the first paragraph provisions of this Section 5. Upon such 7, upon surrender of Warrants and payment of the Exercise Price Warrant certificate or certificates, the Company shall issue and cause to be delivered deliver with all reasonable dispatch dispatch, to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the Warrant holder may designate, a certificate or certificates for the number of full Warrant Shares issuable or other securities or property to which such holder is entitled hereunder upon the exercise of such Warrants together with Warrants, including, at the Company’s option, any cash payable in lieu of fractional interests as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 1116. Such certificate or certificates shall be deemed to have been issued and any person Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Company may issue fractional shares of Common Stock upon exercise of any Warrants in accordance with Section 16. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part (provided that Warrants shall be exercisable in multiples of 5,000 Warrants unless all of the Warrants evidenced by a particular certificate are being exercised) and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time on or prior to the date of expiration of the WarrantsExpiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued issued, and the Company will duly execute and deliver the required new Warrant certificate or certificates pursuant to the provisions of Section 4 and this SectionSection 7. All Warrant Certificates certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates certificates shall then be disposed of by in a manner satisfactory to the CompanyCompany and in accordance with any applicable law. The Company shall account promptly in writing with respect to Warrants exercised and all monies received for the purchase of the Warrant Shares through the exercise of such Warrants. In the event that the Company shall purchase or otherwise acquire Warrants, the Company may elect to have the Warrants canceled and retired.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the each Warrant holder Holder shall have the right, which may be exercised commencing at from the opening date of business on August 25, 1998 original issuance of the Warrant certificates pursuant to the terms of this Agreement and until prior to the earlier of (i) 5:00 p.m., Pacific p.m. New York city time on August 24the seventh (7th) anniversary of the Closing (the “Expiration Date”) or (ii) immediately prior to an acquisition, 2008 merger or consolidation of the Company by or with any unrelated third party in which the Company is not the surviving entity, to exercise each Warrant and receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder Holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price (as herein defined) then in effect for such Warrant Shares. In Each Warrant, when exercised will entitle the alternative, the Warrant holder may exercise its right, during the Exercise Period, Holder thereof to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been purchase one fully paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a nonassessable share of Common Stock determined by at the Company's Board of Directors in good faithExercise Price. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 the Expiration Date shall become void and all rights thereunder and all rights in respect thereof under this agreement Agreement shall cease as of such time, except as expressly provided otherwise in this Agreement. No adjustments as If the reported last sale price of the Common Stock does not equal or exceed $10 per share for any 20 trading days within a 30 trading day period occurring at any time period prior to dividends the Expiration Date, then the date which is the tenth (10th) anniversary of the Closing will be the Expiration Date for all purposes hereunder. Notwithstanding any other provision, if a certain Agreement by and among CGLIC and United States Pharmaceutical Group, LLC and the Company made upon exercise as of May 4, 2005 (the “Strategic Agreement”) is terminated as a result of a breach by CGLIC, then the Expiration Date will be one (1) year after the date after the effective date of such termination under Section 6.04 of the WarrantsStrategic Agreement. A Warrant may be exercised upon surrender to the Company at its principal office of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be guaranteed by an “eligible guarantor” as defined in the regulations promulgated under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and upon payment to the Company of the exercise price of $6.60 (the '“Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A ”), as adjusted as herein provided, for the number of each Warrant Shares in respect of which such Warrants are Share then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash United States dollars or (ii) by certified or official bank check payable to the order of the Company. In lieu of payment of the Exercise Price as aforesaid, or the Holder of a Warrant may request the payment of “Spread”, which shall be delivered by the Company by delivering Common Stock with an aggregate current market price (iias of the date of delivery of request by the Holder to the Company pursuant to Section 15) in equal to the manner provided in difference between the first paragraph current market price per share of this Common Stock less the Exercise Price multiplied by the number of Warrants being exercised. Subject to the provisions of Section 5. Upon 7 hereof, upon such surrender of Warrants and payment of the Exercise Price Price, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder Holder and in the such name of or names, as the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other names as the holder Holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants Warrants, together with cash as provided in Section 1113 hereof; PROVIDEDprovided, HOWEVERhowever, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereofCompany, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five two (2) business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence sentence, together with cash as provided in Section 1113 hereof. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. No fractional shares shall be issued upon exercise of any Warrants in accordance with Section 13 hereof. The Warrants shall be exercisable, at the election of the holders Holders thereof, either in full or from time to time in part (in whole shares) and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued by the Company pursuant to the provisions of this SectionSection and of Section 4 hereof. All Warrant Certificates certificates surrendered upon exercise of Warrants shall be canceled cancelled by the Company. Such canceled Warrant Certificates Company and shall then thereafter be disposed of by the CompanyCompany in accordance with applicable law. The Company shall keep copies of this Agreement, the SEC Reports (as defined below) and any notices given or received hereunder available for inspection by the Holders of the Warrants during normal business hours at its office.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Warrant Agreement, the each Warrant holder shall have the right, which may be exercised commencing at from the opening date of business the original issuance of the Warrant Certificates and prior to 5:00 p.m. New York City Time, on August 25June 21, 1998 2012 (the “Expiration Date”), to exercise each Warrant and until 5:00 p.m., Pacific time on August 24, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares shares of the Common Stock which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the aggregate Exercise Price then in effect for such Warrant Sharesshares of the Common Stock. In addition, prior to the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange delivery of any funds, the Warrant holder receives that number shares of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in that the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchangeCompany shall be obligated to deliver upon proper exercise of the Warrants, the average Company shall comply with all applicable federal and state laws, rules and regulations which require action to be taken by the Company. Each Warrant, when exercised, will entitle the holder thereof to purchase one share of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, at the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price orExercise Price, in each case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. as adjusted from time to time as herein provided. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 the Expiration Date shall become void and all rights thereunder and all rights in respect thereof under this agreement Warrant Agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the WarrantsNO WARRANT OR ANY SHARES OF COMMON STOCK RECEIVED ON EXERCISE OF A WARRANT MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED EXCEPT (A)(1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OF FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) TO AN INSTITUTION THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT, (3) IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PURSUANT TO RULE 144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM. WARRANTS AND THE SHARES OF COMMON STOCK RECEIVED ON EXERCISE OF A WARRANT MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED THEREBY. A Warrant may be exercised upon surrender to the Company at its principal office the Warrant Agent Office referred to in Section 20 (the “Warrant Agent Office”) of the certificate Warrant Certificate or certificates Warrant Certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof (the “Exercise Notice”) duly filled in and properly completed and signed, which signature shall be guaranteed by an “Eligible Guarantor Institution” as defined in Rule 17Ad-15(2) promulgated under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and upon payment to the Warrant Agent for the account of the Company of the exercise price of $25.16 (the '“Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A ”), as adjusted from time to time as herein provided, for the number of each Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price for all shares of the Common Stock being exercised in respect of a Warrant Certificate shall be made (ia) in cash United States Dollars or (b) by certified or official bank check for United States Dollars made payable to the order of “RCN Corporation”. In lieu of payment of the aggregate Exercise Price as aforesaid and subject to applicable law, the holder of a Warrant may elect to receive from the Company a number of shares of the Common Stock equal to the “Spread” by indicating such election in the Exercise Notice delivered by such Warrant holder. The “Spread” shall, subject to Section 14, be paid by the Company by delivering to such Warrant holder a number of shares of the Common Stock equal to (a)(i) the product of (x) the current market price per share of the Common Stock (as of the date of receipt of the Exercise Notice by the Company) multiplied by (y) the number of shares of the Common Stock underlying the Warrants being exercised, or minus (ii) in the manner provided in product of (x) the first paragraph Exercise Price, multiplied by (y) the number of this shares of the Common Stock underlying the Warrants being exercised, divided by (b) the current market price per share of the Common Stock (as of the date of receipt of the Exercise Notice by the Company). Subject to the provisions of Section 5. Upon 8, upon such surrender exercise of Warrants and payment of the aggregate Exercise Price Price, the Company shall issue and cause to be delivered with all reasonable dispatch promptly to or upon the written order of the Warrant holder and in the such name of or names, as the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, a certificate or certificates for the number of full Warrant Shares shares of the Common Stock issuable upon the exercise of such Warrants together with cash as provided in Section 1114; PROVIDEDprovided, HOWEVERhowever, that if any consolidation, merger or lease or sale of assets Fundamental Transaction (as defined in Section 12(f)) is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a there is pending any tender offer or an exchange offer for shares of the Common Stock of the Company shall be madeStock, upon such surrender exercise of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five two business days thereafter, issue and cause to be delivered the full number of Warrant Shares shares of the Common Stock issuable upon the exercise of such Warrants in the manner described in this sentence together with any cash as provided in Section 1114. For purposes of this Warrant Agreement, a “business day” means any day other than a Saturday, Sunday or a day on which banking institutions in New York City are authorized or obligated by law, regulation or executive order to close or remain closed. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares shares of the Common Stock as of the close of business on the date of the surrender exercise of such Warrants and payment of the aggregate Exercise Price. No fractional shares shall be issued upon exercise of any Warrants in accordance with Section 14. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part (in whole shares of the Common Stock) and, in the event that a certificate Warrant Certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares shares of the Common Stock issuable on such exercise at any time prior to the date of expiration of the WarrantsExpiration Date, a new certificate Certificate evidencing the remaining Warrant or Warrants will be issued promptly issued, and the Warrant Agent is hereby irrevocably authorized and directed to countersign and to deliver the required new Warrant Certificate or Certificates pursuant to the provisions of this SectionSection 7 and of Section 5, and the Company, whenever required by the Warrant Agent or under this Warrant Agreement, will supply the Warrant Agent with Warrant Certificates duly executed on behalf of the Company for such purpose. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled cancelled by the CompanyWarrant Agent. Such canceled cancelled Warrant Certificates shall then be disposed of by or at the Companydirection of the Company in accordance with applicable law. The Warrant Agent shall (x) advise an authorized representative of the Company as directed by the Company by the end of each day on which Warrants were exercised (i) the number of shares of Common Stock issued upon exercise of a Warrant and the number of Warrants exercised, (ii) delivery of Warrant Certificates evidencing the balance, if any, of the Warrants after such exercise of the Warrants represented by each Warrant Certificate and (iii) such other information as the Company shall reasonably require and (y) concurrently pay to the Company all funds received by it in payment of the aggregate Exercise Price. The Warrant Agent shall promptly confirm such information to the Company in writing. The Warrant Agent shall keep copies of this Warrant Agreement and any notices given or received hereunder available for inspection by the holders of the Warrants during normal business hours at the Warrant Agent Office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Warrant Agreement as the Warrant Agent may request.

Terms of Warrants; Exercise of Warrants. (a) Subject to the terms of this Agreement, the Warrant holder each Holder shall have the right, which may be exercised at any time and from time to time during the period commencing at on the opening of business on August 25, 1998 date specified herein as the “Initial Exercise Date” and until ending immediately prior to 5:00 p.m., Pacific time New York City time, on August 24July 1, 2008 2009 (the “Exercise Period”), to receive from the Company Company, unless such Holder shall make a Common Stock Purchase Election, the number of fully paid and nonassessable non-assessable Warrant Shares which the Warrant holder Holder may at the time be entitled to receive on upon exercise of such Warrants and payment upon payment, subject to Section 3(f), of the price provided in this Section 3(a), as adjusted from time to time in accordance with Section 7 (the “Exercise Price then Price”), in effect for such Warrant Shares. In cash, by wire transfer or by certified or official bank check payable to the alternative, order of the Company; provided that Holders holding Warrants shall be able to exercise their Warrants only in accordance with the procedures set forth in this Agreement and the Warrant holder may exercise its right, during Certificate and only if (i) a registration statement relating to the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its the Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" and issuance of the Warrant Shares shall mean (i) if the or, upon a Common Stock Purchase Election, shares of Common Stock) upon such exercise is in then effective under the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average Securities Act of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question1933, as reported by The Nasdaq Small Cap Market amended (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Marketthe “Securities Act”), or (ii) if the exercise of such Warrants and the issuance of the Warrant Shares (or, upon a Common Stock Purchase Election, shares of Common Stock) upon such exercise is traded in The Nasdaq National Market or on a national securities exchange, exempt from the average for the 30 consecutive trading days immediately preceding the date in question registration requirements of the daily per share closing prices in The Nasdaq National Market Securities Act and such Warrant Shares (or on the principal stock exchange on which it is listedshares of Common Stock, as the case may be) are qualified for sale or exempt from registration or qualification under the applicable securities laws of the states in which the various Holders of the Warrants or other Persons to whom it is proposed that such Warrant Shares (or shares of Common Stock, as the case may be) be issued upon exercise of the Warrants reside. For purposes Each Warrant shall be exercisable for the number of clause (i) aboveshares of Series C Preferred Stock, if trading subject to adjustment in accordance with Section 7, equal to the Common Series C Preferred Stock is not reported by The Nasdaq Small Cap MarketExercise Amount. From and after the Issue Date, the applicable bid price referred to in said clause Exercise Price shall be $0.010; provided that the lowest bid Exercise Price shall increase as of the Initial Exercise Date to the price specified below if the Company shall have attained the amount specified opposite such price as reported “LTM EBITDA” for the applicable LTM EBITDA measurement period described below: LTM EBITDA Exercise Price $72.5 million to, but not including, $75.0 million $ 0.125 $75.0 million to, but not including, $77.5 million $ 0.250 $77.5 million to, but not including, $80.0 million $ 0.375 $80.0 million or greater $ 0.500 If the Initial Exercise Date shall be June 30, 2007, LTM EBITDA shall be equal to the sum of the Company’s EBITDA for the Company’s four consecutive fiscal quarters ending on March 31, 2007 and shall be derived from the unaudited condensed consolidated financial statements of the Company for such fiscal quarters prepared on a basis consistent with the Company’s most recent audited condensed consolidated financial statements. If the Initial Exercise Date shall occur before June 30, 2007, LTM EBITDA shall be equal to the product of (x) two and (y) the sum of the Company’s EBITDA for the Company’s two consecutive fiscal quarters ending on the OTC Electronic Bulletin Board last day of the National Association fiscal quarter immediately preceding the fiscal quarter in which the Initial Exercise Date shall occur and for which condensed consolidated financial statements of Securities Dealersthe Company are available and shall be derived from the unaudited condensed consolidated financial statements of the Company for such fiscal quarters prepared on a basis consistent with the Company’s most recent audited condensed consolidated financial statements. As soon as reasonably practicable after the Initial Exercise Date, Inc. or, if not reported thereon, as reported in an Officer shall deliver a certificate to the "pink sheets" published by National Quotation Bureau, Incorporated, Warrant Agent that shall set forth the applicable LTM EBITDA and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such dayapplicable, the average increased Exercise Price. Notwithstanding this Section 3(a) or any other provision of this Agreement or any Warrant to the contrary, upon the exercise of any Warrants, the Company shall receive payment of the reported closing bid and asked prices, Exercise Price in either case in The Nasdaq National Market or on an amount not less than the national securities exchange on which par value of the Common shares of Series C Preferred Stock is then listed.. issuable upon such exercise. Each Warrant not exercised prior to 5:00 p.m., Pacific New York City time, on August 24July 1, 2008 2009 (the “Expiration Date”) shall become void and all rights thereunder and all rights in respect thereof under this agreement Agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of the Company, or (ii) in the manner provided in the first paragraph of this Section 5. Upon such surrender of Warrants and payment of the Exercise Price the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued pursuant to the provisions of this Section. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates shall then be disposed of by the Company.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the each Warrant holder shall have the right, which may be exercised commencing at any time on or after the opening date of the occurrence of the earliest of: (i) immediately prior to the occurrence of a Change of Control (as defined in the Indenture); (ii) the 60th day (or such earlier date as determined by the Company in its sole discretion) following a Public Equity Offering (as defined in the Indenture); or (iii) February 15, 1998 (each, an "Exercise Event") and on or prior to the close of business on August 2515, 1998 2004 (the "Expiration Date") to exercise Warrants and until 5:00 p.m., Pacific time on August 24, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative; provided that upon any such exercise no holder shall be entitled to sell or transfer such holder's Warrants Shares at any time unless, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to such sale or transfer, (i) a registration statement under the aggregate Exercise Price that would otherwise have been paid by Securities Act covering the Warrant holder. For purposes of the foregoing sentence, "fair market value" offer and sale of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market has been filed with, and not in The Nasdaq National Market nor on any national securities exchangedeclared effective by, the average of Securities and Exchange Commission (the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market"SEC"), and no stop order suspending the effectiveness of such registration statement has been issued by the SEC or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question offer and sale of the daily per share closing prices in The Nasdaq National Market or on Warrant Shares to the principal stock exchange on which it is listed, as Warrant holder are exempt from registration under the case may be. For purposes Securities Act and the holder of clause (i) abovethe Warrants, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined requested by the Company's Board , has delivered to the Company an opinion of Directors in good faithcounsel to such effect. Each Initial Warrant, when exercised, will entitle the holder thereof to purchase 0.134484 fully paid and nonassessable shares of Class A Common Stock at the Exercise Price. The closing price referred Number of Shares is subject to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. adjustment under certain circumstances as provided herein by Section 15. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 the Expiration Date shall become void and all rights thereunder and all rights in respect thereof under this agreement Agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised at any time on or after the occurrence of an Exercise Event at the election of the holder thereof, either in full or from time to time in part (in whole shares) upon surrender to the Company at its the principal office of the certificate Warrant Agent of the Warrant Certificate or certificates evidencing the Warrants Certificates to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be guaranteed by an "eligible guarantor" as defined in the regulations promulgated under the Exchange Act and upon payment to the Warrant Agent for the account of the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A , as adjusted as herein provided, for the number of each Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in the form of cash or by a certified or official bank or bank cashier's check payable to the order of the Company. Subject to the provisions of Section 10 hereof, or (ii) in the manner provided in the first paragraph of this Section 5. Upon upon such surrender of Warrants and payment of the Exercise Price Price, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the Warrant holder may designate, a certificate or certificates for the number of full whole Warrant Shares issuable upon the exercise of such Warrants together with any cash which may be payable as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 17 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the aggregate Exercise Price. The Warrants No fractional shares shall be exercisable, at the election issued upon exercise of the holders thereof, either any Warrants in full or from time to time in part and, in accordance with Section 17 hereof. In the event that a certificate evidencing Warrants Warrant Certificate is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the WarrantsExpiration Date, a new certificate Warrant Certificate evidencing the remaining Warrant or Warrants will be issued issued, and the Warrant Agent is hereby irrevocably authorized to countersign and to deliver the required new Warrant Certificate or Certificates pursuant to the provisions of this SectionSection and of Section 4 hereof, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrant Certificates duly executed on behalf of the Company for such purpose. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the CompanyWarrant Agent. Such canceled Warrant Certificates shall then be disposed of by the CompanyCompany in accordance with applicable law. The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all monies received by the Warrant Agent for the purchase of the Warrant Shares through the exercise of such Warrants. The Warrant Agent shall keep copies of this Agreement and any notices given or received hereunder available for inspection by the Warrant holders during normal business hours at its office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Agreement as the Warrant Agent may request.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder each Holder shall have the right, which may be exercised commencing at the opening of business on August 25, 1998 the Exercisability Date and until 5:00 p.m., Pacific time New York City time, on August 24, 2008 the Expiration Date to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder Holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its the principal office of the Warrant Agent of the certificate or certificates evidencing the Warrants Warrant to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be guaranteed by a bank or trust company having an office or correspondent in the United States or a broker or dealer which is a member of a registered securities exchange or the National Association of Securities Dealers, Inc., and upon payment to the Warrant Agent for the account of the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A Price as adjusted as herein provided, for each of the number of Warrant Shares in respect of which such Warrants are Warrant is then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check check, payable to the order of the Company, or (ii) in the manner provided in the first paragraph of this Section 5. Upon such surrender The exercise of Warrants by Holders of beneficial interest in Global Warrants shall be effected in accordance with this Agreement and payment the procedures of the Exercise Price Depositary therefor. Subject to the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order provisions of the Warrant holder and in the name of the Warrant holder, orSection 8 hereof, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaidprovided above, the Warrant Agent shall thereupon promptly notify the Company, and the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause shall promptly transfer to be delivered the full Holder of such Warrant Certificate a certificate or certificates for the appropriate number of Warrant Shares issuable upon to which the exercise Holder is entitled, registered or otherwise placed in, or payable to the order of, such name or names as may be directed in writing by the Holder, and shall deliver such certificate or certificates representing the Warrant Shares and any cash in lieu of such Warrants in the manner described in this sentence together with cash any fraction of a share as provided in Section 1114 to the person or persons entitled to receive the same. Such Any such certificate or certificates representing the Warrant Shares shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder Holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisableexercisable commencing on the Exercisability Date, at the election of the holders Holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued issued, and the Warrant Agent is hereby irrevocably authorized to countersign and to deliver the required new Warrant Certificate or Certificates pursuant to the provisions of this SectionSection and of Section 4 hereof, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrant Certificates duly executed on behalf of the Company for such purpose. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the CompanyWarrant Agent. Such canceled Warrant Certificates shall then be disposed of by the Warrant Agent in a manner satisfactory to the Company. The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all monies received by the Warrant Agent for the purchase of Warrant Shares through the exercise of such Warrants. The Warrant Agent shall keep copies of this Agreement and any notices given or received hereunder by or from the Company available for inspection by the Holders during normal business hours at its office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Agreement as the Warrant Agent may request.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Warrant Agreement, the each Warrant holder shall have the right, which may be exercised commencing at from the opening date of business original issuance of the Warrant Certificates pursuant to the terms of this Warrant Agreement and prior to 5:00 p.m. New York City Time, on August 25February 28, 1998 2011 (the “Expiration Date”), to exercise each Warrant and until 5:00 p.m., Pacific time on August 24, 2008 to receive from the Company the number of fully paid and nonassessable Warrant Shares shares of Common Stock which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the aggregate Exercise Price then in effect for such Warrant Sharesshares of Common Stock. In addition, prior to the alternativedelivery of any shares of Common Stock that the Company shall be obligated to deliver upon proper exercise of the Warrants, the Warrant holder may exercise its rightCompany shall comply with all applicable federal and state laws, during the Exercise Period, rules and regulations which require action to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid be taken by the Warrant holderCompany. For purposes of Each Warrant, when exercised, will entitle the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred holder thereof to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a purchase one share of Common Stock determined by at the Company's Board of Directors in good faithExercise Price. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised or converted pursuant to this Warrant Agreement prior to 5:00 p.m., Pacific time, on August 24, 2008 the Expiration Date shall become void and all rights thereunder and all rights in respect thereof under this agreement Warrant Agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office the Warrant Agent Office referred to in Section 22 (the “Warrant Agent Office”) of the certificate Warrant Certificate or certificates Warrant Certificates evidencing the Warrants to be exercised exercised, together with the form of election to purchase on the reverse thereof (the “Notice of Exercise”) duly filled in and properly completed and signed, which signature shall be guaranteed by an “Eligible Guarantor Institution” as defined in Rule 17Ad-15(2) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and upon payment to the Warrant Agent for the account of the Company of the exercise price of $10.00 (the '“Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A ”), as adjusted from time to time as herein provided, for the number each share of Warrant Shares in respect of which such Warrants are then exercisedCommon Stock to be purchased. Payment of the aggregate Exercise Price for all shares of Common Stock being exercised in respect of a Warrant shall be made (ia) in cash United States Dollars or (b) by certified or official bank check for United States Dollars made payable to the order of the Company. In lieu of payment of the aggregate Exercise Price as aforesaid and subject to applicable law, or the holder of a Warrant may elect to receive from the Company a number of shares of Common Stock equal to the “Spread” by indicating such election in the Notice of Exercise delivered by such Warrant holder. The “Spread” shall, subject to Section 15, be paid by the Company by delivering to such Warrant holder a number of shares of Common Stock equal to (a)(i) the product of (x) the Current Market Price (as defined in Section 13(c) below) per share of Common Stock as of the date of receipt of the Notice of Exercise by the Company multiplied by (y) the number of shares of Common Stock underlying the Warrants being exercised, minus (ii) in the manner provided in product of (x) the first paragraph Exercise Price, multiplied by (y) the number of this shares of Common Stock underlying the Warrants being exercised, divided by (b) the Current Market Price per share of Common Stock as of the date of receipt of the Notice of Exercise to the Company. Subject to the provisions of Section 5. Upon 9 below and Article Eleventh of the Certificate of Incorporation of the Company, upon such surrender of Warrants and payment of the aggregate Exercise Price Price, the Company shall issue and cause to be delivered with all reasonable dispatch promptly to or upon the written order of the Warrant holder and in the such name of or names, as the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, a certificate or certificates for the number of full Warrant Shares shares of Common Stock issuable upon the exercise of such Warrants together with cash as provided in Section 1115; PROVIDEDprovided, HOWEVERhowever, that if any consolidation, merger or lease or sale of assets Fundamental Transaction (as defined in Section 13(g)) is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a there is pending any tender offer or an exchange offer for shares of Common Stock of the Company shall be madeStock, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five two business days thereafter, issue and cause to be delivered the full number of Warrant Shares full shares of Common Stock issuable upon the exercise of such Warrants in the manner described in this sentence together with any cash as provided in Section 1115. For purposes of this Warrant Agreement, a “business day” means any day other than a Saturday, Sunday or a day on which banking institutions in New York City are authorized or obligated by law, regulation or executive order to close or remain closed. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares shares of Common Stock as of the close of business on the date of the surrender of such Warrants and payment of the aggregate Exercise Price. In accordance with Section 15, no fractional shares shall be issued upon exercise of any Warrants. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part (in whole shares of Common Stock) and, in the event that a certificate Warrant Certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares shares of Common Stock issuable on such exercise at any time prior to the date of expiration of the WarrantsExpiration Date, a new certificate Warrant Certificate evidencing the remaining Warrant or Warrants will be issued promptly issued, and the Warrant Agent is hereby irrevocably authorized and directed to countersign and to deliver the required new Warrant Certificate or Warrant Certificates pursuant to the provisions of this SectionSection 7 and of Section 5, and the Company, whenever required by the Warrant Agent or under this Warrant Agreement, will supply the Warrant Agent with Warrant Certificates duly executed on behalf of the Company for such purpose. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled cancelled by the CompanyWarrant Agent. Such canceled cancelled Warrant Certificates shall then be disposed of by or at the Companydirection of the Company in accordance with applicable law. The Warrant Agent shall (x) advise an authorized representative of the Company as directed by the Company by the end of each day on which Warrants were exercised (i) the number of shares of Common Stock issued upon exercise of a Warrant, (ii) delivery of Warrant Certificates evidencing the balance, if any, of the shares of Common Stock issuable after such exercise of the Warrant and (iii) such other information as the Company shall reasonably require and (y) concurrently pay to the Company all funds received by the Warrant Agent in payment of the aggregate Exercise Price. The Warrant Agent shall promptly confirm such information to the Company in writing. The Warrant Agent shall keep copies of this Warrant Agreement and any notices given or received hereunder available for inspection by the holders of the Warrants during normal business hours at the Warrant Agent Office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Warrant Agreement as the Warrant Agent may request.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder shall have the right, which Warrants may be exercised commencing at any time after the opening date hereof. Each Warrant, when exercised in accordance with the terms hereof and upon payment in cash (or by tendering the Holdings Notes, as provided in the next succeeding paragraph) of business on August 25, 1998 the exercise price of $1,382.59 per unit (the "Exercise Price") will entitle the holder thereof to acquire from Holdings (and until 5:00 p.m., Pacific time on August 24, 2008 Holdings shall issue to receive from the Company the number such holder of a Warrant) one fully paid and nonassessable unit of Holdings' authorized but unissued Common Units (subject to adjustment as provided in Section 11). No cash dividend shall be paid to a holder of Warrant Shares which issuable upon the Warrant holder may at the time be entitled to receive on exercise of Warrants unless such Warrants and payment holder was, as of the Exercise Price then in effect record date for the declaration of such dividend, the record holder of such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to Holdings at the Company at its principal office Register Office of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, and upon together with payment to the Company Holdings of the exercise price (the 'Exercise Price") which is set forth in the form of Price for each Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are Share then exercised. Payment To the extent any holder of a Warrant surrenders with such Warrant any Holdings Note then held by such holder, such holder shall be deemed to have paid that portion of the aggregate Exercise Price for all Warrant Shares then exercised equal to 100% of that portion of the Accreted Value (as defined in the Holdings Indenture) of, together with all accrued and unpaid interest on such portion of, any Holdings Note of such holder cancelled pursuant to this paragraph up to but excluding the date of such issuance of such Holdings Note which the holder thereof directs Holdings to accept as payment of such aggregate Exercise Price, which Holdings Note shall be made cancelled and not reissued. To the extent the face amount of such surrendered Holdings Note is greater than the aggregate amount of the Exercise Price for all Warrant Shares then paid for by surrender thereof (i) in cash or exclusive of the portion of such exercise price paid for by certified or official bank check payable interest, if any, on such Surrendered Note), Holdings shall deliver a new Holdings Note to the order tendering holder thereof, in accordance with the provisions of the CompanyHoldings Indenture, or (ii) dated the date of the original issuance of the tendered Holdings Note, in the manner provided in face amount which bears the first paragraph same proportion to the face amount of this Section 5such surrendered Note immediately prior to such redemption as the unredeemed portion of the Accreted Value of such surrendered Note bears to the Accreted Value of such surrendered Note immediately prior to such redemption. Upon such surrender In lieu of Warrants and payment of the Exercise Price pursuant to the Company preceding paragraph, the Warrant holder shall have the right to require Holdings to convert the Warrants, in whole or in part and at any time or times (the "Conversion Right"), into Warrant Shares by surrendering to Holdings the certificate or certificates evidencing the Warrant to be converted with the form of notice of conversion on the reverse thereof duly filled in and signed. Upon exercise of the Conversion Right, Holdings shall deliver to the Warrant holder (without payment by the holder of the Warrant of any Exercise Price) that number of Warrant Shares which is equal to the quotient obtained by dividing (x) the value of the number of Warrants being exercised at the time the Warrants are exercised (determined by subtracting the aggregate Exercise Price for all such Warrants immediately prior to the exercise of the Warrants from the aggregate Current Market Price (determined pursuant to Section 11(f) of that number of Warrant Shares purchasable upon exercise of such Warrants immediately prior to the exercise of the Warrants (taking into account all applicable adjustments pursuant to Section 11) by (y) the Current Market Price of one Common Unit immediately prior to the exercise of the Warrants. Subject to the provisions of Section 8, upon surrender of the Warrant certificate or certificates, Holdings shall issue and cause to be delivered deliver with all reasonable dispatch dispatch, to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the Warrant holder may designate, a certificate or certificates for the number of full Warrant Shares issuable or other securities or property to which such holder is entitled hereunder upon the exercise of such Warrants together with Warrants, including, at Holdings' option, any cash payable in lieu of fractional interests as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 1113. Such certificate or certificates shall be deemed to have been issued and any person Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. Holdings may issue fractional Common Units upon exercise of any Warrants in accordance with Section 13. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the WarrantsExpiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued issued, and Holdings will duly execute and deliver the required new Warrant certificate or certificates pursuant to the provisions of Section 4 and this SectionSection 7. All Warrant Certificates certificates surrendered upon exercise of Warrants shall be canceled by the CompanyHoldings. Such canceled Warrant Certificates certificates shall then be disposed of in a manner satisfactory to Holdings and in accordance with any applicable law. Holdings shall account promptly in writing with respect to Warrants exercised and all monies received for the purchase of the Warrant Shares through the exercise of such Warrants. In the event that Holdings shall purchase or otherwise acquire Warrants, Holdings may elect to have the Warrants canceled and retired. Holdings shall keep copies of this Agreement and any notices given or received hereunder available for inspection by the Companyregistered Warrant holders during normal business hours and upon reasonable notice at the Register Office. Upon exercise of Warrants, the holder of Warrant Shares shall be admitted as a member of Holdings, in accordance with the Holdings Operating Agreement (which shall so provide).

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the each Warrant holder shall have the right, which may be exercised commencing at any time during the opening period from (and including) the date of business on August 25, 1998 and this Agreement until 5:00 p.m., Pacific time Eastern time, on August 24June 26, 2008 2012 (such period being herein referred to as the "Exercise Period"), to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative, the The Warrant Shares issued to a Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealersfully paid, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faithnonassessable and subject to no preemptive rights. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 the expiration of the Exercise Period shall become void void, and all rights thereunder and all rights in respect thereof under this agreement Agreement shall cease as of such time. No adjustments as During the Exercise Period, each Warrant holder may exercise, at any time or from time to dividends will be made upon exercise time, some or all of the Warrants. A Warrants represented by its Warrant may be exercised upon surrender Certificates by (1) surrendering to the Company at its principal office of the certificate or certificates evidencing the Warrants to be exercised such Warrant Certificates with the form Form of election Election to purchase on the reverse thereof Purchase attached thereto duly filled in and signed, with signatures guaranteed by a bank or trust company having an office or correspondent in the United States or a broker or dealer which is a member of a registered securities exchange or the National Association of Securities Dealers, Inc., and upon payment (2) paying to the Company of the exercise price (the 'Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, Price for the number of Warrant Shares in respect of which such Warrants are then being exercised. Warrants shall be deemed exercised on the date Warrant Certificates representing such Warrants are surrendered to the Company, accompanied by the Form of Election to Purchase as provided above, and payment of the Exercise Price for such Warrants is received by the Company, and the Warrant Shares in respect of which the Warrants are exercised shall be deemed issued on that date, and the Person in whose name the certificate representing the Warrant Shares is to be issued shall be deemed the holder of such Warrant Shares as of that date for all purposes. Payment of the aggregate Exercise Price by the Warrant holder shall be made (i) in cash or by certified or official bank check payable to the order of the CompanyCompany or by wire transfer of immediately available funds, or (ii) in as the manner provided in holder shall elect. In addition to the first paragraph rights of the holders under the preceding provisions of this Section 5. Upon such surrender Section, each holder shall have the right, in lieu of Warrants and payment of paying the Exercise Price in cash, to instruct the Company to reduce the number of shares of Common Stock thereafter eligible to be purchased by such holder pursuant to Warrants held by it in accordance with the following formula: P N = ------------- ( M - E ) where: N = the number of shares of Common Stock to be subtracted from remaining number of Warrant Shares purchasable upon exercise of such holder's Warrants; and P = the aggregate Exercise Price otherwise payable for the shares issuable upon exercise of the Warrants; and M = the Market Price determined as of the date of such exercise; and E = the Exercise Price on the date of such exercise. Subject to the provisions of Section 7, upon the exercise of any Warrants, the Company shall issue and cause to be delivered with all reasonable dispatch (but in any event within ten Business Days) to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the Warrant holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants Warrants, together with cash as provided in Section 11; PROVIDEDsuch other property, HOWEVERincluding cash, that if which shall be deliverable upon such exercise. Notwithstanding any consolidationother provision of this Agreement or the Warrants, merger or lease or sale but subject to the terms of assets is proposed to be effected by the Intercreditor Agreement, the Company as described shall have the option in subsection (m) lieu of Section 10 hereof, or a tender offer or an exchange offer for delivering shares of Common Stock upon exercise of Warrants, to deliver cash in an amount equal to the number of shares of Common Stock otherwise deliverable times the Market Price per share of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of Common Stock on the date of the surrender of such Warrants and payment of the Exercise Priceexercise. The Warrants shall be exercisableexercisable at any time or from time to time during the Exercise Period, at the election of the holders thereof, either in full or from time to time in part andpart, in the event that a certificate evidencing Warrants is exercised in respect of and if fewer than all of the Warrants represented by a Warrant Shares issuable on such exercise at any time prior to the date of expiration of the WarrantsCertificate are exercised, a new certificate evidencing the remaining Warrant or Warrants not exercised will be issued pursuant by the Company at the Company's expense, to the provisions holder of this Sectionsuch Warrants with all reasonable dispatch (but in any event within ten Business Days). All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates shall then be disposed of by the Company.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the each Warrant holder shall have the right, which may be exercised commencing at on or after the opening of business on August 25, 1998 and Separation Date until 5:00 p.m., Pacific New York, New York time on August 24________, 2008 2007 (the "Expiration Date"), to exercise each Warrant and receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative; provided, the however, that no Warrant holder may shall be entitled to exercise its rightsuch holder's Warrants at any time unless, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal exercise, (i) a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), relating to the aggregate Exercise Price that would otherwise have Warrant Shares has been paid filed with, and declared effective by, the Securities and Exchange Commission (the "SEC"), and no stop order suspending the effectiveness of such registration statement has been issued by the Warrant holder. For purposes of SEC or (ii) the foregoing sentence, "fair market value" issuance of the Warrant Shares shall mean (i) if is permitted pursuant to an exemption from the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average registration requirements of the per share closing bid price on Securities Act. Each Warrant, when exercised, will entitle the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred holder thereof to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share purchase 1.936 fully paid and nonassessable shares of Common Stock determined by at the Company's Board of Directors in good faithExercise Price. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Any Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 the Expiration Date shall become void and all rights thereunder and all rights in respect thereof under this agreement Agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant The Warrants may be exercised upon surrender by surrendering to the Company at its principal office of the certificate or certificates Warrant Certificates evidencing the Warrants to be exercised with the accompanying form of election to purchase on properly completed and executed, together with payment of the reverse thereof duly filled Exercise Price. Payment of the Exercise Price may be made (A) by tendering shares of Preferred Stock having an aggregate Liquidation Preference (as defined in the Certificate of Designation), plus, without duplication, accumulated and signedunpaid dividends, and upon payment if any, at the time of tender equal to the Company of the exercise price (the 'Exercise Price", (B) which is set forth by tendering Exchange Notes having an aggregate principal amount, plus accrued and unpaid interest, if any, at the time of tender equal to the Exercise Price, (C) by tendering Warrants having a fair market value equal to the Exercise Price, (D) in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of the CompanyCompany or (E) by any combination of shares of Preferred Stock, Warrants and cash or Exchange Notes, Warrants and cash. For purposes of clause (C) above, the fair market value of the Warrants shall be determined as follows: (A) if the Common Stock is publicly traded and listed on the Nasdaq National Market or a national securities exchange, the fair market value shall be equal to the greater of (1) the difference between (a) the average closing price as quoted on the Nasdaq National Market of the Common Stock for each of the ten trading days immediately prior to the exercise date (or, if the Common Stock is listed on a national securities exchange, the average closing price as reported on such national securities exchange during such ten trading day period) and (b) the Exercise Price, and (2) zero; or (B) if the Common Stock is not publicly traded, or otherwise is not listed on a national securities exchange, the fair market value shall be equal to the value per share as determined in good faith by the Board of Directors of the Company (ii) the "Board of Directors"). If Preferred Stock or Exchange Notes are surrendered in payment of the manner provided Exercise Price, the Warrant Agent shall deliver such Preferred Stock or Exchange Notes, as applicable, to the Company and the Company shall deliver such Preferred Stock to the Transfer Agent or such Exchange Notes to the Exchange Note Trustee, as applicable, for cancellation and the Transfer Agent or Exchange Note Trustee, as applicable, shall notify the Company in writing whether such Preferred Stock or Exchange Notes, as applicable, were in good form and, if such Preferred Stock or Exchange Notes, as applicable, were in good form the first paragraph Company shall notify the Warrant Agent in writing that the Company has received full and proper payment of this the Exercise Price. Subject to the provisions of Section 5. Upon 10 hereof, upon such surrender of Warrants and payment of the Exercise Price Price, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the Warrant holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash cash, if any, as provided in Section 1116 hereof; PROVIDEDprovided, HOWEVERhowever, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (mo) of Section 10 14 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company Successor Guarantor (as hereinafter defined) or the Company, as applicable, shall, as soon as possible, but in any event not later than five two business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash cash, if any, as provided in Section 1116 hereof. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. No fractional shares shall be issued upon exercise of any Warrants in accordance with Section 16 hereof. The Company will pay to the holder of the Warrant at the time of exercise an amount in cash equal to the current market value of any such fractional share of Common Stock less a corresponding fraction of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part (in whole shares) and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the WarrantsExpiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued issued, and the Warrant Agent is hereby irrevocably authorized to countersign and to deliver the required new Warrant Certificate or Certificates pursuant to the provisions of this SectionSection and of Section 4 of this Agreement, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrant Certificates duly executed on behalf of the Company for such purpose. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled cancelled by the CompanyWarrant Agent. Such canceled cancelled Warrant Certificates shall then be disposed of by the CompanyCompany in accordance with applicable law. The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all monies or surrender to the Company all shares of Preferred Stock or Exchange Notes received by the Warrant Agent for the purchase of the Warrant Shares through the exercise of such Warrants. The Warrant Agent shall keep copies of this Agreement and any notices given or received hereunder available for inspection by the holders during normal business hours at its office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Agreement as the Warrant Agent may request.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder shall have the right, which may be exercised commencing at the opening of business on August 25January 30, 1998 and until 5:00 p.m., Pacific time on August 24January 29, 2008 2001 to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair current market value (as defined below) price at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair current market valueprice" of the Warrant Shares shall mean (i) if the Common Stock is will be determined in the over-the-counter market and not manner set forth in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (iiSection 10(d) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may behereof. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24January 29, 2008 2001 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants. A Warrant may be exercised upon surrender to the Company at its principal office of the certificate or certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to the Company of the exercise price (the '"Exercise Price") which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable to the order of the Company, or (ii) in the manner provided in the first paragraph of this Section 5. Upon such surrender of Warrants and payment of the Exercise Price the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant holder and in the such name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other or names as the holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 11; PROVIDEDprovided, HOWEVERhowever, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five two business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of such Warrants in the manner described in this sentence together with cash as provided in Section 11. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued pursuant to the provisions of this Section. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled cancelled by the Company. Such canceled cancelled Warrant Certificates shall then be disposed of by the Company.

Terms of Warrants; Exercise of Warrants. Subject to the terms of this Agreement, the Warrant holder Agreement each Warrantholder shall have the right, which may be exercised commencing at on or after the opening earliest to occur of business (a) an Initial Public Offering of the Company or a Qualifying IPO of Parent, (b) the occurrence of an Event of Default (as defined in the Indenture), (c) the occurrence of a Change of Control (as defined in the Indenture), (d) any merger or consolidation of Parent or the sale, transfer or conveyance of all or substantially all of the assets of the Company (determined on August 25a consolidated basis for the Company and its Subsidiaries), 1998 and (e) the redemption, repayment or defeasance of all the Notes or (f) November 15, 2004 (the earliest such date, the "Trigger Date"), until 5:00 p.m., Pacific time New York City time, on August 24May 15, 2008 2011 (the "Expiration Date"), to receive from the Company upon the exercise of each Warrant the number of fully paid and nonassessable Warrant Shares which the Warrant holder may at the time be entitled to receive on exercise of such Warrants Warrant and payment of the Exercise Price then in effect (as defined below) for such Warrant Shares. In the alternative, the Warrant holder may exercise its right, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal to the aggregate Exercise Price that would otherwise have been paid by the Warrant holder. For purposes of the foregoing sentence, "fair market value" of the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average of the per share closing bid price on the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question of the daily per share closing prices in The Nasdaq National Market or on the principal stock exchange on which it is listed, as the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall be the lowest bid price as reported on the OTC Electronic Bulletin Board of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 the Expiration Date shall become void and all rights thereunder and all rights in respect thereof under this agreement Agreement shall cease as of such time. No adjustments as In the event of an Initial Public Offering of the Company, the Company will have the right to dividends will require all Holders of Warrants to exercise their Warrants upon consummation of the Initial Public Offering; provided that the resale of Warrant Shares issued upon exercise to the Holders shall have been registered under the Securities Act. To exercise this right, the Company must provide Holders with written notice at least ten Business Days prior to consummation of the Initial Public Offering. The price per share at which Warrant Shares shall be made purchasable upon exercise of Warrants shall be equal to $0.01 (the Warrants"Exercise Price"), subject to adjustment pursuant to Section 13. A Warrant may be exercised upon surrender to at the office or agency of the Company maintained for such purpose, which initially will be at its principal the corporate trust office of the certificate Warrant Agent in New York, New York, located at x/x Xxx Xxxxxxxxxx Xxxxx Xxxxxxx, XXXX Xxxxxxxxxx, 0xx Xxxxx, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, of the Warrant Certificate or certificates Certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof (the "Election to Exercise") duly filled in and signed, and upon payment to which signature shall be guaranteed in accordance with the Company of the exercise price (the 'Exercise Price") which is provisions set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, Certificate. The "Exercise Date" for a Warrant shall be the number of Warrant Shares in respect of which such Warrants are then exercised. Payment date on and after the Trigger Date when all of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check payable items referred to the order of the Company, or (ii) in the manner provided in immediately preceding sentence and the first next paragraph of this Section 5. Upon such surrender of Warrants and payment of the Exercise Price the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of are received by the Warrant holder Agent at or prior to 11 a.m., New York City time, on a Business Day and in the name of the Warrant holder, or, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of the Warrants will be effective as of such Warrants together with cash as provided Exercise Date. If any items referred to in Section 11; PROVIDEDsuch sentence are received after 11 a.m., HOWEVERNew York City time, that if any consolidationon a Business Day, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaid, the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause to be delivered the full number of Warrant Shares issuable upon the exercise of the Warrants to which such Warrants in item relates will be effective on the manner described in this sentence together with cash as provided in Section 11next succeeding Business Day. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of Notwithstanding the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part andforegoing, in the event that a certificate evidencing case of an exercise of Warrants is exercised in respect of fewer than on the Expiration Date, if all of the items referred to in such sentence are received by the Warrant Shares issuable on such exercise Agent at any time or prior to 5 p.m., New York City time, on the date of expiration Expiration Date, the exercise of the Warrants, a new certificate evidencing the remaining Warrant or Warrants to which such items relate will be issued pursuant to effective on the provisions of this Section. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the Company. Such canceled Warrant Certificates shall then be disposed of by the CompanyExpiration Date.

Terms of Warrants; Exercise of Warrants. Subject to the --------------------------------------- terms of this Agreement, the each Warrant holder Holder shall have the right, which may be exercised commencing at the opening of business on August 25, 1998 and until 5:00 p.m., Pacific time on August 24, 2008 the Exercise Date to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Warrant holder Holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price then in effect for Price; provided that no Warrant Holder shall be entitled to exercise such Warrant Shares. In the alternativeHolder's Warrants at any time, the Warrant holder may exercise its rightunless, during the Exercise Period, to receive Warrant Shares on a net basis, such that, without the exchange of any funds, the Warrant holder receives that number of Warrant Shares otherwise issuable (or payable) upon exercise of its Warrants less that number of Warrant Shares having an aggregate fair market value (as defined below) at the time of exercise equal (A), (i) a registration statement under the Securities Act relating to the aggregate Exercise Price that would otherwise have Warrant Shares has been paid filed with, and declared effective by, the Commission, and no stop order suspending the effectiveness of such registration statement has been issued by the Warrant holder. For purposes of Commission or (ii) the foregoing sentence, "fair market value" issuance of the Warrant Shares shall mean (i) if is permitted pursuant to an exemption from the Common Stock is in the over-the-counter market and not in The Nasdaq National Market nor on any national securities exchange, the average registration requirements of the per share closing bid price on Securities Act and (B) such Warrant Shares are qualified for sale or exempt from qualification under the 30 consecutive trading days immediately preceding the date in question, as reported by The Nasdaq Small Cap Market (or an equivalent generally accepted reporting service if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded in The Nasdaq National Market or on a national applicable securities exchange, the average for the 30 consecutive trading days immediately preceding the date in question laws of the daily per share closing prices states in The Nasdaq National Market which the various holders of the Warrants or on the principal stock exchange on which other Persons to whom it is listed, as proposed that the case may be. For purposes of clause (i) above, if trading in the Common Stock is not reported by The Nasdaq Small Cap Market, the applicable bid price referred to in said clause shall Warrant Shares be the lowest bid price as reported issued on the OTC Electronic Bulletin Board exercise of the National Association of Securities Dealers, Inc. or, if not reported thereon, as reported in the "pink sheets" published by National Quotation Bureau, Incorporated, and, if such securities are not so reported, shall be the price of a share of Common Stock determined by the Company's Board of Directors in good faith. The closing price referred to in clause (ii) above shall be the last reported sale price or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case in The Nasdaq National Market or on the national securities exchange on which the Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m., Pacific time, on August 24, 2008 shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such timeWarrants reside. No adjustments as to dividends will be made upon exercise of the Warrants. A Upon the occurrence of a Change of Control or an IPO, Holders will be required to exercise their Warrants at such time in the manner set forth in Section 6. In order to exercise all or any of the Warrants represented by a Warrant may be exercised upon Certificate, (i) in the case of Definitive Warrants, the holder thereof must surrender for exercise the Warrant Certificate to the Company at its principal the office of the certificate Warrant Agent at its New York corporate trust office, (ii) in the case of a book-entry interest in a Global Warrant, the exercising Participant whose name appears on a securities position listing of the Depositary as the holder of such book-entry interest must comply with the Depositary's procedures relating to the exercise of such book-entry interest in such Global Warrant and (iii) in the case of both Global Warrants and Definitive Warrants, the holder thereof or certificates evidencing the Warrants Participant, as applicable, must deliver to be exercised with the Company at the office of the Warrant Agent the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be a medallion guaranteed by an institution which is a member of a Securities Transfer Association recognized signature guarantee program, and upon payment to the Warrant Agent for the account of the Company of the exercise price (the 'Exercise Price") , which is set forth in the form of Warrant Certificate attached hereto as Exhibit A as adjusted as herein provided, for the number of Warrant Shares in respect of which such Warrants are then exercised. In addition, if the holder is exercising warrants sold pursuant to Regulation S, (A) such holder must certify in writing that (i) it is not a "U.S. person" within the meaning of Rule 902(k) of Regulation S under the Securities Act, (ii) the Warrants are not being purchased or exercised on behalf of or for the account or benefit of a "U.S. person", (iii) such Holder will resell such Warrants only in accordance with the provisions of Rules 901 through 905 of Regulation S, pursuant to registration under the Securities Act or pursuant to an available exemption from registration, and (iv) such Holder will not engage in hedging transactions with regard to the Warrants and the shares issuable on exercise of such Warrants unless in compliance with the Securities Act or (B) give a written opinion of counsel to the effect that the warrant and the securities delivered upon exercise thereof have been registered under the Securities Act or are exempt from registration thereunder. Payment of the aggregate Exercise Price shall be made (i) in cash or by certified or official bank check check, payable to the order of the Company, or (ii) by tendering Notes having an aggregate principal amount at the time of tender, plus accrued and unpaid interest, if any, thereon, to the date of exercise (or if such exercise occurs prior to December 1, 2002, an Accreted Value (as defined in the manner provided Indenture) on the date of exercise) equal to the Exercise Price, (iii) by tendering Warrants having a fair market value equal to the Exercise Price or (iv) by tendering a combination of cash, Notes and Warrants. For purposes of clause (iii) above, the fair market value of the Warrants shall be determined as follows: (A) to the extent the Common Stock is publicly traded and listed on the Nasdaq National Market or a national securities exchange, the fair market value shall be equal to the greater of (1) the difference between (a) the average closing price as quoted on the Nasdaq National Market of the Common Stock for each of the 10 trading days immediately prior to the exercise date (or, if the Common Stock is listed on a national securities exchange, the average closing price as reported on such national securities exchange during such 10-trading-day period) and (b) the Exercise Price, and (2) zero; or (B) to the extent the Common Stock is not publicly traded, or otherwise is not listed on a national securities exchange, the fair market value shall be equal to the value per share as determined in good faith by the first paragraph Board of Directors of the Company. The exercise of Warrants by Holders of beneficial interest in Global Warrants shall be effected in accordance with this Section 5Agreement and the procedures of the Depositary therefor. If Notes are surrendered in payment of the Exercise Price, the Warrant Agent shall deliver such Notes to the Company and the Company shall deliver such Notes to the Trustee for cancellation and, upon written notification from the Trustee to the Company that such Notes were in good form, the Company shall notify the Warrant Agent in writing that the Company has received full and proper payment of the Exercise Price. Upon such surrender of Warrants and any Notes in payment of the Exercise Price and cancellation of such Notes, the Company Trustee or the Depositary (as defined in the Indenture) at the direction of the Trustee, as applicable, shall issue and cause a new Note with a principal amount at maturity adjusted to be delivered with all reasonable dispatch to or upon reflect the written order reduction for payment of the Warrant holder and Exercise Price, in the name accordance with Article 2 of the Warrant holder, orIndenture. Subject to the provisions of Section 9 hereof, upon satisfaction of the transfer requirements in Section 4, such other names as the holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants together with cash as provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of assets is proposed to be effected by the Company as described in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer for shares of Common Stock of the Company shall be made, upon such surrender of Warrants and payment of the Exercise Price as aforesaidprovided above, the Warrant Agent shall thereupon promptly notify the Company, and the Company shall, as soon as possible, but in any event not later than five business days thereafter, issue and cause shall promptly transfer to be delivered the full Holder of such Warrant Certificate a certificate or certificates for the appropriate number of Warrant Shares issuable upon or other securities or property (including any money) to which the exercise of Holder is entitled, registered or otherwise placed in, or payable to the order of, such Warrants name or names as may be directed in writing by the manner described in this sentence Holder, and shall deliver such certificate or certificates representing the Warrant Shares and any other securities or property (including any money) to the person or persons entitled to receive the same, together with an amount in cash in lieu of any fraction of a share as provided in Section 1114. Such Any such certificate or certificates representing the Warrant Shares shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder Holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price. The Warrants shall be exercisableexercisable commencing on the Exercise Date, at the election of the holders Holders thereof, either in full or from time to time in part andpart. If less than all the Warrants represented by a Definitive Warrant are exercised, such Definitive Warrant shall be surrendered and a new Definitive Warrant of the same tenor and for the number of Warrants which were not exercised shall be executed by the Company and delivered to the Warrant Agent and the Warrant Agent shall countersign the new Definitive Warrant, registered in such name or names as may be directed in writing by the holder, and shall deliver the new Definitive Warrant to the Person or Persons entitled to receive the same. The Warrant Agent shall make such notations on Schedule A to each Global Warrant as are required to reflect any change in the event that a certificate evidencing number of Warrants is exercised represented by such Global Warrant resulting from any exercise in respect of fewer than all of accordance with the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued pursuant to the provisions of this Sectionterms hereof. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the CompanyWarrant Agent. Such canceled The Warrant Certificates Agent shall then be disposed of account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all monies received by the CompanyWarrant Agent for the purchase of the Warrant Shares through the exercise of such Warrants. The Warrant Agent shall keep copies of this Agreement and any notices given or received hereunder by or from the Company available for inspection by the Holders during normal business hours at its office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Agreement as the Warrant Agent may reasonably request. All certificates representing Warrant Shares issued in a transaction exempt from registration under the Securities Act shall bear the following legend (provided that if no legend is required none shall be placed on the Warrant Shares): THIS SECURITY MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND ANY APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS.