Exhibit 99.4


                           CERTIFICATE OF DESIGNATION
                     AMENDING THE ARTICLES OF INCORPORATION
                                       OF
                           VITALSTREAM HOLDINGS, INC.
                                ESTABLISHING THE
                          2003 SERIES A PREFERRED STOCK
                                     AND THE
                          2003 SERIES B PREFERRED STOCK

  Pursuant to Section 78.195 of the Nevada Revised Statutes and Section (a) of
Article IV of the Corporation's Articles of Incorporation, the Board of
Directors of VitalStream Holdings, Inc. (the "Corporation") has adopted a
resolution establishing the voting powers, designations, preferences,
limitations, restrictions and relative rights of the Corporation's 2003 Series A
Preferred Stock and 2003 Series B Preferred Stock.

A. The name of the Corporation is VitalStream Holdings, Inc.

B. On September 25, 2003, pursuant to Section (a) of Article IV of the
Corporation's Articles of Incorporation, the Board of Directors of the
Corporation adopted the following resolutions establishing the 2003 Series A
Preferred Stock of the Corporation and the 2003 Series B Preferred Stock of the
Corporation:

RESOLVED that the Board of Directors hereby creates a series of preferred stock
of the Corporation to be designated as the "2003 Series A Preferred Stock,"
which shall consist of 1,000 shares, $0.001 par value, and which shall have the
powers, preferences, rights, qualifications, limitations, and restrictions set
forth in Part B of this Certificate of Designation; and

FURTHER RESOLVED that the Board of Directors hereby creates a series of
preferred stock of the Corporation to be designated as the "2003 Series B
Preferred Stock," which shall consist of 1,100 shares, $0.001 par value, and
which shall have the powers, preferences, rights, qualifications, limitations,
and restrictions set forth in Part C of this Certificate of Designation.

A. CERTAIN DEFINITIONS. For purposes of this Certificate of Designation, the
following capitalized terms shall have the following meanings:

      1. "Alliance Factoring and Security Agreements" means the two Factoring
and Security Agreements dated June 30, 2003 among Alliance Bank, the Corporation
and certain VitalStream Subsidiaries and the Memorandum of Interest in Trademark
and Goodwill dated July 7, 2003 among Alliance Bank, the Corporation and certain
VitalStream Subsidiaries, as amended, modified, restated, superseded or replaced
from time to time.

      2. "Amended and Restated Notes" means the "Amended and Restated Notes"
issued pursuant to the Purchase Agreement, as amended, modified, restated,
superseded or replaced from time to time, and any Amended and Restated Notes
issued upon the exchange or transfer or in replacement or substitution of all or
any portion of the outstanding principal amount of such Amended and Restated
Notes.

      3. "Asset Purchase Agreement" means that certain Amended and Restated
Asset Purchase Agreement, dated as of January 15, 2003, by and among the
Corporation, VitalStream Broadcasting Corp., Epoch Networks, Inc. and Epoch
Hosting, Inc., as amended, modified, restated, superseded or replaced from time
to time.

      4. "Authorized VitalStream Acquisition Transaction" means a VitalStream
Acquisition Transaction which (i) the Board of Directors has determined, in its
good faith judgment, to be fair and in the best interest of all of the
securityholders of the Corporation and (ii) has been approved in writing, or by
the vote at a duly-called meeting of the Board of Directors, by a majority of
the members of the Board of Directors.

      5. "Authorized VitalStream Sale Transaction" means a VitalStream Sale
Transaction in which either (i) the consideration to be paid consists solely of
Cash Consideration, (ii) each of the following conditions have been satisfied:
(a) the Board of Directors has determined, in its good faith judgment, to be
fair and in the best interest of all of the securityholders of the Corporation,
(b) has been approved in writing, or by the vote at a duly-called meeting of the
Board of Directors, by a majority of the members of the Board of Directors, (c)
after giving effect to such VitalStream Sale Transaction, the Net Worth of the
acquiring or surviving Person of such VitalStream Sale Transaction immediately
after the consummation of such VitalStream Sale Transaction is equal to or
greater than the Net Worth of the Corporation immediately prior to the
consummation of such VitalStream Sale Transaction, (d) after giving effect to
such VitalStream Sale Transaction, the Indebtedness to Equity Ratio of the
acquiring or surviving Person of such VitalStream Sale Transaction immediately
after the consummation of such VitalStream Sale Transaction less than or equal
to 0.35, and (e) after giving effect to such VitalStream Sale Transaction, the
Current Ratio of the acquiring or surviving Person of such VitalStream Sale
Transaction immediately after the consummation of such VitalStream Sale
Transaction is equal to or greater than 1.6 or (iii) the acquiring Person in
such VitalStream Sale Transaction shall, immediately prior to the consummation
of such VitalStream Sale Transaction, (a) have securities listed on a major
national or international stock exchange and (b) have a public market
capitalization of at least $1,000,000,000.

      6. "Average Monthly Cash Flow" means, with respect to any period of any
Person, the sum of the Cash Flow of such Person for each month (and pro rata
portion thereof) during such period divided by the number of months (and pro
rata portion thereof) in such period.

      7. "Board of Directors" means the board of directors of the Corporation.

      8. "Business Day" means any day other than a Saturday, a Sunday or a day
which is a legal holiday in the State of Nevada.

      9. "Cash" means cash and cash equivalents (including marketable securities
and short term Investments).

      10. "Cash Consideration" means cash and Marketable Securities.

      11. "Cash Flow" means, with respect to any period of any Person, (i) the
sum of each of the following for such Person and all Subsidiaries of such Person
on a consolidated basis for such period, to the extent applicable, without
duplication, (a) net income or loss (excluding

                                      -2-

extraordinary or non-recurring items) after taxes and interest plus (b)
depreciation expense minus (ii) the sum of each of the following for such Person
and all Subsidiaries of such Person on a consolidated basis for such period, to
the extent applicable, without duplication, (a) changes in net working capital
(which change for purposes hereunder shall be a positive number for an increase
in net working capital and a negative number for a decrease in net working
capital) plus (b) changes in fixed assets (which change for purposes hereunder
shall be a positive number for an increase in fixed assets and a negative number
for a decrease in fixed assets) plus (c) the amount of payments and prepayments
of principal on any Indebtedness for borrowed money or any Indebtedness
evidenced by any Debt Security minus (iii) the amount of proceeds of any Debt
Security issued in substitution for, or exchange of, Indebtedness for borrowed
money, in each case as determined in accordance with GAAP applied on a
consistent basis in accordance with such Person's past practice. For the
avoidance of any doubt, the parties hereto hereby agree that the calculation of
Cash Flow as described immediately above shall be done in accordance with the
methodology set forth in Chapter 13 of the text Corporate Finance: A Valuation
Approach by Simon Benninga and Oded Sarig.

      12. "Certificate of Designation" means this Certificate of Designation
Amending the Articles of Incorporation of VitalStream Holdings, Inc.
Establishing the 2003 Series A Preferred Stock and the 2003 Series B Preferred
Stock.

      13. "Closing Date" has the meaning set forth in the Purchase Agreement.

      14. "Commitment Shares" means the shares of Common Stock issued as the
"Commitment Fee" pursuant to the Initial Note Purchase Agreement and the
Subsequent Note Purchase Agreement.

      15. "Common Stock" means the common stock, par value $0.001 per share of
the Corporation.

      16. "Common Stock Deemed Outstanding" means, at any given time, the number
of shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock deemed to be outstanding pursuant to Section 5(e) of Part
B for the Series A Preferred and Part C for the Series B Preferred, regardless
of whether the Options or Convertible Securities are actually exercisable at
such time, but excluding any shares of Common Stock issuable upon exercise of
the series of Preferred Stock with respect to which the calculation is being
made.

      17. "Convertible Securities" means any capital stock or securities
(directly or indirectly) convertible into or exchangeable for Common Stock.

      18. "Corporation Optional Series A Redemption" has the meaning set forth
in Section 4(b) of Part B.

      19. "Corporation Optional Series B Redemption" has the meaning set forth
in Section 4(b) of Part C.

      20. "Corporation Optional Series A Redemption Notice" has the meaning set
forth in Section 4(b) of Part B.


                                      -3-

      21. "Corporation Optional Series B Redemption Notice" has the meaning set
forth in Section 4(b) of Part C.

      22. "Current Ratio" means, with respect to any Person as of any date, the
ratio of (i) the aggregate amount of all current assets of such Person and all
Subsidiaries of such Person as determined on a consolidated basis as of such
date divided by (ii) the aggregate amount of all current Liabilities of such
Person and all Subsidiaries of such Person as determined on a consolidated basis
as of such date, in each case as determined in accordance with GAAP applied on a
consistent basis in accordance with such Person's past practice.

      23. "Debt Security" means any note, bond, debenture or other instrument or
security evidencing Indebtedness.

      24. "Dolphin" means Dolphin Fund I and Dolphin Fund II.

      25. "Dolphin Communications" means Dolphin Communications Fund, L.P.

      26. "Dolphin Communications II" means Dolphin Communications Fund II, L.P.

      27. "Dolphin Director" has the meaning set forth in the Investor Rights
Agreement.

      28. "Dolphin Fund" means Dolphin Communications and Dolphin Parallel.

      29. "Dolphin Fund II" means Dolphin Communications II and Dolphin Parallel
II.

      30. "Dolphin Parallel" means Dolphin Communications Parallel Fund, L.P.

      31. "Dolphin Parallel II" means Dolphin Communications Parallel Fund II
(Netherlands), L.P.

      32. "EBITDA" means, with respect to any period of any Person, (a) the net
income or loss (excluding extraordinary or non-recurring items) of such Person
for such period plus (b) the sum of the amount of each of the following for such
Person for such period to the extent deducted in the computation of such net
income or loss: (i) interest expense, (ii) income tax expense, (iii)
depreciation expense and (iv) amortization expense (each item referred to in
clauses (a) and (b) above to be calculated in accordance with GAAP in accordance
with such Person's past practice on a consistent basis, in each case on a
consolidated basis).

      33. "Equity Securities" means (a) any capital stock or other equity
security, (b) any security directly or indirectly convertible into or
exchangeable for any capital stock or other equity security or security
containing any profit participation features, (c) any warrants, options or other
rights directly or indirectly to subscribe for or to purchase any capital stock,
other equity security or security containing any profit participation features
or directly or indirectly to subscribe for or to purchase any security directly
or indirectly convertible into or exchangeable for any capital stock, other
equity security or security containing profit participation features, or (d) any
stock appreciation rights, phantom stock rights or other similar rights.


                                      -4-

      34. "Fair Market Value" means the price at which an asset would change
hands between a willing buyer and a willing seller when the former is not under
any compulsion to buy and the latter is not under any compulsion to sell, and
both parties are able, as well as willing, to trade and are well-informed about
the asset and the market for the asset, as determined jointly by the Corporation
and the holders of a majority of the outstanding shares of the series of
Preferred Stock with respect to which the determination is being made. If such
parties are unable to reach agreement within a reasonable period of time, such
"Fair Market Value" shall be determined by an independent appraiser experienced
in valuing such type of asset jointly selected by the Corporation and the
holders of a majority of the outstanding shares of the series of Preferred Stock
with respect to which the determination is being made. The determination of such
appraiser shall be final and binding upon the parties and the Corporation shall
pay the fees and expenses of such appraiser. Notwithstanding the foregoing, the
"Fair Market Value" of any security listed on any securities exchange or quoted
in the NASDAQ System or the over-the-counter market shall be the "Market Price".

      35. "Fully Diluted Outstanding Common Stock" means the sum of (a)
31,158,392 shares of Common Stock, (b) the aggregate number of shares of Common
Stock issued by the Corporation after the Closing Date pursuant to Section 2(d)
of the Asset Purchase Agreement, (c) the aggregate number of shares of Common
Stock issued by the Corporation after the Closing Date pursuant to Section
1.4(b) and Section 1.4(c)(iii) of the Merger Agreement; and (d) the number of
Option Shares.

      36. "GAAP" means United States generally accepted accounting principles as
in affect from time to time on a consistent basis.

      37. "Governmental Entity" means individually, and "Governmental Entities"
means collectively, the United States of America, any state or other political
subdivision thereof, or any entity exercising executive, legislative, judicial,
regulatory or administrative functions of government, including any court.

      38. "Indebtedness" means at a particular time, without duplication, (a)
any indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money, (b) any indebtedness evidenced by any note,
bond, debenture or other Debt Security, (c) any indebtedness for the deferred
purchase price of property or services with respect to which a Person is liable,
contingently or otherwise, as obligor or otherwise (other than trade payables
and other current liabilities incurred in the Ordinary Course of Business), (d)
any commitment by which a Person assures a creditor against loss (including,
without limitation, contingent reimbursement obligations with respect to letters
of credit), (e) any indebtedness guaranteed in any manner by a Person
(including, without limitation, guaranties in the form of an agreement to
repurchase or reimburse), (f) any obligations under capitalized leases and (g)
any indebtedness secured by a Lien on a Person's assets.

      39. "Indebtedness to Equity Ratio" means, with respect to any Person as of
any date, the quotient of (i) the aggregate amount of Indebtedness of such
Person and all Subsidiaries of such Person as determined on a consolidated basis
as of such date divided by (ii) the aggregate amount of stockholders equity of
such Person as of such date, in each case as determined in

                                      -5-

accordance with GAAP applied on a consistent basis in accordance with such
Person's past practice.

      40. "Initial Note Purchase Agreement" has the meaning set forth in the
Purchase Agreement.

      41. "Investor Rights Agreement" means that certain Amended and Restated
Investor Rights Agreement, dated as of the Closing Date, by and among the
Corporation and the securityholders of the Corporation referred to therein, as
amended, modified, restated, superseded or replaced from time to time.

      42. "Junior Preferred Stock" means any share or series of preferred stock,
$.001 par value per share, of the Corporation that ranks junior to the Series A
Preferred or Series B Preferred with respect to dividends, redemptions or
distributions upon liquidation or otherwise.

      43. "Junior Securities" means any capital stock or other Equity Securities
of the Corporation, except for the Series A Preferred and the Series B
Preferred.

      44. "Laws" means all constitutions, statutes, laws, codes, ordinances,
regulations, rules, orders, judgments, writs, injunctions, acts or decrees of
any Governmental Entity.

      45. "Legal Requirement" means any requirement arising under any action,
Law, treaty, rule or regulation, determination or direction of an arbitrator or
Governmental Entity.

      46. "Lien" means any mortgage, pledge, restriction, security interest,
encumbrance, option, lien or charge of any kind (including, without limitation,
any conditional sale or other title retention agreement or lease in the nature
thereof), any sale of receivables with recourse against the Corporation or any
VitalStream Subsidiaries, any filing or agreement to file a financing statement
as debtor under the Uniform Commercial Code or any similar statute other than to
reflect ownership by a third party of property leased to the Corporation or any
VitalStream Subsidiaries under a lease which is not in the nature of a
conditional sale or title retention agreement, or any subordination arrangement
in favor of another Person (other than any subordination arising in the Ordinary
Course of Business).

      47. "Market Price" of any security means (a) if such security is listed on
an exchange, the average closing price of such security on the principal
exchange on which such security is listed, or, if there has been no sale on any
such exchange on any day, the average closing price of such security on the
principal exchange on the most recent day on which sales of such security have
taken place on such exchange or (b) if such security is not listed on an
exchange but is quoted through the NASDAQ System, or on the domestic
over-the-counter market as reported by the National Quotation Bureau, the
average of the closing sales prices as reported by the NASDAQ System or the
National Quotation Bureau, as applicable, over a period of 5 days consisting of
the day as of which "Market Price" is being determined and the 4 consecutive
Business Days prior to such day on which trades were reported in such security.
If at any time such security is not listed on any securities exchange or quoted
in the NASDAQ System or the over-the-counter market, the "Market Price" shall be
the fair value thereof determined jointly by the Corporation and the holders of
a majority of the outstanding shares of series of Preferred Stock with respect
to which the determination is being. If such parties are unable to reach
agreement within a reasonable

                                      -6-

period of time, such fair value shall be determined by an appraiser jointly
selected by the Corporation and the holders of the outstanding shares of the
series of Preferred Stock with respect to which the determination is being made.
The determination of such appraiser shall be final and binding upon the parties,
and the fees and expenses of such appraiser shall be borne by the Corporation.

      48. "Marketable Securities" means securities (i) issued by an issuer with
a public float equal to or greater than $500,000,000; (ii) that are of a class
of securities listed on a major national or international stock exchange or the
Nasdaq National Market (or any successor to the Nasdaq National Market); (iii)
that constitute, in the aggregate, not more than 3.0% of the outstanding
securities of such class; (iv) that are or were issued to the holders of Series
A Preferred Stock or Series B Preferred Stock, as the case may be, in a
transaction registered under the Securities Act, or the resale of which by such
holders of Series A Preferred Stock or Series B Preferred Stock, as the case may
be, is registered under the Securities Act, and are otherwise freely tradable by
such holders of Series A Preferred Stock or Series B Preferred Stock, as the
case may be, without restriction under applicable federal and state securities
Laws; and (v) for which the product of (a) the weekly trading volume for such
securities for the five (5) Business Days ending immediately prior to the date
of consummation of an Authorized VitalStream Sale Transaction for which such
securities are to be issued, multiplied by, (b) four (4), is greater than the
aggregate number of shares of securities issued by such issuer as consideration
for the Authorized VitalStream Sale Transaction for which such securities are
being issued.

      49. "Merger Agreement" means that certain Merger Agreement, dated as of
February 13, 2002, among the Corporation, VitalStream, Inc., and VitalStream
Operating Corporation.

      50. "Net Worth" means, with respect to any Person as of any date, the
difference of (i) the aggregate amount of all assets of such Person and all
Subsidiaries of such Person on a consolidated basis as of such date minus (ii)
the aggregate amount of all Liabilities of such Person and all Subsidiaries of
such Person on a consolidated basis as of such date, in each case as determined
in accordance with GAAP applied on a consistent basis in accordance with such
Person's past practice.

      51. "Nevada Corporate Code" means the Private Corporations Act of the
State of Nevada, contained in Nevada Revised Statutes, Section 78.010 et seq.,
and any successor statute thereto.

      52. "Options" means any rights or options directly or indirectly to
subscribe for or purchase Common Stock or Convertible Securities.

      53. "Option Shares" means the aggregate number of shares of capital stock
issued by the Corporation pursuant to (a) that certain Option Agreement, dated
as of May 10, 2002, by and between the Corporation and Steve Smith, as amended,
modified, restated, superseded or replaced from time to time, (b) that certain
Option Agreement, dated as of May 10, 2002, by and between the Corporation and
David R. Williams, as amended, modified, restated, superseded or replaced from
time to time, (c) that certain Option Agreement, dated as of November 1, 2001,
by and between the Corporation and Kevin Herzog, as amended, modified, restated,
superseded or replaced from time to time, (d) that certain Option Agreement,
dated as of November 1, 2001, by and between the Corporation and David R.
Williams, as amended, modified, restated, superseded

                                      -7-

or replaced from time to time, and (e) that certain Option Agreement, dated as
of November 1, 2001, by and between the Corporation and Steve Smith, as amended,
modified, restated, superseded or replaced from time to time.

      54. "Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).

      55. "Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock corporation, a trust, a joint
venture, an unincorporated organization or any other similar entity or
organization or a governmental entity or any department, agency or political
subdivision thereof.

      56. "Preferred Equity Securities" means any Equity Security of the
Corporation (other than the Series B Preferred or Series A Preferred) that ranks
senior to the Common Stock as to dividends or the distribution of assets upon
any liquidation, dissolution or winding up of the Corporation, or any Debt
Security that is issued with any Equity Security.

      57. "Preferred Stock" means the preferred stock, $.001 par value, of the
Corporation.

      58. "Purchase Agreement" means that certain Securities Exchange and
Purchase Agreement dated as of the Series A Preferred Issue Date, as amended,
restated or modified from time to time, pursuant to which, among other things,
the Series A Preferred were first issued.

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

      60. "Series A Liquidation Value" of any share of Series A Preferred as of
any particular date shall be equal to $1,000, as adjusted for combinations or
splits with respect to such share.

      61. "Series A Preferred " has the meaning set forth in Part B, Section 1.

      62. "Series A Preferred Issue Date" means the date on which the first
share of Series A Preferred was issued.

      63. "Series A Redemption Date" as to any share of Series A Preferred,
means the date specified in the Corporation Optional Series A Redemption Notice
of any Corporation Optional Series A Redemption on which such Corporation
Optional Series A Redemption shall be consummated; provided, that no such date
shall be a Series A Redemption Date unless the Series A Liquidation Value (plus
all accrued and unpaid dividends thereon) of such share of Series A Preferred is
actually paid in full on such date, and if not so paid in full, the Series A
Redemption Date shall be the date on which such amount is fully paid.

      64. "Series B Liquidation Value" of any share of Series B Preferred as of
any particular date shall be equal to $1,000, as adjusted for combinations or
splits with respect to such share.

      65. "Series B Preferred" has the meaning set forth in Part C, Section 1.

      66. "Series B Preferred Issue Date" means, with respect to each separate
share of Series B Preferred, the date on which such share of Series B Preferred
was issued.


                                      -8-

      67. "Series B Redemption Date" as to any share of Series B Preferred,
means the date specified in the Corporation Optional Series B Redemption Notice
of any Corporation Optional Series B Redemption on which such Corporation
Optional Series B Redemption shall be consummated; provided, that no such date
shall be a Series B Redemption Date unless the Series B Liquidation Value (plus
all accrued and unpaid dividends thereon) of such share of Series B Preferred is
actually paid in full on such date, and if not so paid in full, the Series B
Redemption Date shall be the date on which such amount is fully paid.

      68. "Subsequent Note Purchase Agreement" has the meaning set forth in the
Purchase Agreement.

      69. "Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (a) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (b) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or
shall be or control any managing director or general partner of such limited
liability company, partnership, association or other business entity.

      70. "Transaction Agreements" means the Amended and Restated Notes, the
Guaranty (as defined in the Purchase Agreement), this Certificate of
Designation, the Warrants, the Purchase Agreement, the Investor Rights
Agreement, the Security Agreement (as defined in the Purchase Agreement), the
Registration Agreement (as defined in the Purchase Agreement) and all other
agreements and instruments delivered pursuant to any of the foregoing.

      71. "Underlying Common Stock " means (i) the Common Stock issued or
issuable pursuant to the Asset Purchase Agreement, (ii) the Commitment Shares
(iii) the Common Stock issued or issuable, directly or indirectly, upon
conversion of the Amended and Restated Notes, (iv) the Common Stock issued or
issuable, directly or indirectly, upon conversion of the Series B Preferred, (v)
the Common Stock issued or issuable, directly or indirectly, upon conversion of
the Series A Preferred initially issued to Dolphin, (vi) the Common Stock issued
or issuable upon exercise of the Warrants (assuming the exercise of each such
Warrant pursuant to Section 1B(i)(d)(3) of such Warrant) initially issued to
Dolphin and (vii) any Common Stock issued or issuable with respect to the
securities referred to in clauses (i) through (vi) above by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. For purposes of
this Certificate of Designation, (a) any Person who holds Amended and Restated
Notes shall be deemed to be the holder of the Underlying Common Stock issuable,
directly or indirectly, upon conversion of such Amended and Restated Notes
regardless of any restriction or limitation on the conversion of such Amended
and Restated Notes, (b) any Person who holds Series B Preferred shall be deemed
to be the

                                      -9-

holder of the Underlying Common Stock issuable upon conversion of such Series B
Preferred regardless of any restriction or limitation on the exercise of such
Series B Preferred, (c) any Person who holds Series A Preferred shall be deemed
to be the holder of the Underlying Common Stock issuable upon conversion of such
Series A Preferred regardless of any restriction or limitation on the exercise
of such Series A Preferred, and (d) any Person who holds Warrants shall be
deemed to be the holder of the Underlying Common Stock issuable upon exercise of
such Warrants regardless of any restriction or limitation on the exercise of
such Warrants, and with respect to clauses (a) through (d) above, such
Underlying Common Stock shall be deemed to be in existence and such Person shall
be entitled to exercise the rights of a holder of such Underlying Common Stock
hereunder. As to any particular shares of Underlying Common Stock, such shares
shall cease to be Underlying Common Stock when they have been (1) effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them, (2) distributed to the public through a
broker, dealer or market maker or (3) repurchased by the Corporation or any
VitalStream Subsidiary.

      72. "VitalStream Acquisition Transaction" means (i) the acquisition by the
Corporation or any VitalStream Subsidiary of a Person who is not an Affiliate of
the Corporation or a substantial portion of the business of such Person by means
of any transaction or series of related transactions, including (a) any merger,
consolidation or other similar transaction, involving the Corporation or any
VitalStream Subsidiary and such Person (and its Affiliates) that, if
consummated, would result in the securityholders of the Corporation immediately
prior to the consummation of such merger, consolidation or other similar
transaction, directly or indirectly, owning more than 50% of the voting power of
the outstanding Equity Securities and Debt Securities of the surviving Person of
such merger, consolidation or other similar transaction, (b) the acquisition by
the Corporation or any VitalStream Subsidiary of Equity Securities or Debt
Securities of such Person or (c) the acquisition by the Corporation or any
VitalStream Subsidiary of the assets of such Person and (ii) the Corporation or
any VitalStream Subsidiary entering into a joint venture with a Person who is
not an Affiliate of the Corporation.

      73. "VitalStream Sale Transaction" means the acquisition of the
Corporation or any VitalStream Subsidiary or a substantial portion of the
business of the Corporation or any VitalStream Subsidiary by a Person who is not
an Affiliate of the Corporation by means of any transaction or series of related
transactions, including (i) any merger, consolidation or other similar
transaction, involving the Corporation or any VitalStream Subsidiary and such
Person (and its Affiliates) that, if consummated, would result in the
securityholders of the Corporation immediately prior to the consummation of such
merger, consolidation or other similar transaction, directly or indirectly,
owning less than 50% of the voting power of the outstanding Equity Securities
and Debt Securities of the surviving Person of such merger, consolidation or
other similar transaction, (ii) the issuance of Equity Securities or Debt
Securities by the Corporation or any VitalStream Subsidiary to such Person (and
its Affiliates) or the acquisition by such Person (and its Affiliates) of Equity
Securities or Debt Securities of the Corporation or any VitalStream Subsidiary
representing more than 50% of the voting power of the outstanding Equity
Securities and Debt Securities of the Corporation or such VitalStream
Subsidiary, (iii) any tender or exchange offer that, if consummated, would
result in such Person and its Affiliates owning Equity Securities or Debt
Securities of the Corporation or any VitalStream Subsidiary representing more
than 50% of the voting power of the outstanding Equity Securities or Debt


                                      -10-

Securities of the Corporation or such VitalStream Subsidiary or (iv) the sale of
all or substantially all of the assets of the Corporation or any VitalStream
Subsidiary.

      74. "VitalStream Subsidiaries" shall mean the Subsidiaries of the
Corporation.

      75. "Warrants" means those certain Common Stock Purchase Warrants of the
Corporation issued pursuant to the Purchase Agreement, including the Additional
Warrants (as defined in the Purchase Agreement) and the Amended and Restated
Warrants (as defined in the Purchase Agreement).

      76. "Wholly-Owned Subsidiary" means, with respect to any Person, a
Subsidiary of which all of the outstanding capital stock or other ownership
interests are owned by such Person or another Wholly-Owned Subsidiary of such
Person.

All references in Part A to any Section not accompanied by a reference to Part
A, Part B, Part C or Part D shall be deemed to be references to such Section in
Part A. All references in Part B to any Section not accompanied by a reference
to Part A, Part B, Part C or Part D shall be deemed to be references to such
Section in Part B. All references in Part C to any Section not accompanied by a
reference to Part A, Part B, Part C or Part D shall be deemed to be references
to such Section in Part C. All references in Part D to any Section not
accompanied by a reference to Part A, Part B, Part C or Part D shall be deemed
to be references to such Section in Part D. Identical capitalized terms that are
defined in more than one Part shall apply only to the Part in which they are
defined.

B. CREATION OF 2003 SERIES A PREFERRED.

      1. Designation and Number of 2003 Series A Preferred. Of the authorized
Preferred Stock of the Corporation, 1,000 shares of Preferred Stock shall be
designated as 2003 Series A Preferred Stock, $0.001 par value (the "Series A
Preferred") and shall have the preferences, limitations, and relative rights set
forth in this Part B and in Part D.

      2. Dividends.

            (a) General Obligation. When, as and if declared by the
Corporation's Board of Directors, and to the extent permitted under the Nevada
Corporate Code, the Corporation shall pay preferential dividends in cash to the
holders of the Series A Preferred as provided in this Section 2. Dividends on
each share of the Series A Preferred shall accrue on a monthly basis at the rate
of 7.0% per annum of the sum of the Series A Liquidation Value thereof plus all
accumulated and unpaid dividends thereon from and including the Series A
Preferred Issue Date to and including the first to occur of (i) the date on
which the Series A Liquidation Value (plus all accrued and unpaid dividends
thereon) of such share of Series A Preferred is paid to the holder thereof in
connection with the liquidation of the Corporation or the redemption of such
share of Series A Preferred by the Corporation, (ii) the date on which such
share of Series A Preferred is converted into shares of Common Stock hereunder,
(iii) the date on which such share of Series A Preferred is otherwise acquired
by the Corporation or (iv) January 15, 2006. Such dividends shall accrue whether
or not they have been declared and whether or not there are profits, surplus or
other funds of the Corporation legally available for the payment of dividends.


                                      -11-

            (b) Dividend Payment Dates.

                  (i) Discretionary. Except as set forth in subsections (ii) and
(iii) of this Section 2(b), Section 2(d) and Section 3, all dividends which have
accrued on the Series A Preferred shall be payable only when, as and if declared
by the Corporation's Board of Directors.

                  (ii) Redemption Upon Authorized VitalStream Sale Transaction.
In connection with any redemption of the Series A Preferred pursuant to Section
4(a), accrued and unpaid dividends with respect to redeemed shares of Series A
Preferred shall be paid as provided in Section 4(a)(ii).

                  (iii) Redemption Upon Corporation Optional Series A
Redemption. In connection with any redemption of the Series A Preferred pursuant
to Section 4(b), accrued and unpaid dividends with respect to redeemed shares of
Series A Preferred shall be paid as provided in Section 4(b).

                  (iv) Conversion Into Common Stock. Upon conversion of any
share of Series A Preferred into shares of Common Stock, the accrued but unpaid
dividends with respect to such share of Series A Preferred shall be payable by
the Corporation on the date of conversion of such share of Series A Preferred in
cash or, at the discretion of the Corporation, a number of fully-paid,
nonassessable shares of Common Stock equal to the aggregate amount of such
accrued but unpaid dividends divided by the Series A Conversion Price then in
effect.

            (c) Distribution of Partial Dividend Payments. Except as otherwise
provided herein, in the event that the Corporation pays less than the total
amount of dividends then accrued with respect to all outstanding shares of the
Series A Preferred and the Series B Preferred, such payment shall be distributed
pro rata among the holders thereof based upon the aggregate accrued but unpaid
dividends on the shares of Series A Preferred and the Series B Preferred held by
each such holder.

            (d) Participating Dividends. In addition to any other dividends
accruing or declared hereunder, in the event that the Corporation declares or
pays any dividends upon the Common Stock (whether payable in cash, securities or
other property) other than dividends payable solely in shares of Common Stock,
the Corporation shall also declare and pay to the holders of the Series A
Preferred at the same time that it declares and pays such dividends to the
holders of the Common Stock, the dividends which would have been declared and
paid with respect to the Common Stock issuable upon conversion of the Series A
Preferred had all of the outstanding Series A Preferred been converted
immediately prior to the record date for such dividend, or if no record date is
fixed, the date as of which the record holders of Common Stock entitled to such
dividends are to be determined.

            (e) Inability to Pay Dividends. If the Corporation is not permitted
under applicable Law to pay any portion of the accrued and unpaid dividends on
the Series A Preferred that the Corporation is obligated to pay with respect to
the Series A Preferred, then, at the option of the holder the Corporation shall
(i) cause all accrued but unpaid dividends to be converted into a number of
shares of Common Stock equal to the amount of such accrued but unpaid dividends
divided by the Series A Conversion Price then in effect, or (ii) pay such
dividends to the holder

                                      -12-

as soon thereafter as funds of the Corporation are legally available for such
payment. At the request of any such holder, the Corporation shall provide such
holder with written evidence of its obligation to such holder.

      3. Liquidation Rights. Upon any liquidation, dissolution or winding up of
the Corporation, either voluntary or involuntary, each holder of Series A
Preferred shall be entitled to be paid, before any distribution or payment is
made upon any Junior Securities, an amount in cash (the "Series A Liquidation
Preference") equal to the greater of (i) the aggregate Series A Liquidation
Value (plus all accrued and unpaid dividends thereon) for all shares of Series A
Preferred held by such holder and (ii) the aggregate amount to which such holder
would be entitled as the holder of the number of shares of Underlying Common
Stock into which such shares of Series A Preferred (plus all accrued and unpaid
dividends thereon) could then be converted pursuant to the provisions of Section
5 hereof (assuming the conversion of all outstanding shares of Series A
Preferred and Series B Preferred (including all shares of Series A Preferred and
Series B Preferred held by such holder) at the date fixed for such liquidation,
dissolution or winding up of the Corporation), and the holders of Series A
Preferred shall not be entitled to any further payment. If upon any such
liquidation, dissolution or winding up of the Corporation, the Corporation's
assets available to be distributed among the holders of the Series A Preferred
and Series B Preferred are insufficient to permit payment to such holders of the
aggregate amount which they are entitled to be paid, then the entire assets
available to be distributed shall be distributed ratably among such holders
based upon the sum of the aggregate Series A Liquidation Value (plus all accrued
and unpaid dividends thereon) of the Series A Preferred held by each such holder
and the aggregate Series B Liquidation Value (plus all accrued and unpaid
dividends (including Accrued Dividends) thereon) of the Series B Preferred held
by each such holder. The Corporation shall mail written notice of such
liquidation, dissolution or winding up, not less than 20 days prior to the
payment date stated therein, to each record holder of Series A Preferred.

      4. Redemptions.

            (a) Redemption in the Event of an Authorized VitalStream Sale
Transaction

                  (i) In the event of an Authorized VitalStream Sale
Transaction, the Corporation shall give prompt written notice no later than
thirty (30) days before the consummation of such Authorized VitalStream Sale
Transaction describing in reasonable detail the material terms and the expected
date of consummation (the "Authorized VitalStream Sale Transaction Closing
Date") of the Authorized VitalStream Sale Transaction to each holder of Series A
Preferred and the Corporation shall give each holder of Series A Preferred
prompt written notice of any material change in the terms or timing of such
transaction. Any holder of Series A Preferred may require the Corporation to
redeem all or any portion of the Series A Preferred then held by such holder at
a price per share of Series A Preferred equal to the Series A Liquidation Value
(plus all accrued and unpaid dividends thereon) thereof by giving written notice
(an "Authorized VitalStream Sale Transaction Redemption Election") to the
Corporation of such election at any time on or prior to the Authorized
VitalStream Sale Transaction Closing Date.


                                      -13-

                  (ii) Upon receipt of any Authorized VitalStream Sale
Transaction Redemption Election and as a condition to closing of the Authorized
VitalStream Sale Transaction, the Corporation shall be obligated to redeem the
aggregate number of shares of Series A Preferred (plus all accrued and unpaid
dividends thereon) specified in the Authorized VitalStream Sale Transaction
Redemption Election on the Authorized VitalStream Sale Transaction Closing Date
and simultaneously with the closing of the Authorized VitalStream Sale
Transaction. For each share of Series A Preferred which is to be redeemed, the
Corporation shall be obligated on the Authorized VitalStream Sale Transaction
Closing Date to pay to the holder thereof (upon surrender by such holder at the
Corporation's principal office of the certificate representing such share of
Series A Preferred) an amount of Cash Consideration equal to the Series A
Liquidation Value (plus all accrued and unpaid dividends thereon) of such share
(such Cash Consideration to be paid to the holder thereof in cash and Marketable
Securities in the same proportions as the cash and Marketable Securities that
are paid as consideration in connection with such Authorized VitalStream Sale
Transaction). If the funds of the Corporation legally available for redemption
of shares of Series A Preferred and shares of Series B Preferred with respect to
which a redemption election has been made on any Authorized VitalStream Sale
Transaction Closing Date are insufficient to redeem the total number of shares
of Series A Preferred and Series B Preferred to be redeemed on such date, those
funds which are legally available shall be used to redeem the maximum possible
number of shares of Series A Preferred and Series B Preferred ratably among the
holders of the shares of Series A Preferred and Series B Preferred to be
redeemed based upon the sum of the aggregate Series A Liquidation Value (plus
all accrued and unpaid dividends thereon) of such shares of Series A Preferred
held by each such holder and the aggregate Series B Liquidation Value (plus all
accrued and unpaid dividends (including Accrued Dividends) thereon) of such
shares of Series B Preferred held by each such holder. Any shares of Series A
Preferred with respect to which a Authorized VitalStream Sale Transaction
Election was timely submitted but which were not redeemed on any Authorized
VitalStream Sale Transaction Closing Date as a result of the insufficiency of
funds shall remain outstanding and entitled to all of the powers, rights and
preferences provided herein. At any time thereafter when additional funds of the
Corporation are legally available for such redemption of shares of Series A
Preferred and Series B Preferred, such funds shall immediately be used to
ratably redeem the balance of the shares of Series A Preferred and Series B
Preferred which the Corporation has become obligated to redeem on the Authorized
VitalStream Sale Transaction Closing Date but which it has not redeemed.

                  (iii) If any proposed Authorized VitalStream Sale Transaction
does not occur, all requests for redemption in connection therewith shall be
automatically rescinded, or if there has been a material change in the terms or
the timing of the Authorized VitalStream Sale Transaction, any holder of Series
A Preferred may rescind such holder's request for redemption by giving written
notice of such rescission to the Corporation.

            (b) Optional Redemption at the Election of the Corporation. At any
time after the sixth anniversary of the Closing Date, the Corporation may redeem
(the "Corporation Optional Series A Redemption") all (and not less than all) of
the shares of Series A Preferred as are then outstanding at a price per share
equal to the Series A Liquidation Value (plus all accrued and unpaid dividends
thereon). The Corporation may elect to require the holders of the outstanding
shares of Series A Preferred to effect the Corporation Optional Series A
Redemption by giving written notice (a "Corporation Optional Series A Redemption
Notice") to the holders of Series A

                                      -14-

Preferred of such election and setting forth the Series A Redemption Date. Any
proposed redemption pursuant to this Section 4(b) shall only be made by the
Corporation if the funds of the Corporation legally available for redemption of
shares of Series A Preferred on any Series A Redemption Date are sufficient to
redeem all outstanding shares of Series A Preferred on such date.

            (c) Redeemed or Otherwise Acquired Shares. Any shares of Series A
Preferred which are redeemed or otherwise acquired by the Corporation shall be
canceled and shall not be reissued, sold or transferred.

            (d) Other Redemptions or Acquisitions. Neither the Corporation nor
any Subsidiary shall redeem or otherwise acquire any Series A Preferred, except
as expressly authorized herein or pursuant to a purchase offer made pro rata to
all holders of Series A Preferred on the basis of the number of shares of Series
A Preferred owned by each such holder.

      5. Conversion. The holders of the 2003 Series A Preferred shall have
conversion rights and obligations as follows:

            (a) Right to Convert. At any time and from time to time (including
after receipt of a Corporation Optional Series A Redemption Notice), any holder
of Series A Preferred may convert all or any portion of the shares of Series A
Preferred held by such holder into that number of fully-paid, nonassessable
shares of Common Stock determined by multiplying the number of shares of Series
A Preferred to be converted times the Series A Liquidation Value (but not
accrued and unpaid dividends thereon), and dividing the result by the Series A
Conversion Price then in effect. The number of shares of Common Stock into which
each share of Series A Preferred may be converted is referred to as the "Series
A Conversion Rate" of such share of Series A Preferred.

            (b) Automatic Conversion.

                  (i) In the event of an Authorized VitalStream Sale
Transaction, and subject to compliance by the Corporation with the provisions
set forth in Section 4(a) above, each share of Series A Preferred for which an
Authorized VitalStream Sale Transaction Redemption Election has not been
delivered on or prior to the third Business Day prior to the Authorized
VitalStream Sale Transaction Closing Date, shall automatically be converted on
the Authorized VitalStream Sale Transaction Closing Date and simultaneously with
the closing of the Authorized VitalStream Sale Transaction into fully-paid,
nonassessable shares of Underlying Common Stock at the then effective Series A
Conversion Rate of such share of Series A Preferred.

                  (ii) Each share of Series A Preferred shall automatically be
converted into fully-paid, nonassessable shares of Underlying Common Stock at
the then effective Series A Conversion Rate of such share of Series A Preferred
upon the receipt by the Corporation of a written request for such conversion
from the holders of a majority of the Series A Preferred then outstanding, or,
if later, the effective date for conversion specified in such request. Any
mandatory conversion pursuant to this Section 5(b)(ii) shall only be effected at
the time of and

                                      -15-

subject to such election of the holders of a majority of shares of Series A
Preferred then outstanding.

                  (iii) The Corporation shall mail written notice of any
mandatory conversion pursuant to this Section 5 to each record holder of Series
A Preferred setting forth the instructions for the surrender of the certificate
or certificates representing the shares of Series A Preferred held by such
holder and the exchange of such certificate or certificates for a certificate or
certificates representing Underlying Common Stock.

            (c) Mechanics of Conversion.

                  (i) Except as otherwise provided herein, each conversion of a
share of Series A Preferred shall be deemed to have been effected as of the
close of business on the date on which the duly endorsed certificate or
certificates representing the share of Series A Preferred to be converted have
been surrendered at the principal office of the Corporation. At such time as
such conversion has been effected, the rights of the holder of such share of
Series A Preferred as such holder shall cease and the Person or Persons in whose
name or names any certificate or certificates for shares of Underlying Common
Stock are to be issued upon such conversion shall be deemed to have become the
holder or holders of record of the shares of Underlying Common Stock represented
thereby.

                  (ii) The conversion rights of any share of Series A Preferred
subject to redemption hereunder shall terminate on the Series A Redemption Date
for such share of Series A Preferred or on the Authorized VitalStream Sale
Transaction Closing Date for any share of Series A Preferred for which an
Authorized VitalStream Sale Transaction Redemption Election has been delivered,
unless the Corporation has failed to pay to the holder thereof the Series A
Liquidation Value (plus all accrued and unpaid dividends thereon) of such share
of Series A Preferred, in which case the conversion rights shall terminate on
the date on which such amount is fully paid.

                  (iii) Notwithstanding any other provision hereof, if a
conversion of Series A Preferred is to be made in connection with an Authorized
VitalStream Sale Transaction or any other transaction or event, the conversion
of any shares of Series A Preferred may, at the election of the holder of such
Series A Preferred, be conditioned upon the occurrence of such transaction or
event in which case such conversion shall not be deemed to be effective until
immediately prior to the occurrence of such transaction or event.

                  (iv) As soon as possible after a conversion has been effected
(but in any event within five Business Days in the case of subparagraph (1)
below), the Corporation shall deliver to the converting holder:

                        (1) a certificate or certificates representing the
number of shares of Underlying Common Stock issuable by reason of such
conversion in such name or names and such denomination or denominations as the
converting holder has specified;

                        (2) a cash payment in an amount equal to the amount
payable under Section 5(c)(vii) below with respect to such conversion;


                                      -16-

                        (3) to the extent not elected to be converted by the
Corporation pursuant to Section 2(b)(iii), payment in an amount equal to all
accrued but unpaid dividends with respect to each share of Series A Preferred
converted; and

                        (4) a certificate representing any shares of Series A
Preferred which were represented by the certificate or certificates delivered to
the Corporation in connection with such conversion but which were not converted.

                  (v) The issuance of certificates for shares of Underlying
Common Stock upon conversion of Series A Preferred shall be made without charge
to the holders of such Series A Preferred for any issuance tax in respect
thereof or other cost incurred by the Corporation in connection with such
conversion and the related issuance of shares of Underlying Common Stock. Upon
conversion of each share of Series A Preferred, the Corporation shall take all
such actions as are necessary in order to insure that the Underlying Common
Stock issuable with respect to such conversion shall be validly issued, fully
paid and nonassessable.

                  (vi) The Corporation shall not close its books against the
transfer of Series A Preferred or of Underlying Common Stock in any manner which
interferes with the timely conversion of Series A Preferred. The Corporation
shall assist and cooperate with any holder of shares of Series A Preferred
required to make any governmental filings or obtain any governmental approval
prior to or in connection with any conversion of shares of Series A Preferred
hereunder (including, without limitation, making any filings required to be made
by the Corporation).

                  (vii) If any fractional interest in a share of Underlying
Common Stock would, except for the provisions of this Section 5(c)(vii), be
deliverable upon any conversion of the Series A Preferred, the Corporation, in
lieu of delivering the fractional share therefor, shall pay an amount to the
holder thereof equal to the Fair Market Value of such fractional interest as of
the date of conversion.

                  (viii) The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of issuance upon the conversion of the Series A Preferred, the
number of shares of Underlying Common Stock issuable upon the conversion of all
outstanding Series A Preferred. All shares of Underlying Common Stock which are
so issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Corporation shall
take all such actions as may be necessary to assure that all such shares of
Underlying Common Stock may be so issued without violation of any applicable Law
or governmental regulation or any requirements of any domestic securities
exchange upon which shares of Underlying Common Stock may be listed (except for
official notice of issuance which shall be immediately delivered by the
Corporation upon each such issuance).

                  (ix) If the shares of Underlying Common Stock issuable by
reason of such conversion of Series A Preferred are convertible into or
exchangeable for any other stock or securities of the Corporation, the
Corporation shall, at the converting holder's option, upon surrender of the
shares of Series A Preferred to be converted by such holder as provided above
together with any notice, statement or payment required to effect such
conversion or exchange of

                                      -17-

Underlying Common Stock, deliver to such holder or as otherwise specified by
such holder a certificate or certificates representing the stock or securities
into which the shares of Underlying Common Stock issuable by reason of such
conversion are so convertible or exchangeable, registered in such name or names
and in such denomination or denominations as such holder has specified.

            (d) Series A Conversion Price.

                  (i) The initial Series A Conversion Price of a share of Series
A Preferred shall be equal to $0.235 per share. In order to prevent dilution of
the conversion rights granted under this Section 5, the Series A Conversion
Price shall be subject to adjustment from time to time pursuant to this Section
5(d).

                  (ii) If at any time during the period beginning on the Series
A Preferred Issue Date and ending on January 15, 2006, the Corporation issues or
sells, or in accordance with Section 5(e) is deemed to have issued or sold, any
shares of Common Stock for a consideration per share less than the Series A
Conversion Price in effect immediately prior to the time of such issue or sale,
then immediately upon such issue or sale or deemed issue or sale the Series A
Conversion Price shall be reduced to the Series A Conversion Price determined by
dividing (a) the sum of (1) the product derived by multiplying the Series A
Conversion Price in effect immediately prior to such issue or sale by the number
of shares of Common Stock Deemed Outstanding immediately prior to such issue or
sale, plus (2) the consideration, if any, received by the Corporation upon such
issue or sale, by (b) the number of shares of Common Stock Deemed Outstanding
immediately after such issue or sale; provided, that there shall be no
adjustment in the Series A Conversion Price pursuant to this Section 5(d)(ii) as
a result of any issuance or sale (or, in accordance with Section 5(e), any
deemed issuance or sale) of shares of Common Stock (A) which are outstanding on
the Series A Preferred Issue Date, (B) upon issuance of any Amended and Restated
Notes or Series A Preferred issued pursuant to the Purchase Agreement, (C) upon
issuance of any Warrants, (D) upon conversion of any Amended and Restated Notes
or Series A Preferred issued pursuant to the Purchase Agreement (or upon
issuance or conversion of any Series B Preferred or other Preferred Equity
Securities issuable upon conversion of any Amended and Restated Notes issued
pursuant to the Purchase Agreement), (E) upon exercise of any Warrants, (F) upon
exercise of any Options or conversion of any Convertible Securities outstanding
on January 15, 2003, (G) to the directors or employees of, or consultants to,
the Corporation and the VitalStream Subsidiaries pursuant to stock option plans
and stock ownership plans approved by the Board of Directors (including any
shares of its Common Stock issued or issuable upon exercise of Options granted
pursuant to such plans), up to an aggregate of 8,000,000 shares of Common Stock
(including any shares of its Common Stock issued (or, in accordance with Section
5(e) any deemed issuance or sale) pursuant to such plans before, on or after the
Closing Date) (as such number of shares is proportionately adjusted for
subsequent stock splits, combinations and dividends affecting the Common Stock),
(H) as a dividend or other distribution on the outstanding shares of its Common
Stock (provided such dividend or other distribution causes an adjustment to the
Conversion Price pursuant to Section 5(e)), (I) in connection with a stock split
or subdivision of its outstanding Common Stock (provided such stock split or
subdivision causes an adjustment to the Conversion Price pursuant to Section
5(e)), or (J) in connection with equipment lease financing transactions, real
estate leasing transactions, strategic partnering arrangements and other similar
transaction provided

                                      -18-

such issuances are (1) approved by the Board of Directors and (2) primarily for
purposes other than an Equity Securities or Debt Securities financing (including
any shares of its Common Stock issued or issuable upon exercise of Options or
conversion of Convertible Securities granted in connection therewith).

            (e) Effect on Series A Conversion Price of Certain Events. For
purposes of determining the adjusted Series A Conversion Price under Section
5(d), the following shall be applicable:

                  (i) Issuance of Rights or Options. If the Corporation in any
manner grants any Options and the price per share for which Common Stock is
issuable upon the exercise of such Options or upon conversion or exchange of
such Convertible Securities is less than the Series A Conversion Price in effect
immediately prior to the time of the granting of such Options, then the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options or upon conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options shall be
deemed to have been issued and sold by the Corporation at the time of the
granting of such Options for such price per share. For purposes of this
paragraph, the "price per share for which Common Stock is issuable" shall be
determined by dividing (a) the total amount, if any, received or receivable by
the Corporation as consideration for the granting of such Options, plus the
minimum aggregate amount of additional consideration payable to the Corporation
upon exercise of all such Options, plus in the case of such Options which relate
to Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the issuance or sale of
such Convertible Securities and the conversion or exchange thereof, by (b) the
total maximum number of shares of Common Stock issuable upon the exercise of
such Options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such Options. No further adjustment of
the Series A Conversion Price shall be made when Convertible Securities are
actually issued upon the exercise of such Options or when Common Stock is
actually issued upon the exercise of such Options or the conversion or exchange
of such Convertible Securities in accordance with their terms.

                  (ii) Issuance of Convertible Securities. If the Corporation in
any manner issues or sells any Convertible Securities and the price per share
for which Common Stock is issuable upon such conversion or exchange is less than
the Series A Conversion Price in effect immediately prior to the time of such
issue or sale, then the maximum number of shares of Common Stock issuable upon
conversion or exchange of such Convertible Securities shall be deemed to have
been issued and sold by the Corporation at the time of the issuance or sale of
such Convertible Securities for such price per share. For the purposes of this
paragraph, the "price per share for which Common Stock is issuable" shall be
determined by dividing (a) the total amount received or receivable by the
Corporation as consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Corporation upon the conversion or exchange thereof, by (b)
the total maximum number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities. No further adjustment of the
Series A Conversion Price shall be made when Common Stock is actually issued
upon the conversion or exchange of such Convertible Securities in accordance
with their terms, and if any such issue or sale of such Convertible Securities
is made upon exercise in accordance with their terms of any Options for

                                      -19-

which adjustments of the Series A Conversion Price had been or are to be made
pursuant to other provisions of this Section 5(e), no further adjustment of the
Series A Conversion Price shall be made by reason of such issue or sale.

                  (iii) Change in Option Price or Series A Conversion Rate. If
the purchase price provided for in any Options, the additional consideration, if
any, payable upon the conversion or exchange of any Convertible Securities or
the rate at which any Convertible Securities are convertible into or
exchangeable for Common Stock changes at any time, the Series A Conversion Price
in effect at the time of such change shall be immediately adjusted to the Series
A Conversion Price which would have been in effect at such time had such Options
or Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or conversion rate, as the case may be, at the
time initially granted, issued or sold; provided, that if such adjustment would
result in an increase of the Series A Conversion Price then in effect, such
adjustment shall not be effective until 30 days after written notice thereof has
been given by the Corporation to all holders of the Series A Preferred. For
purposes of this Section 5(e), if the terms of any Option or Convertible
Security which was outstanding as of the Series A Preferred Issue Date are
changed in the manner described in the immediately preceding sentence, then such
Option or Convertible Security and the Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have been issued as
of the date of such change; provided, that no such change shall at any time
cause the Series A Conversion Price hereunder to be increased. No adjustment of
the Series A Conversion Price for the Series A Preferred shall have the effect
of increasing the Series A Conversion Price to an amount which exceeds the lower
of (a) the Series A Conversion Price on the Series A Preferred Issue Date, or
(b) the Series A Conversion Price that would have resulted from any actual
issuance of additional shares of Common Stock between the Series A Preferred
Issue Date and such readjustment date.

                  (iv) Calculation of Consideration Received. If any Common
Stock, Option or Convertible Security is issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor shall be deemed to
be the net amount received by the Corporation therefor. In case any Common
Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of the consideration other than cash received by the
Corporation shall be the fair value of such consideration, except where such
consideration consists of securities, in which case the amount of consideration
received by the Corporation shall be the Market Price thereof as of the date of
receipt. If any Common Stock, Option or Convertible Security is issued to the
owners of the non-surviving entity in connection with any merger in which the
Corporation is the surviving corporation, the amount of consideration therefor
shall be deemed to be the fair value of such portion of the net assets and
business of the non-surviving entity as is attributable to such Common Stock,
Options or Convertible Securities, as the case may be. The fair value of any
consideration other than cash and securities shall be its Fair Market Value.

                  (v) Integrated Transactions. In case any Option or Convertible
Security is issued in connection with the issue or sale of other securities of
the Corporation, together comprising one integrated transaction in which no
specific consideration is allocable to such Option or Convertible Security by
the parties thereto, the Option or Convertible Security, as the case may be,
shall be deemed to have been issued for a consideration of $0.01.


                                      -20-

                  (vi) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Corporation or any Subsidiary, and the disposition of any
shares so owned or held shall be considered an issue or sale of Common Stock.

                  (vii) Record Date. If the Corporation takes a record of the
holders of Common Stock for the purpose of entitling them (a) to receive a
dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (b) to subscribe for or purchase Common Stock, Options
or Convertible Securities, then such record date shall be deemed to be the date
of the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or upon the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

                  (f) Subdivision or Combination of Common Stock. If after the
Series A Preferred Issue Date the Corporation at any time subdivides (by any
stock split, stock dividend, recapitalization or otherwise) one or more classes
of its outstanding shares of Common Stock into a greater number of shares, the
Series A Conversion Price in effect immediately prior to such subdivision shall
be proportionately reduced and if after the Series A Preferred Issue Date the
Corporation at any time combines (by reverse stock split or otherwise) one or
more classes of its outstanding shares of Common Stock into a smaller number of
shares the Series A Conversion Price in effect immediately prior to such
combination shall be proportionately increased.(1)

                  (g) Reorganization, Reclassification, Consolidation, Merger or
Sale. Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Corporation's assets to another
Person or other transaction (other than an Authorized VitalStream Sale
Transaction) which is effected in such a manner that holders of Common Stock are
entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred
to herein as an "Organic Change". Prior to the consummation of any Organic
Change, unless the Series A Preferred are to be converted or redeemed at the
closing of such Organic Change, the Corporation shall make appropriate
provisions (in form and substance satisfactory to the holders of a majority of
the Series A Preferred then outstanding) to insure that each holder of Series A
Preferred shall thereafter have the right to acquire and receive, in lieu of or
in addition to (as the case may be) the shares of Underlying Common Stock
immediately theretofore acquirable and receivable upon the conversion of such
holder's Series A Preferred, such shares of stock, securities or assets as such
holder would have received in connection with such Organic Change if such holder
had converted its Series A Preferred immediately prior to such Organic Change.
In each such case, the Corporation shall also make appropriate provisions (in
form and substance satisfactory to the

----------

(1)   For example, (1) if the Corporation consummates a two for one stock split
      of its Common Stock, the Series A Conversion Price shall be reduced to
      fifty percent of the Series A Conversion Price then in effect and (2) if
      the Corporation consummates a two for one reverse stock split of its
      Common Stock, the Series A Conversion Price shall be increased to two
      hundred percent of the Series A Conversion Price then in effect.


                                      -21-




holders of a majority of the Series A Preferred then outstanding) to insure that
the provisions of this Section 5 and Sections 6 and 7 hereof shall thereafter be
applicable to the Series A Preferred (including, in the case of any such
consolidation, merger or sale in which the successor entity or purchasing entity
is other than the Corporation, an immediate adjustment of the Series A
Conversion Price to the value for the Common Stock reflected by the terms of
such consolidation, merger or sale, and a corresponding immediate adjustment in
the number of shares of Underlying Common Stock acquirable and receivable upon
conversion of Series A Preferred, if the value so reflected is less than the
Series A Conversion Price in effect immediately prior to such consolidation,
merger or sale). The Corporation shall not effect any such consolidation, merger
or sale, unless prior to the consummation thereof the successor entity (if other
than the Corporation) resulting from consolidation or merger or the entity
purchasing such assets assumes by written instrument (in form reasonably
satisfactory to the holders of a majority of the Series A Preferred then
outstanding) the obligation to deliver to each such holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to acquire.

            (h) If any event occurs of the type contemplated by the provisions
of this Section 5 but not expressly provided for by such provisions (including,
without limitation, the granting of stock appreciation rights, phantom stock
rights or other rights with equity features), then the Board of Directors shall
make an appropriate adjustment in the Series A Conversion Price so as to protect
the rights of the holders of Series A Preferred; provided, that no such
adjustment shall increase the Series A Conversion Price as otherwise determined
pursuant to Section 5(e) or decrease the number of shares of Underlying Common
Stock issuable upon conversion of each share of Series A Preferred.

            (i) Notices.

                  (i) Immediately upon any adjustment of the Series A Conversion
Price, the Corporation shall give written notice thereof to all holders of
Series A Preferred setting forth in reasonable detail the calculation of such
adjustment.

                  (ii) The Corporation shall give written notice to all holders
of Series A Preferred at least 20 days prior to the date on which the
Corporation closes its books or takes a record (a) with respect to any dividend
or distribution upon Common Stock, (b) with respect to any pro rata subscription
offer to holders of Common Stock or (c) for determining rights to vote with
respect to any Organic Change, dissolution or liquidation.

                  (iii) The Corporation shall also give written notice to the
holders of Series A Preferred at least 20 days prior to the date on which any
Organic Change, liquidation or dissolution shall take place.

      6. Liquidating Dividends. If the Corporation declares or pays a dividend
upon the Common Stock payable otherwise than in cash out of earnings or earned
surplus (determined in accordance with generally accepted accounting principles,
consistently applied) except for a stock dividend payable in shares of Common
Stock (a "Liquidating Dividend"), then the Corporation shall pay to the holders
of Series A Preferred at the time of payment thereof the Liquidating Dividends
which would have been paid on the shares of Underlying Common Stock


                                      -22-

had such Series A Preferred been converted immediately prior to the date on
which a record is taken for such Liquidating Dividend, or, if no record is
taken, the date as of which the record holders of Common Stock entitled to such
dividends are to be determined.

      7. Purchase Rights. If at any time the Corporation grants, issues or sells
any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
Common Stock (the "Purchase Rights"), then each holder of Series A Preferred
shall be entitled to acquire, upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights which such holder could have acquired if such
holder had held the number of shares of Underlying Common Stock acquirable upon
conversion of such holder's Series A Preferred immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of
Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights.

C. CREATION OF 2003 SERIES B PREFERRED.

      1. Designation and Number of 2003 Series B Preferred. Of the authorized
Preferred Stock of the Corporation, 1,100 shares of Preferred Stock shall be
designated as 2003 Series B Preferred Stock, $0.001 par value (the "Series B
Preferred") and shall have the preferences, limitations, and relative rights set
forth in this Part C and in Part D. Shares of Series B Preferred shall be
issuable only upon conversion of Amended and Restated Notes on the terms set
forth in the Amended and Restated Notes.

      2. Dividends.

            (a) General Obligation. When, as and if declared by the
Corporation's Board of Directors, and to the extent permitted under the Nevada
Corporate Code, the Corporation shall pay preferential dividends in cash to the
holders of the Series B Preferred as provided in this Section 2.

                  (i) Accrued Dividend Rights. Upon conversion of any portion of
the principal amount of any Amended and Restated Note into shares of Series B
Preferred, all amounts of "Unconverted Interest" (as defined in the Amended and
Restated Notes) with respect to the converted principal amount that is not paid
at the time of such conversion and that pursuant to Section 1(b)(i) of the
Amended and Restated Notes converts into an "Accrued Dividend" shall become,
upon the issuance of shares of Series B Preferred upon such conversion, an
accumulated but unpaid dividend relating to (and allocated pro rata among) the
shares of Series B Preferred issued upon such conversion (such accumulated but
unpaid dividend, an "Accrued Dividend"). Accrued Dividends shall be payable
when, as and if declared by the Corporation's Board of Directors on the same
terms as dividends accruing under Section 2(a)(ii) and, except as otherwise
provided, all references to "dividends" in this Part C shall include Accrued
Dividends.

                  (ii) Accruing Dividends. Dividends on each share of the Series
B Preferred shall accrue on a monthly basis at the rate of 7.0% per annum of the
sum of the Series B Liquidation Value thereof plus all accumulated and unpaid
dividends thereon (including


                                      -23-

Accrued Dividends) from and including the Series B Preferred Issue Date of such
shares of Series B Preferred to and including the first to occur of (i) the date
on which the Series B Liquidation Value (plus all accrued and unpaid dividends
thereon (including Accrued Dividends)) of such share of Series B Preferred is
paid to the holder thereof in connection with the liquidation of the Corporation
or the redemption of such share of Series B Preferred by the Corporation, (ii)
the date on which such share of Series B Preferred is converted into shares of
Common Stock hereunder, (iii) the date on which such share of Series B Preferred
is otherwise acquired by the Corporation or (iv) January 15, 2006. Such
dividends shall accrue whether or not they have been declared and whether or not
there are profits, surplus or other funds of the Corporation legally available
for the payment of dividends. The date on which the Corporation initially issues
any particular share of Series B Preferred shall be deemed to be Series B
Preferred Issue Date regardless of the number of times transfer of such share of
Series B Preferred is made on the stock records maintained by or for the
Corporation and regardless of the number of certificates which may be issued to
evidence such share of Series B Preferred.

            (b) Dividend Payment Dates.

                  (i) Discretionary. Except as set forth in subsections (ii) and
(iii) of this Section 2(b), Section 2(d) and Section 3, all dividends which have
accrued on the Series B Preferred shall be payable only when, as and if declared
by the Corporation's Board of Directors.

                  (ii) Redemption Upon Authorized VitalStream Sale Transaction.
In connection with any redemption of the Series B Preferred pursuant to Section
4(a), accrued and unpaid dividends with respect to redeemed shares of Series B
Preferred shall be paid as provided in Section 4(a)(ii).

                  (iii) Redemption Upon Corporation Optional Series B
Redemption. In connection with any redemption of the Series B Preferred pursuant
to Section 4(b), accrued and unpaid dividends with respect to redeemed shares of
Series B Preferred shall be paid as provided in Section 4(b).

                  (iv) Conversion Into Common Stock. Upon conversion of any
share of Series B Preferred into shares of Common Stock, the accrued but unpaid
dividends (including all Accrued Dividends) with respect to such share of Series
B Preferred shall be payable by the Corporation on the date of conversion of
such share of Series B Preferred in cash or, at the discretion of the
Corporation, a number of fully-paid, nonassessable shares of Common Stock equal
to the aggregate amount of such accrued but unpaid dividends (including all
Accrued Dividends) divided by the Series B Conversion Price then in effect.

            (c) Distribution of Partial Dividend Payments. Except as otherwise
provided herein, in the event that the Corporation pays less than the total
amount of dividends then accrued with respect to all outstanding shares of the
Series A Preferred and the Series B Preferred, such payment shall be distributed
pro rata among the holders thereof based upon the aggregate accrued but unpaid
dividends on the shares of Series A Preferred and the Series B Preferred held by
each such holder.


                                      -24-

            (d) Participating Dividends. In addition to any other dividends
accruing or declared hereunder, in the event that the Corporation declares or
pays any dividends upon the Common Stock (whether payable in cash, securities or
other property) other than dividends payable solely in shares of Common Stock,
the Corporation shall also declare and pay to the holders of the Series B
Preferred at the same time that it declares and pays such dividends to the
holders of the Common Stock, the dividends which would have been declared and
paid with respect to the Common Stock issuable upon conversion of the Series B
Preferred had all of the outstanding Series B Preferred been converted
immediately prior to the record date for such dividend, or if no record date is
fixed, the date as of which the record holders of Common Stock entitled to such
dividends are to be determined.

            (e) Inability to Pay Dividends. If the Corporation is not permitted
under applicable Law to pay any portion of the accrued and unpaid dividends on
the Series B Preferred that the Corporation is obligated to pay with respect to
the Series B Preferred, then, at the option of the holder the Corporation shall
(i) cause all accrued but unpaid dividends to be converted into a number of
shares of Common Stock equal to the amount of such accrued but unpaid dividends
divided by the Series B Conversion Price then in effect, or (ii) pay such
dividends to the holder as soon thereafter as funds of the Corporation are
legally available for such payment. At the request of any such holder, the
Corporation shall provide such holder with written evidence of its obligation to
such holder.

      3. Liquidation Rights. Upon any liquidation, dissolution or winding up of
the Corporation, either voluntary or involuntary, each holder of Series B
Preferred shall be entitled to be paid, before any distribution or payment is
made upon any Junior Securities, an amount in cash (the "Series B Liquidation
Preference") equal to the greater of (i) the aggregate Series B Liquidation
Value (plus all accrued and unpaid dividends thereon) for all shares of Series B
Preferred held by such holder and (ii) the aggregate amount to which such holder
would be entitled as the holder of the number of shares of Underlying Common
Stock into which such shares of Series B Preferred (plus all accrued and unpaid
dividends thereon) could then be converted pursuant to the provisions of Section
5 hereof (assuming the conversion of all outstanding shares of Series B
Preferred and Series A Preferred (including all shares of Series B Preferred and
Series A Preferred held by such holder) at the date fixed for such liquidation,
dissolution or winding up of the Corporation), and the holders of Series B
Preferred shall not be entitled to any further payment. If upon any such
liquidation, dissolution or winding up of the Corporation, the Corporation's
assets available to be distributed among the holders of the Series B Preferred
and Series A Preferred are insufficient to permit payment to such holders of the
aggregate amount which they are entitled to be paid, then the entire assets
available to be distributed shall be distributed ratably among such holders
based upon the sum of the aggregate Series B Liquidation Value (plus all accrued
and unpaid dividends thereon) of the Series B Preferred held by each such holder
and the aggregate Series A Liquidation Value (plus all accrued and unpaid
dividends thereon) of the Series A Preferred held by each such holder. The
Corporation shall mail written notice of such liquidation, dissolution or
winding up, not less than 20 days prior to the payment date stated therein, to
each record holder of Series B Preferred.

      4. Redemptions.

            (a) Redemption in the Event of an Authorized VitalStream Sale
Transaction


                                      -25-

                  (i) In the event of an Authorized VitalStream Sale
Transaction, the Corporation shall give prompt written notice no later than
thirty (30) days before the consummation of such Authorized VitalStream Sale
Transaction describing in reasonable detail the material terms and the expected
date of consummation (the "Authorized VitalStream Sale Transaction Closing
Date") of the Authorized VitalStream Sale Transaction to each holder of Series B
Preferred, and the Corporation shall give each holder of Series B Preferred
prompt written notice of any material change in the terms or timing of such
transaction. Any holder of Series B Preferred may require the Corporation to
redeem all or any portion of the Series B Preferred then held by such holder at
a price per share of Series B Preferred equal to the Series B Liquidation Value
(plus all accrued and unpaid dividends thereon) thereof by giving written notice
(an "Authorized VitalStream Sale Transaction Redemption Election") to the
Corporation of such election at any time on or prior to the Authorized
VitalStream Sale Transaction Closing Date.

                  (ii) Upon receipt of any Authorized VitalStream Sale
Transaction Redemption Election, as a condition to closing of the Authorized
VitalStream Sale Transaction and conditioned upon the closing of the Authorized
VitalStream Sale Transaction, the Corporation shall be obligated to redeem the
aggregate number of shares of Series B Preferred (plus all accrued and unpaid
dividends thereon) specified in the Authorized VitalStream Sale Transaction
Redemption Election on the Authorized VitalStream Sale Transaction Closing Date
and simultaneously with the closing of the Authorized VitalStream Sale
Transaction. For each share of Series B Preferred which is to be redeemed, the
Corporation shall be obligated on the Authorized VitalStream Sale Transaction
Closing Date to pay to the holder thereof (upon surrender by such holder at the
Corporation's principal office of the certificate representing such share of
Series B Preferred) an amount of Cash Consideration equal to the Series B
Liquidation Value (plus all accrued and unpaid dividends thereon) of such share
(such Cash Consideration to be paid to the holder thereof in cash and Marketable
Securities in the same proportions as the cash and Marketable Securities that
are paid as consideration in connection with such Authorized VitalStream Sale
Transaction). If the funds of the Corporation legally available for redemption
of shares of Series B Preferred and shares of Series A Preferred with respect to
which a redemption election has been made on any Authorized VitalStream Sale
Transaction Closing Date are insufficient to redeem the total number of shares
of Series B Preferred and Series A Preferred to be redeemed on such date, those
funds which are legally available shall be used to redeem the maximum possible
number of shares of Series B Preferred and Series A Preferred ratably among the
holders of the shares of Series B Preferred and Series A Preferred to be
redeemed based upon the sum of the aggregate Series B Liquidation Value (plus
all accrued and unpaid dividends thereon) of such shares of Series B Preferred
held by each such holder and the aggregate Series A Liquidation Value (plus all
accrued and unpaid dividends thereon) of such shares of Series A Preferred held
by each such holder. Any shares of Series B Preferred with respect to which an
Authorized VitalStream Sale Transaction Election was timely submitted but which
were not redeemed on any Authorized VitalStream Sale Transaction Closing Date as
a result of the insufficiency of funds shall remain outstanding and entitled to
all of the powers, rights and preferences provided herein. At any time
thereafter when additional funds of the Corporation are legally available for
such redemption of shares of Series B Preferred and Series A Preferred, such
funds shall immediately be used to ratably redeem the balance of the shares of
Series B Preferred and Series A Preferred which the Corporation has become
obligated to


                                      -26-

redeem on the Authorized VitalStream Sale Transaction Closing Date but which it
has not redeemed.

                  (iii) If any proposed Authorized VitalStream Sale Transaction
does not occur, all requests for redemption in connection therewith shall be
automatically rescinded, or if there has been a material change in the terms or
the timing of the Authorized VitalStream Sale Transaction, any holder of Series
B Preferred may rescind such holder's request for redemption by giving written
notice of such rescission to the Corporation.

            (b) Optional Redemption at the Election of the Corporation. At any
time after the sixth anniversary of the Closing Date, the Corporation may redeem
(the "Corporation Optional Series B Redemption") all (and not less than all) of
the shares of Series B Preferred as are then outstanding at a price per share
equal to the Series B Liquidation Value (plus all accrued and unpaid dividends
(including Accrued Dividends) thereon). The Corporation may elect to require the
holders of the outstanding shares of Series B Preferred to effect the
Corporation Optional Series A Redemption by giving written notice (a
"Corporation Optional Series B Redemption Notice") to the holders of Series B
Preferred of such election and setting forth the Series B Redemption Date. Any
proposed redemption pursuant to this Section 4(b) shall only be made by the
Corporation if the funds of the Corporation legally available for redemption of
shares of Series B Preferred on any Series B Redemption Date are sufficient to
redeem all outstanding shares of Series B Preferred on such date.

            (c) Redeemed or Otherwise Acquired Shares. Any shares of Series B
Preferred which are redeemed or otherwise acquired by the Corporation shall be
canceled and shall not be reissued, sold or transferred.

            (d) Other Redemptions or Acquisitions. Neither the Corporation nor
any Subsidiary shall redeem or otherwise acquire any Series B Preferred, except
as expressly authorized herein or pursuant to a purchase offer made pro rata to
all holders of Series B Preferred on the basis of the number of shares of Series
B Preferred owned by each such holder.

      5. Conversion. The holders of the 2003 Series B Preferred shall have
conversion rights and obligations as follows:

            (a) Right to Convert. At any time and from time to time (including
after receipt of a Corporation Optional Series B Redemption Notice), any holder
of Series B Preferred may convert all or any portion of the shares of Series B
Preferred held by such holder into that number of fully-paid, nonassessable
shares of Common Stock determined by multiplying the number of shares of Series
B Preferred to be converted times the Series B Liquidation Value (but not
accrued and unpaid dividends thereon), and dividing the result by the Series B
Conversion Price then in effect. The number of shares of Common Stock into which
each share of Series B Preferred may be converted is referred to as the "Series
B Conversion Rate" of such share of Series B Preferred.

            (b) Automatic Conversion.

                  (i) In the event of an Authorized VitalStream Sale
Transaction, and subject to compliance by the Corporation with the provisions
set forth in Section 4(a) above,


                                      -27-

each share of Series B Preferred for which an Authorized VitalStream Sale
Transaction Redemption Election has not been delivered on or prior to the third
Business Day prior to the Authorized VitalStream Sale Transaction Closing Date,
shall automatically be converted on the Authorized VitalStream Sale Transaction
Closing Date and simultaneously with the closing of the Authorized VitalStream
Sale Transaction into fully-paid, nonassessable shares of Underlying Common
Stock at the then effective Series B Conversion Rate of such share of Series B
Preferred.

                  (ii) Each share of Series B Preferred shall automatically be
converted into fully-paid, nonassessable shares of Underlying Common Stock at
the then effective Series B Conversion Rate of such share of Series B Preferred
upon the receipt by the Corporation of a written request for such conversion
from the holders of a majority of the Series B Preferred then outstanding, or,
if later, the effective date for conversion specified in such request. Any
mandatory conversion pursuant to this Section 5(b)(ii) shall only be effected at
the time of and subject to such election of the holders of a majority of shares
of Series B Preferred then outstanding.

                  (iii) The Corporation shall mail written notice of any
mandatory conversion pursuant to this Section 5 to each record holder of Series
B Preferred setting forth the instructions for the surrender of the certificate
or certificates representing the shares of Series B Preferred held by such
holder and the exchange of such certificate or certificates for a certificate or
certificates representing Underlying Common Stock.

            (c) Mechanics of Conversion.

                  (i) Except as otherwise provided herein, each conversion of a
share of Series B Preferred shall be deemed to have been effected as of the
close of business on the date on which the duly endorsed certificate or
certificates representing the share of Series B Preferred to be converted have
been surrendered at the principal office of the Corporation. At such time as
such conversion has been effected, the rights of the holder of such share of
Series B Preferred as such holder shall cease and the Person or Persons in whose
name or names any certificate or certificates for shares of Underlying Common
Stock are to be issued upon such conversion shall be deemed to have become the
holder or holders of record of the shares of Underlying Common Stock represented
thereby.

                  (ii) The conversion rights of any share of Series B Preferred
subject to redemption hereunder shall terminate on the Series B Redemption Date
for such share of Series B Preferred or on the Authorized VitalStream Sale
Transaction Closing Date for any share of Series B Preferred for which an
Authorized VitalStream Sale Transaction Redemption Election has been delivered,
unless the Corporation has failed to pay to the holder thereof the Series B
Liquidation Value (plus all accrued and unpaid dividends thereon) of such share
of Series B Preferred, in which case the conversion rights shall terminate on
the date on which such amount is fully paid.

                  (iii) Notwithstanding any other provision hereof, if a
conversion of Series B Preferred is to be made in connection with an Authorized
VitalStream Sale Transaction Closing Date or any other transaction or event, the
conversion of any shares of Series B


                                      -28-

Preferred may, at the election of the holder of such Series B Preferred, be
conditioned upon the occurrence of such transaction or event in which case such
conversion shall not be deemed to be effective until immediately prior to the
occurrence of such transaction or event.

                  (iv) As soon as possible after a conversion has been effected
(but in any event within five Business Days in the case of subparagraph (1)
below), the Corporation shall deliver to the converting holder:

                        (1) a certificate or certificates representing the
number of shares of Underlying Common Stock issuable by reason of such
conversion in such name or names and such denomination or denominations as the
converting holder has specified;

                        (2) a cash payment in an amount equal to the amount
payable under Section 5(c)(vii) below with respect to such conversion;

                        (3) to the extent not elected to be converted pursuant
to Section 2(b)(iii), payment in an amount equal to all accrued but unpaid
dividends with respect to each share of Series B Preferred converted; and

                        (4) a certificate representing any shares of Series B
Preferred which were represented by the certificate or certificates delivered to
the Corporation in connection with such conversion but which were not converted.

                  (v) The issuance of certificates for shares of Underlying
Common Stock upon conversion of Series B Preferred shall be made without charge
to the holders of such Series B Preferred for any issuance tax in respect
thereof or other cost incurred by the Corporation in connection with such
conversion and the related issuance of shares of Underlying Common Stock. Upon
conversion of each share of Series B Preferred, the Corporation shall take all
such actions as are necessary in order to insure that the Underlying Common
Stock issuable with respect to such conversion shall be validly issued, fully
paid and nonassessable.

                  (vi) The Corporation shall not close its books against the
transfer of Series B Preferred or of Underlying Common Stock in any manner which
interferes with the timely conversion of Series B Preferred. The Corporation
shall assist and cooperate with any holder of shares of Series B Preferred
required to make any governmental filings or obtain any governmental approval
prior to or in connection with any conversion of shares of Series B Preferred
hereunder (including, without limitation, making any filings required to be made
by the Corporation).

                  (vii) If any fractional interest in a share of Underlying
Common Stock would, except for the provisions of this Section 5(c)(vii), be
deliverable upon any conversion of the Series B Preferred, the Corporation, in
lieu of delivering the fractional share therefor, shall pay an amount to the
holder thereof equal to the Fair Market Value of such fractional interest as of
the date of conversion.

                  (viii) The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of issuance upon the conversion of the Series B Preferred, the
number of shares of Underlying Common Stock


                                      -29-

issuable upon the conversion of all outstanding Series B Preferred. All shares
of Underlying Common Stock which are so issuable shall, when issued, be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges. The Corporation shall take all such actions as may be necessary to
assure that all such shares of Underlying Common Stock may be so issued without
violation of any applicable Law or governmental regulation or any requirements
of any domestic securities exchange upon which shares of Underlying Common Stock
may be listed (except for official notice of issuance which shall be immediately
delivered by the Corporation upon each such issuance).

                  (ix) If the shares of Underlying Common Stock issuable by
reason of such conversion of Series B Preferred are convertible into or
exchangeable for any other stock or securities of the Corporation, the
Corporation shall, at the converting holder's option, upon surrender of the
shares of Series B Preferred to be converted by such holder as provided above
together with any notice, statement or payment required to effect such
conversion or exchange of Underlying Common Stock, deliver to such holder or as
otherwise specified by such holder a certificate or certificates representing
the stock or securities into which the shares of Underlying Common Stock
issuable by reason of such conversion are so convertible or exchangeable,
registered in such name or names and in such denomination or denominations as
such holder has specified.

            (d) Series B Conversion Price.

                  (i) The initial Series B Conversion Price of a share of Series
B Preferred shall be equal to (i) 0.85 multiplied by (ii) $1,100,000 divided by
the difference between (a) the Fully Diluted Outstanding Common Stock divided by
0.868 minus (b) the Fully Diluted Outstanding Common Stock. In order to prevent
dilution of the conversion rights granted under this Section 5, the Series B
Conversion Price shall be subject to adjustment from time to time pursuant to
this Section 5(d).

                  (ii) If at any time during the period beginning on the Series
B Preferred Issue Date and ending on January 15, 2006, the Corporation issues or
sells, or in accordance with Section 5(e) is deemed to have issued or sold, any
shares of Common Stock for a consideration per share less than the Series B
Conversion Price in effect immediately prior to the time of such issue or sale,
then immediately upon such issue or sale or deemed issue or sale the Series B
Conversion Price shall be reduced to the Series B Conversion Price determined by
dividing (a) the sum of (1) the product derived by multiplying the Series B
Conversion Price in effect immediately prior to such issue or sale by the number
of shares of Common Stock Deemed Outstanding immediately prior to such issue or
sale, plus (2) the consideration, if any, received by the Corporation upon such
issue or sale, by (b) the number of shares of Common Stock Deemed Outstanding
immediately after such issue or sale; provided, that there shall be no
adjustment in the Series B Conversion Price pursuant to this Section 5(d)(ii) as
a result of any issuance or sale (or, in accordance with Section 5(e), any
deemed issuance or sale) of shares of Common Stock (A) which are included in the
calculation of the number of shares of Fully Diluted Outstanding Common Stock,
(B) upon issuance of any Amended and Restated Notes or Series A Preferred issued
pursuant to the Purchase Agreement, (C) upon issuance of any Warrants, (D) upon
conversion of any Amended and Restated Notes or Series A Preferred issued
pursuant to the Purchase Agreement (or upon issuance or conversion of any Series
B Preferred or


                                      -30-

other Preferred Equity Securities issuable upon conversion of any Amended and
Restated Notes issued pursuant to the Purchase Agreement), (E) upon exercise of
any Warrants, (F) upon exercise of any Options or conversion of any Convertible
Securities outstanding on January 15, 2003, (G) to the directors or employees
of, or consultants to, the Corporation and the VitalStream Subsidiaries pursuant
to stock option plans and stock ownership plans approved by the Board of
Directors (including any shares of its Common Stock issued or issuable upon
exercise of Options granted pursuant to such plans), up to an aggregate of
8,000,000 shares of Common Stock (including any shares of its Common Stock
issued (or, in accordance with Section 5(e) any deemed issuance or sale)
pursuant to such plans before, on or after the Closing Date) (as such number of
shares is proportionately adjusted for subsequent stock splits, combinations and
dividends affecting the Common Stock), (H) as a dividend or other distribution
on the outstanding shares of its Common Stock (provided such dividend or other
distribution causes an adjustment to the Conversion Price pursuant to Section
5(e)), (I) in connection with a stock split or subdivision of its outstanding
Common Stock (provided such stock split or subdivision causes an adjustment to
the Conversion Price pursuant to Section 5(e)), or (J) in connection with
equipment lease financing transactions, real estate leasing transactions,
strategic partnering arrangements and other similar transaction provided such
issuances are (1) approved by the Board of Directors and (2) primarily for
purposes other than an Equity Securities or Debt Securities financing (including
any shares of its Common Stock issued or issuable upon exercise of Options or
conversion of Convertible Securities granted in connection therewith).

            (e) Effect on Series B Conversion Price of Certain Events. For
purposes of determining the adjusted Series B Conversion Price under Section
5(d), the following shall be applicable:

                  (i) Issuance of Rights or Options. If the Corporation in any
manner grants any Options and the price per share for which Common Stock is
issuable upon the exercise of such Options or upon conversion or exchange of
such Convertible Securities is less than the Series B Conversion Price in effect
immediately prior to the time of the granting of such Options, then the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options or upon conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options shall be
deemed to have been issued and sold by the Corporation at the time of the
granting of such Options for such price per share. For purposes of this
paragraph, the "price per share for which Common Stock is issuable" shall be
determined by dividing (a) the total amount, if any, received or receivable by
the Corporation as consideration for the granting of such Options, plus the
minimum aggregate amount of additional consideration payable to the Corporation
upon exercise of all such Options, plus in the case of such Options which relate
to Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the issuance or sale of
such Convertible Securities and the conversion or exchange thereof, by (b) the
total maximum number of shares of Common Stock issuable upon the exercise of
such Options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such Options. No further adjustment of
the Series B Conversion Price shall be made when Convertible Securities are
actually issued upon the exercise of such Options or when Common Stock is
actually issued upon the exercise of such Options or the conversion or exchange
of such Convertible Securities in accordance with their terms.


                                      -31-

                  (ii) Issuance of Convertible Securities. If the Corporation in
any manner issues or sells any Convertible Securities and the price per share
for which Common Stock is issuable upon such conversion or exchange is less than
the Series B Conversion Price in effect immediately prior to the time of such
issue or sale, then the maximum number of shares of Common Stock issuable upon
conversion or exchange of such Convertible Securities shall be deemed to have
been issued and sold by the Corporation at the time of the issuance or sale of
such Convertible Securities for such price per share. For the purposes of this
paragraph, the "price per share for which Common Stock is issuable" shall be
determined by dividing (a) the total amount received or receivable by the
Corporation as consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Corporation upon the conversion or exchange thereof, by (b)
the total maximum number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities. No further adjustment of the
Series B Conversion Price shall be made when Common Stock is actually issued
upon the conversion or exchange of such Convertible Securities in accordance
with their terms, and if any such issue or sale of such Convertible Securities
is made upon exercise in accordance with their terms of any Options for which
adjustments of the Series B Conversion Price had been or are to be made pursuant
to other provisions of this Section 5(e), no further adjustment of the Series B
Conversion Price shall be made by reason of such issue or sale.

                  (iii) Change in Option Price or Series B Conversion Rate. If
the purchase price provided for in any Options, the additional consideration, if
any, payable upon the conversion or exchange of any Convertible Securities or
the rate at which any Convertible Securities are convertible into or
exchangeable for Common Stock changes at any time, the Series B Conversion Price
in effect at the time of such change shall be immediately adjusted to the Series
B Conversion Price which would have been in effect at such time had such Options
or Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or conversion rate, as the case may be, at the
time initially granted, issued or sold; provided, that if such adjustment would
result in an increase of the Series B Conversion Price then in effect, such
adjustment shall not be effective until 30 days after written notice thereof has
been given by the Corporation to all holders of the Series B Preferred. For
purposes of this Section 5(e), if the terms of any Option or Convertible
Security which was outstanding as of the Closing Date are changed in the manner
described in the immediately preceding sentence, then such Option or Convertible
Security and the Common Stock deemed issuable upon exercise, conversion or
exchange thereof shall be deemed to have been issued as of the date of such
change; provided, that no such change shall at any time cause the Series B
Conversion Price hereunder to be increased. No adjustment of the Series B
Conversion Price for the Series B Preferred shall have the effect of increasing
the Series B Conversion Price to an amount which exceeds the lower of (a) the
Series B Conversion Price on the Series B Preferred Issue Date, or (b) the
Series B Conversion Price that would have resulted from any actual issuance of
additional shares of Common Stock between the Series B Preferred Issue Date and
such readjustment date.

                  (iv) Calculation of Consideration Received. If any Common
Stock, Option or Convertible Security is issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor shall be deemed to
be the net amount received by the Corporation therefor. In case any Common
Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of the consideration other than cash


                                      -32-

received by the Corporation shall be the fair value of such consideration,
except where such consideration consists of securities, in which case the amount
of consideration received by the Corporation shall be the Market Price thereof
as of the date of receipt. If any Common Stock, Option or Convertible Security
is issued to the owners of the non-surviving entity in connection with any
merger in which the Corporation is the surviving corporation, the amount of
consideration therefor shall be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such Common Stock, Options or Convertible Securities, as the case may be. The
fair value of any consideration other than cash and securities shall be its Fair
Market Value.

                  (v) Integrated Transactions. In case any Option or Convertible
Security is issued in connection with the issue or sale of other securities of
the Corporation, together comprising one integrated transaction in which no
specific consideration is allocable to such Option or Convertible Security by
the parties thereto, the Option or Convertible Security, as the case may be,
shall be deemed to have been issued for a consideration of $0.01.

                  (vi) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Corporation or any Subsidiary, and the disposition of any
shares so owned or held shall be considered an issue or sale of Common Stock.

                  (vii) Record Date. If the Corporation takes a record of the
holders of Common Stock for the purpose of entitling them (a) to receive a
dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (b) to subscribe for or purchase Common Stock, Options
or Convertible Securities, then such record date shall be deemed to be the date
of the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or upon the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

            (f) Subdivision or Combination of Common Stock. If after the Series
B Preferred Issue Date the Corporation at any time subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the Series B
Conversion Price in effect immediately prior to such subdivision shall be
proportionately reduced and if after the Series B Preferred Issue Date the
Corporation at any time combines (by reverse stock split or otherwise) one or
more classes of its outstanding shares of Common Stock into a smaller number of
shares the Series B Conversion Price in effect immediately prior to such
combination shall be proportionately increased.(2)


-------------
2     For example, (1) if the Corporation consummates a two for one stock split
      of its Common Stock, the Series B Conversion Price shall be reduced to
      fifty percent of the Series B Conversion Price then in effect and (2) if
      the Corporation consummates a two for one reverse stock split of its
      Common Stock, the Series B Conversion Price shall be increased to two
      hundred percent of the Series B Conversion Price then in effect.


                                      -33-

            (g) Reorganization, Reclassification, Consolidation, Merger or Sale.
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Corporation's assets to another Person
or other transaction (other than an Authorized VitalStream Sale Transaction)
which is effected in such a manner that holders of Common Stock are entitled to
receive (either directly or upon subsequent liquidation) stock, securities or
assets with respect to or in exchange for Common Stock is referred to herein as
an "Organic Change". Prior to the consummation of any Organic Change, unless the
Series B Preferred are to be converted or redeemed at the closing of such
Organic Change, the Corporation shall make appropriate provisions (in form and
substance satisfactory to the holders of a majority of the Series B Preferred
then outstanding) to insure that each holder of Series B Preferred shall
thereafter have the right to acquire and receive, in lieu of or in addition to
(as the case may be) the shares of Underlying Common Stock immediately
theretofore acquirable and receivable upon the conversion of such holder's
Series B Preferred, such shares of stock, securities or assets as such holder
would have received in connection with such Organic Change if such holder had
converted its Series B Preferred immediately prior to such Organic Change. In
each such case, the Corporation shall also make appropriate provisions (in form
and substance satisfactory to the holders of a majority of the Series B
Preferred then outstanding) to insure that the provisions of this Section 5 and
Sections 6 and 7 hereof shall thereafter be applicable to the Series B Preferred
(including, in the case of any such consolidation, merger or sale in which the
successor entity or purchasing entity is other than the Corporation, an
immediate adjustment of the Series B Conversion Price to the value for the
Common Stock reflected by the terms of such consolidation, merger or sale, and a
corresponding immediate adjustment in the number of shares of Underlying Common
Stock acquirable and receivable upon conversion of Series B Preferred, if the
value so reflected is less than the Series B Conversion Price in effect
immediately prior to such consolidation, merger or sale). The Corporation shall
not effect any such consolidation, merger or sale, unless prior to the
consummation thereof the successor entity (if other than the Corporation)
resulting from consolidation or merger or the entity purchasing such assets
assumes by written instrument (in form reasonably satisfactory to the holders of
a majority of the Series B Preferred then outstanding) the obligation to deliver
to each such holder such shares of stock, securities or assets as, in accordance
with the foregoing provisions, such holder may be entitled to acquire.

            (h) If any event occurs of the type contemplated by the provisions
of Section 5 but not expressly provided for by such provisions (including,
without limitation, the granting of stock appreciation rights, phantom stock
rights or other rights with equity features), then the Board of Directors shall
make an appropriate adjustment in the Series B Conversion Price so as to protect
the rights of the holders of Series B Preferred; provided, that no such
adjustment shall increase the Series B Conversion Price as otherwise determined
pursuant to Section 5(e) or decrease the number of shares of Underlying Common
Stock issuable upon conversion of each share of Series B Preferred.

            (i) Notices.

                  (i) Immediately upon any adjustment of the Series B Conversion
Price, the Corporation shall give written notice thereof to all holders of
Series B Preferred and Amended and Restated Notes setting forth in reasonable
detail the calculation of such adjustment.


                                      -34-

                  (ii) The Corporation shall give written notice to all holders
of Series B Preferred at least 20 days prior to the date on which the
Corporation closes its books or takes a record (a) with respect to any dividend
or distribution upon Common Stock, (b) with respect to any pro rata subscription
offer to holders of Common Stock or (c) for determining rights to vote with
respect to any Organic Change, dissolution or liquidation.

                  (iii) The Corporation shall also give written notice to the
holders of Series B Preferred at least 20 days prior to the date on which any
Organic Change, liquidation or dissolution shall take place.

      6. Liquidating Dividends. If the Corporation declares or pays a dividend
upon the Common Stock payable otherwise than in cash out of earnings or earned
surplus (determined in accordance with generally accepted accounting principles,
consistently applied) except for a stock dividend payable in shares of Common
Stock (a "Liquidating Dividend"), then the Corporation shall pay to the holders
of Series B Preferred at the time of payment thereof the Liquidating Dividends
which would have been paid on the shares of Underlying Common Stock had such
Series B Preferred been converted immediately prior to the date on which a
record is taken for such Liquidating Dividend, or, if no record is taken, the
date as of which the record holders of Common Stock entitled to such dividends
are to be determined.

      7. Purchase Rights. If at any time the Corporation grants, issues or sells
any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
Common Stock (the "Purchase Rights"), then each holder of Series B Preferred
shall be entitled to acquire, upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights which such holder could have acquired if such
holder had held the number of shares of Underlying Common Stock acquirable upon
conversion of such holder's Series B Preferred immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of
Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights.

D. ADDITIONAL SERIES A PREFERRED AND SERIES B PREFERRED PROVISIONS.

      1. Restrictive Covenants.

            (a) In addition to any action otherwise required by the Articles of
Incorporation or applicable Law, at any time that any shares of Series A
Preferred or Series B Preferred remain outstanding and the Underlying Common
Stock constitutes at least ten (10) percent of the Corporation's outstanding
Common Stock, the Corporation shall not take any of the following actions
without the prior written authorization and approval of the holders of a
majority of the Underlying Common Stock.

                  (i) merge or consolidate with any Person, or permit any of the
VitalStream Subsidiaries to merge or consolidate with any Person (other than a
Wholly-Owned Subsidiary), except, so long as the Dolphin Director continues to
be a member of the Board of Directors, for any merger or consolidation (A) in
which the pro forma consolidated Average Monthly Cash Flow of the Person with
whom the Corporation or any of the VitalStream


                                      -35-

Subsidiaries will merge or consolidate for the twelve (12) month period
immediately following the execution of a definitive agreement relating to such
merger or consolidation (as determined, by the Board of Directors in its good
faith judgment) is greater than $0.00 and (B) which constitutes either (i) an
Authorized VitalStream Sale Transaction or (ii) an Authorized VitalStream
Acquisition Transaction;

                  (ii) sell, lease or otherwise dispose of, or permit any of the
VitalStream Subsidiaries to sell, lease or otherwise dispose of, in the
aggregate, more than 17.5% of the consolidated assets of the Corporation and the
VitalStream Subsidiaries (computed on the basis of the greater of (A) book value
determined in accordance with GAAP consistently applied or (B) Fair Market
Value, except for (i) any sale, lease or other disposition of assets in the
Ordinary Course of Business, (ii) any sale, lease or other disposition of assets
required by any Law or Legal Requirement in order to permit the Corporation or
any VitalStream Subsidiary to consummate an acquisition (whether by a purchase
of assets, purchase of stock, merger or otherwise) of any interest in a Person
or such Person's business; provided, that, (Y) to the extent required, such
acquisition has been approved by the holders of the Amended and Restated Notes
(Z), such acquisition has been approved in writing, or by the vote at a
duly-called meeting of the Board of Directors, by a majority of the members of
the Board of Directors or (iii) any sale of assets which constitutes an
Authorized VitalStream Sale Transaction (for the avoidance of any doubt, the
granting of a security interest to a secured lender by the Corporation or any
VitalStream Subsidiary in its accounts receivable in connection with the
establishment by the Corporation or any VitalStream Subsidiary of a secured
credit facility shall not constitute a sale, lease or otherwise disposition of
the assets of the Corporation or any VitalStream Subsidiary for purposes of this
Section 1(a)(ii));

                  (iii) liquidate, dissolve or effect a recapitalization or
reorganization in any form of transaction (including, without limitation, any
reorganization into a limited liability company, a partnership or any other
non-corporate entity which is treated as a partnership for federal income tax
purposes), except for any liquidation, dissolution, recapitalization or
reorganization effectuated in connection with the consummation of (A) an
Authorized VitalStream Sale Transaction or (B) an Authorized VitalStream
Acquisition Transaction;

                  (iv) create, incur, assume or suffer to exist (including as a
result of the consummation of an Authorized VitalStream Acquisition Transaction
or Authorized VitalStream Sale Transaction in which VitalStream is not the
surviving entity), or permit any of the VitalStream Subsidiaries to create,
incur, assume or suffer to exist (including as a result of the consummation of
an Authorized VitalStream Acquisition Transaction or Authorized VitalStream Sale
Transaction in which such VitalStream Subsidiary is not the surviving entity),
Indebtedness other than Indebtedness arising under the Amended and Restated
Notes, or to the extent classified as Indebtedness, any shares of Series B
Preferred or Series A Preferred, and except for (A) any Indebtedness incurred
under capitalized leases entered into in the Ordinary Course of Business, (B)
any Indebtedness of the surviving Person of an Authorized VitalStream Sale
Transaction or Authorized VitalStream Acquisition Transaction if (i) the
Indebtedness to Equity Ratio of such surviving Person is less than or equal to
.35, or (ii) the securities of such surviving Person are Listed Securities and
have a public market capitalization of at least $1,000,000,000, or (C) any
Indebtedness incurred under one or more commercial bank loans or other credit
facilities with one or more commercial banking institutions in an aggregate
amount not


                                      -36-

exceeding $1,500,000 (with Indebtedness outstanding under the Alliance Factoring
and Security Agreements counting against such $1,500,000 limit) as determined on
a consolidated basis; provided, that, with respect to any Indebtedness described
in clause (C) above, the Indebtedness evidenced by the Amended and Restated
Notes (if any are outstanding) ranks pari passu as to seniority with respect to
any Lien granted in any assets of VitalStream or any VitalStream Subsidiary to
secure such Indebtedness (other than with respect to any Lien granted in the
accounts receivable of VitalStream or any VitalStream Subsidiary);

                  (v) change the nature of the business or operations of the
Corporation or any VitalStream Subsidiaries or enter into or allow any
VitalStream Subsidiaries to enter into the ownership, active management or
operation of a line of business other than that line of business in which the
Corporation and the VitalStream Subsidiaries engage as of the Closing Date;
provided, that the Corporation may continue to employ new technologies and
provide new services which become commonly employed or provided by, or in the
good faith judgment of the management of the Corporation, are reasonably
expected to become commonly employed or provided by, companies engaged in the
Corporation's or the VitalStream Subsidiaries' line of business;

                  (vi) become subject to, or permit any VitalStream Subsidiary
to become subject to (including, without limitation, by way of amendment to or
modification of) any agreement or instrument which by its terms would (under any
circumstances) restrict (A) the right of any of the VitalStream Subsidiaries to
make loans or advances or pay dividends to, transfer property to, or repay any
Indebtedness owed to, the Corporation or any VitalStream Subsidiaries or (B) the
Corporation's or any VitalStream Subsidiaries' right to perform the provisions
of any of the Amended and Restated Notes or the Transaction Agreements;

                  (vii) except as required by the terms of the Series A
Preferred or Series B Preferred, directly or indirectly redeem, purchase or
otherwise acquire, or permit any VitalStream Subsidiaries to redeem, purchase or
otherwise acquire, any Equity Securities or directly or indirectly redeem,
purchase or make any payments with respect to any stock appreciation rights,
phantom stock plans or similar rights or plans; provided, that for so long the
as Dolphin Director continues to be a member of the Board of Directors, the
Corporation may, at any time or from time to time during any fiscal quarter,
repurchase shares of Common Stock which are publicly traded and listed on any
securities exchange or quoted in the NASDAQ System (or any successor to the
NASDAQ System) or the over-the-counter market, for an aggregate purchase price
of up to 35% of the consolidated Cash Flow of the Corporation and the
VitalStream Subsidiaries (as determined from the books and records of the
Corporation and the VitalStream Subsidiaries) for the prior fiscal quarter of
the Corporation if (A) the Board of Directors has determined, in its good faith
judgment, that such redemption is fair and in the best interest of all of the
securityholders of the Corporation and (B) such redemption has been approved in
writing, or by the vote at a duly-called meeting of the Board of Directors, by a
majority of the members of the Board of Directors;

                  (viii) directly or indirectly declare or pay any dividends or
make any distributions upon any Equity Securities other than the Series B
Preferred or Series A Preferred, except for dividends payable in shares of
Common Stock issued upon the outstanding shares of Common Stock;


                                      -37-

                  (ix) make any amendment (whether by merger, consolidation or
otherwise) to the Articles of Incorporation of the Corporation or the
Corporation's bylaws, or file any resolution of the Board of Directors with the
Nevada Secretary of State containing any provisions, which would increase the
number of authorized shares of the Common Stock, Series A Preferred or Series B
Preferred;

                  (x) make any amendment (whether by merger, consolidation or
otherwise) to the Articles of Incorporation of the Corporation or the
Corporation's bylaws, or file any resolution of the Board of Directors with the
Nevada Secretary of State containing any provisions, which would adversely
affect or otherwise impair the rights or the relative preferences and priorities
of the holders of the Series A Preferred or Series B Preferred (for purposes of
clarification, neither (A) the creation, designation or issuance of shares of
Junior Preferred Stock, nor (B) effecting a reverse stock split of the Common
Stock (whether or not the number of authorized shares of Common Stock is
changed) would adversely affect or otherwise impact such rights, preferences or
priorities);

                  (xi) except as expressly contemplated by the Exchange and
Purchase Agreement, authorize, issue or enter into any agreement providing for
the authorization or issuance (contingent or otherwise) of any Series A
Preferred or Series B Preferred or other Equity Securities which are senior to
or on a parity with the Series A Preferred or the Series B Preferred with
respect to the payment of dividends, redemptions or distributions upon
liquidation or otherwise (for purposes of clarification, the foregoing shall not
prohibit the creation, designation or issuance of shares of Junior Preferred
Stock); or

                  (xii) permit any VitalStream Subsidiary to authorize, issue or
enter into any agreement providing for the issuance (contingent or otherwise) of
any Equity Securities or Debt Securities.

For purposes of this Section 1, at any time prior to the date on which the
Dolphin Director is no longer entitled to be a member of the Board of Directors
pursuant to the terms of the Investor Rights Agreement, if no individual is
serving as a member of the Board of Directors in the capacity of the Dolphin
Director, VitalStream shall have the right to deliver written notice (the
"Dolphin Director Notice") to the Dolphin Holders (as defined in the Investor
Rights Agreement) requesting that the Dolphin Holders designate an individual to
be nominated as the Dolphin Director. If the Dolphin Holders do not submit a
nominee to serve as the Dolphin Director in writing to VitalStream within ten
(10) business days after receipt by the Dolphin Holders of the Dolphin Director
Notice, then the Dolphin Director shall be deemed to be a member of the Board of
Directors (regardless of whether an individual is actually serving in such
capacity).

      2. Voting. Except as otherwise expressly provided herein or as expressly
required by Law, the holders of the Series A Preferred, Series B Preferred and
the holders of Common Stock shall vote together as a single class and not as
separate classes. In any such vote, each holder of Common Stock will be entitled
to one vote per share of Common Stock held by such holder, each holder of Series
A Preferred will be entitled to one vote for each share of Common Stock into
which the Series A Preferred held by such holder is then convertible, and each
holder of Series B Preferred will be entitled to one vote for each share of
Common Stock into which the Series B Preferred held by such holder is then
convertible. The holders of shares of Series A


                                      -38-

Preferred and Series B Preferred shall be entitled to vote on all matters on
which the Common Stock shall be entitled to vote, and the holders of Common
Stock shall not be entitled to vote separately as a class on any matter. Holders
of Series A Preferred and Series B Preferred shall be entitled to notice of any
stockholders meeting in accordance with the Bylaws of the Corporation.
Fractional votes shall not, however, be permitted and any fractional voting
rights resulting from the above formula (after aggregating all shares into which
shares of Series A Preferred and Series B Preferred held by each holder could be
converted), shall be disregarded in connection with the exercise of any voting
rights by holders of Series A Preferred or Series B Preferred pursuant to this
Certificate of Designations.

                                      * * *


                                      -39-

E. These resolutions were adopted by the board of directors pursuant to Section
78.195 of the Nevada Revised Statutes and Section (a) of Article IV of the
Corporation's Articles of Incorporation, and shareholder action is not required
to effect this designation.

F. Person to contact about this filing:

                Bryan Allen
                Stoel Rives LLP
                201 South Main Street, Suite 1100
                Salt Lake City, Utah 84111
                (801) 578-6908

Dated: September 26, 2003

                                             VITALSTREAM HOLDINGS, INC.




                                             By:
                                                  ------------------------------
                                                  Name:  Paul S. Summers
                                                  Title: President


                                      -40-