TABLE OF CONTENTS

                                                                            PAGE

                                                           EXHIBIT 10.21
SECTION 1  TERMS OF PURCHASE AND ISSUANCE.....................................1
1.1      Description of Series D Redeemable Preferred Stock and Funding
         Warrants.............................................................1
1.2      Sale and Purchase....................................................1
1.3      Letters of Credit....................................................1
1.4      Subscription Warrants................................................1
1.5      Closing..............................................................2
1.6      Offset of Purchase Price Payment Obligation..........................2
1.7      Use of Proceeds......................................................2
SECTION 2  REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................3
2.1      Organization and Corporate Power.....................................3
2.2      Authorization........................................................4
2.3      Non-contravention....................................................4
2.4      Capitalization of the Company........................................4
2.5      Financial Statements.................................................6
2.6      Absence of Undisclosed Liabilities...................................6
2.7      Accounts Receivable..................................................7
2.8      Title to Properties..................................................7
2.9      Tax Matters..........................................................7
2.10     Contracts and Commitments............................................8
2.11     Proprietary Rights; Employee Restrictions............................8
2.12     Litigation...........................................................9
2.13     Offeree..............................................................9
2.14     Business; Compliance with Laws......................................10
2.15     Information Supplied to Series D Investors..........................10
2.16     Investment Banking; Brokerage.......................................10
2.17     Solvency............................................................11
2.18     Environmental Matters...............................................11
2.19     Employee Benefit Programs...........................................12
2.20     Product and Services Claims.........................................13
2.21     Employees; Labor Matters............................................14
2.22     Corporate Records; Copies of Documents..............................14
2.23     Affiliate Transactions..............................................14
2.24     Investments Related to Certain Foreign Countries....................14
2.25     Small Business Concern, Etc.........................................15
2.26     Insurance...........................................................15
2.27     Absence of Certain Developments.....................................15
SECTION 3  CONDITIONS OF PURCHASE............................................16
3.1      Satisfaction of Conditions..........................................16
3.2      Opinion of Counsel..................................................16
3.3      Authorization.......................................................16
3.4      Effectiveness of Preferred Stock Terms..............................16
3.5      Delivery of Documents...............................................16
3.6      SBIC Deliveries.....................................................17
3.7      Execution of Agreement and Providing Letters of Credit..............17
3.8      Compliance with Law.................................................17
SECTION 4  CONDITIONS OF SALE................................................18
4.1      Satisfaction of Conditions..........................................18
4.2      Compliance With Law.................................................18
4.3      Execution of Agreement and Providing Letters of Credit..............18
SECTION 5  COVENANTS OF THE COMPANY..........................................18
5.1      Financial Statements; Minutes.......................................18
5.2      Budget and Operating Forecast.......................................19
5.3      Conduct of Business.................................................19
5.4      Access to Books and Records.........................................19
5.5      Sales of Additional Securities......................................19
5.6      Stockholders' Agreement.............................................20
5.7      Distributions on, and Redemptions of, Capital Stock.................20
5.8      Merger, Consolidation, Sale of Assets, Acquisitions and Other
         Actions.............................................................21
5.9      Annual Updates; Number of Stockholders; Use of Proceeds; Regulatory
         Violation; Economic Impact Information; Amendment...................21
5.10     June and December Warrants..........................................23
SECTION 6  CONFIDENTIALITY...................................................23
SECTION 7  INVESTOR REPRESENTATIONS..........................................24
SECTION 8  INDEMNIFICATION...................................................25
8.1      Indemnification for Vicarious Liability.............................25
8.2      Notice; Defense of Claims...........................................27
8.3      Satisfaction of Indemnification Obligations.........................28
SECTION 9  GENERAL...........................................................28
9.1      Amendments, Waivers and Consents....................................28
9.2      Survival of Representations, Warranties and Covenants;
         Assignability of Rights.............................................29
9.3      Governing Law.......................................................29
9.4      Section Headings; Counterparts......................................29
9.5      Notices and Demands.................................................29
9.6      Severability........................................................29
9.7      Expenses............................................................30
9.8      Integration.........................................................30
9.9      Certain Provisions Applicable to SBIC Investors.....................30
9.10     No Assignment.......................................................30

APPENDICES
Appendix A  (Form of Warrant)
Appendix B  Securities Acquired
Appendix C  (Form of Legal Opinion)
Appendix D  (Form of Certificate of Designations, Preferences and Rights of
            (Series D Redeemable Preferred Stock)

SCHEDULES
Schedule 2.1  Certain Violations
Schedule 2.4  Capitalization and Beneficial Ownership
Schedule 2.6  Undisclosed Liabilities
Schedule 2.7  Accounts Receivable
Schedule 2.8  Title to Properties
Schedule 2.9  Tax Matters
Schedule 2.10 Material Contracts
Schedule 2.11 Proprietary Rights
Schedule 2.12 Litigation
Schedule 2.14 Business; Compliance with Laws
Schedule 2.18 Environmental Matters
Schedule 2.20 Product and Services Claims
Schedule 2.21 Employees; Labor Matters
Schedule 2.23 Affiliate Transactions
Schedule 2.27 Absence of Certain Developments



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                            GOLDEN SKY HOLDINGS, INC.







                               Shares of Series D
                           Redeemable Preferred Stock
                            and Common Stock Warrants






                      STOCK AND WARRANT PURCHASE AGREEMENT






                           Dated as of January 4, 2000






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<PAGE>

                      STOCK AND WARRANT PURCHASE AGREEMENT

         AGREEMENT made as of this 4th day of January, 2000 by and among Golden
Sky Holdings, Inc., a Delaware corporation (the "Company"), and the investors
identified on the signature page hereto, who are herein collectively referred
to, where no distinction is required, as the "Investors" and individually as an
"Investor."

SECTION 1.  TERMS OF PURCHASE AND ISSUANCE

         1.1  Description of Series D Redeemable Preferred Stock and Funding
Warrants. The Company has authorized the issuance and sale to the Investors of
an aggregate of 100,000 shares of its authorized but unissued Series D
Redeemable Preferred Stock, par value $.01 per share (the "Series D Redeemable
Preferred Stock"), along with warrants substantially in the form of and
containing the terms set forth in Appendix A hereto (each a "Funding Warrant")
exercisable for an aggregate of 3,500 shares of the Company's common stock, $.01
par value (the "Common Stock"), for a collective purchase price of $200 per
share for the Series D Redeemable Preferred Stock and the associated Funding
Warrants.

         1.2  Sale and Purchase. At the Closing (as defined in Section 1.5
hereof) and subject to the terms and conditions herein set forth, the Company
shall issue and sell to each of the Investors, and each Investor severally and
not jointly shall purchase from the Company, the number of shares of Series D
Redeemable Preferred Stock and the Funding Warrants set forth opposite the name
of such Investor in Appendix B hereto for the aggregate purchase price set forth
opposite the name of such Investor in Appendix B (the "Purchase Price").

         1.3  Letters of Credit. The Investors each intend severally to
cause Fleet National Bank (the "LC Bank") to issue for the benefit of Paribas
(formerly known as Banque Paribas) as Syndication Agent (the "Agent") on behalf
of Paribas, Fleet National Bank, General Electric Capital Corporation, PAMCO
Caymen Ltd., PAM Capital Funding, L.P., Citizen's Bank (formerly known as State
Street Bank and Trust Company), Union Bank of California, IBJ Whitehall
Financial Group, Fremont Financial Corporation and DLJ Capital Funding, Inc.
(the "Lenders") under the Amended and Restated Credit Agreement, dated as of
July 7, 1997 and amended and restated as of May 8, 1998, and further amended as
of January 4, 2000, among the Company, Golden Sky Systems, Inc. ("GSS"), Banque
Paribas, Fleet National Bank and General Electric Capital Corporation (the
"Credit Facility"), letters of credit in the respective amounts set forth
opposite each Investor's name under the heading "Purchase Price" in Appendix B
hereof (collectively the "Letters of Credit" and each individually a "Letter of
Credit") to be used as security for an advance under the Credit Facility in the
principal amount of up to $20,000,000 from the Lenders to GSS (the "Loan"), with
the Letters of Credit being on terms and conditions acceptable to the Lenders
and the Investors.

         1.4  Subscription Warrants. Upon the later to occur of (i) the
execution and delivery of this Agreement by the Company and all the Investors,
and (ii) the issuance of all of the Letters of Credit in a form acceptable to
the Lenders, and in consideration of the execution and delivery of this
Agreement by the Investors, the Company shall issue to each Investor warrants
substantially in the form of and containing the terms set forth in Appendix A
hereto (each a "Subscription Warrant" and, together with the Funding Warrants,
the "Warrants") exercisable for the number of shares of Common Stock set forth
opposite such Investor's name on Appendix B attached hereto.

         1.5  Closing. The closing (the "Closing") of the sale and purchase
of the Series D Redeemable Preferred Stock and the Funding Warrants shall take
place upon the request of the Company only in the event that either (i) the
Lenders have asserted that the Loan or credit facility is in default, or (ii) a
principal payment is due under the terms of the Loan within ten days (the
"Notice Condition"). Upon occurrence of a Notice Condition, the Company may
provide written notice (the "Closing Notice") to the Investors of the date of
the Closing, which shall in no event be earlier than two business days after
receipt of the Closing Notice. The Closing shall take place at the offices of
McDermott, Will & Emery, 600 13th Street, N.W., Washington, D.C. 20005, at 10:00
A.M., on the date specified in the Closing Notice, or such other date, time and
place as shall be mutually agreed upon by the Company and a majority in interest
of the Investors (the "Closing Date"). At the Closing, the Company will deliver
the Series D Redeemable Preferred Stock and Funding Warrants being acquired by
each Investor in the form of a stock certificate and a warrant certificate
issued in such Investor's name or in the name of its nominee (of which the
Investor shall notify the Company not less than one business day prior to the
Closing), against payment of the full Purchase Price therefor by check or wire
transfer by or on behalf of each Investor to the Company. The obligations of the
Investors to consummate the purchase of the Series D Redeemable Preferred Stock
and Funding Warrants are several, not joint, and the failure of any one or more
of the Investors to fulfill their obligations hereunder shall not relieve any
other Investor of its obligations hereunder.

         1.6  Offset of Purchase Price Payment Obligation. Notwithstanding
anything herein to the contrary, in the event that (i) the Agent prior to the
Closing Date draws upon a Letter of Credit provided by any of the Investors, or
(ii) any Investor makes a payment to reduce the amount outstanding under the
Loan, the amount so drawn under the Letter of Credit or so paid to reduce the
amount outstanding under the Loan shall be credited against such Investor's
payment obligations to the Company under Sections 1.2 and 1.5 hereof.

         1.7  Use of Proceeds.

                  (a) It is the intention of the parties that proceeds received
         by the Company from the sale of Series D Redeemable Preferred Stock and
         Funding Warrants to the Investors pursuant to this Agreement shall be
         used for the purpose of repaying the Loan and terminating all
         obligations imposed by the Lender to maintain Letters of Credit
         provided by Investors who have purchased the shares of Series D
         Redeemable Preferred Stock specified in Appendix B.

                  (b) Immediately upon receipt by the Company of a notice that
         (i) the Loan or Credit Facility is in default, or (ii) a principal
         payment is due under the terms of the Loan, the Company shall provide
         such notice to each Investor by means set forth in Section 9.5 below.

                  (c) In the event that an Investor purchases the shares of
         Series D Redeemable Preferred Stock specified in Appendix B at the
         Closing as provided herein, and if the Letter of Credit provided by
         such Investor has not been drawn upon by the Agent, the Company shall
         cause Golden Sky DBS, Inc., a Delaware corporation and wholly-owned
         subsidiary of the company ("DBS") to cause GSS, a wholly-owned
         subsidiary of DBS, to promptly pay the proceeds of such sale to the
         Agent to be applied against payment obligations under the Loan and
         shall cause the Agent to terminate the obligation to continue the
         Letter of Credit provided by such Investor.

                  (d) In the event that an Investor purchases the shares of
         Series D Redeemable Preferred Stock specified in Appendix B at the
         Closing as provided herein, and if subsequently the Letter of Credit
         provided by such Investor is drawn upon by the Agent to satisfy part of
         the Company's payment obligation under the Loan, the Company shall
         promptly pay such Investor the amount of the draw under the Letter of
         Credit, not to exceed the amount of the Purchase Price paid by such
         Investor.

                  (e) Notwithstanding anything herein to the contrary, in the
         event that prior to the Closing Date (i) the Agent draws upon a Letter
         of Credit provided by any of the Investors, or (ii) an Investor makes a
         payment to the Company as full or partial consideration for shares of
         Series D Redeemable Preferred Stock, the Company shall promptly request
         that the Agent terminate or reduce the applicable Letter(s) of Credit
         by the amount so drawn or the amount so paid (as referenced in Section
         12 of the Second Amendment, Consent and Waiver to the Amended and
         Restated Credit Agreement, dated as of the date hereof, among the
         Company, GSS, the Banks party thereto, Paribas, as Syndication Agent,
         Fleet National Bank, as Administrative Agent, and General Electric
         Capital Corporation, as Documentation Agent).


SECTION 2.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         In order to induce the Investors to enter into this Agreement, the
Company (which term shall be deemed to include, for purposes of this Section 2,
any subsidiary or subsidiaries of the Company existing at the date of this
Agreement, including without limitation GSS), subject to Section 9.2 hereof,
hereby represents and warrants to the Investors that as of the date hereof:

         2.1  Organization and Corporate Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and is qualified to do business as a foreign corporation in
each jurisdiction in which such qualification is required, except where failure
to so qualify would not have a material adverse effect on the business, assets,
operations or condition (financial or otherwise) of the Company. The Company has
all required corporate power and authority to own its property, to carry on its
business as presently conducted or contemplated, to enter into and perform this
Agreement and the agreements contemplated hereby, and generally to carry out the
transactions contemplated hereby and thereby. The copies of the Company's
Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation") and its By-laws, each as amended to date, which have been
furnished to counsel for the Investors, are correct and complete at the date
hereof. The Company is not in violation of any term of its Certificate of
Incorporation or By-laws or, except as set forth in Schedule 2.1, any material
agreement, instrument, judgment, decree, order, statute, rule or government
regulation applicable to the Company.

         2.2  Authorization. This Agreement and all documents and
instruments executed pursuant hereto or contemplated hereby are valid and
binding obligations of the Company, enforceable in accordance with their terms
against the Company, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws or court decisions of general
application affecting enforcement of creditors' rights generally, and (ii) as
limited by laws or court decisions relating to the availability of specific
performance, injunctive relief or other equitable remedies or to equitable
principles of general applicability. The execution, delivery and performance of
this Agreement and all documents and instruments contemplated hereby and the
delivery and issuance of the Series D Redeemable Preferred Stock and the
Warrants have been duly authorized by all necessary corporate or other action of
the Company. Assuming the accuracy of the Investor representations set forth in
Section 7 hereof, no consent, approval or authorization of, or designation,
declaration or filing with, any governmental authority is required of the
Company in connection with the execution, delivery and performance of this
Agreement, or the issuance and delivery by the Company of the Series D
Redeemable Preferred Stock or the Warrants in accordance with the terms of this
Agreement, or the performance or consummation of any other transaction
contemplated hereby.

         2.3  Non-contravention. The execution, delivery and performance by
the Company of this Agreement and each of the other agreements and instruments
to which it is a party and which are contemplated hereby will not: (a) conflict
with or result in any default under any contract, obligation or commitment of
the Company or any charter provision, by-law or corporate restriction of the
Company, other than such conflicts or defaults that have been waived in writing
prior to the date hereof; (b) result in the creation of any lien, charge or
encumbrance of any nature upon any of the properties or assets of the Company;
or (c) violate any instrument, agreement, judgment, decree, order, statute, rule
or regulation of any federal, state or local government or agency applicable to
the Company or to which the Company is a party.

         2.4  Capitalization of the Company. The authorized capital stock of
the Company consists of: (a) 1,000,000 shares of Common Stock, of which 25,399
shares are, and will be as of the Closing, duly and validly issued, outstanding,
fully paid, and nonassessable; (b) 1,593,000 shares of designated preferred
stock, par value $.01 per share, of which (i) 418,000 shares have been
designated as Series A Convertible Participating Preferred Stock, par value $.01
(the "Series A Convertible Preferred Stock"), and all of which are duly and
validly issued, outstanding, fully paid, and nonassessable, (ii) 228,500 shares
have been designated as Series B Convertible Preferred Stock, par value $.01
(the "Series B Convertible Preferred Stock"), 228,442 of which are duly and
validly issued, outstanding, fully paid, and non assessable, (iii) 51,000 shares
have been designated as Series C Senior Convertible Preferred Stock, par value
$.01 (the "Series C Convertible Preferred Stock") all of which are duly and
validly issued, outstanding, fully paid and nonassessable, (iv) 100,000 shares
have been designated as Series D Redeemable Preferred Stock, all of which will
be as of the Closing, and upon satisfaction of the obligations of the Investors
hereunder, duly and validly issued, outstanding, fully paid and nonassessable,
and (v) 418,000 shares have been designated as Series A Redeemable Preferred
Stock, par value $.01 per share (the "Series A Redeemable Preferred Stock), and
228,500 shares have been designated as Series B Redeemable Preferred Stock, par
value $.01 per share (the "Series B Redeemable Preferred Stock"), none of which
are outstanding; and (c) 149,000 shares of undesignated preferred stock, par
value $.01 per share. Except for 58,852 shares of Common Stock reserved for
issuance under the Company's Stock Option Plan adopted on July 24, 1997 (the
"Stock Option Plan"), 5,682 shares of Common Stock issuable upon the exercise of
warrants (the "Alta Warrants") issued to certain investment funds affiliated
with Alta Communications, Inc. in connection with loans extended by such
investment funds to the Company, 7,000 shares of Common Stock issuable upon
exercise of the Warrants, 7,000 shares issuable upon exercise of the June and
December Warrants (if applicable, as described in Section 5.10 hereof) or as
otherwise disclosed in Schedule 2.4, the Company has not issued any other shares
of its capital stock and there are no outstanding warrants, options or other
rights to purchase or acquire any of such shares, nor any outstanding securities
convertible into such shares or outstanding warrants, options or other rights to
acquire any such convertible securities. As of the Closing, all of the
outstanding shares of capital stock of the Company will have been offered,
issued, sold and delivered in compliance with applicable federal and state
securities laws.

         The Series A Convertible Preferred Stock is currently convertible into
418,000 shares of Series A Redeemable Preferred Stock and 418,000 shares (the
"Series A Conversion Shares") of Common Stock, together representing 52.2% of
the Common Stock on a fully-diluted basis after giving effect to the issuance of
the 58,852 shares reserved for issuance under the Stock Option Plan and the
exercise, exchange or conversion of any other securities exercisable or
exchangeable for or convertible into Common Stock (including the Series B
Convertible Preferred Stock, the Series C Convertible Preferred Stock, the Alta
Warrants and the Warrants). The Series B Convertible Preferred Stock is
currently convertible into 228,442 shares of Series B Redeemable Convertible
Preferred Stock and 228,442 shares (the "Series B Conversion Shares") of Common
Stock, together representing 28.6% of the Common Stock on a fully diluted basis
after giving effect to the issuance of the 58,852 shares reserved for issuance
under the Stock Option Plan and the exercise, exchange or conversion of any
other securities exercisable or exchangeable for or convertible into Common
Stock (including the Series A Convertible Preferred Stock, the Series C
Convertible Preferred Stock, the Alta Warrants and the Warrants). The Series C
Convertible Preferred Stock is convertible, as of November 30, 1999, into 57,233
shares (the "Series C Conversion Shares" and, together with the Series A and B
Conversion Shares, the "Conversion Shares") of Common Stock representing 7.2% of
the Common Stock of the Company on a fully diluted basis after giving effect to
the issuance of the 58,852 shares reserved for issuance under the Stock Option
Plan and the exercise, exchange or conversion of any other securities
exercisable or exchangeable for or convertible into Common Stock (including the
Series A Convertible Preferred Stock, the Series B Convertible Preferred Stock,
the Alta Warrants and the Warrants). The relative rights, preferences,
restrictions and other provisions relating to the Company's capital stock are as
set forth in the Certificate of Incorporation. The Company has authorized and
reserved for issuance (i) upon conversion of the Series A Convertible Preferred
Stock, 418,000 shares of Series A Redeemable Preferred Stock and 418,000 shares
of Common Stock, (ii) upon conversion of the Series B Convertible Preferred
Stock, 228,442 shares of Series B Redeemable Preferred Stock and 228,442 shares
of Common Stock, and (iii) upon conversion of the Series C Convertible Preferred
Stock, as of November 30, 1999, 57,233 shares of Common Stock. The Conversion
Shares issuable upon such conversions will be, when issued in accordance with
the Certificate of Incorporation, duly and validly authorized and issued, fully
paid and nonassessable. The Company has authorized and reserved for issuance
upon exercise of the Warrants and the Alta Warrants not less than 12,682 shares
of Common Stock and such shares will be, when issued in accordance with the
Certificate of Incorporation, duly and validly authorized and issued, fully paid
and nonassessable.

         Except as set forth in the Certificate of Incorporation or the
Stockholders' Agreement, dated as of November 24, 1997, by and among Golden Sky
Holdings, Inc. and the Investors identified therein (the "Stockholders'
Agreement"), there are no preemptive rights or rights of first refusal with
respect to the issuance or sale of the Company's capital stock. No officer,
director or employee of the Company or any other person or entity has, or to the
best knowledge of the Company claims to have or has any right to claim to have
any interest in the Company's capital stock other than (i) as disclosed in
Schedule 2.4 hereof, (ii) options to acquire certain of the 58,852 shares of
Common Stock granted pursuant to the Stock Option Plan, (iii) the Alta Warrants,
or (iv) as an Investor hereunder. There are no restrictions on the transfer of
the Company's capital stock other than those arising from federal and state
securities laws or under this Agreement or the Stockholders' Agreement. Except
as set forth in the Stockholders' Agreement, there are no rights, obligations or
restrictions on the voting of any of the Company's capital stock or the
registration of such capital stock for offering to the public pursuant to the
Securities Act of 1933, as amended (the "Securities Act").

         Except as set forth in Schedule 2.4, the Company has no subsidiaries or
investments in any other corporation or business organization and does not own
or have any direct or indirect interest in, a loan or advance to, or control
over any corporation, partnership, joint venture or other entity of any kind.

         2.5  Financial Statements. The Company has heretofor furnished to
the Investors the following unaudited financial statements of the Company: (i)
an income statement for the year ended December 31, 1998; (ii) a balance sheet,
and related footnotes, as of December 31, 1998 (the "1998 Balance Sheet"); (iii)
an income statement for the nine months ended September 30, 1999; and (iv) a
balance sheet, and related footnotes, as of September 30, 1999 (the "Third
Quarter Balance Sheet"). Such financial statements and schedules have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis, except that such unaudited financial statements have been
prepared without footnote disclosures and year-end audit adjustments, which will
not, in any event, be material. Such financial statements contain notations for
all significant accruals or contingencies, fairly represent the financial
condition of the Company in all material respects as of the date thereof, and
are true and correct as of the date thereof in all respects. Nothing has come to
the attention of management of the Company since such dates that would indicate
that the financial statements were not true and correct in all material respects
as of the date thereof.

         2.6  Absence of Undisclosed Liabilities. The Company does not have
any material liability or liabilities of any nature, whether accrued, absolute,
contingent or otherwise, asserted or unasserted, known or unknown, which are or
would be required to be disclosed in accordance with generally accepted
accounting principles, except as and to the extent disclosed in Schedule 2.6 or
as otherwise set forth in the 1998 Balance Sheet or the Third Quarter Balance
Sheet, and, to the best knowledge of the Company, there exists no set of facts
or circumstances which should be reasonably anticipated to form the basis for
any such material liabilities.

         2.7  Accounts Receivable. To the best knowledge of the Company, all
of the accounts receivable of the Company represent bona fide completed sales
made in the ordinary course of business and are valid and enforceable claims,
subject to no express set-off or counterclaim. Except as disclosed on Schedule
2.7, the Company has no material accounts receivable from any person, firm or
corporation which is affiliated with it or from any of its directors, officers,
employees or shareholders or any affiliates of any of the foregoing.

         2.8  Title to Properties. The Company has good and marketable title
to all of its material properties and assets, free and clear of all liens,
restrictions or encumbrances, except as disclosed in Schedule 2.8, and such
properties and assets constitute all of the assets necessary for the conduct of
the Company's business as presently conducted. All machinery and equipment
included in such properties which is necessary to the business of the Company is
in good condition and repair and all leases of real or personal property to
which the Company is a party are fully effective and afford the Company peaceful
and undisturbed possession of the subject matter of the lease. The Company is
not in violation, in any material respect, of any zoning, building or safety
ordinance, regulation or requirement or other law or regulation applicable to
the operation of its owned or leased properties, nor has the Company received
any notice of violation with which it has not complied.

         2.9  Tax Matters. Except as set forth in Schedule 2.9 attached
hereto:

                  (a) The Company has paid or caused to be paid all federal,
state, local, foreign, and other taxes, including without limitation, income
taxes, estimated taxes, alternative minimum taxes, excise taxes, sales taxes,
franchise taxes, employment and payroll-related taxes, withholding taxes,
transfer taxes, and all deficiencies, or other additions to tax, interest, fines
and penalties owed by it (collectively, "Taxes"), required to be paid by it
through the date hereof whether disputed or not, other than possible sales and
use tax obligations which in the aggregate are not material to the Company. All
taxes and other assessments and levies which the Company is required to withhold
or collect have been withheld and collected and have been paid over to the
proper governmental authorities. The Company has, in accordance with applicable
law, timely and properly filed all federal, state, local and foreign tax returns
required to be filed by it through the date hereof, all such returns correctly
and accurately set forth the amount of any Taxes relating to the applicable
period and any deductions from, or credits against any Taxes or taxable income
relating to such returns are valid and proper items of deduction or credit.

                  (b) Neither the Internal Revenue Service ("IRS") nor any other
governmental authority is now asserting or, to the knowledge of the Company is
threatening to assert against the Company, any deficiency or claim for
additional Taxes. No claim has ever been made by an authority in a jurisdiction
where the Company does not file reports and returns that the Company is or may
be subject to taxation by that jurisdiction. There are no security interests on
any of the assets of the Company that arose in connection with any failure (or
alleged failure) to pay any Taxes. The Company is not and never has been a
"personal holding company" as defined under Section 541 of the Internal Revenue
Code of 1986, as amended (the "Code"). Except as set forth on Schedule 2.9
hereto, there has not be any audit of any tax return filed by the Company, no
audit of any tax return of the Company or any subsidiary, as the case may be, is
in progress and, to the Company's best knowledge, no tax authority is
contemplating any such audit, nor is any such audit pending. No extension of
time with respect to any date on which a tax return was or is to be filed by the
Company is in force, and no waiver or agreement by the Company is in force for
the extension of time for the assessment or payment of any Taxes. The Company
does not have any liability for the Taxes of any person or entity other than the
Company.

                  (c) For purposes of this Agreement, all references to Sections
of the Code shall include any predecessor provisions to such Sections and any
similar provisions of federal, state, local or foreign law.

         2.10  Contracts and Commitments. Except as set forth in Schedule
2.10, the Company does not know of any basis for the termination, expiration or
modification of any material contract, obligation or commitment prior to the
expiration date thereof, nor, to the Company's best knowledge, does any other
party to any such contract, obligation or commitment plan or intend to so
terminate, modify or fail to renew on substantially similar terms any such
contract, obligation or commitment, which termination, expiration or
modification, in any such case, or failure to renew, may have an adverse effect
on the assets, liabilities, business, prospects or financial condition of the
Company. Except as set forth in Schedule 2.10, the Company is not in default,
nor to the Company's best knowledge, is any other party thereto in default,
under any material contract, obligation or commitment, and to the best knowledge
of the Company there is no state of facts which upon notice or lapse of time or
both would constitute such a default. The Company is not a party to any material
contract or arrangement the performance of which under circumstances now
foreseeable is likely to have an adverse effect on the assets, liabilities,
business or condition (financial or otherwise) of the Company. The Company does
not have any liability for renegotiation of any government contracts or
subcontracts. Without limiting the generality of the foregoing, all key
employees of the Company and each of its subsidiaries listed on Schedule 2.10
hereof have entered into non-competition agreements with the Company containing
non-competition, non-solicitation and confidentiality provisions, which
agreements continue in full force and effect.

         2.11  Proprietary Rights; Employee Restrictions. The Company owns or
possesses exclusive licenses to use, free and clear of claims or rights of any
other person, all patents, patent applications, trademarks, trademark
applications, service marks, service mark applications, trade names, copyrights,
licenses, sublicenses, trade secrets and know how (collectively "Intellectual
Property") necessary to the conduct of its business as presently conducted and
as proposed to be conducted. The Company is not aware of any infringement by any
other person of any rights of the Company under any Intellectual Property. No
claim is pending or currently, or during the past 12 months, threatened against
the Company, nor has the Company received any notice from any third parties, to
the effect that any Intellectual Property owned or licensed by the Company, or
which the Company otherwise has the right to use, or the operation, products or
services of the Company infringe upon or conflict with the asserted rights of
any other person under any Intellectual Property, and, to the best knowledge of
the Company, there is no basis for any such claim (whether or not pending or
threatened). No claim is pending or, to the best knowledge of the Company, is
threatened against the Company, nor has the Company received any notice from any
third parties to the effect that any Intellectual Property owned or licensed by
the Company, or which the Company otherwise has the right to use, is invalid or
unenforceable by the Company, as the case may be, and, to the best knowledge of
the Company, there is no basis for any such claim (whether or not pending or
threatened).

         All technical information developed by or belonging to the Company
which has not been patented and which is material to the business of the Company
has been kept confidential. To the best knowledge of the Company, the Company is
not making unlawful use of any Intellectual Property of any other person,
including without limitation any former employer of any past or present
employees of the Company. Except as disclosed in Schedule 2.11, neither the
Company nor, to the best knowledge of the Company, any of its employees,
officers or consultants has any agreements or arrangements with former employers
of such employees, officers or consultants relating to any Intellectual Property
of such employers, which interfere or conflict with the performance of such
employee's duties for the Company or results in any former employers of such
employees having any rights in, or claims on, the Company's Intellectual
Property. To the best knowledge of the Company, the activities of the Company's
employees and officers do not violate any agreements or arrangements which any
such employees have with former employers. The Company has taken all
commercially reasonable steps required to establish and preserve its ownership
of all of the Intellectual Property.

         Without limitation of any of the foregoing and except as otherwise
expressly disclosed in Schedule 2.11 hereto: (a) the Company has taken
reasonable security measures to guard against unauthorized disclosure or use of
any of the Intellectual Property; and (b) the Company has no reason to believe
that any person (including without limitation any former employee of the
Company) has unauthorized possession of any of the Intellectual Property, or any
part thereof, or that any person has obtained unauthorized access to any of the
Intellectual Property.

         2.12  Litigation. Except as disclosed in Schedule 2.12, there is no
litigation or governmental proceeding or investigation pending or, to the best
knowledge of the Company, currently, or, during the past 12 months, threatened
against the Company, or any officer or key employee of the Company, which (a)
may call into question the validity or hinder the enforceability or performance
of this Agreement or the agreements and transactions contemplated hereby, or (b)
relates to the Company or its business or affairs and could be reasonably
expected to have material adverse effect on the assets, liabilities, business or
condition (financial or otherwise) of the Company, nor, to the best knowledge of
the Company, has there occurred any event nor does there exist any condition on
the basis of which any such litigation, proceeding or investigation might
properly be instituted.

         2.13  Offeree. Neither the Company nor anyone acting on its behalf
has in the past or will in the future sell, offer for sale or solicit offers to
buy any securities of the Company so as to bring the offer, issuance or sale of
the Series D Redeemable Stock, the Warrants or the June or December Warrants (if
applicable, as described in Section 5.10 hereof) as contemplated by this
Agreement, within the provisions of Section 5 of the Securities Act, unless such
offer, issuance or sale was or will be eligible for one or more of the
registration exemptions under the Securities Act. The Company has in the past
complied and will continue to comply in all material respects with all
applicable state "blue-sky" or securities laws in connection with the issuance
and sale of its Common Stock, preferred stock and all other securities
heretofore issued and to be issued upon the closing of the Agreement. The
Company has in the past complied in all material respects with all applicable
federal and state securities laws in connection with the offer, solicitation of
offers and sales of its securities.

         2.14  Business; Compliance with Laws. Except as disclosed in
Schedule 2.14, the Company has all material franchises, permits, licenses and
other rights and privileges necessary to permit it to own its property and to
conduct its business as it is presently conducted. The Company is not in
violation, in any material respect, of any law, regulation, authorization or
order of any public authority. The Company is in compliance, in all material
respects, with all federal (including all laws and regulations of the Federal
Communications Commission), state and local laws and regulations (including all
applicable environmental laws and regulations) relating to its business as
presently conducted, except as disclosed in Schedule 2.14. The Company has been
approved as an NRTC affiliate member and DBS participant. Neither the Company
nor any of its affiliates has been: (a) subject to a voluntary or involuntary
petition under the federal bankruptcy laws or any state insolvency law or the
appointment of a receiver, fiscal agent or similar officer by a court for his
business or property; (b) convicted in a criminal proceeding or named as a
subject of a pending criminal proceeding (excluding traffic violations and other
minor offenses); (c) subject to any order, judgment, or decree (not subsequently
reversed, suspended or vacated) of any court of competent jurisdiction
permanently or temporarily enjoining it, him or her from, or otherwise imposing
limits or conditions on its, his or her, engaging in any securities, investment
advisory, banking, insurance or other type of business or acting as an officer
or director of a public company; or (d) found by a court of competent
jurisdiction in a civil action or by the Securities and Exchange Commission or
the Commodity Futures Trading Commission to have violated any federal or state
commodities, securities or unfair trade practices law or regulations of any
regulatory agency, which such judgment or finding has not been subsequently
reversed, suspended or vacated.

         2.15  Information Supplied to Series D Investors. This Agreement and
the Schedules, taken as a whole, do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not misleading. There is no material fact directly
relating to the assets, liabilities, business, prospects or condition (financial
or otherwise) of the Company (other than facts which relate to general economic
or industry trends or conditions) presently known to the Company which has not
been disclosed to the Investors that materially adversely affects or in the
future may reasonably be expected to materially adversely affect the same.

         2.16  Investment Banking; Brokerage. No broker, finder, agent or
similar intermediary has acted on behalf of the Company in connection with this
Agreement or the transactions contemplated hereby and there are no brokerage
commissions, finders fees or similar fees or commissions payable in connection
therewith. The Company agrees to indemnify and hold the Investors harmless from
any losses, damages, costs or expenses they may suffer or incur as a result of a
breach of this representation (including any dilution or diminution in value of
their investment in the Company).

         2.17  Solvency. The Company has not: (a) made a general assignment
for the benefit of creditors; (b) filed any voluntary petition in bankruptcy or
suffered the filing of any involuntary petition by its creditors; (c) suffered
the appointment of a receiver to take possession of all, or substantially all,
of its assets; (d) suffered the attachment or other judicial seizure of all, or
substantially all, of its assets; (e) admitted in writing its inability to pay
its debts as they come due; or (f) made an offer of settlement, extension or
composition to its creditors generally.

         2.18  Environmental Matters.

                  (a) Except as set forth in Schedule 2.18, (i) the Company has
never generated, transported, used, stored, treated, disposed of, or managed any
Hazardous Waste (as defined below); (ii) to the best knowledge of the Company,
no Hazardous Material (as defined below) has ever been or is threatened to be
spilled, released, or disposed of by the Company, at any site presently or
formerly owned, operated, leased, or used by the Company, or has ever come to be
located in the soil or groundwater at any such site; (iii) to the best knowledge
of the Company, no Hazardous Material of the Company has ever been transported
from any site presently or formerly owned, operated, leased, or used by the
Company for treatment, storage, or disposal at any other place; (iv) to the best
knowledge of the Company, the Company presently does not own, operate, lease, or
use, nor has the Company previously owned, operated, leased, or used, any site
on which underground storage tanks are or were located; and (v) to the best
knowledge of the Company, no lien has ever been imposed by any governmental
agency on any property, facility, machinery, or equipment owned, operated,
leased, or used by the Company with the presence of any Hazardous Material and
based upon any action or inaction of the Company.

                  (b) Except as set forth in Schedule 2.18, (i) the Company has
no liability under, nor has it ever violated in any material respect, any
Environmental Law (as defined below); (ii) the Company, any property owned,
operated, leased, or used by the Company and any facilities and operations
thereon are presently in compliance in all material respects with all applicable
Environmental Laws; (iii) the Company has never entered into or been subject to
any judgment, consent decree, compliance order, or administrative order with
respect to any environmental or health and safety matter or received any request
for information, notice, demand letter, administrative inquiry, or formal or
informal complaint or claim with respect to any environmental or health and
safety matter or the enforcement of any Environmental Law; and (iv) to the best
knowledge of the Company, none of the items enumerated in clause (iii) of this
paragraph will be forthcoming.

                  (c) Except as set forth in Schedule 2.18, to the best
knowledge of the Company, no site owned, operated, leased or used by the Company
contains any asbestos or asbestos-containing material, any polychlorinated
biphenyls ("PCBs") or equipment containing PCBs, or any urea formaldehyde foam
insulation.

                  (d) The Investors have been provided with copies of all
documents, records, and information available concerning any environmental or
health and safety matter relevant to the Company, whether generated in
connection with the Company's business or otherwise, including, without
limitation, environmental audits, environmental risk assessments, site
assessments, documentation regarding off-site disposal of Hazardous Materials,
spill control plans, and reports, correspondence, permits, licenses, approvals,
consents, and other authorizations related to environmental or health and safety
matters issued by any governmental agency.

                  (e) For purposes of this Section 2.18, (i) "Hazardous
Material" shall mean and include any hazardous waste, hazardous material,
hazardous substance, petroleum product, oil, toxic substance, pollutant,
contaminant, or other substance which may pose a threat to the environment or to
human health or safety, as defined or regulated under any Environmental Law;
(ii) "Hazardous Waste" shall mean and include any hazardous waste as defined or
regulated under any Environmental Law; (iii) "Environmental Law" shall mean any
environmental or health and safety-related law, regulation, rule, ordinance, or
by-law at the federal, state, or local level, whether existing as of the date
hereof, or subsequently enacted; and (iv) "Company" shall include the Company,
and any predecessor to the Company.

         2.19  Employee Benefit Programs.

                  (a) The Company has never maintained (as defined below) an
Employee Program (as defined below) which has at any time been intended to
satisfy the requirements under Section 501(c)(9) of the Code.

                  (b) Each Employee Program that has ever been maintained by the
Company has been maintained in compliance in all material respects with all
applicable laws. With respect to any Employee Program ever maintained by the
Company, there has occurred no "prohibited transaction," as defined in Section
406 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 4975 of the Code (for which there exists neither a
statutory nor regulatory exception), or material breach of any duty under ERISA
or other applicable law (including, without limitation, any health care
continuation requirements or any other tax law requirements, or conditions to
favorable tax treatment, applicable to such plan or to any person in regard to
such plan), which could result, directly or indirectly (including, without
limitation, through any obligation of indemnification or contribution), in any
taxes, penalties or other liability to the Company or any of its affiliates. No
litigation, arbitration or governmental administrative proceeding (or
investigation) or other proceeding (other than those relating to routine claims
for benefits) is pending or, to the best knowledge of the Company, threatened
with respect to any such Employee Program.

                  (c) Neither the Company nor any Affiliate (as defined below)
(i) has ever maintained any Employee Program which has been subject to Title IV
of ERISA or Section 412 of the Code (including, but not limited to, any
Multiemployer Plan (as defined below)) or (ii) has ever provided health care or
any other non-pension benefits to any employees after their employment is
terminated (other than as required by part 6 of subtitle B of Title I of ERISA)
or has ever promised to provide such post-termination benefits.

                  (d) With respect to each Employee Program maintained by or on
behalf of the Company or any affiliate since November 24, 1997, complete and
correct copies of the following documents (if applicable to such Employee
Program) have previously been delivered to the Investors: (i) all documents
embodying or governing such Employee Program, and any funding medium for the
Employee Program (including, without limitation, trust agreements), as they may
have been amended to the date hereof; (ii) the most recent IRS determination or
approval letter with respect to such Employee Program under Code Section 401 or
501(c)(9), and any applications for determination or approval subsequently filed
with the IRS; (iii) the three most recently filed IRS Forms 5500, with all
applicable schedules and accountants' opinions attached thereto; (iv) the
summary plan description for such Employee Program (or other descriptions of
such Employee Program provided to employees) and all modifications thereto; (v)
any insurance policy (including any fiduciary liability insurance policy and any
excess loss policy) related to such Employee Program; (vi) any documents
evidencing any loan to an Employee Program that is a leveraged employee stock
ownership plan; and (vii) all other materials reasonably necessary for the
Company to perform any of its responsibilities with respect to any Employee
Program subsequent to the Closing (including, without limitation, health care
continuation requirements).

                  (e) For purposes of this Section 2.19:

                           (i) "Employee Program" means (A) all employee benefit
         plans within the meaning of ERISA Section 3(3), including, but not
         limited to, employer welfare arrangements (within the meaning of ERISA
         Section 3(40)), plans to which more than one unaffiliated employer
         contributes and employee benefit plans (such as foreign or excess
         benefit plans) which are not subject to ERISA; and (B) all stock or
         cash option plans, restricted stock plans, bonus or incentive award
         plans, severance pay policies or agreements, deferred compensation
         agreements, supplemental income arrangements, vacation plans, and all
         other employee benefit plans, agreements, and arrangements not
         described in (A) above. In the case of an Employee Program funded
         through an organization described in Code Section 501(c)(9), each
         reference to such Employee Program shall include a reference to such
         organization.

                           (ii) An entity "maintains" an Employee Program if
         such entity sponsors, contributes to, or provides (or has promised to
         provide) benefits under such Employee Program, or has any obligation
         (by agreement or under applicable law) to contribute to or provide
         benefits under such Employee Program, or if such Employee Program
         provides benefits to or otherwise covers employees of such entity (or
         their spouses, dependents, or beneficiaries).

                           (iii) An entity is an "Affiliate" of the Company if
         it would have ever been considered a single employer with the Company
         or any Entity under ERISA Section 4001(b) or part of the same
         "controlled group" as the Company for purposes of ERISA Section
         302(d)(8)(C).

                           (iv) "Multiemployer Plan" means a (pension or
         non-pension) employee benefit plan to which more than one employer
         contributes and which is maintained pursuant to one or more collective
         bargaining agreements.

         2.20  Product and Services Claims. Except as set forth on Schedule
2.20, (i) there are no pending or, to the best knowledge of the Company,
threatened material product or service claims with respect to any products or
services provided by the Company prior to the date hereof nor are there any
facts upon which a claim of such nature could reasonably be anticipated to be
based and (ii) the Company does not have any contractual liability for breach of
warranty or service claims. No claims have been made against the Company for
renegotiation or price redetermination of any business transaction resulting
from or relating to defective products or services, and, to the best knowledge
of the Company, there are no facts upon which any such claim should reasonably
be anticipated to be based.

         2.21  Employees; Labor Matters. The Company is not delinquent in
payments to any of its employees for any material amount of wages, salaries,
commissions, bonuses or other direct compensation for any services performed for
it to the date hereof or amounts required to be reimbursed to such employees.
The Company does not have any policy, or practice, plan or program of paying
severance pay or any form of severance compensation in connection with the
termination of employment, except as set forth in Schedule 2.21. The Company is
in compliance in all material respects with all applicable laws and regulations
respecting labor, employment, fair employment practices, work place safety and
health, terms and conditions of employment, and wages and hours. Except as set
forth in Schedule 2.21, there are no material charges of employment
discrimination or unfair labor practices, nor are there any strikes, slowdowns,
stoppages of work or any other concerted interference with normal operations
which are existing, pending or, to the best knowledge of the Company threatened
against or involving the Company. The Company has not received any information
indicating that any of its employment policies or practices is currently being
audited or investigated by any federal, state or local government agency. The
Company is, and at all times since November 24, 1997 has been, in material
compliance with the requirements of the Immigration Reform Control Act of 1986.
Schedule 2.21 sets forth a complete list of each officer, employee and sales
representative who is scheduled to receive total remuneration from the Company
on an annualized basis in excess of $100,000 for the calendar year ending
December 31, 1999.

         2.22  Corporate Records; Copies of Documents. The corporate record
books of the Company accurately record all corporate action taken by its
stockholders and board of directors and committees. The copies of the corporate
records of the Company, as made available to the Investors for review, are true
and complete copies of the originals of such documents.

         2.23  Affiliate Transactions. Except as set forth in Schedule 2.23
hereto, neither the Company nor any officer, employee or director of the Company
or any of their respective spouses or family members or any of their affiliates,
owns, directly or indirectly, on an individual or joint basis, any material
interest in, or serves as an officer, director, partner or in another similar
capacity of, any competitor of the Company, or any organization which has a
contract or arrangement with the Company.

         2.24  Investments Related to Certain Foreign Countries. Neither the
Company nor any affiliate of the Company has participated in, or is
participating in, an anti-Israeli boycott within the scope of Chapter 7 of Part
2 of Division 4 of Title 2 of the California Government Code, as in effect from
time to time.

         2.25  Small Business Concern, Etc.

                  (a) The Company, together with its "affiliates" (as that term
is defined in 13 CFR Section 121.103), is a "smaller enterprise" within the
meaning of SBIC Regulations, including 13 CFR Section 107.710. The information
regarding the Company and its affiliates set forth in SBA Form 480, Form 652 and
Section A of Form 1031 delivered on or prior to the date hereof is accurate and
complete. The Company does not presently engage in, nor shall hereafter engage
in, any activities, and the Company shall not use the proceeds of the sale of
the Series D Redeemable Preferred Stock hereunder directly or indirectly for any
purpose, for which an SBIC is prohibited from providing funds by SBIC
Regulations (including 13 CFR Section 107.720).

                  (b) As of the date hereof, the Company, together with its
"affiliates," has a net worth of not more than $6.0 million and average net
income after federal income taxes (excluding any carryover losses) for the
preceding two years no greater than $2.0 million.

                  (c) For all purposes of this Agreement, the following terms
shall have the following meanings:

                           (i) "SBA" means the United States Small Business
         Administration, and any successor agency performing the functions
         thereof;

                           (ii) "SBIC" means a Small Business Investment Company
         licensed by the SBA under the SBIC Act;

                           (iii) "SBIC Act" means the Small Business Investment
         Act of 1958, as amended; and

                           (iv) "SBIC Regulations" means the SBIC Act and the
         regulations issued by the SBA thereunder, codified at Title 13 of the
         Code of Federal Regulations ("13 CFR"), Parts 107 and 121.

         2.26  Insurance. The Company maintains insurance which is adequate
to protect the Company against the risks involved in the business conducted by
the Company.

         2.27  Absence of Certain Developments. Except as disclosed in
Schedule 2.27, since the date of the 1998 Balance Sheet there has been (i) no
adverse change in the condition, financial or otherwise, of the Company or in
the assets, liabilities, business or prospects of the Company, (ii) no
declaration, setting aside or payment of any dividend or other distribution with
respect to, or any direct or indirect redemption or acquisition of, any of the
capital stock of the Company, (iii) no loan by the Company to any officer,
director, employee or stockholder of the Company, or affiliates of any of the
foregoing or any agreement or commitment therefor, excluding ordinary course of
business items such as travel advances, (v) no increase in the compensation paid
or payable to any officer, director, employee or agent of the Company or
affiliates of any of the foregoing, other than as approved by the Compensation
Committee of the Board of Directors, (vi) no material loss, destruction or
damage to any property of the Company, whether or not insured, (vii) no labor
trouble involving the Company and no material change in the personnel of the
Company or the terms and conditions of their employment and (viii) no
acquisition or disposition of any assets (or any contract or arrangement
therefor) nor any other transaction by the Company otherwise than for fair value
in the ordinary course of business.

SECTION 3.  CONDITIONS OF PURCHASE

         The Investors' obligation to purchase and pay for the Series D
Redeemable Preferred Stock and the Funding Warrants shall be subject to
compliance by the Company and each of its subsidiaries, including without
limitation GSS, with the Company's agreements herein contained and to the
fulfillment to the Investors' satisfaction on or before the Closing Date of the
following conditions:

         3.1  Satisfaction of Conditions. The representations and warranties
of the Company contained in this Agreement (including, but not limited to, the
representations and warranties made in Section 2 hereof) shall be true and
correct in all material respects on and as of the Closing Date; each of the
conditions specified in this Section 3 shall have been satisfied or waived in
writing; and on the Closing Date, certificates to such effect executed by the
President and the principal financial officer of the Company shall be delivered
to the Investors.

         3.2  Opinion of Counsel. The Investors shall have received an
opinion, dated the Closing Date, in substantially the form of Appendix C
attached hereto.

         3.3  Authorization. The Board of Directors of the Company shall
have duly adopted resolutions in form reasonably satisfactory to the Investors
authorizing the Company to consummate the transactions contemplated hereby in
accordance with the terms hereof, and the Investors shall have received a duly
executed certificate of the Secretary of the Company setting forth a copy of
such resolutions, the Company's Certificate of Designations, Preferences and
Rights of Series D Redeemable Preferred Stock (the "Certificate of
Designations") and the By-laws and such other matters as may be requested by the
Investors.

         3.4  Effectiveness of Preferred Stock Terms. The Board of Directors
of the Company shall have adopted a resolution establishing the terms of the
Series D Redeemable Preferred Stock as set forth in Appendix D hereto and such
action shall have been made effective by the required approval thereof, if any,
by the holders of the Series A Convertible Preferred Stock, the Series B
Convertible Preferred Stock, the Series C Convertible Preferred Stock and the
Common Stock and the filing of a certificate of designations with the Secretary
of State for the State of Delaware.

         3.5  Delivery of Documents. The Company shall have executed and
delivered to the Investors (or shall have caused to be executed and delivered to
the Investors by the appropriate persons) the following:

                  (a) Certificates evidencing shares of the Series D Redeemable
         Preferred Stock and the Funding Warrants;

                  (b) Certified copies of resolutions of the Board of Directors,
         and any required resolutions or consents by the stockholders of the
         Company, authorizing the execution and delivery of this Agreement, the
         Certificate of Designations creating the Series D Redeemable Preferred
         Stock and the issuance of the Series D Redeemable Preferred Stock, the
         Warrants, the June and December Warrants (if applicable, as described
         in Section 5.10 hereof) and the shares of Common Stock issuable upon
         exercise of such warrants;

                  (c) A copy of the corporate charter of the Company, as
         amended, certified as of a recent date by the Secretary of State of the
         State of Delaware;

                  (d) A copy of the By-laws of the Company certified by the
         Company's secretary;

                  (e) Certificates issued by the Secretaries of State of the
         States of Delaware and Missouri, certifying that the Company and each
         of its subsidiaries is in good standing in their respective states; and

                  (f) Such other supporting documents requested by the Investors
         as may be reasonably necessary for the Investors to carry out the
         transactions contemplated hereby.

         3.6 SBIC Deliveries. The Company shall have delivered to Norwest Equity
Partners V ("Norwest"):

                  (a) duly completed and executed SBA Forms 480, 652 and Part A
         of 1031;

                  (b) if not delivered prior to the Closing, a business plan
         showing the Company's financial projections for a five-year period from
         the Closing;

                  (c) a written statement from the Company regarding its
         intended use of the proceeds from the sale of the Series D Redeemable
         Preferred Stock; and

                  (d) a list, after giving effect to the Closing, of (i) the
         name of each of the Company's directors, (ii) the name and title of
         each of the Company's officers, and (iii) the name of each of the
         Company's stockholders setting forth the number and class of shares
         held.

         3.7  Execution of Agreement and Providing Letters of Credit. Each
of the Investors shall have executed and delivered this Agreement to the Company
and shall have provided to the Agent the several Letters of Credit in the
amounts contemplated by Section 1.3 hereof and specified in Appendix B.

         3.8  Compliance with Law. The issuance and sale of the Series D
Redeemable Preferred Stock, the Warrants and the June and December Warrants (if
applicable, as described in Section 5.10 hereof) to the Investors shall be made
in conformity with all applicable state and federal securities laws.

SECTION 4. CONDITIONS OF SALE

         The Company's obligation to issue the Series D Redeemable Preferred
Stock and the Funding Warrants to any Investor and perform its other obligations
hereunder shall be subject to compliance by such Investor with the Investor's
agreements herein contained and to the fulfillment to the Company's satisfaction
on or before the Closing Date of the following conditions:

         4.1  Satisfaction of Conditions. The representations and warranties
of each Investor contained in this Agreement (including, but not limited to, the
representations and warranties made in Section 7 hereof) shall be true and
correct in all material respects on and as of the Closing Date; each of the
conditions specified in this Section 4 shall have been satisfied or waived in
writing; and on the Closing Date, certificates to such effect executed by an
authorized officer of each Investor shall be delivered to the Company.

         4.2  Compliance With Law. The issuance and sale of the Series D
Redeemable Preferred Stock to the Investors shall be made in conformity with all
applicable state and federal securities laws.

         4.3  Execution of Agreement and Providing Letters of Credit. Each
of the Investors shall have executed and delivered this Agreement to the Company
and shall have provided to the Agent the several Letters of Credit in the amount
contemplated by Section 1.3 hereof and specified in Appendix B.

SECTION 5.  COVENANTS OF THE COMPANY

         From and after the date hereof, the Company (which term shall be deemed
to include, for purposes of this Section 5, any subsidiary or subsidiaries of
the Company existing at or formed after the date of this Agreement) shall comply
with the following covenants except as shall otherwise be expressly agreed
pursuant to a written consent or consents executed by the holders of a majority
in interest of the Series D Redeemable Preferred Stock, until such time as all
of the Series D Redeemable Preferred Stock shall have been redeemed in
accordance with their terms or upon the closing of an underwritten public
offering pursuant to an effective registration statement under the Securities
Act covering the offer and sale of Common Stock of the Company to the public in
which the proceeds received by the Company, net of underwriting discounts and
commissions, equal or exceed $35 million and the shares are offered to the
public at a price per share of no less than $600 (in each case as appropriately
adjusted for any stock split, combination, reorganization, recapitalization,
reclassification, stock distribution, stock dividend or similar event) (a
"Qualified Public Offering") or as otherwise provided in the Certificate of
Incorporation, whichever first occurs.

         5.1  Financial Statements; Minutes. The Company will maintain a
comparative system of accounts in accordance with generally accepted accounting
principles, keep full and complete financial records and make available to the
Investors the following reports: (a) within 120 days after the end of each
fiscal year, a copy of the consolidated balance sheet of the Company as at the
end of such year, together with a consolidated statement of income and retained
earnings of the Company for such year, audited and certified by independent
public accountants of recognized national standing reasonably satisfactory to
the Investors, prepared in accordance with generally accepted accounting
principles and practices consistently applied; and (b) within 45 days after the
end of each quarter, a consolidated unaudited balance sheet of the Company as at
the end of such quarter and a consolidated unaudited statement of income and
retained earnings for the Company for such quarter and for the year to date; and
(c) such other financial information as the holders of a majority in interest of
the Series D Redeemable Preferred Stock may reasonably request, including
without limitation, certificates of the principal financial officer of the
Company concerning compliance with the covenants of the Company under this
Section 5.

         5.2  Budget and Operating Forecast. The Company will prepare and
submit to the Board of Directors of the Company a budget for the Company for
each fiscal year of the Company at least 30 days prior to the beginning of such
fiscal year, together with management's written discussion and analysis of such
budget. The budget shall be accepted as the budget for such fiscal year when it
has been approved by a majority of the full Board of Directors of the Company
and, thereupon, a copy of such budget promptly shall be sent to the Investors.
The Company shall review the budget periodically and shall advise the Board of
Directors and the Investors of all changes therein and all material deviations
therefrom.

         5.3  Conduct of Business. So long as any shares of Series D
Redeemable Preferred Stock shall remain outstanding, the Company shall conduct
its business in a manner that does not cause the Outside Investors to recognize
any item of gross income which would generate "unrelated business taxable
income" (as that term is defined in Sections 512 through 514 of the Code),
including without limitation any income derived from or on account of any
"debt-financed property" (as defined in Section 514 of the Code), or gross
income directly attributable to a "trade or business" (within the meaning of
Sections 512 and 513 of the Code).

         5.4  Access to Books and Records. The Investors may examine the
books and records of the Company and inspect its facilities and may request
information at reasonable times and intervals concerning the general status of
the financial condition and operations of the Company, provided that access to
highly confidential proprietary information and facilities need not be provided.

         5.5  Sales of Additional Securities.

                  (a) So long as any shares of Series D Redeemable Preferred
         Stock shall be outstanding, the Company covenants and agrees that it
         shall not accept subscriptions for or issue, sell, give away, transfer,
         pledge, mortgage, assign or otherwise dispose of any shares of capital
         stock or any other equity interests, or other securities convertible
         into or exchangeable for capital stock or other equity interests or
         options, warrants or rights carrying any rights to purchase capital
         stock or other equity interests or convertible or exchangeable
         securities, without the express written consent of holders of a
         majority in interest of the Series D Redeemable Preferred Stock, except
         as provided in Section 5.5(b) hereof.

                  (b) Notwithstanding the foregoing, the Company may (i) issue
         shares of Common Stock, or options, warrants or other rights to
         purchase or subscribe for, shares of its Common Stock to officers,
         directors, employees, consultants or agents of the Company pursuant to
         employee stock option or similar compensatory plans or arrangements to
         the extent authorized by the Board of Directors and issue shares of its
         Common Stock upon the exercise of such stock options, warrants or other
         rights; (ii) issue Conversion Shares upon the conversion of shares of
         the Series A, B or C Convertible Preferred Stock; (iii) issue shares of
         Common Stock upon the exercise of the Warrants, the Alta Warrants and
         the June and December Warrants (if applicable, as described in Section
         5.10 hereof); (iv) declare, make or issue a dividend or other
         distribution payable in shares of the Common Stock in respect of
         outstanding shares of the Common Stock, Series A, B or C Convertible
         Preferred Stock or Series A or B Redeemable Preferred Stock in
         accordance with the Certificate of Incorporation; (v) issue shares of
         Common Stock in connection with a Qualified Public Offering; (vi) issue
         shares of Common Stock, or options, warrants or rights to purchase or
         subscribe for shares of its Common Stock in connection with any debt,
         equipment or capital lease or other similar financing transaction
         authorized by the Board of Directors, or (vii) issue shares of capital
         stock or other securities in connection with joint ventures,
         acquisitions of the securities or assets of other entities, mergers,
         consolidations or other strategic transactions authorized by the Board
         of Directors.

         5.6  Stockholders' Agreement. The Company will diligently enforce
all of its rights under the Stockholders' Agreement. The Company will not effect
any transfer of any of the outstanding capital stock of the Company on the stock
record books of the Company unless such transfer is made in accordance with the
terms of the Stockholders' Agreement. The Company will not waive or release any
rights under, or consent to the amendment of, the Stockholders' Agreement
without the requisite written approval of the parties thereto. The parties
hereto agree that the provisions of the Stockholders' Agreement shall apply,
according to the terms thereof, to the Series D Redeemable Preferred Stock, the
Warrants, the June and December Warrants (if applicable, as described in Section
5.10 hereof) and the shares of Common Stock issuable upon exercise of the
Warrants and the June and December Warrants (if applicable), except that the
registration rights provisions contained in Article IV of the Stockholders'
Agreement shall not apply with respect to the Series D Redeemable Preferred
Stock, the Warrants or the June or December Warrants (if applicable).

         5.7  Distributions on, and Redemptions of, Capital Stock. So long
as any shares of Series D Redeemable Preferred Stock shall remain outstanding,
except as otherwise expressly provided in this Agreement, the Certificate of
Incorporation or the Certificate of Designations, the Company will not, without
the prior written consent of a majority in interest of all outstanding shares of
Series D Redeemable Preferred Stock, declare or pay any dividends or make any
distributions of cash, property or securities of the Company with respect to any
shares of its Common Stock or any other class of its capital stock, or directly
or indirectly redeem, purchase, or otherwise acquire for consideration any
shares of its Common Stock or any other class of its capital stock; provided,
however, that this restriction shall not apply to the repurchase of shares of
the Common Stock pursuant to stock repurchase agreements under which the Company
has the option to repurchase such shares upon the occurrence of certain events,
including the termination of employment and involuntary transfers, by operation
of law, provided that the repurchase price paid by the Company does not exceed
the purchase price paid to the Company for such shares. Any redemption,
repurchase or other acquisition by the Company of any shares of its capital
stock shall be made in compliance with all laws, including but not limited to
federal and state securities laws.

         5.8  Merger, Consolidation, Sale of Assets, Acquisitions and Other
Actions. So long as any shares of Series D Redeemable Preferred Stock shall
remain outstanding, the Company will not without the prior written consent of a
majority in interest of the Series D Redeemable Preferred Stock: (a) merge or
consolidate with or into another entity (with respect to which less than a
majority of the outstanding voting power of such surviving entity is held by
stockholders of the Company immediately prior to such event), or sell, lease or
otherwise dispose of (whether in one transaction or a series of related
transactions) all, or substantially all, of the assets of the Company determined
on a consolidated basis, (b) voluntarily liquidate or wind up its operations,
(c) issue any shares of its capital stock which are senior to or on a parity
with the Series D Redeemable Preferred Stock with respect to dividends,
conversion, liquidation or redemptions or with any special voting rights, (d)
issue voting securities in a single transaction or series of related
transactions that result in securities representing a majority of the voting
power of the Company (with respect to actions to be voted on by holders of all
voting securities of the Company voting as a single class) to be beneficially
owned by a single person or group of affiliated persons, (e) increase or
decrease the size of the Board of Directors from the number of directors in
office on the date hereof, (f) adversely alter or change the preferences, rights
or privileges of the Series D Redeemable Preferred Stock with respect to
dividends, liquidation, preferences, conversion or redemption except as
contemplated by this Agreement or as expressly provided in the Certificate of
Incorporation or the Certificate of Designations, (g) increase or decrease the
authorized number of shares of any series of Preferred Stock except as
contemplated by this Agreement or as expressly provided in the Certificate of
Incorporation or the Certificate of Designations, (h) enter into any agreement
with any party which by its terms restricts the payments due the holders of the
Series D Redeemable Preferred Stock pursuant to the Certificate of Incorporation
or the Certificate of Designations.

         5.9 Annual Updates; Number of Stockholders; Use of Proceeds; Regulatory
Violation; Economic Impact Information; Amendment.

                  (a) As long as an SBIC Investor holds any of the Securities
         (as defined below), the Company shall, on an annual basis, provide to
         such SBIC Investor the information required under 13 CFR Section
         107.620(b) and shall provide the information and access required by 13
         CFR Section 107.620(c). For purposes of this Agreement, an "SBIC
         Investor" shall mean BancBoston and Norwest, an affiliate of BancBoston
         or Norwest that has been licensed as an SBIC and holds the Securities
         or any other Investor or any permitted transferee of an Investor that
         has been licensed as an SBIC and holds the Securities.

                  (b) The Company has more than 50 record holders of its voting
         stock.

                  (c) Within seventy-five (75) days after the Closing, and at
         the end of each month thereafter until all of the proceeds from the
         sale of Series D Preferred Redeemable Stock hereunder have been used by
         the Company, the Company shall deliver to all of the Investors a
         written statement certified by the Company's president or chief
         financial officer describing in reasonable detail the use of the
         proceeds of the purchase Series D Preferred Redeemable Stock hereunder
         by the Company. In addition to any other rights granted hereunder, the
         Company shall grant all of the Investors and the SBA access to the
         Company's records for the purpose of verifying the use of such
         proceeds.

                  (d) Upon the occurrence of a Regulatory Violation (as defined
         below) or in the event that any SBIC Investor determines in its
         reasonable good faith judgment that a Regulatory Violation has
         occurred, in addition to any other rights and remedies to which it may
         be entitled (whether under this Agreement or any other agreement), such
         SBIC Investor shall have the right, to the extent required under SBIC
         Regulations, to demand the immediate repurchase of all of the
         outstanding Securities owned by such SBIC Investor at a price equal to
         the purchase price paid for such Securities hereunder plus accrued
         dividends by delivering written notice of such demand to the Company;
         provided, however, that, in the event of a Regulatory Violation, any
         SBIC Investor shall, prior to demanding the repurchase of all of the
         outstanding Securities owned by such SBIC Investor, use reasonable
         efforts to retain its investment in the Securities, including, without
         limitation, petitioning the SBA for its approval with respect to any
         unforeseen changes in the principal business activity of the Company.
         The Company shall pay the purchase price for such Securities by a
         cashier's or certified check or by wire transfer of immediately
         available funds to such SBIC Investor within thirty (30) days after the
         Company's receipt of the demand notice, and, upon such payment, such
         SBIC Investor shall deliver the certificates, if any, evidencing the
         Securities being repurchased duly endorsed for transfer or accompanied
         by duly executed forms of assignment.

         For purposes of this Agreement, "Regulatory Violation" means a change
in the principal business activity of the Company to an ineligible business
activity (within the meaning of the SBIC Regulations), if such change occurs
within one (1) year after the date of the initial purchase by the affected SBIC
Investor of Securities hereunder.

                  (e) Promptly after the end of each fiscal year (but in any
         event prior to February 28 of each year), the Company shall deliver to
         each Investor a written assessment of the economic impact of the total
         investment by all SBIC Investors in the Company, specifying the
         full-time equivalent jobs created or retained in connection with the
         investment, the impact of the investment on the businesses of the
         Company in terms of expanded revenue and taxes, and the other economic
         benefits resulting from the investment, including but not limited to,
         technology development or commercialization, minority business
         development, urban or rural business development and expansion of
         exports, together with all other information reasonably requested by
         any SBIC Investor in order to provide the information required by 13
         CFR Section 107.630.

                  (f) Notwithstanding anything herein to the contrary, the
         provisions of this Section 5.9 shall not be amended without the prior
         written consent of holders of a majority of the issued and outstanding
         Securities of any SBIC Investors (determined on an as converted basis).

                  (g) For purposes of this Section 5.9, "Securities" shall refer
         to the shares of Series D Preferred Stock, the Warrants, the June and
         December Warrants (if applicable, as defined in Section 5.10 hereof)
         and the shares of Common Stock issuable upon exercise of the Warrants
         and the June and December Warrants (if applicable).

         5.10 June and December Warrants. In the event that the Company does not
redeem all of the outstanding shares of Series D Preferred Stock on or before
June 30, 2000, the Company shall issue to the holders of the then outstanding
shares of Series D Preferred Stock warrants exercisable for an aggregate of
3,500 shares of Common Stock (the "June Warrants"). In the event that the
Company does not redeem all of the outstanding shares of Series D Preferred
Stock on or before December 31, 2000, the Company will issue to the holders of
the then outstanding shares of Series D Preferred Stock warrants exercisable for
3,500 shares of Common Stock (the "December Warrants"). The amount of June and
December Warrants issued under this Section 5.10 shall be proportionately
decreased for any shares of Series D Preferred Stock redeemed by the Company
prior to the above dates. The form and terms of the June and December Warrants
shall be substantially identical to those of the Warrants.

SECTION 6. CONFIDENTIALITY

         Each Investor agrees to maintain the confidentiality of, and to not
make or permit any disclosure regarding the existence or substance of, any and
all Confidential Information received from the Company. For purposes of this
Agreement, "Confidential Information" includes all information, regardless of
the form in which it is communicated or maintained (whether prepared by the
Company, its financial or other advisors or otherwise), which contains or
otherwise reflects any non-public information concerning the Company and which
is provided to the Investors by or on behalf of the Company, its advisors or
their respective advisors or agents. Without limiting the foregoing in any
manner, except as set forth in this Section 6 the Investors shall not disclose
to any individual or entity their receipt of Confidential Information from the
Company, the nature or substance of such Confidential Information or their
response or plans with respect to such Confidential Information.

         Notwithstanding the foregoing, the Investors shall not be required to
maintain the confidentiality of any portion of the Confidential Information to
the extent that such portion is publicly disclosed by the Company by press
release, filings with the Securities and Exchange Commission or similar manner.
In addition, the Investors may make disclosure of Confidential Information to
the extent advised, pursuant to the written opinion (a copy of which shall be
provided to the Company prior to such disclosure) of their counsel, that such
disclosure must be made in order to avoid a violation of law and, prior to such
disclosure, the Company and its legal counsel are promptly advised and consulted
with concerning the information to be disclosed (and, in such event, the
Investors shall cooperate with the Company to the extent it may seek to limit
such disclosure).

         In the event that any Investor is requested or required (by deposition,
interrogatories, requests for information or documents in legal proceedings,
subpoenas, civil investigative demand or similar process), in connection with
any proceeding, to disclose any Confidential Information, such Investor shall
(i) provide the Company with prompt written notice of such request or
requirement so that the Company may seek an appropriate protective order or
other remedy, and (ii) cooperate with the Company to obtain such protective
order. In the event that such protective order or other remedy is not obtained
or the Company waives compliance with the relevant provisions of this Agreement,
such Investor shall (or shall cause such other person to whom such request is
directed to) furnish only that portion of the Confidential Information which, in
the written opinion (a copy of which shall be provided to the Company prior to
furnishing such portion) of the counsel of such Investor, is legally required to
be disclosed and, upon the Company's request, use such Investor's best efforts
to obtain assurances that confidential treatment will be accorded to such
information.

         The provisions of this Section 6 shall not apply to the extent of any
communications of Confidential Information made solely among the Investors and
between the Investors and their respective agents and advisors.

SECTION 7. INVESTOR REPRESENTATIONS

         It is the understanding of the Company, and each Investor hereby
severally represents with respect to such Investor's purchase of Series D
Redeemable Preferred Stock and Funding Warrants and such Investor's receipt of
Subscription Warrants (and such Investor's receipt of June and/or December
Warrants, as applicable) hereunder that:

                  (a) The execution of this Agreement has been duly authorized
         by all necessary action on the part of the Investor, has been duly
         executed and delivered by the Investor, and constitutes a valid,
         binding and enforceable agreement of the Investor.

                  (b) The Investor is acquiring the Series D Redeemable
         Preferred Stock, the Warrants (and the June and December Warrants, if
         applicable) and any shares of Common Stock issued upon exercise of the
         Warrants (and the June and December Warrants, if applicable) for its
         own account, for investment, and not with a present view to any
         "distribution" thereof within the meaning of the Securities Act. The
         Investor was not formed or organized for the purpose of acquiring the
         Series D Redeemable Preferred Stock, the Warrants, the June or December
         Warrants (if applicable) or the shares of Common Stock issuable upon
         exercise of the Warrants or the June or December Warrants (if
         applicable).

                  (c) The Investor understands that because none of the Series D
         Redeemable Preferred Stock, the Warrants, the June or December Warrants
         (if applicable) or the shares of Common Stock issuable upon exercise of
         the Warrants or the June or December Warrants (if applicable) have been
         registered under the Securities Act, it cannot dispose of any or all of
         the Series D Redeemable Preferred Stock, the Warrants, the June or
         December Warrants (if applicable) or the shares of Common Stock
         issuable upon exercise of the Warrants or the June or December Warrants
         (if applicable) unless such securities are subsequently registered
         under the Securities Act or exemptions from such registration are
         available. The Investor understands that each certificate representing
         the Series D Redeemable Preferred Stock, the Warrants, the June and
         December Warrants (if applicable) and the shares of Common Stock
         issuable upon exercise of the Warrants and the June and December
         Warrants (if applicable) will bear the following legend or one
         substantially similar thereto:

                  The securities represented by this certificate have not been
                  registered under the Securities Act of 1933, as amended (the
                  "Act"). These securities have been acquired for investment and
                  not with a view to distribution or resale, and may not be
                  sold, mortgaged, pledged, hypothecated or otherwise
                  transferred without an effective registration statement for
                  such securities under the Act or the availability of an
                  exemption from such registration requirements.

                  (d) The Investor is sufficiently knowledgeable and experienced
         in the making of venture capital investments so as to be able to
         evaluate the risks and merits of its investment in the Company, and is
         able to bear the economic risk of loss of its investment in the
         Company. The Investor acknowledges that the Company may, subject to the
         restrictions set forth in this Agreement, enter into one or more
         acquisitions, joint ventures or additional types of financings in the
         future which could result in a valuation for the capital stock of the
         Company that is significantly below the purchase price for the Series D
         Redeemable Preferred Stock and Funding Warrants hereunder.

                  (e) The Investors have been advised that none of the Series D
         Redeemable Preferred Stock, the Warrants, the June or December Warrants
         (if applicable) or the shares of Common Stock issuable upon exercise of
         the Warrants or the June or December Warrants (if applicable) have been
         registered under the Securities Act or under the "blue sky" laws of any
         jurisdiction and that the Company, in issuing the Series D Redeemable
         Preferred Stock, the Warrants, the June and December Warrants (if
         applicable) and the shares of Common Stock issuable upon exercise of
         the Warrants and the June and December Warrants (if applicable), is
         relying upon, among other things, the representations and warranties of
         the Investors contained in this Section 7.

                  (f) No broker, finder, agent or similar intermediary has acted
         on behalf of the Investor in connection with this Agreement or the
         transactions contemplated hereby and there are no brokerage
         commissions, finder's fees or similar fees or commissions payable in
         connection therewith.

                  (g) The Investor is a "qualified institutional buyer" as
         defined in Rule 144A under the Securities Act.

SECTION 8.  INDEMNIFICATION

         8.1  Indemnification for Vicarious Liability. Subject to Section 9.2
hereof, the Company shall, to the full extent permitted by law, and in addition
to any such rights that the Investors and persons serving as officers,
directors, partners, employees or agents of each Investor may have pursuant to
statute, the Certificate of Incorporation or By-laws, or otherwise, indemnify
and hold harmless each Investor (including its respective directors, officers,
partners, employees and agents, an "Indemnified Investor") and each person (a
"Controlling Person") (collectively with the Indemnified Investors, the
"Indemnified Parties" and individually an "Indemnified Party") who controls any
of them within the meaning of Section 15 of the Securities Act, or Section 20 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), from and
against any and all losses, claims, damages, expenses and liabilities, joint or
several, including any investigation, legal and other expenses incurred in
connection with the investigation, defense, settlement or appeal of, and any
amount paid in settlement of, any action, suit or proceeding or any claim
asserted ("Losses" or "Loss"), to which they, or any of them, may become subject
by reason of their status as a security holder, creditor, director, agent,
representative or controlling person of the Company (including, without
limitation, any and all Losses under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or otherwise,
which relates directly or indirectly to the registration, purchase, sale or
ownership of any securities of the Company or any of its subsidiaries or to any
fiduciary obligation owed with respect thereto); provided, however, that the
Company will not be liable to the extent that such Loss arises from and is based
on an untrue statement or omission or alleged untrue statement or omission in a
registration statement or prospectus which is made in reliance on and in
conformity with written information furnished to the Company in an instrument
duly executed by or on behalf of such Indemnified Party specifically stating
that it is for use in the preparation thereof. The indemnification and
contribution provided for in this Section 8.1 will remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Parties or any officer, director, employee, agent or Controlling Person of the
Indemnified Parties.

         If the indemnification provided for in this Section 8.1 is for any
reason held by a court of competent jurisdiction to be unavailable to an
Indemnified Party in respect of any Losses referred to therein, then the
Company, in lieu of indemnifying such Indemnified Party thereunder, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Investor relating to such Indemnified
Party or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Investor relating to such Indemnified Party in connection
with the action or inaction which resulted in such Losses, as well as any other
relevant equitable considerations. In connection with any registration of the
Company's securities, the relative benefits received by the Company and the
Investors shall be deemed to be in the same respective proportions as the net
proceeds from the offering (before deducting expenses) received by the Company
and the Investors, in each case as set forth in the table on the cover page of
the applicable prospectus, bear to the aggregate public offering price of the
securities so offered. The relative fault of the Company and the Investors shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Investors
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

         The Company and the Investors agree that it would not be just and
equitable if contribution pursuant to the foregoing paragraph were determined by
pro rata or per capita allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. In connection with any registration of the
Company's securities, in no event shall an Investor be required to contribute
any amount under this Section 8.1 in excess of the lesser of (i) that proportion
of the total of such Losses indemnified against equal to the proportion of the
total securities sold under such registration statement which is being sold by
such Investor or (ii) the proceeds received by such Investor from its sale of
securities under such registration statement. No person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
found guilty of such fraudulent misrepresentation.

         8.2 Notice; Defense of Claims. Promptly after receipt by an Indemnified
Party of notice of any third party or other claim, liability or expense to which
the indemnification obligations hereunder would apply, including in connection
with any governmental proceeding, the Indemnified Party shall give notice
thereof in writing to the Company, but the omission to so notify the Company
promptly will not relieve the Company from any liability except, and only to the
extent, that the Company shall have been materially prejudiced as a result of
the failure or delay in giving such notice. Such notice shall state the
information then available regarding the amount and nature of such claim,
liability or expense.

         In the case of any third party claim, if within 20 days after receiving
the notice described in the preceding paragraph the Company (i) gives written
notice to the Indemnified Party or Parties stating that it intends to defend in
good faith against such claim, liability or expense at its own cost and expense
and (ii) provides assurance and security reasonably acceptable to such
Indemnified Party or Parties that such indemnification will be paid fully and
promptly if required and such Indemnified Party or Parties will not incur cost
or expense during the proceeding, then counsel for the defense shall be selected
by the Company (subject to the consent of such Indemnified Party or Parties,
which consent shall not be unreasonably withheld) and such Indemnified Party or
Parties shall not be required to make any payment with respect to such claim,
liability or expense as long as the Company is conducting a good faith and
diligent defense at its own expense; provided, however, that the assumption of
defense of any such matters by the Company shall relate solely to the claim,
liability or expense that is subject or potentially subject to indemnification.
If the Company assumes such defense in accordance with the preceding sentence,
it shall have the right, with the consent of such Indemnified Party or Parties,
which consent shall not be unreasonably withheld, to settle all indemnifiable
matters related to claims by third parties which are susceptible to being
settled provided the Company's obligation to indemnify such Indemnified Party or
Parties therefor will be fully satisfied and the settlement includes a complete
release of such Indemnified Party or Parties. The Company shall keep such
Indemnified Party or Parties apprised of the status of the claim, liability or
expense and any resulting suit, proceeding or enforcement action, shall furnish
such Indemnified Party or Parties with all documents and information that such
Indemnified Party or Parties shall reasonably request and shall consult with
such Indemnified Party or Parties prior to acting on major matters, including
settlement discussions. Notwithstanding anything herein stated, such Indemnified
Party or Parties shall at all times have the right to fully participate in such
defense at its or their own expense directly or through counsel; provided,
however, if the named parties to the action or proceeding include both the
Company and the Indemnified Party or Parties and representation of both parties
by the same counsel would be inappropriate under applicable standards of
professional conduct, the expense of separate counsel for such Indemnified Party
or Parties shall be paid by the Company. The Indemnified Party or Parties shall
make available all information and assistance that the Company may reasonably
request and shall cooperate with the Company in such defense.

         If the Company does not give notice of its intent to defend against any
third party or other claim, liability or expense in accordance with the
foregoing paragraph, or if such diligent good faith defense is not being or
ceases to be conducted, the Indemnified Party or Parties will have the right to
retain its or their own counsel in any such action and all fees, disbursements
and other charges incurred in the investigation, defense and/or settlement of
such action shall be advanced and reimbursed by the Company promptly as they are
incurred and shall have the right to compromise or settle such claim, liability
or expense; provided, however, that the Indemnified Party or Parties shall agree
to repay any expenses so advanced hereunder if it is ultimately determined by a
court of competent jurisdiction that the Indemnified Party or Parties to whom
such expenses are advanced is or are not entitled to be indemnified as a matter
of law or under the terms of this Agreement.

         8.3 Satisfaction of Indemnification Obligations. Any indemnity payable
pursuant to this Section 8 shall be paid within the later of (a) ten days after
the Indemnified Party's request therefor or (b) ten days prior to the date on
which the Loss upon which the indemnity is based is required to be satisfied by
the Indemnified Party.

SECTION 9.  GENERAL

         9.1  Amendments, Waivers and Consents. For the purposes of this
Agreement and all agreements, documents and instruments executed pursuant
hereto, except as otherwise specifically set forth herein or therein, no course
of dealing between the Company and any Investor and no delay on the part of any
party hereto in exercising any rights hereunder or thereunder shall operate as a
waiver of the rights hereof and thereof. No covenant or other provision hereof
or thereof may be waived otherwise than by a written instrument signed by the
party so waiving such covenant or other provision; provided, however, that
except as otherwise provided herein or therein, changes in or additions to, and
any consents required by, this Agreement may be made, and compliance with any
term, covenant, condition or provision set forth herein may be omitted or waived
(either generally or in a particular instance and either retroactively or
prospectively) with respect to the holders of the Series D Redeemable Preferred
Stock by a consent or consents in writing signed by the holders of a majority in
interest of such series; provided, however, that the amendment, modification or
waiver of any provision which by its terms requires the consent or approval of
holders of more than a majority in interest of such series shall only be
effective if it is signed by holders of such requisite percentage. Any amendment
or waiver effected in accordance with this Section 9.1 shall be binding upon
each holder of the Series D Redeemable Preferred Stock at the time outstanding,
each future holder of all such securities and the Company.

         9.2  Survival of Representations, Warranties and Covenants;
Assignability of Rights. All covenants, agreements, representations and
warranties of the Company made herein and in the certificates, lists, exhibits,
schedules or other written information delivered or furnished by or on behalf of
the Company to any Investor in connection herewith or therewith shall be deemed
material and to have been relied upon by such Investor, and, except as otherwise
provided in this Agreement, shall survive the delivery of the Series D
Redeemable Preferred Stock regardless of any instruction and shall not merge in
the performance of any obligation and shall bind the Company's successors,
assigns and heirs, whether so expressed or not, and, except as otherwise
provided in this Agreement, all such covenants, agreements, representations and
warranties shall inure to the benefit of such Investor's successors and assigns
and to transferees of the Series D Redeemable Preferred Stock of such Investor,
whether so expressed or not. The representations and warranties made by the
Investors in Section 7 of this Agreement shall survive the delivery of the
Series D Redeemable Preferred Stock and shall bind the Investors' successors and
assigns and shall inure to the benefit of the Company's successors and assigns.

         9.3 Governing Law. This Agreement shall be deemed to be a contract made
under, and shall be construed in accordance with, the laws of the State of New
York (without giving effect to principles of conflicts of law the effect of
which would cause the application of domestic substantive laws of any other
jurisdiction).

         9.4  Section Headings; Counterparts. The descriptive headings in this
Agreement have been inserted for convenience only and shall not be deemed to
limit or otherwise affect the construction of any provision thereof or hereof.
This Agreement may be executed simultaneously in any number of counterparts,
each of which when so executed and delivered shall be taken to be an original;
but such counterparts shall together constitute but one and the same document.

         9.5  Notices and Demands. Any notice or demand which, by any provision
of this Agreement or any agreement, document or instrument executed pursuant
hereto or thereto, except as otherwise provided therein, is required or provided
to be given shall be deemed to have been sufficiently given or served and
received for all purposes when delivered or five days after being sent by
certified or registered mail, postage and charges prepaid, return receipt
requested, or, in the case of a nationally recognized overnight courier service,
on the day following the date of such mailing, or by express delivery providing
receipt of delivery, to the following addresses: if to the Company, at its
address as shown on the signature page hereof, or at any other address
designated by the Company to each of the Investors in writing; if to a Investor,
at its mailing address as shown on the records of the Company, or at any other
address designated by such Investor to the Company and the other Investors in
writing; and if to an assignee of a Investor, at its address as designated to
the Company and the other Investor in writing.

         9.6  Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be deemed
prohibited or invalid under such applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, and such
prohibition or invalidity shall not invalidate the remainder of such provision
or the other provisions of this Agreement.

         9.7  Expenses. The Company shall pay the reasonable costs and expenses
of one special counsel for the Investors in connection with the negotiation,
execution, delivery and performance of this Agreement and any amendments hereto
and the agreements, documents and instruments contemplated hereby or executed
pursuant hereto, not to exceed $25,000. In addition to the foregoing, the
Company shall pay the fees charged by the LC Bank for issuing and maintaining
the Letters of Credit, including attorney's fees and other fees and expenses
incurred in connection with the application for such letters of credit and the
preparation, execution and delivery of any reimbursement agreement or similar
document.

         9.8  Integration. This Agreement together with the Stockholders'
Agreement, including the exhibits, documents and instruments referred to herein
or therein, constitute all of the agreements and supersede all other prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.

         9.9 Certain Provisions Applicable to SBIC Investors. Sections 2.25, 3.6
and 5.9 hereof contain certain provisions that are included herein solely for
the benefit of SBIC Investors. A stockholder of the Company may not assert any
rights or claims with respect to such provisions arising at any time after it
has ceased to be an SBIC.

         9.10 No Assignment. Except as otherwise provided herein, this Agreement
may not be assigned, pledged, hypothecated or otherwise transferred by the
Company without the consent of all of the parties hereto.

                            [Signature page follows]


<PAGE>



         IN WITNESS WHEREOF, the undersigned have executed this Agreement as a
sealed instrument as of the day and year first above written.

                                 GOLDEN SKY HOLDINGS, INC.
                                 605 W. 47th Street, Suite 300
                                 Kansas City, MO  64112


                                 By_______________________________________
                                 Name:
                                 Title:


                                 ALTA SUBORDINATED DEBT PARTNERS III, L.P.

                                 By:      Alta Subordinated Debt Management
                                          III, L.P.


                                 By:_______________________________________
                                 Name:
                                  Title:


                                 ALTA COMMUNICATIONS VI, L.P.

                                 By:      Alta Communications VI
                                          Management Partners, L.P.


                                 By:_______________________________________
                                 Name:
                                 Title:


                                 ALTA-COMM S BY S, LLC


                                 By:_______________________________________
                                 Name:
                                 Title:


                                 HARBOURVEST PARTNERS V-DIRECT FUND L.P.

                                 By:      HVP V-Direct Associates, LLC
                                          Its General Partner

                                          By:      HarbourVest Partners, LLC
                                                   Its Managing Member

                                          By:_______________________
                                          Name:
                                          Title:


                                 SPECTRUM EQUITY INVESTORS L.P.

                                 By:      Spectrum Equity Associates, L.P.,
                                          General Partner


                                 By:_______________________________________
                                 Name:
                                 Title:


                                 SPECTRUM EQUITY INVESTORS II, L.P.

                                 By:      Spectrum Equity Associates II, L.P.,
                                          General Partner

                                 By:_______________________________________
                                 Name:
                                 Title:


                                 NORWEST EQUITY PARTNERS VI,
                                 A MINNESOTA LIMITED PARTNERSHIP

                                 By:      Itasca Partners V, L.L.P.
                                          General Partner


                                 By:_______________________________________
                                 Name:
                                 Title:


                                 BANCBOSTON VENTURES INC.


                                 By:_______________________________________
                                 Name:
                                 Title:


                                 GENERAL ELECTRIC CAPITAL CORPORATION


                                 By:_______________________________________
                                 Name:
                                 Title:




<PAGE>

                                   APPENDIX A

                                (Form of Warrant)


<PAGE>

                                   APPENDIX B

                               Securities Acquired

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                             Shares of Series D       Number of         Number of
                                              Purchase           Redeemable       Funding Warrants     Subscription
               Investor                        Price           Preferred Stock                           Warrants
----------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                     <C>                    <C>                <C>
Alta Communications VI, L.P.              $3,804,739.07           19,023.70              665.83             665.83
---------------------------------------------------------------------------------------------------------------------
Alta Subordinated Debt Partners III,
L.P.                                       2,287,468.87           11,437.34              400.31             400.31
---------------------------------------------------------------------------------------------------------------------
Alta-Comm S by S, LLC                         86,662.06              433.31               15.17              15.17
---------------------------------------------------------------------------------------------------------------------
HarbourVest Partners V - Direct Fund
L.P.                                       2,577,574.60           12,887.87              451.08             451.08
---------------------------------------------------------------------------------------------------------------------
Spectrum Equity Investors II L.P.
                                           3,431,877.16           17,159.39              600.58             600.58
---------------------------------------------------------------------------------------------------------------------
Spectrum Equity Investors, L.P.            1,715,921.42            8,579.61              300.29             300.29

---------------------------------------------------------------------------------------------------------------------
Norwest Equity Partners VI, L.P.
                                           2,577,574.60           12,887.87              451.08             451.08
---------------------------------------------------------------------------------------------------------------------
BancBoston Ventures Inc.                   3,003,529.31           15,017.65              525.62             525.62
---------------------------------------------------------------------------------------------------------------------
General Electric Capital Corporation         514,652.92            2,573.26               90.06              90.06
---------------------------------------------------------------------------------------------------------------------
          Totals:                           $20,000,000          100,000.00            3,500.00           3,500.00
----------------------------------------------------------------------------------------------------------------------

</TABLE>


<PAGE>

                                   APPENDIX C

                             (Form of Legal Opinion)



<PAGE>

                                   APPENDIX D

         (Form of Certificate of Designations, Preferences and Rights of
                      Series D Redeemable Preferred Stock)


<PAGE>

                                  SCHEDULE 2.1

                               Certain Violations

1.       Golden Sky was in violation of certain covenants under its credit
         facility for the quarter ended September 30, 1999.

2.       While the Company has exclusive DIRECTV distribution rights in its
         markets, it is not allowed to have customers outside its markets.
         Further, DIRECTV and the Company are prohibited by law from providing
         DIRECTV programming outside the United States. Despite our customers'
         assurances that they receive programming within one or our markets, a
         portion of our subscribers may, in fact, be receiving DIRECTV
         programming outside our markets. If we must disconnect a significant
         portion of our subscribers because they receive services outside our
         markets, our business could be adversely affected.

3.       The Company makes no representation with respect to the possible
         application of state law to the Company's DBS equipment service
         agreement program.



<PAGE>

                                  SCHEDULE 2.4

                     Capitalization and Beneficial Ownership

1.       Holders of the Series A, B and C Convertible Preferred Stock are
         entitled to receive shares of Common Stock upon conversion of their
         shares of preferred stock, as provided in the Certificate of
         Incorporation.

2.       See attached list of equity holders.

3.       GSS owns a 76.25% interest in South Plains DBS, L.P. GSS funds the
         operating losses of South Plains and is periodically reimbursed by the
         minority interest of South Plains for its portion of such losses.

4.       The Company owns all of the outstanding capital stock of DBS, which
         owns all of the outstanding capital stock of GSS. GSS owns all of the
         outstanding capital stock of Argos Support Services Company,
         Primewatch, Inc. and DCE Satellite Entertainment, LLC. The Company
         makes advances to fund the operations of its subsidiaries, from time to
         time.



<PAGE>

                                  SCHEDULE 2.6

                             Undisclosed Liabilities

1.       See Schedule 2.1.

2.       See Schedule 2.10.

3.       See Schedule 2.12.



<PAGE>

                                  SCHEDULE 2.7

                               Accounts Receivable

None.



<PAGE>

                                  SCHEDULE 2.8

                               Title to Properties

1.       GSS' credit facility is secured by a lien against all of the assets of
         GSS.

2.       Certain promissory notes issued as consideration in Golden Sky's
         acquisitions have been secured by liens against the assets of the
         acquired entity.

3.       Golden Sky has entered into equipment capital leases whereby the
         related capital lease obligations are secured by liens on the equipment
         that is the subject of the leases. The aggregate outstanding balance of
         capital lease obligations secured by such liens on equipment under
         capital leases approximated $550,000 at September 30, 1999. The
         original cost of the equipment under capital leases subject to such
         liens approximated $1.2 million as of the same date.

4.       Golden Sky has entered into various operating leases providing the
         leased premises for its approximate 72 local sales and customer service
         offices, its national call center, its corporate office, warehouse and
         storage locations and various equipment. The future minimum
         non-cancelable lease payments related to these operating leases
         approximate $1.2 million in 2000; $700,000 in 2001; $450,000 in 2002;
         and $121,000 in 2003.

5.       GSS owns a 76.25% interest in South Plains DBS, L.P. and, therefore,
         the assets of South Plains are partially owned by the minority
         interest.




<PAGE>

                                  SCHEDULE 2.9

                                   Tax Matters

1.       Golden Sky was audited by the Missouri Department of Revenue in 1999
         with respect to sales and use taxes and payroll taxes. The field work
         on the audit was completed in late October 1999. Golden Sky has been
         informally advised that no additional taxes, penalties or interest will
         be owed, however, a final report has not been issued.

2.       Golden Sky is currently in the process of being audited by the Texas
         Comptroller of Public Accounts with respect to sales and use taxes. The
         field work on the audit is still in progress. Golden Sky has not
         received any notice of findings to date.




<PAGE>

                                  SCHEDULE 2.10

                               Material Contracts

1.       See Schedule 2.1.

2.       See Schedule 2.12.

3.       Golden Sky has entered into non-competition agreements with the
         following key employees:

o        Rodney A. Weary
o        Jo Ellen Linn
o        John R. Hager
o        William J. Gerski
o        Eric Tucker
o        Dennis O'Hara
o        Gordon Smith
o        Scott Brown
o        Laquita Allen

4.       The Company makes no representation with respect to the possible effect
         on the Company of the  NRTC/DIRECTV litigation described in
          Schedule 2.12.



<PAGE>

                                  SCHEDULE 2.11

                               Proprietary Rights

None.



<PAGE>

                                  SCHEDULE 2.12

                                   Litigation

1.       The ongoing NRTC/DIRECTV litigation may have an adverse effect on
         Golden Sky.

2.       On October 15, 1999, Schaller Telephone Company filed a Petition at Law
         in the Iowa District Court for Woodbury County naming Golden Sky
         Systems, Rodney A. Weary and Jo Ellen Linn as defendants. In the
         Petition, Schaller alleges that the named defendants represented to
         Schaller that Golden Sky intended to purchase Schaller's rights to
         provide satellite television services to homes located in Woodbury,
         Monona, Plymouth and Ida counties in Iowa, and that Golden Sky entered
         into an agreement with Schaller to purchase these rights for
         $13,500,000. Schaller further alleges, among other things, that the
         representations of the named defendants were fraudulent and that Golden
         Sky breached the agreement. Schaller seeks an unspecified amount of
         damages in the Petition. Golden Sky removed the lawsuit to the United
         States District Court for the Northern District of Iowa. On December
         17, 1999, Golden Sky timely filed its Pre-answer Motion to Dismiss all
         counts where appropriate and answered Schaller's count for breach of
         contract by specifically denying the allegations.

3.       In the ordinary course of business, the Company receives, from time to
         time, litigation threats from former employees, customers, dealers and
         others.

4.       During August and September 1999, three former employees of the
         Company's Foley, Alabama office each filed charges of discrimination
         and harassment against the Company with the Birmingham, Alabama EEOC
         office following the end of their employment with the Company. The
         Company has scheduled an informal mediation of these charges with the
         EEOC for January 25, 2000. The Company will not be required to submit a
         position statement, if at all, until after the completion of the
         mediation.

5.       Deborah Gay, a former employee of the Company's Rincon, Georgia office,
         filed a charge of age discrimination with the Savannah, Georgia EEOC
         office on July 21, 1999. The EEOC attempted to negotiate a conciliation
         agreement between the Company and Ms. Gay. When that attempt failed,
         the EEOC issued a "failure to conciliate" finding in late October 1999.
         Under federal law, Ms. Gay has 90 days from the date of the finding to
         file suit against the Company.

6.       On June 28,1999, Golden Sky received a letter asserting it was engaged
         in concerted activity to destroy the cable business of Roxie and Ben
         Cartwright. On August 5, 1999, Golden Sky responded in writing to the
         Cartwright's allegations specifically denying the same. The Cartwrights
         have taken no further action to Golden Sky's knowledge.

7.       On June 28, 1999, Golden Sky received a letter asserting that it had
         damaged Lynn and Gary Anderson, who had been Golden Sky dealers, by
         using its own sales force to market and sell equipment and programming.
         On August 5, 1999, Golden Sky responded in writing to the Andersons'
         allegations specifically denying the same. The Andersons have taken no
         further action to Golden Sky's knowledge.

8.       On February 10, 1999, the Office of the Attorney General of the State
         of Minnesota notified Golden Sky of its investigation of possible
         violations of Minnesota's antitrust laws. On March 4, 1999 Golden Sky
         provided answers to interrogatories and responses to document requests
         from the Attorney General's office. The Attorney General's office has
         taken no further action to Golden Sky's knowledge.

9.       Golden Sky has received and responded to a subpoena duces tecum from
         the United States Department of Agriculture which is investigating the
         sale of the Baldwin County Membership Cooperative Direct Broadcast
         Satellite franchise rights to Golden Sky. The Department advised Golden
         Sky that it is not a target of the investigation, merely a material
         witness.

10.      A former employee of the Las Vegas branch office has informed Golden
         Sky that she believes she was subject to sexual harassment while
         employed. The alleged harasser is no longer employed by Golden Sky.
         Discussions are continuing with the former employee and her attorney.

11.      An attorney representing three employees of the Gainesville, Texas
         office asserted on September 14, 1999 that they had been subject to
         sexual harassment and retaliation. Golden Sky investigated and took
         responsive action. One of the employees nonetheless quit her employment
         asserting that she was constructively discharged. The other two
         employees remained employed by Golden Sky through December 1999, when
         Golden Sky closed the Gainesville office and terminated all of the
         employees in the Gainesville office. Golden Sky had previously been
         advised by one of the employed women that she had withdrawn herself
         from representation and did not desire to pursue a claim. The two
         remaining claimants filed a charge against Golden Sky with the Houston,
         Texas office of the National Labor Relations Board on December 10,
         1999, alleging retaliation for their engaging in concerted activity
         (the report of sexual harassment). Golden Sky denies the claimants'
         allegations and is in the process of preparing its position statement.

12.      On June 18, 1999, an attorney representing two former employees in
         Michigan asserted that they had been subject to retaliatory discharge,
         gender discrimination, and sexual harassment. The employment of these
         employees ended in April 1999. Golden Sky responded to these
         assertions. The attorney indicated that he was continuing to
         investigate the claims, but nothing further has been heard.



<PAGE>

                                  SCHEDULE 2.14

                         Business; Compliance with Laws

1.       See Schedule 2.1.

2.       See Schedule 2.10.

3.       See Schedule 2.12.



<PAGE>

                                  SCHEDULE 2.18

                              Environmental Matters

None.


<PAGE>

                                  SCHEDULE 2.20

                           Product and Services Claims

1.       See Schedule 2.1.

2.       See Schedule 2.10.

3.       See Schedule 2.12.



<PAGE>

                                  SCHEDULE 2.21

                            Employees; Labor Matters

1.       Golden Sky has entered into employment agreements, the terms of which
         require Golden Sky to make severance payments, with the following
         individuals:

         o   Rodney A. Weary
         o   Jo Ellen Linn
         o   John R. Hager
         o   William J. Gerski
         o   Eric Tucker
         o   Dennis O'Hara
         o   Gordon Smith
         o   Scott R. Brown

2.       The following officers, employees and sales representatives of Golden
         Sky received total remuneration from the Company on an annualized basis
         in excess of $100,000 for the calendar year 1999:

         o   Rodney A. Weary
         o   John R. Hager
         o   William J. Gerski
         o   Jo Ellen Linn
         o   Scott R. Brown
         o   Laquita J. Allen
         o   Eric Tucker
         o   Randall K. Duncan
         o   Brad E. Behmer

3.       The Company has a general practice of offering severance to employees
         upon termination of employment, the amount of which is based upon the
         time of service.

4.       See Schedule 2.12.



<PAGE>

                                  SCHEDULE 2.23

                             Affiliate Transactions

1.       Rodney A. Weary is the sole shareholder of 421 Golden Eagle Gale, which
         subleases a 1979 Cessna Citation to GSS pursuant to an Aircraft Lease,
         dated as of October 23, 1987. This sublease was voluntarily terminated
         by the parties effective December 31, 1999.

2.       GSS has an oral consulting agreement with Robert B. Liepold, a director
         of the Company, to provide expertise on an "as needed" basis.


<PAGE>

                                  SCHEDULE 2.27

                         Absence of Certain Developments

1.       See Schedule 2.6.