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                               ASSET PURCHASE AGREEMENT


          THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made on
May 7, 1998, between EDWARD STEVEN CORPORATION, a Pennsylvania corporation 
("ESC"); DRAKE TELEPHONE CO., a Pennsylvania corporation ("DTC" and together 
with ESC, the "Sellers"); CHOICETEL COMMUNICATIONS, INC., a Minnesota 
corporation (the "Purchaser"); JAY LUDWIG, a resident of the State of 
Pennsylvania ("Ludwig"); and JAY SCOTT, a resident of the State of 
Pennsylvania ("Scott", and together with Ludwig, the "Shareholders").

                                     BACKGROUND:

          A.   The Shareholders in the aggregate own all of the outstanding
shares of capital stock of both Sellers.  

          B.   Sellers together operate a business that provides pay telephone
services in Pennsylvania and is conducted under the name "Jay Telephone Vending"
(the "Business").

          C.   Sellers desire to sell to Purchaser certain assets of the
Business, and Purchaser desires to purchase such assets from Sellers, on the
terms and conditions set forth in this Agreement;

          NOW, THEREFORE, the parties agree as follows:

          
                                     ARTICLE I
                                          
                                 PURCHASE AND SALE

          Subject to and in reliance upon the representations, warranties and
agreements of the Sellers and Purchaser, and subject to the terms and conditions
of this Agreement: 

          1.01   SALE AND PURCHASE OF ASSETS.  Sellers agree to sell, transfer,
     convey and deliver to Purchaser, and Purchaser agrees to purchase from
     Sellers, on the date of Closing defined in Section 3.01, at the purchase
     price stated in Section 2.01, the Assets.  As used in this Agreement, the
     term "Assets" means, except as expressly stated herein, all of the assets
     used in or relating to the Business, including, but not limited to, the
     following:

               (a)  SITE PROVIDER CONTRACTS.  All contracts pertaining to the
     provision of pay telephones placed or to be placed into operation at
     particular sites pursuant to an agreement therefor ("Site Contracts") with
     site owners or operators ("Site Providers"), together with the Sellers'
     right to provide pay telephone services to the Site Providers.

               (b)  EQUIPMENT.  All pay telephones, and all furniture, fixtures,
     equipment, machines and other tangible assets which are owned by Sellers
     and used in connection with the Business as of the date of Closing
     including but not limited to those tangible assets set forth on
     SCHEDULE 1.01(b), hereto.

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               (c)  TRADE INFORMATION.  All of Sellers' customer lists (together
     with the right to solicit and service said customers), manuals, forms,
     computer programs, business plans or like data respecting the Business or
     the conduct thereof, whether existing or created as of the date of this
     Agreement or as of the date of Closing.

               (d)  NAME AND PROPRIETARY INFORMATION.  All rights relating to
     exclusive use of the name "Jay Telephone Vending" or any similar or
     derivative name, all goodwill relating thereto and to the Business, and the
     right to free use of any proprietary information respecting the Business or
     the conduct thereof.

               (e)  EXCLUDED ASSETS.  The following assets shall not be sold,
     transferred, conveyed or delivered to Purchaser pursuant to this Agreement:
     (i) cash and monies in bank accounts, (ii) life insurance policies, (iii)
     prepaid expenses, (iv) accounts receivable earned prior to the date of
     Closing, (v) dial-around receivables earned prior to the date of Closing,
     and (vi) all revenue earned by Sellers prior to the date of Closing
     including operator service revenues and any tax or regulatory refunds or
     credits, whenever received or credited.  In the event Purchaser receives a
     credit or a refund, Purchaser shall pay to Sellers the amount of such
     credit or refund immediately upon receipt thereof.


                                     ARTICLE II
                                          
               PURCHASE PRICE; PAYMENT; NO ASSUMPTION OF LIABILITIES

          2.01 PURCHASE PRICE.  The aggregate purchase price for the Assets (the
     "Purchase Price") shall be an amount calculated as follows, subject to a
     minimum of $3,800,000 and a maximum of $4,300,000:

               (a)  Subject to Sections 2.01(b) and (c), below, Purchaser shall
     pay to Sellers an amount equal to (i) 27.2 (the "Multiple"), TIMES (ii) the
     average monthly cash flow per phone generated from the phones sold
     hereunder which are installed and in service as of the date of Closing to
     be set forth on a schedule identified as SCHEDULE 2.01(a) to be delivered
     at or prior to Closing (collectively, the "Installed Phones") for the 12
     full months following the Closing (the "12 Month Period"), TIMES (iii) the
     difference between the number of Installed Phones and the number of
     Installed Phones removed from service prior to the expiration of the 12
     Month Period solely due to the absence of enforceable Site Contracts
     therefor which have not been replaced within thirty (30) days of such
     removal (provided, however, that any such replacement must have occurred
     through the sole efforts of someone other than an employee of Purchaser and
     the Site Contract therefor must have terms and be with a Site Provider
     reasonably acceptable to Purchaser).  For purposes of this Agreement, "cash
     flow" shall mean coin revenue received, PLUS operator service and store and
     forward receipts, PLUS dial-around compensation received, MINUS line
     charges and long distance bills paid, MINUS commissions paid to Site
     Providers, MINUS applicable sales, use and/or excise


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     taxes which appear on the telephone bills, MINUS the charges described in 
     Section 2.01(d), below, but only to the extent described therein.  
     Notwithstanding the foregoing, the removal of any of the Installed Phones 
     from service prior to the expiration of the 12 Month Period for any 
     reason other than the absence of an enforceable Site Contract therefor, 
     including but not limited to removal due to store closing, fire, 
     vandalism, change in store ownership and expiration of the Site Contract 
     therefor, shall have no effect on the Purchase Price or the number used 
     pursuant to (iii), above, to determine the Purchase Price.  Due to the 
     uncertainty of the dial-around compensation rate, the effect of increasing
     the local coin rate, and the implementation of changes in the tariff for 
     local phone service, the Purchase Price as described in this Section 
     2.01(a) will be determined by the Accountants (as defined below) in 
     accordance with Section 2.02, below.  Purchaser may use any 
     clearinghouse for the determination and distribution of its dial-around
     compensation so long as its clearinghouse distributes all of the 
     dial-around compensation attributable to the Installed Phones for the 
     entire 12 Month Period no later than the date American Public 
     Communications Counsel Services distributes dial-around compensation 
     for such period.

               (b)  In the event that eighty-five percent (85%) or more of the
     Installed Phones are subject to Site Contracts as of the date of Closing,
     the Multiple shall be increased to 27.4.

               (c)  The Purchase Price shall be reduced by $2,000 for any
     Installed Phone removed from service following the 12 Month Period but
     before the conclusion of the Accountants' review due to the absence of an
     enforceable Site Contract therefor which has not been replaced within
     thirty (30) days of such removal (provided, however, that any such
     replacement must have occurred through the sole efforts of someone other
     than an employee of Purchaser and the Site Contract therefor must have
     terms and be with a Site Provider reasonably acceptable to Purchaser).  Any
     Purchase Price reduction pursuant to this Section 2.01(c) shall be effected
     first by reducing the principal amount of the Note (as defined below) to
     the extent of the outstanding indebtedness then evidenced thereby and,
     thereafter, by a cash refund to Purchaser.

               (d)  The parties acknowledge that the Federal Communications
     Commission has authorized telephone companies to recover certain one-time
     costs related to developing a tracking system for dial-around calls
     ("Tracking Costs"), which costs are anticipated to be passed on to pay
     telephone service providers in the monthly line charges.  If the portion of
     these costs attributable to the Installed Phones are billed to Purchaser in
     the 12 Month Period, whether as a one-time charge or spread out over a
     number of months, then the Accountants shall allocate such costs over a 
     36-month period.  For example and for illustration purposes only, if $15 of
     Tracking Costs are billed to Purchaser in the 12 Month Period, then only $5
     of the $15 shall be included as expense for the 12 Month Period in
     determining the average monthly cash flow for the 12 Month Period. 
     Alternatively, if the telephone companies elect to pass on the Tracking
     Costs by increasing line charges indefinitely, then the actual amounts paid
     therefor by Purchaser in the 12 Month Period would be included in such
     calculation as expense.


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          2.02 DETERMINATION OF PURCHASE PRICE. 

               (a)  Coopers & Lybrand L.L.P. or, in the event such firm is
     unwilling or unable to undertake such engagement, another firm of certified
     public accountants selected by Purchaser and reasonably acceptable to
     Sellers (in either case, the "Accountants"), shall be engaged to conduct
     the review described herein and to determine the cash flow generated by the
     Installed Phones.  The fees and expenses of the Accountants for the
     foregoing services only shall be shared and paid equally by the Purchaser
     and the Sellers.

               (b)  The review by the Accountants shall occur as soon as
     reasonably practicable following Purchaser's receipt of the payment(s) for
     dial-around compensation attributable to the Installed Phones for the
     entire 12 Month Period, which review shall be concluded no later 30 days
     after receipt of such payment(s) and a written report thereof shall be
     delivered to Purchaser and Sellers within 10 days of the conclusion of the
     review (the "Report Date").   The purpose of the review is to determine the
     average monthly cash flow from the Installed Phones and the number of
     Installed Phones removed from service both prior to the expiration of the
     12 Month Period and following the 12 Month Period but before the conclusion
     of the Accountants' review due to the absence of enforceable Site Contracts
     therefor, all of which will be used by the Accountants to establish the
     amount of the Purchase Price. 

          2.03 PAYMENT.

     The Purchase Price shall be paid as follows:

                    (i)  $62,500 paid contemporaneously with the execution of
               this Agreement, which payment shall be non-refundable in the
               event the transactions contemplated hereby are not consummated
               for any reason, except that the Sellers shall refund the full
               amount paid herewith in the event any of the representations,
               warranties or statements made herein or in any document,
               information or exhibit furnished under this Agreement or in
               connection with the transactions contemplated hereby, contains
               any untrue statement of a material fact, or omits to state a
               material fact necessary to make the statements or facts contained
               therein not misleading, which refund obligation shall be joint
               and several as between the two Sellers, and

                    (ii) $37,500 payable on or before 5:00 p.m. Philadelphia
               Time, Tuesday, May 12, 1998, and

                    (iii)     $3,700,000 payable at Closing in cash, by
               certified check or by wire transfer pursuant to Sellers'
               instructions, and 


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                    (iv) the balance, if any, to be paid in full no later than
               ten (10) days after the Report Date, all as more fully set forth
               in the form of promissory note attached hereto as EXHIBIT A (the
               "Note"). The Note shall have an initial principal value of
               $500,000 and shall be subject to reduction in an amount, if any,
               by which $4,300,000 exceeds the amount of the Purchase Price as
               determined by the Accountants.   Further, the Note shall be
               secured by either (i) an irrevocable letter of credit ("LC"),
               (ii) a financial performance bond, ("Bond") or (iii) a cash
               escrow ("Escrow") as determined by the Purchaser in its sole
               discretion and having terms reasonably acceptable to Sellers (in
               either case, the "Security Document"), a copy of which in draft
               form shall be provided to Sellers no less than ten (10) days
               prior to the Closing.

                    (v)  The  LC, Bond or Escrow will provide that the  initial
               draw by Sellers shall be in the amount directed in writing by the
               Accountants.  In the event either the Purchaser or Sellers
               believe the Accountants' determination is incorrect by an amount
               in excess of $10,000 the parties agree to meet to resolve the
               dispute amicably.  In the event an agreement is not reached
               within 30 days after the  LC, Bond or Escrow is initially drawn 
               against, the parties agree to submit the matter for binding
               resolution in accordance with the Rules of the American
               Arbitration Association in a proceeding to be venued  in Chicago,
               Illinois.  The parties to such proceeding hereby agree to equally
               share the fees payable to the arbitration panel but shall
               otherwise be solely responsible for their respective costs in
               connection with such proceeding.  Until such time as the parties
               amicably resolve the dispute or the arbitration decision is
               rendered the balance of the LC, Bond, or Escrow shall remain in
               place as security for the Note.

          2.04 NO ASSUMPTION OF LIABILITIES.  In connection with this Agreement,
     neither Purchaser nor any affiliate of Purchaser is assuming or agreeing to
     assume or discharge any liability or obligation of Sellers or Shareholders
     whatsoever, whether now existing or hereafter incurred, including, without
     limitation, any liability or obligation relating to any of the Assets or
     the sale thereof, or pursuant to any lease, for the Sellers' office located
     at Lee Park, 555 N. Lane, Conshohoken, Pennsylvania or otherwise, pursuant
     to which either of the Sellers or either of the Shareholders is a party
     except for liabilities assumed as set forth on Schedule 4.04 attached
     hereto.


                                 ARTICLE III
                                          
                                   CLOSING

          3.01 TIME AND PLACE.  Subject to satisfaction or waiver of the
     conditions to closing set forth in Article VII, below, the closing of the
     transaction contemplated by this Agreement 


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     (the "Closing") shall take place at such time and location as shall be 
     agreed to by Sellers and Purchaser, but in no event later than 
     June 30, 1998.

          3.02 DELIVERIES.  At or before the Closing, and as a condition
     precedent to Closing, unless waived in writing by the receiving party:

               (a)  Sellers shall deliver to Purchaser a fully-executed Bill of
     Sale in the form attached as EXHIBIT B, and any other document or
     instrument reasonably requested by Purchaser to evidence the sale and
     transfer of any of the Assets free and clear of any and all claims, liens
     or encumbrances of any kind.

               (b)  Ludwig shall execute and deliver to Purchaser an Employment
     Agreement in the form of EXHIBIT C (the "Employment Agreement").

               (c)  The warranties and representations set forth in Article IV,
     below, shall be true and correct on the date of Closing, as if then made,
     and the Sellers shall deliver to Purchaser a certificate to that effect
     signed by its chief executive officer and chief financial officer.

               (d)  Possession of the Assets shall be relinquished to Purchaser
     by Sellers at the Closing.

               (e)  Purchaser shall deliver the payment required to be paid at
     Closing pursuant to Section 2.03(ii), above, and the Note and Security
     Document.

                                     ARTICLE IV
                                          
     REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLERS AND SHAREHOLDERS

          To induce Purchaser to consummate the transactions contemplated by
this Agreement, the Sellers and Shareholders, jointly and severally, warrant,
represent and covenant with and to Purchaser as follows, all of which
representations, warranties and covenants are made as of the date of this
Agreement and as of the date of Closing:

          4.01 CORPORATE STANDING.  Each of the Sellers is a corporation duly
     organized, validly existing and in good standing under the laws of the 
     Commonwealth of Pennsylvania and has all requisite power, authority,
     permits and franchises to own, lease and operate its properties and to
     carry on the Business as now being conducted.  Each of the Sellers is duly
     qualified and in good standing as a foreign corporation in all other states
     where the character of its properties or the nature of the Business makes
     such qualification necessary.

          4.02 AUTHORIZATION OF AGREEMENT AND ENFORCEABILITY.  The execution and
     delivery of this Agreement by each of the Sellers has been duly authorized
     by all necessary corporate action and the execution and delivery of this
     Agreement by each of the Shareholders is done 


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     as their respective free acts and deeds.  This Agreement has been duly 
     and validly executed and delivered by the Sellers and the Shareholders 
     and constitutes the valid and legally binding obligation of the Sellers 
     and the Shareholders, enforceable against the Sellers and the 
     Shareholders in accordance with its terms. 

          4.03 CHARTER AND BY-LAWS.  Each of the Sellers has furnished to
     Purchaser a good standing certificate issued by the Secretary of State of
     Pennsylvania.

          4.04 OWNERSHIP OF ASSETS.  The Sellers in the aggregate own all of the
     Assets free and clear of any and all liabilities, liens, encumbrances,
     restrictions, assessments, obligations, charges and options of any kind
     whatsoever (collectively, "Liens") except for Liens identified on Schedule
     4.04 attached hereto.  The Sellers in the aggregate will have at Closing
     good and marketable title to the Assets and the absolute right, power and
     capacity to sell, assign and deliver the Assets to Purchaser, free and
     clear of any and all Liens, except for Liens identified on Schedule 4.04
     attached hereto.

          4.05 CAPITALIZATION.  All of the issued and outstanding shares of the
     capital stock of ESC, and all of the issued and outstanding shares of the
     capital stock of DTC, are owned in the aggregate by the Shareholders. 
     There are no shareholder agreements, understandings, or commitments
     relating to the right of the Sellers, respectively, to sell the Assets.

          4.06 FINANCIAL CONDITION.  SCHEDULE 4.06(a) attached hereto is an
     unaudited analysis of pay telephone revenues and expenses for each of the
     Sellers for the  years ended December 31, 1997 and 1996, and for the
     interim period ending on the most recent practicable date (the "Latest
     Date"), and each of the Sellers will deliver to Purchaser, at Purchaser's
     expense, prior to or at the Closing an audited balance sheet and statement
     of income and surplus information for the same periods which will confirm
     the unaudited analyses set forth on SCHEDULE 4.06(a) (collectively, the
     "Financial Statements").  The Financial Statements are and will be complete
     and accurate, have been and will be prepared in accordance with generally
     accepted accounting principles, consistently applied, and fairly present
     and will fairly present the financial condition and results of operations
     of Sellers as of the dates and for the periods indicated.  There has been
     no material adverse change in the financial condition, properties or
     business of either of the Sellers since the Latest Date.  Neither of the
     Sellers has any liabilities, obligations or commitments, whether absolute,
     accrued, contingent or otherwise, other than (i) liabilities disclosed or
     adequately provided for in the Financial Statements and (ii) liabilities
     incurred in the ordinary course of business since the Latest Date which
     individually and in the aggregate are not material in amount.  At the date
     of Closing, neither of the Sellers will have any outstanding liability for
     borrowed money, or  trade or other payables whether absolute, accrued,
     contingent or otherwise, other than those that shall be listed in a
     schedule identified as SCHEDULE 4.06(b) to be delivered to Purchaser at
     Closing.

          4.07 NO MATERIAL ADVERSE CHANGE.  The Sellers will notify Purchaser
     prior to Closing of any occurrence, event or condition which has occurred
     or occurs between the date of the unaudited Financial Statements and the
     Closing, and which has a reasonable likelihood 


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     of adversely affecting the Assets, the Business, business prospects or 
     the financial condition of Sellers.  Since the Latest Date, there have 
     been no changes in the state, municipal or other non-federal laws, 
     regulations or orders pertaining to the provision of pay telephone 
     service or installation of pay telephones which will or would be 
     likely to materially adversely affect the Business.  All known facts 
     material to the condition (financial or otherwise) of the Business or 
     the Assets have been disclosed to the Purchaser in this Agreement or 
     in a writing pursuant hereto.

          4.08 CONTRACTS.  Each of the Sellers has delivered to Purchaser a
     complete and accurate list of all written documents evidencing Liens,
     franchises, licenses, leases, employment agreements (including any pension,
     profit sharing, bonus or severance pay commitments), and other contracts,
     undertakings and commitments to which such Seller is a party or by which it
     is bound or to which any of its properties are subject.  Each of the
     Sellers has performed all material obligations required to be performed by
     it under such Liens, franchises, licenses, leases, contracts, agreements
     and other undertakings and commitments and is not in material default
     thereof.  The lease for Sellers' office/warehouse facility can be
     terminated by Sellers on no more than thirty (30) days' written notice to
     the landlord thereunder, and upon such termination Sellers will have no
     further obligation to such landlord. As of the date hereof, eleven (11) of
     the Sellers' pay telephones are placed with the Sellers' largest Site
     Provider (based on the number of Installed Phones under contract with such
     Site Provider).  As of the date of Closing, (i) there will be at least 960
     Installed Phones and (ii) at least seventy-eight percent (78%) of the
     Installed Phones will be subject to a Site Contract. As of the date hereof
     and as of the date of Closing, ninety-eight percent (98%) of Sellers' Site
     Contracts are and will be in full force and effect, Sellers have not
     defaulted on or received either a default notice or a notice of intention
     to cancel a Site Contract with respect to more than two percent (2%) of
     Sellers' Site Contracts, and ninety-eight percent (98%) of Sellers' Site
     Contracts have or will have as of such date the following provisions:

               (a)  the Site Contract has an initial term of a least five (5)
     years, except as indicated on SCHEDULE 4.08(a) attached hereto, 

               (b)  the Site Contract automatically renews at the end of the
     current term, except as indicated on SCHEDULE 4.08(b) attached hereto, 

               (c)  Except as indicated on Schedule 4.08(c) attached hereto, the
     Site Contract is assignable by Sellers without the consent of the Site
     Provider and pursuant to such assignment, the assignee will have all of the
     rights, title and interest of the Sellers as though such assignee was an
     original party thereto,

               (d)  Sellers have the exclusive right to operate pay telephones
     at the location or locations which are the subject of the Site Contract, 


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               (e)  Except as set forth in Schedule 4.08(a) or 4.08 (b) the Site
     Contract  cannot be terminated by the Site Provider during the term of the
     Site Contract, and 

               (f)  Sellers can terminate the Site Contract in the event the
     revenue generated by Sellers' pay telephones at the site is insufficient.

          4.09 PROPERTIES.  The Sellers in the aggregate own all rights,
     properties and other assets necessary to permit Sellers to conduct the
     Business in all respects in the same manner as it conducts the Business on
     the date hereof, and Sellers in the aggregate have good and marketable
     title to all of the Assets and other properties used by them in the
     Business, subject to no Liens, leases, mortgages, pledges or charges of any
     kind, except as otherwise disclosed in this Agreement or in Schedule 4.04. 
     All of the tangible Assets are in good working order and repair excluding
     normal wear and tear, are of merchantable quality, and are fit for the
     particular purpose for which they are intended to be used.

          4.10 INSURANCE.  Each of the Sellers has delivered or will deliver on
     or prior to Closing to Purchaser a complete and accurate schedule listing
     and briefly describing all policies of fire, liability, automobile and
     other insurance maintained by such Seller. Such policies are in amounts to
     provide coverages customarily maintained by similar businesses and are in
     full force and effect.

          4.11 LITIGATION; COMPLIANCE WITH LAWS.  Except as set forth on
     SCHEDULE 4.11 hereto, no litigation, proceeding or controversy is pending
     or threatened against either of the Sellers before any court or any
     governmental agency.  Neither of the Sellers has violated or is in
     violation of any federal, state, municipal or other laws, regulations or
     orders applicable to the Business or Sellers' activities, including but not
     limited to those pertaining to the provision of pay telephone service and
     installation of pay telephones, and any failure of Sellers to fully comply
     with such laws, regulations and ordinances will not have an adverse impact
     or prejudicial effect on the Business or the acquisition of the Assets by
     Purchaser in accordance with the terms of this Agreement.  Sellers' charges
     for intrastate long-distance calls comply with all applicable state and
     local laws, regulations and orders.

          4.12 TAXES.  Each of the Sellers has filed all federal, state, county,
     municipal, local and other tax returns and information which is required by
     law and has paid or made provision for the payment of all taxes due with
     respect to such returns and each such return is true and correct. Sellers
     and/or Shareholders shall pay all sales, use, ad valorem, value added,
     excise, employment, franchise, income and similar tax liabilities
     (including any interest and penalties) pertaining to the Business or the
     Assets for all periods up to and including the date of Closing.  In
     addition, Sellers and/or Shareholders shall pay any and all sales, income
     and other taxes payable by Sellers in connection with the transfer of the
     Assets to the Purchaser.  Neither of the Sellers has been notified that its
     federal or state income tax returns have been audited by the Internal
     Revenue Service or any applicable state revenue department, and neither of
     the Sellers has waived any statute of limitations governing federal or
     state  income tax claims.  All taxes, charges, levies and assessments which
     either of the 


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<PAGE>

     Sellers is required by law to withhold or collect have been duly withheld 
     or collected, and to the extent required, have been paid over to the 
     proper governmental authorities or are held in separate bank accounts for 
     such purpose.

          4.13 OTHER AGREEMENTS.  Neither the execution nor the delivery of this
     Agreement by the Sellers and Shareholders, nor the performance of any of
     their respective obligations hereunder, will result in a breach or
     violation of any term or provision of or constitute a default under the
     charter or By-laws of either of the Sellers or any indenture, mortgage or
     other agreement or instrument to which either of the Sellers or either of
     the Shareholders is a party.

          4.14 BOOKS AND RECORDS.  All of the books of account and other
     financial and corporate records of both Sellers have been or prior to
     Closing will be made available to Purchaser and its counsel and are in all
     material respects complete and correct, are maintained in accordance with
     customary business practices, and are accurately reflected in the Financial
     Statements.

          4.15 LABOR DISPUTES.  Each of the Sellers is in compliance with all
     laws respecting employment and employment practices, terms and conditions
     of employment, and wages and hours and neither of the Sellers is engaged in
     any unfair labor practices or has discriminated on the basis of age, sex,
     race, religion or national origin in its employment conditions or
     practices.  There is no unfair labor practice or discrimination complaint
     against either of the Sellers pending before or threatened before any
     board, department, commission or agency, nor does any basis therefor exist.

          4.16 NO BROKERS OR FINDERS.  Neither the Sellers nor the Shareholders
     have incurred any obligation or liability, contingent or otherwise, for any
     broker's or finder's fees or commissions, or other like payments, in
     connection with their respective execution and delivery of this Agreement
     or the Sellers' sale of the Assets to Purchaser.

          4.17 INTELLECTUAL PROPERTY.  Neither of the Sellers is a party to any
     intellectual property agreements to which the Assets or its use of the
     Assets are subject, and the Sellers' use of the  Assets does not infringe
     on the protected intellectual property rights of others.

          4.18 CHARGES FOR INTERSTATE CALLS.  Sellers' charges for interstate
     calls made from their pay telephones do not exceed $5.00 for the first
     three minutes.

          4.19 MATERIAL MISSTATEMENTS OR OMISSIONS.  No representation, warranty
     or statement of the Sellers or the Shareholders in this Agreement or in any
     document, information, exhibit or schedule furnished under this Agreement
     or in connection with the transactions contemplated hereby, contains or
     will contain any untrue statement of a material fact, or omits to state a
     material fact necessary to make the statements or facts contained therein
     not misleading.


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                                     ARTICLE V
                                          
                    REPRESENTATIONS AND WARRANTIES OF PURCHASER

          As of the date of this Agreement and as of the date of Closing,
Purchaser represents and warrants to the Sellers as follows:

          5.01 ORGANIZATION.  Purchaser is a corporation duly organized, validly
     existing and in good standing under the laws of the State of Minnesota with
     full power and authority to conduct the business conducted by it in the
     manner in which such business has been conducted.

          5.02 AUTHORITY.  The execution, delivery and performance of this
     Agreement and all transactions contemplated by this Agreement by Purchaser
     have been duly authorized by all necessary corporate action.  This
     Agreement shall be a valid and binding obligation of Purchaser, enforceable
     in accordance with its terms, except as limited by bankruptcy,
     reorganization, insolvency, moratorium, or other similar laws presently or
     hereafter in effect affecting the enforcement of creditors' rights
     generally and subject to general equitable principles.  Neither the
     execution nor the delivery of this Agreement nor the consummation of the
     transactions contemplated by this Agreement shall conflict with or result
     in a breach of the charter or By-laws of Purchaser or any instrument or
     agreement binding on Purchaser.

          5.03 RETENTION OF EMPLOYEES.  Purchaser will not reduce the Sellers'
     work force in place as of the date of Closing and for the six (6) months
     thereafter; provided however, individual employees may be terminated for
     breach of their employment duties or failure to adhere to employment
     policies and procedures.


                                     ARTICLE VI
                                          
                            ACTIONS PENDING THE CLOSING

          Between the date of this Agreement and the Closing, the parties agree
that they shall conduct themselves as follows:

          6.01 CONTINUED CONDUCT OF BUSINESS.  The Sellers shall, and the
     Shareholders shall cause the Sellers to:

               (a)  conduct the Business only in the usual and ordinary course;

               (b)  refrain from amending the charter or By-laws of either of
     the Sellers;


                                      11

<PAGE>

               (c)  except as conducted in the ordinary course of business,
     refrain from making any purchases, sales or transfers of any material
     properties; entering into any material contracts or commitments;
     mortgaging, pledging, hypothecating, subjecting to a Lien, assigning or
     otherwise encumbering any of the Assets or other properties of either of
     the Sellers;

               (d)  refrain from making any change in the compensation or
     benefits payable to any of the employees or agents of either of the Sellers
     or making any new bonus payment or arrangement or benefit to or with any of
     them;

               (e)  preserve the present relationships with Sellers' customers,
     merchants, suppliers and other persons having business dealings with the
     Sellers;

               (f)  maintain the Assets in customary repair, order and
     condition;

               (g)  maintain in force existing insurance policies; and

               (h)  refrain from selling any of the Assets out of the ordinary
     course, change the character of the Business, or take actions which would
     materially increase the operating expenses of the Business.

          6.02 ACCESS TO RECORDS.  Purchaser's representatives, attorneys and
     accountants shall have reasonable access to the records and files, audits
     and properties of Sellers as well as all information otherwise pertaining
     to the Assets and to the business and affairs of Sellers, which information
     shall be deemed confidential and shall not be disclosed to any third party
     without Sellers' consent.  In the event the transactions contemplated
     herein are not consummated, Purchaser's representatives, attorneys and
     accountants shall return to Sellers all copies of any such information
     obtained by them.

                  [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


                                      12

<PAGE>

                                    ARTICLE VII
                                          
                          CONDITIONS PRECEDENT TO CLOSING

          7.01 PURCHASER'S CONDITIONS.  Purchaser shall not be required to close
     the transaction contemplated by this Agreement unless the following
     conditions have been satisfied or waived in writing by Purchaser:

               (a)  Each of the warranties and representations made by the
     Sellers and the Shareholders herein are true and correct;

               (b)  The Sellers and the Shareholders, respectively, shall have
     complied with the covenants required by Article VI, above, and all other
     conditions of Closing which are contained in this Agreement;

               (c)  The Sellers shall have delivered all of the items which are
     to be delivered and performed all of the things to be done by it at or
     prior to the Closing;

               (d)  Purchaser shall have received all regulatory approvals
     necessary to complete the transactions contemplated hereby;

               (e)  Sellers shall have delivered to Purchaser a schedule listing
     all of the Installed Phones;  

               (f)  Sellers shall have delivered to Purchaser SCHEDULES 2.01(a)
     AND 4.06(b), the audited Financial Statements described in Section 4.06,
     above, and the insurance policies described in Section 4.10, above; and

               (g)  Purchaser's Board of Directors shall have approved this
     Agreement and the transactions contemplated hereby.

               In the event that one or more of the foregoing conditions is not
     fulfilled as of the date of Closing, Purchaser may, by written notice to
     the Sellers on or prior to the date of Closing, elect not to consummate the
     transactions provided for in this Agreement.  Notwithstanding the
     foregoing, the provisions of Section 2.03(i) and (ii) shall remain in full
     force and effect.

          7.02 SELLERS' CONDITIONS.  The Sellers shall not be required to close
     the transaction contemplated by this Agreement unless the following
     conditions have been satisfied or waived in writing by the Sellers:

               (a)  Each of the warranties and representations made by Purchaser
     herein are true and correct;


                                      13

<PAGE>

               (b)  Purchaser shall have complied with all other conditions of
     Closing which are contained in this Agreement; and

               (c)  Purchaser shall have delivered all of the items which are to
     be delivered and performed all of the things to be done by it at the
     Closing.

               In the event that one or more of the foregoing conditions is not
     fulfilled as of the date of Closing, the Sellers may, by written notice to
     Purchaser on or prior to the date of Closing, elect not to consummate the
     transactions provided for in this Agreement.


                                    ARTICLE VIII
                                          
                                  INDEMNIFICATION

          8.01 SELLERS' INDEMNIFICATION.  The Sellers and the Shareholders,
     jointly and severally, agree to indemnify Purchaser and its directors,
     officers, employees and agents, and their successors and assigns, against
     any and all liabilities, claims or obligations, including costs, expenses
     and attorneys' fees, of or against Purchaser, whether accrued, absolute,
     contingent or otherwise, arising from, related to or caused by the Sellers'
     or the Shareholders' breach of this Agreement or any of the warranties,
     representations or covenants of them hereunder, or Sellers' ownership and
     operation of the Assets at any time prior to the Closing; provided,
     however, that in the event the removal from service of a pay telephone
     acquired by Purchaser hereunder arises from, relates to or is caused by the
     breach of any of the representations and warranties of Sellers and
     Shareholders set forth in Article IV hereof at any time while such
     representations and warranties remain in effect (a "Claim for Removed
     Phones"), then the damages payable therefor to Purchaser shall be, and be
     limited to, an amount per phone so removed equal to the product of:

      (a)  (i) the Purchase Price (as the same may be adjusted pursuant to the
          provisions of Sections 2.01(a) and (c), above), DIVIDED BY

          (ii) the number of pay telephones acquired by Purchaser hereunder,

     TIMES

      (b) (i) the difference between 28 and the number of full months elapsed
          between the date of Closing and the date such phone is removed from
          service, DIVIDED BY

          (ii) 28.

     The Sellers and the Shareholders, jointly and severally, shall further
     indemnify Purchaser, and its directors, officers, employees and agents, and
     their successors and assigns, against 


                                      14

<PAGE>

     any and all loss, liability and expense, including reasonable attorneys' 
     fees, resulting from or arising out of taxes levied, imposed or assessed 
     by any governmental authority prior to and after the date of Closing 
     with respect to the income and operations of Sellers for all periods 
     prior to the date of Closing.

          Purchaser shall give notice to the Sellers with respect to each claim
     for indemnification hereunder specifying the amount and nature of the
     claim, and of any matter which reasonably appears likely to give rise to an
     indemnification claim.  Failure to give timely notice of a matter which may
     give rise to an indemnification claim shall not affect the right of
     Purchaser to indemnity; provided, however, that Purchaser shall not be
     entitled to indemnification for any loss, cost, damage, liability or
     expense resulting directly from Purchaser's delay in promptly notifying the
     Sellers of such matter.  Purchaser shall give the Sellers a reasonable
     opportunity to defend the same at the Sellers' expense and with counsel of
     their own selection; provided that Purchaser shall at all times also have
     the right to fully participate in the defense at its own expense.  If the
     Sellers shall, within a reasonable time after notice, fail to defend,
     Purchaser shall have the right, but not the obligation, to undertake the
     defense of, and to compromise or settle the claim or other matter on
     behalf, for the account, and at the risk, of the Sellers and the
     Shareholders.  If the claim is one that cannot by its nature be defended
     solely by the Sellers, then Purchaser shall make available all information
     and assistance that the Sellers may reasonably request.  Except with the
     prior written consent of Purchaser, the Sellers shall not, in defending any
     claim, enter into any settlement by which Purchaser is to be bound.  The
     Sellers shall pay to Purchaser any amounts due hereunder within twenty (20)
     days after final judgment or compromise and settlement for payment of a
     claim under this Section 8.01; provided, however, that Purchaser shall be
     entitled to offset amounts owed by the Sellers and/or the Shareholders
     under this Section 8.01 against amounts next due and owing to the Sellers
     under this Agreement, the Note or any other agreement between Purchaser, on
     the one hand, and either of the Sellers or either of  the Shareholders, on
     the other hand, and such offset(s) shall be in addition to any other
     remedies available to Purchaser.  Notwithstanding the foregoing, any Claim
     for Removed Phones shall be satisfied first with an offset against the
     amount, if any, due and owing to the Sellers under the Note and then as
     otherwise provided herein.

          8.02 PURCHASER'S INDEMNIFICATION.  The Purchaser agrees to indemnify
     Sellers and their respective directors, officers, employees and agents, and
     their successors and assigns, against any and all liabilities, claims or
     obligations, including costs, expenses and attorneys' fees, of or against
     either of the Sellers, whether accrued, absolute, contingent or otherwise,
     arising from, related to or caused by the Purchaser's breach of this
     Agreement or any of the warranties, representations or covenants of it
     hereunder, or Purchaser's ownership and operation of the Assets at any time
     subsequent to the Closing.  The Purchaser shall further indemnify the
     Sellers, and their respective directors, officers, employees and agents,
     and their successors and assigns, against any and all loss, liability and
     expense, including reasonable attorneys' fees, resulting from or arising
     out of taxes levied, imposed or assessed by any governmental authority
     after the date of Closing with respect to the income and operations of
     Purchaser for all periods after the date of Closing.


                                      15

<PAGE>

          Sellers shall give notice to the Purchaser with respect to each claim
     for indemnification hereunder specifying the amount and nature of the
     claim, and of any matter which reasonably appears likely to give rise to an
     indemnification claim.  Failure to give timely notice of a matter which may
     give rise to an indemnification claim shall not affect the right of Sellers
     to indemnity; provided, however, that Sellers shall not be entitled to
     indemnification for any loss, cost, damage, liability or expense resulting
     directly from Sellers' delay in promptly notifying the Purchaser of such
     matter.  Sellers shall give the Purchaser a reasonable opportunity to
     defend the same at the Purchaser's expense and with counsel of its own
     selection; provided that Sellers shall at all times also have the right to
     fully participate in the defense at their own expense.  If the Purchaser
     shall, within a reasonable time after notice, fail to defend, Sellers shall
     have the right, but not the obligation, to undertake the defense of, and to
     compromise or settle the claim or other matter on behalf, for the account,
     and at the risk, of the Purchaser.  If the claim is one that cannot by its
     nature be defended solely by the Purchaser, then Sellers shall make
     available all information and assistance that the Purchaser may reasonably
     request.  Except with the prior written consent of Sellers, the Purchaser
     shall not, in defending any claim, enter into any settlement by which
     Sellers are to be bound.  The Purchaser shall pay to Sellers any amounts
     due hereunder within twenty (20) days after final judgment or compromise
     and settlement for payment of a claim under this Section 8.02.


                                     ARTICLE IX
                                          
                              COVENANT NOT TO COMPETE

          For a period of five (5) years after the date of Closing, neither the
Sellers nor the Shareholders shall directly or indirectly, either as a
principal, agent, employee, employer, stockholder, co-partner or in any other
individual or representative capacity whatsoever, engage in the States of
Pennsylvania, New Jersey or Delaware in any business directly competitive with
or similar to Purchaser's business as it exists on the date of Closing, and
neither the Sellers nor the Shareholders will directly or indirectly, either as
principal, agent, employee, employer, stockholder, co-partner or in any other
individual or representative capacity whatsoever, solicit, call on, take away,
divert or assist any person in so soliciting, diverting, calling on, or taking
away any customers of Purchaser, employ any of the then or former employees of
Purchaser (including individuals employed by either of the Sellers as of the
date hereof or as of the date of Closing but who subsequently become employees
of Purchaser), or induce any such employees to terminate their employment with
Purchaser.  Notwithstanding the foregoing, (i) Purchaser acknowledges Ludwig's
existing investment in Payphone Services, Inc., a New Jersey corporation, and
hereby agrees that Ludwig may make additional investments therein but only to
maintain the percentage ownership thereof that he has on the date hereof and,
(ii) Purchaser acknowledges Scott's existing investment in "Penn Triple S
Vending" and hereby agrees that Scott may (a) make additional investments
therein but only to maintain the percentage ownership thereof that he has on the
date hereof, and (b) provide assistance thereto with respect to its vending
business other than its pay telephone services 


                                      16

<PAGE>

business, (iii) Purchaser further agrees that Scott may engage in any 
business directly competitive with or similar to Purchaser's business as it 
exists on the date hereof and on the following terms: Scott, on his own 
behalf or on behalf of another, may continue to acquire telephones and site 
locations and he will pay for all costs associated with installing the 
telephones at the new locations.  Purchaser will do the installation and 
maintain the equipment.  Profits from these sites will be divided equally 
between Scott and the Purchaser after a $25 monthly per telephone deduction 
for service and all other expenses associated with operating the site.  After 
such telephones have been in service for a full 12 months, Purchaser shall 
have the option for a period of 30 days following each 12 month period for 
each telephone to purchase the acquired telephones for 28 times cash flow, 
which shall be defined as in section 2.01(a) hereof.  If Purchaser elects not 
to purchase an acquired telephone within said 30 days, it shall belong to 
Scott for all purposes.  (iv) Purchaser further agrees that Ludwig may engage 
in any business directly competitive with or similar to Purchaser's business 
as it exists on the date of Closing provided that (a) Ludwig has not been 
employed by Purchaser for at least six (6) months, and (b) Ludwig, on his own 
behalf or on behalf of another, may thereafter acquire telephones and site 
locations and he will pay for all costs associated with installing the 
telephones at the new locations.  Purchaser will do the installation and 
maintain the equipment. Profits from these sites will be divided equally 
between Ludwig and the Purchaser after a $25 monthly per telephone deduction 
for service and all other expenses associated with operating the site.  After 
such telephones have been in service for a full 12 months, Purchaser shall 
have the option for a period of 30 days following each 12 month period for 
each telephone to purchase the acquired telephones for 28 times cash flow, 
which shall be defined as in section 2.01(a) hereof.  If Purchaser elects not 
to purchase an acquired telephone within said 30 days, it shall belong to 
Ludwig for all purposes.  Notwithstanding anything to the contrary herein, 
neither Scott nor Ludwig shall for a period of thirteen (13) months following 
the installation of each phone offer to sell such phone(s) to any other 
party.  The covenants contained herein shall be construed and interpreted in 
any judicial proceeding to permit its enforcement to the maximum extent.  
Each of the Sellers and each of the Shareholders agree that the restraint 
imposed is necessary for the reasonable and proper protection of Purchaser 
and its affiliates, and that said restraint is reasonable in terms of subject 
matter, duration, and geographic scope.  It is understood by and between the 
parties that these restrictive covenants are an essential element of this 
Agreement and that, but for such covenant, Purchaser would not have entered 
into this Agreement.  Without intending in any way to limit the remedies 
available to Purchaser, each of the Sellers and each of the Shareholders 
further understand and agree that damages at law may be an insufficient 
remedy to Purchaser if either of them breach their respective covenants not 
to compete and that Purchaser may have injunctive relief in any court of 
competent jurisdiction to restrain the breach or the threatened breach of or 
otherwise specifically to enforce the covenants contained in this Article IX.

                                     ARTICLE X
                                          
                                   MISCELLANEOUS

          10.01 ADDITIONAL DOCUMENTS.  Each of the parties agrees to execute
     such additional documents as may reasonably be necessary to carry out the
     purposes and intent of this Agreement and to fulfill the obligations of the
     respective parties under this Agreement.


                                      17

<PAGE>

          10.02 BINDING ON SUCCESSORS.  This Agreement shall be binding upon,
     and shall inure to the benefit of, the parties to this Agreement and their
     respective successors and assigns.

          10.03 SEVERABILITY.  Whenever possible, each provision of this
     Agreement shall be interpreted in such manner as to be effective and valid
     under applicable law, but if any provision of this Agreement is held to be
     prohibited by or invalid under applicable law, such provision shall be
     ineffective only to the extent of such prohibition or invalidity, without
     invalidating the remainder of such provision or the remaining provisions of
     this Agreement.

          10.04 ENTIRETY OF AGREEMENT.  This Agreement states the entire
     agreement of the parties, merges all prior negotiations, agreements and
     understandings and states in full all representations, warranties and
     covenants which have induced this Agreement, there being no
     representations, warranties or covenants other than those stated in this
     Agreement.  Each party agrees that in dealing with third parties, no
     contrary representations will be made.

          10.05 AMENDMENT.  This Agreement may be modified or amended only by an
     instrument in writing, duly executed by the parties.

          10.06 SURVIVAL OF REPRESENTATION AND WARRANTIES.  The representations,
     warranties, covenants and agreements set forth in this Agreement shall
     survive for twenty-eight (28) months after the Closing; provided, however,
     that the representations and warranties in Section 4.12, above, shall
     survive for six (6) years after the Closing.

          10.07 HEADINGS.  The headings in this Agreement are included for
     convenience only and shall not constitute a part of this Agreement.

          10.08 NOTICES.  Any notice or other communication required or
     permitted under any provision of this Agreement shall be in writing and
     shall be personally delivered or sent by certified mail, return receipt
     requested, and addressed as follows:

                To Sellers and
                  Shareholders:    301 S. Fawn Street
                                   Philadelphia, PA 19103

                  with a copy to:  Peter Meltzer
                                   1600 Locust Street
                                   Suite 200
                                   Philadelphia, PA 19103

                To Purchaser:      9724 10th Avenue North
                                   Plymouth, MN  55441
                                   Attn: Jack Kohler


                                      18

<PAGE>

                  with a copy to:  Robert T. Montague
                                   Robins, Kaplan, Miller & Ciresi L.L.P. 
                                   2800 LaSalle Plaza
                                   800 LaSalle Avenue
                                   Minneapolis, MN  55402-2015

     Either party may change its address by notice given to the other party as
     specified above.

          10.09 COUNTERPARTS.  This Agreement may be executed in multiple
     counterparts.  Each counterpart shall be deemed an original agreement, but
     all counterparts shall constitute only a single agreement.

          10.10 GOVERNING LAW AND REMEDIES.  This Agreement shall be construed
     by and in accordance with the laws of the Commonwealth of  Pennsylvania. 
     Because a breach of the provisions of this Agreement may not adequately be
     compensated by money damages, any party shall be entitled, either before or
     after the Closing, in addition to any other legal right or remedy available
     to it, to an injunction restraining such breach or a threatened breach and
     to specific performance of any such provision of this Agreement, and in
     either case no bond or other security shall be required in connection
     therewith, and the parties hereby consent to the issuance of such an
     injunction and to the ordering of specific performance.


                                      19

<PAGE>

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

                                      THE SELLERS:

                                      EDWARD STEVEN CORPORATION

                                      By: /s/ Jay Ludwig
                                         ------------------------------------
                                      Its President
                                         ------------------------------------

                                      DRAKE TELEPHONE CO.

                                      By: /s/ Jay Ludwig
                                         ------------------------------------
                                      Its President
                                         ------------------------------------

                                      THE SHAREHOLDERS:

                                      /s/ Jay Ludwig
                                      ---------------------------------------
                                      Jay Ludwig

                                      /s/ Jay Scott
                                      ---------------------------------------
                                      Jay Scott

                                      THE PURCHASER:

                                      CHOICETEL COMMUNICATIONS, INC.

                                      By: /s/ Jeffrey R. Paletz
                                         ------------------------------------
                                            Jeffrey R. Paletz
                                            President


                                      20