Document:

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                                                                   EXHIBIT 10.31

                                MASTER AGREEMENT

                                 BY AND BETWEEN

                             WINSTAR WIRELESS, INC.

                                       AND

                                  WAM!NET INC.

         This Master Agreement is entered into as of the 31st day of December,
1999 (the "Effective Date") by and between WINSTAR WIRELESS, INC., a Delaware
corporation, with offices located at 7799 Leesburg Pike, Suite 700 South, Tysons
Corner, VA 22043 ("Winstar"), and WAM!NET INC., a corporation organized under
the laws of Minnesota, with offices located at 655 Lone Oak Drive, Eagan, MN
55121 ("Wam!Net").

                              EXPLANATORY STATEMENT
                              ---------------------

         Wam!Net desires to acquire from Winstar certain network facilities,
connectivity and Capacity. Winstar is willing to provide Wam!Net with such
network facilities, connectivity and Capacity, on the terms and conditions set
forth herein.

1. Definitions

         1.1 Certain Definitions.

                  (a) "Affiliate" shall mean, with respect to any entity, any
         other entity Controlling, Controlled by or under common Control with
         such entity, whether directly or indirectly through one or more
         intermediaries.

                  (b) "Agreement" means this Master Agreement.

                  (c) "Business Day" means any day on which Citibank, N.A. is
         open for the transaction of banking business.

                  (d) "Capacity" shall mean the digital transmission capability
         of a given portion of the Winstar Network designed to transmit digital
         signals at a stated rate. Capacity is designated in industry standard
         measurements such as OC-3, DS-3, T-1 etc.

                  (e) "Confidential Information" means all information, in any
         form, furnished or made available directly or indirectly by one Party
         (the "Disclosing Party") to the other (the "Receiving Party") that (i)
         concerns the operations, affairs or businesses of the Disclosing Party,
         the financial affairs of the Disclosing Party, or the relations of

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         the Disclosing Party with its customers, employees or service
         providers, and (ii) is marked confidential, restricted, proprietary, or
         with a similar designation or (iii) is provided during or created for
         the Build-out Process. "Confidential Information" excludes any
         particular information that the Receiving Party can demonstrate:

                           (i) at the time of disclosure, was in the public
                  domain or in the possession of the Receiving Party;

                           (ii) is published or otherwise becomes part of the
                  public domain other than by the unauthorized disclosure by the
                  Receiving Party;

                           (iii) was received after disclosure from a third
                  party who had a lawful right to disclose such information to
                  the Receiving Party without any obligation to restrict its
                  further use or disclosure; or

                           (iv) was independently developed by the Receiving
                  Party without reference to Confidential Information of the
                  Disclosing Party.

                  (f) "Control" and its derivatives shall mean legal, beneficial
         or equitable ownership, directly or indirectly, of more than fifty
         percent (50%) of the outstanding voting capital stock (or other
         ownership interest, if not a corporation) of an entity, or actual
         managerial or operational control over such entity.

                  (g) "Days" or "days" shall mean calendar days unless otherwise
         specified.

                  (h) "Deferred Payments" shall have the meaning set forth in
         Schedule 1.

                  (i) "Down Payment" shall mean Twenty Million and 00/100
         Dollars ($20,000,000.00).

                  (j) "DS-3" shall mean a quantity of Capacity comprising a
         digital circuit (fiber or spectrum) capable of transporting signals at
         a speed of approximately 45 Mbps.

                  (k) "Effective Date" has the meaning set forth in the preamble
         to this Agreement.

                  (l) "Eligible Location" shall mean a building designated by
         Wam!Net at which a Wam!Net customer is located that meets all of the
         following criteria: (i) it is within the reliable radio range of a
         then-existing Winstar hub; (ii) it has verified (or creatable, with
         good faith efforts by Winstar), line of sight without frequency
         interference; (iii) the site has been visited by Winstar personnel or
         otherwise verified as, in Winstar's reasonable opinion, able to be
         built-out utilizing outdoor unit space, power, security, verified riser
         and any other necessary build-out elements; and (iv) Winstar has or may
         acquire all necessary roof rights.

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                  (m) "Equipment" shall mean the equipment provided by Winstar
         to Wam!Net pursuant to Schedule B.

                  (n) "Events of Default" shall mean each of the following:

                           (i) any representation or warranty made by a Party in
                  the Transaction Documents shall prove to have been incorrect
                  when made in any respect which could reasonably be expected to
                  have a material adverse effect upon the other Party's ability
                  to realize the benefits of the Transaction Documents;

                           (ii) a Party commits a material breach of the
                  Transaction Documents that is capable of being cured on
                  commercially reasonable terms within thirty (30) days, which
                  breach is not cured within thirty (30) days after notice of
                  breach to the breaching Party, or

                           (iii) a Party commits a material breach of the
                  Transaction Documents that is not capable of being cured
                  within thirty (30) days and the breaching Party fails to (a)
                  proceed promptly and diligently after written notice to
                  correct the breach, (b) develop within fifteen (15) days
                  following written notice of breach a complete plan for curing
                  the breach, and (c) cure the breach within sixty (60) days of
                  notice thereof.

                  (o) "FCC Licenses" shall have the meaning set forth in Section
         5.1(b).

                  (p) "Installed Equipment" shall mean equipment owned by
         Wam!Net used on the Winstar Network.

                  (q) "Intercity Backbone" shall mean the long haul backbone
         network used by Winstar to provide Capacity pursuant to Schedule A.

                  (r) "Indefeasible Right of Use" or "IRU" shall mean an
         exclusive indefeasible right to use a specified amount of Capacity for
         a specified period.

                  (s) "Link" shall mean local access links, composed of radio
         pairs and backhaul facilities connecting an Eligible Location to a
         Winstar switch center.

                  (t) "Losses" shall mean all liabilities, damages and related
         costs and expenses (including fines, levies, assessments, reasonable
         legal fees and disbursements and costs of investigations, litigation,
         settlement, judgment, interest and penalties) directly incurred by a
         Party.

                  (u) "Network Control" shall mean (i) the unfettered use of all
         Network Facilities; (ii) day to day operation and control of the
         Network Facilities; (iii) determination and the carrying out of policy
         decisions, including the preparation and filing of applications with
         the Federal Communications Commission ("FCC") relating to the Network
         Facilities; (iv) employment, supervision, and dismissal of personnel

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         involved with the Network Facilities; (v) payment of financial
         obligations, including expenses arising out of operation involved with
         the Network Facilities; and (vi) the receipt of monies and profits
         derived from the operation of the Network Facilities.

                  (v) "Network Facilities" shall mean the Intercity Backbone,
         the Installed Equipment, and any other equipment and facilities used in
         providing Capacity and local connectivity on the Winstar Network
         pursuant to this Agreement, over which Winstar, as a FCC licensee, must
         retain control as that term is defined in the Communications Act of
         1934, as amended, and/or any applicable FCC rules or case law.

                  (w) "Notice of Election" shall have the meaning set forth in
         Section 12.4.

                  (x) "OC-3" shall mean a quantity of Capacity comprising a
         digital circuit (fiber or spectrum) capable of transporting signals at
         a speed of approximately 155 Mbps.

                  (y) "Party" shall mean Wam!Net or Winstar, individually, as
         appropriate.

                  (z) "Parties" shall mean Wam!Net and Winstar, collectively.

                  (aa) "Purchase Price" shall mean the sum of the Down Payment
         and the total principal amount of the Deferred Payments to be paid by
         Wam!Net to Winstar pursuant to Schedule 1.

                  (bb) "Security Interest" shall have the meaning set forth in
         Schedule 2.

                  (cc) "T-1" shall mean a quantity of Capacity comprising a
         digital circuit (fiber or spectrum) capable of transporting signals at
         a speed of approximately 1.544 Mbps.

                  (dd) "Term" shall have the meaning set forth in Section 3.

                  (ee) "Transaction Documents" shall mean the Agreement and all
         Schedules and Exhibits.

                  (ff) "Wam!Net" shall mean Wam!Net Inc.

                  (gg) "Winstar" shall mean Winstar Wireless, Inc.

                  (hh) "Winstar Network" shall mean the facilities-based
         telecommunications system over which Winstar offers telecommunications
         services to its subscribers to the extent that Winstar has an
         obligation to use the system to meet its obligations hereunder.

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         1.2 Other Definitions. Other terms used in this Agreement are defined
in the context in which they are used and have the meanings there stated.

2. Quarterly Meetings

         During the Term, Wam!Net and Winstar shall meet on a quarterly basis to
discuss their joint plans and objectives with respect to the development and
deployment of new e-business solutions and any issues which may arise related to
the performance of the Parties' obligations under the Transaction Documents.
Each Party will designate representatives from its areas of technical,
marketing, and senior management, to participate in each of the quarterly
meetings. The Parties shall develop a process for creating the quarterly agenda
for the quarterly meetings.

3. Term. Except as may otherwise be provided in a Schedule, the term of the
Transaction Documents shall begin upon the Effective Date and shall end on the
twentieth (20th) anniversary of the Acceptance Date of the first System Segment
that is Accepted pursuant to Schedule A (the "Term"), unless terminated earlier
in accordance with this Agreement.

4. Obligations of the Parties

         4.1 Intercity Backbone Capacity. Winstar shall sell to Wam!Net and
Wam!Net shall purchase from Winstar IRUs with respect to specified Capacity on
the Intercity Backbone pursuant to the terms and conditions in Schedule A.

         4.2 Equipment Sale. Winstar shall sell to Wam!Net and Wam!Net shall
purchase from Winstar the Equipment, pursuant to the terms and conditions in
Schedule B.

         4.3 Installation and Maintenance. Winstar shall sell and Wam!Net will
purchase certain local access connectivity, and certain support services,
pursuant to the terms and conditions in Schedule C.

         4.4 Collocation. Winstar shall sell and Wam!Net shall purchase
collocation and associated services, pursuant to the terms and conditions in
Schedule D.

         4.5 Joint Marketing. The Parties shall engage in joint marketing
activities, pursuant to the terms and conditions in Schedule E.

5. Covenants of the Parties

         5.1 Control.

                  (a) Winstar shall secure, at its own expense, all licenses,
         permits, agreements, consents, rights-of-way, and other arrangements
         necessary for: (i) the installation and operation of the Network
         Facilities, (ii) any other element of the Winstar

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         Network utilized by Winstar in meeting its obligations under the
         Transaction Documents, and (iii) Network Control of the Network
         Facilities. Winstar shall not be responsible (x) for such costs to the
         extent that Winstar, in its reasonable discretion, determines that such
         costs would exceed its standard cost guidelines for the geographic area
         involved by more than 20% or (y) for Wam!Net's internal costs incurred
         to make initial contact with building owners or managers to assist
         Winstar in acquiring the necessary roof rights.

                  (b) During the Term, each of the Parties shall at all times
         comply with FCC rules and regulations as well as all state and local
         regulations or requirements governing spectrum licenses owned by
         Winstar and used by Winstar to provide all connectivity pursuant to
         this Agreement ("FCC Licenses"), and the provision of
         telecommunications services hereunder, as all such rules, regulations,
         and requirements are applicable to such Parties' obligations under the
         Transaction Documents.

                  (c) Winstar shall retain Network Control and control over its
         FCC Licenses at all times during the Term of the Transaction Documents,
         and shall have, at all times therein unfettered access to all of the
         facilities where transmissions and receptions under its FCC Licenses
         are being conducted or controlled.

                  (d) Winstar will take all reasonable precautions not to
         disturb or interfere with Wam!Net's use of the Installed Equipment,
         Capacity, collocation, and local connectivity provided by Winstar under
         the Transaction Documents, unless such disturbance is deemed by Winstar
         to be necessary for Network Control and control over its FCC Licenses.

                  (e) During the Term, Wam!Net shall not represent itself as the
         holder of any of the FCC Licenses, nor as the representative of Winstar
         before the FCC, any state regulatory body or any other third party.

                  (f) Except as otherwise required by law, all filings made
         during the Term before regulatory bodies with respect to Winstar's FCC
         Licenses, including filings with respect to obtaining any licenses or
         approvals needed in connection with Winstar's obligations hereunder,
         shall be made by and in the name of Winstar. Wam!Net, at Winstar's
         expense, shall cooperate fully with Winstar in the making of such
         filings that are applicable to any Winstar obligations under the
         Transaction Documents.

                  (g) Wam!Net shall not take a position or issue a public
         statement with respect to regulatory or legislative issues that could
         be reasonably expected to adversely impact Winstar's business without
         first consulting with Winstar. Wam!Net will, at Winstar's expense,
         reasonably support Winstar's legislative and regulatory efforts with
         respect to ensuring nondiscriminatory access to buildings by
         telecommunications carriers, and, in no event, will take any position
         adverse to Winstar's positions on this matter.

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                  (h) Nothing in the Transaction Documents is intended to
         diminish or restrict Winstar's obligations as an FCC licensee and
         Winstar and Wam!Net desire that the Transaction Documents be in full
         compliance with (i) the terms and conditions of Winstar's FCC Licenses;
         (ii) all applicable rules and policies of the FCC; (iii) the
         Communications Act of 1934, as amended, and (iv) any other applicable
         federal, state and local law or regulation It is expressly understood
         by Winstar and Wam!Net that nothing in the Transaction Documents is
         intended to give Wam!Net any right which would be deemed to constitute
         a transfer of control (as `control' is defined in the Communications
         Act of 1934, as amended, and/or any applicable FCC rules or case law)
         of Winstar or of one or more of the FCC Licenses from Winstar to
         Wam!Net.

         5.2 Network Integrity.

                  (a) Subject to Section 5.1(d), neither Party may improperly
         restrict or interfere with the other Party's network or use of services
         by the other Party, its Affiliates, any other customer of either Party
         or any third party. Upon notice by a Party, the other Party shall
         promptly remove any hazard, interference or service obstruction that
         may be caused by hardware, software or connectivity that the notifying
         Party does not provide. Nothing stated herein shall be construed to
         interfere with a Party's ability to comply with the rules, regulations
         or directives of any governmental or jurisdictional authority.

                  (b) Winstar may, after giving Wam!Net notice, immediately
         suspend services under the Transaction Documents to Wam!Net in whole or
         part, without incurring any liability for such suspension, if Winstar
         in the exercise of reasonable discretion, determines that Wam!Net is or
         may utilize such services in a manner not contemplated by this
         Agreement that results in, or could result in (i) interference with the
         use of the Winstar Network, or any component thereof, by other parties;
         (ii) damage, interference, degradation or other adverse effects with
         respect to the proper functioning of the Winstar Network, or any
         component thereof, equipment or service; (iii) the fraudulent
         procurement of (1) any Network Facilities or other support services
         provided hereunder, or (2) of any other services utilizing the Winstar
         Network, or any component thereof; or (iv) a violation of the
         Communications Act of 1934, as amended, and/or any applicable FCC rules
         or case law. In the case of a suspension of service under Section
         5.2(b)(iii), Winstar shall give Wam!Net not less than twelve (12) hours
         notice. To the extent that any of the events set forth above are the
         result of any action by a Wam!Net customer, Wam!Net will, following
         notice from Winstar, suspend the service of the Wam!Net customer.

         5.3 Designation of Eligible Locations.

                  (a) Within fifteen (15) days of Wam!Net identifying a desired
         site to Winstar, Winstar shall provide Wam!Net with a determination as
         to whether the site is an Eligible Location. During such 15-day period,
         Winstar and Wam!Net will work together to allow Wam!Net to provide
         Winstar with a fully completed service request form in the event, and
         after, the site identified by Wam!Net is classified by Winstar as

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         an Eligible Location. Upon receipt of such service request form,
         Winstar will provide Wam!Net with a firm order committment, and will
         install the necessary equipment at the Eligible Location as promptly as
         practicable, but in no event more than sixty (60) days after receipt of
         such service request form.

                  (b) In determining whether a desired site is an Eligible
         Location, if Winstar reasonably determines that the cost of rooftop
         access and/or equipment installation will exceed its standard cost
         guidelines for the geographic area involved by not more than 20%,
         Winstar must offer Wam!Net the option to pay one-half of the amount in
         excess of Winstar's standard cost guidelines, and if Wam!Net so
         chooses, and subject to the site satisfying all other required criteria
         used in determining whether the site is an Eligible Location, the site
         shall be deemed an Eligible Location. If the costs would exceed such
         guidelines by more than 20%, Winstar may, in its sole discretion,
         choose not to designate such site as an Eligible Location.

         5.4 Access to Facilities. Both Parties shall provide the other Party's
personnel with access to its facilities to the extent reasonably required for
such Party to perform its obligations hereunder. Any such access permitted
hereunder shall be in accordance with each Party's applicable internal security
procedures, and any applicable FCC requirements.

         5.5 Future Winstar Network Build-out.

                  (a) Pursuant to Schedule C, during calendar year 2000, Winstar
         will, at Wam!Net's request, install and provide connectivity with at
         least 700 Links to Eligible Locations designated by Wam!Net.

                  (b) In determining whether a location is an Eligible Location
         or whether Winstar will build its network to certain geographic areas,
         Wam!Net shall be entitled to participate in the process by which
         Winstar determines its ultimate network build-out map ("Build-out
         Process").

                  (c) As part of the Build-out Process, Winstar will provide
         Wam!Net with existing and planned hub addresses, city identifications,
         switch addresses, delivery time frames, and construction status of
         already planned hub and central office addresses. Wam!Net will provide
         Winstar such information as Winstar reasonably requires to complete the
         Build-out Process. The information provided hereunder will be used to
         assess: (i) existing and planned overlay coverage; (ii) potential
         bandwidth required by Wam!Net's customers across all applications;
         (iii) bandwidth segmentation requirement required by Wam!Net's
         customers across all applications; (iv) strategy outcome planning; and
         (v) new product application deployment. Notwithstanding Wam!Net's
         participation in the Build-out Process, Winstar shall have the final
         determination with respect to identifying a building as an Eligible
         Location or extending its network to a certain geographic area.

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                  (d) Future Purchases. During the Term, for any additional
         purchases Wam!Net desires to make from Winstar, Winstar will provide
         Wam!Net with price and terms at least as favorable with regard to
         Winstar's percentage of profit over Winstar's costs for the purchase
         being priced as Wam!Net is receiving hereunder.

                  (e) In the event a Wam!Net designated node in one of the
         markets listed in Exhibit 1 of Schedule D has not been collocated with
         a Winstar switch center pursuant to Schedule D on the date a System
         Segment terminating in that market is ready for Acceptance (as defined
         in Schedule A), Winstar shall, at Winstar's expense, provide high
         capacity links between the Wam!Net node and the Winstar Terminal
         Facility that are engineered to Wam!Net's satisfaction to carry
         Wam!Net's customer traffic. Such high capacity links shall be
         maintained by Winstar until Wam!Net's node has been collocated with a
         Winstar switch center. Notwithstanding the foregoing, this obligation
         shall not become effective until the Parties have agreed upon a
         delivery schedule pursuant to Exhibit 3 of Schedule D.

                  (f) Winstar will be obligated to meet certain additional
         performance obligations related to the delivery and operations of the
         Intercity Backbone and the availability of the Capacity, all of which
         are contained in Exhibit 3 of Schedule C, which are incorporated herein
         by reference.

6. Purchase Price; Payment Terms

         6.1 Purchase of Capacity, Connectivity and Equipment. As of the
Effective Date, Wam!Net agrees to purchase the Capacity, connectivity,
collocation, and Equipment pursuant to the Transaction Documents and Winstar
agrees to provide the Capacity, connectivity, collocation, and Equipment
pursuant to the Transaction Documents for the Purchase Price. Except as
expressly provided in a Schedule, the Purchase Price will be the sole
consideration due to Winstar for the performance of any and all of its
obligations due under the Transaction Documents.

         6.2 Payment of Purchase Price. The Purchase Price shall be payable as
follows: (i) the Down Payment shall be paid upon execution of this Agreement;
and (ii) Two Hundred Forty Million Two Hundred Seventy-Nine Thousand Five
Hundred Ninety-Three Dollars and 00/100 ($240,279,593.00) shall be paid on the
terms and conditions set forth in Schedule 1, which shall be secured pursuant to
Schedule 2.

         6.3 Allocation. The Parties agree to allocate the Purchase Price (and
all other capitalizable costs) among the Network Facilities acquired and
Winstar's other obligations undertaken hereunder for all purposes (including
accounting and tax purposes) in accordance with the allocation table attached as
Schedule 3. Winstar and Wam!Net agree to report the allocation as provided in
the applicable sections of the Internal Revenue Code of 1986, as amended, and
regulations promulgated thereunder, in accordance with such allocation and agree
to prepare and file all income tax returns in a manner consistent with such
allocation.

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         6.4 Form of Payment. Wam!Net shall make payments under this Agreement
by wire transfer of immediately available funds to the United States bank
account or accounts designated by Winstar. At Winstar's discretion, payments to
be made pursuant to this Agreement may be made by check or draft of immediately
available funds delivered to the address designated in writing by Winstar or,
failing such designation, to the address for notice to Winstar pursuant to
Section 14.2.

         6.5 Taxes. The Parties' respective responsibilities for taxes arising
under or in connection with the Transaction Documents shall be as follows:

                  (a) Each Party shall be responsible for personal property
         taxes on property it owns or leases, for franchise and privilege taxes
         on its business, for taxes based on its net income or gross receipts,
         and for any third-party imposed fees.

                  (b) Each Party shall timely report and pay any and all sales,
         use, income, gross receipts, excise, transfer, ad valorem or other
         taxes, and any and all franchise fees or similar fees assessed against
         it due to the implementation of any facilities or equipment in
         connection with the Network Facilities.

                  (c) If a sales, use, excise, value-added, services,
         consumption, or other tax is assessed on the provision of the
         connectivity, maintenance or any other services, each Party shall
         timely report and pay any such tax assessed against it and the Parties
         shall work together to segregate the payments under this Agreement into
         two (2) payment streams:

                           (i)      Payments for taxable items; and

                           (ii)     Payments for other nontaxable items.

                  (d) The Parties agree to cooperate with each other to enable
         each to determine more accurately its own tax liability and to minimize
         such liability to the extent legally permissible. Each Party shall
         provide and make available to the other any resale certificates and
         other exemption certificates or information reasonably requested by
         either Party that is applicable to the subject matter of this
         Agreement.

                  (e) Each Party shall within thirty (30) business days notify
         the other of, and coordinate the response to and settlement of, any
         claim for taxes asserted by applicable taxing authorities for which the
         other Party is responsible hereunder. With respect to any claim arising
         out of a form or return signed by a Party to this Agreement, such Party
         shall have the right to elect to control the response to and settlement
         of the claim.

7. Confidentiality

         7.1 Confidential Information. Winstar and Wam!Net acknowledge that they
may be furnished with, receive, or otherwise have access to information of or

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concerning the other Party that such Party considers to be confidential,
proprietary, a trade secret or otherwise restricted. The terms and conditions of
the Transaction Documents shall be deemed Confidential Information.

         7.2 Obligations. The following obligations with respect to Confidential
Information shall survive the expiration or termination of this Agreement for a
period of seven (7) years or such longer period as required by regulation, law
or court order.

                  (a) Ongoing Obligation. Each Party's Confidential Information
         shall remain the property of that Party except as expressly provided
         otherwise by the other provisions of the Transaction Documents. Each
         Party shall each use at least the same degree of care, but in any event
         no less than a reasonable degree of care, to prevent unauthorized
         disclosure of Confidential Information as it employs to avoid
         unauthorized disclosure of its own information of a similar nature. The
         Parties may disclose such information to entities performing services
         required hereunder where: (i) use of such entity is authorized under
         the Transaction Documents, (ii) such disclosure is necessary or
         otherwise naturally occurs in that entity's scope of responsibility,
         and (iii) the entity agrees in writing to assume the obligations
         described in this Section 7.2 Any disclosure to such entity shall be
         under the terms and conditions of this Section 7.2.

                  (b) Unauthorized Disclosure. Each Party shall take reasonable
         steps to ensure that its employees or agents comply with this Section.
         In the event of any disclosure or loss of, or inability to account for,
         any Confidential Information of the Disclosing Party, the Receiving
         Party shall promptly, at its own expense: (i) notify the Disclosing
         Party in writing, and (ii) take such actions as may be necessary and
         cooperate in all reasonable respects with the Disclosing Party to
         minimize the violation and any damage resulting therefrom.

                  (c) Permitted Disclosures.

                           (i) Either Party may disclose the terms and
                  conditions of the Transaction Documents to third parties that
                  (1) have expressed a bona fide interest in consummating a
                  significant financing, merger, acquisition, or strategic
                  commercial transaction between such third parties and such
                  Party, (2) have a reasonable ability (financial and otherwise)
                  to consummate such transaction, and (3) have executed a
                  nondisclosure agreement that includes within its scope the
                  terms and conditions of this Agreement and also includes a
                  procedure to limit the extent of copying and distribution of
                  this Agreement. Each Party shall endeavor to delay the
                  disclosure of the terms and conditions of the Transaction
                  Documents until the status of discussions concerning such
                  transaction warrants such disclosure.

                           (ii) If the Receiving Party becomes legally obligated
                  to disclose Confidential Information by any governmental
                  entity with jurisdiction over it, the Receiving Party will
                  give the Disclosing Party prompt written notice sufficient to
                  allow the Disclosing Party to seek a protective order or other
                  appropriate remedy. The Receiving Party will disclose only
                  such Confidential Information as is legally required

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                  and will use its reasonable best efforts to obtain
                  confidential treatment for any Confidential Information that
                  is so disclosed.

         7.3 No Implied Rights. Nothing contained in this Section shall be
construed as obligating a Party to disclose its Confidential Information to the
other Party, or as granting to or conferring on a Party, expressly or impliedly,
any rights or license to the Confidential Information of the other Party.

8. Termination.

         8.1 Termination.

                  (a) In the event that either Party commits an Event of
         Default, then the other Party may, by giving written notice (i)
         terminate this Agreement including any Schedule or Exhibit as set forth
         in Section 8.1(c) for cause as of a date specified in the notice of
         termination, and (ii) subject to the terms of this Article, pursue any
         legal remedies it may have under applicable law or principles of equity
         relating to such breach. Additional events which shall constitute
         Events of Default under this Agreement are detailed in Schedule 1. Any
         Event of Default may be waived in writing at the non-defaulting Party's
         option.

                  (b) Termination may also occur under the condition set forth
         in Section 11.6(d).

                  (c) If an Event of Default by Winstar exists under any one of
         Schedule A (Intercity Backbone), Schedule B (Equipment Sale), Schedule
         C (Installation and Maintenance), Schedule D (Terminal Facility
         Collocation Space) or Schedule E (Joint Marketing), Wam!Net, at its
         option, may elect to terminate the Transaction Documents in their
         entirety or only the affected Schedule. In the event that an Event of
         Default by Winstar exists under two or more of the schedules referenced
         in the previous sentence, Wam!Net may only elect to terminate all of
         the Transaction Documents in their entirety.

         8.2 Effect of Termination. Termination of this Agreement refers to the
termination of the Parties' respective commitments and obligations from and
after the date of termination, but does not relieve the Parties of their payment
and other obligations incurred prior to the date of termination and their
continuing obligations under Articles 7 and 12 or as may be specifically
provided in a Schedule.

9. Inducements. Each Party represents, warrants and covenants that it has not
offered or provided any inducements in violation of law or the other Party's
policies, of which it has been given notice, in connection with this Agreement.

10. Representations; Disclaimer

         10.1 Representations. Each Party represents and warrants to the other
that:

                                       12
<PAGE>

                  (a) It has the requisite corporate power and authority to
         enter into the Transaction Documents and to carry out the transactions
         contemplated by the Transaction Documents; and

                  (b) The execution, delivery and performance of the Transaction
         Documents and the consummation of the transactions contemplated by the
         Transaction Documents have been duly authorized by the requisite
         corporate action on the part of such Party. (c) Each Party represents
         that the Transaction Documents have been duly executed and delivered,
         and create lawful, valid and legally binding obligations, in accordance
         with their respective terms. The execution and delivery of the
         Transaction Documents and the consummation of the transactions
         contemplated hereby are not prohibited by, do not violate or conflict
         with any provision of, and do not constitute a default under or a
         breach of: (a) any contract, agreement or other instrument to which it
         is a party or by which any of the assets that are the subject hereof
         are bound; or (b) to the Party's knowledge, any order, writ,
         injunction, decree or judgment of any court or governmental agency.

         10.2 Winstar represents that the Network Facilites will function in
accordance with the terms of the Transaction Documents for the Term.

         10.3 Winstar covenants and agrees that it has or shall obtain any and
all rights, licenses, permits, authorizations, consents and approvals
(including, without limitation, any necessary local, state, federal or tribal
authorizations and environmental permits) as are reasonably necessary in order
to permit Winstar to perform all of its obligations under the Transaction
Documents, and to permit Wam!Net to use the Capacity and the connectivity as
provided and permitted hereunder.

         10.4 Manufacturers' Equipment Warranty. Winstar will pass through to
Wam!Net all warranties from the manufacturers of the Equipment to the extent
Winstar is able pursuant to any agreements between Winstar and such
manufacturers. Notwithstanding the foregoing, the existence of such
manufacturers' warranties does not diminish or limit Winstar's obligations under
Schedule C.

         10.5 Disclaimer. EXCEPT AS SPECIFICALLY SET FORTH IN THE TRANSACTION
DOCUMENTS, THE PARTIES MAKE NO WARRANTY TO EACH OTHER OR ANY OTHER ENTITY,
WHETHER EXPRESS, IMPLIED OR STATUTORY, AS TO THE MERCHANTABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE OF THE EQUIPMENT, NETWORK FACILITIES, ANY CAPACITY, IRUs,
CONNECTIVITY, MAINTENANCE, MANAGEMENT, ANCILLARY SERVICES OR ANY OTHER
EQUIPMENT, FACILITIES OR SERVICES PROVIDED OR USED HEREUNDER OR DESCRIBED
HEREIN, OR AS TO ANY OTHER MATTER, ALL OF WHICH WARRANTIES ARE HEREBY EXPRESSLY
EXCLUDED AND DISCLAIMED.

                  IN NO EVENT, WHETHER IN CONTRACT OR IN TORT (INCLUDING BREACH
OF WARRANTY, NEGLIGENCE AND STRICT LIABILITY IN TORT), SHALL

                                       13
<PAGE>

A PARTY BE LIABLE FOR INDIRECT OR CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR SPECIAL
DAMAGES EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES
IN ADVANCE.

11. Liability

         11.1 General Intent. Subject to the specific provisions of this Article
11, it is the intent of the Parties that each Party shall be liable to the other
Party only for any direct damages incurred by the non-breaching Party as a
result of the breaching Party's failure to perform its obligations in the manner
required by the Transaction Documents.

         11.2 Liability Restrictions.

                  (a) Winstar's liability to Wam!Net whether in contract or in
         tort (including breach of warranty, negligence and strict liability in
         tort) shall be limited to the amounts actually paid (including both
         principal and interest) to Winstar by Wam!Net at the time the event
         resulting in liablity occurs.

                  (b) The limitation set forth in Subsection (a), above, shall
         not apply with respect to: (i) third-party claims subject to
         indemnification pursuant to the Agreement; or (ii) fees due and owing
         under this Agreement at the time of the claim.

                  (c) For the purposes of this Section 11.2, all amounts payable
         or paid to third parties in connection with claims that are eligible
         for indemnification pursuant to this Agreement shall be deemed direct
         damages.

         11.3 Insurance Requirements.

                  (a) During the Term each Party shall obtain and maintain, at
         its expense, an appropriate insurance policy with terms and coverage
         thresholds equal to the amounts below and provide the other Party with
         a certificate of such coverage upon request. Winstar will assist
         Wam!Net to the extent reasonably requested in the coordination of all
         insurance claims against Wam!Net's own insurer for any event of loss.
         Wam!Net shall be responsible for all of Winstar's third-party costs
         reasonably incurred as a result of such coordination other than
         Winstar's internal costs. During the Term, each Party shall have and
         maintain in force the following insurance coverages:

                           (i) Worker's Compensation and Employer's Liability.
                  Worker's Compensation Insurance in amounts required by
                  applicable law and Employers Liability Insurance with limits
                  not less than $1,000,000 each accident.

                           (ii) Commercial General Liability. Each Party shall
                  carry broadform general liability insurance coverage for
                  property damage, bodily injury, personal injury, and
                  contractual liability with coverage of at least $10,000,000
                  per occurrence and in the aggregate. Total limits can be
                  attained by the inclusion of an Umbrella/Excess Liability
                  policy.

                                       14
<PAGE>

                  (b) Each Party shall cause its insurers to issue certificates
         of insurance evidencing that the coverages required under this
         Agreement are maintained in force. The minimum limits of coverage
         specified herein are not intended, and shall not be construed, to limit
         any liability or indemnity of either Party under this Agreement.

                  (c) Nothing in this Agreement shall be construed to prevent
         either Party satisfying its insurance obligations pursuant to this
         Agreement under a blanket policy or policies of insurance that meet or
         exceed the requirements of this Article.

         11.4 Risk of Loss.

                  (a) For the Network Facilities and any support services
         provided under the Transaction Documents, each Party shall take all
         reasonable precautions against, and shall assume liability for, subject
         to the terms of the Transaction Documents, any damage caused by it to
         the property of the other Party. Winstar shall bear the risk of loss
         with regard to the equipment and facilities owned by Winstar that it
         uses to meet its obligations to Wam!Net under the Transaction
         Documents; provided, however, that Wam!Net shall be responsible for all
         damage and loss to such equipment and facilities caused by Wam!Net's
         gross negligence or willful misconduct.

                  (b) Except as otherwise contemplated herein, for the duration
         of the Security Interest granted pursuant to Schedule 2, Wam!Net shall
         not cause or permit any part of the Network Facilities to become
         subject to any lien, security interests, or encumbrances whether by
         operation of law or otherwise.

         11.5 Performance Obligations Limitation.

                  In the event that Winstar commits a breach of a performance
         obligation imposed in any of the Exhibits to the Schedules, then
         Winstar shall provide Wam!Net with a Performance Enhancement credit
         towards future purchases of Intercity Backbone IRUs, Equipment,
         connectivity, any support services obtained from Winstar pursuant to a
         Transaction Document, or any third party carrier's backhaul services
         for the Wam!Net network, in the amount(s) set forth in the applicable
         Exhibit.

         11.6 Force Majeure.

                  (a) Subject to Section 11.6(d), neither Party shall be liable
         for any default or delay in the performance of its obligations under
         the Transaction Documents if and to the extent such default or delay is
         caused, directly or indirectly, by fire, flood, lightning, earthquake,
         elements of nature or acts of God, war, riots, civil disorders,
         rebellions or revolutions, provided that such default or delay could
         not have been prevented by reasonable precautions and cannot be
         reasonably circumvented by the non-performing Party through the use of
         alternate sources, workaround plans or other means, including to the
         extent contemplated by applicable disaster recovery processes or
         procedures.

                                       15
<PAGE>

                  (b) In such event, the non-performing Party shall be excused
         from further performance or observance of the obligation(s) so affected
         for as long as such circumstances prevail and such Party continues to
         use commercially reasonable efforts to recommence performance or
         observance whenever and to whatever extend possible without delay.

                  (c) The term of a Party's performance of any obligation(s)
         excused by a force majeure event shall be extended by any period(s) of
         force majeure.

                  (d) If any period of force majeure affecting Winstar's
         obligations under any Transaction Documents extends for more than
         thirty (30) days, and (i) if the force majeure event affects all or
         substantially all of the Network Facilities (a "Major Force Majeure
         Event"), then either Party may, at its option, terminate this Agreement
         upon twenty (20) days prior written notice to the other, and in that
         event, Winstar's failure to perform its obligation shall be considered
         a non-excused breach; or (ii) for any force majeure event that is not a
         Major Force Majeure Event (a "Minor Force Majeure Event"), then for a
         period of one hundred eighty days (180) thereafter, Winstar will
         provide Wam!Net with a Performance Enhancement credit towards future
         purchases of Intercity Backbone IRUs, Equipment, connectivity, any
         support services obtained from Winstar pursuant to a Transaction
         Document, or any third party carrier's backhaul services for the
         Wam!Net network, in the amount set forth in Exhibit 3 of Schedule C. If
         after such one hundred eighty (180) day period, Winstar is unable to
         perform its obligations with respect to the portion of the Network
         Facilities affected by such Minor Force Majeure Event, Wam!Net may
         terminate the portion of the Transaction Documents applicable to such
         obligation, and in such event, Winstar's inability to perform such
         obligation shall be considered a non-excused breach.

12. Indemnification

         12.1 Indemnities by Winstar. Winstar agrees to indemnify, defend and
hold harmless Wam!Net and its Affiliates and their respective officers,
directors, employees, agents, successors, and assigns, from any and all Losses
and threatened Losses arising from, in connection with, or based on allegations
of, any of the following:

                  (a) Winstar's failure to observe or perform any duties or
         obligations to third parties (e.g., duties or obligations to
         subcontractors);

                  (b) Any claims of infringement of any patent, trade secret,
         copyright or other proprietary rights, alleged to have occurred based
         upon the provision of the Network Facilities by Winstar, except to the
         extent that such claims arise from (i) modification of the Network
         Facilities or any component thereof by Wam!Net that is not recommended
         or otherwise approved by Winstar, (ii) maintenance of the Network
         Facilities by Wam!Net other than in accordance with the provisions set
         forth in the Transaction Documents that is not recommended or otherwise
         approved by Winstar, or (iii) use of the Network Facilities by Wam!Net
         in combination with deliverables furnished by third parties that is not
         recommended or otherwise approved by Winstar;

                                       16
<PAGE>

                  (c) The death or bodily injury of any agent, employee,
         customer, business invitee or any other person caused by the tortious
         conduct of Winstar;

                  (d) The damage, loss or destruction of any real or tangible
         personal property caused by the tortious conduct of Winstar; or

                  (e) Any claim, demand, charge, action, cause of action, or
         other proceeding asserted against Wam!Net but resulting from an act or
         omission of Winstar in its capacity as an employer of a person.

         12.2 Indemnities by Wam!Net. Wam!Net agrees to indemnify, defend and
hold harmless Winstar and its Affiliates and their respective officers,
directors, employees, agents, successors, and assigns, from any and all Losses
and threatened Losses arising from, in connection with, or based on allegations
of, any of the following:

                  (a) Wam!Net's failure to observe or perform any duties or
         obligations to third parties (e.g., duties or obligations to
         subcontractors);

                  (b) Any claims of infringement of any patent, trade secret,
         copyright or other proprietary rights, alleged to have occurred based
         upon misuse of the Network Facilities by Wam!Net, including (i)
         modification of the Network Facilities or any component thereof by
         Wam!Net that is not recommended or otherwise approved by Winstar, (ii)
         maintenance of the Network Facilities other than by Winstar or
         Winstar's designees in accordance with the provisions set forth in the
         Transaction Documents that is not recommended or otherwise approved by
         Winstar, or (iii) use of the Network Facilities by Wam!Net in
         combination with deliverables furnished by third parties that is not
         contemplated by the Transaction Documents, recommended or otherwise
         approved by Winstar;

                  (c) The death or bodily injury of any agent, employee,
         customer, business invitee or any other person caused by the tortious
         conduct of Wam!Net;

                  (d) The damage, loss or destruction of any real or tangible
         personal property caused by the tortious conduct of Wam!Net; or

                  (e) Any claim, demand, charge, action, cause of action, or
         other proceeding asserted against Winstar but resulting from an act or
         omission of Wam!Net in its capacity as an employer of a person.

         12.3 Infringement. If any item used by Winstar to provide the Network
Facilities becomes, or in Winstar's reasonable opinion is likely to become, the
subject of an infringement or misappropriation claim or proceeding, in addition
to indemnifying Wam!Net as provided in this Article 12 by Winstar and to the
other rights Wam!Net may have under the Transaction Documents, Winstar shall,
promptly at Winstar's expense:

                                       17
<PAGE>

                  (a) secure the right to continue using the item, or

                  (b) if the action described in Subsection (a) cannot be
         accomplished by Winstar, replace or modify the item to make it
         non-infringing, provided that any such replacement or modification will
         not degrade the fit, form or function of the affected Network
         Facilities.

         12.4 Indemnification Procedures. With respect to third-party claims,
the following procedures shall apply:

                  (a) Promptly after receipt of notice of the commencement or
         threatened commencement of any civil, criminal, administrative, or
         investigative action or proceeding involving a claim in respect of
         which Indemnitee will seek indemnification pursuant to this Article,
         Indemnitee will notify Indemnitor of such claim in writing. No failure
         to so notify Indemnitor will relieve Indemnitor of its obligations
         under this Agreement except to the extent that it can demonstrate
         damages attributable to such failure. Within fifteen (15) Days
         following receipt of written notice from Indemnitee relating to any
         claim, but no later than ten (10) Days before the date on which any
         response to a complaint or summons is due, Indemnitor will notify
         Indemnitee in writing if Indemnitor elects to assume control of the
         defense and settlement of that claim (a "Notice of Election").

                  (b) If Indemnitor delivers a Notice of Election relating to
         any claim within the required notice period, Indemnitor shall be
         entitled to have sole control over the defense and settlement of such
         claim; provided that (i) Indemnitee shall be entitled to participate in
         the defense of such claim and to employ counsel at its own expense to
         assist in the handling of such claim, and (ii) Indemnitor shall obtain
         the prior written approval of Indemnitee before entering into any
         settlement of such claim or ceasing to defend against such claim. After
         Indemnitor has delivered a Notice of Election relating to any claim in
         accordance with the preceding paragraph, Indemnitor shall not be liable
         to Indemnitee for any legal expenses incurred by Indemnitee in
         connection with the defense of that claim. In addition, Indemnitor
         shall not be required to indemnify Indemnitee for any amount paid or
         payable by the Indemnitee in the settlement of any claim for which the
         Indemnitor has delivered a timely Notice of Election if such amount was
         agreed to without the written consent of the Indemnitor.

                  (c) If Indemnitor does not deliver a Notice of Election
         relating to any claim within the required notice period, Indemnitee
         shall have the right to defend the claim in such manner as it may in
         its reasonable judgement deem appropriate, at the cost and expense of
         Indemnitor. Indemnitor shall promptly reimburse Indemnitee for all such
         costs and expenses.

13. Dispute Resolution Any dispute between the Parties arising out of or
relating to the Transaction Documents, shall be resolved as provided in this
Section.

         13.1 Informal Dispute Resolution.

                                       18
<PAGE>

                  (a) Prior to the initiation of formal dispute resolution
         procedures, the Parties shall first attempt to resolve their dispute
         informally pursuant to this Section. Upon the written request of a
         Party, each Party shall appoint a representative from its senior
         management who does not devote substantially all of his or her time to
         performance under the Transaction Documents, whose task it will be to
         meet for the purpose of endeavoring to resolve such dispute. If, after
         thirty (30) days from the written request the representatives from
         senior management have not resolved such dispute, each Party shall
         appoint a representative from its executive management whose task it
         will be to meet for the purpose of endeavoring to resolve such dispute.
         If, after sixty (60) days from the appointment of such representatives
         from executive management, the representatives have not resolved such
         dispute, then the provisions of Section 13.2 shall apply.

                           (i) The designated representatives shall meet as
                  often as the Parties reasonably deem necessary in order to
                  gather and furnish to the other all information with respect
                  to the matter in issue which the Parties believe to be
                  appropriate and germane in connection with its resolution. The
                  representatives shall discuss the problem and attempt to
                  resolve the dispute without the necessity of any formal
                  proceeding.

                           (ii) During the course of discussion, all reasonable
                  requests made by one Party to another for non-privileged
                  information, reasonably related to this Agreement, shall be
                  honored in order that each of the Parties may be fully advised
                  of the other's position.

                           (iii) The specific format for the discussions shall
                  be left to the discretion of the designated representatives.

                  (b) The Parties agree that disputes, controversies or claims
         between them shall not be subject to the provisions of this Section
         where:

                           (i) A Party makes a good faith determination that a
                  breach of the terms of the Transaction Documents by the other
                  Party is such that a temporary restraining order or other
                  injunctive relief is the only appropriate and adequate remedy;
                  or

                           (ii) Institution of formal proceedings earlier than
                  as set forth in this Section 13.1 for the resolution of a
                  dispute may be commenced after the earlier of (x) a good faith
                  determination that such proceedings are necessary to avoid the
                  expiration of any applicable limitations period or (y) to
                  preserve a superior position with respect to other creditors.

                  (c) If a Party files a pleading with a court seeking immediate
         injunctive relief and this pleading is challenged by the other Party
         and the injunctive relief sought is not awarded in substantial part,
         the Party filing the pleading seeking immediate injunctive relief shall
         pay all of the costs and attorneys' fees of the Party successfully
         challenging the pleading.

                                       19
<PAGE>

         13.2 Arbitration.

         Except as providided in Section 13.1(b) any dispute, controversy or
claim arising out of or relating to the Transaction Documents or the breach,
termination or validity thereof, shall be finally settled in accordance with the
commercial arbitration rules of the American Arbitration Association (the "AAA")
then obtaining, by a panel of three arbitrators. Each party shall have the right
to appoint one arbitrator from the list of arbitrators supplied to the parties
by the AAA, and the two arbitrators so appointed shall appoint the third.

         The place of arbitration shall be the City of New York, New York,
U.S.A. The language of the arbitration shall be in English. The arbitrators
shall determine the matters in dispute in accordance with the internal law of
the State of New York, without reference to the Convention on Contracts for the
International Sale of Goods. Except as precluded by the United Nations
Convention on the Recognition and Enforcements of Foreign Arbitral Awards, the
internal procedural and substantive laws of New York and the United States
Federal Arbitration Act shall govern all questions of arbitral procedure,
arbitral review, scope of arbitral authority, and arbitral enforcement.

         The parties agree that the award of the arbitrators shall be the sole
and exclusive remedy between them regarding any claims, counterclaims, issues or
accountings presented or pled to the arbitrators, that the award shall be made
and shall be promptly payable in U.S. dollars, free of any tax, deduction or
offset, and that any costs, fees or taxes instant to enforcing the award shall,
to the maximum extent permitted by law, be charged against the party resisting
such enforcement.

         The award shall include interest from the date of damages incurred for
breach or other violation of the Transaction Documents, and from the date of the
award until paid in full, at a rate to be fixed by the arbitrators.

         No claim may be submitted by a party to arbitration in accordance with
this Article 13 unless notified to the other party within one (1) year of the
date on which the submitting party first knew or should have known of the
existence of the facts indicating the existence of such dispute.

         13.3 Continued Performance. Each Party agrees to continue performing
its obligations under the Transaction Documents while any dispute is being
resolved except to the extent the issue in dispute precludes performance
(dispute over payment shall not be deemed to preclude performance).

         13.4 Governing Law. The Transaction Documents and performance under
them shall be governed by and construed in accordance with the laws of the State
of New York without regard to its choice of law principles and the Convention or
Contracts for the International Sale of Goods.

14. General

                                       20
<PAGE>

         14.1 Binding Nature and Assignment.

                  (a) The Transaction Documents shall accrue to the benefit of
         and be binding upon the Parties hereto and any purchaser or any
         successor entity into which either Party has been merged or
         consolidated or to which either Party has sold or transferred all or
         substantially all of its assets.

                  (b) Except as expressly provided in a Transaction Document,
         neither Party may, or shall have the power to, assign the Transaction
         Documents or delegate such Party's obligations hereunder without the
         prior written consent of the other, except that either Party may assign
         its rights and obligations under the Transaction Documents without the
         approval of the other Party to

                           (i) an entity which acquires all or substantially all
                  of the assets of the assigning party,

                           (ii) to any Affiliate, in which event the assignor
                  shall remain liable as a guarantor of the assignee/Affiliate's
                  performance of such Party's obligations hereunder, or

                           (iii) to a successor in a merger or acquisition.

         14.2 Notices. Any notices, requests, demands, and determinations under
this Agreement (other than routine operational communications), shall be in
writing and shall be deemed duly given (i) when delivered by hand, (ii) one (1)
business day after being given to an express, overnight courier with a reliable
system for tracking delivery, (iii) when sent by confirmed facsimile with a copy
delivered by another means specified in this Section, or (iv) four (4) business
days after the day of mailing, when mailed by United States mail, registered or
certified mail, return receipt requested, postage prepaid, and addressed as
follows:

If to Wam!Net:                         If to Winstar:

Wam!Net Inc.                           Winstar Wireless, Inc.
655 Lone Oak Drive                     7799 Leesburg Pike
Eagan, MN  55121                       Suite 700 South
Attn:  Gary Hokkanen, President        Tysons Corner, VA  22043
Facsimile:  (651) 994-9591             Attn: Robert K. McGuire, President
                                             and Chief Operating Officer
                                             Winstar Large Accounts
                                       Facsimile:  (703) 226-7649

With a copy to:                        With a copy to:

Wam!Net Inc.                           Winstar Wireless, Inc.
655 Lone Oak Drive                     7799 Leesburg Pike

                                       21
<PAGE>

Eagan, MN  55121                       Suite 700 South
Attn:  Lisa Gray                       Tysons Corner, VA  22043
General Counsel                        Attn:  Colleen R. Jones
Facsimile:  (651) 256-5176                    Chief Counsel
                                              Winstar Large Accounts
                                       Facsimile:  (703) 226-7649

         A Party may from time to time change its address or designee for
notification purposes by giving the other prior written notice of the new
address or designee and the date upon which it will become effective.

         14.3 Counterparts. The Transaction Documents may be executed in several
counterparts, all of which taken together shall constitute one single agreement
between the Parties hereto.

         14.4 Relationship of Parties. Winstar, in furnishing the Network
Facilities and other services hereunder, is acting as an independent contractor,
and Winstar personnel (including, without limitation, and any subcontractors)
shall not be considered or represented as employees or agents of Wam!Net.
Winstar is not otherwise an agent of Wam!Net and has no authority to represent
Wam!Net as to any matters, except as expressly authorized in the Transaction
Document. Winstar is solely responsible for: (a) performing its responsibilities
under the Transaction Documents, (b) management and control of its personnel;
(c) the payment of all compensation owed to its personnel, including payment of
employment-related taxes, benefits, and worker's compensation insurance; (d) the
filing of all required employment returns and reports; and (e) the withholding
and payment of all applicable federal, state, and local taxes and other wage or
employment assessments, including but not limited to income tax, social security
tax, and unemployment insurance premiums for its personnel.

         14.5 Severability.

                  (a) In the event that any provision of the Transaction
         Documents conflicts with the law under which the Transaction Documents
         are to be construed or if any such provision is held invalid by an
         arbitrator or a court with jurisdiction over the Parties, such
         provision shall be deemed to be modified to reflect as nearly as
         possible the original intentions of the Parties in accordance with
         applicable law. The remainder of the Transaction Documents shall remain
         in full force and effect.

                  (b) If such modification would substantially deprive either
         party of the economic benefit of the Transaction Documents as
         originally executed, then that Party may terminate the Transaction
         Documents. Any disputes over whether a modification under this Section
         should allow a termination of the Transaction Documents shall be
         resolved in accordance with Section 13.

                                       22
<PAGE>

                  (c) If the FCC or any state body of competent jurisdiction
         determines that any provision of the Transaction Documents violates any
         applicable rules, policies, or regulations, both Parties shall make
         reasonable efforts to immediately bring the Transaction Documents into
         compliance and shall endeavor in those efforts to preserve for both
         Parties the economic benefits as reflected in the Transaction Documents
         to the maximum extent possible. If it is impossible to preserve the
         economic benefits, then Section 14.5(b) will apply.

         14.6 Consents and Approval. Except where expressly provided as being in
the sole discretion of a Party, where agreement, approval, acceptance, consent,
or similar action by either Party is required under this Agreement, such action
shall not be unreasonably delayed or withheld. An approval or consent given by a
Party under this Agreement shall not relieve the other Party from responsibility
for complying with the requirements of the Transaction Documents, nor shall it
be construed as a waiver of any rights under the Transasction Documents, except
as and to the extent otherwise expressly provided in such approval or consent.

         14.7 Waiver of Default. No waiver or discharge hereof shall be valid
unless in writing and signed by an authorized representative of the Party
against which such amendment, waiver, or discharge is sought to be enforced. A
delay or omission by either Party hereto to exercise any right or power under
the Transaction Documents shall not be construed to be a waiver thereof. A
waiver by either of the Parties of any of the covenants to be performed by the
other or any breach thereof shall not be construed to be a waiver of any
succeeding breach thereof or of any other covenant.

         14.8 Cumulative Remedies. Except as otherwise expressly provided, all
remedies provided for in the Transaction Documents shall be cumulative and in
addition to and not in lieu of any other remedies available to either Party at
law, in equity or otherwise.

         14.9 Survival. Any provision of the Transaction Documents which
contemplates performance or observance subsequent to any termination or
expiration of the Transaction Documents (in whole or in part) shall survive any
termination or expiration of the Transaction Documents (in whole or in part, as
applicable) and continue in full force and effect.

         14.10 Public Disclosures. All media releases, public announcements, and
public disclosures relating to this Agreement or the subject matter of this
Agreement, including promotional or marketing material, but not including
announcements intended solely for internal distribution or disclosures to the
extent required to meet legal or regulatory requirements beyond the reasonable
control of the disclosing Party, shall be coordinated with and shall be subject
to approval by each Party prior to release.

         14.11 Third Party Beneficiaries. Except as otherwise provided in the
Transaction Documents, the Transaction Documents shall not be deemed to create
any

                                       23
<PAGE>

rights in third parties, including suppliers and customers of a Party, or to
create any obligations of a Party to any such third parties.

         14.12 Amendment. The Transaction Documents shall not be modified,
amended or in any way altered except by an instrument in writing signed by both
Parties.

         14.13 Interpretation.

                  (a) Terms other than those defined in the Transaction
         Documents shall be given their plain English meaning, and those terms,
         acronyms and phrases known in the telecommunications and information
         technology services industries shall be interpreted in accordance with
         their generally known meanings. Unless the context otherwise requires,
         words importing the singular include the plural and vice-versa.

                  (b) References to "Article," "Section," "Subsection" and
         "Schedule" mean references to an article, section, subsection or
         schedule of the Transaction Documents, as appropriate, unless otherwise
         specifically stated.

                  (c) The article and section headings in the Transaction
         Documents are intended to be for reference purposes only and shall in
         no way be construed to modify or restrict any of the terms or
         provisions of the Transaction Documents.

                  (d) The words "include," "includes," and "including," when
         following a general statement or term, are not to be construed as
         limiting the general statement or term to any specific item or matter
         set forth or to similar items or matters, but rather as permitting the
         general statement or term to refer also to all other items or matters
         that could reasonably fall within its broadest scope.

                  (e) All dollar amounts referred to in the Transaction
         Documents are in United States dollars.

         14.14 Incorporation by Reference and Order of Precedence.

                  (a) Any conflict among or between the documents making up the
         Transaction Documents will be resolved in accordance with the following
         order of precedence (in descending order of precedence):

                           (i)      The Exhibits;
                           (ii)     The Schedules, and
                           (iii)    The Agreement.

                  (b) In the event of conflict between the documents making up
         the Transaction Documents and the terms and conditions of any purchase
         order issued by either Party, the terms of the Transaction Documents
         shall supersede any such purchase order.

                                       24
<PAGE>

         14.15 Entire Agreement. The Transaction Documents, constitute the
entire agreement between the Parties with respect to the subject matter in this
Agreement, and supersede all prior agreements, whether written or oral, with
respect to the subject matter contained in this Agreement.

                                       25
<PAGE>

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
undersigned officers, thereunto, duly authorized, as of the date first written
above.

WAM!NET INC.                        WINSTAR WIRELESS, INC.

By: /s/ Edward J. Driscoll          By: /s/ Ken Patterson
   -------------------------           ----------------------------
Name:                               Name:
     -----------------------             --------------------------
Title:                              Title:
      ----------------------              -------------------------
Date:                               Date:
     -----------------------             --------------------------

                                       26BONSO ELECTRONICS INTERNATIONAL INC.

                                WARRANT AGREEMENT
                                -----------------

     THIS AGREEMENT (the "Agreement"), dated as of _____________, 2000, is
between BONSO ELECTRONICS INTERNATIONAL INC., an International Business Company
organized in the British Virgin Islands (the "Company"), and U.S. STOCK TRANSFER
CORPORATION as warrant agent (the "Warrant Agent").

WHEREAS, the Company has declared a dividend payable to all record holders of
the Company's warrants at the close of trading on January 19, 2000 and to all
persons who exercised the Company's warrants during the period commencing
November 22, 1999 and ending at the close of business on January 19, 2000, said
dividend to consist of common stock purchase warrants (the "Warrants"); and

     WHEREAS, in connection with the warrant dividend, the Company will issue
2,174,403 Warrants evidencing the right to purchase an aggregate of 1,087,201
shares of Common Stock as constituted on the date hereof; and

     WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, registration, transfer, exchange, exercise and redemption of the
Warrants;

NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein set forth, the parties agree as follows:

     SECTION 1. Appointment of Warrant Agent. The Company hereby appoints the
Warrant Agent to act as agent of the Company for the Warrants, and the Warrant
Agent hereby accepts such appointment and agrees to perform the same in
accordance with the terms and conditions set forth in this Agreement.

     SECTION 2. Warrants and Form of Warrant Certificates.

     (A) Each two Warrants shall entitle the registered holder of the
certificate representing such Warrants to purchase upon the exercise thereof one
share of Common Stock, subject to the adjustments provided for in Section 9
hereof, at any time after issuance of the the Warrants until 2:00 p.m., Pacific
Time, on December 31, 2001 (the "Expiration Date"), unless earlier redeemed
pursuant to Section 11 hereof. At any time and from time to time prior to the
Expiration Date then in effect, the Company in its discretion may extend the
Expiration Date. In case the Company shall determine to extend the Expiration
Date, it shall so notify the Warrant Agent and the registered holders of the
outstanding Warrants, by mailing, first class, postage prepaid, notice that the
Expiration Date has been so extended, to such registered holders at their
addresses as they shall appear on the records of the Warrant Agent. Any notice
mailed in the manner provided herein shall be conclusively presumed to have been
duly given whether or not the registered holder actually receives such notice.
Upon the mailing of such notice as herein provided, the Expiration Date as so
extended shall be deemed the Expiration Date for all purposes of this Agreement.

                                       1
<PAGE>

     (B) The Warrant certificates shall be in registered form only. The text of
the Warrant certificate and the form of election to exercise a Warrant on the
reverse side thereof shall be substantially in the form of Exhibit A attached
hereto. Each Warrant certificate shall be dated as of the date of issuance
thereof by the Warrant Agent (whether upon initial issuance or upon transfer or
exchange), and shall be executed on behalf of the Company by the manual or
facsimile signature of its President or a Vice President, under its corporate
seal, affixed or in facsimile, and attested to by the manual or facsimile
signature of its Secretary or an Assistant Secretary. In case any officer of the
Company who shall have signed any Warrant certificate shall cease to be such
officer of the Company prior to the issuance thereof, such Warrant certificate
may nevertheless be issued and delivered with the same force and effect as
though the person who signed the same had not ceased to be such officer of the
Company. Any such Warrant certificate may be signed on behalf of the Company by
persons who at the actual date of execution of such Warrant certificate, are the
proper officers of the Company, although at the nominal date of such Warrant
certificate any such person shall not have been such officer of the Company.

     SECTION 3. Exercise of Warrants, Duration and Warrant Price. Subject to the
provisions of this Agreement, each registered holder of one or more Warrant
certificates shall have the right, which may be exercised as in such Warrant
certificates expressed, to purchase from the Company (and the Company shall
issue and sell to such registered holder) the number of shares of Common Stock
to which the Warrants represented by such certificates are at the time entitled
hereunder.

     Each Warrant not exercised by its Expiration Date shall become void, and
all rights thereunder and a in respect thereof under this Agreement shall cease
on such date.

     A Warrant may be exercised by the surrender of the certificate representing
such Warrant to the Company, at the office of the Warrant Agent, or at the
office of a successor to the Warrant Agent, with the purchase form set forth on
the reverse thereof duly executed and properly endorsed with the signatures
properly guaranteed, and upon payment in full to the Warrant Agent for the
account of the Company of the Warrant Price (as hereinafter defined) for the
number of shares of Common Stock as to which the Warrant is exercised. Such
Warrant Price shall be paid in full in cash or by certified or official bank
check payable in United States currency to the order of the Warrant Agent.

     The price per share of Common Stock at which the Warrants may be exercised
(the "Warrant Price") shall be $17.50, subject to adjustment in accordance with
Section 9 hereof and reduction as hereinafter provided. At any time and from
time to time prior to the Expiration Date, the Company in its discretion may
permanently or temporarily (for such period as the Company may determine) reduce
the Warrant Price. In case the Company shall determine to reduce the Warrant
Price, it shall so notify the Warrant Agent and the registered holders of the
outstanding Warrants, by mailing, first class, postage prepaid, notice of the
reduced Warrant Price (and if temporarily reduced, of the period during which
the Warrants may be exercised at such reduced price) to such registered holders
at their addresses as they shall appear on the records of the Warrant Agent. Any
notice mailed in the manner provided herein shall be conclusively presumed to
have been duly given whether or not the registered holder actually receives such
notice.

                                       2
<PAGE>

     Subject to the further provisions of this Section 3 and of Section 6
hereof, upon such surrender of Warrant certificates and payment of the Warrant
Price as aforesaid, the Company shall issue and cause to be delivered, with all
reasonable dispatch to or upon the written order of the registered holder of
such Warrants and in such name or names as such registered holder may designate,
a certificate or certificates for the number of securities so purchased upon the
exercise of such Warrants, together with cash, as provided in Section 10 of this
Agreement, in respect of any fraction of a share or security otherwise issuable
upon such surrender. All shares of Common Stock issued upon the exercise of a
Warrant shall be validly issued, fully paid and nonassessable and shall be
listed on any and all national securities exchanges upon which any other shares
of the Common Stock or securities otherwise issuable are then listed.

     Certificates representing such securities shall be deemed to have been
issued and any person so designated to be named therein shall be deemed to have
become a holder of record of such securities as of the date of the surrender of
such Warrants and payment of the Warrant Price as aforesaid; provided, however,
that if, at the date of surrender of such Warrants and payment of such Warrant
Price, the transfer books for the Common Stock or other securities purchasable
upon the exercise of such Warrants shall be closed, the certificates for the
securities in respect of which such Warrants are then exercised shall be
issuable as of the date on which such books shall next be opened and until such
date the Company shall be under no duty to deliver any certificate for such
securities. The rights of purchase represented by each Warrant certificate shall
be exercisable, at the election of the registered holders thereof, either as an
entirety or from time to time for part of the number of securities specified
therein and, in the event that any Warrant certificate is exercised in respect
of less than all of the securities specified therein at any time prior to the
Expiration Date of the Warrant certificate, a new Warrant certificate or
certificates will be issued to such registered holder for the remaining number
of securities specified in the Warrant certificate so surrendered.

     SECTION 4. Countersignature and Registration. The Warrant Agent shall
maintain books (the "Warrant Register") for the registration and the
registration of transfer of the Warrants. Upon the initial issuance of the
Warrants, the Warrant Agent shall issue and register the Warrants in the names
of the respective holders thereof in such denominations and otherwise in
accordance with instructions delivered to the Warrant Agent by the Company. The
Warrant certificates shall be countersigned manually or by facsimile by the
Warrant Agent (or by any successor to the Warrant Agent then acting as such
under this Agreement) and shall not be valid for any purpose unless so
countersigned. Warrant certificates may be so countersigned, however, by the
Warrant Agent and delivered by the Warrant Agent, notwithstanding that the
persons whose manual or facsimile signatures appear thereon as proper officers
of the Company shall have ceased to be such officers at the time of such
countersignature or delivery.

     Prior to due presentment for registration of transfer of any Warrant
certificate, the Company and the Warrant Agent may deem and treat the person in
whose name such Warrant certificate shall be registered upon the Warrant
Register (the "registered holder") as the absolute owner of such Warrant
certificate and of each Warrant represented thereby (notwithstanding any
notation of ownership or other writing on the Warrant certificate made by anyone
other than the Company or the Warrant Agent), for the purpose of any exercise
thereof, of any distribution or notice to the holder thereof, and for all other
purposes, and neither the Company nor the Warrant Agent shall be affected by any
notice to the contrary.

                                       3
<PAGE>

     SECTION 5. Transfer and Exchange of Warrants. The Warrant Agent shall
register the transfer, from time to time, of any outstanding Warrant upon the
Warrant Register, upon surrender of the certificate evidencing such Warrant for
transfer, properly endorsed with signatures properly guaranteed and accompanied
by appropriate instructions for transfer. Upon any such transfer, a new Warrant
certificate representing an equal aggregate number of Warrants shall be issued
to the transferee and the surrendered Warrant certificate shall be cancelled by
the Warrant Agent. The Warrant certificates so cancelled shall be delivered by
the Warrant Agent to the Company from time to time upon request.

     Warrant certificates may be surrendered to the Warrant Agent, together with
a written request for exchange, and thereupon the Warrant Agent shall issue in
exchange therefor one or more new Warrant certificates as requested by the
registered holder of the Warrant certificate or certificates so surrendered,
representing an equal aggregate number of Warrants.

     The Warrant Agent shall not be required to effect any registration of
transfer or exchange which w. in the issuance of a Warrant certificate for a
fraction of a Warrant.

No service charge shall be made for any exchange or registration of transfer of
Warrant certificates.

     The Warrant Agent is hereby authorized to countersign and to deliver, in
accordance with the terms of this Agreement, the new Warrant certificates
required to be issued pursuant to the provisions hereof, and the Company,
whenever required by the Warrant Agent, will supply the Warrant Agent with
Warrant certificates duly executed on behalf of the Company for such purpose.

     SECTION 6. Payment of Taxes. The Company will pay any documentary stamp
taxes attributable to the initial issuance of the shares of Common Stock
issuable upon the exercise of Warrants; provided, however, that the Company
shall not be required to pay any tax or taxes which may be payable in respect of
any transfer involved in the issuance or delivery of any certificates for
Warrants or for shares of Common Stock in a name other than that of the
registered holder of the Warrants surrendered in respect thereof, and in such
case neither the Company nor the Warrant Agent shall be required to issue or
deliver any certificate for shares of Common Stock or any Warrant certificate
until the person requesting the same has paid to the Company the amount of such
tax or has established to the Company's satisfaction that such tax has been
paid.

     SECTION 7. Mutilated or Missing Warrants. In case any of the Warrant
certificates shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, and the Warrant Agent shall countersign and deliver in
exchange and substitution for and upon cancellation of the mutilated Warrant
certificate, or in lieu of and substitution for the Warrant certificate lost,
stolen or destroyed, a new Warrant certificate representing an equal aggregate
number of Warrants, but only upon receipt of evidence satisfactory to the
Company and the Warrant Agent of such loss, theft or destruction of such Warrant
certificate and reasonable indemnity, if requested, also satisfactory to them.
Applicants for such substitute Warrant certificates shall also comply with such
other reasonable conditions and pay such reasonable charges as the Company or
the Warrant Agent may prescribe.

                                       4
<PAGE>

     SECTION 8. Reservation of Common Stock. There have been reserved, and the
Company shall at all times keep reserved, out of the authorized and unissued
shares of Common Stock, a number of shares sufficient to provide for the
exercise of the rights of purchase represented by the Warrants then outstanding
(or issuable upon exercise of the Representatives' Warrants), and the transfer
agent for the Common Stock and every subsequent transfer agent for any shares of
the Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid are hereby irrevocably authorized and directed at all times
to reserve such number of authorized and unissued shares as shall be requisite
for such purpose.

Prior to the issuance of any shares of Common Stock upon exercise of the
Warrants, the Company shall secure the listing of such shares on any and all
national securities exchanges and/or The Nasdaq Stock Market upon which any of
the other shares of the Common Stock are then listed and/or included. So long as
any unexpired Warrants remain outstanding, the Company will use its best efforts
to file such post-effective amendments to the Registration Statement or
supplements to the Prospectus filed pursuant to the Securities Act of 1933, as
amended (the "Act"), with respect to the Warrants (or such other registration
statements or post-effective amendments or supplements) as may be necessary to
permit trading in the Warrants and to permit the Company to deliver to each
person exercising a Warrant a Prospectus meeting the requirements of Section
10(a)(3) of the Act, and otherwise complying therewith; and the Company will,
from time to time, furnish the Warrant Agent with such Prospectuses in
sufficient quantity to permit the Warrant Agent to deliver such a Prospectus to
each holder of a Warrant upon the exercise thereof. The Company will use its
best efforts to obtain appropriate approvals or registrations under state "blue
sky" securities laws to permit lawful exercise of the Warrants. Notwithstanding
anything herein, Warrants may not be exercised by, or shares of Common Stock
issued to, any registered holder in any state or under any circumstance in which
such exercise would be unlawful. The Company will keep a copy of this Agreement
on file with the transfer agent for the Common Stock and with every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants.

     The Warrant Agent is hereby irrevocably authorized to requisition from time
to time from such transfer agent stock certificates required to honor
outstanding Warrants. The Company will supply such transfer agent with duly
executed certificates for such purpose and will itself provide or otherwise make
available any cash as provided in Section 10 of this Agreement. All Warrant
certificates surrendered in the exercise of the rights thereby evidenced shall
be cancelled by the Warrant Agent and shall thereafter be delivered to the
Company, and such cancelled Warrant certificates shall constitute sufficient
evidence of the number of shares of Common Stock which have been issued upon the
exercise of such Warrants. Promptly after the Expiration Date of the Warrants,
the Warrant Agent shall certify to the Company the aggregate number of such
Warrants which expired unexercised, and after the Expiration Date of the
Warrants, no shares of Common Stock shall be subject to reservation in respect
of such Warrants.

     SECTION 9. Adjustment of Warrant Price and Number of Shares of Common
Stock. Except as otherwise provided in this Section 9, the number and kind of
securities purchasable upon the exercise of the Warrants and the Warrant Price
shall be subject to adjustment from time to time upon the happening of certain
events, as follows:

                                       5
<PAGE>

     9.1 Adjustments. The number of shares of Common Stock purchasable upon the
exercise of each and the Warrant Price shall be subject to adjustment as
follows:

          (a) In case the Company shall (i) pay a dividend in Common Stock or
make a distribution in Common Stock, (ii) subdivide its outstanding Common
Stock, (iii) combine its outstanding Common Stock into a smaller number of
shares of Common Stock, or (iv) issue, by reclassification of its Common Stock,
other securities of the Company, the number of shares of Common Stock
purchasable upon exercise of a Warrant immediately prior thereto shall be
adjusted so that the holder of a Warrant shall be entitled to receive the kind
and number of shares of Common Stock or other securities of the Company which
such holder would have owned or would have been entitled to receive immediately
after the happening of any of the events described above, had the Warrant been
exercised immediately prior to the happening of such event or any record date
with respect thereto. Any adjustment made pursuant to this subsection 9.1(a)
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.

          (b) In case the Company shall issue rights, options, warrants or
convertible securities to all or substantially all holders of its Common Stock,
without any charge to such holders, entitling them to subscribe for or purchase
Common Stock at a price per share which is lower at the record date mentioned
below than the then Current Market Price (as defined in Section 10 hereof), the
number of shares of Common Stock thereafter purchasable upon the exercise of
each Warrant shall be determined by multiplying the number of shares of Common
Stock theretofore purchasable upon exercise of a Warrant by a fraction, of which
the numerator shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of such rights, options, warrants or
convertible securities plus the number of additional shares of Common Stock
offered for subscription or purchase, and of which the denominator shall be the
number of shares of Common Stock outstanding immediately prior to the issuance
of such rights, options, warrants or convertible securities plus the number of
shares which the aggregate offering price of the total number of shares offered
would purchase at such Current Market Price. Such adjustment shall be made
whenever such rights, options, warrants or convertible securities are issued,
and shall become effective immediately and retroactive to the record date for
the determination of shareholders entitled to receive such rights, options,
warrants or convertible securities.

          (c) In case the Company shall distribute to all or substantially all
holders of its Common Stock, evidences of its indebtedness or assets (excluding
cash dividends or distributions out of earnings) or rights, options, warrants or
convertible securities containing the right to subscribe for or purchase Common
Stock (excluding those referred to in subsection 9.1(b) above), then in each
case the number of shares of Common Stock thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying the number of shares
of Common Stock theretofore purchasable upon exercise of such Warrant by a
fraction, of which the numerator shall be the then Current Market Price on the
date of such distribution, and of which the denominator shall be such Current
Market Price on such date minus the then fair value (determined as provided in
subparagraph (f) below) of the portion of the assets or evidences of
indebtedness so distributed or of such subscription rights, options, warrants or
convertible securities applicable to one share. Such adjustment shall be made

                                       6
<PAGE>

whenever any such distribution is made and shall become effective on the date of
distribution retroactive to the record date for the determination of
shareholders entitled to receive such distribution.

          (d) No adjustment in the number of shares of Common Stock purchasable
pursuant to the Warrants shall be required unless such adjustment would require
an increase or decrease of at least one percent in the number of shares of
Common Stock then purchasable upon the exercise of the Warrants or, if the
Warrants are not then exercisable, the number of shares of Common Stock
purchasable upon the exercise of the Warrants on the first date thereafter that
the Warrants become exercisable; provided, however, that any adjustments which
by reason of this subsection 9.1(d) are not required to be made immediately
shall be carried forward and taken into account in any subsequent adjustment.

          (e) Whenever the number of shares of Common Stock purchasable upon the
exercise of a Warrant is adjusted as herein provided, the Warrant Price payable
upon exercise of the Warrant shall be adjusted by multiplying such Warrant Price
immediately prior to such adjustment by a fraction, of which the numerator shall
be the number of shares of Common Stock purchasable upon the exercise of such
Warrant immediately prior to such adjustment, and of which the denominator shall
be the number of shares of Common Stock so purchasable immediately thereafter.

          (f) To the extent not covered by subsections 9.1(b) or (c) hereof, in
case the Company shall sell or issue Common Stock or rights, options, warrants
or convertible securities containing the right to subscribe for or purchase
shares of Common Stock at a price per share (determined, in the case of such
rights, options, warrants or convertible securities, by dividing (i) the total
amount received or receivable by the Company in consideration of the sale or
issuance of such rights, options, warrants or convertible securities, plus the
total consideration payable to the Company upon exercise or conversion thereof,
by (ii) the total number of shares covered by such rights, options, warrants or
convertible securities) lower than the then Current Market Price in effect
immediately prior to such sale or issuance, then the Warrant Price shall be
reduced to a price (calculated to the nearest cent) determined by dividing (I)
an amount equal to the sum of (A) the number of shares of Common Stock
outstanding immediately prior to such sale or issuance multiplied by the then
existing Warrant Price, plus (B) the consideration received by the Company upon
such sale or issuance, by (II) the total number of shares of Common Stock
outstanding immediately after such sale or issuance. The number of shares of
Common Stock purchasable upon the exercise of a Warrant shall thereafter be that
number determined by multiplying the number of shares of Common Stock issuable
upon exercise immediately prior to such adjustment by a fraction, of which the
numerator shall be the Warrant Price in effect immediately prior to such
adjustment and the denominator shall be the Warrant Price as so adjusted. For
the purposes of such adjustments, the Common Stock which the holders of any such
rights, options, warrants or convertible securities shall be entitled to
subscribe for or purchase shall be deemed issued and outstanding as of the date
of such sale or issuance and the consideration received by the Company therefor
shall be deemed to be the consideration received by the Company for such rights,
options, warrants or convertible securities, plus the consideration or premiums
stated in such rights, options, warrants or convertible securities to be paid
for the Common Stock covered thereby. In case the Company shall sell or issue
Common Stock or rights, options, warrants or convertible securities containing
the right to subscribe for or purchase Common Stock for a consideration
consisting, in whole or in part, of property other than cash or its equivalent,
then, in determining the "price per share" of Common Stock and the

                                       7
<PAGE>

"consideration received by the Company ~ for purposes of the first sentence of
this subsection 9. l(f), the Board of Directors shall determine the fair value
of said property, and such determination, if based upon the Board of Directors'
good faith business judgment, shall be binding upon the registered holders. In
determining the "price per share" of Common Stock, any underwriting discounts or
commissions paid to brokers, dealers or other selling agents shall not be
deducted from the price received by the Company for sales of securities
registered under the Act or issued in a private placement. There shall be no
adjustment of the Warrant Price pursuant to this subsection 9.1(f) if the amount
of such adjustment would be less than $.05 per share of Common Stock; provided,
however, that any adjustment which by reason of this provision is not required
to be made immediately shall be carried forward and taken into account in any
subsequent adjustment.

          (g) Whenever the number of shares of Common Stock purchasable upon the
exercise of a Warrant or the Warrant Price is adjusted as herein provided, the
Company shall cause to be promptly mailed to the Warrant Agent and each
registered holder of a Warrant by first class mail, postage prepaid, notice of
such adjustment or adjustments and, with regard to the Warrant Agent only, a
certificate of the chief financial officer of the Company setting forth the
number of shares of Common Stock purchasable upon the exercise of a Warrant and
the Warrant Price after such adjustment, a brief statement of the facts
requiring such adjustment and the computation by which such adjustment was made.

          (h) For the purpose of this Section 9, the term "Common Stock" shall
mean (i) the class designated as the Common Stock of the Company at the date of
this Agreement, or (ii) any other class of stock resulting from successive
changes or reclassifications of such Common Stock consisting solely of changes
in par value, or from par value to no par value, or from no par value to par
value. In the event that at any time, as a result of an adjustment made pursuant
to this Section 9, a registered holder shall become entitled to purchase any
securities of the Company other than Common Stock, (i) if the registered
holder's right to purchase is on any other basis than that available to all
holders of the Company's Common Stock, the Company shall obtain an opinion of an
investment banking firm valuing such other securities and (ii) thereafter the
number of such other securities so purchasable upon exercise of a Warrant and
the Warrant Price of such securities shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in this Section 9.

          (i) Upon the expiration of any rights, options, warrants or conversion
privileges, if such shall not have been exercised, the number of shares of
Common Stock purchasable upon exercise of a Warrant and the Warrant Price, to
the extent a Warrant has not then been exercised, shall, upon such expiration,
be readjusted and shall thereafter be such as they would have been had they been
originally adjusted (or had the original adjustment not been required, as the
case may be) on the basis of (A) the fact that the only shares of Common Stock
so issued were the shares of Common Stock, if any, actually issued or sold upon
the exercise of such rights, options, warrants or conversion privileges, and (B)
the fact that such shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise plus the
consideration, if any, actually received by the Company for the issuance, sale
or grant of all such privileges, options, warrants or conversion privileges
whether or not exercised; provided, however, that no such readjustment shall

                                       8
<PAGE>

have the effect of increasing the Warrant Price by an amount in excess of the
amount of the adjustment initially made in respect of the issuance, sale or
grant of such rights, options, warrants or conversion privileges.

     9.2 No Adjustment for Dividends. Except as provided in Section 9.1 hereof,
no adjustment in respect of any dividends or distributions out of earnings shall
be made during the term of a Warrant or upon the exercise of a

     9.3 No Adjustment in Certain Cases. No adjustments shall be made pursuant
to Section 9 hereof in connection with the issuance of the Warrants (or the
underlying shares of Common Stock), the exercise of options or warrants of the
Company outstanding at the date hereof or the grant or exercise of options to or
by officers, directors or employees of the Company or pursuant to the 1996 Stock
Option Plan or the 1996 Non-Employee Directors' Stock Option Plan of the
Company. No adjustment shall be made pursuant to Section 9.1(b), (c), or (f)
hereof if, as a result of such adjustment, either (i) the number of shares of
Common Stock purchasable upon the exercise of each Warrant immediately after
such adjustment would be less than the number of shares of Common Stock
otherwise purchasable upon exercise of each Warrant immediately prior to such
adjustment, or (ii) the Warrant Price immediately after such adjustment would be
more than the Warrant Price immediately prior to such adjustment.

     9.4 Preservation of Purchase Rights upon Reclassification, Consolidation,
etc. In case of any consolidation of the Company with or merger of the Company
into another corporation or in case of any sale or conveyance to another
corporation of the property, assets or business of the Company as an entirety or
substantially as an entirety, the Company or such successor or purchasing
corporation, as the case may be, shall execute with the Warrant Agent an
agreement that the registered holders of the Warrants shall have the right
thereafter, upon payment of the Warrant Price in effect immediately prior to
such action, to purchase, upon exercise of each Warrant, the kind and amount of
shares and other securities and property which it would have owned or have been
entitled to receive after the happening of such consolidation, merger, sale or
conveyance had each Warrant been exercised immediately prior to such action. In
the event of a merger described in Section 368(a)(2)(E) of the Internal Revenue
Code of 1986, as amended, in which the Company is the surviving corporation, the
right to purchase shares of Common Stock under the Warrants shall terminate on
the date of such merger and thereupon the Warrants shall become null and void,
but only if the controlling corporation shall agree to substitute for the
Warrants its warrants which entitle the holders thereof to purchase upon their
exercise the kind and amount of shares and other securities and property which
they would have owned or been entitled to receive had the Warrants been
exercised immediately prior to such merger. Any such agreements referred to in
this subsection 9.4 shall provide for adjustments, which shall be as nearly
equivalent as may be practicable to the adjustments provided for in Section 9
hereof. The provisions of this subsection 9.4 shall similarly apply to
successive consolidations, mergers, sales or conveyances.

     9.5 Par Value of Shares of Common Stock. Before taking any action which
would cause an adjustment reducing the Warrant Price below the then par value of
the Common Stock issuable upon exercise of the Warrants, the Company will take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Common Stock at such adjusted Warrant Price.

                                       9
<PAGE>

     9.6 Independent Public Accountants. The Company may retain a firm of
independent public accountants of recognized national standing (which may be any
such firm regularly employed by the Company) to make any computation required
under this Section 9, and a certificate signed by such firm shall be conclusive
evidence of the correctness of any computation made under this Section 9.

     9.7 Statement on Warrant Certificates. Irrespective of any adjustments in
the Warrant Price or the number of securities issuable upon exercise of
Warrants, Warrant certificates theretofore or thereafter issued may continue to
express the same price and number of securities as are stated in the similar
Warrant certificates initially issuable pursuant to this Agreement. However, the
Company may, at any time in its sole discretion (which shall be conclusive),
make any change in the form of Warrant certificate that it may deem appropriate
and that does not affect the substance thereof; and any Warrant certificate
thereafter issued, whether upon registration of transfer of, or in exchange or
substitution for, an outstanding Warrant certificate, may be in the form so
changed.

     9.8 Notices to Holders of Warrants. If, at any time prior to the expiration
of a Warrant and prior to its exercise, any one or more of the following events
shall occur:

     (a) any action which would require an adjustment pursuant to subsection 9.
I(a)(iv), 9.1(b), 9.1(c) or 9.4 hereof; or

     (b) a dissolution, liquidation or winding up of the Company (other than in
connection with a consolidation, merger or sale of its property, assets and
business as an entirety or substantially as an entirety) shall be proposed;

then the Company shall give notice in writing of such event to the registered
holders of the Warrants, as provided in Section 18 hereof, at least 20 days
prior to the date fixed as a record date or the date of closing the transfer
books for the determination of the shareholders entitled to any relevant
dividend, distribution, subscription rights or other rights or for the
determination of shareholders entitled to vote on such proposed dissolution,
liquidation or winding up. Such notice shall specify such record date or the
date of closing the transfer books, as the case may be. Failure to mail or
receive such notice or any defect therein shall not affect the validity of any
action taken with respect thereto.

     SECTION 10. Fractional Interests. The Company shall not be required to
issue fractional shares of Common Stock on the exercise of a Warrant. If any
fraction of a share of Common Stock would, except for the provisions of this
Section l0, be issuable on the exercise of a Warrant (or specified portion
thereof), the Company shall in lieu thereof pay an amount in cash equal to the
then Current Market Price multiplied by such fraction. For purposes of this
Agreement, the term "Current Market Price" shall mean (i) if the Common Stock is
traded in the over-the-counter market and not in The Nasdaq National Market nor
on any national securities exchange, the average of the per share closing bid
prices of the Common Stock on the 30 consecutive trading days immediately
preceding the date in question, as reported by The Nasdaq Small Cap Market (or
an equivalent generally accepted reporting service if quotations are not
reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is traded
in The Nasdaq National Market or on a national securities exchange, the average
for the 30 consecutive trading days immediately preceding the date in question

                                       10
<PAGE>

of the daily per share closing prices of the Common Stock in The Nasdaq National
Market or on the principal stock exchange on which it is listed, as the case may
be. For purposes of clause (i) above, if trading in the Common Stock is not
reported by The Nasdaq Small Cap Market, the bid price referred to in said
clause shall be the lowest bid price as reported in the Nasdaq Electronic
Bulletin Board or, if not reported thereon, as reported in the "pink sheets"
published by National Quotation Bureau, Incorporated, and, if such Common Stock
is not so reported, shall be the price of a share of Common Stock determined by
the Company's Board of Directors in good faith. The closing price referred to in
clause (ii) above shall be the last reported sale price or, in the case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case in The Nasdaq National Market or on the
national securities exchange on which the Common Stock is then listed.

     SECTION 11. Redemption.

     (A) The then outstanding Warrants may be redeemed, at the option of the
Company, at $.01 per Warrant, at any time after issuance, if, and only if, the
Public Trading Price per share of the Common Stock has equalled or exceeded 110%
of the then current Exercise Price of the Warrants for at least 20 trading days
within the preceding 30 trading days, and prior to expiration of the Warrants.
The Public Trading Price of the Common Stock shall be determined by the Company
in the manner set forth in Section ll.(E) as of the end of each trading day (or,
if no trading in the Common Stock occurred on such day, as of the end of the
immediately preceding trading day in which trading occurred) and verified to the
Warrant Agent before the Company may give notice of redemption. All outstanding
Warrants must be redeemed if any are redeemed, and any right to exercise an
outstanding Warrant shall terminate at 5:00 p.m. (Pacific Time) on the business
day immediately preceding the date fixed for redemption. A trading day shall
mean a day in which trading of securities occurred on the New York Stock
Exchange.

     (B) The Company may exercise its right to redeem the Warrants only by
giving the notice set forth in the following sentence by the end of the
thirtieth (30th) day after the end of the applicable period of 30 trading days
referred to in Section 11(A). In case the Company shall exercise its right to
redeem, it shall give notice to the Warrant Agent and the registered holders of
the outstanding Warrants, by mailing to such registered holders a notice of
redemption, first class, postage prepaid, at their addresses as they shall
appear on the records of the Warrant Agent. Any notice mailed in the manner
provided herein shall be conclusively presumed to have been duly given whether
or not the registered holder actually receives such notice.

     (C) The notice of redemption shall specify the redemption price, the date
fixed for redemption (which shall be at least thirty days after such notice is
mailed), the place where the Warrant certificates shall be delivered and the
redemption price shall be paid, and that the right to exercise the Warrants
shall terminate at 5:00 P.M. (Pacific Time) on the business day immediately
preceding the date fixed for redemption.

     (D) At any time prior to the date fixed for redemption then in effect, the
Company in its discretion may extend the date fixed for redemption or rescind
the redemption without prejudice to its right later to redeem the Warrants if
each of the conditions specified in Section 11(A) have been satisfied at the
time of such later redemption. In case the Company shall determine to extend the
date fixed for redemption or to rescind the redemption, it shall so notify the
Warrant Agent and the registered holders of the outstanding Warrants, by
mailing, first class, postage prepaid, notice that the date fixed for redemption

                                       11
<PAGE>

has been extended or that the redemption has been rescinded, as the case may be,
to such registered holders at their addresses as they shall appear on the
records of the Warrant Agent. Any notice mailed in the manner provided herein
shall be conclusively presumed to have been duly given whether or not the
registered holder actually receives such notice.

     (E) Appropriate adjustment shall be made to the redemption price and to the
minimum Public Trading Price prerequisite to redemption set forth in Section I
l(A) hereof, in each case on the same basis as provided in Section 9 hereof with
respect to adjustment of the Warrant Price.

     (F) For purposes of this Agreement, the term "Public Trading Price" shall
mean (i) if the Common Stock is traded in the over-the-counter market and not in
The Nasdaq National Market nor on any national securities exchange, the closing
bid price of the Common Stock on the trading day in question, as reported by The
Nasdaq Small Cap Market (or an equivalent generally accepted reporting service
if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the
Common Stock is traded in The Nasdaq National Market or on a national securities
exchange, the daily per share closing price of the Common Stock in The Nasdaq
National Market System or on the principal stock exchange on which it is listed
on the trading day in question, as the case may be. For purposes of clause (i)
above, if trading in the Common Stock is not reported by The Nasdaq Small Cap
Market, the bid price referred to in said clause shall be the lowest bid price
as reported in the Nasdaq Electronic Bulletin Board or, if not reported thereon,
as reported in the "pink sheets" published by National Quotation Bureau,
Incorporated, and, if such Common Stock is not so reported, shall be the price
of a share of Common Stock determined by the Company's Board of Directors in
good faith. The closing price referred to in clause (ii) above shall be the last
reported sale price or, in the case no such reported sale takes place on such
day, the average of the reported closing bid and asked prices, in either case in
The Nasdaq National Market or on the national securities exchange on which the
Common Stock is then listed.

     SECTION 12. Rights as Warrantholders. Nothing contained in this Agreement
or in any of the Warrants shall be construed as conferring upon the holders
thereof, as such, any of the rights of shareholders of the Company, including,
without limitation, the right to receive dividends or other distributions, to
exercise any preemptive rights, to vote or to consent or to receive notice as
shareholders in respect of the meetings of shareholders or the election of
directors of the Company or any other matter. Anything herein to the contrary
notwithstanding, the Company shall cause copies of all financial statements and
reports, proxy statements and other documents as it shall send to its
shareholders to be sent by the same class mail as sent to its shareholders,
postage prepaid, on the date of the mailing to such shareholders, to each
registered holder of Warrants at his address appearing on the Warrant Register
as of the record date for the determination of the shareholders entitled to such
documents

     SECTION 13. Disposition of Proceeds on Exercise of Warrants. The Warrant
Agent shall account promptly to the Company with respect to Warrants exercised,
and shall promptly pay to the Company all monies received by it upon the
exercise of such Warrants, and shall keep copies of this Agreement available for
inspection by holders of Warrants during normal business hours.

                                       12
<PAGE>

     SECTION 14. Merger or Consolidation or Change of Name of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Warrant Agent under
the provisions of Section 16 of this Agreement. In case at the time such
successor to the Warrant Agent shall succeed to the agency created by this
Agreement and any of the Warrant certificates shall have been countersigned but
not delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent and deliver such Warrant
certificates so countersigned; and in case at that time any of the Warrant
certificates shall not have been countersigned, any successor to the Warrant
Agent may countersign such Warrant certificates either in the name of the
predecessor Warrant Agent or in the name of the successor Warrant Agent, and in
all such cases the Warrants represented by such Warrant certificates shall have
the full force provided in the Warrant certificates and in this Agreement. Any
such successor Warrant Agent shall promptly give notice of its succession as
Warrant Agent to the Company and to the registered holder of each Warrant
certificate.

     In case at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrant certificates shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior name
and deliver Warrant certificates so countersigned; and in case at that time any
of the Warrant certificates shall not have been countersigned, the Warrant Agent
may countersign such Warrant certificates either in its prior name or in its
changed name; and in all such cases the Warrants represented by such Warrant
certificates shall have the full force provided in the Warrant certificates and
in this Agreement.

     SECTION 15. Duties of Warrant Agent. The Warrant Agent hereby undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, all of which shall bind the Company and the holders of Warrants
by their acceptance thereof:

     (A) The statements of fact and recitals contained herein and in the
Warrants shall be taken as statements of the Company, and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrants
except as herein expressly provided.

     (B) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrants to be complied with by the Company.

     (C) The Warrant Agent may consult at any time with counsel satisfactory to
it (who may be counsel for the Company) and the Warrant Agent shall incur no
liability or responsibility to the Company or to any holder of any Warrant in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with the opinion or the advice of such counsel.

     (D) The Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Warrant for any action taken in reliance on any
notice, resolution, waiver, consent, order, certificate or other paper, document
or instrument believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.

                                       13
<PAGE>

     (E) The Company agrees to pay to the Warrant Agent reasonable compensation
for all services rendered by the Warrant Agent in the execution of this
Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges incurred by the Warrant Agent in the
execution of this Agreement and to indemnify the Warrant Agent and save it
harmless against any and all liabilities, including judgments, costs and
reasonable counsel fees, for anything done or omitted by the Warrant Agent in
the execution of this Agreement, except as a result of the Warrant Agent's
negligence, willful misconduct or bad faith.

     (F) The Warrant Agent shall be under no obligation to institute any action,
suit or legal proceeding or to take any other action on behalf of the Company or
any registered holder, but this provision shall not affect the power of the
Warrant Agent to take such action as the Warrant Agent may consider proper. All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrants or
the production thereof at any trial or other proceeding relative thereto, and
any such action, suit or proceeding instituted by the Warrant Agent shall be
brought in its name as Warrant Agent, and any recovery of judgment shall be for
the ratable benefit of all the registered holders of the Warrants, as their
respective rights or interests may appear.

     (G) The Warrant Agent and any shareholder, director, officer or employee of
the Warrant Agent may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Warrant Agent
under this Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.

     (H) The Warrant Agent shall act hereunder solely as agent and not in a
ministerial capacity, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for anything which it
may do or refrain from doing in connection with this Agreement, except for its
own negligence, willful misconduct or bad faith.

     (I) Any request, direction, election, order or demand of the Company shall
be sufficient if evidenced by an instrument signed in the name of the Company by
its President, a Vice President or chief financial officer (unless other
evidence in respect thereof is therein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Warrant Agent by a
copy thereof certified by the Secretary or an Assistant Secretary of the
Company.

     SECTION 16. Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties under this Agreement by giving the Company at least
30 days' prior notice in writing, and by mailing notice in writing to the
registered holders at their addresses appearing on the Warrant Register, of such
resignation, specifying a date when such resignation shall take effect. The
Warrant Agent may be removed by like notice to the Warrant Agent from the
Company and by like mailing of notice to the registered holders of the Warrants.
If the Warrant Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Warrant Agent.
If the Company shall fail to make such appointment within 30 days after such
removal or after it has been notified in writing of such resignation or

                                       14
<PAGE>

incapacity by the resigning or incapacitated Warrant Agent or by the registered
holder of a Warrant (who shall, with such notice, submit his Warrant certificate
for inspection by the Company), then the registered holder of any Warrant may
apply to any court of competent jurisdiction for the appointment of a successor
to the Warrant Agent. Any successor Warrant Agent, whether appointed by the
Company or by such a court, shall be registered and otherwise authorized to
serve as a transfer agent pursuant to the Securities Exchange Act of 1934, as
amended. If at any time the Warrant Agent shall cease to be eligible in
accordance with the provisions of this Section 16, it shall resign immediately
in the manner and with the effect specified in this Section 16. After acceptance
in writing of the appointment, the successor Warrant Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed; but the former
Warrant Agent shall deliver and transfer to the successor Warrant Agent any
property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Upon request of
any successor Warrant Agent, the Company shall make, execute, acknowledge and
deliver any and all instruments in writing for more fully and effectually
vesting in and confirming to such successor Warrant Agent all such powers,
rights, duties and responsibilities. Failure to file or mail any notice provided
in this Section 16, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Warrant Agent or the
appointment of the successor Warrant Agent, as the case may be.

     SECTION 17. Identity of Transfer Agent. Forthwith upon the appointment of
any transfer agent for the Common Stock or of any subsequent transfer agent for
shares of the Common Stock or other shares of the Company's capital stock
issuable upon the exercise of the rights of purchase represented by the
Warrants, the Company will file with the Warrant Agent a statement setting forth
the name and address of such transfer agent.

     SECTION 18. Notices. All notices, requests and other communications
pursuant to this Agreement shall be in writing and shall be sufficiently given
or made when delivered or mailed by first class mail, postage prepaid, addressed
as follows:

     (a) if to the Company, to (until another address is filed in writing by the
Company with the Warrant Agent):

                      Bonso Electronics International Inc.
                               Flat A-D, 8/Floor,
                          Universal Industrial Centre,
                             23-25, Shan Mei Street,
                                Fo Tan, Sha Tin,
                           New Territories, Hong Kong

     (b) if to the Warrant Agent, to (until another address is filed in writing
by the Warrant Agent with the Company):

                         U.S. Stock Transfer Corporation
                            1745 Gardena Avenue #200
                               Glendale, CA 91204

     (c) if to the registered holder of a Warrant, to the address of such holder
as shown in the Warrant Register.

                                       15
<PAGE>

     SECTION 19. Supplements and Amendments. The Company and the Warrant Agent
may from time to time supplement or amend this Agreement without the approval of
any holders of Warrants (i) in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provision hereir, or (ii) to make any other provisions in regard
to matters or questions arising hereunder which the Company and the Warrant
Agent may deem necessary or desirable and which shall not be inconsistent with
the provisions of the Warrants, or (iii) to make amendments which shall not
adversely affect the interests of the holders of Warrants (including reducing
the Warrant Price or extending the date fixed for redemption or the Expiration
Date).

     SECTION 20. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Warrant Agent or the registered
holders of the Warrants shall bind and inure to the benefit of their respective
successors and assigns hereunder.

     SECTION 21. Governing Law. This Agreement shall be deemed to be a contract
made under the laws of the State of Colorado and for all purposes shall be
construed in accordance with the laws of said State.

     SECTION 22. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrants any legal or equitable
right, remedy or claim under this Agreement. This Agreement shall be for the
sole and exclusive benefit of the Company, the Warrant Agent and the registered
holders of the Warrants.

     SECTION 23. Counterparts. This Agreement may be executed in counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.

     SECTION 24. Descriptive Headings. The descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed,
as of the year first above written.

                                          BONSO ELECTRONICS INTERNATIONAL INC.

                                          By:
                                          --------------------------------------

                                          U.S. STOCK TRANSFER CORPORATION

                                          By:
                                          --------------------------------------

                                       16

<PAGE>

================================================================================
Number                                                      Warrants to Purchase

--------------------------------------------------------------------------------
BEI-W_____________________                             Shares of of Common Stock
================================================================================

                              VOID AFTER 2:00 P.M,
                       PACIFIC TIME, ON DECEMBER 31, 2001

                   WARRANT TO PURCHASE SHARES OF CONMON STOCK

                      BONSO ELECTRONICS INTERNATIONAL INC.
          AN INTERNATIONAL BUSINESS COMPANY ORGANIZED UNDER THE LAWS OF
                           THE BRITISH VIRGIN ISLANDS

     This certifies that, for value received ________________________________,
the registered holder hereof or assigns (the "Holder".), is entitled to purchase
from Bonso Electronics International Inc., an International Business Company
organized under the laws of the British Virgin Islands (the "Company"), at any
time before 2:00 p.m., Pacific Time, on December 31, 2001 (unless extended), at
the purchase price per Share of S17.50 (the "Warrant Price"), the number of
shares of Common Stock of the Company set forth above (the "Shares"). The number
of Shares purchasable upon exercise of each Warrant evidenced hereby and the
Warrant Price per Share shall be subject to adjustment and reduction from time
to time as set forth in the Warrant Agreement referred to below. This Warrant is
subject to redemption by the Company, at $.01 per Warrant upon not less than 30
days' notice, at any time after issuance if, and only if, the Public Trading
Price (determined pursuant to the Warrant Agreement) per share of Common Stock
has equaled or exceeded 110% of the then current Exercise Price of the Warrants
for at least 20 trading days within the preceding 30 trading days ending within
30 days prior to the date of the notice of redemption, and prior to expiration
of the Warrants. The Warrant redemption price and the Public Trading Price
referred to above shall be subject to adjustment from time to time as set forth
in the Warrant Agreement.

     The Warrants evidenced hereby may be exercised in whole or in part by
presentation of this Warrant certificate with the Purchase Form on the reverse
side hereof duly executed (with a signature guarantee as provided on the reverse
side hereof) and simultaneous payment of the Warrant Price (subject to
adjustment) at the principal office in Glendale, California, of U.S. Stock
Transfer Corporation (the "Warrant Agent"). Payment of such price shall be made
at the option of the Holder in cash or by certified or official check all as
provided in the Warrant Agreement.

     The Warrants evidenced hereby are part of a duly authorized issue of Common
Stock Purchase Warrants with rights to purchase an aggregate of up to 1,087,201
Shares of Common Stock of the Company and are issued under and in accordance
with a Warrant Agreement dated as of ____________, 2000, between the Company and
the Warrant Agent (the "Warrant Agreement") and are subject to the terms and
provisions contained in such Warrant Agreement, to all of which the Holder of
this Warrant certificate by acceptance hereof consents. A copy of the Warrant
Agreement may be obtained for inspection by the Holder hereof upon written
request to the Warrant Agent.

<PAGE>

     Upon any partial exercise of the Warrants evidenced hereby, there shall be
countersigned and issued to the Holder a new Warrant certificate in respect of
the Shares as to which the Warrants evidenced hereby share not have been
exercised. This Warrant certificate may be exchanged at the office of the
Warrant Agent by surrender of this Warrant certificate properly endorsed (with a
signature guarantee) either separately or in combination with one or more other
Warrants for one or more new Warrants to purchase the same aggregate number of
Shares as here evidenced by the Warrant or Warrants exchanged. No fractional
Shares will be issued upon the exercise of rights to purchase hereunder, but the
Company shall pay the cash value of any fraction upon the exercise of two or
more Warrants. The Warrants evidenced hereby are transferable at the office of
the Warrant Agent in the manner and subject to the limitations set forth in the
Warrant Agreement.

     The Holder hereof may be treated by the Company, the Warrant Agent and all
other persons dealing with this Warrant certificate as the absolute owner hereof
for all purposes and as the person entitled to exercise the rights represented
hereby, any notice to the contrary notwithstanding, and until such transfer is
entered on such books, the Company may treat the Holder hereof as the owner for
all purposes.

This Warrant certificate does not entitle the Holder hereof to any of the rights
of a shareholder of the Company.

This Warrant certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Warrant Agent.

Dated:                                     BONSO ELECTRONICS INTERNATIONAL, INC.

Countersigned:                             By: _________________________________
U.S. Stock Transfer Corporation,               President
Warrant Agent
                                           By: _________________________________
By:_____________________________               Secretary
       Authorized Signatory

                                     [Seal]
<PAGE>

                      [Reverse side of Warrant Certificate]
                      BONSO ELECTRONICS INTERNATIONAL INC.
                              PURCHASE FORM Mailing
                                    Address:
                      Bonso Electronics International Inc.
                       c/o U.S. Stock Transfer Corporation
                         1745 Gardena Avenue, Suite 200
                       Glendale, California 91204, U.S.A.

The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant certificate for, and to purchase thereunder,
__________ Shares of Common Stock provided for therein, and requests that
certificates for such Shares be issued in the name of:

         _______________________________________________________________
         (Please Print or Type Name, Address and Social Security Number)

         _______________________________________________________________

and, if said number of Shares shall not be all the Shares purchasable hereunder,
that a new Warrant certificate for the balance of the Shares purchasable under
the within Warrant certificate be registered in the name of the undersigned
Holder or his Assignee as below indicated and delivered to the address stated
below.

              Name of Holder or Assignee:__________________________
                                               (Please Print)

              Address:_____________________________________________

              _____________________________________________________

              Signature:___________________________________________

Note: The above signature must correspond with the name as it appears upon the
face of the within Warrant certificate in every particular, without alteration
or enlargement or any change whatever, unless these Warrants have been assigned.

Signature Guaranteed:__________________________________________________________

(Signature must be guaranteed by a bank or trust company having an office or
correspondent in the United States or by a member firm of a registered
securities exchange or the National Association of Securities Dealers, Inc.)

                                   ASSIGNMENT
                 (To be signed only upon assignment of Warrants)

  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

         _______________________________________________________________
         (Please Print or Type Name, Address and Social Security Number)

         _______________________________________________________________

         _______________________________________________________________

the within Warrants, hereby irrevocably constituting and appointing
____________________________ Attorney to transfer said Warrants on the books of
the Company, with full power of substitution in the premises.

Dated:_____________________________              _______________________________
                                                 Signature of Registered Holder

Note: The signature on this assignment must correspond with the name as it
appears upon the face of the within Warrant certificate in every particular,
without alteration or enlargement or any change whatever.

Signature Guaranteed:__________________________________________________________

(Signature must be guaranteed by a bank or trust company having an office or
correspondent in the United States or by a member firm of a registered
securities exchange or the National Association of Securities Dealers, Inc.)

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