Document:

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                                                                  EXECUTION COPY

                           RECAPITALIZATION AGREEMENT

                                  BY AND AMONG

                               BIRCH TELECOM, INC.

                                     AND THE

                                   PURCHASERS

                                  NAMED HEREIN

                             DATED AS OF MAY 8, 2001
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                                TABLE OF CONTENTS
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                                                                                                               PAGE
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1.       Agreement To Sell, Purchase and Exchange.................................................................1

         1.1      Authorization of Shares.........................................................................1
         1.2      Sale and Purchase...............................................................................2
         1.3      Exchange........................................................................................2
         1.4      Exchange Procedures.............................................................................3
         1.5      Tax Free Reorganization.........................................................................3
         1.6      "All or None"...................................................................................3

2.       Closing, Delivery And Payment............................................................................3

         2.1      Closings........................................................................................3
         2.2      Delivery........................................................................................4

3.       Representations And Warranties Of The Company............................................................4

         3.1      Organization, Good Standing and Qualification...................................................4
         3.2      Subsidiaries....................................................................................5
         3.3      Capitalization; Voting Rights...................................................................5
         3.4      Authorization; Binding Obligations..............................................................6
         3.5      SEC Reports; Financial Statements...............................................................6
         3.6      Undisclosed Liabilities.........................................................................7
         3.7      Contracts; Action...............................................................................7
         3.8      Obligations to Related Parties..................................................................8
         3.9      Changes.........................................................................................8
         3.10     Title to Properties and Assets; Liens, etc......................................................9
         3.11     Patents and Trademarks..........................................................................9
         3.12     Compliance with Other Instruments..............................................................10
         3.13     Litigation.....................................................................................10
         3.14     Tax Returns and Payments.......................................................................11
         3.15     Employees......................................................................................12
         3.16     Registration Rights............................................................................12
         3.17     Compliance with Laws...........................................................................12
         3.18     Environmental and Safety Laws..................................................................13
         3.19     Offering Valid.................................................................................15
         3.20     Employee Benefit Plans.........................................................................15
         3.21     Insurance......................................................................................16
         3.22     Books and Records..............................................................................16
         3.23     Business Plan; Projections.....................................................................16
         3.24     Accounts Receivable and Bad Debts..............................................................16
         3.25     Licenses.......................................................................................17
         3.26     Network........................................................................................17
         3.27     Customers......................................................................................17

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         3.28     No Broker......................................................................................17
         3.29     Disclosure.....................................................................................17

4.       Representations And Warranties Of Each Purchaser........................................................18

         4.1      Requisite Power; Authorization; Binding Obligations............................................18
         4.2      Investment Representations.....................................................................18
         4.3      Transfer Restrictions..........................................................................19
         4.4      Ownership of Exchanged Shares..................................................................19

5.       Covenants of the Company................................................................................19

         5.1      Ordinary Course of Business....................................................................19
         5.2      Use of Proceeds................................................................................19
         5.3      Efforts........................................................................................20
         5.4      Notification of Certain Matters................................................................20

6.       Conditions To Closing...................................................................................20

         6.1      Conditions to Each Purchaser's Obligation to Purchase the Initial Purchased Shares.............20
         6.2      Conditions to Company's Obligations to Issue the Initial Purchased Shares......................21
         6.3      Conditions to Each Purchaser's Obligation to Purchase the Subsequent Purchased Shares..........22
         6.4      Conditions to Company's Obligations to Issue the Initial Purchased Shares......................23

7.       Miscellaneous...........................................................................................23

         7.1      Governing Law; Jurisdiction; Waiver of Jury Trial..............................................23
         7.2      Survival.......................................................................................23
         7.3      Successors and Assigns; Assignment.............................................................24
         7.4      Entire Agreement; Supercedes Prior Agreement...................................................24
         7.5      Severability...................................................................................24
         7.6      Amendment and Waiver...........................................................................24
         7.7      Delays or Omissions............................................................................24
         7.8      Notices........................................................................................24
         7.9      Expenses; Indemnification......................................................................26
         7.10     Interpretation.................................................................................26
         7.11     Knowledge......................................................................................26
         7.12     Termination....................................................................................27
         7.13     Counterparts; Execution by Facsimile Signature.................................................27
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INDEX OF ANNEXES

Annex A  Purchase and Exchange Allocation

Annex B  Calculation of Exchanged Shares

INDEX OF EXHIBITS

Exhibit A  Form of Certificate

Exhibit B  Form of Legal Opinion

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                               BIRCH TELECOM, INC.

                           RECAPITALIZATION AGREEMENT

          THIS RECAPITALIZATION AGREEMENT (the "AGREEMENT") is entered into as
of May 8, 2001 by and among BIRCH TELECOM, INC., a Delaware corporation (the
"COMPANY"), and the holders of Series B Preferred Stock and/or Series D
Preferred Stock that are signatories hereto, together with such affiliates that
such holders shall designate (collectively, "PURCHASERS").

                                    RECITALS

          WHEREAS, the Company has authorized the sale and issuance of an
aggregate of up to 329,000,000 shares of its Series G Preferred Stock;

          WHEREAS, on March 26, 2001, BTI Ventures L.L.C. ("BTI") entered into
a purchase agreement with the Company (the "SERIES G PURCHASE AGREEMENT"),
pursuant to which BTI will purchase up to an aggregate of 300,000,000 shares of
Series G Preferred Stock for a purchase price of $0.35 per share, subject to the
terms and conditions set forth therein;

          WHEREAS, Section 5.11 of the Series G Purchase Agreement contemplates
a recapitalization agreement substantially in the form of this Agreement;

          WHEREAS, Purchasers desire to purchase an aggregate of 1,373,410
shares of Series G Preferred Stock from the Company on the terms and conditions
set forth herein;

          WHEREAS, Purchasers desire to exchange an aggregate of 26,369 shares
of Series B Preferred Stock for the same number of shares of Series H Preferred
Stock of the Company and to exchange an aggregate of 95,694 shares of Series D
Preferred Stock for the same number of shares of Series I Preferred Stock of the
Company, as calculated on Annex B and on the terms and conditions set forth
herein; and

          WHEREAS, the Company desires to issue and sell to Purchasers such
shares of Series G Preferred Stock and to issue to Purchasers such shares of
Series H Preferred Stock and Series I Preferred Stock in exchange for such
shares of Series B Preferred Stock and Series D Preferred Stock on the terms and
conditions set forth herein.

          NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:

1. AGREEMENT TO SELL, PURCHASE AND EXCHANGE.

     1.1 AUTHORIZATION OF SHARES. On or prior to the First Closing (as defined
below), the Company shall have authorized (i) the sale and issuance to
Purchasers of an aggregate of 1,351,982 shares of Series G Preferred Stock (the
"PURCHASED SHARES" and together with the New Shares (as defined below), the
"SHARES") in the amounts and to the Purchasers identified on Annex A hereto,
(ii) the issuance of an aggregate of 26,369 shares of Series H Preferred Stock
(the "SERIES H NEW SHARES") in exchange for the same number, in the aggregate,
of shares of

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Series B Preferred Stock (the "SERIES B EXCHANGED SHARES") in the amounts and to
the Purchasers identified on Annex A hereto, (iii) the issuance of an aggregate
of 94,027 shares of Series I Preferred Stock (the "SERIES I NEW SHARES" and
together with the Series H New Shares, the "NEW SHARES") in exchange for the
same number, in the aggregate, of shares of Series D Preferred Stock (the
"SERIES D EXCHANGED SHARES" and together with the Series B Exchanged Shares, the
"EXCHANGED SHARES") in the amounts and to the Purchasers identified on Annex A
hereto, and (iv) the issuance of such shares of Common Stock to be issued upon
conversion of the Shares (the "CONVERSION SHARES"). The Shares and the
Conversion Shares shall have the rights, preferences, privileges and
restrictions set forth in the Restated Certificate of Incorporation of the
Company attached hereto as Exhibit A (the "CERTIFICATE").

     1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof, (a) at
the First Closing, the Company hereby agrees to issue and sell to each
Purchaser, and each Purchaser agrees to purchase from the Company, the number of
Purchased Shares set forth opposite such Purchaser's name on Annex A hereto and
indicated under the column "Initial Purchased Shares" (the "INITIAL PURCHASED
SHARES") at a purchase price of $0.35 per Purchased Share, and (b) at the Second
Closing (as defined below), the Company hereby agrees to issue and sell to each
Purchaser, and each Purchaser agrees to purchase from the Company, the number of
Purchased Shares set forth opposite such Purchaser's name on Annex A hereto as
indicated under the column "Subsequent Purchased Shares" (the "SUBSEQUENT
PURCHASED SHARES") at a purchase price of $0.35 per Purchased Share.

     1.3 EXCHANGE.

          (a) Subject to the terms and conditions set forth in this Agreement,
effective at the First Closing, (i) the number of Series B Exchanged Shares set
forth opposite each Purchaser's name on Annex A hereto and indicated under the
column "Initial Series B Exchanged Shares" (the "INITIAL SERIES B EXCHANGED
SHARES") will be converted, without any action on the part of the holder
thereof, into a right to receive, and the Company shall thereupon issue, the
same whole number of fully paid and non-assessable shares of Series H New
Shares, and (ii) the number of Series D Exchanged Shares set forth opposite each
Purchaser's name on Annex A hereto and indicated under the column "Initial
Series D Exchanged Shares" (the "INITIAL SERIES D EXCHANGED SHARES" and,
together with the Initial Series B Exchanged Shares, the "INITIAL EXCHANGED
SHARES") will be converted, without any action on the part of the holder
thereof, into a right to receive, and the Company shall thereupon issue, the
same whole number of fully paid and non-assessable shares of Series I New
Shares.

          (b) Subject to the terms and conditions set forth in this Agreement,
effective at the Second Closing, (i) the number of Series B Exchanged Shares set
forth opposite each Purchaser's name on Annex A hereto and indicated under the
column "Subsequent Series B Exchanged Shares" (the "SUBSEQUENT SERIES B
EXCHANGED SHARES") will be converted, without any action on the part of the
holder thereof, into a right to receive, and the Company shall thereupon issue,
the same whole number of fully paid and non-assessable shares of Series H New
Shares, and (ii) the number of Series D Exchanged Shares set forth opposite each
Purchaser's name on Annex A hereto and indicated under the column "Subsequent
Series D Exchanged Shares" (the "SUBSEQUENT SERIES D EXCHANGED SHARES" and,
together with the Subsequent Series B Exchanged Shares, the "SUBSEQUENT
EXCHANGED SHARES") will be converted, without any action

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on the part of the holder thereof, into a right to receive, and the Company
shall thereupon issue, the same whole number of fully paid and non-assessable
shares of Series I New Shares.

     1.4 EXCHANGE PROCEDURES. At the First Closing, the Company shall deliver to
each Purchaser stock certificates representing the New Shares being exchanged
for the Initial Exchanged Shares (the "INITIAL NEW Shares") at such Closing. At
the Second Closing, the Company shall deliver to each Purchaser stock
certificates representing the New Shares being exchanged for the Subsequent
Exchanged Shares (the "SUBSEQUENT NEW SHARES") at such Closing. At the First
Closing, Purchasers as holders of the Initial Exchanged Shares shall have no
rights as holders of such Initial Exchanged Shares, other than the right to
receive Initial New Shares in accordance with this Agreement. At the Second
Closing, Purchasers as holders of the Subsequent Exchanged Shares shall have no
rights as holders of such Subsequent Exchanged Shares, other than the right to
receive Subsequent New Shares in accordance with this Agreement. Notwithstanding
the foregoing, this Section 1.4 shall have no effect on shares of Series B
Preferred Stock or Series D Preferred Stock that are issued and outstanding but
are not Exchanged Shares, and the rights of Purchasers as holders of shares of
Series B Preferred Stock or Series D Preferred Stock that are not Exchanged
Shares shall not be affected by this Section 1.4. If the certificate or
certificates representing the Exchanged Shares delivered in accordance with
Section 2.2 also represent shares of Series B Preferred Stock or Series D
Preferred Stock that are not exchanged pursuant to this Agreement, at the
applicable Closing and subject to the receipt of such certificate or
certificates, the Company shall deliver to each Purchaser stock certificates
representing the shares of Series B Preferred Stock or Series D Preferred Stock,
if any, held by such Purchaser in excess of the Exchanged Shares for the
particular Closing.

     1.5 TAX FREE REORGANIZATION. The exchange of New Shares for Exchanged
Shares is intended to be a "reorganization" within the meaning of Section
368(a)(1)(E) of the Internal Revenue Code of 1986, as amended (the "CODE"), and
this Agreement is intended to constitute a "plan of reorganization" within the
meaning of the regulations promulgated under Section 368 of the Code. No party
hereto shall take any action which is inconsistent with such intent; PROVIDED
that nothing contained herein shall require any party to contest or litigate any
proposed adjustment or deficiency imposed by any taxing authority or agency with
respect to such treatment. Each party hereto acknowledges it has consulted with
its own tax advisors with respect to such treatment.

     1.6 "ALL OR NONE". The obligations of the parties hereto are subject, inter
alia, to the condition that (a) each Purchaser purchases all of the Initial
Purchased Shares at the First Closing allocated to it on Annex A hereto and (b)
each Purchaser purchases all of the Subsequent Purchased Shares at the Second
Closing allocated to it on Annex A hereto. In the event that the applicable
condition is not satisfied, the Company and the applicable Purchaser may amend
or waive this Section 1.6 in writing in accordance with the other provisions of
this Agreement; PROVIDED that, notwithstanding the foregoing or any other
provision to the contrary, any amendment or waiver of this Section 1.6 by the
Company must also require the prior written consent of BTI Ventures L.L.C.

2. CLOSING, DELIVERY AND PAYMENT.

     2.1 CLOSINGS. The closing of the sale and purchase of the Initial Purchased
Shares and the exchange of the Initial Exchanged Shares for the Initial New
Shares under this Agreement

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(the "FIRST CLOSING") shall take place at 10:00 a.m. on the second business day
after the satisfaction or waiver of the conditions set forth in Sections 6.1 and
6.2, at the offices of the Company, 2020 Baltimore Avenue, Kansas City, Missouri
64108; PROVIDED that such Closing shall not occur later than May 8, 2001 (such
date is hereinafter referred to as the "FIRST CLOSING DATE"). The closing of the
sale and purchase of the Subsequent Purchased Shares and the exchange of the
Subsequent Exchanged Shares for the Subsequent New Shares under this Agreement
(the "SECOND CLOSING" and together with the First Closing, the "CLOSINGS") shall
take place concurrently with the Second Closing (as defined and as contemplated
in the Series G Purchase Agreement; PROVIDED that if no Second Closing is to
take place under the Series G Purchase Agreement, the Second Closing under this
Agreement shall take place concurrently with the closing of the sale and
issuance of the Additional Equity (as defined in and as contemplated by the
Series G Purchase Agreement)) after the satisfaction or waiver of the conditions
set forth in Sections 6.3 and 6.4, at the offices of the Company, 2020 Baltimore
Avenue, Kansas City, Missouri 64108, or at such other time or place as the
Company and Purchasers may mutually agree (such date is hereinafter referred to
as the "SECOND CLOSING DATE" and together with the First Closing Date, the
"CLOSING DATES").

     2.2 DELIVERY. Subject to the terms and conditions hereof, the Company will
deliver all of the Initial Shares at the First Closing and all of the Subsequent
Shares at the Second Closing, in each case in the amounts and to the Purchasers
as set forth on Annex A hereto, by delivery of a certificate or certificates
evidencing the Shares to be issued at each Closing, free and clear of any
mortgage, pledge, lien, lease, encumbrance or charge or other claim
(collectively, an "ENCUMBRANCE"), and each Purchaser will make payment to the
Company of the purchase price for the respective purchase prices therefor as set
forth on Annex A hereto by wire transfer of immediately available funds to an
account designated by the Company and deliver the certificate or certificates
representing the Initial Exchanged Shares being exchanged for the Initial New
Shares at the First Closing and the certificate or certificates representing the
Subsequent Exchanged Shares being exchanged for the Subsequent New Shares at the
Second Closing.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     Except as set forth on a Schedule of Exceptions delivered by the Company to
Purchasers at the First Closing, the Company hereby represents and warrants to
each Purchaser as of the date of this Agreement and each Closing Date as
follows:

     3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the Company and
its Subsidiaries (as defined below) is a corporation or other entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of incorporation or formation and has all requisite power and
authority to own and operate its respective properties and assets and to carry
on its respective business as currently conducted and as currently proposed to
be conducted. The Company has all requisite corporate power and authority to
execute and deliver this Agreement (the Agreement and together with any other
agreement entered into in connection with this transaction, the "RELATED
AGREEMENTS"), to issue and sell the Purchased Shares, issue and exchange the New
Shares for the Exchanged Shares and to carry out the provisions of this
Agreement and the Related Agreements. Each of the Company and its Subsidiaries
is duly qualified and is authorized to do business and is in good standing as a
foreign corporation or other entity in all jurisdictions in which the nature of
its activities and of its properties (both owned and leased) makes such
qualification necessary, except for those jurisdictions in which

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failure to do so would not have a material adverse effect on the assets,
liabilities, business, results of operations, financial condition or prospects
of the Company and its Subsidiaries, taken as a whole (a "MATERIAL ADVERSE
EFFECT"). Schedule 3.1 lists all the jurisdictions in which the Company is
qualified as a foreign corporation and the dates of such qualifications.

     3.2 SUBSIDIARIES. The Company does not own voting securities or other
similar interests of any corporation or other entity that is sufficient to
enable the Company to elect a majority of the members of such corporation's or
other entity's Board of Directors or other governing body, except for those
corporations or other entities set forth in the SEC Reports (as defined below)
or Schedule 3.2 (each a "SUBSIDIARY" and collectively, the "SUBSIDIARIES"). All
the outstanding shares of capital stock or other equity interests of the
Subsidiaries have been validly issued and are fully paid and non-assessable and
all such outstanding shares are owned directly by the Company free of any
Encumbrance. Except as set forth in the SEC Reports or Schedule 3.2, neither the
Company nor any of its Subsidiaries is a participant in any joint venture,
partnership or similar arrangement.

     3.3 CAPITALIZATION; VOTING RIGHTS.

          (a) As of the date hereof and before giving effect to the transactions
contemplated by this Agreement, the authorized capital stock of the Company
consists of 950,000,000 shares, of which 500,000,000 are shares of Common Stock,
par value $0.001 per share, 859,202 shares of which are issued and outstanding
and 1,267,399 shares of which are reserved for future issuance to employees
pursuant to the Stock Option Plans (as hereinafter defined) and 450,000,000 are
shares of Preferred Stock, par value $0.001 per share; 8,750,000 shares of which
are designated Series B Preferred Stock, 7,881,248 of which are issued and
outstanding; 8,500,000 shares of which are designated Series C Preferred Stock,
6,270,527 of which are issued and outstanding; 3,000,000 of which are designated
Series D Preferred Stock, of which 2,374,436 are issued and outstanding;
1,904,898 of which are designated Series E Preferred Stock, none of which are
issued and outstanding; 30,000,000 of which are designated Series F Preferred
Stock, 23,596,492 of which are issued and outstanding; 329,000,000 of which are
designated Series G Preferred Stock, of which 223,638,432 are issued and
outstanding; 6,579,000 shares of which are designated Series H Preferred Stock,
690,791 of which are issued and outstanding; and 2,223,000 shares of which are
designated Series I Preferred Stock, 494,102 of which are issued and
outstanding. All issued and outstanding shares of the Company's capital stock
(i) have been duly authorized and validly issued, (ii) are fully paid and
nonassessable, (iii) were issued in compliance with all applicable state and
federal laws concerning the issuance of securities. The rights, preferences,
privileges and restrictions of the Preferred Stock are as stated in the
Certificate.

          (b) The Company has delivered to Purchasers a copy of the Company's
1998 Stock Option Plan (the "1998 PLAN") and 2000 Equity Participation Plan (the
"2000 PLAN" and, together with the 1998 Plan, the "STOCK OPTION PLANS").
Schedule 3.3 sets forth a true and complete summary of all options issued under
each Stock Option Plan, including the holder, issue date, exercise price,
vesting status and expiration date of such option. Other than the 1,267,399
shares reserved for issuance under the Stock Option Plans, the options issued
pursuant to the Stock Option Plans as set forth on Schedule 3.3 and 115,000
outstanding warrants (the "EXISTING WARRANTS") to purchase 253,047 shares of
Common Stock pursuant to the Warrant Agreement, dated as of June 23, 1998,
between the Company and Norwest Bank Minnesota,

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National Association, as Warrant Agent, and except as may be granted pursuant to
this Agreement, the Series G Purchase Agreement and the Related Agreements,
there are no outstanding options, warrants, rights (including conversion or
preemptive rights and rights of first refusal), proxy or shareholder agreements,
or agreements of any kind for the purchase or acquisition from the Company or
any Subsidiary of any of their securities. Except as described in this
Agreement, the Series G Purchase Agreement or set forth in Schedule 3.3, (x)
there are no outstanding obligations of the Company or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any securities of the Company or any
voting or equity securities or interests of any subsidiary of the Company, (y)
there is no voting trust or other agreement or understanding to which the
Company or any of its Subsidiaries is a party or is bound with respect to the
voting of the capital stock or other voting securities of the Company or any of
its Subsidiaries and (z) there are no other options, calls, warrants or other
rights, agreements, arrangements or commitments of any character relating to the
issued or unissued capital stock of the Company or any of its Subsidiaries to
which the Company or any of its Subsidiaries is a party.

          (c) On each Closing Date, the Company's authorized capital stock will
be as set forth in the Certificate, and the rights, preferences, privileges and
restrictions of the Preferred Stock will be as stated in the Certificate. When
issued in accordance with the provisions of this Agreement and the Certificate,
the Shares and the Conversion Shares will be duly authorized, validly issued,
fully paid and nonassessable and will be delivered free and clear of any
Encumbrances and will have the rights, preferences, privileges and restrictions
set forth in the Certificate; PROVIDED, HOWEVER, that such shares may be subject
to restrictions on transfer under the Amended and Restated Purchasers Rights
Agreement, dated as of March 26, 2001, by and among the Company and certain of
its stockholders (the "PURCHASERS RIGHTS AGREEMENT") or under state or federal
securities laws or as otherwise required by such laws at the time a transfer is
proposed.

          (d) Schedule 3.3 sets forth as of the date hereof the name of each
person or entity owning any of the Company's outstanding equity securities and
the number and class of equity security owned by each such person or entity.

     3.4 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the part of
the Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement and the Related
Agreements, the consummation of the transactions contemplated hereby and
thereby, and the performance of all obligations of the Company hereunder and
thereunder (including but not limited to the authorization, sale, issuance and
delivery of the Purchased Shares, the authorization, issuance, exchange and
delivery of the New Shares for the Exchanged Shares, and the authorization,
reservation, issuance and delivery of the Conversion Shares) has been or will be
taken prior to the First Closing. This Agreement and the Related Agreements,
when executed and delivered, will be valid and binding obligations of the
Company enforceable against it in accordance with their terms, except (a) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights;
(b) general principles of equity that restrict the availability of equitable
remedies; and (c) to the extent that the enforceability of the indemnification
provisions in Section 2.5 of the Purchasers Rights Agreement may be limited by
applicable laws. The sale of the Shares is not and will not be subject to any
preemptive rights or rights of first refusal that have not been properly waived.

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     3.5 SEC REPORTS; FINANCIAL STATEMENTS.

          (a) The Company has filed with the Securities and Exchange Commission
(the "SEC") all forms, reports, schedules, proxy statements (collectively, and
in each case including all exhibits and schedules thereto and documents
incorporated by reference therein, the "SEC REPORTS") required to be filed by
the Company with the SEC since September 1, 1998. As of their respective dates,
the SEC Reports complied in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and the rules and
regulations promulgated thereunder and none of such SEC Reports contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements made therein, in light
of the circumstances under which they were made, not misleading.

          (b) The Company has delivered to Purchasers an unaudited consolidated
balance sheet (the "STATEMENT DATE BALANCE SHEET") of the Company and its
Subsidiaries as at December 31, 2000 (the "STATEMENT DATE") and unaudited
consolidated statement of income and cash flows of the Company and its
Subsidiaries for the twelve-months ending on the Statement Date (the "STATEMENT
DATE INCOME STATEMENT" and "STATEMENT DATE CASH FLOW STATEMENT" respectively,
and collectively with the Statement Date Balance Sheet and all audited and
unaudited financial statements included in the SEC Reports, the "FINANCIAL
STATEMENTS"). Except as set forth on Schedule 3.5(b), the Financial Statements,
together with the notes thereto, have been prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods indicated, except as disclosed therein, and present fairly the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates presented therein and the consolidated results of operations
and cash flows of the Company and its Subsidiaries for the respective periods
presented therein; PROVIDED, HOWEVER, that the unaudited financial statements
are subject to normal recurring year-end audit adjustments (which are not
individually or in the aggregate expected to be material).

     3.6 UNDISCLOSED LIABILITIES. Except as and to the extent set forth on
the Statement Date Balance Sheet of the Company and its Subsidiaries at the
Statement Date, neither the Company nor any Subsidiaries has any liabilities
that are material (individually or in the aggregate), except current liabilities
incurred in the ordinary course of business consistent with past practice
subsequent to the Statement Date.

     3.7 CONTRACTS; ACTION.

          (a) Except (i) as set forth on Schedule 3.7(a), (ii) as described in
the Company's Annual Report on Form 10-K for the year ended December 31, 2000
(the "2000 FORM 10-K"), and (iii) for agreements between the Company or any
Subsidiary and its employees with respect to the sale of Common Stock, there are
no agreements, contracts, understandings or proposed transactions between the
Company or any Subsidiary and any of its officers, directors, affiliates or any
affiliate thereof.

          (b) Attached hereto as Schedule 3.7(b) is a list of (i) all "material
contracts" with the meaning of Item 601 of Regulation S-K of the SEC, and (ii)
all contracts restricting the Company or any of its Subsidiaries from engaging
in any line of business or competing with any person or entity or in any
geographical area, or from using or disclosing any information in its

                                       7
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possession (other than routine vendor and customer confidentiality agreements
and confidentiality agreements with potential acquisition targets) (collectively
referring to the items in clauses (i) and (ii), the "CONTRACTS").

          (c) Except as set forth in Schedule 3.7(c), neither the Company nor
any of its Subsidiaries is, nor to the Company's knowledge is any other party to
any Contract, in material default under, or in material breach or material
violation of, any Contract and, to the knowledge of the Company, no event has
occurred which, with the giving of notice or passage of time or both would
constitute a material default by the Company under any Contract. Other than
Contracts which have terminated or expired in accordance with their terms, each
of the Contracts is a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms (subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered on a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing) and is in full force and
effect. No event has occurred which either entitles, or would, on notice or
lapse of time or both, entitle the holder of any indebtedness of the Company or
any of its Subsidiaries to accelerate or which does accelerate the maturity of
any indebtedness for borrowed money of the Company or any of the Subsidiaries.

          (d) Since July 13, 1999, except as set forth on Schedule 3.7(d),
neither the Company nor any Subsidiary has (i) declared or paid any dividends,
or authorized or made any distribution upon or with respect to any class or
series of its capital stock, (ii) incurred any indebtedness for money borrowed
or any other liabilities, individually, in excess of $1,000,000, (iii) made any
loans or advances to any person, other than ordinary advances for travel
expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or
rights, other than the sale of its inventory in the ordinary course of business.

          (e) For the purposes of subsection (d) above, all indebtedness,
liabilities, agreements, understandings, instruments, contracts and proposed
transactions involving the same person or entity (including persons or entities
the Company or any Subsidiary has reason to believe are affiliated therewith)
shall be aggregated for the purpose of meeting the individual minimum dollar
amounts of such subsections.

     3.8 OBLIGATIONS TO RELATED PARTIES. There are no obligations of the Company
or any Subsidiary to their respective officers, directors, shareholders, or
employees other than (a) for payment of salary for services rendered, (b)
reimbursement for reasonable expenses incurred on behalf of the Company or
Subsidiary and (c) for other standard employee benefits made generally available
to all employees (including stock option agreements outstanding under the Stock
Option Plans). Except as set forth on Schedule 3.8, neither the Company nor any
Subsidiary is a guarantor or indemnitor of any indebtedness of any other person,
firm or corporation.

     3.9 CHANGES Since the Statement Date and except as set forth on Schedule
3.9, there has not been:

          (a) any change in the assets, liabilities, financial condition or
operations of the Company and its Subsidiaries from that reflected in the
Statement Date Balance Sheet and

                                       8
<PAGE>

Statement Date Income Statement, other than changes in the ordinary course of
business, none of which individually or in the aggregate has had, or could
reasonably be expected to have, a Material Adverse Effect;

          (b) any resignation or termination of any key officers of the Company
and its Subsidiaries; and the Company does not know of the impending resignation
or termination of employment of any such key officer;

          (c) any material damage, destruction or loss, whether or not covered
by insurance;

          (d) any waiver by the Company or any Subsidiary of a valuable right or
of a material debt owed to it;

          (e) any direct or indirect loans made by the Company or any Subsidiary
to any shareholder, employee, officer or director of the Company or any
Subsidiary, other than travel advances and salary advances (which salary
advances do not exceed $25,000 in the aggregate) made in the ordinary course of
business consistent with past practice;

          (f) any material change in any compensation arrangement or agreement
with any employee, officer, director or shareholder (other than compensation
increases in the ordinary course of business consistent with past practice);

          (g) any declaration or payment of any dividend or other distribution
of the assets of the Company or any Subsidiary;

          (h) to the Company's knowledge, any labor organization activity;

          (i) any debt, obligation or liability incurred, assumed or guaranteed
by the Company or any Subsidiary, except those for immaterial amounts and for
current liabilities incurred in the ordinary course of business and consistent
with past practice;

          (j) any sale, assignment or transfer of any material patents,
trademarks, copyrights, trade secrets or other intangible assets;

          (k) any change in any Contract which could reasonably be expected to
have a Material Adverse Effect; or

          (l) any other event or condition of any character that, either
individually or cumulatively, has had, or could reasonably be expected to have,
a Material Adverse Effect.

     3.10 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. The Company and each of
its Subsidiaries has good and marketable title to its respective properties and
assets, including the properties and assets reflected in the Statement Date
Balance Sheet, and good title to its respective leasehold estates, in each case
subject to no Encumbrance. The Company and each of its Subsidiaries is in
compliance with all material terms of each lease to which it is a party or is
otherwise bound.

                                       9
<PAGE>

     3.11 PATENTS AND TRADEMARKS. Except as set forth in Schedule 3.11, the
Company and each of its Subsidiaries owns or possesses sufficient legal rights
to all patents, trademarks, service marks, trade names, copyrights, trade
secrets, licenses, information and other proprietary rights and processes
necessary for their respective businesses as now conducted and as currently
proposed to be conducted, without any known infringement of the rights of
others. Neither the Company nor any of its Subsidiaries has received any
communications alleging that it has violated or, by conducting its business as
currently proposed, would violate any of the patents, trademarks, service marks,
trade names, copyrights or trade secrets, licenses, information or other
proprietary rights and processes of any other person or entity. Neither the
Company nor any of its Subsidiaries is aware that any of its employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with their duties to
the Company or any of its Subsidiaries or that would conflict with the Company's
or any of its Subsidiaries' business as presently proposed to be conducted.
Neither the execution nor delivery of this Agreement, nor the carrying on of the
Company's or any of its Subsidiaries' business by the employees of the Company
or its Subsidiaries, nor the conduct of the Company's or any of its
Subsidiaries' business as currently proposed, will conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
any contract, covenant or instrument under which any employee is now obligated.
Neither the Company nor any of its Subsidiaries believes it is or will be
necessary to utilize any inventions, trade secrets or proprietary information of
any of its employees made prior to their employment by the Company or any of its
Subsidiaries, except for inventions, trade secrets or proprietary information
that have been assigned to the Company or any of its Subsidiaries.

     3.12 COMPLIANCE WITH OTHER INSTRUMENTS. Neither the Company nor any of its
Subsidiaries is in violation or default of (i) the Certificate or Bylaws, (ii)
any Contract or (iii) any judgment, decree, order, writ, or any statute, rule or
regulation, including, without limitation, requirements of the Federal
Communications Commission (the "FCC") or any state regulatory agency applicable
to the Company or any Subsidiary, except for such violations or defaults in
respect of clauses (ii) or (iii) which would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect. The
execution, delivery, and performance of this Agreement, and the Related
Agreements, and the issuance and sale of the Shares pursuant hereto, will not,
with or without the passage of time or giving of notice, result in any
violation, or be in conflict with or constitute a default under (i) the
Certificate or Bylaws, (ii) any Contract or (iii) any judgment, decree, order,
writ or any statute, rule or regulation including, without limitation,
requirements of the FCC or any state regulatory agency applicable to the Company
or any Subsidiary. The execution, delivery and performance of this Agreement,
and the Related Agreements, and the issuance and sale of the Shares pursuant
hereto, will not result in the creation of any Encumbrance upon any of the
properties or assets of the Company and its Subsidiaries or the suspension,
revocation, impairment, forfeiture or nonrenewal of any permit or license
(including but not limited to any License (as defined below)), authorization or
approval applicable to the Company, its business or operations or any of its
assets or properties.

     3.13 LITIGATION. Except as set forth on Schedule 3.13, there is no action,
suit, proceeding or investigation pending or to the Company's knowledge
currently threatened against the Company or any Subsidiary. The foregoing
includes, without limitation, actions pending or threatened (or any basis
therefor known to the Company) involving the prior employment of any

                                     10
<PAGE>

of the Company's or any Subsidiary's employees, their use in connection with the
Company's or any Subsidiary's business of any information or techniques
allegedly proprietary to any of their former employers, or their obligations
under any agreements with prior employers. Neither the Company nor any
Subsidiary is a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government authority. There is no
action, suit, proceeding or investigation by the Company or any Subsidiary
currently pending or which the Company or any Subsidiary intends to initiate.

     3.14 TAX RETURNS AND PAYMENTS.

          (a) Except as set forth on Schedule 3.14(a), each of the Company and
its Subsidiaries has accurately prepared and filed on time with all appropriate
governmental authorities all material Tax (as defined below) returns and other
material documents that it has been required to file in respect of any Taxes for
all fiscal periods ending on or prior to the First Closing Date and all such
returns or other material documents are correct and complete in all material
respects and do not contain a disclosure statement under Section 6662 of the
Code.

          (b) Each of the Company and its Subsidiaries has paid in full all
material Taxes due on or before the date hereof and, in the case of such Taxes
accruing on or before such date that are not due on or before such date, the
Company has made adequate provision in its books and records and Financial
Statements to the extent currently required by GAAP.

          (c) Each of the Company and its Subsidiaries has withheld from each
payment made to any of its present or former employees, officers, directors and
managers all amounts required by law to be withheld or remitted. Each of the
Company and its Subsidiaries has remitted all social security contributions and
other Taxes payable by it in respect of its employees. Each of the Company and
its Subsidiaries has charged, collected and remitted all material Taxes as
required under applicable legislation on any sale, supply or delivery
whatsoever, made by the Company or any of its Subsidiaries.

          (d) Except as set forth on Schedule 3.14(d), there are no
reassessments of Taxes of the Company or any of its Subsidiaries that have been
issued and are outstanding. No governmental authority has challenged, disputed
or questioned the Company or any of its Subsidiaries in writing in respect of
any Taxes or of any Tax returns, filings or other reports filed under any
statute providing for such Taxes.

          (e) Except as set forth in Schedule 3.14(e), neither the Company nor
any of its Subsidiaries has (i) granted any waiver of any statute of limitations
with respect to, or any extension of a period for the assessment of, any Tax, or
(ii) requested any extension of time within which to file any federal income Tax
Return or any state income or franchise Tax Return, which Tax Return has not
been filed as of the date hereof.

         (f) Except as set forth in Schedule 3.14(f), neither the Company nor
any of its Subsidiaries (i) is a party to or bound by (nor will it become a
party to or become bound by) any Tax indemnity, Tax sharing, Tax allocation or
similar agreement or arrangement (or administrative or accounting practice
having substantially the same effect); (ii) has filed a consent under Section
341(f) of the Code (or any corresponding provisions of state, local or foreign
income tax law) or agreed to have Section 341(f) of the Code (or any
corresponding

                                       11
<PAGE>

provision of state, local or foreign tax law) apply to any disposition of any
asset owned by it; (iii) has agreed to make or is required to make any material
adjustment under Section 481(a) of the Code; (iv) has been a member of an
affiliate group of corporations, within the meaning of Section 1504 of the Code
(other than the affiliated group of which the Company is the common parent
corporation); (v) owns material assets that directly or indirectly secure debt
the interest on which is tax-exempt under Section 103(a) of the Code; (vi) is
obligated under any agreements in connection with industrial development bonds
or other obligations with respect to which the excludability from gross income
of the holder for federal or state income tax purposes would be affected by the
transactions contemplated hereunder, or (vii) owns any property of a character,
the indirect transfer of which pursuant to this Agreement, would give rise to
any material documentary, stamp or other transfer tax.

          (g) Neither the Company nor any of its Subsidiaries is, or has been, a
United States real property holding corporation (as defined in Section 897(c)(2)
of the Code) during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code, and, to the Company's knowledge, no foreign person directly or
indirectly holds (within the meaning of Section 897(c)(3) of the Code), more
than 5% of the voting stock of the Company.

          (h) Except as set forth on Schedule 3.14(h), neither the Company nor
any of its Subsidiaries is a party to any agreement, contract, arrangement or
plan that has resulted or would result, separately or in the aggregate, in
connection with this Agreement or any change of control of the Company or any of
its Subsidiaries, in the payment of any material "excess parachute payments"
within the meaning of Section 280G of the Code.

          (i) For purposes of this Agreement, the term "TAX" or "TAXES" shall
mean all taxes, charges, fees, levies, imposts and other assessments, including
all income, sales, use, goods and services, value added, capital, capital gains,
alternative net worth, transfer, profits, withholding, payroll, employer health,
excise, real property and personal property taxes, and any other taxes, customs
duties, fees, assessments or similar charges in the nature of a tax, including,
without limitation, any interest, fines and penalties imposed by any
governmental authority.

     3.15 EMPLOYEES. Neither the Company nor any of its Subsidiaries has any
collective bargaining agreements with any of its employees. There is no labor
union organizing activity pending or, to the knowledge of the Company or any of
its Subsidiaries, threatened with respect to the Company or any of its
Subsidiaries. Neither the Company nor any of its Subsidiaries is aware that any
officer or key employee, or that any group of key employees, intends to
terminate their employment with the Company or any of its Subsidiaries, nor does
the Company or any of its Subsidiaries have a present intention to terminate the
employment of any officer, key employee or group of key employees.

     3.16 REGISTRATION RIGHTS. Except as required pursuant to the Purchasers
Rights Agreement or as set forth in Schedule 3.16, neither the Company nor any
of its Subsidiaries is currently under any obligation, and has not granted any
rights, to register any of the Company's or any Subsidiary's currently
outstanding securities or any of its securities that may hereafter be issued
under the Securities Act or state securities laws.

                                       12
<PAGE>

     3.17  COMPLIANCE WITH LAWS.

          (a) Neither the Company nor any of its Subsidiaries has been, or
currently is, in violation, in any material respect, of any material statute,
rule, regulation, order or restriction of any domestic or foreign government
authority thereof in respect of the conduct of its business or the ownership of
its properties. Except as set forth on Schedule 3.17(a), the Company is in
compliance, in all material respects, with all applicable material FCC and state
regulatory agency tariffing requirements, reporting requirements, universal
service and telecommunications relay service funding obligations and other
telecommunications regulations. Except as set forth on Schedule 3.17(a), no
governmental orders, permissions, consents, approvals or authorizations are
required to be obtained and no registrations or declarations are required to be
filed in connection with the execution and delivery of this Agreement and the
issuance of the Shares.

          (b) Except as set forth on Schedule 3.17(b), there are no proceedings
or investigations pending or threatened, before the FCC or any state regulatory
agency directed specifically at the Company or, in the case of matters of
general applicability to the telecommunications industry, in which the Company
is identified for possible disparate treatment or whose outcome may have a
disparate impact on the Company in which any of the following matters are being
considered which are reasonably likely to have a Material Adverse Effect, nor
has the Company or any of its Subsidiaries received written notice or inquiry
from the FCC or any state regulatory agency, indicating that any of such matters
should be considered or may become the object of consideration or investigation
specifically regarding the Company which are reasonably likely to have a
Material Adverse Effect, or, in the case of matters of general applicability to
the telecommunications industry, in which the Company is identified for possible
disparate treatment or whose outcome may have a disparate impact on the Company
or which otherwise involves: (a) increases or reductions in access charges,
universal service contributions or the like; (b) traffic routing restrictions or
restrictions on use of facilities; (c) reduction or restriction of rates charged
to customers; (d) reduction of earnings; (e) refunds or other forfeitures of
amounts previously charged to customers; (f) use of NXX codes; or (g) failure to
meet any expense, infrastructure, service quality or other commitments
previously made to or imposed by the FCC or any state regulatory agency.

          (c) Except as set forth on Schedule 3.17(c), neither the Company nor
any of its Subsidiaries has any outstanding commitments made in the context of a
matter or proceeding related specifically to the Company or, in the case of
matters of general applicability to the telecommunications industry, in which
the Company is identified for possible disparate treatment or whose outcome may
have a disparate impact on the Company (and no such obligations have been
imposed upon the Company and remain outstanding), regarding: (a) increases or
reductions in access charges, universal service contributions or the like; (b)
traffic routing restrictions or restrictions on use of facilities; (c) reduction
or restriction of rates charged to customers; (d) reduction of earnings; (e)
refunds or other forfeitures of amounts previously charged to customers; (f) use
of NXX codes; or (g) expenses, infrastructure expenditures, service quality or
other regulatory requirements, to or by the FCC or any state regulatory agency,
in each case which are reasonably likely to have a Material Adverse Effect.

     3.18 ENVIRONMENTAL AND SAFETY LAWS.

          (a) All material licenses or permits which are required under
Environmental Laws (as defined below) (each an "ENVIRONMENTAL PERMIT") for the
conduct of the business of the Company or any Subsidiary or the operation of any
property owned, leased or occupied by the

                                     13
<PAGE>

Company or any of its Subsidiaries which are required to be obtained or applied
for by the Company or any of its Subsidiaries have been so obtained or applied
for.

         (b) Neither the Company nor any Subsidiary has failed to comply in any
material respect with any Environmental Laws or any Environmental Permit and
neither the Company nor any Subsidiary has been notified by any governmental
authority of any such non-compliance and, to the Company's knowledge, no
Environmental Permit will be modified, suspended, canceled or revoked or cannot
be renewed in the ordinary course of business.

         (c) To the Company's knowledge, no Hazardous Substance (as defined
below) is currently or has been in the past generated, stored, handled, treated,
transported to or from or disposed of on any property currently or formerly
owned by the Company or any of its Subsidiaries, or operated or leased by the
Company or any of its Subsidiaries. To the Company's knowledge, neither the
Company nor any Subsidiary has generated, disposed of, transported or arranged
for the transportation (directly or indirectly) of any Hazardous Substances to
any location that is listed or, to the knowledge of the Company, proposed for
listing on the National Properties List or the CERCLA Information System under
CERCLA, or under any similar state, local or foreign list, or where there has
been a Release (as defined below) or suspected Release of a Hazardous Substance.
Neither the Company nor any Subsidiary has generated or disposed of any
Hazardous Substance in a manner which could reasonably be expected to give rise
to a material liability under any Environmental Law.

          (d) Neither the Company nor any Subsidiary has received any written
notice from any person or entity advising it that it is responsible for or
potentially responsible for cleanup or remediation of any Hazardous Substances.
No capital expenditure is planned or required in respect of the assets of the
Company or any of its Subsidiaries pursuant to or to comply with any
Environmental Law, nor has the Company or any of its Subsidiaries received any
written notice of any such requirement.

          (e) There is no claim pending or, to the best knowledge of the
Company, threatened against the Company or any of its Subsidiaries or pending
or, to the knowledge of the Company, threatened against any other person or
entity whose liability for any environmental claim the Company or any of its
Subsidiaries has or may have retained or assumed either contractually or by
operation of law under any Environmental Law. To the Company's knowledge, no
real property currently or formerly owned by the Company or any of its
Subsidiaries, or operated or leased by the Company or any of its Subsidiaries
(during the period of such operation or lease) has been impacted by any Release
or threatened Release of any Hazardous Substance.

          (f) Each of the Company and its Subsidiaries has delivered or
otherwise made available for inspection to the Purchasers true, accurate and
complete copies and results of any reports, studies, analyses, tests or
monitoring possessed or initiated by the Company or any of its Subsidiaries
pertaining to Hazardous Substances in, on, beneath or adjacent to any property
or regarding compliance by the Company or any of its Subsidiaries with
applicable Environmental Laws.

                                     14
<PAGE>

          (g) To the Company's knowledge, there are no underground or above-
ground storage tanks (whether or not currently in use) located on or under any
real property currently owned, leased or operated by the Company or any of its
Subsidiaries.

          (h) For purposes of this Agreement, the term (i) "ENVIRONMENTAL LAWS"
shall mean all federal, foreign, state, local or municipal environmental, health
or safety-related laws, regulations, by-laws, rules, ordinances, judicial or
administrative decrees or decisions, orders or requirements applicable to the
Company or any of its Subsidiaries relating to the physical or environmental
condition or use of their respective properties, their respective businesses or
pollution or protection of human health or the Environment, including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C., ss.9601, et seq., as amended ("CERCLA"), the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended, the
Clean Air Act, 42 U.S.C. Section 7401 et seq., as amended, the Clean Water Act,
33 U.S.C. Section et seq., the Toxic Substance Control Act, 15 U.S.C. ss.2601 et
seq., the Occupational Safety and Health Act, laws relating to Releases or
threatened Releases of Hazardous Substances into the Environment or otherwise
relating to the manufacture, generation, processing, distribution, use,
treatment, storage, abatement, existence, holding, Release, transport or
handling of Hazardous Substances, and all laws and regulations with regard to
recordkeeping, notification, disclosure and reporting requirements respecting
Hazardous Substances; (ii) "HAZARDOUS SUBSTANCES" shall mean any pollutant,
contaminant, toxic substance, hazardous waste, hazardous material, or hazardous
substance, or any oil, petroleum or petroleum product, each as defined or listed
in, or classified pursuant to, any Environmental Laws; and (iii) "RELEASE" shall
have the meaning ascribed to such term in any Environmental Laws.

     3.19 OFFERING VALID. Assuming the accuracy of the representations and
warranties of each of the Purchasers contained in Section 4 hereof, the offer,
sale and issuance of the Purchased Shares and the offer, issuance and exchange
of the New Shares for the Exchanged Shares will be exempt from the registration
requirements of the Securities Act and will have been registered or qualified
(or are exempt from registration and qualification) under the registration,
permit or qualification requirements of all applicable state securities laws.

     3.20 EMPLOYEE BENEFIT PLANS.

          (a) Schedule 3.20 contains a true and complete list of each "employee
benefit plan" (within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), stock purchase, stock
option, severance, employment, change-in-control, fringe benefit, bonus,
incentive, deferred compensation and all other employee benefit plans,
agreements, programs, policies or other arrangements, whether or not subject to
ERISA, under which any employee or former employee of the Company or its
Subsidiaries has any present or future right to benefits and under which the
Company or its Subsidiaries has any present of future liability. All such plans,
agreements, programs, policies and arrangements shall be collectively referred
to as the "COMPANY PLAN".

          (b) Each Company Plan has been established and administered in
accordance with its terms, in all material respects, and in material compliance
with the applicable provisions of ERISA, the Code and other applicable laws,
rules and regulations and neither the Company nor any of its Subsidiaries has
incurred any material tax, fine, lien, penalty or other liability imposed

                                       15

<PAGE>

by ERISA, the Code or other applicable law, rule and regulations; and each
Company Plan which is intended to be qualified within the meaning of Code
section 401(a) has received a favorable determination or if such plan is a
prototype plan, the prototype plan has received a favorable determination
letter, in all material respects, to its qualifications, or is in a form in
which the Internal Revenue Service consider the terms of such Company Plan to be
qualified without the need to receive such a letter, and subsequent to that term
nothing has occurred, whether by action or failure to act, that could reasonably
be expected to cause the loss of such qualification.

         (c) No Company Plan is (i) subject to Title IV or ERISA or (ii) a
"multiemployer plan" (as such term is defined in section 3(37) of ERISA) and
neither the Company nor any of its Subsidiaries has incurred any withdrawal
liability or termination liability with respect to any such plan that remains
unsatisfied. The Company has not engaged in, and is not a successor or parent
corporation to any entity that has engaged in, a transaction described in
Section 4069 or 4212(c).

          (d) Except as disclosed on Schedule 3.20(d), with respect to any
Company Plan, no actions, suits or claims (other than routine claims for
benefits in the ordinary course) are pending or, to the knowledge of the Company
or any of its Subsidiaries, threatened or reasonably expected to arise.

          (e) Except as disclosed on Schedule 3.20(e), no Company Plan exists
that could result in the payment to any present or former employee of the
Company or its Subsidiaries of any money or other property or accelerate or
provide any other rights or benefits to any present or former employee of the
Company or its Subsidiaries as a direct result of the transaction contemplated
by this Agreement, whether or not such payment would constitute a parachute
payment within the meaning of Code section 280G.

     3.21 INSURANCE. Each insurance policy pertaining to the assets or
operations of the Company and each Subsidiary is in full force and effect and
neither the Company nor any Subsidiary has any claims pending under any such
policies nor has the Company or any Subsidiary been denied coverage with respect
to any claim or potential claim filed under any such policies.

     3.22 BOOKS AND RECORDS. The books of account, stock records, minute books
and other records of the Company and each of its Subsidiaries are accurate,
up-to-date and complete in all material respects, and have been maintained in
accordance with prudent business practices.

     3.23 BUSINESS PLAN; PROJECTIONS. Attached as Schedule 3.23(a) is the
Company's Business Plan, dated March 19, 2001 (the "2001 BUSINESS PLAN"), which
consists of the budget for the Company and its Subsidiaries for 2001 on a
consolidated basis, and attached as Schedule 3.23(b) are the projections of the
future performance of the Company and its Subsidiaries, on a consolidated basis,
including annual income, net profits and cash flows for each year of the
five-year period ending 2005 (the "PROJECTIONS"). The Projections have been
prepared in good faith and are based on what the Company and its management
believe to be a reasonable assessment of the future performance of the Company
and its Subsidiaries. All material assumptions used in the preparation of the
Projections are set forth in the notes thereto. Notwithstanding the foregoing,
no representation is made that the projections will be attained.

                                     16
<PAGE>

     3.24 ACCOUNTS RECEIVABLE AND BAD DEBTS. All notes and accounts receivable
of the Company and its Subsidiaries shown on the Statement Date Balance Sheet
were generated for valid consideration in the ordinary course of business.

     3.25 LICENSES. All licenses used by the Company or any of its Subsidiaries
and which is material to the conduct and operation of the Company business (the
"LICENSES") are in full force and effect. The Company and its Subsidiaries have
complied in all material respects with the terms of the Licenses and there are
no pending, or to the knowledge of the Company, threatened, modifications,
amendments or revocations of the Licenses which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect. All
fees due and payable from the Company or any of its Subsidiaries to governmental
authorities pursuant to the Licenses have been paid. All reports required of the
Company or any of its Subsidiaries to be filed in connection with the Licenses
have been timely filed and are accurate and complete. The Company believes it
can obtain, without undue burden or expense, any similar authority for the
conduct of its business as planned to be conducted. Except as specified in
Schedule 3.25, no registrations, filings, applications, notices, transfers,
consents, approvals, audits, qualifications, waivers or other action of any kind
is required by virtue of the execution and delivery of this Agreement or any
Related Agreement, or of the consummation of the transactions contemplated
hereby or thereby, including but not limited to the issuance and sale of the
Shares, (a) to avoid the loss of any License pursuant to the terms thereof or
the violation or breach of any law applicable thereto, or (b) to enable the
Company and its Subsidiaries to hold and enjoy the same after each Closing Date
in the conduct of its business as conducted immediately prior to the First
Closing Date. Except as set forth in Schedule 3.25, the Company and its
Subsidiaries have received authorization from the FCC to provide international
telecommunications service.

     3.26 NETWORK. The Company's and its Subsidiaries' switches are (i) fully
installed, (ii) interconnected to the incumbent telephone company's local
network and (iii) capable of carrying commercial traffic. The Company's and its
Subsidiaries' collocation sites possess all of the necessary equipment to carry
commercial traffic and are linked via leased or owned transmission cable to a
switch owned by the Company or any Subsidiary.

     3.27 CUSTOMERS. No single customer of the Company accounted for more than
5% of the Company's consolidated net sales for 2000, and the Company does not
anticipate any single customer accounting for more than 5% of the Company's
consolidated net sales in 2001. Schedule 3.27 sets forth as of December 31,
2000, the total number of lines in service.

     3.28 NO BROKER. Except as set forth in Schedule 3.28, neither the Company
nor any of its Subsidiaries has employed any broker or finder, or incurred any
liability for any brokerage or finders' fees or any similar fees or commissions
in connection with the transactions contemplated by this Agreement.

     3.29 DISCLOSURE. No representation or warranty contained in this Agreement
or any statement or information contained in any schedule, exhibit, certificate,
written statement, document or instrument, or other information attached to,
delivered or required to be delivered pursuant to this Agreement contains any
untrue statement of material fact or omits to state a material fact necessary in
order to make the statements contained herein not misleading or

                                     17
<PAGE>

necessary in order to fully and fairly provide the information required to be
provided in any such document.

4. REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER.

     Each Purchaser hereby, severally and not jointly, represents and warrants
to the Company as follows:

     4.1 REQUISITE POWER; AUTHORIZATION; BINDING OBLIGATIONS. Such Purchaser has
all requisite power and authority to execute and deliver this Agreement and the
Related Agreements and to carry out their provisions. All action on such
Purchaser's part necessary for the authorization, execution and delivery of this
Agreement and the Related Agreements, the consummation of the transactions
contemplated hereby and thereby, and the performance of all obligations of such
Purchaser hereunder and thereunder has been or will be taken prior to the First
Closing. This Agreement and the Related Agreements, when executed and delivered,
will be valid and binding obligations of such Purchaser enforceable against it
in accordance with their terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights, (b) general principles of equity
that restrict the availability of equitable remedies, and (c) to the extent that
the enforceability of the indemnification provisions of Section 2.5 of the
Purchasers Rights Agreement may be limited by applicable laws.

     4.2 INVESTMENT REPRESENTATIONS. Such Purchaser understands that neither the
Shares nor the Conversion Shares have been registered under the Securities Act.
Such Purchaser also understands that the Purchased Shares are being offered and
sold and the New Shares are being offered and exchanged for the Exchanged Shares
pursuant to an exemption from registration contained in the Securities Act based
in part upon Purchaser's following representations and warranties:

          (a) PURCHASER BEARS ECONOMIC RISK. Such Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Such Purchaser understands that it must
bear the economic risk of this investment indefinitely unless the Shares are
registered pursuant to the Securities Act, or an exemption from registration is
available. Such Purchaser understands that the Company has no present intention
of registering the Shares, the Conversion Shares or any shares of its Common
Stock. Such Purchaser also understands that there is no assurance that any
exemption from registration under the Securities Act will be available and that,
even if available, such exemption may not allow such Purchaser to transfer all
or any portion of the Shares under the circumstances, in the amounts or at the
times such Purchaser might propose.

          (b) ACQUISITION FOR OWN ACCOUNT. Such Purchaser is acquiring the
Shares for its own account for investment only, and not with a view towards
their distribution.

          (c) EACH PURCHASER CAN PROTECT ITS INTEREST. Such Purchaser represents
that by reason of its, or of its management's, business or financial experience,
such Purchaser has the capacity to protect its own interests in connection with
the transactions contemplated in this

                                     18
<PAGE>

Agreement and the Related Agreements. Further, such Purchaser is aware of no
publication of any advertisement in connection with the transactions
contemplated in the Agreement.

          (d) ACCREDITED INVESTOR. Such Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.

          (e) COMPANY INFORMATION. Such Purchaser has received and read the
Financial Statements and has had an opportunity to discuss the Company's
business, management and financial affairs with directors, officers and
management of the Company and has had the opportunity to review the Company's
operations and facilities. Such Purchaser has also had the opportunity to ask
questions of and receive answers from the Company and its management regarding
the terms and conditions of this investment.

          (f) RULE 144. Such Purchaser acknowledges and agrees that the Shares
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Such
Purchaser has been advised or is aware of the provisions of Rule 144 promulgated
under the Securities Act as in effect from time to time, which permits limited
resale of shares purchased in a private placement subject to the satisfaction of
certain conditions, including, among other things: the availability of certain
current public information about the Company, the resale occurring following the
required holding period under Rule 144 and the number of shares being sold
during any three-month period not exceeding specified limitations.

     4.3 TRANSFER RESTRICTIONS. Such Purchaser acknowledges and agrees that the
Shares and Conversion Shares are subject to restrictions on transfer as set
forth in the Purchasers Rights Agreement.

     4.4 OWNERSHIP OF EXCHANGED SHARES. Such Purchaser represents that the
Exchanged Shares held by such Purchaser as set forth on Annex A hereto are owned
of record and beneficially by such Purchaser, free and clear of any security
interest, claim, lien, limitation on voting rights (other than pursuant to the
Purchasers Rights Agreement) or encumbrance; provided, however, that certain
Exchanged Shares held by Dan Boyle will be held in his individual retirement
account.

5. COVENANTS OF THE COMPANY.

     5.1 ORDINARY COURSE OF BUSINESS. Except, as otherwise contemplated by the
terms of this Agreement, during the period from the date of this Agreement to
the Second Closing Date (the "PRE-CLOSING PERIOD"), the Company shall use
commercially reasonable efforts to preserve intact its and its Subsidiaries'
current business organizations, keep available the services of their current
officers and employees and preserve their relationships with customers,
suppliers, licensors, licensees, advertisers, distributors and others having
business dealings with them to the end that their goodwill and ongoing
businesses shall be unimpaired.

     5.2 USE OF PROCEEDS. The Company shall use the proceeds from the sale of
the Purchased Shares for working capital and general corporate purposes.

                                     19
<PAGE>

     5.3 EFFORTS. Each party hereto agrees to use commercially reasonable
efforts to take any and all actions required in order to consummate the
transactions contemplated in this Agreement and the Related Agreements. Without
limiting the foregoing, the Company shall make all necessary filings with or
notifications to the state regulatory commissions listed on Schedule 5.3 hereto
as soon as possible but in any event prior to the First Closing (unless the
requirement to give such notice does not arise until the First Closing in which
case the Company shall give such notice promptly after the First Closing).

     5.4 NOTIFICATION OF CERTAIN MATTERS. During the Pre-Closing Period, the
Company shall give prompt notice to each Purchaser of the occurrence or
non-occurrence of any event the occurrence or non-occurrence of which would be
likely to cause any representation or warranty contained in Section 3 to be
untrue, or the failure of the Company to comply with or satisfy any covenant or
agreement under this Agreement.

     5.5 BASIC FINANCIAL INFORMATION. The Company shall deliver to each
Purchaser copies of its annual reports on Form 10-K and its quarterly reports on
Form 10-Q, respectively, shortly after such time as they are filed with the SEC.

     5.6 OBSERVER RIGHTS. For purposes of determining Observer Rights pursuant
to Section 8.4 of the Purchasers Rights Agreement, Series H New Shares shall be
counted as Series B Preferred Stock and Series I New Shares shall be counted as
Series D Preferred Stock until such time as the Purchasers Rights Agreement is
amended to adjust Observer Rights accordingly.

6. CONDITIONS TO CLOSING.

     6.1 CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE THE INITIAL
PURCHASED SHARES. Each Purchaser's obligation to purchase the Initial Purchased
Shares and to have its Initial Exchanged Shares exchanged for Initial New Shares
at the First Closing is subject to the satisfaction of the following conditions:

          (a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF OBLIGATIONS.
The representations and warranties made by the Company in Section 3 hereof shall
be true and correct in all materials respects as of the First Closing Date with
the same force and effect as if they had been made on and as of the First
Closing Date, except (A) for changes contemplated by this Agreement, (B) for
those representations and warranties which address matters only as of a
particular date (which representation and warranties shall be true and correct
in all material represents as of such particular date) and (C) all Material
Adverse Effect qualifications and other qualifications based on the word
"material" or similar phrases contained in such representations and warranties
shall be disregarded. The Company shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to the
First Closing Date.

          (b) LEGAL INVESTMENT. On the First Closing Date, the sale and issuance
of the Initial Purchased Shares and the exchange and issuance of the Initial New
Shares for the Exchanged Shares shall be legally permitted by all laws and
regulations to which such Purchaser and the Company are subject.

          (c) CONSENTS, PERMITS, AND WAIVERS. The Company shall have obtained
any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions

                                     20
<PAGE>

contemplated by the Agreement and the Related Agreements (except for those that
such Purchaser determines may be properly obtained subsequent to the First
Closing Date).

          (d) CORPORATE DOCUMENTS. The Company shall have delivered to any
Purchaser or its counsel, copies of all corporate documents of the Company as
any such Purchaser shall reasonably request.

          (e) COMPLIANCE CERTIFICATE; SECRETARY'S CERTIFICATE; GOOD STANDING
CERTIFICATE. The Company shall have delivered to such Purchaser a Compliance
Certificate, executed by the President of the Company, dated the First Closing
Date, to the effect that the conditions specified in Section 6.1(a) have been
satisfied. The Company shall have delivered to such Purchaser a certificate
executed by the Secretary of the Company, dated the First Closing Date,
certifying as to the resolutions of the Board of Directors of the Company
evidencing approval of the transactions contemplated by and from this Agreement
and the Related Agreements and the authorization of the named officer or
officers to execute and deliver this Agreement and the Related Agreements. The
Company shall have delivered to such Purchaser certificates of the Secretary of
State of the State of Delaware, dated a recent date, that the Company is in good
standing.

          (f) LEGAL OPINION. Such Purchaser shall have received from legal
counsel to the Company an opinion addressed to them, dated as of the First
Closing Date, in a form attached hereto as Exhibit B.

          (g) PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at the First Closing hereby and
all documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to such Purchaser and its counsel, and such
Purchaser and its counsel shall have received all such counterpart originals or
certified or other copies of such documents as they may reasonably request.

          (h) NO MATERIAL ADVERSE EFFECT. No event or change has occurred which
has had, or could reasonably be expected to have, a Material Adverse Effect.

          (i) PURCHASERS RIGHTS AGREEMENT. The Purchasers Rights Agreement shall
be in full force and effect.

          (j) TRANSACTION FEE. At the First Closing, the Company shall have paid
to each such Purchaser or one of its designees, a transaction fee of 2.0% of the
aggregate purchase price of the Initial Purchased Shares being purchased by such
Purchaser incurred for the benefit of the Company in connection with the
purchase of the Initial Purchased Shares by such Purchaser, in cash by wire
transfer of immediately available funds to a bank account identified by such
Purchaser prior to the First Closing.

          (k) SERIES G PURCHASE AGREEMENT. The First Closing (as defined in and
as contemplated by the Series G Purchase Agreement) shall have been consummated.

     6.2 CONDITIONS TO COMPANY'S OBLIGATIONS TO ISSUE THE INITIAL PURCHASED
SHARES. The Company's obligation to issue and sell the Initial Purchased Shares
and to issue and exchange

                                     21
<PAGE>

the Initial New Shares for the Initial Exchanged Shares at the First Closing is
subject to the satisfaction, on or prior to the First Closing, of the following
conditions:

          (a) REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties made by each Purchaser in Section 4 hereof shall be true and correct
in all material respects at the date of the First Closing Date with the same
force and effect as if they had been made on and as of the First Closing Date,
and each Purchaser shall have performed all obligations and conditions herein
required to be performed or complied with by it on or prior to the First Closing
Date.

          (b) CONSENTS, PERMITS, AND WAIVERS. The Company shall have obtained
any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements (except for such as each Purchaser determines may be properly
obtained subsequent to the First Closing Date).

          (c) PURCHASERS RIGHTS AGREEMENT. The Purchasers Rights Agreement shall
be in full force and effect and shall have been executed and delivered by each
Purchaser.

          (d) "ALL OR NONE". Each Purchaser shall have purchased all of the
Initial Purchased Shares allocated to it on Annex A hereto.

     6.3 CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE THE SUBSEQUENT
PURCHASED SHARES. Each Purchaser's obligation to purchase the Subsequent
Purchased Shares and to have its Subsequent Exchanged Shares exchanged for
Subsequent New Shares at the Second Closing is subject to the satisfaction of
the following conditions:

          (a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF OBLIGATIONS.
The representations and warranties made by the Company in Section 3 hereof shall
be true and correct in all materials respects as of the Second Closing Date with
the same force and effect as if they had been made on and as of the Second
Closing Date, except (A) for changes contemplated by this Agreement, (B) for
those representations and warranties which address matters only as of a
particular date (which representation and warranties shall be true and correct
in all material represents as of such particular date) and (C) all Material
Adverse Effect qualifications and other qualifications based on the word
"material" or similar phrases contained in such representations and warranties
shall be disregarded. The Company shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to the
Second Closing Date.

          (b) LEGAL INVESTMENT. On the Second Closing Date, the sale and
issuance of the Subsequent Purchased Shares and the exchange and issuance of the
Subsequent New Shares for the Subsequent Exchanged Shares shall be legally
permitted by all laws and regulations to which such Purchaser and the Company
are subject.

          (c) COMPLIANCE CERTIFICATE. The Company shall have delivered to such
Purchaser a Compliance Certificate, executed by the President of the Company,
dated the Second Closing Date, to the effect that the conditions specified in
Section 6.3(a) have been satisfied.

          (d) FIRST CLOSING. The First Closing shall have been consummated.

                                     22
<PAGE>

          (e) NO MATERIAL ADVERSE EFFECT. No change or event has occurred which
has had, or could reasonably be expected to have, a Material Adverse Effect.

          (f) OPERATING BUDGET. The Company shall be in compliance with its
operating budget, as delivered to such Purchaser on or prior to the date hereof.

          (g) TRANSACTION FEE. At the Second Closing, the Company shall have
paid to such Purchaser or one of its designees, a transaction fee of 2.0% of the
aggregate purchase price of the Subsequent Purchased Shares being purchased by
such Purchaser incurred for the benefit of the Company in connection with the
purchase of the Subsequent Purchased Shares by such Purchaser, in cash by wire
transfer of immediately available funds to a bank account identified by such
Purchaser prior to the Second Closing.

          (h) (i) LEGAL OPINION. Each Purchaser shall have received from legal
counsel to the Company an opinion addressed to them, dated as of such Second
Closing Date, substantially in the form attached hereto as Exhibit B.

          (i) SERIES G PURCHASE AGREEMENT. The Second Closing (as defined in and
as contemplated by the Series G Purchase Agreement) shall have been or shall
concurrently therewith be consummated or the Company shall have received
Additional Equity (as defined in and as contemplated by the Series G Purchase
Agreement) equal to or greater than $30 million.

     6.4 CONDITIONS TO COMPANY'S OBLIGATIONS TO ISSUE THE SUBSEQUENT PURCHASED
SHARES. The Company's obligation to issue and sell the Subsequent Purchased
Shares and to issue and exchange the Subsequent New Shares for the Subsequent
Exchanged Shares at the Second Closing is subject to the satisfaction, on or
prior to the Second Closing, of the following conditions:

          (a) "ALL OR NONE". Each Purchaser shall have purchased all of the
Subsequent Purchased Shares allocated to it on Annex A hereto.

          (b) FIRST CLOSING. The First Closing shall have been consummated.

7. MISCELLANEOUS.

     7.1 GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. This Agreement shall
be governed in all respects by the laws of the State of New York. No suit,
action or proceeding with respect to this Agreement may be brought in any court
or before any similar authority other than in a court of competent jurisdiction
in the State of Missouri, as a any Purchaser may elect in its sole discretion,
and the Company hereby submits to the exclusive jurisdiction of such courts for
the purpose of such suit, proceeding or judgment. The Company hereby irrevocably
waives any right which it may have had to bring such an action in any other
court, domestic or foreign, or before any similar domestic or foreign authority.
Each of the parties hereto hereby irrevocably and unconditionally waives trial
by jury in any legal action or proceeding in relation to this Agreement and for
any counterclaim therein.

     7.2 SURVIVAL. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any Purchaser and the
closing of the transactions

                                     23
<PAGE>

contemplated hereby. All statements as to factual matters contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant hereto in connection with the transactions contemplated hereby shall be
deemed to be representations and warranties by the Company hereunder solely as
of the date of such certificate or instrument.

     7.3 SUCCESSORS AND ASSIGNS; ASSIGNMENT. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares from time to time. This Agreement may
not be assigned by a Purchaser without the prior written consent of the Company
and may not be assigned by the Company without the prior written consent of all
Purchasers, except that a Purchaser may assign its rights and obligations
hereunder to any affiliate.

     7.4 ENTIRE AGREEMENT; SUPERCEDES PRIOR AGREEMENT. This Agreement and the
exhibits and schedules hereto, the Related Agreements and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof, and no party
shall be liable or bound to any other in any manner by any representations,
warranties, covenants and agreements except as specifically set forth herein and
therein; except that Section 1.6 is intended to benefit BTI Ventures L.L.C.

     7.5 SEVERABILITY. In case any provision of the Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

     7.6 AMENDMENT AND WAIVER. This Agreement may be amended or modified upon
the written consent of the Company and each Purchaser. The rights of the Company
or Purchasers hereunder may only be waived with the written consent of the party
granting the waiver of such right.

     7.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to exercise
any right, power or remedy accruing to any party, upon any breach, default or
noncompliance by another party under this Agreement or the Related Agreements,
shall impair any such right, power or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of or in any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character on a Purchaser's part of any breach, default or
noncompliance under this Agreement or the Related Agreements or any waiver on
such party's part of any provisions or conditions of the Agreement or the
Related Agreements, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, or the Related Agreements, by law, or otherwise afforded to any
party, shall be cumulative and not alternative.

     7.8 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified; (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (c) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (d) one business day after deposit
with a nationally

                                     24
<PAGE>

recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the addresses set
forth below:

                  If to the Company:

                                        Birch Telecom, Inc.
                                        2020 Baltimore Avenue
                                        Kansas City, MO  64108
                                        Telephone:  (816) 300-3000
                                        Fax: (816) 300-3291
                                        Attn: General Counsel

                                      25
<PAGE>

                  with copies to:

                                        Latham & Watkins
                                        885 Third Avenue
                                        New York, N.Y.  10022
                                        Telephone:  (212) 906-1788
                                        Fax: (212) 751-4864
                                        Attn:  Raymond Y. Lin, Esq.

                  If to Purchasers:

                                        To the addresses set forth on Annex A.

                  with copies to:

                                        Blackwell Sanders Peper Martin
                                        Two Pershing Square
                                        2300 Main Street, Suite 1000
                                        Kansas City, MO  64108
                                        Telephone:  (816) 983-8000
                                        Fax: (816) 983-8080
                                        Attn:  Ralph G. Wrobley

     7.9 EXPENSES; INDEMNIFICATION. The Company shall pay all costs and expenses
that it incurs with respect to the negotiation, execution, delivery and
performance of this Agreement and the Related Agreements (including amendments
thereto and consent in connection therewith). The Company hereby further agrees
to indemnify, exonerate and hold each Purchaser and its members and its
shareholders, officers, directors, employees, affiliates and agents (each an
"INDEMNITEE") free and harmless from and against any and all actions, causes of
action, suits, losses, liabilities, damages and expenses, including, without
limitation, reasonable attorneys' fees and disbursements, incurred in any
capacity by any of such indemnitees as a result of or relating to any breach of
any representation, warranty, covenant or agreement of the Company in this
Agreement or any Related Agreement.

     7.10 INTERPRETATION. The titles of the sections and subsections of the
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement. All pronouns contained herein, and any variations
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as to the identity of the parties hereto may require. The
words "hereof", "herein" and "hereunder" and words of similar import when used
in this Agreement will refer to the Agreement as a whole, including exhibits,
schedules and the other documents delivered in connection with this Agreement,
and not only to a particular provision of this Agreement. The words "include"
and "including" and words of similar import when used in this Agreement shall be
deemed to be followed by the words "without limitation".

     7.11 KNOWLEDGE. References to "knowledge" of the Company or a Subsidiary in
this Agreement shall refer to the knowledge of each of the officers of the
Company or the Subsidiary, respectively, after due inquiry into the matters at
issue with the employees of the Company or Subsidiary, respectively, responsible
for such matters.

                                       26
<PAGE>

     7.12 TERMINATION. This Agreement may be terminated with respect to any
Purchaser by (i) mutual agreement of the Company and such Purchaser or (ii) by
all Purchasers or the Company in the event the First Closing has not occurred by
May 8, 2001, PROVIDED that this termination right may not be exercised by a
party whose nonperformance has delayed any Closing.

     7.13 COUNTERPARTS; EXECUTION BY FACSIMILE SIGNATURE. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument. This Agreement may be
executed by facsimile signatures.

                     [Rest of page intentionally left blank]

                                       27
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this RECAPITALIZATION
AGREEMENT as of the date set forth in the first paragraph hereof.

                                       BIRCH TELECOM, INC.

                                       By: /s/ David E. Scott
                                          ------------------------------
                                           Name: David E. Scott
                                           Title: President

                                       [PURCHASER]

                                       By: _____________________________
                                           Name:
                                           Title:

<PAGE>

                                                                         ANNEX A

                        PURCHASE AND EXCHANGE ALLOCATION
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                            Total                  Initial   Subsequent     Initial     Subsequent
                               Initial       Subsequent   Purchased   Aggregate    Series B   Series B     Series D      Series D
        Purchasers            Purchased      Purchased     Shares      Purchase   Exchanged   Exchanged    Exchanged    Exchanged
 (including notice info)     Shares (70%)   Shares (30%)    (100%)    Price ($)    Shares      Shares       Shares        Shares
------------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>            <C>           <C>         <C>         <C>        <C>           <C>          <C>
[TO BE PROVIDED BY BSPM]
[Address]
Tel:
Fax:
Attn:
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
           Totals:
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                                                         ANNEX B

                         CALCULATION OF EXCHANGED SHARES

Each Purchaser shall be entitled to exchange a number of Series D Preferred
Stock equal to the following quotient, rounded up: (i) the aggregate purchase
price for the New Shares being purchased by such Purchaser (ii) divided by the
Original Issue Price (as defined in the Certificate) of such Series D Exchanged
Shares up to the number of shares of Series D Preferred Stock held by such
Purchaser on the date hereof. Seventy percent (70%) (rounded up) of such shares
shall be exchanged at the First Closing and the remainder of such shares shall
be exchanged at the Second Closing. For each Purchaser, the amount equal to the
original issue price of its Series D Exchanged Shares multiplied by the total
number of such Series D Exchanged Shares to be exchanged by it at both Closings
is referred to as the "Series D Dollar Amount".

Each Purchaser also shall be entitled to exchange a number of Series B Preferred
Stock equal to the following quotient, rounded up: (i) the aggregate purchase
price for the New Shares being purchased by such Purchaser minus the Series D
Dollar Amount (ii) divided by the Original Issue Price of such Series B
Exchanged Shares up to the number of shares of Series B Preferred Stock held by
such Purchaser on the date hereof. Seventy percent (70%) (rounded up) of such
shares shall be exchanged at the First Closing and the remainder of such shares
shall be exchanged at the Second Closing. Any remaining amounts after the
calculation in clause (i) of this paragraph shall not be allocated to any other
shares of capital stock of the Company for exchange under the Agreement.

Each Purchaser must exchange shares of Series D Preferred Stock before
exchanging any share of Series B Preferred Stock at each of the First Closing
and the Second Closing. No Purchaser may exchange any more shares of Series B
Preferred Stock or Series D Preferred Stock than is owned by such Purchaser on
the date hereof.

Example: If a Purchaser who owns as of the date hereof 500,000 shares of Series
B Preferred Stock and 20,000 shares of Series D Preferred Stock invests
$999,999.70 in shares of Series G Preferred Stock, such Purchaser will receive
2,000,000 shares of Series G Preferred Stock at the First Closing and 857,142
shares of Series G Preferred Stock at the Second Closing.

Such Purchaser shall exchange up to 155,557 shares of Series D Preferred Stock
for 155,557 shares of Series I Preferred Stock at the First Closing (equivalent
to (x) 70% (rounded up) of (y) 222,223, which is $999,999.70 divided by $4.50
(rounded up)) and shall exchange up to 66,666 shares of Series D Preferred Stock
for 66,666 shares of Series I Preferred Stock at the Second Closing (equivalent
to (x) 222,223 minus 155,557); however, such Purchaser shall actually exchange
14,000 shares of Series D Preferred Stock for 14,000 shares of Series I
Preferred Stock at the First Closing (i.e., 70% of the total Series D Preferred
Stock held as of the date hereof) and 6,000 shares of Series D Preferred Stock
for 6,000 shares of Series I Preferred Stock at the Second Closing (i.e., 30% of
the total Series D Preferred Stock held as of the date hereof). The Series D
Dollar Amount for such Purchaser shall be $90,000 (20,000 multiplied by $4.50).

Such Purchaser shall also exchange 419,080 shares of Series B Preferred Stock
for 419,080 shares of Series H Preferred Stock at the First Closing (equivalent
to (x) 70% (rounded up) of (y)

<PAGE>

an amount equal to (I) 598,685, which is the difference of $999,999.70 minus
$90,000 (II) divided by $1.52 (rounded up)) and shall exchange 179,605 shares of
Series B Preferred Stock for 179,605 shares of Series H Preferred Stock at the
Second Closing (equivalent to 598,685 minus 419,080). 98,683 shares of Series B
Preferred Stock shall not be exchanged.<PAGE>

                                                                Exhibit 10.50

                                    RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                               BIRCH TELECOM, INC.

       BIRCH TELECOM, INC., a corporation organized and existing under the laws
of the State of Delaware, certifies as follows:

       1. The original Certificate of Incorporation of Birch Telecom, Inc. was
filed with the Delaware Secretary of State on December 23, 1996.

       2. This Restated Certificate of Incorporation amends and restates the
provisions of the Restated Certificate of Incorporation of this Corporation, and
was duly adopted in accordance with Sections 245 and 242 of the General
Corporation Law of the State of Delaware by the directors and stockholders of
the Corporation.

       3. The text of the Certificate of Incorporation is amended and restated
to read in its entirety as set forth below:

       FIRST: The name of the Corporation is Birch Telecom, Inc. (the
"Corporation").

       SECOND: The address of the Corporation's registered office in the State
of Delaware is 2711 Centerville Road, Suite 400, Wilmington, County of New
Castle, Delaware 19808, and the name of its registered agent at such address is
the Corporation Service Company.

       THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.

       FOURTH:

A.     The total number of shares that the Corporation shall have authority to
issue is 1,200,000,000 shares. The total number of shares of common stock that
the Corporation shall have authority to issue is 800,000,000 shares (the "Common
Stock"), and the par value of each share of Common Stock is $0.001. The total
number of shares of preferred stock that the Corporation shall have authority to
issue is 400,000,000 shares (the "Preferred Stock"), and the par value of each
share of Preferred Stock is $0.001.

       This Restated Certificate of Incorporation shall become effective in
accordance with the General Corporation Law of the State of Delaware (such time
of effectiveness, the "Effective Time"). Immediately after the Effective Time
(such time immediately after the Effective Time, the "Stock Split Effective
Time"), each share of Common Stock, par value $0.001 per share, of the
Corporation ("Old Common Stock") issued and outstanding immediately prior to the
Stock Split Effective Time shall be automatically reclassified as and converted
into 10 validly issued,

                                       1

<PAGE>

fully paid and nonassessable shares of Common Stock, par value $0.001 per share,
of the Corporation ("New Common Stock").

       Each holder of a certificate or certificates that, immediately prior to
the Stock Split Effective Time represented outstanding shares of Old Common
Stock (the "Old Certificates," whether one or more) shall be entitled to receive
upon surrender of such Old Certificates to UMB Bank, n.a. (and any successor
thereto or successor transfer agent appointed by the Corporation, the "Transfer
Agent") for cancellation, a certificate or certificates (the "New Certificates,"
whether one or more) representing the number of whole shares of the New Common
Stock formerly represented by such Old Certificates so surrendered and
reclassified under the terms hereof. From and after the Stock Split Effective
Time, Old Certificates shall represent the applicable number of whole shares of
New Common Stock and the right to receive New Certificates (and, where
applicable, cash in lieu of fractional shares, as provided below) pursuant to
the provisions hereof.

       If after the Stock Split Effective Time more than one Old Certificate
shall be surrendered at one time for the account of the same stockholder, the
number of full shares of New Common Stock for which New Certificates shall be
issued shall be computed on the basis of the aggregate number of shares
represented by the Old Certificates surrendered. If any New Certificate is to be
issued in a name other than that in which the Old Certificates surrendered for
exchange are issued, the Old Certificates so surrendered shall be properly
endorsed and otherwise in proper form for transfer, and the person or persons
requesting such exchange shall affix any requisite stock transfer stamps to the
Old Certificate surrendered, or provide funds for their purchase, or establish
to the satisfaction of the Transfer Agent that such taxes are not payable.

B.     The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is expressly authorized to provide for the
issuance of all or any number of shares of Preferred Stock in one or more
classes or series, and to fix for each such class or series, the voting powers,
full or limited, or no voting powers, and such designations, preferences and
relative, participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, as shall be stated and expressed in the
resolution or resolutions adopted by the Board of Directors provided for the
issuance of such class or series and as may be permitted by the Delaware General
Corporation Law and this Restated Certificate of Incorporation, including but
not limited to fixing the dividend rights, dividend rate, conversion rate,
voting rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, the liquidation preferences of any
wholly unissued series of Preferred Stock, and the number of shares constituting
any such series and the designation thereof, or any of them; and to increase or
decrease the number of shares of any series subsequent to the issue of shares of
that series, but not below the number of shares of such series then outstanding.
In case the number of shares of any series shall be so decreased, the shares
constituting such decrease shall resume the status which they had prior to the
adoption of the resolution originally fixing the number of shares of such
series.

         Of the authorized shares of Preferred Stock, 8,750,000 shares are
hereby designated "Series B Preferred Stock"; 8,500,000 shares are hereby
designated "Series C Preferred Stock"; 3,000,000 shares are hereby designated
"Series D Preferred Stock"; 30,000,000 shares are hereby designated "Series F
Preferred Stock"; 329,000,000 shares are hereby designated "Series G

                                       2
<PAGE>

Preferred Stock"; 6,579,000 shares are hereby designated "Series H Preferred
Stock"; and 2,223,000 shares are hereby designated "Series I Preferred Stock."

C.     The powers, preferences, rights, restrictions and other matters relating
to the Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock, Series F Preferred Stock, Series G Preferred Stock, Series H Preferred
Stock and Series I Preferred Stock are as follows:

              (1) Dividends.

              (a) SERIES B PREFERRED STOCK. The holders of Series B Preferred
       Stock shall be entitled to receive dividends in cash at the rate of
       fifteen percent (15%) per annum on an amount equal to $1.52 plus all
       unpaid dividends accrued on such shares of Series B Preferred Stock, on
       each outstanding share of Series B Preferred Stock (as adjusted for any
       stock dividends, combinations, splits and the like with respect to such
       shares), when and as declared by the Board of Directors out of the funds
       legally available for that purpose. Such dividends shall be cumulative
       from the date of issuance of the Series B Preferred Stock, whether or not
       earned, whether or not funds of the Corporation are legally available for
       the payment of dividends and whether or not declared by the Board of
       Directors, but such dividends shall be payable only when, as, and if
       declared by the Board of Directors. So long as any shares of Series B
       Preferred Stock shall be outstanding, no dividend, whether in cash, stock
       or property, shall be paid or declared, nor shall any other distribution
       be made, on any shares of Series C Preferred Stock, Common Stock or any
       other class or series of capital stock of the Corporation authorized or
       issued after the Effective Time, the terms of which do not expressly
       provide that it ranks senior to or on a parity with the Series B
       Preferred Stock as to dividends ("B Junior Securities"), nor shall any
       shares of Series C Preferred Stock, Common Stock or any other class or
       series of B Junior Securities be purchased, redeemed or otherwise
       acquired for value by the Corporation (except for acquisitions of Common
       Stock by the Corporation pursuant to agreements which permit the
       Corporation to repurchase such shares upon termination of services to the
       Corporation, in exercise of the Corporation's right of first refusal upon
       a proposed transfer, and for payments of cash in lieu of fractional
       shares pursuant to Section (4)(n) below) until all dividends set forth in
       this Section (1)(a) on the Series B Preferred Stock shall have been paid
       or declared and set apart. So long as any shares of Series B Preferred
       Stock shall be outstanding, no dividend, whether in cash or property,
       shall be paid or declared, nor shall any other distribution be made, on
       any shares of Series D Preferred Stock, Series H Preferred Stock, Series
       I Preferred Stock or any other class or series of capital stock of the
       Corporation authorized and issued after the Effective Time, the terms of
       which expressly provide that it will rank on a parity with the Series B
       Preferred Stock as to dividends ("B Parity Securities"), nor shall any
       shares of Series D Preferred Stock, Series H Preferred Stock, Series I
       Preferred Stock or any other class or series of B Parity Securities be
       purchased, redeemed or otherwise acquired for value by the Corporation
       (except for exercises of the Corporation's right of first refusal upon a
       proposed transfer, for payments of cash in lieu of fractional shares
       pursuant to Section (4)(n) below, or an exchange of shares of Series D
       Preferred Stock for shares of Series I Preferred Stock in accordance with
       one or more recapitalization agreements by and among the Corporation and
       certain holders of shares of Series B Preferred Stock and Series D
       Preferred Stock (each such

                                       3
<PAGE>

       agreement, a "Recapitalization Agreement") entered into in accordance
       with Section 5.11 of the Series G Preferred Stock Purchase Agreement,
       dated as of March 26, 2001 (the "Series G Purchase Agreement") between
       the Corporation and BTI (as defined below)) until all dividends set forth
       in this Section (1)(a) on the Series B Preferred Stock shall have been
       paid or declared and set apart, except if at any time the Corporation
       pays less than the total amount of dividends then accrued with respect to
       the Series B Preferred Stock, the Series D Preferred Stock, Series H
       Preferred Stock, Series I Preferred Stock and any other B Parity
       Securities, such payment shall be distributed ratably among the holders
       of the Series B Preferred Stock, Series D Preferred Stock, Series H
       Preferred Stock, Series I Preferred Stock and each other class or series
       of B Parity Securities entitled to receive such dividends based upon the
       aggregate accrued but unpaid dividends on such shares held by each
       holder. When dividends are not paid in full or consideration sufficient
       for such payment is not set apart as aforesaid, all dividends declared
       upon the Series B Preferred Stock, Series D Preferred Stock, Series H
       Preferred Stock, Series I Preferred Stock and any other class or series
       of B Parity Securities shall be declared ratably in proportion to the
       respective amounts of dividends accumulated and unpaid on the Series B
       Preferred Stock, Series D Preferred Stock, Series H Preferred Stock,
       Series I Preferred Stock and accumulated and unpaid on such B Parity
       Securities.

            (b)  SERIES C PREFERRED STOCK. The holders of Series C Preferred
       Stock shall be entitled to receive dividends in cash at the rate of ten
       percent (10%) per annum on an amount equal to $1.52 on each outstanding
       share of Series C Preferred Stock (as adjusted for any stock dividends,
       combinations, splits and the like with respect to such shares), when and
       as declared by the Board of Directors out of funds legally available for
       that purpose. Notwithstanding anything to the contrary herein, such
       dividends shall be payable only when, as and if declared by the Board of
       Directors and shall not be cumulative. So long as any shares of Series C
       Preferred Stock shall be outstanding, no dividend, whether in cash, stock
       or property, shall be paid or declared, nor shall any other distribution
       be made, on any shares of Common Stock or any other class or series of
       capital stock of the Corporation authorized or issued after the Effective
       Time, the terms of which do not expressly provide that it ranks senior to
       or on a parity with the Series C Preferred Stock as to dividends ("C
       Junior Securities"), nor shall any shares of Common Stock or any class or
       series of C Junior Securities be purchased, redeemed or otherwise
       acquired for value by the Corporation (except for acquisitions of Common
       Stock by the Corporation pursuant to agreements which permit the
       Corporation to repurchase such shares upon termination of services to the
       Corporation, in exercise of the Corporation's right of first refusal upon
       a proposed transfer, or for payments of cash in lieu of fractional shares
       pursuant to Section (4)(n) below) until all dividends set forth in this
       Section (1)(b) on the Series C Preferred Stock shall have been paid or
       declared and set apart. So long as any shares of Series C Preferred Stock
       shall be outstanding, no dividend, whether in cash or property, shall be
       paid or declared, nor shall any other distribution be made, on any class
       or series of capital stock of the Corporation authorized and issued after
       the Effective Time, the terms of which expressly provide that it will
       rank on a parity with the Series C Preferred Stock as to dividends ("C
       Parity Securities"), nor shall any shares of any class or series of C
       Parity Securities be purchased, redeemed or otherwise acquired for value
       by the Corporation (except for exercises of the Corporation's right of
       first refusal upon a proposed transfer, or for payments of cash in lieu
       of fractional shares pursuant to Section

                                       4
<PAGE>

       (4)(n) below) until all dividends set forth in this Section (1)(b) on the
       Series C Preferred Stock shall have been paid or declared and set apart,
       except if at any time the Corporation pays less than the total amount of
       dividends then accrued with respect to the C Parity Securities, such
       payment shall be distributed ratably among the holders of the Series C
       Preferred Stock and each other class or series of C Parity Securities
       entitled to receive such dividends based upon the aggregate accrued but
       unpaid dividends on such shares held by each holder. When dividends are
       not paid in full or consideration sufficient for such payment is not set
       apart as aforesaid, all dividends declared upon the Series C Preferred
       Stock and any class or series of C Parity Securities shall be declared
       ratably in proportion to the respective amounts of dividends accumulated
       and unpaid on the Series C Preferred Stock and accumulated and unpaid on
       such C Parity Securities.

            (c)  SERIES D PREFERRED STOCK. The holders of Series D Preferred
       Stock shall be entitled to receive dividends in cash at the rate of
       fifteen percent (15%) per annum on an amount equal to $4.50 plus all
       unpaid dividends accrued on such shares of Series D Preferred Stock, on
       each outstanding share of Series D Preferred Stock (as adjusted for any
       stock dividends, combinations, splits and the like with respect to such
       shares), when and as declared by the Board of Directors out of the funds
       legally available for that purpose. Such dividends shall be cumulative
       from the date of issuance of the Series D Preferred Stock, whether or not
       earned, whether or not funds of the Corporation are legally available for
       the payment of dividends and whether or not declared by the Board of
       Directors, but such dividends shall be payable only when, as, and if
       declared by the Board of Directors. So long as any shares of Series D
       Preferred Stock shall be outstanding, no dividend, whether in cash, stock
       or property, shall be paid or declared, nor shall any other distribution
       be made, on any shares of Series C Preferred Stock, Common Stock or any
       other class or series of capital stock of the Corporation authorized or
       issued after the Effective Time, the terms of which do not expressly
       provide that it ranks senior to or on a parity with the Series D
       Preferred Stock as to dividends ("D Junior Securities"), nor shall any
       shares of Series C Preferred Stock, Common Stock or any class or series
       of D Junior Securities be purchased, redeemed or otherwise acquired for
       value by the Corporation (except for acquisitions of Common Stock by the
       Corporation pursuant to agreements which permit the Corporation to
       repurchase such shares upon termination of services to the Corporation,
       in exercise of the Corporation's right of first refusal upon a proposed
       transfer, or for payments of cash in lieu of fractional shares pursuant
       to Section (4)(n) below) until all dividends set forth in this Section
       (1)(c) on the Series D Preferred Stock shall have been paid or declared
       and set apart. So long as any shares of Series D Preferred Stock shall be
       outstanding, no dividend, whether in cash or property, shall be paid or
       declared, nor shall any other distribution be made, on any shares of
       Series B Preferred Stock, Series H Preferred Stock, Series I Preferred
       Stock or any other class or series of capital stock of the Corporation
       authorized and issued after the Effective Time, the terms of which
       expressly provide that it will rank on a parity with the Series D
       Preferred Stock as to dividends ("D Parity Securities"), nor shall any
       shares of Series B Preferred Stock, Series H Preferred Stock, Series I
       Preferred Stock or any other class or series of D Parity Securities be
       purchased, redeemed or otherwise acquired for value by the Corporation
       (except for exercises of the Corporation's right of first refusal upon a
       proposed transfer, for payments of cash in lieu of fractional shares
       pursuant to Section (4)(n) below, or an exchange of shares of Series B
       Preferred Stock for

                                       5
<PAGE>

       shares of Series H Preferred Stock in accordance with a Recapitalization
       Agreement) until all dividends set forth in this Section (1)(c) on the
       Series D Preferred Stock shall have been paid or declared and set apart,
       except if at any time the Corporation pays less than the total amount of
       dividends then accrued with respect to the Series B Preferred Stock, the
       Series D Preferred Stock, Series H Preferred Stock, Series I Preferred
       Stock and any other D Parity Securities, such payment shall be
       distributed ratably among the holders of the Series B Preferred Stock,
       Series D Preferred Stock, Series H Preferred Stock, Series I Preferred
       Stock and each other class or series of B Parity Securities entitled to
       receive such dividends based upon the aggregate accrued but unpaid
       dividends on such shares held by each holder. When dividends are not paid
       in full or consideration sufficient for such payment is not set apart as
       aforesaid, all dividends declared upon the Series B Preferred Stock,
       Series D Preferred Stock, Series H Preferred Stock, Series I Preferred
       Stock and any other class or series of D Parity Securities shall be
       declared ratably in proportion to the respective amounts of dividends
       accumulated and unpaid on the Series B Preferred Stock, Series D
       Preferred Stock, Series H Preferred Stock, Series I Preferred Stock and
       accumulated and unpaid on such D Parity Securities.

            (d)  SERIES F PREFERRED STOCK. The holders of Series F Preferred
       Stock shall be entitled to receive dividends in cash at the rate of
       fifteen percent (15%) per annum on an amount equal to the purchase price
       for such shares (the "Purchase Price") plus all unpaid dividends accrued
       on such shares of Series F Preferred Stock, on each outstanding share of
       Series F Preferred Stock (as adjusted for any stock dividends,
       combinations, splits and the like with respect to such shares), payable
       on March 31, June 30, September 30 and December 31 of each year, when and
       as declared by the Board of Directors out of the funds legally available
       for that purpose. Such dividends shall be cumulative from the date of
       issuance of the Series F Preferred Stock, whether or not earned, whether
       or not funds of the Corporation are legally available for the payment of
       dividends and whether or not declared by the Board of Directors, but such
       dividends shall be payable only when, as, and if declared by the Board of
       Directors. The Purchase Price for the Series F Preferred Stock is (i)
       $4.50 per share for the initial purchase of 13,333,334 shares by BTI
       Ventures L.L.C. or its affiliates ("BTI"), (ii) $4.75 per share for the
       purchase of 5,263,158 shares of Series F Preferred Stock which were
       purchased upon the exercise of BTI's option to purchase such shares and
       (iii) $5.00 per share for the purchase of 5,000,000 shares of Series F
       Preferred Stock which were purchased upon the exercise of BTI's option to
       purchase such shares. So long as any shares of Series F Preferred Stock
       shall be outstanding, no dividend, whether in cash or property, shall be
       paid or declared, nor shall any other distribution be made, on any shares
       of Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
       Stock, Series H Preferred Stock, Series I Preferred Stock, Common Stock
       or any other class or series of capital stock of the Corporation
       authorized or issued after the Effective Time, the terms of which do not
       expressly provide that it ranks senior to or on a parity with the Series
       F Preferred Stock as to dividends ("F Junior Securities"), nor shall any
       shares of Series B Preferred Stock, Series C Preferred Stock, Series D
       Preferred Stock, Series H Preferred Stock, Series I Preferred Stock,
       Common Stock or any other class or series of F Junior Securities be
       purchased, redeemed or otherwise acquired for value by the Corporation
       (except for acquisitions of Common Stock by the Corporation pursuant to
       agreements which permit the Corporation to repurchase such shares upon
       termination of services to the

                                       6
<PAGE>

       Corporation, in exercise of the Corporation's right of first refusal upon
       a proposed transfer, for payments of cash in lieu of fractional shares
       pursuant to Section (4)(n) below or an exchange of shares of Series B
       Preferred Stock for shares of Series H Preferred Stock and an exchange of
       shares of Series D Preferred Stock for shares of Series I Preferred Stock
       in accordance with a Recapitalization Agreement) until all dividends set
       forth in this Section (1)(d) on the Series F Preferred Stock shall have
       been paid or declared and set apart. So long as any shares of Series F
       Preferred Stock shall be outstanding, no dividend, whether in cash or
       property, shall be paid or declared, nor shall any other distribution be
       made, on any shares of Series G Preferred Stock or any other class or
       series of capital stock of the Corporation authorized and issued after
       the Effective Time, the terms of which expressly provide that it will
       rank on a parity with the Series F Preferred Stock as to dividends ("F
       Parity Securities"), nor shall any shares of Series G Preferred Stock or
       any other class or series of F Parity Securities be purchased, redeemed
       or otherwise acquired for value by the Corporation (except for payments
       of cash in lieu of fractional shares pursuant to Section (4)(n) below)
       until all dividends set forth in this Section (1)(d) on the Series F
       Preferred Stock shall have been paid or declared and set apart, except if
       at any time the Corporation pays less than the total amount of dividends
       then accrued with respect to the Series F Preferred Stock, the Series G
       Preferred Stock and any other F Parity Securities, such payment shall be
       distributed ratably among the holders of the Series F Preferred Stock,
       the Series G Preferred Stock and each other class or series of F Parity
       Securities entitled to receive such dividends based upon the aggregate
       accrued but unpaid dividends on such shares held by each holder. When
       dividends are not paid in full or consideration sufficient for such
       payment is not set apart as aforesaid, all dividends declared upon the
       Series F Preferred Stock, the Series G Preferred Stock and any other
       class or series of F Parity Securities shall be declared ratably in
       proportion to the respective amounts of dividends accumulated and unpaid
       on the Series F Preferred Stock and the Series G Preferred Stock and
       accumulated and unpaid on such F Parity Securities. In addition to the
       15% per annum quarterly dividend payable on the Series F Preferred Stock,
       the shares of Series F Preferred Stock shall be entitled to receive the
       amount of any cash or non-cash dividends or distributions declared and
       paid on the shares of Common Stock, as if the shares of Series F
       Preferred Stock had been converted immediately prior to the record date
       for the payment of such dividend or distribution.

            (e)  SERIES G PREFERRED STOCK. The holders of Series G Preferred
       Stock shall be entitled to receive dividends in cash at the rate of
       fifteen percent (15%) per annum on an amount equal to $0.35 plus all
       unpaid dividends accrued on such shares of Series G Preferred Stock, on
       each outstanding share of Series G Preferred Stock (as adjusted for any
       stock dividends, combinations, splits and the like with respect to such
       shares), payable on March 31, June 30, September 30 and December 31 of
       each year, when and as declared by the Board of Directors out of the
       funds legally available for that purpose. Such dividends shall be
       cumulative from the date of issuance of the Series G Preferred Stock,
       whether or not earned, whether or not funds of the Corporation are
       legally available for the payment of dividends and whether or not
       declared by the Board of Directors, but such dividends shall be payable
       only when, as, and if declared by the Board of Directors. So long as any
       shares of Series G Preferred Stock shall be outstanding, no dividend,
       whether in cash or property, shall be paid or declared, nor shall

                                       7
<PAGE>

       any other distribution be made, on any shares of Series B Preferred
       Stock, Series C Preferred Stock, Series D Preferred Stock, Series H
       Preferred Stock, Series I Preferred Stock, Common Stock or any other
       class or series of capital stock of the Corporation authorized or issued
       after the Effective Time, the terms of which do not expressly provide
       that it ranks senior to or on a parity with the Series G Preferred Stock
       as to dividends (the "G Junior Securities"), nor shall any shares of
       Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
       Stock, Series H Preferred Stock, Series I Preferred Stock, Common Stock
       or any other class or series of G Junior Securities be purchased,
       redeemed or otherwise acquired for value by the Corporation (except for
       acquisitions of Common Stock by the Corporation pursuant to agreements
       which permit the Corporation to repurchase such shares upon termination
       of services to the Corporation, in exercise of the Corporation's right of
       first refusal upon a proposed transfer, for payments of cash in lieu of
       fractional shares pursuant to Section (4)(n) below, or an exchange of
       shares of Series B Preferred Stock for shares of Series H Preferred Stock
       and an exchange of shares of Series D Preferred Stock for shares of
       Series I Preferred Stock in accordance with a Recapitalization Agreement)
       until all dividends set forth in this Section (1)(e) on the Series G
       Preferred Stock shall have been paid or declared and set apart. So long
       as any shares of Series G Preferred Stock shall be outstanding, no
       dividend, whether in cash or property, shall be paid or declared, nor
       shall any other distribution be made, on any shares of Series F Preferred
       Stock or any other class or series of capital stock of the Corporation
       authorized and issued after the Effective Time, the terms of which
       expressly provide that it will rank on a parity with the Series G
       Preferred Stock as to dividends (the "G Parity Securities"), nor shall
       any shares of Series F Preferred Stock or any other class or series of G
       Parity Securities be purchased, redeemed or otherwise acquired for value
       by the Corporation (except for payments of cash in lieu of fractional
       shares pursuant to Section (4)(n) below) until all dividends set forth in
       this Section (1)(e) on the Series G Preferred Stock shall have been paid
       or declared and set apart, except if at any time the Corporation pays
       less than the total amount of dividends then accrued with respect to the
       Series G Preferred Stock, the Series F Preferred Stock and any other G
       Parity Securities, such payment shall be distributed ratably among the
       holders of the Series F Preferred Stock, the Series G Preferred Stock and
       each other class or series of G Parity Securities entitled to receive
       such dividends based upon the aggregate accrued but unpaid dividends on
       such shares held by each holder. When dividends are not paid in full or
       consideration sufficient for such payment is not set apart as aforesaid,
       all dividends declared upon the Series G Preferred Stock, the Series F
       Preferred Stock and any other class or series of G Parity Securities
       shall be declared ratably in proportion to the respective amounts of
       dividends accumulated and unpaid on the Series F Preferred Stock and the
       Series G Preferred Stock and accumulated and unpaid on such G Parity
       Securities. In addition to the 15% per annum quarterly dividend payable
       on the Series G Preferred Stock, the shares of Series G Preferred Stock
       shall be entitled to receive the amount of any cash or non-cash dividends
       or distributions declared and paid on the shares of Common Stock, as if
       the shares of Series G Preferred Stock had been converted immediately
       prior to the record date for the payment of such dividend or
       distribution.

            (f)  SERIES H PREFERRED STOCK. The holders of Series H Preferred
       Stock shall be entitled to receive dividends in cash at the rate of
       fifteen percent (15%) per annum on an amount equal to $1.52 plus the sum
       of (i) all unpaid dividends accrued on each share of

                                       8
<PAGE>

       Series H Preferred Stock from and including the date of issuance of such
       share of Series H Preferred Stock and (ii) all unpaid dividends accrued
       on the share of Series B Preferred Stock exchanged for such share of
       Series H Preferred Stock in accordance with the Recapitalization
       Agreement to (but excluding) the date of such exchange (such dividends of
       this clause (ii), the "Series H Roll-Over Amount"), on each outstanding
       share of Series H Preferred Stock (as adjusted for any stock dividends,
       combinations, splits and the like with respect to such shares), when and
       as declared by the Board of Directors out of the funds legally available
       for that purpose. Such dividends shall be cumulative from the date of
       issuance of the Series H Preferred Stock, whether or not earned, whether
       or not funds of the Corporation are legally available for the payment of
       dividends and whether or not declared by the Board of Directors, but such
       dividends shall be payable only when, as, and if declared by the Board of
       Directors. So long as any shares of Series H Preferred Stock shall be
       outstanding, no dividend, whether in cash, stock or property, shall be
       paid or declared, nor shall any other distribution be made, on any shares
       of Series C Preferred Stock, Common Stock or any other class or series of
       capital stock of the Corporation authorized or issued after the Effective
       Time, the terms of which do not expressly provide that it ranks senior to
       or on a parity with the Series H Preferred Stock as to dividends ("H
       Junior Securities"), nor shall any shares of Series C Preferred Stock,
       Common Stock or any class or series of H Junior Securities be purchased,
       redeemed or otherwise acquired for value by the Corporation (except for
       acquisitions of Common Stock by the Corporation pursuant to agreements
       which permit the Corporation to repurchase such shares upon termination
       of services to the Corporation, in exercise of the Corporation's right of
       first refusal upon a proposed transfer, or for payments of cash in lieu
       of fractional shares pursuant to Section (4)(n) below) until all
       dividends set forth in this Section (1)(f) on the Series H Preferred
       Stock shall have been paid or declared and set apart. So long as any
       shares of Series H Preferred Stock shall be outstanding, no dividend,
       whether in cash or property, shall be paid or declared, nor shall any
       other distribution be made, on any shares of Series B Preferred Stock,
       Series D Preferred Stock, Series I Preferred Stock or any other class or
       series of capital stock of the Corporation authorized and issued after
       the Effective Time, the terms of which expressly provide that it will
       rank on a parity with the Series H Preferred Stock as to dividends ("H
       Parity Securities"), nor shall any shares of Series B Preferred Stock,
       Series D Preferred Stock, Series I Preferred Stock or any other class or
       series of H Parity Securities be purchased, redeemed or otherwise
       acquired for value by the Corporation (except for exercises of the
       Corporation's right of first refusal upon a proposed transfer, for
       payments of cash in lieu of fractional shares pursuant to Section (4)(n)
       below, or an exchange of shares of Series B Preferred Stock for shares of
       Series H Preferred Stock and an exchange of shares of Series D Preferred
       Stock for shares of Series I Preferred Stock in accordance with a
       Recapitalization Agreement) until all dividends set forth in this Section
       (1)(f) on the Series H Preferred Stock shall have been paid or declared
       and set apart, except if at any time the Corporation pays less than the
       total amount of dividends then accrued with respect to the Series B
       Preferred Stock, the Series D Preferred Stock, Series H Preferred Stock,
       Series I Preferred Stock and any other H Parity Securities, such payment
       shall be distributed ratably among the holders of the Series B Preferred
       Stock, Series D Preferred Stock, Series H Preferred Stock, Series I
       Preferred Stock and each other class or series of H Parity Securities
       entitled to receive such dividends based upon the aggregate accrued but
       unpaid dividends

                                       9
<PAGE>

       on such shares held by each holder. When dividends are not paid in full
       or consideration sufficient for such payment is not set apart as
       aforesaid, all dividends declared upon the Series B Preferred Stock,
       Series D Preferred Stock, Series H Preferred Stock, Series I Preferred
       Stock and any other class or series of H Parity Securities shall be
       declared ratably in proportion to the respective amounts of dividends
       accumulated and unpaid on the Series B Preferred Stock, Series D
       Preferred Stock, Series H Preferred Stock, Series I Preferred Stock and
       accumulated and unpaid on such H Parity Securities.

            (g)  SERIES I PREFERRED STOCK. The holders of Series I Preferred
       Stock shall be entitled to receive dividends in cash at the rate of
       fifteen percent (15%) per annum on an amount equal to $4.50 plus the sum
       of (i) all unpaid dividends accrued on each share of Series I Preferred
       Stock from and including the date of issuance of such share of Series I
       Preferred Stock and (ii) all unpaid dividends accrued on the share of
       Series D Preferred Stock exchanged for such share of Series I Preferred
       Stock in accordance with a Recapitalization Agreement to (but excluding)
       the date of such exchange (such dividends of this clause (ii), the
       "Series I Roll-Over Amount"), on each outstanding share of Series I
       Preferred Stock (as adjusted for any stock dividends, combinations,
       splits and the like with respect to such shares), when and as declared by
       the Board of Directors out of the funds legally available for that
       purpose. Such dividends shall be cumulative from the date of issuance of
       the Series I Preferred Stock, whether or not earned, whether or not funds
       of the Corporation are legally available for the payment of dividends and
       whether or not declared by the Board of Directors, but such dividends
       shall be payable only when, as, and if declared by the Board of
       Directors. So long as any shares of Series I Preferred Stock shall be
       outstanding, no dividend, whether in cash, stock or property, shall be
       paid or declared, nor shall any other distribution be made, on any shares
       of Series C Preferred Stock, Common Stock or any other class or series of
       capital stock of the Corporation authorized or issued after the Effective
       Time, the terms of which do not expressly provide that it ranks senior to
       or on a parity with the Series I Preferred Stock as to dividends ("I
       Junior Securities"), nor shall any shares of Series C Preferred Stock,
       Common Stock or any other class or series of I Junior Securities be
       purchased, redeemed or otherwise acquired for value by the Corporation
       (except for acquisitions of Common Stock by the Corporation pursuant to
       agreements which permit the Corporation to repurchase such shares upon
       termination of services to the Corporation, in exercise of the
       Corporation's right of first refusal upon a proposed transfer, or for
       payments of cash in lieu of fractional shares pursuant to Section (4)(n)
       below) until all dividends set forth in this Section (1)(g) on the Series
       I Preferred Stock shall have been paid or declared and set apart. So long
       as any shares of Series I Preferred Stock shall be outstanding, no
       dividend, whether in cash or property, shall be paid or declared, nor
       shall any other distribution be made, on any shares of Series B Preferred
       Stock, Series D Preferred Stock, Series H Preferred Stock or any other
       class or series of capital stock of the Corporation authorized and issued
       after the Effective Time, the terms of which expressly provide that it
       will rank on a parity with the Series I Preferred Stock as to dividends
       ("I Parity Securities"), nor shall any shares of Series B Preferred
       Stock, Series D Preferred Stock, Series H Preferred Stock or any other
       class or series of I Parity Securities be purchased, redeemed or
       otherwise acquired for value by the Corporation (except for exercises of
       the Corporation's right of first refusal upon a proposed transfer, for
       payments of cash in lieu of fractional shares pursuant to Section (4)(n)
       below, or an exchange of shares of Series B Preferred Stock for shares of

                                       10
<PAGE>

       Series H Preferred Stock and an exchange of shares of Series D Preferred
       Stock for shares of Series I Preferred Stock in accordance with a
       Recapitalization Agreement) until all dividends set forth in this Section
       (1)(g) on the Series I Preferred Stock shall have been paid or declared
       and set apart, except if at any time the Corporation pays less than the
       total amount of dividends then accrued with respect to the Series B
       Preferred Stock, the Series D Preferred Stock, Series H Preferred Stock,
       Series I Preferred Stock and any other I Parity Securities, such payment
       shall be distributed ratably among the holders of the Series B Preferred
       Stock, Series D Preferred Stock, Series H Preferred Stock, Series I
       Preferred Stock and each other class or series of I Parity Securities
       entitled to receive such dividends based upon the aggregate accrued but
       unpaid dividends on such shares held by each holder. When dividends are
       not paid in full or consideration sufficient for such payment is not set
       apart as aforesaid, all dividends declared upon the Series B Preferred
       Stock, Series D Preferred Stock, Series H Preferred Stock, Series I
       Preferred Stock and any other class or series of I Parity Securities
       shall be declared ratably in proportion to the respective amounts of
       dividends accumulated and unpaid on the Series B Preferred Stock, Series
       D Preferred Stock, Series H Preferred Stock, Series I Preferred Stock and
       accumulated and unpaid on such I Parity Securities.

            (2)  Liquidation Rights.

            (a)  SERIES G PREFERRED STOCK. Upon any liquidation, dissolution, or
       winding up of the Corporation, and before any distribution or payment
       shall be made to the holders of Series B Preferred Stock, Series C
       Preferred Stock, Series H Preferred Stock or Common Stock, the holders of
       Series G Preferred Stock shall be entitled to be paid out of the assets
       of the Corporation an amount equal to the greater of (i) the sum of (a)
       $0.35 per share of Series G Preferred Stock (as adjusted for any stock
       dividends, combinations, splits and the like with respect to such shares)
       plus (b) an amount equal to all unpaid dividends accrued on such shares
       of Series G Preferred Stock to the date of payment of such preference,
       whether or not earned, whether or not funds of the Corporation are
       legally available for the payment of dividends and whether or not such
       dividends have been declared by the Board of Directors; or (ii) the
       amount the holders of Series G Preferred Stock would have received upon
       liquidation, dissolution or winding up of the Corporation had such shares
       of Series G Preferred Stock and all shares of Series D Preferred Stock,
       Series F Preferred Stock and Series I Preferred Stock been converted to
       Common Stock immediately prior to such liquidation, dissolution or
       winding up (such greater amount, the "Series G Liquidation Preference"),
       for each share of Series G Preferred Stock held by them. If the assets of
       the Corporation shall be insufficient to make payment in full to all
       holders of Series G Preferred Stock, Series F Preferred Stock, Series D
       Preferred Stock and Series I Preferred Stock of the liquidation
       preference set forth in Sections (2)(a) through (d), inclusive, then such
       assets shall be distributed among the holders of Series G Preferred
       Stock, Series F Preferred Stock, Series D Preferred Stock and Series I
       Preferred Stock at the time outstanding ratably in proportion to the full
       amounts to which they would otherwise be respectively entitled.

            (b)  SERIES F PREFERRED STOCK. Upon any liquidation, dissolution, or
       winding up of the Corporation, and before any distribution or payment
       shall be made to the holders of Series B Preferred Stock, Series C
       Preferred Stock, Series H Preferred Stock or Common

                                       11
<PAGE>

       Stock, the holders of Series F Preferred Stock shall be entitled to be
       paid out of the assets of the Corporation an amount equal to the greater
       of (i) the sum of (a) the applicable Purchase Price per share of Series F
       Preferred Stock (as adjusted for any stock dividends, combinations,
       splits and the like with respect to such shares) plus (b) an amount equal
       to all unpaid dividends accrued on such shares of Series F Preferred
       Stock to the date of payment of such preference, whether or not earned,
       whether or not funds of the Corporation are legally available for the
       payment of dividends and whether or not such dividends have been declared
       by the Board of Directors; or (ii) the amount the holders of Series F
       Preferred Stock would have received upon liquidation, dissolution or
       winding up of the Corporation had such shares of Series F Preferred Stock
       and all shares of Series D Preferred Stock, Series G Preferred Stock and
       Series I Preferred Stock been converted to Common Stock immediately prior
       to such liquidation, dissolution or winding up (such greater amount, the
       "Series F Liquidation Preference"), for each share of Series F Preferred
       Stock held by them. If the assets of the Corporation shall be
       insufficient to make payment in full to all holders of Series F Preferred
       Stock, Series G Preferred Stock, Series D Preferred Stock and Series I
       Preferred Stock of the liquidation preference set forth in Sections
       (2)(a) through (d), inclusive, then such assets shall be distributed
       among the holders of Series F Preferred Stock, Series G Preferred Stock,
       Series D Preferred Stock and Series I Preferred Stock at the time
       outstanding ratably in proportion to the full amounts to which they would
       otherwise be respectively entitled.

            (c)  SERIES D PREFERRED STOCK. Upon any liquidation, dissolution, or
       winding up of the Corporation, and before any distribution or payment
       shall be made to the holders of Series B Preferred Stock, Series C
       Preferred Stock, Series H Preferred Stock or Common Stock, the holders of
       Series D Preferred Stock shall be entitled to be paid out of the assets
       of the Corporation an amount equal to the greater of (i) the sum of (a)
       $4.50 per share of Series D Preferred Stock (as adjusted for any stock
       dividends, combinations, splits and the like with respect to such shares)
       plus (b) an amount equal to all unpaid dividends accrued on such shares
       of Series D Preferred Stock to the date of payment of such preference,
       whether or not earned, whether or not funds of the Corporation are
       legally available for the payment of dividends and whether or not such
       dividends have been declared by the Board of Directors; or (ii) the
       amount the holders of Series D Preferred Stock would have received upon
       liquidation, dissolution or winding up of the Corporation had such shares
       of Series D Preferred Stock and all shares of Series F Preferred Stock,
       Series G Preferred Stock and Series I Preferred Stock been converted to
       Common Stock immediately prior to such liquidation, dissolution or
       winding up (such greater amount the "Series D Liquidation Preference"),
       for each share of Series D Preferred Stock held by them. If the assets of
       the Corporation shall be insufficient to make payment in full to all
       holders of Series F Preferred Stock, Series G Preferred Stock, Series D
       Preferred Stock and Series I Preferred Stock of the liquidation
       preference set forth in Sections (2)(a) through (d) inclusive, then such
       assets shall be distributed among the holders of Series F Preferred
       Stock, Series G Preferred Stock, Series D Preferred Stock and Series I
       Preferred Stock at the time outstanding ratably in proportion to the full
       amounts to which they would otherwise be respectively entitled.

            (d)  SERIES I PREFERRED STOCK. Upon any liquidation, dissolution, or
       winding up of the Corporation, and before any distribution or payment
       shall be made to the holders of

                                       12
<PAGE>

       Series B Preferred Stock, Series C Preferred Stock, Series H Preferred
       Stock or Common Stock, the holders of Series I Preferred Stock shall be
       entitled to be paid out of the assets of the Corporation an amount equal
       to the greater of (i) the sum of $4.50 per share of Series I Preferred
       Stock (as adjusted for any stock dividends, combinations, splits and the
       like with respect to such shares) plus (b) the sum of (x) the Series I
       Roll-Over Amount (as adjusted for any stock dividends, combinations,
       splits and the like with respect to such shares) and (y) an amount equal
       to all unpaid dividends accrued on such shares of Series I Preferred
       Stock to the date of payment of such preference, whether or not earned,
       whether or not funds of the Corporation are legally available for the
       payment of dividends and whether or not such dividends have been declared
       by the Board of Directors; or (ii) the amount the holders of Series I
       Preferred Stock would have received upon liquidation, dissolution or
       winding up of the Corporation had such shares of Series I Preferred Stock
       and all shares of Series F Preferred Stock, Series G Preferred Stock and
       Series D Preferred Stock been converted to Common Stock immediately prior
       to such liquidation, dissolution or winding up (such greater amount the
       "Series I Liquidation Preference"), for each share of Series I Preferred
       Stock held by them. If the assets of the Corporation shall be
       insufficient to make payment in full to all holders of Series F Preferred
       Stock, Series G Preferred Stock, Series D Preferred Stock and Series I
       Preferred Stock of the liquidation preference set forth in Sections
       (2)(a) through (d) inclusive, then such assets shall be distributed among
       the holders of Series F Preferred Stock, Series G Preferred Stock, Series
       D Preferred Stock and Series I Preferred Stock at the time outstanding
       ratably in proportion to the full amounts to which they would otherwise
       be respectively entitled.

            (e)  SERIES B PREFERRED STOCK. Upon any liquidation, dissolution, or
       winding up of the Corporation, and after the payment of the full
       liquidation preference of the Series G Preferred Stock as set forth in
       Section (2)(a) above, the Series F Preferred Stock as set forth in
       Section (2)(b) above, the Series D Preferred Stock as set forth in
       Section (2)(c) above, and the Series I Preferred Stock as set forth in
       Section (2)(d) above, and before any distribution or payment shall be
       made to the holders of Series C Preferred Stock or Common Stock, the
       holders of Series B Preferred Stock shall be entitled to be paid out of
       the assets of the Corporation an amount equal to the sum of (i) $1.52 for
       each share of Series B Preferred Stock held by them (as adjusted for any
       stock dividends, combinations, splits and the like with respect to such
       shares) plus (ii) an amount equal to all unpaid dividends accrued on such
       shares of Series B Preferred Stock to the date of payment of such
       preference, whether or not earned, whether or not funds of the
       Corporation are legally available for the payment of dividends and
       whether or not such dividends have been declared by the Board of
       Directors (the "Series B Liquidation Preference"), for each share of
       Series B Preferred Stock held by them. If the remaining assets of the
       Corporation shall be insufficient to make payment in full to all holders
       of Series B Preferred Stock and Series H Preferred Stock of the
       liquidation preferences set forth in Sections (2)(e) through (f)
       inclusive, then such remaining assets shall be distributed among the
       holders of Series B Preferred Stock and Series H Preferred Stock at the
       time outstanding ratably in proportion to the full amounts to which they
       would otherwise be respectively entitled.

                                       13
<PAGE>

            (f)  SERIES H PREFERRED STOCK. Upon any liquidation, dissolution, or
       winding up of the Corporation, and after the payment of the full
       liquidation preference of the Series G Preferred Stock as set forth in
       Section (2)(a) above, the Series F Preferred Stock as set forth in
       Section (2)(b) above, the Series D Preferred Stock as set forth in
       Section (2)(c) above, and the Series I Preferred Stock as set forth in
       Section (2)(d) above, and before any distribution or payment shall be
       made to the holders of Series C Preferred Stock or Common Stock, the
       holders of Series H Preferred Stock shall be entitled to be paid out of
       the assets of the Corporation an amount equal to the sum of (i) $1.52 per
       share of Series H Preferred Stock held by them (as adjusted for any stock
       dividends, combinations, splits and the like with respect to such shares)
       plus (ii) an amount equal to the sum of (x) the Series H Roll-Over Amount
       (as adjusted for any stock dividends, combinations, splits and the like
       with respect to such shares) and (y) all unpaid dividends accrued on such
       shares of Series H Preferred Stock to the date of payment of such
       preference, whether or not earned, whether or not funds of the
       Corporation are legally available for the payment of dividends and
       whether or not such dividends have been declared by the Board of
       Directors (the "Series H Liquidation Preference"), for each share of
       Series H Preferred Stock held by them. If the remaining assets of the
       Corporation shall be insufficient to make payment in full to all holders
       of Series H Preferred Stock and Series B Preferred Stock of the
       liquidation preferences set forth in Sections (2)(e) through (f),
       inclusive, then such remaining assets shall be distributed among the
       holders of Series H Preferred Stock and Series B Preferred Stock at the
       time outstanding ratably in proportion to the full amounts to which they
       would otherwise be respectively entitled.

            (g)  SERIES C PREFERRED STOCK. Upon any liquidation, dissolution, or
       winding up of the Corporation, and after the payment of the full
       liquidation preference of the Series G Preferred Stock as set forth in
       Section (2)(a) above, the Series F Preferred Stock as set forth in
       Section (2)(b) above, the Series D Preferred Stock as set forth in
       Section (2)(c) above, the Series I Preferred Stock as set forth in
       Section (2)(d) above, the Series B Preferred Stock as set forth in
       Section (2)(e) above, and the Series H Preferred Stock as set forth in
       Section (2)(f) above and before any distribution or payment shall be made
       to the holders of Common Stock, the holders of Series C Preferred Stock
       shall be entitled to be paid out of the assets of the Corporation an
       amount equal to the sum of (i) $1.52 per share of Series C Preferred
       Stock (as adjusted for any stock dividends, combinations, splits and the
       like with respect to such shares), plus (ii) an amount equal to all
       declared and unpaid dividends for each share of Series C Preferred Stock
       held by them (the "Series C Liquidation Preference"). If the remaining
       assets of the Corporation shall be insufficient to make payment in full
       to all holders of Series C Preferred Stock of the liquidation preference
       set forth in this Section (2)(g), then such remaining assets shall be
       distributed among the holders of Series C Preferred Stock at the time
       outstanding ratably in proportion to the full amounts to which they would
       otherwise be respectively entitled.

            (h)  COMMON STOCK. Upon any liquidation, dissolution, or winding up
       of the Corporation, and after the payment in full of the Series G
       Liquidation Preference, Series F Liquidation Preference, Series D
       Liquidation Preference, the Series I Liquidation Preference, the Series B
       Liquidation Preference, the Series H Liquidation Preference, and the
       Series C Liquidation Preference, then the remaining assets of the
       Corporation legally

                                       14
<PAGE>

       available for distribution, if any, shall be distributed ratably to the
       holders of the Common Stock.

            (i)  DEEMED LIQUIDATIONS.

                 (i) At the election of the holders of a majority of the voting
            power of the outstanding shares of the Series B Preferred Stock,
            Series C Preferred Stock, Series D Preferred Stock, Series F
            Preferred Stock, Series G Preferred Stock, Series H Preferred
            Stock and Series I Preferred Stock, voting together as a single
            class, the following events will be deemed a liquidation under
            this section: (i) consolidation, reorganization, share exchange,
            recapitalization, business combination, merger or similar
            transaction involving the Corporation in which the stockholders
            of the Corporation immediately prior to such transaction in the
            aggregate cease to own at least 50% of the voting securities of
            the entity surviving or resulting from such transaction (or the
            ultimate parent thereof), or any transaction or series of related
            transactions in which in excess of 50% of the Corporation's
            voting power is transferred (in any case, an "Acquisition"); and
            (ii) the sale, lease, transfer or other disposition of all or
            substantially all of the assets of the Corporation (an "Asset
            Transfer").

                 (ii) Notwithstanding the foregoing, the Corporation shall
            not be obligated to make any payment of the applicable
            liquidation preferences in cash pursuant to this Section (2)(i)
            if such payment or the existence of this deemed liquidation
            provision would violate the terms of the Indenture, dated as of
            June 23, 1998, by and between the Corporation and Norwest Bank
            Minnesota, National Association (as trustee), as amended (the
            "Indenture"), until 91 days after the date on which the Senior
            Notes due 2008 issued by the Corporation pursuant to such
            Indenture (the "Senior Notes") mature. If the Corporation is
            unable to pay the liquidation preferences in cash as set forth in
            this section, the holders of a majority of the voting power of
            the then outstanding shares of Series B Preferred Stock, Series C
            Preferred Stock, Series D Preferred Stock, Series F Preferred
            Stock, Series G Preferred Stock, Series H Preferred Stock and
            Series I Preferred Stock, voting together as a single class, may
            elect to receive shares of Common Stock with a fair market value
            (as determined in accordance with Section (2)(k)) equal to the
            respective liquidation preferences of such shares.

              (j) PAYMENTS IN PROPERTY. Whenever the distribution provided for
       in this Section (2) shall be payable in securities or other property
       other than cash, the value of that distribution shall be the fair market
       value of those securities or other property.

              (k) DETERMINATIONS OF FAIR MARKET VALUE. Whenever a determination
       of fair market value is required under this Restated Certificate of
       Incorporation, the fair market value shall be determined based upon the
       price that would be paid by a willing buyer of the assets or shares at
       issue, in a sale process designed to attract all possible participants
       and to maximize value. The determination of fair market value shall be
       made (i) by the Board of Directors or (ii) if the holders of a majority
       of the voting power of the outstanding shares of Series F Preferred Stock
       and the Series G Preferred Stock, voting

                                       15
<PAGE>

       together as a single class, object to such determination by the Board of
       Directors, by a nationally recognized investment banking firm mutually
       agreeable to the Corporation and the holders of a majority of the voting
       power of the outstanding shares of Series F Preferred Stock and the
       Series G Preferred Stock, voting together as a single class. The fees and
       expenses of such investment banking firm shall be paid by the
       Corporation.

              (3) Voting Rights.

              (a) SERIES B, SERIES C, SERIES D, SERIES F, SERIES G, SERIES H AND
       SERIES I PREFERRED STOCK. The holders of Series B Preferred Stock shall
       be entitled to cast one vote for each share of Series B Preferred Stock
       held by them on an as-converted basis, the holders of Series C Preferred
       Stock shall be entitled to cast one vote for each share of Series C
       Preferred Stock held by them on an as-converted basis, the holders of
       Series D Preferred Stock shall be entitled to cast one vote for each
       share of Series D Preferred Stock held by them on an as-converted basis,
       the holders of Series F Preferred Stock shall be entitled to cast one
       vote for each share of Series F Preferred Stock held by them on an
       as-converted basis, the holders of Series G Preferred Stock shall be
       entitled to cast one vote for each share of Series G Preferred Stock held
       by them on an as-converted basis, the holders of Series H Preferred Stock
       shall be entitled to cast one vote for each share of Series H Preferred
       Stock held by them on an as-converted basis, and the holders of Series I
       Preferred Stock shall be entitled to cast one vote for each share of
       Series I Preferred Stock held by them on an as-converted basis. Such
       votes shall be cast together with those cast by the holders of Common
       Stock and not as a separate class, except as otherwise provided herein or
       required by applicable law. The Series B Preferred Stock, the Series C
       Preferred Stock, the Series D Preferred Stock, the Series F Preferred
       Stock, the Series G Preferred Stock, the Series H Preferred Stock, and
       Series I Preferred Stock shall not have cumulative voting rights.

              (b) Restrictions and Limitations.

                     (i) So long as the outstanding shares of Series F Preferred
              Stock represent at least five percent (5%) or more of the
              outstanding shares of Common Stock of the Corporation (on an
              as-converted to Common Stock basis), the approval by the vote or
              written consent of the holders of at least seventy-five percent
              (75%) of the then outstanding shares of Series F Preferred Stock
              shall be necessary for effecting or validating the following
              actions with respect to the Corporation:

                            (A) Any amendment, alteration, or repeal of any
                     provision of this Restated Certificate of Incorporation or
                     Bylaws of the Corporation (including the filing of a
                     Certificate of Designation), each as amended from time to
                     time, that adversely affects the voting powers, preferences
                     or other special rights or privileges, qualifications,
                     limitations, or restrictions of the Series F Preferred
                     Stock;

                            (B) Any authorization, creation, or increase in the
                     authorized number of any class or series of capital stock
                     ranking senior to or on parity with the Series F Preferred
                     Stock as to dividends, voting rights or

                                       16
<PAGE>

                     liquidation, or any issuance of any shares of such class
                     or series of capital stock (or any securities convertible
                     into, or exchangeable or exerciseable for such shares);

                            (C) Any payment of any cash or non-cash dividends or
                     other distributions with respect to its capital stock;

                            (D) Any reclassification, combination, split,
                     subdivision, redemption, repurchase or other acquisition of
                     any shares of capital stock (except for acquisitions of
                     Common Stock by the Corporation pursuant to agreements
                     which permit the Corporation to repurchase such shares upon
                     the termination of services to the Corporation or in
                     exercise of the Corporation's right of first refusal upon a
                     proposed transfer);

                            (E) Any agreement by the Corporation or its
                     stockholders regarding an Acquisition or an Asset Transfer
                     (as defined in Section (2)(i));

                            (F) Any acquisition of assets or securities of any
                     other person or entity, except for acquisitions involving
                     cash with an aggregate value of less than five percent (5%)
                     of the Corporation's assets for any single acquisition or
                     series of related transactions;

                            (G) Any joint venture or similar profit sharing
                     arrangement involving material assets or the payment or
                     receipt of more than five percent (5%) of the Corporation's
                     assets;

                            (H) Any liquidation, dissolution or winding up of
                     the Corporation; or

                            (I) An amendment, alteration, or repeal of this
                     Section (3)(b)(i).

                   (ii)   So long as the outstanding shares of Series G
              Preferred Stock represent at least five percent (5%) or more of
              the outstanding shares of Common Stock of the Corporation (on an
              as-converted to Common Stock basis), the approval by the vote or
              written consent of the holders of at least seventy-five percent
              (75%) of the then outstanding shares of Series G Preferred Stock
              shall be necessary for effecting or validating the following
              actions with respect to the Corporation:

                          (A) Any amendment, alteration, or repeal of any
                   provision of this Restated Certificate of Incorporation or
                   Bylaws of the Corporation (including the filing of a
                   Certificate of Designation), each as amended from time to
                   time, that adversely affects the voting powers,
                   preferences or other special rights or privileges,
                   qualifications, limitations, or restrictions of the Series G
                   Preferred Stock;

                                       17
<PAGE>

                          (B) Any authorization, creation, or increase in the
                   authorized number of any class or series of capital stock
                   ranking senior to or on parity with the Series G Preferred
                   Stock as to dividends, voting rights or liquidation, or
                   any issuance of any shares of such class or series of
                   capital stock (or any securities convertible into, or
                   exchangeable or exerciseable for such shares);

                           (C) Any payment of any cash or non-cash dividends or
                   other distributions with respect to its capital stock;

                           (D) Any reclassification, combination, split,
                   subdivision, redemption, repurchase or other acquisition
                   of any shares of capital stock (except for acquisitions of
                   Common Stock by the Corporation pursuant to agreements
                   which permit the Corporation to repurchase such shares
                   upon the termination of services to the Corporation or in
                   exercise of the Corporation's right of first refusal upon
                   a proposed transfer);

                           (E) Any agreement by the Corporation or its
                   stockholders regarding an Acquisition or an Asset Transfer
                   (as defined in Section (2)(i));

                           (F) Any acquisition of assets or securities of any
                   other person or entity, except for acquisitions involving
                   cash with an aggregate value of less than five percent
                   (5%) of the Corporation's assets for any single
                   acquisition or series of related transactions;

                            (G) Any joint venture or similar profit sharing
                   arrangement involving material assets or the payment or
                   receipt of more than five percent (5%) of the Corporation's
                   assets;

                            (H) Any liquidation, dissolution or winding up of
                   the Corporation; or

                            (I) An amendment, alteration, or repeal of this
                   Section (3)(b)(ii).

              (c) Election of Board of Directors.

                     (i) For so long as at least 6,666,667 shares of Series F
              Preferred Stock remain outstanding (subject to adjustment for any
              stock split, reverse stock split and the like), the holders of
              Series F Preferred Stock, voting as a separate class, shall be
              entitled to elect that number of directors to the Corporation's
              Board of Directors equal to (A) the authorized size of the
              Corporation's Board of Directors, multiplied by (B) (I) the total
              number of shares of the Corporation's Common Stock represented by
              the shares of Series F Preferred Stock then outstanding (on an
              as-converted basis), divided by (II) the total number of shares of
              the Corporation's Common Stock then outstanding (assuming
              conversion of all Preferred Stock then outstanding), rounding up
              so that the nominees of the holders of Series F Preferred Stock
              will not represent less than such proportionate

                                       18
<PAGE>

              interest in (B) above, at each meeting or pursuant to each
              consent of the Corporation's stockholders for the election of
              directors; provided, however, that for purposes of this Section
              (3)(c)(i) only, the calculation of the total number of shares
              outstanding shall exclude any equity securities issued by the
              Corporation after August 5, 1999 (the "Series F Original Issue
              Date") (other than the shares of Series F Preferred Stock issued
              after such date, shares of Series G Preferred Stock, shares of
              Series H Preferred Stock, shares of Series I Preferred Stock, and
              any shares of Common Stock issued upon conversion of any of the
              foregoing) if at such time the outstanding shares of Series F
              Preferred Stock represent thirty percent (30%) or more of the
              outstanding Common Stock of the Corporation (on an as-converted to
              Common Stock basis). Only the holders of the Series F Preferred
              Stock shall be entitled to remove from office such directors
              without cause, and only the holders of the Series F Preferred
              Stock and the directors elected by the holders of the Series F
              Preferred Stock shall be entitled to fill any vacancy caused by
              the resignation, death or removal of such directors.

                     (ii) For so long as at least 42,379,182 shares of Series G
              Preferred Stock remain outstanding (subject to adjustment for any
              stock split, reverse stock split and the like), the holders of
              Series G Preferred Stock, voting as a separate class, shall be
              entitled to elect that number of directors to the Corporation's
              Board of Directors equal to (A) the authorized size of the
              Corporation's Board of Directors, multiplied by (B) (I) the total
              number of shares of the Corporation's Common Stock represented by
              the shares of Series G Preferred Stock then outstanding (on an
              as-converted basis), divided by (II) the total number of shares of
              the Corporation's Common Stock then outstanding (assuming
              conversion of all Preferred Stock then outstanding), rounding up
              so that the nominees of the holders of Series G Preferred Stock
              will not represent less than such proportionate interest in (B)
              above (provided that no rounding up will occur if as a result of
              rounding up for the Series F Preferred Stock there would be more
              than one director more than the proportionate interest represented
              by the holders of the Series F Preferred Stock and the Series G
              Preferred Stock together), at each meeting or pursuant to each
              consent of the Corporation's stockholders for the election of
              directors; provided, however, that for purposes of this Section
              (3)(c)(ii) only, the calculation of the total number of shares
              outstanding shall exclude any equity securities issued by the
              Corporation after the date of this Restated Certificate of
              Incorporation (other than shares of Series H Preferred Stock,
              shares of Series I Preferred Stock, and any shares of Common Stock
              issued upon conversion of any of the foregoing) if at such time
              the outstanding shares of Series G Preferred Stock represent
              thirty percent (30%) or more of the outstanding Common Stock of
              the Corporation (on an as-converted to Common Stock basis). Only
              the holders of the Series G Preferred Stock shall be entitled to
              remove from office such directors without cause, and only the
              holders of the Series G Preferred Stock and the directors elected
              by the holders of the Series G Preferred Stock shall be entitled
              to fill any vacancy caused by the resignation, death or removal of
              such directors.

                                       19
<PAGE>

                     (iii) For so long as at least 15,000,000 shares of Series B
              Preferred Stock, Series C Preferred Stock, Series D Preferred
              Stock, Series H Preferred Stock and Series I Preferred Stock
              remain outstanding (subject to adjustment for any stock split,
              reverse stock split and the like), the holders of Series B
              Preferred Stock, Series C Preferred Stock, Series D Preferred
              Stock, Series H Preferred Stock and Series I Preferred Stock,
              voting together as a single class, shall be entitled to elect one
              (1) member of the Board of Directors at each meeting or pursuant
              to each consent of the Corporation's stockholders for the election
              of directors, and only the holders of the Series B Preferred
              Stock, Series C Preferred Stock, Series D Preferred Stock, Series
              H Preferred Stock and Series I Preferred Stock, voting together a
              single class, shall be entitled to remove from office such
              director without cause, and only the holders of the Series B
              Preferred Stock, Series C Preferred Stock, Series D Preferred
              Stock, Series H Preferred Stock and Series I Preferred Stock and
              the director elected by such holders of the Series B Preferred
              Stock, Series C Preferred Stock, Series D Preferred Stock, Series
              H Preferred Stock and Series I Preferred Stock shall be entitled
              to fill any vacancy caused by the resignation, death or removal of
              such director.

                     (iv) For so long as the conditions set forth in Sections
              (3)(c)(i) through (iii) are satisfied, the holders of Common
              Stock, voting as a separate class, shall be entitled to elect one
              (1) member of senior management of the Corporation to the Board of
              Directors at each meeting or pursuant to each consent of the
              Corporation's stockholders for the election of directors, and only
              the holders of the Common Stock shall be entitled to remove from
              office such director without cause, and only the holders of Common
              Stock and the director elected by such holders of Common Stock
              shall be entitled to fill any vacancy caused by the resignation,
              death or removal of such director.

                     (v) Except as provided in Sections (3)(c)(i) through (iv)
              above, the holders of Common Stock and Preferred Stock, voting
              together as a single class, shall be entitled to elect all members
              of the Board of Directors.

              (4) CONVERSION RIGHTS. The holders of the Series B Preferred
       Stock, Series C Preferred Stock, Series D Preferred Stock, Series F
       Preferred Stock, Series G Preferred Stock, Series H Preferred Stock and
       Series I Preferred Stock shall have the following rights with respect to
       the conversion of the Series B Preferred Stock, Series C Preferred Stock,
       Series D Preferred Stock, Series F Preferred Stock, Series G Preferred
       Stock, Series H Preferred Stock and Series I Preferred Stock into shares
       of Common Stock (the "Conversion Rights"):

              (a) OPTIONAL CONVERSION. Subject to and in compliance with the
       provisions of this Section (4), any shares of Series B Preferred Stock,
       Series C Preferred Stock, Series D Preferred Stock, Series F Preferred
       Stock, Series G Preferred Stock, Series H Preferred Stock and Series I
       Preferred Stock may, at the option of the holder, be converted at any
       time into fully paid and nonassessable shares of Common Stock. The number
       of shares of Common Stock to which a holder of Series B Preferred Stock,
       Series C Preferred Stock, Series D Preferred Stock, Series F Preferred
       Stock, Series G Preferred Stock,

                                       20
<PAGE>

       Series H Preferred Stock or Series I Preferred Stock shall be entitled
       upon conversion shall be the product obtained by multiplying the
       applicable Preferred Stock Rate then in effect (determined as provided in
       Section (4)(c)) by the number of shares of Series B Preferred Stock,
       Series C Preferred Stock, Series D Preferred Stock, Series F Preferred
       Stock, Series G Preferred Stock, Series H Preferred Stock or Series I
       Preferred Stock being converted by such holder.

              (b) AUTOMATIC CONVERSION. (i) Subject to and in compliance with
       the provisions of this Section (4), all outstanding shares of Series B
       Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
       Series F Preferred Stock, Series G Preferred Stock, Series H Preferred
       Stock and Series I Preferred Stock shall be automatically converted into
       shares of Common Stock immediately prior to the closing of a firmly
       underwritten public offering pursuant to an effective registration
       statement under the Securities Act of 1933, as amended, covering the
       offer and sale of Common Stock for the account of the Corporation (such
       offering, an "IPO") in which (x) the gross proceeds to the Corporation
       (before underwriting discounts, commissions and fees) are at least
       $60,000,000 and (y) the per share price to the public is at least $1.05
       (after giving effect to the 1 for 10 stock split described in the second
       paragraph of paragraph (A) of this Article Fourth and subject to
       adjustment for any subsequent stock split, reverse stock split and the
       like) (such an IPO meeting the qualifications of clauses (x) and (y), a
       "Qualified Public Offering"). The number of shares of Common Stock to
       which a holder of Series B Preferred Stock shall be entitled upon
       conversion shall be the product obtained by multiplying the applicable
       Preferred Stock Rate then in effect by the number of shares of Series B
       Preferred Stock being converted by such holder. The number of shares of
       Common Stock to which a holder of Series C Preferred Stock shall be
       entitled upon conversion shall be the product obtained by multiplying the
       applicable Preferred Stock Rate then in effect by the number of shares of
       Series C Preferred Stock being converted by such holder. The number of
       shares of Common Stock to which a holder of Series D Preferred Stock
       shall be entitled upon conversion shall be the product obtained by
       multiplying the applicable Preferred Stock Rate then in effect by the
       number of shares of Series D Preferred Stock being converted by such
       holder. The number of shares of Common Stock to which a holder of Series
       F Preferred Stock shall be entitled upon conversion shall be the product
       obtained by multiplying the applicable Preferred Stock Rate then in
       effect by the number of shares of Series F Preferred Stock being
       converted by such holder. The number of shares of Common Stock to which a
       holder of Series G Preferred Stock shall be entitled upon conversion
       shall be the product obtained by multiplying the applicable Preferred
       Stock Rate then in effect by the number of shares of Series G Preferred
       Stock being converted by such holder. The number of shares of Common
       Stock to which a holder of Series H Preferred Stock shall be entitled
       upon conversion shall be the product obtained by multiplying the
       applicable Preferred Stock Rate then in effect by the number of shares of
       Series H Preferred Stock being converted by such holder. The number of
       shares of Common Stock to which a holder of Series I Preferred Stock
       shall be entitled upon conversion shall be the product obtained by
       multiplying the applicable Preferred Stock Rate then in effect by the
       number of shares of Series I Preferred Stock being converted by such
       holder.

                                       21
<PAGE>

              (ii) Subject to and in compliance with the provisions of this
       Section (4), upon the written election of the holders of a majority of
       the voting power of the then outstanding shares of Series B Preferred
       Stock, Series C Preferred Stock, Series D Preferred Stock, Series F
       Preferred Stock, Series G Preferred Stock, Series H Preferred Stock and
       Series I Preferred Stock, voting together as a single class, immediately
       prior to the closing of an IPO that is not a Qualified Public Offering,
       all outstanding shares of Series B Preferred Stock, Series C Preferred
       Stock, Series D Preferred Stock, Series F Preferred Stock, Series G
       Preferred Stock, Series H Preferred Stock and Series I Preferred Stock
       shall be automatically converted into shares of Common Stock. The number
       of shares of Common Stock to which a holder of Series B Preferred Stock
       shall be entitled upon conversion shall be the product obtained by
       multiplying the applicable Preferred Stock Rate then in effect by the
       number of shares of Series B Preferred Stock being converted by such
       holder. The number of shares of Common Stock to which a holder of Series
       C Preferred Stock shall be entitled upon conversion shall be the product
       obtained by multiplying the applicable Preferred Stock Rate then in
       effect by the number of shares of Series C Preferred Stock being
       converted by such holder. The number of shares of Common Stock to which a
       holder of Series D Preferred Stock shall be entitled upon conversion
       shall be the product obtained by multiplying the applicable Preferred
       Stock Rate then in effect by the number of shares of Series D Preferred
       Stock being converted by such holder. The number of shares of Common
       Stock to which a holder of Series F Preferred Stock shall be entitled
       upon conversion shall be the product obtained by multiplying the
       applicable Preferred Stock Rate then in effect by the number of shares of
       Series F Preferred Stock being converted by such holder. The number of
       shares of Common Stock to which a holder of Series G Preferred Stock
       shall be entitled upon conversion shall be the product obtained by
       multiplying the applicable Preferred Stock Rate then in effect by the
       number of shares of Series G Preferred Stock being converted by such
       holder. The number of shares of Common Stock to which a holder of Series
       H Preferred Stock shall be entitled upon conversion shall be the product
       obtained by multiplying the applicable Preferred Stock Rate then in
       effect by the number of shares of Series H Preferred Stock being
       converted by such holder. The number of shares of Common Stock to which a
       holder of Series I Preferred Stock shall be entitled upon conversion
       shall be the product obtained by multiplying the applicable Preferred
       Stock Rate then in effect by the number of shares of Series I Preferred
       Stock being converted by such holder.

              (c) PREFERRED STOCK. The conversion rate of the applicable series
       of Preferred Stock in effect at any time for conversion of the Series B
       Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
       Series F Preferred Stock, Series G Preferred Stock, Series H Preferred
       Stock or Series I Preferred Stock (the "Preferred Stock Rate") shall be
       the quotient obtained by dividing the Original Issue Price of the
       applicable series of Preferred Stock by the applicable Preferred Stock
       Price, calculated as provided in Section (4)(d). The "Original Issue
       Price" for the Series B Preferred Stock, Series C Preferred Stock and
       Series H Preferred Stock shall equal $1.52 per share. The "Original Issue
       Price" of the Series D Preferred Stock and Series I Preferred Stock shall
       equal $4.50 per share. The "Original Issue Price" of the Series F
       Preferred Stock shall equal the Purchase Price with respect to each
       share. The "Original Issue Price" of the Series G Preferred Stock shall
       equal $0.35 per share.

                                       22
<PAGE>

              (d) CONVERSION PRICE. The conversion price, as of the Effective
       Time (as defined in the second paragraph of paragraph (A) of this Article
       Fourth), shall: for the Series B Preferred Stock be $8.468; for the
       Series C Preferred Stock be $8.468; for the Series D Preferred Stock be
       $25.07; for the Series F Preferred Stock be $3.50; for the Series G
       Preferred Stock be $3.50, for the Series H Preferred Stock be $3.50; and
       for the Series I Preferred Stock be $3.50 (in each case, the "Preferred
       Stock Price"). Such Preferred Stock Prices shall be adjusted from time to
       time after the Effective Time in accordance with this Section (4),
       including but not limited to an adjustment for the 1 for 10 stock split
       described in the second paragraph of paragraph (A) of this Article
       Fourth, such that the Preferred Stock Prices shall, as of the close of
       business on the date on which the Stock Split Effective Time occurs: for
       the Series B Preferred Stock be $0.8468; for the Series C Preferred Stock
       be $0.8468; for the Series D Preferred Stock be $2.507; for the Series F
       Preferred Stock be $0.35; for the Series G Preferred Stock be $0.35, for
       the Series H Preferred Stock be $0.35; and for the Series I Preferred
       Stock be $0.35. All references to the Preferred Stock Price herein shall
       mean the Preferred Stock Price as applicable and as so adjusted.

              (e) MECHANICS OF CONVERSION. Each holder of Series B Preferred
       Stock, Series C Preferred Stock, Series D Preferred Stock, Series F
       Preferred Stock, Series G Preferred Stock, Series H Preferred Stock or
       Series I Preferred Stock who desires to convert the same into shares of
       Common Stock pursuant to this Section (4) shall surrender the certificate
       or certificates therefor, duly endorsed, at the office of the Corporation
       or any transfer agent for the Series B Preferred Stock, Series C
       Preferred Stock, Series D Preferred Stock, Series F Preferred Stock,
       Series G Preferred Stock, Series H Preferred Stock or Series I Preferred
       Stock, and shall give written notice to the Corporation at such office
       that such holder elects to convert the same. Such notice shall state the
       number of shares of Series B Preferred Stock, Series C Preferred Stock,
       Series D Preferred Stock, Series F Preferred Stock, Series G Preferred
       Stock, Series H Preferred Stock or Series I Preferred Stock being
       converted. Thereupon, the Corporation shall promptly issue and deliver at
       such office to such holder a certificate or certificates for the number
       of shares of Common Stock to which such holder is entitled. Such
       conversion shall be deemed to have been made at the close of business on
       the date of such surrender of the certificates representing the shares of
       Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
       Stock, Series F Preferred Stock, Series G Preferred Stock, Series H
       Preferred Stock or Series I Preferred Stock to be converted, and the
       person entitled to receive the shares of Common Stock issuable upon such
       conversion shall be treated for all purposes as the record holder of such
       shares of Common Stock on such date.

              (f) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the
       Corporation shall at any time or from time to time after the Effective
       Time effect a subdivision of the outstanding Common Stock without a
       corresponding subdivision of the Series B Preferred Stock, Series C
       Preferred Stock, Series D Preferred Stock, Series F Preferred Stock,
       Series G Preferred Stock, Series H Preferred Stock or Series I Preferred
       Stock, the Preferred Stock Price for each series of Preferred Stock in
       effect immediately before that subdivision shall be proportionately
       decreased. Conversely, if the Corporation shall at any time or from time
       to time after the Effective Time combine the outstanding shares of

                                       23
<PAGE>

       Common Stock into a smaller number of shares without a corresponding
       combination of the Series B Preferred Stock, Series C Preferred Stock,
       Series D Preferred Stock, Series F Preferred Stock, Series G Preferred
       Stock, Series H Preferred Stock or Series I Preferred Stock, the
       Preferred Stock Price for each series of Preferred Stock in effect
       immediately before the combination shall be proportionately increased.
       Any adjustment under this Section (4)(f) shall become effective at the
       close of business on the date the subdivision or combination becomes
       effective, including the 1 for 10 stock split described in the second
       paragraph of paragraph (A) of this Article Fourth.

              (g) ADJUSTMENT FOR COMMON STOCK DIVIDENDS AND DISTRIBUTIONS. If
       the Corporation at any time or from time to time makes, or fixes a record
       date for the determination of holders of Common Stock entitled to
       receive, a dividend or other distribution payable in additional shares of
       Common Stock, in each such event the Preferred Stock Price of each
       applicable series of Preferred Stock that is then in effect shall be
       decreased as of the time of such issuance or, in the event such record
       date is fixed, as of the close of business on such record date, by
       multiplying the Preferred Stock Price for each applicable series of
       Preferred Stock then in effect by a fraction (i) the numerator of which
       is the total number of shares of Common Stock issued and outstanding
       immediately prior to the time of such issuance or the close of business
       on such record date, and (ii) the denominator of which is the total
       number of shares of Common Stock issued and outstanding immediately prior
       to the time of such issuance or the close of business on such record date
       plus the number of shares of Common Stock issuable in payment of such
       dividend or distribution; provided, however, that if such record date is
       fixed and such dividend is not fully paid or if such distribution is not
       fully made on the date fixed therefor, the applicable Preferred Stock
       Price shall be recomputed accordingly as of the close of business on such
       record date and thereafter the applicable Preferred Stock Price shall be
       adjusted pursuant to this Section (4)(g) to reflect the actual payment of
       such dividend or distribution.

              (h) ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. If the
       Corporation at any time or from time to time makes, or fixes a record
       date for the determination of holders of Common Stock entitled to
       receive, a dividend or other distribution payable in securities of the
       Corporation other than shares of Common Stock, in each such event
       provision shall be made so that the holders of the Series B Preferred
       Stock, Series C Preferred Stock, Series D Preferred Stock, Series F
       Preferred Stock, Series G Preferred Stock, Series H Preferred Stock and
       Series I Preferred Stock shall receive upon conversion thereof, in
       addition to the number of shares of Common Stock receivable thereupon,
       the amount of other securities of the Corporation which they would have
       received had their Series B Preferred Stock, Series C Preferred Stock,
       Series D Preferred Stock, Series F Preferred Stock, Series G Preferred
       Stock, Series H Preferred Stock or Series I Preferred Stock been
       converted into Common Stock on the date of such event and had they
       thereafter, during the period from the date of such event to and
       including the conversion date, retained such securities receivable by
       them as aforesaid during such period, subject to all other adjustments
       called for during such period under this Section (4)(h) with respect to
       the rights of the holders of the Preferred Stock or with respect to such
       other securities by their terms.

                                       24
<PAGE>

              (i) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND SUBSTITUTION. If
       at any time or from time to time after the Effective Time, the Common
       Stock issuable upon the conversion of the Series B Preferred Stock,
       Series C Preferred Stock, Series D Preferred Stock, Series F Preferred
       Stock, Series G Preferred Stock, Series H Preferred Stock and Series I
       Preferred Stock is changed into the same or a different number of shares
       of any class or classes of stock, whether by recapitalization,
       reclassification or otherwise (other than an Acquisition or Asset
       Transfer (as defined in Section (2)(i)) that is deemed a liquidation
       pursuant to Section (2)(i) and pursuant to which the holders of the
       Preferred Stock receive the applicable liquidation preferences therefor,
       or a subdivision or combination of shares or stock dividend or a
       reorganization, merger, consolidation or sale of assets provided for
       elsewhere in this Section (4)), in any such event each holder of Series B
       Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
       Series F Preferred Stock, Series G Preferred Stock, Series H Preferred
       Stock and Series I Preferred Stock shall have the right thereafter to
       convert such stock into the kind and amount of stock and other securities
       and property receivable upon such recapitalization, reclassification or
       other change by holders of the maximum number of shares of Common Stock
       into which such shares of Series B Preferred Stock, Series C Preferred
       Stock, Series D Preferred Stock, Series F Preferred Stock, Series G
       Preferred Stock, Series H Preferred Stock or Series I Preferred Stock
       could have been converted immediately prior to such recapitalization,
       reclassification or change, all subject to further adjustment as provided
       herein or with respect to such other securities or property by the terms
       thereof.

              (j) REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALES OF ASSETS.
       If at any time or from time to time after the Effective Time, there is a
       capital reorganization of the Common Stock, merger, consolidation or sale
       of assets (other than an Acquisition or Asset Transfer (as defined in
       Section (2)(i)) that is deemed a liquidation pursuant to Section (2)(i)
       and pursuant to which the holders of the Preferred Stock receive the
       applicable liquidation preferences therefor, or a recapitalization,
       subdivision, combination, reclassification, exchange or substitution of
       shares provided for elsewhere in this Section (4)), as a part of such
       capital reorganization, merger, consolidation or sale of assets,
       provision shall be made so that the holders of the Series B Preferred
       Stock, Series C Preferred Stock, Series D Preferred Stock, Series F
       Preferred Stock, Series G Preferred Stock, Series H Preferred Stock and
       Series I Preferred Stock shall thereafter be entitled to receive upon
       conversion of the Series B Preferred Stock, Series C Preferred Stock,
       Series D Preferred Stock, Series F Preferred Stock, Series G Preferred
       Stock, Series H Preferred Stock and Series I Preferred Stock the number
       of shares of stock or other securities or property of the Corporation or
       third party entity to which a holder of the number of shares of Common
       Stock deliverable upon conversion would have been entitled on such
       capital reorganization, merger, consolidation or sale of assets, subject
       to adjustment in respect of such stock or securities by the terms
       thereof. In any such case, appropriate adjustment shall be made in the
       application of the provisions of this Section (4) with respect to the
       rights of the holders of Series B Preferred Stock, Series C Preferred
       Stock, Series D Preferred Stock, Series F Preferred Stock, Series G
       Preferred Stock, Series H Preferred Stock and Series I Preferred Stock
       after the capital reorganization, merger, consolidation or sale of assets
       to the end that the provisions of this Section (4) (including adjustment
       of the Preferred Stock Price then in effect and the

                                       25
<PAGE>

       number of shares issuable upon conversion of the Series B Preferred
       Stock, Series C Preferred Stock, Series D Preferred Stock, Series F
       Preferred Stock, Series G Preferred Stock, Series H Preferred Stock and
       Series I Preferred Stock) shall be applicable after that event and be as
       nearly equivalent as practicable.

              (k) SALE OF SHARES BELOW PREFERRED STOCK PRICE.

                     (i) If at any time or from time to time after the Effective
              Time, the Corporation issues or sells, or is deemed by the express
              provisions of this Section (4)(k) to have issued or sold,
              Additional Shares of Common Stock (as defined in Section
              (4)(k)(iv) below), other than as a dividend or other distribution
              on any class of stock as provided in Section (4)(g) above, and
              other than a subdivision or combination of shares of Common Stock
              as provided in Section (4)(f) above, for an Effective Price (as
              defined in Section (4)(k)(iv) below) less than the then effective
              Preferred Stock Price with respect to the applicable series of
              Preferred Stock, then and in each such case: (I) the then existing
              Preferred Stock Price with respect to the Series B Preferred
              Stock, Series C Preferred Stock and Series D Preferred Stock shall
              be reduced, as of the opening of business on the date of such
              issue or sale, to a price determined by multiplying the applicable
              existing Preferred Stock Price by a fraction (i) the numerator of
              which shall be (A) the number of shares of Common Stock deemed
              outstanding (as defined below) immediately prior to such issue or
              sale, plus (B) the number of shares of Common Stock which the
              aggregate consideration received (as defined in Section (4)(k)(ii)
              below) by the Corporation for the total number of Additional
              Shares of Common Stock so issued would purchase at such applicable
              Preferred Stock Price, and (ii) the denominator of which shall be
              the number of shares of Common Stock deemed outstanding (as
              defined below) immediately prior to such issue or sale plus the
              total number of Additional Shares of Common Stock so issued; and
              (II) the then existing Preferred Stock Price with respect to the
              Series F Preferred Stock, Series G Preferred Stock, Series H
              Preferred Stock and Series I Preferred Stock shall be reduced, as
              of the opening of business on the date of such issue or sale, to a
              price equal to the Effective Price. For the purposes of this
              Section (4)(k)(i), the number of shares of Common Stock deemed to
              be outstanding as of a given date shall be the sum of (A) the
              number of shares of Common Stock actually outstanding, (B) the
              number of shares of Common Stock into which the then outstanding
              shares of Series B Preferred Stock, Series C Preferred Stock,
              Series D Preferred Stock, Series F Preferred Stock, Series G
              Preferred Stock, Series H Preferred Stock and Series I Preferred
              Stock could be converted if fully converted on the day immediately
              preceding the given date, and (C) the number of shares of Common
              Stock which could be obtained through the exercise or conversion
              of all other rights, options and convertible securities on the day
              immediately preceding the given date.

                     (ii) For the purpose of making any adjustment required
              under this Section (4)(k), the consideration received by the
              Corporation for any issue or sale of securities shall (A) to the
              extent it consists of cash, be computed at the net amount of cash
              received by the Corporation after deduction of any underwriting

                                       26
<PAGE>

              or similar commissions, compensation or concessions paid or
              allowed by the Corporation in connection with such issue or sale
              but without deduction of any expenses payable by the Corporation,
              (B) to the extent it consists of property other than cash, be
              computed at the fair value of that property as determined in good
              faith by the Board of Directors, and (C) if Additional Shares of
              Common Stock, Convertible Securities (as defined in Section
              (4)(k)(iii) below) or rights or options to purchase either
              Additional Shares of Common Stock or Convertible Securities are
              issued or sold together with other stock or securities or other
              assets of the Corporation for a consideration which covers both,
              be computed as the portion of the consideration so received that
              may be reasonably determined in good faith by the Board of
              Directors to be allocable to such Additional Shares of Common
              Stock, Convertible Securities or rights or options.

                     (iii) For the purpose of the adjustment required under this
              Section (4)(k), if the Corporation issues or sells any rights or
              options for the purchase of, or stock or other securities
              convertible into, Additional Shares of Common Stock (such
              convertible stock or securities being herein referred to as
              "Convertible Securities") and if the Effective Price of such
              Additional Shares of Common Stock is less than the applicable
              Preferred Stock Price, in each case the Corporation shall be
              deemed to have issued at the time of the issuance of such rights
              or options or Convertible Securities the maximum number of
              Additional Shares of Common Stock issuable upon exercise or
              conversion thereof and to have received as consideration for the
              issuance of such shares an amount equal to the total amount of the
              consideration, if any, received by the Corporation for the
              issuance of such rights or options or Convertible Securities,
              plus, in the case of such rights or options, the minimum amounts
              of consideration, if any, payable to the Corporation upon the
              exercise of such rights or options, plus, in the case of
              Convertible Securities, the minimum amounts of consideration, if
              any, payable to the Corporation (other than by cancellation of
              liabilities or obligations evidenced by such Convertible
              Securities) upon the conversion thereof; provided that if in the
              case of Convertible Securities the minimum amounts of such
              consideration cannot be ascertained, but are a function of
              antidilution or similar protective clauses, the Corporation shall
              be deemed to have received the minimum amounts of consideration
              without reference to such clauses; provided further that if the
              minimum amount of consideration payable to the Corporation upon
              the exercise or conversion of rights, options or Convertible
              Securities is reduced over time or on the occurrence or
              non-occurrence of specified events other than by reason of
              antidilution adjustments, the Effective Price shall be
              recalculated using the figure to which such minimum amount of
              consideration is reduced; provided further that if the minimum
              amount of consideration payable to the Corporation upon the
              exercise or conversion of such rights, options or Convertible
              Securities is subsequently increased, the Effective Price shall be
              again recalculated using the increased minimum amount of
              consideration payable to the Corporation upon the exercise or
              conversion of such rights, options or Convertible Securities. No
              further adjustment of the applicable Preferred Stock Price, as
              adjusted upon the issuance of such rights, options or Convertible
              Securities, shall be made as a result of the actual issuance of
              Additional Shares of Common Stock on the

                                       27
<PAGE>

              exercise of any such rights or options or the conversion of any
              such Convertible Securities. If any such rights or options or the
              conversion privilege represented by any such Convertible
              Securities shall expire without having been exercised, the
              applicable Preferred Stock Price as adjusted upon the issuance of
              such rights, options or Convertible Securities shall be readjusted
              to the applicable Preferred Stock Price which would have been in
              effect had an adjustment been made on the basis that the only
              Additional Shares of Common Stock so issued were the Additional
              Shares of Common Stock, if any, actually issued or sold on the
              exercise of such rights or options or rights of conversion of such
              Convertible Securities, and such Additional Shares of Common
              Stock, if any, were issued or sold for the consideration actually
              received by the Corporation upon such exercise, plus the
              consideration, if any, actually received by the Corporation for
              the granting of all such rights or options, whether or not
              exercised, plus the consideration received for issuing or selling
              the Convertible Securities actually converted, plus the
              consideration, if any, actually received by the Corporation (other
              than by cancellation of liabilities or obligations evidenced by
              such Convertible Securities) on the conversion of such Convertible
              Securities, provided that such readjustment shall not apply to
              prior conversions of Series B Preferred Stock, Series C Preferred
              Stock, Series D Preferred Stock, Series F Preferred Stock, Series
              G Preferred Stock, Series H Preferred Stock or Series I Preferred
              Stock.

                     (iv) "Additional Shares of Common Stock" shall mean all
              shares of Common Stock issued by the Corporation or deemed to be
              issued pursuant to this Section (4)(k), whether or not
              subsequently reacquired or retired by the Corporation other than
              (A) shares of Series G Preferred Stock, Series H Preferred Stock
              and Series I Preferred Stock issued pursuant to the Series G
              Purchase Agreement or the agreements referred to in Section 5.11
              thereof; (B) shares of Common Stock issued upon conversion of the
              Series B Preferred Stock, Series C Preferred Stock, Series D
              Preferred Stock, Series F Preferred Stock, Series G Preferred
              Stock, Series H Preferred Stock or Series I Preferred Stock; (C)
              Common Stock and/or options, warrants or other Common Stock
              purchase rights, and the Common Stock issued pursuant to such
              options, warrants or other rights to employees, officers or
              directors of, or consultants or advisors to the Corporation or any
              subsidiary pursuant to stock purchase or stock option plans or
              other arrangements that are approved by the Board of Directors of
              the Corporation; (D) shares of Common Stock issued pursuant to the
              exercise of options, warrants or convertible securities
              outstanding as of the Series F Original Issue Date (as defined in
              Section (3)(c)(i)); (E) warrants to purchase Common Stock, and the
              Common Stock issued pursuant to such warrants, that are issued to
              holders of the Senior Notes (as defined in Section (2)(i)); and
              (F) the issuance of Common Stock pursuant to Sections (2)(i),
              (5)(a)(ii) or (5)(b)(ii). The "Effective Price" of Additional
              Shares of Common Stock shall mean the quotient determined by
              dividing the total number of Additional Shares of Common Stock
              issued or sold, or deemed to have been issued or sold by the
              Corporation under this Section (4)(k), into the aggregate
              consideration received, or deemed to have been

                                       28
<PAGE>

              received by the Corporation for such issue under this Section
              (4)(k), for such Additional Shares of Common Stock.

              (l) CERTIFICATE OF ADJUSTMENT. In each case of an adjustment or

       readjustment of the applicable Preferred Stock Price for the number of

       shares of Common Stock or other securities issuable upon conversion of
       the Series B Preferred Stock, Series C Preferred Stock, Series D
       Preferred Stock, Series F Preferred Stock, Series G Preferred Stock,
       Series H Preferred Stock or Series I Preferred Stock, if the Series B
       Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
       Series F Preferred Stock, Series G Preferred Stock, Series H Preferred
       Stock or Series I Preferred Stock is then convertible pursuant to this
       Section (4), the Corporation, at its expense, shall compute such

       adjustment or readjustment in accordance with the provisions hereof
       and prepare a certificate showing such adjustment or readjustment, and
       shall mail such certificate, by first class mail, postage prepaid, to
       each registered holder of Series B Preferred Stock, Series C Preferred
       Stock, Series D Preferred Stock, Series F Preferred Stock, Series G
       Preferred Stock, Series H Preferred Stock or Series I Preferred Stock
       at the holder's address as shown in the Corporation's books. The
       certificate shall set forth such adjustment or readjustment, showing
       in detail the facts upon which such adjustment or readjustment is
       based, including a statement of (i) the consideration received or
       deemed to be received by the Corporation for any Additional Shares of
       Common Stock issued or sold or deemed to have been issued or sold,
       (ii) the Preferred Stock Price at the time in effect, (iii) the number
       of Additional Shares of Common Stock and (iv) the type and amount, if
       any, of other property which at the time would be received upon
       conversion of the Series B Preferred Stock, Series C Preferred Stock,
       Series D Preferred Stock, Series F Preferred Stock, Series G Preferred
       Stock, Series H Preferred Stock or Series I Preferred Stock.

            (m) NOTICES OF RECORD DATE. Upon (i) any taking by the Corporation
       of a record of the holders of any class of securities for the purpose
       of determining the holders thereof who are entitled to receive any
       dividend or other distribution, or (ii) any Acquisition (as defined in
       Section (2)(i)) or other capital reorganization of the Corporation,
       any reclassification or recapitalization of the capital stock of the
       Corporation, any merger or consolidation of the Corporation with or
       into any other corporation, or any Asset Transfer (as defined in
       Section (2)(i)), or any voluntary or involuntary dissolution,
       liquidation or winding up of the Corporation, the Corporation shall
       mail to each holder of Preferred Stock at least twenty (20) calendar
       days prior to the record date specified therein a notice specifying
       (A) the date on which any such record is to be taken for the purpose
       of such dividend or distribution and a description of such dividend or
       distribution, (B) the date on which any such Acquisition,
       reorganization, reclassification, transfer, consolidation, merger,
       Asset Transfer, dissolution, liquidation or winding up is expected to
       become effective, and (C) the date, if any, that is to be fixed as to
       when the holders of record of Common Stock (or other securities) shall
       be entitled to exchange their shares of Common Stock (or other
       securities) for securities or other property deliverable upon such
       Acquisition, reorganization, reclassification, transfer,
       consolidation, merger, Asset Transfer, dissolution, liquidation or
       winding up. Notwithstanding the foregoing, this Section (4)(m) shall
       not apply to the 1 for 10 stock split described in the second
       paragraph of paragraph (A) of this Article Fourth.

                                       29
<PAGE>

            (n) FRACTIONAL SHARES. No fractional shares of Common Stock shall
       be issued upon conversion of Series B Preferred Stock, Series C
       Preferred Stock, Series D Preferred Stock, Series F Preferred Stock,
       Series G Preferred Stock, Series H Preferred Stock or Series I
       Preferred Stock. All shares of Common Stock (including fractions
       thereof) issuable upon conversion of more than one share of Series B
       Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
       Series F Preferred Stock, Series G Preferred Stock, Series H Preferred
       Stock or Series I Preferred Stock by a holder thereof shall be
       aggregated for purposes of determining whether the conversion would
       result in the issuance of any fractional share. If, after the
       aforementioned aggregation, the conversion would result in the
       issuance of any fractional share, the Corporation shall, in lieu of
       issuing any fractional share, pay cash equal to the product of such
       fraction multiplied by the Common Stock's fair market value (as
       determined in accordance with Section (2)(k)) on the date of
       conversion.

              (o) RESERVATION OF STOCK. The Corporation shall at all
       times reserve and keep available out of its authorized but unissued
       shares of Common Stock such number of its shares of Common Stock as
       shall from time to time be sufficient to effect the conversion of all
       outstanding shares of Series B Preferred Stock, Series C Preferred
       Stock, Series D Preferred Stock, Series F Preferred Stock, Series G
       Preferred Stock, Series H Preferred Stock and Series I Preferred Stock
       and the exercise of all outstanding options and warrants of the
       Corporation. If at any time the number of authorized but unissued
       shares of Common Stock shall not be sufficient to effect the
       conversion of all then outstanding shares of the Series B Preferred
       Stock, Series C Preferred Stock, Series D Preferred Stock, Series F
       Preferred Stock, Series G Preferred Stock, Series H Preferred Stock
       and Series I Preferred Stock or the exercise of all outstanding
       options and warrants, the Corporation will take such corporate action
       as may, in the opinion of its counsel, be necessary to increase its
       authorized but unissued shares of Common Stock to such number of
       shares as shall be sufficient for such purposes.

            (p) NOTICES. Any notice required by the provisions of this
       Section (4) shall be in writing and shall be deemed effectively given:
       (i) upon personal delivery to the party to be notified, (ii) when sent
       by confirmed telex or facsimile if sent during normal business hours
       of the recipient; if not, then on the next business day, (iii) five
       (5) business days after having been sent by registered or certified
       mail, return receipt requested, postage prepaid, or (iv) one (1)
       business day after deposit with a nationally recognized overnight
       courier, specifying next day delivery, with written verification of
       receipt. All notices shall be addressed to each holder of record at
       the address of such holder appearing on the books of the Corporation.

            (q) PAYMENT OF TAXES. The Corporation will pay all taxes (other than
       taxes based upon income) and other governmental charges that may be
       imposed with respect to the issue or delivery of shares of Common
       Stock upon conversion of shares of Series B Preferred Stock, Series C
       Preferred Stock, Series D Preferred Stock, Series F Preferred Stock,
       Series G Preferred Stock, Series H Preferred Stock or Series I
       Preferred Stock, excluding any tax or other charge imposed in
       connection with any transfer involved in the issue and delivery of
       shares of Common Stock in a name other than that in which the shares
       of Series B Preferred Stock, Series C Preferred Stock, Series D
       Preferred Stock,

                                       30
<PAGE>

       Series F Preferred Stock, Series G Preferred Stock, Series H Preferred
       Stock or Series I Preferred Stock so converted were registered.

             (5) Redemption.

             (a) Series F Preferred Stock.

                     (i) GENERALLY. In the event of a breach by the Corporation
              of any of the terms of this Restated Certificate of Incorporation,
              the Bylaws of the Corporation or the Amended and Restated
              Purchasers Rights Agreement, dated as of March 26, 2001, by and
              among the Corporation and certain holders of its capital stock, as
              the same may be amended or restated from time to time (including
              in connection with the issuance of Series G Preferred Stock,
              Series H Preferred Stock and Series I Preferred Stock) (the
              "Purchasers Rights Agreement"), which has a material adverse
              effect on the holders of the Series F Preferred Stock that is not
              cured within fifteen (15) days of receipt of written notice by the
              Corporation from a holder of Series F Preferred Stock (a "Series F
              Redemption Event"), the holders of a majority of the voting power
              of the outstanding shares of Series F Preferred Stock may elect to
              demand in writing (a "Series F Redemption Demand") the redemption
              of all or any portion of the shares of Series F Preferred Stock,
              from any source of funds legally available therefor, at a
              redemption price per share (the "Series F Redemption Price") equal
              to the amount of the Series F Liquidation Preference. The
              redemption under this Section (5)(a) shall take place on a date
              (the "Series F Redemption Date") that is no later than thirty (30)
              days after the receipt by the Corporation of the Series F
              Redemption Demand.

                     (ii) INDENTURE RESTRICTION. Notwithstanding the foregoing,
              the Corporation shall not be obligated to redeem the shares of
              Series F Preferred Stock for cash pursuant to Section (5)(a)(i),
              if such redemption or the existence of the redemption provision
              would violate the terms of the Indenture (as defined in Section
              (2)(i)) pursuant to which the Senior Notes were issued, until 91
              days after the date on which the Senior Notes mature. If the
              Corporation is unable to redeem the Series F Preferred Stock for
              cash as set forth above, the holders of a majority of the voting
              power of the outstanding shares of Series F Preferred Stock may
              elect to receive shares of Common Stock with a fair market value
              (as determined in accordance with Section (2)(k)) equal to the
              Series F Redemption Price.

                     (iii) PROCEDURE. At least fifteen (15) days prior to a
              Series F Redemption Date, written notice shall be mailed, first
              class postage prepaid, to each holder of record (at the close of
              business on the business day next preceding the day on which
              notice is given) of the Series F Preferred Stock to be redeemed,
              at the address last shown on the records of the Corporation for
              such holder, notifying such holder of the redemption to be
              effected, specifying the number of shares to be redeemed from such
              holder, the Series F Redemption Date, the Series F Redemption
              Price, whether or not the Corporation may redeem the shares for
              cash, or if not, the number of shares of Common Stock issuable in
              lieu of cash as

                                       31
<PAGE>

              set forth in Section (5)(a)(ii) above, the place at which payment
              or delivery may be obtained and calling upon such holder to
              surrender to the Corporation, in the manner and at the place
              designated, his certificate or certificates representing the
              shares to be redeemed (the "Series F Redemption Notice"). Except
              as provided in Section (5)(c), on or after the applicable Series F
              Redemption Date, each holder of Series F Preferred Stock to be
              redeemed shall surrender to the Corporation the certificate or
              certificates representing such shares, in the manner and at the
              place designated in the Series F Redemption Notice, and thereupon
              the Series F Redemption Price of such shares (in cash or shares of
              Common Stock, as applicable) shall be payable to the order of the
              person whose name appears on such certificate or certificates as
              the owner thereof and each surrendered certificate shall be
              canceled. In the event less than all the shares represented by any
              such certificate are redeemed, a new certificate shall be issued
              representing the unredeemed shares.

                     (iv) DEPOSIT OF REDEMPTION PRICE OR SHARES OF COMMON STOCK.
              Subject to the provisions set forth above, on or prior to each
              Series F Redemption Date, the Corporation shall deposit the Series
              F Redemption Price of all shares of Series F Preferred Stock
              designated for redemption in the Series F Redemption Notice and
              not yet redeemed with a bank or trust corporation as a trust fund
              for the benefit of the respective holder or holders of the shares
              designated for redemption and not yet redeemed, with irrevocable
              instructions and authority to the bank or trust corporation to pay
              the Series F Redemption Price for such shares to their respective
              holder or holders on or after the applicable Series F Redemption
              Date upon receipt of notification from the Corporation that such
              holder has surrendered his share certificate to the Corporation
              pursuant to Section (5)(a)(iii). As of the applicable Series F
              Redemption Date, the deposit shall constitute full payment of the
              shares to the holder or holders, and from and after the applicable
              Series F Redemption Date the shares so called for redemption shall
              be redeemed and shall be deemed to be no longer outstanding, and
              the holder or holders thereof shall cease to be stockholders with
              respect to such shares and shall have no rights with respect
              thereto except the rights to receive from the bank or trust
              corporation payment of the Series F Redemption Price of the
              shares, without interest, upon surrender of their certificates
              therefor. The balance of any moneys deposited by the Corporation
              pursuant to this Section (5)(a)(iv) remaining unclaimed at the
              expiration of two years following the applicable Series F
              Redemption Date shall thereafter be returned to the Corporation
              upon its request expressed in a resolution of its Board of
              Directors. In the event that the Corporation must issue new shares
              of Common Stock instead of cash pursuant to the provisions set
              forth in Section (5)(a)(ii), shares of Common Stock shall be
              delivered to the bank or trust corporation in lieu of such cash.

              (b) Series G Preferred Stock.

                    (i) GENERALLY. In the event of a breach by the Corporation
               of any of the terms of this Restated Certificate of
               Incorporation, the Bylaws of the Corporation, or the Purchasers
               Rights Agreement, which has a material adverse effect on the

                                       32
<PAGE>

               holders of the Series G Preferred Stock that is not cured within
               fifteen (15) days of receipt of written notice by the
               Corporation from a holder of Series G Preferred Stock (a
               "Series G Redemption Event"), the holders of a majority of the
               voting power of the outstanding shares of Series G Preferred
               Stock may elect to demand in writing ("Series G Redemption
               Demand") the redemption of all or any portion of the shares of
               Series G Preferred Stock, from any source of funds legally
               available therefor, at a redemption price per share (the
               "Series G Redemption Price") equal to the amount of the Series
               G Liquidation Preference. The redemption under this Section
               (5)(b) shall take place on a date (the "Series G Redemption
               Date") that is no later than thirty (30) days after the
               receipt by the Corporation of the Series G Redemption Demand.

                   (ii) INDENTURE RESTRICTION. Notwithstanding the foregoing,
               the Corporation shall not be obligated to redeem the shares of
               Series G Preferred Stock for cash pursuant to Section
               (5)(b)(i), if such redemption or the existence of the
               redemption provision would violate the terms of the Indenture
               until 91 days after the date on which the Senior Notes mature.
               If the Corporation is unable to redeem the Series G Preferred
               Stock for cash as set forth above, the holders of a majority
               of the voting power of the outstanding shares of Series G
               Preferred Stock may elect to receive shares of Common Stock
               with a fair market value (as determined in accordance with
               Section (2)(k)) equal to the Series G Redemption Price.

                    (iii) PROCEDURE. At least fifteen (15) days prior to a
               Series G Redemption Date, written notice shall be mailed,
               first class postage prepaid, to each holder of record (at the
               close of business on the business day next preceding the day
               on which notice is given) of the Series G Preferred Stock to
               be redeemed, at the address last shown on the records of the
               Corporation for such holder, notifying such holder of the
               redemption to be effected, specifying the number of shares to
               be redeemed from such holder, the Series G Redemption Date,
               the Series G Redemption Price, whether or not the Corporation
               may redeem the shares for cash, or if not, the number of
               shares of Common Stock issuable in lieu of cash as set forth
               in Section (5)(b)(ii) above, the place at which payment or
               delivery may be obtained and calling upon such holder to
               surrender to the Corporation, in the manner and at the place
               designated, his certificate or certificates representing the
               shares to be redeemed (the "Series G Redemption Notice").
               Except as provided in Section (5)(c), on or after the
               applicable Series G Redemption Date, each holder of Series G
               Preferred Stock to be redeemed shall surrender to the
               Corporation the certificate or certificates representing such
               shares, in the manner and at the place designated in the
               Series G Redemption Notice, and thereupon the Series G
               Redemption Price of such shares (in cash or shares of Common
               Stock, as applicable) shall be payable to the order of the
               person whose name appears on such certificate or certificates
               as the owner thereof and each surrendered certificate shall be
               canceled. In the event less than all the shares represented by
               any such certificate are redeemed, a new certificate shall be
               issued representing the unredeemed shares.

                                       33
<PAGE>

                   (iv) DEPOSIT OF REDEMPTION PRICE OR SHARES OF COMMON STOCK.
               Subject to the provisions set forth above, on or prior to each
               Series G Redemption Date, the Corporation shall deposit the
               Series G Redemption Price of all shares of Series G Preferred
               Stock designated for redemption in the Series G Redemption
               Notice and not yet redeemed with a bank or trust corporation
               as a trust fund for the benefit of the respective holder or
               holders of the shares designated for redemption and not yet
               redeemed, with irrevocable instructions and authority to the
               bank or trust corporation to pay the Series G Redemption Price
               for such shares to their respective holder or holders on or
               after the applicable Series G Redemption Date upon receipt of
               notification from the Corporation that such holder has
               surrendered his share certificate to the Corporation pursuant
               to Section (5)(b)(iii). As of the applicable Series G
               Redemption Date, the deposit shall constitute full payment of
               the shares to the holder or holders, and from and after the
               applicable Series G Redemption Date the shares so called for
               redemption shall be redeemed and shall be deemed to be no
               longer outstanding, and the holder or holders thereof shall
               cease to be stockholders with respect to such shares and shall
               have no rights with respect thereto except the rights to
               receive from the bank or trust corporation payment of the
               Series G Redemption Price of the shares, without interest,
               upon surrender of their certificates therefor. The balance of
               any moneys deposited by the Corporation pursuant to this
               Section (5)(b)(iv) remaining unclaimed at the expiration of
               two years following the applicable Series G Redemption Date
               shall thereafter be returned to the Corporation upon its
               request expressed in a resolution of its Board of Directors.
               In the event that the Corporation must issue new shares of
               Common Stock instead of cash pursuant to the provisions set
               forth in Section (5)(b)(ii), shares of Common Stock shall be
               delivered to the bank or trust corporation in lieu of such
               cash.

       (c) Rights of Redeemed Stock; Default.

                   (i) From and after the applicable Series F Redemption Date or
              Series G Redemption Date, unless there shall have been a
              default in payment of the Series F Redemption Price or Series G
              Redemption Price, as applicable (in cash or shares of Common
              Stock, as applicable), all rights of the holders of shares of
              Preferred Stock designated for redemption in the Series F
              Redemption Notice as holders of Series F Preferred Stock or in
              the Series G Redemption Notice as holders of Series G Preferred
              Stock, as applicable (except the right to receive the
              applicable Series F Redemption Price or Series G Redemption
              Price, respectively, without interest upon surrender of their
              certificate or certificates) shall cease with respect to such
              shares, and such shares shall not thereafter be transferred on
              the books of the Corporation or be deemed to be outstanding for
              any purpose whatsoever.

                   (ii) If the Corporation fails to redeem for any reason,
              including, but not limited to, the insufficiency of funds
              legally available for the redemption of shares, the total
              number of shares of Preferred Stock to be redeemed on the
              applicable Series F Redemption Date or Series G Redemption
              Date, those funds which are legally available will be used to
              redeem the maximum possible number

                                       34
<PAGE>

              of such shares ratably among the holders of such shares to be
              redeemed based upon their holdings of Series F Preferred Stock
              with respect to Section (5)(a) or their holdings of Series G
              Preferred Stock with respect to Section (5)(b). The shares of
              Preferred Stock not redeemed shall remain outstanding and be
              entitled to all the rights and preferences provided herein or
              may be otherwise converted into shares of Common Stock pursuant
              to the provisions set forth in Sections (5)(a)(ii) or
              (5)(b)(ii). At any time thereafter when additional funds of the
              Corporation are legally available for the redemption of such
              shares of Preferred Stock, such funds will immediately be used
              to redeem the balance of the shares which the Corporation has
              become obliged to redeem on any applicable Redemption Date, but
              which it has not redeemed.

              (6) INCREASING COMMON STOCK. Subject to the provisions of this
       Restated Certificate of Incorporation, the number of authorized shares of
       Common Stock may be increased or decreased (but not below the number of
       shares of Common Stock then outstanding, issuable upon the conversion of
       the Series B Preferred Stock, Series C Preferred Stock, Series D
       Preferred Stock, Series F Preferred Stock, Series G Preferred Stock,
       Series H Preferred Stock and Series I Preferred Stock and any other
       convertible securities of the Corporation, and issuable upon the exercise
       of all outstanding options and warrants), by the affirmative vote of the
       holders of a majority of the voting power of the outstanding shares of
       Common Stock and Preferred Stock, voting together as a single class.

              (7) NO REISSUANCE OF SERIES B, SERIES C, SERIES D, SERIES F,
       SERIES G, SERIES H OR SERIES I PREFERRED Stock. No share or shares of
       Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
       Stock, Series F Preferred Stock, Series G Preferred Stock, Series H
       Preferred Stock or Series I Preferred Stock acquired by the Corporation
       by reason of redemption, purchase, or otherwise shall be reissued, and
       all such shares shall be canceled, retired and eliminated from the shares
       which the Corporation shall be authorized to issue.

       FIFTH: The Board of Directors shall have that number of Directors set out
in the Bylaws of the Corporation as adopted or as set from time to time by a
duly adopted amendment thereto by the Directors or stockholders of the
Corporation, and, notwithstanding any other provision of this Restated
Certificate of Incorporation, the authorized number of Directors may be changed
by a resolution of the Board of Directors. All directors shall be of one class.
The directors of the Corporation shall be elected by the stockholders entitled
to vote thereon at each annual meeting of stockholders and shall hold office
after the annual meeting of stockholders and until his or her successor shall be
elected and qualified, subject, however, to prior death, resignation,
disqualification or removal from office. The term of office of each director in
office at the time this Restated Certificate of Incorporation becomes effective
shall expire at the first annual meeting of stockholders held after the issuance
of the Series G Preferred Stock or upon the effectiveness of a written consent
of stockholders in lieu of an annual meeting in accordance with Section 211(b)
of the Delaware General Corporation Law, as the case may be. Any newly created
directorship resulting from an increase in the number of directors may be filled
by a majority of the Board of Directors then in office, provided that a quorum
is present, and any other vacancy on the Board of Directors may be filled by a
majority of the directors then in office, even if less than a quorum, or

                                       35
<PAGE>

by a sole remaining director. In no case shall a decrease in the number of
directors shorten the term of any incumbent director.

       SIXTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to adopt, repeal, alter,
amend and rescind the Bylaws of the Corporation. Notwithstanding the foregoing,
the Bylaws may be rescinded, altered, amended or repealed in any respect by the
affirmative vote of the holders of at least a majority of the outstanding voting
stock of the Corporation, voting together as a single class.

       SEVENTH: Notwithstanding the provisions of Article Fifth, whenever the
holders of any one or more classes or series of Preferred Stock issued by the
Corporation have the right, voting separately by class or series, to elect
directors at an annual or special meeting of stockholders, the election, term of
office, filling of vacancies and other features of such directorships shall be
governed by the terms of this Restated Certificate of Incorporation or the
resolution or resolutions adopted by the Board of Directors pursuant to Article
Fourth applicable thereto.

       EIGHTH: Elections of directors at an annual or special meeting of
stockholders need not be by written ballot unless the Bylaws of the Corporation
shall so provide.

       NINTH:

       (a) Subject only to the exclusions set forth in paragraph (c) of this
Article Ninth, the Corporation shall hold harmless and indemnify, to the fullest
extent permitted by applicable law as it presently exists or may hereafter be
amended, each director or officer of the Corporation (each, an "Indemnitee")
against any and all liability and loss suffered and expenses (including
attorneys' fees), judgments, fines, excise taxes assessed with respect to any
employee benefit plan, or penalties and amounts paid in settlement actually and
reasonably incurred by Indemnitee in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (including an action by or in the right of the Corporation), to
which Indemnitee is, was or at any time becomes a party, or is threatened to be
made a party, by reason of the fact that Indemnitee is, was or at any time
becomes a director or officer of the Corporation, or, while a director or
officer of the Corporation, is, or was serving, or at any time serves at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise.

       (b) The expenses (including attorneys' fees) actually and reasonably
incurred by Indemnitee in defending any proceeding and any judgments, fines or
amounts to be paid in settlement shall be advanced by the Corporation at the
request of the Indemnitee and upon delivery to the Corporation of an undertaking
by such Indemnitee to repay all amounts so advanced if it shall ultimately be
determined that Indemnitee was not entitled to be indemnified or was not to be
fully indemnified.

       (c) No indemnity pursuant to this Article Ninth shall be paid by the
Corporation (i) for which payment is actually made to Indemnitee under a valid
and collectible insurance policy, except in respect of any excess beyond the
amount of payment under such insurance; (ii) for which Indemnitee is indemnified
by the Corporation pursuant to applicable law or otherwise than pursuant to this
Article Ninth; (iii) for an accounting of profits made from the purchase or sale
by

                                       36
<PAGE>

Indemnitee of securities of the Corporation within the meaning of Section 16(b)
of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any state statutory law or common law; (iv) on account of
Indemnitee's conduct which is finally adjudged by a court to have been knowingly
fraudulent, deliberately dishonest or willful misconduct; (v) if a final
decision by a court having jurisdiction in the matter shall determine that such
indemnity is not lawful; or (vi) for an action, suit or proceeding (or portion
thereof) initiated by the Indemnitee without the prior approval of the Board of
Directors of the Corporation (other than an action, suit or proceeding (or a
portion thereof) initiated by the Indemnitee to enforce its rights hereunder).

       (d) All obligations of the Corporation contained herein shall continue
during the period Indemnitee is a director or officer of the Corporation (or,
while a director or officer of the Corporation, is, or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise) and shall
continue thereafter so long as Indemnitee shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of the fact that Indemnitee was a director
or officer of the Corporation or serving in any other capacity referred to
herein.

       (e) Promptly after receipt by Indemnitee of notice of the commencement of
any action, suit or proceeding, Indemnitee will, if a claim in respect thereof
is to be made against the Corporation under this Article Ninth, notify the
Corporation of the commencement thereof; but the omission so to notify the
Corporation will not relieve it from any liability which it may have to
Indemnitee otherwise than under this Article Ninth. With respect to any such
action, suit or proceeding as to which Indemnitee notifies the Corporation of
the commencement thereof, the Corporation will be entitled to participate
therein at its own expense.

       (f) Except as otherwise provided below, to the extent that it may wish,
the Corporation jointly with any other indemnifying party similarly notified
will be entitled to assume the defense thereof with counsel reasonably
satisfactory to the Indemnitee. After notice from the Corporation to Indemnitee
of its election so to assume the defense thereof, the Corporation will not be
liable to Indemnitee under this Article Ninth for any legal or other expenses
subsequently incurred by Indemnitee in connection with the defense thereof other
than reasonable costs of investigation or as otherwise provided below.
Indemnitee shall have the right to employ its counsel in such action, suit or
proceeding, but the fees and expenses of such counsel, incurred after notice
from the Corporation of its assumption of the defense thereof, shall be at the
expense of Indemnitee unless (i) the employment of counsel by Indemnitee has
been authorized by the Corporation, (ii) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Corporation and
Indemnitee in the conduct of the defense of such, subject to the approval of the
Corporation, which approval shall not be unreasonably withheld, or (iii) the
Corporation shall not in fact have employed counsel to assume the defense of
such action, in each of which cases the fees and expenses of counsel shall be at
the expense of the Corporation. The Corporation shall not be entitled to assume
the defense of any action, suit or proceeding brought by or on behalf of the
Corporation or as to which Indemnitee shall have made the conclusion provided
for in (ii) above.

       (g) The Corporation shall not be liable to indemnify Indemnitee under
this Article Ninth for any amounts paid in settlement of any action or claim
effected without its written consent.

                                       37
<PAGE>

The Corporation shall not settle any action or claim in any manner which would
impose any penalty or limitation on Indemnitee without Indemnitee's written
consent. Neither the Corporation nor Indemnitee will unreasonably withhold their
consent to any proposed settlement.

       (h) In the event Indemnitee is required to bring any action to enforce
rights or to collect moneys due under this Article Ninth and is successful in
such action, the Corporation shall promptly reimburse Indemnitee for all of
Indemnitee's reasonable fees and expenses in bringing and pursuing such action.

       (i) The provisions of this Article Ninth shall inure to the benefit of
and be enforceable by the Indemnitee's personal or legal representatives,
executors, administrators, heirs, devises and legatees.

       (j) The Corporation shall have power to purchase and maintain insurance,
at its expense, on behalf of any person who is or was an officer, director,
employee or agent of the Corporation or a subsidiary thereof, or is or was
serving at the request of the Corporation as an officer, director, partner,
member, employee, trustee or agent of another corporation, partnership, joint
venture, trust or other enterprise, including any employee benefit plan, against
any expense, liability or loss asserted against such person and incurred by such
person in any such capacity, or arising out of such person's status as such,
whether or not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the Bylaws, the provisions of this
Article Ninth or the Delaware General Corporation Law.

       (k) The indemnification provided by this Article Ninth shall not be
deemed exclusive of any other rights to which a person seeking indemnification
may be entitled under any statute, the Bylaws, other provisions of this Restated
Certificate of Incorporation, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in such person's official capacity and
as to action in any other capacity while holding such office, and shall continue
as to a person who has ceased to be an officer or director of the Corporation or
a subsidiary thereof or an officer, director, partner, member, employee, trustee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, including any employee benefit plan, and shall inure to the benefit
of the heirs, executors and administrators of such person.

       (l) This Article Ninth may be hereafter amended or repealed; provided,
however, that no amendment or repeal shall reduce, terminate, or otherwise
adversely affect the right of a person entitled to obtain indemnification
hereunder with respect to acts or omissions of such person occurring prior to
the effective date of such amendment or repeal.

       TENTH: A director shall not be personally liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that this Article shall not eliminate or limit the liability
of a director (i) for any breach of his duty of loyalty to the Corporation or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law, (iii) under Section
174 of the Delaware General Corporation Law, or (iv) for any transaction from
which the director derives an improper personal benefit.

                                       38
<PAGE>

       If the Delaware General Corporation Law is hereafter amended to authorize
corporate action further limiting or eliminating the personal liability of
directors, then the liability of the director to the Corporation shall be
limited or eliminated to the fullest extent permitted by the Delaware General
Corporation Law, as so amended from time to time. Any repeal or modification of
this Article by the stockholders of the Corporation shall be prospective only,
and shall not adversely affect any limitation on the personal liability of a
director of the Corporation existing at the time of such repeal or modification.

       ELEVENTH: Any action required by applicable law to be taken at any annual
or special meeting of stockholders of the Corporation, or any action which may
be taken at any annual or special meeting of the stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted and shall be
delivered to the Corporation by delivery to its registered office in the State
of Delaware, its principal place of business or an officer or agent of the
Corporation having custody of the book in which proceedings or meetings of
stockholders are recorded.

       TWELFTH: Special meetings of the stockholders of the Corporation for any
purpose or purposes may be called at any time only by the Chairman of the Board
of Directors, the Chief Executive Officer of the Corporation, the President of
the Corporation, or a majority of the members of the Board of Directors, and
such special meetings may not be called by any other person or persons;
PROVIDED, HOWEVER, that if and to the extent that any special meeting of
stockholders may be called by any other person or persons specified in any other
provisions of this Restated Certificate of Incorporation or any amendment hereto
or any certificate filed under Section 151(g) of the Delaware General
Corporation Law, then such special meeting may also be called by the person or
persons, in the manner, at the times and for the purposes so specified.

       THIRTEENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation, in
the manner now or hereafter prescribed by statute, and all rights conferred on
stockholders herein are granted subject to this reservation.

       FOURTEENTH: Each reference in this Restated Certificate of Incorporation
to any provision of the Delaware General Corporation Law refers to the specified
provision of the General Corporation Law of the State of Delaware, as the same
now exists or as it may hereafter be amended or superseded.

                     [Rest of page intentionally left blank]

                                       39
<PAGE>

       IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
executed on behalf of the Corporation this 10th day of May, 2001.

                                  BIRCH TELECOM, INC.

                                  By:  /s/ Gregory C. Lawhon
                                       ---------------------------------------
                                       Gregory C. Lawhon, Senior Vice President

                                       40

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