Document:

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                                                                  Exhibit 10.47

                                                                 EXECUTION COPY

                               BIRCH TELECOM, INC.

                AMENDED AND RESTATED PURCHASERS RIGHTS AGREEMENT

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                                TABLE OF CONTENTS

<TABLE>
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                                                                                PAGE
<C>                                                                             <C>
1.   CERTAIN DEFINITIONS ........................................................1

2.   REGISTRATION RIGHTS ........................................................5

     2.1  REQUESTED REGISTRATION.................................................5
     2.2  COMPANY REGISTRATION...................................................8
     2.3  EXPENSES OF REGISTRATION...............................................9
     2.4  REGISTRATION PROCEDURES................................................9
     2.5  INDEMNIFICATION.......................................................11
     2.6  INFORMATION BY HOLDER.................................................14
     2.7  LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS.........................14
     2.8  RULE 144 REPORTING....................................................14
     2.9  TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS.........................14
     2.10 "MARKET STAND-OFF" AGREEMENT..........................................15
     2.11 DELAY OF REGISTRATION.................................................15

3.   RESTRICTIONS ON TRANSFER...................................................15

     3.1  TRANSFER..............................................................15
     3.2  EXEMPT TRANSFER.......................................................15
     3.3  SECURITIES LAWS; ASSIGNMENT OF OBLIGATIONS............................17
     3.4  LEGEND................................................................18
     3.5  IMPROPER TRANSFER.....................................................18

4.   PRE-EMPTIVE RIGHT..........................................................18

     4.1  PRE-EMPTIVE RIGHT.....................................................18
     4.2  NEW SECURITIES........................................................19
     4.3  NOTICE................................................................19
     4.4  SELLING PERIOD........................................................20
     4.5  TRANSFER OF PRE-EMPTIVE RIGHT.........................................20
     4.6  TERMINATION OF PRE-EMPTIVE RIGHT......................................20

5.   RIGHT OF FIRST REFUSAL.....................................................21

     5.1  RIGHT OF FIRST REFUSAL................................................21
     5.2  TRANSFERS EXEMPT FROM RIGHT OF FIRST REFUSAL..........................22
     5.3  RIGHT OF FIRST REFUSAL AFTER A PUBLIC OFFERING........................22
     5.4  TRANSFER EXEMPT FROM FIRST REFUSAL RIGHT AFTER A PUBLIC OFFERING......23
     5.5  TRANSFERS BY BTI EXEMPT FROM FIRST REFUSAL RIGHT......................23

6.   CO-SALE RIGHT..............................................................23

     6.1  NOTICE................................................................23
     6.2  NOTICE OF PARTICIPATION...............................................23
     6.3  TRANSFER..............................................................24
     6.4  ADDITIONAL TRANSFER PROVISIONS........................................24

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     6.5  NO ELECTION TO PARTICIPATE............................................24
     6.6  TRANSFERS EXEMPT FROM CO-SALE RIGHT...................................24
     6.7  TERMINATION OF CO-SALE RIGHTS.........................................25

7.   DRAG ALONG RIGHTS..........................................................25

     7.1  DRAG ALONG RIGHT......................................................25
     7.2  CONSIDERATION.........................................................25
     7.3  EXPENSES..............................................................26
     7.4  NOTICE................................................................26
     7.5  DELIVERY OF SECURITIES................................................26
     7.6  REMITTANCE OF CONSIDERATION...........................................26
     7.7  TERMINATION OF DRAG-ALONG RIGHTS......................................26

8.   BOARD OF DIRECTORS.........................................................26

     8.1  NOMINATION AND ELECTION OF DIRECTORS..................................26
     8.2  BOARD COMMITTEES......................................................29
     8.3  VETO RIGHTS...........................................................30
     8.4  OBSERVER RIGHTS.......................................................31

9.   MISCELLANEOUS..............................................................32

     9.1  GOVERNING LAW; PROCEEDINGS AND WAIVER OF JURY TRIAL...................32
     9.2  SUCCESSORS AND ASSIGNS................................................32
     9.3  ENTIRE AGREEMENT; AMENDMENT; WAIVER...................................32
     9.4  NOTICES, ETC..........................................................33
     9.5  DELAYS OR OMISSIONS...................................................33
     9.6  RIGHTS; SEPARABILITY..................................................33
     9.7  INFORMATION CONFIDENTIAL..............................................33
     9.8  TITLES AND SUBTITLES..................................................34
     9.9  COUNTERPARTS; EXECUTION BY FACSIMILE SIGNATURE........................34
     9.10 BOARD MEETINGS/INFORMATION............................................34
     9.11 RESTATED CERTIFICATE AND BYLAWS.......................................34
     9.12 SPECIFIC PERFORMANCE..................................................34
     9.13 EFFECTIVENESS.........................................................34
</TABLE>

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                              AMENDED AND RESTATED
                           PURCHASERS RIGHTS AGREEMENT

     THIS AMENDED AND RESTATED PURCHASERS RIGHTS AGREEMENT (this "AGREEMENT") is
made and entered into as of March 26, 2001 by and among BIRCH TELECOM, INC., a
Delaware corporation (the "COMPANY"), and certain purchasers of the Company's
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 (together, the "SERIES PREFERRED"), and of the
Company's Common Stock (the "COMMON STOCK") (including the purchasers of the
Common Shares (as defined herein), and certain holders of stock options and
Option Shares (as defined herein)), each as set forth on Exhibit A hereto. Such
purchasers of the Series Preferred and Common Stock and holders of stock options
or Option Shares (including members of Key Management (as defined herein)) shall
be referred to hereinafter as the "PURCHASERS" and each individually as a
"PURCHASER."

                                    RECITALS

     WHEREAS, the Purchasers other than David M. Hollingsworth and Steve
Faulkner (the "PRIOR PURCHASERS") possess registration rights, information
rights and other rights pursuant to that certain Amended and Restated Purchaser
Rights Agreement, dated as of April 13, 2000, among the Company and the Prior
Purchasers (the "PRIOR AGREEMENT");

     WHEREAS, the Prior Purchasers desire to include David M. Hollingsworth and
Steve Faulkner as parties hereto and to further amend and restate the Prior
Agreement.

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

1.   CERTAIN DEFINITIONS.

     Capitalized terms used herein and not otherwise defined shall have the
meaning ascribed thereto in the Purchase Agreement (as defined herein). As used
in this Agreement, the following terms shall have the meanings set forth below:

          (a)  "AFFILIATE" shall have the meaning ascribed to such term in Rule
12b-2 promulgated under the Exchange Act.

          (b)  "BTI" shall refer to BTI Ventures L.L.C. and each of its
Affiliates, including, without limitation, Kohlberg Kravis Roberts & Co. L.P.
and the KKR 1996 Fund L.P.

          (c)  "COMMISSION" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.

          (d)  "COMMON SHARES" shall mean the shares of the Company's Common
Stock issued pursuant to the Securities Purchase Agreement.

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          (e)  "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.

          (f)  "HOLDER" shall mean any Purchaser who holds Registrable
Securities and any holder of Registrable Securities to whom the registration
rights conferred by this Agreement have been transferred in compliance with
Section 2.9 and Section 3 hereof.

          (g)  "INITIATING HOLDERS" shall mean any Holder or Holders who in the
aggregate hold at least sixty-six and two-thirds percent (66 2/3%) of the
outstanding Registrable Securities.

          (h)  "KEY MANAGEMENT" shall mean, whether currently or formerly a
member of key management of the Company, David E. Scott, Jeffrey D. Shackelford,
Gary L. Chesser, David W. Vranicar, Donald H. Goldman, Bradley A. Moline,
Gregory C. Lawhon, and David M. Hollingsworth.

          (i)  "1998 AGREEMENT" shall mean that certain Purchaser Rights
Agreement, dated as of February 10, 1998, among the Company and certain Persons.

          (j)  "OPTION SHARES" shall mean the shares of Common Stock issued or
issuable upon the exercise of stock options granted pursuant to a stock option
plan of the Company (including the vested and unvested shares of Common Stock
held by Key Management as of the date hereof that were obtained pursuant to the
exercise of stock options pursuant to a stock option plan of the Company).

          (k)  "OTHER PURCHASERS" shall mean Persons other than Holders who, by
virtue of agreements with the Company, are entitled to include their securities
in certain registrations hereunder.

          (l)  "PERSONS" shall mean any individual, corporation (including
non-profit corporation), general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, company, firm or other
enterprise, association, organization or entity, or any governmental body or
authority (federal, state or local).

          (m)  "PURCHASE AGREEMENT" shall mean that certain Series F Preferred
Stock Purchase Agreement, dated as of July 13, 1999, by and between the Company
and BTI Ventures L.L.C.

          (n)  "QUALIFYING PUBLIC OFFERING" shall mean the closing of a firmly
underwritten public offering pursuant to an effective registration statement
under the Securities Act covering the offer and sale of Common Stock for the
account of the Company (x) the gross proceeds to the Company (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 (subject to adjustments for
stock splits, stock dividends, reverse stock splits, including the 10 for 1
reverse stock split contemplated by the Restated Certificate filed or to be
filed pursuant to the Series G Purchase Agreement, and the like) (such price,
the "QUALIFIED COMMON STOCK PRICE").

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          (o)  "QUALIFYING TRADING PERIOD" shall mean a thirty (30) consecutive
full trading day period following the closing of a firmly underwritten public
offering pursuant to an effective registration statement under the Securities
Act covering the offer and sale of Common Stock for the account of the Company
(an "IPO") that is not a Qualifying Public Offering during which a Qualifying
Public Offering has not occurred and (i) the average of the high and low sales
price of the Common Stock on each such day or, in the case no such sale takes
place on any such day, the average of the closing bid and asked prices of the
Common Stock for each such day, in each case (A) on the principal national
securities exchange on which the shares of Common Stock are listed or to which
such shares are admitted for trading or (B) if the Common Stock is not listed or
admitted for trading on a national securities exchange, in the over-the-counter
market as reported by the Nasdaq or any comparable system (such average price
for each such Trading Day, the "STOCK PRICE"), is equal to or greater than the
Qualified Common Stock Price or (ii) the average Stock Price for such period is
equal to or greater than the Qualified Common Stock Price plus $0.10 (subject to
adjustments for stock splits, stock dividends, reverse stock splits, including
the 10 for 1 reverse stock split contemplated by the Restated Certificate filed
or to be filed pursuant to the Series G Purchase Agreement, and the like).

          (p)  "REGISTRABLE SECURITIES" shall mean (i) the Common Shares and
fully vested Option Shares; and (ii) the shares of Common Stock issuable upon
the conversion of the Series B Preferred Stock, Series C Preferred Stock, Series
D Preferred Stock, Series F Preferred Stock and Series G Preferred Stock;
provided, however, that Registrable Securities shall not include any shares of
Common Stock which have previously been registered or which have been sold to
the public either pursuant to a registration statement or Rule 144, or which
have been sold in a private transaction in which the transferor's rights and
obligations under this Agreement are not assigned.

          (q)  The terms "REGISTER" and "REGISTRATION" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.

          (r)  "REGISTRATION EXPENSES" shall mean all expenses incurred in
effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification, and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, and expenses of any regular or special audits incident to or
required by any such registration, but shall not include Selling Expenses.

          (s)  "RESTATED CERTIFICATE" shall mean the Company's Restated
Certificate of Incorporation, as amended and in effect from time to time.

          (t)  "RESTRICTED HOLDERS" shall mean the Purchasers set forth on
Exhibit B hereto.

          (u)  "RESTRICTED SECURITIES" shall mean any Registrable Securities
required to bear the legend set forth in Section 3.4 hereof.

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          (v)  "RULE 144" shall mean Rule 144 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.

          (w)  "RULE 145" shall mean Rule 145 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.

          (x)  "SECURITIES" shall mean (i) the Common Stock, (ii) the Series
Preferred, and (iii) the shares of Common Stock issuable upon the conversion of
the Series Preferred. Notwithstanding the foregoing, Securities shall not
include any shares of Common Stock that have been issued by the Company pursuant
to a registration statement or have been sold to the transferee in a "public"
sale pursuant to a registration statement or Rule 144, PROVIDED, HOWEVER, that
Securities sold to a transferee in a "public" sale pursuant to Rule 144 that
were sold by a Purchaser in an Exempt Transfer pursuant to Sections 3.2(a), (b),
(c), (d), (e), (f), (g) or (h) shall still be deemed to be Securities.

          (y)  "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.

          (z)  "SECURITIES PURCHASE AGREEMENT" shall mean that certain
Securities Purchase Agreement, dated as of February 10, 1998, by and among the
Company and certain of the Purchasers of the Company's Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock and Common Stock, as the same
may be amended and in effect from time to time.

          (aa) "SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale of Registrable
Securities.

          (bb) "SERIES G PURCHASE AGREEMENT" shall mean that certain Series G
Preferred Stock Purchase Agreement, by and between the Company and BTI Ventures
L.L.C.

          (cc) "SERIES G RECAPITALIZATION AGREEMENT" shall mean one or more
recapitalization agreements, by and among the Company and certain holders of
Series B Preferred Stock and Series D Preferred Stock, as contemplated in
Section 5.11 of the Series G Purchase Agreement.

          (dd) "WARRANTS" shall mean the Company's issued and outstanding
Warrants to purchase certain shares of Common Stock issued pursuant to the
Warrant Agreement, dated as of June 23, 1998, between the Company and Norwest
Bank Minnesota, National Association, as warrant agent.

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2.   REGISTRATION RIGHTS.

     2.1  REQUESTED REGISTRATION.

          (a)  REQUEST FOR REGISTRATION. If the Company shall receive from
Initiating Holders at any time after the earlier of (I) April 13, 2005 or (II)
one year after the effective date of the first registration statement filed by
the Company pursuant to the Securities Act covering an underwritten offering of
Common Stock to the general public, a written request that the Company effect
any registration with respect to all or a part of the Registrable Securities,
the Company will:

               (i)  promptly give written notice of the proposed registration to
all other Holders; and

               (ii) as soon as practicable, use its commercially reasonable
efforts to effect such registration (including, without limitation, filing
post-effective amendments, appropriate qualifications under applicable blue sky
or other state securities laws, and appropriate compliance with the Securities
Act) and as would permit or facilitate the sale and distribution of all or such
portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request received
by the Company within twenty (20) calendar days after such written notice from
the Company is given. The registration statement filed pursuant to the request
of the Initiating Holders may, subject to the provisions of Sections 2.1(e),
include other securities of the Company, with respect to which registration
rights have been granted, and may include securities of the Company being sold
for the account of the Company.

     The Company shall not be obligated to effect, or to take any action to
effect, any such registration pursuant to this Section 2.1(a):

                    (A)  In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification, or compliance, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;

                    (B)  After the Company has initiated one such registration
pursuant to this Section 2.1(a) (counting for these purposes only registrations
which have been declared or ordered effective and pursuant to which securities
have been sold and registrations which have been withdrawn by the Holders as to
which the Holders have not elected to bear the Registration Expenses pursuant to
Section 2.3 hereof and would, absent such election, have been required to bear
such expenses) or

                    (C)  During the period starting with the date sixty (60)
days prior to the Company's good faith estimate of the date of filing of, and
ending on a date one hundred eighty (180) days after the effective date of, a
Company-initiated registration; provided that the Company is actively employing
in good faith all reasonable efforts to cause such registration statement to
become effective.

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          (b)  SPECIAL DEMAND RIGHTS. After 180 days after the effective date of
the first registration statement filed by the Company pursuant to the Securities
Act covering an underwritten offering of Common Stock to the general public,
upon the written request of BTI (or its Affiliates or a transferee who agrees to
be bound by the terms of this Agreement) (a "BTI DEMAND"), that the Company
effect any registration with respect to all or a part of the Registrable
Securities held by such entity, the Company will:

               (i)  promptly give written notice of the proposed registration to
all other Holders; and

               (ii) as soon as practicable, use commercially reasonable efforts
to effect such registration (including, without limitation, filing
post-effective amendments, appropriate qualifications under applicable blue sky
or other state securities laws, and appropriate compliance with the Securities
Act) and as would permit or facilitate the sale and distribution of all or such
portion of such Registrable Securities as are specified in such request
(including shares of Common Stock issuable upon the conversion of Series F
Preferred Stock and Series G Preferred Stock, if applicable), together with all
or such portion of the Registrable Securities of any Holder or Holders joining
in such request as are specified in a written request received by the Company
within twenty (20) calendar days after such written notice from the Company is
given. The registration statement filed pursuant to a BTI Demand may, subject to
the provisions of Sections 2.1(e), include other securities of the Company, with
respect to which registration rights have been granted, and may include
securities of the Company being sold for the account of the Company.

     The Company shall not be obligated to effect, or to take any action to
effect, any such registration pursuant to this Section 2.1(b):

                    (A)  In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification, or compliance, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;

                    (B)  After the Company has initiated pursuant to this
Section 2.1(b) six such registrations (counting for these purposes only
registrations which have been declared or ordered effective and pursuant to
which at least 80% of the securities requested to be sold by BTI have been
sold);

                    (C)  If the party making the BTI Demand holds less than 5%
of the outstanding shares of Common Stock (on an as converted basis) at the time
of such demand; or

                    (D)  During the period starting with the date sixty (60)
days prior to the Company's good faith estimate of the date of filing of, and
ending on a date one hundred eighty (180) days after the effective date of, a
Company-initiated registration; PROVIDED that the Company is actively employing
in good faith all reasonable efforts to cause such registration statement to
become effective.

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          (c)  Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities so requested to be registered as
soon as practicable after receipt of the requests contemplated in Sections
2.1(a) and 2.1(b); PROVIDED, HOWEVER, that if (I) in the good faith judgment of
the Board of Directors of the Company, such registration would be seriously
detrimental to the Company and the Board of Directors of the Company concludes,
as a result, that it is essential to defer the filing of such registration
statement at such time, and (II) the Company shall furnish to such Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company for such registration statement to be filed in the
near future and that it is, therefore, essential to defer the filing of such
registration statement, then the Company shall have the right to defer such
filing (except as provided in clause (C) above) for a period of not more than
one hundred twenty (120) days after receipt of the request of the Initiating
Holders or the BTI Demand, as the case may be, and, provided further, that the
Company shall not defer its obligation in this manner more than once in any
twelve-month period.

          (d)  UNDERWRITING. If the Holders requesting registration intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as part of their request made
pursuant to Section 2.1(a) or 2.1(b) and the Company shall include such
information in the written notice referred to in Section 2.1(a)(i) and Section
2.1(b)(i). In such event, the right of any Holder to registration pursuant to
Sections 2.1(a) or 2.1(b) shall be conditioned upon such Holder's participation
in such underwriting and the inclusion of such Holder's Registrable Securities
in the underwriting to the extent provided herein. A Holder may elect to include
in such underwriting all or a part of the Registrable Securities such Holder
holds.

          (e)  PROCEDURES. If the Company shall request inclusion in any
registration pursuant to Sections 2.1(a) or 2.1(b) of securities being sold for
its own account, or if other Persons shall request inclusion in any registration
pursuant to Sections 2.1(a) or 2.1(b), the Initiating Holders or the party
making the BTI Demand shall, on behalf of all Holders, offer to include such
securities in the underwriting and may condition such offer on their acceptance
of the further applicable provisions of this Section 2. The Company shall
(together with all Holders and other Persons proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for such underwriting by a majority in interest of the Initiating
Holders, in the case of registrations pursuant to Section 2.1(a) or the entity
making the BTI Demand, in the case of registrations pursuant to Section 2.1(b),
which underwriters are reasonably acceptable to the Company. Notwithstanding any
other provision of this Section 2.1(e), if the representative of the
underwriters advises the Initiating Holders or the entity making the BTI Demand
in writing that marketing factors require a limitation on the number of shares
to be underwritten, the number of shares to be included in the underwriting or
registration shall be allocated: first, to the Holders of Registrable Securities
pro rata based on the number of shares of Registrable Securities for which
registration was requested; and second, to the Company for securities being sold
for its own account; and finally, to the holders of other securities of the
Company with registration rights pro rata based on the number of shares for
which registration was requested. The Company shall not limit the number of
Registrable Securities to be included in a registration statement pursuant to
this Section 2.1 in order to include shares held by Purchasers with no

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<PAGE>

registration rights or any other shares of stock issued to employees, officers,
directors or consultants pursuant to a stock option plan of the Company or in
order to include in such registration securities registered for the Company's
own account. If a Person who has requested inclusion in such registration as
provided above does not agree to the terms of any such underwriting, such Person
shall be excluded therefrom by written notice from the Company, the underwriter,
the Initiating Holders or BTI, as the case may be, and the securities so
excluded shall also be withdrawn from registration. Any Registrable Securities
or other securities excluded or withdrawn from such underwriting shall also be
withdrawn from such registration. If shares are so withdrawn from the
registration and if the number of shares to be included in such registration was
previously reduced as a result of marketing factors pursuant to this Section
2.1(e), then the Company shall offer to all holders who have retained rights to
include securities in the registration the right to include additional
securities in the registration in an aggregate amount equal to the number of
shares so withdrawn, with such shares to be allocated among such Holders
requesting additional inclusion in accordance with this Section 2.1(e).

     2.2  COMPANY REGISTRATION.

          (a)  If the Company shall determine to register any of its securities
either for its own account or the account of a security holder or holders
exercising their respective demand registration rights (other than pursuant to
Section 2.1 hereof), other than a registration statement on Form S-8 relating
solely to employee benefit plans, or a registration relating to a corporate
reorganization or other transaction under Rule 145, or a registration on any
registration form that does not permit secondary sales, the Company will:

               (i)  promptly give to each Holder written notice thereof; and

               (ii) use its best efforts to include in such registration (and
any related qualification under blue sky laws or other compliance), except as
set forth in Section 2.2(b) below, and in any underwriting involved therein, all
the Registrable Securities specified in a written request or requests, made by
any Holder and received by the Company within ten (10) calendar days after the
written notice from the Company described in clause (i) above is given by the
Company. Such written request may specify all or a part of a Holder's
Registrable Securities.

          (b)  UNDERWRITING. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2.2(a)(i). In such event, the right of any Holder to
registration pursuant to this Section 2.2 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their Registrable Securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected by the Company.

          (c)  Notwithstanding any other provision of this Section 2.2, if the
representative of the underwriters advises the Company in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
representative may (subject to the limitations set forth below) exclude all
Registrable Securities from, or limit the number of Registrable

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<PAGE>

Securities to be included in, the registration and underwriting. The Company
shall so advise all holders of securities requesting registration, and the
number of shares of securities that are entitled to be included in the
registration and underwriting shall be allocated: first, to the Company for
securities being sold for its own account; second, to the Holders of Registrable
Securities pro rata based on the number of shares of Registrable Securities for
which registration was requested; and finally, to the holders of other
securities of the Company with registration rights pro rata based on the number
of Other Shares for which registration was requested. The Company shall not
limit the number of Registrable Securities to be included in a registration
pursuant to this Agreement in order to include shares held by Purchasers with no
registration rights or any other shares of stock issued to employees, officers,
directors, or consultants pursuant to a stock option plan of the Company, in
order to include in such registration securities registered for the Company's
own account. If any Person does not agree to the terms of any such underwriting,
he shall be excluded therefrom by written notice from the Company or the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.

          (d)  If shares are so withdrawn from the registration or if the number
of shares of Registrable Securities to be included in such registration was
previously reduced as a result of marketing factors, the Company shall then
offer to all Persons who have retained the right to include securities in the
registration the right to include additional securities in the registration in
an aggregate amount equal to the number of shares so withdrawn, with such shares
to be allocated among the Persons requesting additional inclusion as set forth
above.

     2.3  EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Sections 2.1 and 2.2 hereof and reasonable fees and expenses of one counsel for
the selling Holders shall be borne by the Company; PROVIDED, HOWEVER, that if
the Holders bear the Registration Expenses for any registration proceeding begun
pursuant to Section 2.1(a) and subsequently withdrawn by the Holders registering
shares therein, such registration proceeding shall not be counted as a requested
registration pursuant to Section 2.1(a)(ii)(B) hereof. Furthermore, in the event
that a withdrawal by the Holders is based upon material adverse information
relating to the Company that is different from the information known or
available (upon request from the Company or otherwise) to the Holders requesting
registration at the time of their request for registration under Section 2.1,
such registration shall not be treated as a counted registration for purposes of
Section 2.1 hereof, even though the Holders do not bear the Registration
Expenses for such registration. All Selling Expenses relating to securities so
registered shall be borne by the holders of such securities pro rata on the
basis of the number of shares of securities so registered on their behalf, as
shall any other expenses in connection with the registration required to be
borne by the holders of such securities.

     2.4  REGISTRATION PROCEDURES. In the case of each registration effected by
the Company pursuant to Section 2, the Company will keep each Holder advised in
writing as to the initiation of each registration and as to the completion
thereof. At its expense, the Company will use commercially reasonable efforts
to:

          (a)  Keep such registration effective for a period of one hundred
eighty (180) days or until the Holder or Holders have completed the distribution
described in the registration

                                       9
<PAGE>

statement relating thereto, whichever first occurs; PROVIDED, HOWEVER, that such
180-day period shall be extended for a period of time equal to the period the
Holder refrains from selling any securities included in such registration at the
request of an underwriter of Common Stock (or other securities) of the Company;

          (b)  Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;

          (c)  Furnish such number of prospectuses and other documents incident
thereto, including any amendment of or supplement to the prospectus, as a Holder
from time to time may reasonably request and provide the Holders, underwriters
and their respective counsel the opportunity to participate in the preparation
of such documents;

          (d)  Notify each seller of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and at the request of any such seller, prepare and
furnish to such seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing;

          (e)  Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed and use commercially reasonable efforts to
register and qualify the Registrable Securities under state securities laws or
blue sky laws of those jurisdictions within the United States and Puerto Rico as
shall be reasonably required in order to effect the distribution of the
Registrable Securities; provided, however, that the Company shall not for any
such purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the requirements of
this Section 2.4 be obligated to be so qualified or to consent to general
service of process in any such jurisdiction and provided that the Company shall
not be required to register or qualify such Registrable Securities in any
jurisdiction in which the Company would solely as a result thereof (i) become
subject to taxation, (ii) be required (or any shareholder would be required) to
escrow shares of Common Stock or be subject to other significant limitations on
its (or any such shareholder's) disposition of such shares or (iii) be required
to amend the terms of such public offering, in each case in a manner which is
materially adverse to the Company;

          (f)  Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such registration statement and a CUSIP number
for all such Registrable Securities, in each case not later than the effective
date of such registration;

                                       10
<PAGE>

          (g)  Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen months, beginning
with the first month after the effective date of the Registration Statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act;

          (h)  In connection with any underwritten offering pursuant to a
registration statement filed pursuant to Section 2.1 hereof, the Company will
enter into an underwriting agreement in form reasonably necessary to effect the
offer and sale of Common Stock, PROVIDED that such underwriting agreement
contains customary underwriting provisions and PROVIDED FURTHER that if the
underwriter so requests the underwriting agreement will contain customary
contribution provisions;

          (i)  Use its commercially reasonable efforts to obtain the withdrawal
of any stop order suspending the effectiveness of such registration statement or
any post-effective amendment thereto at the earliest practicable date;

          (j)  Cause to be furnished, at the request of each Holder of
Registrable Securities, on the date that such Registrable Securities are
delivered to the underwriters for sale in connection with a registration, if
such Registrable Securities are being sold through underwriters, or, if such
Registrable Securities are not being sold through underwriters, on the date that
the registration statement with respect to such Registrable Securities becomes
effective, (i) a signed counterpart of an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance reasonably satisfactory to such Holder, addressed to the
underwriters, if any, and to each Holder of Registrable Securities, and (ii) a
letter dated such date, signed by the independent certified public accountants
of the Company, in form and substance reasonably satisfactory to such Holder of
Registrable Securities, addressed to the underwriters, if any, and to such
Holder of Registrable Securities, covering substantially the same matters with
respect to such registration statement (and the prospectus included therein)
and, in the case of the independent certified public accountants' letter, with
respect to events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuers' counsel and in independent certified
public accountants' letters delivered to the underwriters in underwritten public
offerings of securities and, in the case of the independent certified public
accountants' letter, such other financial matters, and, in the case of the legal
opinion, such other legal matters, as such Holder (or the underwriters, if any)
may reasonably request; and

          (k)  Otherwise use commercially reasonable efforts to make available
the executive officers of the Company (including David Scott and the Company's
Chief Financial Officer) to participate in such "road shows" or other selling
efforts as may be reasonably requested by the Holders in connection with the
distribution of the Registrable Securities.

     2.5  INDEMNIFICATION.

          (a)  The Company will indemnify each Holder, each of its officers,
directors, partners, legal counsel, and accountants and each Person controlling
such Holder within the

                                       11
<PAGE>

meaning of Section 15 of the Securities Act, with respect to which registration,
qualification, or compliance has been effected pursuant to this Section 2, and
each underwriter, if any, and each Person who controls within the meaning of
Section 15 of the Securities Act any underwriter, against all expenses, claims,
losses, damages, and liabilities (or actions, proceedings, or settlements in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular, or other document (including any related registration statement,
notification, or the like) incident to any such registration, qualification, or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the Securities Act or
any rule or regulation thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, qualification, or compliance, and will reimburse each such Holder,
each of its officers, directors, partners, legal counsel, and accountants and
each Person controlling such Holder, each such underwriter, and each Person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and defending or settling any such
claim, loss, damage, liability, or action, PROVIDED that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability, or expense arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company by such Holder
or underwriter and stated to be specifically for use therein. It is agreed that
the indemnity agreement contained in this Section 2.5(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability, or action
if such settlement is effected without the consent of the Company (which consent
has not been unreasonably withheld).

          (b)  Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification, or
compliance is being effected, indemnify the Company, each of its directors,
officers, partners, legal counsel, and accountants and each underwriter, if any,
of the Company's securities covered by such a registration statement, each
Person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, each other such Holder and Other Purchaser,
and each of their officers, directors, and partners, and each Person controlling
such Holder or Other Purchaser, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular, or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, Other Purchasers,
directors, officers, partners, legal counsel, and accountants, Persons,
underwriters, or control Persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability, or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular, or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein; PROVIDED, HOWEVER, that the obligations of such
Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof if such
settlement is effected without the consent of such Holder (which consent shall
not be

                                       12
<PAGE>

unreasonably withheld); and PROVIDED FURTHER that in no event shall any
indemnity under this Section 2.5 exceed the gross proceeds from the offering
received by such Holder.

          (c)  Each party entitled to indemnification under this Section 2.5
(the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, PROVIDED that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense (unless the Indemnifying Party otherwise agrees
or unless representation by the Indemnifying Party's counsel is inappropriate
due to actual or potential conflicts of interest), and PROVIDED FURTHER that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 2, to the
extent such failure is not prejudicial. No Indemnifying Party, in the defense of
any such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement that does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.

          (d)  If the indemnification provided for in this Section 2.5 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.

          (e)  Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.

          (f)  Notwithstanding any of the foregoing, no Holder shall be required
to contribute any amount in excess of the amount of net proceeds received by
such Holder from the sale of Registrable Securities covered by such registration
statement and no Person guilty of

                                       13
<PAGE>

fraudulent misrepresentation shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.

     2.6  INFORMATION BY HOLDER. Each Holder of Registrable Securities shall
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification, or compliance referred to in this Section 2.

     2.7  LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and until April
13, 2004, if the Company enters into any agreement with any holder or
prospective holder of any securities of the Company giving such holder or
prospective holder any registration rights the terms of which are more favorable
than the registration rights granted to the Holders hereunder, then the Company
shall give equivalent registration rights to the Holders.

     2.8  RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission that may permit the sale of the
Restricted Securities to the public without registration, the Company agrees to
use commercially reasonable efforts to:

          (a)  Make and keep public information regarding the Company available
as those terms are understood and defined in Rule 144 under the Securities Act,
at all times from and after ninety (90) days following the effective date of the
first registration under the Securities Act filed by the Company for an offering
of its securities to the general public;

          (b)  File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
at any time after it has become subject to such reporting requirements;

          (c)  So long as a Holder owns any Restricted Securities, furnish to
the Holder forthwith upon written request a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 (at any time from
and after ninety (90) days following the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents so filed as a Holder may reasonably request in availing itself of any
rule or regulation of the Commission allowing a Holder to sell any such
securities without registration.

     2.9  TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register securities granted to a Holder by the Company under this
Section 2 may be transferred or assigned by a Holder only to a transferee or
assignee of not less than 200,000 shares of Registrable Securities (subject to
adjustments for stock splits, stock dividends, reverse stock splits, including
the 10 for 1 reverse stock split contemplated by the Restated Certificate filed
or to be filed pursuant to the Series G Purchase Agreement, and the like),
PROVIDED that the Company is given written notice prior to said transfer or
assignment, stating the name and address of the transferee or assignee and
identifying the securities with respect to which such registration rights are
being transferred or assigned, and, PROVIDED FURTHER that the transferee or
assignee of such rights assumes in writing the obligations of such Holder under
this Agreement.

                                       14
<PAGE>

     2.10 "MARKET STAND-OFF" AGREEMENT. If requested by the Company and an
underwriter of securities of the Company, a Purchaser shall not sell or
otherwise transfer or dispose of any securities of the Company held by such
Purchaser (other than those included in the registration) during the one hundred
eighty (180) day period following the effective date of a registration statement
of the Company filed under the Securities Act, PROVIDED that:

          (a)  such agreement shall only apply to the first such registration
statement of the Company, including securities to be sold on its behalf to the
public in an underwritten offering; and

          (b)  all officers and directors of the Company are bound by and have
entered into similar agreements.

     The obligations described in this Section 2.10 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period.

     2.11 DELAY OF REGISTRATION. No Holder shall have any right to take any
action to restrain, enjoin, or otherwise delay any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Section 2.

3.   RESTRICTIONS ON TRANSFER.

     3.1  TRANSFER. No Purchaser will, voluntarily or involuntarily, directly or
indirectly, sell, transfer, assign, donate, pledge or otherwise encumber or
dispose of any interest (a "TRANSFER") in all or any portion of the Securities
or Option Shares except pursuant to an Exempt Transfer.

     3.2  EXEMPT TRANSFER. The restrictions contained in this Section 3 will not
apply to any Transfer which is one of the following "EXEMPT TRANSFERS":

          (a)  the Transfer by a partnership to its partners or retired partners
in accordance with partnership interests;

          (b)  the Transfer by a corporation to its shareholders in accordance
with their interest in the corporation;

          (c)  the Transfer by a limited liability company to its members in
accordance with their interest in the limited liability company;

          (d)  the Transfer by a Purchaser to such Purchaser's spouse, lineal
descendant, father, mother, brother or sister ("IMMEDIATE FAMILY");

          (e)  the Transfer by a Purchaser to a custodian or trustee for the
account of such Purchaser or such Purchaser's Immediate Family;

                                       15
<PAGE>

          (f)  the Transfer by a Purchaser (other than Transfers of Option
Shares by a member of Key Management) to any Affiliate of that Purchaser;

          (g)  the Transfer to the Company or any other Purchaser; PROVIDED,
HOWEVER, that a member of Key Management may not Transfer any Option Shares to
the Company or any other Purchaser during the Key Management Restricted Period
(as defined below), except for Transfers to the Company in payment of the
exercise price of any stock option granted pursuant to a stock option plan
and/or option agreement of the Company;

          (h)  a bona fide pledge or mortgage with a commercial lending
institution that creates a mere security interest;

          (i)  pursuant to Section 5 or 6 of this Agreement; PROVIDED that:

               (i)  Transfers of fully vested Option Shares held by Key
Management may be made only after the fifth anniversary of the date of the
option grant pursuant to which such Option Shares were acquired (the "KEY
MANAGEMENT RESTRICTED PERIOD"); PROVIDED, HOWEVER, that prior to the end of the
applicable Key Management Restricted Period with respect to any fully vested
Option Shares, each member of Key Management may exercise its co-sale rights
under Section 6 on Transfers by BTI or its Affiliates; and

               (ii) Restricted Holders may not Transfer any of their respective
Securities under this subsection 3.2(i) for a period of three (3) years from and
including the closing date of the Company's first Qualifying Public Offering
(the "IPO CLOSING DATE") (PROVIDED that if the Company consummates an IPO that
is not a Qualifying Public Offering, the IPO Closing Date shall be deemed to be
the earlier of (x) the last day of any Qualifying Trading Period and (y) the
closing date of such IPO if in connection with such IPO, all of the shares of
the Series Preferred are converted into shares of Common Stock pursuant to the
Restated Certificate); PROVIDED, HOWEVER, that:

                    (a)  Restricted Holders may Transfer during each of the
periods set forth below up to the percentage of their respective Securities
(not including any Option Shares held by Key Management) outstanding on the IPO
Closing Date set forth opposite such periods:

<TABLE>
<CAPTION>
                  Period (measured in
               days from IPO Closing Date)             Percentage
               ---------------------------             ----------
<S>                                                    <C>
                    1 through 180                           0%
                    181 through 270                        12.5%
                    271 through 365                        12.5%
                    366 through 456                         8.75%
                    457 through 546                         8.75%
                    547 through 636                         8.75%
                    637 through 730                         8.75%
                    731 through 821                        10%
                    822 through 911                        10%
                    912 through 1001                       10%
</TABLE>

                                     16
<PAGE>

      1002 through 1095                     10%

                   (B)  Any unused portion of the percentage of Securities
(not including any Option Shares held by Key Management) a Restricted Holder
may Transfer pursuant to subsection 3.2(ii)(A) above for any given period may
be carried over and added to the percentage permitted to be Transferred in a
subsequent period.

          (j)  pursuant to Section 2 or 7 of this Agreement; PROVIDED, HOWEVER,
each member of Key Management acknowledges and agrees that he may not Transfer
any Option Shares pursuant to Section 2 until the expiration of the Key
Management Restricted Period, except that prior to the end of the applicable Key
Management Restricted Period with respect to any Option Shares, each member of
Key Management may request registration of fully vested Option Shares pursuant
to Section 2.1 or 2.2 in an amount equal to the product of (i) the number of
fully vested Option Shares then held by such member of Key Management and (ii)
the quotient determined by dividing (A) the total number of shares of Common
Stock requested by BTI to be registered in such offering by (B) the aggregate
number of shares of Common Stock beneficially owned by BTI;

          (k)  Transfers of fully vested Option Shares held Key Management that
are made after a Qualifying Public Offering (or, in the event that the Company
consummates an IPO that is not a Qualifying Public Offering, after the earlier
to occur of (x) the last day of any Qualifying Trading Period and (y) the
closing date of such IPO if in connection with such IPO, all of the shares of
the Series Preferred are converted into shares of Common Stock pursuant to the
Restated Certificate) but before the fifth anniversary of the date of the option
grant pursuant to which such Option Shares were acquired; PROVIDED that (i) no
more than ten percent (10%) of the fully vested Option Shares held by any
individual may be Transferred in any given calendar year pursuant to this
Section 3.2(k), (ii) any unused portion of this ten percent (10%) from a given
calendar year may be carried over to, and be available for Transfers in,
subsequent calendar years pursuant to this Section 3.2(k), and (iii) in no event
can any individual Transfer more than an aggregate of twenty five percent (25%)
of their fully vested Option Shares pursuant to this Section 3.2(k); or

          (l)  notwithstanding any provision herein to the contrary, at any
time, Transfers effected in accordance with the terms of a merger,
consolidation, recapitalization or similar transaction that has been approved by
a majority of the Board of Directors, and, if so required, that has been
approved or adopted by the requisite vote or votes of the stockholders of the
Company.

     3.3 SECURITIES LAWS; ASSIGNMENT OF OBLIGATIONS. In addition to any other
restriction on Transfer herein, such Purchaser will not effect any Transfer
(other than Transfers pursuant to Sections 2, 3.2(i) or 7 hereof) until the
transferee has agreed in writing to be bound by the terms of this Agreement, at
which time such transferee shall be a "Purchaser" for all purposes of this
Agreement, and:

          (a)  There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or

                                       17
<PAGE>

          (b) Such Purchaser shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and if reasonably
requested by the Company, such Purchaser shall have furnished the Company with
an opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such shares under the Securities
Act; PROVIDED, HOWEVER, that it is agreed that the Company will not require
opinions of counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.

     3.4 LEGEND.

          (a) Each certificate representing Securities shall (unless otherwise
permitted by the provisions of this Agreement) be stamped or otherwise imprinted
with legends substantially similar to the following (in addition to any legend
required under applicable state securities laws):

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAW OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED TO EFFECTUATE
SUCH TRANSACTION.

THE SALE, TRANSFER OR PLEDGE OF THIS CERTIFICATE IS SUBJECT TO THE TERMS AND
CONDITIONS OF A CERTAIN PURCHASER RIGHTS AGREEMENT BETWEEN THE COMPANY AND
CERTAIN HOLDERS OF ITS SECURITIES, AS THE SAME MAY BE AMENDED AND IN EFFECT FROM
TIME TO TIME. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO
THE SECRETARY OF THE COMPANY.

          (b) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any Purchaser if the Purchaser shall have
obtained an opinion of counsel at such Purchaser's expense (which counsel may be
counsel to the Company) reasonably acceptable to the Company to the effect that
the securities proposed to be disposed of may lawfully be so disposed of without
registration, qualification or legend.

     3.5 IMPROPER TRANSFER. Any attempt to Transfer any Securities or Option
Shares which is not in accordance with this Agreement shall be null and void,
and the Company shall not give any effect to such attempted Transfer in the
records of the Company.

4.   PRE-EMPTIVE RIGHT.

     4.1 PRE-EMPTIVE RIGHT. The Company hereby grants to each Purchaser who owns
shares of Series Preferred or Common Stock (such Purchasers referred to as the
"PRE-EMPTIVE PURCHASERS") the right to purchase a pro rata portion of New
Securities (as defined in Section 4.2) which the Company may, from time to time,
propose to sell and issue (the "PRE-EMPTIVE RIGHT"). Such Pre-Emptive
Purchaser's pro rata share for purposes of this Pre-Emptive Right is

                                       18
<PAGE>

the ratio of the number of shares of Common Stock owned by such Pre-Emptive
Purchaser (on an as-converted, as-exercised basis) immediately prior to the
issuance of New Securities, to the total number of shares of Common Stock
outstanding immediately prior to the issuance of New Securities, assuming full
conversion of all securities and full exercise of all outstanding rights,
options and warrants to acquire Common Stock of the Company. Each Pre-Emptive
Purchaser exercising their portion of the Pre-Emptive Right in full (an
"EXERCISING PRE-EMPTIVE PURCHASER") shall have a right of over-allotment such
that if any other Pre-Emptive Purchaser fails to exercise its right hereunder to
purchase its pro rata share of New Securities (a "NON-PURCHASING PRE-EMPTIVE
PURCHASER"), such Exercising Pre-Emptive Purchaser may purchase such portion, on
a pro rata basis, by giving written notice to the Company within ten (10)
calendar days from the date that the Company provides written notice of the
amount of New Securities such Non-Purchasing Pre-Emptive Purchasers have failed
to exercise their Pre-Emptive Rights hereunder. This Pre-Emptive Right shall be
subject to the following provisions of this Section 4.

     4.2 NEW SECURITIES. "NEW SECURITIES" shall mean any capital stock
(including Common Stock and/or Preferred Stock) of the Company whether now
authorized or not, and rights, options or warrants to purchase such capital
stock, and securities of any type whatsoever that are, or may become,
convertible into capital stock; PROVIDED that the term "New Securities" does not
include (i) securities purchased under the Securities Purchase Agreement, Series
D Purchase Agreement, dated July 2, 1999 (the "SERIES D PURCHASE AGREEMENT"),
the plan of recapitalization adopted by the Board of Directors and stockholders
of the Company providing for the conversion of each share of the Series B
Preferred Stock into one share of Series B Preferred Stock and 0.22222 of a
share of Series E Preferred Stock (the "SERIES E RECAPITALIZATION"), the
Purchase Agreement, the Series G Purchase Agreement or the Series G
Recapitalization Agreement; (ii) securities issuable upon conversion or exercise
of the securities purchased under the Securities Purchase Agreement, Series D
Purchase Agreement, Series E Recapitalization, Purchase Agreement, Series G
Purchase Agreement or the Series G Recapitalization Agreement]; (iii) securities
issued pursuant to the acquisition of another business entity or business
segment of any such entity by the Company by merger, purchase of substantially
all the assets or other reorganization whereby the Company will own more than
fifty percent (50%) of the voting power of such business entity or business
segment of any such entity; (iv) any borrowings, direct or indirect, from
financial institutions or other Persons by the Company, whether or not currently
authorized, including any type of loan or payment evidenced by any type of debt
instrument, PROVIDED such borrowings do not have any equity features including
warrants, options or other rights to purchase capital stock and are not
convertible into capital stock of the Company; (v) securities issued to
employees, consultants, officers or directors of the Company pursuant to any
stock option, stock purchase or stock bonus plan, agreement or arrangement
approved by the Board of Directors; (vi) securities issued to vendors or
customers or to other Persons in similar commercial situations with the Company
if such issuance is approved by the Board of Directors; (vii) securities issued
in connection with obtaining lease financing, whether issued to a lessor,
guarantor or other Person; (viii) securities issued in connection with any stock
split, stock dividend or recapitalization of the Company; and (ix) securities
issuable upon the exercise of the Warrants.

     4.3 NOTICE. In the event the Company proposes to undertake an issuance of
New Securities, it shall give each Pre-Emptive Purchaser written notice of its
intention, describing the

                                       19
<PAGE>

type of New Securities, and their price and the general terms upon which the
Company proposes to issue the same. Each such Pre-Emptive Purchaser shall have
twenty (20) calendar days after any such notice is given to agree to purchase
such Pre-Emptive Purchaser's pro rata share of such New Securities for the price
and upon the terms specified in the notice by giving written notice to the
Company and stating therein the quantity of New Securities to be purchased.

     4.4 SELLING PERIOD. In the event any Pre-Emptive Purchaser or Exercising
Pre-Emptive Purchaser fails to exercise fully the Pre-Emptive Right within said
twenty (20) day period and after the expiration of the 10-day period for the
exercise of the over-allotment provisions of Section 4.1, the Company shall have
one hundred twenty (120) calendar days thereafter to sell or enter into an
agreement (pursuant to which the sale of New Securities covered thereby shall be
closed, if at all, within one hundred twenty (120) calendar days from the date
of said agreement) to sell the New Securities respecting which any Pre-Emptive
Purchasers' or Exercising Pre-Emptive Purchasers' Pre-Emptive Right option set
forth in this Section 4 was not exercised, at a price and upon terms no more
favorable to the purchasers thereof than specified in the Company's notice to
the Pre-Emptive Purchasers pursuant to Section 4.3. In the event the Company has
not sold within said 120-day period or entered into an agreement to sell the New
Securities in accordance with the foregoing within said 120-day period from the
date of said agreement, the Company shall not thereafter issue or sell any New
Securities, without first again offering such securities to the Pre-Emptive
Purchasers in the manner provided in Section 4.3 above.

     4.5 TRANSFER OF PRE-EMPTIVE RIGHT. The Pre-Emptive Right set forth in this
Section 4 may be transferred or assigned by a Pre-Emptive Purchaser only to a
transferee or assignee of not less than (i) 200,000 shares of Series B Preferred
Stock or Series H Preferred Stock or a combination of both, (ii) 200,000 shares
of Series C Preferred Stock, (iii) 200,000 shares of Series D Preferred Stock or
Series I Preferred Stock or a combination of both, (iv) 200,000 shares of Series
F Preferred Stock, (v) 200,000 shares of Series G Preferred Stock, or (vi)
200,000 shares of Common Stock (in each case, subject to adjustments for stock
splits, stock dividends, reverse stock splits, including the 10 for 1 reverse
stock split contemplated by the Restated Certificate filed or to be filed
pursuant to the Series G Purchase Agreement, and the like), PROVIDED that the
Company is given written notice prior to said transfer or assignment, stating
the name and address of the transferee or assignee and identifying the
securities with respect to which such Pre-Emptive Rights are being transferred
or assigned, and PROVIDED FURTHER that the transferee or assignee of such rights
assumes in writing the obligations of such Pre-Emptive Purchaser under this
Agreement.

     4.6 TERMINATION OF PRE-EMPTIVE RIGHT. Notwithstanding any other provision
of this Article 4, no Purchaser shall have any Pre-Emptive Right pursuant to
this Agreement or otherwise with respect to the Company's initial public
offering of its Common Stock pursuant to a registration statement on Form S-1 or
Form S-3, and the Purchasers shall no longer have any Pre-Emptive Right pursuant
to this Agreement or otherwise after the Company's first Qualifying Public
Offering (PROVIDED that if the Company consummates an IPO that is not a
Qualifying Public Offering in which all of the shares of Series Preferred are
converted into shares of Common Stock pursuant to the Restated Certificate, then
the Purchasers shall no longer have any Pre-Emptive Right pursuant to this
Agreement or otherwise after such IPO).

                                       20
<PAGE>

5.   RIGHT OF FIRST REFUSAL.

     5.1 RIGHT OF FIRST REFUSAL. Commencing on (i) the earlier of 180 days after
a Qualifying Public Offering (PROVIDED that if the Company consummates an IPO
that is not a Qualifying Public Offering in which all of the shares of Series
Preferred are converted into shares of Common Stock pursuant to the Restated
Certificate, then 180 days after such IPO) and April 13, 2003 for Purchasers
other than as provided in (ii), and (ii) the fifth anniversary of the date of
the option grant pursuant to which the fully vested Option Shares held by
members of Key Management were acquired, no Purchaser shall sell or otherwise
Transfer any shares of capital stock of the Company (whether now owned or
hereafter acquired) or any right or interest therein, whether voluntarily or by
operation of law, or by gift or otherwise, except as set forth herein:

          (a) If Purchaser desires to sell or otherwise Transfer any shares of
capital stock, then such Purchaser (the "SECTION 5 SELLING PURCHASER") shall
give at least thirty (30) calendar days written notice thereof to the Company
and the other Purchasers. The notice shall name the proposed transferee and
state the number of shares of capital stock to be sold or otherwise Transferred,
the proposed consideration, and all other terms and conditions of the proposed
sale or other Transfer.

          (b) For twenty (20) calendar days following receipt of such notice,
the Company shall have the option but not the obligation to purchase all (but
not less than all) of the shares of capital stock specified in the notice at the
price and upon the terms set forth in such notice; PROVIDED, HOWEVER, that, with
the consent of the Section 5 Selling Purchaser, the Company shall have the
option to purchase a lesser portion of the shares of capital stock specified in
said notice at the price and upon the terms set forth therein. In the event of a
gift, property settlement or other Transfer in which the proposed transferee is
not paying the full price for the shares of capital stock, and that is not
otherwise exempted from the provisions of this Section 5.1, the price shall be
deemed to be the fair market value of the capital stock at such time as
determined in good faith by the Board of Directors. In the event the Company
elects to purchase all of the shares of capital stock or, with consent of the
Section 5 Selling Purchaser, a lesser portion of the shares of capital stock, it
shall give written notice to the Section 5 Selling Purchaser of its election and
settlement for said shares of capital stock shall be made as provided below in
paragraph (d).

          (c) If the Company does not elect to purchase the shares specified in
the notice, then the Company shall promptly provide written notice to the
Purchasers of such election (which in no event will be later than 20 calendar
days following receipt of the notice referred to in Section 5.1(a)) and the
Purchasers may elect to purchase all (but not less than all) of the shares by
delivering written notice to the Company and the Section 5 Selling Purchaser
within ten (10) calendar days after notice is given by the Company.

          (d) In the event the Company and/or any other Purchasers elect to
acquire any of the shares of capital stock of the Section 5 Selling Purchaser as
specified in said Section 5 Selling Purchaser's notice, the Secretary of the
Company shall so notify the Section 5 Selling Purchaser and settlement thereof
shall be made in cash within forty (40) days after the Secretary of the Company
receives said Section 5 Selling Purchaser's notice; PROVIDED that if the terms
of payment set forth in said Section 5 Selling Purchaser's notice were other
than cash against

                                       21
<PAGE>

delivery, the Company and/or the other Purchasers shall pay for said shares on
the same terms and conditions set forth in said Section 5 Selling Purchaser's
notice.

          (e) In the event the Company and/or the other Purchasers do not elect
to acquire all of the shares of capital stock specified in the Section 5 Selling
Purchaser's notice, said Section 5 Selling Purchaser may, within the sixty-day
period following the expiration of the rights granted to the Company and/or the
other Purchasers herein, Transfer the shares of capital stock specified in said
Section 5 Selling Purchaser's notice which were not acquired by the Company
and/or the other Purchasers as specified in said Section 5 Selling Purchaser's
notice on terms and conditions not more favorable to the transferee than those
described in the Section 5 Selling Purchaser's notice. Any proposed Transfer on
terms and conditions more favorable than those described in such notice, as well
as any subsequent proposed Transfer of any of the shares of capital stock
specified in such notice shall again be subject to the right of first refusal
rights of the Company and the Purchasers and shall require compliance by such
Section 5 Selling Purchaser(s) with the procedures described in this Section 5.

     5.2 TRANSFERS EXEMPT FROM RIGHT OF FIRST REFUSAL. Anything to the contrary
contained herein notwithstanding, the following transactions shall be exempt
from the provisions of this section:

          (a) A Purchaser's Transfer to such Purchaser's Immediate Family.

          (b) A Transfer to any custodian or trustee for the account of such
Purchaser or such Purchaser's Immediate Family.

          (c) A Purchaser's bona fide pledge or mortgage with a commercial
lending institution creating a mere security interest.

          (d) A corporate Purchaser's Transfer of any or all of its shares of
capital stock to its stockholders in accordance with their interest in the
corporation.

          (e) A Transfer by a Purchaser which is a partnership to any or all of
its partners or retired partners in accordance with partnership interests.

          (f) A Transfer by a Purchaser to any Affiliate of that Purchaser.

          (g) A Transfer by a Purchaser which is a limited liability company to
its members in accordance with their interest in the limited liability company.

     In any such case, the transferee, assignee, or other recipient shall
receive and hold such stock subject to the provisions of this section, and there
shall be no further Transfer of such stock except in accord with this section.

     5.3 RIGHT OF FIRST REFUSAL AFTER A PUBLIC OFFERING. The foregoing right of
first refusal shall be modified after the closing of a Qualifying Public
Offering (or an IPO that is not a Qualifying Public Offering in which all of the
shares of Series Preferred are converted into shares of Common Stock pursuant to
the Restated Certificate) with respect to "public sales" pursuant to Rule 144
(including Rule 144(k)) under the Securities Act such that the Company

                                       22
<PAGE>

shall have twenty-four (24) hours to decide to exercise its right to purchase
the shares specified in the notice and to notify the Purchasers of its election
and the Purchasers only twenty-four (24) hours after such notice is given to
exercise their election.

     5.4 TRANSFER EXEMPT FROM FIRST REFUSAL RIGHT AFTER A PUBLIC OFFERING.
Anything to the contrary contained herein notwithstanding, any Transfer after
the closing of a Qualifying Public Offering (or an IPO that is not a Qualifying
Public Offering in which all of the shares of Series Preferred are converted
into shares of Common Stock pursuant to the Restated Certificate) by a Purchaser
which in the aggregate, over the term of this Agreement, amounts to no more than
10,000 shares of Series Preferred or Common Stock (subject to adjustments for
stock splits, stock dividends, reverse stock splits, including the 10 for 1
reverse stock split contemplated by the Restated Certificate filed or to be
filed pursuant to the Series G Purchase Agreement, and the like), shall be
exempt from the provisions of this Section 5.

     5.5 TRANSFERS BY BTI EXEMPT FROM FIRST REFUSAL RIGHT. Anything to the
contrary contained herein notwithstanding, any Transfer of any shares of capital
stock of the Company by BTI shall be exempt from the provisions of this Section
5.

6.   CO-SALE RIGHT.

     6.1 NOTICE. At any time after April 13, 2003, if a Purchaser holding Series
Preferred or Common Stock proposes to sell or otherwise Transfer any shares of
Series Preferred or Common Stock ("CO-SALE STOCK") then such Purchaser (a
"SECTION 6 SELLING PURCHASER") shall promptly give written notice (the "NOTICE")
simultaneously to the Company and to each of the other Purchasers holding Series
Preferred or Common Stock at least thirty (30) calendar days prior to the
closing of such sale or other Transfer. The Notice shall describe in reasonable
detail the proposed sale or other Transfer including, without limitation, the
number of shares of Co-Sale Stock to be sold or otherwise Transferred, the
nature of such sale or other Transfer, the total consideration to be paid to the
Section 6 Selling Purchaser (including any consideration for the securities that
is paid or to be paid under other arrangements with the Section 6 Selling
Purchaser, including but not limited to, compensation for employment or services
in excess of the reasonable value of the Section 6 Selling Purchaser's
services), and the name and address of each prospective purchaser or transferee.

     6.2 NOTICE OF PARTICIPATION. Each Purchaser holding Series Preferred or
Common Stock shall have the right, exercisable upon written notice to the
Company within fifteen (15) calendar days after the Notice is given, to
participate in such sale of Co-Sale Stock on the same terms and conditions. Such
notice shall indicate the number of shares of Series Preferred or Common Stock
such Purchaser wishes to sell under his or her right to participate. To the
extent one or more Purchasers exercises such right of participation in
accordance with the terms and conditions set forth in this Section 6, the number
of shares of Co-Sale Stock that may be sold in the transaction shall be computed
as set forth below. Each Purchaser desiring to participate shall be referred to
as a "PARTICIPANT". If one or more Purchasers become Participants, each
Participant shall sell that number of shares of Series Preferred or Common Stock
equal to the product obtained by multiplying (a) the aggregate number of shares
of Co-Sale Stock by (b) a

                                       23
<PAGE>

fraction the numerator of which is the number of shares of Series Preferred or
Common Stock owned by the Participant or the Section 6 Selling Purchaser, as the
case may be, at the time of the sale or other Transfer (on an as-converted to
Common Stock basis) and the denominator of which is the total number of shares
of Series Preferred or Common Stock owned by all Participants and the Section 6
Selling Purchaser at the time of the sale or other Transfer (on an as-converted
to Common Stock basis).

     6.3 TRANSFER. Each Participant shall effect its participation in the sale
by promptly delivering to the Company for Transfer to the prospective purchaser
one or more certificates, properly endorsed for Transfer of the type and number
of shares of Series Preferred or Common Stock which such Participant elects to
sell. In the event the Participant holds the same type of stock as the Section 6
Selling Purchaser intends to sell the Participant must sell that type of stock.

     6.4 ADDITIONAL TRANSFER PROVISIONS. The stock certificate or certificates
that the Participant delivers to the Company pursuant to Section 6.3 shall be
Transferred to the prospective purchaser in consummation of the sale of the
Series Preferred or Common Stock pursuant to the terms and conditions specified
in the Notice, and the Section 6 Selling Purchaser(s) shall concurrently
therewith remit to such Participant that portion of the sale proceeds to which
such Participant is entitled by reason of its participation in such sale. To the
extent that any prospective purchaser or purchasers prohibits such Transfer or
otherwise refuses to purchase shares or other securities from a Participant
exercising its rights of co-sale hereunder, such Section 6 Selling Purchaser(s)
shall not sell to such prospective purchaser or purchasers any Co-Sale Stock
unless and until, simultaneously with such sale, such Section 6 Selling
Purchaser(s) shall purchase such shares or other securities from such
Participant on the same terms and conditions specified in the Notice.

     6.5 NO ELECTION TO PARTICIPATE. If none of the other Purchasers holding
Series Preferred or Common Stock to participate in the sale of the Co-Sale Stock
subject to the Notice, such Section 6 Selling Purchaser(s) may, not later than
sixty (60) calendar days following delivery to the Company of the Notice, enter
into an agreement providing for the closing of the Transfer of the Co-Sale Stock
covered by the Notice within thirty (30) days of such agreement on terms and
conditions not more favorable to the transferee than those described in the
Notice. Any proposed Transfer on terms and conditions more favorable than those
described in the Notice, as well as any subsequent proposed Transfer of any of
the Co-Sale Stock by a Section 6 Selling Purchaser(s), shall again be subject to
the co-sale rights of the Purchasers and shall require compliance by such
Section 6 Selling Purchaser(s) with the procedures described in this Section 6.

     6.6 TRANSFERS EXEMPT FROM CO-SALE RIGHT.

          (a) Notwithstanding the foregoing, the co-sale rights of the Purchaser
shall not apply to (i) any Transfer or Transfers by a Section 6 Selling
Purchaser(s) which in the aggregate, over the term of this Agreement, amount to
no more than 10,000 shares of Co-Sale Stock held by such holder (subject to
adjustments for stock splits, stock dividends, reverse stock splits, including
the 10 for 1 reverse stock split contemplated by the Restated Certificate filed
or to be filed pursuant to the Series G Purchase Agreement, and the like), (ii)
any bona fide pledge or

                                       24
<PAGE>

mortgage of Co-Sale Stock with a commercial lending institution that creates a
mere security interest, (iii) any Transfer to the Immediate Family of the
holders of Co-Sale Stock, (iv) any Transfer to a custodian or trustee for the
account of the holder of Co-Sale Stock or such holder's Immediate Family, (v)
any Transfer or Transfers by a holder of Co-Sale Stock to another holder of
Co-Sale Stock (the "TRANSFEREE-HOLDER") so long as the Transferee-Holder is, at
the time of the Transfer, employed by, or acting as a consultant or director of,
the Company, (vi) any bona fide gift or (vii) any Transfer by any Purchaser to
an Affiliate of such Purchaser; PROVIDED that in the event of any Transfer made
pursuant to one of the exemptions provided by clauses (ii), (iii), (iv), (v),
(vi) and (vii), (A) the holder of Co-Sale Stock shall inform the Purchasers of
such Transfer prior to effecting it and (B) the pledgee, transferee or donee
shall furnish the Purchasers with a written agreement to be bound by and comply
with all provisions of Sections 6 of this Agreement. Such transferred Co-Sale
Stock shall remain "Restricted Stock" hereunder.

          (b) The co-sale rights of the Purchasers are subject to, and shall in
no manner limit the right which the Company may have to repurchase securities
from the holder of Co-Sale Stock pursuant to (i) a stock restriction agreement
or other agreement between the Company and the holder of Co-Sale Stock and (ii)
the Pre-Emptive Right set forth in Section 5 hereto.

     6.7 TERMINATION OF CO-SALE RIGHTS. The provisions of Section 6 of this
Agreement shall not apply to sales pursuant to a registered public offering or
"public" sales pursuant to Rule 144 under the Securities Act after the closing
of a Qualifying Public Offering (or an IPO that is not a Qualifying Public
Offering in which all of the shares of Series Preferred are converted into
shares of Common Stock pursuant to the Restated Certificate).

7.   DRAG ALONG RIGHTS.

     7.1 DRAG ALONG RIGHT. Notwithstanding any provisions herein to the
contrary, if at any time after the date of this Agreement, BTI (the "INITIATING
SECURITYHOLDER") sells or otherwise Transfers (whether in a stock sale, merger,
consolidation or other transaction) all or substantially all of its securities
of the Company, or agrees to the sale of all or substantially all of the assets
of the Company to a third party (whether for cash, securities or a combination
of both) (a "DRAG TRANSACTION"), then all Purchasers (including but not limited
to the holders of the Option Shares) ("SELLING SECURITYHOLDERS") will be
required to sell or similarly Transfer all of their securities of the Company
held by them (and may be required to convert their Series Preferred into Common
Stock in connection with such Drag Transaction) and to vote or act by written
consent with respect to all securities of the Company beneficially owned by
them, at each annual or special stockholders meeting with respect to such Drag
Transaction, or to take all actions by written consent in lieu of such meetings,
as are necessary to authorize, approve and adopt such Drag Transaction.

     7.2 CONSIDERATION. The consideration to be received by the Selling
Securityholders shall be the same consideration per share to be received by the
Initiating Securityholder for the corresponding class or series of stock (on an
as-converted basis, if applicable), or type of security, and the terms and
conditions of such sale shall be the same as those upon which the Initiating
Securityholder sells its securities; PROVIDED, HOWEVER, that any general
indemnity given by the Selling Securityholder, applicable to liabilities not
specific to a particular Selling

                                       25
<PAGE>

Securityholder, to the purchaser in connection with such sale shall be
apportioned among the Selling Securityholder according to the consideration
received by each Selling Securityholder.

     7.3 EXPENSES. The fees and expenses incurred in connection with a sale
under this Section 7 shall be shared by all the Purchasers on a pro rata basis.

     7.4 NOTICE. The Initiating Securityholder shall provide written notice to
the other Selling Securityholder setting forth the consideration to be paid by
the purchaser for the securities and the material terms of the sale within ten
(10) business days after such Initiating Securityholder exercises the Drag Along
Rights pursuant to Section 7.1 ("DRAG ALONG NOTICE").

     7.5 DELIVERY OF SECURITIES. Within ten (10) business days after the date of
the Drag Along Notice, each Selling Securityholder shall deliver to the Company,
the duly endorsed certificate or certificates representing the securities held
by such Selling Securityholder to be sold or Transferred, and a limited
power-of-attorney authorizing the Company to take all actions necessary to sell
or otherwise Transfer such securities. In the event that a Selling
Securityholder should fail to deliver the securities, the Company shall cause
the books and records of the Company to show that such securities are bound by
the provisions of this Section 7 and that such securities may only be
Transferred to the purchaser in such sale.

     7.6 REMITTANCE OF CONSIDERATION. Promptly after the consummation of the
sale, the Purchaser shall remit directly to the Selling Securityholder the
consideration for the securities sold pursuant thereto.

     7.7 TERMINATION OF DRAG-ALONG RIGHTS. Notwithstanding any other provision
in this Article 7, if at any time BTI shall no longer beneficially own more that
20% of the Company's outstanding Common Stock (assuming conversion of all Series
Preferred), BTI shall no longer have any Drag-Along Rights under this Agreement.

8.   BOARD OF DIRECTORS.

8.1  NOMINATION AND ELECTION OF DIRECTORS.

          (a) SIZE. The Company and the Purchasers agree to take any actions
necessary so that the Board will be comprised of eleven (11) directors. The
Company and the Purchasers agree to take any actions necessary so that, as of
the First Closing (as defined and contemplated in the Series G Purchase
Agreement), (i) the Series F Directors (as defined below) shall consist of Adam
H. Clammer, James H. Greene, Jr., Clint Johnstone and Henry R. Kravis, (ii) the
Series G Directors (as defined below) shall consist of Mory Ejabat, Alexander
Navab, Jr., and George R. Roberts; (iii) the Other Series Preferred Director (as
defined below) shall consist of either Henry H. Bradley or Thomas R. Palmer;
(iv) the Common Director (as defined below) shall be David E. Scott; and (v) the
Other Directors (as defined below) shall be Richard A. Jalkut and either, to the
extent not elected as an Other Series Preferred Director, Henry H. Bradley or
Thomas R. Palmer. Notwithstanding the foregoing, upon the effectiveness of the
Company's first registration statement on Form 8-A (or any successor form or
registration statement) with respect to its Common Stock (the "8-A EFFECTIVENESS
EVENT"), no Purchaser shall have any rights or obligations, voting or otherwise,
under this Section 8.1(a).

                                       26
<PAGE>

          (b) SERIES F AND G DIRECTORS AND BTI DIRECTORS.

               (i) For so long 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 shall be
entitled to elect and remove directors of the Company (the "SERIES F DIRECTORS")
pursuant to the Company's Restated Certificate. For so long 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 shall be entitled to elect and remove directors of the Company
(the "SERIES G DIRECTORS" and, together with the Series F Directors, the "SERIES
F AND G DIRECTORS") pursuant to the Company's Restated Certificate.

               (ii) In the event that either (x) less than 6,666,667 shares of
Series F Preferred Stock or (y) less than 6,666,667 shares of Series G Preferred
Stock remain outstanding (in each case, subject to adjustment for any stock
split, reverse stock split and the like), as a result of conversion or
otherwise, but BTI beneficially owns at least ten percent (10%) of the
outstanding Common Stock of the Company (assuming conversion of all Series
Preferred), each of the Purchasers shall cause the election to the Board of
Directors of a number of persons nominated by BTI to serve as members of the
Board of Directors (each a "BTI NOMINEE" and together, the "BTI NOMINEES") equal
to (A) the authorized size of the Board of Directors, multiplied by (B) (1) the
total number of shares of Common Stock beneficially owned by BTI (assuming
conversion of all Series Preferred), divided by (2) the total number of shares
of Common Stock then outstanding (assuming conversion of all Series Preferred),
rounding up so that the BTI Nominees will not represent less than such
proportionate interest in the Company calculated above (less any Series F and G
Directors elected by BTI as holders of Series F Preferred Stock and Series G
Preferred Stock); PROVIDED, HOWEVER, that for purposes of this Section
8.1(b)(ii) only, the calculation of the total number of shares outstanding shall
exclude (x) any equity securities issued by the Company after August 5, 1999
(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 BTI beneficially owns
twenty-five percent (25%) or more of the outstanding Common Stock of the Company
(assuming conversion of all Series Preferred and including (i) all equity
securities issued by the Company after August 5, 1999, and (ii) any vested
Option Shares and all shares of Common Stock issuable upon exercise of the
Company's Warrants); PROVIDED that, so long as BTI beneficially owns at least
five percent (5%) of the outstanding Common Stock of the Company (assuming
conversion of all Series Preferred), each of the Purchasers shall cause the
election to the Board of Directors of one (1) BTI Nominee. The Company agrees to
cause the BTI Nominees to be nominated for election to the Board of Directors
(the "BTI DIRECTORS"); PROVIDED that for so long as BTI controls at least a
majority of the voting power of the Series F Preferred Stock, the Series F
Directors shall be deemed to be BTI Directors, and for so long as BTI controls
at least a majority of the voting power of the Series G Preferred Stock, the
Series G Directors shall be deemed to be BTI Directors. The Company and each
Purchaser agree that a BTI Director may be removed without cause only with the
approval of BTI.

          (c) OTHER SERIES PREFERRED DIRECTORS. 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

                                       27
<PAGE>

Preferred Stock and Series I Preferred Stock remain outstanding (subject to
adjustments for stock splits, stock dividends, reverse stock splits, including
the 10 for 1 reverse stock split contemplated by the Restated Certificate filed
or to be filed pursuant to the Series G Purchase Agreement, 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 and remove one (1)
director of the Company (the "OTHER SERIES PREFERRED DIRECTOR") pursuant to the
Company's Restated Certificate. The Purchasers of Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock, Series H Preferred Stock and
Series I Preferred Stock agree that for so long as the Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock, Series H Preferred Stock and
Series I Preferred Stock remain outstanding and for such time as Henry H.
Bradley or Thomas R. Palmer (i) is an employee of News-Press & Gazette Company
and Kansas City Equity Partners, respectively, (ii) is willing to continue to
serve on the Board of Directors, and (iii) do not violate their fiduciary duties
to the stockholders of the Company or otherwise demonstrate that they are unfit
to serve as members of the Board of Directors, that they will continue to
nominate and elect either Mr. Bradley or Mr. Palmer (PROVIDED that such person
nominated and elected meets the qualifications of clauses (i) through (iii)) as
their representative on the Board of Directors of the Company.

          (d) COMMON AND CEO DIRECTOR.

               (i)   For so long as the conditions set forth in Sections 8.1(b)
(i) and 8.1(c) are satisfied, the holders of Common Stock shall be entitled to
elect and remove one (1) director of the Company (the "COMMON DIRECTOR")
pursuant to the Company's Restated Certificate and the holders of the Common
Stock agree, that until such time as David E. Scott ceases to hold the position
of Chief Executive Officer of the Company, that they will nominate and elect Mr.
Scott as their representative on the Board of Directors, and if Mr. Scott ceases
to function as the Chief Executive Officer of the Company, the holders of the
Common Stock will nominate and elect another member of senior management of the
Company to replace Mr. Scott. Notwithstanding the foregoing, after the 8-A
Effectiveness Event, the holders of the Common Stock shall have no rights or
obligations, voting or otherwise, under this Section 8.1(d)(i).

               (ii)  In the event the conditions set forth in either Section 8.1
(b)(i) or 8.1(c) cease to be satisfied or the 8-A Effectiveness Event has
occurred, the Purchasers, for so long as Mr. Scott holds the position of Chief
Executive Officer of the Company, shall cause Mr. Scott to be elected to the
Board of Directors (the "CEO DIRECTOR").

          (e) OTHER DIRECTORS. The Board of Directors shall nominate the other
members of the Board of Directors, if any, for election to the Board of
Directors (the "OTHER DIRECTORS").

          (f) VOTING. Each Purchaser and any Affiliate of such Purchaser owning
shares of Series Preferred or Common Stock agree to cast the votes to which they
are entitled (whether at an annual or special meeting of stockholders or by
written consent in lieu of a meeting or otherwise) in such a manner as to cause
the BTI Nominees to be elected to the Board of Directors. Notwithstanding the
foregoing, after the 8-A Effectiveness Event, no Purchaser or any Affiliate of a
Purchaser shall have any rights or obligations, voting or otherwise, under this
Section 8.1(f).

                                       28
<PAGE>

          (g) EFFECTIVENESS. The Company and the Purchasers hereby represent and
warrant that the procedures established in this Section 8.1 relating to the size
of the Board of Directors and for the designation, nomination and election of
the BTI Nominees is effective, under the terms of the Company's Restated
Certificate and Bylaws, to ensure that at all times subsequent to the date
hereof and until the earlier of the 8-A Effectiveness Event or the termination
of this Agreement, the BTI Nominees shall be members of the Board of Directors.
The Company and Purchasers covenant that if, at some point in the future, these
procedures shall prove to be ineffective in so providing, the Company and the
Purchasers shall take all steps within their respective power to provide for the
designation, nomination and election of the BTI Nominees to the Board of
Directors; PROVIDED that after the 8-A Effectiveness Event, no Purchaser shall
have any obligation, voting or otherwise, with respect to the designation,
nomination and election of the BTI Nominees. Upon the request of BTI, the
Company agrees that it shall take all actions necessary to cause the Board of
Directors to appoint nominees of the holders of Series F Preferred Stock and
Series G Preferred Stock or BTI, as applicable, to the Boards of Directors of
one or more Subsidiaries in proportion to the representation of the holders of
the Series F Preferred Stock and Series G Preferred Stock or BTI, as applicable,
on the Company's Board of Directors.

          (h) PUBLIC SOLICITATION. After a registered offering to the general
public of the Company's equity securities, the Company shall use its reasonable
best efforts to solicit from the stockholders of the Company eligible to vote
for the election of directors proxies in favor of the nominees designated in
accordance with this Section 8.1. For purposes of this Section 8.1 and all other
purposes of this Agreement, "beneficial ownership" or to "beneficially own"
shall be determined in a manner consistent with the meanings assigned to such
terms in Rule 13d-3 and Rule 13d-5 of the Securities Act.

     8.2 BOARD COMMITTEES.

          (a) The Purchasers and the Company agree that so long as BTI
beneficially owns at least ten percent (10%) of the outstanding Common Stock of
the Company (assuming conversion of all Series Preferred), the Purchasers and
the Company shall take all actions necessary to cause the Board of Directors to
appoint no less than two (2) of the Series F and G Directors or BTI Directors to
any committees of the Board of Directors other than the Audit Committee, as
requested by (i) the Purchasers holding a majority of the votes of the Series F
Preferred Stock and Series G Preferred Stock (if the condition set forth in
Sections 8.1(b)(i) is satisfied and the 8-A Effectiveness Event has not
occurred), or (ii) BTI (if the condition set forth in Sections 8.1(b)(i) is not
satisfied or the 8-A Effectiveness Event has occurred); PROVIDED that, so long
as BTI beneficially owns at least five percent (5%) of the outstanding Common
Stock of the Company (assuming conversion of all Series Preferred), such
committees shall include at least one (1) BTI Director.

          (b) The Purchasers and the Company agree that so long as BTI
beneficially owns at least ten percent (10%) of the outstanding Common Stock of
the Company (assuming conversion of all Series Preferred), the Company shall,
and the Purchasers shall cause the Company to, create a Compensation Committee
of the Board of Directors consisting of four (4) members. Two members of such
Compensation Committee shall not be employees of the Company and one member
shall be either the Chief Executive Officer, the President, the Chief

                                       29
<PAGE>

Operating Officer or a Senior Vice President of the Company. The Purchasers and
the Company agree that no fewer than two (2) BTI Directors shall serve on the
Compensation Committee for so long as BTI beneficially owns at least ten percent
(10%) of the outstanding Common Stock of the Company (assuming conversion of all
Series Preferred); PROVIDED that, so long as BTI beneficially owns at least five
percent (5%) of the outstanding Common Stock of the Company (assuming conversion
of all Series Preferred), such committee shall include at least one (1) BTI
Director.

          (c) Notwithstanding the foregoing, the Purchasers and the Company
agree that BTI's representation on, and the size of, such committees of the
Board of Directors shall be increased at any time as appropriate to reflect
BTI's proportionate equity interest in the Company.

     8.3 VETO RIGHTS. So long as BTI beneficially owns at least 10% of the
outstanding Common Stock of the Company (assuming conversion of all Series
Preferred) or the aggregate outstanding shares of Series F Preferred Stock and
Series G Preferred Stock, in each case representing such number of shares of
Common Stock on an as-converted basis (subject to adjustment for any stock
split, reverse stock split and the like), the approval of at least one (1) of
the BTI Directors shall be required for the Board of Directors of the Company or
any Subsidiary to approve and authorize any of the following with respect to the
Company or any Subsidiary:

          (a) Any increase or decrease in the total authorized shares of, or
issuance, sale, pledge or other disposition of, capital stock or any security
exchangeable or exerciseable for or convertible into capital stock;

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

          (c) Any reclassification, combination, split, subdivision, redemption,
repurchase or other acquisition of any shares of capital stock (excluding
repurchases upon termination of services);

          (d) Any individual incurrence or guarantee of indebtedness (excluding
draw downs on credit facilities) or the individual issuance of any debt
securities in excess of $25,000,000;

          (e) Any change in the size or composition of the Board of Directors or
any committee of the Board of Directors or create any new committee of the Board
of Directors;

          (f) Any transaction with an Affiliate or any entity in which an
Affiliate has an interest as a director, officer, employee or greater than 5%
stockholder or interest through a family relationship (excluding repurchases
upon termination of services);

          (g) Any hiring or termination of a chief executive officer;

          (h) Any adoption or modification of the annual budget and business
plan;

                                       30
<PAGE>

          (i) Any amendment or modification of any material provision of the
Indenture for the Company's Senior Notes, or the Company's main credit facility
or any other material contract;

          (j) Any adoption, renewal or material modification of any material
compensation or benefit plan or arrangement;

          (k) Any authorization of entering into a new line of business provided
as of the date hereof;

          (l) Any consolidation, reorganization, share exchange,

recapitalization, business combination, merger or similar transaction other than
intra-Company transactions;

          (m) Any sale, pledge, grant of security interest, lease, transfer or
other disposition of assets in excess of twenty-five million dollars
($25,000,000);

          (n) Any acquisition of assets or securities of any other Person,
except for acquisitions involving cash with an aggregate value of less than
twenty-five million dollars ($25,000,000) for any single acquisition or series
of related transactions;

          (o) Any amendment to the Company's Restated Certificate or Bylaws;

          (p) Any voting or similar agreement concerning the Company's capital
stock;

          (q) Any payment, discharge or satisfaction of any material claim,
liability or obligation or the commencement of any material suit or proceeding;

          (r) Any joint venture or similar profit sharing arrangement involving
material assets or the payment or receipt of more than twenty-five million
dollars ($25,000,000);

          (s) Any material license, contract or agreement; or

          (t) Any liquidation, dissolution or winding up of the Company.

     8.4 OBSERVER RIGHTS. Subject to the provisions of this Section 8.4, so long
as Stephen L. Sauder holds at least an aggregate of 2,054,678 shares of the
Company's Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock (subject to adjustment for any stock split, reverse stock split
and the like), he shall have the right to attend all meetings of the Company's
Board of Directors (other than Board committee meetings) in a nonvoting observer
capacity, to receive notice of such meetings and to receive all minutes,
consents and other materials, financial or otherwise, which the Company provides
to its Board of Directors ("OBSERVER RIGHTS"). Subject to the provisions of this
Section 8.4, so long as Advantage Capital Missouri Partners I, L.P., Advantage
Capital Missouri Partners II, L.P. and their Affiliates hold at least an
aggregate of 940,875 shares the Company's Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock (subject to adjustment for any
stock split, reverse stock split and the like), they shall have the right to
appoint a total of one representative who shall have Observer Rights. Subject to
the provisions of this Section 8.4, so long as White Pines Limited Partnership I
and Pacific Capital, L.P. hold at least an aggregate of 1,104,526 shares the

                                       31
<PAGE>

Company's Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock (subject to adjustment for any stock split, reverse stock split
and the like), they shall have the right to appoint a total of one
representative who shall have Observer Rights. The Company may require as a
condition precedent to granting Observer Rights under this Section 8.4 that each
person proposing to attend any meeting of the Company's Board of Directors and
each person to have access to any of the information provided by the Company to
the Board of Directors shall agree to hold in confidence and trust and to act in
a fiduciary manner with respect to all information so received during such
meetings or otherwise. The Company also reserves the right not to provide
information and to exclude persons having Observer Rights from any meeting or
portion thereof (a) if the Company believes upon advice of counsel and with
reasonable notice to the persons having Observer Rights that attendance at such
meeting by such persons would adversely affect the attorney-client privilege or
the Board's fiduciary duties, or (b) to protect confidential or competitively
sensitive information. The Observer Rights set forth in this Section 8.4 shall
terminate upon the closing of a Qualifying Public Offering (or an IPO that is
not a Qualifying Public Offering in which all of the shares of Series Preferred
are converted into shares of Common Stock pursuant to the Restated Certificate)
unless terminated sooner pursuant to the terms of this Section 8.4.

9.   MISCELLANEOUS.

     9.1 GOVERNING LAW; PROCEEDINGS AND WAIVER OF JURY TRIAL. This Agreement
shall be governed in all respects by the laws of the State of New York. All
actions and proceedings arising our of or relating to this Agreement shall be
heard and determined in New York state or federal court located in New York.
Each party irrevocably waives all right to trial by jury in any action or
proceeding (including counterclaims) arising out of or relating to this
Agreement.

     9.2 SUCCESSORS AND ASSIGNS. 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.

     9.3 ENTIRE AGREEMENT; AMENDMENT; WAIVER.

          (a) This Agreement (including the Exhibits hereto) constitutes the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof; PROVIDED that the parties to this Agreement
acknowledge and agree that the rights, restrictions and obligations set forth in
this Agreement are in addition to, and not in replacement of, the rights,
restrictions and obligations set forth in the Purchase Agreement, the Series G
Purchase Agreement, the Company's Restated Certificate and the Management
Stockholder Agreements.

          (b) This Agreement may be amended or modified only upon the written
consent of the Company and Purchasers holding: (i) at least fifty percent (50%)
of the Common Stock, voting together as a single class; (ii) at least fifty
percent (50%) of the Series B Preferred Stock and Series H Preferred Stock,
voting together as a single class; (iii) at least fifty percent (50%) of the
Series C Preferred Stock, voting together as a single class; and (iv) at least
fifty percent (50%) of the Series D Preferred Stock and Series I Preferred
Stock, voting together as a single class; (v) at least fifty percent (50%) of
the Series F Preferred Stock, voting together as a single

                                       32
<PAGE>

class; and (vi) at least fifty percent (50%) of the Series G Preferred Stock,
voting together as a single class.

          (c) The obligations of the Company and the rights of the holders of
any series of the Series Preferred or of the Common Stock under this Agreement
may be waived only with the written consent of Purchasers holding the following
percentage of that series of the Series Preferred or of the Common Stock, as
applicable: (i) at least fifty percent (50%) of the Common Shares, voting
together as a single class; (ii) at least fifty percent (50%) of the Series B
Preferred and Series H Preferred Stock, voting together as a single class; (iii)
at least fifty percent (50%) of the Series C Preferred Stock, voting together as
a single class; (iv) at least fifty percent (50%) of the Series D Preferred
Stock and Series I Preferred Stock, voting together as a single class; (v) at
least fifty percent (50%) of the Series F Preferred Stock, voting together as a
single class; and (vi) at least fifty percent (50%) of the Series G Preferred
Stock, voting together as a single class.

     9.4 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by United States
first-class mail, postage prepaid, sent by facsimile or delivered personally by
hand or nationally recognized courier addressed (a) if to a Holder, as indicated
on the list of Holders attached hereto as Exhibit A, or at such other address as
such holder or permitted assignee shall have furnished to the Company in
writing, or (b) if to the Company, at such address or facsimile number as the
Company shall have furnished to each Holder in writing. All such notices and
other written communications shall be effective on the date of mailing,
facsimile transfer or delivery.

     9.5 DELAYS OR OMISSIONS. No delay or omission to exercise any right, power
or remedy accruing to any Holder, upon any breach or default of the Company
under this Agreement shall impair any such right, power or remedy of such Holder
nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default therefore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any Holder of any
breach or default under this Agreement or any waiver on the part of any Holder
of any provisions or conditions of this Agreement must be made in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement or by law or otherwise afforded to any
Holder, shall be cumulative and not alternative.

     9.6 RIGHTS; SEPARABILITY. Unless otherwise expressly provided herein, a
Holder's rights hereunder are several rights, not rights jointly held with any
of the other Holders. 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.

     9.7 INFORMATION CONFIDENTIAL. Each Holder acknowledges that the information
received by them pursuant hereto may be confidential and for its use only, and
it will not use such confidential information in violation of the Exchange Act
or reproduce, disclose or disseminate such information to any other Person
(other than its employees or agents having a need to know the contents of such
information, and its attorneys), except in connection with the exercise of
rights under this Agreement, unless the Company has made such information
available to the public generally or such Holder is required to disclose such
information by a governmental body.

                                       33
<PAGE>

     9.8 TITLES AND SUBTITLES. The titles of the paragraphs and subparagraphs of
this Agreement are for convenience of reference only and are not to be
considered in construing or interpreting this Agreement.

     9.9 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 signature(s).

     9.10 BOARD MEETINGS/INFORMATION. The Board of Directors of the Company
shall meet at least quarterly at all times during the term of this Agreement. In
addition to the information rights set forth in the Purchase Agreement and the
Series G Purchase Agreement, the Company shall provide to the Directors as soon
as available after the end of each calendar month, copies of the unaudited
interim financial statements of the Company and its consolidated Subsidiaries as
at the end of such month or fiscal quarter, as the case may be, in each case in
a form customarily distributed to the officers of the Company.

     9.11 RESTATED CERTIFICATE AND BYLAWS. The Company and the Purchasers shall
take or cause to be taken all lawful action necessary to ensure at all times
that the Company's Restated Certificate and Bylaws do not, at any time,
contradict the provisions of this Agreement.

     9.12 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or equity.

     9.13 EFFECTIVENESS. This Agreement shall become effective upon the First
Closing (as defined in the Series G Purchase Agreement).

                     [Rest of page intentionally left blank]

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                     BIRCH TELECOM, INC.

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

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                         /s/ Stephen L. Sauder
                                         ---------------------------------------
                                         Stephen L. Sauder

Number of shares held:
<TABLE>
<S>                                   <C>
Common Stock:                            -0-
Series B Preferred Stock:             19,781
Series C Preferred Stock:                -0-
Series D Preferred Stock:                -0-
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                         NEWS-PRESS & GAZETTE COMPANY

                                         By: /s/ Henry H. Bradley
                                         ---------------------------------------
                                         Name:  Henry H. Bradley
                                         Title:

Number of shares held:
<TABLE>
<S>                                <C>
Common Stock:                            -0-
Series B Preferred Stock:          1,648,438
Series C Preferred Stock:          1,582,500
Series D Preferred Stock:            222,222
Series F Preferred Stock                 -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                         HENRY H. BRADLEY TRUST DATED
JANUARY 9, 1998

                                         By: /s/ Henry Bradley
                                         ---------------------------------------
                                             Henry Bradley, Trustee

                                         By: /s/ Vickie Bradley
                                             -------------------
                                             Vickie Bradley, Trustee

Number of shares held:
<TABLE>
<S>                                   <C>
Common Stock:                            -0-
Series B Preferred Stock:             65,938
Series C Preferred Stock:                -0-
Series D Preferred Stock:             14,815
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                         VICKIE A. BRADLEY TRUST DATED
                                         JANUARY 9, 1998

                                         By: /s/ Henry Bradley
                                         ---------------------------------------
                                             Henry Bradley, Trustee

                                         By: /s/ Vickie Bradley
                                         ---------------------------------------
                                             Vickie Bradley, Trustee

Number of shares held:
<TABLE>
<S>                                   <C>
Common Stock:                            -0-
Series B Preferred Stock:             32,969
Series C Preferred Stock:                -0-
Series D Preferred Stock:              7,407
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                        /s/ Henry H. Bradley
                                         ---------------------------------------
                                        Henry H. Bradley, as custodian for
                                        Katherine Elizabeth Bradley under the
                                        Missouri Uniform Transfers to Minors Act

Number of shares held:
<TABLE>
<S>                                   <C>
Common Stock:                            -0-
Series B Preferred Stock:             32,969
Series C Preferred Stock:                -0-
Series D Preferred Stock:             11,111
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                     /s/ Henry H. Bradley
                                     -------------------------------------------
                                     Henry H. Bradley, as custodian for Stephane
                                     Suzanne Bradley under the Missouri Uniform
                                     Transfers to Minors Act.

Number of shares held:
<TABLE>
<S>                                   <C>
Common Stock:                            -0-
Series B Preferred Stock:             32,969
Series C Preferred Stock:                -0-
Series D Preferred Stock:             11,111
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                        /s/ Henry H. Bradley
                                        ----------------------------------------
                                        Henry H. Bradley, as custodian for David
                                        Bradley, III under the Missouri Uniform
                                        Transfers to Minors Act.

Number of shares held:
<TABLE>
<S>                                   <C>
Common Stock:                            -0-
Series B Preferred Stock:             32,969
Series C Preferred Stock:                -0-
Series D Preferred Stock:             11,111
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                         PACIFIC CAPITAL, L.P.

                                         By:  White Pines Ventures, LLC,
                                         its management company

                                         By: /s/Ian R. N. Bund
                                             -----------------------------------
                                         Name:  Ian R. N. Bund
                                             -----------------------------------
                                         Title: President
                                             -----------------------------------

Number of shares held:
<TABLE>
<S>                                <C>
Common Stock:                            -0-
Series B Preferred Stock:          1,219,925
Series C Preferred Stock:                -0-
Series D Preferred Stock:                -0-
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                         WHITE PINES LIMITED PARTNERSHIP I

                                         By:  White Pines Ventures, LLC,
                                         its management company

                                         By: /s/ Ian R. N. Bund
                                             -----------------------------------
                                         Name: Ian R. N. Bund
                                             -----------------------------------
                                         Title: President
                                             -----------------------------------

Number of shares held:
<TABLE>
<S>                                  <C>
Common Stock:                            -0-
Series B Preferred Stock:            989,128
Series C Preferred Stock:                -0-
Series D Preferred Stock:                -0-
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                         /s/ David E. Scott
                                         ---------------------------------------
                                         David E. Scott

myriad

Number of shares held:
<TABLE>
<S>                                 <C>
Common Stock:                       2,130,249
Series B Preferred Stock:                -0-
Series C Preferred Stock:             189,900
Series D Preferred Stock:                -0-
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                         ADVANTAGE CAPITAL MISSOURI
                                         PARTNERS I, L.P.

                                         By:  Advantage Capital MO -
                                              GP I, LLC, its general partner

                                         By: /s/ David W. Bergmann
                                                --------------------------------
                                         Name: David W. Bergmann
                                                --------------------------------
                                         Title: VP/Member/Manager
                                                --------------------------------

Number of shares held:
<TABLE>
<S>                                 <C>
Common Stock:                            -0-
Series B Preferred Stock:           1,318,750
Series C Preferred Stock:                -0-
Series D Preferred Stock:             145,550
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                         KCEP I, L.P.

                                         By: /s/ Thomas R. Palmer
                                             -----------------------------------
                                         Name: Thomas R. Palmer
                                             -----------------------------------
                                         Title: Vice President
                                             -----------------------------------

Number of shares held:
<TABLE>
<S>                                  <C>
Common Stock:                            -0-
Series B Preferred Stock:            945,108
Series C Preferred Stock:                -0-
Series D Preferred Stock:            111,111
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                         /s/ Jeffrey D. Shackelford
                                         ---------------------------------------
                                         Jeffrey D. Shackelford

Number of shares held:
<TABLE>
<S>                                <C>
Common Stock:                      1,425,520
Series B Preferred Stock:                -0-
Series C Preferred Stock:                -0-
Series D Preferred Stock:                -0-
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                         /s/ Gregory C. Lawhon
                                         ---------------------------------------
                                         Gregory C. Lawhon

Number of shares held:
<TABLE>
<S>                                   <C>
Common Stock:                         92,035
Series B Preferred Stock:                -0-
Series C Preferred Stock:                -0-
Series D Preferred Stock:                -0-
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                         /s/ David W. Vranicar
                                         ---------------------------------------
                                         David W. Vranicar

Number of shares held:
<TABLE>
<S>                                  <C>
Common Stock:                        568,619
Series B Preferred Stock:             36,266
Series C Preferred Stock:                -0-
Series D Preferred Stock:                -0-
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                         KANSAS VENTURE CAPITAL, INC.

                                         By: /s/ John S. Dalton
                                             -----------------------------------
                                         Name:   John S. Dalton
                                             -----------------------------------
                                         Title: President
                                             -----------------------------------

Number of shares held:
<TABLE>
<S>                                  <C>
Common Stock:                            -0-
Series B Preferred Stock:            164,844
Series C Preferred Stock:                -0-
Series D Preferred Stock:            166,666
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND
RESTATED PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.

                                         /s/ Ian R. N. Bund
                                         ---------------------------------------
                                         Ian R. N. Bund

Number of shares held:
<TABLE>
<S>                                   <C>
Common Stock:                            -0-
Series B Preferred Stock:             32,971
Series C Preferred Stock:                -0-
Series D Preferred Stock:             18,223
Series F Preferred Stock:                -0-
Series G Preferred Stock:                -0-
Series H Preferred Stock:                -0-
Series I Preferred Stock:                -0-
</TABLE>

<PAGE>

     IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND RESTATED
PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first paragraph
hereof.

                                        KCEP VENTURES II, L.P.

                                        By: /s/ Thomas R. Palmer
                                           -------------------------------------

                                        Name: Thomas R. Palmer
                                             -----------------------------------

                                        Title: Vice President
                                              ----------------------------------

Number of shares held:
<TABLE>

<S>                                  <C>
Common Stock:                          -0-
Series B Preferred Stock:              -0-
Series C Preferred Stock:              -0-
Series D Preferred Stock:            555,556
Series F Preferred Stock:              -0-
Series G Preferred Stock:              -0-
Series H Preferred Stock:              -0-
Series I Preferred Stock:              -0-
</TABLE>

<PAGE>

     IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND RESTATED
PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first paragraph
hereof.

                                        ADVANTAGE CAPITAL MISSOURI
                                        PARTNERS II, L.P.

                                        By: Advantage Capital MO - GP II L.L.C.,
                                        its general partner

                                        By: /s/ David W. Bergmann
                                           -------------------------------------

                                        Name: David W. Bergmann
                                             -----------------------------------

                                        Title: VP/Member/Manager
                                              ----------------------------------

Number of shares held:
<TABLE>
<S>                                  <C>
Common Stock:                          -0-
Series B Preferred Stock:              -0-
Series C Preferred Stock:              -0-
Series D Preferred Stock:            417,450
Series F Preferred Stock:              -0-
Series G Preferred Stock:              -0-
Series H Preferred Stock:              -0-
Series I Preferred Stock:              -0-
</TABLE>

<PAGE>

     IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND RESTATED
PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first paragraph
hereof.

                                        STEPHEN LOCKWOOD SAUDER REVOCABLE
                                        TRUST DTD MARCH 1, 1976

                                             /s/ Stephen L. Sauder
                                        ----------------------------------------
                                        Stephen L. Sauder, Trustee

                                             /s/ Paula Kay Friesen Sauder
                                        ----------------------------------------
                                        Paula Kay Friesen Sauder, Trustee

Number of shares held:

<TABLE>

<S>                                 <C>
Common Stock:                          -0-
Series B Preferred Stock:              -0-
Series C Preferred Stock:           1,544,788
Series D Preferred Stock:              -0-
Series F Preferred Stock:              -0-
Series G Preferred Stock:              -0-
Series H Preferred Stock:              -0-
Series I Preferred Stock:              -0-
</TABLE>

<PAGE>

     IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND RESTATED
PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first paragraph
hereof.

                                        PAULA KAY FRIESEN SAUDER REVOCABLE
                                        TRUST DTD MARCH 1, 1976

                                             /s/ Stephen L. Sauder
                                        ----------------------------------------
                                        Stephen L. Sauder, Trustee

                                             /s/ Paula Kay Friesen Sauder
                                        ----------------------------------------
                                        Paula Kay Friesen Sauder, Trustee

Number of shares held:
<TABLE>
<S>                                 <C>
Common Stock:                          -0-
Series B Preferred Stock:              -0-
Series C Preferred Stock:           1,544,787
Series D Preferred Stock:              -0-
Series F Preferred Stock:              -0-
Series G Preferred Stock:              -0-
Series H Preferred Stock:              -0-
Series I Preferred Stock:              -0-
</TABLE>

<PAGE>

     IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND RESTATED
PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first paragraph
hereof.

                                        S. L. SAUDER FAMILY LIMITED PARTNERSHIP

                                        By: /s/ Stephen L. Sauder
                                           -------------------------------------

                                        Name: Stephen L. Sauder
                                             -----------------------------------

                                        Title: General Partner
                                              ----------------------------------

Number of shares held:

<TABLE>

<S>                                 <C>
Common Stock:                          -0-
Series B Preferred Stock:              -0-
Series C Preferred Stock:           1,000,000
Series D Preferred Stock:              -0-
Series F Preferred Stock:              -0-
Series G Preferred Stock:              -0-
Series H Preferred Stock:              -0-
Series I Preferred Stock:              -0-
</TABLE>

<PAGE>

     IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND RESTATED
PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first paragraph
hereof.

                                        BTI VENTURES L.L.C.

                                        By: /s/ Alexander Navab, Jr.
                                           -------------------------------------

                                        Name: Alexander Navab, Jr.
                                             -----------------------------------

                                        Title: Authorized Person
                                              ----------------------------------

Number of shares held:

<TABLE>

<S>                                 <C>
Common Stock:                          -0-
Series B Preferred Stock:              -0-
Series C Preferred Stock:              -0-
Series D Preferred Stock:              -0-
Series F Preferred Stock            23,596,492
Series G Preferred Stock:              -0-
Series H Preferred Stock:              -0-
Series I Preferred Stock:              -0-
</TABLE>

<PAGE>

     IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND RESTATED
PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first paragraph
hereof.

                                             /s/ Gregory C. Lawhon
                                        ----------------------------------------
                                        Gregory C. Lawhon

                                             /s/ Jina A. Lawhon
                                        ----------------------------------------
                                        Jina A. Lawhon

Number of shares held:
<TABLE>
<S>                                  <C>
Common Stock:                        574,427
Series B Preferred Stock:              -0-
Series C Preferred Stock:              -0-
Series D Preferred Stock:              -0-
Series F Preferred Stock:              -0-
Series G Preferred Stock:              -0-
Series H Preferred Stock:              -0-
Series I Preferred Stock:              -0-
</TABLE>

<PAGE>

     IN WITNESS WHEREOF, the undersigned has executed this AMENDED AND RESTATED
PURCHASERS RIGHTS AGREEMENT as of the date set forth in the first paragraph
hereof.

                                             /s/ Jeffrey D. Shackelford
                                        ----------------------------------------
                                        Jeffrey D. Shackelford

                                             /s/ Deborah A. Shackelford
                                        ----------------------------------------
                                        Deborah A. Shackelford

Number of shares held:

<TABLE>

<S>                                  <C>
Common Stock:                          -0-
Series B Preferred Stock:              -0-
Series C Preferred Stock:            105,550
Series D Preferred Stock:              -0-
Series F Preferred Stock:              -0-
Series G Preferred Stock:              -0-
Series H Preferred Stock:              -0-
Series I Preferred Stock:              -0-
</TABLE>

<PAGE>

                                    EXHIBIT A
                                   PURCHASERS

SERIES B PURCHASERS

Advantage Capital Missouri Partners I, L.P.
KCEP I, L.P.
News-Press & Gazette Company
Henry H. Bradley and Vickie A. Bradley, Trustees of the Henry H. Bradley Trust
dtd 1/9/98
Henry H. Bradley and Vickie A. Bradley, Trustees of the Vickie A. Bradley Trust
dtd 1/9/98
Brian A. Bradley
Eric A. Bradley
David R. Bradley, Jr. and Katherine Suzanne Bradley, Trustees of the David R.
Bradley, Jr. Trust dated March 1, 1983
Katherine Suzanne Bradley
Henry H. Bradley, as custodian for Katherine Elizabeth Bradley under the
Missouri Uniform Transfers to Minors Act
Henry H. Bradley, as custodian for Stephane Suzanne Bradley under the Missouri
Uniform Transfers to Minors Act
Henry H. Bradley, as custodian for David R. Bradley, III under the Missouri
Uniform Transfers to Minors Act
Gregory C. Lawhon
Gary L. Chesser
David W. Vranicar
Bradley A. Moline
Gwen C. Bortner
Earl W. Sauder
Stephen L. Sauder
Bobbie L. Agler
Dale McCabe
Citruck & Co., as Trustee for Emily Modeer
Samuel Allen & Maurine Ruth Agron as Trustees of the Samuel Agron Trust
Dorothy H. Ammon, Trustee of the Dororthy H. Ammon Trust dated 12/15/97
Charles G. & Val Jean Adams, Joint Tenants with Rights of Survivorship
Richard A. Bauman, Trustee of Richard A. Bauman Living Trust dated 5/16/97
Marsha L. Broomfield, Trustee of Marsha L. Broomfield Trust dated 12/7/90
Charles S. Broomfeld, Trustee of Charles S. Broomfield Trust dated 11/12/96
Steven R. & Nancy A. Cobb, Tenants in the entirety
Joseph M. Crowe, Sr.
Joseph M. Crowe, Jr.
Jeffrey M. Crowe
Martin J. Crowe, III & Frances C. Crowe, Trustee of the Martin J. Crowe III
Trust dated 3/26/92
Martin J. Crowe, III & Frances C. Crowe, Trustee of the Francis C. Crowe Trust
dated 3/26/92

<PAGE>

SERIES B PURCHASERS CONTINUED

GJA, LLC
Edward D. Jones & Co. as Custodian FBO Michael Griess, IRS #159-90586-1-5
Michael D. & Linda Griess, Joint Tenants with Rights of Survivorship
James & Kathryn Healy, Joint Tenants with Rights of Survivorship
H. David Heumann
Jerry M. & Mary S. Huffman, Joint Tenants with Rights of Survivorship
Kansas Venture Capital, Inc.
KCEP I, L.P.
Thomas E. Keller
Charles H. Koslowsky, Jr.
Kathryn K. Koslowsky
Charles H. Koslowsky, III
Ronald L. Langstaff
John Mark Legg
Suzanne S. McCann Revocable Trust u/t/a dated 12/5/88 as amended
George J. McLiney, Jr. & Laurie M. McLiney, Trustees of the Revocable Living
Trust Agreement of George J. McLiney, Jr. dated October 12, 1992
Kevin C. McLiney
Frederick P. & Lisa S. Mahler, Joint Tenants with Rights of Survivorship
UMB Bank, n.a. Trustee for Robert Modeer #523585008
Roger A. Moline SEP IRA
Jerry Moyes
Pamela J. Perilstein
Jeff A. Poe
Edward D. Jones & Co. Custodian FBO Sean F. Pyle IRA #639-90603-1-5
Sean F. Pyle
Michael A. & Anne Marie C. Russell, Joint Tenants with Rights of Survivorship
Timothy R. & Roselee C. Saracini, Joint Tentants with Rights of Survivorship
Theodore H. Schell
Dain Rauscher Inc., Custodian for Christine S. Schroff IRA
Dain Rauscher Inc., Custodian for Earl H. Scudder, Jr., IRA
Mark A. Scudder & Alison Armstrong, Joint Tenants with Rights of Survivorship
Smith Barney Inc., IRA Custodian for Mark A. Scudder IRA
Don Simpson
Ron Simpson
Jane E. Snowden, Trustee for the Jane E. Snowden Trust dated 12/23/94
Philip L. Spartis
Wayne & Judy Widener
Carolyn J. Crowe
Elizabeth E. Crowe
Martin C. Crowe
Michael P. Crowe

<PAGE>

SERIES B PURCHASERS CONTINUED

Thomas K. Crowe
Daniel B. Bauman
Ellen C. Ganey
Mary & Steve Gaarder, JTWROS
Eileen & Doug Johnson, JTWROS
Lawrence K & Melinda Crowe, JTWROS
Pacific Capital, L.P.
White Pines Limited Partnership I
Ian R. N. Bund
Herbert S. Amster, Trustee of the Herbert S. Amster Amended Trust dated
January 23, 1989
Ronald G. Kalish, as Trustee of the Ronald G. Kalish Trust dated September 9,
1997
Volunteer Healthcare Associates, L.L.C.
Yocum Consulting Associates, Inc.
Michael & Julie McCann
Robert & Karen McCann
Christopher McCann
Dean Griess
Lori Ann Greenberg
Gerri Lyn Greenberg
Daniel J. Boyle
Lois F. Marler
Michael G. Williams
John P. Crowe
Frances C. Lester, Trustee UAD 10-30-92 for Frances C. Lester
Brenda Lou Bartels
Beth Denise Karnopp
Kim Rachelle Jaeger
Charles G. Adams
Roger A. Moline
Jill Moline, as custodian for Ryan A. Moline
Jill Moline, as custodian for Adam M. Moline

SERIES C PURCHASERS

News-Press & Gazette Company
David E. Scott
Jeffrey D. Shackelford
Richard L. Tidwell
Stormy Supiran Revocable Trust dtd January 31, 2001
S. L. Sauder Family Limited Partnership, LLP
Stephen Lockwood Sauder Revocable Trust dtd March 1, 1976
Paula Kay Friesen Sauder Revocable Trust dtd March 1, 1976
Hubert Shackelford

<PAGE>

SERIES C PURCHASERS CONTINUED

Marge Shackelford
Albert Miller
Bernice Miller
Steven Shackelford
Constance Shackelford
Margie Ann Shackelford
Wallace and Janet Whitney
Gregory Shackelford
David Taylor
Stephen Miller
Jeannie Miller
Kent Hydeman
Diane Hydeman
Joe Miller
David Miller
Phillip Lee Tidwell
Christopher William Tidwell

COMMON STOCK PURCHASERS

David E. Scott
Jeffrey D. Shackelford
Gregory C. Lawhon
Gary L. Chesser
David W. Vranicar
Bradley A. Moline
Michael D. Griess
Sean F. Pyle
Gwen C. Bortner
Steven R. Cobb
Paul D. Rowlett
Anne M. Krinsky
Michelle Mulik
James R. Pyle
Carolyn S. Pyle
Amy K. Pyle
Sylvia M. Scott
Gary W. Widener
Judith S. Widener
David M. Hollingsworth
Geraldine M. Lawhon
Charla A. Lawhon
Carla Supiran

<PAGE>

SERIES D PURCHASERS

KCEP Ventures II, L.P.
KCEP I, L.P.
Advantage Capital Missouri Partners I, L.P.
Advantage Capital Missouri Partners II, L.P.
News-Press & Gazette Company
Henry H. Bradley and Vickie A. Bradley Trustees of the Henry H. Bradley Trust
dated 1/9/98
Henry H. Bradley and Vickie A. Bradley Trustees of the Vickie A. Bradley Trust
dated 1/9/98
Brian A. Bradley
Eric A. Bradley
David R. Bradley, Jr. and Katherine Suzanne Bradley, Trustees of the David R.
Bradley, Jr. Trust dated March 1, 1983
Katherine Suzanne Bradley
Henry H. Bradley, as custodian for Katherine Elizabeth Bradley under the
Missouri Uniform Transfer to Minors Act
Henry H. Bradley, as custodian for Stephane Suzanne Bradley under the
Missouri Uniform Transfers to Minors Act
Henry H. Bradley, as custodian for David R. Bradley, III under the Missouri
Uniform Transfers to Minors Act
Kansas Venture Capital, Inc.
Douglas B. Fuller
Lyle Leimkuhler
Lee Sawyer
GJA, Inc.
Tim R. & Roselee Saracini, JTWROS
Richard A. Bauman, Trustee of Richard A. Bauman Living Trust dated 5/16/97
Jeffrey M. Crowe
Frederick P. & Lisa S. Mahler, JTWROS
Pamela J. Perilstein
John Mark Legg
Thomas E. Keller
Martin J. Crowe, III & Frances C. Crowe Trustees of the Frances C. Crowe Trust
dated 3/26/92
Martin J. Crowe, III & Frances C. Crowe Trustees of the Martin J. Crowe Trust
dated 3/26/92
Charles H. Koslowsky, III
Kevin C. McLiney
George J. McLiney, Jr. & Lauri M. McLiney, Trustees of the Revocable Living
Trust Agreement of George J. McLiney, Jr. dated October 12, 1992
James & Kathryn Healy, JTWROS
Michael A. & Anne Marie C. Russell, JTWROS
Jerry M. & Mary S. Huffman, JTWROS
Charles S. Broomfield, Trustee of Charles S. Broomfield Trust dated November 12,
1996
Marsha L. Broomfield, Trustee of Marsha L.   Broomfield Trust dated December 7,
1990
Jane E. Snowden, Trustee of the Jane E. Snowden Trust dated December 23, 1994

<PAGE>

SERIES D PURCHASERS CONTINUED

Ian R. N. Bund
Herbert S. Amster IRA
Ronald G. Kalish, Trustee of the Ronald G. Kalish Living Trust dated
September 9, 1997
Volunteer Healthcare Associates, L.L.C.
Daniel J. Boyle, IRA
Daniel J. Boyle
Michael Williams
S. Sterling McMillan, III
Mark A. Scudder & Alison Armstrong, JTWROS
Wayne & Judy Widener, Community Property
Suzanne S. McCann Revocable Trust u/t/a dated 12/5/88 as amended
Anthony Grover
H. David Heumann
Jerry Moyes c/o Swift Transportation Co., Inc.
Dain Rauscher Inc., Custodian for Christine S. Schroff IRA
Smith Barney Inc., IRA Custodian for Mark A. Scudder, IRA
Dain Rauscher Inc., Custodian for Earl H. Scudder, Jr., IRA
Don Simpson
Ron Simpson
GC&H Investments
LBI Group Inc.
George H. Young III
Philip A. Dougall
Ros L'Esperance
Peter J. Toal
John S. Zuckerman
Stephen J. Jeselson, Jr.
David Zwick
Eileen Johnson, custodian for George Crowe Lester UTMA/MO
Eileen Johnson, custodian for Joseph Andrew Lester UTMA/MO
Eileen Johnson, custodian for Amelia Claire Lester UTMA/MO
John P. Crowe
Frances C. Lester, Trustee UAD 10-30-92 for Frances C. Lester

<PAGE>

SERIES F PURCHASER

BTI Ventures L.L.C.

SERIES G PURCHASERS

BTI Ventures L.L.C. (at the First Closing)

SERIES H PURCHASERS

SERIES I PURCHASERS

OPTION SHARE PURCHASERS

David E. Scott
Jeffrey D. Shackelford
Gregory C. Lawhon
Gary L. Chesser
David W. Vranicar
Bradley A. Moline
Richard L. Tidwell
Stormy C. Supiran
Gwen C. Bortner
Bobbie L. Agler
Dale McCabe
Sean F. Pyle
Michael D. Griess
Steven R. Cobb
Paul D. Rowlett
Anne M. Krinsky
Michelle Mulik
Donald H. Goldman
David M. Hollingsworth

<PAGE>

                                    EXHIBIT B

                               RESTRICTED HOLDERS

BTI Ventures L.L.C.

News-Press & Gazette Company
Henry H. Bradley and Vickie A. Bradley, Trustees of the Henry H. Bradley Trust
dtd 1/9/98
Henry H. Bradley and Vickie A. Bradley, Trustees of the Vickie A. Bradley Trust
dtd 1/9/98
Brian A. Bradley
Eric A. Bradley
David R. Bradley, Jr. and Katherine Suzanne Bradley, Trustees of the David R.
Bradley, Jr. Trust dated March 1, 1983
Katherine Suzanne Bradley
Henry H. Bradley, as custodian for Katherine Elizabeth Bradley under the
Missouri Uniform Transfers to Minors Act
Henry H. Bradley, as custodian for Stephane Suzanne Bradley under the Missouri
Uniform Transfers to Minors Act
Henry H. Bradley, as custodian for David R. Bradley, III under the Missouri
Uniform Transfers to Minors Act
Douglas B. Fuller Trust dated March 31, 1988
Rhonda K. Fuller Trust dated December 5, 1997
Lyle Leimkuhler
Lee M. Sawyer and Toni J. Sawyer, JTWROS

Stephen L. Sauder
S. L. Sauder Family Limited Partnership, LLP
Stephen Lockwood Sauder Revocable Trust dtd March 1, 1976
Paula Kay Friesen Sauder Revocable Trust dtd March 1, 1976
Earl W. Sauder

Advantage Capital Missouri Partners I, L.P.
Advantage Capital Missouri Partners II, L.P.

KCEP I, L.P.
KCEP Ventures II, L.P.

Pacific Capital, L.P.
White Pines Limited Partnership I
Ian R. N. Bund
Herbert S. Amster, Trustee of the Herbert S. Amster Amended Trust dated
January 23, 1989
Ronald G. Kalish, as Trustee of the Ronald G. Kalish Trust dated September 9,
1997
Volunteer Healthcare Associates, LLC
Yocum Consulting Associates, Inc.
Daniel J. Boyle, IRA
Daniel J. Boyle
Michael Williams

<PAGE>

S. Sterling McMillan, III
Anthony Grover
Lois F. Marler

Kansas Venture Capital, Inc.

David E. Scott
Jeffrey D. Shackelford
Gregory C. Lawhon
Gregory C. Lawhon IRA
Gary L. Chesser
David W. Vranicar
Bradley A. Moline
Michael D. Griess
Edward D. Jones & Co. as Custodian FBO Michael Griess, IRS #159-90586-1-5
Michael D. & Linda Griess, Joint Tenants with Rights of Survivorship
Dean W. Griess
Sean F. Pyle
Edward D. Jones & Co. Custodian FBO Sean F. Pyle IRA #639-90603-1-5
Gwen C. Bortner
Steven R. Cobb
Steven R. & Nancy A. Cobb, Tenants in the entirety
Paul D. Rowlett
Michelle Mulik
Richard L. Tidwell
Stormy C. Supiran
Bobbie L. Agler
Dale McCabe
Brenda Lou Bartels
Beth Denise Karnopp
Kim Rachelle Jaeger
Charles G. Adams
Roger A. Moline
Jill Moline, as custodian for Ryan A. Moline
Jill Moline, as custodian for Adam M. Moline
Hubert Shackelford
Marge Shackelford
Albert Miller
Bernice Miller
Steven Shackelford
Constance Shackelford
Margie Ann Shackelford
Wallace and Janet Whitney
Gregory Shackelford
David Taylor
Stephen Miller

<PAGE>

Jeannie Miller
Kent Hydeman
Diane Hydeman
Joe Miller
David Miller
Phillip Lee Tidwell
Christopher William Tidwell
James R. Pyle
Carolyn S. Pyle
Amy K. Pyle
Sylvia M. Scott
Gary W. Widener
Judith S. Widener
David M. Hollingsworth

LBI Group Inc.
George H. Young III
Philip A. Dougall
Ros L'Esperance
Peter J. Toal
John S. Zuckerman
Stephen J. Jeselson, Jr.
David Zwick
Geraldine M. Lawhon
Charla A. Lawhon
Carla Supiran<PAGE>

                                                                   Exhibit 10.48

                                                                  EXECUTION COPY

                           RECAPITALIZATION AGREEMENT

                                  BY AND AMONG

                               BIRCH TELECOM, INC.

                                     AND THE

                                   PURCHASERS

                                  NAMED HEREIN

                           DATED AS OF APRIL 16, 2001

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                               PAGE

<S>     <C>     <C>                                                                                           <C>
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...............................................................7
         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

                                      i

<PAGE>

         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........................................................................................19
         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......................................................................................27
         7.12     Termination....................................................................................27
         7.13     Counterparts; Execution by Facsimile Signature.................................................27
</TABLE>

                                      ii

<PAGE>

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

                                      iii
<PAGE>

                               BIRCH TELECOM, INC.

                           RECAPITALIZATION AGREEMENT

     THIS RECAPITALIZATION AGREEMENT (the "AGREEMENT") is entered into as of
April 16, 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 12,810,001 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 986,844 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 663,001 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 12,810,001 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 986,844 shares of Series H Preferred Stock
(the "SERIES H NEW SHARES") in exchange for the same number, in the aggregate,
of shares of Series B Preferred Stock (the "SERIES B EXCHANGED SHARES") in the
amounts and to the

<PAGE>

Purchasers identified on Annex A hereto, (iii) the issuance of an aggregate
of 663,001 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 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.

                                       2
<PAGE>

     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 (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

                                       3
<PAGE>

shall not occur later than April 12, 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 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

                                       4
<PAGE>

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, 8,572,039 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 2,868,538 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 214,285,715 are issued and
outstanding; 6,579,000 shares of which are designated Series H Preferred Stock,
none of which are issued and outstanding; and 2,223,000 shares of which are
designated Series I Preferred Stock, none 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, 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

                                       5
<PAGE>

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.

                                       6
<PAGE>

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 possession
(other than routine vendor and customer confidentiality agreements and

                                       7
<PAGE>

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 Statement Date Income Statement, other than
changes in the ordinary course of business, none of

                                       8
<PAGE>

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.

     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,

                                       9
<PAGE>

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 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

                                       10
<PAGE>

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 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

                                       11
<PAGE>

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.

     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

                                       12
<PAGE>

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 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.

                                       13
<PAGE>

          (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.

          (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.

                                       14
<PAGE>

          (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 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

                                       15
<PAGE>

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.

     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.

                                       16
<PAGE>

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

                                       17
<PAGE>

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 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.

                                       18
<PAGE>

          (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 on or prior
to the First Closing, Advantage Capital Missouri Partners II, L.P. ("ADVANTAGE
II") anticipates transferring its Series D Exchanged Shares to Advantage Capital
Partners VII Limited Partnership ("ADVANTAGE VII"); provided, further, that
Advantage VII shall, concurrently with such transfer, become a party to the
Purchasers Rights Agreement. Advantage II shall make the representation pursuant
to this Section 4.4 as of the signing of this Agreement and Advantage VII shall
make the representation pursuant to this Section 4.4 at the First Closing Date
pursuant to Section 6.2(a) and at all times thereafter.

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.

     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

                                       19
<PAGE>

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.

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 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).

                                       20
<PAGE>

          (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 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:

                                       21
<PAGE>

          (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.

          (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.

                                       22
<PAGE>

          (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 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.

                                       23

<PAGE>

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

                                       24
<PAGE>

                  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 shall at each Closing
reimburse the reasonable fees of and expenses of Purchasers incurred in
connection with the transactions contemplated by this Agreement and the Related
Agreements, including the payment of the reasonable fees and expenses of
Purchasers in the amount previously disclosed to the Company and Purchasers'
financial, legal and accounting advisors, such fees and expenses not to exceed
$50,000. 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".

                                       26
<PAGE>

     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.

     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
April 12, 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>
------------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>             <C>           <C>         <C>           <C>         <C>          <C>         <C>
                                                           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
------------------------------------------------------------------------------------------------------------------------------------
[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.

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