Document:

<PAGE>

         Manufactured Housing Contract Senior/Subordinate Pass-Through
                          Certificates, Series 2000-2

                              TRANSFER AGREEMENT

                                    between

                     CONSECO FINANCE SECURITIZATIONS CORP.
                                   Purchaser

                                      and

                             CONSECO FINANCE CORP.
                                    Seller

                                  dated as of

                                  May 1, 2000
<PAGE>

                               TABLE OF CONTENTS
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                                                                           Page
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<S>                                                                        <C>
ARTICLE I
     DEFINITIONS..........................................................   1
     SECTION 1.1.  General................................................   1
     SECTION 1.2.  Specific Terms.........................................   1
     SECTION 1.3.  Usage of Terms.........................................   3
     SECTION 1.4.  No Recourse............................................   3

ARTICLE II
     CONVEYANCE OF THE INITIAL CONTRACTS AND THE INITIAL COLLATERAL
     SECURITY.............................................................   3
     SECTION 2.1.  Conveyance of the Initial Contracts and the Initial
                   Collateral Security....................................   3
     SECTION 2.2.  Purchase Price of Initial Contracts....................   4
     SECTION 2.3.  Conveyance of Subsequent Contracts and Collateral
                   Security...............................................   4

ARTICLE III
     REPRESENTATIONS AND WARRANTIES.......................................   5
     SECTION 3.1.  Representations and Warranties of Conseco Finance......   5
     SECTION 3.2.  Representations and Warranties of CFSC.................   7

ARTICLE IV
     COVENANTS OF CONSECO FINANCE.........................................   9
     SECTION 4.1.  Transfer of Contracts..................................   9
     SECTION 4.2.  Costs and Expenses.....................................   9
     SECTION 4.3.  Indemnification........................................   9
     SECTION 4.4.  Financial Statement Disclosure.........................  10

ARTICLE V
     REPURCHASES..........................................................  10
     SECTION 5.1.  Repurchase of Contracts Upon Breach of Warranty........  10
     SECTION 5.2.  Reassignment of Purchased Contracts....................  11
     SECTION 5.3.  Waivers................................................  11

ARTICLE VI
     MISCELLANEOUS........................................................  11
     SECTION 6.1.  Liability of Conseco Finance...........................  11
     SECTION 6.2.  Merger or Consolidation of Conseco Finance or CFSC.....  11
     SECTION 6.3.  Limitation on Liability of Conseco Finance and Others..  12
     SECTION 6.4.  Amendment..............................................  12
     SECTION 6.5.  Notices................................................  13
     SECTION 6.6.  Merger and Integration.................................  13
     SECTION 6.7.  Severability of Provisions.............................  13
</TABLE>
                                      -i-
<PAGE>

<TABLE>
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     SECTION 6.8.  Intention of the Parties..............................   13
     SECTION 6.9.  Governing Law.........................................   14
     SECTION 6.10. Counterparts..........................................   14
     SECTION 6.11. Conveyance of the Initial Contracts and the
                   Initial Collateral Security to the Trust..............   14
     SECTION 6.12. Nonpetition Covenant..................................   14
</TABLE>

                                   SCHEDULES

Schedule A  --  Schedule of Initial Contracts

                                    EXHIBITS

Exhibit A  --  Form of Subsequent Transfer Agreement

                                     -ii-
<PAGE>

                               TRANSFER AGREEMENT
                               ------------------

          THIS TRANSFER AGREEMENT, dated as of May 1, 2000, executed between
Conseco Finance Securitizations Corp., a Minnesota corporation, as purchaser
("CFSC"), and Conseco Finance Corp., a Delaware corporation, as seller ("Conseco
Finance").

                              W I T N E S S E T H:
                              - - - - - - - - - -

          WHEREAS, CFSC has agreed to purchase from Conseco Finance and Conseco
Finance, pursuant to this Agreement, is transferring to CFSC certain
manufactured housing contracts specified in the Schedule of Initial Contracts
attached hereto as Schedule A (the "Initial Contracts"); and

          WHEREAS, CFSC has agreed to purchase from Conseco Finance and Conseco
Finance has agreed to transfer to CFSC the Subsequent Contracts and Subsequent
Collateral Security in an amount set forth herein.

          NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, CFSC and Conseco Finance, intending to be
legally bound, hereby agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

          SECTION 1.1.  General.  The specific terms defined in this Article
                        -------
include the plural as well as the singular.  The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision, and Article,
Section, Schedule and Exhibit references, unless otherwise specified, refer to
Articles and Sections of and Schedules and Exhibits to this Agreement.
Capitalized terms used herein without definition shall have the respective
meanings assigned to such terms in the Pooling and Servicing Agreement, dated as
of May 1, 2000, by and among Conseco Finance Securitizations Corp. (as Seller),
Conseco Finance Corp. (in its individual capacity and as Servicer), and U.S.
Bank National Association, as trustee (the "Trustee") relating to the
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificates,
Series 2000-2  (the "Trust").

          SECTION 1.2.  Specific Terms.  Whenever used in this Agreement, the
                        --------------
following words and phrases, unless the context otherwise requires, shall have
the following meanings:

          "Agreement" shall mean this Transfer Agreement and all amendments
           ---------
hereof and supplements hereto.

          "Closing Date" means, May 30, 2000.
           ------------
<PAGE>

          "Collateral Security" means the Initial Collateral Security conveyed
           -------------------
by Conseco Finance to CFSC pursuant to this Agreement together with any and all
Subsequent Collateral Security conveyed by Conseco Finance to CFSC pursuant to
each Subsequent Transfer Agreement.

          "Initial Contracts" means the Contracts listed on the Schedule of
           -----------------
Initial Contracts attached hereto as Schedule A.

          "Initial Collateral Security" means, with respect to any Initial
           ---------------------------
Contract, (i) the security interests, if any, granted by or on behalf of the
related Obligor with respect thereto, including a first priority perfected
security interest in the related Manufactured Home, (ii) all other security
interests or liens and property subject thereto from time to time purporting to
secure payment of such Contract, whether pursuant to the agreement giving rise
to such Contract or otherwise, together with all financing statements signed by
the Obligor describing any collateral securing such Contract, (iii) all security
agreements granting a security interest in the related Manufactured Home and all
guarantees, insurance and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such Contract whether
pursuant to the agreement giving rise to such Contract or otherwise, and (iv)
all records in respect of such Contract.

          "Other Conveyed Property" means the Initial Other Conveyed Property
           -----------------------
conveyed by Conseco Finance to CFSC pursuant to this Agreement together with any
and all Subsequent Other Conveyed Property conveyed by Conseco Finance to CFSC
pursuant to each Subsequent Purchase Agreement.

          "Pooling and Servicing Agreement" means the Pooling and Servicing
           -------------------------------
Agreement, dated as of May 1, 2000, executed and delivered by Conseco Finance
Corp., as Originator and Servicer, Conseco Finance Securitizations Corp. as
Seller; and the Trustee.

          "Related Documents" means the Certificates, the Pooling and Servicing
           -----------------
Agreement, each Subsequent Transfer Agreement and the Underwriting Agreement
among Conseco Finance, CFSC and the underwriters of the Certificates.  The
Related Documents to be executed by any party are referred to herein as "such
party's Related Documents," "its Related Documents" or by a similar expression.

          "Repurchase Event" means the occurrence of a breach of any of Conseco
           ----------------
Finance's representations and warranties hereunder or under any Subsequent
Purchase Agreement or any other event which requires the repurchase of a
Contract by Conseco Finance under the Pooling and Servicing Agreement.

          "Schedule of Initial Contracts" means the schedule of all Contracts
           -----------------------------
sold and transferred pursuant to this Agreement which is attached hereto as
Schedule A.

          "Schedule of Contracts" means the Schedule of Initial Contracts
           ---------------------
attached hereto as Schedule A as supplemented by each Schedule of Subsequent
Contracts attached to each Subsequent Purchase Agreement as Schedule A.

                                      -2-
<PAGE>

          "Schedule of Subsequent Contracts" means the schedule of all Contracts
           --------------------------------
sold and transferred pursuant to a Subsequent Purchase Agreement which is
attached to such Subsequent Purchase Agreement as Schedule A, which Schedule of
Subsequent Contracts shall supplement the Schedule of Initial Contracts.

          "Subsequent Contracts" means the Contracts specified in the Schedule
           --------------------
of Subsequent Contracts attached as Schedule A to each Subsequent Purchase
Agreement.

          "Subsequent Collateral Security" means the Subsequent Collateral
           ------------------------------
Security conveyed by Conseco Finance to CFSC pursuant to each Subsequent
Transfer Agreement.

          "Subsequent Transfer Agreement" has the meaning assigned in Section
           -----------------------------
2.3(b)(iii).

          "Trust" means the trust created by the Trust Agreement, the estate of
           -----
which consists of the Trust Property.

          "Trustee means U.S. Bank Trust National Association, a national
           -------
banking association organized and existing under the laws of the United States,
not in its individual capacity but solely as trustee of the Trust, and any
successor trustee appointed and acting pursuant to the Trust Agreement.

          "Trust Property" means the property and proceeds of every description
           --------------
conveyed by CFSC to the Trust pursuant to the Pooling and Servicing Agreement
and pursuant to any Subsequent Transfer Agreement, together with the Certificate
Accounts (including all Eligible Investments therein and all proceeds
therefrom).

          SECTION 1.3.  Usage of Terms.  With respect to all terms used in this
                        --------------
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement or the Pooling and
Servicing Agreement; references to Persons include their permitted successors
and assigns; and the terms "include" or "including" mean "include without
limitation" or "including without limitation."

          SECTION 1.4.  No Recourse.  Without limiting the obligations of
                        -----------
Conseco Finance hereunder, no recourse may be taken, directly or indirectly,
under this Agreement or any certificate or other writing delivered in connection
herewith or therewith, against any stockholder, officer or director, as such, of
Conseco Finance, or of any predecessor or successor of Conseco Finance.

                                      -3-
<PAGE>

                                  ARTICLE II
                      CONVEYANCE OF THE INITIAL CONTRACTS
                      AND THE INITIAL COLLATERAL SECURITY

          SECTION 2.1.  Conveyance of the Initial Contracts and the Initial
                        ---------------------------------------------------
Collateral Security. Subject to the terms and conditions of this Agreement,
-------------------
Conseco Finance hereby sells, transfers, assigns, and otherwise conveys to CFSC
without recourse (but without limitation of its obligations in this Agreement or
in the Pooling and Servicing Agreement), and CFSC hereby purchases, all right,
title and interest of Conseco Finance in and to the Initial Contracts and the
Initial Collateral Security.  It is the intention of Conseco Finance and CFSC
that the transfer and assignment contemplated by this Agreement shall constitute
a sale of the Initial Contracts and the Initial Collateral Security from Conseco
Finance to CFSC, conveying good title thereto free and clear of any Liens, and
the Initial Contracts and the Initial Collateral Security shall not be part of
Conseco Finance's estate in the event of the filing of a bankruptcy petition by
or against Conseco Finance under any bankruptcy or similar law.

          SECTION 2.2.  Purchase Price of Initial Contracts.  Simultaneously
                        -----------------------------------
with the conveyance of the Initial Contracts and the Initial Collateral Security
to CFSC, CFSC has paid or caused to be paid to or upon the order of Conseco
Finance approximately $701,714,415.00 by wire transfer of immediately available
funds (representing the proceeds to CFSC from the sale of the Initial Contracts
before (i) deducting expenses incurred by CFSC in connection with such sale and
(ii) depositing the Pre-Funded Amount in the Pre-Funding Account.

          SECTION 2.3.  Conveyance of Subsequent Contracts and Subsequent
                        -------------------------------------------------
Collateral Security.
-------------------

          (a)  Subject to the conditions set forth in paragraph (b) below and
the terms and conditions in the related Subsequent Transfer Agreement, in
consideration of CFSC's delivery on the related Subsequent Transfer Date to or
upon the order of Conseco Finance of an amount equal to the purchase price of
the Subsequent Contracts (as set forth in the related Subsequent Transfer
Agreement), Conseco Finance hereby agrees to sell, transfer, assign, and
otherwise convey to CFSC without recourse (but without limitation of its
obligations in this Agreement and the related Subsequent Purchase Agreement),
and CFSC hereby agrees to purchase all right, title and interest of Conseco
Finance in and to the Subsequent Contracts and the Subsequent Collateral
Security described in the related Subsequent Transfer Agreement.

          (b)  Conseco Finance shall transfer to CFSC, and CFSC shall acquire,
the Subsequent Contracts and the Subsequent Collateral Security to be
transferred on any Subsequent Transfer Date only upon the satisfaction of each
of the following conditions on or prior to such Subsequent Transfer Date:

               (i) Conseco Finance shall have provided the Trustee and the
     relevant rating agencies with an Addition Notice at least five Business
     Days prior to the Subsequent Transfer Date and shall have provided any
     information reasonably requested by the Trustee with respect to the
     Subsequent Contracts;

                                      -4-
<PAGE>

               (ii)   Conseco Finance shall have delivered the related Contract
     File for each Subsequent Contract to the Trustee at least two Business Days
     prior to the Subsequent Transfer Date;

               (iii)  CFSC shall have delivered to Conseco Finance a duly
     executed Subsequent Transfer Agreement substantially in the form of Exhibit
     A hereto (the "Subsequent Transfer Agreement"), which shall include a List
     of Contracts identifying the related Subsequent Contracts;

               (iv)   as of each Subsequent Transfer Date, as evidenced by
     delivery of the Subsequent Transfer Instrument, that neither Conseco
     Finance nor CFSC shall be insolvent nor shall they have been made insolvent
     by such transfer nor shall they be aware of any pending insolvency;

               (v)    such transfer shall not result in a material adverse tax
     consequence to the Trust (including the Master REMIC and the Subsidiary
     REMIC) or the Certificateholders or Class C Certificateholders;

               (vi)   the Pre-Funding Period shall not have ended;

               (vii)  Conseco Finance shall have delivered to CFSC an Officer's
     Certificate substantially in the form attached to the Pooling and Servicing
     Agreement as Exhibit E, confirming the satisfaction of each condition
     precedent and the representations specified in this Section and in Sections
     3.01, 3.02 and 3.04 of the Pooling and Servicing Agreement;

               (viii) the Seller and CFSC shall have delivered to the Trustee
     Opinions of Counsel addressed to S&P, Moody's, Fitch and the Trustee with
     respect to the transfer of the Subsequent Contracts substantially in the
     form of the Opinions of Counsel delivered on the Closing Date regarding
     certain bankruptcy, corporate and tax matters;

               (ix)   each of the representations and warranties contained in
     Section 3.04 of the Pooling and Servicing Agreement shall be true and
     correct.

          (c)  Conseco Finance covenants to transfer to CFSC pursuant to
paragraph (a) above Subsequent Contracts with an aggregate Cut-off Date
Principal Balance approximately equal to $286,498.90; provided, however, that
                                                      --------  -------
the sole remedy of CFSC with respect to a failure of such covenant shall be to
enforce the provisions of Section 8.07 of the Pooling and Servicing Agreement.

                                  ARTICLE III
                        REPRESENTATIONS AND WARRANTIES

          SECTION 3.1.  Representations and Warranties of Conseco Finance.
                        -------------------------------------------------
Conseco Finance makes the following representations and warranties, on which
CFSC relies in purchasing the Initial Contracts and the Initial Collateral
Security and in transferring the Initial Contracts and

                                      -5-
<PAGE>

the Initial Collateral Security to the Trust under the Pooling and Servicing
Agreement. Such representations are made as of the execution and delivery of
this Agreement, but shall survive the sale, transfer and assignment of the
Initial Contracts and the Initial Collateral Security hereunder and the sale,
transfer and assignment thereof by CFSC to the Trust under the Pooling and
Servicing Agreement. Conseco Finance and CFSC agree that CFSC will assign to the
Trust all of CFSC's rights under this Agreement and that the Trust will
thereafter be entitled to enforce this Agreement against Conseco Finance in the
Trust's own name.

          (a) Representations Regarding Contracts.  The representations and
              -----------------------------------
     warranties set forth in Sections 3.02, 3.03 and 3.04 of the Pooling and
     Servicing Agreement are true and correct.

          (b) Organization and Good Standing.  Conseco Finance has been duly
              ------------------------------
     organized and is validly existing as a corporation in good standing under
     the laws of the State of Delaware, with power and authority to own its
     properties and to conduct its business as such properties are currently
     owned and such business is currently conducted, and had at all relevant
     times, and now has, power, authority and legal right to acquire, own and
     sell the Initial Contracts and the Initial Collateral Security transferred
     to CFSC.

          (c) Due Qualification.  Conseco Finance is duly qualified to do
              -----------------
     business as a foreign corporation in good standing, and has obtained all
     necessary licenses and approvals, in all jurisdictions in which the
     ownership or lease of its property or the conduct of its business requires
     such qualification.

          (d) Power and Authority.  Conseco Finance has the power and authority
              -------------------
     to execute and deliver this Agreement and its Related Documents and to
     carry out its terms and their terms, respectively; Conseco Finance has full
     power and authority to sell and assign the Initial Contracts and the
     Initial Collateral Security to be sold and assigned to and deposited with
     CFSC hereunder and has duly authorized such sale and assignment to CFSC by
     all necessary corporate action; and the execution, delivery and performance
     of this Agreement and Conseco Finance's Related Documents have been duly
     authorized by Conseco Finance by all necessary corporate action.

          (e) Valid Sale; Binding Obligations.  This Agreement and Conseco
              -------------------------------
     Finance's Related Documents have been duly executed and delivered, shall
     effect a valid sale, transfer and assignment of the Initial Contracts and
     the Initial Collateral Security, enforceable against Conseco Finance and
     creditors of and purchasers from Conseco Finance; and this Agreement and
     Conseco Finance's Related Documents constitute legal, valid and binding
     obligations of Conseco Finance enforceable in accordance with their
     respective terms, except as enforceability may be limited by bankruptcy,
     insolvency, reorganization or other similar laws affecting the enforcement
     of creditors' rights generally and by equitable limitations on the
     availability of specific remedies, regardless of whether such
     enforceability is considered in a proceeding in equity or at law.

          (f) No Violation.  The consummation of the transactions contemplated
              ------------
     by this Agreement and the Related Documents and the fulfillment of the
     terms of this Agreement

                                      -6-
<PAGE>

     and the Related Documents shall not conflict with, result in any breach of
     any of the terms and provisions of or constitute (with or without notice,
     lapse of time or both) a default under, the certificate of incorporation or
     bylaws of Conseco Finance, or any indenture, agreement, mortgage, deed of
     trust or other instrument to which Conseco Finance is a party or by which
     it is bound, or result in the creation or imposition of any Lien upon any
     of its properties pursuant to the terms of any such indenture, agreement,
     mortgage, deed of trust or other instrument, other than this Agreement and
     the Pooling and Servicing Agreement, or violate any law, order, rule or
     regulation applicable to Conseco Finance of any court or of any federal or
     state regulatory body, administrative agency or other governmental
     instrumentality having jurisdiction over Conseco Finance or any of its
     properties.

          (g) No Proceedings.  There are no proceedings or investigations
              --------------
     pending or, to Conseco Finance's knowledge, threatened against Conseco
     Finance, before any court, regulatory body, administrative agency or other
     tribunal or governmental instrumentality having jurisdiction over Conseco
     Finance or its properties (i) asserting the invalidity of this Agreement or
     any of the Related Documents, (ii) seeking to prevent the issuance of the
     Certificates or the consummation of any of the transactions contemplated by
     this Agreement or any of the Related Documents, (iii) seeking any
     determination or ruling that might materially and adversely affect the
     performance by Conseco Finance of its obligations under, or the validity or
     enforceability of, this Agreement or any of the Related Documents or (iv)
     seeking to affect adversely the federal income tax or other federal, state
     or local tax attributes of, or seeking to impose any excise, franchise,
     transfer or similar tax upon, the transfer and acquisition of the Initial
     Contracts and the Initial Collateral Security hereunder or under the
     Pooling and Servicing Agreement.

          (h) Chief Executive Office.  The chief executive office of Conseco
              ----------------------
     Finance is located at 1100 Landmark Towers, 345 St. Peter Street, Saint
     Paul, MN 55102-1639.

          SECTION 3.2.  Representations and Warranties of CFSC.  CFSC makes the
                        --------------------------------------
following representations and warranties, on which Conseco Finance relies in
selling, assigning, transferring and conveying the Initial Contracts and the
Initial Collateral Security to CFSC hereunder. Such representations are made as
of the execution and delivery of this Agreement, but shall survive the sale,
transfer and assignment of the Initial Contracts and the Initial Collateral
Security hereunder and the sale, transfer and assignment thereof by CFSC to the
Trust under the Pooling and Servicing Agreement.

          (a) Organization and Good Standing.  CFSC has been duly organized and
              ------------------------------
     is validly existing and in good standing as a corporation under the laws of
     the State of Minnesota, with the power and authority to own its properties
     and to conduct its business as such properties are currently owned and such
     business is currently conducted, and had at all relevant times, and has,
     full power, authority and legal right to acquire and own the Initial
     Contracts and the Initial Collateral Security and to transfer the Initial
     Contracts and the Initial Collateral Security to the Trust pursuant to the
     Pooling and Servicing Agreement.

                                      -7-
<PAGE>

          (b) Due Qualification.  CFSC is duly qualified to do business as a
              -----------------
     foreign corporation in good standing, and has obtained all necessary
     licenses and approvals in all jurisdictions where the failure to do so
     would materially and adversely affect (i) CFSC's ability to acquire the
     Initial Contracts or the Initial Collateral Security, (ii) the validity or
     enforceability of the Initial Contracts and the Initial Collateral Security
     or (iii) CFSC's ability to perform its obligations hereunder and under the
     Related Documents.

          (c) Power and Authority.  CFSC has the power, authority and legal
              -------------------
     right to execute and deliver this Agreement and its Related Documents and
     to carry out the terms hereof and thereof and to acquire the Initial
     Contracts and the Initial Collateral Security hereunder; and the execution,
     delivery and performance of this Agreement and its Related Documents and
     all of the documents required pursuant hereto or thereto have been duly
     authorized by CFSC by all necessary action.

          (d) No Consent Required.  CFSC is not required to obtain the consent
              -------------------
     of any other Person, or any consent, license, approval or authorization or
     registration or declaration with, any governmental authority, bureau or
     agency in connection with the execution, delivery or performance of this
     Agreement and the Related Documents, except for such as have been obtained,
     effected or made.

          (e) Binding Obligation.  This Agreement and each of its Related
              ------------------
     Documents constitutes a legal, valid and binding obligation of CFSC,
     enforceable against CFSC in accordance with its terms, subject, as to
     enforceability, to applicable bankruptcy, insolvency, reorganization,
     conservatorship, receivership, liquidation and other similar laws and to
     general equitable principles.

          (f) No Violation.  The execution, delivery and performance by CFSC of
              ------------
     this Agreement, the consummation of the transactions contemplated by this
     Agreement and the Related Documents and the fulfillment of the terms of
     this Agreement and the Related Documents do not and will not conflict with,
     result in any breach of any of the terms and provisions of or constitute
     (with or without notice or lapse of time) a default under the articles of
     incorporation or bylaws of CFSC, or conflict with or breach any of the
     terms or provisions of, or constitute (with or without notice or lapse of
     time) a default under, any indenture, agreement, mortgage, deed of trust or
     other instrument to which CFSC is a party or by which CFSC is bound or to
     which any of its properties are subject, or result in the creation or
     imposition of any Lien upon any of its properties pursuant to the terms of
     any such indenture, agreement, mortgage, deed of trust or other instrument
     (other than the Pooling and Servicing Agreement), or violate any law,
     order, rule or regulation, applicable to CFSC or its properties, of any
     federal or state regulatory body or any court, administrative agency, or
     other governmental instrumentality having jurisdiction over CFSC or any of
     its properties.

          (g) No Proceedings.  There are no proceedings or investigations
              --------------
     pending, or, to the knowledge of CFSC, threatened against CFSC, before any
     court, regulatory body, administrative agency, or other tribunal or
     governmental instrumentality having jurisdiction over CFSC or its
     properties:  (i) asserting the invalidity of this Agreement or

                                      -8-
<PAGE>

     any of the Related Documents, (ii) seeking to prevent the consummation of
     any of the transactions contemplated by this Agreement or any of the
     Related Documents, (iii) seeking any determination or ruling that might
     materially and adversely affect the performance by CFSC of its obligations
     under, or the validity or enforceability of, this Agreement or any of the
     Related Documents or (iv) that may adversely affect the federal or state
     income tax attributes of, or seeking to impose any excise, franchise,
     transfer or similar tax upon, the transfer and acquisition of the Initial
     Contracts and the Initial Collateral Security hereunder or the transfer of
     the Initial Contracts and the Initial Collateral Security to the Trust
     pursuant to the Pooling and Servicing Agreement.

In the event of any breach of a representation and warranty made by CFSC
hereunder, Conseco Finance covenants and agrees that it will not take any action
to pursue any remedy that it may have hereunder, in law, in equity or otherwise,
until a year and a day have passed since the later of (i) the date on which all
pass-through certificates or other similar securities issued by the Trust, or a
trust or similar vehicle formed by CFSC, have been paid in full, or (ii) all
Certificates or other similar securities issued by the Trust, or a trust or
similar vehicle formed by CFSC, have been paid in full.  Conseco Finance and
CFSC agree that damages will not be an adequate remedy for such breach and that
this covenant may be specifically enforced by CFSC or by the Trustee on behalf
of the Trust.

                                  ARTICLE IV
                         COVENANTS OF CONSECO FINANCE

          SECTION 4.1.  Transfer of Contracts.  Conseco Finance has filed a form
                        ---------------------
UCC-1 financing statement regarding the sale of the Contracts to CFSC, and shall
file continuation statements in respect of such UCC-1 financing statement as if
such financing statement were necessary to perfect such sale.  Conseco Finance
shall take any other actions necessary to maintain the perfection of the sale of
the Contracts to CFSC.

          SECTION 4.2.  Costs and Expenses.  Conseco Finance shall pay all
                        ------------------
reasonable costs and disbursements in connection with the performance of its
obligations hereunder and under each Subsequent Transfer Agreement and its
Related Documents.

          SECTION 4.3.  Indemnification.
                        ---------------

          (a) Conseco Finance will defend and indemnify CFSC against any and all
costs, expenses, losses, damages, claims, and liabilities, including reasonable
fees and expenses of counsel and expenses of litigation, arising out of or
resulting from any breach of any of Conseco Finance's representations and
warranties contained herein or in any Subsequent Purchase Agreement.
Notwithstanding any other provision of this Agreement, the obligation of Conseco
Finance under this Section shall not terminate upon a Service Transfer pursuant
to Article VII of the Pooling and Servicing Agreement, except that the
obligation of Conseco Finance under this Section shall not relate to the actions
of any subsequent Servicer after a Service Transfer.

                                      -9-
<PAGE>

          (b) No obligation or liability to any Obligor under any of the
Contracts is intended to be assumed by CFSC under or as a result of this
Agreement and the transactions contemplated hereby and, to the maximum extent
permitted and valid under mandatory provisions of law, CFSC expressly disclaims
such assumption.

          (c) Conseco Finance agrees to pay, and to indemnify, defend and hold
harmless CFSC from any taxes which may at any time be asserted with respect to,
and as of the date of, the transfer of the Contracts to CFSC including, without
limitation, any sales, gross receipts, general corporation, personal property
and costs, expenses and reasonable counsel fees in defending against the same,
whether arising by reason of the acts to be performed by Conseco Finance under
this Agreement or imposed against CFSC.

          (d) Indemnification under this Section 4.3 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Originator has made any indemnity payments to CFSC pursuant to this
Section and CFSC thereafter collects any of such amounts from others, CFSC will
repay such amounts collected to Conseco Finance, as the case may be, without
interest.

          SECTION 4.4.  Financial Statement Disclosure.  Conseco Finance's
                        ------------------------------
financial statements will disclose that the Initial, Additional and Subsequent
Contracts have been transferred by Conseco Finance to CFSC, and by CFSC to the
Trust, and that these Contracts and any other assets of CFSC are not available
to satisfy claims of Conseco Finance's creditors.

                                   ARTICLE V
                                  REPURCHASES

          SECTION 5.1.  Repurchase of Contracts Upon Breach of Warranty.
                        -----------------------------------------------

          (a) Upon the occurrence of a Repurchase Event, Conseco Finance shall,
unless such breach shall have been cured in all material respects, repurchase
such Contract from the Trust pursuant to Section 3.05 of the Pooling and
Servicing Agreement, subject to the limitation of Section 3.06 of the Pooling
and Servicing Agreement.  It is understood and agreed that the obligation of
Conseco Finance to repurchase any Contract as to which a breach has occurred and
is continuing shall, if such obligation is fulfilled, constitute the sole remedy
against Conseco Finance for such breach available to CFSC, the
Certificateholders or the Trustee on behalf of Certificateholders.  The
provisions of this Section 5.1 are intended to grant the Trustee a direct right
against Conseco Finance to demand performance hereunder, and in connection
therewith, Conseco Finance waives any requirement of prior demand against CFSC
with respect to such repurchase obligation.  Any such purchase shall take place
in the manner specified in Section 3.06 of the Pooling and Servicing Agreement.
Notwithstanding any other provision of this Agreement, any Subsequent Purchase
Agreement or the Pooling and Servicing Agreement or any Subsequent Transfer
Agreement to the contrary, the obligation of Conseco Finance under this Section
shall not terminate upon a termination of Conseco Finance as Servicer under the
Pooling and Servicing Agreement and shall be performed in accordance with the
terms hereof notwithstanding the failure of the Servicer or CFSC to perform any
of their respective obligations with respect to such Contract under the Pooling
and Servicing Agreement.

                                      -10-
<PAGE>

          (b) In addition to the foregoing and notwithstanding whether the
related Contract shall have been purchased by Conseco Finance, Conseco Finance
shall indemnify the Trustee, the Trust and the Certificateholders against all
costs, expenses, losses, damages, claims and liabilities, including reasonable
fees and expenses of counsel, which may be asserted against or incurred by any
of them as a result of third party claims arising out of the events or facts
giving rise to such Repurchase Events.

          SECTION 5.2.  Reassignment of Purchased Contracts.  Upon deposit of
                        -----------------------------------
the purchase amount of any Contract repurchased or replaced by Conseco Finance
under Section 5.1, CFSC shall cause the Trustee to take such steps as may be
reasonably requested by Conseco Finance in order to assign to Conseco Finance
all of CFSC's and the Trust's right, title and interest in and to such Contract
and all security and documents and all Collateral Security conveyed to CFSC and
the Trust directly relating thereto, without recourse, representation or
warranty, except as to the absence of liens, charges or encumbrances created by
or arising as a result of actions of CFSC or the Trustee.  Such assignment shall
be a sale and assignment outright, and not for security.  If, following the
reassignment of a Contract, in any enforcement suit or legal proceeding, it is
held that Conseco Finance may not enforce any such Contract on the ground that
it shall not be a real party in interest or a holder entitled to enforce the
Contract, CFSC and the Trustee shall, at the expense of Conseco Finance, take
such steps as Conseco Finance deems reasonably necessary to enforce the
Contract, including bringing suit in CFSC's or the Trustee's name.

          SECTION 5.3.  Waivers.  No failure or delay on the part of CFSC, or
                        -------
the Trustee as assignee of CFSC, in exercising any power, right or remedy under
this Agreement or under any Subsequent Transfer Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other or future exercise thereof or the exercise of
any other power, right or remedy.

                                  ARTICLE VI
                                 MISCELLANEOUS

          SECTION 6.1.  Liability of Conseco Finance.  Conseco Finance shall be
                        ----------------------------
liable in accordance herewith only to the extent of the obligations in this
Agreement or in any Subsequent Transfer Agreement specifically undertaken by
Conseco Finance and the representations and warranties of Conseco Finance.

          SECTION 6.2.   Merger or Consolidation of Conseco Finance or CFSC.
                         --------------------------------------------------
Any corporation or other entity (i) into which Conseco Finance or CFSC may be
merged or consolidated, (ii) resulting from any merger or consolidation to which
Conseco Finance or CFSC is a party or (iii) succeeding to the business of
Conseco Finance or CFSC, in the case of CFSC, which corporation has articles of
incorporation containing provisions relating to limitations on business and
other matters substantively identical to those contained in CFSC's articles of
incorporation, provided that in any of the foregoing cases such corporation
shall execute an agreement of assumption to perform every obligation of Conseco
Finance or CFSC, as the case may be, under this Agreement and each Subsequent
Transfer Agreement and, whether or not such assumption agreement is executed,
shall be the successor to Conseco Finance or CFSC, as

                                      -11-
<PAGE>

the case may be, hereunder and under each such Subsequent Transfer Agreement
(without relieving Conseco Finance or CFSC of its responsibilities hereunder, if
it survives such merger or consolidation) without the execution or filing of any
document or any further act by any of the parties to this Agreement or each
Subsequent Transfer Agreement. Conseco Finance or CFSC shall promptly inform the
other party, the Trustee of such merger, consolidation or purchase and
assumption. Notwithstanding the foregoing, as a condition to the consummation of
the transactions referred to in clauses (i), (ii) and (iii) above, (x)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Sections 3.1 and 3.2 and this Agreement, or similar
representation or warranty made in any Subsequent Transfer Agreement, shall have
been breached (for purposes hereof, such representations and warranties shall
speak as of the date of the consummation of such transaction), (y) Conseco
Finance or CFSC, as applicable, shall have delivered written notice of such
consolidation, merger or purchase and assumption to the relevant rating agencies
prior to the consummation of such transaction and shall have delivered to the
Trustee an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this Section 6.2 and that all conditions precedent, if any, provided for in
this Agreement, or in each Subsequent Transfer Agreement, relating to such
transaction have been complied with, and (z) Conseco Finance or CFSC, as
applicable, shall have delivered to the Trustee an Opinion of Counsel, stating
that, in the opinion of such counsel, either (A) all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary to preserve and protect the interest of the Trustee in the Trust
and reciting the details of the filings or (B) no such action shall be necessary
to preserve and protect such interest.

          SECTION 6.3.  Limitation on Liability of Conseco Finance and Others.
                        -----------------------------------------------------
Conseco Finance shall not be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to its obligations under this
Agreement, any Subsequent Transfer Agreement or its Related Documents and that
in its opinion may involve it in any expense or liability.

          SECTION 6.4.  Amendment.
                        ---------

          (a) This Agreement and any Subsequent Transfer Agreement may be
amended by Conseco Finance and CFSC and without the consent of the Trustee or
any of the Certificateholders (A) to cure any ambiguity or (B) to correct any
provisions in this Agreement or any such Subsequent Transfer Agreement;
provided, however, that such action shall not, as evidenced by an Opinion of
--------  -------
Counsel delivered to the Trustee, adversely affect in any material respect the
interests of any Certificateholder.

          (b) This Agreement may also be amended from time to time by Conseco
Finance and CFSC, with the prior written consent of the Trustee and the Holders
of Certificates representing, in the aggregate, 66 2/3% or more of the Aggregate
Cut-off Date Principal Balance, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement,
or of modifying in any manner the rights of the Certificateholders; provided,
                                                                    --------
however, that no such amendment shall (i) increase or reduce in any manner the
-------
amount of, or accelerate or delay the timing of, collections of payments on the
Contracts or, distributions that are required to be made on any Certificate or
(ii) reduce the aforesaid

                                      -12-
<PAGE>

percentage required to consent to any such amendment or any waiver hereunder,
without the consent of the Holders of all Certificates then outstanding.

          (c) This Agreement shall not be amended under this Section without the
consent of 100% of the Certificateholders and the Class C Certificateholders if
such amendment would result in the disqualification of the Trust as a REMIC
under the Code.

          (d) Concurrently with the solicitation of any consent pursuant to this
Section 6.4, CFSC shall furnish written notification to S&P, Moody's and Fitch.
Promptly after the execution of any amendment or consent pursuant to this
Section 6.4, CFSC shall furnish written notification of the substance of such
amendment to S&P, Moody's, Fitch, each Certificateholder and the Class C
Certificateholders.

          (e) It shall not be necessary for the consent of Certificateholders
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof.  The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee, as applicable, may
prescribe, including the establishment of record dates.  The consent of any
Holder of a Certificate given pursuant to this Section or pursuant to any other
provision of this Agreement shall be conclusive and binding on such Holder and
on all future Holders of such Certificate and of any Certificate issued upon the
transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the Certificate.

          SECTION 6.5.  Notices.  All demands, notices and communications to
                        -------
Conseco Finance or CFSC hereunder shall be in writing, personally delivered, or
sent by telecopier (subsequently confirmed in writing), reputable overnight
courier or mailed by certified mail, return receipt requested, and shall be
deemed to have been given upon receipt (a) in the case of Conseco Finance, to
Conseco Finance Corp., 300 Landmark Towers, 345 St. Peter Street, Saint Paul,
Minnesota 55102-1639, Attention: Chief Financial Officer, or such other address
as shall be designated by Conseco Finance in a written notice delivered to the
other party or to the Trustee, as applicable, or (b) in case of CFSC, to Conseco
Finance Securitizations Corp., 1100 Landmark Towers, 345 St. Peter Street, Saint
Paul, Minnesota 55102-1639, Attention: Chief Financial Officer.

          SECTION 6.6.  Merger and Integration.  Except as specifically stated
                        ----------------------
otherwise herein, this Agreement and the Related Documents set forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement and the
Related Documents.  This Agreement may not be modified, amended, waived or
supplemented except as provided herein.

          SECTION 6.7.  Severability of Provisions.  If any one or more of the
                        --------------------------
covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.

                                      -13-
<PAGE>

          SECTION 6.8.  Intention of the Parties.  The execution and delivery of
                        ------------------------
this Agreement and of each Subsequent Transfer Agreement shall constitute an
acknowledgment by Conseco Finance and CFSC that they intend that each assignment
and transfer herein and therein contemplated constitute a sale and assignment
outright, and not for security, of the Initial Contracts and the Initial
Collateral Security and the Subsequent Contracts and Subsequent Collateral
Security, as the case may be, conveying good title thereto free and clear of any
Liens, from Conseco Finance to CFSC, and that the Initial Contracts and the
Initial Collateral Security and the Subsequent Contracts and Subsequent
Collateral Security shall not be a part of Conseco Finance's estate in the event
of the bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law, or the occurrence of another similar event, of, or with respect to, Conseco
Finance.  In the event that such conveyance is determined to be made as security
for a Contract made by CFSC, the Trust or the Certificateholders to Conseco
Finance, the parties intend that Conseco Finance shall have granted to CFSC a
security interest in all of Conseco Finance's right, title and interest in and
to the Initial Contracts and the Initial Collateral Security and the Subsequent
Contracts and Subsequent Collateral Security, as the case may be, conveyed
pursuant to Section 2.1 hereof or pursuant to any Subsequent Transfer Agreement,
and that this Agreement and each Subsequent Transfer Agreement shall constitute
a security agreement under applicable law.

          SECTION 6.9.  Governing Law.  This Agreement shall be construed in
                        -------------
accordance with, the laws of the State of Minnesota without regard to the
principles of conflicts of laws thereof, and the obligations, rights and
remedies of the parties under this Agreement shall be determined in accordance
with such laws.

          SECTION 6.10. Counterparts.  For the purpose of facilitating the
                        ------------
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

          SECTION 6.11. Conveyance of the Initial Contracts and the Initial
                        ---------------------------------------------------
Collateral Security to the Trust.  Conseco Finance acknowledges that CFSC
--------------------------------
intends, pursuant to the Pooling and Servicing Agreement, to convey the Initial
Contracts and the Initial Collateral Security, together with its rights under
this Agreement, to the Trust on the date hereof.  Conseco Finance acknowledges
and consents to such conveyance and waives any further notice thereof and
covenants and agrees that the representations and warranties of Conseco Finance
contained in this Agreement and the rights of CFSC hereunder are intended to
benefit the Trustee, the Trust, and the Certificateholders.  In furtherance of
the foregoing, Conseco Finance covenants and agrees to perform its duties and
obligations hereunder, in accordance with the terms hereof for the benefit of
the Trustee, the Trust, and the Certificateholders and that, notwithstanding
anything to the contrary in this Agreement, Conseco Finance shall be directly
liable to the Trustee and the Trust (notwithstanding any failure by the Servicer
or CFSC to perform its duties and obligations hereunder or under the Pooling and
Servicing Agreement) and that the Trustee may enforce the duties and obligations
of Conseco Finance under this Agreement against Conseco Finance for the benefit
of the Trust and the Certificateholders.

                                      -14-
<PAGE>

          SECTION 6.12.  Nonpetition Covenant.  Neither CFSC nor Conseco Finance
                         --------------------
shall petition or otherwise invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Trust
(or, in the case of Conseco Finance, against CFSC) under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Trust (or CFSC) or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Trust (or CFSC).

                                      -15-
<PAGE>

          IN WITNESS WHEREOF, the parties have caused this Transfer Agreement to
be duly executed by their respective officers as of the day and year first above
written.

                            CONSECO FINANCE SECURITIZATIONS CORP.,
                              as Purchaser

                            By _____________________________________
                               Name:  Phyllis A. Knight
                               Title: Senior Vice President and Treasurer

                            CONSECO FINANCE CORP.,
                              as Seller

                            By _____________________________________
                              Name:  Phyllis A. Knight
                              Title: Senior Vice President and Treasurer

                                      -16-
<PAGE>

                                  SCHEDULE A

                         SCHEDULE OF INITIAL CONTRACTS

                                      A-1
<PAGE>

                                                                       EXHIBIT A

                                    FORM OF

                         SUBSEQUENT TRANSFER AGREEMENT

                                    between

                     CONSECO FINANCE SECURITIZATIONS CORP.
                                   Purchaser

                                      and

                             CONSECO FINANCE CORP.
                                    Seller

                                  dated as of

                                ________, 2000
<PAGE>

          SUBSEQUENT TRANSFER AGREEMENT, dated as of ____________, 2000, between
Conseco Finance Securitizations Corp., a Minnesota corporation, as purchaser
("CFSC"), and Conseco Finance Corp., a Delaware corporation, as seller ("Conseco
Finance"), pursuant to the Transfer Agreement, dated as of May 1, 2000 between
CFSC and Conseco Finance.

                             W I T N E S S E T H:
                             - - - - - - - - - -

          WHEREAS, Conseco Finance and CFSC are parties to a Transfer Agreement,
dated as of May 1, 2000 (as amended or supplemented, the "Transfer Agreement");

          WHEREAS, pursuant to the Transfer Agreement and this Agreement, CFSC
has agreed to purchase from Conseco Finance and Conseco Finance is transferring
to CFSC the Subsequent Contracts and the Subsequent Collateral Security.

          NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, CFSC and Conseco Finance, intending to be
legally bound, hereby agree as follows:

          1.   Defined Terms.  Capitalized terms used but not otherwise defined
               -------------
herein shall have the respective meanings assigned to such terms in the Transfer
Agreement.

          "Schedule of Subsequent Contracts" means the schedule of all
           --------------------------------
manufactured housing contracts sold and transferred pursuant to this Agreement
attached hereto as Schedule A, which Schedule of Subsequent Contracts shall
supplement the Schedule of Initial Contracts attached to the Transfer Agreement.

          "Subsequent Cut-off Date" shall mean, with respect to the Subsequent
           -----------------------
Contracts conveyed hereby, ____________, 2000.

          "Subsequent Collateral Security" means the Subsequent Collateral
           ------------------------------
Security conveyed by Conseco Finance to CFSC pursuant to each Subsequent
Transfer Agreement.

          "Subsequent Contracts" means, for purposes of this Agreement, the
           --------------------
Contracts listed in the Schedule of Subsequent Contracts.

          2.   Conveyance of the Subsequent Contracts and the Collateral
               ---------------------------------------------------------
Security. Subject to the terms and conditions of this Agreement and the Transfer
--------
Agreement, Conseco Finance hereby sells, transfers, assigns, and otherwise
conveys to CFSC without recourse (but without limitation of its obligations in
this Agreement and the Transfer Agreement), and CFSC hereby purchases, all
right, title and interest of Conseco Finance in and to the Subsequent Contracts
and the Subsequent Transfer Agreement, including (i) all the right, title and
interest of Conseco Finance in and to the Subsequent Contracts identified on the
list attached hereto as Exhibit A (the "Subsequent Contracts"), including,
without limitation, all right, title and interest in and to the Collateral
Security and all rights to receive payments on or with respect to the

                                    Ex. A-1
<PAGE>

Subsequent Contracts (other than the principal and interest due on the
Subsequent Contracts before the applicable Cut-off Date), (ii) all rights under
every Hazard Insurance Policy relating to a Manufactured Home securing a
Subsequent Contract for the benefit of the creditor of such Subsequent Contract,
(iii) all rights under all FHA/VA Regulations pertaining to any Subsequent
Contract that is an FHA/VA Contract, (iv) the proceeds from the Errors and
Omissions Protection Policy and all rights under any blanket hazard insurance
policy to the extent they relate to the Manufactured Homes, (v) all documents
contained in the Contract Files and the Land-and-Home Contract Files relating to
the Subsequent Contracts, (vi) all rights of Conseco Finance under the
Subsequent Transfer Agreement between Conseco Finance and CFSC, and (vii) all
proceeds and products of the foregoing. It is the intention of Conseco Finance
and CFSC that the transfer and assignment contemplated by this Agreement shall
constitute a sale of the Subsequent Contracts and the Collateral Security from
Conseco Finance to CFSC, conveying good title thereto free and clear of any
Liens, and the Subsequent Contracts and the Collateral Security shall not be
part of Conseco Finance's estate in the event of the filing of a bankruptcy
petition by or against Conseco Finance under any bankruptcy or similar law.
Conseco Finance's financial statements will disclose that the Subsequent
Contracts have been transferred by Conseco Finance to CFSC, and by CFSC to the
Trust, and are not available to satisfy claims of Conseco Finance's creditors.

          3.   Purchase Price.  Simultaneously with the conveyance of the
               --------------
Subsequent Contracts and the Collateral Security to CFSC, CFSC has paid or
caused to be paid to or upon the order of Conseco Finance, by wire transfer of
immediately available funds (representing certain proceeds to CFSC from the sale
of the Certificates on deposit in the Pre-Funding Account), the amount of funds
as specified below:

          (i)  Principal Balance of Subsequent Contracts:  $________

          (ii) Proceeds to Conseco Finance:                $________

          4.   Representations and Warranties of Conseco Finance.  Conseco
               -------------------------------------------------
Finance makes the following representations and warranties, on which CFSC relies
in purchasing the Subsequent Contracts and the Collateral Security and in
transferring the Subsequent Contracts and the Collateral Security to the Trust
under this Agreement.  Such representations are made as of the execution and
delivery of this Agreement, but shall survive the sale, transfer and assignment
of the Subsequent Contracts and the Collateral Security hereunder, and the sale,
transfer and assignment thereof by CFSC to the Trust hereunder.  Conseco Finance
and CFSC agree that CFSC will assign to the Trust all of CFSC's rights under
this Agreement, and that the Trust will thereafter be entitled to enforce this
Agreement against Conseco Finance in the Trust's own name.

          (a)  Schedule of Representations.  The representations and warranties
               ---------------------------
     set forth in Sections 3.02, 3.03 and 3.04 of the Pooling and Servicing
     Agreement are true and correct.

          (b)  Organization and Good Standing.  Conseco Finance has been duly
               ------------------------------
     organized and is validly existing as a corporation in good standing under
     the laws of the

                                    Ex. A-2
<PAGE>

     State of Delaware, with power and authority to own its properties and to
     conduct its business as such properties are currently owned and such
     business is currently conducted, and had at all relevant times, and now
     has, power, authority and legal right to acquire, own and sell the
     Subsequent Contracts and the Collateral Security transferred to CFSC.

          (c)  Due Qualification.  Conseco Finance is duly qualified to do
               -----------------
     business as a foreign corporation in good standing, and has obtained all
     necessary licenses and approvals, in all jurisdictions in which the
     ownership or lease of its property or the conduct of its business requires
     such qualification.

          (d)  Power and Authority.  Conseco Finance has the power and authority
               -------------------
     to execute and deliver this Agreement and to carry out its terms and their
     terms, respectively; Conseco Finance has full power and authority to sell
     and assign the Subsequent Contracts and the Collateral Security to be sold
     and assigned to and deposited with CFSC hereunder and has duly authorized
     such sale and assignment to CFSC by all necessary corporate action; and the
     execution, delivery and performance of this Agreement have been duly
     authorized by Conseco Finance by all necessary corporate action.

          (e)  Valid Sale; Binding Obligations.  This Agreement has been duly
               -------------------------------
     executed and delivered, shall effect a valid sale, transfer and assignment
     of the Subsequent Contracts and the Collateral Security, enforceable
     against Conseco Finance and creditors of and purchasers from Conseco
     Finance; and this Agreement constitutes the legal, valid and binding
     obligations of Conseco Finance enforceable in accordance with its terms,
     except as enforceability may be limited by bankruptcy, insolvency,
     reorganization or other similar laws affecting the enforcement of
     creditors' rights generally and by equitable limitations on the
     availability of specific remedies, regardless of whether such
     enforceability is considered in a proceeding in equity or at law.

          (f)  No Violation.  The consummation of the transactions contemplated
               ------------
     by this Agreement and the fulfillment of the terms of this Agreement shall
     not conflict with, result in any breach of any of the terms and provisions
     of or constitute (with or without notice, lapse of time or both) a default
     under, the certificate of incorporation or bylaws of Conseco Finance, or
     any indenture, agreement, mortgage, deed of trust or other instrument to
     which Conseco Finance is a party or by which it is bound, or result in the
     creation or imposition of any Lien upon any of its properties pursuant to
     the terms of any such indenture, agreement, mortgage, deed of trust or
     other instrument, other than this Agreement and the Transfer Agreement, or
     violate any law, order, rule or regulation applicable to Conseco Finance of
     any court or of any federal or state regulatory body, administrative agency
     or other governmental instrumentality having jurisdiction over Conseco
     Finance or any of its properties.

          (g)  No Proceedings.  There are no proceedings or investigations
               --------------
     pending or, to Conseco Finance's knowledge, threatened against Conseco
     Finance, before any court, regulatory body, administrative agency or other
     tribunal or governmental instrumentality having jurisdiction over Conseco
     Finance or its properties (i) asserting the invalidity of

                                    Ex. A-3
<PAGE>

     this Agreement, (ii) seeking to prevent or the consummation of any of the
     transactions contemplated by this Agreement, (iii) seeking any
     determination or ruling that might materially and adversely affect the
     performance by Conseco Finance of its obligations under, or the validity or
     enforceability of, this Agreement, or (iv) seeking to affect adversely the
     federal income tax or other federal, state or local tax attributes of, or
     seeking to impose any excise, franchise, transfer or similar tax upon, the
     transfer and acquisition of the Subsequent Contracts and the Collateral
     Security hereunder.

          (h)  Insolvency.  As of the Subsequent Cut-off Date and the Subsequent
               ----------
     Transfer Date, neither Conseco Finance nor CFSC is insolvent nor will
     either of them have been made insolvent after giving effect to the
     conveyance set forth in Section 2 of this Agreement, nor are any of them
     aware of any pending insolvency.

          (i)  Chief Executive Office.  The chief executive office of Conseco
               ----------------------
     Finance is located at 1100 Landmark Towers, 345 St. Peter Street, Saint
     Paul, Minnesota 55102-1639.

          5.   Representations and Warranties of CFSC.  CFSC makes the following
               --------------------------------------
representations and warranties, on which Conseco Finance relies in selling,
assigning, transferring and conveying the Subsequent Contracts and the
Collateral Security to CFSC hereunder.  Such representations are made as of the
execution and delivery of this Agreement, but shall survive the sale, transfer
and assignment of the Subsequent Contracts and the Collateral Security
hereunder.

          (a)  Organization and Good Standing.  CFSC has been duly organized and
               ------------------------------
     is validly existing and in good standing as a corporation under the laws of
     the State of Minnesota, with the power and authority to own its properties
     and to conduct its business as such properties are currently owned and such
     business is currently conducted, and had at all relevant times, and has,
     full power, authority and legal right to acquire and own the Subsequent
     Contracts and the Collateral Security, and to transfer the Subsequent
     Contracts and the Collateral Security to the Trust pursuant to this
     Agreement.

          (b)  Due Qualification.  CFSC is duly qualified to do business as a
               -----------------
     foreign corporation in good standing, and has obtained all necessary
     licenses and approvals in all jurisdictions where the failure to do so
     would materially and adversely affect CFSC's ability to acquire the
     Subsequent Contracts or the Collateral Security or the validity or
     enforceability of the Subsequent Contracts and the Collateral Security or
     to perform CFSC's obligations hereunder.

          (c)  Power and Authority.  CFSC has the power, authority and legal
               -------------------
     right to execute and deliver this Agreement and to carry out the terms
     hereof and to acquire the Subsequent Contracts and the Collateral Security
     hereunder; and the execution, delivery and performance of this Agreement
     and all of the documents required pursuant hereto have been duly authorized
     by CFSC by all necessary action.

                                    Ex. A-4
<PAGE>

          (d)  No Consent Required.  CFSC is not required to obtain the consent
               -------------------
     of any other Person, or any consent, license, approval or authorization or
     registration or declaration with, any governmental authority, bureau or
     agency in connection with the execution, delivery or performance of this
     Agreement, except for such as have been obtained, effected or made.

          (e)  Binding Obligation.  This Agreement constitutes a legal, valid
               ------------------
     and binding obligation of CFSC, enforceable against CFSC in accordance with
     its terms, subject, as to enforceability, to applicable bankruptcy,
     insolvency, reorganization, conservatorship, receivership, liquidation and
     other similar laws and to general equitable principles.

          (f)  No Violation.  The execution, delivery and performance by CFSC of
               ------------
     this Agreement, the consummation of the transactions contemplated by this
     Agreement and the fulfillment of the terms of this Agreement do not and
     will not conflict with, result in any breach of any of the terms and
     provisions of, or constitute (with or without notice or lapse of time) a
     default under, the articles of incorporation or bylaws of CFSC, or conflict
     with or breach any of the terms or provisions of, or constitute (with or
     without notice or lapse of time) a default under, any indenture, agreement,
     mortgage, deed of trust or other instrument to which CFSC is a party or by
     which CFSC is bound or to which any of its properties are subject, or
     result in the creation or imposition of any Lien upon any of its properties
     pursuant to the terms of any such indenture, agreement, mortgage, deed of
     trust or other instrument (other than the Pooling and Servicing Agreement
     and the Transfer Agreement), or violate any law, order, rule or regulation,
     applicable to CFSC or its properties, of any federal or state regulatory
     body, any court, administrative agency, or other governmental
     instrumentality having jurisdiction over CFSC or any of its properties.

          (g)  No Proceedings.  There are no proceedings or investigations
               --------------
     pending, or, to the knowledge of CFSC, threatened against CFSC, before any
     court, regulatory body, administrative agency, or other tribunal or
     governmental instrumentality having jurisdiction over CFSC or its
     properties:  (i) asserting the invalidity of this Agreement, (ii) seeking
     to prevent the consummation of any of the transactions contemplated by this
     Agreement, (iii) seeking any determination or ruling that might materially
     and adversely affect the performance by CFSC of its obligations under, or
     the validity or enforceability of, this Agreement, or (iv) that may
     adversely affect the federal or state income tax attributes of, or seeking
     to impose any excise, franchise, transfer or similar tax upon, the transfer
     and acquisition of the Subsequent Contracts and the Collateral Security to
     the Trust.

In the event of any breach of a representation and warranty made by CFSC
hereunder, Conseco Finance covenants and agrees that it will not take any action
to pursue any remedy that it may have hereunder, in law, in equity or otherwise,
until a year and a day have passed since the date on which all pass-through
certificates or other similar securities issued by the Trust, or a trust or
similar vehicle formed by CFSC, have been paid in full.  Conseco Finance and
CFSC agree that damages will not be an adequate remedy for such breach and that
this covenant may be specifically enforced by CFSC or by the Trustee on behalf
of the Trust.

                                    Ex. A-5
<PAGE>

          6.   Conditions Precedent.  The obligation of CFSC to acquire the
               --------------------
Subsequent Contracts and the Collateral Security hereunder is subject to the
satisfaction, on or prior to the Subsequent Transfer Date, of the following
conditions precedent:

          (a)  Representations and Warranties.  Each of the representations and
               ------------------------------
     warranties made by the Conseco Finance in Section 4 of this Agreement and
     in Section 3.1 of the Transfer Agreement shall be true and correct as of
     the date of this Agreement and as of the Subsequent Transfer Date.

          (b)  Transfer Agreement Conditions.  Each of the conditions set forth
               -----------------------------
     in Section 2.3(b) of the Transfer Agreement applicable to the conveyance of
     Subsequent Contracts and the Collateral Security shall have been satisfied.

          (c)  Pooling and Servicing Agreement Representations and Warranties.
               --------------------------------------------------------------
     Each of the representations and warranties contained in Section 3.04 of the
     Pooling and Servicing Agreement shall be true and correct.

          (d)  Additional Information.  Conseco Finance shall have delivered to
               ----------------------
     CFSC such information as was reasonably requested by CFSC to satisfy itself
     as to (i) the accuracy of the representations and warranties set forth in
     Section 4 of this Agreement and in Section 3.1 of the Transfer Agreement
     and (ii) the satisfaction of the conditions set forth in this Section 6.

          7.   Ratification of Transfer Agreement.  As supplemented by this
               ----------------------------------
Agreement, the Transfer Agreement is in all respects ratified and confirmed and
the Transfer Agreement as so supplemented by this Agreement shall be read, taken
and construed as one and the same instrument.

          8.   Governing Law.  This Agreement shall be construed in accordance
               -------------
with the laws of the State of Minnesota without regard to the principles of
conflicts of laws thereof, and the obligations, rights and remedies of the
parties under this Agreement shall be determined in accordance with such laws.

          9.   Counterparts.  For the purposes of facilitating the execution of
               ------------
this Agreement and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute but
one and the same instrument.

          10.  Conveyance of the Subsequent Contracts and the Collateral
               ---------------------------------------------------------
Security to the Trust.  Conseco Finance acknowledges that CFSC intends, pursuant
---------------------
to a Subsequent Transfer Instrument, to convey the Subsequent Contracts and the
Collateral Security, together with its rights under this Agreement and under the
Transfer Agreement, to the Trust on the date hereof. Conseco Finance
acknowledges and consents to such conveyance and waives any further notice
thereof and covenants and agrees that the representations and warranties of
Conseco Finance contained in this Agreement and the rights of CFSC hereunder and
thereunder are intended to benefit Trustee, the Trust and the
Certificateholders.  In furtherance of the foregoing, Conseco

                                    Ex. A-6
<PAGE>

Finance covenants and agrees to perform its duties and obligations hereunder and
under this Agreement and the Transfer Agreement, in accordance with the terms
hereof and thereof for the benefit of the Trustee, the Trust and the
Certificateholders and that, notwithstanding anything to the contrary in this
Agreement or in the Transfer Agreement, Conseco Finance shall be directly liable
to the Trustee and the Trust (notwithstanding any failure by CFSC to perform its
duties and obligations hereunder or under the Pooling and Servicing Agreement or
the Transfer Agreement) and that the Trustee may enforce the duties and
obligations of Conseco Finance under this Agreement and the Transfer Agreement
against Conseco Finance for the benefit of the Trust and the Certificateholders.

                                    Ex. A-7
<PAGE>

          IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.

                            CONSECO FINANCE SECURITIZATIONS CORP.,
                              as Purchaser

                            By ___________________________________
                               Name:  Phyllis A. Knight
                               Title: Senior Vice President and Treasurer

                            CONSECO FINANCE CORP.,
                              as Seller

                            By ___________________________________
                              Name:  Phyllis A. Knight
                              Title: Senior Vice President and Treasurer

                                    Ex. A-8COMMON STOCK PURCHASE AGREEMENT

                          DATED AS OF DECEMBER 7, 2000

         THIS COMMON STOCK PURCHASE  AGREEMENT is entered into as of the 7th day
of December, 2000 (this "Agreement"),  by and between the investor identified on
Schedule A hereto (the "Buyer"), and Teligent, Inc., a corporation organized and
existing under the laws of the State of Delaware (the "Company");

         WHEREAS,  the parties  desire  that,  upon the terms and subject to the
conditions contained herein, the Company may issue and sell to the Buyer and the
Buyer shall purchase from the Company (i) up to $250,000,000 of the Common Stock
(as defined below) from time to time as provided herein and (ii) warrants in the
form  attached  hereto as  Exhibit  A to  purchase  Four  Million  Nine  Hundred
Seventy-Two  Thousand Three Hundred Seventy  (4,972,370)  shares of Common Stock
(the "Warrants"); and

         WHEREAS,  such investments will be made in reliance upon the provisions
of  Section  4(2)  ("Section   4(2)")  and  Regulation  D  ("Regulation  D")  as
promulgated by the United States  Securities and Exchange  Commission  under the
Securities  Act of 1933,  as amended (the  "Securities  Act"),  and/or upon such
other exemption from the registration  requirements of the Securities Act as may
be available with respect to any or all of the investments to be made hereunder.

         NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I
                               CERTAIN DEFINITIONS

         Section  1.1  "Accredited  Buyer"  shall have the  meaning set forth in
Section 3.2.

         Section  1.2  "Agreement"  shall  have  the  meaning  set  forth in the
preamble of this Agreement.

         Section 1.3  "Average  Daily  Trading  Volume" with respect to any Draw
Down  effected by the Company in  accordance  with Section 2.3 hereof shall mean
the  average  daily  volume of shares of Common  Stock  traded on the  Principal
Market as reported by  Bloomberg  Financial  during the thirty (30)  consecutive
Trading Day period ending on the Trading Day  immediately  preceding the date on
which a Draw Down  Notice (as  defined  below) is deemed to have been  delivered
pursuant to Section 2.3(b) hereof.

         Section  1.4 "Bid  Price"  for any given  Trading  Day  shall  mean the
closing bid price of the Common  Stock on such date on the  Principal  Market as
reported by Bloomberg Financial.

         Section  1.5  "Bloomberg  Financial"  shall  mean  Bloomberg  Financial
Markets or an equivalent  reliable reporting service acceptable to and hereafter
designated by the Buyer.

         Section 1.6 "Bring Down Comfort  Letter" shall mean a letter from Ernst
& Young LLP ("E&Y") or another "Big Five" independent public accounting firm, in
form and substance  satisfactory to the Buyer,  addressed to Buyer and the Board
of  Directors of the Company and dated as of the  applicable  Draw Down Date (i)
confirming that they are independent  public  accountants  within the meaning of
the  Securities  Act and are in  compliance  with  the  applicable  requirements
relating to the  qualification of accountants  under Rule 2-01 of Regulation S-X
of the SEC, (ii) stating,  as of the applicable  Draw Down Date, the conclusions
and findings of such firm with respect to the  financial  information  and other
matters covered by the Comfort Letter and (iii) updating the Comfort Letter with
any  information  which would have been  included in such Comfort  Letter had it
been given on such Draw Down Date.

         Section 1.7 "Buyer" shall have the meaning set forth in the preamble of
this Agreement.

         Section 1.8 "Bylaws" shall have the meaning set forth in Section 4.3.

         Section 1.9 "Capital  Shares"  shall mean (i) the Common Stock and (ii)
any  shares  of any  other  class of  common  stock,  whether  now or  hereafter
authorized,  having the right to participate in the distribution of earnings and
assets of the  Company  and which  shall,  together  with the Common  Stock,  be
treated as one class of equity securities for purposes of determining beneficial
ownership  under  Section 13 and Section 16 of the Exchange Act  (including  the
rules and regulations promulgated thereunder).

         Section 1.10 "Certificate of Incorporation"  shall have the meaning set
forth in Section 4.3.

         Section 1.11 "Class B Common Stock" shall have the meaning set forth in
Section 4.3.

         Section  1.12  "Closing"  shall have the  meaning  set forth in Section
2.2(a).

         Section  1.13  "Closing  Date" shall mean the date on which the Closing
occurs.

         Section 1.14  "Comfort  Letter" shall mean a letter from E&Y or another
"Big Five" independent public accounting firm satisfactory to the Buyer, in form
and substance satisfactory to the Buyer, addressed to the Buyer and the Board of
Directors of the Company and dated as of the Effective Date (i) confirming  that
they are  independent  public  accounts within the meaning of the Securities Act
and  are  in  compliance  with  the  applicable  requirements  relating  to  the
qualification  of  accountants  under Rule 2-01 of Regulation S-X of the SEC and
(ii) stating,  as of the Effective  Date, the  conclusions  and findings of such
firm with respect to the  financial  information  and other  matters  ordinarily
covered by  accountants'  "comfort  letters" to  underwriters in connection with
registered public offerings.

         Section 1.15  "Commitment  Period" shall mean the period  commencing on
the earlier to occur of (i) the Effective  Date or (ii) such earlier date as the
Company  and the  Buyer may  mutually  agree in  writing,  and  expiring  on the
earliest to occur of (x) the date on which the Buyer shall have  purchased  Draw
Down Shares  pursuant  to this  Agreement  for an  aggregate  Purchase  Price of
$250,000,000, (y) the date this Agreement is terminated pursuant to Article VII,
or (z) the date occurring  eighteen (18) months from the date of commencement of
the Commitment Period.

         Section 1.16 "Common  Stock"  shall mean the  Company's  Class A common
stock, $.01 par value per share.

         Section 1.17 "Common Stock  Equivalents" shall mean any securities that
are convertible into or exchangeable  for Common Stock or any warrants,  options
or  other  rights  to  subscribe  for or  purchase  Common  Stock  or  any  such
convertible or exchangeable securities.

         Section 1.18 "Company" shall have the meaning set forth in the preamble
of this Agreement.

         Section  1.19  "Company  Permits"  shall have the  meaning set forth in
Section 4.17.

         Section  1.20  "Control  Person"  shall have the  meaning  set forth in
Article X.

         Section 1.21 "Damages" shall mean any loss, claim,  damage,  liability,
costs and expenses (including,  without limitation,  reasonable  attorneys' fees
and disbursements and costs and expenses of expert witnesses and investigation).

         Section 1.22 "Draw Down" shall mean each occasion the Company elects to
exercise its right to tender a Draw Down Notice  requiring the Buyer to purchase
a dollar amount of the  Company's  Common Stock equal to the  Investment  Amount
specified  in such Draw Down  Notice,  and at such  price and on such  terms and
conditions as are set forth in this Agreement.

         Section 1.23 "Draw Down Cancellation"  shall have the meaning set forth
in Section 6.4(a).

         Section 1.24 "Draw Down  Cancellation  Date" shall have the meaning set
forth in Section 6.4(a).

         Section 1.25 "Draw Down Cancellation Notice" shall have the meaning set
forth in Section 6.4(a).

         Section  1.26 "Draw Down Date"  shall mean any  Trading  Day during the
Commitment  Period that a Draw Down Notice to sell Common  Stock to the Buyer is
deemed delivered pursuant to Section 2.3(b) hereof.

         Section  1.27 "Draw  Down  Notice"  shall mean a written  notice to the
Buyer in the form  attached  hereto as  Exhibit B setting  forth the  Investment
Amount that the Company  intends to sell to the Buyer pursuant to such Draw Down
and the Floor Price applicable to such Draw Down.

         Section 1.28 "Draw Down  Shares"  shall mean all shares of Common Stock
issued or  issuable  pursuant  to a Draw Down that has  occurred or may occur in
accordance with the terms and conditions of this Agreement.

         Section  1.29  "DWAC  Transfer"  shall  have the  meaning  set forth in
Section 2.4.

         Section  1.30  "Effective  Date"  shall  mean the date on which the SEC
first declares effective a Registration  Statement registering the resale of the
Registrable Securities as set forth in Section 6.2(a).

         Section 1.31  "Environmental  Laws" shall have the meaning set forth in
Section 4.19(a).

         Section  1.32  "Event of  Default"  shall have the meaning set forth in
Section 7.2.

         Section 1.33 "Exchange  Act" shall mean the Securities  Exchange Act of
1934, as amended, and the regulations promulgated thereunder.

         Section 1.34 "Floor  Price"  shall mean the lowest VWAP (before  taking
into account any discount  used to calculate  the Purchase  Price  hereunder) at
which the  Company  will sell its  Common  Stock as  specified  in the Draw Down
Notice  delivered in  connection  with any Draw Down  effected  pursuant to this
Agreement, but in no event shall the Floor Price be less than $2.00.

         Section 1.35 "Hazardous  Materials" shall have the meaning set forth in
Section 4.19.

         Section 1.36 "Information  Technology" shall have the meaning set forth
in Section 4.10(a).

         Section 1.37  "Intellectual  Property" shall have the meaning set forth
in Section 4.10.

         Section 1.38 "Investment Amount" shall mean the aggregate dollar amount
(within  the range  specified  in  Section  2.3) of any Draw  Down  Shares to be
purchased by the Buyer with respect to any Draw Down  effected by the Company in
accordance with Section 2.3 hereof.

         Section 1.39  "Investment  Company" shall have the meaning set forth in
Section 4.25.

         Section 1.40 "Irrevocable  Transfer Agent  Instructions" shall have the
meaning set forth in Article IX.

         Section 1.41 "Irrevocable  Transfer Agent  Instructions" shall have the
meaning set forth in Article IX.

         Section 1.42 "Material  Adverse Effect" shall mean any material adverse
effect  on  (i)  the  Securities,  (ii)  the  assets,   liabilities,   business,
properties,  operations,  financial  condition or results of  operations  of the
Company and its Subsidiaries  (as defined in Section 4.1 hereof),  if any, taken
as a whole, (iii) the transactions  contemplated  hereby or by the agreements or
instruments  to be entered into in connection  herewith or (iv) the authority or
the ability of the Company to perform its obligations under this Agreement,  the
Registration Rights Agreement or the Warrants.

         Section 1.43  "Maximum  Draw Down Amount" with respect to any Draw Down
effected by the Company in accordance  with Section 2.3 hereof shall mean ninety
percent (90%) of the product of (x) the VWAP for the Common Stock on the Trading
Day immediately  preceding the applicable Draw Down Date,  multiplied by (y) the
Average Daily Trading Volume of the Common Stock applicable with respect to such
Draw Down Date.

         Section 1.44 "Maximum Share Amount" shall have the meaning set forth in
Section 2.1(c).

         Section 1.45      "Minimum Draw Down Amount" shall mean $1,000,000.

         Section 1.46 "NASD" shall mean the National  Association  of Securities
Dealers, Inc.

         Section 1.47  "Outstanding" when used with reference to Common Stock or
Capital Shares (collectively the "Shares"),  shall mean, at any date as of which
the  number of such  Shares is to be  determined,  all  issued  and  outstanding
Shares,  and shall  include all such Shares  issuable in respect of  outstanding
scrip or any  certificates  representing  fractional  interests  in such Shares;
provided,  however,  that  "Outstanding"  shall  not mean any such  Shares  then
directly or indirectly owned or held by or for the account of the Company.

         Section  1.48  "Person"  shall mean an  individual,  a  corporation,  a
partnership, an association, a trust or other entity or organization,  including
a government or political subdivision or an agency or instrumentality thereof.

         Section 1.49  "Principal  Market" shall mean the Nasdaq National Market
("Nasdaq"),  the Nasdaq SmallCap Market ("Nasdaq SmallCap"),  the American Stock
Exchange (the "AMEX") or the New York Stock Exchange (the "NYSE"),  whichever is
at the time the principal trading exchange or market for the Common Stock.

         Section 1.50 "Prospectus  Supplement"  shall have the meaning set forth
in Section 6.2(o).

         Section 1.51 "Purchase Price" with respect to each Trading Day during a
Valuation  Period (or such other date on which the Purchase  Price is calculated
in  accordance  with the terms and  conditions  of this  Agreement)  shall  mean
ninety-five percent (95%) of the VWAP for such Trading Day.

         Section 1.52 "Registrable  Securities" shall mean the Draw Down Shares,
the Warrant Shares and any other shares of capital stock issued or issuable as a
dividend on or in exchange for or otherwise with respect to the Draw Down Shares
and  Warrant  Shares  until (i) the  Registration  Statement  has been  declared
effective  by the SEC and all such shares have been  disposed of pursuant to the
Registration Statement,  (ii) all such shares have been sold under circumstances
under  which  all of the  applicable  conditions  of Rule  144  (or any  similar
provision  then in force) are met,  (iii) all such  shares  have been  otherwise
transferred to holders who may trade such shares without  restriction  under the
Securities  Act,  and the  Company  has  delivered  a new  certificate  or other
evidence of ownership for such securities not bearing a restrictive legend, (iv)
such time as, in the  opinion of counsel  to the Buyer,  all such  shares may be
sold without any time, volume or manner limitations  pursuant to Rule 144(k) (or
any  similar  provision  then in  effect)  under the  Securities  Act or (v) any
combination of the foregoing relating to all such shares.

         Section 1.53  "Registration  Rights Agreement" shall mean the agreement
regarding  the  filing  of the  Registration  Statement  for the  resale  of the
Registrable Securities, entered into between the Company and the Buyer as of the
Closing Date and in the form attached hereto as Exhibit C.

         Section  1.54  "Registration   Statement"  shall  mean  a  registration
statement  on Form S-3 (if use of such  form is then  available  to the  Company
pursuant to the rules of the SEC and, if not, on such other form  promulgated by
the SEC for which the Company then  qualifies  and which counsel for the Company
shall deem  appropriate  and which form shall be available for the resale of the
Registrable  Securities  to be  registered  thereunder  in  accordance  with the
provisions  of this  Agreement and the  Registration  Rights  Agreement,  and in
accordance with the intended method of distribution of such securities), for the
registration of the resale by the Buyer of the Registrable  Securities under the
Securities Act.

         Section  1.55  "Regulation  D" shall have the  meaning set forth in the
recitals of this Agreement.

         Section  1.56  "Rule 144"  shall  mean Rule 144  promulgated  under the
Securities Act (or a successor rule).

         Section 1.57 "SEC" shall mean the United States Securities and Exchange
Commission.

         Section  1.58  "SEC  Documents"  shall  have the  meaning  set forth in
Section 4.7.

         Section  1.59  "Section  4(2)"  shall have the meaning set forth in the
recitals of this Agreement.

         Section 1.60 "Securities" shall mean collectively the Draw Down Shares,
the Warrants and the Warrant Shares.

         Section 1.61 "Securities Act" shall have the definition  ascribed to it
in the recitals of this Agreement.

         Section 1.62 "Settlement Date" shall mean the fourth, seventh and tenth
Trading Day following the Draw Down Date.

         Section 1.63 "Subsidiaries" shall have the meaning set forth in Section
4.1.

         Section 1.64 "Trading  Cushion"  shall mean, at any time, the mandatory
three (3) Trading Days between the end of a Valuation  Period and any subsequent
Draw Down Date.

         Section  1.65  "Trading  Day"  shall  mean  any day  during  which  the
Principal Market shall be open for trading.

         Section  1.66  "Tranche"  shall have the  meaning  set forth in Section
2.1(b).

         Section  1.67  "Tranche  Period"  shall mean the three (3)  Trading Day
period  ending on and  including  the Trading  Day  immediately  preceding  each
Settlement Date.

         Section 1.68  "Tranche  Shares"  shall mean,  with respect to a Tranche
Period, the number of shares of Common Stock which Buyer is required to purchase
from the Company as specified in Section 2.3(c) with respect to the Trading Days
comprising  such Tranche Period based on the Purchase  Price  applicable on each
Trading Day comprising such Tranche Period.

         Section  1.69  "Valuation  Period"  shall  mean the  period of nine (9)
consecutive  Trading Days  following the Trading Day on which a Draw Down Notice
is deemed to be delivered pursuant to Section 2.3(b) hereof.

         Section  1.70  "VWAP"  for any given  Trading  Day shall mean the daily
volume weighted  average price of the Common Stock on such date on the Principal
Market as reported by Bloomberg Financial using the AQR function.

         Section 1.71  "Warrants"  shall mean the  Warrants,  a form of which is
annexed hereto as Exhibit A.

         Section 1.72 "Warrant Shares" shall mean the Common Stock issued and/or
issuable upon exercise of or otherwise pursuant to the Warrants.

         Section 1.73 "Year 2000 Compliant"  shall have the meaning set forth in
Section 4.10(b).

                                   ARTICLE II
                        PURCHASE AND SALE OF COMMON STOCK

         Section 2.1       Investments.

         (a)  Purchase  and Sale of  Common  Stock.  Subject  to the  terms  and
conditions of this Agreement, the Company, at its sole and exclusive option, may
issue and sell to the Buyer,  and the Buyer shall purchase from the Company,  up
to Two Hundred  Fifty Million  Dollars  ($250,000,000)  of the Company's  Common
Stock,  based on up to as many Draw  Downs  (subject  to the  Maximum  Draw Down
Amount and the Minimum Draw Down Amount) as the Company, in its sole discretion,
shall choose to deliver during the Commitment  Period until the aggregate amount
purchased  under  this  Agreement  equals  Two  Hundred  Fifty  Million  Dollars
($250,000,000).

         (b) Draw Downs.  Upon the terms and subject to the conditions set forth
herein,  on any Trading Day during the Commitment Period on which the conditions
set forth in Sections  6.2 and 6.3 hereof have been  satisfied,  the Company may
exercise a Draw Down by the  delivery  of a Draw Down  Notice to the Buyer.  The
aggregate  number  of Draw Down  Shares  that the Buyer  shall be  obligated  to
purchase pursuant to such Draw Down shall be determined by dividing the relevant
portions  of the  Investment  Amount  specified  in the Draw Down  Notice by the
corresponding  Purchase Prices for each Trading Day during the Valuation  Period
as  specified  in Section  2.3(c).  Each Draw Down  shall be divided  into three
tranches  (each,  a "Tranche").  The three  Tranches  within a Draw Down will be
settled on the applicable Settlement Dates following the Draw Down Date.

         (c) Maximum Amount of Draw Down Shares.  Unless the Company obtains the
approval of its  stockholders in accordance with the corporate laws of the State
of Delaware  and the  applicable  rules of the  Principal  Market,  no more than
12,730,370 shares of Common Stock (the "Maximum Share Amount") may be issued and
sold pursuant to all Draw Downs hereunder.

         (d) Warrants.  On the Closing Date,  the Company will issue and deliver
to Buyer or its permitted assignees,  Warrants to purchase a number of shares of
Common Stock equal to the product of (x) $250,000,000  divided by the average of
the daily VWAPs for each of the ten (10)  consecutive  Trading Days  immediately
preceding the date of execution of this Agreement, multiplied by (y) six percent
(6%).  The  Warrants  will have a term of five years.  The Warrant  Shares to be
issued  pursuant to the Warrants  shall be  registered  for resale in accordance
with  the  terms  of the  Registration  Rights  Agreement.  Notwithstanding  any
termination  of this  Agreement,  regardless of whether or not the  Registration
Statement is or is not filed,  and regardless of whether or not the Registration
Statement  is  approved  or  denied  by the SEC,  the Buyer  shall  retain  full
ownership of the Warrants as partial consideration for its commitment hereunder.

         Section 2.2       Investment Commitment.

         (a) Investment  Commitment Closing.  The closing of this Agreement (the
"Closing")  shall be deemed to occur when this  Agreement  and the  Registration
Rights  Agreement have been executed by both the Buyer and the Company,  and the
other conditions set forth in Section 2.2(b) below have been met.

         (b) Conditions to Buyer's Obligations. As a prerequisite to the Closing
and the Buyer's  obligations  hereunder,  all of the following  conditions shall
have been satisfied  prior to or concurrently  with the Company's  execution and
delivery of this Agreement:

         (1)      the  following  documents  shall  have been  delivered  to the
                  Buyer: (i) the Registration  Rights Agreement (executed by the
                  Company); (ii) the Warrant(s) (executed by the Company); (iii)
                  the  opinion(s)  of  counsel in the forms  attached  hereto as
                  Exhibit  D;  (iv) a copy  of the  Irrevocable  Transfer  Agent
                  Instructions  (executed  by both the Company and the  Transfer
                  Agent);   (v)  a  Secretary's   certificate   as  to  (A)  the
                  resolutions  of the Company's  Board of Directors  authorizing
                  this   transaction,   (B)   the   Company's   Certificate   of
                  Incorporation,  and  (C) the  Company's  Bylaws;  and  (vi) an
                  Officer's  Certificate in form and substance to be agreed upon
                  by the parties;

         (2)      this  Agreement,  executed  by the  Company,  shall  have been
                  received by the Buyer;

         (3)      the  Company's  Common  Stock  shall be listed for trading and
                  actually trading on the Principal Market;

         (4)      Since the date of  filing of the  Company's  most  recent  SEC
                  Document,  no event that had or is reasonably likely to have a
                  Material Adverse Effect shall have occurred; and

         (5)      the  representations  and  warranties  of the  Company in this
                  Agreement  shall be true and correct in all material  respects
                  and the  conditions to Buyer's  obligations  set forth in this
                  Section  2.2(b)  shall have been  satisfied as of the Closing;
                  and the Company shall deliver an Officer's Certificate, signed
                  by an officer of the Company, to such effect to the Buyer.

         Section 2.3       Mechanics of Draw Downs.

         (a) Draw Down Notice. On any Trading Day during the Commitment  Period,
the  Company  may  deliver  a Draw  Down  Notice to the  Buyer,  subject  to the
satisfaction  of the  conditions  set forth in Sections  6.2 and 6.3;  provided,
however,  the Investment  Amount for each Draw Down as designated by the Company
in the  applicable  Draw Down Notice shall be neither less than the Minimum Draw
Down Amount nor more than the Maximum Draw Down Amount (as  determined as of the
applicable Draw Down Date); provided further,  however, that if the Maximum Draw
Down Amount as of the  applicable  Draw Down Date is less than the Minimum  Draw
Down  Amount,  the  Company  shall not be entitled to deliver any such Draw Down
Notice.

         (b) Date of Delivery of Draw Down  Notice.  A Draw Down Notice shall be
deemed delivered on (i) the Trading Day it is received by facsimile or otherwise
by the Buyer if such notice is received  prior to 3:00 p.m., New York City time,
or (ii) the immediately succeeding Trading Day if it is received by facsimile or
otherwise  after 3:00 p.m.,  New York City time, on a Trading Day or at any time
on a day which is not a Trading Day. No Draw Down Notice may be deemed delivered
on a day that is not a Trading Day.

         (c)  Determination  of Draw Down Shares  Issuable.  Subject to Sections
2.3(d) and (e)  below,  the number of Draw Down  Shares to be  purchased  by the
Buyer with respect to any Draw Down shall be  determined on a daily basis during
the applicable Valuation Period and shall equal with respect to any such Trading
Day the quotient of (x) one-ninth (1/9) of the Investment Amount, divided by (y)
the Purchase  Price for such Trading Day. The portion of the  Investment  Amount
for which  Draw Down  Shares  may be issued  for each  Trading  Day  during  the
Valuation Period may not exceed one-ninth (1/9) of the Investment Amount.

         (d) Floor  Price  Limitation.  If the VWAP on any  Trading Day during a
Valuation  Period is less than the Floor Price  specified in the applicable Draw
Down  Notice,  the Company  shall not sell and the Buyer shall not  purchase the
Draw Down Shares  otherwise to be purchased  for such Trading Day. In such case,
the  Investment  Amount  shall be reduced by one-ninth  (1/9) of the  Investment
Amount for each such Trading Day.

         (e)  Minimum  Trading  Hours  Limitation.  In the event that the Common
Stock is not listed and approved for trading on a Principal Market and free from
any halts or suspensions of trading (whether imposed generally on such Principal
Market or  specifically  with  respect to the  Common  Stock) for a period of at
least six (6) hours on any  Trading  Day  during a  Valuation  Period,  then the
portion of the Investment  Amount  allocable to the purchase of Draw Down Shares
with respect to such Trading Day pursuant to clause (x) of Section  2.3(c) above
shall  equal  the  product  of (x)  one-ninth  (1/9) of the  Investment  Amount,
multiplied by (y) the quotient of (A) the number of hours (or portions  thereof)
during which the Common Stock  actually  trades on the Principal  Market on such
Trading Day (exclusive of any halts or suspensions of trading imposed  generally
on the  Principal  Market or  specifically  with  respect to the Common  Stock),
divided by (B) 6.5. In such event, the Investment Amount shall be reduced by the
difference  between  one-ninth  (1/9) of the  Investment  Amount  and the amount
calculated pursuant to the preceding sentence for each such Trading Day.

         Section 2.4  Settlements.  Subject to the provisions of Section 6.4, on
each  Settlement  Date the Company  shall,  unless  otherwise  instructed by the
Buyer,  cause the Transfer  Agent to  electronically  transmit  shares of Common
Stock to the Buyer (by crediting  the account of the Buyer's  Prime  Broker,  as
designated  by the Buyer,  with the  Depository  Trust  Corporation  through its
Deposit Withdrawal Agent Commission system ("DWAC  Transfer"))  representing the
Tranche Shares to be purchased by the Buyer on such Settlement Date with respect
to the Tranche Period  immediately  preceding such  Settlement  Date pursuant to
Section 2.3(c) herein and, upon receipt of such Tranche Shares,  the Buyer shall
deliver the portion of the Investment Amount  representing the Tranche Shares to
be purchased on such Settlement  Date by wire transfer of immediately  available
funds to an account  designated by the Company on or before the Settlement Date.
In addition,  on or prior to each such Settlement  Date, each of the Company and
the Buyer shall deliver all documents,  instruments and writings  required to be
delivered by either of them pursuant to this Agreement in order to implement and
effect the transactions contemplated herein.

         Section 2.5 Liquidated Damages. In the event the Tranche Shares are not
timely delivered by the Company on any Settlement Date, the Company will pay the
Buyer,  as liquidated  damages for such failure to deliver and not as a penalty,
two percent (2%) of the  aggregate  Purchase  Price for such Tranche  Shares for
each seven (7) calendar day period, or part thereof,  following such failure, in
cash,  until  such  Tranche  Shares  have been  delivered.  Such  amount  may be
subtracted  by the Buyer from the  portion of the  Investment  Amount  otherwise
payable by the Buyer with respect to such Tranche Shares.

                                   ARTICLE III
                     BUYER'S REPRESENTATIONS AND WARRANTIES

         The Buyer represents and warrants to the Company that:

         Section 3.1  Investment  Purpose.  As of the date hereof,  the Buyer is
purchasing  the  Securities  for its own  account  and not with a  present  view
towards  the public  sale or  distribution  thereof,  except  pursuant  to sales
registered or exempted from  registration  under the Securities  Act;  provided,
however, that by making the representations  herein, the Buyer does not agree to
hold any of the  Securities  for any minimum or other specific term and reserves
the right to dispose of the Securities at any time  (including,  but not limited
to,  during  any  Valuation   Period)  in  accordance  with  or  pursuant  to  a
registration statement or an exemption under the Securities Act.

         Section  3.2  Accredited  Buyer  Status.  The  Buyer is an  "accredited
investor" as that term is defined in Rule 501(a) of Regulation D (an "Accredited
Buyer").

         Section 3.3 Information.  The Buyer and its advisors, if any, have been
furnished with all materials  relating to the business,  finances and operations
of the Company and  materials  relating to the offer and sale of the  Securities
which  have  been  requested  by the  Buyer or its  advisors.  The Buyer and its
advisors,  if any,  have been afforded the  opportunity  to ask questions of the
Company.  Neither  such  inquiries  nor any  other due  diligence  investigation
conducted by Buyer or any of its advisors or representatives shall modify, amend
or affect Buyer's right to rely on the Company's  representations and warranties
contained in Section 4 below.  The Buyer  understands that its investment in the
Securities involves a significant degree of risk.

         Section 3.4 Governmental  Review.  The Buyer understands that no United
States federal or state agency or any other  government or  governmental  agency
has passed upon or made any recommendation or endorsement of the Securities.

         Section 3.5 Transfer or Re-sale.  The Buyer understands that (i) except
as provided in the  Registration  Rights  Agreement,  the sale or re-sale of the
Securities has not been and is not being  registered under the Securities Act or
any applicable  state securities laws, and the Securities may not be transferred
unless  (a) the  Securities  are  sold  pursuant  to an  effective  registration
statement  under the  Securities  Act, (b) the Buyer shall have delivered to the
Company an opinion of counsel  (which  opinion  shall be in form,  substance and
scope  customary  for  opinions of counsel in  comparable  transactions)  to the
effect that the Securities to be sold or transferred  may be sold or transferred
pursuant to an exemption from such registration,  (c) the Securities are sold or
transferred to an  "affiliate"  (as defined in Rule 144) of the Buyer who agrees
to sell or  otherwise  transfer  the  Securities  only in  accordance  with this
Section  3.5 and who is an  Accredited  Buyer  or (d) the  Securities  are  sold
pursuant to Rule 144; (ii) any sale of such  Securities made in reliance on Rule
144 may be made only in accordance  with the terms of said Rule and further,  if
said Rule is not applicable,  any re-sale of such Securities under circumstances
in which the seller (or the person  through whom the sale is made) may be deemed
to be an underwriter (as that term is defined in the Securities Act) may require
compliance  with some other  exemption under the Securities Act or the rules and
regulations of the SEC  thereunder;  and (iii) neither the Company nor any other
person is under any obligation to register such Securities  under the Securities
Act or any state  securities  laws or to comply with the terms and conditions of
any exemption  thereunder (in each case, other than pursuant to the Registration
Rights  Agreement).  Notwithstanding  the foregoing or anything  else  contained
herein  to  the  contrary,  the  Securities  may be  pledged  as  collateral  in
connection  with a bona fide margin  account or other  lending  arrangement.  In
connection  with any sale of  Registrable  Securities  by the Buyer  pursuant to
clause (a) above,  the Buyer agrees to sell all such  securities  in  compliance
with applicable prospectus delivery requirements.

         Section  3.6  Authorization;   Enforcement.   This  Agreement  and  the
Registration  Rights  Agreement  have been  duly and  validly  authorized.  This
Agreement has been duly executed and delivered on behalf of the Buyer,  and this
Agreement  constitutes,  and upon  execution  and  delivery  by the Buyer of the
Registration Rights Agreement, such agreement will constitute, valid and binding
agreements of the Buyer enforceable in accordance with their terms.

         Section 3.7 Residency.  The Buyer is a resident of the jurisdiction set
forth immediately below such Buyer's name on the signature pages hereto.

                                   ARTICLE IV
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to the Buyer that:

         Section 4.1 Organization and Qualification. The Company and each of its
Subsidiaries  (as defined  below),  if any,  is a  corporation  duly  organized,
validly  existing and in good  standing  under the laws of the  jurisdiction  in
which it is incorporated, with full power and authority (corporate and other) to
own,  lease,  use and operate its properties and to carry on its business as and
where now owned, leased, used, operated and conducted. Schedule 4.1 sets forth a
list of all of the  Subsidiaries  of the Company and the  jurisdiction  in which
each is incorporated. The Company and each of its Subsidiaries is duly qualified
as a  foreign  corporation  to do  business  and is in good  standing  in  every
jurisdiction  in which its  ownership  or use of  property  or the nature of the
business  conducted by it makes such  qualification  necessary  except where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect.  "Subsidiaries"  means any  corporation or other  organization,  whether
incorporated  or  unincorporated,   in  which  the  Company  owns,  directly  or
indirectly,  any  equity  or  other  ownership  interest  and  which  would be a
"Significant  Subsidiary"  of the  Company  as  defined  under  Rule  1-02(w) of
Regulation S-X promulgated under the Securities Act.

         Section  4.2  Authorization;  Enforcement.  (i)  The  Company  has  all
requisite  corporate  power  and  authority  to  enter  into  and  perform  this
Agreement,  the Registration Rights Agreement and the Warrants and to consummate
the transactions contemplated hereby and thereby and to issue the Securities, in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
this  Agreement,  the  Registration  Rights  Agreement  and the  Warrants by the
Company and the consummation by it of the transactions  contemplated  hereby and
thereby  (including  without  limitation,  the  issuance of the Warrants and the
issuance  and  reservation  for issuance of the Draw Down Shares and the Warrant
Shares) have been duly  authorized  by the  Company's  Board of  Directors  and,
except as contemplated by Section 2.1(c), no further consent or authorization of
the Company, its Board of Directors, or its stockholders is required, (iii) this
Agreement  has been duly  executed and  delivered by the Company,  and (iv) this
Agreement  constitutes,  and upon  execution  and delivery by the Company of the
Registration  Rights  Agreement and the Warrants,  each of such  agreements  and
instruments  will  constitute,  a legal,  valid and  binding  obligation  of the
Company  enforceable against the Company in accordance with its terms, except as
such  enforceability  may  be  limited  by  applicable  bankruptcy,  insolvency,
reorganization,  moratorium,  fraudulent  transfer,  liquidation or similar laws
relating to, or affecting  generally,  the enforcement of creditor's  rights and
remedies or by other equitable  principles of general  application  from time to
time in effect.

         Section  4.3  Capitalization.  As of the date  hereof,  the  authorized
capital stock of the Company consists of (i) 500,000,000 shares of Common Stock,
of  which  42,423,082  shares  of  Common  Stock  are  issued  and  outstanding,
23,729,125  shares of Common Stock are  reserved  for  issuance  pursuant to the
Company's stock option plans,  9,205,026 shares of Common Stock are reserved for
issuance  pursuant  to  securities  exercisable  for,  or  convertible  into  or
exchangeable for shares of Common Stock and 5,966,844 (1.2x currently  required)
shares of Common Stock are reserved for issuance  upon  exercise of the Warrants
(subject to adjustment  pursuant to the Company's  covenant set forth in Section
5.8 below);  (ii) 70,000,000  shares of Class B Common Stock, par value $.01 per
share (the "Class B Common Stock"), of which 21,260,610 shares of Class B Common
Stock are issued and outstanding,  0 shares of Class B Common Stock are reserved
for issuance  pursuant to the Company's stock option plans and 0 shares of Class
B Common Stock are reserved for issuance pursuant to securities exercisable for,
or  convertible  into or  exchangeable  for  shares of Common  Stock;  and (iii)
10,000,000 shares of preferred stock,  529,289 shares of which are designated as
7 3/4 % Series A Cumulative Convertible Preferred Stock, of which 529,289 shares
are issued and outstanding. All of such outstanding shares of capital stock are,
or upon  issuance  will be,  duly  authorized,  validly  issued,  fully paid and
nonassessable.  No  shares  of  capital  stock of the  Company  are  subject  to
preemptive rights or any other similar rights of the stockholders of the Company
or any liens or  encumbrances  imposed  through the actions or failure to act of
the Company.  Except as disclosed in Schedule 4.3, as of the  effective  date of
this Agreement, (i) there are no outstanding options, warrants, scrip, rights to
subscribe for, puts, calls, rights of first refusal, agreements, understandings,
claims or other commitments or rights of any character  whatsoever  relating to,
or  securities  or rights  convertible  into or  exchangeable  for any shares of
capital  stock of the Company or any of its  Subsidiaries,  or  arrangements  by
which the  Company or any of its  Subsidiaries  is or may become  bound to issue
additional  shares of capital  stock of the Company or any of its  Subsidiaries,
(ii) there are no agreements or  arrangements  under which the Company or any of
its  Subsidiaries  is  obligated  to  register  the  sale of any of its or their
securities under the Securities Act (except the Registration  Rights  Agreement)
and (iii) there are no anti-dilution or price adjustment provisions contained in
any  security  issued by the Company (or in any  agreement  providing  rights to
security  holders) that will be triggered by the issuance of the  Warrants,  the
Draw Down Shares or Warrant Shares.  The Company has furnished to the Buyer true
and correct copies of the Company's Certificate of Incorporation as in effect on
the date hereof (the "Certificate of  Incorporation"),  the Company's By-laws as
in effect on the date hereof  (the  "Bylaws"),  and the terms of all  securities
convertible into or exercisable for Common Stock of the Company and the material
rights of the holders thereof in respect thereto.  The Company shall provide the
Buyer with a written update of this representation signed by the Company's Chief
Executive  or Chief  Financial  Officer on behalf of the Company as of each Draw
Down Date.

         Section 4.4 Issuance of Shares. The Draw Down Shares and Warrant Shares
may and will be properly  issued  pursuant to Regulation D and/or any applicable
state law.  When issued,  the Draw Down Shares and Warrant  Shares shall be duly
and validly issued, fully paid, and nonassessable. Neither the sales of the Draw
Down Shares and Warrant Shares pursuant to, nor the Company's performance of its
obligations  under,  this  Agreement,  the Warrants or the  Registration  Rights
Agreement  will (i) result in the creation or imposition of any liens,  charges,
claims or other  encumbrances  upon the Draw Down Shares,  the Warrant Shares or
any of the assets of the  Company,  or (ii)  entitle the holders of  outstanding
shares of capital stock to preemptive or other rights to subscribe to or acquire
shares of capital stock or other securities of the Company. The Draw Down Shares
and Warrant  Shares shall not subject the Buyer to personal  liability by reason
of the possession thereof.

         Section 4.5  Acknowledgment  of Dilution.  The Company  understands and
acknowledges  the  potentially  dilutive  effect to the  Common  Stock  upon the
issuance of the Draw Down Shares  pursuant to Draw Downs effected  hereunder and
upon issuance of the Warrant  Shares upon  exercise of or otherwise  pursuant to
the Warrants.  The Company's  directors and executive  officers have studied and
fully understand the nature of the Securities being sold hereunder.  The Company
further  acknowledges  that its obligation to issue Draw Down Shares and Warrant
Shares in  accordance  with this  Agreement  and the  Warrants is  absolute  and
unconditional  regardless of the dilutive  effect that such issuance may have on
the  ownership  interests  of other  stockholders  of the  Company.  Taking  the
foregoing into account, the Company's Board of Directors has determined,  in its
good faith business judgment,  that the issuance of the Securities hereunder and
under the Warrants and the consummation of the transactions  contemplated hereby
and thereby are in the best interest of the Company and its stockholders.

         Section 4.6 No Conflicts.  The execution,  delivery and  performance of
this  Agreement,  the  Registration  Rights  Agreement  and the  Warrants by the
Company and the  consummation  by the Company of the  transactions  contemplated
hereby and thereby (including,  without limitation, the issuance and reservation
for issuance,  as applicable,  of the Draw Down Shares and Warrant  Shares) will
not  (i)  conflict  with  or  result  in a  violation  of any  provision  of the
Certificate  of  Incorporation  or By-laws or (ii) violate or conflict  with, or
result in a breach of any  provision  of, or  constitute  a default (or an event
which with  notice or lapse of time or both could  become a default)  under,  or
give  to  others  any  rights  of   termination,   amendment,   acceleration  or
cancellation of, any agreement,  indenture, patent, patent license or instrument
to which the Company or any of its Subsidiaries is a party, or (iii) result in a
violation of any law, rule,  regulation,  order,  judgment or decree  (including
federal  and  state  securities  laws and  regulations  and  regulations  of any
self-regulatory  organizations  to  which  the  Company  or its  securities  are
subject)  applicable to the Company or any of its  Subsidiaries  or by which any
property or asset of the Company or any of its Subsidiaries is bound or affected
(except for such conflicts, defaults, terminations,  amendments,  accelerations,
cancellations  and  violations as would not,  individually  or in the aggregate,
have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries
is  in  violation  of  its  Certificate  of  Incorporation,   By-laws  or  other
organizational  documents and neither the Company nor any of its Subsidiaries is
in default (and no event has occurred which with notice or lapse of time or both
could put the Company or any of its  Subsidiaries in default) under, and neither
the Company nor any of its  Subsidiaries  has taken any action or failed to take
any action  that would  give to others  any  rights of  termination,  amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its  Subsidiaries  is a party or by which any  property or
assets of the Company or any of its  Subsidiaries  is bound or affected,  except
for possible  defaults as would not,  individually  or in the aggregate,  have a
Material Adverse Effect. The businesses of the Company and its Subsidiaries,  if
any, are not being conducted, and shall not be conducted so long as a Buyer owns
any of the Securities,  in violation of any law,  ordinance or regulation of any
governmental  entity the violation of which would reasonably be expected to have
a Material Adverse Effect. Except as specifically contemplated by this Agreement
and as required under the Securities  Act and any  applicable  state  securities
laws, the Company is not required to obtain any consent,  authorization or order
of, or make any filing or  registration  with, any court,  governmental  agency,
regulatory  agency,  self  regulatory  organization or stock market or any third
party in order for it to  execute,  deliver  or perform  any of its  obligations
under this  Agreement,  the  Registration  Rights  Agreement  or the Warrants in
accordance  with the terms  hereof or thereof or to issue and sell the Draw Down
Shares and Warrants in accordance with the terms hereof and to issue the Warrant
Shares  upon  exercise  of or  otherwise  pursuant  to the  Warrants.  Except as
disclosed in Schedule 4.6, all  consents,  authorizations,  orders,  filings and
registrations  which the Company is required to obtain pursuant to the preceding
sentence  have been  obtained or effected  on or prior to the date  hereof.  The
Company is not in  violation of the listing  requirements  of the Nasdaq and the
Company is not aware of any event or condition that could reasonably be expected
to cause the  Common  Stock to be  delisted  by the  Nasdaq  in the  foreseeable
future.   The  Company  and  its  Subsidiaries  are  unaware  of  any  facts  or
circumstances which might give rise to any of the foregoing.

         Section 4.7 SEC  Documents;  Financial  Statements.  Since December 31,
1997, the Company has timely filed all reports, schedules, forms, statements and
other  documents  required  to be  filed  by it  with  the SEC  pursuant  to the
reporting  requirements of the Exchange Act (all of the foregoing filed prior to
the date hereof and all exhibits  included therein and financial  statements and
schedules  thereto  and  documents  (other  than  exhibits  to  such  documents)
incorporated by reference  therein,  being  hereinafter  referred to as the "SEC
Documents").  The Company has delivered or made  available to the Buyer true and
complete  copies of the SEC Documents.  As of their  respective  dates,  the SEC
Documents  complied  in all  material  respects  with  the  requirements  of the
Exchange Act and the rules and  regulations  of the SEC  promulgated  thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC,  contained  any untrue  statement of a material fact or
omitted to state a material fact  required to be stated  therein or necessary in
order to make the statements  therein, in light of the circumstances under which
they were made,  not  misleading.  None of the  statements  made in any such SEC
Documents is, or has been,  required to be amended or updated  under  applicable
law (except for such  statements  as have been amended or updated in  subsequent
filings prior to the date hereof).  As of their respective  dates, the financial
statements of the Company  included in the SEC Documents  complied as to form in
all material respects with applicable accounting  requirements and the published
rules and regulations of the SEC with respect thereto. Such financial statements
have  been  prepared  in  accordance  with  United  States  generally   accepted
accounting principles, consistently applied, during the periods involved (except
(i) as may be otherwise  indicated  in such  financial  statements  or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they
may not include footnotes or may be condensed or summary  statements) and fairly
present in all material  respects  the  consolidated  financial  position of the
Company  and its  consolidated  Subsidiaries  as of the  dates  thereof  and the
consolidated  results of their  operations  and cash flows for the periods  then
ended (subject,  in the case of unaudited  statements,  to normal year-end audit
adjustments).  Except as set forth in the  financial  statements  of the Company
included in the SEC  Documents,  the Company has no  liabilities,  contingent or
otherwise,  other  than (i)  liabilities  incurred  in the  ordinary  course  of
business  subsequent to December 31, 1999 and (ii)  obligations  under contracts
and  commitments  incurred in the  ordinary  course of business and not required
under generally accepted accounting principles to be reflected in such financial
statements,  which,  individually  or in the aggregate,  are not material to the
financial condition or operating results of the Company.

         Section 4.8 Absence of Certain Changes.  Since December 31, 1999, there
has been no material adverse change and no material  adverse  development in the
assets, liabilities,  business, properties,  operations,  financial condition or
results of  operations  of the  Company or any of its  Subsidiaries  (other than
changes which have been disclosed in the SEC Documents filed since such date).

         Section 4.9 Absence of  Litigation.  There is no action,  suit,  claim,
proceeding,  inquiry  or  investigation  before or by any court,  public  board,
government  agency,  self-regulatory  organization  or body  pending  or, to the
knowledge  of the  Company  or any of its  Subsidiaries,  threatened  against or
affecting the Company or any of its Subsidiaries, or their officers or directors
in their capacity as such, that could have a Material  Adverse Effect.  Schedule
4.9  contains  a  complete  list  and  summary  description  of any  pending  or
threatened   proceeding   against  or  affecting  the  Company  or  any  of  its
Subsidiaries  which  could,  either  individually  or in the  aggregate,  have a
Material  Adverse Effect.  The Company and its  Subsidiaries  are unaware of any
facts or circumstances which might give rise to any of the foregoing.

         Section 4.10      Patents, Copyrights, etc.

                  (a) The Company and each of its Subsidiaries owns or possesses
the requisite licenses or rights to use all patents, patent applications, patent
rights, inventions, know-how, trade secrets, trademarks, trademark applications,
service  marks,  service  names,  trade  names  and  copyrights   ("Intellectual
Property")  necessary to enable it to conduct its business as now operated (and,
except  as set  forth in  Schedule  4.10  hereof,  to the best of the  Company's
knowledge,  as presently contemplated to be operated in the future); there is no
claim or action by any person  pertaining to, or proceeding  pending,  or to the
Company's knowledge threatened,  which challenges the right of the Company or of
a Subsidiary with respect to any Intellectual Property necessary to enable it to
conduct its business as now operated (and,  except as set forth in Schedule 4.10
hereof, to the best of the Company's knowledge,  as presently contemplated to be
operated in the future); to the best of the Company's  knowledge,  the Company's
or its Subsidiaries'  current and intended  products,  services and processes do
not  infringe on any  Intellectual  Property or other rights held by any person;
and the Company is unaware of any facts or  circumstances  which might give rise
to any of the  foregoing.  The Company and each of its  Subsidiaries  have taken
reasonable  security measures to protect the secrecy,  confidentiality and value
of their Intellectual Property.

                  (b)  All of  the  Company's  computer  software  and  computer
hardware,  and other  similar or related  items of  automated,  computerized  or
software systems that are used or relied on by the Company in the conduct of its
business or that were, or currently  are being,  sold or licensed by the Company
to customers (collectively,  "Information Technology"), are Year 2000 Compliant.
For  purposes of this  Agreement,  the term "Year 2000  Compliant"  means,  with
respect to the Company's Information Technology, that the Information Technology
is designed to be used prior to,  during and after the calendar  year 2000 A.D.,
and the Information Technology used during each such time period will accurately
receive, provide and process date and time data (including,  but not limited to,
calculating,  comparing and sequencing) from, into and between the 20th and 21st
centuries,  including the years 1999 and 2000, and leap-year  calculations,  and
will not malfunction, cease to function, or provide invalid or incorrect results
as a result of the date or time  data,  to the  extent  that  other  information
technology,  used in  combination  with  the  Information  Technology,  properly
exchanges date and time data with it.

         Section 4.11 No Materially Adverse Contracts,  Etc. Neither the Company
nor any of its Subsidiaries is subject to any charter,  corporate or other legal
restriction,  or any judgment,  decree,  order,  rule or regulation which in the
judgment of the  Company's  officers  has or is expected in the future to have a
Material  Adverse Effect.  Neither the Company nor any of its  Subsidiaries is a
party to any  contract  or  agreement  which in the  judgment  of the  Company's
officers has or is expected to have a Material Adverse Effect.

         Section  4.12 Tax  Status.  Except as set forth on Schedule  4.12,  the
Company and each of its  Subsidiaries  has made or filed all federal,  state and
foreign income and all other tax returns,  reports and declarations  required by
any  jurisdiction to which it is subject (unless and only to the extent that the
Company  and each of its  Subsidiaries  has set  aside on its  books  provisions
reasonably  adequate for the payment of all unpaid and unreported taxes) and has
paid all taxes and other governmental  assessments and charges that are material
in  amount,  shown  or  determined  to be  due  on  such  returns,  reports  and
declarations,  except  those being  contested in good faith and has set aside on
its  books  provisions  reasonably  adequate  for the  payment  of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company know of no
basis for any such claim.  The Company has not executed a waiver with respect to
the statute of  limitations  relating to the  assessment  or  collection  of any
foreign, federal, state or local tax. Except as set forth on Schedule 4.12, none
of the Company's tax returns is presently being audited by any taxing authority.

         Section 4.13 Certain Transactions. Except as set forth on Schedule 4.13
and as  otherwise  disclosed  in the SEC  Documents  and except for arm's length
transactions  pursuant  to which the  Company or any of its  Subsidiaries  makes
payments in the ordinary  course of business upon terms no less  favorable  than
the Company or any of its Subsidiaries could obtain from third parties and other
than the grant of stock options disclosed on Schedule 4.3, none of the officers,
directors,  or employees of the Company is presently a party to any  transaction
with  the  Company  or any of its  Subsidiaries  (other  than  for  services  as
employees,  officers and directors),  including any contract, agreement or other
arrangement  providing for the  furnishing  of services to or by,  providing for
rental of real or personal property to or from, or otherwise  requiring payments
to or from any officer,  director or such  employee or, to the  knowledge of the
Company,  any  corporation,  partnership,  trust or other  entity  in which  any
officer,  director,  or any such  employee has a  substantial  interest or is an
officer, director, trustee or partner.

         Section 4.14 Disclosure.  All information relating to or concerning the
Company or any of its  Subsidiaries  set forth in this Agreement and provided to
the Buyer  pursuant to Section 3.3 hereof and otherwise in  connection  with the
transactions  contemplated  hereby is true and correct in all material  respects
and the Company has not omitted to state any material fact necessary in order to
make the statements made herein or therein,  in light of the circumstances under
which they were made, not misleading  (other than any  information the Buyer has
refused to accept).  No event or circumstance has occurred or exists, nor is the
Company in possession of any information,  with respect to the Company or any of
its Subsidiaries or its or their business, properties,  prospects, operations or
financial  conditions,  which has not been  publicly  announced or disclosed but
under  applicable  law,  rule  or  regulation,  requires  public  disclosure  or
announcement  by the  Company  (assuming  for this  purpose  that the  Company's
reports  filed under the Exchange Act are being  incorporated  into an effective
registration statement filed by the Company under the Securities Act).

         Section 4.15  Acknowledgment  Regarding Buyer's Purchase of Securities.
The  Company  acknowledges  and  agrees  that the Buyer is acting  solely in the
capacity of an arm's length  purchaser  with respect to this  Agreement  and the
transactions  contemplated  hereby.  The Company further  acknowledges  that the
Buyer is not acting as a financial  advisor or  fiduciary  of the Company (or in
any  similar  capacity)  with  respect to this  Agreement  and the  transactions
contemplated  hereby  and that  any  statement  made by the  Buyer or any of its
representatives or agents in connection with this Agreement and the transactions
contemplated  hereby is not advice or a recommendation  and is merely incidental
to the Buyer's  purchase of the  Securities  and has not been relied upon by the
Company, its officers or directors in any way. The Company further represents to
the Buyer that the  Company's  decision  to enter into this  Agreement  has been
based   solely  on  the   independent   evaluation   of  the   Company  and  its
representatives.

         Section 4.16 No Integrated  Offering.  Neither the Company,  nor any of
its  affiliates,  nor any person acting on its or their behalf,  has directly or
indirectly  made any offers or sales of any security or solicited  any offers to
buy any security under  circumstances that would require  registration under the
Securities Act of the issuance of the  Securities to the Buyer.  The issuance of
the  Securities to the Buyer will not be integrated  with any other  issuance of
the  Company's  securities  (past,  current  or  future)  for  purposes  of  any
stockholder approval provisions applicable to the Company or its securities.

         Section  4.17 No Brokers.  The Company has taken no action  which would
give rise to any claim by any person for brokerage commissions, finder's fees or
similar  payments  relating to this Agreement or the  transactions  contemplated
hereby.

         Section  4.18  Permits;   Compliance.  The  Company  and  each  of  its
Subsidiaries  is  in  possession  of  all  franchises,  grants,  authorizations,
licenses, permits, easements,  variances,  exemptions,  consents,  certificates,
approvals and orders  necessary to own,  lease and operate its properties and to
carry on its business as it is now being conducted  (collectively,  the "Company
Permits")  except in such  instances  where the failure to possess  such Company
Permits would not,  either  individually  or in the  aggregate,  have a Material
Adverse  Effect,  and there is no action  pending  or, to the  knowledge  of the
Company,  threatened  regarding suspension or cancellation of any of the Company
Permits,  the suspension or cancellation of which would not, either individually
or in the aggregate, have a Material Adverse Effect. Neither the Company nor any
of its  Subsidiaries  is in conflict with, or in default or violation of, any of
the Company  Permits,  except for any such  conflicts,  defaults  or  violations
which,  individually  or in the  aggregate,  would not reasonably be expected to
have a Material Adverse Effect. Since December 31, 1999, neither the Company nor
any of its Subsidiaries  has received any notification  with respect to possible
conflicts,  defaults  or  violations  of  applicable  laws,  except for  notices
relating  to  possible  conflicts,  defaults  or  violations,  which  conflicts,
defaults or violations would not have a Material Adverse Effect.

         Section 4.19      Environmental Matters.

                  (a) Except as set forth in  Schedule  4.19,  there are, to the
Company's  knowledge,  with respect to the Company or any of its Subsidiaries or
any predecessor of the Company,  no past or present  violations of Environmental
Laws (as defined below), releases of any material into the environment, actions,
activities,   circumstances,   conditions,  events,  incidents,  or  contractual
obligations which may give rise to any common law environmental liability or any
liability  under the  Comprehensive  Environmental  Response,  Compensation  and
Liability  Act of 1980 or similar  federal,  state,  local or  foreign  laws and
neither the Company nor any of its  Subsidiaries  has  received  any notice with
respect to any of the foregoing,  nor is any action pending or, to the Company's
knowledge,  threatened  in  connection  with  any of  the  foregoing.  The  term
"Environmental Laws" means all federal, state, local or foreign laws relating to
pollution or protection of human health or the environment  (including,  without
limitation,  ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions,  discharges,
releases or threatened releases of chemicals,  pollutants contaminants, or toxic
or hazardous substances or wastes (collectively, "Hazardous Materials") into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all  authorizations,  codes,  decrees,  demands  or  demand  letters,
injunctions,  judgments,  licenses,  notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.

                  (b) Other than those that are or were stored, used or disposed
of in compliance with applicable law, no Hazardous Materials are contained on or
about any real property currently owned, leased or used by the Company or any of
its Subsidiaries,  and no Hazardous Materials were released on or about any real
property  previously  owned,  leased  or  used  by  the  Company  or  any of its
Subsidiaries  during the period the  property  was owned,  leased or used by the
Company or any of its Subsidiaries, except in the normal course of the Company's
or any of its Subsidiaries' business.

                  (c) There  are no  underground  storage  tanks on or under any
real property  owned,  leased or used by the Company or any of its  Subsidiaries
that are not in compliance with applicable law.

         Section 4.20 Title to Property.  The Company and its Subsidiaries  have
good and  marketable  title in fee  simple  to all  real  property  and good and
marketable title to all personal property owned by them which is material to the
business of the Company and its Subsidiaries, in each case free and clear of all
liens, encumbrances and defects except such as are described in Schedule 4.20 or
such as  would  not have a  Material  Adverse  Effect.  Any  real  property  and
facilities held under lease by the Company and its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as would not
have a Material Adverse Effect.

         Section 4.21 Insurance.  The Company and each of its  Subsidiaries  are
insured by insurers of recognized financial  responsibility  against such losses
and risks and in such  amounts  as  management  of the  Company  believes  to be
prudent  and  customary  in  the   businesses  in  which  the  Company  and  its
Subsidiaries  are engaged.  Neither the Company nor any such  Subsidiary has any
reason  to  believe  that it will not be able to renew  its  existing  insurance
coverage as and when such coverage  expires or to obtain  similar  coverage from
similar  insurers as may be  necessary  to continue  its business at a cost that
would not have a Material Adverse Effect.

         Section 4.22 Internal Accounting Controls.  The Company and each of its
Subsidiaries  maintain a system of internal accounting controls  sufficient,  in
the  judgment  of the  Company's  board  of  directors,  to  provide  reasonable
assurance that (i)  transactions  are executed in accordance  with  management's
general or specific authorizations,  (ii) transactions are recorded as necessary
to permit  preparation  of financial  statements  in conformity  with  generally
accepted  accounting  principles  and to maintain  asset  accountability,  (iii)
access to assets is permitted only in accordance  with  management's  general or
specific  authorization  and (iv) the  recorded  accountability  for  assets  is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

         Section 4.23 Foreign Corrupt Practices. Neither the Company, nor any of
its Subsidiaries,  nor any director,  officer,  agent,  employee or other person
acting on behalf of the  Company  or any  Subsidiary  has,  in the course of his
actions  for, or on behalf of, the  Company,  used any  corporate  funds for any
unlawful contribution,  gift,  entertainment or other unlawful expenses relating
to  political  activity;  made any direct or  indirect  unlawful  payment to any
foreign or  domestic  government  official  or employee  from  corporate  funds;
violated  or is in  violation  of any  provision  of the  U.S.  Foreign  Corrupt
Practices Act of 1977; or made any bribe,  rebate,  payoff,  influence  payment,
kickback  or other  unlawful  payment  to any  foreign  or  domestic  government
official or employee.

         Section 4.24 Solvency. The Company (both before and after giving effect
to the transactions contemplated by this Agreement) is solvent (i.e., its assets
have a fair market  value in excess of the amount  required to pay its  probable
liabilities  on its existing  debts as they become  absolute and  matured).  The
Company did not receive a qualified  opinion from its  auditors  with respect to
its most  recent  fiscal year end and does not  anticipate  or know of any basis
upon  which its  auditors  might  issue a  qualified  opinion  in respect of its
current fiscal year.

         Section 4.25 No  Investment  Company.  The Company is not, and upon the
issuance and sale of the Securities as  contemplated  by this Agreement will not
be, an  "investment  company"  required to be  registered  under the  Investment
Company Act of 1940 (an "Investment Company").  The Company is not controlled by
an Investment Company.

                                    ARTICLE V
                                    COVENANTS

         Section 5.1 Best  Efforts.  The parties shall use their best efforts to
satisfy  timely  each of the  conditions  described  in Sections 5 and 6 of this
Agreement.

         Section 5.2 Form D; Blue Sky Laws.  The Company agrees to file a Form D
with respect to the Securities as required  under  Regulation D and to provide a
copy thereof to the Buyer promptly after such filing.  The Company shall,  on or
before the  Closing  Date,  take such  action as the  Company  shall  reasonably
determine is necessary to qualify the  Securities for sale to the Buyer pursuant
to this Agreement under  applicable  securities or "blue sky" laws of the states
of the United States (or to obtain an exemption  from such  qualification),  and
shall  provide  evidence of any such action so taken to the Buyer on or prior to
the Closing Date.

         Section  5.3  Reporting  Status;  Eligibility  to Use Form  S-3,  Press
Releases.  The Company's  Common Stock is registered  under Section 12(g) of the
Exchange Act. So long as the Buyer beneficially owns any of the Securities,  the
Company shall timely file all reports required to be filed with the SEC pursuant
to the Exchange Act, and the Company shall not terminate its status as an issuer
required to file reports  under the Exchange Act even if the Exchange Act or the
rules and  regulations  thereunder  would permit such  termination.  The Company
currently  meets,  and will take all necessary  action to continue to meet,  the
"registrant  eligibility"  requirements set forth in the general instructions to
Form S-3  applicable to both "primary" and "resale"  registrations  on Form S-3.
The Company shall issue a press  release  describing  the material  terms of the
transactions  contemplated  hereby as soon as practicable  following the Closing
Date but in no event more than fifteen (15) days following the Closing Date, and
shall file with the SEC a Current  Report on Form 8-K  describing  the  material
terms of the transactions contemplated hereby (and attaching as exhibits thereto
this Agreement,  the Registration  Rights Agreement and the Warrants) as soon as
practicable  following  the Closing  Date but in no event more than fifteen (15)
days  following  the Closing  Date,  which  press  release and Form 8-K shall be
subject to prior review by the Buyers.

         Section 5.4 Use of Proceeds.  The Company  shall use the proceeds  from
the sale of the Draw Down Shares and the  Warrants  and from the exercise of the
Warrants in the manner set forth in Schedule 5.4 attached hereto and made a part
hereof and shall not, directly or indirectly,  use such proceeds for any loan to
or investment in any other corporation,  partnership, enterprise or other person
(except  in  connection   with  its  currently   existing   direct  or  indirect
Subsidiaries).

         Section 5.5       [Intentionally Omitted.]

         Section 5.6 Expenses. The Company shall pay to the Buyer at the Closing
a  non-accountable  expense  allowance equal to Sixty Thousand Dollars ($60,000)
for all expenses incurred by it in connection with the negotiation, preparation,
execution,  delivery and performance of this Agreement and the other  agreements
to be executed in connection herewith. In addition,  the Company shall reimburse
the Buyer for up to Twenty Thousand  Dollars  ($20,000) in legal, due diligence,
travel costs and related expenses incurred by the Buyer promptly upon submission
of receipts.

         Section  5.7  Financial  Information.  The  Company  agrees to send the
following reports to the Buyer until the Buyer transfers,  assigns, or sells all
of the  Securities:  (i) within  ten (10) days after the filing  with the SEC, a
copy of its Annual Report on Form 10-K,  its Quarterly  Reports on Form 10-Q and
any Current  Reports on Form 8-K; (ii) within one (1) day after release,  copies
of all press  releases  issued by the  Company or any of its  Subsidiaries;  and
(iii)  contemporaneously with the making available or giving to the stockholders
of the Company,  copies of any notices or other  information  the Company  makes
available or gives to such stockholders.

         Section 5.8 Reservation of Shares.  The Company shall at all times have
authorized,  and reserved for the purpose of  issuance,  a sufficient  number of
shares of Common  Stock to provide  for the full  exercise of the  Warrants  and
issuance of the Warrant  Shares in connection  therewith  (based on the Exercise
Price (as defined in the Warrants) of the Warrants in effect from time to time).
The Company  shall not reduce the number of shares  reserved for  issuance  upon
exercise of the Warrants without the consent of the Buyer. The Company shall use
its best  efforts at all times to maintain  the number of shares of Common Stock
so  reserved  for  issuance  at no less than 1.2 times the  number  that is then
actually  issuable  upon full  exercise of the  Warrants  (based on the Exercise
Price (as defined in the Warrants) of the Warrants in effect from time to time).
If at any time the number of shares of Common Stock  authorized and reserved for
issuance is below the number of Warrant Shares issued and issuable upon exercise
of or  otherwise  pursuant  to the  Warrants  (based on the  Exercise  Price (as
defined in the  Warrants)  of the  Warrants  in effect  from time to time),  the
Company will  promptly  take all  corporate  action  necessary to authorize  and
reserve a sufficient number of shares, including, without limitation,  calling a
special  meeting of  stockholders  to  authorize  additional  shares to meet the
Company's  obligations  under this Section  5.8, in the case of an  insufficient
number of authorized  shares,  and using its best efforts to obtain  stockholder
approval  of an  increase  in such  authorized  number of  shares.  Prior to the
delivery of a Draw Down Notice,  the Company will have  reserved and the Company
shall  continue to reserve and keep available at all times  thereafter,  free of
preemptive rights, a number of shares of Common Stock sufficient for the purpose
of  enabling  the Company to satisfy  its  obligation  to issue Draw Down Shares
pursuant to such Draw Down Notice  (assuming for such purposes that the Purchase
Price  applicable  to such Draw Down is  ninety-five  percent (95%) of the Floor
Price).

         Section 5.9 Listing.  The Company shall promptly  secure the listing of
the Draw Down Shares and Warrant Shares upon the Principal Market and each other
national  securities  exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed  (subject to official notice of issuance)
and, so long as the Buyer owns any of the Securities, shall maintain, so long as
any other  shares of Common  Stock shall be so listed,  such listing of all Draw
Down Shares and Warrant  Shares from time to time issuable  under this Agreement
or upon  exercise of the  Warrants.  The Company will obtain and, so long as the
Buyer owns any of the Securities, maintain the listing and trading of its Common
Stock on a Principal Market,  and will comply in all respects with the Company's
reporting,  filing  and  other  obligations  under  the  bylaws or rules of such
Principal Market and any other exchanges or automated quotation systems on which
the Common Stock is then listed. The Company shall promptly provide to the Buyer
copies of any  notices  it  receives  from the  Principal  Market  and any other
exchanges  or  automated  quotation  systems on which the  Common  Stock is then
listed  regarding the continued  eligibility  of the Common Stock for listing on
such exchanges and quotation systems.

         Section 5.10      [Intentionally Omitted].

         Section 5.11 No  Integration.  The Company shall not make any offers or
sales of any security (other than the Securities) under circumstances that would
require registration of the Securities being offered or sold hereunder under the
Securities  Act or cause the offering of Securities  to be  integrated  with any
other  offering of securities by the Company for the purpose of any  stockholder
approval provision applicable to the Company or its securities.

         Section  5.12  Registration   Rights.   The  Company  shall  cause  the
Registration Rights Agreement to remain in full force and effect and the Company
shall comply in all respects with the terms thereof.

         Section  5.13  Notice  of  Certain   Events   Affecting   Registration;
Suspension of Right to Deliver a Draw Down Notice.  The Company will immediately
notify the Buyer upon the  occurrence of any of the following  events in respect
of the Registration  Statement or related prospectus in respect of the resale of
the  Registrable   Securities:   (i)  receipt  of  any  request  for  additional
information  from the SEC or any other federal or state  governmental  authority
during the period of effectiveness of the Registration  Statement,  the response
to which  would  require  any  amendments  or  supplements  to the  Registration
Statement  or  related  prospectus;  (ii) the  issuance  by the SEC or any other
federal  or state  governmental  authority  of any  stop  order  suspending  the
effectiveness of the Registration Statement or the initiation of any proceedings
for  that  purpose;  (iii)  receipt  of any  notification  with  respect  to the
suspension of the  qualification  or exemption from  qualification of any of the
Securities for sale in any  jurisdiction or the initiation or threatening of any
proceeding  for such  purpose;  (iv) the  happening  of any event that makes any
statement  made in the  Registration  Statement  or  related  prospectus  or any
document  incorporated or deemed to be incorporated  therein by reference untrue
in any  material  respect  or that  requires  the  making of any  changes in the
Registration Statement,  related prospectus or documents so that, in the case of
the  Registration  Statement,  it will not  contain  any untrue  statement  of a
material fact or omit to state any material  fact required to be stated  therein
or necessary to make the statements therein not misleading, and that in the case
of the  related  prospectus,  it will not  contain  any  untrue  statement  of a
material fact or omit to state any material  fact required to be stated  therein
or necessary to make the statements  therein,  in the light of the circumstances
under which they were made,  not  misleading;  and (v) the Company's  reasonable
determination that a post-effective  amendment or supplement to the Registration
Statement would be appropriate;  and the Company will promptly make available to
the Buyer any such  supplement  or  amendment  to the  related  prospectus.  The
Company  shall  not  deliver  to the  Buyer  any Draw  Down  Notice  during  the
continuation  of any of the  foregoing  events and shall cancel an existing Draw
Down by  delivering a Draw Down  Cancellation  Notice in the manner  required by
Section 6.4 of this Agreement.

         Section 5.14 Disclosure of Material Information.  In the event that the
Company  comes into  possession  of any  material  non-public  information,  the
Company shall make full and complete  public  disclosure in accordance  with all
applicable securities laws (including all common law formulations thereof).

         Section 5.15 Issuance of Draw Down Shares. The sale and issuance of the
Draw  Down  Shares  shall  be  made  in  accordance   with  the  provisions  and
requirements of Regulation D and any applicable state law.

         Section 5.16 Trading Guidelines. The Buyer has the right to sell shares
of Common Stock during the Commitment  Period. The Buyer agrees,  however,  that
prior to and  during the  Commitment  Period,  neither  the Buyer nor any of its
affiliates,  nor any entity managed by the Buyer, will intentionally sell shares
of Common  Stock  other  than the  shares of  Common  Stock  which the Buyer has
purchased  under the terms of this Agreement  (including  for this purpose,  the
number of shares of Common Stock issued  and/or  issuable  upon  exercise of the
Warrants  and,  in the case of a Draw Down Notice  that has been  delivered,  an
estimate of the number of Draw Down Shares issuable in connection with such Draw
Down Notice  (assuming  for such purposes that the number of Draw Down Shares to
be issued  pursuant  to such Draw  Down  Notice  equals  the  Investment  Amount
specified in such Draw Down Notice divided by  ninety-five  percent (95%) of the
Floor Price)),  whether in accounts directly or indirectly  managed by the Buyer
or any affiliate of the Buyer or any entity managed by the Buyer.

                                   ARTICLE VI
                       CONDITIONS TO DELIVERY OF DRAW DOWN
                      NOTICES AND CONDITIONS TO SETTLEMENT

         Section 6.1  Conditions  Precedent to the  Obligation of the Company to
Issue and Sell Common Stock.  The  obligation  hereunder of the Company to issue
and sell the Draw Down  Shares  to the  Buyer  incident  to each  Settlement  is
subject to the satisfaction,  at or before each such Settlement,  of each of the
conditions set forth below.

                  (a) Accuracy of the Buyer's Representation and Warranties. The
representations  and  warranties  of the Buyer  shall be true and correct in all
material  respects  as of the date  when  made  and as of the date of each  such
Settlement  as though  made at each such time  (except for  representations  and
warranties  specifically  made as of a  particular  date which shall be true and
correct in all material respects as of the date when made).

                  (b) Performance by the Buyer.  The Buyer shall have performed,
satisfied  and  complied in all  respects  with all  covenants,  agreements  and
conditions  required by this  Agreement to be  performed,  satisfied or complied
with by the Buyer at or prior to such Settlement.

         Section 6.2 Conditions Precedent to the Right of the Company to Deliver
a Draw Down  Notice.  The right of the  Company  to  deliver a Draw Down  Notice
hereunder is subject to the  satisfaction,  on the date of delivery of such Draw
Down Notice, of each of the following conditions:

                  (a)  Registration  of the Common  Stock  with the SEC.  As set
forth in the Registration  Rights  Agreement,  the Company shall have filed with
the SEC a Registration  Statement with respect to the resale of the  Registrable
Securities that shall have been declared effective by the SEC prior to the first
Draw Down Date.

                  (b)  Effective  Registration  Statement.  As set  forth in the
Registration Rights Agreement,  the Registration Statement shall have previously
been  declared  effective  and shall  remain  effective  and sales of all of the
Registrable  Securities  (including  all of the  Warrant  Shares  issued  and/or
issuable upon exercise of the Warrants,  all of the Draw Down Shares issued with
respect to all prior Draw Downs and all of the Draw Down  Shares  expected to be
issued in  connection  with the Draw Down  specified  by the  current  Draw Down
Notice  (assuming  for such purpose that the Purchase  Price  applicable to such
Draw Down is  ninety-five  percent (95%) of the Floor Price)) may be made by the
Buyer  thereunder  and (i) neither the Company nor the Buyer shall have received
notice that the SEC has issued or intends to issue a stop order with  respect to
the Registration  Statement or that the SEC otherwise has suspended or withdrawn
the  effectiveness  of  the  Registration   Statement  either,   temporarily  or
permanently,  or intends or has threatened to do so, (ii) no other suspension of
the use or  withdrawal of the  effectiveness  of the  Registration  Statement or
related  prospectus  shall exist and (iii) no event  specified  in Section  5.13
shall have occurred and be continuing.

                  (c) Accuracy of the Company's  Representations and Warranties.
The  representations  and warranties of the Company shall be true and correct in
all  material  respects as of the date when made and as of the  applicable  Draw
Down Date as though made at such time (except for representations and warranties
specifically made as of a particular date which shall be true and correct in all
material respects as of the date when made).

                  (d)  Performance  by  the  Company.  The  Company  shall  have
performed,  satisfied and complied in all material  respects with all covenants,
agreements and conditions required by this Agreement and the Registration Rights
Agreement to be performed, satisfied or complied with by the Company at or prior
to such date.

                  (e) No Injunction.  No statute,  rule,  regulation,  executive
order,  decree,   ruling  or  injunction  shall  have  been  enacted,   entered,
promulgated  or endorsed by any court or  governmental  authority  of  competent
jurisdiction  or any  self-regulatory  organization  having  authority  over the
matters contemplated hereby that prohibits or directly and adversely affects any
of the transactions contemplated by this Agreement, and no proceeding shall have
been commenced  that may have the effect of  prohibiting or adversely  affecting
any of the transactions contemplated by this Agreement.

                  (f) Material Adverse Changes.  Since the date hereof, no event
that had or is reasonably  likely to have a Material  Adverse  Effect shall have
occurred  (provided that any changes resulting from general economic  conditions
or the telecommunications  industry in general shall not be deemed to constitute
a "Material Adverse Effect" for purposes hereof).

                  (g) No  Suspension of Trading In or Delisting of Common Stock.
The trading of the Common  Stock  (including  without  limitation  the Draw Down
Shares) shall not have been  suspended by the SEC, the  Principal  Market or the
NASD and the Common Stock  (including  without  limitation the Draw Down Shares)
shall have been  approved  for listing or  quotation  on and shall not have been
delisted from the Principal Market.

                  (h)      Adequacy of Disclosure.  In the reasonable opinion of
counsel to the Buyer, the  disclosure  contained in  the  Registration Statement
shall not be inadequate or misleading.

                  (i) Cross  Default.  The Company  shall not be in default of a
material term, covenant, warranty or undertaking of the Company contained in the
Warrants and the Registration Rights Agreement, nor shall there have occurred an
Event of Default under this Agreement.

                  (j) No  Knowledge.  The Company shall have no knowledge of any
event that  would  reasonably  be  expected  to have the effect of causing  such
Registration  Statement to be suspended or otherwise ineffective (which event is
more likely than not to occur  within the nine (9) Trading  Days  following  the
Trading Day on which such Draw Down Notice is deemed delivered).

                  (k) Trading Cushion.  The Trading  Cushion  shall have elapsed
since the end of the preceding Valuation Period.

                  (l) Maximum Share Amount.  Unless the Company has obtained the
requisite  approval of its stockholders in accordance with the corporate laws of
the State of Delaware and the applicable  rules of the Principal  Market,  in no
event may the Company issue a Draw Down Notice to sell an  Investment  Amount to
the extent that the sum of (x) the number of shares of Common Stock  represented
by the  quotient  of (i)  the  requested  Investment  Amount,  divided  by  (ii)
ninety-five  percent (95%) of the Floor Price,  plus (y) the cumulative total of
all  shares of Common  Stock  issued  under all  previous  Draw  Downs  effected
pursuant to this Agreement, would exceed the Maximum Share Amount.

                  (m) Price.  The VWAP on  the Trading Day immediately preceding
the Draw Down Date is greater than $2.00.

                  (n) Investment Amount Limitation.  On each Draw Down Date, the
Investment  Amount  specified in the applicable  Draw Down Notice may not exceed
the dollar  amount which would result in a number of Draw Down Shares then to be
purchased by the Buyer (for purposes of this Section 6.2(n),  assuming that such
number of Draw Down Shares to be issued pursuant to such Draw Down Notice equals
the Investment Amount specified in such Draw Down Notice, divided by ninety-five
percent (95%) of the Floor Price) which,  when  aggregated with all other shares
of Common  Stock then  owned by the Buyer  beneficially  or deemed  beneficially
owned by the Buyer  (excluding  shares  which may become  issuable  pursuant  to
future  Draw  Downs   hereunder  and  excluding   shares  which  may  be  deemed
beneficially  owned through the ownership of the  unexercised  Warrants),  would
result in the  beneficial  ownership  by the Buyer of more than 9.9% of the then
Outstanding  Shares on such Draw Down  Date.  For  purposes  of the  immediately
preceding sentence,  beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and  Regulation  13D-G  thereunder,  except as
otherwise  provided  above with  respect to the  exclusion  of shares  which may
become issuable pursuant to future Draw Downs.

                  (o) Prospectus  Supplement.  A supplement to the  Registration
Statement (the "Prospectus Supplement"), in form and substance to be agreed upon
by the parties,  setting forth  information  regarding the Draw Down  including,
without  limitation,  the Draw Down Date, the Investment  Amount,  the number of
shares sold to the Buyer in  connection  with all  previous  Draw Downs,  if not
previously disclosed in an SEC Document, and any additional information required
by SEC rules and  regulations,  including Item 507 of Regulation S-K, shall have
been filed with the SEC.

         Section 6.3 Documents  Required to be Delivered on each Draw Down Date.
The Buyer's  obligation  to purchase  Shares  pursuant to a Draw Down  hereunder
shall  additionally be conditioned upon the delivery to the Buyer of each of the
following documents on or before the Draw Down Date:

                  (a) a certificate in  substantially  the form and substance of
Exhibit E hereto,  executed  by an  executive  officer of the Company and to the
effect  that all the  conditions  to such  Draw  Down  Notice  shall  have  been
satisfied as at the date of each such certificate;

                  (b)      a Bring Down Comfort Letter;

                  (c)      a Prospectus Supplement; and

                  (d)      the opinion(s) of counsel in the forms attached
hereto as Exhibit F dated as of the Draw Down Date.

         Section 6.4       Draw Down Cancellation.

                  (a) Mechanics of Draw Down Cancellation. If at any time during
a Valuation  Period,  (i) any of the events  specified  in Section  5.13 of this
Agreement shall occur,  (ii) any of the conditions  precedent to a Draw Down set
forth in  Section  6.2 shall no longer be  satisfied  as of any date  during the
Valuation  Period or (iii) the Company  discovers  that a document  set forth in
Section 6.3(a),  (b) or (d) would no longer be true if delivered as of such date
during the  Valuation  Period,  then the Company  shall  cancel the Draw Down (a
"Draw Down Cancellation")  immediately by delivering written notice to the Buyer
in the form attached hereto as Exhibit G (the "Draw Down Cancellation  Notice"),
by facsimile and overnight courier.  The Draw Down Cancellation  Notice shall be
deemed delivered on (i) the Trading Day it is received by facsimile or otherwise
by the Buyer if such notice is received  prior to 5:00 p.m., New York City time,
or (ii) the immediately succeeding Trading Day if it is received by facsimile or
otherwise  after 5:00 p.m., New York City time, on a Trading Day, or at any time
on a day which is not a Trading  Day.  No Draw Down  Cancellation  Notice may be
deemed  delivered  on a day that is not a Trading Day.  "Draw Down  Cancellation
Date" shall be the date the Draw Down  Cancellation  Notice is deemed  delivered
pursuant to the preceding sentence.

                  (b)  Effect  of  Draw  Down  Cancellation.   If  a  Draw  Down
Cancellation  Notice has been delivered to the Buyer after a Draw Down Date, the
Valuation  Period for such Draw Down shall (except as provided in the proviso to
the succeeding  sentence) end on the Trading Day immediately  preceding the Draw
Down  Cancellation  Date. In such event, the Investment  Amount relating to such
Draw Down shall be reduced by  one-ninth  (1/9) with respect to each Trading Day
during the period beginning on and including the Draw Down Cancellation Date and
ending on the last  Trading Day of such  Valuation  Period;  provided,  however,
that, except as otherwise provided in Section 2.3(e) hereof, in the event that a
Draw Down  Cancellation  Notice is deemed  delivered  on the  Trading  Day it is
received by the Buyer  pursuant to clause (i) of the second  sentence of Section
6.4(a) above,  then the Investment Amount allocable to such Trading Day shall be
reduced by the difference  between (x) one-ninth (1/9) of the Investment  Amount
and (y) the product of (A) one-ninth (1/9) of the Investment Amount,  multiplied
by (B) the  quotient  of (i) the number of hours (or  portions  thereof)  during
which the  Common  Stock has  actually  traded on the  Principal  Market on such
Trading Day (exclusive of any halts or suspensions of trading imposed  generally
on the Principal Market or specifically  with respect to the Common Stock) prior
to the actual time on which the Buyer received the Draw Down Cancellation Notice
(as evidenced by the time and date set forth on Buyer's facsimile copy thereof),
divided by (ii) 6.5.  Anytime a Draw Down  Cancellation  Notice is  delivered to
Buyer, such Draw Down shall remain effective as to the portion of the Investment
Amount not canceled  pursuant to the  preceding  sentence and the Buyer shall be
entitled to use the Registration  Statement and related  prospectus for sales of
the Tranche  Shares  issuable with respect to such  non-canceled  portion of the
Investment Amount.

                                   ARTICLE VII
                                   TERMINATION

         Section  7.1  Term;  Termination  by  Mutual  Consent.  Subject  to the
provisions of Section 7.2, the term of this Agreement shall run until the end of
the Commitment Period; provided that the right of the Company to effect any Draw
Downs under this  Agreement may be  terminated at any time by mutual  consent of
the parties.

         Section 7.2 Termination by the Buyer. The Buyer may terminate the right
of the  Company  to effect  any Draw Downs  under  this  Agreement  upon one (1)
Trading  Day's  notice  if any of the  following  events  (each,  an  "Event  of
Default") shall occur:

                  (a) The Company (i) fails to issue  shares of Common  Stock to
the Buyer on any Settlement  Date, (ii) fails to remove any  restrictive  legend
(or to  withdraw  any stop  transfer  instructions  in respect  thereof)  on any
certificate  or any  shares  of  Common  Stock  issued  to the Buyer as and when
required by this Agreement or the Registration Rights Agreement,  or (iii) fails
to fulfill its  obligations  pursuant to Sections 5.3, 5.4, 5.6, 5.8, 5.9, 5.13,
5.14 or Article IX of this  Agreement (or makes any  announcement,  statement or
threat  that it does not  intend  to honor  the  obligations  described  in this
paragraph),  and any such failure shall continue  uncured (or any  announcement,
statement  or threat  not to honor its  obligations  shall not be  rescinded  in
writing) for ten (10) days after the Company shall have been notified thereof in
writing by any Buyer;

                  (b) The  Company  fails to obtain  effectiveness  with the SEC
prior  to April  7,  2001 of the  Registration  Statement  required  to be filed
pursuant  to Section  2(a) of the  Registration  Rights  Agreement,  or fails to
obtain the effectiveness of any additional  Registration  Statement (required to
be filed pursuant to Section 3(b) of the Registration  Rights  Agreement) within
ninety  (90)  days  after  the  Registration  Trigger  Date (as  defined  in the
Registration Rights Agreement),  or any such Registration  Statement,  after its
initial  effectiveness  and during the  Registration  Period (as  defined in the
Registration  Rights  Agreement),  lapses  in  effect  or  sales  of  all of the
Registrable Securities otherwise cannot be made thereunder (whether by reason of
the Company's failure to amend or supplement the prospectus  included therein in
accordance with the Registration Rights Agreement, the Company's failure to file
and obtain  effectiveness with the SEC of an additional  Registration  Statement
required  pursuant  to Section  3(b) of the  Registration  Rights  Agreement  or
otherwise) for more than twenty (20) consecutive Trading Days or more than sixty
(60)  Trading  Days in any twelve  (12)  month  period  after such  Registration
Statement becomes effective;

                  (c) The Company or any Subsidiary shall make an assignment for
the  benefit  of  creditors,  or apply for or consent  to the  appointment  of a
receiver or trustee for it or for all or  substantially  all of its  property or
business; or such a receiver or trustee shall otherwise be appointed;

                  (d)  Bankruptcy,  insolvency,  reorganization  or  liquidation
proceedings or other  proceedings for relief under any bankruptcy law or any law
for the relief of debtors  shall be  instituted by or against the Company or any
subsidiary of the Company;

                  (e) The  Company  shall fail to  maintain  the  listing of the
Common  Stock on a  Principal  Market or  trading  in such  Common  Stock  shall
otherwise be halted or suspended  for a period of ten (10)  consecutive  Trading
Days;

                  (f)  The   sale,   conveyance   or   disposition   of  all  or
substantially all of the assets of the Company,  the effectuation by the Company
of a transaction or series of related transactions in which more than 50% of the
voting  power of the Company is  disposed  of, or the  consolidation,  merger or
other  business  combination  of the  Company  with or into any other  Person or
Persons when the Company is not the survivor;

                  (g)  The  Company  breaches  any  material  representation  or
warranty contained in this Agreement; or

                  (h)  Since  the  date  hereof,  an event  that had a  Material
Adverse  Effect shall have occurred  (provided  that any changes  resulting from
general economic conditions or the telecommunications  industry in general shall
not be deemed to constitute a "Material Adverse Effect" for purposes hereof).

                                  ARTICLE VIII
                NON-DISCLOSURE OF MATERIAL NON-PUBLIC INFORMATION

         Section 8.1       Non-Disclosure of Material Non-Public Information.

                  (a) The Company  covenants  and agrees  that it shall  refrain
from disclosing, and shall cause its officers,  directors,  employees and agents
to refrain from disclosing,  any material  non-public  information to the Buyer,
unless prior to  disclosure  of such  information  the Company  identifies  such
information as being material non-public  information and provides the Buyer and
its advisors and  representatives  with the  opportunity  to accept or refuse to
accept such material non-public information for review.

                  (b) The Company acknowledges and understands that the Buyer is
entering  into this  Agreement  and the  Registration  Rights  Agreement  at the
request  of the  Company  and in  good  faith  reliance  on  (i)  the  Company's
representation  set forth in Section  4.14 that  neither it nor its agents  have
disclosed  to the  Buyer  any  material  non-public  information;  and  (ii) the
Company's  covenant  set forth in Section  5.14 that if the  Company  comes into
possession of any material non-public information, the Company shall timely make
full and complete public  disclosure of all or such portion of such  information
in  accordance  with  all  applicable  securities  laws  (including  common  law
formulations thereof).

                  (c)  Nothing  herein  shall  require  the  Company to disclose
material non-public information to the Buyer or its advisors or representatives,
and the Company  represents  that it does not  disseminate  material  non-public
information  to any  investors  who  purchase  stock in the  Company in a public
offering, to money managers or to securities analysts;  provided,  however, that
notwithstanding   anything  herein  to  the  contrary,   the  Company  will,  as
hereinabove  provided,  immediately  notify  the  Buyer  and  its  advisors  and
representatives  and, if any,  underwriters,  of the  existence  of any event or
circumstance   (without  any  obligation  to  disclose  the  specific  event  or
circumstance)  of which  it  becomes  aware,  constituting  material  non-public
information  (whether or not requested of the Company  specifically or generally
during the course of due diligence by such persons or entities),  which,  if not
disclosed in the prospectus  included in the Registration  Statement would cause
such  prospectus to include a material  misstatement  or to omit a material fact
required to be stated therein in order to make the statements  therein, in light
of the circumstances in which they were made, not misleading.

                                   ARTICLE IX
                           TRANSFER AGENT INSTRUCTIONS

         The Company shall issue  irrevocable  instructions in the form attached
hereto as Exhibit H to its transfer  agent to  electronically  transmit the Draw
Down Shares to the Buyer by DWAC  Transfer upon issuance of the Draw Down Shares
in  accordance   with  the  terms  hereof  (the   "Irrevocable   Transfer  Agent
Instructions").  The  Company  warrants  that  no  instruction  other  than  the
Irrevocable  Transfer Agent Instructions  referred to in this Article IX will be
given by the Company to its transfer  agent with respect to the Draw Down Shares
and that the Draw Down Shares  shall  otherwise  be freely  transferable  on the
books and records of the Company as and to the extent provided in this Agreement
and the Registration  Rights Agreement.  Nothing in this Section shall affect in
any way the  Buyer's  obligations  to  comply  with  all  applicable  prospectus
delivery requirements, if any, upon re-sale of the Draw Down Shares.

                                    ARTICLE X
                                 INDEMNIFICATION

         The  Company  agrees to  indemnify  and hold  harmless  the Buyer,  its
partners,  affiliates,  officers,  directors,  employees,  and  duly  authorized
agents,  and each Person or entity,  if any,  who  controls the Buyer within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (a
"Control  Person"),  from and against  any  Damages,  joint or several,  and any
action  in  respect  thereof  to which  the  Buyer,  its  partners,  affiliates,
officers,  directors,  employees,  duly authorized  agents and Control  Persons,
becomes subject to, resulting from,  arising out of or relating to any breach or
alleged  breach by the  Company  of any  representation  or  warranty  or to the
nonfulfillment of or failure to perform any covenant or agreement on the part of
Company contained in this Agreement or the Registration  Rights Agreement in any
event as such  Damages are  incurred.  The Company and the Buyer hereby agree to
resolve  any claim for  indemnification  under this  Article X  pursuant  to the
procedures for indemnification set forth in Section 6 of the Registration Rights
Agreement.

                                   ARTICLE XI
                                  MISCELLANEOUS

         Section 11.1  Governing  Law. This  Agreement  shall be governed by and
construed in  accordance  with the laws of the State of Delaware  applicable  to
agreements made and to be performed in the State of Delaware  (without regard to
principles  of  conflict  of laws).  Both  parties  irrevocably  consent  to the
exclusive  jurisdiction of the United States federal courts and the state courts
located in Delaware with respect to any suit or  proceeding  based on or arising
under this Agreement,  the agreements entered into in connection herewith or the
transactions  contemplated  hereby or  thereby  and  irrevocably  agree that all
claims in respect of such suit or  proceeding  may be determined in such courts.
Both  parties  irrevocably  waive the  defense of an  inconvenient  forum to the
maintenance of such suit or proceeding.  Both parties further agree that service
of  process  upon a party  mailed by first  class  mail shall be deemed in every
respect  effective  service  of  process  upon the  party  in any  such  suit or
proceeding. Nothing herein shall affect either party's right to serve process in
any  other  manner   permitted  by  law.   Both  parties   agree  that  a  final
non-appealable  judgment in any such suit or proceeding  shall be conclusive and
may be enforced in other  jurisdictions by suit on such judgment or in any other
lawful manner.

         Section  11.2  Notices.  Any notices  required or permitted to be given
under the terms of this Agreement  shall be sent by certified or registered mail
(return receipt  requested) or delivered  personally or by courier  (including a
recognized  overnight  delivery  service) or by facsimile and shall be effective
five days after being  placed in the mail,  if mailed by regular  United  States
mail,  or upon  receipt,  if  delivered  personally  or by courier  (including a
recognized  overnight delivery service) or by facsimile,  in each case addressed
to a party. The addresses for such communications shall be:

                           If to the Company:

                                    Teligent, Inc.
                                    8065 Leesburg Pike, Suite 400
                                    Vienna, Virginia   22182
                                    Attention: General Counsel
                                    Facsimile: (703) 762-5117

                           With copy to:

                                    Cravath Swaine & Moore
                                    825 Eighth Avenue
                                    New York, NY 10019
                                    Attention:  Scott A. Barshay, Esq.
                                    Facsimile: (212) 474-3700

         If to a Buyer: To the address set forth  immediately below such Buyer's
name on the signature pages hereto.

                           With copy to:

                                    Bradley D. Houser
                                    Akerman, Senterfitt & Eidson, P.A.
                                    SunTrust International Center
                                    One Southeast Third Avenue, 28th Floor
                                    Miami, Florida  33131-1714
                                    Facsimile:  (305) 374-5095

         Each party  shall  provide  notice to the other  party of any change in
address.

         Section 11.3 Counterparts;  Signatures by Facsimile. This Agreement may
be executed in one or more  counterparts,  all of which shall be considered  one
and the same agreement and shall become  effective when  counterparts  have been
signed by each party and  delivered to the other  party.  This  Agreement,  once
executed by a party,  may be  delivered  to the other party  hereto by facsimile
transmission  of a copy of this Agreement  bearing the signature of the party so
delivering this Agreement.

         Section  11.4  Headings.   The  headings  of  this  Agreement  are  for
convenience   of   reference   and  shall  not  form  part  of,  or  affect  the
interpretation of, this Agreement.

         Section 11.5 Severability.  If any provision of this Agreement shall be
invalid   or   unenforceable   in   any   jurisdiction,   such   invalidity   or
unenforceability  shall  not  affect  the  validity  or  enforceability  of  the
remainder of this Agreement or the validity or  enforceability of this Agreement
in any other jurisdiction.

         Section  11.6  Entire  Agreement;   Amendments.   This  Agreement,  the
Warrants,  the Registration Rights Agreement and the Exhibits hereto contain the
entire  agreement and  understanding  of the parties with respect to the matters
covered  herein  and  therein  and  supersede  all  prior  and   contemporaneous
agreements,  negotiations and understandings  between the parties, both oral and
written  relating to the subject matter hereof.  The terms and conditions of all
Exhibits to this Agreement are  incorporated  herein by this reference and shall
constitute part of this Agreement as if fully set forth herein.  No provision of
this  Agreement  may be waived or amended other than by an instrument in writing
signed by the party to be charged with enforcement.

         Section 11.7  Successors and Assigns.  This Agreement  shall be binding
upon and inure to the benefit of the parties and their  successors  and assigns.
Neither the Company nor the Buyer shall  assign this  Agreement or any rights or
obligations   hereunder   without  the  prior  written  consent  of  the  other.
Notwithstanding  the  foregoing,  subject to Section 3, the Buyer may assign its
rights  hereunder to any of its  "affiliates," as that term is defined under the
Exchange Act, without the consent of the Company.

         Section 11.8 Third Party Beneficiaries.  This Agreement is intended for
the benefit of the parties hereto and their respective  permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

         Section  11.9  Survival.  The  representations  and  warranties  of the
Company and the  agreements  and covenants set forth in Article IV, V, VI, VIII,
IX  and  X  shall  survive  the  Closing  and  each  Settlement  Date  hereunder
notwithstanding any due diligence investigation conducted by or on behalf of the
Buyer.

         Section 11.10 Publicity. The Company and the Buyer shall have the right
to review a  reasonable  period of time before  issuance of any press  releases,
filings  with the SEC,  NASD or any  stock  exchange  or  interdealer  quotation
system,  or any  other  public  statements  with  respect  to  the  transactions
contemplated  hereby;  provided,  however,  that the Company  shall be entitled,
without  the prior  approval of the Buyer,  to make any press  release or public
filings with respect to such  transactions  as is required by applicable law and
regulations  (although the Buyer shall be consulted by the Company in connection
with any such press  release  or public  filing  prior to its  release or public
filing and shall be provided with a copy thereof and be given an  opportunity to
comment thereon).

         Section 11.11 Further  Assurances.  Each party shall do and perform, or
cause to be done and  performed,  all such  further  acts and things,  and shall
execute and deliver all such other  agreements,  certificates,  instruments  and
documents,  as the other party may reasonably  request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

         Section  11.12  No  Strict  Construction.  The  language  used  in this
Agreement  will be deemed to be the  language  chosen by the  parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.

         Section 11.13 Remedies. The Company acknowledges that a breach by it of
its obligations  hereunder will cause irreparable harm to the Buyer by vitiating
the intent and purpose of the transactions contemplated hereby. Accordingly, the
Company  acknowledges  that the  remedy at law for a breach  of its  obligations
under this Agreement will be inadequate and agrees,  in the event of a breach or
threatened  breach by the Company of the provisions of this Agreement,  that the
Buyer shall be entitled,  in addition to all other available  remedies in law or
in equity,  to an injunction or  injunctions  to prevent or cure any breaches of
the  provisions  of this  Agreement  and to enforce  specifically  the terms and
provisions of this Agreement, without the necessity of showing economic loss and
without any bond or other security being required.

         Section  11.14  Reporting  Entity for the Common  Stock.  The reporting
entity relied upon for the  determination of the VWAP,  trading price or trading
volume of the Common  Stock on any given  Trading  Day for the  purposes of this
Agreement shall be Bloomberg Financial.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.

                                                     TELIGENT, INC.

                                              By: /s/ Alex J. Mandl
                                                  ____________________________
                                                      Alex J. Mandl,
                                                      Chief Executive Officer

                                              RGC INTERNATIONAL INVESTORS, LDC
                                              By:     Rose Glen Capital
                                                      Management, L.P.,
                                              Investment Manager

                                              By:     RGC General Partner Corp.,
                                                      as General Partner

                                              By: /s/ Wayne D. Bloch
                                                  ____________________________
                                                      Wayne D. Bloch,
                                                      Managing Director

                                              RESIDENCE: Cayman Islands

                                              ADDRESS:

                                          c/o Rose Glen Capital Management, L.P.
                                              3 Bala Plaza East, Suite 501
                                              251 St. Asaphs Road
                                              Bala Cynwyd, PA  19004
                                              Attn: Gary S. Kaminsky
                                              Facsimile:        (610) 617-0570
                                              Telephone:        (610) 617-5900

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