Document:

<PAGE>

                                                                    Exhibit 10.1

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                      PREFERRED STOCK PURCHASE AGREEMENT

                                  dated as of

                               December 29, 2000

                                    between

                        CALIBER LEARNING NETWORK, INC.

                                      and

                      THE PURCHASERS LISTED ON SCHEDULE 1

================================================================================
<PAGE>

                                          TABLE OF CONTENTS

<TABLE>
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                                                                                           Page
<S>              <C>                                                                       <C>
SECTION 1.       SALE AND PURCHASE OF PREFERRED STOCK....................................    1

SECTION 2.       THE CLOSING.............................................................    2

SECTION 3.       DEFINITIONS.............................................................    3

SECTION 4.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................   15
        4.1.     Corporate Existence, Power and Authority................................   15
        4.2.     Capital Stock...........................................................   16
        4.3.     Subsidiaries............................................................   17
        4.4.     Business................................................................   17
        4.5.     No Defaults or Conflicts................................................   18
        4.6.     Disclosure Materials; Other Information.................................   19
        4.7.     Litigation..............................................................   19
        4.8.     Taxes...................................................................   20
        4.9.     ERISA...................................................................   20
        4.10.    Legal Compliance........................................................   22
        4.11.    Outstanding Securities..................................................   22
        4.12.    Intellectual Property and Other Rights..................................   22
        4.13.    Key Employees...........................................................   23
        4.14.    Properties..............................................................   23
        4.15.    Suppliers and Customers.................................................   23
        4.16.    Environmental Compliance................................................   24
        4.17.    No Burdensome Agreements................................................   25
        4.18.    Offering of Shares......................................................   25
        4.19.    SEC Reports.............................................................   25
        4.20.    Indebtedness............................................................   25
        4.21.    Use of Proceeds.........................................................   26
        4.22.    Other Names.............................................................   26
        4.23.    Brokers.................................................................   26

SECTION 5.       REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS........................   27
        5.1.     Corporate Power and Authority...........................................   27
        5.2.     Investment Intent.......................................................   27
        5.3.     Brokers.................................................................   27

SECTION 6.       RESTRICTIONS ON TRANSFER................................................   28

SECTION 7.       INFORMATION AS TO THE COMPANY...........................................   28
        7.1.     Financial Information...................................................   28
        7.2.     Communication with Accountants..........................................   30
</TABLE>
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                          TABLE OF CONTENTS (cont'd)

<TABLE>
                                                                                          Page
<S>                                                                                       <C>
        7.3.     Inspection..............................................................   31
        7.4.     Notices.................................................................   31
        7.5.     Confidentiality Agreement...............................................   33

SECTION 8.       AFFIRMATIVE COVENANTS...................................................   33
        8.1.     Maintenance of Existence, Properties and Franchises;
                 Compliance with Law; Taxes; Insurance...................................   33
        8.2.     Office for Payment, Exchange and Registration; Location of
                 Office; Notice of Change of Name or Office..............................   34
        8.3.     Fiscal Year.............................................................   34
        8.4.     Environmental Matters...................................................   34
        8.5.     Reservation of Shares...................................................   35
        8.6.     Securities Exchange Act Registration....................................   36
        8.7.     Delivery of Information for Rule 144A Transactions......................   36
        8.8.     Senior Securities.......................................................   36
        8.9.     Subsequent Closings.....................................................   36
        8.10.    Further Assurances......................................................   36

SECTION 9.       NEGATIVE COVENANTS......................................................   37
        9.1.     No Dilution or Impairment; No Changes in Capital Stock..................   37
        9.2.     Indebtedness............................................................   38
        9.3.     Consolidation, Merger and Sale..........................................   38
        9.4.     No Change in Business...................................................   39
        9.5.     Restricted Payments; Investments........................................   39
        9.6.     Affiliate Loans and Guaranties..........................................   39
        9.7.     Transactions with Affiliates............................................   39
        9.8.     Liens...................................................................   40
        9.9.     Private Placement Status................................................   40
        9.10.    Maintenance of Public Market............................................   40
        9.11.    Actions Prior to the Closing Date.......................................   41

SECTION 10.      PREEMPTIVE RIGHTS.......................................................   41

SECTION 11.      CONDITIONS TO PURCHASERS' OBLIGATIONS...................................   43
        11.1.    Series B Articles Supplementary; Stockholders' Agreement;
                 Registration Rights Agreement...........................................   43
        11.2.    Certificates for Shares.................................................   43
        11.3.    Senior Status...........................................................   43
        11.4.    Accuracy of Representations and Warranties..............................   43
        11.5.    Compliance with Agreements..............................................   44
        11.6.    Officers' Certificates..................................................   44
        11.7.    Proceedings.............................................................   44
        11.8.    Legality; Governmental and Other Authorization..........................   44
        11.9.    No Material Adverse Change..............................................   45
</TABLE>

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                          TABLE OF CONTENTS (cont'd)

<TABLE>
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<S>                                                                                       <C>
        11.10.   Opinion of Counsel......................................................   45
        11.11.   Other Documents and Opinions............................................   45

SECTION 11A.     CONDITIONS TO CLOSINGS..................................................   45
        11A.1.   Classification of Series B Preferred as Equity..........................   45
        11A.2.   Nasdaq Shareholder Approval Rule........................................   45

SECTION 12.      BREACH OF REPRESENTATIONS, WARRANTIES AND COVENANTS.....................   46

SECTION 13.      SPECIFIC PERFORMANCE....................................................   46

SECTION 14.      EXPENSES................................................................   46

SECTION 15.      DIRECT PAYMENTS.........................................................   48

SECTION 16.      AMENDMENTS AND WAIVERS..................................................   49

SECTION 17.      EXCHANGE OF SHARES; CANCELLATION OF SURRENDERED SHARES;
                 REPLACEMENT.............................................................   49

SECTION 18.      NOTICES.................................................................   50

SECTION 19.      MISCELLANEOUS...........................................................   50

EXHIBIT A      Series B Articles Supplementary...........................................  A-1
EXHIBIT B      Stockholders' Agreement...................................................  B-1
EXHIBIT C      Registration Rights Agreement.............................................  C-1
EXHIBIT D      Opinion of Counsel for the Company........................................  D-1
EXHIBIT E      Confidentiality Agreement.................................................  E-1
EXHIBIT F      A-2 Articles Supplementary................................................  F-1
</TABLE>

                                     -iii-
<PAGE>

                       PREFERRED STOCK PURCHASE AGREEMENT

            This PREFERRED STOCK PURCHASE AGREEMENT is dated as of December 29,
2000 between Caliber Learning Network, Inc., a Maryland corporation (the
"Company"), and Sylvan Ventures, LLC, a Maryland limited liability company
 -------
("Sylvan"), and Fleming US Discovery Fund III, L.P. and Fleming US Discovery
  ------
Offshore Fund III, L.P. (collectively, the "Fleming Funds") and such other
purchasers as may from time to time purchase the Series B Preferred (as defined
below) directly from the Company (the "Future Investors") (each of the foregoing
                                       ----------------
parties other than the Company being referred to individually as a "Purchaser"
                                                                    ---------
and collectively as the "Purchasers").
                         ----------

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

            WHEREAS, the Company desires to issue and sell to the Purchasers,
and each of the Purchasers desires to purchase from the Company, shares of the
Company's Series B Convertible Preferred Stock, par value $.01 per share (the
"Series B Preferred"), upon the terms and provisions hereinafter set forth;
 ------------------

            NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

SECTION 1.  SALE AND PURCHASE OF PREFERRED STOCK

            (a) The Company agrees to sell to the Purchaser and, subject to
the terms and conditions hereof and in reliance upon the representations and
warranties of the Company contained herein or made pursuant hereto, each
Purchaser severally agrees to purchase from the Company on the Closing Date
specified in Section 2 hereof, the number of shares of Series B Preferred set
forth opposite such Purchaser's name on Schedule 1 hereto. The shares of Series
B Preferred being acquired under this Agreement from time to time are
collectively referred to herein as the "Shares", containing rights and
                                        ------
privileges as more fully set forth in the Series B Articles Supplementary of the
Company in the form attached hereto as Exhibit A (the "Series B Articles
                                       ---------       -----------------
Supplementary"). The Company's agreement with each Purchaser is a separate
-------------
agreement, and the sale of Series B Preferred to each Purchaser is a separate
sale and the obligations of the Purchasers hereunder are several and not joint.

            (b) The aggregate purchase price to be paid to the Company by
each Purchaser for the Shares to be purchased by each Purchaser pursuant to this
Agreement shall be the amount set forth opposite such Purchaser's name on
Schedule 1 hereto. No further payment shall be required from such Purchaser for
the Shares.
<PAGE>

            (c) The parties further acknowledge and agree that the Shares are
intended not to constitute "preferred stock" as that term is used in Section
305(b)(4) of the Code and Treasury Regulation (S) 1.305-5(a). Except as required
by any Taxing Authority or court, the Company and the Purchaser agree to treat
the Shares for Federal, state and local income and franchise tax purposes as not
constituting "preferred stock", and to take no position inconsistent with such
characterization on any Tax Return or before any Taxing Authority or court.

            (d) The Company will use the proceeds from the sale of the Shares,
together with other funds it will receive on the Closing Date to fund future
development opportunities and for working capital purposes.

SECTION 2.  THE CLOSING

            (a) Subject to the terms and conditions hereof, the closing of the
purchase and sale of 110,000 shares of Series B Preferred to be purchased by
Sylvan and the Fleming Funds under this Agreement (the "Initial Closing") will
                                                        ---------------
take place at the offices of Piper Marbury Rudnick & Wolfe LLP, 6225 Smith
Avenue, Baltimore, Maryland at 10:00 A.M., Eastern time, on December 29, 2000,
or such other time and date as shall be mutually agreed to by the Company and
Sylvan, but in any event no later than December 30, 2000 (such time and date are
herein referred to as the "Initial Closing Date").
                           --------------------

            (b) Subject to the terms and conditions hereof, one or more
subsequent closings (each, a "Subsequent Closing") of the purchase and sale of
                              ------------------
the Shares to be purchased by any Future Investors will take place on or before
March 31, 2001 at a time and place as are mutually agreeable to the Company and
the Future Investors (each such time and date are herein referred to as a
"Subsequent Closing Date"). Each such Future Investor shall execute a copy of
 -----------------------
this Agreement and shall be added to Schedule 1 hereto. Without the prior
written consent of Sylvan and the Fleming Funds, (i) the aggregate purchase
amount of Shares purchased at the Initial Closing and all Subsequent Closings
shall not exceed $30 million and (ii) the purchase price per share of Series B
Preferred to purchased in any Subsequent Closing shall be equal to $100.

            (c) Subject to the terms and conditions hereof, on the Initial
Closing Date and each Subsequent Closing Date (i) the Company will deliver to
each Purchaser a certificate registered in such Purchaser's name (or the name of
its nominee, if any, as specified on Schedule 1 hereto) evidencing the number of
Shares set forth opposite such Purchaser's name on Schedule 1, and (ii) upon
such Purchaser's receipt thereof, such Purchaser will deliver to the Company a
certified or official bank check (or wire transfer) in an amount equal to the
aggregate purchase price (as specified in Section 1(b) hereof) for the Shares to
be purchased by such Purchaser payable to the order of the Company in federal or
other immediately available funds.

                                      -2-
<PAGE>

SECTION 3.  DEFINITIONS

            (a) For purposes of this Agreement, the following definitions shall
apply (such definitions to be equally applicable to both the singular and plural
forms of the terms defined):

            "6% Non-Voting Convertible Preferred Stock" means the Company's
             -----------------------------------------
        6% Non-Voting Preferred Stock, par value $.01, which is expressly
        subordinated, in all respects, to the Series A-2 Preferred and Series B
        Preferred.

            "Affiliate", when used with respect to any Person, means (i) if
             ---------
        such Person is a corporation, any officer or director thereof (other
        than a director elected pursuant to Section 4(c) of the Series B
        Articles Supplementary) and any Person which is, directly or indirectly,
        the beneficial owner (by itself or as part of any group) of more than
        five percent (5%) of any class of any equity security (within the
        meaning of the Securities Exchange Act) thereof, and, if such beneficial
        owner is a partnership, any general partner thereof, or if such
        beneficial owner is a corporation, any Person controlling, controlled by
        or under common control with such beneficial owner, or any officer or
        director of such beneficial owner or of any corporation occupying any
        such control relationship, (ii) if such Person is a partnership, any
        general or limited partner thereof, and (iii) any other Person which,
        directly or indirectly, controls or is controlled by or is under common
        control with such Person. For purposes of this definition, "control"
        (including the correlative terms "controlling", "controlled by" and
        "under common control with"), with respect to any Person, shall mean
        possession, directly or indirectly, of the power to direct or cause the
        direction of the management and policies of such Person, whether through
        the ownership of voting securities or by contract or otherwise. The
        holding of Shares (or of Conversion Shares obtained upon conversion of
        Shares), and the rights under this Agreement or under the Series B
        Articles Supplementary, the Stockholders' Agreement or the Registration
        Rights Agreement (or the exercise of any such rights, including, without
        limitation, nominating a director to the Board (or Board committee) of
        the Company and Subsidiaries or sending an observer to Board (or Board
        committee) meetings of the Company and Subsidiaries), shall not cause a
        Purchaser to be deemed to be an "Affiliate" of the Company or any
        Subsidiary.

            "Affiliate Agreements" means (i) Lease Agreement, dated as of May
             --------------------
        30, 1997, between SHL Financial Services and the Company, (ii)
        Intercompany Management and Facility Use Agreement, dated as of January
        1, 1998, by and between Sylvan Learning and the Company, (iii)
        facilities use and content development arrangement with Leapit.com, Inc.
        and (iv) the Promissory Note dated December 28, 2000 made by the Company
        in favor of Sylvan Learning in the principal amount of $1 million, each
        as may be amended, modified or renewed from time to time.

                                      -3-
<PAGE>

            "Agreement" means this Stock Purchase Agreement (together with
             ---------
        exhibits and schedules) as such may be from time to time assigned,
        supplemented or amended or as the terms hereof may be waived.

            "Benefit Plan" means any Plan, existing at the Closing Date or
             ------------
        prior thereto, established or to which contributions have at any time
        been made by the Company or any ERISA Affiliate, or any predecessor of
        any of the foregoing, or under which any employee, former employee or
        director of the Company or any ERISA Affiliate or any beneficiary
        thereof is covered, is eligible for coverage or has benefit rights as a
        result of employment by or service with the Company or any ERISA
        Affiliate, or as a result of designation as a beneficiary by any
        employee, former employee or director of the Company or any ERISA
        Affiliate.

            "Board" or "Board of Directors" means with respect to any Person
             -----      ------------------
        which is a corporation, a business trust or other entity, the board of
        directors or other group, however, designated, which is charged with
        legal responsibility for the management of such Person, or any committee
        of such board of directors or group, however designated, which is
        authorized to exercise the power of such board or group in respect of
        the matter in question.

            "Business Day" means any day other than a Saturday, Sunday or any
             ------------
        day on which banks in the location of the office of the Company provided
        for in Section 18 hereof are authorized or obligated to close.

            "Capitalized Leases" means (a) any lease to which the Company or
             ------------------
        a Subsidiary is party as lessee, or by which it is bound, under which it
        leases any property (real, personal or mixed) from any lessor other than
        the Company or a Subsidiary, and (b) which either (i) is required to be
        capitalized in accordance with GAAP, or, (ii) with respect to real
        property, even if not so required to be capitalized, shall have a
        remaining term of greater than three (3) years (including leases of
        shorter duration which are or were extendible to a total term greater
        than three (3) years at the option of the lessor) (the "Extended
                                                                --------
        Leases"); provided that the Company makes a determination as to whether,
        ------    --------
        at the time of its calculation of Capitalized Lease Value, it could be
        released from its obligations under such Extended Leases without any
        adverse economic consequence and (I) the Extended Leases shall not be
        included in the calculation of Capitalized Leases if the Company
        determines there would be no adverse economic consequences, and (II) the
        Extended Leases shall be included in the calculation of Capitalized
        Leases to the extent of such adverse economic consequence if the Company
        determines that there would be adverse economic consequences.

            "Capitalized Lease Value" means, as of the time of any determination
             -----------------------
        thereof, the sum of the then present values, determined as hereinafter
        provided, of future obligations of the Company and its subsidiaries
        under then existing Capitalized Leases. To compute the value of any
        Capitalized Lease, the following methods shall be used, as applicable:

                                      -4-
<PAGE>

     (i)   values of leases required to be capitalized in accordance with GAAP
           shall be computed in accordance with such principles; and

     (ii)  values of other leases (and values of contracts or other items which
           this Agreement provides are to be valued as if they were Capitalized
           Leases) shall be computed by discounting, to the date of
           determination, at an assumed interest rate of eight percent (8%) per
           annum, the minimum amount of future rental payments that will be due
           from the Company or its subsidiaries under the related documentation,
           including rental payments that may be due during extensions which are
           at the other party's option, but excluding any amounts in respect of
           insurance on, taxes on and/or maintenance of the properties subject
           to such leases (provided that such amounts are owed and paid only to
           the extent actually incurred).

     "Code" means the Internal Revenue Code of 1986, as amended from time to
      ----
time.

     "Commission" means the Securities and Exchange Commission and any other
      ----------
similar or successor agency of the federal government administering the
Securities Act or the Securities Exchange Act.

     "Common Stock" means the Company's Common Stock, par value $.01 per share,
      ------------
and shall also include any common stock of the Company hereafter authorized and
any capital stock of the Company of any other class hereafter authorized which
is not preferred as to dividends or assets over any other class of capital stock
of the Company or which has ordinary voting power for the election of directors
of the Company; provided that Common Stock shall not include the Series A-2
                --------
Preferred or Series B Preferred.

     "Company" means Caliber Learning Network, Inc., a Maryland corporation, its
      -------
successors and assigns.

     "Confidentiality Agreement" has the meaning set forth in Section 7.5
      -------------------------
hereof.

      "Consolidated" or "consolidated", when used with reference to any
       ------------      ------------
financial term in this Agreement, means the aggregate for the Company and any of
its majority-owned Subsidiaries of the amounts signified by such term for all
such Persons, with intercompany items eliminated, and, with respect to net
worth, after eliminating the portion of net worth properly attributable to
minority interests, if any, in the capital of any such Person (other than in the
capital of the Company) and otherwise as determined in accordance with GAAP
(except as otherwise expressly provided herein).

     "Conversion Share" or "Conversion Shares" means the shares of the Company's
      ----------------      -----------------
Common Stock obtained or obtainable upon conversion of Shares and shall also
include any capital stock or other securities into which such shares of Common
Stock are

                                      -5-
<PAGE>

changed and any capital stock or other securities resulting from or comprising a
reclassification, combination or subdivision of, or a stock dividend on, any
such shares of Common Stock. In the event that any Conversion Shares are sold
either in a public offering pursuant to a registration statement under the
Securities Act or pursuant to a Rule 144 Transaction, then the transferees of
such Conversion Shares shall not be entitled to any benefits under this
Agreement with respect to such Conversion Shares and such Conversion Shares
shall no longer be considered to be "Conversion Shares" for purposes of any
consent or waiver provision of this Agreement.

     "Disclosure Material" has the meaning specified in Section 4.6(a) hereof.
      -------------------

     "EBITDA" means, the consolidated or combined, as the case may be, net
      ------
income for such period plus (a) the sum of, without duplication, to the extent
deducted in computing consolidated or combined net income: (i) income tax
expense, (ii) interest expense, (iii) depreciation, amortization (exclusive of
deferred rent amortization) and other non-cash charges and (iv) any
extraordinary or non-recurring losses or expenses, minus (b) the sum of (without
duplication), to the extent included in computing consolidated net income, (i)
interest or dividend income, (ii) non-operating income and (iii) any
extraordinary or non-recurring gains or income, all as determined in accordance
with GAAP, where applicable, consistently applied.

     "Environmental Laws" means all federal, state, local, foreign, civil and
      ------------------
criminal laws, statutes, ordinances, orders, codes, rules, policies, and
regulations and common law relating to the protection of the environment and
human health or relating to the handling, use, generation, treatment, storage,
transportation or disposal of Hazardous Materials, including but not limited to
the Resource Conservation and Recovery Act of 1976, 42 U.S.C.(S) 6901 et seq.;
                                                                      ------
the Toxic Substances Control Act, 15 U.S.C.(S) 2601 et seq.; the Comprehensive
                                                    -- ---
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.(S)
9601 et seq.; the Federal Water Pollution Control Act, 33 U.S.C.(S) 1251 et
     ------                                                              --
seq.; the Clean Air Act, 42 U.S.C.(S) 7401 et seq.; the Hazardous Materials
---                                        ------
Transportation Act, 49 U.S.C.(S) 1801 et seq.; the Occupational Safety and
                                      ------
Health Act, 29 U.S.C.(S) 651; the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C.(S) 136y et seq.; and the Oil Pollution Act of 1990, 33 U.S.C.(S)
                      ------
2701 et seq., all as may be amended or superseded from time to time, and all
     -- ---
common law claims relating to the same.

     "Environmental Lien" has the meaning set forth in Section 4.16 hereof.
      ------------------

     "Environmental Permits" means all permits, licenses, approvals,
      ---------------------
authorizations or consents required by any Governmental Authority under any
applicable Environmental Law and includes any and all orders, consent orders or
binding agreements issued or entered into by a Governmental Authority under any
applicable Environmental Law.

     "ERISA" means Employee Retirement Income Security Act of 1974, as amended.
      -----

                                      -6-
<PAGE>

     "ERISA Affiliate" means each "person" (as defined in Section 3(9) of ERISA)
      ---------------
which is, or at any time was, a member of a controlled group (within the meaning
of Section 412(n)(6) of the Code) that includes, or at any time included, the
Company or any of its Subsidiaries.

     "Fleming Funds" has the meaning set forth in the recitals hereof, together
      -------------
with their respective successors and assigns.

     "Fully Diluted" means, with respect to the calculation of the number of
      -------------
shares of Common Stock, as of the time of determination thereof, the sum of (i)
all shares of Common Stock outstanding at the time of determination and (ii) all
shares of Common Stock issuable upon the exchange, exercise or conversion of all
warrants, options and convertible securities then outstanding (whether or not
such warrants, options or convertible securities are then exercisable,
exchangeable, convertible or subject to contingencies).

     "Fundamental Transaction" has the meaning set forth in Section 9.3 hereof.
      -----------------------

     "GAAP" means generally accepted accounting principles consistently applied.
      ----

     "Going Private Transaction" has the meaning set forth in Section 9.10
      -------------------------
hereof.

     "Governmental Authority" means any federal, state, or local governmental
      ----------------------
agency or authority (including regulatory authority) having jurisdiction over
the Company or any of its Subsidiaries or any of its respective assets or
businesses.

     "Guaranty" means (i) any guaranty or endorsement of the payment or
      --------
performance of, or any contingent obligation in respect of, any indebtedness or
other obligation of any other Person, (ii) any other arrangement whereby credit
is extended to one obligor (directly or indirectly) on the basis of any promise
or undertaking of another Person (a) to pay the indebtedness of such obligor,
(b) to purchase an obligation owed by such obligor, (c) to purchase or lease
assets (or to provide funds, goods or services) under circumstances that would
enable such obligor to discharge one or more of its obligations or (d) to
maintain the capital, working capital, solvency or general financial condition
of such obligor, in each case whether or not such arrangement is disclosed in
the balance sheet of such other Person or is referred to in a footnote thereto
and (iii) any liability as a general partner of a partnership in respect of
indebtedness or other obligations of such partnership; provided, however, that
                                                       --------  -------
the term "Guaranty" shall not include (1) endorsements for collection or deposit
in the ordinary course of business, (2) any guaranty of indebtedness of the
Company by a subsidiary of the Company or (3) obligations of the Company or its
Subsidiaries which would constitute Guaranties solely by virtue of the
continuing liability of a Person which has sold assets subject to liabilities
for the liabilities which were assumed by the Person acquiring the assets,
unless such liability is required to be carried on the consolidated balance
sheet of the Company. The

                                      -7-
<PAGE>

amount of any Guaranty and the amount of indebtedness resulting from such
Guaranty shall be the maximum amount of the guarantor's potential obligation in
respect of such Guaranty.

     "Hazardous Materials" means any petroleum, petroleum hydrocarbons,
      -------------------
petroleum waste or petroleum products, underground storage tanks, asbestos or
asbestos-containing materials, pesticides, lead and lead-containing materials,
urea formaldehyde insulation and polychlorinated biphenyls (PCBs), ionizing and
non-ionizing radiation including radon and electromagnetic frequency radiation;
and any chemicals, materials, substances or wastes in any amount or
concentration which are now or hereafter "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants" or words of similar
import, under any applicable Environmental Law.

     "Indebtedness" of any Person means, without duplication, as of any date as
      ------------
of which the amount thereof is to be determined, (i) all obligations of such
Person to repay money borrowed (including, without limitation, all notes payable
and drafts accepted representing extensions of credit, all obligations under
letters of credit, all obligations evidenced by bonds, debentures, notes or
other similar instruments and all obligations upon which interest charges are
customarily paid), (ii) the Capitalized Lease Value of all Capitalized Leases in
respect of which such Person is liable as lessee or as the guarantor of the
lessee, (iii) all monetary obligations which are secured by any Lien existing on
property owned by such Person whether or not the obligations secured thereby
have been incurred or assumed by such Person, (iv) all conditional sales
contracts and similar title retention debt instruments under which such Person
is obligated to make payments, (v) all Guaranties by such Person and (vi) all
contractual obligations (whether absolute or contingent) of such Person to
repurchase goods sold and distributed. "Indebtedness" shall not include,
however, (1) Indebtedness of the Company to any of its wholly-owned Subsidiaries
or Indebtedness of any wholly-owned Subsidiary to the Company or to another
wholly-owned Subsidiary, and (2) any unfunded obligations in any employee
pension benefit plan (as defined in ERISA) of the Company or of any Subsidiary.

     "Initial Closing" has the meaning set forth in Section 2(a) hereof.
      ---------------

     "Initial Closing Date" has the meaning set forth in Section 2(a) hereof.
      --------------------

     "Internal Rate of Return" means the discount rate at which the present
      -----------------------
value of the future cash flows of an investment equal the cost of the
investment.

     "Investment" means, with respect to any Person, (i) any loan, advance or
      ----------
extension of credit by such Person to, and any contributions to the capital of,
any other Person, (ii) any Guaranty by such Person, (iii) any interest in any
capital stock, equity interest or other securities of any other Person, (iv) any
transfer or sale of property of such Person to any other Person other than upon
full payment, in cash or other

                                      -8-
<PAGE>

consideration, of not less than the agreed sale price bargained on an arms-
length basis and (v) any commitment or option to make an Investment if, in the
case of an option, the consideration therefor exceeds $10,000, and any of the
foregoing under clauses (i) through (v) shall be considered an Investment
whether such Investment is acquired by purchase, exchange, merger or any other
method; provided, that the term "Investment" (1) shall not include an Investment
        --------
in the Company or in a wholly-owned Subsidiary, (2) shall not include current
trade and customer accounts receivable and allowances, provided they relate to
goods furnished in the ordinary course of business and are given in accordance
with the customary practices of the Company or a Subsidiary, (3) shall not
include temporary investments of excess cash of the Company or of any Subsidiary
in any of the following: (A) investment grade obligations maturing within one
year of their issuance which as to principal and interest constitute direct
obligations of, or obligations guaranteed by, the United States of America, (B)
negotiable certificates of deposit of banks or trust companies which are
organized under the laws of the United States of America or any state thereof
and which have capital and surplus of at least $500,000,000, (C) commercial
paper which is rated not less than prime-one or A-1 or their equivalents by
Moody's Investor Service, Inc. or Standard & Poor's Corporation or their
successors, (D) any repurchase agreement secured by any one or more of the
foregoing and (E) money market funds primarily investing in any of the foregoing
securities and sponsored by or affiliated with nationally recognized brokerage
or investment advisory firms, and (4) shall not include Investments of the
Company existing on the date hereof and disclosed on Schedule 3(a) hereto.

     "Lien" means any mortgage, pledge, hypothecation, assignment, deposit
      ----
arrangement, encumbrance, or preference, priority or other security interest of
any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same effect as any of the foregoing, any assignment or other
conveyance of any right to receive income and any assignment of receivables with
recourse against the assignor), any filing of a financing statement as debtor
under the Uniform Commercial Code or any similar statute and any agreement to
give or make any of the foregoing; provided that the term "Lien" shall not
include Permitted Liens.

     "MCI" means MCI Telecommunications Corporation, which as of the date of
      ---
this Agreement holds 662,513 shares of Common Stock.

     "MCI Warrants" means the amended and restated warrant to purchase 1,193,573
      --- --------
shares of Common Stock, as adjusted pursuant to the anti-dilution terms thereof,
issued to MCI.

     "Outside Directors" means those directors on the Company's Board of
      -----------------
Directors at any time who are not otherwise Affiliates of or employed by the
Company; provided that notwithstanding the foregoing, Douglas L. Becker and R.
         --------
Christopher Hoehn-Saric shall be deemed Outside Directors for the purposes
hereof.

                                      -9-
<PAGE>

     "Outstanding" or "outstanding" means (a) when used with reference to the
      -----------      -----------
Shares or the Conversion Shares as of a particular time, all Shares or
Conversion Shares theretofore duly issued except (i) Shares and Conversion
Shares theretofore reported as lost, stolen, mutilated or destroyed or
surrendered for transfer, exchange or replacement, in respect of which new or
replacement Shares or Conversion Shares have been issued by the Company, (ii)
Shares and Conversion Shares theretofore canceled by the Company and (iii)
Shares and Conversion Shares registered in the name of, as well as Shares owned
beneficially by, the Company, any Subsidiary or any of its Affiliates. For
purposes of the preceding sentence, in no event shall "Affiliates" include (x)
the Purchasers or (y) any Affiliates of the Purchasers.

     "Patents and Applications" has the meaning set forth in Section 4.12
      ------------------------
hereof.

     "Pension Plan" means any "employee pension benefit plan" as defined in
      ------------
Section 3(2) of ERISA.

     "Permitted Lien" means (i) any Lien for Taxes, governmental charges or
      --------------
levies not yet due or delinquent or being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with
GAAP, (ii) any imperfections of title, easements, rights of way or similar
Liens, zoning laws or land use restrictions as normally exist with respect to
property similar in character to the property affected thereby and which
individually or in the aggregate with other such Liens, zoning laws or land use
restrictions do not materially impair the value or marketability of the property
subject to such Liens, zoning laws or land use restrictions or interfere with
the use of such property in the conduct of the business of the Company and which
do not secure obligations for money borrowed, (iii) Liens imposed by any law,
such as mechanic's, materialman's, landlord's, warehouseman's and carrier's
Liens, securing obligations incurred in the ordinary course of business which
are not yet overdue or which are being diligently contested in good faith by
appropriate proceedings and, with respect to such obligations which are being
contested, for which the Company has set aside adequate reserves, if
appropriate, (iv) any Lien resulting from purchase by the Company of goods in
the ordinary course of business as to which Liens are not filed of record and
(v) any Lien necessary to secure Indebtedness that is not prohibited by Section
9.2 hereof; provided that "Permitted Lien" shall not include any Lien upon or
with respect to any shares of capital stock of any Subsidiary.

     "Permitted Transferee" means any Transferee that holds not less than an
      --------------------
aggregate of 20,000 Shares.

     "Permitted Transferee Designee" means each person that any Permitted
      -----------------------------
Transferee designates in writing to the Company to receive, on behalf of such
Permitted Transferee, the information to which such Permitted Transferee is
entitled to pursuant to

                                      -10-
<PAGE>

Section 7.1(b)(v) hereof; provided that each Permitted Transferee may not
designate more than two persons pursuant hereto.

     "Person" or "person" means an individual, corporation, partnership, limited
      ------      ------
liability company, firm, association, joint venture, trust, unincorporated
organization, government, governmental body, agency, political subdivision or
other entity.

     "Plan" means any bonus, incentive compensation, deferred compensation,
      ----
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, worker's compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, or whether for the benefit of a single
individual or more than one individual including, but not limited to, any
"employee benefit plan" within the meaning of Section 3(3) of ERISA.

     "Preferred Stock" means any class of the capital stock of a corporation
      ---------------
(whether or not convertible into any other class of such capital stock) which
has any right, whether absolute or contingent, to receive dividends or other
distributions of the assets of such corporation (including, without limitation,
amounts payable in the event of the voluntary or involuntary liquidation,
dissolution or winding-up of such corporation), which right is superior to the
rights of another class of the capital stock of such corporation. "Preferred
Stock" includes, without limitation, the Series A-2 Preferred and Series B
Preferred.

     "Purchaser" has the meaning set forth in the recitals hereof, together with
      ---------
its successors and assigns.

     "Purchasers" has the meaning set forth in the recitals hereof, together
      ----------
with their respective successors and assigns.

     "Registration Rights Agreement" means the Amended and Restated Registration
      -----------------------------
Rights Agreement, dated as of the Closing Date, among the Company and each of
the Purchasers.

     "Restricted Payment" means (i) every payment in connection with
      ------------------
the redemption, purchase, retirement or other acquisition by or on behalf of the
Company or any Subsidiary of any shares of the Company's or a Subsidiary's
capital stock (as defined below), whether or not owned by the Company or any
Subsidiary, (ii) any prepayments or repayments made on Indebtedness of the
Company or any Subsidiary, (iii) every payment to or on behalf of any Affiliate
of the Company or any Affiliate of any Subsidiary on account of or with respect
to any lease arrangements, and (iv) every payment by or on behalf of the Company
or of any Subsidiary (whether as repayment or prepayment of principal or as
interest or otherwise) on or with respect to (A) any obligation to repay money
borrowed owing to any Affiliate of the Company or of any Subsidiary or (B) any

                                      -11-
<PAGE>

        obligation, to any Person, of any Affiliate of the Company or of any
        Subsidiary or to any other holder of shares of the Company's capital
        stock (as defined below), which obligation is assumed, or is the subject
        of a Guaranty, by the Company or a Subsidiary; provided, however, (a)
                                                       --------  -------
        that the restrictions of the foregoing clause (i) shall not apply to (A)
        any payment in respect of capital stock of the Company to the extent
        payable in shares of the capital stock of the Company, (B) any
        redemption of the Series A-2 Preferred or Series B Preferred or (C) any
        redemption or repurchase pursuant to the 1997 Stock Option Plan and the
        1998 Stock Incentive Plan as in effect on the date hereof, (b) that the
        restrictions of the foregoing clause (ii) shall not apply to any
        regularly scheduled prepayment or repayment of Indebtedness, provided
        that such Indebtedness being prepaid or repaid is not at the time of
        such prepayment or repayment or at any prior time thereto owing to an
        Affiliate of the Company, or any payments due under the Affiliate
        Agreements, (c) that none of the foregoing clauses shall apply to any
        payments from a Subsidiary to the Company or from a Subsidiary to a
        wholly-owned Subsidiary and (d) that none of the foregoing clauses shall
        apply to any payments, distributions or other transfers or actions on or
        with respect to the Shares or the Conversion Shares or to the Purchasers
        (or holders of Shares or the Conversion Shares) under this Agreement.
        For purposes of this definition, "capital stock" shall also include
        warrants and other rights and options to acquire shares of capital stock
        (whether upon exercise, conversion, exchange or otherwise).

               "Rule 144" means (i) Rule 144 under the Securities Act as such
                --------
        Rule is in effect from time to time and (ii) any successor rule,
        regulation or law, as in effect from time to time.

               "Rule 144A" means (i) Rule 144A under the Securities Act as such
                ---------
        Rule is in effect from time to time and (ii) any successor rule,
        regulation or law, as in effect from time to time.

               "Rule 144 Transaction" means a transfer of Conversion Shares (A)
                --------------------
        complying with Rule 144 as such Rule is in effect on the date of such
        transfer (but not including a sale other than pursuant to "brokers'
        transactions" as defined in clauses (1) and (2) of paragraph (g) of such
        Rule as in effect on the date hereof) and (B) occurring at a time when
        Conversion Shares are registered pursuant to Section 12 of the
        Securities Exchange Act.

               "SEC Reports" has the meaning set forth in Section 4.19 hereof.
                -----------

               "Securities Act" means the Securities Act of 1933, as amended,
                --------------
        and the rules, regulations and interpretations thereunder.

               "Securities Exchange Act" means the Securities Exchange Act of
                -----------------------
        1934, as amended, and the rules, regulations and interpretations
        thereunder.

                                      -12-
<PAGE>

               "Series A-2 Preferred" means the Company's Series A-2 Convertible
                --------------------
        Preferred Stock, par value $.01 per share, classified by Articles
        Supplementary filed with the Maryland Department of Assessments and
        Taxation on December 27, 2000 and attached as Exhibit F hereto (the "A-2
        Articles Supplementary").

               "Series B Articles Supplementary" has the meaning set forth in
                -------------------------------
Section 1(a) hereof.

               "Series B Designee" means each person that any Purchaser
                -----------------
        designates in writing to the Company to receive, on behalf of such
        Purchaser, the information to which such Purchaser is entitled pursuant
        to Section 7.1(b)(v) hereof; provided that each Purchaser may not
        designate more than two persons pursuant hereto.

               "Series B Preferred" means the Company's Series B Convertible
                ------------------
        Preferred Stock, par value $.01 per share, which will have the rights,
        powers and privileges as more fully set forth in the Series B Articles
        Supplementary.

               "Shares" has the meaning set forth in Section 1(a) hereof. In the
                ------
        event that any Shares are sold either in a public offering pursuant to a
        registration statement under Section 5 of the Securities Act or pursuant
        to a Rule 144 Transaction, then the transferees of such Shares shall not
        be entitled to any benefits under this Agreement with respect to such
        Shares and such Shares shall no longer be considered to be "Shares" for
        purposes of any consent or waiver provision of this Agreement.

               "Stockholders' Agreement" means the Amended and Restated
                -----------------------
        Stockholders' Agreement, dated as of the Closing Date, among the
        Company, the Purchasers and certain other stockholders of the Company.

               "Subsidiary", with respect to any Person, means any corporation,
                ----------
        association or other entity of which more than 50% of the total voting
        power of shares of stock or other equity interests (without regard to
        the occurrence of any contingency) to vote in the election of directors,
        managers or trustees thereof is, at the time as of which any
        determination is being made, owned or controlled, directly or
        indirectly, by such Person or one or more of its Subsidiaries, or both.
        The term "Subsidiary" or "Subsidiaries" when used herein without
                  ----------      ------------
        reference to any particular Person, means a Subsidiary or Subsidiaries
        of the Company.

               "Subsequent Closing" has the meaning set forth in Section 2(b)
                ------------------
hereof.

               "Subsequent Closing Date" has the meaning set forth in Section
                -----------------------
2(b) hereof.

               "Sylvan" has the meaning set forth in the recitals hereof,
                ------
        together with its successors and assigns.

                                      -13-
<PAGE>

               "Sylvan Learning" means Sylvan Learning Systems, Inc., which
                ---------------
        holds 1,227,393 shares of Common Stock and all of the outstanding 6%
        Nonvoting Convertible Preferred Stock.

               "Takeover Proposal" shall mean any tender or exchange offer for
                -----------------
        in excess of 15% of the outstanding securities involving the Company,
        any proposal for a merger, consolidation or other business combination
        involving the Company, any proposal or offer to acquire in any manner a
        greater than 15% equity interest in, or a significant portion of the
        business or assets of, the Company (other than immaterial or
        insubstantial assets or inventory in the ordinary course of business or
        assets held for sale), any proposal or offer with respect to any
        recapitalization or restructuring with respect to the Company or any
        proposal or offer with respect to any other transaction similar to any
        of the foregoing with respect to the Company other than pursuant to the
        transactions to be effected pursuant to this Agreement.

               "Takeover Proposal Interest" has the meaning set forth in Section
                --------------------------
        7.4(e) hereof.

               "Tax" or "Taxes" means all federal, state, local or foreign net
                ---      -----
        or gross income, gross receipts, net proceeds, sales, use, ad valorem,
                                                                   ----------
        value added, franchise, bank shares, withholding, payroll, employment,
        excise, property, alternative or add-on minimum, environmental or other
        taxes, assessments, duties, fees, levies or other governmental charges
        of any nature whatsoever, whether disputed or not, together with any
        interest, penalties, additions to tax or additional amounts with respect
        thereto.

               "Tax Returns" means any returns, reports or statements (including
                -----------
        any information returns) required to be filed for purposes of a
        particular Tax.

               "Taxing Authority" means any governmental agency, board, bureau,
                ----------------
        body, department or authority of any United States federal, state or
        local jurisdiction, or any foreign jurisdiction, having or purporting to
        exercise jurisdiction with respect to any Tax.

               "Transferees" shall mean any transferee of the Shares or the
                -----------
        Conversion Shares from a Purchaser. Transferees shall not include a
        transferee of Shares or Conversion Shares sold in either a public
        offering pursuant to a registration statement under the Securities Act
        or pursuant to a Rule 144 Transaction.

               (b)  For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:

                    (i)  the words "herein", "hereof" and "hereunder" and other
        words of similar import refer to this Agreement as a whole and not to
        any particular Section or other subdivision;

                                      -14-
<PAGE>

                    (ii)   all accounting terms not otherwise defined herein
        have the meanings assigned to them in accordance with GAAP (except as
        otherwise provided herein);

                    (iii)  all computations provided for herein, if any, shall
        be made in accordance with GAAP (except as otherwise provided herein);

                    (iv)   any uses of the masculine, feminine or neuter gender
        shall also be deemed to include any other gender, as appropriate;

                    (v)    all references herein to actions by the Company or
        any Subsidiary, such as "create", "sell", "transfer", "dispose of",
        etc., mean such action whether voluntary or involuntary, by operation of
        law or otherwise;

                    (vi)   the exhibits and schedules to this Agreement shall be
        deemed a part of this Agreement;

                    (vii)  each of the representations and warranties of the
        Company contained in Section 4 hereof is separate and is not limited,
        qualified or modified by the existence, wording or satisfaction of any
        other representation or warranty of the Company in Section 4 or
        otherwise;

                    (viii) each of the covenants of the Company contained in
        Sections 7, 8 and 9 hereof or otherwise contained in this Agreement, the
        Series B Articles Supplementary, the Stockholders' Agreement or the
        Registration Rights Agreement is separate and is not limited or
        satisfied by the existence, wording or satisfaction of any other
        covenant of the Company in Section 7, 8 or 9 or otherwise; and

                    (ix)   all references herein (in covenants or otherwise) to
        any action(s) which are to be taken (or which are prohibited from being
        taken) by any Person or the Company or any Subsidiary shall apply to
        such Person or the Company or such Subsidiary, as the case may be,
        whether such action is taken directly or indirectly.

SECTION 4.     REPRESENTATIONS AND WARRANTIES OF THE COMPANY

               The Company represents and warrants to the Purchaser as follows
as of the date hereof and as of the Initial Closing Date and any Subsequent
Closing Date, except as set forth in the disclosure schedules attached hereto:

               4.1. Corporate Existence, Power and Authority.
                    ----------------------------------------

               (a)  Each of the Company and each Subsidiary is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The

                                      -15-
<PAGE>

Company and each Subsidiary is duly qualified, licensed and authorized to do
business and is in good standing in each jurisdiction in which it owns or leases
any property or in which the conduct of its business requires it to so qualify
or be so licensed, except for such jurisdictions where the failure to so qualify
or be so licensed would not have a material adverse effect on the Company's
assets, properties, liabilities, business, affairs, results of operations,
condition (financial or otherwise) or prospects, on a consolidated basis.

               (b)  No proceeding has been commenced looking toward the
dissolution or merger of the Company or any Subsidiary or the amendment of their
respective certificates of incorporation (other than the Series B Articles
Supplementary). Neither the Company nor any Subsidiary is in violation in any
respect of its charter or by-laws.

               (c)  Each of the Company and each Subsidiary has all requisite
power, authority (corporate and other) and legal right to own or to hold under
lease and to operate the properties it owns or holds and to conduct its business
as now being conducted.

               (d)  The Company has all requisite power, authority (corporate
and other) and legal right to execute, deliver, enter into, consummate the
transactions contemplated by and perform its obligations under (i) this
Agreement, including, without limitation, the issuance by the Company of the
Shares and the Conversion Shares as contemplated herein and therein and in the
Series B Articles Supplementary (subject to the proper filing with the Maryland
State Department of Assessments and Taxation of the Series B Articles
Supplementary), (ii) the Stockholders' Agreement and (iii) the Registration
Rights Agreement. The execution, delivery and performance of this Agreement, the
Stockholders' Agreement and the Registration Rights Agreement by the Company
(including, without limitation, the issuance by the Company of the Shares and
the Conversion Shares as contemplated herein and therein and in the Series B
Articles Supplementary) have been duly authorized by all required corporate and
other actions. The Company has duly executed and delivered this Agreement and at
the Initial Closing and at each Subsequent Closing will have duly executed and
delivered the Stockholders' Agreement and the Registration Rights Agreement.
This Agreement constitutes and, at the Initial Closing and at each Subsequent
Closing, the Stockholders' Agreement and the Registration Rights Agreement will
constitute the legal, valid and binding obligations of the Company enforceable
in accordance with their respective terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to the rights of
creditors generally or under general principles of equity.

               4.2. Capital Stock.
                    -------------

               (a)  Schedule 4.2(a) hereto correctly and completely lists (i)
the authorized capital stock of the Company (Common Stock and Preferred Stock),
(ii) the number of designated shares of Preferred Stock in each series or class
after giving effect to the Series B Articles Supplementary and the Series A-2
Preferred, (iii) on December 29, 2000, after giving effect to the issuance of
Shares contemplated by this Agreement, the number of shares outstanding in each
series or class, and (iv) on December 29, 2000, after giving effect to the

                                      -16-
<PAGE>

issuance of Shares contemplated by this Agreement, a table showing the
capitalization of the Company reflecting outstanding options and warrants and
the issuance of the Conversion Shares. There have been no material issuances of
shares since September 30, 2000, except the issuance of 71,682 shares of Common
Stock in connection with the Company's Employee Stock Purchase Plan, the
issuance of 2,500 shares of Common Stock in connection with the exercise of
employee stock options and the issuance of the Series A-2 Preferred. All of such
outstanding shares are, or on the Initial Closing Date and each Subsequent
Closing will be, duly authorized, validly issued and outstanding, fully paid and
non-assessable. The shares of the Company's Common Stock issuable upon
conversion of the Series B Preferred will be, when issued in accordance with the
terms of the Series B Preferred, duly authorized, validly issued, fully paid and
non-assessable. Except as provided in the Series B Articles Supplementary and as
described in Schedule 4.2(a), none of the shares of the Company's capital stock
which will be outstanding at the Initial Closing and each Subsequent Closing (i)
were or will be subject to preemptive rights when issued or (ii) provide the
holders thereof with any preemptive rights with respect to any issuances of
capital stock.

               (b)  Schedule 4.2(b) hereto correctly and completely lists the
number and purpose for which shares of the Company's Common Stock are reserved
for issuance by the Company.

               (c)  Except as referred to in Section 4.2(b), there are no
outstanding options, warrants, subscriptions, rights, convertible securities or
other agreements or plans under which the Company may become obligated to issue,
sell or transfer shares of its capital stock or other securities.

               (d)  Except for the registration rights contained in the
Registration Rights Agreement and as described in Schedule 4.2(d), there are and
will be no outstanding registration rights with respect to any capital stock of
the Company or of any Subsidiary, which (in either case) will be outstanding on
the Closing Date, or any capital stock referred to in Section 4.2(b) or 4.2(c).

               (e)  There are no voting agreements, voting trusts, proxies or
other agreements or understandings with respect to the voting of any capital
stock of the Company or any Subsidiary.

               (f)  Except as described in Schedule 4.2(f), there are no
anti-dilution protections or other adjustment provisions in existence with
respect to any capital stock of the Company or any Subsidiary or any capital
stock referred to in Section 4.2(b) or 4.2(c).

               (g)  The Series B Articles Supplementary has been duly adopted by
the Company and is fully effective as a supplement to the Company's charter. The
Shares will have all of the rights, priorities and terms set forth in the Series
B Articles Supplementary.

                                      -17-
<PAGE>

               (h)  The A-2 Articles Supplementary has been duly adopted by the
Company and is fully effective as a supplement to the Company's charter.

               (i)  To the knowledge of the Company, those persons who
beneficially own, directly or indirectly, more than 5% (calculated in accordance
with Rule 13d-3 under the Securities Exchange Act) of the Company's outstanding
Common Stock are as listed on Schedule 4.2(i); provided that the Company may
                                               --------
rely on the accuracy of all Schedules 13D and Schedules 13G filed under the
Securities Exchange Act for purposes of determining those persons who
beneficially own, directly or indirectly, more than 5% of the Company's
outstanding Common Stock.

               4.3. Subsidiaries.
                    ------------

               The Company has no Subsidiaries. The Company has no Investments
in any other Person.

               4.4. Business.
                    --------

               The Company is engaged primarily in the business of distributed
learning and internet communications. The Company neither currently engages in,
nor has any intention of engaging in, any other business.

               4.5. No Defaults or Conflicts.
                    ------------------------

               (a)  Neither the Company nor any of its Subsidiaries is in
violation or default in any material respect (and is not in default in any
respect regarding any Indebtedness) under any indenture, agreement or instrument
to which it is a party or by which it or its properties may be bound that would
materially adversely affects or will materially adversely affect the assets,
properties, liabilities, business, affairs, results of operations, condition
(financial or otherwise) or prospects of the Company or the ability of the
Company to perform its obligations under this Agreement, the Series B Articles
Supplementary, the Stockholders' Agreement, the Registration Rights Agreement,
the A-2 Articles Supplementary or any of the transactions contemplated hereby or
thereby. Neither the Company nor any Subsidiary is in default in any material
respect under any material order, writ, injunction, judgment or decree of any
court or other governmental authority or arbitrator(s).

               (b)  The execution, delivery and performance by the Company of
this Agreement, the Stockholders' Agreement and the Registration Rights
Agreement and any of the transactions contemplated hereby or thereby (including,
without limitation, the issuance of the Shares and the Conversion Shares as
contemplated herein and therein and in the Series B Articles Supplementary, the
adoption of each of the Series B Articles Supplementary and the A-2 Articles
Supplementary as amendments to the Company's charter) do not and will not (i)
violate, conflict with or give rise to a termination right under, with or
without the giving of notice or the passage of time or both, any provision of
(A) the respective charters or by-laws of the Company or any of

                                      -18-
<PAGE>

its Subsidiaries, (B) any law, rule, regulation or order of any federal, state,
county, municipal or other governmental authority, (C) any judgment, writ,
injunction, decree, award or other action of any court or governmental authority
or arbitrator(s), or (D) any agreement, indenture or other instrument applicable
to the Company or any of its Subsidiaries or any of their respective properties,
(ii) result in the creation of any Lien upon any of the Company's or any
Subsidiary's properties, assets or revenues, except as provided in the Series B
Articles Supplementary or the A-2 Articles Supplementary, (iii) require the
consent, waiver, approval, order or authorization of, or declaration,
registration, qualification or filing with, any Person (whether or not a
governmental authority and including, without limitation, any shareholder
approval) (other than approvals which have been obtained prior to the Closing
Date), or (iv) cause antidilution clauses of any outstanding securities to
become operative or give rise to any preemptive rights (other than with respect
to the Series A-2 Preferred). No provision of any item referred to in Sections
(A) and (C) of the preceding clause (i) materially adversely affects or will
materially adversely affect the assets, properties, liabilities, business,
affairs, results of operations, condition (financial or otherwise) or prospects
of the Company or the ability of the Company to perform its obligations under
this Agreement, the Series B Articles Supplementary, the Stockholders'
Agreement, the Registration Rights Agreement, the A-2 Articles Supplementary or
any of the transactions contemplated hereby or thereby.

               4.6. Disclosure Materials; Other Information.
                    ---------------------------------------

               (a)  The Company has previously furnished to the Purchasers the
materials described on Schedule 4.6(a) hereto (the "Disclosure Material"). The
                                                    -------------------
audited and unaudited financial statements referred to or contained in the
materials referred to on Schedule 4.6(a) fairly present the consolidated
financial condition of the Company as of the respective dates thereof and the
consolidated results of the operations of the Company for such periods and have
been prepared in accordance with GAAP, except that any such unaudited statements
may omit notes and may be subject to normal year-end adjustment.

               (b)  Since September 30, 2000, except as disclosed in the
Company's Quarterly Report on Form 10-Q for the three months ended September 30,
2000 or subsequently publicly announced, (i) the business of the Company has
been conducted in the ordinary course and (ii) there has been no material
adverse change in the assets, properties, liabilities, business, affairs,
results of operations, condition (financial or otherwise) or prospects of the
Company. As of the date hereof, there are no material liabilities of the Company
or any Subsidiary which would be required to be provided for in a consolidated
balance sheet of the Company as of either such date prepared in accordance with
GAAP, other than liabilities provided for in the financial statements referred
to in Section 4.6(a). Since September 30, 2000, no amount or property has
directly or indirectly been declared, ordered, paid, made or set aside for any
Restricted Payment nor has any such action been agreed to.

               (c)  There are no material liabilities, contingent or otherwise,
of the Company or the Subsidiaries that have not been disclosed in the financial
statements referred to in Section 4.6(a) or otherwise disclosed in the schedules
hereto.

                                      -19-
<PAGE>

               (d)  The financial projections included in the Disclosure
Material conform with the internal operating forecasts of the Company and its
Subsidiaries and were based on good faith assumptions when made and have been
prepared in good faith.

               (e)  There is no fact known to the Company or any of the
Subsidiaries which is not in the disclosure schedules hereto which is necessary
in order to make the representations and warranties made, in light of the
circumstances under which they were made, not misleading.

               4.7. Litigation.
                    ----------

               There is no action, suit, proceeding, investigation or claim
pending or, to the knowledge of the Company or the Subsidiaries, threatened in
law, equity or otherwise before any court, administrative agency or arbitrator
which (i) questions the validity of this Agreement, the Series B Articles
Supplementary, the Stockholders' Agreement, the Registration Rights Agreement,
the A-2 Articles Supplementary, the Shares or the Conversion Shares or any
action taken or to be taken pursuant hereto or thereto, (ii) might adversely
affect the right, title or interest of any Purchaser to the Shares or the
Conversion Shares or (iii) might result in a material adverse change in the
assets, properties, liabilities, business, affairs, results of operations,
condition (financial or otherwise) or prospects of the Company.

               4.8. Taxes.
                    -----

               Each of the Company and each Subsidiary has duly and timely filed
all Tax Returns required to be filed by it, and each such Tax Return correctly
and completely reflects the Tax liability and all other information required to
be reported thereon. Each of the Company and each Subsidiary has paid or caused
to be paid all Taxes (whether or not reflected on such Tax Returns) that are due
and payable. The provision for Taxes due by the Company and its Subsidiaries in
the most recent financial statement included in the Disclosure Material is
sufficient for all unpaid Taxes, being current Taxes not yet due and payable, of
the Company and its Subsidiaries, as of the end of the period covered by such
financial statement, and as of the Initial Closing Date and each Subsequent
Closing Date, such provision, as adjusted for the passage of time through the
Initial Closing Date and each Subsequent Closing Date, will be sufficient for
the then-accrued and unpaid Taxes not yet due and payable of the Company and its
Subsidiaries. No Tax Returns of the Company or any Subsidiary have ever been
audited by any Taxing Authority, there is no dispute concerning any Tax
liability of the Company or any Subsidiary either threatened, claimed or raised
by any Taxing Authority, and the Company does not expect any Taxing Authority to
assess additional Taxes against or in respect of it or any Subsidiary for any
past period. The Company and each Subsidiary has withheld and paid, or, if not
yet due for payment, set aside in accounts for such purposes, all Taxes required
to have been withheld in connection with amounts paid or owing to any employee,
creditor, independent contractor or other third party. Other than stamp taxes,
the Company and its Subsidiaries have no liability for Taxes of any Person other
than the Company and its Subsidiaries (i) as a transferee or successor, (ii) by
contract, or (iii) otherwise.

                                      -20-
<PAGE>

               4.9. ERISA.
                    -----

               (a)  All Benefit Plans are listed in Section 4.9(a) of Schedule
4.9, and copies of all documentation relating to such Benefit Plans have been
delivered to or made available for review by Purchasers (including, without
limitation, copies of written Benefit Plans, written descriptions of oral
Benefit Plans, summary plan descriptions, trust agreements, the three most
recent annual returns, employee communications, and IRS determination letters).

               (b)  Each Benefit Plan has at all times been maintained and
administered in all material respects in accordance with its terms and with the
requirements of all applicable law, including, without limitation, ERISA and the
Code, and each Benefit Plan intended to qualify under section 401(a) of the Code
has at all times since its adoption been so qualified, and each trust which
forms a part of any such plan has at all times since its adoption been
tax-exempt under section 501(a) of the Code.

               (c)  No Benefit Plan has incurred any "accumulated funding
deficiency" within the meaning of section 302 of ERISA or section 412 of the
Code, and the "amount of unfunded benefit liabilities" within the meaning of
section 4001(a)(18) of ERISA does not exceed zero with respect to any Benefit
Plan subject to Title IV of ERISA.

               (d)  No "reportable event" (within the meaning of section 4043 of
ERISA) has occurred with respect to any Benefit Plan since the effective date of
said section 4043 for which notice is not waived under the regulations issued
pursuant to said section 4043.

               (e)  No Benefit Plan is a multiemployer plan within the meaning
of section 3(37) of ERISA.

               (f)  No direct, contingent or secondary liability has been
incurred or is expected to be incurred by the Company or any ERISA Affiliate
under Title IV of ERISA to any party with respect to any Benefit Plan.

               (g)  Neither the Company nor any ERISA Affiliate has incurred any
liability for any tax imposed under Chapter 43 of the Code or any liability
under Part 5 of Title I of ERISA.

               (h)  No benefit under any Benefit Plan, including, without
limitation, any severance or parachute payment plan or agreement, will be
established or become accelerated, vested or payable by reason of any
transaction contemplated under this Agreement.

               (i)  No Benefit Plan provides health or death benefit coverage
beyond the termination of an employee's employment, except as required by Part 6
of Subtitle B of Title I of ERISA or section 4980B of the Code or any State laws
requiring continuation of benefits coverage following termination of employment.

                                      -21-
<PAGE>

               (j)   No suit, action or other litigation (excluding claims for
benefits incurred in the ordinary course of plan activities) has been brought
or, to the knowledge of the Company or any Subsidiary, threatened against or
with respect to any Benefit Plan and there are no facts or circumstances known
to the Company or any Subsidiary that could reasonably be expected to give rise
to any such suit, action or other litigation.

               (k)   All contributions to Benefit Plans that were required to be
made under such Benefit Plans have been made, and all benefits accrued under any
unfunded Benefit Plan have been paid, accrued or otherwise adequately reserved
in accordance with GAAP, all of which accruals under unfunded Benefit Plans are
as disclosed in Schedule 4.9, and each of the Company and each Subsidiary has
performed all material obligations required to be performed under all Benefit
Plans.

               (l)   The execution, delivery and performance of this Agreement,
the Stockholders' Agreement and the Registration Rights Agreement and the
consummation of the transactions contemplated hereby and thereby (including,
without limitation, the offer, issue and sale by the Company, and the purchase
by the Purchaser of the Shares and the Conversion Shares) will not involve any
"prohibited transaction" within the meaning of ERISA or the Code that could
subject the Company or any ERISA Affiliate to a tax, penalty or liability under
ERISA or the Code.

               4.10. Legal Compliance.
                     ----------------

               (a)   Each of the Company and each Subsidiary has complied with
all applicable laws, rules, regulations, orders, licenses, judgments, writs,
injunctions, decrees or demands, except to the extent that failure to so comply
would not materially adversely affect the assets, properties, liabilities,
business affairs, results of operations, condition (financial or otherwise) or
prospects of the Company on a consolidated basis.

               (b)   There are no adverse orders, judgments, writs, injunctions,
decrees, or demands of any court or administrative body, domestic or foreign, or
of any other governmental agency or instrumentality, domestic or foreign,
outstanding against the Company or any Subsidiary.

               4.11. Outstanding Securities.
                     ----------------------

               Schedule 4.11 hereto correctly and completely lists the
outstanding securities (as defined in the Securities Act) of the Company and the
Subsidiaries. All securities of the Company have been offered, issued, sold and
delivered in compliance with, or pursuant to exemptions from, all applicable
federal and state laws, and the rules and regulations of federal and state
regulatory bodies governing the offering, issuance, sale and delivery of
securities.

                                      -22-
<PAGE>

          4.12.  Intellectual Property and Other Rights.
                 --------------------------------------

          (a)    Each of the Company and each Subsidiary owns or possesses all
patents, patent rights, trademarks, trademark rights, trade names, trade name
rights and copyrights (collectively, the "Intellectual Property") (each of which
                                          ---------------------
is listed on Schedule 4.12(a) hereto), and all rights and privileges with
respect to any of the foregoing, as are necessary for the conduct of its
business as now being conducted and as proposed to be conducted. To the best of
the Company's knowledge, the rights of (and use by) each of the Company and each
Subsidiary with respect to such Intellectual Property or any other patents,
patent rights, trademarks, trademark rights, trade names, trade name rights or
copyrights do not conflict with or infringe any rights of others in a manner
which might materially and adversely affect the assets, properties, liabilities,
business, affairs, results of operations, condition (financial or otherwise) or
prospects of the Company, and no such claim of conflict or infringement has been
asserted by any Person.

          (b)    Each of the Company and each Subsidiary owns and holds all
franchises, licenses, permits, consents, approvals and other authority,
governmental or otherwise (collectively, the "Licenses") (each of which is
                                              --------
listed on Schedule 4.12(b) hereto), and all rights and privileges with respect
to any of the foregoing, as are materially necessary for the conduct of its
business as now being conducted and as proposed to be conducted, except to the
extent that failure to so own or hold is not reasonably likely to materially
adversely affect the assets, properties, liabilities, business, affairs, results
of operations, condition (financial or otherwise) or prospects of the Company.
Neither the Company nor any Subsidiary is in default in any material respect
under any of such Licenses. To the best of the Company's knowledge, the rights
of (and use by) each of the Company and each Subsidiary with respect to such
Licenses or any other franchise, license, permit, consent, approval or other
authority do not conflict with or infringe any rights of others in a manner
which might materially and adversely affect the assets, properties, liabilities,
business, affairs, results of operations, condition (financial or otherwise) or
prospects of the Company, and no such claim of conflict or infringement has been
asserted by any Person.

          4.13.  Key Employees.
                 -------------

          Each of the Company and each Subsidiary has good relationships with
its employees and has not had and does not expect any substantial labor
problems. Neither the Company nor any Subsidiary has any knowledge as to any
intentions of any key employee to leave the employ of the Company or any
Subsidiary. The employees of the Company and each Subsidiary are not and have
never been represented by any labor union, and no collective bargaining
agreement is binding and in force against the Company or any Subsidiary or
currently being negotiated by the Company or any Subsidiary.

          4.14.  Properties.
                 ----------

          Neither the Company nor any Subsidiary owns any real property. Other
than Permitted Liens, each of the Company and each Subsidiary has good and
marketable title to each

                                      -23-
<PAGE>

of its other properties other than real property or leased properties. Certain
real property used by the Company or the Subsidiaries in the conduct of their
respective businesses is held under lease (as identified on Schedule 4.14
hereto), and neither the Company nor any Subsidiary is aware of any pending or
threatened claim or action by any lessor of any such property to terminate any
such lease. All such leases are valid and in full force and effect, and none of
such leases is in default. None of the properties owned or leased by the Company
or any Subsidiary is subject to any Liens which could materially and adversely
affect the assets, properties, liabilities, business, affairs, results of
operations, condition (financial or otherwise) or prospects of the Company on a
consolidated basis.

          4.15.  Suppliers and Customers.
                 -----------------------

          (a)    Each of the Company and each Subsidiary has adequate sources of
supply for its business as currently conducted and as proposed to be conducted.
Each has good relationships with all of its material sources of supply of goods
and services and each does not anticipate any material problem with any such
material sources of supply.

          (b)    Neither the Company nor any Subsidiary has any knowledge that
the customer base of the Company and its Subsidiaries might materially decrease.

          4.16.  Environmental Compliance.
                 ------------------------

          (a)    To the knowledge of the Company or any Subsidiaries, there is
no Hazardous Material on, about, under or in, any property, real or personal, in
which the Company or any Subsidiary has or has formerly had any interest in an
amount or concentration which could constitute a violation that would result in
a liability in excess of $25,000 or otherwise result in a liability in excess of
$25,000 to the Company or any Subsidiary under any applicable Environmental Law.

          (b)    There is no (and has not been any) off-site use, handling,
storage or disposal or on-site use, handling, storage or disposal of Hazardous
Material at or from any locations currently or formerly owned, leased, operated
or occupied by the Company or any Subsidiary as a result of which use, handling,
storage or disposal the Company could incur a material liability or obligation
under any applicable Environmental Law.

          (c)    Neither the Company nor any Subsidiary has received any verbal
or written notice, citation, subpoena, summons, complaint or other
correspondence or communication from any person with respect to the presence of
any non-indigenous Hazardous Material upon, into, beneath, or emanating from or
affecting any of the real property (including improvements) currently or
formerly owned or occupied by the Company that could result in a liability to
the Company or any Subsidiary in excess of $25,000.

          (d)    There has been no intentional or unintentional, gradual or
sudden, release, disposal or discharge by the Company or, to the Company's
knowledge, by others, upon, into or

                                      -24-
<PAGE>

beneath the real property (including improvements) currently or formerly owned
or occupied by the Company or any Subsidiary that has caused or is causing soil
or groundwater contamination which, under applicable Environmental Laws could
require investigation or remediation or could otherwise create a material
liability or obligation on the part of the Company or any Subsidiary.

          (e)    The Company and its Subsidiaries are in material compliance
with all applicable Environmental Laws, has received all required Environmental
Permits and is in material compliance with the terms and conditions of all
Environmental Permits.

          (f)    To the best knowledge of the Company and its Subsidiaries after
reasonable inquiry, there are no Liens arising under or pursuant to any
Environmental Law ("Environmental Liens") relating to any real property
                    -------------------
(including improvements thereon) currently owned by the Company or any
Subsidiary.

          (g)    There are no (i) underground storage tanks, (ii)
polychlorinated biphenyl containing equipment or (iii) asbestos-containing
materials at any site currently owned, operated or leased by the Company or any
Subsidiary, except in compliance with all applicable Environmental Laws.

          4.17.  No Burdensome Agreements.
                 ------------------------

                 To the best of the knowledge of the Company and its
Subsidiaries, other than this Agreement and the related documents, the Company
is not a party to any contract or agreement with any Affiliate of the Company or
of any Subsidiary, the terms of which are materially less favorable to the
Company or such Subsidiary, as the case may be, than those which might have been
obtained, at the time such contract or agreement was entered into, from a person
who was not such an Affiliate.

          4.18.  Offering of Shares.
                 ------------------

          The Company, any Subsidiary, any agent or any other person acting on
its behalf, directly or indirectly, (i) has not offered and will not offer any
of the Shares or any similar security of the Company (A) by any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) or (B) for sale to or solicited offers to buy any thereof
from, or otherwise approached or negotiated with respect thereto with, any
person other than (x) the Purchasers and (y) not more than five other investors,
each of which the Company reasonably believes was an "accredited investor"
within the meaning of Regulation D under the Securities Act or (ii) has not done
and will not cause to be done (or has not omitted to do or caused to be done or
omitted) any act which act (or which omission) would result in bringing the
issuance or sale of the Shares within the provisions of Section 5 of the
Securities Act or the filing, notification or reporting provisions of any state
securities laws.

                                      -25-
<PAGE>

          4.19.  SEC Reports.
                 -----------

          The Company has filed all proxy statements, reports and other
documents required to be filed by it under the Securities Exchange Act. The
Company has furnished the Purchaser with copies of (i) its Annual Report on Form
10-K for the fiscal year ended December 31, 1999, (ii) its Quarterly Reports on
Form 10-Q for the fiscal quarters ended March 31, 2000, June 30, 2000 and
September 30, 2000 and (iii) its Proxy Statement dated May 25, 2000
(collectively, the "SEC Reports"). Each SEC Report was in substantial compliance
                    -----------
with the requirements of its respective form and none of the SEC Reports, nor
the financial statements (and the notes thereto) included in the SEC Reports, as
of their respective dates, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

          4.20.  Indebtedness.
                 ------------

          Schedule 4.20 hereto sets forth (i) the amount of all Indebtedness of
the Company and any Subsidiary outstanding as of September 30, 2000 (and there
is no additional material amount of Indebtedness of the Company outstanding
other as set forth on such Schedule 4.20), (ii) any Lien with respect to such
Indebtedness and (iii) a description of each instrument or agreement governing
such Indebtedness. The Company has made available to the Purchaser a complete
and correct copy of each such instrument or agreement (including all amendments,
supplements or modifications thereto). No material default exists with respect
to or under any such Indebtedness or any instrument or agreement relating
thereto and no event or circumstance exists with respect thereto that (with
notice or the lapse of time or both) could give rise to such a default.

          4.21.  Use of Proceeds.
                 ---------------

          The Company will use the proceeds realized from the sale of the Shares
to fund future development opportunities and for working capital purposes. No
portion of such proceeds will be used for the purpose, whether immediate,
incidental or ultimate, of purchasing or carrying, within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System, as amended
from time to time, any "margin stock" as defined in said Regulation U, or any
"margin stock" as defined in Regulation G of the Board of Governors of the
Federal Reserve System, as amended from time to time, or for the purpose of
purchasing, carrying or trading in securities within the meaning of Regulation T
of the Board of Governors of the Federal Reserve System, as amended from time to
time, or for the purpose of reducing or retiring any indebtedness which both (i)
was originally incurred to purchase any such margin stock or other securities
and (ii) was directly or indirectly secured by such margin stock or other
securities. None of the assets of the Company or any Subsidiary includes any
such "margin stock." Neither the Company nor any Subsidiary has any present
intention of acquiring any such "margin stock."

                                      -26-
<PAGE>

          4.22.  Other Names.
                 -----------

          Except as listed on Schedule 4.22, the businesses previously or
presently conducted by the Company and any Subsidiary have not been conducted
under any corporate, trade or fictitious name.

          4.23.  Brokers.
                 -------

          Except as set forth in Schedule 4.23, no broker, finder or investment
banker or other party is entitled to any brokerage, finder's or other similar
fee or commission in connection with this Agreement, the Stockholders'
Agreement, the Registration Rights Agreement or the Series B Articles
Supplementary or any of the transactions contemplated hereby or thereby, based
upon arrangements made by or on behalf of the Company or any Subsidiary or any
of their respective Affiliates.

SECTION 5.REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

          Each Purchaser represents and warrants to the Company as follows:

          5.1.   Corporate Power and Authority.
                 -----------------------------

          The Purchaser has all requisite power, authority and legal right to
execute, deliver, enter into, consummate the transactions contemplated by and
perform its obligations under this Agreement, the Stockholders' Agreement and
the Registration Rights Agreement. The execution, delivery and performance of
this Agreement, the Stockholders' Agreement and the Registration Rights
Agreement by the Purchaser have been duly authorized by all required corporate
and other actions. The Purchaser has duly executed and delivered this Agreement,
the Stockholders' Agreement and the Registration Rights Agreement, and this
Agreement, the Stockholders' Agreement and the Registration Rights Agreement
constitute the legal, valid and binding obligations of the Purchaser enforceable
against the Purchaser in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to the rights of creditors generally or under general principles of
equity and except as rights to indemnity and contribution may be limited by
applicable law.

          5.2.   Investment Intent.
                 -----------------

          The Purchaser is capable of evaluating the risk of its investment in
the Shares being purchased by it and is able to bear the economic risk of such
investment. The Purchaser is purchasing the Shares to be purchased by it for its
own account for investment and not with a present view to any distribution
thereof in violation of applicable securities laws; provided, however, that the
                                                    --------  -------
Purchaser may transfer record and/or beneficial ownership of the Shares or the
Conversion Shares to one or more Affiliates or officers or employees of the
Purchaser or its Affiliates, in all cases in compliance with federal securities
laws. It is understood that the

                                      -27-
<PAGE>

disposition of the Purchaser's property shall at all times be within the
Purchaser's control. If the Purchaser should in the future decide to dispose of
any of its Shares or Conversion Shares, it is understood that it may do so only
in compliance with the Securities Act, applicable securities laws and this
Agreement. The Purchaser is an "accredited investor" as defined in Rule 501(a)
under the Securities Act.

          5.3.   Brokers.
                 -------

          Except as set forth in Schedule 5.3, no broker, finder or investment
banker or other party is entitled to any brokerage, finder's or other similar
fee or commission in connection with this Agreement, the Stockholders'
Agreement, the Registration Rights Agreement or the Series B Articles
Supplementary or any of the transactions contemplated hereby or thereby, based
upon arrangements made by or on behalf of the Purchaser or any Subsidiary or any
of their respective Affiliates.

SECTION 6.RESTRICTIONS ON TRANSFER

          Each Purchaser agrees that it will not sell or otherwise dispose of
any Shares or Conversion Shares unless such Shares or Conversion Shares have
been registered under the Securities Act and, to the extent required, under any
applicable state securities laws, or pursuant to an applicable exemption from
such registration requirements. The Company may endorse on all certificates
representing Shares or Conversion Shares a legend stating or referring to such
transfer restrictions; provided, that no such legend shall be endorsed on any
                       --------
Share certificates which, when issued, are no longer subject to the restrictions
of this Section 6.

SECTION 7.INFORMATION AS TO THE COMPANY

          The Company covenants and agrees as follows:

          7.1.   Financial Information.
                 ---------------------

          (a)    The Company will maintain, and cause each Subsidiary to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
accordance with GAAP.

          (b)    So long as a Purchaser or a Permitted Transferee owns at least
20,000 Shares, the Company will deliver to (I) such Purchaser and (II) each such
Permitted Transferee, the following:

                 (i)    as soon as practicable but not later than five (5)
Business Days after their issuance, and in any event within ninety (90) days
after the close of each fiscal year of the Company, (A) a consolidated balance
sheet of the Company and its Subsidiaries as of the end

                                      -28-
<PAGE>

of such fiscal year and (B) consolidated statements of operations, stockholders'
equity and cash flows of the Company and its Subsidiaries for such fiscal year,
in each case setting forth in comparative form the corresponding figures for the
preceding fiscal year, all such balance sheets and statements to be in
reasonable detail and certified without qualification by Ernst & Young LLP or
any other "Big Five" independent public accounting firm selected by the Company,
and such statements shall be accompanied by a management analysis of any
material differences between the results for such fiscal year and the
corresponding figures for the preceding year; the Company's Annual Report on
Form 10-K shall satisfy such requirement provided that it is in compliance with
all applicable requirements of the SEC and is certified by a "Big Five"
accounting firm;

                 (ii)   as soon as practicable, copies (A) of all financial
statements, proxy material or reports sent to the Company's or any Subsidiary's
stockholders, (B) of any public press releases and (C) of all reports or
registration statements filed with the Commission pursuant to the Securities Act
or the Securities Exchange Act;

                 (iii)  as soon as practicable and in any event within forty-
five (45) days after the close of each of the first three (3) fiscal quarters of
the Company, (A) a consolidated balance sheet of the Company and its
Subsidiaries as of the end of such fiscal quarter, (B) consolidated statements
of operations, stockholders' equity and cash flows of the Company and its
Subsidiaries for the portion of the fiscal year ended with the end of such
quarter, in each case in reasonable detail, certified by (I) the Chief Financial
Officer, (II) the Chief Executive Officer or (III) the President of the Company
and setting forth in comparative form the corresponding figures for the
comparable period one year prior thereto (subject to normal year-end
adjustments), together with a management analysis of any material differences
between such results and the corresponding figures for such prior period and (C)
a certificate of (I) the Chief Financial Officer, (II) the Chief Executive
Officer or (III) the President certifying the Company's compliance with the
covenants contained in Section 9 of this Agreement; the Company's Quarterly
Report on Form 10-Q shall satisfy such requirement provided that it is in
compliance with all applicable requirements of the SEC;

                 (iv)   as soon as practicable but not later than thirty (30)
days after the end of each month other than the final month of the Company's
fiscal year, (A) an unaudited consolidated balance sheet of the Company and its
Subsidiaries as at the end of such month and (B) unaudited consolidated
statements of operations, stockholders' equity and cash flows of the Company and
its Subsidiaries for the portion of the fiscal year ended with the end of such
month, in each case in reasonable detail, setting forth in comparative form the
corresponding figures for the corresponding period one year prior thereto
(subject to normal year-end adjustments);

                 (v)    as soon as practicable and without duplication of any of
the above items, any other materials furnished to the Company's Board of
Directors or to holders of the Company's capital stock or Indebtedness,
including, without limitation, any compliance certificates furnished in respect
of such Indebtedness, which shall be delivered to the Series B Designee(s) and
the Permitted Transferee Designee(s); and

                                      -29-
<PAGE>

                 (vi)   as soon as practicable, such other information as
may reasonably be requested by (I) the Purchasers or (II) any Permitted
Transferee.

          (c)     The Company will deliver to each member of the Company's Board
of Directors and each observer to the Company's Board of Directors appointed
pursuant to Section 3(a) of the Stockholders' Agreement, as soon as practicable
(and in the case of (iii), prior to the end of each fiscal year) and without
duplication of any of the items listed below, the following:

                 (i)    copies of any annual, special or interim audit
reports or management or comment letters with respect to the Company or its
Subsidiaries or their operations submitted to the Company by independent public
accountants;

                 (ii)   copies of summary financial information prepared on a
quarterly basis regarding the Company on a consolidated basis as presented to
the Board and any other summary financial information otherwise prepared;

                 (iii)  copies of the annual budget and business plan for the
next fiscal year;

                 (iv)   copies of all formal communications, from time to time,
to directors of the Company (including without limitation all information
furnished to such directors in connection with such communications), and copies
of minutes of meetings of the Board of Directors (and of any executive
committees thereof) of the Company;

                 (v)    notice of default under any material agreement, contract
or other instrument to which the Company or any of its Subsidiaries is a party
or by which any of them is bound;

                 (vi)   notice of any action or proceeding which has been
commenced or threatened against the Company or any of its Subsidiaries and
which, if adversely determined, would have, individually or in the aggregate, a
material adverse effect on the assets, properties, liabilities, business,
affairs, results of operations, condition (financial or otherwise) or prospects
of the Company on a consolidated basis; and

                 (vii)  copies of all filings made with the Commission.

          (d)    All such financial statements referred to in this Section 7.1
shall be prepared in accordance with GAAP (except for any change in accounting
principles specified in the accompanying certificate, in the financial
statements themselves or required by GAAP, and except that any interim financial
statements may omit notes and may be subject to normal year-end adjustments).

                                      -30-
<PAGE>

          (e)    Without limiting the foregoing provisions of this Section 7.1,
the Company agrees that, if requested in writing by any holder of Shares, it
will not deliver to such holder (until otherwise instructed by such holder) (x)
any non-public information or non-public materials regarding the Company or any
Subsidiary (whether described in this Section 7.1 or otherwise) and (y) any
information (whether or not included in clause (x)) which such holder specifies
that it does not want to receive. The Company shall comply with any such request
with respect to each person entitled to information hereunder, until instructed
otherwise by the then holder of such Shares.

          7.2.   Communication with Accountants.
                 ------------------------------

                 The Company (on behalf of itself and each of its Subsidiaries)
hereby authorizes (i) each Purchaser to communicate directly with the
independent certified public accountants for the Company or any Subsidiary and
(ii) such accountants to disclose to such Purchaser any and all financial
statements and any other information of any kind that they may have with respect
to the assets, properties, liabilities, business, affairs, results of
operations, condition (financial or otherwise) or prospects of the Company or
any Subsidiary; provided that (a) such Purchaser in good faith and based upon
                --------
reasonable assumptions has financial concerns regarding the Company that causes
it to desire to communicate with such accountants and (b) such Purchaser must
first notify the Company of its intention to speak with such accountants and
permit the Company to participate in such conversation if the Company desires to
do so. The Company shall deliver a letter addressed to such accountants
instructing them to comply with the provisions of this Section 7.2.

          7.3.   Inspection.
                 ----------

          The Company will permit (i) each Purchaser, (ii) any Permitted
Transferee, and (iii) any authorized representative of each Purchaser or such
Permitted Transferee, to visit and inspect any of the properties of the Company
and its Subsidiaries, to examine their respective books and records and to
discuss with their officers their books and records and the assets, properties,
liabilities, business, affairs, results of operations, condition (financial or
otherwise) or prospects of the Company or any Subsidiary, all at such reasonable
times, all on reasonable notice and as often as may be reasonably requested.

          7.4.   Notices.
                 -------

          The Company will give notice to all holders of Shares promptly
after it learns, other than by notice from all of such holders, of the existence
of any of the following:

          (a)    any default under any Indebtedness (or under any indenture,
mortgage or other agreement relating to any Indebtedness) which Indebtedness is
in an aggregate principal amount exceeding $100,000 (or the equivalent thereof
in other currencies) in respect of which the Company or any Subsidiary is
liable;

                                      -31-
<PAGE>

          (b)    any action or proceeding which has been commenced or threatened
against the Company or any of its Subsidiaries and which, if adversely
determined, would have, individually or in the aggregate, a material adverse
effect on the assets, properties, liabilities, business, affairs, results of
operations, condition (financial or otherwise) or prospects of the Company on a
consolidated basis or the ability of the Company to perform its obligations
under this Agreement, the Stockholders' Agreement, the Registration Rights
Agreement, Series B Articles Supplementary or the A-2 Articles Supplementary;

          (c)    any dispute which exists between the Company or any of its
Subsidiaries and any governmental regulatory body which, in the reasonable
opinion of the Company is reasonably likely to, individually or in the
aggregate, materially adversely affect the normal business operations of the
Company or any of its Subsidiaries or the assets, properties, liabilities,
business, affairs, results of operations, condition (financial or otherwise) or
prospects of the Company on a consolidated basis or the ability of the Company
to perform its obligations under this Agreement, the Stockholders' Agreement,
the Registration Rights Agreement or the Series B Articles Supplementary or the
A-2 Articles Supplementary; and

          (d)    if any (i) "reportable event" (as such term is described in
Section 4043(c) of ERISA) has occurred; or (ii) "accumulated funding deficiency"
(within the meaning of Section 412(a) of the Code or Section 302 of ERISA) has
been incurred with respect to a Pension Plan maintained or contributed to (or
required to be maintained or contributed to) by the Company or any ERISA
Affiliate that is subject to the funding requirements of ERISA and/or the Code
or that an application may be or has been made to the Secretary of the Treasury
for a waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period under
Section 412 of the Code or Section 302 of ERISA, in each case with respect to
such a Pension Plan; or (iii) Pension Plan maintained or contributed to (or
required to be maintained or contributed to) by the Company or any ERISA
Affiliate has been terminated, reorganized, petitioned or declared insolvent
under Title IV of ERISA; or (iv) Pension Plan maintained or contributed to (or
required to be maintained or contributed to) by the Company or any ERISA
Affiliate has an unfunded current liability giving rise to a lien under ERISA or
the Code; or (v) proceeding has been instituted pursuant to Section 515 of ERISA
to collect a delinquent contribution to a Pension Plan maintained or contributed
to (or required to be maintained or contributed to) by the Company or any ERISA
Affiliate; or (vi) of the Company or its ERISA Affiliates will or may incur any
liability (including any contingent or secondary liability) to or on account of
the termination or withdrawal from a Pension Plan maintained or contributed to
(or required to be maintained or contributed to) by the Company or any ERISA
Affiliate; or (vii) "prohibited transaction" (as such term is defined in Section
406 of ERISA or Section 4975 of the Code) in connection with an "employee
benefit plan" (as defined in Section 3(3) of ERISA), maintained or contributed
to (or required to be maintained or contributed to) by the Company or any ERISA
Affiliate that could subject the Company or any ERISA Affiliate to a tax penalty
or liability under ERISA or the Code.

                                      -32-
<PAGE>

          (e)    if any proposals, inquiries or expressions of interest are
received by, any information is requested from, or any negotiations or
discussions are sought to be initiated or continued with the Company or any of
its Subsidiaries or its representatives, in each case in connection with any
Takeover Proposal or the possibility or consideration by a third party of making
a Takeover Proposal ("Takeover Proposal Interest") indicating, in connection
                      --------------------------
with such notice, the name of the Person indicating such Takeover Proposal
Interest and the terms and conditions of any proposals or offers, and continuing
to keep the Purchasers informed, on a current basis, of the status and terms of
any Takeover Proposal Interest; provided that the timing and content of such
                                --------
notice shall be the same as that which is provided to the Board of Directors.
The Company agrees that it will take the necessary steps promptly to inform the
Persons referred to in the first sentence hereof of the obligations undertaken
in this Section 7.4(e).

Such notice (i) with respect to subsection (a) above, shall specify the nature
and period of existence of any such default and what the Company proposes to do
with respect thereto and (ii) with respect to subsections (b), (c) or (d) above,
shall specify the nature of any such matter referred to in such clause, what
action the Company proposes to take with respect thereto and what action any
other relevant Person is taking or proposes to take with respect thereto.

          7.5.   Confidentiality Agreement.
                 -------------------------

          The Company's obligation to provide any non-public information under
this Section 7 or otherwise to any person other than members of its Board of
Directors shall be subject to prior execution of a confidentiality agreement
between the Company and the recipient of such information as more fully set
forth in the form attached hereto as Exhibit E (the "Confidentiality
                                                     ---------------
Agreement").
---------
SECTION 8.AFFIRMATIVE COVENANTS

          The Company covenants and agrees as follows:

          8.1.   Maintenance of Existence, Properties and Franchises; Compliance
                 ---------------------------------------------------------------
                 with Law; Taxes; Insurance.
                 --------------------------

          The Company will, and will cause each Subsidiary to:

          (a)    maintain their respective corporate existence, rights and other
franchises in full force and effect;

          (b)    maintain their respective tangible assets in good repair,
working order and condition so far as necessary or advantageous to the proper
carrying on of their respective businesses;

                                      -33-
<PAGE>

          (c)   comply with all applicable laws and with all applicable orders,
rules, rulings, certificates, licenses, regulations, demands, judgments, writs,
injunctions and decrees, provided, that such compliance shall not be necessary
                         --------
so long as (i) the applicability or validity of any such law, order, rule,
ruling, certificate, license, regulation, demand, judgment, writ, injunction or
decree shall be contested in good faith by appropriate proceedings and (ii)
failure to so comply will not have a material adverse effect on the assets,
properties, liabilities, business, affairs, results of operations, condition
(financial or otherwise) or prospects of the Company on a consolidated basis;

          (d)   pay promptly when due all Taxes imposed upon its properties,
assets or income and all claims or indebtedness (including, without limitation,
vendor's, workmen's and like claims) which might become a lien upon such
properties or assets; provided, that payment of any such Tax shall not be
necessary so long as (i) the applicability or validity thereof shall be
contested in good faith by appropriate proceedings and a reserve, if
appropriate, shall have been established with respect thereto and (ii) failure
to make such payment will not have a material adverse effect on the assets,
properties, liabilities, business, affairs, results of operations, condition
(financial or otherwise) or prospects of the Company on a consolidated basis;
and

          (e)   keep adequately insured, by financially sound and reputable
insurers of nationally recognized stature, all its properties of a character
customarily insured by entities similarly situated, against loss or damage of
the kinds and in amounts customarily insured against by such entities and with
such deductibles or coinsurance as is customary.

          8.2.  Office for Payment, Exchange and Registration; Location of
                ----------------------------------------------------------
                Office; Notice of Change of Name or Office.
                ------------------------------------------

          (a)   So long as any of the Shares is outstanding, the Company will
maintain an office or agency where Shares may be presented for redemption,
exchange, conversion, exercise or registration of transfer as provided in this
Agreement. Such office or agency initially shall be the office of the Company
specified in Section 18 hereof, subject to Section 8.2(b).

          (b)   The Company shall give each holder of Shares at least twenty
(20) days' prior written notice of any change in (i) the name of the Company as
then in effect or (ii) the location of the office of the Company required to be
maintained under this Section 8.2.

          8.3.  Fiscal Year.
                -----------

          The fiscal year of the Company and its Subsidiaries for tax,
accounting and any other purposes shall end on December 31 of each calendar
year.

          8.4.  Environmental Matters.
                ---------------------

          (a)    The Company and each Subsidiary shall keep and maintain any
property either owned leased, operated or occupied by the Company or any
Subsidiary free and clear of

                                      -34-
<PAGE>

any Environmental Liens, and the Company and each Subsidiary, as the case may
be, shall keep all such property free of Hazardous Material contamination and in
compliance with all applicable Environmental Laws and the terms and conditions
of any Environmental Permits; provided, however, that the Company or any
                              --------  -------
Subsidiary shall have the right at its cost and expense, and acting in good
faith, to contest, object or appeal by appropriate legal proceeding the validity
of any Environmental Lien. The contest, objection or appeal with respect to the
validity of an Environmental Lien shall suspend the Company's obligation to
eliminate such Environmental Lien under this paragraph pending a final
determination by appropriate administrative or judicial authority of the
legality, enforceability or status of such Environmental Lien, provided that the
following conditions are satisfied: (i) contemporaneously with the commencement
of such proceedings, the Company shall give written notice thereof to each
Purchaser and its Transferees while they hold Shares or Conversion Shares; and
(ii) if under applicable law any real property or improvements thereon are
subject to sale or forfeiture for failure to satisfy the Environmental Lien
prior to a final determination of the legal proceedings, the Company or such
Subsidiary must successfully move to stay such sale, forfeiture or foreclosure
pending final determination of the Company's (or Subsidiary's) action; and (iii)
the Company or such Subsidiary must, if requested, furnish to the Purchasers and
their Transferees, as a group, while they hold Shares or Conversion Shares a
good and sufficient bond, surety, letter of credit or other security
satisfactory to such holders equal to the amount (including any interest and
penalty) secured by the Environmental Lien.

               (b)   The Company will, by administrative or judicial process,
enforce the obligations of any other Person who is potentially liable for
damages, contribution or other relief in connection with any violation of
Environmental Laws, including, but not limited to, asbestos abatement, Hazardous
Material remediation or off-site or on-site disposal.

               (c)   The Company will defend, indemnify and hold harmless each
current, former and future holder of Shares or Conversion Shares, its employees,
officers, directors, stockholders, partners, financial and legal representatives
and assigns, from and against any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits and claims, joint or several, and any
costs, disbursements and expenses (including attorneys' fees and expenses and
costs of investigation) of whatever kind or nature, known or unknown, contingent
or otherwise asserted against, imposed on, or sustained by, them, arising out of
or in any way related to (i) the presence, disposal, release, removal, discharge
or storage of any Hazardous Material upon, into, from or affecting any real
property (including improvements) currently or formerly owned, leased, operated
or occupied by or on behalf of the Company or any Subsidiary or any predecessor
thereof; (ii) any judicial or administrative action, suit or proceeding, actual
or threatened, relating to Hazardous Material upon, in, from or affecting any
real property (including improvements) currently or formerly owned, leased,
operated or occupied by the Company for which the Company or any Subsidiary
could be liable; (iii) any violation of any Environmental Law or Environmental
Permit, by the Company or any Subsidiary or any of their agents, tenants,
subtenants or invitees; (iv) the imposition of any Environmental Lien for the
recovery of costs expended in the investigation, study or remediation of any
environmental liability of (or asserted against) the Company or any Subsidiary;
and (v) any liability arising out

                                      -35-
<PAGE>

of or related to the off-site shipment, transportation, disposal, treatment,
handling or disposal of Hazardous Materials by or on behalf of the Company or
any predecessor thereof. This Section 8.4(c) and Section 8.4(d) shall survive
any payment, conversion or transfer of Shares and any termination of this
Agreement.

          (d)   To the extent that the Company or any Subsidiary is strictly
liable without regard to fault under any Environmental Law, the Company's
obligations to the holders of Shares or Conversion Shares under any of the
indemnification provisions of this Agreement shall likewise be strict without
regard to fault with respect to the violation of any Environmental Law which
results in any liability to any of the indemnified persons referred to in
Section 8.4(c).

          8.5.  Reservation of Shares.
                ---------------------

          There have been reserved, and the Company shall at all times keep
reserved, free from preemptive rights, out of its authorized Common Stock a
number of shares of Common Stock sufficient to provide for the exercise of the
conversion rights provided in Section 5 of the Series B Articles Supplementary.

          8.6.  Securities Exchange Act Registration.
                ------------------------------------

          (a)   the Company will maintain effective a registration statement
(containing such information and documents as the Commission shall specify and
otherwise complying with the Securities Exchange Act), under Section 12(b) or
Section 12(g), whichever is applicable, of the Securities Exchange Act, with
respect to the Common Stock of the Company, and the Company will file on time
such information, documents and reports as the Commission may require or
prescribe for companies whose stock has been registered pursuant to such Section
12(b) or Section 12(g), whichever is applicable.

          (b)   The Company will, upon the request of any holder of Shares, make
whatever other filings with the Commission, or otherwise make generally
available to the public such financial and other information, as any such holder
may deem reasonably necessary or desirable in order to enable such holder to be
permitted to sell Shares pursuant to the provisions of Rule 144.

          8.7.  Delivery of Information for Rule 144A Transactions.
                --------------------------------------------------

          If a holder of Shares proposes to transfer any such Shares pursuant to
Rule 144A under the Securities Act (as in effect from time to time), the Company
agrees to provide (upon the request of such holder or the prospective
transferee) to such holder and (if requested) to the prospective transferee any
financial or other information concerning the Company and its Subsidiaries which
is required to be delivered by such holder to any transferee of such Shares
pursuant to such Rule 144A, subject to confidentiality provisions, if
applicable.

          8.8.  Senior Securities.
                -----------------

                                      -36-
<PAGE>

           The Company shall maintain the senior status of the Series B
Preferred such that it shall rank senior in all respects, including the payment
on liquidation and redemption, to all other equity securities of the Company.

           8.9.   Subsequent Closings.
                  -------------------

           The Company shall provide to each party who is a Purchaser at the
time of any Subsequent Closing, notice of such Subsequent Closing, including the
name of any Future Investor and the amount of Series B Preferred purchased by
such Future Investor.

           8.10.  Further Assurances.
                  ------------------

           The Company shall from time to time, upon the request of any one or
more Purchasers or any Transferee, promptly and duly execute and deliver any and
all such further instruments and documents as the Purchasers or such Transferee,
as the case may be, may reasonably deem necessary or desirable to obtain the
full benefits of (i) the obligations of the Company under this Agreement and
(ii) the other rights and powers herein granted. Upon the instructions from time
to time of the Purchasers or any Transferee, the Company shall execute and cause
to be filed any document or filing presented to the Company in proper form for
signing or filing, in each case as the Purchasers or such Transferee may
reasonably deem necessary or desirable in light of the Company's obligations
under this Agreement, and the Company shall pay or cause to be paid any filing
or other fees in connection therewith.

SECTION 9. NEGATIVE COVENANTS

           The Company covenants and agrees that (i) with respect to Sections
9.1, 9.2, 9.3, 9.4, 9.5, 9.6, 9.8, 9.9, 9.10 and 9.11, without the prior written
consent of the holders of more than 50% of outstanding Shares and (ii) with
respect to Section 9.7, without the approval described therein:

           9.1.  No Dilution or Impairment; No Changes in Capital Stock.
                 ------------------------------------------------------

           The Company will not, by amendment of its charter or through any
consolidation, merger, reorganization, transfer of assets, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Agreement, the Series B
Articles Supplementary, the Registration Rights Agreement or the Stockholders'
Agreement. The Company will at all times in good faith assist in the carrying
out of all such terms, and in the taking of all such action, as may be necessary
or appropriate in order to protect the rights of the holders of Shares (as such
rights are set forth in this Agreement, the Series B Articles Supplementary, the
Registration Rights Agreement and the Stockholders' Agreement) against dilution
or other impairment. Without limiting the generality of the foregoing, the
Company (a) will not issue any shares or class or series of equity or equity-
linked

                                      -37-
<PAGE>

security, which is senior to, or pari passu with, the Series B Preferred as to
                                 ----------
dividend payments or amounts payable in the event of liquidation or winding up
of the Company, (b) will not enter into any agreement or instrument which would
restrict or otherwise materially adversely affect the ability of the Company to
perform its obligations under this Agreement, the Stockholders' Agreement, the
Registration Rights Agreement or the Series B Articles Supplementary, (c) will
not amend its charter or by-laws in any manner which would impair or reduce the
rights of the Preferred Stock, including, without limitation, an amendment which
would alter or change the powers, privileges or preferences of the holders of
the Series B Preferred (including, without limitation, changing the Series B
Articles Supplementary after any Shares have been called for redemption), (d)
except as otherwise provided in the Series B Articles Supplementary will not
redeem, repurchase or otherwise acquire, either directly or indirectly through
its Subsidiaries, any shares of capital stock of the Company or any of its
Subsidiaries or any other rights or options to subscribe for or purchase any
capital stock of the Company or any other securities convertible into or
exchangeable for capital stock of the Company, (e) will not permit the par value
or the determined or stated value of any shares of Common Stock receivable upon
the conversion of the Shares to exceed the amount payable therefor upon such
conversion, (f) will take all such action as may be necessary or appropriate in
order that the Company may at all times validly and legally issue duly
authorized, fully paid and nonassessable shares of the Common Stock free from
all taxes, Liens and charges with respect to the issue thereof, upon the
conversion of the Shares from time to time outstanding, (g) will not take any
action which results in any adjustment of the current conversion price under the
Series B Articles Supplementary if the total number of shares of the Common
Stock (or other securities) issuable after the action upon the conversion of all
of the then outstanding Shares would exceed the total number of shares of Common
Stock (or other securities) then authorized by the Company's charter and
available for the purpose of issuance upon such conversion or exercise, (h) will
not have any authorized Common Stock (and will not issue any Common Stock) other
than its existing authorized Common Stock, and (i) will not amend its charter to
change any terms of its Common Stock.

          9.2.   Indebtedness.
                 ------------

          So long as more than 25% of the Shares are outstanding, the Company
will not (i) incur Indebtedness, including any Indebtedness set forth on
Schedule 4.20 hereto, in excess of the greater of either (A) $30,000,000 in
aggregate principal amount or (B) 3.5 times EBITDA for the preceding twelve
months; or (ii) enter into any agreement, amendment or modification with respect
to any Indebtedness, which agreement, amendment or modification under clause
(ii) restricts or prohibits (or was intended primarily to restrict or prohibit)
the Company from making any payments under, or otherwise performing under this
Agreement.

          9.3.   Consolidation, Merger and Sale.
                 ------------------------------

          Neither the Company nor any Subsidiary will (or will agree to):
(a) wind up, liquidate or dissolve its affairs (except that a wholly-owned
Subsidiary can be wound-up, dissolved and liquidated into another wholly-owned
Subsidiary or into the Company), (b) so long as more than 25% of the Shares are
outstanding, sell, lease, transfer or otherwise dispose of all or

                                      -38-
<PAGE>

substantially all of its assets to any other Person (except that a wholly-owned
Subsidiary can sell, lease, transfer or otherwise dispose of all or
substantially all of its assets to another wholly-owned Subsidiary or to the
Company); or (c) so long as more than 25% of the Shares are outstanding, effect
a merger or consolidation if the Company is not the surviving corporation from
such merger or consolidation. Notwithstanding the foregoing, the Company may
take any of the actions described in the foregoing subsection (b) or (c)
pursuant to a contemplated transaction (the "Fundamental Transaction"); provided
                                             -----------------------    --------
that, prior to taking any such action, the Company offers, in writing, to the
Purchasers the right to receive securities or other consideration in the
Fundamental Transaction that are substantially similar from an economic
standpoint to the outstanding value of the Shares, on substantially similar
terms as the other investors in the Fundamental Transaction.

          9.4.   No Change in Business.
                 ---------------------

          So long as more than 25% of the Shares are outstanding, neither the
Company nor any of its Subsidiaries will change substantially the character of
its business as conducted on the Closing Date as represented in Section 4.4
hereof and described in the Disclosure Material.

          9.5.   Restricted Payments; Investments.
                 --------------------------------

          Neither the Company nor any of its Subsidiaries will declare or make
or permit to be declared or made:

                 (a)   any Restricted Payment; or

                 (b)   any Investment.

          9.6.   Affiliate Loans and Guaranties.
                 ------------------------------

          Neither the Company nor any Subsidiary may incur or permit to exist
any of the following:

          (a)    any obligation of the Company or of any Subsidiary to repay
money borrowed owing to (i) any Affiliate of the Company, (ii) any Affiliate of
any Subsidiary or (iii) any other holder of shares of the capital stock of the
Company or a Subsidiary; or

          (b)    any obligation, to any Person, which obligation is assumed or
guaranteed by the Company or a Subsidiary and which is an obligation of (i) any
Affiliate of the Company, (ii) any Affiliate of any Subsidiary or (iii) any
other holder of shares of the capital stock of the Company or a Subsidiary
(excluding, in the case of this clause (b), any obligation of the Company or of
a wholly-owned Subsidiary which is not owed to an Affiliate of the Company or to
an Affiliate of a Subsidiary or to any other holder of shares of the capital
stock of the Company or of a Subsidiary).

                                      -39-
<PAGE>

This Section 9.6 shall not apply to (1) any obligations under this Agreement or
with respect to the Shares, (2) any loans, advances or Guarantees referred to in
clause (1) of the proviso to the definition of "Investment" contained in Section
3 hereof, (3) Indebtedness identified on Schedule 4.20 hereto or (4) any
obligations under any of the Affiliate Agreements.

          9.7.   Transactions with Affiliates.
                 ----------------------------

          The Company will not, and will not permit any Subsidiary to, directly
or indirectly, enter into any transaction or agreement (including, without
limitation, the purchase, sale, distribution, lease or exchange of any property
or the rendering of any service) with any Affiliate of the Company or of any
Subsidiary, other than a wholly-owned Subsidiary of the Company, unless such
transaction or agreement (a) is approved by a majority of the Outside Directors
on the Board of Directors, and (b) is on terms that are no less favorable to the
Company or such Subsidiary, as the case may be, than those which might be
obtained at the time of such transaction from a Person who is not such an
Affiliate; provided, however, that this Section 9.7 shall not limit, or be
           --------  -------
applicable to, (i) employment arrangements with (and general salary and benefits
compensation for) any individual who is a full-time employee of the Company or
any Subsidiary if such arrangements are approved by a majority of the Outside
Directors on the Board of Directors; and (ii) the payment of reasonable and
customary regular fees to directors of the Company who are not employees of the
Company; and (iii) any obligations under any of the Affiliate Agreements.

          9.8.   Liens.
                 -----

          The Company will not create or permit to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Lien upon or with respect to any
of its assets or income, other than Permitted Liens and existing liens set forth
on Schedule 9.8 hereto.

          9.9.   Private Placement Status.
                 ------------------------

          Neither the Company nor any agent nor other Person acting on the
Company's behalf will do or cause to be done (or will omit to do or to cause to
be done) any act which act (or which omission) would result in bringing the
issuance or sale of the Shares or the Conversion Shares within the provisions of
Section 5 of the Securities Act or the filing, notification or reporting
requirements of any state securities law (other than in accordance with a
registration and qualification of Conversion Shares pursuant to the Registration
Rights Agreement).

          9.10.  Maintenance of Public Market.
                 ----------------------------

          So long as more than 25% of the Shares are outstanding, the Company
will not proceed with a program of acquisition of its Common Stock, initiate a
corporate reorganization or recapitalization or undertake a consolidation or
merger or authorize, consent to or take any action which would have the effect
of:

                                      -40-
<PAGE>

          (a)    removing the Company from registration with the Commission
under the Securities Exchange Act with respect to the Company's Common Stock;

          (b)    requiring the Company to make a filing under Section 13(e) of
the Securities Exchange Act;

          (c)    reducing the average daily trading volume over a 30-day period
of the Common Stock on the principal securities exchange under which it is then
listed to less than 5,000 shares of Common Stock or eliminating the public
market for shares of Common Stock of the Company;

          (d)    causing a delisting of the Company's Common Stock as a Nasdaq
National Market Security on the Nasdaq Stock Market (unless such stock is
delisted as a result of being listed on a national securities exchange); or

          (e)    if any shares of the Company's Common Stock are at any time
listed on a national securities exchange, causing a delisting of such stock from
such exchange, unless such delisting is in connection with a listing on another
national securities exchange.

Notwithstanding the foregoing, the Company may take any of the actions described
in the foregoing subsection (a) or (c) pursuant to a contemplated transaction
(the "Going Private Transaction"); provided that, prior to taking any such
      -------------------------    --------
action, the Company offers, in writing, to the Purchasers the right to receive
securities or other consideration in the Going Private Transaction that are
substantially similar from an economic standpoint to the outstanding value of
the Shares, on substantially similar terms as the other investors in the Going
Private Transaction.

          9.11.  Actions Prior to the Closing Date.
                 ---------------------------------

          From the date hereof through the Initial Closing Date and each
Subsequent Closing Date, the Company will not, and will not permit any
Subsidiary to, (a) issue or agree to issue any capital stock or any securities
exercisable for, or convertible or exchangeable into, capital stock other than
the Series A-2 Preferred or (b) purchase, redeem or otherwise acquire any of its
capital stock; provided, however, that this Section 9.11 shall not limit, or be
               --------  -------
applicable to, (i) the transactions contemplated by this Agreement, including
any issuance of capital stock in connection with the transactions contemplated
by Sections 9.1 and 9.10 hereof and (ii) grants of options or issuances of
Common Stock to officers, directors or employees of the Company pursuant to the
current terms of the Company's 1997 Stock Option Plan and 1998 Stock Incentive
Plan or the exercise of any existing warrants listed on Schedule 4.11 hereto.

                                      -41-
<PAGE>

SECTION 10. PREEMPTIVE RIGHTS

            (a)   Except (i) for issuances of pro rata dividends to all holders
of Common Stock, (ii) stock issued to employees, officers or directors in
connection with management options or incentive plans approved by the Board of
Directors, (iii) stock issued in connection with any merger, acquisition or
business combination, (iv) stock issued for consideration amounting to less than
$500,000 in any single transaction where the purchase price is not less than the
then applicable Conversion Price (as defined in the Series B Articles
Supplementary), provided that the aggregate amount of all such transactions
shall not exceed $1,000,000, (v) up to 5,167,328 shares of stock issuable upon
conversion of the 6% Non-Voting Convertible Preferred Stock (as adjusted
pursuant to the antidilution provisions therein), (vi) up to 1,193,573 shares of
stock issuable pursuant to the MCI Warrant (as adjusted pursuant to the
antidilution provisions therein), (vii) up to 4,681,303 shares of stock issuable
upon conversion of the Series A-2 Preferred (as adjusted pursuant to the
antidilution provisions therein), (viii) up to an aggregate of 190,000 shares of
Series B Preferred which may be issued in the Subsequent Closings, if any, or
(ix) up to an aggregate of 8,571,429 shares of stock issuable upon conversion of
the Series B Preferred (as adjusted pursuant to the antidilution provisions
therein), in order to enable such holders to maintain their Fully Diluted
percentage ownership of the Company, the holders of the Series B Preferred shall
have preemptive rights, as hereinafter set forth, to purchase any capital stock,
including any warrants or securities convertible into capital stock, of the
Company hereafter issued by the Company so that a holder of the Series B
Preferred shall hereafter be entitled to acquire a percentage of capital stock
which is hereafter issued equal to the same percentage of the issued and
outstanding Common Stock of the Company as is held (directly or obtainable upon
conversion of the Series B Preferred) by such holder of Series B Preferred
immediately prior to the date on which the capital stock is to be issued on a
Fully Diluted basis.

            (b)   The Company shall, before issuing any additional capital stock
(other than the exceptions referred to in Section 10(a) hereof), give written
notice thereof to the holders of the Series B Preferred. Such notice shall
specify what type of instrument the Company intends to issue and the
consideration which the Company intends to receive therefor. For a period of
twenty (20) days following receipt by the holders of the Series B Preferred of
such notice, the Company shall be deemed to have irrevocably offered to sell to
the holders of the Series B Preferred a sufficient number of shares of such
capital stock so that the holders of the Series B Preferred, if such holders
elects to acquire such shares as hereinafter set forth, shall be capable of
acquiring the same percentage of such shares as the percentage of Common Stock
beneficially owned (directly or obtainable upon conversion of the Series B
Preferred) by such holders immediately prior to the proposed issuance on a Fully
Diluted basis. In the event any such offer is accepted, in whole or in part, by
the holders of the Series B Preferred, the Company shall sell such shares to
holders of the Series B Preferred for the consideration and on the precise terms
set forth in the Company's notice (given under the first two sentences of this
paragraph). In the event that one or more holders of the Series B Preferred
elects not to, or fails to, exercise its rights under this Section 10 within the
twenty (20) day period, then the Company may issue the remaining shares of
capital stock offered to, but not purchased by, such holders of the Series B
Preferred, to third persons but only for the same consideration set forth in the
Company's notice

                                      -42-
<PAGE>

(given under the first two sentences of this paragraph) and no later than ninety
(90) days after the expiration of such twenty day period. The closing for such
transaction shall take place as proposed by the Company with respect to the
shares of capital stock proposed to be issued, at which closing the Company
shall deliver certificates for the shares of capital stock in the respective
names of the holders of the Series B Preferred against receipt of the
consideration therefor.

            (c)   Notwithstanding any other provision hereof, the preemptive
rights granted to holders of Series B Preferred by this Section 10 shall
terminate with respect to a share of Series B Preferred upon the conversion or
redemption of such share of Series B Preferred in accordance with the provisions
hereof or in the Series B Articles Supplementary.

SECTION 11. CONDITIONS TO PURCHASERS' OBLIGATIONS

            Each Purchaser's obligation to purchase Shares hereunder is subject
to satisfaction of the following conditions at the Initial Closing or any
Subsequent Closing (any of which may be waived by such Purchaser):

            11.1.  Series B Articles Supplementary; Stockholders' Agreement;
                   ----------------------------------------------------------
                   Registration Rights Agreement.
                   -----------------------------

            (a)    The charter of the Company shall have been duly supplemented
by the filing of the Series B Articles Supplementary in the form of Exhibit A
                                                                    ---------
hereto.

            (b)    The Company, the Purchasers and certain other stockholders of
the Company named therein shall have entered into a Stockholders' Agreement
substantially in the form of Exhibit B hereto.
                             ---------

            (c)    The Company shall have entered into a Registration Rights
Agreement with the Purchasers substantially in the form of Exhibit C hereto.
                                                           ---------

            (d)    The Company shall have exchanged its outstanding Series A-1
Convertible Preferred Stock for an equivalent number of shares of Series A-2
Preferred as provided by the Exchange Agreement dated as of December 29, 2000
between the Company and the Fleming Funds (as defined therein) (the "Exchange
Agreement"). The Company and the Fleming Funds (as defined in the Exchange
Agreement) shall have each executed and delivered the Exchange Agreement.

            11.2.  Certificates for Shares.
                   -----------------------

            Each Purchaser shall concurrently receive the certificates for
Shares contemplated by Section 2(b) hereof.

                                      -43-
<PAGE>

            11.3.  Senior Status.
                   -------------

            The Company shall have taken all of the necessary actions, including
the amendment of the appropriate existing agreements, so that the Series B
Preferred shall rank senior in all respects, including the payment on
liquidation and redemption, to all other equity securities of the Company.

            11.4.  Accuracy of Representations and Warranties.
                   ------------------------------------------

            The representations and warranties of the Company contained herein
or in any certificate or document delivered pursuant hereto shall be correct and
complete on and as of the Initial Closing Date or any Subsequent Closing Date
with the same effect as though made on and as of the Initial Closing Date or any
Subsequent Closing Date (after giving effect to the transactions contemplated by
this Agreement).

            11.5.  Compliance with Agreements.
                   --------------------------

            The Company shall have performed and complied in all material
respects with all agreements, covenants and conditions contained in this
Agreement and any other document contemplated hereby or thereby which are
required to be performed or complied with by the Company on or before the
Initial Closing Date or any Subsequent Closing Date.

            11.6.  Officers' Certificates.
                   ----------------------

            The Purchaser shall have received a certificate dated the Initial
Closing Date or any Subsequent Closing Date and signed by the President or Chief
Executive Officer and by the Secretary or the Chief Financial Officer of the
Company, to the effect that the conditions of Sections 11.4, 11.5, 11.8 (second
sentence only), 11.9, 11A.1 and 11A.2 have been satisfied.

            11.7.  Proceedings.
                   -----------

            All corporate and other proceedings in connection with the
transactions contemplated by this Agreement, and all documents incident thereto,
shall be in form and substance satisfactory to the Purchaser and its counsel,
and the Purchaser shall have received all such originals or certified or other
copies of such documents as the Purchaser or its counsel may reasonably request.

            11.8.  Legality; Governmental and Other Authorization.
                   ----------------------------------------------

            The purchase of and payment for the Shares shall not be prohibited
by any law or governmental order, rule, ruling, regulation, release,
interpretation or opinion applicable to the Purchaser and shall not subject the
Purchaser to any penalty, tax, liability or other onerous condition. Any
necessary consents, approvals, licenses, permits, orders and authorizations of,
and any filings, registrations or qualifications with, any governmental or
administrative agency

                                      -44-
<PAGE>

or other Person, with respect to the transactions contemplated by this Agreement
shall have been obtained or made and shall be in full force and effect. The
Company shall have delivered to the Purchaser, upon its reasonable request
setting forth what is required, factual certificates or other evidence, in form
and substance satisfactory to the Purchaser and its counsel, to enable the
Purchaser to establish compliance with this condition.

               11.9.  No Material Adverse Change.
                      --------------------------

               There shall have been no material adverse change in the assets,
properties, liabilities, business, affairs, results of operations, condition
(financial or otherwise) or prospects of the Company on a consolidated basis
since September 30, 2000, except as disclosed in Schedule 11.9 hereto.

               11.10. Opinion of Counsel.
                      ------------------

               The Purchaser shall have received an opinion, dated the Initial
Closing Date or any Subsequent Closing Date (as applicable) and addressed to the
Purchasers, of Piper Marbury Rudnick & Wolfe LLP, counsel for the Company, which
opinion shall be in form and substance satisfactory to the Purchaser and its
counsel and shall be to the effect set forth in Exhibit D hereto.
                                                ---------

               11.11. Other Documents and Opinions.
                      ----------------------------

               The Purchaser shall have received such other documents and
opinions, in form and substance reasonably satisfactory to the Purchaser and its
counsel, relating to matters incident to the transactions contemplated hereby as
the Purchaser may reasonably request.

SECTION 11A.   CONDITIONS TO CLOSINGS

               The Company's obligation to issue the Shares hereunder, and each
Purchaser's obligation to purchase Shares hereunder, is subject to satisfaction
of the following conditions at the Initial Closing and any Subsequent Closing
(any of which may be waived by the Company and such Purchaser):

               11A.1. Classification of Series B Preferred as Equity.
                      ----------------------------------------------

               The Company shall have received confirmation from Ernst & Young
LLP that the Series B Preferred will be classified under GAAP as equity on the
Company's financial statements.

               11A.2. Nasdaq Shareholder Approval Rule.
                      --------------------------------

               The Company shall have received written confirmation from Piper
Marbury Rudnick & Wolfe LLP that shareholder approval of the terms of the Series
B Preferred is not

                                     -45-
<PAGE>

required pursuant to Rule 4350(i)(1)(d) of the Manual adopted by the National
Association of Securities Dealers, Inc. prior to issuance and sale of the Series
B Preferred.

SECTION 12. BREACH OF REPRESENTATIONS, WARRANTIES AND COVENANTS

            (a) The representations, warranties, covenants and agreements of the
Company and each Purchaser contained in this Agreement, the Stockholders'
Agreement, the Registration Rights Agreement or in any document or certificate
delivered pursuant hereto or thereto or in connection herewith shall survive
from the Initial Closing and any Subsequent Closing, and shall continue in
effect following, the execution and delivery of this Agreement, the
Stockholders' Agreement, the Registration Rights Agreement, the closings
hereunder and thereunder, any investigation at any time made by such Purchaser
or on its behalf or by any other Person, the issuance, sale and delivery of the
Shares, any disposition thereof and any payment, conversion or cancellation of
the Shares; provided that Section 9 shall terminate upon conversion of all of
the Shares. All statements contained in any certificate or other document
delivered by or on behalf of the Company pursuant hereto shall constitute
representations and warranties by the Company hereunder.

            (b) The Company agrees to indemnify and hold each Purchaser harmless
from and against and will pay to such Purchaser the full amount of any loss,
damage, liability or expense (including amounts paid in settlement and
reasonable attorneys' fees and expenses) to such Purchaser resulting either
directly or indirectly from any breach of the representations, warranties,
covenants or agreements of the Company contained in this Agreement, or in the
Stockholders' Agreement, the Registration Rights Agreement or any other document
or certificate delivered pursuant hereto or thereto or in connection herewith or
therewith.

SECTION 13. SPECIFIC PERFORMANCE

            The parties agree that irreparable damage will result in the event
that this Agreement is not specifically enforced, and the parties agree that any
damages available at law for a breach of this Agreement would not be an adequate
remedy. Therefore, the provisions hereof and the obligations of the parties
hereunder shall be enforceable in a court of equity, or other tribunal with
jurisdiction, by a decree of specific performance, and appropriate injunctive
relief may be applied for and granted in connection therewith. Such remedies and
all other remedies provided for in this Agreement shall, however, be cumulative
and not exclusive and shall be in addition to any other remedies which a party
may have under this Agreement or otherwise.

SECTION 14. EXPENSES

            (a) Whether or not the transactions herein contemplated are
consummated, the Company shall pay (i) the costs, fees and expenses of the
Company and its counsel in connection

                                     -46-
<PAGE>

with this Agreement, the Series B Articles Supplementary, the Stockholders'
Agreement and the Registration Rights Agreement, other related documentation and
the issuance of the Shares and the Conversion Shares and the furnishing of all
opinions by counsel for the Company, (ii) the costs, fees and expenses of
Covington & Burling and Morgan, Lewis & Bockius LLP in connection with this
Agreement, the Series B Articles Supplementary, the Stockholders' Agreement and
the Registration Rights Agreement, the issuance of the Shares and the Conversion
Shares, other related documentation and the transactions contemplated hereby and
thereby (whether or not a Closing occurs hereunder) and if the Initial Closing
occurs the Company will make such payment on the Initial Closing Date);
provided, however, that (x) such fees and expenses shall not exceed $25,000 with
--------  -------
respect to Covington & Burling and $28,000 with respect to Morgan, Lewis &
Bockius LLP without the approval of the Company and (y) in the event that the
Initial Closing does not occur, the Company shall pay all such costs, fees and
expenses upon the termination of negotiations between the Company and Sylvan,
(iii) the costs, fees and expenses of counsel to the Purchasers in connection
with any amendments to or modifications or waivers of any provisions of this
Agreement, the Series B Articles Supplementary, the Stockholders' Agreement or
the Registration Rights Agreement, other related documentation or in connection
with any other agreements between the Purchasers and the Company and (iv) the
costs, fees and expenses (including the attorneys' fees and expenses) of any
holder of Shares or Conversion Shares in enforcing its rights against the
Company if the Company defaults in its obligations hereunder, under the Series B
Articles Supplementary, the Stockholders' Agreement or the Registration Rights
Agreement.

               (b)  In addition to all other sums due hereunder or provided for
in this Agreement, the Company shall pay to each Purchaser or its agents,
respectively, an amount sufficient to indemnify such persons (net of any Taxes
on any indemnity payments) against all reasonable costs and expenses (including
reasonable attorneys' fees and expenses and reasonable costs of investigation)
and damages and liabilities incurred by the Purchaser or its agents pursuant to
any investigation or proceeding against any or all of the Company, the
Purchasers, or their agents, arising out of or in connection with this
Agreement, the Stockholders' Agreement, the Registration Rights Agreement, the
Purchaser's purchase of the Shares (or any transaction contemplated hereby or
thereby or any other document or instrument executed herewith or therewith or
pursuant hereto or thereto), whether or not the transactions contemplated by
this Agreement are consummated, which investigation or proceeding requires the
participation of the Purchaser or its agents or is commenced or filed against
the Purchaser or its agents because of this Agreement, the Stockholders'
Agreement, the Registration Rights Agreement, the Purchaser's purchase of the
Shares or any of the transactions contemplated hereby or thereby (or any other
document or instrument executed herewith or therewith or pursuant hereto or
thereto), other than any investigation or proceeding in which it is finally
determined that there was (i) gross negligence or willful misconduct on the part
of the Purchaser or its agents, (ii) a material breach by Purchaser of any of
its representations or warranties contained herein, or (iii) a material breach
by the Purchaser of any provision of the Confidentiality Agreement or any other
confidentiality agreement between the Company and the Purchaser, in any case,
which was not made by the Purchaser in reliance upon any of the Company's
representations, warranties, covenants or agreements in this Agreement, the
Stockholders' Agreement, the Registration

                                     -47-
<PAGE>

Rights Agreement or in any other documents or instruments contemplated hereby or
thereby or executed herewith or therewith or pursuant hereto or thereto. The
Company shall assume the defense, and shall appoint counsel (which counsel may
be the same counsel that the Company uses so long as there is no conflict of
interest) to represent the Purchaser and such agents, in connection with
investigating, defending or preparing to defend any such action, suit, claim or
proceeding (including any inquiry or investigation); provided, however, that the
                                                     --------  -------
Purchaser, or any such agent, shall have the right (without releasing the
Company from any of its obligations hereunder) to employ its own counsel and
either to direct its own defense or to participate in the Company's defense, but
the fees and expenses of such counsel shall be at the expense of such person
unless (i) the employment of such counsel shall have been authorized in writing
by the Company in connection with such defense, (ii) the Company shall not have
provided its counsel to take charge of such defense or (iii) there may be
defenses available to the Purchaser, or such agent of the Purchaser which are
different from or additional to those available to the Company, then in any of
such events referred to in clauses (i), (ii) or (iii) such counsel fees and
expenses (but only for one counsel for the Purchaser and its agents) shall be
borne by the Company. Any settlement of any such action, suit, claim or
proceeding shall require the consent of both the Company and such indemnified
person (neither of which shall unreasonably withhold its consent).

               (c)  The Company agrees to pay, or to cause to be paid, all
documentary, stamp and other similar Taxes, other than transfer taxes payable
upon the transfer by each Purchaser of Shares to a Transferee (which transfer
taxes shall be paid by the Transferee), levied under the laws of the United
States of America, any state or local Taxing Authority thereof or therein or any
other applicable jurisdiction in connection with the issuance and sale of the
Shares, the conversion of Shares into Conversion Shares and the execution and
delivery of this Agreement, the Stockholders' Agreement, the Registration Rights
Agreement and any other documents or instruments contemplated hereby or thereby
and any modification of this Agreement, the Series B Articles Supplementary, the
Stockholders' Agreement or the Registration Rights Agreement or any such other
documents or instruments and will hold the Purchaser harmless without limitation
as to time against any and all liabilities with respect to all such Taxes.

               (d)  The obligations of the Company under this Section 14 shall
survive the Closing hereunder and any termination of this Agreement.

SECTION 15. DIRECT PAYMENTS

            As long as any Purchaser or any institutional holder which is a
direct or indirect transferee (as a result of one or more transfers) from the
Purchaser shall be the holder of any Shares, the Company will make all
redemption payments, liquidation payments and other distributions by wire
transfer to the Purchaser's or such other holder's (or its nominee's) account at
any bank or trust company, notwithstanding any contrary provision herein or in
the Company's charter with respect to the place of payment. Each Purchaser has
provided an

                                     -48-
<PAGE>

address on Schedule 1 hereto for payments by wire transfer, and such address may
be changed for such Purchaser or any subsequent holder by notice to the Company.
All such payments shall be made in U.S. dollars and in federal or other
immediately available funds.

SECTION 16. AMENDMENTS AND WAIVERS

            (a)  The terms and provisions of this Agreement may be amended,
waived, modified or terminated only with the written consent of the holders of
more than 50% of outstanding Shares; provided, however, that no such amendment,
                                     --------  -------
waiver, modification or termination shall change this Section 16(a) without the
written consent of the holders of all the Shares and the Conversion Shares then
outstanding.

            (b)  Promptly after obtaining the written consent of the holders as
herein provided, the Company shall transmit a copy of any amendment, waiver,
modification or termination which has been adopted to all holders of Shares and
Conversions Shares then outstanding, but failure to transmit copies shall not in
any way affect the validity of any such amendment, waiver, modification or
termination.

SECTION 17. EXCHANGE OF SHARES; CANCELLATION OF SURRENDERED SHARES; REPLACEMENT

            (a)  Subject to Section 6 hereof, at any time at the request of any
holder of Shares to the Company at its address provided under Section 18 hereof,
the Company at its expense (other than transfer taxes payable upon the transfer
by the Purchaser of Shares to a Transferee, which transfer taxes shall be paid
by the Transferee) will issue and deliver to or upon the order of the holder in
exchange therefor a new certificate or certificates in such amount or amounts as
such holder may request in the aggregate representing the number of Shares
represented by such surrendered certificates, and registered in the name of such
holder or as such holder may direct.

            (b)  Any Share certificate which is converted into Conversion Shares
in whole or in part shall be canceled by the Company, and no new Share
certificates shall be issued in lieu of any Shares which have been converted
into Conversion Shares. The Company shall issue a new certificate with respect
to any Shares which were not converted into Conversion Shares and were
represented by a certificate which was converted in part.

            (c)  Upon receipt of evidence satisfactory to the Company of the
loss, theft, destruction or mutilation of any Share certificate and, in the case
of any such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory to the Company (if requested by the Company and
unsecured in the case of the Purchaser or another similar institutional holder),
or in the case of any such mutilation, upon surrender of such Share certificate
(which surrendered Share certificate shall be canceled by the Company), the
Company

                                     -49-
<PAGE>

will issue a new Share certificate of like tenor in lieu of such lost, stolen,
destroyed or mutilated Share certificate as if the lost, stolen, destroyed or
mutilated Share certificate were then surrendered for exchange.

SECTION 18. NOTICES

            All notices, requests, demands, consents and other communications
hereunder shall be in writing and shall be delivered by hand or shall be sent by
telex or telecopy (confirmed by registered, certified or overnight mail or
courier, postage and delivery charges prepaid), (i) if to the Company, to
Caliber Learning Network, Inc., 509 South Exeter Street, Baltimore, MD 21202,
Attention: Chief Financial Officer, with a copy to Piper Marbury Rudnick & Wolfe
LLP, 6225 Smith Avenue, Baltimore, MD 21209, Attention: Richard C. Tilghman, Jr.
or (ii) if to a Purchaser, at the address indicated on Schedule 1 hereto, with a
copy to such Purchaser's counsel, at the address indicated on Schedule 1 hereto,
or at such other address as a party may from time to time designate as its
address in writing to the other party to this Agreement. Whenever any notice is
required to be given hereunder, such notice shall be deemed given and such
requirement satisfied only when such notice is delivered or, if sent by telex or
telecopier, when received.

SECTION 19. MISCELLANEOUS

            (a)  This Agreement, the Stockholders' Agreement, the Registration
Rights Agreement and, upon the closing hereunder, the Series B Articles
Supplementary, together with any further agreements entered into by each
Purchaser and the Company at the closing hereunder, contain the entire agreement
between such Purchaser and the Company, and supersede any prior oral or written
agreements, commitments, terms or understandings, regarding the subject matter
hereof.

            (b)  Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties
hereby waive any provision of law which may render any provision hereof
prohibited or unenforceable in any respect.

            (c)  This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, whether so
expressed or not; provided, that (a) the Company may not assign any of its
                  --------
rights, duties or obligations under this Agreement, except with the written
consent of 50% of the outstanding Shares, and (b) each Purchaser may assign any
of its rights, duties or obligations under this Agreement to a purchaser of its
Shares, provided that such purchaser is reasonably acceptable to the Company.

                                     -50-
<PAGE>

            (d)  In addition to any assignment by operation of law, each
Purchaser may assign, in whole or in part, any or all of its rights (and/or
obligations) under this Agreement to any transferee of any or all of its Shares
or Conversion Shares, and (unless such assignment expressly provides otherwise)
any such assignment shall not diminish the rights such Purchaser would otherwise
have under this Agreement or with respect to any remaining Shares or Conversion
Shares held by the Purchaser.

            (e)  No course of dealing and no delay on the part of any party
hereto in exercising any right, power, or remedy conferred by this Agreement
shall operate as a waiver thereof or otherwise prejudice such party's rights,
powers and remedies. No single or partial exercise of any right, power or remedy
conferred by this Agreement shall preclude any other or further exercise thereof
or the exercise of any other right, power or remedy.

            (f)  The headings and captions in this Agreement are for convenience
of reference only and shall not define, limit or otherwise affect any of the
terms or provisions hereof.

            (g)  This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (other than any conflict of
laws rule which might result in the application of the laws of any other
jurisdiction).

            (h)  This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument, and all signatures need not appear on any one counterpart.

            (i)  THE COMPANY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND
IRREVOCABLY AGREES THAT, SUBJECT TO THE PURCHASER'S ELECTION, ALL ACTIONS OR
PROCEEDINGS RELATING TO THIS AGREEMENT, THE SERIES B ARTICLES SUPPLEMENTARY, THE
STOCKHOLDERS' AGREEMENT, THE REGISTRATION RIGHTS AGREEMENT, THE SHARES OR THE
CONVERSION SHARES MAY BE LITIGATED IN SUCH COURTS. THE COMPANY ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, THE SERIES B ARTICLES
SUPPLEMENTARY, THE STOCKHOLDERS' AGREEMENT, THE REGISTRATION RIGHTS AGREEMENT,
THE SHARES OR THE CONVERSION SHARES. THE COMPANY HEREBY AGREES THAT SERVICE OF
ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT SHALL BE RECEIVED BY THE
COMPANY AT THE COMPANY'S HEADQUARTERS AT THE ADDRESS AND TO THE ATTENTION OF
SUCH PERSON DESIGNATED PURSUANT TO SECTION 18 HEREOF, AND SUCH

                                     -51-
<PAGE>

SERVICE BEING HEREBY ACKNOWLEDGED BY THE COMPANY TO BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED
BY REGISTERED MAIL TO THE COMPANY AT THE ADDRESS OF THE COMPANY PROVIDED
HEREUNDER EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE
TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. AS AN
ALTERNATIVE TO SERVICE OF PROCESS ON SUCH AGENT (WHETHER OR NOT ANY SUCH AGENT
HAS BEEN APPOINTED), THE COMPANY HEREBY AGREES THAT SERVICE UPON IT BY MAIL
SHALL CONSTITUTE SUFFICIENT NOTICE AND SERVICE OF PROCESS. NOTHING HEREIN SHALL
AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT OF THE PURCHASER TO BRING PROCEEDINGS OR OBTAIN OR ENFORCE
JUDGMENTS AGAINST THE COMPANY IN THE COURTS OF ANY OTHER JURISDICTION.

            (j)  THE COMPANY AND EACH PURCHASER HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT, THE SERIES B ARTICLES SUPPLEMENTARY, THE STOCKHOLDERS'
AGREEMENT, THE REGISTRATION RIGHTS AGREEMENT, THE SHARES OR THE CONVERSION
SHARES, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION. THE COMPANY AND THE PURCHASER ALSO WAIVE ANY BOND OR SURETY OR
SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE
PURCHASER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
THE COMPANY AND THE PURCHASER FURTHER WARRANT AND REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT,
THE SERIES B ARTICLES SUPPLEMENTARY, THE STOCKHOLDERS' AGREEMENT, THE
REGISTRATION RIGHTS AGREEMENT, THE SHARES OR THE CONVERSION SHARES. IN THE EVENT
OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
(WITHOUT A JURY) BY THE COURT.

                  [remainder of page intentionally left blank]

                                     -52-
<PAGE>

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

                                           CALIBER LEARNING NETWORK, INC.

                                           By /s/ Chris L. Nguyen
                                             --------------------------------
                                              Name:  Chris L. Nguyen
                                              Title: President and CEO

                                           SYLVAN VENTURES, LLC

                                           By /s/ B. Lee McGee
                                             --------------------------------
                                              Name:  B. Lee McGee
                                              Title: Executive Vice President

                                           FLEMING US DISCOVERY FUND III, L.P.

                                       By: FLEMING US DISCOVERY PARTNERS, L.P.,
                                           its general partner

                                           By:  FLEMING US DISCOVERY, LLC,
                                                its general partner

                                           By: /s/ Robert L. Burr
                                              -------------------------------
                                               Robert L. Burr, member
<PAGE>

                                 FLEMING US DISCOVERY OFFSHORE FUND III, L.P.

                                     By:  FLEMING US DISCOVERY PARTNERS, L.P.,
                                          its general partner

                                          By: FLEMING US DISCOVERY, LLC,
                                              its general partner

                                          By: /s/ Robert L. Burr
                                             ---------------------------------
                                              Robert L. Burr, member

                                     -54-
<PAGE>

                   [Form of Future Investor Signature Page]

                                          [Name of Investor]

                                          By _________________________________
                                             Name:
                                             Title:

Date:  __________________, ___
<PAGE>

                                                                      Schedule 1
                                                 to the Stock Purchase Agreement

<TABLE>
<CAPTION>
                                           Aggregate
                              Number of    Purchase                                                             Address for Payments
  Name of Purchaser            Shares       Price        Address for Communications         Closing Date          by Wire Transfer
---------------------      ------------- ------------  ------------------------------     ------------------   ---------------------
<S>                        <C>           <C>           <C>                                <C>                  <C>
Sylvan Ventures, LLP              80,000  $8,000,000      1000 Lancaster Street            December 29, 2000
                                                           Baltimore, MD 21202

Fleming US Discovery              25,854  $2,585,400                                       December 29, 2000
Fund III, L.P.                                         Chase Fleming Asset Management USA
                                                           320 Park Avenue, 11/th/ Floor
                                                            New York, New York 10022
                                                              Attn: Robert L. Burr
                                                                David J. Edwards

                                                                 with a copy to:
                                                           Morgan, Lewis & Bockius LLP
                                                                 101 Park Avenue
                                                          New York, New York 10178-0060
                                                           Attn: David W. Pollak, Esq.

Fleming US Discovery               4,146  $  414,600                                       December 29, 2000
Offshore  Fund III, L.P.                              Chase Fleming Asset Management USA
                                                          320 Park Avenue, 11/th/ Floor
                                                            New York, New York 10022
                                                              Attn: Robert L. Burr
                                                                David J. Edwards

                                                                 with a copy to:
                                                           Morgan, Lewis & Bockius LLP
                                                                 101 Park Avenue
                                                          New York, New York 10178-0060
                                                           Attn: David W. Pollak, Esq.
</TABLE><PAGE>

                                                                    EXHIBIT 10.2
================================================================================

              AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

                                  dated as of

                               December 29, 2000

                                     among

                        Caliber Learning Network, Inc.,

                               and the Investors

================================================================================
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                Page
<S>                                                                             <C>
ARTICLE I.  SERIES A-2 DEMAND REGISTRATIONS..............................        2
     1.1     Requests for Registration by Series A-2 Holders.............        2
     1.2     Limitations on Series A-2 Demand Registrations..............        2
     1.3     Effective Registration Statement............................        2
     1.4     Priority on Series A-2 Demand Registrations.................        3
     1.5     Selection of Underwriters...................................        3
     1.6     Priority of Series A-2 Demand Registrations.................        3

ARTICLE 1A. SERIES B PURCHASER DEMAND REGISTRATIONS......................        3
     1A.1    Requests for Registration by Series B Purchaser.............        3
     1A.2    Limitations on Series B Purchaser Demand Registrations              4
     1A.3    Effective Registration Statement............................        4
     1A.4    Priority on Demand Registrations............................        4
     1A.5    Selection of Underwriters...................................        4

ARTICLE II. OTHER REGISTRATIONS..........................................        5
     2.1     Right to Piggyback..........................................        5
     2.2     Priority on Primary Registrations...........................        5
     2.3     Priority on Secondary Registrations.........................        5
     2.4     Other Registrations.........................................        5
     2.5     Other Registration Rights...................................        6

ARTICLE III.REGISTRATION PROCEDURES......................................        6

ARTICLE IV. REGISTRATION EXPENSES........................................       10

ARTICLE V.  UNDERWRITTEN OFFERINGS.......................................       10
     5.1     Demand Underwritten Offerings...............................       10
     5.2     Incidental Underwritten Offerings...........................       11

ARTICLE VI. INDEMNIFICATION..............................................       11
     6.1     Indemnification by the Company..............................       11
     6.2     Indemnification by Holders..................................       12
     6.3     Indemnification Procedures..................................       13
     6.4     Indemnification of the Underwriters.........................       14
     6.5     Contribution................................................       14
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<S>                                                                      <C>
6.6           Timing of Indemnification Payments....................     15

ARTICLE VII.  RULE 144..............................................     15

ARTICLE VIII. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS...........     16

ARTICLE IX.   MERGERS, ETC..........................................     16

ARTICLE X.    DEFINITIONS...........................................     16

ARTICLE XI.   MISCELLANEOUS.........................................     19
     11.1     No Inconsistent Agreements............................     19
     11.2     Adjustments Affecting Registrable Securities..........     19
     11.3     Remedies..............................................     20
     11.4     Amendments and Waivers................................     20
     11.5     Successors and Assigns................................     20
     11.6     Notices...............................................     20
     11.7     Headings..............................................     22
     11.8     Gender................................................     22
     11.9     Invalid Provisions....................................     22
     11.10    Governing Law.........................................     23
     11.11    Counterparts..........................................     23
</TABLE>

                                     -ii-
<PAGE>

              AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

          This Amended and Restated Registration Rights Agreement is dated as of
December 29, 2000, among Caliber Learning Network, Inc., a Maryland corporation
(the "Company"), Fleming US Discovery Fund III, L.P., Fleming US Discovery
      -------
Offshore Fund III, L.P. and Robert Fleming Nominees Limited (collectively, the
"Series A-2 Purchasers"), and Sylvan Ventures LLC, a Maryland limited liability
 ---------------------
company ("Sylvan"), Fleming US Discovery Fund III, L.P. and Fleming US Discovery
          ------
Offshore Fund III, L.P. and such other purchasers as may from time to time
purchase the Series B Preferred (as defined below) directly from the Company
(the "Future Investors") (each of the foregoing parties other than the Company
and the Series A-2 Purchasers being referred to individually as a "Series B
                                                                   --------
Purchaser" and collectively as the "Series B Purchasers").  The Series A-2
---------                           -------------------
Purchasers, any Series A-2 Holder, any Series B Purchaser and any Transferee are
collectively referred to herein as the "Investors" and, individually, an
                                        ---------
"Investor."  Capitalized terms used and not otherwise defined herein have the
 --------
respective meanings ascribed thereto in Article X.

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

          WHEREAS, the Series A-2 Purchasers hold shares of Series A-2
Convertible Preferred Stock pursuant to the terms of the Series A-2 Stock
Purchase Agreements and the Exchange Agreements;

          WHEREAS, simultaneously herewith, Sylvan, Fleming US Discovery Fund
III, L.P. and Fleming US Discovery Offshore Fund III, L.P. have each purchased
80,000, 25,854 and 4,146 shares, respectively, of Series B Preferred pursuant to
the Series B Agreement;

          WHEREAS, pursuant to the Series B Agreement, the Company may issue and
sell additional shares of Series B Preferred to the Future Investors;

          WHEREAS, it is a condition to the consummation of the transactions
contemplated by the Exchange Agreement dated as of December 29, 2000 and the
Series B Agreement that (i) the Registration Rights Agreement dated as of
October 26, 1999, as amended, among the Company and the Series A-2 Purchasers be
terminated as of the date hereof and such agreement shall be of no further force
and effect and (ii) the Company and the Investors (including each Future
Investor) enter into this Agreement whereby the Company shall grant, and the
Investors shall obtain, the rights relating to the registration of the
Registrable Securities under the Securities Act, as set forth in this Agreement;

          NOW, THEREFORE, the parties hereto hereby agree as follows:

                                      -1-
<PAGE>

                                   ARTICLE I
                        SERIES A-2 DEMAND REGISTRATIONS
                        -------------------------------

          1.1  Requests for Registration by Series A-2 Holders. Subject to
               -----------------------------------------------
Section 1.2, at any time and from time to time on or after the date hereof, the
Series A-2 Holders and any Transferee of a Series A-2 Holder may request
registration under the Securities Act of all or part of their Series A-2
Registrable Securities which registration shall be filed (i) on Form S-1 or any
similar long-form registration available to the Company ("Long-Form Demand
                                                          ----------------
Registration"), or (ii) on Form S-3 or any similar short-form registration
-------------
("Short Form Demand Registration").  Thereafter, the Company will use its best
  ------------------------------
efforts to promptly effect the registration of such Series A-2 Registrable
Securities under the Securities Act on the form requested by the holder or
holders making such registration request.  All registrations requested pursuant
to this Section 1.1 are referred to herein as "Series A-2 Demand Registrations."
                                               -------------------------------
Upon receipt of a request for a Series A-2 Demand Registration, the Company will
give prompt written notice (in any event within five (5) Business Days after its
receipt of such request) of the request for a Series A-2 Demand Registration to
all holders of Series A-2 Registrable Securities not making such request and
will include in such Series A-2 Demand Registration all Series A-2 Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within ten (10) days after the receipt of the Company's
notice.  The holders of the Series A-2 Registrable Securities making any such
registration request may, at any time prior to the effective date of the
registration statement relating to any Series A-2 Demand Registration, revoke
such Series A-2 Demand Registration request by providing written notice to the
Company.

          1.2  Limitations on Series A-2 Demand Registrations.  The holders of
               ----------------------------------------------
the Series A-2 Registrable Securities, as a group, shall be entitled to (i) one
(1) Long-Form Demand Registration and (ii) two (2) Short-Form Demand
Registrations.

          1.3  Effective Registration Statement. (a) A Series A-2 Demand
               --------------------------------
Registration requested pursuant to Section 1.1 of this Agreement shall not be
deemed to have been effected (i) unless a registration statement with respect
thereto has become effective, (ii) if after it has become effective, such
registration is interfered with by any stop order, injunction or other order or
requirement of the Securities and Exchange Commission (the "SEC") or other
                                                            ---
governmental agency or court for any reason, and the Series A-2 Registrable
Securities covered thereby have not been sold, or (iii) if the conditions to
closing specified in the purchase agreement or underwriting agreement entered
into in connection with such registration are not satisfied by reason of (x) a
failure by or inability of the Company to satisfy any thereof, or (y) the
occurrence of an event outside the control of the holders of Series A-2
Registrable Securities.

          (b)  A Series A-2 Demand Registration requested pursuant to Section
1.1(a) of this Agreement shall not be deemed to have been effected if holders of
Series A-2 Registrable Securities are not able to register and sell at least 80%
of the amount of Series A-2 Registrable Securities requested to be included in
such registration.

                                      -2-
<PAGE>

          1.4  Priority on Series A-2 Demand Registrations.  The Company will
               -------------------------------------------
not include in any Series A-2 Demand Registration any securities which are not
Series A-2 Registrable Securities without the written consent of the Series A-2
Holders. If other securities are permitted to be included in a Series A-2 Demand
Registration which is an underwritten offering and the managing underwriters
advise the Company in writing that in their opinion the number of Registrable
Securities exceeds the number of Registrable Securities which can be sold in
such offering within a price range acceptable to the Series A-2 Holders, the
Company will include in such registration prior to the inclusion of any
securities which are not Series A-2 Registrable Securities the number of Series
A-2 Registrable Securities requested to be included which in the opinion of such
underwriters can be sold within a price range acceptable to the Series A-2
Holders, pro rata among the respective holders on the basis of the amount of
Series A-2 Registrable Securities requested to be offered thereby.

          1.5  Selection of Underwriters.  The Series A-2 Holders will have the
               -------------------------
right to select the underwriters and the managing underwriters to administer a
Series A-2 Demand Registration, provided that such underwriters and managing
                                -------------
underwriters shall be reasonably acceptable to the Company.

          1.6  Priority of Series A-2 Demand Registrations.  The right of the
               -------------------------------------------
holders of Series A-2 Registrable Securities under this Article I shall be
superior to the right of any holder of other Registrable Securities, including
holders of Series B Purchaser Registrable Securities, to request a Series B
Purchaser Demand Registration.

                                  ARTICLE IA
                    SERIES B PURCHASER DEMAND REGISTRATIONS
                    ---------------------------------------

          1A.1 Requests for Registration by Series B Purchaser. Subject to
               -----------------------------------------------
Section 1A.2, at any time and from time to time on or after the date hereof, the
holders of a majority of the Series B Purchaser Registrable Securities may
request registration under the Securities Act of all or part of their Series B
Purchaser Registrable Securities which registration shall be filed (i) on a
Long-Form Demand Registration, or (ii) on a Short Form Demand Registration.
Thereafter, the Company will use its best efforts to promptly effect the
registration of such Series B Purchaser Registrable Securities under the
Securities Act on the form requested by the holder or holders making such
registration request.  All registrations requested pursuant to this Section 1A.1
are referred to herein as "Series B Purchaser Demand Registrations."  Upon
                           ---------------------------------------
receipt of a request for a Series B Purchaser Demand Registration, the Company
will give prompt written notice (in any event within five (5) Business Days
after its receipt of such request) of the request for a Series B Purchaser
Demand Registration to all holders of Series B Purchaser Registrable Securities
not making such request and will include in such Series B Purchaser Demand
Registration all Series B Purchaser Registrable Securities with respect to which
the Company has

                                      -3-
<PAGE>

received written requests for inclusion therein within ten (10) days after the
receipt of the Company's notice. The holders of the Series B Purchaser
Registrable Securities making any such registration request may, at any time
prior to the effective date of the registration statement relating to any Series
B Purchaser Demand Registration, revoke such Series B Purchaser Demand
Registration request by providing written notice to the Company.

          1A.2 Limitations on Series B Purchaser Demand Registrations.  The
               ------------------------------------------------------
holders of the Series B Purchaser Registrable Securities, as a group, shall be
entitled to (i) one (1) Long-Form Demand Registration and (ii) two (2) Short-
Form Demand Registrations.

          1A.3 Effective Registration Statement. (a) A Series B Purchaser
               --------------------------------
Demand Registration requested pursuant to Section 1A.1 of this Agreement shall
not be deemed to have been effected (i) unless a registration statement with
respect thereto has become effective, (ii) if after it has become effective,
such registration is interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court for any
reason, and the Series B Purchaser Registrable Securities covered thereby have
not been sold, or (iii) if the conditions to closing specified in the purchase
agreement or underwriting agreement entered into in connection with such
registration are not satisfied by reason of (x) a failure by or inability of the
Company to satisfy any thereof, or (y) the occurrence of an event outside the
control of the holders of Series B Purchaser Registrable Securities.

          (b)  A Series B Purchaser Demand Registration requested pursuant to
Section 1A.1(a) of this Agreement shall not be deemed to have been effected if
holders of Series B Purchaser Registrable Securities are not able to register
and sell at least 80% of the amount of Series B Purchaser Registrable Securities
requested to be included in such registration.

          1A.4 Priority on Demand Registrations. The Company will not include
               --------------------------------
in any Series B Purchaser Demand Registration any securities which are not
Series B Purchaser Registrable Securities without the written consent of the
Series B Purchasers requesting such registration.  If other securities are
permitted to be included in a Series B Purchaser Demand Registration which is an
underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities exceeds the
number of Registrable Securities which can be sold in such offering within a
price range acceptable to the Series B Purchasers requesting such registration,
the Company will include in such registration prior to the inclusion of any
securities which are not Series B Purchaser Registrable Securities the number of
Series B Purchaser Registrable Securities requested to be included which in the
opinion of such underwriters can be sold within a price range acceptable to the
Purchasers requesting such registration, pro rata among the respective holders
on the basis of the amount of Series B Purchaser Registrable Securities
requested to be offered thereby.

          1A.5 Selection of Underwriters.  The Series B Purchasers requesting
               -------------------------
such registration will have the right to select the underwriters and the
managing underwriters to

                                      -4-
<PAGE>

administer a Series B Purchaser Demand Registration, provided that such
                                                     -------------
underwriters and managing underwriters shall be reasonably acceptable to the
Company.

                                  ARTICLE II
                              OTHER REGISTRATIONS
                              -------------------

          2.1  Right to Piggyback.  Whenever the Company proposes to register
               ------------------
any of its securities under the Securities Act (other than pursuant to a Series
A-2 Demand Registration or a Series B Purchaser Demand Registration), and the
registration form to be used may be used for the registration of Registrable
Securities (a "Piggyback Registration"), the Company will give prompt written
               ----------------------
notice (in any event within three (3) Business Days after its receipt of notice
of any exercise of other demand registration rights) to all holders of
Registrable Securities of its intention to effect such a registration and will
include in such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein within ten (10)
days after the receipt of the Company's notice.

          2.2  Priority on Primary Registrations.  If a Piggyback Registration
               ---------------------------------
is an underwritten primary registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering at a price range which is acceptable
to the Company, the Company will include in such registration (i) first, the
securities the Company proposes to sell, (ii) second, the Series B Purchaser
Registrable Securities requested to be included in such registration, (iii)
third, the Series A-2 Registrable Securities requested to be included in such
registration and (iv) finally, other securities requested to be included in such
registration.

          2.3  Priority on Secondary Registrations.  If a Piggyback Registration
               -----------------------------------
is an underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering at a price
acceptable to the holders of the Company's securities, the Company will include
in such registration (i) first, the securities requested to be included therein
by the holders requesting such registration, (ii) second, the Series B Purchaser
Registrable Securities requested to be included in such registration, (iii)
third, the Series A-2 Registrable Securities requested to be included in such
registration and (iv) finally, other securities requested to be included in such
registration.  The Company hereby agrees that whenever it grants piggyback
rights to any holder of its securities such holder's piggyback rights will be
expressly subordinated to the piggyback rights granted to the holders of the
Registrable Securities under this Article II.

          2.4  Other Registrations.  If the Company has previously filed a
               -------------------
registration statement for a Long-Form Demand Registration with respect to
Registrable Securities pursuant

                                      -5-
<PAGE>

to Articles I or IA of this Agreement or pursuant to this Article II, or
previously filed underwritten registration of shares of the Company's Common
Stock which includes shares sold for the Company's account ("Company
Registration"), and if such previous registration has not been withdrawn or
abandoned, the Company will not file or cause to be effected any other
registration of any of its equity securities or securities convertible,
exchangeable or exercisable for or into its equity securities under the
Securities Act (except on Form S-4 or S-8 or any successor form), whether on its
own behalf or at the request of any holder or holders of such securities other
than the holders of the Registrable Securities, until a period of at least three
(3) months elapsed from the effective date of such previous registration.

          2.5  Other Registration Rights.  The Company may grant to any Person
               -------------------------
the right to request the Company to register any equity securities of the
Company, or any securities convertible, exchangeable or exercisable for or into
such securities; provided, however, that all such registration rights shall be
                 --------  -------
subordinate in all respects to the registration rights held by the holders of
the Registrable Securities.

                                  ARTICLE III
                            REGISTRATION PROCEDURES
                            -----------------------

          Whenever the holders of Registrable Securities have requested that any
Registrable Securities be registered pursuant to this Agreement, the Company
will use its best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of registration
thereof, and pursuant thereto the Company will as expeditiously as possible or,
in the case of clause (q) below, will not:

          (a)  promptly prepare and file with the SEC a registration statement
with respect to such Registrable Securities (such registration statement to
include all information which the holders of the Registrable Securities to be
registered thereby shall reasonably request) and use its best efforts to
promptly cause such registration statement to become effective, provided that at
                                                                --------
least five days before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company will (i) furnish to counsel
selected by the Series A-2 Holders and/or Series B Purchasers (as applicable)
copies of all such documents proposed to be filed, and the Company shall not, in
the case of a Demand Registration, file any such documents to which such counsel
shall have objected on the grounds that such document does not comply in all
material respects with the requirements of the Securities Act or of the rules or
regulations thereunder, and (ii) notify each holder of Registrable Securities
covered by such registration statement of (x) any request by the SEC to amend
such registration statement or amend or supplement any prospectus or (y) any
stop order issued or threatened by the SEC, and take all reasonable actions
required to prevent the entry of such stop order or to remove it if entered;

                                      -6-
<PAGE>

          (b)  (i) promptly prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary (A) in the case of a Long-Form Demand
Registration, to keep such registration statement effective for a period of not
less than 180 days (except that such 180-day period shall be (I) shortened to
the extent that all shares are sold thereunder, or (II) extended (x) by the
length of any period that a stop order or similar proceeding is in effect which
prohibits the distribution of the Registrable Securities, and (y) by the number
of days during the period from and including the date on which each seller of
Registrable Securities shall have received a notice delivered pursuant to clause
(f) below until the date when such seller shall have received a copy of the
supplemented or amended prospectus contemplated by clause (f) below), and (B) in
the case of a shelf registration statement pursuant to Rule 415 of the
Securities Act, keep such registration statement continually effective,  (ii)
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;

          (c)  as soon as reasonably possible, furnish to each seller of
Registrable Securities, without charge, such number of conformed copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus
and prospectus supplement and, in each case, including all exhibits) and such
other documents as such seller may reasonably request, all in conformity with
the requirements of the Securities Act, in order to facilitate the disposition
of the Registrable Securities owned by such seller;

          (d)  use its best efforts promptly to register or qualify the Shares
under such other securities or blue sky laws of such jurisdictions as any seller
thereof shall reasonably request, to keep such registration or qualification in
effect for so long as such registration statement remains in effect and to do
any and all other acts and things which may be reasonably necessary or advisable
to enable such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller, provided, however, that the Company
                                             --------  -------
will not be required to (i) qualify generally to do business as a foreign
corporation in any jurisdiction where it would not otherwise be required to
qualify but for this clause (d), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction;

          (e)  furnish to each seller of Registrable Securities a signed copy,
addressed to such seller (and the underwriters, if any) of an opinion of counsel
for the Company or special counsel to the selling stockholders, dated the
effective date of such registration statement (and, if such registration
statement includes an underwritten public offering, dated the date of the
closing under the underwriting agreement), reasonably satisfactory in form and
substance to counsel

                                      -7-
<PAGE>

selected by the Series A-2 Holders and/or the Series B Purchasers (as
applicable), covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) as are customarily
covered in opinions of issuer's counsel delivered to the underwriters in
underwritten public offerings, and such other legal matters as the seller (or
the underwriters, if any) may reasonably request;

          (f)  promptly notify each seller of Registrable Securities, at a time
when a prospectus relating to the Shares is required to be delivered under the
Securities Act, of the Company's becoming aware that the prospectus included in
such registration statement, as then in effect, contains an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances under which they were made, and, at the request of any such
seller, promptly prepare and furnish such seller a reasonable number of copies
of a supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made;

          (g)  cause all of the Shares to be listed or quoted, and to continue
to be listed or quoted on the American Stock Exchange, other national securities
exchange, the Nasdaq National Market or the Nasdaq Small-Cap Market, on which
the Common Stock of the Company is then listed, if the listing of such Shares is
then permitted under the rules of such exchange or The Nasdaq Stock Market;

          (h)  provide a transfer agent and registrar for all of the Shares not
later than the effective date of such registration statement;

          (i)  enter into such customary arrangements and take all such other
actions as the Series A-2 Holders, the Series B Purchasers or the underwriters,
if any, reasonably request in order to expedite or facilitate the disposition of
the Shares;

          (j)  make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement, in each case
pursuant to confidentiality agreements, as appropriate;

                                      -8-
<PAGE>

          (k)  cause the Company's officers to make presentations to potential
purchasers of the Shares, as reasonably requested by any seller of Registrable
Securities or any underwriter participating in any disposition pursuant to such
registration statement;

          (l)  subject to other provisions hereof, use its best efforts to cause
the Shares to be registered with or approved by such other governmental agencies
or authorities or self-regulatory organizations as may be necessary to enable
the sellers thereof to consummate the disposition of the Shares;

          (m)  in connection with (i) a Short-Form Demand Registration or a
Piggyback Registration, if any other participant in such Short-Form Demand
Registration or Piggyback Registration, as the case may be, receives a "comfort"
letter as described herein, or (ii) a Long-Form Demand Registration, use its
best efforts to obtain a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an underwritten
offering, dated the date of the closing under the underwriting agreement),
signed by the independent public accountants who have certified the Company's
financial statements, addressed to each seller, and to the underwriters, if any,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and with respect to events
subsequent to the date of such financial statements, as are customarily covered
in accountants' letters delivered to the underwriters in underwritten public
offerings of securities and such other financial matters as such seller (or the
underwriters, if any) may reasonably request;

          (n)  otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC and make available to its security holders, in
each case as soon as practicable, an earning statement covering a period of at
least twelve months, beginning after the effective date of the registration
statement, which earning statement shall satisfy the provisions of Section 11(a)
of the Securities Act;

          (o)  permit any holder of Registrable Securities, which holder, in the
sole judgment exercised in good faith of such holder, might be deemed to be a
controlling person of the Company (within the meaning of the Securities Act or
the Exchange Act), to participate in the preparation of any registration
statement covering such holder's Registrable Securities and to include therein
material, furnished to the Company in writing, which in the reasonable judgment
of such holder should be included and which is reasonably acceptable to the
Company;

          (p)  use every reasonable effort to obtain the lifting at the earliest
possible time of any stop order suspending the effectiveness of any registration
statement or of any order preventing or suspending the use of any preliminary
prospectus;

          (q)  at any time file or make any amendment to a registration
statement, or any amendment of or supplement to a prospectus (including
amendments of the documents

                                      -9-
<PAGE>

incorporated by reference into the prospectus), of which each seller of
Registrable Securities or the managing underwriters shall not have previously
been advised and furnished a copy or to which the sellers of Registrable
Securities, the managing underwriters, or counsel for such sellers or for the
underwriters shall reasonably object; and

          (r)  make such representations and warranties (subject to appropriate
disclosure schedule exceptions) to sellers of Registrable Securities and the
underwriters, if any, in form, substance and scope as are customarily made by
issuers to underwriters and selling holders, as the case may be, in underwritten
public offerings of substantially the same type.

                                  ARTICLE IV
                             REGISTRATION EXPENSES
                             ---------------------

          All expenses incident to the Company's performance of or compliance
with this Agreement, including without limitation, all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, fees and expenses for listing or
quoting the Shares on each securities exchange or The Nasdaq Stock Market on
which similar securities issued by the Company are then listed or quoted, and
fees and disbursements of counsel for the Company, reasonable fees and
disbursement of one counsel chosen by the Series A-2 Holders and/or one counsel
chosen by the Series B Purchasers (as the case may be), any transfer agent and
all independent certified public accountants, underwriters (excluding discounts
and selling commissions) and other Persons retained by the Company in connection
with any Demand Registration or any Piggyback Registration (all such expenses
being herein called "Registration Expenses"), will be paid by the Company.
                     ---------------------

                                   ARTICLE V
                            UNDERWRITTEN OFFERINGS
                            ----------------------

          5.1  Demand Underwritten Offerings.  If requested by the underwriters
               -----------------------------
for any underwritten offerings of Registrable Securities pursuant to a Demand
Registration, the Company will enter into an underwriting agreement with such
underwriters for such offering, such agreement to be reasonably satisfactory in
substance and form to the Company, the underwriters and the Series A-2 Holders
and/or the Series B Purchasers (as the case may be), and to contain such
representations and warranties by the Company and such other terms as are
generally included in agreements of this type, including, without limitation,
indemnities customarily included in such agreements.  The holders of Registrable
Securities to be distributed by such underwriters may be parties to such
underwriting agreement and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the

                                      -10-
<PAGE>

part of, the Company to and for the benefit of such underwriters shall also be
made to and for the benefit of such holders of Registrable Securities and that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the obligations of
such holders of Registrable Securities. The Company shall cooperate with any
such holder of Registrable Securities in order to limit any representations or
warranties to, or agreements with, the Company or the underwriters to be made by
such holder only to those representations, warranties or agreements regarding
such holder, such holder's Registrable Securities and such holder's intended
method of distribution and any other representation required by law.

          5.2  Incidental Underwritten Offerings.  If the Company at any time
               ---------------------------------
proposes to register any of its securities under the Securities Act as
contemplated by Article II of this Agreement and such securities are to be
distributed by or through one or more underwriters, the Company will, if
requested by any holder of Registrable Securities as provided in Article II of
this Agreement, arrange for such underwriters to include all the Registrable
Securities to be offered and sold by such holder, subject to the limitations set
forth in Article II hereof, among the securities to be distributed by such
underwriters.  The holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the Company
and such underwriters, and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities.  The Company shall cooperate with any such
holder of Registrable Securities in order to limit any representations or
warranties to, or agreements with, the Company or the underwriters to be made by
such holder only to those representations, warranties or agreements regarding
such holder, such holder's Registrable Securities and such holder's intended
method of distribution and any other representation required by law.

                                   ARTICLE VI
                                INDEMNIFICATION
                                ---------------

          6.1  Indemnification by the Company.  The Company agrees to indemnify
               ------------------------------
and hold harmless, to the extent permitted by law, each of the holders of any
Registrable Securities covered by any registration statement prepared pursuant
to this Agreement, each other Person, if any, who controls such holder within
the meaning of the Securities Act or the Exchange Act, and each of their
respective directors, general partners and officers, as follows:

               (i)  against any and all loss, liability, claim, damage and
          expense arising out of or based upon an untrue statement or alleged
          untrue statement of a material fact contained in any registration
          statement (or any amendment or

                                      -11-
<PAGE>

          supplement thereto), including all documents incorporated therein by
          reference, or in any preliminary prospectus or prospectus (or any
          amendment or supplement thereto) or the omission or alleged omission
          therefrom of a material fact required to be stated therein or
          necessary to make the statements therein, in light of the
          circumstances under which they were made, not misleading;

               (ii)  against any and all loss, liability, claim, damage and
          expense to the extent of the aggregate amount paid in settlement of
          any litigation, investigation or proceeding by any governmental agency
          or body, commenced or threatened, or of any claim whatsoever based
          upon any such untrue statement or omission or any such alleged untrue
          statement or omission, if such settlement is effected with the written
          consent of the Company; and

               (iii) against any and all expense incurred by them in connection
          with investigating, preparing or defending against any litigation,
          investigation or proceeding by any governmental agency or body,
          commenced or threatened, or any claim whatsoever based upon any such
          untrue statement or omission or any such alleged untrue statement or
          omission, to the extent that any such expense is not paid under clause
          (i) or (ii) above;

provided, that this indemnity does not apply to any loss, liability, claim,
--------
damage or expense to the extent arising out of an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any holder expressly for use in the preparation of any registration statement
(or any amendment or supplement thereto), including all documents incorporated
therein by reference, or in any preliminary prospectus or prospectus (or any
amendment or supplement thereto); and provided further, that the Company will
                                      -------- -------
not be liable to any holder under the indemnity agreement in this Section 6.1,
with respect to any preliminary prospectus or the final prospectus or the final
prospectus as amended or supplemented, as the case may be, to the extent that
any such loss, liability, claim, damage or expense of such controlling Person or
holder results from the fact that such holder sold Registrable Securities to a
Person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the final prospectus or of the final
prospectus as then amended or supplemented, whichever is most recent, if the
Company has previously and timely furnished copies thereof to such holder.  Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such holder or any such director, officer, general
partner, or other controlling person and shall survive the transfer of such
securities by such seller.

          6.2  Indemnification by Holders.  In connection with any registration
               --------------------------
statement in which a holder of Registrable Securities is participating, each
such holder agrees to indemnify and hold harmless (in the same manner and to the
same extent as set forth in Section

                                      -12-
<PAGE>

6.1 of this Agreement), to the extent permitted by law, the Company and its
directors, officers and controlling Persons, and their respective directors,
officers and general partners, with respect to any statement or alleged
statement in or omission or alleged omission from such registration statement,
any preliminary, final or summary prospectus contained therein, or any amendment
or supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such holder,
specifically stating that it is for use in the preparation of such registration
statement, preliminary, final or summary prospectus or amendment or supplement.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company, or such holder, as the case
may be, or any of their respective directors, officers, controlling Persons or
general partners and shall survive the transfer of such securities by such
holder. The obligations of each holder of Registrable Securities pursuant to
this Section 6.2 are to be several and not joint; provided, that, with respect
                                                  --------
to each claim pursuant to this Section 6.2, each such holder's maximum liability
under this Section shall be limited to an amount equal to the net proceeds
actually received by such holder (after deducting any underwriting discount and
expenses) from the sale of Registrable Securities being sold pursuant to such
registration statement or prospectus by such holder.

          6.3  Indemnification Procedures.  Promptly after receipt by an
               --------------------------
indemnified party hereunder of written notice of the commencement of any action
or proceeding involving a claim referred to in Section 6.1 or Section 6.2 of
this Agreement, such indemnified party will, if a claim in respect thereof is to
be made against an indemnifying party, give written notice to the latter of the
commencement of such action; provided, that the failure of any indemnified party
                             --------
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under Section 6.1 or Section 6.2 of this Agreement except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice.  In case any such action is brought against an indemnified party,
the indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified,
to the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof, unless a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, in which case the
indemnifying party shall not be liable for the fees and expenses of (i) more
than one counsel for all holders of Registrable Securities, selected by the
Series A-2 Holders and/or the Series B Purchasers (as the case may be), or (ii)
more than one counsel for the Company in connection with any one action or
separate but similar or related actions.  An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such

                                      -13-
<PAGE>

claim, in which event the indemnifying party shall be obligated to pay the fees
and expenses of such additional counsel or counsels. The indemnifying party will
not, without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not such indemnified party or any Person who
controls such indemnified party is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability arising out
of such claim, action, suit or proceeding. Notwithstanding anything to the
contrary set forth herein, and without limiting any of the rights set forth
above, in any event any party will have the right to retain, at its own expense,
counsel with respect to the defense of a claim.

          6.4  Indemnification of Underwriters.  The Company and each holder of
               -------------------------------
Registrable Securities requesting registration shall provide for the foregoing
indemnity in any underwriting agreement with respect to any required
registration or other qualification of securities under any Federal or state law
or regulation of any governmental authority other than the Securities Act.

          6.5  Contribution.  If the indemnification provided for in Sections
               ------------
6.1 and 6.2 of this Agreement is unavailable or insufficient to hold harmless an
indemnified party under such Sections, then each indemnifying party shall
contribute to the amount paid or payable to such indemnified party as a result
of the losses, claims, damages or liabilities referred to in Section 6.1 or
Section 6.2 of this Agreement in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand, and the
indemnified party on the other, in connection with statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations, including, without limitation, the
relative benefits received by each party from the offering of the securities
covered by such registration statement, the parties' relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted and the opportunity to correct and prevent any statement or omission.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statements or omission.  The parties hereto agree that it
would not be just and equitable if contributions pursuant to this Section 6.5
were to be determined by pro rata or per capita allocation (even if the
underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the first sentence of this Section 6.5.  The amount paid to an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this Section 6.5 shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim (which shall be
limited as provided in Section 6.3 of this Agreement if the indemnifying

                                      -14-
<PAGE>

party has assumed the defense of any such action in accordance with the
provisions thereof) which is the subject of this Section 6.5. Promptly after
receipt by an indemnified party under this Section 6.5 of notice of the
commencement of any action against such party in respect of which a claim for
contribution may be made against an indemnifying party under this Section 6.5,
such indemnified party shall notify the indemnifying party in writing of the
commencement thereof if the notice specified in Section 6.3 of this Agreement
has not been given with respect to such action; provided, that the omission to
                                                --------
so notify the indemnifying party shall not relieve the indemnifying party from
any liability which it may otherwise have to any indemnified party under this
Section 6.5, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. The Company and each holder of
Registrable Securities agrees with each other and the underwriters of the
Registrable Securities, if requested by such underwriters, that (i) the
underwriters' portion of such contribution shall not exceed the underwriting
discount and (ii) the amount of such contribution shall not exceed an amount
equal to the net proceeds actually received by such indemnifying party from the
sale of Registrable Securities in the offering to which the losses, liabilities,
claims, damages or expenses of the indemnified parties relate. No Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

          6.6  Timing of Indemnification Payments.  The indemnification required
               ----------------------------------
by this Article VI shall be made (i) by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are
received or expenses are incurred, and (ii) upon determination of liability by a
court of competent jurisdiction whether or not such judgment is appealed, with
respect to loss, damage or liability.

                                  ARTICLE VII

                                    RULE 144
                                    --------

          The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder (or, if the Company is not required to
file such reports, it will, upon the request of any holder of Registrable
Securities, make publicly available other information), and it will take such
further action as any holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holder to sell
shares of Registrable Securities without registration under the Securities Act
within the limitation of the exemption provided by (i) Rule 144 or Rule 144A
under the Securities Act, as such Rules may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the SEC.  Upon the
request of any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied with such
requirements.

                                      -15-
<PAGE>

                                  ARTICLE VIII
                  PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
                  -------------------------------------------

          No Person may participate in any underwritten registration hereunder
unless such Person (i) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Person or Persons
entitled hereunder to approve such arrangements and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements and
consistent with the provisions of this Agreement.

                                  ARTICLE IX
                                 MERGERS, ETC.
                                 -------------

          The Company shall not, directly or indirectly, enter into any merger,
consolidation, or reorganization in which the Company shall not be the surviving
corporation unless the proposed surviving corporation shall, prior to such
merger, consolidation, or reorganization, agree in writing to assume the
obligations of the Company under this Agreement, and for that purpose references
hereunder to "Registrable Securities" shall be deemed to be references to the
securities that the Investors or the holders of Registrable Securities would be
entitled to receive in exchange for Registrable Securities under any such
merger, consolidation, or reorganization.

                                   ARTICLE X
                                  DEFINITIONS
                                  -----------

          As used in this Agreement, the following defined terms shall have the
meanings set forth below:

          "Business Day" means a day other than Saturday, Sunday or any day on
           ------------
which banks in the State of New York are authorized or obligated to close.

          "Common Stock" means the Company's Common Stock, par value $.01 per
           ------------
share.

          "Conversion Share" or "Conversion Shares" means, collectively, the
           ----------------      -----------------
Series A-2 Conversion Shares and the Series B Conversion Shares.

          "Demand Registrations" shall mean, collectively, Series A-2 Demand
           --------------------
Registrations and Series B Purchaser Demand Registrations.

                                      -16-
<PAGE>

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.
           ------------

          "Exchange Agreements" means the shall mean, collectively, the Exchange
           -------------------
Agreement between the Company and the Series A-2 Purchasers dated as of
September 29, 2000 and the Exchange Agreement between the Company and the Series
A-2 Purchasers dated as of December 29, 2000.

          "Future Investors" shall have the meaning set forth in the first
           ----------------
paragraph hereof.

          "Investor" or "Investors" shall have the meaning set forth in the
           --------      ---------
first paragraph hereof.

          "Long-Form Demand Registrations" shall have the meaning set forth in
           ------------------------------
Section 1.1 hereof.

          "Person" means any individual, corporation, partnership, association,
           ------
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.

          "Registrable Securities" shall mean, collectively, Series A-2
           ----------------------
Registrable Securities and Series B Purchaser Registrable Securities.

          "SEC" shall have the meaning set forth in Section 1.1 hereof.
           ---

          "Securities Act" means the Securities Act of 1933, as amended, and the
           --------------
rules and regulations thereunder.

          "Series A-2 Conversion Shares" means the shares of the Company's
           ----------------------------
Common Stock obtained or obtainable upon conversion of the 163,845.6 shares of
Series A-2 Preferred held by the Series A-2 Purchasers (the "Series A-2 Shares")
and shall also include any capital stock or other securities into which such
shares of Common Stock are changed and any capital stock or other securities
resulting from or comprising a reclassification, combination or subdivision of,
or a stock dividend on, any such shares of Common Stock.  On the date hereof the
Series A-2 Shares are convertible into 4,681,303 Conversion Shares.

          "Series A-2 Demand Registrations" shall have the meaning set forth in
           -------------------------------
Section 1.1 hereof.

          "Series A-2 Holders" means (i) the Series A-2 Purchasers and (ii) any
           ------------------
Affiliate, officer or employee of an Affiliate or investment fund managed by an
Affiliate of the Series A-2

                                      -17-
<PAGE>

Purchasers, or any successor thereof, to which the Series A-2 Purchasers may
transfer record and/or beneficial ownership of 163,845.6 shares of Series A-2
Preferred held by the Series A-2 Purchasers on the date hereof and the Series A-
2 Conversion Shares.

          "Series A-2 Preferred" means the Company's Series A-2 Convertible
           --------------------
Preferred Stock, par value $.01 per share, which Series A-2 Preferred is
convertible into shares of Common Stock.

          "Series A-2 Purchasers" shall have the meaning set forth in the first
           ---------------------
paragraph hereof.

          "Series A-2 Registrable Securities" means (i) any shares of Common
           ---------------------------------
Stock issued or issuable upon conversion of the Series A-2 Preferred purchased
by the Series A-2 Purchasers pursuant to the Series A-2 Stock Purchase
Agreements and (ii) any securities issued or issuable with respect to the Common
Stock referred to in clause (i) by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise.  As to any particular Series A-2
Registrable Securities, such securities will cease to be Series A-2 Registrable
Securities when they have (x) been effectively registered under the Securities
Act and disposed of in accordance with the registration statement covering them
or (y) been transferred pursuant to Rule 144 (or any similar rule then in force)
under the Securities Act.

          "Series A-2 Stock Purchase Agreements" means, collectively, the
           ------------------------------------
separate Stock Purchase Agreements, dated as of October 26, 1999, between the
Company and each of the Series A-2 Purchasers.

          "Series B Agreement" means the Preferred Stock Purchase Agreement,
           ------------------
dated as of December 29, 2000, among the Company and the Series B Purchasers.

          "Series B Conversion Shares" means the shares of the Company's Common
           --------------------------
Stock obtained or obtainable upon conversion of the shares of Series B Preferred
purchased by the Series B Purchasers listed on Schedule 1 to the Series B
Agreement (the "Series B Shares") and shall also include any capital stock or
other securities into which such shares of Common Stock are changed and any
capital stock or other securities resulting from or comprising a
reclassification, combination or subdivision of, or a stock dividend on, any
such shares of Common Stock.  On the date hereof the Series B Shares are
convertible into 3,142,858 Conversion Shares.

          "Series B Preferred" means the Company's Series B Convertible
           ------------------
Preferred Stock, par value $.01 per share, which Series B Preferred is
convertible into shares of Common Stock.

                                      -18-
<PAGE>

          "Series B Purchaser" or "Series B Purchasers" shall have the meaning
           ------------------      -------------------
set forth in the first paragraph hereof.

          "Series B Purchaser Demand Registrations" shall have the meaning set
           ---------------------------------------
forth in Section 1A.1 hereof.

          "Series B Purchaser Registrable Securities" means (i) any shares of
           -----------------------------------------
Common Stock issued or issuable upon conversion of the Series B Preferred
purchased by the Series B Purchasers pursuant to the Series B Agreement and (ii)
any securities issued or issuable with respect to the Common Stock referred to
in clause (i) by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise.  As to any particular Series B Purchaser
Registrable Securities, such securities will cease to be Series B Purchaser
Registrable Securities when they have (x) been effectively registered under the
Securities Act and disposed of in accordance with the registration statement
covering them or (y) been transferred pursuant to Rule 144 (or any similar rule
then in force) under the Securities Act.

          "Shares" means the shares of Registrable Securities registered on the
           ------
registration statement filed with the SEC in connection with any Demand
Registration or any Piggyback Registration.

          "Short-Form Demand Registration" shall have the meaning set forth in
           ------------------------------
Section 1.1 hereof.

          "Sylvan" shall have the meaning set forth in the first paragraph
           ------
hereof.

          "Transferees" shall mean any transferee of the Series A-2 Preferred or
           -----------
the Series B Preferred or Conversion Shares from either a Series A-2 Holder or a
Series B Purchaser (as the case may be).  Transferees shall not include a
transferee of Series A-2 Preferred or the Series B Preferred or Conversion
Shares sold in either a public offering pursuant to a registration statement
under the Securities Act or pursuant to a Rule 144 Transaction.

                                   ARTICLE XI
                                 MISCELLANEOUS
                                 -------------

          11.1 No Inconsistent Agreements.  The Company will not hereafter enter
               --------------------------
into any agreement with respect to its securities which is inconsistent with the
rights granted to the holders of Registrable Securities in this Agreement.

          11.2 Adjustments Affecting Registrable Securities.  The Company will
               --------------------------------------------
not  effect or permit to occur any combination, subdivision or reclassification
of any of its securities

                                      -19-
<PAGE>

which would adversely affect the ability of the holders of Registrable
Securities to include Registrable Securities in a registration undertaken
pursuant to this Agreement or which, to the extent within its control, would
adversely affect the marketability of such Registrable Securities in any such
registration (including, without limitation, effecting a stock split or a
combination of shares).

          11.3 Remedies.  In the event of a breach by any party to this
               --------
Agreement of its obligations under this Agreement, any party injured by such
breach, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement.  The parties agree that the provisions of this
Agreement shall be specifically enforceable, it being agreed by the parties that
the remedy at law, including monetary damages, for breach of any such provision
will be inadequate compensation for any loss and that any defense in any action
for specific performance that a remedy at law would be adequate is waived.

          11.4 Amendments and Waivers.  Except as otherwise provided herein, no
               ----------------------
modification, amendment or waiver of any provision of this Agreement will be
effective against the Company or any holder of Registrable Securities, unless
such modification, amendment or waiver is approved in writing by the Company and
the Investors to which such modification, amendment or waiver applies.  The
failure of any party to enforce any of the provisions of this Agreement will in
no way be construed as a waiver of such provisions and will not affect the right
of such party thereafter to enforce each and every provision of this Agreement
in accordance with its terms.

          11.5 Successors and Assigns.  All covenants and agreements in this
               ----------------------
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not.  In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of the
Investors or the holders of Registrable Securities are also for the benefit of,
and enforceable by, any subsequent holder of Registrable Securities.

          11.6 Notices.  Subject to Section 11.6(b) hereof, all notices,
               -------
requests and other communications hereunder must be in writing and will be
deemed to have been duly given only if delivered personally or by facsimile
transmission or sent by nationally recognized overnight courier service to the
parties at the following addresses or facsimile numbers:

                                      -20-
<PAGE>

          (i)    If to a Series A-2 Holder or a holder of Series A-2 Registrable
                 Securities, to:

                 c/o Chase Fleming Asset Management USA
                 320 Park Avenue
                 NY, NY 10022
                 Facsimile No.:  (212) 508-3676
                 Attn:  Robert L. Burr
                        David J. Edwards

                 with a copy to:

                 Morgan, Lewis & Bockius LLP
                 101 Park Avenue
                 New York, NY 10178
                 Facsimile No.:  (212) 309-6273
                 Attn: David W. Pollak, Esq.

          (ii)   If to a Series B Purchaser or a holder of Series B Purchaser
Registrable Securities to its address and the address of its counsel (if any)
listed on Schedule 1 to the Series B Agreement.

          (iii)  If to Sylvan to:

                 1000 Lancaster Street
                 Baltimore, MD 21202
                 Facsimile No.: (410) 843-8060
                 Attn: B. Lee McGee

                 with a copy to:

                 Covington & Burling
                 1330 Avenue of the Americas
                 New York, NY 10019
                 Facsimile No.:  (212) 841-1010
                 Attn:  Stephen A. Infante

                                      -21-
<PAGE>

          (iv) If to the Company, to:

               Caliber Learning Network, Inc.
               509 South Exeter Street
               Baltimore, MD 21202
               Facsimile No.:  (410) 843-1300
               Attn:  Chief Financial Officer

               with a copy to:

               Piper Marbury Rudnick & Wolfe LLP
               6225 Smith Avenue
               Baltimore, MD 21209
               Facsimile No.:  (410) 580-3001
               Attn:  Richard C. Tilghman, Jr.

All such notices, requests and other communications will (x) if delivered
personally to the address as provided in this Section 11.6(a), be deemed given
upon delivery, (y) if delivered by facsimile transmission to the facsimile
number as provided in this Section 11.6(a), be deemed given upon receipt and (z)
if delivered by nationally recognized overnight courier service in the manner
described above to the address as provided in this Section 11.6(a), be deemed
given on the Business Day following the day it was sent (in each case regardless
of whether such notice, request or other communication is received by any other
Person to whom a copy of such notice is to be delivered pursuant to this Section
11.6(a)).  Any party may from time to time change its address, facsimile number
or other information for the purpose of notices to that party by giving notice
specifying such change to the other parties hereto.

          11.7 Headings.  The headings used in this Agreement have been inserted
               --------
for convenience of reference only and do not define or limit the provisions
hereof.

          11.8 Gender.  Whenever the pronouns "he" or "his" are used herein they
               ------
shall also be deemed to mean "she" or "hers" or "it" or "its" whenever
applicable.  Words in the singular shall be read and construed as though in the
plural and words in the plural shall be construed as though in the singular in
all cases where they would so apply.

          11.9 Invalid Provisions.  If any provision of this Agreement is held
               ------------------
to be illegal, invalid or unenforceable, and if the rights or obligations of any
party hereto under this Agreement will not be materially and adversely affected
thereby, (i) such provision will be fully severable, (ii) this Agreement will be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, (iii) the remaining provisions of this
Agreement will remain in full force and effect and will not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom and
(iv) in lieu of such illegal, invalid or

                                      -22-
<PAGE>

unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.

          11.10  Governing Law.  This Agreement shall be governed by and
                 -------------
construed in accordance with the laws of the State of New York applicable to a
contract executed and performed in such State without giving effect to the
conflicts of laws principles thereof.

          11.11  Counterparts.  This Agreement may be executed in any number of
                 ------------
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

                 [remainder of page intentionally left blank]

                                      -23-
<PAGE>

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

                              CALIBER LEARNING NETWORK, INC.

                              By: /s/ Chris L. Nguyen
                                  ----------------------------------------------
                                 Name: Chris L. Nguyen
                                 Title: President and CEO

                              FLEMING US DISCOVERY FUND III, L.P.

                              By:  FLEMING US DISCOVERY
                                    PARTNERS, L.P.,
                                   its general partner

                                   By:  FLEMING US DISCOVERY, LLC,
                                        its general partner

                                         By: /s/ Robert L. Burr
                                             -----------------------------------
                                              Robert L. Burr, member

                              FLEMING US DISCOVERY OFFSHORE
                                FUND III, L.P.

                              By:  FLEMING US DISCOVERY
                                    PARTNERS, L.P.,
                                   its general partner

                                   By:  FLEMING US DISCOVERY, LLC,
                                        its general partner

                                         By: /s/ Robert L. Burr
                                             -----------------------------------
                                              Robert L. Burr, member

                              ROBERT FLEMING NOMINEES LIMITED

                              By: /s/ Arthur Levy
                                  ---------------------------------------------

                                      -24-
<PAGE>

                              SYLVAN VENTURES, LLC

                              By: /S/ B. Lee McGee
                                 ----------------------
                                 Name:  B. Lee McGee
                                 Title: Executive Vice President

                                      -25-
<PAGE>

                       [Future Investors signature page]

                              FUTURE INVESTORS

                              __________________________________________________

                              By:_______________________________________________
                                 Name:
                                 Title:

Dated:  _____________, _____

                                      -26-

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