Document:

Purchase Agreement

                                     between

         Siemens AG, ICN VD SV 8, Richard-Strauss-Str. 76, 81679 Munich

              o hereinafter referred to as "Siemens" or "Supplier"-

                                       and

      CompleTel Deutschland GmbH, Maximilianstra(beta)e 35 a, 80539 Munich

             - hereinafter referred to as "CompleTel" or "Customer"-

   - Siemens and CompleTel hereinafter together referred to as the "Parties"-

         PREAMBLE

         Siemens and CompleTel have entered into negotiations to conclude a
         long-form Framework Agreement ("Framework Agreement") on the purchase,
         delivery, installation, the putting into operation, operation, the
         maintenance and servicing of telecommunication equipment and
         infrastructure.

         A direct conclusion of said negotiations is not foreseeable, however,
         since CompleTel is in urgent need of Equipment because of the timing
         with regard to the development of a telecommunication infrastructure,
         the Parties agree as follows:

1.       SCOPE OF THE AGREEMENT

1.1      CompleTel has the right, but no obligation to purchase at least 4
         so-called switches of the EWSD technology at the prices identified in
         Exhibit 2 and with the configuration identified in Exhibit 3
         (hereinafter referred to as "Switches") based on individual orders to
         be submitted by CompleTel.

1.2      The purchase of the Switches shall be exclusively governed by the
         provisions of this Agreement.

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                                       2

1.3      Capitalized  terms used but not defined in this  Agreement  shall have
         the  meanings  ascribed  thereto in Exhibit 1 attached
         hereto.

1.4      The Customer shall have the right to acquire a license to, and the
         Supplier shall be obligated to license to the Customer, the Software to
         the extent and as provided in this Agreement. The Supplier shall make
         available to the Customer for license under this Agreement all Software
         Supplier generally makes available to Supplier's Customers at the time
         of an Order or within 6 months thereafter.

1.5      Nothing in this agreement shall constitute a precedent with regard to
         the negotiations on the Framework Agreement.

2.       CONCLUSION OF A FRAMEWORK AGREEMENT

2.1      Upon execution of the contemplated long-form framework agreement
         ("Framework Agreement") and an arrangement for the financing of the
         purchase of corresponding Equipment ("Financing Arrangement"), such
         Framework Agreement and Financing Arrangement shall replace this
         Agreement and any financing with regard to this Agreement with regards
         to the Switches, e.g. the Switches will be treated as if they had been
         purchased after the execution of and under the Framework Agreement and
         as if they were subject to the Financing Arrangement from the
         beginning.

2.2      Should the Parties not reach an agreement on the execution of (a) a
         Framework Agreement and (b) a Financing Arrangement by August 20, 1999,
         the rights and obligations of the Parties with regard to the Switches
         shall be exclusively determined by this Purchase Agreement. In this
         event CompleTel is entitled to a partial rescission of this Purchase
         Agreement with regard to each individual Switch or of this entire
         Purchase Agreement. In the event of a declaration of a rescission,
         Siemens is entitled to a payment of 30% of the order price with respect
         to the Equipment in question. Previous down payments made by CompleTel
         shall be calculated in. No further claims shall incur to the Parties.

3.       ORDERING

3.1      Orders. All purchases of Equipment, Documentation and Services, and
         licensing of Software, by the Customer pursuant to this Agreement shall
         be made by means of one or more purchase orders (each an "Order" or
         collectively "Orders" as the context may require) issued from time to
         time by the Customer in writing. Each Order shall set forth in
         reasonable detail:

         (a)      The Order number and date of issuance:

         (b)      The Equipment, Software and Services ordered, including the
                  applicable price therefor (either by reference to the price
                  list attached as Exhibit 2 or otherwise) and any applicable
                  discounts (the "Price");

         (c)      Requested place of delivery (the "Destination" and, if
                  different than the Destination, the Site for installation;

         (d)      Each Subsystem, System and Group of Assets, if different,
                  included in such Order and the interconnections required;

         (e)      The Project Schedule, which shall specify the requested
                  delivery date, the scheduled Site Readiness Date and the
                  Target Acceptance Date for each Subsystem, System and Group of
                  Assets covered by such Order;

         (f)      If Equipment is being ordered, whether the Supplier is to (i)
                  furnish the Equipment without engineering or installation
                  Services ("FO Orders"), (ii) furnish the Equipment with
                  engineering Services only ("E&F Orders"), (iii) furnish the
                  Equipment with installation Services only ("F&I Orders") or
                  (iv) furnish the Equipment with engineering and installation
                  services ("EF&I Orders");

         (g)      With respect to each E&F Order, F&I Order and EF&I Order, the
                  specific  engineering and installation  Services to be
                  performed by the Supplier;

         (h)      All applicable  requirements regarding Commissioning testing
                  and procedures,  including, if applicable,  any changes
                  or additions to the tests and procedures set forth in Exhibit
                  4; and

         (i)      Other appropriate information as may be mutually agreed by the
                  Parties.

         Any order that amounts to a value over DM 100.000,- requires the joint
         approval of CompleTel's Managing Director and CompleTel's chief
         technology officer (Rick Clevenger) or his designate in order to be
         valid.

3.2      Supplier Assistance in Ordering. If Customer desires the assistance of
         Supplier in determining what Equipment, Software or Services are
         required for a System, Subsystem or Group of Assets, Customer shall
         submit to Supplier the information necessary for the furnishing by
         Supplier of a proposal. Supplier shall, within 30 days thereafter,
         generate a proposal, which proposal shall include documents
         corresponding to separate Exhibits Proposals submitted by Supplier
         pursuant to this Section 3.2 may be accepted by Customer, in whole or
         in part, by Customer's issuance of an Order referencing or
         incorporating such proposal. If Customer rejects a proposal for
         Services submitted by Supplier under this Section 3.2, Customer may
         elect to perform such Services itself or by a third party on its behalf
         in which event Supplier shall have no responsibility for such Services.
         In performing such Services or in having such Services performed by a
         third party on its behalf, the Customer shall not violate Siemens'
         intellectual property rights and shall not exploit Siemens' information
         (see Section 16).

3.3      Acceptance of Order by the Supplier.

3.3.1    Immediately upon receipt of an order, the Customer shall receive from
         the Supplier a written order confirmation. Subsequently, the Supplier
         will issue a System Sheet on the objects covered by the individual
         agreement. Deviations from the order shall be identified separately and
         require an immediate written confirmation of the Customer in order to
         be binding.

3.3.2    If the Customer submits an Order with Delivery Times that are shorter
         than the Delivery Times set forth in Section 6.1, the Supplier shall
         use commercially reasonable efforts to accommodate the Delivery Times
         set forth in such Order, and shall, within 7 Working Days, indicate in
         writing to the Customer whether such shortened Delivery Times are
         acceptable. If such shortened Delivery Times are unacceptable, the
         Delivery Times set forth in Section 6.1 shall apply.

3.4      Form of Orders.

3.4.1    Any Order issued by the Customer during the Term of this Agreement
         shall be deemed to have been issued pursuant to this Agreement and
         shall be governed by the terms and conditions of this Agreement, unless
         the Parties expressly agree to the contrary in writing.

3.4.2    The Customer should use the order form identified in Exhibit 5. No
         preprinted form or condition of an Order shall be binding upon the
         Supplier.

3.5      Change Orders.

3.5.1    Except as set forth below, any change to an Order, shall be negotiated
         by the Parties in good faith and shall be mutually agreed upon and
         subsequently detailed in a written change to the Order ("Change
         Order"), referencing the original Order and signed by authorized
         representatives of the Customer and the Supplier.

3.5.2    The Customer may change the Destination or Site within the Country by
         an Order Notice to the Supplier at least 12 Working Days prior to the
         scheduled delivery or installation date. Changes to the Destination or
         Installation within the Country shall not result in any adjustment to
         price or delivery date.

4.       CO-OPERATION BETWEEN THE PARTIES

         The Parties, shall for the sake of an efficient co-operation nominate
         skilled responsible employees which render the information required
         from the implementation of this Agreement and who either pass decisions
         or have decisions passed. If the contract persons of one Contractual
         Party change, this will be communicated to the other Contractual Party
         without delay. As central contract persons, the following persons are
         nominated:

                  For the Customer:

                  Operation Management                        Mr. Heydtmann
         `        Purchasing                                  Mr. Hulm
                  Technique                                   Mr. Hulm
                  Commercial Tasks                            Mr. Rieder

         Furthermore, the Customer will appoint responsible persons of contact
for special projects, respectively locations.

                  For the Supplier:

                  Operation Management
                  and Co-ordination                           Mr. Schwanke
                  Sales Tasks                                 Mr. Moosmuller
                  Technique                                   Mr. Rein
                  Commercial and Business
                  Economic Issues                             Mr. Averesch

5.       PRICES

5.1      General.

5.1.1    The prices, fees and discount schedules for Equipment, Software,
          Documentation and Services are set forth on Exhibit 2.

          Prices are fixed for a period of 6 months counting from the day of the
          execution of the Agreement. After expiration of this period, prices
          may be adapted to the prevailing market situation. The requested price
          adaptation must be communicated to a Party at least 30 Working Days
          prior to the expiration of the period in writing. Subsequently the
          Parties shall enter into constructive negotiations. Should the Parties
          not reach an agreement, the attempt shall be made without delay to
          reach an agreement at management level. Should the Parties not reach
          and agreement within a period of 30 Working Days counting from the
          receipt of the request pursuant to this Agreement, either party may
          terminate this Agreement in its entirety or with regard to the
          individual technologies with immediate effect. Until the termination
          takes effect, the agreed prices will apply. Their termination has to
          be declared within 14 days. Should no request or adaptation of prices
          be made in time, the fixed prices shall continue to apply for another
          6 months. The agreed prices shall expire, at the latest, upon
          termination of this Agreement.

5.1.2     Prices for Equipment, Software, Documentation and Services not set
          forth in Exhibit 2 shall be mutually agreed between the Parties in
          writing.

5.2      Prices Inclusive. To the extent Supplier's Specifications Exhibit 3
         include the use of software pursuant to Section 12, the unit prices for
         such Equipment include use of such Software and as many complete sets
         of all manuals and Documentation as set forth in Section 8 (except as
         otherwise provided herein, in an Exhibit hereto or in any Conforming
         Order). The Supplier warrants that the Documentation, in conjunction
         with training in accordance with Exhibit 6, is all that is reasonably
         necessary to use, maintain and operate the Equipment, Software and
         Systems sold or licensed to the Customer pursuant to this Agreement.

5.3      Freight. All prices for Equipment and Software set forth in Exhibit 2
         are, and all prices for Equipment or Software to be charged in the
         future shall be Delivered Duty Paid, VAT unpaid at named place of
         Destination in the Country ("DDP (Destination)").

5.4      Insurance. The Supplier will pay for all insurance costs associated
         with shipment of the Equipment and Software to the Destination in the
         Country specified in the applicable Order or a Change Order made in
         accordance with Section 3.5.

5.5      Taxes. Prices and charges for any Equipment, Software and/or Services
         set forth in Exhibit 2 do not Include Value Added Tax or sales tax,
         which if applicable will be identified separately on the invoice and
         payable by the Customer as an addition to the Price.

5.6      Volume Discount.  The volume discounts for EWSD are set forth in
         Exhibit 2.

6.       DELIVERY

6.1      Delivery. Siemens shall deliver the Switches within the Delivery Times
         that were mutually agreed to by the Parties in writing to the sites
         identified in the order form and shall put them in a ready for
         operation state.

         Unless otherwise determined in an individual agreement, the following
regular Delivery Time apply:

                  EWSD delivery between 8 - 12 weeks

         counting from the receipt of the respective order confirmation by the
         Customer respectively receipt of the counter-confirmation by the
         Supplier. The Delivery Times are met if the Supplier delivers Ready For
         Acceptance Statement to the Customer within the Delivery Times. Any
         delay caused by the necessity for performing an loTW test by Deutsche
         Telekom AG or any other carrier (see Exhibit 4) shall not be calculated
         in the period as set forth herein above.

6.2      Title

6.2.1    The delivered Equipment or Software ("Objects") (retention of title
         goods) remain the property of the Supplier until fulfillment of all
         payment obligations of the Customer from the individual contract, in
         particular the purchase price, payment obligation and ancillary
         obligations.

6.2.2    During the retention of the title, the Customer may not pledge or grant
         a security title in the objects and any onward sale by re-sellers in
         the ordinary course of business is only permitted under the condition
         that the re-seller receives payment from his customer or makes the
         reservation that title shall only pass to the customer once the
         customer's payment obligation has been fulfilled.

6.2.3    In the event of an attachment, seizure or other disposition or act of a
         third party, the Customer shall inform the Supplier immediately.

6.2.4    In the event of any guilty violation of a payment obligation by the
         Customer, the Supplier, after having sent a reminder setting a final
         period of 8 days, is entitled to claim the purchased object back; the
         Customer is obligated to release the Objects. The reclaim of the
         Objects, respectively the claiming of the retention of title, or the
         attachment of the purchased objects by the Supplier shall not be
         considered a rescission of the Agreement unless the Supplier expressly
         states this.

6.3      Spares. The Supplier shall maintain in its warehouse, at no charge to
         the Customer a one-month's supply of the greater of (a) the Supplier's
         recommended level of spares for the Equipment and the component parts
         thereof previously ordered by the Customer, and (b) the one-month
         average of the quantity of Equipment and the component parts thereof
         ordered by the Customer in the immediately preceding four months. This
         shall not apply to third party products.

6.5      Time is of the Essence. Regarding delivery of the EWSD-Equipment, time
         of performance is of the essence and is a substantial and material term
         hereof. In the event of a delay in the performance of the Supplier's
         obligations hereunder (other than as a result of a Change Order causing
         such delay), the Supplier shall use reasonable endeavors to minimize or
         cure the delays at the Supplier's cost. In the event of a delay in the
         delivery of Equipment or Software which is the subject of a Order
         beyond the delivery date specified in such Order therefor, and such
         delay is not excused under the provisions of Section 19, upon the
         Customer's request shipment of the delayed Equipment or Software when
         ready to ship shall be made specifying priority transportation at the
         Supplier's sole cost.

7.       PAYMENT

7.1      Currency. All prices and fees shall be stated, all invoices shall be
         issued, and all payments shall be made, in German Marks or Euro. The
         Customer shall have the right to elect at the time of the invoice, that
         the prices and fees shall be stated, all invoices shall be issued, and
         all payments shall be made, in EURO.

7.2      Invoices. The Supplier shall invoice the Customer for Equipment,
         Software and Documentation for the appropriate amounts and at the
         appropriate times in accordance with Section 7.3 as applicable. The
         Supplier shall invoice the Customer for Services as set forth in
         Section 7.4 or 7.5, as applicable. Each invoice shall specify whether
         it is partial or final. No preprinted term or condition of any invoice
         shall be binding upon the Customer. Payments shall be due 30 days from
         receipt of invoice (assuming invoices were given in accordance with the
         applicable provisions of this Section 7). All payments have to be made
         to a bank account of the Supplier and shall be payable without any
         deductions.

7.3      Equipment/Software

         The Customer will pay the purchase prices pursuant to Exhibit 2 after
         receipt of an invoice by Siemens in the following partial amounts at
         the following points in time:

         a)       Upon order
                  (receipt of a confirmation of the
                   order from Siemens)                 30% of purchase price

         b)       Upon delivery                        35% of purchase price

         c)       Upon acceptances                     35% of purchase price

7.4      First Line Maintenance Services. The Parties will enter at a later
         point in time into an agreement according to which Siemens will provide
         first line maintenance services with regard to the Equipment and the
         Software ("Service Agreement"). This Service Agreement shall be
         attached as Exhibit 7 to this Agreement. The Supplier shall invoice the
         Customer for First Line Maintenance Services with regard to EWSD in
         accordance with the procedures set forth in Exhibit 7.

7.5      The purchase price, installation price and other prices not to be
         continuously paid are due and payable up to an order volume of up to DM
         100,000 immediately after the performance of the supply or Service and
         receipt of a Supplier invoice by the Customer.

7.6      Payment Not Acceptance.  Any payments by the Customer in accordance
         with this Agreement shall not constitute Acceptance.

7.7      Disputes as to Invoices. The Customer is not required to pay invoiced
         amounts that the Customer disputes until such dispute is resolved,
         provided the Customer notifies the Supplier in writing of such dispute
         prior to 1 week after receiving such invoice. Once such dispute is
         resolved, the Customer shall pay such invoice within 1 week following
         the resolution of such dispute, however, not earlier than determined in
         Section 7.2, sentence 5. The Supplier shall continue to provide
         Equipment, Documentation, Software and Services without interruption in
         the event of disputes concerning payment or other provisions of this
         Agreement for a period of at least 25 calendar days counting from the
         receipt of the Customer's written notification pursuant to the first
         sentence hereof by the Supplier.

7.8       Interest rate. Due payments shall bear interest payable by the
          Customer in an amount of 5% annually to the Supplier as of the 10th
          Working Day following the due date quoted in the invoice.

8.       TECHNICAL SPECIFICATIONS

8.1      Specifications. The Supplier's Specifications in Exhibit 3, including
         drawings relating to Equipment and Software ordered, and including the
         EWSD Technical Specifications and the Product Descriptions are hereby
         made a part of this Agreement for the purposes of each Order.

8.2      Drawings. The Supplier shall provide, as requested by the Customer and
         at no charge, any applicable drawings and updates thereof concerning
         the delivered Equipment ("Drawings"). The Supplier shall also provide,
         at no charge, and on an ongoing basis, a current index of all Drawings,
         showing latest issue number, as well as complete descriptive
         information. If the Customer requires up to two additional sets of the
         Supplier's manuals and documentation and Drawings and Index (all in
         hardware), said documents shall be made available to the Customer at no
         charge. The Supplier shall provide with each Order current applicable
         Drawings in the type of media as specified by the Customer and as
         available to the Supplier. Such drawings shall be delivered to the
         Destination specified in the applicable Order.

8.3      Site Preparation Specifications. The Supplier shall promptly furnish
         for each Order, standard site preparation Specifications, if
         applicable, in such detail to ensure that Equipment can be properly
         installed. The Customer shall prepare the Site at its own expense. If
         any alterations or modifications are required in site preparation which
         are attributable to either Parties incomplete or erroneous
         Specifications, such alterations or modifications shall be made at the
         cost of the party causing such alterations or modifications.

9        CUSTOMER'S AND SUPPLIER'S OBLIGATIONS

9.1       Customer's Obligations. In order to enable the Supplier to perform the
          Supplier's obligations pursuant to Orders, the Customer agrees to
          fulfill any of its obligations specified hereinafter.

9.1.1     The Customer shall provide the Supplier with a Site which is Site
          Ready for installation on or before the date specified in the Project
          Schedule included in the applicable Order; provided, however, if the
          Site is not Site Ready on the Scheduled Site Readiness Date then the
          Supplier shall have the right to request an extension of the related
          Delivery Time as set forth in section 6.1 on a day-for-day basis that
          the Site Readiness Date is delayed beyond its Scheduled Site Readiness
          Date. Failure of the Customer to meet the Site Readiness Date shall
          result in the rights described in this Section 9.1.1, but shall not
          constitute a breach of this Agreement by the Customer or give rise to
          any other rights or claims by the Supplier. However, the Customer
          shall indemnify the Supplier for his additional costs for
          transportation, storage, insurance, etc. that are caused because of
          said Customer's failure.

9.1.2    As long as the Supplier is obligated to service under a Service
         Agreement (Exhibit _) and complies with its obligations, the Customer
         shall only have the Supplier's tasks performed by the Supplier or with
         the Supplier's consent. Should the Supplier not fulfil its obligations
         under said Service Agreement, in accordance with the contractual
         regulations the Customer may, after the setting of a final deadline in
         writing which may be included in a reminder have the delayed services
         performed at the cost of the Supplier.

9.1.3    The Customer shall realise the operational statuses required for the
         performance of services, shall provide the required free access, and
         shall make available to the Supplier, without any additional charge,
         the following:

-        Documentation  and  information  (e.g.  Documentation  of the system,
         memory dumps,  diagnosis  information or related system configuration),
-        communication  connection  to the public PSTN in the  vicinity of the
         Equipment  and the  technically  required  transmission equipment,
-        data carriers with the version of the system programs with data base
         and system parameters,
-        ancillary equipment such as ladders or scaffolds with required
         operating  staff and upon  request of the  Supplier
-        the additional second person required for purposes of accident
         prevention.

9.1.4    As a prerequisite for an orderly performance of the Supplier, the
         Customer shall make available adequate installation space with electric
         current. Upon request, the Supplier will advise the Customer about
         approvals to be obtained by the Customer and in the choice of the
         auxiliary means to be obtained by the Customer.

9.1.5    Five Working Days prior to the commencement of the installation/putting
         into operation, the Supplier must have received a written declaration
         of the Customer that the space for the installation of the object is
         prepared in line with the requirements set forth by the provisions of
         the agreed project plan. The Customer guarantees the Supplier
         unrestricted access to all premises to the extent this is required for
         an orderly performance.

9.2      Supplier's Obligations.

9.2.1    The Supplier shall, at no additional charge, package Equipment and
         Software in a suitable manner in accordance with all applicable laws
         and regulations and provide protection against damage during shipment
         and handling. All Equipment and Software shall be shipped DDP
         (Destination).

9.2.2    To the extent that it does not conflict with any non disclosure or
         confidentiality agreements previously entered into with any third
         parties, the Supplier agrees, at no charge to the Customer, (i) to
         provide the Customer with reasonably available Market Data for Business
         Case Modeling for, and (ii) to his discretion to assist the Customer in
         acquiring interconnect access with any local telecommunications
         providers with which the Supplier (or any of its Affiliates) has a
         relationship.

9.2.3    Provided that Sites are ready for Installation and Commissioning and
         Operation of Equipment, the Supplier shall furnish at its own cost and
         expense all labor, supervision, machinery, tools, equipment, fuel,
         materials, expendable supplies, transportation licenses (other than
         those as set forth in Section 6 German Telecommunication Act) and
         permits as necessary to operate the Equipment, bonds, and all other
         items that may be required or appropriate in the procurement of
         Systems, Equipment or Software, except the Customer's operating
         licenses.

9.2.4    The Supplier will upon the reasonable request of the Customer provide
         the Customer with reports containing information requested by the
         Customer, which include: (i) a list and description of all Equipment,
         Software, Documentation and Services Ordered by the Customer during a
         particular period; (ii) the prices therefor and (iii) a statement as to
         which such Orders have been performed and which are pending; and a
         statement as to the status of all pending Orders.

9.25     The Supplier shall supply all future updates, revisions and corrections
         of Documentation necessary for the Customer's use of all Systems,
         Equipment and Software in the German language and as needed and
         commercially available in English. Reproductions and translations of
         Documentation shall include copyright to similar proprietary notices.
         Upon Customer's request the Supplier shall provide Documentation in
         hard copy, by CD-ROM or other reasonably available technology.

9.2.6    The Supplier shall service the purchased objects during the term of a
         Service Agreement pursuant to Exhibit 7.

9.2.7    To the extent the storage or other processing of personal data is
         required for and/or within the scope of the activities to be performed
         by the Supplier vis-a-vis the Customer, the Supplier is obligated to
         comply with the statutory provisions respectively with the directions
         given by the Customer and to implement the required technical and
         organisational measures to secure the data against misuse and
         disclosure to unauthorised third parties. These obligations remain in
         force after expiration of the Agreement.

10.      ACCEPTANCE

10.1     Definition of Acceptance. "Acceptance" shall mean, with respect to a
         System, Subsystem, Group of Assets or any item of Equipment or
         Software, that such System, Subsystem, Group of Assets or item of
         Equipment or Software, as the case may be, (i) meets each of the
         Specifications, (ii) has successfully completed Commissioning in
         accordance with Exhibit4 (as it may be modified pursuant to Section
         10.2) if the Supplier performs Installation Services, (iii) meets all
         requirements of this Agreement and any Order accepted under this
         Agreement in accordance with Section 3, and (iv) has been put
         In-Service, in each case in accordance with this Section 10, and the
         Parties have signed an Acceptance Certificate in accordance with
         Section 10.3.

10.2     Tests and Procedures. Exhibit 4 is a detailed description of the tests
         and procedures to be performed to ensure that all applicable Equipment,
         Software, Systems and Subsystems meet each of the Specifications. The
         Customer and the Supplier recognize that such tests and procedures (i)
         may be modified or supplemented, if applicable, by the reasonable
         request of the Customer in the Project Schedule Included in an Order,
         or otherwise by mutual agreement of the Parties hereto, and (ii) may
         require updating from time to time but requests for such updating shall
         not be made later than 10 Working Days before Commissioning tests are
         scheduled to commence; and the Parties hereto agree to work in good
         faith to agree upon any update or modification prior to the
         commencement of Commissioning tests after a reasonable request for an
         update or modification is made by either party.

10.3     Certificate of Test Results; Non-Acceptance. The Supplier shall notify
         the Customer as soon as it knows, but at least 10 calendar days before
         the date on which Commissioning (as agreed pursuant to Section 10.2)
         will be conducted with respect to any System, Subsystem, Group of
         Assets or item of Equipment or Software. The Supplier and the Customer
         (or the Customer's nominee) shall jointly conduct the Commissioning
         tests. This joint conduct of the Commissioning tests shall occur within
         10 Working Days after Ready for Acceptance Statement.

10.3.1   If any System, Subsystem, Group of Assets or item of Equipment or
         Software does not meet each of the applicable Specifications, fails to
         pass all Commissioning tests or otherwise does not fulfill the
         applicable criteria set forth in Exhibit 4 (as it may be modified
         pursuant to Section 10.2), the Supplier shall, at its expense, correct
         the defects promptly. Commissioning and other testing (or so much of it
         as necessary) shall be recommenced immediately after such correction
         and Supplier's new Ready for Acceptance Statement in accordance with
         this Section .

10.3.2    Upon the successful completion of the Commissioning tests to the
          Supplier's satisfaction, both Parties shall execute a certificate
          certifying the test results (the "Certificate of Test Results") and
          stating that the System, Subsystem, Group of Assets or applicable
          Equipment and Software has been installed in accordance with the
          requirements of this Agreement (if the Supplier was to install such
          System or Equipment and Software, and that the applicable System,
          Subsystem, Group of Assets, Equipment and Software has passed all
          Commissioning tests and performs in accordance with the requirements
          of this Agreement. At such time, any items identified as remaining
          outstanding and which the Customer did not consider at that time as
          material enough to prevent Acceptance from occurring with respect to
          the applicable System, Subsystem, Group of Assets, Equipment or
          Software shall be identified ("deficiency list items") and the list
          attached to the applicable Acceptance Certificate. The Supplier shall,
          within 10 calendar days after its receipt of an executed Acceptance
          Certificate, complete and correct all deficiency list items at the
          Supplier's expense. Upon resolution of deficiency list items by the
          Supplier, the Supplier shall submit to the Customer a certificate
          verifying that no further deficiency list items remain unresolved, and
          the Customer shall execute such certificate and return it to the
          Supplier within 10 calendar days if it concurs. "Final Acceptance" of
          a Group of Assets shall not be considered to have occurred until all
          Systems, Subsystems, Equipment and Software included in the applicable
          Order have been Accepted and all deficiency list items for all items
          included in such Group of Assets have been corrected except for
          pre-agreed minor and/or non-service affecting deficiencies.

10.3.3    Should the Customer refuse to sign the Certificate of Test Results,
          the Customer (or its designee) may, at its own expense, retest the
          applicable System, Subsystem, Group of Assets, Equipment or Software
          for conformity with the Specifications, satisfaction of the
          Commissioning tests and the other requirements set forth in
          Exhibit4(as it may be modified pursuant to Section 10.2). If such
          tests, retests or inspections conducted by the Customer (or its
          designee) indicate that the System, Subsystem, Group of Assets,
          Equipment or Software does not comply with the Specifications, does
          not satisfy the Commissioning tests or otherwise does not fulfill all
          of the requirements set forth in Exhibit4, (as it may be modified
          pursuant to Section 10.2), the Customer shall deliver written notice
          of such noncompliance to the Supplier's offices at the address
          specified in Section 4.2 for Order Notices specifying in detail the
          tests, retests or inspections performed and the results obtained, and
          Acceptance thereof shall not occur. The Supplier shall at its own
          expense, promptly take whatever action is necessary to correct such
          deficiencies, including if necessary replacement of rejected
          purchases, and shall provide the Customer's central contact person
          Technique (see Section 4) with written notice of correction. This
          notice of correction shall be treated as Supplier's new Ready for
          Acceptance Statement. Thereafter, the acceptance procedure as
          described in Sections 10.1 10.2 and this 10.3 shall be repeated.
          Should the completion of the Commissioning test fail for a second
          time, the Parties shall use best efforts to agree on the further
          procedure with regard to acceptance.

10.3.4    If the Customer either (i) has not provided written notice pursuant to
          Section 10.3.3 that it intends to test, retest or inspect the
          applicable System, Subsystem, Group of Assets, Equipment or Software
          with respect to a Certificate of Test Results or has not otherwise
          provided written notice to the Supplier's offices at the address
          specified in Section 4.2 for Order Notices that any such System,
          Subsystem, Group of Assets, Equipment or Software is not acceptable or
          (ii) has determined that the Systems, Subsystems, Group of Assets,
          Equipment and Software, as applicable, are acceptable, then the
          Customer shall promptly sign the applicable Acceptance Certificate and
          deliver it to the Supplier evidencing that Acceptance has occurred
          with respect to all Systems, Subsystems, Groups of Assets, Equipment
          and Software that are the subject of such Acceptance Certificate.

10.3.5   The above rules shall also apply to partial acceptances which have to
         be agreed or by the Parties in writing, provided that the partial
         acceptances concern equipment which is ready for operation with the
         Customer immediately after partial acceptance. Partial acceptances have
         to be agreed separately by the Parties. The Supplier shall not be
         responsible for the absence for any ready for operation state to the
         extent the Customer is responsible therefor.

10.3.6   Should the joint conduct of the Commissioning test, for reasons for
         which the Customer is responsible, not be held within 10 Working Days
         after Ready For Acceptance Statement, acceptance is deemed to have
         occurred upon expiration of the period. Customer shall be obligated to
         make payment pursuant to Section 7 especially Section 7.3 and the
         warranty period as set forth in Section 11.1 shall start, provided that
         the System, Subsystem, Group of Assets, Equipment and Software was
         acceptable (in the meaning of Section 10.1). The Customer shall bear
         the burden of proof that the System, Subsystem, Group of Assets,
         Equipment and Software was not acceptable (in the meaning of Section
         10.1).

10.4      Specifications. The Supplier acknowledges that any System ordered by
          the Customer will perform in accordance with the Specifications.

10.5     Liquidated Damages.

10.5.1   If the Supplier does not comply with the Delivery Times as set forth in
         Section 6.1 for reasons for which he is responsible, the Customer may,
         after expiration of a further period of 8 calendar days, counting from
         the receipt of a reminder by the Supplier, request payment of the
         following contractual penalty:

         The contractual penalty amounts to 0.5% per completed week, at a
         maximum, however, to 5% of the value of the delayed delivery of the
         individual agreement.

         Any additional claims remain unaffected within the frame set by Section
         11. A possible contractual penalty will be set-off against any
         additional claim.

         After expiration of a period of 3 weeks counting from the receipt of a
         written reminder of the Customer by the Supplier, the Customer is
         entitled to rescind the respective individual Agreement, provided he
         notified the Supplier in the reminder about the possibility that the
         right to rescind could be exercised after expiration of the 3 week
         period without any delivery having been made.

10.5.2   The sum determined as set out in Section 10.5.1 shall be in full and
         final satisfaction of the Supplier's liability for delay for such
         period.

10.6     Deliveries and services without installation, putting into operation
          shall be subject to the provisions of Section 377 et. seq. of the
          German Commercial Code.

11.      WARRANTIES

         Siemens is liable for defects including the absence of guaranteed
qualities as follows:

11.1     Any parts or services have to be repaired, replaced or re-performed,
         irrespective of the operating time without any additional charge which
         are impaired in their usefulness due to any event prior to acceptance
         unless the defect is insignificant, within 12 months, counting from the
         day of the acceptance.

11.2     Warranty claims shall be subject to a statute of limitation of 12
         months, counting from the written notification of the defect to
         Siemens.

11.3     Siemens has to be given sufficient time and opportunity to remedy
         defects. If this is rejected, Siemens shall be released from any
         warranty obligation.

         As long as a Service Agreement pursuant to Exhibit 7 is in force,
         Siemens will perform defect remediation measures within the periods
         determined in the Service Agreement (Exhibit 7).

11.4     Warranty obligations shall not extend to usual wear and tear or to
         damages which occur after the acceptance due to fault-full or negligent
         treatment, to excessive use, to unsuitable operating means, to
         defective construction works, to unsuitable construction ground or to
         other particular environmental influences which have not been agreed in
         the respective individual contract, nor to not reproducible software
         errors. Should CompleTel or any third party undertake improper changes
         or maintenance works to or of the Equipment and Software, Siemens'
         warranty shall not extend thereto and to the consequences of such acts.

11.5     The warranty period for any remediation works, replacements or
         re-performances shall be 12 months, counting from the remediation,
         replacement or re-performance.

11.6     Program errors shall only be a deviation of the program from the
         program description (functions and performance description as described
         in the EWSD Technical Specifications, in particular the feature list in
         the respective agreed version). This does not constitute a guarantee of
         any qualities. As long as Siemens is under an obligation to remedy
         program errors, Siemens will fulfill such obligation through the
         provision of a new program version. Until a new program version is
         submitted, Siemens has to make an intermediary solution available for
         the circumvention of errors if a priority 1 error pursuant to the
         Service Agreement EWSD/SDH/Access according to fault report processing
         is given. Siemens shall receive from CompleTel all Documentation and
         information required for the remediation of program errors to the
         extent available with CompleTel. Any further claims of CompleTel are
         excluded.

11.7     Should Siemens not succeed to remedy a defect by reinstalling the
         agreed technical and operational functionality within the following
         periods, differentiating according to the following priorities:

         Defect remediation:
         Priorities:
         Prio 1:  Critical defect    a severe soft or hardware problem causing
                                     significant operational reductions

         Prio 2:  Uncritical defect  a soft or hardware problem causing
                                     operational restrictions, but, however, not
                                     affecting principal functions of the system

         Prio 3:  Impairment         a soft or hardware problem that causes
                                     small operational restrictions without,
                                     however, significantly affecting system's
                                     functionality

         Provision of a software correction:
         Prio 1 = 4 weeks, final deadline 2 weeks

         Prio 2 = 2 months, final deadline 3 weeks

         Prio 3 = 3 months, final deadline 4 weeks

         Provision of a hardware correction:
         Prio 1 = 1 month, final deadline 2 weeks
         Prio 2 = 3 months, final deadline 3 weeks
         Prio 3 = 4 months, final deadline 4 weeks

         the Customer may request a reduction of the price or rescission of the
         contract, provided, he has granted the supplier the above mentioned
         additional period and no remediation occurred during the final period.
         Damage claims shall never incur as a consequence of warranty

11.8      Further warranty claims of CompleTel against Siemens and any third
          party employed by Siemens for the performance of his obligations
          towards CompleTel shall be excluded.

12.      PROGRAMS (SOFTWARE):  EXPLOITATION RIGHT, PRICES, REMEDIATION OF FAULTS

12.1     CompleTel shall have the non-exclusive right to use the programs
         supplied to him for the Equipment identified in the System Sheets,
         respectively the objects replacing such Equipment as a consequence of
         warranty claims or of the fulfillment of the Service Agreement pursuant
         to Exhibit 7 within the performance criteria agreed. CompleTel will
         perpetually ensure within the frame set by Section 12 that the programs
         and program Documentation, including any copies thereof will not be
         made available without the prior written consent of Siemens to third
         parties also as revisions, extensions or modified versions made by
         Siemens. CompleTel will, only with the prior written consent of
         Siemens, copy programs, program Documentation or change programs. He
         shall not re-develop or translate programs and shall not separate any
         program parts. CompleTel shall not delete any alphanumerical
         identifications, trademarks or copyright notes. In the event of any
         authorized copying, they will be copied unchanged and any copy will be
         identified with a consecutive number including also the serial numbers
         of the program. Furthermore, CompleTel shall keep records of all
         copies, which Siemens may inspect upon request. Provisions of Section
         69a et. sec. German Copyright Act remain unaffected. In the cases
         determined in figure 11.1.2, CompleTel is entitled to make the program
         and program Documentation available to the third party employed for the
         defect remediation to the extent required for the remediation, provided
         the third party is subject to obligations as determined in Section 6.1.
         Siemens shall not be under an obligation to release the source code.

12.2     The above rules shall not restrict CompleTel in his possibilities to
         dispose of the Equipment, including the software, provided the
         acquiring party assumes the obligations determined in Section 10
         vis-a-vis Siemens.

13.      LIABILITY OF SIEMENS

13.1     Siemens is not liable for a delay or non-performance of his obligation
         pursuant to this Agreement if such delay or non-performance is caused
         by force majeure. Force majeure shall, in particular comprise of war,
         riots, natural catastrophes, fire, flood, strike or blocking out of
         workers. Siemens shall inform CompleTel about any case of force majeure
         without delay. The Parties will jointly agree on a new date for the
         performance.

13.2     Siemens is liable for damages to persons for which Siemens is
         responsible without any limit and shall in addition thereto, be liable
         for any damage to objects for which Siemens is responsible up to the
         amount of the respective order volume, at a maximum, however of up to
         an amount of DM 2 million per damaging event. In the event of damage to
         data carriers, the compensation obligation shall not include the effort
         for the re-installation of lost data and information.

13.3     The above rules shall apply analogously for services and operations to
         be performed by Siemens.

13.4     The entire liability of Siemens under this Agreement is limited to 50%
         of the aggregate order volume.

13.5     Siemens shall, under no circumstances,  be liable for lost profits, as
         well as the lost of interest  respectively  information and data.

13.6     Further damage claims, irrespective of their legal source, are
         excluded.

13.7     CompleTel shall always have to give proof for the damage.

14.      LIABILITY OF SIEMENS BECAUSE OF A VIOLATION OF THIRD PARTY INTELLECTUAL
         PROPERTY RIGHTS

14.1     If any third party should assert claims for the violation of
         intellectual property rights or copyrights (hereinafter Intellectual
         Property Rights) by the product supplied by Siemens vis-a-vis CompleTel
         and is the use of the products impaired or prohibited hereby, Siemens
         will modify or replace the products at his own costs in a way that they
         do not violate the Intellectual Property Rights, but nonetheless comply
         with the agreed specifications with an insignificant deviation having
         to be accepted by CompleTel. Alternatively hereto, Siemens may
         according to his choice and at his costs, provide CompleTel with the
         right to use the product either through the conclusion of a License
         Agreement with a third party or by seeing to the conclusion of a
         License Agreement between the third party and CompleTel provided
         Siemens holds CompleTel harmless from the obligation to pay any
         royalties for the use of their products vis-a-vis the third party.
         CompleTel has to enable the conclusion of the License Agreement with a
         third party. If Siemens is not in a position to achieve the above on
         adequate condition, he has to take the product back against payment of
         the paid compensation.

14.2     A condition for liability of Siemens pursuant to Section 14.1 is that
         CompleTel notifies Siemens about claims of third parties for a
         violation of Intellectual Property Rights without delay in writing,
         does not acknowledge the asserted violation and that CompleTel conducts
         any dispute including any out of court settlement only in co-ordination
         with Siemens. Should CompleTel cease the use of the product for reasons
         of damaged mitigation or other important reasons, he is obligated to
         notify the third party that the ceasing of the use does not include the
         acknowledgment of a violation of the Intellectual Property Right.

14.3     To the extent CompleTel is responsible for the Intellectual Property
         Right violation, any claims against Siemens according to Section 14.1
         are excluded. The same applies to the extent the Intellectual Property
         Right violation is based on special requirements of CompleTel deviating
         from the standard offer of Siemens is caused by an application not
         foreseeable by Siemens or caused by modifications made by CompleTel to
         the products or by the products being operated together with products
         not delivered by Siemens.

15.      Y2K WARRANTY AND LIABILITY

15.1     Definition of Y2K Safety

         "Year 2000 safety" means that neither the performance nor the
         functionality of objects of the individual Agreement is negatively
         influence by dates referring to a time before, during or after the year
         2000 (hereinafter "actual date"). This means in particular:

         Rule 1:  No actual date will cause any interruption of operation.
         Rule 2:  Any  functionality  based on a date must remain  unaffected
                  with regard to date which refer to a time before,  during
                  or after the year 2000.
         Rule 3:  All  interfaces,  as well as date memories must specify the
                  century  either  expressly or on the basis of unambiguous
                  algorithms or interpretation rules.
         Rule 4:  The year 2000 must be identified as a leap year and the year
                  2001 as not being a leap year.

15.2     Warranty

15.2.1 Siemens warrants the Y2K safety of the products supplied under this
Agreement within the frame of the subsequent provisions.

15.2.2   Should supplied products be defective, Siemens will at his cost and his
         choice, remedy the defect through a correction of the error,
         replacement of the product or supply of an amended version. The above
         obligations are subject to the condition that CompleTel reports the
         defect immediately, that the defect is reproducible and concerns the
         most recent version of the supplied product.

15.2.3   Warranty claims shall only be given if the products are used according
         to their proper purpose, in particular in the event of a correct
         operation and entering of product appropriate data, unless CompleTel
         proves that the defect would have also occurred in the event of an
         adequate use. Furthermore, Siemens shall not be subject to warranty
         obligations for products modified by CompleTel unless CompleTel proves
         that there is no causal link between the modification and the defect.

         Siemens does not warrant the seamless operation of the product supplied
         under this Agreement with other products not supplied by Siemens under
         this Framework Agreement.

         Should the remediation of the defect reveal or should it later be
         revealed that the defect was caused by a use of the Equipment not in
         line with its proper use or be due to a modification of the products or
         the influence of products not subject to this Agreement. CompleTel
         shall bear the cost incurred to Siemens in course of the defect
         remediation.

15.3     Limitation of Liability

15.3.1   Siemens is liable without any limitation for damages to persons based
         on a violation of the Y2K warranty.

15.3.2   Any further warranty due to a violation of the Y2K warranty, is
         expressly excluded unless a mandatory liability is provided for in
         statutory provisions.

15.4     Scope of Application, Term of the Warranty

15.4.1   These provisions on the warranty and liability in conjunction with the
         lack of Y2K safety of the products supplied under this Agreement shall
         be final and shall take precedence over any deviating contractual
         provisions.

15.4.2  The warranty of the Y2K safety pursuant to these provisions shall expire
        on April 30, 2001.

16.      SECRECY

         The Parties will treat all information on business issues and
         Documentation of the other party, which become known to them in
         conjunction with this Agreement, confidential and will take the
         necessary steps to comply with this secrecy obligation.

         CompleTel and Siemens are in agreement that the information which they
         obtained from the respective other party shall not be used for any
         purpose other than the purposes of this Purchase Agreement.

         The obligations which the Parties have assumed pursuant to this Section
         16 shall survive in fulfillment of this Agreement.

17.      FORCE MAJEURE

17.1     General. If the performance of any duty or obligation under this
         Agreement or an Order, other than the obligations to indemnify or the
         obligations under a warranty, is interfered with by reason of an event
         of force majeure (as hereinafter defined), the party that is unable to
         perform as a result of such event shall give prompt Notice of such
         event with reasonably full particulars concerning such event.
         Thereupon, the obligations of the party that is unable to perform, so
         far as they are affected by such event, shall be suspended during, but
         no longer than, the continuance of such event, provided such party uses
         its reasonable efforts to remove the force majeure event as quickly as
         practicable (and the other party shall likewise be excused from the
         performance of its obligations to the extent such party's obligations
         relate to the performance so interfered with). Both parties shall
         proceed to perform their respective obligations with dispatch whenever
         such causes are removed or cease to exist. The term "force majeure"
         shall mean an act of God, act of the public enemy, war, blockade,
         public riot, explosion, lightening, fire, storm, flood or other act of
         nature. Neither financial difficulty nor the failure of hardware,
         software and systems to be year 2000 compliant, shall be considered an
         event of force majeure.

17.2     Accepted.  Systems that have been Accepted in accordance with this
         Agreement  shall not be subject to the provisions of this Section 19.

17.3     Termination. In the event either party shall be prevented by force
         majeure from material performance of its obligations hereunder for a
         continuous period of more than 30 days the other party shall have the
         right to terminate this Agreement or any Order by Notice. With respect
         to any Subsystem (whether or not the Subsystem has been Accepted) that
         is part of a System that has not been Accepted, (A) the Equipment and
         Software components that are useable in the reasonable opinion of the
         Customer following the Termination shall be retained by the Customer
         and the Customer shall pay for them at the Order Price therefor; and
         (B) the Equipment and Software components of such Subsystem that are
         not useable in the reasonable opinion of the Customer following the
         Termination shall be decommissioned, de-installed and/or extracted, as
         the case may be. The parties hereto shall divide the costs so incurred
         to decommission, de-install and/or extract equally between the parties.

18.      MISCELLANEOUS

18.1     Should provisions of this Purchase Agreement be or become invalid, this
         shall not have any effect on the validity of the remaining provisions.
         The invalid provisions shall, in this case, be replaced by such other
         valid provisions which come as close as possible to the economic
         purpose of the invalid provision.

18.2     In case of deviation between this Agreement and its Exhibits, the
         provisions of this Agreement are prevailing.

18.3     Each Party may terminate this Agreement in writing with a notice period
         of 6 weeks.

18.4     The export of the  Equipment,  Software and  Documentation  may - e.g.
         due to their kind or their  purpose - be subject to an approval (see
         also notices in the delivery documents and invoices).

18.5     The Agreement shall be subject to the laws of the Federal Republic of
         Germany.

18.6     All disputes arising in conjunction with this Agreement or its validity
         shall be decided according to the arbitration of the German Institute
         for Arbitration (DIS) in Bonn by 3 Arbitrators excluding access to
         ordinary courts. The Arbitration Court shall be competent to determine
         the validity of this Arbitration Agreement. The seat of the Arbitration
         Court shall be Munich.

Munich, 04.08.99

/s/ William  H. Pearson  /s/ Joerg Rieder
--------------------------------------------
CompleTel

 /s/ Dirk Averisch   /s/  Gunther Brauning
 -----------------------------------------
 Siemens<PAGE>

                           NORTHSTAR COMPUTER FORMS, INC.
                                AMENDED AND RESTATED
                        OUTSIDE DIRECTORS STOCK OPTION PLAN

     1.   ESTABLISHMENT AND PURPOSE.  Northstar Computer Forms, Inc. (the
"Company") established in 1995 a plan providing for the grant of stock
options to certain non-employee members of its Board of Directors who are
serving or will serve on the Board of the Company. This plan is known as the
Northstar Computer Forms, Inc. Outside Directors Stock Option Plan and is
hereby amended and restated effective February 5, 1999 (the "Plan").  The
purpose of the Plan is to advance the interests of the Company and its
shareholders by enhancing the Company's ability to attract and retain
qualified persons to serve on its Board of Directors.

     2.   DEFINITIONS.  The following terms have the meanings set forth
below, unless the context otherwise requires:

     2.1  "BOARD" means the Board of Directors of the Company.

     2.2  "CODE" means the Internal Revenue Code of 1986, as amended.

     2.3  "COMMON STOCK" means the common stock of the Company, par value
$.05 per share, or the number and kind of shares of stock or other securities
into which such Common Stock may be changed in accordance with Section 4.3 of
the Plan.

     2.4  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

     2.5  "FAIR MARKET VALUE" means, with respect to the Common Stock, the
following:

          (a)  If the Common Stock is listed or admitted to unlisted trading
     privileges on any national securities exchange or is not so listed or
     admitted but transactions in the Common Stock are reported on the Nasdaq
     National Market, the last sale price of the Common Stock on such exchange
     or reported by the Nasdaq National Market as of such date (or, if no shares
     were traded on such day, as of the next preceding day on which there was
     such a trade.).

          (b)  If the Common Stock is not so listed or admitted to unlisted
     trading privileges or reported on the Nasdaq National Market, and bid and
     asked prices therefor in the over-the-counter market are reported by The
     Nasdaq SmallCap Market-Registered Trademark- or the National Quotation
     Bureau, Inc. (or any comparable reporting service), the mean of the closing
     bid and asked prices as of such date, as so reported by the Nasdaq System,
     or, if not so reported thereon, as reported by the National Quotation
     Bureau, Inc. (or such comparable reporting service).

          (c)  If the Common Stock is not so listed or admitted to unlisted
     trading privileges, or reported on the Nasdaq National Market, and such bid
     and asked prices

<PAGE>

     are not so reported, such price as the Board determines in good faith in
     the exercise of its reasonable discretion.

     2.6  "NASD" means the National Association of Securities Dealers, Inc.

     2.7  "OPTION" means a right to purchase Common Stock granted to an
Outside Director under this Plan that does not qualify as an incentive stock
option under Section 422 of the Code.  Options may be either Formula Options
or Discretionary Options.

     2.8  "OUTSIDE DIRECTOR" means a member of the Board who is not an
employee of the Company or any Subsidiary.

     2.9  "PERSON" means any individual, corporation, partnership, group,
association or other "person" (as such term is used in Section 14(d) of the
Exchange Act), other than the Company, a wholly owned subsidiary of the
Company or any employee benefit plan sponsored by the Company or a wholly
owned subsidiary of the Company.

     2.10 "PREVIOUSLY ACQUIRED SHARES" means shares of Common Stock that are
already owned by the Participant and shares of Common Stock that could be
acquired by the Participant pursuant to the exercise of an Option.

     2.11 "SECURITIES ACT" means the Securities Act of 1933, as amended.

     2.12 "DISCRETIONARY OPTION" means an Option granted pursuant to Section
5A of the Plan, which is granted at the discretion of the Administrator.

     2.13 "FORMULA OPTION" means an Option granted pursuant to Section 5 of
the Plan, as amended.

     3.   ADMINISTRATION OF THE PLAN.  The Plan shall be administered by the
Company's Compensation Committee (the "Administrator"), who shall be
responsible for overseeing that the terms and conditions of the Plan are
complied with and that grants are made to Outside Directors at the proper
times and in the proper amounts as are required hereunder with respect to
Formula Options and properly implemented with respect to Discretionary
Options.  The Administrator shall have the power and authority to make grants
of Discretionary Options to Outside Directors from time to time pursuant to
the terms of the Plan, including the power to determine the number of shares
to be covered by each such award granted hereunder and the terms and
conditions, not inconsistent with the terms of the Plan, of any award granted
hereunder (including, but not limited to, any vesting schedule or restriction
on any Option and/or the shares of Common Stock relating thereto).  The
Administrator shall have no discretion with respect to Formula Options.

     The Administrator shall have the authority to adopt, alter and repeal
such administrative rules, guidelines and practices governing the Plan as it
shall, from time to time, deem advisable; to interpret the terms and
provisions of the Plan and any award issued under the Plan (and any
agreements relating thereto); and to otherwise supervise the administration
of the

                                       2
<PAGE>

Plan.  The Administrator may delegate its authority to officers of the
Company for the purpose of implementing any aspect of the Plan.

     4.   COMMON STOCK SUBJECT TO THE PLAN.

     4.1  NUMBER OF SHARES.  Subject to adjustment as provided in Section 4.3
below, the maximum number of shares of Common Stock that shall be authorized
and reserved for issuance under the Plan shall be 150,000 shares of Common
Stock. The maximum number of shares authorized may also be increased from
time to time by approval of the Board and, if required pursuant to Rule 16b-3
under the Exchange Act or the applicable rules of any securities exchange or
the NASD, the shareholders of the Company.

     4.2  SHARES AVAILABLE FOR USE.  Shares of Common Stock that may be issued
upon exercise of Options shall be applied to reduce the maximum number of shares
of Common Stock remaining available for use under the Plan.  Any shares of
Common Stock that are subject to an Option (or any portion thereof) that lapses,
expires or for any reason is terminated unexercised shall automatically again
become available for use under the Plan.

     4.3  ADJUSTMENTS TO SHARES.    In the event of any reorganization, merger,
consolidation, recapitalization, liquidation, reclassification, stock dividend,
stock split, combination of shares, rights offering, extraordinary dividend or
divestiture (including a spin-off) or any other change in the corporate
structure or shares of the Company, appropriate adjustment shall be made as to
the number and kind of securities subject to outstanding Options.  Without
limiting the generality of the foregoing, in the event that any of such
transactions are effected in such a way that holders of Common Stock shall be
entitled to receive stock, securities or assets, including cash, with respect to
or in exchange for such Common Stock, any Outside Director holding outstanding
Options shall upon the exercise of such Option receive, in lieu of any shares of
Common Stock he or she may be entitled to receive, such stock, securities or
assets, including cash, as have been issued to such Outside Directors if their
Options had been exercised and such Outside Directors had received Common Stock
prior to such transaction.

     5.   TERMS AND CONDITIONS OF FORMULA OPTIONS

     5.1  GRANT.  Subject to the terms and conditions of the Plan, the
Administrator shall grant Formula Options to each Outside Director who is not,
on the date such Option would be granted, the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of more than 5% of the outstanding Common
Stock, on the terms and conditions set forth in this Section 5.  During the term
of the Plan and provided that sufficient shares of Common Stock are available
pursuant to Section 4:

          (a)  OUTSIDE DIRECTORS ELECTED PRIOR TO 1993.  No Outside directors
     elected to the Board prior to 1993 shall be eligible to participate in, or
     receive Formula Options under, the Plan.

          (b)  OUTSIDE DIRECTORS ELECTED DURING OR AFTER 1993.  Any Outside
     Director elected during or after 1993 shall receive a Formula Option to
     purchase 10,000

                                       3
<PAGE>

     shares of Common Stock, which Option shall be issued effective on the
     date the Outside Director is elected to the Board (the "Grant Date").

     5.2  EXERCISE PRICE.  The exercise price for the Formula Options granted
hereunder shall be equal to the Fair Market Value of the Common Stock on the
Grant Date.

     5.3  VESTING OF OPTIONS.  Subject to the provisions of Section 5.4
hereof, Formula Options granted hereunder shall vest over a five year period
at the rate of 20% per year, commencing one year from the Grant Date.

     5.4  DURATION.  Each Formula Option granted to an Outside Director
pursuant to this Plan and all rights to purchase Common Stock thereunder
shall terminate on the earliest of:

          (a)  Ten years after the date such Option is granted; or

          (b)  The expiration of the period specified in Section 6, whichever is
          applicable, after an Outside Director ceases to be a member of the
          Board.

In no event shall a Formula Option be exercisable at any time after its
original expiration date.

     5.5  MANNER OF EXERCISE.  A Formula Option may be exercised by an
Outside Director in whole or in part from time to time, subject to the
conditions contained herein, by delivery, in person or through certified or
registered mail, of written notice of exercise to the Company at its
principal executive office (Attention:  Chief Financial Officer), and by
paying in full the total Option exercise price for the shares of Common Stock
purchased.  Such notice shall be in a form satisfactory to the Administrator
and shall specify the particular Option (or portion thereof) that is being
exercised and the number of shares with respect to which the Option is being
exercised.  The exercise of the Option shall be deemed effective upon receipt
of such notice and payment complying with the terms of the Plan.  As soon as
practicable after the effective exercise of the Option, the Outside Director
shall be recorded on the stock transfer books of the Company as the owner of
the shares purchased, and the Company shall deliver to the Outside Director
one or more duly issued stock certificates evidencing such ownership.  If an
Outside Director exercises any Formula Option with respect to some, but not
all, of the shares of Common Stock subject to such Option, the right to
exercise such Option with respect to the remaining shares shall continue
until it expires or terminates in accordance with its terms.  A Formula
Option shall only be exercisable with respect to whole shares.

     5.6  PAYMENT OF EXERCISE PRICE.  The total purchase price of the shares
to be purchased upon exercise of a Formula Option may be paid entirely in
cash (including check, bank draft or money order) or in whole or in part, by
transfer from the Outside Director to the Company of Previously Acquired
Shares.  In the event the Outside Director pays the purchase price of a
Formula Option in whole or in part with Previously Acquired Shares, the value
of such shares shall be equal to their Fair Market Value on the date of
exercise of the Option.

     5.7  RIGHTS AS A SHAREHOLDER.  No Outside Directors shall have any
rights as a shareholder with respect to any shares of Common Stock covered by
a Formula Option until the

                                       4
<PAGE>

Outside Director shall have become the holder of record of such shares, and
no adjustments shall be made for dividends or other distributions or other
rights as to which there is a record date preceding the date the Outside
Director becomes the holder of record of such shares.

     5A.  TERMS AND CONDITIONS OF DISCRETIONARY OPTIONS

     5A.1 GRANT.  Subject to the terms and conditions of the Plan, the
Administrator shall have the discretion and authority to grant Discretionary
Options to each Outside Director who is not, on the date such Option would be
granted, the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act) of more than 5% of the outstanding Common Stock, on the terms and
conditions set forth in this Section 5A.  The terms and conditions of the
Discretionary Options shall be as specified in a resolution approved by the
Administrator or a stock option grant agreement entered into between an
authorized representative of the Administrator and an Outside Director and
may contain or vary any of the provisions specified in this Section 5A
(except for Section 5A.2).

     5A.2 EXERCISE PRICE.  The exercise price for all Discretionary Options
granted hereunder shall be equal to the Fair Market Value of the Common Stock
on the Grant Date.

     5A.3 VESTING OF OPTIONS.  Unless otherwise specified by the
Administrator, and subject to the provisions of Section 5A.4 hereof,
Discretionary Options granted hereunder shall vest over a five year period at
the rate of 20% per year, commencing one year from the Grant Date.

     5A.4 DURATION. Unless otherwise specified by the Administrator, each
Discretionary Option granted to an Outside Director pursuant to this Plan and
all rights to purchase Common Stock thereunder shall terminate on the
earliest of:

     (a)  Ten years after the date such Option is granted; or

     (b)  The expiration of the period specified in Section 6, whichever is
applicable, after an Outside Director ceases to be a member of the Board.

In no event shall a Discretionary Option be exercisable at any time after its
original expiration date.

     5A.5 MANNER OF EXERCISE. Unless otherwise specified by the
Administrator, a Discretionary Option may be exercised by an Outside Director
in whole or in part from time to time, subject to the conditions contained
herein, by delivery, in person or through certified or registered mail, of
written notice of exercise to the Company at its principal executive office
(Attention:  Chief Financial Officer), and by paying in full the total Option
exercise price for the shares of Common Stock purchased.  Such notice shall
be in a form satisfactory to the Administrator and shall specify the
particular Option (or portion thereof) that is being exercised and the number
of shares with respect to which the Option is being exercised.  The exercise
of the Option shall be deemed effective upon receipt of such notice and
payment complying with the terms of the Plan.  As soon as practicable after
the effective exercise of the Option, the Outside

                                       5
<PAGE>

Director shall be recorded on the stock transfer books of the Company as the
owner of the shares purchased, and the Company shall deliver to the Outside
Director one or more duly issued stock certificates evidencing such
ownership. If an Outside Director exercises any Discretionary Option with
respect to some, but not all, of the shares of Common Stock subject to such
Option, the right to exercise such Option with respect to the remaining
shares shall continue until it expires or terminates in accordance with its
terms.  A Discretionary Option shall only be exercisable with respect to
whole shares.

     5A.6 PAYMENT OF EXERCISE PRICE.  The total purchase price of the shares
to be purchased upon exercise of a Discretionary Option may be paid entirely
in cash (including check, bank draft or money order) or in whole or in part,
by transfer from the Outside Director to the Company of Previously Acquired
Shares. In the event the Outside Director pays the purchase price of a
Discretionary Option in whole or in part with Previously Acquired Shares, the
value of such shares shall be equal to their Fair Market Value on the date of
exercise of the Option.

     5A.7 RIGHTS AS A SHAREHOLDER.  No Outside Directors shall have any
rights as a shareholder with respect to any shares of Common Stock covered by
a Discretionary Option until the Outside Director shall have become the
holder of record of such shares, and no adjustments shall be made for
dividends or other distributions or other rights as to which there is a
record date preceding the date the Outside Director becomes the holder of
record of such shares.

     6.   TERMINATION OF SERVICE ON THE BOARD.  An Option granted to an
Outside Director shall continue to be exercisable for a period of one year
after the date such Outside Director ceases to be a member of the Board, for
any reason, but only to the extent that the Option was exercisable
immediately prior to said Outside Director's ceasing to be a member of the
Board (and in no event beyond the date set forth in Section 5.4(a) or Section
5A.4(a), as the case may be).

     7.   CHANGE IN CONTROL.  In the event of any Change in Control of the
Company, as defined herein, all Options held by Outside Directors pursuant to
this Plan shall immediately vest and become exercisable.  For purposes of
this Section 7, a "Change in Control" of the Company shall mean (a) the sale,
lease, exchange or other transfer of all or substantially all of the assets
of the Company (in one transaction or in a series of related transactions) to
a corporation that is not controlled by the Company, (b) the approval by the
shareholders of the Company of any plan or proposal for the liquidation or
dissolution of the Company, or (c) a change in control of the Company of a
nature that would be required to be reported (assuming such event has not
been "previously reported") in response to Item 1(a) of the Current Report on
Form 8-K, as in effect on the effective date of the Plan, pursuant to Section
13 or 15(d) of the Exchange Act, whether or not the Company is then subject
to such reporting requirement; provided, however, that, without limitation,
such a Change in Control shall be deemed to have occurred at such time as (i)
any Person becomes after the effective date of the Plan the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 20% or more of the combined voting power of the Company's
outstanding securities ordinarily having the right to vote at elections of
directors, or (ii) individuals who constitute the Board on the effective date
of the Plan cease for any reason to constitute at least a majority thereof,
provided that any person becoming a director subsequent to the effective date
of the Plan whose election,

                                       6
<PAGE>

or nomination for election by the Company's shareholders, was approved by a
vote of at least a majority of the directors comprising or deemed pursuant
hereto to comprise the Board on the effective date of the Plan (either by a
specific vote or by approval of the proxy statement of the Company in which
such person is named as a nominee for director) shall be, for purposes of
this clause (ii) and the following sentence, considered as though such person
were a member of the Board on the effective date of the Plan.
Notwithstanding anything in the foregoing to the contrary, no Change in
Control shall be deemed to have occurred for purposes of this Section 7 by
virtue of any transaction which shall have been approved by the affirmative
vote of at least a majority of the members of the Board on the effective date
of the Plan.

     8.   RESTRICTIONS ON TRANSFER.  Other than pursuant to a qualified
domestic relations order (as defined by the Code), no right or interest of
any Outside Director in an Option prior to the exercise of such Options shall
be assignable or transferable, or subjected to any lien, during the lifetime
of the Outside Director, either voluntarily or involuntarily, directly or
indirectly, by operation of law or otherwise, including execution, levy,
garnishment, attachment, pledge, divorce or bankruptcy.  In the event of an
Outside Director's death, such person's rights and interest in Options shall
be transferable by testamentary will or the laws of descent and distribution,
and payment of any amounts due under the Plan shall be made to, and exercise
of any Options (to the extent permitted pursuant to Section 6 of the Plan)
may be made by, the Outside Director's legal representatives, heirs or
legatees.

     9.   NON-EXCLUSIVITY OF THE PLAN.  Nothing contained in the Plan is
intended to amend, modify or rescind any previously approved compensation
plans or programs entered into by the Company.  The Plan will be construed to
be in addition to any and all such other plans or programs.  Neither the
adoption of the Plan nor the submission of the Plan to the shareholders of
the Company for approval will be construed as creating any limitations on the
power or authority of the Board to adopt such additional or other
compensation arrangements as the Board may deem necessary or desirable.

     10.  SECURITIES RESTRICTIONS.  Shares of Common Stock issued pursuant to
Options granted under the Plan may not be sold, assigned, transferred,
pledged, encumbered or otherwise disposed of, whether voluntarily or
involuntarily, directly or indirectly, by operation of law or otherwise,
except pursuant to registration under the Securities Act and applicable state
securities laws or pursuant to exemptions from such registration.  The
Company may condition the sale, assignment, transfer, pledge, encumbrance or
other disposition of such shares not issued pursuant to an effective and
current registration statement under the Securities Act and all applicable
state securities laws on the receipt from the party to whom the shares of
Common Stock are to be so transferred of any representations or agreement
requested by the Company in order to permit such transfer to be made pursuant
to exemptions from registration under the Securities Act and applicable state
securities laws.

     11.  PLAN AMENDMENT, MODIFICATION AND TERMINATION.  The Board may
suspend or terminate the Plan or any portion thereof at any time, and may
amend the Plan from time to time in such respects as the Board may deem
advisable in order that Options under the Plan shall conform to any change in
applicable laws or regulations or in any other respect the Board may deem to
be in the best interests of the Company; provided, however, that no such
amendment

                                       7
<PAGE>

shall be effective, without approval of the shareholders of the Company, if
shareholder approval of the amendment is then required pursuant to Rule 16b-3
under the Exchange Act or any successor rule or under the applicable rules or
regulations of any securities exchange or the NASD; and provided further that
this Plan shall not be amended more than once in any six month period, except
to comply with applicable rules and regulations of the Code, the Exchange
Act, any securities exchange or the NASD.  No termination, suspension or
amendment of the Plan shall alter or impair any outstanding Option without
the consent of the Outside Director affected thereby.

     12.  GOVERNING LAW.   This Plan shall be governed by and construed in
accordance with the laws of the State of Minnesota.

     13.  EFFECTIVE DATE.   This Plan shall become effective on the date it
is adopted by the Shareholders of the Company.

                                       8

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