Document:

Exhibit 4.3

                          REGISTRATION RIGHTS AGREEMENT

      THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as of February
7, 2001 by and between Omnicom Group Inc., a New York corporation (the
"Company"), and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Initial Purchaser") pursuant to the Purchase Agreement, dated
as of February 1, 2001 (the "Purchase Agreement"), between the Company and the
Initial Purchaser. In order to induce the Initial Purchaser to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution of this Agreement is a condition to
the closing under the Purchase Agreement.

      The Company agrees with the Initial Purchaser, (i) for the benefit of the
Initial Purchaser and (ii) for the benefit of the beneficial owners (including
the Initial Purchaser) from time to time of the Securities (as defined herein)
and the beneficial owners from time to time of the Underlying Common Stock (as
defined herein) issued upon conversion of the Securities (each of the foregoing
a "Holder" and together the "Holders"), as follows:

      Section 1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:

      "Affiliate" means, with respect to any specified person, an "affiliate,"
as defined in Rule 144, of such person.

      "Amendment Effectiveness Deadline Date" has the meaning specified in
Section 2(d) hereof.

      "Applicable Conversion Price" means, as of any date of determination, the
Applicable Principal Amount of Securities as of such date of determination
divided by the Conversion Rate in effect as of such date of determination or, if
no Securities are then outstanding, the Conversion Rate that would be in effect
were Securities then outstanding.

      "Applicable Principal Amount" means $1,000 per Security or, if no
Securities are then outstanding, such sum calculated as if such Securities were
then outstanding.

      "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.

      "Common Stock" means any shares of Common Stock, par value $0.15 per
share, of the Company and any other shares of common stock as may constitute
"Common Stock" for purposes of the Indenture, including the Underlying Common
Stock.

      "Conversion Rate" has the meaning assigned to that term in the Indenture.

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      "Damages Accrual Period" has the meaning specified in Section 2(e) hereof.

      "Damages Payment Date" means each August 7 and February 7 in the case of
Securities and the Underlying Common Stock.

      "Deferral Notice" has the meaning specified in Section 3(i) hereof.

      "Deferral Period" has the meaning specified in Section 3(i) hereof.

      "Effectiveness Deadline Date" has the meaning specified in Section 2(a)
hereof.

      "Effectiveness Period" means the period of two years from the date the
Shelf Registration Statement is declared effective or such shorter period that
will terminate upon the earliest of the following: (A) when all the Securities
covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement, (B) when all shares of Common Stock issued upon
conversion of any such Securities that had not been sold pursuant to the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement and (C) when, in the written opinion of counsel to the Company, all
outstanding Registrable Securities held by persons which are not affiliates of
the Company may be resold without registration under the Securities Act pursuant
to Rule 144(k) under the Securities Act or any successor provision thereto.

      "Event" has the meaning specified in Section 2(e) hereof.

      "Event Termination Date" has the meaning specified in Section 2(e) hereof.

      "Event Date" has the meaning specified in Section 2(e) hereof.

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

      "Filing Deadline Date" has the meaning specified in Section 2(a) hereof.

      "Holder" has the meaning specified in the second paragraph of this
Agreement.

      "Indenture" means the Indenture dated as of the date hereof between the
Company and the Trustee, pursuant to which the Securities are being issued.

      "Initial Purchaser" means Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated.

      "Initial Shelf Registration Statement" has the meaning specified in
Section 2(a) hereof.

      "Issue Date" means February 7, 2001.

      "Liquidated Damages Amount" has the meaning specified in Section 2(e)
hereof.

      "Losses" has the meaning specified in Section 6 hereof.

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      "Material Event" has the meaning specified in Section 3(i) hereof.

      "Notice and Questionnaire" means a written notice delivered to the Company
containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A to the Offering
Memorandum of the Company issued February 1, 2001 relating to the Securities.

      "Notice Holder" means, on any date, any Holder that has delivered a Notice
and Questionnaire to the Company on or prior to such date.

      "Prospectus" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A or Rule 415 promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such
Prospectus.

      "Purchase Agreement" has the meaning specified in the first paragraph of
this Agreement.

      "Record Holder" means, with respect to any Damages Payment Date relating
to any Securities or Underlying Common Stock as to which any Liquidated Damages
Amount has accrued, the registered holder of such Securities or Underlying
Common Stock, as the case may be, 15 days prior to the next succeeding Damages
Payment Date.

      "Registrable Securities" means the Securities and the Underlying Common
Stock, until such securities have been converted or exchanged, and, at all times
subsequent to any such conversion or exchange, any securities into or for which
such securities have been converted or exchanged, and any security issued with
respect thereto upon any stock dividend, split or similar event until, in the
case of any such security, the earliest of (i) its effective registration under
the Securities Act and resale in accordance with the Registration Statement
covering it, (ii) the expiration of the holding period that would be applicable
thereto under Rule 144(k) were it not held by an Affiliate of the Company or
(iii) its sale to the public pursuant to Rule 144.

      "Registration Expenses" has the meaning specified in Section 5 hereof.

      "Registration Statement" means any registration statement of the Company
that covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.

      "Restricted Securities" has the meaning assigned to that term in Rule 144.

      "Rule 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

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      "Rule 144A" means Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

      "SEC" means the U.S. Securities and Exchange Commission and any successor
agency.

      "Securities" means the Liquid Yield Option(TM) Notes due 2031 of the
Company to be purchased pursuant to the Purchase Agreement.

      "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.

      "Shelf Registration Statement" has the meaning specified in Section 2(a)
hereof.

      "Subsequent Shelf Registration Statement" has the meaning specified in
Section 2(b) hereof.

      "TIA" means the Trust Indenture Act of 1939, as amended.

      "Trustee" means The Chase Manhattan Bank (or any successor entity), the
Trustee under the Indenture.

      "Underlying Common Stock" means the Common Stock into which the Securities
are convertible or issued upon any such conversion.

      Section 2. Shelf Registration. (a) The Company shall prepare and file or
cause to be prepared and filed with the SEC, as soon as practicable but in any
event by the date (the "Filing Deadline Date") 90 days after the Issue Date, a
Registration Statement for an offering to be made on a delayed or continuous
basis pursuant to Rule 415 of the Securities Act (a "Shelf Registration
Statement") registering the resale from time to time by Holders thereof of all
of the Registrable Securities (the "Initial Shelf Registration Statement"). The
Initial Shelf Registration Statement shall be on Form S-3 or another appropriate
form permitting registration of such Registrable Securities for resale by such
Holders in accordance with the methods of distribution elected by the Holders
and set forth in the Initial Shelf Registration Statement. The Company shall use
reasonable efforts to cause the Initial Shelf Registration Statement to be
declared effective under the Securities Act as promptly as is practicable but in
any event by the date (the "Effectiveness Deadline Date") that is 210 days after
the Issue Date, and to keep the Initial Shelf Registration Statement (or any
Subsequent Shelf Registration Statement) continuously effective under the
Securities Act until the expiration of the Effectiveness Period; provided,
however, that no Holder shall be entitled to have the Registrable Securities
held by it covered by such Shelf Registration Statement unless such Holder shall
have provided a Notice and Questionnaire in accordance with Section 2(d) and is
in compliance with Section 4. None of the Company's security holders (other than
the Holders of Registrable Securities) shall have the right to include any of
the Company's securities in the Shelf Registration Statement.

      (b) If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period (other than because all Registrable Securities
registered thereunder shall have been resold

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pursuant thereto or shall have otherwise ceased to be Registrable Securities),
the Company shall use all reasonable efforts to obtain the prompt withdrawal of
any order suspending the effectiveness thereof, and in any event shall within 30
days of such cessation of effectiveness amend the Shelf Registration Statement
in a manner reasonably expected to obtain the withdrawal of the order suspending
the effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a "Subsequent Shelf Registration Statement"). If a
Subsequent Shelf Registration Statement is filed, the Company shall use all
reasonable efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is practicable after such filing and to keep
such Registration Statement (or subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period.

      (c) The Company shall supplement and amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement,
if required by the Securities Act or, as reasonably requested by the Initial
Purchaser or by the Trustee on behalf of the registered Holders.

      (d) Each Holder of Registrable Securities agrees that if such Holder
wishes to sell Registrable Securities pursuant to a Shelf Registration Statement
and related Prospectus, it will do so only in accordance with this Section 2(d)
and Section 3(i). Each Holder of Registrable Securities wishing to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus agrees to deliver a Notice and Questionnaire to the Company at least
five Business Days prior to any intended distribution of Registrable Securities
under the Shelf Registration Statement. From and after the date the Initial
Shelf Registration Statement is declared effective, the Company shall, as
promptly as is practicable after the date a Notice and Questionnaire is
delivered, and in any event within five Business Days after such date, (i) if
required by applicable law, file with the SEC a post-effective amendment to the
Shelf Registration Statement or prepare and, if required by applicable law, file
a supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that the Holder delivering such Notice and Questionnaire is named as a
selling security holder in the Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of the Registrable Securities in accordance with applicable law
and, if the Company shall file a post-effective amendment to the Shelf
Registration Statement, use reasonable efforts to cause such post-effective
amendment to be declared effective under the Securities Act as promptly as is
practicable, but in any event by the date (the "Amendment Effectiveness Deadline
Date") that is 30 days after the date such post-effective amendment is required
by this clause to be filed, (ii) provide such Holder copies of any documents
filed pursuant to Section 2(d)(i), and (iii) notify such Holder as promptly as
practicable after the effectiveness under the Securities Act of any
post-effective amendment filed pursuant to Section 2(d)(i); provided, that if
such Notice and Questionnaire is delivered during a Deferral Period, the Company
shall so inform the Holder delivering such Notice and Questionnaire and shall
take the actions set forth in clauses (i), (ii) and (iii) above upon expiration
of the Deferral Period in accordance with Section 3(i), provided, further, that
if under applicable law the Company has more than one option as to the type or
manner of making any such filing, it will make the required filing or filings in
the manner or of a type that is reasonably expected to result in the earliest
availability of the Prospectus for

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effecting resales of Registrable Securities. Notwithstanding anything contained
herein to the contrary, the Company shall be under no obligation to name any
Holder that is not a Notice Holder as a selling security holder in any
Registration Statement or related Prospectus; provided, however, that any Holder
that becomes a Notice Holder pursuant to the provisions of Section 2(d) of this
Agreement (whether or not such Holder was a Notice Holder at the time the
Registration Statement was declared effective) shall be named as a selling
security holder in the Registration Statement or related Prospectus in
accordance with the requirements of this Section 2(d).

      (e) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if (i) the Initial Shelf Registration Statement
has not been filed on or prior to the Filing Deadline Date, (ii) the Initial
Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to the Effectiveness Deadline Date, (iii) the Company
has failed to perform its obligations set forth in Section 2(d) hereof within
the time period required therein, (iv) the aggregate duration of Deferral
Periods in any period exceeds the number of days permitted in respect of such
period pursuant to Section 3(i) hereof or (v) the number of Deferral Periods in
any period exceeds the number permitted in respect of such period pursuant to
Section 3(i) (each of the events of a type described in any of the foregoing
clauses (i) through (v) are individually referred to herein as an "Event," and
the Filing Deadline Date in the case of clause (i), the Effectiveness Deadline
Date in the case of clause (ii), the date by which the Company is required to
perform its obligations set forth in Section 2(d) in the case of clause (iii)
(including the filing of any post-effective amendment prior to the Amendment
Effectiveness Deadline Date), the date on which the aggregate duration of
Deferral Periods in any period exceeds the number of days permitted by Section
3(i) hereof in the case of clause (iv), and the date of the commencement of a
Deferral Period that causes the limit on the number of Deferral Periods in any
period under Section 3(i) hereof to be exceeded in the case of clause (v), being
referred to herein as an "Event Date"). Events shall be deemed to continue until
the "Event Termination Date," which shall be the following dates with respect to
the respective types of Events: the date the Initial Shelf Registration
Statement is filed in the case of an Event of the type described in clause (i),
the date the Initial Shelf Registration Statement is declared effective under
the Securities Act in the case of an Event of the type described in clause (ii),
the date the Company performs its obligations set forth in Section 2(d) in the
case of an Event of the type described in clause (iii) (including, without
limitation, the date the relevant post-effective amendment to the Shelf
Registration Statement is declared effective under the Securities Act),
termination of the Deferral Period that caused the limit on the aggregate
duration of Deferral Periods in a period set forth in Section 3(i) to be
exceeded in the case of the commencement of an Event of the type described in
clause (iv), and termination of the Deferral Period the commencement of which
caused the number of Deferral Periods in a period permitted by Section 3(i) to
be exceeded in the case of an Event of the type described in clause (v).

      Accordingly, commencing on (and including) any Event Date and ending on
(but excluding) the next date on which there are no Events that have occurred
and are continuing (a "Damages Accrual Period"), the Company agrees to pay, as
liquidated damages and not as a penalty, an amount (the "Liquidated Damages
Amount"), payable on the Damages Payment Dates to Record Holders of
then-outstanding Securities that are Registrable Securities and of
then-outstanding shares of Underlying Common Stock issued upon conversion of
Securities that

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are Registrable Securities, as the case may be, accruing, for each portion of
such Damages Accrual Period beginning on and including a Damages Payment Date
(or, in respect of the first time that the Liquidation Damages Amount is to be
paid to Holders on a Damages Payment Date as a result of the occurrence of any
particular Event, from the Event Date) and ending on but excluding the first to
occur of (A) the date of the end of the Damages Accrual Period or (B) the Next
Damages Payment Date, at a rate per annum equal to one-quarter of one percent
(0.25%) for the first 90-day period from the Event Date, and thereafter at a
rate per annum equal to one-half of one percent (0.50%) of the aggregate
Applicable Principal Amount of such Securities and the aggregate Applicable
Conversion Price of such shares of Underlying Common Stock, as the case may be,
in each case determined as of the Business Day immediately preceding the next
Damages Payment Date; provided, that in the case of a Damages Accrual Period
that is in effect solely as a result of an Event of the type described in clause
(iii) of the immediately preceding paragraph, such Liquidated Damages Amount
shall be paid only to the Holders that have delivered Notice and Questionnaires
that caused the Company to incur the obligations set forth in Section 2(d) the
non-performance of which is the basis of such Event; provided further, that any
Liquidated Damages Amount accrued with respect to any Securities or portion
thereof called for redemption on a redemption date or converted into Underlying
Common Stock on a conversion date prior to the Damages Payment Date, shall, in
any such event, be paid instead to the Holder who submitted such Securities or
portion thereof for redemption or conversion on the applicable redemption date
or conversion date, as the case may be, on such date (or promptly following the
conversion date, in the case of conversion). Notwithstanding the foregoing, no
Liquidated Damages Amounts shall accrue as to any Registrable Security from and
after the earlier of (x) the date such security is no longer a Registrable
Security and (y) expiration of the Effectiveness Period. The rate of accrual of
the Liquidated Damages Amount with respect to any period shall not exceed the
rate provided for in this paragraph notwithstanding the occurrence of multiple
concurrent Events. Following the cure of all Events requiring the payment by the
Company of Liquidated Damages Amounts to the Holders of Registrable Securities
pursuant to this Section, the accrual of Liquidated Damages Amounts will cease
(without in any way limiting the effect of any subsequent Event requiring the
payment of Liquidated Damages Amounts by the Company).

      The Trustee shall be entitled, on behalf of Holders of Securities or
Underlying Common Stock, to seek any available remedy for the enforcement of
this Agreement, including for the payment of any Liquidated Damages Amount.
Notwithstanding the foregoing, the parties agree that the sole monetary damages
payable for a violation of the terms of this Agreement with respect to which
liquidated damages are expressly provided shall be such liquidated damages.
Nothing shall preclude a Notice Holder or Holder of Registrable Securities from
pursuing or obtaining specific performance or other equitable relief with
respect to this Agreement.

      All of the Company's obligations set forth in this Section 2(e) that are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 8(k)).

      The parties hereto agree that the liquidated damages provided for in this
Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or

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declared effective or available for effecting resales of Registrable Securities
in accordance with the provisions hereof.

      Section 3. Registration Procedures. In connection with the registration
obligations of the Company under Section 2 hereof, the Company shall:

      (a) Before filing any Registration Statement or Prospectus or any
amendments or supplements thereto with the SEC, furnish to the Initial Purchaser
copies of all such documents proposed to be filed and use reasonable efforts to
reflect in each such document when so filed with the SEC such comments as the
Initial Purchaser reasonably shall propose within three Business Days of the
delivery of such copies to the Initial Purchaser.

      (b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the applicable period
specified in Section 2(a); cause the related Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) under the Securities Act;
and use all reasonable efforts to comply with the provisions of the Securities
Act applicable to it with respect to the disposition of all securities covered
by such Registration Statement during the Effectiveness Period in accordance
with the intended methods of disposition by the sellers thereof set forth in
such Registration Statement as so amended or such Prospectus as so supplemented.

      (c) As promptly as practicable give notice to the Notice Holders directly
or through the Trustee and the Initial Purchaser (i) when any Prospectus,
Prospectus supplement, Registration Statement or post-effective amendment to a
Registration Statement has been filed with the SEC and, with respect to a
Registration Statement or any post-effective amendment, when the same has been
declared effective, (ii) of any request, following the effectiveness of the
Initial Shelf Registration Statement under the Securities Act, by the SEC or any
other federal or state governmental authority for amendments or supplements to
any Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of any Registration
Statement or the initiation or threatening of any proceedings for that purpose,
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (v) of the occurrence of (but
not the nature of or details concerning) a Material Event (provided, however,
that no notice by the Company shall be required pursuant to this clause (v) in
the event that the Company either promptly files a Prospectus supplement to
update the Prospectus or a Form 8-K or other appropriate Exchange Act report
that is incorporated by reference into the Registration Statement, which, in
either case, contains the requisite information with respect to such Material
Event that results in such Registration Statement no longer containing any
untrue statement of material fact or omitting to state a material fact necessary
to make the statements contained therein, in the light of the circumstances
under which they were made, not misleading) and (vi) of the determination by the
Company that a post-effective amendment to a Registration Statement will be
filed with the SEC, which notice may, at the discretion of the Company (or as

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required pursuant to Section 3(i)), state that it constitutes a Deferral Notice,
in which event the provisions of Section 3(i) shall apply.

      (d) Use all reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction in which they have been
qualified for sale, in either case at the earliest possible moment.

      (e) If reasonably requested by the Initial Purchaser or any Notice Holder,
promptly as reasonably practicable incorporate in a Prospectus supplement or
post-effective amendment to a Registration Statement such information as the
Initial Purchaser or such Notice Holder shall, on the basis of an opinion of
nationally-recognized counsel experienced in such matters, determine to be
required to be included therein by applicable law and make any required filings
of such Prospectus supplement or such post-effective amendment; provided, that
the Company shall not be required to take any actions under this Section 3(e)
that are not, in the reasonable opinion of counsel for the Company, in
compliance with applicable law.

      (f) Promptly as reasonably practicable furnish to each Notice Holder and
the Initial Purchaser, upon their request and without charge, at least one
conformed copy of the Registration Statement and any amendment thereto,
including financial statements but excluding schedules, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits
(unless requested in writing to the Company by such Notice Holder or the Initial
Purchaser, as the case may be).

      (g) During the Effectiveness Period, deliver to each Notice Holder in
connection with any sale of Registrable Securities pursuant to a Registration
Statement, without charge, as many copies of the Prospectus or Prospectuses
relating to such Registrable Securities (including each preliminary prospectus)
and any amendment or supplement thereto as such Notice Holder may reasonably
request; and the Company hereby consents (except during such periods that a
Deferral Notice is outstanding and has not been revoked) to the use of such
Prospectus or each amendment or supplement thereto by each Notice Holder in
connection with any offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto in the manner set forth
therein.

      (h) Prior to any public offering of the Registrable Securities pursuant to
the Shelf Registration Statement, use all reasonable efforts to register or
qualify or cooperate with the Notice Holders in connection with the registration
or qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Notice Holder reasonably
requests in writing (which request may be included in the Notice and
Questionnaire); prior to any public offering of the Registrable Securities
pursuant to the Shelf Registration Statement, use all reasonable efforts to keep
each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period in connection with such Notice Holder's offer
and sale of Registrable Securities pursuant to such registration or
qualification (or exemption therefrom) and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of such
Registrable Securities in the manner set forth in the relevant Registration
Statement and the related Prospectus; provided, that the Company will not be
required to (i)

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qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this
Agreement or (ii) take any action that would subject it to general service of
process in suits or to taxation in any such jurisdiction where it is not then so
subject.

      (i) Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the existence
of any fact (a "Material Event") as a result of which any Registration Statement
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any Prospectus shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (C) the occurrence or existence
of any pending corporate development that, in the discretion of the Company,
makes it appropriate to suspend the availability of the Shelf Registration
Statement and the related Prospectus, (i) in the case of clause (B) above,
subject to the next sentence, as promptly as practicable prepare and file a
post-effective amendment to such Registration Statement or a supplement to the
related Prospectus or any document incorporated therein by reference or file any
other required document that would be incorporated by reference into such
Registration Statement and Prospectus so that such Registration Statement does
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and such Prospectus does not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
and, in the case of a post-effective amendment to a Registration Statement,
subject to the next sentence, use all reasonable efforts to cause it to be
declared effective as promptly as is reasonably practicable, and (ii) give
notice to the Notice Holders that the availability of the Shelf Registration
Statement is suspended (a "Deferral Notice") and, upon receipt of any Deferral
Notice, each Notice Holder agrees not to sell any Registrable Securities
pursuant to the Registration Statement until such Notice Holder's receipt of
copies of the supplemented or amended Prospectus provided for in clause (i)
above, or until it is advised in writing by the Company that the Prospectus may
be used, and has received copies of any additional or supplemental filings that
are incorporated or deemed incorporated by reference in such Prospectus. The
Company will all use reasonable efforts to ensure that the use of the Prospectus
may be resumed (x) in the case of clause (A) above, as promptly as is
practicable, (y) in the case of clause (B) above, as soon as, in the sole
judgment of the Company, public disclosure of such Material Event would not be
prejudicial to or contrary to the interests of the Company or, if necessary to
avoid unreasonable burden or expense, as soon as reasonably practicable
thereafter and (z) in the case of clause (C) above, as soon as, in the
discretion of the Company, such suspension is no longer appropriate. The period
during which the availability of the Registration Statement and any Prospectus
is suspended (the "Deferral Period") shall, without the Company incurring any
obligation to pay liquidated damages pursuant to Section 2(e), not exceed 45
days in any three month period and 90 days in any twelve month period.

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      (j) If reasonably requested in writing in connection with a disposition of
Registrable Securities pursuant to a Registration Statement, make reasonably
available for inspection during normal business hours by a representative for
the Notice Holders of such Registrable Securities and any broker-dealers,
attorneys and accountants retained by such Notice Holders, all relevant
financial and other records, pertinent corporate documents and properties of the
Company and its subsidiaries, and cause the appropriate executive officers,
directors and designated employees of the Company and its subsidiaries to make
reasonably available for inspection during normal business hours all relevant
information reasonably requested by such representative for the Notice Holders
or any such broker-dealers, attorneys or accountants in connection with such
disposition, in each case as is customary for similar "due diligence"
examinations; provided, however, that such persons shall first agree in writing
with the Company that any information that is reasonably and in good faith
designated by the Company in writing as confidential at the time of delivery of
such information shall be kept confidential by such persons and shall be used
solely for the purposes of exercising rights under this Agreement, unless (i)
disclosure of such information is required by court or administrative order or
is necessary to respond to inquiries of regulatory authorities, (ii) disclosure
of such information is required by law (including any disclosure requirements
pursuant to federal securities laws in connection with the filing of any
Registration Statement or the use of any Prospectus referred to in this
Agreement), (iii) such information becomes generally available to the public
other than as a result of a disclosure or failure to safeguard by any such
person or (iv) such information becomes available to any such person from a
source other than the Company and such source is not bound by a confidentiality
agreement; and provided further, that the foregoing inspection and information
gathering shall, to the greatest extent possible, be coordinated on behalf of
all the Notice Holders and the other parties entitled thereto by the counsel
referred to in Section 5.

      (k) The Company will timely file such reports pursuant to the 1934 Act as
are necessary in order to make generally available to its securityholders, as
soon as practicable, an earning statement for the purposes of, and to provide
the benefits contemplated by, the last paragraph of Section 11(a) of the 1933
Act.

      (l) Cooperate with each Notice Holder to facilitate the timely preparation
and delivery of certificates representing Registrable Securities sold pursuant
to a Registration Statement, and cause such Registrable Securities to be in such
denominations as are permitted by the Indenture and registered in such names as
such Notice Holder may request in writing at least two Business Days prior to
any sale of such Registrable Securities.

      (m) Provide a CUSIP number for all Registrable Securities covered by each
Registration Statement not later than the effective date of such Registration
Statement and provide the Trustee for the Securities and the transfer agent for
the Securities with printed certificates for the Registrable Securities that are
in a form eligible for deposit with The Depository Trust Company.

      (n) Make a reasonable effort to provide such information as is required
for any filings required to be made with the National Association of Securities
Dealers, Inc.

      (o) Upon (i) the filing of the Initial Shelf Registration Statement and
(ii) the effectiveness of the Initial Shelf Registration Statement, promptly
notify the holders of LYONs

                                       11
<PAGE>

thereof and use reasonable best efforts to post this information on the
Company's web site or, at the Company's option, otherwise publicly disclose this
information.

      (p) Cause the Indenture to be qualified under the TIA not later than the
effective date of any Registration Statement; and in connection therewith,
cooperate with the Trustee to effect such changes to the Indenture as may be
required for the Indenture to be so qualified in accordance with the terms of
the TIA and execute, and use all reasonable efforts to cause the Trustee to
execute, all documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable the Indenture to
be so qualified in a timely manner.

      Section 4. Holder's Obligations. Each Holder agrees, by acquisition of the
Registrable Securities, that no Holder of Registrable Securities shall be
entitled to sell any of such Registrable Securities pursuant to a Registration
Statement or to receive a Prospectus relating thereto, unless such Holder has
furnished the Company with a Notice and Questionnaire as required pursuant to
Section 2(d) hereof (including the information required to be included in such
Notice and Questionnaire) and the information set forth in the next sentence.
Each Notice Holder agrees promptly to furnish to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Notice Holder not misleading and any other information
regarding such Notice Holder and the distribution of such Registrable Securities
as may be required in the reasonable view of the Company to be disclosed in the
Registration Statement under applicable law.

      Section 5. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Sections 2 and 3 of this Agreement whether or not any of the
Registration Statements are declared effective. Such fees and expenses shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (x) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (y) of
compliance with federal and state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of the counsel specified
in the next sentence in connection with Blue Sky qualifications of the
Registrable Securities under the laws of such jurisdictions as the Notice
Holders of a majority of the Registrable Securities being sold pursuant to a
Registration Statement may reasonably designate), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities in a form eligible for deposit with The Depository Trust
Company), (iii) duplication expenses relating to copies of any Registration
Statement or Prospectus delivered to any Holders hereunder, (iv) fees and
disbursements of counsel for the Company in connection with the Shelf
Registration Statement, and (v) reasonable fees and disbursements of the Trustee
and its counsel and of the registrar and transfer agent for the Common Stock. In
addition, the Company shall bear or reimburse the Notice Holders for the
reasonable fees and disbursements of one firm of legal counsel for the Holders,
which shall initially be Shearman & Sterling, but which may, upon the written
consent of the Initial Purchaser (which shall not be unreasonably withheld), be
another nationally recognized law firm experienced in securities law matters
designated by the Company. In addition, the Company shall pay the internal
expenses of the Company (including, without limitation, all salaries and
expenses of officers and employees performing legal or accounting duties), the
expense of any annual audit, the fees and expenses incurred in connection with
the

                                       12
<PAGE>

listing of the Registrable Securities on any securities exchange on which
similar securities of the Company are then listed and the fees and expenses of
any person, including special experts, retained by the Company. Notwithstanding
the foregoing, the fees and expenses payable by the Company under this Section 5
shall not include any underwriting fees, discounts, broker-dealer commissions or
selling commissions payable in connection with any underwritten offering of
Registrable Securities.

      Section 6. Indemnification; Contribution. (a) The Company agrees to
indemnify and hold harmless the Initial Purchaser and each holder of Registrable
Securities and each person, if any, who controls the Initial Purchaser or any
holder of Registrable Securities within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, as follows:

            (i) against any and all loss, liability, claim, damage and expense
      whatsoever, as incurred, arising out of any untrue statement or alleged
      untrue statement of a material fact contained in the Registration
      Statement (or any amendment thereto), or the omission or alleged omission
      therefrom of a material fact necessary in order to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading or arising out of any untrue statement or alleged untrue
      statement of a material fact included in any preliminary prospectus or the
      Prospectus (or any amendment or supplement thereto), or the omission or
      alleged omission therefrom of a material fact necessary in order to make
      the statements therein, in the light of the circumstances under which they
      were made, not misleading;

            (ii) against any and all loss, liability, claim, damage and expense
      whatsoever, as incurred, to the extent of the aggregate amount paid in
      settlement of any litigation, or any 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, provided that (subject to Section
      6(d) below) any such settlement is effected with the prior written consent
      of the Company; and

            (iii) against any and all expense whatsoever, as incurred (including
      the fees and disbursements of counsel), reasonably incurred in
      investigating, preparing or defending against any litigation, or any
      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 (i) or (ii) above;

provided, however, that this indemnity shall not apply to any loss, liability,
claim, damage or expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by the Initial
Purchaser or such holder of Registrable Securities (which also acknowledges the
indemnity provisions herein) and each person, if any, who controls the Initial
Purchaser or any such holder of Registrable Securities expressly for use in the
Registration Statement (or any amendment thereto), or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).

                                       13
<PAGE>

      (b) In connection with any Shelf Registration in which a holder,
including, without limitation, the Initial Purchaser, of Registrable Securities
is participating, in furnishing information relating to such holder of
Registrable Securities to the Company in writing expressly for use in such
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto, the holders of such Registrable Securities
agree, severally and not jointly, to indemnify and hold harmless the Initial
Purchaser and each person, if any, who controls the Initial Purchaser within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act and the Company, and each person, if any, who controls the Company within
the meaning of either such Section, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such holder of
Registrable Securities (which also acknowledges the indemnity provisions herein)
and each person, if any, who controls any such holder of Registrable Securities
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).

      The Initial Purchaser agrees to indemnify and hold harmless the Company,
the holders of Registrable Securities, and each person, if any, who controls the
Company or any holder of Registrable Securities within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto), or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by the Initial Purchaser expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).

      (c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party (i) shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a result
thereof and (ii) in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could

                                       14
<PAGE>

be sought under this Section 6 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.

      (d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.

      (e) If the indemnification provided for in this Section 6 is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
the relative fault of the indemnifying party or parties on the one hand and of
the indemnified party on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.

      The relative fault of the Company on the one hand and the holders of the
Registrable Securities or the Initial Purchaser on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or by the
holder of the Registrable Securities or the Initial Purchaser and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

      The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(e) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 6(e). The
aggregate amount of losses, liabilities, claims, damages, and expenses incurred
by an indemnified party and referred to above in this Section 6(e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.

      Notwithstanding the provisions of this Section 6, neither the holder of
any Registrable Securities nor the Initial Purchaser, shall be required to
indemnify or contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such holder of Registrable
Securities or sold in the Offering pursuant to the Purchase Agreement by the
Initial Purchaser, as the case may be, and exceeds the amount of any damages

                                       15
<PAGE>

that such holder of Registrable Securities or the Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.

      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.

      For purposes of this Section 6(e), each person, if any, who controls the
Initial Purchaser or any holder of Registrable Securities within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Initial Purchaser or such holder, and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company.

      Section 7. Information Requirements. (a) The Company covenants that, if at
any time before the end of the Effectiveness Period the Company is not subject
to the reporting requirements of the Exchange Act, it will cooperate with any
Holder of Registrable Securities and take such further reasonable action as any
Holder of Registrable Securities may reasonably request in writing (including,
without limitation, making such reasonable representations as any such Holder
may reasonably request), all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144 and
Rule 144A under the Securities Act and customarily taken in connection with
sales pursuant to such exemptions. Upon the written request of any Holder of
Registrable Securities, the Company shall deliver to such Holder a written
statement as to whether it has complied with such filing requirements, unless
such a statement has been included in the Company's most recent report required
to be filed and filed pursuant to Section 13 or Section 15(d) of Exchange Act.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities (other than the Common
Stock) under any section of the Exchange Act.

      Section 8. Miscellaneous.

      (a) No Conflicting Agreements. The Company is not, as of the date hereof,
a party to, nor shall it, on or after the date of this Agreement, enter into,
any agreement with respect to its securities that interferes with the rights
granted to the Holders of Registrable Securities in this Agreement. The Company
represents and warrants that the rights granted to the Holders of Registrable
Securities hereunder do not in any way interfere with the rights granted to the
holders of the Company's securities under any other agreements.

      (b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of a
majority of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of Securities deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying
Common Stock into which such Securities are or would be convertible or
exchangeable as of the date on which such consent is requested). Notwithstanding
the foregoing, a waiver or consent to

                                       16
<PAGE>

depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other Holders of Registrable Securities may
be given by Holders of at least a majority of the Registrable Securities being
sold by such Holders pursuant to such Registration Statement; provided, that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the immediately preceding sentence. Each
Holder of Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant to
this Section 8(b), whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

      (c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:

      (w) if to a Holder of Registrable Securities, at the most current address
given by such Holder to the Company in a Notice and Questionnaire or any
amendment thereto;

      (x) if to the Company, to:

      Omnicom Group Inc.
      437 Madison Avenue, 9th Floor
      New York, New York 10022
      Attention: General Counsel
      Telecopy No.: (212) 415-3670

      and

      (y) if to the Initial Purchaser, to:

      Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
      World Financial Center
      North Tower
      250 Vesey Street
      New York, New York  10281
      Attention: Syndicate Department
      Telecopy No.: (212) 738-1069

or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.

                                       17
<PAGE>

      (d) Approval of Holders. Whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder, the
Registrable Securities held by the Company or its Affiliates (other than the
Initial Purchaser or subsequent Holders of Registrable Securities if such
subsequent Holders are deemed to be such affiliates solely by reason of their
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.

      (e) Successors and Assigns. Any person who purchases any Registrable
Securities from the Initial Purchaser shall be deemed, for purposes of this
Agreement, to be an assignee of the Initial Purchaser. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding upon each Holder
of any Registrable Securities.

      (f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.

      (g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

      (h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICT OF LAWS.

      (i) Severability. If any term, provision, covenant or restriction of this
Agreement is held to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, and the parties hereto shall use their best efforts to find
and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction, it
being intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.

      (j) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and the registration rights granted by the
Company with respect to the Registrable Securities. Except as provided in the
Purchase Agreement, there are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and undertakings
among the parties with respect to such registration rights.

      (k) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the expiration of the Effectiveness Period,
except for any liabilities or

                                       18
<PAGE>

obligations under Sections 4, 5 or 6 hereof and the obligations to make payments
of and provide for liquidated damages under Section 2(e) hereof to the extent
such damages accrue prior to the end of the Effectiveness Period, each of which
shall remain in effect in accordance with its terms.

                [Remainder of this page intentionally left blank]

                                       19
<PAGE>

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

OMNICOM GROUP INC.

By: /s/ Robert Profusek
    ----------------------------------

Name: Robert Profusek
Title: Executive Vice President

Confirmed and accepted as of the date first above written:

MERRILL LYNCH & CO.
     MERRILL LYNCH, PIERCE, FENNER & SMITH
                 INCORPORATED

By: /s/ Martha Wooding
    ----------------------------------

Name: Martha Wooding
Title: DirectorCOMMON STOCK PURCHASE AGREEMENT

                          DATED AS OF FEBRUARY 9, 2001

                                 BY AND BETWEEN

                            IGEN INTERNATIONAL, INC.

                                       AND

                                ACQUA WELLINGTON

                       NORTH AMERICAN EQUITIES FUND, LTD.

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

ARTICLE I          Definitions.................................................1

       Section 1.1    Definitions..............................................1

ARTICLE II         Purchase and Sale of Common Stock...........................4

       Section 2.1    Purchase and Sale of Stock...............................4
       Section 2.2    The Shares...............................................4
       Section 2.3    Purchase Price and Closing...............................4

ARTICLE III        Representations and Warranties..............................4

       Section 3.1    Representations and Warranties of the Company............4
       Section 3.2    Representations and Warranties of the Purchaser.........11

ARTICLE IV         Covenants..................................................13

       Section 4.1    Securities Compliance...................................13
       Section 4.2    Registration and Listing................................13
       Section 4.3    Registration Statement..................................13
       Section 4.4    Compliance with Laws....................................13
       Section 4.5    Keeping of Records and Books of Account.................14
       Section 4.6    Reporting Requirements..................................14
       Section 4.7    Non-public Information..................................14
       Section 4.8    Effective Registration Statement........................14
       Section 4.9    No Stop Orders..........................................14
       Section 4.10   Amendments to the Registration Statement................15
       Section 4.11   Prospectus Delivery.....................................15
       Section 4.12   Other Financing.........................................15
       Section 4.13   Notices.................................................16

ARTICLE V          Conditions to Closing, Draw Downs and Call Options.........16

       Section 5.1    Conditions Precedent to the Issuance of a Draw
                      Down Notice.............................................16

       Section 5.2    Conditions Precedent to the Obligation of the
                      Purchaser to Close......................................17

       Section 5.3    Conditions Precedent to the Obligation of the
                      Purchaser to Accept a Draw Down Notice and
                      Purchase the Shares.....................................18

ARTICLE VI         Draw Down Terms; Call Option...............................20

       Section 6.1    Draw Down Terms.........................................20
       Section 6.2    Purchaser's Call Option.................................23

                                      -i-
<PAGE>

ARTICLE VII        Termination................................................24

       Section 7.1    Termination by Mutual Consent...........................24
       Section 7.2    Other Termination.......................................24
       Section 7.3    Effect of Termination...................................25

ARTICLE VIII       Indemnification............................................25

       Section 8.1    General Indemnity.......................................25
       Section 8.2    Indemnification Procedures..............................26

ARTICLE IX         Miscellaneous..............................................27

       Section 9.1    Fees and Expenses.......................................27
       Section 9.2    Specific Enforcement, Consent to Jurisdiction...........28
       Section 9.3    Entire Agreement; Amendment.............................28
       Section 9.4    Notices.................................................28
       Section 9.5    Waivers.................................................29
       Section 9.6    Headings................................................29
       Section 9.7    Successors and Assigns..................................30
       Section 9.8    Governing Law...........................................30
       Section 9.9    Survival................................................30
       Section 9.10   Counterparts............................................30
       Section 9.11   Publicity...............................................30
       Section 9.12   Severability............................................30
       Section 9.13   Further Assurances......................................30

                                      -ii-

<PAGE>

                         COMMON STOCK PURCHASE AGREEMENT

      This COMMON STOCK PURCHASE  AGREEMENT  (this  "AGREEMENT")  is dated as of
February 9, 2001 by and between IGEN International, Inc., a Delaware corporation
(the  "COMPANY"),  and Acqua  Wellington  North American  Equities Fund, Ltd., a
limited  liability  company  organized under the laws of the Commonwealth of The
Bahamas (the "PURCHASER").

      The parties hereto agree as follows:

                                   ARTICLE I

                                   Definitions

          SECTION 1.1 DEFINITIONS.

          (a)  "ALTERNATE  MARKET"  shall mean the Nasdaq Small Cap Market,  the
American Stock Exchange,  the New York Stock Exchange or the OTC Bulletin Board,
whichever is at the time the principal trading exchange or market for the Common
Stock.

          (b) "BYLAWS"  shall have the meaning  assigned to such term in Section
3.1(c) hereof.

          (c) "CALL  OPTION"  shall have the  meaning  assigned  to such term in
Section 6.2(a) hereof.

          (d) "CALL OPTION AMOUNT" means the actual amount of proceeds  received
by the  Company  upon  the  exercise  of a Call  Option  by the  Purchaser.

          (e) "CHARTER" shall have the meaning  assigned to such term in Section
3.1(c) hereof.

          (f) "CLOSING" shall have the meaning  assigned to such term in Section
2.3 hereof.

          (g)  "CLOSING  DATE" shall have the  meaning  assigned to such term in
Section 2.3 hereof.

          (h) "COMMISSION" shall mean the Securities and Exchange Commission.

          (i) "COMMISSION DOCUMENTS" shall mean all reports,  schedules,  forms,
statements  and other  documents  required to be filed by the  Company  with the
Commission pursuant to the reporting requirements of the Exchange Act, including
material  filed  pursuant to Section  13(a) or 15(d) of the  Exchange  Act,  and
including all filings made by the Company after the date hereof  pursuant to the
Exchange Act.

<PAGE>

          (j)  "COMMISSION  FILINGS"  means the  Registration  Statement and any
other filings made by the Company  relating  thereto  pursuant to the Securities
Act,  including  all other  filings  made by the  Company  after the date hereof
pursuant to the Securities Act.

          (k) "COMMON  STOCK"  shall have the  meaning  assigned to such term in
Section  2.1 hereof.

          (l) "DRAW  DOWN"  means the  exercise  by the  Company of its right to
request the purchase of shares of Common Stock by the Purchaser.

          (m) "DRAW DOWN  AMOUNT"  means the actual  amount of a Draw Down up to
$6,000,000 in any Draw Down Pricing Period or such other amount  mutually agreed
upon by the Purchaser and the Company.

          (n) "DRAW DOWN  DISCOUNT  PERCENTAGE"  means (i) 94% if the  Threshold
Price is equal to or greater than $10.00 but less than $22.00, (ii) 94.5% if the
Threshold  Price is equal to or greater than $22.00 but less than $26.00,  (iii)
95% if the  Threshold  Price is equal to or  greater  than  $26.00 but less than
$30.00,  and (iv)  95.25% if the  Threshold  Price is equal to or  greater  than
$30.00.

          (o) "DRAW DOWN  EXERCISE  DATE"  shall mean the date of  issuance of a
Draw Down Notice by the Company.

          (p) "DRAW DOWN NOTICE" shall have the meaning assigned to such term in
Section 6.1(i) hereof.

          (q) "DRAW DOWN PRICING  PERIOD"  shall mean a period of eighteen  (18)
consecutive  Trading Days  commencing on the first Trading Day designated as the
start date of such draw down  pricing  period in the Draw Down  Notice,  or such
other period mutually agreed upon by the Purchaser and the Company.

          (r) "EXCHANGE ACT" shall mean the Securities  Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.

          (s) "INVESTMENT  PERIOD " shall have the meaning assigned to such term
in Section 7.1 hereof.

          (t) "MATERIAL  ADVERSE  EFFECT" shall mean any effect on the business,
results of operations,  prospects,  assets or financial condition of the Company
that is material and adverse to the Company and its Subsidiaries and affiliates,
taken as a whole and/or any  condition,  circumstance,  or situation  that would
prohibit or otherwise  materially interfere with the ability of the Company from
entering into and performing any of its obligations  under this Agreement in any
material  respect;  provided,  however,  that the  foregoing  shall not  include
operating  losses of the Company in the amounts  contemplated  by the Commission
Documents.

          (u)  "MATERIAL  CHANGE  IN  OWNERSHIP"  shall  mean  that,  as of  any
particular  measurement  date,  the officers and  directors of the Company shall
beneficially  own in the  aggregate  less than 18.5% of the  outstanding  Common
Stock of the  Company,  which  percentage  shall be reduced and  proportionately
adjusted to account for any Common Stock issued and  outstanding  after the date
of this Agreement.

<PAGE>

          (v) "PERSON" shall mean an individual,  a corporation,  a partnership,
an  association,  a  limited  liability  company,  a trust  or other  entity  or
organization,  including a government or political  subdivision  or an agency or
instrumentality thereof.

          (w)  "PRINCIPAL  SECURITY  HOLDER"  shall mean any person  (other than
officers,  directors and strategic partners of the Company) and any affiliate of
such person who  beneficially  or of record holds more than 5% of the  Company's
Common Stock outstanding on the date hereof on a fully diluted basis.

          (x) "PROSPECTUS" shall mean the prospectus in the form included in the
Registration Statement, as supplemented by any Prospectus Supplement

          (y) "PROSPECTUS  SUPPLEMENT"  shall mean any prospectus  supplement to
the Registration Statement filed with the Commission pursuant to Rule 424(b).

          (z) "REGISTRATION  STATEMENT" shall mean the registration statement on
Form S-3,  Commission File Number 333-53886 under the Securities Act, filed with
the Commission  covering the  registration of the Shares,  as such  Registration
Statement may be amended from time to time.

          (aa)  "SECURITIES  ACT"  shall  mean the  Securities  Act of 1933,  as
amended, and the rules and regulations of the Commission promulgated thereunder.

          (bb) "SETTLEMENT DATE" shall have the meaning assigned to such term in
Section 6.1(d) hereof.

          (cc)  "SHARES"  shall mean the shares of Common  Stock of the  Company
that may be purchased hereunder.

          (dd) "SUBSIDIARY"  shall mean any corporation or other entity of which
at least a  majority  of the  securities  or  other  ownership  interest  having
ordinary voting power (absolutely or contingently) for the election of directors
or other persons  performing similar functions are at the time owned directly or
indirectly by the Company and/or any of its other Subsidiaries.

          (ee)  "THRESHOLD  PRICE" is the lowest per share price the Company may
set in the Draw Down Notice to sell  Shares  during a Draw Down  Pricing  Period
(not taking into account the Draw Down Discount Percentage during such Draw Down
Pricing Period).

          (ff)  "TRADING  DAY"  shall  mean a day on which the  Common  Stock is
traded on the Nasdaq National Market or an Alternate Market.

          (gg) "TRUNCATED DRAW DOWN ALLOCATION AMOUNT" shall mean the portion of
the Draw Down Amount  requested  that is allocated to the purchase of the Shares
in  accordance  with  Section 6.1 hereof for each  Trading Day in a reduced Draw
Down  Pricing  Period (as provided in Section  6.1(m)  hereof) that (i) the VWAP
equals  to or  exceeds  the  Threshold  Price,  and (ii)  the VWAP is below  the

<PAGE>

Threshold  Price and the  Purchaser  elects to purchase  the Common Stock at the
Threshold Price in accordance with clauses (h) and (m) of Section 6.1 hereof.

          (hh) "VWAP" shall mean the daily volume weighted  average price (based
on a Trading Day from 9:30 a.m. to 4:00 p.m.,  eastern time) of the Common Stock
of the Company on the NASDAQ National Market or an Alternate  Market as reported
by Bloomberg Financial LP using the AQR function.

                                   ARTICLE II

                        PURCHASE AND SALE OF COMMON STOCK

          SECTION  2.1  PURCHASE  AND SALE OF  STOCK.  Subject  to the terms and
conditions of this Agreement,  the Company shall issue and sell to the Purchaser
and the  Purchaser  shall  purchase  from the Company up to  $60,000,000  of its
Common  Stock,  $0.001 par value per share (the "COMMON  STOCK"),  based on Draw
Downs,  subject to Section  6.1  hereof,  of up to  $6,000,000  in any Draw Down
Pricing  Period and Call  Options,  subject to Section 6.2 hereof,  of up to the
Draw Down Amount for the  applicable  Draw Down Pricing  Period that the Company
may grant to the Purchaser in the Company's sole discretion.

          SECTION 2.2 THE SHARES.  The Company has  authorized  and has reserved
and covenants to continue to reserve,  subject to Section 4.4(b) hereof, free of
preemptive  rights  and other  similar  contractual  rights of  stockholders,  a
sufficient number of authorized but unissued shares of its Common Stock to cover
the Shares to be issued in connection  with all Draw Downs made and Call Options
issued.

          SECTION 2.3 PURCHASE AND CLOSING. The Company agrees to issue and sell
to the  Purchaser  and, in  consideration  of and in express  reliance  upon the
representations,  warranties, covenants, terms and conditions of this Agreement,
the Purchaser  agrees to purchase on any applicable  Settlement Date that number
of the  Shares  to be  issued  in  connection  with each Draw Down and each Call
Option exercised by the Purchaser.  The closing of the execution and delivery of
this  Agreement  shall occur upon  delivery by facsimile  of executed  signature
pages of this  Agreement  and all  other  documents,  instruments  and  writings
required to be delivered  pursuant to this Agreement to the offices of Jenkens &
Gilchrist Parker Chapin LLP, The Chrysler  Building,  405 Lexington Avenue,  New
York, NY 10174 (the  "CLOSING") at 10:00 a.m.,  eastern time, on (i) February 9,
2001, or (ii) such other time and place or on such date as the Purchaser and the
Company  may agree upon (the  "CLOSING  DATE").  Each party  shall  deliver  all
documents,  instruments  and  writings  required to be  delivered  by such party
pursuant to this Agreement at or prior to the Closing.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

          SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby makes the following representations and warranties to the Purchaser:

<PAGE>

          (a)   ORGANIZATION,   GOOD  STANDING  AND  POWER.  The  Company  is  a
corporation duly  incorporated,  validly existing and in good standing under the
laws of Delaware and has the requisite corporate power to own, lease and operate
its  properties  and  assets  and to  conduct  its  business  as it is now being
conducted.  The  Company  and each  Subsidiary  is duly  qualified  as a foreign
corporation  to do business  and is in good  standing in every  jurisdiction  in
which the nature of the business  conducted  or property  owned by it makes such
qualification  necessary  except for any jurisdiction in which the failure to be
so qualified will not have a Material Adverse Effect.

          (b)  AUTHORIZATION;   ENFORCEMENT.   The  Company  has  the  requisite
corporate  power and  authority to enter into and perform this  Agreement and to
issue and sell the Shares in accordance  with the terms hereof.  The  execution,
delivery and  performance of this Agreement by the Company and the  consummation
by it of the  transactions  contemplated  hereby  have  been  duly  and  validly
authorized by all necessary  corporate  action,  and,  except as contemplated by
Section 4.4(b) hereto, no further consent or authorization of the Company or its
Board of Directors or stockholders is required, except for approval by the Board
of Directors of the Company of the applicable  Threshold Price for any Draw Down
and/or Call Option.  This  Agreement has been duly executed and delivered by the
Company.  This  Agreement  constitutes,  or shall  constitute  when executed and
delivered, a valid and binding obligation of the Company enforceable against the
Company in  accordance  with its  terms,  except as such  enforceability  may be
limited  by  applicable  bankruptcy,  insolvency,  reorganization,   moratorium,
liquidation,  conservatorship,  receivership  or similar  laws  relating  to, or
affecting  generally the  enforcement of,  creditor's  rights and remedies or by
other equitable principles of general application.

          (c)  CAPITALIZATION.  The authorized  capital stock of the Company and
the shares thereof issued and  outstanding as of December 31, 2000 are set forth
on SCHEDULE 3.1(C) attached hereto.  All of the outstanding shares of the Common
Stock  have  been  duly  and  validly   authorized,   and  are  fully  paid  and
non-assessable. Except as set forth in this Agreement including SCHEDULE 3.1(C),
as of December  31, 2000 no shares of Common  Stock are  entitled to  preemptive
rights  and  there  are no  outstanding  options,  warrants,  scrip,  rights  to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities  or rights  convertible  into,  any  shares of  capital  stock of the
Company.  Furthermore,  except as set forth in this Agreement including SCHEDULE
3.1(C),   as  of  December  31,  2000  there  are  no  contracts,   commitments,
understandings,  or  arrangements by which the Company is or may become bound to
issue  additional  shares  of the  capital  stock  of the  Company  or  options,
securities  or rights  convertible  into shares of capital stock of the Company.
Except for customary transfer restrictions  contained in agreements entered into
by the  Company  in  order  to sell  restricted  securities  or as set  forth in
SCHEDULE  3.1(C),  as of December  31,  2000,  the Company is not a party to any
agreement granting  registration rights to any person with respect to any of its
equity or debt  securities.  The  Company is not a party to,  and its  executive
officers have no knowledge of, any agreement  restricting the voting or transfer
of any shares of the  capital  stock of the  Company.  The offer and sale of all
capital  stock,  convertible  securities,  rights,  warrants,  or options of the
Company  issued prior to the Closing  complied with all  applicable  federal and
state  securities  laws, or no stockholder  has a right of rescission or damages
with respect thereto which would have a Material Adverse Effect. The Company has
furnished or made  available  to the  Purchaser  true and correct  copies of the
Company's  Certificate  of  Incorporation  as in effect on the date  hereof (the

<PAGE>

"CHARTER"),  and the  Company's  Bylaws  as in effect  on the date  hereof  (the
"BYLAWS").

          (d) ISSUANCE OF SHARES.  The Shares to be issued under this  Agreement
have been duly authorized by all necessary  corporate  action and, when paid for
and issued in  accordance  with the terms  hereof,  the Shares  shall be validly
issued and outstanding,  fully paid and non-assessable,  and the Purchaser shall
be entitled to all rights accorded to a holder of Common Stock.

          (e) NO CONFLICTS.  The  execution,  delivery and  performance  of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated herein do not (i) violate any provision of the Company's Charter or
Bylaws,  (ii)  conflict  with,  or  constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of  termination,  amendment,  acceleration  or  cancellation  of, any
material agreement,  mortgage,  deed of trust,  indenture,  note, bond, license,
lease agreement, instrument or obligation to which the Company is a party, (iii)
create or impose a lien,  charge or  encumbrance  on any property of the Company
under any  agreement  or any  commitment  to which the  Company is a party or by
which the  Company  is bound or by which  any of its  respective  properties  or
assets are bound, or (iv) result in a violation of any federal,  state, local or
foreign statute, rule, regulation,  order, judgment or decree (including federal
and state securities laws and  regulations)  applicable to the Company or any of
its  Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries are bound or affected,  except, in all cases (other than violations
pursuant to clauses (i) and (iv), to the extent of federal  securities law), for
such conflicts, defaults, terminations, amendments, accelerations, cancellations
and violations as would not,  individually or in the aggregate,  have a Material
Adverse Effect.  The Company is not required under federal,  state or local law,
rule or regulation to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for it to
execute,  deliver or perform any of its  obligations  under this  Agreement,  or
issue and sell the Shares in  accordance  with the terms hereof  (other than any
filings which may be required to be made by the Company with the Commission,  or
the Nasdaq National  Market or Alternate  Market or any state blue sky authority
(solely in the event the Common  Stock is trading on the Nasdaq Small Cap Market
or the OTC Bulletin  Board)  subsequent  to the  Closing);  provided  that,  for
purpose of the representation made in this sentence, the Company is assuming and
relying upon the accuracy of the relevant  representations and agreements of the
Purchaser herein.

          (f) COMMISSION DOCUMENTS,  FINANCIAL  STATEMENTS.  The Common Stock of
the Company is  registered  pursuant to Section  12(b) or 12(g) of the  Exchange
Act,  and since March 31,  2000,  the Company  has timely  filed all  Commission
Documents. The Company has delivered or made available to the Purchaser true and
complete  copies of the Commission  Documents  filed with the  Commission  since
March 31, 2000 and prior to the Closing  Date.  The Company has not  provided to
the  Purchaser  any  information  which,  according to  applicable  law, rule or
regulation, should have been disclosed publicly by the Company but which has not
been so disclosed,  other than with respect to the transactions  contemplated by
this Agreement.  The Form 10-K for the year ended March 31, 2000 complied in all
material  respects with the  requirements  of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder (other than with respect to
any  document  described  in such Form 10-K but not filed by the  Company  as an
Exhibit thereto in the good faith belief that such filing was not required), and
the said Form 10-K did not contain any untrue  statement  of a material  fact or

<PAGE>

omit to state a material  fact  required to be stated  therein or  necessary  in
order to make the statements  therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the  Commission  Documents  comply as to form in all material  respects  with
applicable  accounting  requirements  and the published rules and regulations of
the Commission or other  applicable  rules and regulations with respect thereto.
Such  financial  statements  have been  prepared in  accordance  with  generally
accepted accounting principles ("GAAP") applied on a consistent basis during the
periods  involved  (except (i) as may be otherwise  indicated in such  financial
statements  or the  notes  thereto  or (ii) in the  case  of  unaudited  interim
statements,  to the extent they may not include footnotes or may be condensed or
summary  statements),  and fairly present in all material respects the financial
position  of the Company and its  Subsidiaries  as of the dates  thereof and the
results of operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments).

          (g) SUBSIDIARIES. The Commission Documents or SCHEDULE 3.1(G) attached
hereto set forth each  Subsidiary of the Company as of the date hereof,  showing
the jurisdiction of its incorporation or organization and showing the percentage
of each person's  ownership of the outstanding  stock or other interests of such
Subsidiary.  Except as set forth in the  Commission  Documents or the Commission
Filings,  none of such Subsidiaries is a "significant  subsidiary" as defined in
Regulation S-X.

          (h) NO MATERIAL ADVERSE EFFECT.  Since September 30, 2000, the Company
has not experienced or suffered any Material Adverse Effect.

          (i) NO  UNDISCLOSED  LIABILITIES.  The  Company  has  no  liabilities,
obligations,  claims or losses (whether  liquidated or unliquidated,  secured or
unsecured, absolute, accrued, contingent or otherwise) that would be required to
be disclosed on a balance sheet of the Company or any Subsidiary  (including the
notes thereto) in conformity with GAAP not disclosed in the Commission Documents
or the Commission  Filings,  other than those incurred in the ordinary course of
the Company's or its Subsidiaries respective businesses since September 30, 2000
or which,  individually or in the aggregate, do not or would not have a Material
Adverse  Effect.

          (j) NO UNDISCLOSED  EVENTS OR CIRCUMSTANCES.  No event or circumstance
has occurred or exists with respect to the Company or its  Subsidiaries or their
respective businesses, properties, prospects, operations or financial condition,
which,  under applicable law, rule or regulation,  requires public disclosure or
announcement  by the  Company but which has not been so  publicly  announced  or
disclosed.

          (k)  INDEBTEDNESS.  SCHEDULE 3.1(K) sets forth as of December 31, 2000
all outstanding secured and unsecured  Indebtedness of the Company, or for which
the  Company  or any  Subsidiary  has  commitments.  For  the  purposes  of this
Agreement,  "INDEBTEDNESS"  shall mean (a) any liabilities for borrowed money or
amounts owed in excess of $250,000 (other than trade accounts  payable  incurred
in the ordinary course of business), (b) all guaranties,  endorsements and other

<PAGE>

contingent  obligations in respect of Indebtedness of others, whether or not the
same are or should be reflected  in the  Company's  balance  sheet (or the notes
thereto), except guaranties by endorsement of negotiable instruments for deposit
or collection or similar  transactions in the ordinary  course of business;  and
(c) the present  value of any lease  payments  in excess of  $250,000  due under
leases required to be capitalized in accordance  with GAAP.  Neither the Company
or any Subsidiary is in default with respect to any Indebtedness.

          (l) TITLE TO ASSETS. Each of the Company and its Subsidiaries has good
and marketable title to all of its real and personal property reflected as owned
in the Commission Documents,  free of any mortgages,  pledges,  charges,  liens,
security  interests  or other  encumbrances,  except for those  indicated in the
Commission Documents or the Commission Filings or such that could not reasonably
be  expected  to cause a Material  Adverse  Effect.  All  capital  leases of the
Company and each of its  Subsidiaries are valid and subsisting and in full force
and effect in all material respects.

          (m) ACTIONS PENDING. There is no action, suit, claim, investigation or
proceeding  pending or, to the knowledge of the Company,  threatened against the
Company  which  questions  the validity of this  Agreement  or the  transactions
contemplated  hereby or any action taken or to be taken pursuant hereto.  Except
as disclosed in the Commission Documents or the Commission Filings,  there is no
action, suit, claim, investigation or proceeding pending or, to the knowledge of
the Company, threatened,  against or involving the Company or any Subsidiary, or
any of their respective properties or assets which, if adversely determined,  is
reasonably likely to result in a Material Adverse Effect.

          (n)  COMPLIANCE  WITH LAW. The business of the Company has been and is
presently being conducted in accordance with all applicable  federal,  state and
local  governmental  laws,  rules,  regulations and ordinances,  except for such
conduct that does not cause a Material  Adverse Effect.  Each of the Company and
its  Subsidiaries  has all  franchises,  permits,  licenses,  consents and other
governmental  or  regulatory  authorizations  and  approvals  necessary  for the
conduct of its  business  as now being  conducted  unless the failure to possess
such  franchises,   permits,  licenses,   consents  and  other  governmental  or
regulatory authorizations and approvals, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.

          (o) CERTAIN  FEES. No brokers,  finders or financial  advisory fees or
commissions  will be payable by the  Company  with  respect to the  transactions
contemplated by this Agreement.

          (p) DISCLOSURE. To the Company's knowledge,  neither this Agreement or
the  Schedules  hereto  nor any other  documents,  certificates  or  instruments
furnished to the Purchaser by or on behalf of the Company in connection with the
transactions  contemplated by this Agreement  contain any untrue  statement of a
material fact or omits to state a material  fact  necessary in order to make the
statements made herein or therein, in the light of the circumstances under which
they were made herein or therein, not misleading.

          (q) OPERATION OF BUSINESS. The Company or its Subsidiaries owns or has
a valid  right to use all  patents,  trademarks,  service  marks,  trade  names,
copyrights,  licenses  and  authorizations  and all rights  with  respect to the

<PAGE>

foregoing,  as set forth in the Commission  Documents or the Commission Filings,
which are necessary for the conduct of its business as now conducted without any
conflict  with the  rights  of  others,  except to the  extent  set forth in the
Commission  Documents  or the  Commission  Filings  or with  respect  to which a
Material Adverse Effect could not reasonably be expected to result.

          (r)  ENVIRONMENTAL  COMPLIANCE.  Except as disclosed in the Commission
Filings,  the Company has obtained all approvals,  authorization,  certificates,
consents,  licenses,  orders and permits or other similar  authorizations of all
governmental authorities,  or from any other person, that are required under any
Environmental  Laws except  where the failure to do so would not have a Material
Adverse Effect.  "ENVIRONMENTAL LAWS" shall mean all applicable laws relating to
the  protection  of  the  environment   including,   without   limitation,   all
requirements  pertaining  to  reporting,  licensing,  permitting,   controlling,
investigating  or  remediating  emissions,  discharges,  releases or  threatened
releases of hazardous substances, chemical substances, pollutants,  contaminants
or toxic substances,  materials or wastes,  whether solid,  liquid or gaseous in
nature,  into the air,  surface  water,  groundwater or land, or relating to the
manufacture,   processing,  distribution,  use,  treatment,  storage,  disposal,
transport or handling of hazardous substances, chemical substances,  pollutants,
contaminants or toxic substances,  materials or wastes, whether solid, liquid or
gaseous in nature. Except for such instances as would not individually or in the
aggregate  have a  Material  Adverse  Effect,  to  the  best  of  the  Company's
knowledge,  there  are no past or  present  events,  conditions,  circumstances,
incidents,  actions or omissions relating to or in any way affecting the Company
that violate or could  reasonably be expected to violate any  Environmental  Law
after the  Closing  or that could  reasonably  be  expected  to give rise to any
environmental  liability,  or  otherwise  form the basis of any  claim,  action,
demand,  suit,  proceeding,  hearing,  study  or  investigation  (i)  under  any
Environmental  Law, or (ii) based on or related to the manufacture,  processing,
distribution,  use, treatment, storage (including without limitation underground
storage tanks),  disposal,  transport or handling,  or the emission,  discharge,
release or threatened release of any hazardous substance.

          (s)  MATERIAL  AGREEMENTS.  Except  as  described  in  the  Commission
Documents  or the  Commission  Filings or this  Agreement,  the Company is not a
party  to any  written  or oral  contract,  instrument,  agreement,  commitment,
obligation,  plan or arrangement,  a copy of which would be required to be filed
with the  Commission  as an exhibit to a  registration  statement on Form S-1 or
applicable  form  (collectively,  "MATERIAL  AGREEMENTS")  if  the  Company  was
registering securities under the Securities Act. The Company has in all material
respects  performed all the  obligations  required to be performed by it to date
under the  foregoing  agreements,  has received no notice of default and, to the
best of the Company's  knowledge is not in default under any Material  Agreement
now in effect,  the result of which  could  reasonably  be  expected  to cause a
Material Adverse Effect.

          (t)  TRANSACTIONS   WITH  AFFILIATES.   Except  as  disclosed  in  the
Commission  Documents or the  Commission  Filings,  there are no loans,  leases,
agreements,  contracts, royalty agreements, management contracts or arrangements
or other continuing  transactions exceeding $250,000 between (a) the Company, or
any of its customers  (excluding  agreements related to the purchase or lease of
the Company's products) or suppliers on the one hand, and (b) on the other hand,
any officer, employee,  consultant or director of the Company, or any person who
would be covered by Item 404(a) of Regulation  S-K or any  corporation  or other
entity controlled by such officer, employee, consultant, director or person.

<PAGE>

          (u)  SECURITIES  ACT OF 1933. The Company has complied in all material
respects with all  applicable  federal and state  securities  laws in connection
with the offer, issuance and sale of the Shares hereunder. In addition:

          (i) Each Prospectus included as part of the Registration  Statement as
originally  filed or as part of any  amendment or supplement  thereto,  or filed
pursuant to Rule 424 under the  Securities  Act,  complied  when so filed in all
material  respects with the provisions of the Securities Act. The Commission has
not issued any order preventing or suspending the use of any Prospectus.

          (ii) The Company meets the  requirements for the use of Form S-3 under
the Securities  Act. The  Registration  Statement in the form in which it became
effective and also in such form as it may be when any  post-effective  amendment
thereto  became  effective and the  Prospectus  and any  supplement or amendment
thereto when filed with the  Commission  under Rule 424(b) under the  Securities
Act, complied in all material respects with the provisions of the Securities Act
and did not at any such times contain 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  (in the case of the  Prospectus,  in the  light of the
circumstances   under  which  they  made)  not  misleading,   except  that  this
representation  and warranty does not apply to  statements in or omissions  from
the  Registration  Statement  or the  Prospectus  made in  reliance  upon and in
conformity with information  relating to the Purchaser  furnished to the Company
in writing by or on behalf of the Purchaser expressly for use therein.

          (iii) The Company has not distributed  and, prior to the completion of
the sale of the  Shares  to the  Purchaser,  will not  distribute  any  offering
material in  connection  with the offering and sale of the Shares other than the
Registration Statement,  the Prospectus or other materials, if any, permitted by
the Securities Act.

          (v)  EMPLOYEES.  As of the date hereof,  the Company has no collective
bargaining  arrangements or agreements covering any of its employees.  As of the
date  hereof,  the  Company  has no  employment  contract  or any other  similar
contract  or  restrictive  covenant,  relating to the right of any officer to be
employed or engaged by the  Company.  Each of the  Company and its  Subsidiaries
requires its officers, technical employees and certain consultants to enter into
agreements regarding  proprietary  information and assignment of inventions,  or
other  similar  agreements  containing  restrictive  covenants.  As of the  date
hereof,  since  March 31,  2000,  no officer of the Company  whose  termination,
either individually or in the aggregate,  could reasonably be expected to have a
Material  Adverse  Effect,  has  terminated  or, to the knowledge of the Company
based on notice,  has any present intention of terminating his or her employment
or engagement with the Company.

          (w) USE OF PROCEEDS.  The proceeds from the sale of the Shares will be
used by the  Company  and its  Subsidiaries  for the  purposes  set forth in the
Registration Statement, as amended or supplemented.

          (x) PUBLIC  UTILITY  HOLDING  COMPANY ACT AND  INVESTMENT  COMPANY ACT
STATUS.  The Company is not a "holding company" or a "public utility company" as
such terms are defined in the Public  Utility  Holding  Company Act of 1935,  as

<PAGE>

amended.  The Company is not,  and as a result of and  immediately  upon Closing
will not be, an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.

          (y) ERISA.  No liability to the Pension Benefit  Guaranty  Corporation
has been  incurred  with  respect to any Plan (as defined  below) by the Company
which is or would have a Material Adverse Effect.  The execution and delivery of
this  Agreement  and the  issue  and sale of the  Shares  will not  involve  any
transaction  which is subject to the  prohibitions of Section 406 of ERISA or in
connection  with which a tax could be imposed  pursuant  to Section  4975 of the
Internal Revenue Code of 1986, as amended (the "CODE"), provided that, if any of
the  Purchaser,  or any person or entity that owns a beneficial  interest in the
Purchaser,  is an "employee pension benefit plan" (within the meaning of Section
3(2) of ERISA)  with  respect  to which  the  Company  is a "party in  interest"
(within the meaning of Section  3(14) of ERISA),  the  requirements  of Sections
407(d)(5) and 408(e) of ERISA,  if applicable,  are met. As used in this Section
3.1(y),  the term  "PLAN"  shall mean an  "employee  pension  benefit  plan" (as
defined in Section 3 of ERISA) which is or has been  established  or maintained,
or to which  contributions are or have been made, by the Company or by any trade
or business,  whether or not incorporated,  which, together with the Company, is
under common control, as described in Section 414(b) or (c) of the Code.

          (z)  ACKNOWLEDGMENT  REGARDING  PURCHASER'S  PURCHASE  OF SHARES.  The
Company  acknowledges  and agrees that the  Purchaser has not acted on behalf of
the  Company in any  respect  and has been  treated  by the  Company as an arm's
length   purchaser  with  respect  to  this   Agreement  and  the   transactions
contemplated  hereunder.  The Company further acknowledges that the Purchaser is
not acting as a financial advisor or fiduciary of the Company (or in any similar
capacity)  with  respect to this  Agreement  and the  transactions  contemplated
hereunder and any advice given by the Purchaser or any of its representatives or
agents in  connection  with this  Agreement  and the  transactions  contemplated
hereunder is merely incidental to the Purchaser's purchase of the Shares.

          SECTION 3.2  REPRESENTATIONS  AND  WARRANTIES  OF THE  PURCHASER.  The
Purchaser  hereby makes the  following  representations  and  warranties  to the
Company:

          (a)  ORGANIZATION  AND STANDING OF THE  PURCHASER.  The Purchaser is a
limited liability company duly organized,  validly existing and in good standing
under the laws of the Commonwealth of The Bahamas.

          (b) AUTHORIZATION AND POWER. The Purchaser has the requisite corporate
power and authority to enter into and perform this Agreement and to purchase the
Shares  in  accordance  with the  terms  hereof.  The  execution,  delivery  and
performance  of this  Agreement by Purchaser and the  consummation  by it of the
transactions  contemplated  hereby have been duly  authorized  by all  necessary
corporate action, and no further consent or authorization of the Purchaser,  its
Board of Directors or  stockholders  is required.  This  Agreement has been duly
executed and delivered by the Purchaser.  This Agreement  constitutes,  or shall
constitute  when executed and delivered,  a valid and binding  obligation of the
Purchaser enforceable against the Purchaser in accordance with its terms, except
as such  enforceability  may be limited by  applicable  bankruptcy,  insolvency,
reorganization,  moratorium,  liquidation,  conservatorship,   receivership,  or

<PAGE>

similar laws relating to, or affecting  generally the enforcement of, creditor's
rights and remedies or by other equitable principles of general application.

          (c) NO CONFLICTS.  The  execution,  delivery and  performance  of this
Agreement and the consummation by the Purchaser of the transactions contemplated
hereby  and  thereby  or  relating  hereto  do not and will not (i)  result in a
violation of the Purchaser's  charter documents or bylaws or (ii) conflict with,
or  constitute a default (or an event which with notice or lapse of time or both
would  become a default)  under,  or give to others  any rights of  termination,
amendment,  acceleration or cancellation  of any material  agreement,  mortgage,
deed of trust,  indenture,  note, bond, license, lease agreement,  instrument or
obligation  to which the  Purchaser  is a party,  (iii) create or impose a lien,
charge or  encumbrance  on any property of the Purchaser  under any agreement or
any  commitment  to which the Purchaser is party or by which the Purchaser is or
by which any of its properties or assets are bound or (iv) result in a violation
of any law, rule, or regulation,  or any order,  judgment or decree of any court
or governmental agency applicable to the Purchaser or its properties, except for
such  conflicts,  defaults and violations as would not,  individually  or in the
aggregate,  prohibit or otherwise interfere with the ability of the Purchaser to
enter into and perform its  obligations  under this  Agreement  in any  material
respect.  The Purchaser is not required to obtain any consent,  authorization or
order of, or make any filing or  registration  with,  any court or  governmental
agency in order for it to  execute,  deliver or perform  any of its  obligations
under this  Agreement  or to purchase  the Shares in  accordance  with the terms
hereof,  provided that for purposes of the representation made in this sentence,
the  Purchaser  is  assuming  and  relying  upon the  accuracy  of the  relevant
representations and agreements of the Company herein.

          (d)  INFORMATION.  The Purchaser  and its advisors,  if any, have been
furnished with all materials  relating to the business,  finances and operations
of the Company and materials  relating to the offer and sale of the Shares which
have been  requested by the Purchaser.  The Purchaser and its advisors,  if any,
have  been  afforded  the  opportunity  to ask  questions  of the  Company.  The
Purchaser has sought such accounting,  legal and tax advice as it has considered
necessary  to  make  an  informed   investment  decision  with  respect  to  its
acquisition of the Shares.  Purchaser  understands that it (and not the Company)
shall be responsible for its own tax  liabilities  that may arise as a result of
this  investment  or  the  transactions  contemplated  by  this  Agreement.  The
Purchaser has not obtained any material non-public information from the Company.

          (e) SELLING RESTRICTION. The Purchaser has the right to sell shares of
the Common Stock during the Investment Period. The Purchaser covenants, however,
that prior to and during the Investment Period, neither the Purchaser nor any of
its  affiliates  nor any entity managed by affiliates of the Purchaser will ever
sell shares of Common  Stock of the Company  other than what the  Purchaser  has
accumulated  under the terms of this  Agreement or in any  accounts  directly or
indirectly  managed by the  Purchaser or any  affiliate of the  Purchaser or any
entity managed by affiliates of the Purchaser.

          (f) COMPLIANCE WITH LAW. The business of the Purchaser has been and is
presently being conducted in accordance with all applicable  federal laws, rules
and  regulations,  except for such  conduct  that does not cause a material  and

<PAGE>

adverse effect on the business of the Purchaser. The Purchaser shall comply with
all applicable federal securities laws, rules and regulations in connection with
the sale of the Shares  purchased  by the  Purchaser  hereunder.

          (g)  PURCHASER  INFORMATION  AND  DISTRIBUTION.  The  Purchaser  shall
furnish to the Company information  regarding the Purchaser and the distribution
of  the  Shares  as is  required  by  law to be  disclosed  in the  Registration
Statement,  the Prospectus and any Prospectus  Supplement.  The Purchaser  shall
sell the Shares purchased  hereunder in accordance with the Plan of Distribution
described in the  Registration  Statement or the  Prospectus  or any  applicable
Prospectus Supplement.

                                   ARTICLE IV

                                    COVENANTS

      The Company  covenants with the Purchaser as follows,  which covenants are
for the benefit of the Purchaser and its  permitted  assignees,  that during the
term of this Agreement:

          SECTION  4.1  SECURITIES  COMPLIANCE.  The  Company  shall  notify the
Commission and the Nasdaq National Market or an Alternate Market, if applicable,
in accordance with their rules and regulations, of the transactions contemplated
by this Agreement,  and shall take all other necessary action and proceedings as
may be required and permitted by applicable  law, rule and  regulation,  for the
legal and valid issuance of the Shares to the Purchaser.

          SECTION 4.2 REGISTRATION AND LISTING. The Company will take all action
necessary to cause its Common Stock to continue to be registered  under Sections
12(b) or 12(g) of the Exchange  Act,  will comply with its  reporting and filing
obligations  under the  Exchange  Act,  and will not take any action or file any
document  (whether  or  not  permitted  by  the  Securities  Act  or  the  rules
promulgated  thereunder)  to  terminate  or  suspend  such  registration  or  to
terminate or suspend its reporting and filing obligations under the Exchange Act
or Securities Act, except as permitted herein.  The Company will take all action
necessary to continue the listing or trading of its Common Stock and the listing
of the Shares purchased by Purchaser  hereunder on the Nasdaq National Market or
an Alternate Market and will comply in all material  respects with the Company's
reporting,  filing and other obligations under the bylaws or rules of the Nasdaq
National Market or an Alternate Market.

          SECTION 4.3 REGISTRATION  STATEMENT.  Before the Company shall issue a
Draw Down Notice, the Company shall have caused a sufficient number of shares of
Common Stock to be authorized and registered to cover the Shares to be issued in
connection with this Agreement.

          SECTION 4.4 COMPLIANCE WITH LAWS.

          (a)  The  Company  shall  comply  with  all  applicable  laws,  rules,
regulations and orders,  noncompliance  with which could have a Material Adverse
Effect.

<PAGE>

          (b) The Company will not be obligated to issue and the Purchaser  will
not be  obligated  to purchase any shares of the Common Stock which would result
in the issuance under this  Agreement of more than (i) fourteen and  nine-tenths
percent  (14.9%) of the shares of capital  stock deemed  issued and  outstanding
under the Company's Rights Plan, unless the Board of Directors has approved such
issuance,  and (ii) nineteen and  nine-tenths  percent (19.9%) of the issued and
outstanding  shares of the Common  Stock,  unless  such  issuance  has been duly
approved by the shareholders of the Company.

          SECTION 4.5 KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Company shall
keep adequate  records and books of account,  in which complete  entries will be
made in  accordance  with GAAP  reflecting  all  financial  transactions  of the
Company and its Subsidiaries.

          SECTION 4.6 REPORTING  REQUIREMENTS.  Upon request,  the Company shall
furnish  or  make  available  the  following  to the  Purchaser  so  long as the
Purchaser shall be obligated hereunder to purchase Shares:

          (a) Quarterly  Reports filed with the  Commission on Form 10-Q as soon
as available, and in any event within forty-five (45) days after the end of each
of the first three fiscal quarters of the Company; and

          (b) Annual  Reports filed with the  Commission on Form 10-K as soon as
available, and in any event within ninety (90) days after the end of each fiscal
year of the Company.

          SECTION 4.7 NON-PUBLIC INFORMATION. Except as contemplated by Sections
4.9 through 4.13  hereof,  neither the Company nor any of its officers or agents
shall  disclose any  material  non-public  information  about the Company to the
Purchaser  and  neither the  Purchaser  nor any of its  affiliates,  officers or
agents will solicit any material non-public information from the Company.

          SECTION 4.8  EFFECTIVE  REGISTRATION  STATEMENT.  The Company will use
commercially  reasonable efforts to keep the Registration Statement continuously
effective  for the shorter of the time in which all of the Shares have been sold
by the Purchaser or one year after the expiration of the Investment Period.

          SECTION  4.9 NO STOP  ORDERS.  The Company  will advise the  Purchaser
promptly  and,  if  requested  by the  Purchaser,  will  confirm  such advice in
writing:  (i) of its  receipt  of notice of any  request by the  Commission  for
amendment of or a supplement to the Registration  Statement or any Prospectus or
Prospectus  Supplement  or for  additional  information;  (ii) of its receipt of
notice of the  issuance  by the  Commission  of any stop  order  suspending  the
effectiveness   of  the   Registration   Statement  or  of  the   suspension  of
qualification  of the Shares for  offering  or sale in any  jurisdiction  or the
initiation of any proceeding  for such purpose;  and (iii) of its becoming aware
of the happening of any event, which makes any statement of a material fact made
in  the   Registration   Statement  or  the   Prospectus  (as  then  amended  or
supplemented) untrue or which requires the making of any additions to or changes
in  the   Registration   Statement  or  the   Prospectus  (as  then  amended  or
supplemented)  in order to state a material fact required by the  Securities Act
or the regulations thereunder to be stated therein or necessary in order to make
the  statements  therein  not  misleading,  or of  the  necessity  to  amend  or

<PAGE>

supplement the Prospectus (as then amended or  supplemented)  to comply with the
Securities Act or any other law. If at any time the  Commission  shall issue any
stop order  suspending the  effectiveness  of the  Registration  Statement,  the
Company will make all commercially  reasonable  efforts to obtain the withdrawal
of such order at the earliest possible time.

          SECTION 4.10  AMENDMENTS TO THE  REGISTRATION  STATEMENT.  The Company
will  not (i) file  any  amendment  to the  Registration  Statement  or make any
amendment or supplement to the Prospectus  which relates to the Purchaser,  this
Agreement and the transactions  contemplated hereby of which the Purchaser shall
not  previously  have been advised or to which the  Purchaser  shall  reasonably
object after being so advised or (ii) so long as, in the  reasonable  opinion of
counsel  for  the  Purchaser,  a  Prospectus  is  required  to be  delivered  in
connection with any purchase of Shares by the Purchaser,  file any  information,
documents or reports  pursuant to the Exchange Act without  delivering a copy of
such information, documents or reports to the Purchaser, promptly following such
filing.

          SECTION  4.11  PROSPECTUS  DELIVERY.  The Company  shall file with the
Commission  a  Prospectus  Supplement  on  the  first  Trading  Day  immediately
following  the end of each Draw Down  Pricing  Period,  and will  deliver to the
Purchaser,  without charge,  in such  quantities as reasonably  requested by the
Purchaser,  copies of each form of Prospectus and Prospectus  Supplement on each
Settlement  Date. The Company  consents to the use of the Prospectus (and of any
amendment  or  supplement  thereto) in  accordance  with the  provisions  of the
Securities Act and with the securities or Blue Sky laws of the  jurisdictions in
which the Shares may be sold by the Purchaser,  in connection  with the offering
and sale of the Shares and for such period of time  thereafter as the Prospectus
is required by the  Securities  Act to be delivered in connection  with sales of
the Shares by the Purchaser. If during such period of time any event shall occur
that in the  judgment  of the  Company  or in the  opinion  of  counsel  for the
Purchaser  is required  to be set forth in the  Prospectus  (as then  amended or
supplemented)  or should be set forth  therein  in order to make the  statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading,  or if it is  necessary to  supplement  or amend the  Prospectus  to
comply with the  Securities  Act or any other law,  the Company  will  forthwith
prepare and,  subject to the  provisions  of Section  4.10 above,  file with the
Commission   an   appropriate   supplement  or  amendment   thereto,   and  will
expeditiously furnish to the Purchaser a reasonable number of copies thereof.

          SECTION  4.12 OTHER  FINANCING.  If the Company  enters into any other
financing  agreement,  the primary  purpose of which  would be to obtain  equity
financing for the Company (an "OTHER FINANCING"),  during the Investment Period,
the Company shall promptly  notify the Purchaser of such Other Financing and the
Purchaser  shall have the options set forth in Section  6.1(k)  hereof.  As used
herein,  "OTHER  FINANCING"  shall not include the Company (i)  entering  into a
loan, credit or lease facility with a bank or financing  institution  (including
any equity component  thereof),  (ii) establishing an employee stock option plan
or  agreement,  (iii)  issuing  shares of Common  Stock in  connection  with the
Company's  option  plans (as the same may be amended  from time to time),  stock
purchase plans, rights plans,  currently outstanding warrants or options (unless
the  exercise  price of such  warrants or options are reset to a price below the
current  exercise  price),  or increase the number of shares available under any
such plans (the primary  purpose of which is not to raise equity),  (iv) issuing
shares of Common Stock upon  conversion of the Company's  existing  subordinated

<PAGE>

convertible  debentures  and series B  convertible  preferred  stock (unless the
conversion price of such debentures or series B convertible  preferred stock are
reset (other than by its stated  terms) to a price below the current  conversion
price)  and (v)  issuing  shares  of  Common  Stock  and/or  preferred  stock in
connection  with  the  formation  and  maintenance  of  strategic  partnerships,
alliances or joint ventures and the  acquisition of products,  licenses or other
assets (each a "PERMITTED TRANSACTION").

          SECTION  4.13  NOTICES.  The  Company  shall  immediately  notify  the
Purchaser that (i) a Material Adverse Effect or Material Change in Ownership has
occurred or (ii) the Company has entered into an Other  Financing (as defined in
Section 4.12 hereof).

          SECTION 4.14 ISSUANCE OF ADDITIONAL SECURITIES.  The Company shall not
have any  obligation  to issue  securities to any existing  shareholder  for any
reason that would entitle such existing  shareholder  to purchase any securities
on the  same  terms  as  that  purchased  by the  Purchaser  hereunder.

          SECTION 4.15  DISCLOSURE  OF DRAW DOWN NOTICE.  The Company  shall not
disclose  any Draw Down  Notice or any  information  contained  in any Draw Down
Notice (other than to its legal and accounting  advisors) unless such disclosure
is required by applicable  law, rule,  regulation or court order;  provided that
the Company shall notify the Purchaser if such  disclosure  during the Draw Down
Pricing Period is required by law, rule, regulation or court order.

                                    ARTICLE V

               CONDITIONS TO CLOSING, DRAW DOWNS AND CALL OPTIONS

          SECTION  5.1  CONDITIONS  PRECEDENT  TO THE  ISSUANCE  OF A DRAW  DOWN
NOTICE.  The issuance by the Company of a Draw Down Notice,  and its  obligation
thereby to sell the Shares to the Purchaser,  is subject to the  satisfaction or
waiver,  at or before  each Draw Down  Exercise  Date and  Settlement  Date,  as
applicable,  of each of the conditions set forth below. These conditions are for
the  Company's  sole benefit and may be waived by the Company at any time in its
sole discretion.

          (a) ACCURACY OF THE PURCHASER'S  REPRESENTATIONS  AND WARRANTIES.  The
representations  and warranties of the Purchaser in this Agreement shall be true
and  correct in all  material  respects  as of the date when made and as of each
Draw Down Exercise Date and Settlement  Date, as  applicable,  as though made at
that time, except for  representations and warranties that are expressly made as
of a particular date.

          (b) REGISTRATION  STATEMENT.  The Company shall have Shares registered
under the  Registration  Statement on the Draw Down Exercise Date and Settlement
Date,  as  applicable,  in an amount  equal to or in excess of the number of the
Shares  issuable  pursuant  to  such  Draw  Down  Notice  or  Call  Option.  The
Registration  Statement  registering the offer and sale of the Shares shall have
been declared effective by the Commission on or prior to each Draw Down Exercise

<PAGE>

Date and  Settlement  Date,  as  applicable,  and there  shall be no stop  order
suspending the effectiveness of the Registration  Statement.

          (c) PERFORMANCE BY THE PURCHASER.  The Purchaser shall have performed,
satisfied and complied in all material  respects with all covenants,  agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Purchaser at or prior to each Draw Down Exercise Date and Settlement
Date, as applicable.

          (d) NO INJUNCTION.  No statute,  regulation,  executive order, decree,
ruling or injunction shall have been enacted,  entered,  promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions  contemplated by this Agreement.

          (e) NO  SUSPENSION,  ETC.  Trading in the Common  Stock shall not have
been suspended by the Commission or the Nasdaq  National  Market or an Alternate
Market  (except for any suspension of trading of limited  duration  agreed to by
the  Company,  which  suspension  shall be  terminated  prior to such  Draw Down
Exercise Date and Settlement Date, as applicable).

          (f) NO PROCEEDINGS OR LITIGATION. No action, suit or proceeding before
any arbitrator or any governmental  authority shall have been commenced,  and no
investigation by any governmental authority shall have been threatened,  against
the Company,  or any of the  officers,  directors or  affiliates  of the Company
seeking to restrain,  prevent or change the  transactions  contemplated  by this
Agreement, or seeking damages in connection with such transactions.

          SECTION 5.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER TO
Close.  The  obligation  hereunder of the  Purchaser to enter this  Agreement is
subject to the satisfaction or waiver, at or before the Closing,  of each of the
conditions  set forth  below.  These  conditions  are for the  Purchaser's  sole
benefit and may be waived by the Purchaser at any time in its sole discretion.

          (a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.  Each of
the  representations  and warranties of the Company shall be true and correct in
all material  respects as of the date when made and as of the Closing  Date,  as
though made at that time, except for  representations  and warranties that speak
as of a particular date.

          (b)  PERFORMANCE  BY THE COMPANY.  The Company  shall have  performed,
satisfied and complied in all material  respects with all covenants,  agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the  Company  at or prior to the  Closing.

          (c)  EFFECTIVE  REGISTRATION  STATEMENT.  The  Registration  Statement
registering the offer and sale of the Shares shall have been declared  effective
by the  Commission  on or prior to the  Closing  Date and there shall be no stop
order  suspending  the  effectiveness  of  the  Registration  Statement.

<PAGE>

          (d) NO INJUNCTION.  No statute,  rule,  regulation,  executive  order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent jurisdiction which
prohibits  the  consummation  of any of the  transactions  contemplated  by this
Agreement.

          (e) NO PROCEEDINGS OR LITIGATION. No action, suit or proceeding before
any arbitrator or any governmental  authority shall have been commenced,  and no
investigation by any governmental authority shall have been threatened,  against
the Company,  or any of the  officers,  directors or  affiliates  of the Company
seeking to restrain,  prevent or change the  transactions  contemplated  by this
Agreement, or seeking damages in connection with such transactions.

          (f) OPINION OF COUNSEL,  ETC. At the Closing, the Purchaser shall have
received an opinion of counsel to the Company,  dated the Closing  Date,  in the
form of Exhibit A hereto, a secretary's certificate,  dated the Closing Date, in
the form of Exhibit B hereto,  and such other  certificates and documents as the
Purchaser  or its counsel  shall  reasonably  require  incident to the  Closing.

          SECTION 5.3 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER TO
ACCEPT A DRAW DOWN NOTICE AND PURCHASE THE SHARES.  The obligation  hereunder of
the Purchaser to accept a Draw Down Notice and to acquire and pay for the Shares
on any Settlement Date is subject to the  satisfaction  or waiver,  at or before
each Draw Down Exercise Date and each Settlement Date, as applicable, of each of
the conditions set forth below.  The  conditions  are for the  Purchaser's  sole
benefit and may be waived by the Purchaser at any time in its sole discretion.

          (a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.  Each of
the  representations  and warranties of the Company shall be true and correct in
all  material  respects as of the date when made and as of the  applicable  Draw
Down Exercise Date and Settlement  Date as though made at that time,  except for
representations  and  warranties  that  speak  as  of  a  particular  date.

          (b) REGISTRATION  STATEMENT.  The Company shall have Shares registered
under the  Registration  Statement on the Draw Down  Exercise  Date in an amount
equal to or in excess of the number of the Shares issuable pursuant to such Draw
Down Notice or Call Option. The Registration Statement registering the offer and
sale of the Shares shall have been  declared  effective by the  Commission on or
prior to the Draw Down Exercise Date and the Settlement Date and shall have been
supplemented,  as  required,  to disclose  the sale of the Shares  prior to each
applicable  Settlement  Date.  There  shall  be no  stop  order  suspending  the
effectiveness of the Registration Statement.

          (c) NO  SUSPENSION,  ETC.  Trading in the Common  Stock shall not have
been suspended by the Commission or the Nasdaq  National  Market or an Alternate
Market  (except for any suspension of trading of limited  duration  agreed to by
the Company,  which suspension shall be terminated prior to each applicable Draw
Down Exercise Date or Settlement  Date), and, on or as of the Draw Down Exercise
Date or applicable  Settlement  Date or during the applicable  Draw Down Pricing
Period,  trading in  securities  generally  as reported  by the Nasdaq  National
Market or an  Alternate  Market  shall not have been  suspended  or limited,  or
minimum prices shall not have been  established  on securities  whose trades are

<PAGE>

reported  by the Nasdaq  National  Market or an  Alternate  Market,  nor shall a
banking  moratorium  have been declared  either by the United States or New York
State  authorities,  nor shall  there have  occurred  any  material  outbreak or
escalation of hostilities or other national or international  calamity or crisis
of such  magnitude  in its  effect  on, or any  material  adverse  change in the
financial  markets  generally,  which,  in each  case,  in the  judgment  of the
Purchaser,  makes it  impracticable  or inadvisable to purchase the Shares.  The
Common Stock shall be listed on Nasdaq or an Alternate Market.

          (d)  PERFORMANCE  BY THE COMPANY.  The Company  shall have  performed,
satisfied and complied in all material  respects with all covenants,  agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the  applicable  Draw Down  Exercise Date and
the  Settlement  Date  and  shall  have  delivered  the  Compliance  Certificate
substantially in the form attached hereto as Exhibit C.

          (e) NO INJUNCTION.  No statute,  rule,  regulation,  executive  order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent jurisdiction which
prohibits  the  consummation  of any of the  transactions  contemplated  by this
Agreement.

          (f) NO PROCEEDINGS OR LITIGATION. No action, suit or proceeding before
any arbitrator or any governmental  authority shall have been commenced,  and no
investigation by any governmental authority shall have been threatened,  against
the Company,  or any of the  officers,  directors or  affiliates  of the Company
seeking to restrain,  prevent or change the  transactions  contemplated  by this
Agreement, or seeking damages in connection with such transactions.

          (g) NO MATERIAL  ADVERSE EFFECT;  NO MATERIAL CHANGE IN OWNERSHIP.  No
Material Adverse Effect or Material Change in Ownership shall have occurred.

          (h) BOARD  AUTHORIZATION.  The Company  shall have taken all necessary
corporate  action to authorize the issuance of the Shares  issuable  pursuant to
each Draw Down Notice,  including,  without  limitation,  setting the  Threshold
Price as set forth therein.

          (i)  ISSUANCE OF  ADDITIONAL  SECURITIES.  The Company  shall not have
issued  any  securities  or  granted  rights for  additional  securities  to any
Principal  Security  Holder for any reason other than  pursuant to stock splits,
stock  reclassifications,  stock  dividends,  stock option  plans,  underwritten
public  offerings,  Permitted  Offerings  (as  defined in Section 7.2 hereof) or
Permitted Transactions.

          (j)  DISCLOSURE  OF DRAW  DOWN  NOTICE.  The  Company  shall  not have
disclosed  any Draw Down Notice or any  information  contained  in any Draw Down
Notice (other than to its legal and accounting advisors).

<PAGE>

                                   ARTICLE VI

                          DRAW DOWN TERMS; CALL OPTION

          SECTION  6.1 DRAW  DOWN  TERMS.  Subject  to the  satisfaction  of the
conditions set forth in this Agreement, the parties agree as follows:

          (a) The Company, may, in its sole discretion, issue a Draw Down Notice
at any time after February 20, 2001 with respect to a Draw Down during each Draw
Down Pricing Period of up to (i)  $2,000,000 if the Threshold  Price is equal to
or greater than $10.00 and less than $14.00,  (ii)  $3,000,000  if the Threshold
Price is equal to or greater than $14.00 and less than $18.00,  (iii) $3,500,000
if the Threshold  Price is equal to or greater than $18.00 and less than $22.00,
(iv)  $4,000,000 if the  Threshold  Price is equal to or greater than $22.00 and
less than $26.00,  (v) $5,000,000 if the Threshold  Price is equal to or greater
than $26.00 and less than $30.00,  and (vi) $6,000,000 if the Threshold Price is
equal to or greater than $30.00; provided, HOWEVER, that the Company may, in its
sole  discretion,  issue a Draw Down Notice with respect to any Draw Down Amount
at any Threshold  Price or any Draw Down Discount  Percentage  pursuant to terms
mutually  agreed  upon by the  Purchaser  and the  Company,  which Draw Down the
Purchaser  will be obligated  to accept.  Prior to issuing any Draw Down Notice,
the Company  shall have  sufficient  Shares  registered  under the  Registration
Statement to cover any applicable Draw Down and Call Option.

          (b) The  number of Shares  to be issued in  connection  with each Draw
Down shall be equal to the sum of the  quotients  (for each  Trading  Day of the
Draw Down  Pricing  Period for which the VWAP  equals or exceeds  the  Threshold
Price) of (x) 1/18th (or such other fraction the denominator of which equals the
number of Trading  Days  during the Draw Down  Pricing  Period) of the Draw Down
Amount divided by (y) the applicable Draw Down Discount Percentage multiplied by
the VWAP of the Common Stock for such Trading Day.

          (c) Only one Draw Down  shall be  allowed  in each  Draw Down  Pricing
Period.

          (d) The number of Shares  purchased by the  Purchaser  with respect to
each  Draw Down  shall be  determined  on a daily  basis  during  each Draw Down
Pricing  Period and settled on the second  Trading Day following the end of each
Draw Down Pricing Period (the "SETTLEMENT DATE").

          (e) There shall be a minimum of five (5)  Trading  Days  between  Draw
Downs,  unless  otherwise  mutually  agreed upon between the  Purchaser  and the
Company.

          (f) There shall be a maximum of twenty-four (24) Draw Downs during the
term of this Agreement.

          (g) Each Draw Down will  expire on the end of the last  Trading Day of
each Draw Down Pricing  Period.

<PAGE>

          (h) If the VWAP on a given  Trading  Day is less  than  the  Threshold
Price, then the total amount of the Draw Down for the relevant Draw Down Pricing
Period  will be reduced by 1/18th (or such other  fraction  the  denominator  of
which equals the number of Trading Days during the Draw Down Pricing Period). At
no time shall the Threshold  Price be set below $10.00,  unless  mutually agreed
upon by the  Company  and the  Purchaser.  If  trading  in the  Common  Stock is
suspended  for any reason for more than three (3) hours in any  Trading  Day, at
the  Purchaser's  option,  the price of the Common  Stock  shall be deemed to be
below  the  Threshold  Price  for that  Trading  Day and the  Draw  Down for the
relevant  Draw Down  Pricing  Period  shall be  reduced by 1/18th (or such other
fraction the  denominator  of which equals the number of Trading Days during the
Draw Down  Pricing  Period).  Notwithstanding  anything in the  foregoing to the
contrary, for each Trading Day during the Draw Down Pricing Period that the VWAP
is less than the Threshold  Price or is deemed to be below the  Threshold  Price
pursuant to the immediately  preceding sentence,  the Purchaser may elect in its
sole  discretion  to  purchase  Shares at a price equal to the  Threshold  Price
multiplied  by the Draw Down  Discount  Percentage  at the end of such Draw Down
Pricing Period. The Purchaser will inform the Company via facsimile transmission
no later than 8:00 p.m. (eastern time) on the last Trading Day of such Draw Down
Pricing  Period as to the number of Shares,  if any,  the  Purchaser  chooses to
purchase under such circumstances set forth in this Section 6.1(h).

          (i) The Company must inform the Purchaser  via facsimile  transmission
before  9:30  a.m.  (eastern  time) on the  first  Trading  Day of the Draw Down
Pricing Period in substantially the form attached hereto as Exhibit D (the "DRAW
DOWN  NOTICE")  of the Draw Down  Amount  the  Company  wishes to  exercise.  In
addition to the Draw Down Amount, the Company shall set the Threshold Price with
each Draw Down Notice and shall designate the first Trading Day of the Draw Down
Pricing Period.  Notwithstanding  anything in the foregoing to the contrary,  if
the Company  wishes the Draw Down  Exercise Date to be the first day of the Draw
Down Pricing Period, the Draw Down Notice must be delivered to the Purchaser and
receipt of such Draw Down Notice  confirmed by the Purchaser  prior to 9:30 a.m.
(eastern time) on the date of such Draw Down Exercise Date.

          (j) On each  Settlement  Date,  the Company  shall  deliver the Shares
purchased by the Purchaser to the Purchaser or to The  Depositary  Trust Company
("DTC") on the Purchaser's  behalf via the Deposit  Withdrawal  Agent Commission
system  ("DWAC"),  and upon  receipt of the Shares,  the  Purchaser  shall cause
payment  therefor  to be made to the account  designated  by the Company by wire
transfer of immediately available funds provided that the Shares are received no
later than 1:00 p.m.,  eastern time,  or next day available  funds if the Shares
are received thereafter.

          (k) If during any Draw Down  Pricing  Period the  Company  shall enter
into an Other  Financing  (other than shares of Common  Stock  issued under this
Agreement or pursuant to a Permitted Transaction), the Purchaser may in its sole
discretion  (i)  purchase  the Draw Down Amount of shares of Common Stock and/or
exercise Call Options  granted during such Draw Down Pricing Period on the terms
at which the Company issued shares of Common Stock in the Other Financing during
such Draw Down Pricing Period,  net of any third party's discount and fees, (ii)
purchase  the Draw Down Amount of shares of Common Stock  and/or  exercise  Call
Options granted during such Draw Down Pricing Period at the applicable Draw Down
Discount  Percentage times the VWAP for such Draw Down Pricing Period,  or (iii)
elect not to purchase  any Shares  during  such Draw Down  Pricing  Period.  The

<PAGE>

Purchaser  shall  notify the Company of its  election on the last Trading Day of
the Draw Down Pricing Period.

          (l) If on the Settlement Date, the Company is obligated to deliver the
Shares to be purchased  by the  Purchaser  and fails to deliver the Shares,  and
such failure continues for ten (10) Trading Days, the Company shall pay, in cash
or  restricted  shares of Common  Stock,  at the  option  of the  Purchaser,  as
liquidated  damages and not as a penalty to the Purchaser an amount equal to two
percent  (2%) of the Draw Down Amount for the initial  thirty (30) days and each
additional  thirty (30) day period thereafter until such failure has been cured,
which  shall be pro  rated for such  periods  less  than  thirty  (30) days (the
"PERIODIC  AMOUNT").  Cash payments to be made pursuant to this clause (1) shall
be due and payable immediately upon demand in immediately  available cash funds.
Certificates evidencing the restricted shares of Common Stock shall be delivered
immediately upon demand. The parties agree that the Periodic Amount represents a
reasonable  estimate  on  the  part  of the  parties,  as of the  date  of  this
Agreement, of the amount of damages that may be incurred by the Purchaser if the
Company  fails to deliver the Shares on the  Settlement  Date.  If the Purchaser
elects to receive  shares of Common Stock instead of cash,  the Purchaser  shall
have the right to demand registration once within twelve (12) months of the date
of issuance of such shares of Common Stock and piggyback  registration rights if
the Company files a separate registration statement.

          (m) If during  any Draw Down  Pricing  Period the  Company  reasonably
believes an event may occur which, would result in or may require the suspension
of the  effectiveness  of the  Registration  Statement  prior to the  applicable
Settlement Date, including,  without limitation,  entering into an extraordinary
transaction in which the Company is not the surviving entity,  the Company shall
notify the  Purchaser  before  9:30 a.m.  (eastern  time) on any  Trading Day (a
"SECTION 6.1(M) NOTICE") and reduce the number of Trading Days in such Draw Down
Pricing  Period (a  "TRUNCATED  PRICING  PERIOD").  If the Company  delivers the
Section 6.1(m) Notice (i) before 9:30 a.m.  (eastern time) on a Trading Day, the
last  Trading  Day of such  Truncated  Pricing  Period  shall be the Trading Day
preceding  the receipt of the  Section  6.1(m)  Notice,  or (ii) after 9:30 a.m.
(eastern  time) on a Trading Day,  then the last  Trading Day of such  Truncated
Pricing  Period shall be the Trading Day on which the Section  6.1(m) Notice was
received by the Purchaser.

          The Purchaser will purchase the Truncated Draw Down Allocation  Amount
for each of the Trading  Days in a  Truncated  Pricing  Period for an  aggregate
purchase price determined in accordance with Section 6.1(b) and Section 6.1(h).

          In  addition,  the  Purchaser  may, at its  option,  elect to purchase
Shares in an  additional  dollar  amount  equal to the  product of the Draw Down
Amount  requested in the applicable Draw Down Notice,  first multiplied by (x) a
fraction,  the  numerator of which equals one (1) and the  denominator  of which
equals  eighteen  (18) or such other  number of  Trading  Days in such Draw Down
Pricing Period as the parties may have mutually agreed upon with respect to such
Draw Down Pricing  Period  (such number of days being  referred to herein as the
"TRADING DAY NUMBER"),  and next  multiplied by (y) that number that is equal to
the Trading Day Number minus the number of Trading Days in the Truncated Pricing
Period.  The price per share for such  additional  dollar amount shall equal (i)
the  aggregate  total of  Truncated  Draw Down  Allocation  Amounts  during  the

<PAGE>

Truncated  Pricing  Period  divided by (ii) the number of Shares to be purchased
during such Truncated Pricing Period.

          Upon receipt of the Section 6.1(m) Notice, the Purchaser may (x) elect
to purchase  Common  Stock at the  Threshold  Price for any Trading Day that the
VWAP was below the  Threshold  Price  during  the  Truncated  Pricing  Period in
accordance with Section 6.1(h) hereof, (y) elect to purchase Common Stock in the
additional  amount  as set  forth in the  preceding  paragraph  of this  Section
6.1(m), and (z) elect to exercise any unexercised Call Options by issuing a Call
Option  Notice to the  Company,  in each such  case,  no later  than  10:00 a.m.
(eastern  time) on the first Trading Day after the end of the Truncated  Pricing
Period.  The exercise  price of the Call Option shall be equal to the applicable
Draw Down Discount Percentage  multiplied by the VWAP on the last Trading Day of
the Truncated  Pricing Period (in lieu of the VWAP as specified in clause (A) of
Section  6.2(b)  hereof) and otherwise  determined  in  accordance  with Section
6.2(b) hereof.

          (n) The Settlement Date for any Truncated  Pricing Period shall be the
second  Trading  Day  after the last  Trading  Day in the  applicable  Truncated
Pricing Period.

          SECTION 6.2 PURCHASER'S CALL OPTION.

          (a) During  each Draw Down  Pricing  Period,  the  Company at its sole
discretion  may grant to the  Purchaser  the  right to  exercise  multiple  call
options of up to the applicable Draw Down Amount (a "CALL  OPTION").  The amount
of the Call Option shall be set forth in the Draw Down Notice.  For each Trading
Day during a Draw Down Pricing Period,  the Purchaser may exercise a Call Option
by  providing  notice to the Company of the exercise of a Call Option (the "CALL
OPTION NOTICE"), substantially in the form attached hereto as Exhibit E.

          (b) The  number of shares of Common  Stock to be issued in  connection
with each Call Option shall equal the quotient of (i) the Call Option Amount and
(ii) the product of the applicable Draw Down Discount Percentage and the greater
of (A) the VWAP for the Common  Stock on the day the  Purchaser  issues its Call
Option Notice and (B) the Threshold Price.

          (c) Each Call  Option  exercised  shall be settled  on the  applicable
Settlement Date.

          (d) The  Threshold  Price  designated  by the Company in its Draw Down
Notice shall apply to each Call Option.

          (e) For each Call Option that the Purchaser exercises pursuant to this
Section 6.2, the Purchaser  must issue via facsimile a Call Option Notice to the
Company no later than 8:00 p.m.  (eastern  time) on the day such Call  Option is
exercised.  If the  Purchaser  does not  exercise  a Call  Option  by 8:00  p.m.
(eastern  time) on the last  Trading  Day of the  applicable  Draw Down  Pricing
Period,  the  Purchaser's  Call  Options  with respect to that Draw Down Pricing
Period shall terminate.

<PAGE>

          (f) During the first Draw Down  Pricing  Period,  the  Purchaser  will
exercise Call Options granted by the Company for an aggregate amount equal to at
least  the  product  of (i)  $3,000,000  multiplied  by (ii) the  fraction,  the
numerator of which is the total Draw Down Amount  purchased during the Draw Down
Pricing Period and the  denominator of which is the Draw Down Amount  requested.
During the second Draw Down Pricing  Period,  the  Purchaser  will exercise Call
Options  granted by the Company for an  aggregate  amount  equal to at least the
product of (i)  $2,000,000  multiplied  by (ii) the  fraction,  the numerator of
which is the total  Draw Down  Amount  purchased  during  the Draw Down  Pricing
Period and the denominator of which is the Draw Down Amount requested.

                                  ARTICLE VII

                                   TERMINATION

          SECTION 7.1 TERMINATION BY MUTUAL CONSENT.  The term of this Agreement
shall be the earliest to occur of (i) twenty-eight  (28) months from the date of
execution of this Agreement (the "INVESTMENT PERIOD"), (ii) the date that all of
the shares of Common Stock registered under the Registration Statement have been
issued and sold,  or (iii) the date the Purchaser has purchased in the aggregate
$60,000,000  pursuant  to all Draw Downs  issued and Call  Options  granted  and
exercised.  Either party may terminate this Agreement if the Company enters into
an extraordinary transaction in which the Company is not the surviving entity so
long as such  termination  does not occur during a Draw Down  Pricing  Period or
prior  to the  Settlement  Date  of any  Draw  Down  Pricing  Period  and,  such
termination  shall be  without  liability  for  damages  by either  party.  This
Agreement may be terminated at any time by mutual consent of the parties. Either
party may terminate this  Agreement for a material  breach by the other party so
long as notice of such termination is delivered to the other party in accordance
with Section 9.4 hereof;  provided that the breaching  party shall have five (5)
business days to cure such breach,  unless the party  terminating this Agreement
has been  prejudiced by such breach which prejudice is not subject to cure, then
the  termination of this Agreement shall be effective upon receipt of the notice
of termination.

          SECTION 7.2 OTHER TERMINATION. The Company shall inform the Purchaser,
and the Purchaser  shall have the right to terminate this  Agreement  within the
subsequent thirty (30) days (the "EVENT PERIOD"), if (w) the Company enters into
an Other  Financing  including,  without  limitation,  an equity  line of credit
transaction,  without the prior consent of the Purchaser, which consent will not
be  unreasonably  delayed,  conditioned or withheld,  which provides for (i) the
issuance of Common Stock or securities convertible,  exercisable or exchangeable
into Common Stock at a discount to the then  current  market price of the Common
Stock (except for restricted Common Stock or securities  convertible into Common
Stock where the discount to the then current market price results from a pricing
formula for the transaction  that is based on a premium to the market price in a
forward  looking  period  from the  offering  date,  provided  that the  Company
notifies the Purchaser on the offering date (a  "Permitted  Offering")),  (ii) a
mechanism  for the reset of the purchase  price of the Common Stock to below the
then current  market price of the Common Stock,  or (iii) the issuance of Common
Stock with  warrants,  which have an exercise  price such that together with the
price of the Common Stock would result in the issuance of shares of Common Stock
at a per share price below the then current  market  price of the Common  Stock,
(x) an event  resulting  in a  Material  Adverse  Effect or  Material  Change in

<PAGE>

Ownership  has  occurred,  (y) the Company  shall have issued any  securities or
granted rights for additional  securities to any Principal  Security  Holder for
any reason other than pursuant to stock splits, stock  reclassifications,  stock
dividends,   stock  option  plans,  underwritten  public  offerings,   Permitted
Offerings or  Permitted  Transactions,  or (z) the Company  fails to comply with
Section 4.14 hereof.  The Purchaser may terminate  this  Agreement  upon one (1)
day's notice during the Event Period.

          SECTION 7.3 EFFECT OF TERMINATION.  In the event of termination by the
Company or the Purchaser, written notice thereof shall forthwith be given to the
other  party  and the  transactions  contemplated  by this  Agreement  shall  be
terminated  without  further  action  by  either  party.  If this  Agreement  is
terminated as provided in Section 7.1 or 7.2 herein, this Agreement shall become
of no further  force and  effect,  except as  provided  in Section  9.9  hereof.
Nothing  in this  Section  7.3 shall be deemed to  release  the  Company  or the
Purchaser from any liability for any breach under this  Agreement,  or to impair
the rights of the Company and the Purchaser to compel  specific  performance  by
the other party of its obligations under this Agreement.

                                  ARTICLE VIII

                                 INDEMNIFICATION

          SECTION 8.1 GENERAL INDEMNITY.

          (a)  INDEMNIFICATION  BY THE COMPANY.  The Company will  indemnify and
hold harmless the Purchaser,  each of its directors, fund managers and officers,
and each  person,  if any,  who  controls  the  Purchaser  within the meaning of
Section 15 of the  Securities  Act or Section 20(a) of the Exchange Act from and
against  any  losses,  claims,  damages,  liabilities  and  expenses  (including
reasonable  costs of defense and  investigation  and all  reasonable  attorneys'
fees) to which the Purchaser, each of its directors, fund managers and officers,
and each person,  if any, who controls the Purchaser may become  subject,  under
the  Securities  Act or  otherwise,  insofar as such  losses,  claims,  damages,
liabilities  and  expenses (or actions in respect  thereof)  arise out of or are
based upon, (i) any untrue  statement or alleged untrue  statement of a material
fact  contained,  or incorporated by reference,  in the  Registration  Statement
relating to Common Stock being sold to the Purchaser  (including  any Prospectus
Supplement  filed in connection  with the  transactions  contemplated  hereunder
which  are a part of it),  or any  amendment  or  supplement  to it, or (ii) the
omission or alleged  omission  to state in that  Registration  Statement  or any
document  incorporated by reference in the  Registration  Statement,  a material
fact required to be stated therein or necessary to make the  statements  therein
not misleading, PROVIDED that the Company shall not be liable under this Section
8.1(a)  to  the  extent  that a  court  of  competent  jurisdiction  shall  have
determined  by a final  judgment  (with no  appeals  available)  that such loss,
claim,  damage,  liability  or action  resulted  directly  from any such acts or
failures  to act,  undertaken  or omitted to be taken by the  Purchaser  or such
person through its bad faith or willful misconduct;  PROVIDED, however, that the
foregoing  indemnity shall not apply to any loss,  claim,  damage,  liability or
expense to the extent, but only to the extent,  arising out of or based upon any
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 the Purchaser  expressly for use in the  Registration  Statement,
any  preliminary  prospectus or the  Prospectus  (or any amendment or supplement

<PAGE>

thereto);  and  PROVIDED,  further,  that with  respect to the  Prospectus,  the
foregoing  indemnity shall not inure to the benefit of the Purchaser or any such
person from whom the person  asserting  any loss,  claim,  damage,  liability or
expense  purchased  Common  Stock,  if  copies  of the  Prospectus  were  timely
delivered to the Purchaser pursuant hereto and a copy of the Prospectus (as then
amended or  supplemented  if the Company shall have  furnished any amendments or
supplements  thereto) was not sent or given by or on behalf of the  Purchaser or
any such person to such person, if required by law so to have been delivered, at
or prior to the  written  confirmation  of the sale of the Common  Stock to such
person,  and if the Prospectus (as so amended or supplemented)  would have cured
the defect giving rise to such loss, claim, damage, liability or expense.

          The Company will  reimburse the  Purchaser  and each such  controlling
person promptly upon demand for any legal or other costs or expenses  reasonably
incurred by the Purchaser or any controlling person in investigating,  defending
against,  or  preparing  to  defend  against  any such  claim,  action,  suit or
proceeding,  except that the Company will not be liable to the extent a claim or
action which results in a loss, claim,  damage,  liability or expense arises out
of, or is based upon, an untrue statement, alleged untrue statement, omission or
alleged  omission,  included  in  any  Registration  Statement,   Prospectus  or
Prospectus  Supplement or any amendment or supplement to the thereto in reliance
upon, and in conformity with, written information  furnished by the Purchaser to
the  Company  for  inclusion  in  the  Registration  Statement,   Prospectus  or
Prospectus Supplement.

          (b) INDEMNIFICATION BY THE PURCHASER. The Purchaser will indemnify and
hold harmless the Company, each of its directors and officers,  and each person,
if any,  who  controls  the  Company  within  the  meaning  of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act from and against any losses,
claims, damages, liabilities and expenses (including reasonable costs of defense
and  investigation  and all  attorneys'  fees) to  which  the  Company  and each
director,  officer  and  person,  if any,  who  controls  the Company may become
subject, under the Securities Act or otherwise,  insofar as such losses, claims,
damages,  liabilities and expenses (or actions in respect  thereof) arise out of
or are based upon,  (i) any untrue  statement or alleged  untrue  statement of a
material  fact  contained in the  Registration  Statement or any  Prospectus  or
Prospectus  Supplement or any amendment or supplement to it or (ii) the omission
or alleged omission to state in the Registration  Statement or any Prospectus or
Prospectus  Supplement  or any  amendment or  supplement  to it a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading, to the extent, but only to the extent, the untrue statement, alleged
untrue statement, omission or alleged omission was made in reliance upon, and in
conformity with, written  information  furnished by the Purchaser to the Company
for  inclusion in the  Registration  Statement,  the  Prospectus  or  Prospectus
Supplement  or an  amendment  or  supplement  thereto,  and the  Purchaser  will
reimburse  the Company and each such  director,  officer or  controlling  person
promptly  upon  demand  for any  legal or other  costs  or  expenses  reasonably
incurred by the Company or the other person in investigating, defending against,
or preparing to defend against any such claim, action, suit or proceeding.

          SECTION  8.2  INDEMNIFICATION  PROCEDURES.  Promptly  after  a  person
receives notice of a claim or the commencement of an action for which the person
intends to seek  indemnification  under paragraph (a) or (b) of Section 8.1, the

<PAGE>

person  will  notify  the  indemnifying   party  in  writing  of  the  claim  or
commencement  of the  action,  suit or  proceeding,  but  failure  to notify the
indemnifying  party will not relieve the indemnifying party from liability under
paragraph  (a) or (b) of Section  8.1,  except to the extent  such  indemnifying
party  has  been  materially  prejudiced  by the  failure  to give  notice.  The
indemnifying  party will be entitled to participate in the defense of any claim,
action, suit or proceeding as to which  indemnification is being sought, and the
indemnifying  party may (but will not be required to) assume the defense against
the claim,  action, suit or proceeding with counsel satisfactory to it. After an
indemnifying  party notifies an indemnified  party that the  indemnifying  party
wishes  to  assume  the  defense  of a claim,  action,  suit or  proceeding  the
indemnifying  party will not be liable for any legal or other expenses  incurred
by the  indemnified  party in  connection  with the  defense  against the claim,
action,  suit or  proceeding  except  that if, in the  opinion of counsel to the
indemnifying  party, one or more of the indemnified parties should be separately
represented  in  connection  with  a  claim,  action,  suit  or  proceeding  the
indemnifying  party will pay the  reasonable  fees and  expenses of one separate
counsel for the indemnified  parties.  Each indemnified party, as a condition to
receiving  indemnification  as provided in Paragraph  (a) or (b) of Section 8.1,
will cooperate in all  reasonable  respects with the  indemnifying  party in the
defense  of any  action  or claim  as to which  indemnification  is  sought.  No
indemnifying  party will be liable  for any  settlement  of any action  effected
without its prior written consent. No indemnifying party will, without the prior
written consent of the indemnified party,  effect any settlement of a pending or
threatened  action with respect to which an indemnified party is, or is informed
that  it  may  be,  made  a  party  and  for  which  it  would  be  entitled  to
indemnification,  unless the settlement includes an unconditional release of the
indemnified  party from all liability and claims which are the subject matter of
the pending or threatened action.

      If for any reason the  indemnification  provided for in this  Agreement is
not available to, or is not sufficient to hold harmless, an indemnified party in
respect of any loss or liability  referred to in paragraph (a) or (b) of Section
8.1, each  indemnifying  party will,  in lieu of  indemnifying  the  indemnified
party,  contribute to the amount paid or payable by the  indemnified  party as a
result of the loss or liability,  (i) in the proportion  which is appropriate to
reflect the relative benefits received by the indemnifying party on the one hand
and by the  indemnified  party on the other from the sale of stock  which is the
subject of the claim,  action,  suit or proceeding which resulted in the loss or
liability or (ii) if that allocation is not permitted by applicable law, in such
proportion as is  appropriate  to reflect not only the relative  benefits of the
sale of stock,  but also the relative  fault of the  indemnifying  party and the
indemnified  party with respect to the  statements  or  omissions  which are the
subject of the claim,  action,  suit or proceeding  that resulted in the loss or
liability, as well as any other relevant equitable considerations.

                                   ARTICLE IX

                                  MISCELLANEOUS

          SECTION 9.1 FEES AND EXPENSES.  The Company  shall pay all  reasonable
fees and expenses  related to the  transactions  contemplated by this Agreement;
provided,  that the Company shall pay, at the Closing,  all reasonable attorneys
fees and  expenses  (exclusive  of  disbursements  and  out-of-pocket  expenses)
incurred by the Purchaser of up to $40,000 in connection  with the  preparation,

<PAGE>

negotiation,  execution and delivery of this Agreement. In addition, the Company
shall  pay all  reasonable  fees  and  expenses  incurred  by the  Purchaser  in
connection  with any amendments,  modifications  or waivers of this Agreement or
incurred  in  connection  with the  enforcement  of this  Agreement,  including,
without limitation, all reasonable attorneys' fees and expenses.

          SECTION 9.2 SPECIFIC ENFORCEMENT, CONSENT TO JURISDICTION.

          (a)  The  Company  and  the  Purchaser   acknowledge  and  agree  that
irreparable  damage would occur in the event that any of the  provisions of this
Agreement  were not performed in accordance  with their  specific  terms or were
otherwise breached.  It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce  specifically  the terms and provisions  hereof or
thereof,  this being in addition to any other remedy to which any of them may be
entitled by law or equity.

          (b) Each of the  Company  and the  Purchaser  (i)  hereby  irrevocably
submits to the jurisdiction of the United States District Court and other courts
of the United  States  sitting in the State of New York for the  purposes of any
suit, action or proceeding arising out of or relating to this Agreement and (ii)
hereby waives,  and agrees not to assert in any such suit, action or proceeding,
any claim that it is not personally  subject to the  jurisdiction of such court,
that the suit, action or proceeding is brought in an inconvenient  forum or that
the venue of the suit, action or proceeding is improper. Each of the Company and
the  Purchaser  consents  to process  being  served in any such suit,  action or
proceeding  by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and  sufficient  service of process  and  notice  thereof.  Nothing in this
Section  shall  affect or limit any right to serve  process in any other  manner
permitted by law.

          SECTION 9.3 ENTIRE AGREEMENT;  AMENDMENT.  This Agreement contains the
entire  understanding  of the parties with respect to the matters covered hereby
and,  except as  specifically  set forth  herein,  neither  the  Company nor the
Purchaser  makes any  representation,  warranty,  covenant or  undertaking  with
respect to such matters.  The parties hereto may not amend this Agreement or any
rights or obligations hereunder without the prior written consent of the Company
and each Purchaser to be affected by the amendment.

          SECTION 9.4  NOTICES.  Any notice,  demand,  request,  waiver or other
communication  required or permitted to be given  hereunder  shall be in writing
and shall be effective (a) upon hand  delivery,  by telecopy or facsimile at the
address or number designated below (if delivered on a business day during normal
business  hours where such notice is to be received),  or the first business day
following such delivery (if delivered other than on a business day during normal
business  hours  where  such  notice  is to be  received)  or (b) on the  second
business day following  the date of mailing by express  courier  service,  fully
prepaid,  addressed to such  address,  or upon actual  receipt of such  mailing,
whichever  shall first  occur.  Any notice to be given  hereunder  of a material
breach of this Agreement  shall be delivered by facsimile and overnight  courier
and shall be effective  upon the later to be received.  The  addresses  for such
communications shall be:

<PAGE>

If to the Company:        IGEN International, Inc.
                          16020 Industrial Drive
                          Gaithersburg, MD 20877
                          Tel. No.:  (301) 869-9800
                          Fax No.:  (301) 208-3799
                          Attention: Richard Massey

With copies to:           Kirkpatrick & Lockhart LLP
                          1800 Massachusetts Avenue, N.W.
                          Suite 200
                          Washington, D.C. 20036
                          Tel. No.:  (202) 778-9076
                          Fax No.:  (202) 778-9100
                          Attention: Thomas F. Cooney, III

If to the Purchaser:      Acqua Wellington North American
                          Equities Fund, Ltd.
                          c/o Fortis Fund Services (Bahamas) Ltd.
                          Montague Sterling Centre
                          East Bay Street, P. O. Box SS-6238
                          Nassau, Bahamas
                          Tel. No:  (242) 394-2700
                          Fax No.:  (242) 394-9667
                          Attention:  Anthony L.M. Inder Rieden

With copies to:           Jenkens & Gilchrist Parker Chapin LLP
                          The Chrysler Building
                          405 Lexington Avenue
                          New York, NY  10174
                          Tel. No:  (212) 704-6000
                          Fax No:  (212)704-6288
                          Attention:  Christopher S. Auguste

          Any party  hereto may from time to time change its address for notices
by giving at least ten days written notice of such changed  address to the other
party hereto.

          SECTION 9.5  WAIVERS.  No provision  of this  Agreement  may be waived
other than by a written  instrument signed by the party against whom enforcement
of any such  waiver is sought.  No waiver by either  party of any  default  with
respect to any provision,  condition or  requirement of this Agreement  shall be
deemed  to be a  continuing  waiver  in the  future  or a  waiver  of any  other
provision,  condition or requirement  hereof, nor shall any delay or omission of
any party to exercise any right  hereunder in any manner  impair the exercise of
any such right accruing to it thereafter.

          SECTION 9.6 HEADINGS. The article,  section and subsection headings in
this Agreement are for convenience  only and shall not constitute a part of this
Agreement  for any other  purpose and shall not be deemed to limit or affect any
of the provisions hereof.

<PAGE>

          SECTION 9.7 SUCCESSORS AND ASSIGNS.  The Purchaser may not assign this
Agreement  to any person  without the prior  consent of the  Company;  provided,
however,  that the Purchaser  may assign this  Agreement to any fund which is an
affiliate  of the  Purchaser  and is managed  or advised by the same  manager or
advisor of the Purchaser.  This Agreement shall be binding upon and inure to the
benefit  of the  parties  and their  successors  and  permitted  assigns.  After
Closing,  the  assignment by a party to this  Agreement of any rights  hereunder
shall not affect the obligations of such party under this Agreement.

          SECTION 9.8  GOVERNING  LAW. This  Agreement  shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to the choice of law provisions.

          SECTION  9.9  SURVIVAL.  The  representations  and  warranties  of the
Company and the Purchaser  contained in Article III and the covenants  contained
in  Article  IV shall  survive  the  execution  and  delivery  hereof  until the
termination  of this  Agreement,  and the  agreements and covenants set forth in
Article VIII of this Agreement  shall survive the execution and delivery  hereof
and the Closing hereunder.

          SECTION  9.10  COUNTERPARTS.  This  Agreement  may be  executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and shall become effective when counterparts have been signed by
each party and delivered to the other parties hereto,  it being  understood that
all parties need not sign the same  counterpart.  In the event any  signature is
delivered  by  facsimile  transmission,  the party  using such means of delivery
shall cause four additional executed signature pages to be physically  delivered
to the other parties within five days of the execution and delivery hereof.

          SECTION 9.11 PUBLICITY.  The Company shall not issue any press release
or  otherwise  make any public  statement or  announcement  with respect to this
Agreement  or the  transactions  contemplated  hereby or the  existence  of this
Agreement  without the prior written consent of the Purchaser.  In the event the
Company is required by law or  regulation  to issue a press release or otherwise
make a public  statement or  announcement  with respect to this Agreement or the
transaction contemplated hereby prior to or after the Closing, the Company shall
consult with the  Purchaser on the form and  substance of such press  release or
other disclosure to which the Purchaser shall respond in a timely fashion.

          SECTION  9.12  SEVERABILITY.  The  provisions  of this  Agreement  are
severable  and,  in the event  that any court of  competent  jurisdiction  shall
determine  that  any  one or more of the  provisions  or part of the  provisions
contained  in this  Agreement  shall,  for any  reason,  be held to be  invalid,
illegal  or  unenforceable  in  any  respect,  such  invalidity,  illegality  or
unenforceability  shall not affect any other provision or part of a provision of
this  Agreement,  and this Agreement  shall be reformed and construed as if such
invalid or illegal or unenforceable  provision,  or part of such provision,  had
never been contained herein,  so that such provisions would be valid,  legal and
enforceable to the maximum extent possible.

          SECTION  9.13  FURTHER  ASSURANCES.  From and  after  the date of this
Agreement, upon the request of the Purchaser or the Company, each of the Company

<PAGE>

and the  Purchaser  shall  execute and deliver such  instruments,  documents and
other writings as may be reasonably  necessary or desirable to confirm and carry
out and to effectuate fully the intent and purposes of this Agreement.

                                  [END OF PAGE]

<PAGE>

+

          IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to
be duly  executed by their  respective  authorized  officer as of the date first
above written.

                                 IGEN INTERNATIONAL, INC.

                               By: /s/ Samuel J. Wohlstadter
                                   -----------------------------------
                                   Name:  Samuel J. Wohlstadter
                                   Title: Chairman and Chief Executive Officer

                               ACQUA WELLINGTON NORTH AMERICAN
                               EQUITIES FUND, LTD.

                               By: /s/ Anthony L.M. Inder Rieden
                                   ---------------------------------
                                   Name:  Anthony L.M. Inder Rieden
                                   Title: Director

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