Document:

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                                                                    Exhibit 10.6

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR ANY APPLICABLE STATE LAW, AND
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
THE SALE OR DISTRIBUTION THEREOF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS. NO SUCH SALE OR DISPOSITION MAY BE
EFFECTED WITHOUT (a) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR (b)
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.

No. FM-1                                            Number of Shares:   12,500
Date of Issuance:  March 7, 2001                    Subject to Adjustment in the
                                                    Manner Described Below

                                LENDINGTREE, INC.

                                     WARRANT

         LendingTree, Inc., a Delaware corporation (the "COMPANY"), for value
received, hereby certifies that the Federal Home Loan Mortgage Corporation, a
federally chartered corporation (collectively, with its registered assigns the
"REGISTERED HOLDER"), is entitled, subject to the terms set forth below, to
purchase from the Company, at any time on or after March 8, 2001 until March 7,
2006 (the "EXERCISE PERIOD"), 12,500 fully paid and nonassessable shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), or any
other equity securities that may be issued in addition thereto or in
substitution therefor, as provided herein, at a price of $.01 per share (the
"EXERCISE PRICE"). This warrant (the "WARRANT") is being issued pursuant to the
Revolving Credit Facility, dated as of March 7, 2001, between the Company and
the Registered Holder. As used herein, the term "WARRANT STOCK" shall mean the
Common Stock issuable upon exercise of this Warrant.

         1.       EXERCISE.

                  (a) This Warrant may be exercised in whole or part by the
Registered Holder at any time and from time to time during the Exercise Period
by surrendering this Warrant, with the purchase form appended hereto as Appendix
A duly executed by such Registered Holder, at the principal office of the
Company, or at such other office or agency as the Company may designate in
writing to the Registered Holder, accompanied by payment in full by cash, check
or wire transfer in the amount of the Exercise Price multiplied by the number of
shares of Warrant Stock for which this Warrant is being exercised (the "PURCHASE
PRICE"). Notwithstanding the foregoing, the original Warrant may be tendered on
the day subsequent to the notice of exercise if such original Warrant is
provided to an overnight courier service (e.g. Federal Express) on the date of
such

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notice, in which case it shall be deemed surrendered on the date of delivery of
such notice of exercise. Notwithstanding any other provision of this Warrant, if
either Freddie Mac or an affiliate of Freddie Mac is the Registered Holder, the
Warrant will not be exercisable under any circumstances by such Registered
Holder, but may be transferred in accordance with Section 4 below. Any such
subsequent Registered Holder that is not either Freddie Mac or an affiliate of
Freddie Mac may exercise the Warrant in accordance with this section.

                  (b) The exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered (or deemed surrendered) to the Company as
provided in Section 1(a) above. At such time, the person or persons in whose
name or names any certificates for Warrant Stock shall be issuable upon such
exercise as provided in Section 1(d) below shall be deemed to have become the
Registered Holder or Registered Holders of record of the Warrant Stock
represented by such certificates.

                  (c) NET ISSUABLE EXERCISE.

                           (i) Notwithstanding the payment provisions set forth
         above, in lieu of exercising this Warrant in the manner provided above
         in Section 1(a), the Registered Holder may elect to receive shares of
         Warrant Stock equal to the value of this Warrant by surrender of this
         Warrant at the principal office of the Company, together with notice of
         such election, in which event the Company shall issue to the Registered
         Holder a number of shares of Warrant Stock computed using the following
         formula:

                                   X = Y (A-B)
                                         -----
                                           A

         Where    X = The number of shares of Warrant Stock to be issued to the
                      Registered Holder.

                  Y = The number of shares of Warrant Stock as to which the
                      Warrant is being exercised.

                  A = The Fair Market Value (as defined below) of one share of
                      Warrant Stock (at the date of such calculation).

                  B = The Exercise Price (as adjusted to the date of such
                      calculation).

                           (ii) For purposes of this Section 1(c), the Fair
         Market Value of the Warrant Stock shall be equal to the closing price
         of the Common Stock on the trading day immediately preceding the date
         of delivery of the notice of exercise pursuant to this Section 1(c);
         provided that, if bid and asked prices are reported, the Fair Market
         Value of the Warrant Stock shall be equal to the mean of the last

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         bid and asked prices reported on such trading day. If the Common Stock
         is not then traded on any national securities exchange or automated
         quotation system, the fair market value of a share of Common Stock as
         determined by the reasonable judgment of the board of directors of the
         Company and described in a statement transmitted to the Registered
         Holder in accordance with the provisions of Section 15.

                  (d) As soon as practicable after the exercise of this Warrant,
and in any event within ten (10) days thereafter, the Company at its expense
will cause to be issued in the name of, and delivered to, the Registered Holder,
or as such Registered Holder (upon payment by such Registered Holder of any
applicable transfer taxes) may direct, a certificate or certificates for the
number of shares of Warrant Stock to which such Registered Holder shall be
entitled. If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant, execute and deliver a new Warrant evidencing the
rights of the Registered Holder hereof to purchase the balance of the Warrant
Stock purchasable hereunder

         2.       ANTI-DILUTION PROVISIONS AND OTHER ADJUSTMENTS.

                  (a) Stock Dividends, Splits, Combinations, etc. In the event
that the Company shall, at any time after the date of original issuance hereof
until the expiration of the Exercise Period, (i) pay a dividend or make a
distribution on its Common Stock payable in shares of its capital stock (whether
of shares of Common Stock or of capital stock of any other class), (ii)
subdivide shares of its outstanding Common Stock into a greater number of
shares, (iii) combine its outstanding Common Stock into a smaller number of
shares, or (iv) issue any shares of its capital stock by reclassification of its
Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation),
then and in each such case the Registered Holder shall be entitled to purchase
the aggregate number and kind of shares which, if the Warrant had been exercised
at the Exercise Price in effect immediately prior to such event, the Registered
Holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, distribution, subdivision, combination or
reclassification.

                  (b) Reclassifications, etc. In case of any reclassification,
capital reorganization or other change of the outstanding securities of the
Company or of any merger, reorganization or consolidation of the Company (other
than a Reorganization (as defined below), causing an adjustment in accordance
with Section 3 below) or any similar corporate reorganization on or after the
date of original issuance hereof, then and in each such case the Registered
Holder of this Warrant, upon the exercise hereof at any time after the
consummation of such reclassification, change, merger, reorganization or
consolidation, shall be entitled to receive, in lieu of the stock or other
securities and property receivable upon the exercise hereof prior to such
consummation, the kind and amount of stock and/or other securities or property
to which such Registered Holder would have been entitled upon such consummation
if such Registered Holder had exercised this Warrant immediately prior thereto,
all subject to further adjustment as

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provided in paragraph (a); and in each such case, the terms of this Section 2
shall be applicable to the shares of stock or other securities properly
receivable upon the exercise of this Warrant after such consummation.

                  (c) Additional Issuances. If the Company at any time shall
issue (i) any shares of Common Stock other than Common Stock issued upon
exercise of this Warrant ("ADDITIONAL SHARES") at a price less than the Fair
Market Value per share of Common Stock or (ii) any Convertible Securities
(defined below) that are exercisable or convertible for Additional Shares for a
total consideration less than the Fair Market Value per share of Common Stock
(such total consideration being equal to the original consideration, if any,
received by the Company for the issuance of the Convertible Securities, plus the
minimum amount of consideration, if any, payable to the Company upon exercise or
conversion of any such Convertible Securities, less any amount of such original
consideration to be repaid by the Company notwithstanding such exercise or
conversion), the number of shares of Warrant Stock purchasable hereunder after
such issuance shall be determined by multiplying the number of shares of Warrant
Stock purchasable hereunder immediately prior to such issuance by a fraction,
(i) the denominator of which shall be the number of shares of Fully Diluted
Common Stock (defined below) immediately prior to such issuance plus the number
of shares that the aggregate consideration for the total number of such
Additional Shares (such aggregate consideration being equal to the original
consideration, if any, received by the Company for the issuance of the
Convertible Securities, plus the minimum amount of consideration, if any,
payable to the Company upon exercise or conversion of any such Convertible
Securities, less any amount of such original consideration to be repaid by the
Company notwithstanding such exercise or conversion) would purchase at the Fair
Market Value per share of Common Stock and (ii) the numerator of which shall be
the number of shares of Fully Diluted Common Stock immediately after such
issuance; provided, that the foregoing provisions of this Section 2(c) shall not
apply to any such issuance for which the number of shares of Warrant Stock
purchasable hereunder shall have been adjusted pursuant to Section 2(a).

                  "CONVERTIBLE SECURITIES" means rights to subscribe for, or any
rights or options to purchase, shares of Common Stock, or any stock or other
securities convertible into or exchangeable for shares of Common Stock. "FULLY
DILUTED COMMON STOCK" means, at any time, the then outstanding Common Stock plus
(without duplication) all shares of Common Stock issuable, whether at such time
or upon the passage of time or the occurrence of future events, upon the
exercise, conversion or exchange of all then-outstanding rights, warrants,
options, convertible securities or exchangeable securities or indebtedness, or
other rights exercisable for or convertible or exchangeable into, directly or
indirectly, Common Stock, and securities convertible or exchangeable into Common
Stock, whether at the time of issuance or upon the passage of time or the
occurrence of some future event.

                  Shares of Common Stock owned by or held for the account of the
Company or any subsidiary on such date shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall become effective
immediately after such

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issuance. Such adjustment shall be made successively whenever any such event
shall occur; provided, that no adjustment shall be made for the issuance of
Additional Shares upon the exercise, conversion or exchange of any Convertible
Securities if an adjustment has previously been made upon the issuance of such
Convertible Securities.

                  If the Company at any time shall issue two or more securities
as a unit and one or more of such securities shall be Additional Shares or
Convertible Securities subject to this subsection (b), the consideration
allocated to each such security shall be determined in good faith by the board
of directors of the Company.

                  (d) Distribution of Evidences of Indebtedness or Assets. If
the Company at any time shall fix a record date for the making of a distribution
to all holders of its Common Stock (including any such distribution to be made
in connection with a consolidation or merger in which the Company is to be the
continuing corporation) of evidences of its indebtedness or assets (excluding
dividends paid in or distributions of the Company's capital stock for which the
number of shares of Warrant Stock purchasable hereunder shall have been adjusted
pursuant to Section 2(a) or regular cash dividends or distributions payable out
of earnings or surplus and made in the ordinary course of business), the number
of shares of Warrant Stock purchasable hereunder after such record date shall be
determined by multiplying the number of shares of Warrant Stock purchasable
hereunder immediately prior to such record date by a fraction, of which the
denominator shall be the Fair Market Value per share of Common Stock on such
record date, less the fair market value (as determined in the reasonable
judgment of the board of directors of the Company and described in a statement
transmitted to the Registered Holder in accordance with the provisions of
Section 15) of the portion of the assets or evidences of indebtedness so to be
distributed to a holder of one share of Common Stock, and the numerator shall be
such Fair Market Value per share of Common Stock. Such adjustment shall become
effective immediately after such record date. Such adjustment shall be made
whenever such a record date is fixed; and in the event that such distribution is
not so made, the number of shares of Warrant Stock purchasable hereunder shall
again be adjusted to be the number that was in effect immediately prior to such
record date.

                  (e) Stock Other Than Common Stock. In the event that at any
time, as a result of an adjustment made pursuant to Section 2(a), the Registered
Holder shall become entitled to receive any shares of the capital stock of the
Company other than Common Stock, thereafter the number of such other shares so
receivable upon exercise of this Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in this Section 3, and the
provisions of this Warrant with respect to the Common Stock shall apply on like
terms to any such other shares.

                  (f) No Adjustment for Certain Events. The provisions of this
Section 2 shall not apply to any Common Stock (i) issued or issuable to
employees, officers, consultants or directors pursuant to the Company's employee
benefit plans in the ordinary course, (ii) issued upon exercise of this Warrant,
(iii) issued or issuable pursuant to any agreement made or executed prior to or
on the date hereof and disclosed

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in Schedule 2(f) hereof, or (iv) issued or issuable to business partners of the
Company in transactions approved by the Board of Directors of the Company, the
principal objective of which is other than raising capital.

                  (g) Adjustment of Exercise Price. Whenever the number of
shares of Common Stock purchasable upon the exercise of this Warrant is
adjusted, as provided in Sections 2(a), (b), (c), (d) or (e), the Exercise Price
for each share of Common Stock payable upon the exercise of such Warrant shall
be adjusted (calculated to the nearest $.0001) so that it shall equal the price
determined by multiplying such Exercise Price immediately prior to such
adjustment by a fraction, the numerator of which shall be the number of shares
issuable upon the exercise of this Warrant immediately prior to such adjustment,
and the denominator of which shall be the number of shares so issuable
immediately thereafter.

                  (h) Notice of Adjustment. When any adjustment is required to
be made pursuant to this Section 2, the Company shall promptly mail to the
Registered Holder a certificate setting forth the Exercise Price after such
adjustment and setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such certificate
shall also set forth the kind and amount of stock and/or other securities,
assets or property into which this Warrant shall be exercisable following the
occurrence of any of the events specified in this Section 2. Each such
certificate shall be signed by the Chief Executive Officer or Chief Financial
Officer of the Company and by the Secretary or any assistant secretary of the
Company.

         3.       REORGANIZATION. Simultaneous with the closing of a
consolidation or merger in which the Company is not the surviving entity or the
closing of a merger, consolidation, lease or acquisition of all or substantially
all of the assets or stock of the Company by another entity (the SURVIVING
ENTITY") as a result of which the stockholders of the Company will own less than
50% of the voting capital stock of the surviving entity or the entity that
controls such surviving entity immediately after the transaction or, in the case
of a sale of assets, the Company will own after the transaction less than 50% of
the assets owned by the Company immediately prior to the transaction
(collectively a "REORGANIZATION") prior to the exercise of the Warrant or the
expiration of the Exercise Period, as a result of which the stockholders of the
Company receive cash, stock or other securities or property in respect of their
shares of Common Stock, this Warrant shall become, if it is not already,
immediately exercisable. Furthermore, the Company shall, as a condition
precedent to such Reorganization, at its option, either (a) cause effective
provisions to be made so that the Registered Holder shall have the right
thereafter, by exercising this Warrant, to purchase such kind and number of
shares of capital stock and/or other securities or property of the Company or
the Surviving Entity to which the Registered Holder would have been entitled if
it had held the Warrant Stock issuable upon the exercise hereof immediately
prior to such Reorganization or (b) pay the Registered Holder an amount in cash
determined as of the date the Reorganization is consummated equal to (i) the
Fair Market Value of a share of Warrant Stock minus the Exercise Price
multiplied by (ii) the total number of shares of Warrant Stock. Any such
provision pursuant to clause (a) shall include provision for adjustments in
respect of such

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shares of stock and other securities and property that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Warrant. The foregoing provisions of this Section 3 shall similarly apply to
successive Reorganizations. The Company shall deliver to the Registered Holder
notice of each Reorganization no less than thirty (30) business days before the
date scheduled for closing of the Reorganization.

         4.       TRANSFERS. This Warrant shall be transferred by the Registered
Holder only (i) in a widely disbursed public distribution; (ii) in a private
sale in which no single party, other than an affiliate of the Registered Holder,
acquires warrants exercisable for more than two percent of the Company's voting
shares; or (iii) to a single party owning a majority of the Common Stock.
Notwithstanding the foregoing, neither this Warrant nor any securities purchased
upon exercise of this Warrant may be transferred unless either (i) such transfer
is registered under the Securities Act of 1933 (the "SECURITIES ACT") and any
applicable state securities or blue sky laws or (ii) the transfer is exempt from
the prospectus delivery and registration requirements of the Securities Act and
any applicable state securities or blue sky laws. If the Registered Holder
wishes to transfer the shares pursuant to (ii) above and, in the good faith
determination of the General Counsel (and/or outside counsel) of the Company),
there is a reasonable basis for the belief that such transfer would require
registration under the Securities Act and/or any applicable state securities or
blue sky laws, the Company may require that the Registered Holder furnish the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration under the Securities Act and any
applicable state securities or blue sky laws. Upon any transfer of all or a
portion of the Warrant in compliance with this Section 4 and Section 12, the
transferee shall be deemed a Registered Holder. Notwithstanding anything in this
section, for so long as Freddie Mac or an affiliate of Freddie Mac is the
Registered Holder, such Registered Holder may transfer the Warrant to any of its
affiliates without restriction other than written notice to the Company of such
transfer. The Warrant Stock is included among Common Stock to be registered
under the Securities Act pursuant to the Registration Rights Agreement dated as
of March 7, 2001 (the "Registration Rights Agreement") among the Company and the
signatories to the Registration Rights Agreement.

         5.       LEGEND. A legend setting forth or referring to the above
restrictions shall be placed on this Warrant, any replacement hereof and any
certificate representing a security issued pursuant to the exercise hereof, and
a stop transfer restriction or order shall be placed on the books of the Company
and with any transfer agent until such securities may be legally sold or
otherwise transferred; provided, however, that such legend and a stop transfer
restriction order shall not be placed if (i) in the opinion of counsel to the
Registered Holder (which shall be reasonably satisfactory to the Company)
registration of any future transfer is not required by the applicable provisions
of the Securities Act, (ii) the Company shall have waived the requirements of
such legends, (iii) the transfer of Warrant Stock shall be made in compliance
with the requirements of Rule 144(k) or (iv) the Warrant Stock shall have been
registered under the Securities Act. In the event any Warrant Stock bearing such
a legend shall be outstanding at the time of the occurrence of any of the
foregoing, the Company shall, at the request of the Registered Holder, issue to
the Registered Holder new certificates for Warrant Stock not

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bearing such a legend, within 10 business days of surrender by the Registered
Holder to the Company of the legended certificates.

         6.       REGISTERED HOLDER ITS OWNER. Except as provided in Section 4
hereto, the Company may deem and treat the Registered Holder of this Warrant as
the absolute owner hereof for all purposes regardless of any notice to the
contrary.

         7.       NO IMPAIRMENT. The Company will not, by amendment of its
charter or through reorganization, consolidation, merger, dissolution, sale of
assets or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Registered Holder of this Warrant against impairment. Without limiting the
generality of the foregoing, the Company will not increase the par value of any
shares of stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and at all times will take all such action
as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable stock upon the exercise of this
Warrant.

         8.       EXPIRATION. This Warrant (and the right to purchase securities
upon exercise hereof) shall be void and all rights represented thereby shall
cease unless exercised during the Exercise Period. All restrictions set forth
herein on the shares of capital stock issued upon exercise of any rights
hereunder shall survive such exercise and expiration of the rights granted
hereunder.

         9.       NOTICES OF CERTAIN TRANSACTIONS.  In case:

                  (a) the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time deliverable upon the
exercise of this Warrant) for the purpose of entitling or enabling them to
receive any dividend or other distribution as described in Section 2, or to
receive any right to subscribe for or purchase any shares of stock of any class
or any other securities, or to receive any other right, to subscribe for or
purchase any shares of stock of any class or any other securities, or to receive
any other right, or

                  (b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company, any consolidation or merger of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the surviving entity), or any transfer or lease of all or substantially all
of the assets of the Company, or

                  (c) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Company, or

                  (d) the Company shall propose to take any other action that
would require an adjustment of the number of shares of Warrant Stock purchasable
hereunder

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pursuant to Section 2; then, and in each such case, the Company will fax or
cause to be faxed (confirmed by telephone) and mail or cause to be mailed to the
Registered Holder of this Warrant a notice describing such issuance,
distribution, reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation, winding-up or other action and specifying, as the case
may be, (i) the date on which a record is to be taken for the purpose of such
dividend distribution right, or (ii) the effective date on which such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation, winding-up or other action is to take place, and the time, if any
is to be fixed, as of which the holders of record of Common Stock shall be
entitled to exchange their shares of Common Stock for the securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation or winding-up. Such notice shall be
faxed (and confirmed by telephone) and mailed at least ten (10) business days
prior to the record date or effective date for the event specified in such
notice.

         10.      DUE AUTHORIZATION; RESERVATION OF STOCK; TAXES.

                  (a) The Company represents and warrants that this Warrant has
been duly authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company and entitles the Registered Holder hereof or
its assignees to purchase shares of Warrant Stock upon payment to the Company of
the Exercise Price applicable to such shares in accordance with the terms
hereof. The Company will at all times reserve and keep available, solely for the
issuance and delivery upon the exercise of this Warrant, such shares of Common
Stock and other stock, securities and property, as from time to time shall be
issuable upon the exercise of this Warrant. The Company covenants that all
Common Stock that may be issued upon the exercise of rights represented by this
Warrant will be duly authorized and, upon exercise, be validly issued, fully
paid and nonassessable and free from all taxes, liens, security interests,
charges and other encumbrances or restrictions on sale (other than taxes in
respect of any transfer occurring contemporaneously with the issue) and free and
clear of all preemptive rights. The Company shall pay all taxes and any and all
United States federal, state and local taxes and other charges that may be
payable in connection with the preparation, issuance and delivery of the
certificates representing Common Stock issued hereunder.

                  (b) The Company represents and warrants that the execution and
delivery by it of this Warrant do not require any action by or in respect of, or
filing with, any governmental body, agency or official and do not contravene or
constitute a default under or violation of (i) any provision of applicable law
or regulation, (ii) the articles of incorporation of the Company, or (iii) any
material agreement, judgment, injunction, order, decree or other instrument
binding upon the Company.

         11.      EXCHANGE OF WARRANT. Upon the surrender by the Registered
Holder of this Warrant, properly endorsed, to the Company at the principal
office of the Company, the Company will, subject to the provisions of Section 4
hereof, issue and deliver to or upon the order of such Registered Holder, at the
Company's expense, other Warrants of different denominations, of like tenor, in
the name of such Registered Holder or as such

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Registered Holder (upon payment by such Registered Holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Warrant Stock called for on the face or
faces of the Warrant so surrendered. This Warrant may be divided or combined
with other Warrants that carry the same rights upon presentation hereof at the
office of the Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued and signed by the
Registered Holder hereof. The term "warrant" as used herein includes any
Warrants into which this Warrant may be divided or for which it may be
exchanged.

         12.      REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.

         13.      AVAILABILITY OF INFORMATION. (a) The Company shall comply with
the reporting requirements of Sections 13 and 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), to the extent it is required to do
so under the Exchange Act. The Company shall also cooperate with each Registered
Holder of any Warrants and holder of any shares of Warrant Stock in supplying
such information as may be necessary for such holder to complete and file any
information reporting forms currently or hereafter required by the Securities
and Exchange Commission as a condition to the availability of an exemption from
the Securities Act for the sale of any Warrants or shares of Warrant Stock. The
provisions of this Section 14 shall survive termination of this Warrant, whether
upon exercise of this Warrant in full or otherwise.

                  (b) If at any time the Company is not subject to the
requirements of Section 13 or 15(d) of the Exchange Act, the Company will
promptly furnish at its expense, upon request, for the benefit of Registered
Holders from time to time of Warrants and holders from time to time of shares of
Warrant Stock, to Registered Holders of Warrants, holders of shares of Warrant
Stock and prospective purchasers of Warrants and Warrant Stock information
satisfying the requirements of subsection (d)(4)(i) of Rule 144A under the
Securities Act.

         14.      MAILING OF NOTICES. Any notices required or permitted pursuant
to this Warrant shall be in writing and shall be deemed sufficient (i)
immediately when delivered personally or by facsimile, (ii) twenty-four (24)
hours after being deposited with an overnight courier service (e.g. Federal
Express) for next day delivery, or (iii) seventy-two (72) hours after being
deposited in the U.S. mail, as certified or registered mail (return receipt
requested), with postage prepaid, addressed as follows:

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         If to the Registered Holder:

         Federal Home Loan Mortgage Corporation
         8200 Jones Branch Drive
         MS B3A
         McLean, Virginia  22102
         Fax:   (703) 903-2919
         Tel:   (703) 714-3410
         Attention:  Senior Vice President - Business Development

         With a copy to:

         Federal Home Loan Mortgage Corporation
         8200 Jones Branch Drive
         MS 208
         McLean, Virginia  22102
         Fax:   (703) 903-3613
         Tel:   (703) 903-2781
         Attention:  Associate General Counsel - Securities

         If to the Company:

         LendingTree
         11115 Rushmore Drive
         Charlotte, North Carolina 28277
         Fax:   (704) 541-1824
         Tel:   (704) 944-8593
         Attention:   Keith B. Hall
                      Robert J. Flemma, Jr.
                      Matt Packey

         with a copy to:

         Kennedy Covington Lobdell & Hickman, L.L.P.
         100 North Tryon Street, Suite 4200
         Charlotte, NC 28202-4006
         Fax:   (704)  331-7598
         Tel:   (704) 331-7406
         Attention:  Sean M. Jones

         Each of the foregoing parties shall be entitled to specify a different
address by giving five (5) days' advance written notice as aforesaid to the
other parties.

         15.      NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant,
the Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company; and except as otherwise provided
herein, no dividend or

                                       11
<PAGE>   12

interest shall be payable or shall accrue in respect of this Warrant or the
Warrant Stock purchasable hereunder unless, until and to the extent that this
Warrant shall be exercised.

         16.      NO FRACTIONAL SHARES. No fractional shares of Warrant Stock
will be issued in connection with any exercise hereunder. In lieu of any
fractional shares which would otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the Fair Market Value of one
share of Warrant Stock on the date of exercise, as determined in accordance with
Section 1(c)(ii).

         17.      AMENDMENT OR WAIVER. This Warrant or any provision thereof may
be changed, waived, discharged or terminated only by a statement in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.

         18.      HEADINGS. The headings in this Warrant are for purposes of
reference only and shall not limit or otherwise affect the meaning of any
provision of this Warrant.

         19.      GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL BE
GOVERNED BY, THE LAWS OF THE UNITED STATES. INSOFAR AS THERE MAY BE NO
APPLICABLE PRECEDENT AND INSOFAR AS TO DO SO WOULD NOT FRUSTRATE ANY PROVISIONS
OF THE WARRANT, THE LAWS OF THE STATE OF NEW YORK WILL BE DEEMED REFLECTIVE OF
THE LAWS OF THE UNITED STATES.

         20.      SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon the
Company and inure to the benefit of the Registered Holder and its successors and
assigns.

         22.      RIGHT OF ACTION. All rights of action in respect of this
Warrant are vested in the Registered Holder of this Warrant, and the Registered
Holder of this Warrant, without the consent of the holder of any other Warrant,
may, in such Registered Holder's own behalf and for such Registered Holder's own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce this Warrant.

                                      * * *

                                       12
<PAGE>   13

         IN WITNESS WHEREOF, the Company has executed this Warrant as of the
date first written above.

                                         LendingTree, Inc.

                                         By:
                                            ------------------------------------
                                         Name:
                                              ----------------------------------
                                         Title:
                                               ---------------------------------

                                       13
<PAGE>   14

                                   APPENDIX A

                                FORM OF PURCHASE

                 [To be executed only upon exercise of Warrant]

To LendingTree, Inc.:

The undersigned registered holder of the within Warrant hereby irrevocably
exercises such Warrant for, and purchases thereunder, [ ] shares of Warrant
Stock of LendingTree, Inc. and herewith makes payment of $ therefor OR by
conversion of ______% of the Warrant, and requests that the certificates for
such shares be issued in the name of, and delivered to, whose address is set
forth below.

Date:
                                     -------------------------------------------
                                     (Signature must conform in all respects to
                                     name of holder as specified on the face of
                                     Warrant)

                                     -------------------------------------------
                                     (Street Address)

                                     -------------------------------------------
                                     (City) (State) (Zip Code)<PAGE>   1
                                                                    Exhibit 10.7

                         COMMON STOCK PURCHASE AGREEMENT

                  This COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is
dated as of March 2, 2001 by and between LendingTree, Inc., a Delaware
corporation (the "Company"), and Paul Revere Capital Partners, Ltd. (the
"Purchaser"), a British Virgin Islands corporation.

                  WHEREAS, the parties desire that, upon the terms and subject
to the conditions contained herein, the Company may issue and sell to Purchaser
from time to time as provided herein, and Purchaser shall purchase, up to
$24,000,000 of Common Stock (as defined below); and

                  WHEREAS, such investments will be made by the Purchaser as
statutory underwriter of a registered indirect primary offering of such Common
Stock by the Company.

                  NOW, THEREFORE, in consideration of the foregoing premises,
and the promises and covenants herein contained, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, the parties, intending to
be legally bound, hereby agree as follows:

                                   ARTICLE 1

                        PURCHASE AND SALE OF COMMON STOCK

                  Section 1.1. Purchase and Sale of Stock. Subject to the terms
and conditions of this Agreement, the Company may, in its sole discretion, sell
and issue to the Purchaser and the Purchaser shall be obligated to purchase from
the Company, up to an aggregate of, $24,000,000 of the Common Stock, subject to
the terms herein.

                  Section 1.2. Purchase Price and Initial Closing. The Company
agrees to issue and sell to the Purchaser and the Purchaser agrees to purchase
that number of the Shares to be issued in connection with each Draw Down, if
any, in each case in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement.
The delivery of executed documents under this Agreement and the other agreements
referred to herein and the payment of the fees set forth in Article I of the
Escrow Agreement, attached as Exhibit B hereto, (the "Initial Closing") shall
take place at the offices of Epstein Becker & Green, P.C., 250 Park Avenue, New
York, New York 10177 (i) within fifteen (15) days from the date hereof, or (ii)
such other time and place or on such date as the Purchaser and the Company may
agree upon (the "Initial 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 Initial Closing.

                                       1
<PAGE>   2

                                   ARTICLE 2

                         REPRESENTATIONS AND WARRANTIES

                  Section 2.1. Representation and Warranties of the Company. The
Company hereby makes the following representations and warranties to the
Purchaser:

                           (a) Organization, Good Standing and Power. The
         Company is a corporation duly incorporated validly existing and in good
         standing under the laws of the State of Delaware and has all requisite
         corporate authority to own, lease and operate its properties and assets
         and to carry on its business as now being conducted, except as would
         not have a Material Adverse Effect. The Company does not own more than
         fifty percent (50%) of or control any other business entity except its
         wholly owned subsidiary Homespace Acquisition Corp., a Delaware
         Corporation and except as set forth in the SEC Documents. The Company
         is duly qualified to do business and is in good standing as a foreign
         corporation in every jurisdiction in which the nature of the business
         conducted or property owned by it makes such qualification necessary,
         other than those in which the failure so to qualify would not have a
         Material Adverse Effect.

                           (b) Authorization, Enforcement. (i) The Company has
         the requisite corporate power and corporate authority to enter into and
         perform its obligations under the Transaction Documents and to issue
         the Draw Down Shares pursuant to their respective terms, (ii) the
         execution and delivery of the Transaction Documents by the Company and
         the consummation by it of the transactions contemplated hereby and
         thereby have been duly authorized by all necessary corporate action and
         no further consent or authorization of the Company or its Board of
         Directors or stockholders is required (other than approvals required by
         the Principal Market), and (iii) the Transaction Documents have been
         duly executed and delivered by the Company and at the Initial Closing
         shall constitute valid and binding obligations of the Company
         enforceable against the Company in accordance with their 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, creditors' rights and remedies or by other equitable
         principles of general application. The Company has duly and validly
         authorized and reserved for issuance shares of Common Stock sufficient
         in number for the issuance of the Draw Down Shares.

                           (c) Capitalization. The authorized capital stock of
         the Company consists of 100,000,000 shares of Common Stock of which
         18,737,441 shares are issued and outstanding as of the date hereof and
         10,000,000 shares of preferred stock, par value $0.01, of which none
         are issued and outstanding. All of the outstanding shares of the
         Company's Common Stock have been duly and validly authorized and are
         fully paid and non-assessable, except as may be set forth in the SEC
         Documents. Except as set forth in this Agreement and the Registration
         Rights Agreement or as set forth in the SEC Documents, or on Schedule
         2.1(c) hereto, no shares of Common Stock are entitled to preemptive
         rights or registration rights and there are no outstanding options,
         warrants, scrip, rights to subscribe to, calls or commitments of any
         character whatsoever relating to,

                                       2
<PAGE>   3

         or securities or rights convertible into, any shares of capital stock
         of the Company. Furthermore, except as set forth in this Agreement or
         as set forth in the SEC Documents or on Schedule 2.1(c), 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 as set
         forth on Schedule 2.1(c), 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. Except as set forth on Schedule 2.1(c), the
         Company is not a party to, and it has no actual knowledge of, any
         agreement restricting the voting or transfer of any shares of the
         capital stock of the Company. Except as set forth in the SEC Documents
         or on Schedule 2.1(c) hereto, the offer and sale of all capital stock,
         convertible securities, rights, warrants, or options of the Company
         issued prior to the Initial Closing complied in all material respects
         with all applicable federal and state securities laws, and no
         stockholder has a right of rescission or damages with respect thereto
         which would have a Material Adverse Effect. The Company has made
         available to the Purchaser true and correct copies of the Company's
         certificate of incorporation as in effect on the date hereof (the
         "Charter"), and the Company's bylaws as in effect on the date hereof
         (the "Bylaws"). The Company has not received any notice from the
         Principal Market questioning or threatening the continued inclusion of
         the Common Stock on such market.

                           (d) [INTENTIONALLY DELETED]

                           (e) No Conflicts. Except as set forth on Schedule
         2.1(e), the execution, delivery and performance of this Agreement by
         the Company and the consummation by the Company of the transactions
         contemplated herein do not and will 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 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 or state statute, rule, regulation, order, judgment or decree
         (including any federal or 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 in items (i)-(iv) above, for such
         conflicts, defaults, termination, amendments, accelerations,
         cancellations and violations as would not, individually or in the
         aggregate, have a Material Adverse Effect. The business of the Company
         and its subsidiaries is not being conducted in violation of any laws,
         ordinances or regulations of any governmental entity, except for
         possible violations which singularly or in the aggregate do not and
         will not have a Material Adverse Effect. The Company is not required
         under any federal or state 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

                                       3
<PAGE>   4

         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 SEC or state securities administrators
         subsequent to the Initial Closing and any registration statement which
         may be filed pursuant hereto); provided, however, that for purposes of
         the representations made in this sentence, the Company is assuming and
         relying upon the accuracy of the relevant representations and
         agreements of the Purchaser herein.

                           (f) SEC Documents, Financial Statements. The Common
         Stock of the Company is registered pursuant to Section 12(g) of the
         Exchange Act, and, except as disclosed in the SEC Documents or on
         Schedule 2.1(f) hereto, the Company has timely filed in all material
         respects, all reports, schedules, forms, statements and other documents
         required to be filed by it with the SEC pursuant to the reporting
         requirements of the Exchange Act, including material filed pursuant to
         Section 13(a) or 15(d) of the Exchange Act. The Company has delivered
         or made available to the Purchaser, true and complete copies of the SEC
         Documents filed with the SEC since December 31, 1998, except for such
         SEC Documents that may be retrieved through the EDGAR system. The
         Company has not provided to the Purchaser any information which,
         according to applicable federal or state securities laws, 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. As of their respective filing dates, the SEC Documents
         complied in all material respects with the requirements of the Exchange
         Act or the Securities Act, as applicable, and the rules and regulations
         of the SEC promulgated thereunder applicable to such documents, and, as
         of their respective filing dates, none of the SEC Documents contained
         any untrue statement of a material fact or omitted to state a material
         fact required to be stated therein or necessary in order to make the
         statements therein, in light of the circumstances under which they were
         made, not misleading. The financial statements of the Company included
         in the SEC Documents comply as to form in all material respects with
         applicable accounting requirements under GAAP and the published rules
         and regulations of the SEC or other applicable rules and regulations
         with respect thereto. Such financial statements have been prepared in
         accordance with 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 condition 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 SEC Documents or Schedule
         2.1(g) hereto sets forth each subsidiary of the Company, showing the
         jurisdiction of its incorporation or organization and showing the
         percentage of the Company's ownership of the outstanding stock or other
         interests of such subsidiary. For the purposes of this Agreement,
         "subsidiary" shall mean any corporation or other entity of which at
         least a majority of the securities or other ownership interests 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

                                       4
<PAGE>   5

         subsidiaries. All of the issued and outstanding shares of capital stock
         of each subsidiary have been duly authorized and validly issued, and
         are fully paid and non-assessable. There are no outstanding preemptive,
         conversion or other rights, options, warrants or agreements granted or
         issued by or binding upon any subsidiary for the purchase or
         acquisition of any shares of capital stock of any subsidiary or any
         other securities convertible into, exchangeable for or evidencing the
         rights to subscribe for any shares of such capital stock. Neither the
         Company nor any subsidiary is subject to any obligation (contingent or
         otherwise) to repurchase or otherwise acquire or retire any shares of
         the capital stock of any subsidiary or any convertible securities,
         rights, warrants or options of the type described in the preceding
         sentence. Neither the Company nor any subsidiary is a party to, nor has
         any actual knowledge of, any agreement restricting the voting or
         transfer of any shares of the capital stock of any subsidiary.

                           (h) No Material Adverse Effect. Since the date of the
         financial statements contained in the most recently filed Form 10-Q or
         Form 10-K, whichever is most current, no Material Adverse Effect has
         occurred or exists with respect to the Company, except as disclosed in
         the SEC Documents or on Schedule 2.1(h) hereto.

                           (i) No Undisclosed Liabilities. Except as disclosed
         in the SEC Documents or on Schedule 2.1(i) hereto, neither the Company
         nor any of its subsidiaries has any 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 which are not
         disclosed in the SEC Documents, other than those incurred in the
         ordinary course of the Company's or its subsidiaries' respective
         businesses since such date and which, individually or in the aggregate,
         do not or would not have a Material Adverse Effect on the Company.

                           (j) No Undisclosed Events or Circumstances. Since the
         date of the financial statements contained in the most recently filed
         Form 10-Q, Form 10-K or Form 8-K, whichever is most current, no event
         or circumstance has occurred or exists with respect to the Company or
         its businesses, properties, prospects, operations or financial
         condition, that, under applicable law, rule or regulation, requires
         public disclosure or announcement prior to the date hereof by the
         Company but which has not been so publicly announced or disclosed in
         the SEC Documents.

                           (k) Indebtedness. The SEC Documents or Schedule
         2.1(k) hereto sets forth as of the date hereof all outstanding secured
         and unsecured Indebtedness of the Company or any subsidiary, 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 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

                                       5
<PAGE>   6

         value of any lease payments in excess of $250,000 due under leases
         required to be capitalized in accordance with GAAP. Neither the Company
         nor any subsidiary is in default with respect to any Indebtedness.

                           (l) Title to Assets. Each of the Company and the
         subsidiaries has good and marketable title to all of its real and
         personal property reflected in the SEC Documents, free of any
         mortgages, pledges, charges, liens, security interests or other
         encumbrances, except for those indicated in the SEC Documents or on
         Schedule 2.1(1) hereto or such that do not cause a Material Adverse
         Effect. All said leases of the Company and each of its subsidiaries are
         valid and subsisting and in full force and effect.

                           (m) Actions Pending. There is no action, suit, claim,
         investigation or proceeding pending or, to the actual knowledge of the
         Company, threatened against the Company or any subsidiary which
         questions the validity of this Agreement or the transactions
         contemplated hereby or any action taken or to be taken pursuant hereto
         or thereto. Except as set forth in the SEC Documents or on Schedule
         2.1(m) hereto, there is no action, suit, claim, investigation or
         proceeding pending or, to the actual knowledge of the Company,
         threatened, against or involving the Company, any subsidiary or any of
         their respective properties or assets, except as would not have a
         Material Adverse Effect. There are no outstanding orders, judgments,
         injunctions, awards or decrees of any court, arbitrator or governmental
         or regulatory body against the Company or any subsidiary, except as
         would not have a Material Adverse Effect.

                           (n) Compliance with Law. The Company and each of its
         subsidiaries have all franchises, permits, licenses, consents and other
         governmental or regulatory authorizations and approvals necessary for
         the conduct of their respective businesses as now being conducted by
         them 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) Taxes. The Company and each subsidiary has filed
         all material Tax Returns which it is required to file under applicable
         laws; all such material Tax Returns are true and accurate in all
         material respects and have been prepared in compliance with all
         applicable federal and state laws; the Company has paid all Taxes due
         and owing by it or any subsidiary (whether or not such Taxes are
         required to be shown on a Tax Return), except as would not have a
         Material Adverse Effect and has withheld and paid over to the
         appropriate taxing authorities all Taxes which it is required to
         withhold from amounts paid or owing to any employee, stockholder,
         creditor or other third parties, except as would not have a Material
         Adverse Effect; and since December 31, 1999, the charges, accruals and
         reserves for Taxes with respect to the Company (including any
         provisions for deferred income taxes) reflected on the books of the
         Company are adequate in all material respects to cover any Tax
         liabilities of the Company if its current tax year were treated as
         ending on the date hereof.

                                       6
<PAGE>   7

                           No material claim has been made by a taxing authority
         in a jurisdiction where the Company does not file tax returns that the
         Company or any subsidiary is or may be subject to taxation by that
         jurisdiction. There are no federal or state audits or administrative or
         judicial proceedings pending or being conducted with respect to the
         Company or any subsidiary, except as would not have a Material Adverse
         Effect; no material information related to Tax matters has been
         requested by any federal or state taxing authority; and, except as
         disclosed above, no written notice indicating an intent to open an
         audit or other review has been received by the Company or any
         subsidiary from any federal or state taxing authority. There are no
         material unresolved questions or claims concerning the Company's Tax
         liability. The Company (A) has not executed or entered into a closing
         agreement pursuant to ss. 7121 of the Internal Revenue Code or any
         predecessor provision thereof or any similar provision of state law;
         and (B) has not agreed to or is required to make any adjustments
         pursuant to ss. 481 (a) of the Internal Revenue Code or any similar
         provision of state law by reason of a change in accounting method
         initiated by the Company or any of its subsidiaries or has any actual
         knowledge that the IRS has proposed any such adjustment or change in
         accounting method, or has any application pending with any taxing
         authority requesting permission for any changes in accounting methods
         that relate to the business or operations of the Company. The Company
         has not been a United States real property holding corporation within
         the meaning of ss. 897(c)(2) of the Internal Revenue Code during the
         applicable period specified in ss. 897(c)(1)(A)(ii) of the Internal
         Revenue Code.

                           The Company has not made an election under ss. 341(f)
         of the Internal Revenue Code. The Company is not liable for the Taxes
         of another person that is not a subsidiary of the Company under (A)
         Treas. Reg. ss. 1.1502-6 (or comparable provisions of state law), (B)
         as a transferee or successor, (C) by contract or indemnity or (D)
         otherwise. The Company is not a party to any tax sharing agreement. The
         Company has not made any material payments, is not obligated to make
         material payments nor is it a party to an agreement that could obligate
         it to make any material payments that would not be deductible under ss.
         280G of the Internal Revenue Code.

                           For purposes of this Section 2.1(o):

                           "IRS" means the United States Internal Revenue
         Service.

                           "Tax" or "Taxes" means federal, state or other
         income, gross receipts, ad valorem, franchise, profits, sales or use,
         transfer, registration, excise, utility, environmental, communications,
         real or personal property, capital stock, license, payroll, wage or
         other withholding, employment, social security, severance, stamp,
         occupation, alternative or add-on minimum, estimated and other taxes of
         any kind whatsoever (including, without limitation, deficiencies,
         penalties, additions to tax, and interest attributable thereto) whether
         disputed or not.

                           "Tax Return" means any return, information report or
         filing with respect to Taxes, including any schedules attached thereto
         and including any amendment thereof.

                                       7
<PAGE>   8

                           (p) Certain Fees. Except as set forth on Schedule
         2.1(p) hereto, no brokers, finders or financial advisory fees or
         commissions will be payable by the Company or any subsidiary with
         respect to the transactions contemplated by this Agreement.

                           (q) Disclosure. To the Company's actual 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 or any subsidiary in connection with the transactions
         contemplated by this Agreement contains 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.

                           (r) Operation of Business. The Company and each of
         the subsidiaries owns or possesses all patents, trademarks, service
         marks, trade names, copyrights, licenses and authorizations as set
         forth in the SEC Documents or on Schedule 2.1(r) hereto, and all rights
         with respect to the foregoing, which are necessary for the conduct of
         its business as now conducted.

                           (s) Insurance. Except as disclosed in the SEC
         Documents or on Schedule 2.1(s) hereto, the Company carries or will
         have the benefit of insurance in such amounts and covering such risks
         as is adequate in all material respects for the conduct of its business
         and the value of its properties and as is customary for companies
         engaging in similar businesses and similar industries.

                           (t) Books and Records. The records and documents of
         the Company and its subsidiaries accurately reflect in all material
         respects the information relating to the business of the Company and
         the subsidiaries, the location and collection of their assets, and the
         nature of all transactions giving rise to the obligations or accounts
         receivable of the Company or any subsidiary.

                           (u) Material Agreements. Except as set forth in the
         SEC Documents, or on Schedule 2.1(u) hereto, neither the Company nor
         any subsidiary is 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 SEC as an exhibit to a
         registration statement on Form S-1 or other applicable form
         (collectively, "Material Agreements") if the Company or any subsidiary
         were registering securities under the Securities Act. Except as set
         forth on Schedule 2.1(u), the Company and each of its subsidiaries has
         in all material respects performed all the obligations required to be
         performed by them to date under the foregoing agreements, have received
         no notice of default and, to the best of the Company's knowledge are
         not in default under any Material Agreement now in effect, the result
         of which would cause a Material Adverse Effect. Except as set forth in
         the SEC Documents, no written or oral contract, instrument, agreement,
         commitment, obligation, plan or arrangement of the Company or of any
         subsidiary limits or shall limit the payment of dividends on the
         Company's Common Stock.

                                       8
<PAGE>   9

                           (v) Transactions with Affiliates. Except as set forth
         in the SEC Documents or on Schedule 2.1(v) hereto, there are no loans,
         leases, agreements, contracts, royalty agreements, management contracts
         or arrangements or other continuing transactions exceeding $100,000
         between (A) the Company, any subsidiary or any of their respective
         customers or suppliers on the one hand, and (B) on the other hand, any
         officer, employee, consultant or director of the Company, or any of its
         subsidiaries, or any person owning 5% or more of the capital stock of
         the Company or any subsidiary or any member of the immediate family of
         such officer, employee, consultant, director or stockholder or any
         corporation or other entity controlled by such officer, employee,
         consultant, director or stockholder, or a member of the immediate
         family of such officer, employee, consultant, director or stockholder.

                           (w) Securities Laws. The Company has complied and
         will comply with all applicable federal and state securities laws in
         connection with the offer, issuance and sale of the Shares hereunder.
         Neither the Company nor anyone acting on its behalf, directly or
         indirectly, has or will sell, offer to sell or solicit offers to buy
         the Shares or similar securities to, or solicit offers with respect
         thereto from, or enter into any preliminary conversations or
         negotiations relating thereto with, any person (other than the
         Purchaser), so as to bring the issuance and sale of the Shares under
         the registration provisions of the Securities Act and applicable state
         securities laws. Neither the Company nor any of its affiliates, nor any
         person acting on its or their behalf, has engaged in any form of
         general solicitation or general advertising (within the meaning of
         Regulation D under the Securities Act) in connection with the offer or
         sale of the Shares.

                           (x) Employees. Neither the Company nor any subsidiary
         has any collective bargaining arrangements or agreements covering any
         of its employees. Except as set forth in the SEC Documents or on
         Schedule 2.1(x) hereto, neither the Company nor any subsidiary is in
         breach of any employment contract, agreement regarding proprietary
         information, noncompetition agreement, nonsolicitation agreement,
         confidentiality agreement, or any other similar contract or restrictive
         covenant, relating to the right of any officer, employee or consultant
         to be employed or engaged by the Company or such subsidiary, except as
         would not have a Material Adverse Effect. Since the Company's initial
         public offering, no officer, consultant or key employee of the Company
         or any subsidiary whose termination, either individually or in the
         aggregate, would have a Material Adverse Effect, has terminated or, to
         the actual knowledge of the Company, has any present intention of
         terminating his or her employment or engagement with the Company or any
         subsidiary.

                           (y) Absence of Certain Developments. Except as
         disclosed in SEC Documents, on Schedule 2.1(y) hereto or in widely
         disseminated press releases, since the date of the financial statements
         contained in the most recently filed Form 10-Q (or 10-QSB) or Form 10-K
         (or 10KSB), whichever is most current, neither the Company nor any
         subsidiary has:

                                       9
<PAGE>   10

                                    (i) issued any stock, bonds or other
                  corporate securities or any rights, options or warrants with
                  respect thereto (other than issuances under employee benefit
                  plans);

                                    (ii) borrowed any material amount or
                  incurred or become subject to any material liabilities
                  (absolute or contingent) except current liabilities incurred
                  in the ordinary course of business which are comparable in
                  nature and amount to the current liabilities incurred in the
                  ordinary course of business during the comparable portion of
                  its prior fiscal year, as adjusted to reflect the current
                  nature and volume of the Company's or such subsidiary's
                  business and financial condition;

                                    (iii) discharged or satisfied any material
                  lien or material encumbrance or paid any material obligation
                  or material liability (absolute or contingent), other than
                  current liabilities paid in the ordinary course of business;

                                    (iv) declared or made any payment or
                  distribution of cash or other property to stockholders with
                  respect to its stock, or purchased or redeemed, or made any
                  agreements so to purchase or redeem, any shares of its capital
                  stock;

                                    (v) sold, assigned or transferred any other
                  tangible assets, or canceled any debts or claims, except in
                  the ordinary course of business;

                                    (vi) sold, assigned or transferred any
                  material intellectual property rights, or disclosed any
                  proprietary confidential information to any person except in
                  the ordinary course of business or to the Purchaser or its
                  representatives;

                                    (vii) suffered any material losses (except
                  for anticipated losses consistent with prior quarters) or
                  waived any rights of material value, whether or not in the
                  ordinary course of business, or suffered the loss of any
                  material amount of prospective business;

                                    (viii) made any material changes in employee
                  compensation except in the ordinary course of business and
                  consistent with past practices;

                                    (ix) made capital expenditures or
                  commitments therefor that aggregate in excess of $500,000;

                                    (x) entered into any other material
                  transaction, whether or not in the ordinary course of
                  business;

                                    (xi) suffered any material damage,
                  destruction or casualty loss, whether or not covered by
                  insurance;

                                    (xii) experienced any material problems with
                  labor or management in connection with the terms and
                  conditions of their employment; or

                                       10
<PAGE>   11

                                    (xiii) effected any two or more events of
                  the foregoing kind which in the aggregate would be material to
                  the Company or its subsidiaries.

                           (z) Governmental Approvals. Except as set forth in
         the SEC Documents or on Schedule 2.1(z) hereto, and except for the
         filing of any notice prior or subsequent to any Settlement Date that
         may be required under applicable federal or state securities laws
         (which if required, shall be filed on a timely basis), including the
         filing of a registration statement or post-effective amendment pursuant
         to this Agreement, no authorization, consent, approval, license,
         exemption of, filing or registration with any court or governmental
         department, commission, board, bureau, agency or instrumentality, is or
         will be necessary for, or in connection with, the delivery of the
         Shares, or for the performance by the Company of its obligations under
         this Agreement, except as would not have a Material Adverse Effect.

                           (aa) Acknowledgment Regarding Purchaser's Purchase of
         Shares. Company acknowledges and agrees that Purchaser is acting solely
         in the capacity of 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.
         The Company further represents to the Purchaser that the Company's
         decision to enter into this Agreement has been based solely on (a) the
         Purchaser's representations and warranties in Section 3.2, and (b) the
         independent evaluation by the Company and its own representatives and
         counsel.

                           (bb) Brokers and Finders Fees. Except as set forth on
         Schedule 2.1(bb), the Company does not owe any broker or finder any
         fees in connection with the transaction contemplated under this
         Agreement.

                  Section 2.2. 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 corporation duly incorporated, validly existing and in
         good standing under the laws of the British Virgin Islands.

                           (b) Authorization and Power. The Purchaser has the
         requisite power and authority to enter into and perform the Transaction
         Documents and to purchase the Shares being sold to it hereunder. The
         execution, delivery and performance of the Transaction Documents by
         Purchaser and the consummation by it of the transactions contemplated
         hereby have been duly authorized by all necessary corporate action and
         shall constitute valid and binding obligations of the Purchaser
         enforceable against the Purchaser in accordance with their 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, creditors' rights and remedies or by other equitable
         principles of general application

                                       11
<PAGE>   12

                           (c) No Conflicts. The execution, delivery and
         performance of this Agreement and the consummation by the Purchaser of
         the transactions contemplated hereby 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 agreement, indenture or instrument
         to which the Purchaser is a party, or 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, have any adverse effect on the
         business, operations, properties or financial condition of the
         Purchaser). 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.

                           (d) Financial Risks. The Purchaser acknowledges that
         it is able to bear the financial risks associated with an investment in
         the Shares and that it has been given full access to such records of
         the Company and the subsidiaries and to the officers of the Company and
         the subsidiaries as it has deemed necessary or appropriate to conduct
         its due diligence investigation. The Purchaser is capable of evaluating
         the risks and merits of an investment in the Shares by virtue of its
         experience as an investor and its knowledge, experience, and
         sophistication in financial and business matters and the Purchaser is
         capable of bearing the entire loss of its investment in the Shares. The
         Purchaser has the financial resources or commitments in place to meet
         its obligations hereunder, including but not limited to, its obligation
         to fund each properly noticed Draw Down.

                           (e) Accredited Investor. The Purchaser is an
         "accredited investor" as defined in Regulation D promulgated under the
         Securities Act.

                           (f) General. The Purchaser understands that the
         Company is relying upon the truth and accuracy of the representations,
         warranties, agreements, acknowledgments and understandings of the
         Purchaser set forth herein in order to determine the suitability of the
         Purchaser to acquire the Shares.

                                       12
<PAGE>   13

                                    ARTICLE 3

                                    COVENANTS

                  The Company covenants with the Purchaser as follows:

                  Section 3.1. The Shares. As of the date of each applicable
Draw Down, the Company will have authorized and reserved, free of preemptive
rights and other similar contractual rights of stockholders, a sufficient number
of its authorized but unissued shares of its Common Stock to cover the Draw Down
Shares to be issued in connection with such Draw Down requested under this
Agreement. The Draw Down Shares to be issued under this Agreement, when paid for
and issued in accordance with the terms hereof, 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. Anything in this Agreement
to the contrary notwithstanding, (i) at no time will the Company request a Draw
Down which would result in the issuance of an aggregate number of shares of
Common Stock pursuant to this Agreement which exceeds 19.9% of the number of
shares of Common Stock issued and outstanding on the Initial Closing Date
without obtaining stockholder approval of such excess issuance, or such other
amount as would require stockholder approval under rules of the Principal Market
or otherwise without obtaining stockholder approval of such excess issuance, and
(ii) at no time will the Company request a Draw Down to the extent that such
Draw Down would cause the Company to issue a number of shares of Common Stock
pursuant to such Draw Down greater than 8% of the then issued and outstanding
shares of Common Stock, based on the average of the VWAPs during the five (5)
Trading Days immediately prior to the date the Draw Down Notice is deemed
delivered.

                  Section 3.2. Securities Compliance. If applicable, the Company
shall notify the Principal Market, in accordance with its 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 or subsequent holders.

                  Section 3.3. Registration and Listing. The Company will cause
its Common Stock to continue to be registered under Sections 12(b) or 12(g) of
the Exchange Act, will comply in all respects with its reporting and filing
obligations under the Exchange Act, will comply with all federal and state
securities law requirements related to any registration statement filed pursuant
to this Agreement, and will not take any action or file any document (whether or
not permitted by the Securities Act or the Exchange 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 on the

                                       13
<PAGE>   14

Principal Market and will comply in all respects with the Company's reporting,
filing and other obligations under the bylaws or rules of the Principal Market.

                  Section 3.4. Escrow Arrangement. The Company and the Purchaser
shall enter into an escrow arrangement with Epstein Becker & Green, P.C. (the
"Escrow Agent") in the form of Exhibit B hereto with respect to payment against
delivery of the Shares.

                  Section 3.5. Registration Rights Agreement. The Company and
the Purchaser shall enter into the Registration Rights Agreement in the Form of
Exhibit A hereto. Before the Purchaser shall be obligated to accept a Draw Down
request from the Company, the Company shall have caused a sufficient number of
shares of Common Stock to be registered to cover the Shares to be issued in
connection with such Draw Down.

                  Section 3.6. Accuracy of Registration Statement.On each
Settlement Date, the Registration Statement and the prospectus therein shall not
contain any untrue statement of a material fact or omit to state any material
fact to be required to be stated therein or necessary in order to make the
statements therein not misleading in light of the circumstances under which they
were made; and on such Settlement Date or date of filing of the Registration
Statement and the prospectus therein will not include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, the Company makes no representations or
warranties as to the information contained in or omitted from the Registration
Statement and the prospectus therein in reliance upon and in conformity with the
information furnished in writing to the Company by the Purchaser specifically
for inclusion in the Registration Statement and the prospectus therein.

                  Section 3.7. Compliance with Laws. The Company shall comply,
and cause each subsidiary to comply, with all applicable laws, rules,
regulations and orders, noncompliance with which could have a Material Adverse
Effect.

                  Section 3.8. Keeping of Records and Books of Account. The
Company shall keep and cause each subsidiary to keep adequate records and books
of account, in which substantially complete entries will be made in accordance
with GAAP consistently applied, reflecting all material financial transactions
of the Company and its subsidiaries, and in which, for each fiscal year, all
proper reserves for depreciation, depletion, obsolescence, amortization, taxes,
bad debts and other purposes in connection with its business shall be made,
except for any reserves or portions thereof which are not material.

                  Section 3.9. Other Agreements. The Company shall not enter
into any agreement the terms of which such agreement would restrict or impair
the ability of the Company to perform its obligations under this Agreement.

                  Section 3.10. Notice of Certain Events Affecting Registration;
Suspension of Right to Request a Draw Down. THE COMPANY WILL PROMPTLY NOTIFY THE
PURCHASER IN WRITING AND OBTAIN AN ACKNOWLEDGMENT FROM PURCHASER UPON THE
OCCURRENCE OF ANY OF THE FOLLOWING EVENTS IN RESPECT OF THE REGISTRATION
STATEMENT OR RELATED PROSPECTUS IN RESPECT OF

                                       14
<PAGE>   15

THE SHARES (WITHOUT INDICATING TO THE PURCHASER THE NATURE OF SUCH AN EVENT):
(i) receipt of any request for additional information from the SEC or any other
federal or state governmental authority during the period of effectiveness of
the Registration Statement the response to which would require any amendments or
supplements to the Registration Statement or related prospectus; (ii) the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and (iv) the
happening of any event that makes any statement made in the Registration
Statement or related prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes in the Registration Statement, related
prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the related prospectus, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and (v) the Company's reasonable determination that a post-effective
amendment to the Registration Statement would be appropriate. The Company shall
not deliver to the Purchaser any Draw Down Notice during the continuation of any
of the foregoing events. The Company shall promptly make available to the
Purchaser any such supplements or amendments to the related prospectus, at which
time, provided that the registration statement and any supplements and
amendments thereto are then effective, the Company may recommence the delivery
of Draw Down Notices.

                  Section 3.11. Consolidation; Merger. The Company shall not,
during a Draw Down Pricing Period or prior to ten (10) Trading Days' notice to
the Purchaser (provided that a Draw Down Pricing Period is not pending or in
effect during such period), effect any merger or consolidation of the Company
with or into, or a transfer of all or substantially all of the assets of the
Company to, another entity (a "Consolidation Event") unless the resulting
successor or acquiring entity (if not the Company) assumes by written instrument
or by operation of law the obligation to deliver to the Purchaser such shares of
stock and/or securities as the Purchaser is entitled to receive pursuant to this
Agreement.

                  Section 3.12. Limitation on Future Financing. The Company
agrees that it will not enter into any other equity line type of financing until
the earlier of (i) twenty-four (24) months from the Effective Date, or (ii)
sixty (60) days after the entire Commitment Amount has been purchased by the
Purchaser.

                  Section 3.13. Use of Proceeds. The proceeds from the sale of
the Shares will be used by the Company and its subsidiaries for general
corporate purposes.

                  The Purchaser covenants with the Company as follows:

                  Section 3.14. Compliance with Law. The Purchaser agrees that
its trading activities with respect to shares of the Company's Common Stock will
be in compliance with all

                                       15
<PAGE>   16

applicable state and federal securities laws, rules and regulations and rules
and regulations of the Principal Market on which the Company's Common Stock is
listed. Without limiting the generality of the foregoing, the Purchaser agrees
that it will, whenever required by federal securities laws, deliver the
prospectus included in the Registration Statement to any purchaser of Shares
from the Purchaser.

                  Section 3.15. No Short Sales. [THE PURCHASER AND ITS
AFFILIATES SHALL NOT ENGAGE IN SHORT SALES OF THE COMPANY'S COMMON STOCK (AS
DEFINED IN APPLICABLE SEC AND THE PRINCIPAL MARKET RULES) DURING THE TERM OF
THIS AGREEMENT.]

                  Section 3.16. Cash. On each Settlement Date, the Purchaser
will have sufficient cash or cash equivalents to meet its obligations under this
Agreement.

                                   ARTICLE 4

                  CONDITIONS TO INITIAL CLOSING AND DRAW DOWNS

                  Section 4.1. Conditions Precedent to the Obligation of the
Company. The obligation hereunder of the Company to proceed to close this
Agreement and to issue and sell the Shares to the Purchaser is subject to the
satisfaction or waiver, at or before the Initial Closing, and as of each
Settlement Date 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 shall
         be true and correct in all material respects as of the date when made
         and as of the Initial Closing and as of each Settlement Date as though
         made at that time, except for representations and warranties that speak
         as of a particular date.

                           (b) Performance by the Purchaser. The Purchaser shall
         have performed, satisfied and complied in all material respects with
         all material covenants, agreements and conditions required by this
         Agreement to be performed, satisfied or complied with by the Purchaser
         at or prior to the Initial Closing and as of each Settlement Date.

                           (c) 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.

                  Section 4.2. Conditions Precedent to the Obligation of the
Purchaser to Close. The obligation hereunder of the Purchaser to perform its
obligations under this Agreement and to purchase the Shares is subject to the
satisfaction or waiver, at or before the Initial Closing, of

                                       16
<PAGE>   17

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 Initial Closing 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 Initial Closing.

                           (c) 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.

                           (d) 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 Purchaser or the Company or any
         subsidiary, or any of the officers, directors or affiliates of the
         Company or any subsidiary seeking to restrain, prevent or change the
         transactions contemplated by this Agreement, or seeking damages in
         connection with such transactions.

                           (e) Opinion of Counsel, Etc. At the Initial Closing,
         the Purchaser shall have received an opinion of counsel to the Company,
         dated as of the Initial Closing Date, in the form of Exhibit C hereto.

                  Section 4.3. Conditions Precedent to the Obligation of the
Purchaser to Accept a Draw Down and Purchase the Shares. The obligation
hereunder of the Purchaser to accept a Draw Down request and to acquire and pay
for the Shares is subject to the satisfaction at or before each Settlement Date,
of each of the conditions set forth below.

                           (a) Satisfaction of Conditions to Initial Closing.
         The Company shall have satisfied, or the Purchaser shall have waived at
         the Initial Closing, the conditions set forth in Section 5.2 hereof

                           (b) Effective Registration Statement. The
         Registration Statement registering the Shares shall have been declared
         effective by the SEC and shall remain effective on each Settlement
         Date.

                           (c) No Suspension. Trading in the Company's Common
         Stock shall not have been suspended by the SEC or the Principal Market
         (except for any suspension of trading of limited duration agreed to by
         the Company, which suspension shall be terminated prior to the delivery
         of each Draw Down Notice), and, at any time prior to

                                       17
<PAGE>   18

         such Draw Down Notice, trading in securities generally as reported on
         the Principal Market shall not have been suspended or limited, or
         minimum prices shall not have been established on securities whose
         trades are reported on the Principal Market unless the general
         suspension or limitation shall have been terminated prior to the
         delivery of such Draw Down Notice.

                           (d) Material Adverse Effect. No Material Adverse
         Effect and no Consolidation Event where the successor entity has not
         agreed to perform the Company's obligations shall have occurred.

                           (e) Opinion of Counsel. The Purchaser shall have
         received (i) a "down-to-date" letter from the Company's counsel,
         confirming that there is no change from the counsel's previously
         delivered opinion, or else specifying with particularity the reason for
         any change and an opinion as to the additional items specified in
         Exhibit C hereto, and (ii) any other items set forth in Section 2.2 of
         the Escrow Agreement.

                                   ARTICLE 5

                                 DRAW DOWN TERMS

                  Section 5.1. 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
         and exercise up to twenty-four (24) draw downs (a "Draw Down") during
         the Commitment Period, which Draw Downs the Purchaser shall be
         obligated to accept.

                           (b) Only one Draw Down shall be allowed in each Draw
         Down Pricing Period. The number of shares of Common Stock purchased by
         the Purchaser with respect to each Draw Down shall be determined as set
         forth in Section 5.1(e) herein and settled on:

                                    (i) as to the 1st through the 11th Trading
                           Days after a Draw Down Pricing Period commences, on
                           or before the 12th Trading Day after a Draw Down
                           Pricing Period commences; and

                                    (ii) as to the 12th through the 22nd Trading
                           Days after a Draw Down Pricing Period commences, on
                           or before the 23rd Trading Day after a Draw Down
                           Pricing Period (such settlement periods and such
                           settlement dates in subsection (i) and this
                           subsection (ii) each referred to as a "Settlement
                           Period" and a "Settlement Date", respectively).

                           (c) In connection with each Draw Down Pricing Period,
         the Company shall set the Threshold Price in the Draw Down Notice,
         which Threshold Price shall be the greater of (i) $0.75, and (ii) at
         least 50% of the VWAP on the Trading Day

                                       18
<PAGE>   19

         immediately prior to the date on which the applicable Draw Down Notice
         is delivered to the Purchaser.

                           (d) The minimum Investment Amount for any Draw Down
         shall be $100,000 and the maximum Investment Amount as to each Draw
         Down shall be the greater of (i) $1,000,000, and (ii) 20% of the
         average of the VWAPs for the Common Stock for the twenty-two (22)
         Trading Day period immediately prior to the applicable Commencement
         Date (defined below) multiplied by the total trading volume in respect
         of the Common Stock for such period.

                           (e) The number of Shares of Common Stock to be issued
         on each Settlement Date shall be a number of shares (rounded to the
         nearest whole share) equal to the sum of the quotients (for each
         trading day within the Settlement Period) of (x) 1/22nd of the
         Investment Amount, and (y) the Purchase Price on each Trading Day
         within the Settlement Period, subject to the following adjustments:

                                    (i) if the VWAP on a given Trading Day is
                  less than the Threshold Price, then the Investment Amount will
                  be reduced by 1/22nd and that day shall be withdrawn from the
                  Settlement Period;

                                    (ii) if trading of the Common Stock on the
                  Principal Market is suspended for more than three (3) hours,
                  in the aggregate, on any Trading Day during the Settlement
                  Period, the Investment Amount shall be reduced by 1/22nd and
                  that day shall be withdrawn from the applicable Settlement
                  Period; and

                                    (iii) if the Registration Statement is
                  suspended in accordance with Section 3(j) of the Registration
                  Rights Agreement for more than three (3) hours, in the
                  aggregate, on any Trading Day during the applicable Settlement
                  Period, the Investment Amount shall be reduced by 1/22nd and
                  that day shall be withdrawn from such Settlement Period.

                           (f) The Company must inform the Purchaser by
         delivering a draw down notice, in the form of Exhibit D hereto (the
         "Draw Down Notice"), via facsimile transmission in accordance with
         Section 9.4 as to the amount of the Draw Down (the "Investment Amount")
         the Company wishes to exercise, before the first day of the Draw Down
         Pricing Period (the "Commencement Date"). If the Commencement Date is
         to be the date of the Draw Down Notice, the Draw Down Notice must be
         delivered to and receipt confirmed by the Purchaser at least one hour
         before trading commences on such date. At no time shall the Purchaser
         be required to purchase more than the maximum Investment Amount for a
         given Draw Down Pricing Period so that if the Company chooses not to
         exercise the maximum Investment Amount in a given Draw Down Pricing
         Period the Purchaser is not obligated to and shall not purchase more
         than the scheduled maximum Investment Amount in a subsequent Draw Down
         Pricing Period.

                                       19
<PAGE>   20

                           (g) On each Settlement Date, the Shares purchased by
         the Purchaser shall be delivered to The Depository Trust Company
         ("DTC") on the Purchaser's behalf. Upon the Company electronically
         delivering whole shares of Common Stock to the Purchaser or its
         designees via DTC through its Deposit Withdrawal Agent Commission
         ("DWAC") system by 1:00 p.m. EST, the Purchaser shall wire transfer
         immediately available funds to the Company's designated account on such
         day, less any fees as set forth in Section 2.3 of the Escrow Agreement,
         which fees shall be wired as directed in the Escrow Agreement. Upon the
         Company electronically delivering whole shares of Common Stock to the
         Purchaser or its designee's DTC account via DWAC after 1:00 p.m. EST,
         the Purchaser shall wire transfer next day available funds to the
         Company's designated account on such day, less any fees as set forth in
         Section 2.3 of the Escrow Agreement, which fees shall be wired as
         directed in the Escrow Agreement. In the event that either party elects
         to use the Escrow Agent, the Shares shall be credited by the Company to
         the DTC account designated by the Purchaser via DWAC upon receipt by
         the Escrow Agent of payment for the Draw Down Shares into the Escrow
         Agent's master escrow account, all as further set forth in the Escrow
         Agreement. The Escrow Agent shall be directed to pay the purchase price
         to the Company, net of escrow expenses and any additional fees as set
         forth in Section 2.3 of the Escrow Agreement.

                                    ARTICLE 6

                                   TERMINATION

                  Section 6.1. Term. The term of this Agreement shall begin on
the date hereof and shall end 24 months from the Effective Date or as otherwise
set forth in Section 6.2.

                  Section 6.2. Other Termination.

                           (a) This Agreement shall terminate upon one (1)
         Trading Day's notice if a Material Adverse Effect has occurred.

                           (b) The Company may terminate this Agreement (i) upon
         one (1) Trading Day's notice if the Purchaser shall fail to fund more
         than one properly noticed Draw Down within five (5) Trading Days of the
         end of the applicable Settlement Period, or (ii) upon 10 Trading Days'
         notice if the Company legally completes another private placement (not
         including an equity line type financing); provided, however, as to
         subsection (ii) only, the Company pays the Purchaser a termination fee
         in the amount of $75,000, at the time notice is delivered there are no
         pending Settlements and the Company does not issue a Draw Down Notice
         during such notice period.

                  Section 6.3. Effect of Termination. In the event of
termination by the Company or the Purchaser pursuant to Section 6.2, 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 6.1 or 6.2
herein, this Agreement shall become void and of no further force and effect,
except for Sections

                                       20
<PAGE>   21

3.12, 8.1 and 8.2, and Article 7 herein. Nothing in this Section 6.3 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 or the Purchaser to
compel specific performance by the other party of its obligations under this
Agreement.

                                    ARTICLE 7

                                 INDEMNIFICATION

                  Section 7.1. General Indemnity.

                           (a) The Company agrees to indemnify and hold harmless
         the Purchaser (and its directors, officers, affiliates, agents,
         successors and assigns) from and against any and all losses,
         liabilities, deficiencies, costs, damages and expenses (including,
         without limitation, reasonable attorneys' fees, charges and
         disbursements) incurred by the Purchaser as a result of any inaccuracy
         in or breach of the representations, warranties or covenants made by
         the Company herein.

                           (b) The Purchaser agrees to indemnify and hold
         harmless the Company and its directors, officers, affiliates, agents,
         successors and assigns from and against any and all losses,
         liabilities, deficiencies, costs, damages and expenses (including,
         without limitation, reasonable attorneys' fees, charges and
         disbursements) incurred by the Company as result of any material
         inaccuracy in or breach of the representations, warranties or covenants
         made by the Purchaser herein.

                  Section 7.2. Indemnification Procedure. Any party entitled to
indemnification under this Article 7 (an "Indemnified Party") will give written
notice to the indemnifying party of any matters giving rise to a claim for
indemnification; provided, that the failure of any party entitled to
indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party of its obligations under this Article 7 except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any action, proceeding or claim is brought against an
Indemnified Party in respect of which indemnification is sought hereunder, the
indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of counsel to the Indemnified Party a conflict of interest
between it and the indemnifying party may exist with respect of such action,
proceeding or claim, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party. In the event that the indemnifying party
advises an Indemnified Party that it will contest such a claim for
indemnification hereunder, or fails, within thirty (30) days of receipt of any
indemnification notice to notify, in writing, such person of its election to
defend, settle or compromise, at its sole cost and expense, any action,
proceeding or claim (or discontinues its defense at any time after it commences
such defense), then the Indemnified Party may, at its option, defend, settle or
otherwise compromise or pay such action or claim. In any event, unless and until
the indemnifying party elects in writing to assume and does so assume the
defense of any such claim, proceeding or action, the Indemnified Party's costs
(including reasonable attorneys' fees, charges and disbursements) and expenses
arising out of the defense, settlement or compromise of any

                                       21
<PAGE>   22

such action, claim or proceeding shall be losses subject to indemnification
hereunder. The Indemnified Party shall reasonably cooperate with the
indemnifying party in connection with any settlement negotiations or defense of
any such action or claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the Indemnified
Party, which relates to such action or claim. The indemnifying party shall keep
the Indemnified Party fully apprised as to the status of the defense or any
settlement negotiations with respect thereto. If the indemnifying party elects
to defend any such action or claim, then the Indemnified Party shall be entitled
to participate in such defense with counsel of its choice at its sole cost and
expense. The indemnifying party shall not be liable for any settlement of any
action, claim or proceeding effected without its prior written consent.
Notwithstanding anything in this Article 7 to the contrary, the indemnifying
party shall not, without the Indemnified Party's prior written consent, settle
or compromise any claim or consent to entry of any judgment in respect thereof
which imposes any material future obligation on the Indemnified Party or which
does not include, as an unconditional term thereof, the giving by the claimant
or the plaintiff to the Indemnified Party of a release from all liability in
respect of such claim. The indemnification required by this Article 7 shall be
made by periodic payments of the amount thereof during the course of
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred, within ten (10) Trading Days of written notice
thereof to the indemnifying party so long as the Indemnified Party irrevocably
agrees to refund such moneys, with interest, if it is ultimately determined by a
court of competent jurisdiction that such party was not entitled to
indemnification. The indemnity agreements contained herein shall be in addition
to (a) any cause of action or similar rights of the Indemnified Party against
the indemnifying party or others, and (b) any liabilities to which the
indemnifying party may be subject.

                                    ARTICLE 8

                                  MISCELLANEOUS

                  Section 8.1. Fees and Expenses. Each of the parties to this
Agreement shall pay its own fees and expenses related to the transactions
contemplated by this Agreement; except that, the Company shall pay, at the
Initial Closing, a non-accountable expense allowance of $35,000 for the
Purchaser's legal and administrative costs and expenses and any other additional
fees as set forth in the Escrow Agreement. In addition, the Company shall pay
all reasonable fees and expenses incurred by the Purchaser in connection with
any subsequent amendments, modifications or waivers of this Agreement, the
Escrow Agreement or the Registration Rights Agreement if such subsequent
amendment, modification or waiver is at the request of the Company, including,
without limitation, all reasonable attorneys' fees and expenses. The Company
shall pay all stamp or other similar taxes and duties levied in connection with
issuance of the Shares pursuant hereto.

                  Section 8.2. Specific Enforcement. [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

                                       22
<PAGE>   23

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.]

                  Section 8.3. Entire Agreement; Amendment. The Transaction
Documents contain the entire understanding of the parties with respect to the
matters covered in the Transaction Documents. No provision of this Agreement may
be waived or amended other than by a written instrument signed by the party
against whom enforcement of any such amendment or waiver is sought and no
condition to closing any Draw Down in favor of the Purchaser may be waived by
the Purchaser.

                  Section 8.4. 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 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. The addresses for such communications shall be:

If to the Company:            11115 Rushmore Drive
                              Charlotte, NC 28277
                              Attn:  Chief Financial Officer, General Counsel
                              and Controller
                              Tel: (704) 944-8580
                              Fax:  (704) 541-1824

With copies to:               Skadden, Arps, Slate, Meagher & Flom LLP
(which shall not constitute   Four Times Square
notice)                       New York, New York 10036
                              Attn: David J. Goldschmidt, Esq.
                              Tel: (212) 735-3000
                              Fax: (212) 735-2000

If to Purchaser:              c/o Beacon Corporate Services, Ltd.
                              P.O. Box 972
                              Road Town, Tortola
                              British Virgin Islands
                              Attn: David Sims
                              Fax: (284) 494-4090

with copies to:               Epstein Becker & Green P.C.
(which shall not constitute   250 Park Avenue
notice)                       New York, NY  10177-1211
                              Tel:  (212) 351-3771

                                       23
<PAGE>   24

                              Fax:  (212) 661-0989
                              Attn: Robert F. Charron

                  Any party hereto may from time to time change its address for
notices by giving written notice of such changed address to the other party
hereto in accordance herewith.

                  Section 8.5. Waivers. 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
provisions, 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 8.6. 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.

                  Section 8.7. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
assigns. 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. After Initial 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 8.8. No Third Party Beneficiaries.This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.

                  Section 8.9. Governing Law/Arbitration. 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. The Company
and the Purchaser agree to submit themselves to the in personam jurisdiction of
the state and federal courts situated within the Southern District of the State
of New York with regard to any controversy arising out of or relating to this
Agreement. Any dispute under this Agreement or any Exhibit attached hereto shall
be submitted to arbitration under the American Arbitration Association (the
"AAA") in New York City, New York, and shall be finally and conclusively
determined by the decision of a board of arbitration consisting of three (3)
members (hereinafter referred to as the "Board of Arbitration") selected as
according to the rules governing the AAA. The Board of Arbitration shall meet on
consecutive business days in New York City, New York, and shall reach and render
a decision in writing (concurred in by a majority of the members of the Board of
Arbitration) with respect to the amount, if any, which the losing party is
required to pay to the other party in respect of a claim filed. In connection
with rendering its decisions, the Board of Arbitration shall adopt and follow
the laws of the State of New York. To the extent practical, decisions of the
Board of Arbitration shall be rendered no more than thirty (30) calendar days
following commencement of proceedings with respect thereto. The Board of
Arbitration shall cause its written decision to be delivered to all parties
involved in the dispute. The Board of Arbitration shall be authorized and is
directed to enter a default judgment against any party refusing to participate
in the arbitration proceeding within

                                       24
<PAGE>   25

thirty days of any deadline for such participation. Any decision made by the
Board of Arbitration (either prior to or after the expiration of such thirty
(30) calendar day period) shall be final, binding and conclusive on the parties
to the dispute, and entitled to be enforced to the fullest extent permitted by
law and entered in any court of competent jurisdiction. The prevailing party
shall be awarded its costs, including attorneys' fees, from the non-prevailing
party as part of the arbitration award. Any party shall have the right to seek
injunctive relief from any court of competent jurisdiction in any case where
such relief is available. The prevailing party in such injunctive action shall
be awarded its costs, including reasonable attorneys' fees, from the
non-prevailing party.

                  Section 8.10. 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. Execution may be
made by delivery by facsimile.

                  Section 8.11. Publicity. Neither the Company nor the Purchaser
shall 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 unless, prior to issuing any such
press release, making any such public statement or announcement, the Company or
Purchaser, as applicable, obtains the prior consent of the other party, as
applicable, which consent shall not be unreasonably withheld or delayed.

                  Section 8.12. Severability. The provisions of this Agreement
are severable and, in the event that The Board of Arbitration or any court or
officials of any regulatory agency 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, so long as such construction does not materially
adversely effect the economic rights of either party hereto.

                  Section 8.13. Further Assurances. From and after the date of
this Agreement, upon the request of the Purchaser or the Company, each of the
Company 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.

                  Section 8.14. Effectiveness of Agreement. This Agreement shall
become effective only upon satisfaction of the conditions precedent to the
Initial Closing set forth in Article I of the Escrow Agreement.

                                       25
<PAGE>   26

                                    ARTICLE 9

                                   DEFINITIONS

                  Section 9.1. Certain Definitions.

                           (a) "Commitment Amount" shall have the meaning
         assigned to such term in Section 1.1 hereof.

                           (b) "Commitment Period" shall mean the period of 24
         consecutive months commencing immediately after the Effective Date.

                           (c) "Common Stock" shall mean the Company's common
         stock, $0.01 par value per share.

                           (d) "Draw Down" shall have the meaning assigned to
         such term in Section 5.1(a) hereof.

                           (e) "Draw Down Notice" shall have the meaning
         assigned to such term in Section 5.1(f) hereof.

                           (f) "Draw Down Pricing Period" shall mean a period of
         twenty-two (22) consecutive Trading Days beginning on the date
         specified in the Draw Down Notice (as defined in Section 5.1(f)
         herein); provided, however, the Draw Down Pricing Period shall not
         begin before the day on which receipt of such notice is confirmed by
         the Purchaser.

                           (g) "Effective Date" shall mean the date the
         Registration Statement of the Company covering the Shares being
         subscribed for hereby is declared effective by the Securities and
         Exchange Commission (the "SEC").

                           (h) "Exchange Act" shall mean the Securities and
         Exchange Act of 1934, as amended.

                           (i) "GAAP" shall mean the United States Generally
         Accepted Accounting Principles as those conventions, rules and
         procedures are determined by the Financial Accounting Standards Board
         and its predecessor agencies.

                           (j) "Initial Closing" shall have the meaning assigned
         to such term in Section 1.2 hereof.

                           (k) "Initial Closing Date" shall have the meaning
         assigned to such term in Section 1.2 hereof.

                           (l) "Investment Amount" shall have the meaning
         assigned to such term in Section 5.1(f) hereof.

                                       26
<PAGE>   27

                           (m) "Material Adverse Effect" means (i) any
         suspension or termination of the effectiveness of the Registration
         Statement which is not cured within 45 calendar days, (ii) the
         commencement of a voluntary case or other proceeding seeking
         liquidation, reorganization or other relief with respect to itself or
         its debts under any bankruptcy, insolvency or other similar law, and
         (iii) the Company's common stock being de-listed and is no longer
         eligible for trading on the Principal Market, unless such de-listing is
         in connection with the Company's subsequent listing of the Common Stock
         on the Nasdaq National Market, Nasdaq SmallCap Market, the American
         Stock Exchange or the New York Stock Exchange.

                           (n) "Principal Market" shall mean initially the
         Nasdaq National Market and shall include the American Stock Exchange,
         the Nasdaq Small-Cap Market and the New York Stock Exchange if the
         Company becomes listed and trades on such market or exchange after the
         date hereof.

                           (o) "Purchase Price" shall mean, with respect to Draw
         Down Shares purchased during each applicable Settlement Period, 95% of
         the VWAP on the date in question.

                           (p) "Registration Statement" shall mean the
         registration statement under the Securities Act of 1933, as amended
         (the "Securities Act"), to be filed with the Securities and Exchange
         Commission for the registration of the Shares pursuant to the
         Registration Rights Agreement attached hereto as Exhibit A (the
         "Registration Rights Agreement).

                           (q) "SEC Documents" shall mean any of the Company's
         Securities Act filings, latest Form 10-K as of the time in question,
         all Forms 10-Q, 8-K filed thereafter and the Proxy Statement for its
         latest fiscal year as of the time in question until such time as the
         Company no longer has an obligation to maintain the effectiveness of a
         Registration Statement as set forth in the Registration Rights
         Agreement.

                           (r) "Settlement" shall mean the delivery of the Draw
         Down Shares into the Purchaser's DTC account in exchange for payment
         therefor.

                           (s) "Settlement Date" shall have the meaning assigned
         to such term in Section 5.1(b).

                           (t) "Settlement Period" shall have the meaning
         assigned to such term in Section 5.1(b).

                           (u) "Shares" shall mean the shares of Common Stock of
         the Company being subscribed for hereunder to the extent such shares of
         Common Stock are set forth in a Draw Down Notice (also referred to
         herein as the "Draw Down Shares").

                           (v) "Threshold Price" shall mean the price per Share
         designated by the Company as the lowest VWAP during any Draw Down
         Pricing Period at which the Company will sell its Common Stock in
         accordance with this Agreement.

                                       27
<PAGE>   28

                           (w) "Trading Day" shall mean any day on which the
         Principal Market is open for business.

                           (x) "Transaction Documents" shall mean this
         Agreement, the Registration Rights Agreement and the Escrow Agreement.

                           (y) "VWAP" shall mean the daily volume weighted
         average price of the Company's Common Stock on the Principal Market as
         reported by Bloomberg Financial L.P. (or similar source mutually agreed
         to by the parties)(based on a trading day from 9:30 a.m. Eastern Time
         to 4:02 p.m. Eastern Time) using the VAP function on the date in
         question.

                            [SIGNATURE PAGE FOLLOWS]

                                       28
<PAGE>   29

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorize officer as of this
__ day of March, 2001.

                                     LENDINGTREE, INC.

                                     By:
                                         ---------------------------------------
                                         Douglas Lebda, Chief Executive Officer

                                     PAUL REVERE CAPITAL PARTNERS, LTD.

                                     By:
                                         ---------------------------------------
                                         David Sims, Authorized Signatory

                                       29
<PAGE>   30

                                                                       EXHIBIT A

                          REGISTRATION RIGHTS AGREEMENT

                  THIS REGISTRATION RIGHTS AGREEMENT, dated as of March 2, 2001
between Paul Revere Capital Partners, Ltd. ("Purchaser") and LendingTree, Inc.
(the "Company").

                  WHEREAS, simultaneously with the execution and delivery of
this Agreement, the parties shall enter into the Common Stock Purchase
Agreement, dated as of the date hereof, (the "Purchase Agreement") pursuant to
which the Purchaser has committed to purchase up to $24,000,000 of the Company's
Common Stock (terms not defined herein shall have the meanings ascribed to them
in the Purchase Agreement); and

                  WHEREAS, the execution and delivery of this Agreement and
granting to the Purchaser the registration rights set forth herein with respect
to the Shares is a component part of the transaction contemplated under the
Purchase Agreement.

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

                  Section 1. Registrable Securities. As used herein the term
"Registrable Security" means all the Shares that have not been previously sold
by Purchaser. In the event of any merger, reorganization, consolidation,
recapitalization or other change in corporate structure affecting the Common
Stock, such adjustment shall be deemed to be made in the definition of
"Registrable Security" as is appropriate in order to prevent any dilution or
enlargement of the rights granted pursuant to this Agreement.

                  Section 2. Restrictions on Transfer. The Purchaser
acknowledges and understands that in the absence of an effective Registration
Statement authorizing the resale of the Shares as provided herein, the Shares
are "restricted securities" as defined in Rule 144. The Purchaser understands
that no disposition or transfer of the Shares may be made by Purchaser in the
absence of (i) an opinion of counsel to the Purchaser, in form and substance
reasonably satisfactory to the Company, that such transfer may be made without
registration under the Securities Act, or (ii) such registration.

                  Section 3. Registration Rights With Respect to the Shares.

                           (a) The Company agrees that it will prepare and file
         with the Securities and Exchange Commission ("Commission"), within
         forty-five (45) days after the date hereof, a registration statement
         (on Form S-3 and/or S-1, or other appropriate form of registration
         statement) under the Securities Act (the "Registration Statement"), at
         the sole expense of the Company (except as provided in Section 3(c)
         hereof), so as to permit a public offering and resale of the Shares
         under the Securities Act by Purchaser.

                           (b) The Company shall use its reasonable best efforts
         to cause the Registration Statement to become effective within the
         earlier of (i) 90 days of the date of filing the Registration
         Statement, or (ii) five (5) days after receiving written notice of

<PAGE>   31

         SEC clearance and will within said five (5) days request acceleration
         of effectiveness. The Company will notify Purchaser of the
         effectiveness of the Registration Statement within one Trading Day of
         such event.

                           (c) The Company shall use its reasonable best efforts
         to maintain the effectiveness of the Registration Statement or
         post-effective amendment filed under this Section 3 hereof under the
         Securities Act until the earliest of (i) the date that all the Shares
         have been sold or otherwise disposed of pursuant to the Registration
         Statement, (ii) twenty-five (25) months from the Effective Date of the
         Registration Statement, or (iii) the date that all of the Shares have
         been otherwise transferred to persons who may trade such shares without
         restriction under the Securities Act, and the Company has delivered a
         new certificate or other evidence of ownership for such Shares not
         bearing a restrictive legend (the "Effectiveness Period").

                           (d) All fees, disbursements and out-of-pocket
         expenses and costs incurred by the Company in connection with the
         preparation and filing of the Registration Statement under subparagraph
         3(a) and in complying with applicable securities and Blue Sky laws
         (including, without limitation, all attorneys' fees of the Company)
         shall be borne by the Company. The Purchaser shall bear the cost of
         underwriting and/or brokerage discounts, fees and commissions, if any,
         applicable to the Shares being registered and the fees and expenses of
         its counsel.

                           (e) The Purchaser and its counsel shall have a
         reasonable period, not to exceed ten (10) Trading Days, to review the
         proposed Registration Statement or any amendment thereto, prior to
         filing with the Commission, and the Company shall provide the Purchaser
         with copies of any comment letters received from the Commission with
         respect thereto within two (2) Trading Days of receipt thereof.

                           (f) The Company shall, during regular business hours
         at it corporate offices, make reasonably available for inspection by
         Purchaser, any underwriter participating in any disposition pursuant to
         the Registration Statement, and any attorney, accountant or other agent
         retained by the Purchaser or any such underwriter all relevant
         financial and other records, pertinent corporate documents and
         properties of the Company and its subsidiaries, and cause the Company's
         officers, directors and employees to supply all information reasonably
         requested by the Purchaser or any such underwriter, attorney,
         accountant or agent in connection with the Registration Statement, in
         each case, as is customary for due diligence examinations; provided,
         however, that as shall be set forth more fully in a non-disclosure
         agreement satisfactory to the Company, all records, information and
         documents that are designated in writing by the Company, in good faith,
         as confidential, proprietary or containing any material non-public
         information shall be kept confidential by the Purchaser and any such
         underwriter, attorney, accountant or agent, unless such disclosure is
         made pursuant to judicial process in a court proceeding (after first
         giving the Company an opportunity promptly to seek a protective order
         or otherwise limit the scope of the information sought to be disclosed)
         or is required by law, or such records, information or documents become
         available to the public generally or through a third party not in
         violation of an accompanying obligation of confidentiality. If

                                       2
<PAGE>   32

         the foregoing inspection and information gathering would otherwise
         disrupt the Company's conduct of its business, such inspection and
         information gathering shall, to the maximum extent possible, be
         coordinated on behalf of the Purchaser and the other parties entitled
         thereto by one firm of counsel designed by and on behalf of the
         Purchaser.

                           (g) The Company shall qualify any of the Shares for
         sale in such states as the Purchaser reasonably designates and shall
         furnish indemnification in the manner provided in Section 6 hereof.
         However, the Company shall not be required to qualify in any state
         which will require an escrow or other restriction relating to the
         Company and/or the sellers, or which will require the Company to
         qualify to do business in such state or require the Company to file
         therein any general consent to service of process.

                           (h) The Company at its expense will supply the
         Purchaser with copies of the Registration Statement and the final
         prospectus included therein (the "Prospectus") and other related
         documents in such quantities as may be reasonably requested by the
         Purchaser.

                           (i) The Company shall not be required by this Section
         3 to include a Purchaser's Shares in any Registration Statement which
         is to be filed if, in the opinion of counsel for both the Purchaser and
         the Company (or, should they not agree, in the opinion of another
         counsel experienced in securities law matters acceptable to counsel for
         the Purchaser and the Company) the proposed offering or other transfer
         as to which such registration is requested is exempt from applicable
         federal and state securities laws and would result in all purchasers or
         transferees obtaining securities which are not "restricted securities",
         as defined in Rule 144 under the Securities Act.

                           (j) If at any time or from time to time after the
         effective date of the Registration Statement, the Company notifies the
         Purchaser in writing of the existence of a Potential Material Event (as
         defined in Section 3(k) below), the Purchaser shall not offer or sell
         any Shares or engage in any other transaction involving or relating to
         Shares, from the time of the giving of notice with respect to a
         Potential Material Event until the Purchaser receives written notice
         from the Company that such Potential Material Event either has been
         disclosed to the public or no longer constitutes a Potential Material
         Event (the "Suspension Period"). Notwithstanding anything herein to the
         contrary, if a Suspension Period occurs during any period commencing on
         a Trading Day a Draw Down Notice is deemed delivered and ending ten
         (10) Trading Days following the end of the corresponding Draw Down
         Pricing Period, then the Company must compensate the Purchaser for any
         net decline in the market value of any Shares purchased by the
         Purchaser pursuant to such Draw Down(s) and sold by the Purchaser
         within five (5) Trading Days from the later of the end of such Draw
         Down Pricing Period or the end of the Suspension Period. Net decline
         shall be calculated as the difference between the highest VWAP during
         the applicable Suspension Period and the price at which the Purchaser
         sells the Shares. If a Potential Material Event shall occur prior to
         the date the Registration Statement is filed, then the Company's
         obligation to file the Registration Statement shall be delayed without
         penalty for not more than thirty (30) calendar days. THE COMPANY MUST
         GIVE PURCHASER NOTICE IN WRITING OF THE EXISTENCE OF A POTENTIAL

                                       3
<PAGE>   33

         MATERIAL EVENT PROMPTLY UPON KNOWLEDGE THAT SUCH AN EVENT EXISTS AND,
         WHERE POSSIBLE, AT LEAST TWO (2) TRADING DAYS PRIOR TO THE FIRST DAY OF
         A SUSPENSION PERIOD, IF LAWFUL TO DO SO.

                           (k) "Potential Material Event" means any of the
         following: (i) the possession by the Company of material information
         that is not ripe for disclosure in a registration statement, as
         determined in good faith by the Chief Executive Officer or the Board of
         Directors of the Company or that disclosure of such information in the
         Registration Statement would be detrimental to the business and affairs
         of the Company; or (ii) any material engagement or activity by the
         Company which would, in the good faith determination of the Chief
         Executive Officer or the Board of Directors of the Company, be
         adversely affected by disclosure in a registration statement at such
         time, which determination shall be accompanied by a good faith
         determination by the Chief Executive Officer or the Board of Directors
         of the Company that the Registration Statement could be materially
         misleading absent the inclusion of such information.

                  Section 4. Cooperation with Company. The Purchaser will
cooperate with the Company in all respects in connection with this Agreement,
including timely supplying all information reasonably requested by the Company
(which shall include all information regarding the Purchaser and proposed manner
of sale of the Registrable Securities required to be disclosed in the
Registration Statement) and executing and returning all documents reasonably
requested in connection with the registration and sale of the Registrable
Securities and entering into and performing its obligations under any
underwriting agreement, if the offering is an underwritten offering, in usual
and customary form, with the managing underwriter or underwriters of such
underwritten offering. The Purchaser shall consent to be named as an underwriter
in the Registration Statement. Purchaser acknowledges that in accordance with
current Commission policy, the Purchaser will be deemed a statutory underwriter
of the Shares.

                  Section 5. Registration Procedures. If and whenever the
Company is required by any of the provisions of this Agreement to effect the
registration of any of the Registrable Securities under the Securities Act, the
Company shall (except as otherwise provided in this Agreement), as expeditiously
as reasonably practicable, subject to the Purchaser's assistance and cooperation
as reasonably required:

                           (a) prepare and file with the Commission such
         amendments and supplements to the Registration Statement and the
         Prospectus as may be necessary to keep such registration statement
         effective and to comply with the provisions of the Securities Act with
         respect to the sale or other disposition of all securities covered by
         such registration statement whenever the Purchaser of such Registrable
         Securities shall desire to sell or otherwise dispose of the same
         (including prospectus supplements with respect to the sales of
         securities from time to time in connection with a registration
         statement pursuant to Rule 415 promulgated under the Securities Act, if
         Rule 415 is available for such purpose) and (ii) take all reasonable
         action such that each of (A) the Registration Statement and any
         amendment thereto does not, when it becomes effective, 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 not misleading and (B) the

                                       4
<PAGE>   34

         Prospectus, and any amendment or supplement thereto, does not at any
         time during the Effectiveness Period include an untrue statement of a
         material fact or omit to state a material fact required to be stated
         therein or necessary to make the statements therein, in light of the
         circumstances under which they were made, not misleading;

                           (b) prior to the filing with the Commission of any
         Registration Statement (including any amendments thereto) and the
         distribution or delivery of the Prospectus (including any supplements
         thereto), provide draft copies thereof to the Purchaser and reflect in
         such documents all such comments as the Purchaser (and its counsel)
         reasonably may propose and (ii) furnish to the Purchaser such numbers
         of copies of the Prospectus including a preliminary prospectus or any
         amendment or supplement to the Prospectus, as applicable, in conformity
         with the requirements of the Securities Act, and such other documents,
         as the Purchaser may reasonably request in order to facilitate the
         public sale or other disposition of the Registrable Securities;

                           (c) comply with the New York blue sky laws with
         respect to the Registrable Securities (subject to the limitations set
         forth in Section 3(g) above), and do such other reasonable acts and
         things which may be reasonably necessary or advisable to enable the
         Purchaser to consummate the public sale or other disposition in such
         jurisdiction of the Registrable Securities;

                           (d) list such Registrable Securities on the Principal
         Market, and any other exchange on which the Common Stock of the Company
         is then listed, if the listing of such Registrable Securities is then
         permitted under the rules of such exchange or the Nasdaq Stock Market;

                           (e) notify the Purchaser at any time when the
         Prospectus is required to be delivered under the Securities Act, of the
         happening of any event of which it has knowledge as a result of which
         the Prospectus, as then in effect, includes an untrue statement of a
         material fact or omits to state a material fact required to be stated
         therein or necessary to make the statements therein not misleading in
         the light of the circumstances then existing, and the Company shall
         prepare and file a curative amendment under Section 5(a) as quickly as
         commercially reasonably possible;

                           (f) as promptly as practicable after becoming aware
         of such event, notify the Purchaser (or, in the event of an
         underwritten offering, the managing underwriters) of the issuance by
         the Commission or any state authority of any stop order or other
         suspension of the effectiveness of the Registration Statement and take
         all lawful action to effect the withdrawal, rescission or removal of
         such stop order or other suspension;

                           (g) take all such other lawful actions reasonably
         necessary to expedite and facilitate the disposition by the Purchaser
         of its Registrable Securities in accordance with the intended methods
         therefor provided in the Prospectus which are customary for issuers to
         perform under the circumstances;

                                       5
<PAGE>   35

                           (h) in the event of an underwritten offering,
         promptly include or incorporate in a prospectus supplement or
         post-effective amendment to the Registration Statement such information
         as the managing underwriters reasonably agree should be included
         therein and to which the Company does not reasonably object and make
         all required filings of such prospectus supplement or post-effective
         amendment as soon as practicable after it is notified of the matters to
         be included or incorporated in such prospectus supplement or
         post-effective amendment; and

                           (i) maintain a transfer agent for its Common Stock.

                  Section 6. Indemnification.

                           (a) The Company agrees to indemnify and hold harmless
         the Purchaser and each person, if any, who controls the Purchaser
         within the meaning of the Securities Act ("Distributing Purchaser")
         against any losses, claims, damages or liabilities, joint or several
         (which shall, for all purposes of this Agreement, include, but not be
         limited to, all reasonable costs of defense and investigation and all
         reasonable attorneys' fees), to which the Distributing Purchaser may
         become subject, under the Securities Act or otherwise, insofar as such
         losses, claims, damages or liabilities (or actions in respect thereof)
         arise out of or are based upon any untrue statement or alleged untrue
         statement of any material fact contained in the Registration Statement,
         or any related preliminary prospectus, the Prospectus or amendment or
         supplement thereto, or arise out of or are based upon the omission or
         alleged omission to state therein a material fact required to be stated
         therein or necessary to make the statements therein not misleading;
         provided, however, that the Company will not be liable in any such case
         to the extent that any such loss, claim, damage or liability arises out
         of or is based upon an untrue statement or alleged untrue statement or
         omission or alleged omission made in the Registration Statement,
         preliminary prospectus, the Prospectus or amendment or supplement
         thereto in reliance upon, and in conformity with, written information
         furnished to the Company by the Distributing Purchaser specifically for
         use in the preparation thereof. This Section 6(a) shall not inure to
         the benefit of any Distributing Purchaser with respect to any person
         asserting such loss, claim, damage or liability who purchased the
         Registrable Securities which are the subject thereof if the
         Distributing Purchaser failed to send or give (in violation of the
         Securities Act or the rules and regulations promulgated thereunder) a
         copy of the Prospectus to such person at or prior to the written
         confirmation to such person of the sale of such Registrable Securities,
         where the Distributing Purchaser was obligated to do so under the
         Securities Act or the rules and regulations promulgated thereunder.
         This indemnity agreement will be in addition to any liability which the
         Company may otherwise have.

                           (b) Each Distributing Purchaser agrees that it will
         indemnify and hold harmless the Company, and each officer, director of
         the Company or person, if any, who controls the Company within the
         meaning of the Securities Act, against any losses, claims, damages or
         liabilities (which shall, for all purposes of this Agreement, include,
         but not be limited to, all reasonable costs of defense and
         investigation and all reasonable attorneys' fees) to which the Company
         or any such officer, director or controlling person

                                       6
<PAGE>   36

         may become subject under the Securities Act or otherwise, insofar as
         such losses, claims, damages or liabilities (or actions in respect
         thereof) arise out of or are based upon (i) any untrue statement or
         alleged untrue statement of any material fact contained in the
         Registration Statement, or any related preliminary prospectus, the
         Prospectus or amendment or supplement thereto, or arise out of or are
         based upon the omission or the alleged omission to state therein a
         material fact required to be stated therein or necessary to make the
         statements therein not misleading, but in each case only to the extent
         that such untrue statement or alleged untrue statement or omission or
         alleged omission was made in the Registration Statement, preliminary
         prospectus, the Prospectus or amendment or supplement thereto in
         reliance upon, and in conformity with, written information furnished to
         the Company by such Distributing Purchaser specifically for use in the
         preparation thereof, or (ii) any person asserting such loss, claim,
         damage or liability who purchased the Registrable Securities which are
         the subject thereof if the Distributing Purchaser failed to send or
         give (in violation of the Securities Act or the rules and regulations
         promulgated thereunder) a copy of the Prospectus to such person at or
         prior to the written confirmation to such person of the sale of such
         Registrable Securities, where the Distributing Purchaser was obligated
         to do so under the Securities Act or the rules and regulations
         promulgated thereunder. This indemnity agreement will be in addition to
         any liability which the Distributing Purchaser may otherwise have.
         Notwithstanding anything to the contrary herein, the Distributing
         Purchaser shall not be liable under this Section 6(b) for any amount in
         excess of the net proceeds to such Distributing Purchaser as a result
         of the sale of Registrable Securities pursuant to the Registration
         Statement.

                           (c) Promptly after receipt by an indemnified party
         under this Section 6 of notice of the commencement of any action, such
         indemnified party will, if a claim in respect thereof is to be made
         against the indemnifying party under this Section 6, notify the
         indemnifying party of the commencement thereof; but the omission so to
         notify the indemnifying party will not relieve the indemnifying party
         from any liability which it may have to any indemnified party except to
         the extent of actual prejudice demonstrated by the indemnifying party.
         In case any such action is brought against any indemnified party, and
         it notifies the indemnifying party of the commencement thereof, the
         indemnifying party will be entitled to participate in, and, to the
         extent that it may wish, jointly with any other indemnifying party
         similarly notified, assume the defense thereof, subject to the
         provisions herein stated and after notice from the indemnifying party
         to such indemnified party of its election so to assume the defense
         thereof, the indemnifying party will not be liable to such indemnified
         party under this Section 6 for any legal or other expenses subsequently
         incurred by such indemnified party in connection with the defense
         thereof other than reasonable costs of investigation, unless the
         indemnifying party shall not pursue the action to its final conclusion.
         The indemnified party shall have the right to employ separate counsel
         in any such action and to participate in the defense thereof, but the
         fees and expenses of such counsel shall not be at the expense of the
         indemnifying party if the indemnifying party has assumed the defense of
         the action with counsel reasonably satisfactory to the indemnified
         party; provided that the fees and expenses of such counsel shall be at
         the expense of the indemnifying party if (i) the employment of such
         counsel has been specifically authorized in writing by the indemnifying
         party, or (ii)

                                       7
<PAGE>   37

         the named parties to any such action (including any impleaded parties)
         include both the indemnified party and the indemnifying party and the
         indemnified party shall have been advised by such counsel that there
         may be one or more legal defenses available to the indemnifying party
         different from or in conflict with any legal defenses which may be
         available to the indemnified party (in which case the indemnifying
         party shall not have the right to assume the defense of such action on
         behalf of the indemnified party, it being understood, however, that the
         indemnifying party shall, in connection with any one such action or
         separate but substantially similar or related actions in the same
         jurisdiction arising out of the same general allegations or
         circumstances, be liable only for the reasonable fees and expenses of
         one separate firm of attorneys for the indemnified party, which firm
         shall be designated in writing by the indemnified party and be approved
         by the indemnifying party). No settlement of any action against an
         indemnified party shall be made without the prior written consent of
         the indemnified party, which consent shall not be unreasonably
         withheld.

                           All fees and expenses of the indemnified party
         (including reasonable costs of defense and investigation in a manner
         not inconsistent with this Section and all reasonable attorneys' fees
         and expenses) shall be paid to the indemnified party, as incurred,
         within ten (10) Trading Days of written notice thereof to the
         indemnifying party; provided, that the indemnifying party may require
         such indemnified party to undertake to reimburse all such fees and
         expenses to the extent it is finally judicially determined that such
         indemnified party is not entitled to indemnification hereunder.

                  Section 7. Contribution. In order to provide for just and
equitable contribution under the Securities Act in any case in which (i) the
indemnified party makes a claim for indemnification pursuant to Section 6 hereof
but is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that the express provisions of
Section 6 hereof provide for indemnification in such case, or (ii) contribution
under the Securities Act may be required on the part of any indemnified party,
then the Company and the applicable Distributing Purchaser shall contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (which shall, for all purposes of this Agreement, include, but not be
limited to, all reasonable costs of defense and investigation and all reasonable
attorneys' fees), in either such case (after contribution from others) on the
basis of relative fault as well as any other relevant equitable considerations.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the applicable Distributing Purchaser
on the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Distributing Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in this Section 7. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such

                                       8
<PAGE>   38

indemnified party in connection with investigating or defending any such action
or claim. 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.

                  Notwithstanding any other provision of this Section 7, in no
event shall any (i) Purchaser be required to undertake liability to any person
under this Section 7 for any amounts in excess of the dollar amount of the net
proceeds to be received by the Purchaser from the sale of the Purchaser's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Registration Statement under which such
Registrable Securities are or were to be registered under the Securities Act and
(ii) underwriter be required to undertake liability to any person hereunder for
any amounts in excess of the aggregate discount, commission or other
compensation payable to such underwriter with respect to the Registrable
Securities underwritten by it and distributed pursuant to the Registration
Statement.

                  Section 8. Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be delivered as set forth
in the Purchase Agreement.

                  Section 9. Assignment. Neither this Agreement nor any rights
of the Purchaser or the Company hereunder may be assigned by either party to any
other person. Notwithstanding the foregoing, upon the prior written consent of
the Company, which consent shall not be unreasonably withheld or delayed in the
case of an assignment to an affiliate of the Purchaser, the Purchaser's interest
in this Agreement may be assigned at any time, in whole or in part, to any other
person or entity (including any affiliate of the Purchaser) who agrees to be
bound hereby.

                  Section 10. Counterparts/Facsimile. This Agreement may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which, when together shall constitute but one and the same
instrument, and shall become effective when one or more counterparts have been
signed by each party hereto and delivered to the other party. In lieu of the
original, a facsimile transmission or copy of the original shall be as effective
and enforceable as the original.

                  Section 11. Remedies and Severability. The remedies provided
in this Agreement are cumulative and not exclusive of any remedies provided by
law. If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction 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, 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 is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of those that may
be hereafter declared invalid, illegal, void or unenforceable.

                                       9
<PAGE>   39

                  Section 12. Conflicting Agreements. The Company shall not
enter into any agreement with respect to its securities that is inconsistent
with the rights granted to the purchasers of Registrable Securities in this
Agreement or otherwise prevents the Company from complying with all of its
obligations hereunder.

                  Section 13. Headings. The headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

                  Section 14. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made in New York by persons domiciled in New York City and without
regard to its principles of conflicts of laws. Any action may be brought as set
forth in the Purchase Agreement. The Company and the Purchaser agree to submit
themselves to the in personam jurisdiction of the state and federal courts
situated within the Southern District of the State of New York with regard to
any controversy arising out of or relating to this Agreement. Any party shall
have the right to seek injunctive relief from any court of competent
jurisdiction in any case where such relief is available. Any dispute under this
Agreement shall be submitted to arbitration under the American Arbitration
Association (the "AAA") in New York City, New York, and shall be finally and
conclusively determined by the decision of a board of arbitration consisting of
three (3) members (hereinafter referred to as the "Board of Arbitration")
selected as according to the rules governing the AAA. The Board of Arbitration
shall meet on consecutive business days in New York City, New York, and shall
reach and render a decision in writing (concurred in by a majority of the
members of the Board of Arbitration) with respect to the amount, if any, which
the losing party is required to pay to the other party in respect of a claim
filed. In connection with rendering its decisions, the Board of Arbitration
shall adopt and follow the laws of the State of New York. To the extent
practical, decisions of the Board of Arbitration shall be rendered no more than
thirty (30) calendar days following commencement of proceedings with respect
thereto. The Board of Arbitration shall cause its written decision to be
delivered to all parties involved in the dispute. The Board of Arbitration shall
be authorized and is directed to enter a default judgment against any party
refusing to participate in the arbitration proceeding within thirty days of any
deadline for such participation. Any decision made by the Board of Arbitration
(either prior to or after the expiration of such thirty (30) calendar day
period) shall be final, binding and conclusive on the parties to the dispute,
and entitled to be enforced to the fullest extent permitted by law and entered
in any court of competent jurisdiction. The prevailing party shall be awarded
its costs, including attorneys' fees, from the non-prevailing party as part of
the arbitration award. Any party shall have the right to seek injunctive relief
from any court of competent jurisdiction in any case where such relief is
available. The prevailing party in such injunctive action shall be awarded its
costs, including attorney's fees, from the non-prevailing party.

                            [SIGNATURE PAGE FOLLOWS]

                                       10
<PAGE>   40

                  IN WITNESS WHEREOF, the parties hereto have caused this
Registration Rights Agreement to be duly executed, on this ___ day of March,
2001

                                   LENDINGTREE, INC.

                                   By:
                                       -----------------------------------------
                                       Douglas Lebda, Chief Executive Officer

                                   PAUL REVERE CAPITAL PARTNERS, LTD.

                                   By:
                                       -----------------------------------------
                                       David Sims, Authorized Signatory

                                       11

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