LYNCH INTERACTIVE CORP
EXH10OFORM10KLIC2003
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>exh10oform10klic2003.txt
<DESCRIPTION>EXH10OFORM10KLIC2003
<TEXT>
                                                                   Exhibit 10(o)




                            STOCK PURCHASE AGREEMENT

                                  BY AND AMONG

                         LYNCH TELEPHONE CORPORATION XI

                               (AS THE PURCHASER)

                          LYNCH INTERACTIVE CORPORATION

                                 (AS THE PARENT)

                       BRIGHTON COMMUNICATIONS CORPORATION

                                (AS THE COMPANY)

                  CALIFORNIA-OREGON TELECOMMUNICATIONS COMPANY

                                    (AS COTC)

                                       AND

                            THE SHAREHOLDERS OF COTC

                                (AS THE SELLERS)

                           DATED AS OF MARCH 22, 2004

                                     <PAGE>



                            STOCK PURCHASE AGREEMENT

     This STOCK  PURCHASE  AGREEMENT  (this  "Agreement")  is entered into as of
March  22,  2004  (the   "Execution   Date")  by  and  among   California-Oregon
Telecommunications  Company,  a  California  corporation  ("COTC"),  each of the
persons listed on Schedule A hereto  (individually  a "Seller" and  collectively
"Sellers"),  Brighton  Communications  Corporation,  a Delaware corporation (the
"Company"),  Lynch  Telephone  Corporation  XI,  a  Delaware  corporation  and a
wholly-owned subsidiary of the Company (the "Purchaser"),  and Lynch Interactive
Corporation,  a Delaware corporation ("Parent").  Purchaser,  Company and Parent
are sometimes  herein referred to collectively as the "Purchasing  Parties," and
Sellers and COTC are sometimes  herein  referred to collectively as the "Selling
Parties."  Capitalized  terms not defined herein shall have the meaning ascribed
to them in Schedule B, attached hereto.

     WHEREAS,  Sellers  own all of the issued and  outstanding  shares of common
stock (the "Common Stock") and preferred  stock (the "Preferred  Stock") of COTC
as set forth in Schedule A (the Common Stock and Preferred Stock are referred to
collectively as the "Purchased Stock");

     WHEREAS,   COTC  and  COTC  Subsidiaries   (defined  below)  are  sometimes
hereinafter  referred  to  individually  as a "COTC  Company"  and  collectively
referred to herein as the "COTC Companies";

     WHEREAS,  each of the  Sellers  desires to sell his,  her or its  Purchased
Stock to Purchaser; and

     WHEREAS,  Purchaser desires to purchase all of the Purchased Stock from the
Sellers upon the terms and conditions set forth herein.

                                   Article I.
                                 THE STOCK SALES

     1.1  Sale and  Purchase.  Each  Seller  hereby  agrees,  on the  terms  and
          ------------------
conditions  herein, to sell to Purchaser the number of shares of Purchased Stock
set forth  opposite  such  Seller's  name on  Schedule A. The  Purchaser  hereby
agrees,  on the terms and  conditions  herein,  to purchase from each Seller the
number of shares of Purchased  Stock set forth  opposite  such  Seller's name on
Schedule A. The sales and purchases of the Purchased Stock  contemplated  herein
are hereinafter referred to as the "Stock Sales."

     1.2 Purchase Price. The total purchase price (the "Purchase Price") for the
         --------------
Purchased  Stock  shall be  Twenty-One  Million  Two  Hundred  Thousand  Dollars
($21,200,000)  which shall be allocated among the Sellers in accordance with the
percentage allocations to be specified in writing by the Sellers by an amendment
to Schedule A (which  shall be  delivered  by Sellers to Purchaser at least five
(5)  Business  Days  prior to the  Closing  Date),  payable  at the  Closing  in
accordance  with  Section 1.4  hereof.  The  Purchase  Price shall be subject to
adjustment as set forth in Section 1.7 hereof.

     1.3 Form of Purchase Price. The Purchase Price shall be payable in cash and
         ----------------------
in  promissory  notes.  The cash  portion  shall  be  Fourteen  Million  Dollars
($14,000,000.00) (the "Cash Portion"); and the promissory notes portion shall be
Seven Million Two Hundred Thousand Dollars  ($7,200,000.00) (the "Note Portion")
represented  by  promissory  notes  issued by the  Purchaser  (the  "Notes")  in
substantially  the form set forth in Exhibit A. The Notes shall be valued at the
principal  amount  thereof.  The Notes  shall be  secured  pursuant  to a pledge
agreement  (the  "Pledge  Agreement")  in  substantially  the form set  forth in
Exhibit B, and  guaranteed  by the  Company  and Parent  pursuant  to a guaranty
agreement  in  substantially  the form set  forth in  Exhibit  C (the  "Guaranty
Agreement").

     1.4 Payment of the Purchase Price. At the Closing,  the Purchaser shall (i)
         -----------------------------
pay the  Cash  Portion  of the  Purchase  Price to each  Seller  by  cashier  or
certified check or wire transfer (with wire transfer  instructions  delivered to
Purchaser at least two (2) Business  Days prior to the Closing  Date),  and (ii)
deliver the Notes to each Seller.

     1.5  Closing.  The  closing of the Stock Sales (the  "Closing")  shall take
          -------
place at 10:00 a.m.  at the  offices  of Downey  Brand LLP,  555  Capitol  Mall,
Sacramento,  California, on the later of: (i) the last day of the calendar month
within which all of the conditions  precedent set forth in Article VII have been
satisfied or waived, or (ii) at such other time, date and place as Purchaser and
the Requisite Sellers shall by written instrument designate.  Such time and date
are herein  referred to as the  "Closing  Date."  Subject to the  provisions  of
Article VIII (regarding  termination),  failure to consummate the Stock Sales on
the date and the time determined pursuant to this Section 1.5 will not result in
the  termination  of this  Agreement  and  will  not  relieve  any  party of any
obligation under this Agreement.

     1.6 Transactions at the Closing Date.
         --------------------------------

     (a) Sellers Deliveries.  At the Closing,  each of the Sellers shall deliver
         ------------------
to Purchaser the following:

     (i) stock  certificates,  in form suitable for transfer,  registered in the
name of such Seller,  evidencing  the number of shares of Purchased  Stock to be
purchased  hereunder,  with executed blank stock transfer powers  attached,  and
with all necessary stock transfer tax stamps attached thereto;

     (ii)  all  stock  books,  stock  transfer  ledgers,  minute  books  and the
corporate  seals of COTC  Companies,  and except as provided in Section 6.7, the
resignations of all officers and directors of COTC Companies;

     (iii)  Subordination  agreement(s) (the  "Subordination  Agreement") in the
form  and   containing   the  terms   reasonably   requested  by  the  financial
institution(s)  ("Acquisition  Lender")  lending  funds  to  Purchaser  for  the
acquisition  of  the  Purchased  Stock  (such  acquisition   financing  and  any
substitution or replacement  thereof,  which shall not exceed  Fourteen  Million
($14,000,000)  plus the amount by which the Final  Purchase  Price  exceeds  the
Purchase Price,  being referred to as the "Acquisition  Financing")  executed by
each Seller and pursuant to which  amounts owed by the  Purchaser to the Sellers
pursuant to the Notes and the Pledge  Agreement are reasonably  subordinated  to
the rights of the Acquisition Lender; provided,  however, that nothing contained
in the Subordination Agreement shall subordinate the rights of the Sellers under
this  Agreement  or the  Guaranty  Agreement  to the  rights of the  Acquisition
Lender.

     (iv) A certificate  executed by the Sellers  representing and warranting to
Purchaser that each of Sellers' representations and warranties in this Agreement
was  accurate in all  respects as of the  Execution  Date and is accurate in all
respects as of the  Closing  Date as if made on the Closing  Date  (giving  full
effect to any supplements to the Sellers Disclosure Schedule that were delivered
by Sellers to  Purchaser  prior to the Closing Date in  accordance  with Section
5.4).

     (b) Purchasing Parties Deliveries. At the Closing, Purchasing Parties shall
         -----------------------------
deliver to each Seller the following:

     (i) The  Purchase  Price as required  and in the manner  indicated  in this
Article I;

     (ii) A certificate  executed by the  Purchasing  Parties  representing  and
warranting  to  Seller  that each of  Purchasing  Parties'  representations  and
warranties  in this  Agreement  was accurate in all respects as of the Execution
Date and is  accurate in all  respects as of the Closing  Date as if made on the
Closing Date (giving full effect to any supplements to the Purchaser  Disclosure
Schedule  that were  delivered  by  Purchasing  Parties to Sellers  prior to the
Closing Date in accordance with Section 5.4); and

     (iii) The Pledge Agreement and Guaranty Agreement, executed by the required
parties.

     1.7 Post-Closing Adjustments.
         ------------------------

     (a) As soon as reasonably practical after the Closing, but in no event more
than forty five (45)  calendar  days after the  Closing  Date,  Purchaser  shall
prepare  and  deliver to Sellers  Representative  a  schedule  (the  "Adjustment
Report") showing the computation of the Marketable  Securities  Adjustment,  the
Excess Marketable Securities Proceeds Adjustment, the Dividends Paid Adjustment,
Miscellaneous  Asset Adjustment and the Final Purchase Price. The procedures for
calculating  the  Adjustment  Report  are set forth in  Section  1.7 of  Sellers
Disclosure Schedule.

     (b) Within  forty-five  (45) calendar days after receipt of the  Adjustment
Report, the Sellers  Representative may, by written notice to Purchaser,  object
to the Adjustment Report. If the Sellers Representative shall not object thereto
in writing within such forty-five (45) calendar day period,  the calculations on
the  Adjustment  Report  shall  become final and shall not be subject to further
review,  challenge or adjustment absent fraud. The Sellers Representative may in
good faith object to the Adjustment  Report within such forty-five (45) calendar
day period by  delivering  a written  notice of his  objection  (the  "Objection
Notice") to the  Purchaser:  (i) setting forth the items being  disputed and the
reasons therefor, and (ii) specifying the Sellers  Representative's  calculation
of the figures on the Adjustment  Report.  In connection with the preparation of
the Objection Notice (and any subsequent submissions to the Arbiter),  Purchaser
shall  grant  the  Sellers   Representative   and  his   accountants  and  other
representatives  reasonable  access  to all of the  books  and  records  of COTC
Companies.  Any delay in  granting  access to all such books and  records  shall
accordingly  extend such forty-five (45) calendar day period for delivery of the
Objection Notice.

     (c) For thirty (30) calendar days after  delivery of the Objection  Notice,
Purchaser  and Sellers  Representative  shall  attempt to resolve  all  disputes
between them  regarding  the  Adjustment  Report.  If Purchaser  and the Sellers
Representative  cannot  resolve  all such  disputes  within such thirty (30) day
period,  the  matters in  dispute  shall be  determined  by an  accounting  firm
mutually acceptable to them to resolve the remaining objections (the "Arbiter").
If the  Purchaser  and the  Sellers  Representative  are  unable to agree on the
choice  of  an  accounting  firm,  they  will  select  a   nationally-recognized
accounting  firm  by  lot  after  excluding  their  respective  regular  outside
accounting  firms.  Subject to Section  1.7(d),  any  advance  retainer  and any
periodic  payments to the Arbiter  shall be advanced  equally by  Purchaser  and
Sellers.  Promptly, but not later than forty-five (45) days after the acceptance
of its  appointment,  the Arbiter shall determine (based solely on presentations
by  the  Sellers  Representative  and  Purchaser  to  the  Arbiter  and  not  by
independent  review) only those items in dispute and shall render a report as to
its  resolution of such items and the resulting  calculation  of the  Adjustment
Report. For purposes of the Arbiter's determination,  the amounts to be included
shall be the  amounts  from the  Adjustment  Report as to items  that are not in
dispute,  and the  amounts  determined  by the  Arbiter,  as to  items  that are
submitted for  resolution by the Arbiter.  In resolving any disputed  item,  the
Arbiter must select the  Adjustment  Report  proffered  by the  Purchaser or the
Adjustment Report proffered by the Sellers Representative (and cannot substitute
the Arbiter's own judgment) based upon the position the Arbiter determines to be
closest to the correct  amount.  Purchaser and the Sellers shall  cooperate with
the  Arbiter  in  making  its  determination  and  such  determination  shall be
conclusive and binding upon the Purchaser and the Sellers.

     (d) The fees and  expenses of the  Arbiter  shall be paid by the party (the
"Losing Party") whose Final Purchase Price (as reported on the Adjustment Report
with  respect to the  Purchaser or on the  Objection  Notice with respect to the
Sellers) is furthest from the Final Purchase Price as determined by the Arbiter.
If the other party (the  "Prevailing  Party") has advanced or provided a portion
of the Arbiter's fees and costs as provided above in Section 1.7(c),  the Losing
Party shall  reimburse the  Prevailing  Party for such fees and costs within ten
(10) Business Days of the Arbiter's final decision.

     (e) Within  five (5)  Business  Days after the  determination  of the Final
Purchase Price:

     (i) If the Final  Purchase Price is greater than the Purchase  Price,  then
Purchaser  shall pay or shall cause to be paid to each  Seller of Common  Stock,
such  Seller's pro rata share (based on the  percentage  allocations  for Common
Stock  specified on Schedule A) of the amount by which the Final  Purchase Price
exceeds the Purchase Price.

     (ii) If the Final Purchase Price is less than the Purchase Price, then each
Seller of Common  Stock  shall pay or shall cause to be paid to  Purchaser  such
Seller's pro rata share (based on the  percentage  allocations  for Common Stock
specified on Schedule A) of the amount by which the Purchase  Price  exceeds the
Final Purchase Price.

     1.8 Sellers Representative.
         ----------------------

     (a) In order to administer  efficiently the obligations and requirements of
Sellers under this Agreement,  the Sellers hereby  designate  Robert H. Edgar as
their representative (the "Sellers Representative").

     (b) The  Sellers  hereby  authorize  the  Sellers  Representative  upon the
receipt of written  instructions  of Requisite  Sellers:  (i) to take all action
necessary in  connection  with the defense  and/or  settlement of any claims for
which the Sellers may be required to indemnify  Purchasing  Parties  pursuant to
Section  9.2 hereof,  (ii) to give and receive all notices  required to be given
and take all action  required or permitted to be taken under this  Agreement and
any related agreement  contemplated hereby to which all the Sellers are parties,
and (iii) to take any and all additional  action as is  contemplated to be taken
by or on behalf of the  Sellers by the terms of this  Agreement  and any related
agreement.

     (c) Upon  receiving  notice  of the  death  or  incapacity  of the  Sellers
Representative,  the Sellers  (who shall be deemed to include any  successor  in
interest to any Seller) shall by a vote of the Requisite Sellers (based on their
percentage  interest in the Purchase  Price if there were a Closing as set forth
in  Schedule A) appoint a successor  to fill the  vacancy.  The Sellers may by a
vote of the Requisite Sellers remove the Sellers  Representative with or without
cause and appoint a successor,  provided that notice thereof is given by the new
Sellers  Representative  to  each  of the  other  parties  hereto.  The  Sellers
Representative may resign (other than by death or incompetency) if, and only if,
he is simultaneously replaced with a substitute Sellers Representative.

     (d) By their execution of this Agreement, the Sellers agree that:

     (i)  Notwithstanding  any  other  provision  herein  to the  contrary,  the
Purchasing  Parties shall be able to rely  conclusively on the  instructions and
decisions of the Sellers  Representative  as to the settlement of any claims for
indemnification  by  Purchasing  Parties  pursuant  to Section 9.2 hereof or any
other actions required to be taken by the Sellers Representative  hereunder, and
no party hereunder shall have any cause of action against Purchasing Parties for
any action taken by  Purchasing  Parties in reliance  upon the  instructions  or
decisions of the Sellers Representative;

     (ii) All actions, decisions and instructions of the Sellers Representative,
including  the defense or  settlement of any claims for which the Sellers may be
required to indemnify  Purchasing Parties pursuant to Section 9.2 hereof,  shall
be conclusive and binding upon all of the Sellers,  and no Seller shall have any
right to object,  dissent,  protest or  otherwise  contest  the same or have any
cause of  action  against  the  Sellers  Representative  for any  action  taken,
decision  made or  instruction  given by the Sellers  Representative  under this
Agreement,  except for willful  misconduct  (which shall include  fraud),  gross
negligence or breach by the Sellers  Representative  of his  obligations as such
Sellers Representative;

     (iii) The provisions of this Section 1.8 are independent and severable, are
irrevocable and shall be enforceable notwithstanding any rights or remedies that
any Seller may have in connection  with the  transactions  contemplated  by this
Agreement;

     (iv)  Remedies  available at law for any breach of the  provisions  of this
Section  1.8 are  inadequate;  therefore,  Purchasing  Parties  and the  Sellers
Representative  shall be entitled to temporary and permanent  injunctive  relief
without the  necessity of proving  damages if either  Purchasing  Parties or the
Sellers  Representative  brings an  action to  enforce  the  provisions  of this
Section 1.8; and

     (v) The provisions of this Section 1.8 shall be binding upon the executors,
heirs,  legal  representatives,  successors and assigns of each Seller,  and any
references  in this  Agreement to a Seller or the Sellers shall mean and include
the successors to the Sellers' rights hereunder, whether pursuant to assignment,
testamentary disposition, the laws of descent, and distribution or otherwise.

     (e) All  fees  and  expenses  incurred  by the  Sellers  Representative  in
connection  with this  Agreement  shall be paid by the Sellers in  proportion to
their respective percentage allocations for Common Stock specified in Schedule A
as if there were a Closing.

     (f)  In  acting  as  the   representative  of  the  Sellers,   the  Sellers
Representative  may rely  upon,  and shall not be liable to any  Seller (or such
Seller's  successor in interest) for acting or  refraining  from acting upon, an
opinion of counsel,  certificate  of auditors or other  certificate,  statement,
instrument,  opinion,  report, notice,  request,  consent,  order,  arbitrator's
award, appraisal,  bond or other paper or document reasonably believed by him to
be genuine and to have been signed or  presented by the proper party or parties.
The  Sellers  Representative  shall  incur no  liability  to any Seller (or such
Seller  successor in  interest)  with respect to any action taken or suffered by
him in his  capacity  as  Sellers  Representative  in  reliance  upon any  note,
direction, instruction, consent, statement or other documents believed by him to
be genuinely and duly  authorized,  nor for other action or inaction  except his
own willful misconduct or gross negligence and the Shareholders'  Representative
shall be  indemnified  and held harmless by the Sellers of Common Stock from all
losses,  costs and expenses,  including  reasonable  attorney's  fees, which the
Sellers  Representative  may  incur  as a result  of  involvement  in any  legal
proceedings  arising from the  performance of his or her duties  hereunder.  The
Sellers  Representative may perform his duties as Sellers  Representative either
directly or by or through his agents or attorneys and the Sellers Representative
shall not be  responsible  to the other Sellers for any misconduct or negligence
on the part of any  agent or  attorney  appointed  with  reasonable  care by him
hereunder.

                                  Article II.
            REPRESENTATIONS AND WARRANTIES CONCERNING COTC COMPANIES

     Except as set forth in the disclosure  schedule delivered by Sellers to the
Purchaser  prior to the execution of this  Agreement  (the  "Sellers  Disclosure
Schedule"),  which Sellers Disclosure Schedule shall reference  disclosure items
by section,  each of the Sellers jointly and severally,  represents and warrants
to the Purchaser that:

     2.1 Organization and Qualification; Subsidiaries.
         --------------------------------------------

     (a) COTC is a corporation  validly  existing and in good standing under the
laws of the State of California.  Each Subsidiary of COTC  (individually,  "COTC
Subsidiary" or  collectively,  "COTC  Subsidiaries")  is a corporation,  limited
liability  company  or  general  partnership  (as set forth in  Section  2.1(d))
validly existing and in good standing under the laws of the State of California.
Each COTC Company has the requisite  corporate power and authority  necessary to
own,  lease and operate its properties and to carry on its business as it is now
being conducted.

     (b) Each  COTC  Company  is duly  qualified  to do  business  as a  foreign
corporation, and is in good standing in each jurisdiction where the character of
its properties  owned,  leased or operated by it or the nature of its activities
makes such  qualification  necessary,  except where such  failures to be so duly
qualified  and  in  good  standing  would  not,  either  individually  or in the
aggregate, have a Material Adverse Effect.

     (c) Telephone  Company is a duly certified  public  utility  subject to the
rules and  regulations  of the PUC and the  California  Public  Utilities  Code,
including,  but not limited to, the specific obligations set forth in California
Public  Utilities  Commission  Resolution  T-16762  adopting COTC's General Rate
Case.

     (d) A list of all COTC  Subsidiaries,  together with (i) COTC's  percentage
ownership of each COTC Subsidiary and (ii) laws under which each COTC Subsidiary
is formed, is set forth in Section 2.1(d) of Sellers Disclosure  Schedule.  COTC
and/or  one or more of the COTC  Subsidiaries  own  beneficially  and of  record
substantially  all of the  outstanding  equity  interests  of each  of the  COTC
Subsidiaries.  COTC does not  directly or  indirectly  own any equity or similar
interests in, or any interests  convertible  into or exchangeable or exercisable
for any  equity or similar  interest  in, any  corporation,  partnership,  joint
venture or other  business  association  or entity  other  than in the  ordinary
course of business,  and in no event in excess of 5% of the  outstanding  equity
securities of such entity.

     2.2 Articles of Incorporation and Bylaws. COTC has previously  furnished to
         ------------------------------------
Purchaser a copy of the current articles of incorporation and bylaws, as amended
or restated of COTC and the articles of incorporation, articles of organization,
bylaws,  operating agreement, or partnership agreement,  as applicable,  of each
COTC Subsidiary (such organizational documents being referred to collectively as
the "Organizational  Documents"). The Organizational Documents are in full force
and effect. COTC is not in violation of any of the provisions of its articles or
bylaws.

     2.3 Capitalization.
         --------------

     (a) The  authorized  capital  stock of COTC  consists  of 20,000  shares of
Common Stock and 1,000,000  shares of Preferred Stock. As of the Execution Date,
4,088 shares of Common Stock and 105,160 shares of Preferred  Stock  (identified
in the articles of incorporation as "Preferred Stock,  First Series") are issued
and  outstanding  (of which none are restricted  shares under  employee  benefit
plans which have not been awarded) and held of record by the respective  Sellers
set forth in Schedule A, all of which are duly authorized, validly issued, fully
paid and  non-assessable,  and were not issued in  violation  of any  preemptive
right of any COTC stockholder.  There are no options,  warrants or other rights,
agreements,  arrangements  or commitments of any  character,  including  without
limitation voting agreements or arrangements, relating to the issued or unissued
capital  stock of any COTC  Company or  obligating  any COTC Company to issue or
sell any shares of capital stock of any COTC Company.  There are no  obligations
of any COTC  Company  to  repurchase,  redeem or  otherwise  acquire  any equity
securities of any COTC  Subsidiary.  Each of the  outstanding  shares of capital
stock of each COTC Subsidiary are duly  authorized,  validly issued,  fully paid
and nonassessable,  and were not issued in violation of any preemptive rights of
any COTC Subsidiary stockholder.

     (b) Any equity  securities  purchased  or  otherwise  acquired  by any COTC
Company  were  purchased  or  acquired  in  accordance  with all laws  including
fiduciary duties.

     2.4  Authority.  COTC has the  requisite  corporate  power and authority to
          ---------
execute and deliver this Agreement,  to perform its obligations hereunder and to
consummate the transactions  contemplated  hereby. The execution and delivery of
this Agreement by COTC and the  consummation  of the  transactions  contemplated
hereby have been duly and validly  authorized by all necessary  corporate action
and no  other  corporate  proceedings  on the  part of  COTC  are  necessary  to
authorize  this  Agreement or to consummate  the  transactions  so  contemplated
hereby.  This Agreement has been duly executed and delivered by, and constitutes
a  valid  and  binding  obligation  of COTC  and,  assuming  due  authorization,
execution and delivery by the Purchasing Parties, is enforceable against COTC in
accordance  with its  terms,  except as  enforcement  may be  limited by general
principles of equity whether  applied in a court of law or a court of equity and
by  bankruptcy,  insolvency  and similar laws  affecting  creditors'  rights and
remedies generally.

     2.5 No Conflict; Required Filings and Consents.
         ------------------------------------------

     (a) The execution and delivery of this  Agreement by COTC does not, and the
performance of this Agreement and the transactions  contemplated  hereby by COTC
shall not, (i) conflict with or violate the Organizational Documents of any COTC
Company,  (ii)  conflict  with or violate  any  federal  or state law,  statute,
ordinance,  rule, regulation,  order, judgment or decree (collectively,  "Laws")
applicable to COTC Companies or by which COTC  Companies or any COTC  Subsidiary
or any of their respective  properties is bound or affected,  or (iii) result in
any breach of or  constitute a default (or an event that with notice or lapse of
time or both  would  become a  default)  under,  or give to others any rights of
termination,  amendment,  acceleration,  cancellation of, or result in rights of
payment,  compensation  or other rights or the creation of a lien or encumbrance
on any of the  properties  or assets of any COTC Company  pursuant to, any note,
bond,  mortgage,   indenture,   contract,  agreement,  lease,  license,  permit,
franchise or other instrument or obligation to which any COTC Company is a party
or by which any COTC Company or any of its properties is bound or affected.

     (b) Except as set forth in Section  2.5(b) of Sellers  Disclosure  Schedule
(the list of which shall be referred to herein as the "Government Consents") the
execution and delivery of this  Agreement by COTC does not, and the  performance
of  this   Agreement  by  COTC  shall  not,   require  any  consent,   approval,
authorization  or permit of, or filing with or notification to any  governmental
or regulatory  authority  except the consents or approvals  from the  California
Public  Utility  Commission  ("PUC") and the Federal  Communications  Commission
("FCC").

     2.6 Compliance; Permits. No COTC Company is in conflict with, or in default
         -------------------
or violation  of, (i) any Law  applicable  to it or by which its or any of their
respective  properties is bound or affected,  or (ii) any note, bond,  mortgage,
indenture,  contract,  agreement,  lease,  license,  permit,  franchise or other
instrument or  obligation  to which it is a party or by which its  properties is
bound or affected.

     2.7 Reports; Financial Statements.
         -----------------------------

     (a) Each COTC Company has filed all forms,  reports and documents  required
to be  filed  with  the PUC and  FCC,  and as of the  Execution  Date,  COTC has
delivered  to  Purchaser  copies of its  annual  report to the PUC for the years
ended December 31, 2000, 2001 and 2002 (the "COTC  Reports").  The COTC Reports,
including all COTC Reports  filed after the date of this  Agreement and prior to
or at the Closing Date, (i) were or will be prepared in all material respects in
accordance with the requirements of applicable Law, and (ii) did not at the time
they were  filed,  or will not at the time they are  filed,  contain  any untrue
statement  of a material  fact or omit to state a material  fact  required to be
stated  therein or necessary  in order to make the  statements  therein,  in the
light of the circumstances under which they were made, not misleading.

     (b) COTC has heretofore  furnished Purchaser with the audited and unaudited
financial  statements  for the  periods  listed in  Section  2.7(b)  of  Sellers
Disclosure  Statement (the "Financial  Statements").  The Financial  Statements,
including the footnotes  thereto,  and the financial  statements to be furnished
Purchaser  pursuant to Section  5.1(h)  hereof (the  "Section  5.1(h)  Financial
Statements")  except as  indicated  therein,  have been or will be  prepared  in
accordance with generally accepted accounting  principles  consistently  applied
("GAAP")  and the  uniform  system of  accounts  of the  Federal  Communications
Commission as set forth in 47 C.F.R.  Part 32 and fairly present in all material
respects  the  financial  condition  and results of the  operations  of entities
included  therein and the changes in their financial  position at such dates and
for such periods; provided however, that the Section 5.1(h) Financial Statements
shall be subject to normal year end  adjustments  and lack  footnotes  and other
presentation  items.  The  term  "Balance  Sheet"  shall  mean,  as the  context
requires,  either or both of (i) the balance sheet of COTC (and its consolidated
subsidiaries)  as of June 30, 2003,  and (ii) the balance sheet of COTC (and its
consolidated  subsidiaries)  to be  included  in the  Section  5.1(h)  Financial
Statements.

     (c) There are no material liabilities or obligations of any nature, whether
absolute, accrued, fixed, contingent, matured or unmatured, against, relating to
or  affecting  any COTC,  except (i) as and to the extent  reflected or reserved
against on the  Balance  Sheet,  and (ii) those  incurred  since the date of the
latest Balance Sheet in the ordinary  course of business  consistent  with prior
practice and consistent with Sections 5.1 and 5.2 hereof and which  individually
or in the aggregate do not have and are not expected to have a Material  Adverse
Effect.

     (d) The revenues  attributable  to long  distance  network  access that are
included in the revenues stated in the Financial  Statements (and in the Section
5.1(h) Financial  Statements)  have been calculated in a manner  consistent with
prior years, as modified by and in accordance  with, all applicable  federal and
state rules and regulations;  the cost separation  studies of the COTC Companies
upon which the access settlement  revenues set forth in the Financial  Statement
(and in the Section 5.1(h) Financial  Statements) are based,  have been prepared
in a manner  consistent with prior years, as modified by and in accordance with,
all applicable federal and state tariffs;  and all local service rates currently
utilized  by COTC  and  all of the  COTC  Subsidiaries  are in  compliance  with
applicable tariffs.

     2.8 Absence of Certain  Changes or Events.  Since June 30,  2003:  (a) COTC
         -------------------------------------
Companies have conducted  their  businesses only in the ordinary course and in a
manner  consistent with past practice and, (b) there has not been (i) any change
in the financial condition,  results of operations or business of COTC or any of
the COTC  Subsidiaries  having  a  Material  Adverse  Effect,  (ii) any  damage,
destruction  or loss (whether or not covered by  insurance)  with respect to any
assets  of  COTC  Companies  having  a  Material   Adverse  Effect,   (iii)  any
declaration,  setting  aside or payment of any  dividends  or  distributions  in
respect of Common Stock or Preferred Stock or any redemption,  purchase or other
acquisition  of any of its  securities  or  any of the  securities  of any  COTC
Subsidiary,  (iv) any strike,  work stoppage,  slow-down or other material labor
disturbance suffered by COTC Companies, (v) any collective bargaining agreement,
contract or other agreement or understanding  with a labor union or organization
to which any COTC Company has been a party (vi) any union organizing  activities
relating to  employees of any COTC  Company,  (vii) any  incurrence  of debt for
money  borrowed  (other than the  replacement of existing  credit  facilities or
incurred in the  ordinary  course of  business)  or any lease of any property or
assets  outside  the  ordinary  course  of  business,  or  (viii)  any  material
transaction  not in  the  ordinary  course  of  business  consistent  with  past
practice.

     2.9 Absence of Litigation.
         ---------------------

     (a) No COTC  Company is a party to any, and there are no pending or, to the
best of Sellers' knowledge, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory investigations of any
nature against or relating in any way to any COTC Company,  or  challenging  the
validity or propriety of the transactions contemplated by this Agreement.

     (b)  There  is  no  injunction,   order,  judgment,  decree  or  regulatory
restriction  imposed upon, or, to the knowledge of Sellers,  threatened  against
COTC relating in any way to any COTC Company,  or the assets of any COTC Company
which has had or may have a Material Adverse Effect.

     2.10 Employee Benefit Plans.
          ----------------------

     (a) Plans of COTC. Section 2.10(a) of Sellers Disclosure Schedule lists (i)
         -------------
all  employee  benefit  plans  (as  defined  in  Section  3(3)  of the  Employee
Retirement  Income Security Act of 1974, as amended  ("ERISA")),  and all bonus,
stock  option,   stock   purchase,   restricted   stock,   incentive,   deferred
compensation,  retiree  medical  or  life  insurance,  supplemental  retirement,
severance or other benefit  plans,  programs or  arrangements,  and all material
employment,  termination,  severance or other employment contracts or employment
agreements,   with  respect  to  which  any  COTC  Company  has  any  obligation
(collectively, the "Plans"). COTC has furnished or made available to Purchaser a
copy of each  Plan (or a  description  of the  Plans,  if the  Plans  are not in
writing) and a copy of each material  document  prepared in connection with each
such Plan, including,  without limitation,  and where applicable,  a copy of (i)
each trust or other funding arrangement,  (ii) each summary plan description and
summary of material modifications,  (iii) the three most recently filed Internal
Revenue Service ("IRS") Forms 5500 and related schedules, (iv) the most recently
issued  IRS  determination  letter  for each such  Plan and (v) the  three  most
recently  prepared  actuarial and financial  statements in connection  with each
such Plan.

     (b)  Absence of  Certain  Types of Plans.  No member of COTC's  "controlled
          -----------------------------------
group,"  within the  meaning  of  Section  4001(a)(14)  of ERISA,  maintains  or
contributes  to, or within the five (5) years  preceding the Execution  Date has
maintained or contributed to, an employee  pension benefit plan subject to Title
IV of  ERISA  ("Title  IV  Plan").  No  Title IV Plan of any  member  of  COTC's
"controlled  group" is a  "multi-employer  pension  plan" as  defined in Section
3(37) of ERISA.  None of the Plans  obligates  any COTC  Company to pay material
separation,  severance,  termination or similar-type benefits solely as a result
of any transaction contemplated by this Agreement or as a result of a "change in
ownership or control," within the meaning of such term under regulations adopted
pursuant to Section 280G of the Internal  Revenue Code of 1986,  as amended (the
"Code").

     (c)  Compliance  with  Applicable  Law.  Each Plan has been operated in all
          ---------------------------------
material respects in accordance with the requirements of all applicable Laws and
all  persons  who  participate  in the  operation  of such  Plans  and all  Plan
"fiduciaries"  (within  the  meaning  of Section  3(21) of ERISA)  have acted in
accordance  with the  provisions  of all  applicable  Laws,  except  where  such
violations of applicable Laws would not, individually or in the aggregate,  have
a Material  Adverse  Effect.  COTC  Companies  have  performed  all  obligations
required to be performed by any of them under, are not in any respect in default
under or in violation of, and to Sellers' knowledge have not been any default or
violation  by any party to, any Plan,  except where such  failures,  defaults or
violations would not, individually or in the aggregate,  have a Material Adverse
Effect.

     (d)  Qualification  of  Certain  Plans.  Each Plan that is  intended  to be
          ---------------------------------
qualified  under  Section  401(a)  of the  Code or  Section  401(k)  of the Code
(including  each  trust  established  in  connection  with  such a Plan  that is
intended to be exempt from federal  income  taxation under Section 501(a) of the
Code) has received a favorable  determination  letter from the IRS that it is so
qualified,  and  Sellers  are not aware of any fact or event  that has  occurred
since the date of such determination letter from the IRS to adversely affect the
qualified  status of any such Plan. No trust maintained or contributed to by any
COTC Company is intended to be qualified as a voluntary  employees'  beneficiary
association  or is intended  to be exempt from  federal  income  taxation  under
Section 501(c)(9) of the Code.

     (e) Absence of Certain Liabilities and Events. There has been no prohibited
         -----------------------------------------
transaction  (within the meaning of Section 406 of ERISA or Section  4975 of the
Code) with respect to any Plan.  No COTC Company has incurred any  liability for
any  excise  tax  arising  under  Section  4972 or 4980B of the Code that  would
individually  or in the aggregate have a Material  Adverse  Effect,  and, to the
knowledge  of Sellers,  no fact or event exists that could give rise to any such
liability.

     (f) Plan Contributions. All contributions, premiums or payments required to
         ------------------
be made prior to the Closing  Date with respect to any Plan have been made on or
before the Closing Date.

     (g) Funded  Status of Plans and Rights to  Terminate.  With respect to each
         ------------------------------------------------
Title IV Plan,  the present value of all accrued  benefits under each such Plan,
based upon the  actuarial  assumptions  used for  funding  purposes  in the most
recent  actuarial  report  prepared by each such Plan's  actuary with respect to
each such Plan did not exceed,  as of the most recent  valuation  date, the then
current  value of assets of such Plan,  allocable  to each accrued  benefit.  No
provision  of any such Plan,  nor any  amendment  thereto,  would  result in any
limitation on the rights of any COTC Company to terminate  each such Plan and to
receive any residual amounts under Section 4044 of ERISA.

     (h) Employment Contracts. Except as disclosed on Section 2.10(h) of Sellers
         --------------------
Disclosure Schedule,  no COTC Company is a party to any employment,  consulting,
severance  or  other  similar   contracts  with  present  or  former  employees,
consultants,  officers or  directors of any COTC  Company.  No COTC Company is a
party to any collective bargaining agreement.

     (i)  Post-Retirement  Plans. No COTC Company has any arrangement to provide
          ----------------------
post-retirement  medical or life insurance benefits,  with any present or former
director, officer or other employee of any COTC Company.

     2.11 Title to Property.
          -----------------

     (a) All of the real property and all of the personal property owned by COTC
Companies is  identified in Section  2.11(a)-1  and Section  2.11(a)-2 (by those
items or  groups of  similar  items in excess  of  $100,000),  respectively,  of
Sellers Disclosure Schedule.  COTC Companies have good and indefeasible title to
all of their  respective real and personal  properties and assets owned by them,
free and clear of all  mortgage  liens,  and free and clear of all other  liens,
charges and  encumbrances  except liens  listed on Section  2.11(a)-3 of Sellers
Disclosure  Schedule  and except for taxes not yet due and  payable,  pledges to
secure  deposits  and such  minor  imperfections  of  title,  if any,  as do not
materially  detract  from the  value of or  interfere  with the  present  use or
marketability of the property affected thereby.

     (b) All real property leases and material  personal property leases of COTC
Companies are identified in Section 2.11(b) of Sellers Disclosure Schedule.  The
real  property  leases  and all  personal  property  leases  are  valid  and are
enforceable in accordance with their respective terms.

     (c)  Substantially  all  buildings  and  equipment  in regular  use by COTC
Companies  have  been  reasonably  maintained  and are in good  and  serviceable
condition, reasonable wear and tear excepted.

     2.12 Environmental Matters. (a) (i) Each COTC Company and properties owned,
          ---------------------
leased or operated by the COTC  Companies,  is in material  compliance  with all
applicable  Environmental  Laws;  (ii) there is no asbestos or  ureaformaldehyde
materials in or on any property owned,  leased or operated by COTC Companies and
no electric transformers or capacitors, other than those owned by public utility
companies,  on any such  properties  which contain any PCBs;  (iii) there are no
underground or aboveground  storage tanks located on, in or under any properties
currently or formerly owned or operated by COTC  Companies;  (iv) COTC Companies
have not received any written notice from any governmental agency or third party
notifying COTC Companies of any Environmental Claim (as defined herein);  (v) no
COTC  Company has been  notified by any  governmental  agency or any third party
that a COTC Company may be a  potentially  responsible  party for  environmental
contamination  or any Release  (as defined  below) of  Hazardous  Materials  (as
defined  below);  (vi) COTC  Companies have obtained and each holds all material
Environmental   Permits,  (as  defined  below)  relating  to  the  ownership  or
operations of COTC Companies;  (vii) each COTC Company is in material compliance
with all  terms,  conditions  and  provisions  of all  applicable  Environmental
Permits;  (viii) no Releases of Hazardous  Materials have occurred at, from, in,
on, to or under any property  owned,  operated or leased by COTC  Companies that
violate any Environmental Law, and no Hazardous  Materials are present in, on or
about or  migrating  to or from any such  property  that  would  give rise to an
Environmental  Claim  by a third  party  against  COTC  Companies;  (ix) no COTC
Company has nor to Seller's knowledge any predecessors  thereof have transported
or arranged for the treatment,  storage, handling, disposal or transportation of
any Hazardous  Material to any location  which could result in an  Environmental
Claim  against or liability to COTC  Companies;  and (x) no COTC Company has any
environmental  report  or  statement  prepared  by or on  its  behalf  or in its
possession or control relating to any of its present or former properties.

     (b) For purposes of this Section:

     "Environmental  Claims" shall mean any and all administrative,  regulatory,
      ---------------------
judicial  or  private  actions,   suits,   demands,   notices,   claims,  liens,
investigations,  injunctions  or  similar  proceedings  that may  result in COTC
Companies being liable for: (i) a violation of any  Environmental  Law; (ii) the
release and ordered  remediation of any Hazardous  Material,  including  without
limitation,  any  investigation,   monitoring  abatements,   removal,  remedial,
corrective  or other  response  action in  connection  with the  release  of any
Hazardous   Material  or  order  or  notice  of  liability  or  violation  of  a
governmental  authority  or  Environmental  Law;  or (iii) any actual or alleged
damage, injury, threat or harm to the environment.

     "Environmental  Law" shall  mean any and all  federal  and state  civil and
      ------------------
criminal  laws,  statutes,   ordinances,   orders,   permits,  codes,  rules  or
regulations  of  any  governmental  or  regulatory  authority  relating  to  the
protection of health,  the  environment,  natural  resources,  worker health and
safety and/or  governing  the handling,  use,  generation,  treatment,  storage,
transportation,  disposal, manufacture,  distribution,  formulation,  packaging,
labeling,  or Release of Hazardous Materials,  including but not limited to: the
Clean  Air Act,  42  U.S.C.ss.7401  et  seq.;  the  Comprehensive  Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. ss.9601 et seq.; the
Federal Water  Pollution  Control Act, 33  U.S.C.ss.1251  et seq.; the Hazardous
Material  Transportation Act 49 U.S.C.ss.1801 et seq.; the Federal  Insecticide,
Fungicide and Rodenticide Act 7 U.S.C.ss.136 et seq.; the Resource  Conservation
and  Recovery  Act of  1976  ("RCRA"),  42  U.S.C.ss.6901  et  seq.;  the  Toxic
Substances  Control Act, 15  U.S.C.ss.2601  et seq.; the  Occupational  Safety &
Health Act of 1970, 29  U.S.C.ss.651  et seq.; the Oil Pollution Act of 1990, 33
U.S.C.ss.2701  et seq.;  and the state  analogies  thereto,  all as  amended  or
superceded from time to time, on or before, but not after, the date of Closing.

     "Environmental Permits" shall mean any action,  approval,  consent, waiver,
      ---------------------
exemption,  variance, franchise, order, permit, authorization,  right or license
issued from any federal,  state or local  governmental body, agency or authority
relating to the protection of health, the environment or natural resources.

     "Hazardous  Materials"  shall  mean  any  and  all  chemicals,  pollutants,
      --------------------
contaminants, wastes, toxic substances, compounds, products, solid, liquid, gas,
petroleum, asbestos, asbestos-containing materials, polychlorinated biphenyls or
other regulated substances or materials which are hazardous,  toxic or otherwise
harmful to the environment.

     "Release" shall mean any spilling,  leaking,  pumping,  pouring,  emitting,
      -------
emptying, discharging,  injecting, escaping, leaching, dumping or disposing of a
Hazardous Material into the environment.

     2.13 Absence of  Agreements.  No COTC Company is a party to any  agreement,
          ----------------------
order,  directive,  memorandum of understanding or similar  arrangement with any
governmental  authority  that  materially  restricts the conduct of its business
(other than  restrictions  imposed by the PUC or the FCC on telephone  companies
generally  or as imposed on COTC  Companies  and which  have been  disclosed  to
Purchaser),  nor has  any  COTC  Company  been  advised  that  any  governmental
authority  is  contemplating  issuing  or  requesting  (or  is  considering  the
appropriateness of issuing or requesting) any such agreement,  order, directive,
memorandum of understanding or similar arrangement.

     2.14 Taxes.
          -----

     (a)  Section  2.14(a) of Sellers  Disclosure  Schedule  identifies  the tax
classification  of each COTC  Company.  COTC  Companies  have  timely  filed all
material  Tax Returns (as  defined  below)  required to be filed by them or will
duly and timely file  (including  any extension  periods) such Tax Returns,  and
COTC  Companies have timely paid and discharged all Taxes (as defined below) due
in  connection  with or with  respect to the filing of such Tax Returns and have
timely paid all other Taxes as are due,  except such as are being  contested (as
set forth as Section  2.14(a) of Sellers  Disclosure  Schedule) in good faith by
appropriate proceedings and with respect to which the applicable COTC Company is
maintaining  reserves  adequate for their  payment.  The liability for Taxes set
forth on each such Tax  Return  adequately  reflects  the Taxes  required  to be
reflected on such Tax Return.  For purposes of this Agreement,  "Tax" or "Taxes"
shall mean taxes, charges, fees, levies, and other governmental  assessments and
impositions  of any  kind,  payable  to any  federal,  state,  local or  foreign
governmental   entity  or  taxing  authority  or  agency,   including,   without
limitation,  (i) income,  franchise,  profits,  gross  receipts,  estimated,  ad
valorem,  value added, sales, use, service,  real or personal property,  capital
stock, license, payroll, withholding,  disability,  employment, social security,
workers compensation, unemployment compensation, utility, severance, production,
excise, stamp, occupation, premiums, windfall profits, transfer and gains taxes,
(ii) customs duties,  imposts,  charges,  levies or other similar assessments of
any kind,  and (iii)  interest,  penalties  and  additions  to tax imposed  with
respect thereto; and "Tax Returns" shall mean returns,  reports, and information
statements  with respect to Taxes required to be filed with the IRS or any other
governmental  entity  or  taxing  authority  or  agency,  domestic  or  foreign,
including, without limitation,  consolidated,  combined and unitary tax returns.
Neither the IRS nor any other governmental  entity or taxing authority or agency
has (i) delivered a written notice,  or (ii) to the knowledge of the Sellers had
personal   contact  with  any  of  them,   asserting,   either  through  audits,
administrative  proceedings  or court  proceedings,  any deficiency or claim for
additional  Taxes.  No COTC  Company  has  granted  any waiver of any statute of
limitations with respect to, or any extension of a period for the assessment of,
any Tax.  Except for statutory liens for current taxes not yet due, there are no
tax liens on any assets of COTC Companies. No COTC Company has received a ruling
or entered into an agreement  with the IRS or any other  taxing  authority  that
would have a Material Adverse Effect.  Except as disclosed in Section 2.14(a) of
Sellers Disclosure Schedule,  no agreements relating to allocating or sharing of
Taxes exist among the COTC Companies.

     (b) The Balance Sheet includes  sufficient accruals for Taxes in accordance
with GAAP in all  material  respects  with  respect  to any period for which Tax
Returns for COTC  Companies  were not filed or for which Taxes were not then due
and owing.

     (c) True and  complete  copies of all  income  tax  returns,  and all other
material  Tax  Returns  for the last three (3) years and all  written  tax audit
reports from any governmental authority with respect to COTC Companies have been
furnished to the Purchaser.  Any  deficiencies  proposed in tax audits have been
duly and fully paid,  settled,  or reserved against in the Financial  Statements
and  the  Section  5.1(i)  Financial  Statements.  Section  2.14(c)  of  Sellers
Disclosure  Schedule  identifies all Tax audits which a governmental  agency has
notified in writing COTC  Companies  during the  five-year  period ending on the
Execution Date with respect to (i) income Taxes, and (ii) all other material Tax
Returns.

     (d) No election under Code Section 338 (or any  predecessor  provision) has
been made or filed by or with  respect  to any COTC  Company.  No consent to the
application  of  former  Section  341(f)(2)  of the  Code  (or  any  predecessor
provision)  has been made or filed by or with respect to any COTC Company or any
of its  assets  or  properties.  None of the  assets or  properties  of any COTC
Company is an asset or  property  that COTC is or will be  required  to treat as
being  (i) owned by any other  person  pursuant  to the  provisions  of  Section
168(f)(8) of the Internal  Revenue Code of 1954, as amended and in effect before
the  enactment of the Tax Reform Act of 1986,  or (ii)  tax-exempt  use property
within the  meaning  of  Section  168(h)(1)  of the Code.  No closing  agreement
pursuant  to  Section  7121 of the Code (or any  predecessor  provision)  or any
similar provision of any state,  local, or, if applicable,  foreign Law has been
entered  into by or with  respect  to any COTC  Company  or any of its assets or
properties.

     (e) No COTC Company has agreed to make any  adjustment  pursuant to Section
481(a) of the Code (or any predecessor provision) by reason of any change in any
tax  accounting  method  of any  COTC  Company,  and no  COTC  Company  has  any
application pending with any governmental  authority  requesting  permission for
any changes in any tax accounting  method. To the knowledge of Sellers,  the IRS
has not proposed any such adjustment or change in accounting method.

     (f) COTC  Companies  have withheld and paid all Taxes required to have been
withheld and paid in connection  with any amounts paid or owing to any employee,
independent contractor or other third party.

     (g) No audit is pending or, to the  knowledge of Sellers,  threatened  with
respect to any Taxes due from,  or Tax Return  filed by or relating to, any COTC
Company.

     (h) No COTC Company is party to any  agreement,  contract,  or  arrangement
that would  require any COTC Company to make any gross-up  payments with respect
to any Taxes or otherwise  indemnify or hold  harmless any employee with respect
to Taxes.

     (i) COTC Companies have no deferred  intercompany  gains or losses (as such
term is defined in Treas. Reg. ss. 1.1502-13).

     2.15 Insurance.  Section 2.15 of the Sellers Disclosure  Schedule lists all
          ---------
material  policies of insurance of COTC Companies  currently in effect.  No COTC
Company  has any  liability  for  unpaid  premiums  or premium  adjustments  not
properly  reflected  on  the  Financial  Statements  or on  the  Section  5.1(h)
Financial Statements.

     2.16  Broker/Expenses.  Except as  disclosed  in  Section  2.16 of  Sellers
           ---------------
Disclosure Schedule,  no COTC Company has paid, or agreed to pay, any brokerage,
finder's,  consultant's,  or other  fee or  commission  in  connection  with the
transactions contemplated by this Agreement.

     2.17  Material  Adverse  Effect.  Since  June 30,  2003,  there has been no
           -------------------------
Material Adverse Effect with respect to any Selling Party.

     2.18 Material Contracts/Licenses.
          ---------------------------

     (a) Each Material  Contract of COTC  Companies as of the Execution  Date is
identified in Schedule  2.18(a) of Sellers  Disclosure  Schedule.  Except as set
forth in Schedule 2.18(a) of Sellers Disclosure  Schedule,  no COTC Company is a
party to or obligated under any Material  Contract that is not terminable by the
appropriate COTC Companies without additional payment or penalty within 90 days.
Each  Material  Contract is in full force and effect,  and  constitutes a legal,
valid,  and  binding  obligation  of the  applicable  COTC  Company,  and to the
knowledge of Sellers each other party to such  Material  Contracts in accordance
with their  terms,  except as such  enforcement  may be  limited  by  applicable
bankruptcy, insolvency, moratorium, or similar laws affecting the enforcement of
creditors' rights generally,  or by general  principles of equity (regardless of
whether such  enforceability is considered in a proceeding in law or in equity).
No COTC Company and to the  knowledge of Sellers any other party to any Material
Contract is in  violation or breach of or default  under any  Material  Contract
(with or without notice or lapse of time or both).  For purposes of this Section
2.18,  the term  "Material  Contract"  shall  include any  agreement,  contract,
instrument or understanding involving the payment or receipt by any COTC Company
of $50,000  ($100,000 in the case of billing and collecting  agreements) or more
per year or $100,000 ($200,000 in the case of billing and collecting agreements)
or more in the aggregate through the life of the contract.

     (b)  Section  2.18(b) of Sellers  Disclosure  Schedule  contains a true and
complete  list and  brief  description  of all  franchises,  permits,  licenses,
approvals,  and  other  authorizations  that  are  necessary  for the  business,
operations, and affairs of COTC Companies as being conducted as of the Execution
Date. COTC Companies own or validly hold each such franchise,  permit,  license,
approval,  and  other  authorization.  Each  such  franchise,  permit,  license,
approval,  and other authorization is valid, in good standing, and in full force
and effect.  To the knowledge of Sellers,  no basis exists for the  termination,
suspension,  restriction, or limitation of any such franchise,  permit, license,
approval, or other authorization.

     2.19 Intangible  Property.  COTC Companies own or have the right to use (by
          --------------------
way of license or lease) the  material  items of  intangible  personal  property
(including  inventions,   processes,   designs,   formulas,   licenses,  royalty
arrangements,  trade secrets, know-how and proprietary techniques (collectively,
"Intellectual   Property"))  necessary  for  the  conduct  of  their  respective
businesses,  which are listed on Section  2.19 of Sellers  Disclosure  Schedule.
COTC  Companies  have the right and  authority to use each item of  Intellectual
Property,  and to the  knowledge of Sellers,  such use does not  conflict  with,
infringe upon or violate any patent,  trademark,  trade name, trademark or trade
name registration,  copyright, copyright registration or any pending application
relating thereto of any other person, firm or corporation.

     2.20 State  Takeover  Statutes;  Absence  of  Supermajority  Provision.  No
          -----------------------------------------------------------------
provision  of the  California  General  Corporation  Law  or the  Organizational
Documents or the terms of any rights plan or other takeover defense mechanism of
COTC would, directly or indirectly, restrict or impair the ability of any Seller
or Purchaser to consummate the  transactions  contemplated by this Agreement nor
will any such  provisions  restrict  or impair the ability of the  Purchaser  to
exercise  the same rights to vote or  otherwise  exercise the same rights as the
other or former stockholders of COTC in the event that Purchaser were to acquire
securities of COTC.

     2.21 Easements;  Rights of Way. Section 2.21 of Sellers Disclosure Schedule
          -------------------------
identifies  (i) each  parcel of leased  real  property,  and (ii) each  material
easement and license to use real  property,  that is required for its  business,
operations, and affairs as being conducted by COTC Companies as of the Execution
Date.  COTC  Companies have a valid interest in or right to use each such lease,
easement  and license  according  to its terms.  Each such lease,  easement  and
license is in full force and effect and constitutes a legal,  valid, and binding
obligation of the applicable COTC Company and, to the knowledge of Sellers, each
other party thereto,  enforceable against the parties thereto in accordance with
the terms  thereof  except as such  enforcement  may be  limited  by  applicable
bankruptcy, insolvency, moratorium, or similar laws affecting the enforcement of
creditors' rights generally,  or by general  principles of equity (regardless of
whether such  enforceability is considered in a proceeding in law or in equity).
There have been no  disputes  concerning  material  easements  in which any COTC
Company has been  involved  during the last five (5) years.  To the knowledge of
Sellers,  there are no events or circumstances existing as of the Execution Date
that would  materially and adversely  affect the rights of way of COTC Companies
for its  telephone  and  cables and lines  with  respect  to the  conduct of its
business as presently conducted.

     2.22 Transactions with Affiliates. Since December 31, 2000, no COTC Company
          ----------------------------
has made any  payments  or  distributions  to any  present  or former  director,
officer or person  holding in excess of 1% of outstanding  common stock,  of any
COTC Company,  or any affiliate of any such person,  other than normal directors
fees,  normal  retirement  benefits  under the  Plans,  normal  salary and other
employee  compensation,  and normal  dividends  and  dividends  disclosed in the
audited  financial  statements,  and  there  have  been  and are no  outstanding
liabilities or contracts between or among the COTC Companies and any such person
or affiliate of such person.

     2.23 Disclosure.
          ----------

     (a) No  representation  or  warranty  of Sellers in this  Agreement  and no
statement  in the Sellers  Disclosure  Schedule  omits to state a material  fact
necessary  to  make  the  statements   herein  or  therein,   in  light  of  the
circumstances in which they were made, not misleading.

     (b) No notice of the Sellers  given  pursuant to Sections  5.4 and 5.9 will
contain any untrue  statement or omit to state a material fact necessary to make
the statements  therein or in this Agreement,  in light of the  circumstances in
which they were made, not misleading.

                                  Article III.
                     SELLERS' REPRESENTATIONS AND WARRANTIES

     Except as set forth in Sellers Disclosure  Schedule delivered by Sellers to
the Purchaser prior to the execution of this Agreement, which Sellers Disclosure
Schedule  shall  reference  disclosure  items by  section,  each of the  Sellers
represents  and warrants to the Purchaser with respect to himself,  herself,  or
itself and not with respect to the other Sellers that:

     3.1 Authority. Each of the Sellers has the requisite power and authority to
         ---------
execute  and deliver  this  Agreement,  to perform  his,  her or its  respective
obligations  hereunder and to consummate the transactions  contemplated  hereby.
The  execution  and  delivery of this  Agreement  by each of the Sellers and the
consummation by him, her or it of the transactions contemplated hereby have been
duly and validly  authorized by all necessary action and no other proceedings on
the part of each of the Sellers is necessary to authorize  this  Agreement or to
consummate the transactions so contemplated hereby. This Agreement has been duly
executed and  delivered by, and  constitutes  a valid and binding  obligation of
each of the Sellers and, assuming due  authorization,  execution and delivery by
the Company and the  Purchaser,  is  enforceable  against each of the Sellers in
accordance  with its  terms,  except as  enforcement  may be  limited by general
principles of equity whether  applied in a court of law or a court of equity and
by  bankruptcy,  insolvency  and similar laws  affecting  creditors'  rights and
remedies generally.

     3.2 No Conflict; Required Filings and Consents.
         ------------------------------------------

     (a) The execution  and delivery of this  Agreement by each Seller does not,
and the performance of this Agreement and the transactions  contemplated  hereby
by each of the  Sellers  shall  not,  (i)  conflict  with or  violate  any  Laws
applicable  to such  Seller  or by which  such  Seller  or any of such  Seller's
respective  properties is bound or affected,  or (ii) result in any breach of or
constitute  a default  (or an event  that  with  notice or lapse of time or both
would  become a default)  under,  or give to others  any rights of  termination,
amendment,  acceleration,  cancellation  of, or  result  in  rights of  payment,
compensation  or other rights or the creation of a lien or encumbrance on any of
the properties or assets of such Seller pursuant to, any note,  bond,  mortgage,
indenture,  contract,  agreement,  lease,  license,  permit,  franchise or other
instrument or obligation to which such Seller is a party or by which such Seller
or any of such Seller's respective properties is bound or affected.

     (b) Except for the Government consents,  the execution and delivery of this
Agreement by each Seller does not, and the performance of this Agreement by such
Seller shall not, require any consent, approval,  authorization or permit of, or
filing with or notification to any  governmental or regulatory  authority except
(i) the  consents or approvals of the PUC or the FCC, and (ii) where the failure
to give notice,  to file,  or to obtain any  authorization,  consent or approval
would have a Material Adverse Effect.

     3.3 Title to Stock.  Each  Seller  owns  outright  the  number of shares of
         --------------
Common  Stock and  Preferred  Stock set forth  opposite  such  Seller's  name on
Schedule A hereto,  free and clear of all encumbrances,  security  interests and
charges of any kind. There are no options, warrants or other rights, agreements,
arrangements  or  commitments  of any character,  including  without  limitation
voting  agreements or  arrangements  relating to any of such Seller's  Purchased
Stock.

     3.4 Investment Purpose.  Each Seller is acquiring the Notes for his, her or
         ------------------
its own account as  principal  for  investment  only and not with a present view
towards  the public  sale or  distribution  thereof,  except  pursuant  to sales
exempted from  registration  under the  Securities  Act of 1933, as amended (the
"1933 Act").

     3.5 Accredited Investor Status. Each Seller is an "accredited  investor" as
         --------------------------
that term is defined in Rule 501(a) of  Regulation  D and has such  business and
financial experience (either alone or with his, her or its financial advisor) as
is required to give him,  her or its the capacity to protect his, her or its own
interests in connection with the decision to receive the Notes.

     3.6  Reliance on  Exemptions.  Each Seller  understands  that the Notes are
          -----------------------
being  offered  and sold to it in reliance  upon  specific  exemptions  from the
registration requirements of United States federal and state securities laws and
that  Purchaser  and Parent are relying upon the truth and accuracy of, and such
Seller's   compliance  with,  the   representations,   warranties,   agreements,
covenants,  acknowledgments  and understandings of such Seller set forth in this
Article III in order to determine the  availability  of such  exemptions and the
eligibility of such Seller to acquire the Notes.

     3.7 Information. Each Seller has been furnished with all materials relating
         -----------
to the business,  finances and  operations of Purchaser and Parent and materials
relating to the Notes that have been  requested by such Seller.  Such Seller has
been afforded the  opportunity  to ask questions of Purchaser and Parent and has
received  what such  Seller  believes  to be  satisfactory  answers  to any such
inquiries.  Neither such  inquiries  nor any other due  diligence  investigation
conducted by such Seller or any of its advisors or representatives shall modify,
amend  or  affect  such   Seller's   right  to  rely  on   Purchasing   Parties'
representations and warranties contained in Article IV.

     3.8 No Governmental  Review.  Each Seller understands that no United States
        ------------------------
federal  or state  agency or any other  government  or  governmental  agency has
passed upon or made any recommendation or endorsement of the Notes.

     3.9 Transfer or Resale.  Each Seller  understands that (i) no public market
         ------------------
now exists for the Notes and it is very  unlikely that a public market will ever
exist for the Notes,  (ii) the Notes have not been and are not being  registered
under  the 1933 Act or any  applicable  state  securities  laws,  and may not be
transferred  unless  (a)  subsequently  included  in an  effective  registration
statement  thereunder,  or (b) such Seller shall have delivered to the Purchaser
an opinion of counsel  (which  opinion shall be reasonably  satisfactory  to the
Purchaser) to the effect that the Notes to be sold or transferred may be sold or
transferred  pursuant to an exemption from such registration;  and (iii) neither
the  Purchaser  nor any other person is under any  obligation  to register  such
Notes  under the 1933 Act or any  state  securities  laws or to comply  with the
terms and conditions of any exemption thereunder.

     3.10  Legends.   Each  Seller  understands  that  the  Notes  will  bear  a
           -------
restrictive legend in substantially the form set forth on the face of the Notes.

                                  Article IV.
            REPRESENTATIONS AND WARRANTIES OF THE PURCHASING PARTIES

     Except as set forth in the disclosure  schedule delivered by the Purchasing
Parties to Sellers  prior to the  execution of this  Agreement  (the  "Purchaser
Disclosure  Schedule"),  which  Purchaser  Disclosure  Schedule shall  reference
disclosure  items  by  section,   Purchasing  Parties,  jointly  and  severally,
represent and warrant to the Selling Parties that:

     4.1 Organization and Qualification.
         ------------------------------

     (a) Each of the Purchasing Parties is a corporation validly existing and in
good standing  under the laws of the state of Delaware.  Each of the  Purchasing
Parties has the requisite  corporate power and authority necessary to own, lease
and  operate  its  properties  and to  carry  on  its  business  as it has  been
conducted.

     (b)  Each  of  the  Purchasing  Parties  is  duly  qualified  as a  foreign
corporation to do business,  and is in good standing, in each jurisdiction where
the character of its properties owned, leased or operated by it or the nature of
its activities makes such qualification  necessary,  except for such failures to
be so duly  qualified or licensed and in good  standing  that would not,  either
individually or in the aggregate, have a Material Adverse Effect.

     4.2 Authority.  Purchasing  Parties have the requisite  corporate power and
         ---------
authority  to execute and deliver  this  Agreement  and  Exhibits and to perform
their  respective  obligations  hereunder  and to  consummate  the  transactions
contemplated  hereby.  The execution and delivery of this Agreement and Exhibits
by the Purchasing  Parties and the consummation by the Purchasing Parties of the
transactions  contemplated  hereby have been duly and validly  authorized by all
necessary  corporate  action on the part of the Purchasing  Parties and no other
corporate  proceedings  on the part of the  Purchasing  Parties are necessary to
authorize this Agreement and the Exhibits or to consummate the  transactions  so
contemplated  thereby. This Agreement has been and as of the Closing Date all of
the Exhibits will be duly and validly  executed and delivered by the  Purchasing
Parties and  constitute  the valid and  binding  obligations  of the  Purchasing
Parties  and  assuming  the due  authorization,  execution  and  delivery by the
Selling Parties,  are enforceable  against the Purchasing  Parties in accordance
with their terms,  except as enforcement may be limited by general principles of
equity,  whether  applied  in a  court  of  law or a  court  of  equity,  and by
bankruptcy, insolvency and similar laws affecting creditors' rights and remedies
generally.

     4.3 No Conflict; Required Filings and Consents.
         ------------------------------------------

     (a) The execution and delivery of this Agreement and the Exhibits hereto by
the Purchasing  Parties does not, and the  performance of this Agreement and the
Exhibits by the  Purchasing  Parties shall not, (i) conflict with or violate the
articles of  incorporation  or bylaws of the Purchasing  Parties,  (ii) conflict
with or violate any Laws  applicable to any Purchasing  Party or by which any of
their respective  properties is bound or affected, or (iii) result in any breach
of 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, or  result in right of  payment,
compensation  or other rights or in the creation of a lien or encumbrance on any
of the  properties or assets of the  Purchasing  Parties  pursuant to, any note,
bond,  mortgage,   indenture,   contract,  agreement,  lease,  license,  permit,
franchise  or other  instrument  or  obligation  to which any of the  Purchasing
Parties  is a party or by which any of the  Purchasing  Parties  or any of their
respective properties is bound or affected.

     (b) The  execution  and delivery of this  Agreement and the Exhibits by the
Purchasing  Parties  do not,  and the  performance  of  this  Agreement  and the
Exhibits by the  Purchasing  Parties shall not,  require any consent,  approval,
authorization  or permit of, or filing with or notification to, any governmental
or regulatory authority,  domestic or foreign,  except the consents or approvals
of the PUC or FCC.

     4.4  Compliance;  Permits.  No Purchasing  Party is in conflict with, or in
          --------------------
default or violation  of, (i) any Law  applicable to them or by which its or any
of their  respective  properties is bound or affected,  or (ii) any note,  bond,
mortgage,  indenture,  contract, agreement, lease, license, permit, franchise or
other  instrument or obligation to which any  Purchasing  Party is a party or by
which any Purchasing Party or its or any of their respective properties is bound
or affected.

     4.5 Absence of Certain  Changes or Events.  Since June 30, 2003,  there has
         -------------------------------------
not been (i) any change in the  financial  condition,  results of  operations or
business  of  any   Purchasing   Party;   (ii)  any  material   decline  in  the
creditworthiness  (including,  without limitation the ability to borrow,  become
obligated  on or  guaranty  any  debt) or the  debt  repayment  capacity  of any
Purchaser  Party;  (iii)  the  maturity  of any  debt  with any  lenders  of any
Purchasing  Party  (or any debt with any  lender  guaranteed  by any  Purchasing
Party) that has not been paid in full at  maturity;  or (iv) the  occurrence  or
nonoccurrence of any fact, event or circumstance  affecting any Purchasing Party
which has or may reasonably be expected to have a Material Adverse Effect on any
of the Purchasing Parties.

     4.6 Absence of Litigation.
         ---------------------

     (a) Except as disclosed in Parent's 1934 Act filings,  no Purchasing  Party
is a party to any,  and  there  are no  pending  or,  to the best of  Purchasing
Parties'  knowledge,  threatened,  legal,  administrative,   arbitral  or  other
proceedings, claims, actions or governmental or regulatory investigations of any
nature  against or relating in any way to any Purchasing  Party,  or challenging
the validity or propriety of the transactions contemplated by this Agreement.

     (b)  There  is  no  injunction,   order,  judgment,  decree  or  regulatory
restriction imposed upon, or, to the knowledge of Purchasing Parties, threatened
against any Purchasing Party relating in any way to any Purchasing Party, or the
assets of any  Purchasing  Party  which has had or may have a  Material  Adverse
Effect on any of the Purchasing Parties.

     4.7 Investment Purpose.  Purchaser is acquiring the Purchased Stock for its
         ------------------
own account as principal for investment only and not with a present view towards
the public sale or distribution thereof,  except pursuant to sales exempted from
registration under the 1933 Act.

     4.8 Accredited Investor Status. Purchaser is an accredited investor and has
         --------------------------
such business and financial experience as is required to give it the capacity to
protect  its own  interests  in  connection  with the  decision  to receive  the
Purchased Stock.

     4.9 Information.  Purchaser has been furnished with all materials  relating
         -----------
to the  business,  finances  and  operations  of COTC  Companies  and  materials
relating to the Purchased Stock that have been requested by Purchaser. Purchaser
has been afforded the  opportunity  to ask questions of Sellers and COTC and has
received  what  Purchaser  believes  to be  satisfactory  answers  to  any  such
inquiries.  Neither such  inquiries  nor any other due  diligence  investigation
conducted by Purchaser or any of its advisors or  representatives  shall modify,
amend or affect Purchaser's right to rely on Sellers' and COTC's representations
and warranties contained in Articles II and III.

     4.10 SEC Filings.
          -----------

     (a) Parent has filed all reports,  schedules,  forms,  statements and other
documents  (the  "Parent  SEC  Documents")  required  to be filed by it with the
Securities and Exchange Commission (the "SEC") since January 1, 1999.

     (b) As of its filing date,  each Parent SEC Document  filed pursuant to the
Securities  Exchange  Act of 1934 (the  "1934  Act")  complied  in all  material
respects  with the  requirements  of the 1934 Act and did not contain any untrue
statement  of a material  fact or omit to state any material  fact  necessary in
order to make the statements  therein, in light of the circumstances under which
they were made, not misleading.

     (c) Each Parent SEC Document that is a registration  statement,  as amended
or supplemented,  if applicable, filed pursuant to the 1933 Act, complied in all
material  respects with the requirements of the 1933 Act and as of the date such
registration  statement or amendment became effective did 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.

     4.11  Broker/Expenses.  No Purchasing Party has paid, or agreed to pay, any
           ---------------
brokerage, finder's, consultant's, or other fee or commission in connection with
the transactions contemplated by this Agreement.

     4.12  Employees.  It is the  intent  of the  Purchasing  Parties  to  offer
           ---------
continued   employment   to  COTC   Company's   non-shareholder   employees   on
substantially  the same terms as they have with COTC Companies as of the Closing
Date.

     4.13 Disclosure.
          ----------

     (a) No  representation  or  warranty  of the  Purchasing  Parties  in  this
Agreement and no statement in the Purchaser Disclosure Schedule omits to state a
material fact  necessary to make the statements  herein or therein,  in light of
the circumstances in which they were made, not misleading.

     (b) No notice of the Purchasing  Parties given pursuant to Sections 5.4 and
5.9 will contain any untrue statement or omit to state a material fact necessary
to  make  the  statements  therein  or  in  this  Agreement,  in  light  of  the
circumstances in which they were made, not misleading

                                   Article V.
                              PRE-CLOSING COVENANTS

     5.1 Affirmative  Covenants of Selling Parties.  Each of the Selling Parties
         -----------------------------------------
covenants and agrees with the Purchaser  that from and after the Execution  Date
and prior to the Closing Date, unless the prior written consent (which shall not
be  unreasonably  withheld) of the Purchaser shall have been obtained and except
as  otherwise  contemplated  herein,  each  Seller will cause COTC and each COTC
Subsidiary to:

     (a) operate its business only in the ordinary  course  consistent with past
practices or as described in Section 5.1(a) of Sellers Disclosure Schedule;

     (b)  use   reasonable   efforts  to:  (i)  preserve   intact  its  business
organization and assets,  (ii) maintain its rights and franchises,  (iii) retain
the  services  of  its  officers  and  key  employees,  and  (iv)  maintain  its
relationships with and the goodwill of regulators and customers;

     (c) maintain and keep its  properties in as good repair and condition as at
present, ordinary wear and tear excepted;

     (d) keep in full force and effect  insurance and bonds comparable in amount
and scope of coverage to that now maintained by it;

     (e)  perform  in all  material  respects  all  obligations  required  to be
performed by it under all material contracts,  leases, and documents relating to
or affecting its assets, properties, and business;

     (f) maintain in good standing all material franchises,  permits,  licenses,
approvals and other authorizations owned or held by COTC Companies;

     (g) comply in all material  respects with all material laws and regulations
applicable to the business operations and affairs of COTC Companies;

     (h) provide to Purchaser, COTC's monthly financial statements promptly upon
their completion; and

     (i) notify  Purchaser  in writing of any power of  attorney  granted by any
COTC Company  concerning  any Tax matter that will be in force as of the Closing
Date.

     5.2  Negative   Covenants  of  Selling  Parties.   Except  as  specifically
          ------------------------------------------
contemplated by this Agreement, from the Execution Date and prior to the Closing
Date,  each of the Sellers shall not permit any COTC Company to do,  without the
prior written  consent (which consent may not be  unreasonably  withheld) of the
Purchaser, any of the following:

     (a) except as required  by  applicable  Laws or to  maintain  qualification
pursuant  to the Code or as set forth in Section  5.2(a) on  Sellers  Disclosure
Schedule,   adopt,  amend,  renew  or  terminate  any  Plan  or  any  agreement,
arrangement,  plan or policy  between  any COTC  Company  and one or more of its
current or former  directors,  officers or  employees,  or except as required by
applicable  Law,  increase  in any  manner  the base  salary,  bonus,  incentive
compensation or fringe benefits of any director, officer or employee (other than
normal and usual wage and salary increases for non-Seller  employees) or pay any
benefit not required by any plan or  agreement as in effect as of the  Execution
Date;

     (b) except as  provided in this  Article V or in Section  5.2(b) of Sellers
Disclosure  Schedule,  declare  or pay  any  dividend  on,  or  make  any  other
distribution in respect of, its outstanding shares of capital stock,  except for
dividends by a COTC Subsidiary to COTC;

     (c) except as provided in Section  5.2(c) of Sellers  Disclosure  Schedule,
(i) redeem, purchase or otherwise acquire any shares of its capital stock or any
securities or obligations convertible into or exchangeable for any shares of its
capital stock, or any options,  warrants,  conversion or other rights to acquire
any shares of its capital  stock or any such  securities  or  obligations;  (ii)
merge with or into any other corporation,  permit any other corporation to merge
into it or consolidate with any other corporation,  or effect any reorganization
or recapitalization; (iii) purchase or otherwise acquire any substantial portion
of the  assets,  or more than 5% of any class of stock,  of any  corporation  or
other business other than in the ordinary course of business and consistent with
past  practice;  (iv)  liquidate,  sell,  dispose of, or encumber  any assets or
acquire any assets, other than in the ordinary course of its business consistent
with past practice; or (v) split, combine or reclassify any of its capital stock
or issue or authorize or propose the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock;

     (d) issue,  deliver,  award,  grant or sell,  or  authorize  or propose the
issuance,  delivery, award, grant or sale of, any shares of any class of capital
stock of any COTC  Company  (including  shares held in  treasury) or any rights,
warrants or options to acquire, any such shares;

     (e) directly or  indirectly  through any  director,  officer,  shareholder,
employee, agent, adviser or otherwise,  orally or in writing, initiate, solicit,
encourage,  respond to, discuss, negotiate or accept any inquiries,  indications
of interest,  proposals or offers from, or make any  inquiries,  indications  of
interest,  proposals,  offers, counter proposals or counteroffers to, or furnish
any  information  to, any other  person with  respect to (i) an  acquisition  of
shares of any COTC Company, (ii) additional equity or convertible debt financing
for any COTC Company,  (iii) an acquisition of all or a substantial  part of the
assets  of any COTC  Company  (other  than the sale of the Cal One  Interest  as
permitted under Section 5.13(e)),  or (iv) a merger,  consolidation or any other
transaction  which would  result in a change in control in any COTC Company or a
substantial  change in the business of any COTC  Company,  or (v) provide  third
parties  (other  than  governmental  agencies  regulating  its  business  or its
consultants  and advisors) with any nonpublic  information  relating to any such
inquiry or proposal;

     (f) propose or adopt any amendments to the Organizational  Documents in any
way adverse to the Purchaser;

     (g) change any of its methods of financial accounting for any material item
in effect at June 30,  2003,  or change in any  material  respect its methods of
reporting  income or  deductions  for  federal  income tax  purposes  from those
employed in the  preparation  of its federal  income tax returns for the taxable
year ended December 31, 2002, except, in each case, as may be required by Law or
GAAP; (h) change in any material  respect any material  policies  concerning the
business  or  operations  of the COTC  Companies  (except  as  required  by Law)
including,  without limitation taking any action to: (i) sell, assign, transfer,
pledge,  mortgage or  otherwise  encumber  any of its  assets,  except for those
(other than pledges,  mortgages or encumbrances)  incurred in individual amounts
of less than $25,000 incurred in the ordinary course of business consistent with
past practice subject to an aggregate  maximum of $200,000 or refinancing of the
outstanding  principal balance of existing debt; (ii) make any investment except
in Permitted Investments with a maturity of six months or less; (iii) enter into
any agreement  with respect to any  acquisition  of or acquire  assets except in
individual  amounts of less than  $10,000  incurred  in the  ordinary  course of
business  consistent  with past  practice  subject  to an  aggregate  maximum of
$100,000  (other than capital  improvements  in fiber optic lines under existing
projects and construction projects proposed in the rate case), or any discharge,
waiver,  satisfaction,  release or relinquishment of any contract rights, liens,
encumbrances,  debt or claims, except in individual amounts of less than $10,000
in the ordinary course of business  consistent with past practice  subject to an
aggregate maximum of $100,000;  (iv) settle any claim, action, suit, litigation,
proceeding,  arbitration,  investigation  or  controversy  of any kind,  for any
amount in any single  controversy  in excess of  $25,000,  net of any  insurance
proceeds,  or in any manner which would  restrict the  operations or business of
the COTC  Companies;  (v) make any  capital  expenditure,  except in  individual
amounts  of less than  $50,000  incurred  in the  ordinary  course  of  business
consistent with past practice subject to an aggregate maximum of $200,000 (other
than  existing  projects  to expand  fiber  optic  lines);  (vi)  enter into any
transaction  with a present or former  director,  officer,  employee (other than
routine  employment  arrangements  with non-Seller  employees) or stockholder of
COTC  Companies  or any  affiliate  of any such  person  except as  specifically
described in Sellers Disclosure  Schedule;  (vii) incur any indebtedness  (other
than  refinancing  of existing debt) for money borrowed or lease any property or
assets that is not in the ordinary course of business;  (viii) lower any current
prices or rates with  respect to telephone  or other  services  provided by COTC
Companies  except for changes in the ordinary course of business or as otherwise
required by regulatory authorities;  or (ix) take any action or fail to take any
action  which  individually  or in the  aggregate  is likely to have a  Material
Adverse Effect; or

     (i) agree in writing or otherwise to do any of the foregoing.

     5.3 Access and Information.
         ----------------------

     (a) From the Execution Date and until the Closing Date and upon  reasonable
notice,  Sellers and COTC shall, and shall cause each COTC Subsidiary to, afford
to the Purchaser's  officers,  employees,  accountants,  legal counsel and other
representatives of the Purchaser,  access,  during normal business hours, to all
its properties, books, contracts,  commitments and records, excluding any books,
contracts,  commitments  and  records  related  to the  Stock  Sales.  From  the
Execution  Date and until the  Closing  Date,  Sellers and COTC shall (and shall
cause  each COTC  Subsidiary  to)  furnish  promptly  (as soon as  available  or
received  by COTC  Companies)  to the  Purchaser  (i) a copy of each COTC Report
filed by it or received by it after the Execution  Date and prior to the Closing
Date pursuant to the  requirements  of any  applicable  Laws promptly after such
documents are available, (ii) a copy of any action, including all minutes, taken
by the board of directors,  or any  committee  thereof,  COTC  Companies and any
documents or other  materials of any kind  provided to such boards or committees
promptly  after  such  action,  minutes,  materials  or other  documents  become
available without further request by the Purchaser,  (iii) a copy of each income
tax  return  filed by each COTC  Company  for the three  (3) most  recent  years
available,  a copy of any  correspondence  received  from  the IRS or any  other
governmental  entity or taxing authority or agency and any other  correspondence
relating to Taxes,  and any other  documents  relating to Taxes as the Purchaser
may reasonably request, and (iv) all other information  concerning its business,
properties and personnel as the Purchaser may reasonably request.

     (b) Unless otherwise required by Law, the parties will hold all information
of the other party or parties  obtained as part of this transaction and which is
nonpublic in confidence  until such time as such  information  becomes  publicly
available  through  no  wrongful  act of  either  party,  and in  the  event  of
termination of this  Agreement for any reason each party shall  promptly  return
all nonpublic  documents  obtained from any other party,  and any copies made of
such  documents,  to such other party or destroy such  documents  (including any
resulting  work  product)  and  copies;  provided  that a party  may  make  such
disclosure concerning the transactions contemplated herein as it deems necessary
or appropriate  (after  consultation  with the other parties) to comply with its
obligations under applicable Law.

     5.4 Update Disclosure.  From and after the Execution Date until the Closing
         -----------------
Date,  each of the Selling  Parties  and each of the  Purchasing  Parties  shall
update  the other on a regular  basis by  written  notice to the other  party to
reflect any matters which have  occurred  from and after the Execution  Date, if
existing  on the  Execution  Date would have been  required to be  described  on
Sellers Disclosure Statement or Purchasers Disclosure Schedule.

     5.5 Delivery of  Stockholder  List.  Sellers and COTC shall  deliver to the
         ------------------------------
Purchaser or its  designee,  from time to time prior to the Closing Date, a true
and complete list setting forth the names and addresses of COTC's  stockholders,
their  holdings  of stock as of the  latest  practicable  date,  and such  other
stockholder information as the Purchaser may reasonably request.

     5.6 Appropriate Action;  Consents;  Filings. Between the Execution Date and
         ---------------------------------------
the Closing Date,  Selling  Parties and  Purchasing  Parties will use their best
efforts to cause the conditions in Article VII to be satisfied.

     5.7  Government  Consents.  Promptly after the Execution  Date,  Purchasing
          --------------------
Parties and Selling  Parties shall fully  cooperate with each other and take all
further  actions  reasonably  necessary or  appropriate  in connection  with the
making of all filings  with all  applicable  governmental  agencies  (including,
without  limitation,  the PUC and the  FCC)  so as to  obtain  all  governmental
consents,  licenses,  permits, waivers, approvals,  authorizations,  and permits
required in connection  with the  transactions  contemplated  by this Agreement.
Such  cooperation  shall  include  providing  copies  of  all  documents  to the
non-filing  party and its  advisors  prior to such  filing  and,  if  requested,
accepting all reasonable additions, deletions or changes suggested in connection
therewith.  Each of the Purchasing Parties and each of the Selling Parties shall
furnish all information  required for any application or other filing to be made
pursuant to the rules and  regulations of any applicable Law in connection  with
the  transactions  contemplated  by this  Agreement.  Nothing  contained in this
Section 5.7 shall be  interpreted  as requiring  any party to amend or otherwise
change this Agreement or any of the documents  attached hereto or require any of
them to diminish their rights or increase their burdens therein.  COTC Companies
shall be primarily  responsible  for  preparing  and  obtaining  all PUC and FCC
filings and  consents,  and shall pay all costs and  expenses  relating  thereto
(including,  without  limitation,  all filing fees,  studies and their attorneys
fees, but not the costs and expenses and attorneys  fees of Purchasing  Parties)
Costs and expenses of COTC  Companies in obtaining  PUC and FCC consent shall be
permitted  expenses not shall reduce the  Purchase  Price or the Final  Purchase
Price.

     5.8  Expenses.  All  Expenses  (as defined  below)  incurred by the parties
          --------
hereto  shall be borne  solely and  entirely by the party which has incurred the
same.  "Expenses"  as  used in  this  Agreement  shall  include  all  reasonable
out-of-pocket expenses (including,  without limitation, all fees and expenses of
counsel,  accountants,  investment bankers, experts and consultants to the party
and its  affiliates)  incurred by a party or on its behalf in connection with or
related to the authorization,  preparation and execution of this Agreement,  the
solicitation  of  stockholder  approvals  and all other  matters  related to the
closing of the transactions  contemplated hereby.  Except as provided in Section
5.7, the COTC Companies shall not pay or agree to pay in the aggregate in excess
of $275,000 in connection with the consummation of the transactions contemplated
in this Agreement (the payment of which shall be considered to have been made in
the ordinary  course of business)  except with the prior written  consent of the
Purchaser, which consent shall not be unreasonably withheld or delayed.

     5.9  Notification  of Certain  Matters.  Selling  Parties shall give prompt
          ---------------------------------
notice to the Purchaser,  and the Purchasing Parties shall give prompt notice to
the Selling Parties,  of (i) the occurrence or  non-occurrence of any event, the
occurrence   or   non-occurrence   of  which   would  be  likely  to  cause  any
representation  or  warranty  contained  in  this  Agreement  to  be  untrue  or
inaccurate and (ii) any failure of the Selling Parties or the Purchasing Parties
as the case may be,  to  comply  with or  satisfy  any  covenant,  condition  or
agreement to be complied with or satisfied by it hereunder;  provided,  however,
that the delivery of any notice  pursuant to this Section 5.9 shall not limit or
otherwise  affect the remedies  available  hereunder to the party receiving such
notice. If, however, the parties consummate the Stock Sales contemplated herein,
they shall be deemed to have waived any breach of a representation,  warranty or
covenant which has been corrected  prior to the  satisfaction  of the conditions
set out in Article VII.

     5.10  Environmental  Investigation.  Within thirty (30) days  following the
           ----------------------------
execution of this Agreement, Sellers Representative and Purchaser shall mutually
select a  qualified  environmental  consultant  (at the sole cost and expense of
Purchaser)  to conduct,  and  prepare,  a Phase I  Environmental  Report (or, at
Purchaser's  option, an Environmental  Site Survey) with respect to COTC Company
properties and  operations,  which review shall be conducted in accordance  with
ASTM  standards.  Purchaser  shall  have  the  right  to  conduct  such  further
environmental   investigations  as  it  reasonably  deems   appropriate   (which
collectively with the Phase I Environmental  Report or Environmental Site Survey
referred to in the  preceding  sentence  are  referred to as the  "Environmental
Investigation").

     5.11  Shareholder  Indebtedness.  Each Seller  agrees to pay or cause to be
           -------------------------
paid any and all advances and indebtedness  (including interest thereon) owed by
such Seller and any  Affiliate  of such Seller to COTC  Companies on or prior to
the Closing Date.

     5.12 Marketable Securities.
          ---------------------

     (a) Sale of Marketable Securities. Prior to the Closing Date, Sellers shall
cause the COTC  Companies to sell or otherwise  dispose of all of the Marketable
Securities.

     (b) Distribution of Excess Proceeds.  On or prior to the Closing,  COTC may
make one or more  distributions  to the Sellers of the Common Stock of an amount
not to exceed the Excess  Marketable  Securities  Proceeds  Adjustment  (defined
below). For purposes of this Agreement,  "Excess Marketable  Securities Proceeds
Adjustment"  means  the  aggregate  amount by which  the  Marketable  Securities
Adjustment  exceeds  the  Dividends  Paid  Adjustment  from  time to  time.  Any
distributions  made to the  Sellers  pursuant  to this  Section  5.12,  shall be
included and made a part of the Adjustment Report.

     5.13 Distribution of Miscellaneous Assets. At or prior to the Closing, COTC
          ------------------------------------
Companies  may make a  distribution,  bonus or other  transfer of the  following
assets,  or proceeds from the sale of such assets, to one or more of the Sellers
or other Persons; provided, however, that such distributions,  in the aggregate,
do no result in an  aggregate  net income Tax  liability  of COTC  Companies  in
excess of cash  proceeds from such  distributed  assets that is retained by COTC
Companies  to pay such Tax  liability  (the  determination  of the amount of the
assets to be retained by COTC shall have been approved by Purchaser prior to any
distribution  contemplated  hereby,  and such approval shall not be unreasonably
withheld  or  delayed);  provided,  further,  that to the  extent  any  such Tax
liability is less than or greater than such  retained  assets,  such  difference
shall result in a reduction or an increase, as the case may be, by the amount of
such difference to the Final Purchase Price by way of a proportionate  reduction
to or  increase  of the amount of cash paid by the  Purchaser  or the Sellers of
Common Stock,  as the case may be, pursuant to Section 1.7(e) (such amount being
referred to as the "Miscellaneous Asset Adjustment"):

     (a) All of COTC  Companies'  investment  (including  notes  and  stock)  in
FuGasity  Corporation existing as of December 31, 2002 (whether held directly or
indirectly  through an  investment  in High  Desert  Investments,  a  California
general partnership),  including the repayments and proceeds therefrom, less any
additional  investment in FuGasity  Corporation (whether as debt or equity) made
after December 31, 2002 to the extent such  additional  investment is not repaid
on or prior to the Closing  (collectively,  such net amount being referred to as
the "FuGasity  Investment"),  which are identified in Section 5.13(a) of Sellers
Disclosure Schedule.

     (b) The life insurance policies (or the proceeds therefrom) on the lives of
Robert H. Edgar and Marion A. Edgar.

     (c) The approximate eighty (80) acre parcel of land in Dorris,  California,
as described in Section 2.11(a)-1 of Sellers Disclosure Schedule.

     (d)  Miscellaneous  notes  receivable  (including  repayments  and proceeds
therefrom) from current and former  employees and others as of December 31, 2002
in the approximate  principal  amount of $260,645 (which notes are identified in
Section 5.13(d) of Sellers Disclosure Schedule.

     (e) If the COTC Company  holding the limited  partnership  interest in Cal.
One Cellular, a California limited partnership,  sells, or enters into a binding
contract to sell,  such  limited  partnership  on or prior to the Closing  Date,
Purchaser  shall  increase  the  Purchase  Price by Two Hundred  Fifty  Thousand
Dollars  ($250,000.00)  and shall pay such  additional  amount when the proceeds
from such sale are received from the buyer thereof; provided, however, that such
COTC Company  shall first  obtain the consent of the  Purchaser  (which  consent
shall not be unreasonably withhold or delayed) prior to selling or entering into
a contract to sell such limited partnership interest.

     5.14 Vehicles Used By Sellers.  On or prior to the Closing Date, COTC shall
          ------------------------
be  permitted  to sell  the  vehicles  identified  in  Section  5.14 of  Sellers
Disclosure  Schedule to Sellers at fair market value, and for this purpose only,
fair market value will be the  approximate  midpoint  value from Kelly Blue Book
(trade-in value) for vehicles in similar condition.

                                  Article VI.
                  POST-CLOSING COVENANTS OF PURCHASING PARTIES

     From and after the Closing Date and for so long as any amount remains owing
to Sellers under the Notes or any  Obligation of the  Purchasing  Parties to any
Seller shall remain  unpaid or  unsatisfied,  unless the Sellers  Representative
waives  compliance  in writing,  the  Purchasing  Parties  jointly and severally
covenant and agree to:

     6.1 Financial  Statements  and Regulatory  Filings.  Deliver to the Sellers
         ----------------------------------------------
Representative, in form and detail satisfactory to the Sellers Representative:

     (a) as soon as available, but not later than ninety (90) days after the end
of each fiscal  year,  commencing  with the first  fiscal year ending  after the
Closing  Date, a copy of the  consolidated  balance  sheet of Cal-Ore  Telephone
Company,  a California  corporation  ("Telephone  Company") and the consolidated
balance  sheet of the COTC  Companies,  both as at the end of such  year and the
related statements of income,  shareholders' equity and cash flows for such year
(together with footnote  disclosure),  setting forth in each case in comparative
form  the  figures  for  the  previous  fiscal  year,  and  accompanied  by  the
unqualified  audit  opinion  of  a  certified  public   accountant,   reasonably
acceptable  to Sellers  ("Independent  Auditor"),  which report shall state that
such financial  statements present fairly the financial position for the periods
indicated  in  conformity  with GAAP  applied on a basis  consistent  with prior
years. Such opinion shall not be qualified or limited because of a restricted or
limited  examination by the Independent  Auditor of any material  portion of the
Telephone Company's records;

     (b) as soon as available, but not later than forty-five (45) days after the
end of each fiscal quarter of each fiscal year, commencing with the first fiscal
quarter following the Closing Date, a copy of the unaudited balance sheet of the
Telephone  Company  as of the  end of such  calendar  quarter  and  the  related
statements of income and  shareholders'  equity for the period commencing on the
first day and ending on the last day of such quarter; and

     (c) as soon as  available,  but in no event  later than  fifteen  (15) days
after the applicable  filing date, the regulatory  filings of the COTC Companies
submitted to the PUC and FCC.

     6.2 Certificates;  Other Information. Upon and during the continuance of an
Event of Default,  promptly  deliver such additional  information  regarding the
business,  financial  or  corporate  affairs of COTC  Companies  as the  Sellers
Representative may from time to time request.

     6.3 Notices. Promptly notify the Sellers Representative:
         -------

     (a) of the  occurrence of any Default and of the occurrence or existence of
any event or circumstance  for which it is reasonably  foreseeable will become a
Default,  in each case after any Purchasing Party knows or has reason to know of
the occurrence thereof;

     (b)  of  any  breach  or  non-performance  of,  or any  default  under  the
Acquisition Financing;

     (c) of any Material Adverse Effect  Post-Closing with respect to any change
in COTC  Companies'  or Purchasing  Parties'  business  condition  (financial or
otherwise), operations, properties or prospects, or ability to repay the Notes.

     Each  notice  under  this  Section  6.3 shall be  accompanied  by a written
statement  by the  Purchasing  Party  setting  forth  details of the  occurrence
referred to therein,  and stating what action the  Purchasing  Party proposes to
take with respect thereto and at what time. Each notice under subsection  6.3(a)
shall  describe  with  particularity  any and all clauses or  provisions of this
Agreement or other Transaction Documents that have been (or foreseeably will be)
breached or violated.

     6.4 Preservation of Corporate Existence, Etc. Cause Purchaser, COTC and the
         ----------------------------------------
Telephone Company to:

     (a) preserve and maintain in full force and effect its corporate  existence
and good standing under the laws of its state of incorporation  and states where
it conducts business;

     (b) preserve and maintain in full force and effect all governmental rights,
privileges,  qualifications,  permits,  licenses  and  franchises  necessary  or
desirable in the normal conduct of its business; and

     (c)  use  commercially  reasonable  efforts,  in  the  ordinary  course  of
business, to preserve its business organization and goodwill.

     6.5 Payment of Obligations.  Cause  Purchaser to pay, to discharge,  and to
fully perform and comply when and as required under the Acquisition Financing.

     6.6  Maintenance of Books and Records.  Maintain proper books of record and
          --------------------------------
account,  in which  full,  true and  correct  entries  in  conformity  with GAAP
consistently  applied  shall be made of all financial  transactions  and matters
involving the assets and business of the COTC Companies. Upon the occurrence and
during  the  continuance  of an Event of  Default,  permit,  and the  Purchasing
Parties shall cause the COTC Companies to permit, representatives of the Sellers
to visit and  inspect  any of their  respective  properties,  to  examine  their
respective  corporate,  financial and operating records, and make copies thereof
or abstracts  therefrom,  and to discuss their respective affairs,  finances and
accounts with their  respective  directors,  officers,  and  independent  public
accountants,  at such reasonable times during normal business hours and as often
as may be reasonably desired, upon reasonable advance notice to the Purchaser.

     6.7  Directorships.  Following the Closing  Date,  and at the option of the
     ------------------
Sellers, the Purchasing Parties agree to elect the Sellers identified in Section
6.7 of Sellers Disclosure Schedule to the Board of Directors of COTC for so long
as any principal  balance  remains  owing under any of the Notes.  In connection
therewith and at the sole cost and expense of COTC,  such Sellers shall receive:
(i) during such period, health care benefits generally provided to the full-time
employees  of COTC  Companies  to the extent such  Sellers are  eligible for and
covered by such health  benefits,  and (ii) the benefits of and be covered under
(A)  any  directors  and  officers  liability  insurance  policy(ies)  generally
provided the  officers and  directors  of the  Purchasing  Parties,  and (B) any
indemnification  agreement(s)  generally  provided the officers and directors of
the  Purchasing  Parties.  Purchaser and Sellers will  cooperate in amending the
bylaws of COTC so that the authorized  number of directors will be such that the
Purchaser will have the ability to appoint no less than a majority of the board.

     6.8 SEC Filings.  Timely comply in all material respects with the reporting
         -----------
and  disclosure  provisions of the 1933 Act and the 1934 Act, and shall make all
required filings within the prescribed time periods.

     6.9 Dividends and Affiliate Transactions. For so long as any amount remains
         -----------------------------------
owing by Purchaser  to the Sellers  under any of the Notes,  Purchasing  Parties
will not permit:  (i) Purchaser to make dividends or other  distributions to any
equity owner,  (ii)  Purchaser to issue any equity  securities  (or  derivatives
thereon) to any Person where such  securities or derivatives  are not covered by
the Pledge  Agreement,  and (iii)  Purchaser  or any COTC  Company  to  transact
business with any  Affiliate of Purchasing  Parties other than on terms that are
fair and  reasonable  to the COTC  Company,  including  reasonable  intercompany
charges.

                                  Article VII.
                         CONDITIONS PRECEDENT TO CLOSING

     7.1  Conditions to Obligation of Each Party to Effect the Stock Sales.  The
          ----------------------------------------------------------------
respective  obligations  of each party to effect the  transactions  contemplated
herein shall be subject to the  satisfaction  at or prior to the Closing Date of
the following conditions:

     (a) No Order. No federal or state  governmental or regulatory  authority or
other agency or commission, or federal or state court of competent jurisdiction,
shall have enacted, issued, promulgated,  enforced or entered any statute, rule,
regulation,   executive  order,  decree,  injunction  or  other  order  (whether
temporary,  preliminary or permanent) which has the effect of restricting in any
material  respect  (except  as  provided  in  Section  7.1(c)),   preventing  or
prohibiting consummation of the transactions contemplated by this Agreement.

     (b) Reserved.

     (c) Governmental  Imposed  Restrictions.  The approvals and consents of the
PUC, the FCC and the  Government  Consents shall have been obtained and shall be
final and be in full force and effect. The terms and conditions of the approvals
and consents  shall be  acceptable  in all material  respects to Sellers and the
Purchaser in the exercise of their  reasonable  discretion  and for this purpose
the Sellers may deem any such  approval or consent to be  unreasonable  if it in
any way  restricts  or limits  the  Sellers'  ability  to retain all of the gain
realized on the sale of the Purchased Stock and the dividends and  distributions
allowed by the terms of this Agreement.

     (d) No  Challenge.  There  shall not be a  pending  action,  proceeding  or
investigation  before  any court or  administrative  agency  or by a  government
agency (i) challenging or seeking damages in connection with, the Stock Sales or
(ii)  seeking to  restrain,  prohibit  or limit the  exercise  of full rights of
ownership or operation by the Purchaser of all or any portion of the business or
assets of COTC  Companies,  which in either case is reasonably  likely to have a
Material Adverse Effect.

     7.2 Additional Conditions to Obligations of the Purchaser.  The obligations
         -----------------------------------------------------
of the  Purchaser  to  effect  the  purchase  and sale are also  subject  to the
following conditions:

     (a)  Representations  and  Warranties.  Each  of  the  representations  and
warranties of Selling Parties in this Agreement shall,  without giving effect to
any update to  Sellers  Disclosure  Schedule  or notice to the  Purchaser  under
Section  5.4,  be true and  correct in all  material  respects  at and as of the
Execution  Date and (except to the extent such  representations  and  warranties
speak as of a certain date or period and except as permitted or  contemplated by
this  Agreement)  as of the Closing Date as though made on and as of the Closing
Date.

     (b) Agreements and Covenants.  The Selling  Parties shall have performed or
complied in all material respects with all agreements and covenants  required by
this  Agreement to be performed or complied  with by each of them on or prior to
Closing Date.

     (c)  Consents  Obtained.  Each  of  the  material  consents  and  approvals
identified  in Section 2.5 and Section 2.6 of Sellers  Disclosure  Schedule must
have been obtained and be in the form and substance  reasonably  satisfactory to
Purchaser  (including  without  limitation,  any  terms or  conditions  that are
materially adverse to the Purchaser).

     (d) No Material Adverse Changes.  Since the Execution Date, there shall not
have been any  change in the  financial  condition,  results  of  operations  or
business of COTC Companies, taken as a whole, that either individually or in the
aggregate would have a Material Adverse Effect.

     (e) Opinion of Counsel.  The Purchaser  shall have received from (i) Downey
Brand LLP, counsel to Selling Parties ("Sellers' Counsel") an opinion of counsel
in the form and  substance as set forth in Exhibit D addressed to Purchaser  and
on which  Purchaser's  lenders  preceding  the  Acquisition  Financing  shall be
entitled to rely, and dated as of the Closing Date.

(f) Officers Certificate. The Purchaser shall have received a certificate of the
Chief Executive Officer and Chief Financial Officer of COTC with respect to the
conditions set forth in Sections 7.2(a), (b) and (c).

     (g)  Environmental  Review by Acquisition  Lender.  The Acquisition  Lender
shall be reasonably satisfied with the Environmental Investigation.

     7.3  Additional  Conditions to  Obligations  of Sellers.  The obligation of
Sellers to effect the transactions  contemplated herein subject to the following
conditions precedent:

     (a)  Representations  and  Warranties.  Each  of  the  representations  and
warranties of the  Purchasing  Parties in this Agreement  shall,  without giving
effect to any  update to  Purchasers  Disclosure  Schedule  or notice to Selling
Parties  under  Section 5.4, be true and correct in all material  respects as at
and as of the Execution Date and (except to the extent such  representation  and
warranties  speak as of a certain  date or period) as of the  Closing  Date,  as
though made on and as of the Closing Date.

     (b) Agreements and Covenants.  The Purchasing  Parties shall have performed
or complied in all material respects with all agreements and covenants  required
by this  Agreement to be  performed or complied  with by them on or prior to the
Closing Date.

     (c)  Officers'   Certificate.   Selling   Parties  shall  have  received  a
certificate  signed on behalf of the Purchasing  Parties by the Chief  Executive
Officer or President  and the Chief  Financial  Officer of the  Purchaser to the
effect that each of the conditions  specified above in Section 7.3(a) and (b) is
satisfied in all respects.

     (d)  Consents  Under   Agreements.   All  consents,   waivers,   approvals,
authorizations or orders required to be obtained, and all filings required to be
made by the  Purchaser  for the  authorizations,  execution and delivery of this
Agreement and the  consummation by it of the  transactions  contemplated  hereby
shall have been obtained and made by the Purchaser.

     (e)  Opinion of Counsel.  The Sellers  shall have  received  from  Steefel,
Levitt & Weiss and from John Fikre, Esq., general counsel to Purchasing Parties,
opinions  of  counsel in the forms and  substance  as set forth in Exhibit E and
Exhibit F addressed to Sellers and dated as of the Closing Date.

     (f) No Material Adverse Changes.  Since the Execution Date, there shall not
have been any  change in the  financial  condition,  results  of  operations  or
business of any Purchasing Party taken as a whole,  that either  individually or
in the aggregate would have a Material Adverse Effect.

                                 Article VIII.
                        TERMINATION, AMENDMENT AND WAIVER

     8.1  Termination.  This  Agreement  may be  terminated  as provided  below:
          -----------

     (a) by mutual written consent of the Purchaser and Sellers holding at least
seventy-five  percent  (75%) of the  voting  power of the  Purchased  Stock (the
"Requisite Sellers");

     (b) Purchaser  may terminate  this  Agreement by giving  written  notice to
Sellers Representative at any time prior to the Closing in the event any Selling
Party has breached any material representation,  warranty, or covenant contained
in this  Agreement  in any material  respect,  Purchaser  has  notified  Sellers
Representative  of the breach,  and the breach has continued  without cure for a
period of thirty (30) days after the notice of breach;

     (c) The Sellers  Representative  may  terminate  this  Agreement  by giving
written  notice to  Purchaser  at any time prior to the Closing in the event any
Purchasing Party has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect,  Sellers Representative has
notified  Purchaser of the breach, and the breach has continued without cure for
a period of thirty (30) days after the notice of breach;

     (d) by either the  Purchaser  or the  Requisite  Sellers  if any  permanent
injunction  preventing  the  consummation  of the  purchase  and sale shall have
become final and nonappealable;

     (e) by either the  Purchaser or the Sellers  Representative  if the Closing
has not  occurred  (other  than  through  the  failure  of any party  seeking to
terminate this Agreement to comply in all material respects with its obligations
under this Agreement) on or before June 30, 2005;

     (f) by either the Purchaser or the Requisite  Sellers if the PUC or the FCC
has denied approval of the  transactions  contemplated  herein,  and neither the
Purchaser  nor COTC has,  within  thirty (30) days after the date of issuance of
the decision denying approval,  filed a petition seeking review of such order as
provided by applicable law;

     (g) by Purchaser if any of the  conditions  in Sections 7.1 and 7.2 has not
been satisfied as of the Closing Date or if  satisfaction of such a condition is
or becomes  impossible (other than through the failure of any Purchasing Parties
to comply with their  obligations  under this  Agreement)  and Purchaser has not
waived such condition on or before the Closing Date; or

     (h) by Sellers Representative, if any of the conditions in Sections 7.1 and
7.3 has not be  satisfied as of the Closing  Date or if  satisfaction  of such a
condition  is or becomes  impossible  (other  than  through  the  failure of any
Selling  Party to comply  with its  obligations  under this  Agreement)  and the
Sellers  Representative  have not waived such condition on or before the Closing
Date.

     8.2  Effect  of  Termination.  In the  event  of the  termination  of  this
          -----------------------
Agreement  pursuant to Section 8.1, this Agreement shall  forthwith  become void
and all rights and  obligations  of any party  shall cease  except that  nothing
herein shall relieve any party from  liability for any breach of this  Agreement
or any  representation,  warranty,  covenant  or  agreement  contained  in  this
Agreement or shall restrict either party's rights in the case thereof.

     8.3  Waiver.  At any time prior to the  Closing  Date,  the parties may (i)
          ------
extend the time for the  performance of any of the  obligations or other acts of
the  other  party,  (ii)  waive  any  inaccuracies  in the  representations  and
warranties  contained  herein or in any document  delivered  pursuant hereto and
(iii)  waive  compliance  with any of the  agreements  or  conditions  contained
herein.  Any such  extension  or  waiver  shall be valid  only if set forth in a
written  instrument  signed on behalf of such party (in the case of Sellers,  by
the Sellers  Representative),  but such extension or waiver or failure to insist
on strict compliance with an obligation,  covenant, agreement or condition shall
not operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.

                                  Article IX.
                                 INDEMNIFICATION

     9.1 Survival of  Representations.  All  representations  and  warranties of
         ----------------------------
Purchasing Parties and Selling Parties contained in this Agreement shall survive
the  Closing  Date and shall  continue  for a period of two (2) years  after the
Closing Date, at which time such representations and warranties shall expire and
become null and void, except as to any matters with respect to which a bona fide
written  claim shall have been made before  such date,  in which event  survival
shall  continue  (but only with  respect to, and to the extent of, such  claim);
provided, however, that the representations and warranties set forth in Sections
2.3,  2.4,  2.6,  2.14,  3.1,  3.3,  4.2, and 4.4 shall survive until sixty (60)
calendar days after the  expiration of all  applicable  statutes of  limitations
(including all periods of extension,  whether automatic or permissive), at which
time they shall  expire and become null and void,  except as to any matters with
respect to which a bona fide  written  claim  shall have been made  before  such
date, in which event  survival  shall continue (but only with respect to, and to
the extent of, such claim).

     9.2  Indemnification  by Sellers.  Subject to the  limitations set forth in
          ---------------------------
this Article IX, each Seller of Common Stock will  indemnify  and hold  harmless
Purchasing  Parties  and  their  respective  officers,   directors,  agents  and
attorneys,  and each  person,  if any,  who  controls or may control  Purchasing
Parties  within  the  meaning  of the  Securities  Act  (hereinafter  "Purchaser
Indemnified  Persons")  from and  against any and all  losses,  costs,  damages,
penalties,  fines,  liabilities and expenses (including without limitation legal
fees and  expenses)  arising from claims,  demands,  actions,  causes of action,
injunctions, judgments, orders or rulings (collectively,  "Damages") incurred or
sustained by Purchaser Indemnified Persons as a result of:

     (a) any  inaccuracy  or breach of, or any claim by a third  party  alleging
facts that, if true, would mean the Sellers have breached, any representation or
warranty made by the Sellers contained herein; and

     (b) a breach by the  Selling  Parties of any  covenant  or other  agreement
contained herein.

     The aggregate  indemnification  obligation  for all Sellers of Common Stock
for all Damages to Purchaser  Indemnified  Persons resulting from Section 9.2(a)
shall not exceed $2,000,000 and the aggregate indemnification obligation for any
Seller of Common  Stock shall not exceed  his,  her or its  proportionate  share
(based on the  percentage  allocation  for Common  Stock on  Schedule A) of such
aggregate limit; provided, however, that the aggregate indemnification liability
for each Seller  (including  Sellers of Preferred  Stock) for Damages  resulting
from breaches of  representations  and warranties  contained in Sections 2.3 and
3.3 shall be up to the total Purchase Price received by each  respective  Seller
(less any  amount  paid  under the $2.0  million  cap in the  previous  clause).
Sellers selling solely  Preferred Stock shall have no liability  (whether by way
of  contribution,  indemnity or  otherwise)  to any other  Selling  Party or any
Purchasing  Party under Section 9.2(a) other than for breaches of the warranties
and representations contained in Sections 2.3 and 3.3.

     9.3  Indemnification by Purchaser.  Subject to the limitations set forth in
          ----------------------------
this Article IX, Purchasing Parties will jointly and severally indemnify, defend
and hold harmless Sellers and their respective officers,  directors,  agents and
attorneys,  and each Person,  if any, who controls or may control  Seller within
the meaning of the Securities Act  (hereinafter  "Seller  Indemnified  Persons")
from and against any and all Damages incurred or sustained by Seller Indemnified
Persons as a result of:

     (a) any  inaccuracy  or breach of, or any claim by a third  party  alleging
facts  that,  if  true,  would  mean  Purchasing  Parties  have  breached,   any
representation or warranty by it contained herein; and

     (b) a breach by any  Purchasing  Party of any  covenant or other  agreement
contained herein.

     The aggregate indemnification obligation for all Purchasing Parties for all
Damages to the Seller  Indemnified  Persons  resulting from Section 9.3(a) shall
not exceed $2,000,000;  provided,  however,  that the aggregate  indemnification
liability for Damages resulting from breaches of representations  and warranties
contained in Article IV shall be up to the total Purchase Price (less any amount
paid under the $2 million cap in the previous clause).

     9.4 Indemnification Procedure. Any Person entitled to indemnification under
         -------------------------
Sections 9.2 or 9.3 hereof that asserts a claim under Sections 9.2 or 9.3 hereof
is hereinafter  referred to as the "Indemnitee," and the party against whom such
claim is asserted under Sections 9.2 or 9.3 hereof is hereinafter referred to as
the "Indemnifying Party."

     (a) If an  Indemnitee  becomes  aware of any  matter  that it  believes  is
indemnifiable pursuant to this Article IX and such matter involves (i) any claim
made  against the  Indemnitee  by any person or entity  other than a  Purchasing
Party  or a  Selling  Party  or  (ii)  the  commencement  of any  action,  suit,
investigation,  arbitration,  or similar  proceeding  against  Indemnitee by any
person or entity other than a Purchasing  Party or a Selling  Party,  Indemnitee
will give the  Indemnifying  Party  prompt  written  notice of such claim or the
commencement  of such  action,  suit,  investigation,  arbitration,  or  similar
proceeding. Such notice will (i) provide (with reasonable specificity) the bases
on which  indemnification  is being  asserted,  (ii) set  forth  the  actual  or
estimated  amount of Damages for which  indemnification  is being asserted,  and
(iii) be accompanied  by copies of all relevant  pleadings,  demands,  and other
papers served on Indemnitee.  If Indemnifying  Party's ability to defend against
any such claim, action, suit, investigation,  arbitration, or similar proceeding
is irrevocably prejudiced by the failure of Indemnitee to provide prompt written
notice,  as provided  above,  then  Indemnifying  Party will not be obligated to
indemnify  Indemnitee  with  respect to such  prejudiced  claim,  action,  suit,
investigation, arbitration, or similar proceeding to the extent damaged thereby.

     (b) Indemnifying Party will have a period of the earlier of (i) thirty (30)
calendar  days,  or (ii)  three (3) days  prior to the due date of the  earliest
statutory response (after the delivery of each notice required by Section 9.3(a)
hereof) within which to respond to such notice.  If  Indemnifying  Party accepts
full  responsibility  for the claim described in such notice or does not respond
within such response period,  Indemnifying Party will be obligated to compromise
or defend (and will control the defense of) such claim,  at its own expense,  by
counsel  reasonably  satisfactory  to Indemnitee,  and  Indemnifying  Party will
provide the Indemnitee with such assurances as may be reasonably required by the
Indemnitee to assure that  Indemnifying  Party will assume,  and be  responsible
for, the entire  liability for such claim,  subject to the limitations set forth
in this Article IX. Indemnitee will cooperate reasonably with Indemnifying Party
and counsel for  Indemnifying  Party in the defense against any such claim,  and
the  Indemnitee  will have the right to  participate  at its own  expense in the
defense of any such claim. If  Indemnifying  Party responds within such response
period denying or rejecting responsibility for such claim in whole or in part or
fails to promptly  provide  Indemnitee with such assurances as may be reasonably
required by  Indemnitee  as provided  above,  Indemnitee  will be free,  without
prejudice to any of Indemnitee's  rights  hereunder,  to compromise or settle or
defend (and  control  the defense of) such claim and to pursue such  remedies as
may be available to Indemnitee under applicable law.

     (c)  Any  compromise  or  settlement  of any  claim  (whether  defended  by
Indemnitee or by the Indemnifying  Party) will require the prior written consent
(which may not be unreasonably withheld or delayed) of Indemnitee and, except as
provided  in the last  sentence  of  Section  9.3(b),  Indemnifying  Party.  If,
however,  Indemnitee  refuses to consent to a bona fide offer of  compromise  or
settlement  that (i)  Indemnifying  Party  desires to accept and (ii) imposes no
obligation or liability on Indemnitee and does not adversely restrict Indemnitee
in its  business,  Indemnitee  may  continue to pursue  such claim,  free of any
participation by Indemnifying Party, at the sole expense of Indemnitee.  In such
event, the obligation of Indemnifying  Party to Indemnitee will equal the lesser
of (i) the amount of the offer of  compromise or  settlement  that  Indemnifying
Party desired to accept, plus the reasonable  out-of-pocket expenses (except for
expenses resulting from Indemnitee's  participation in any defense controlled by
Indemnifying  Party)  incurred by  Indemnitee  before the date the  Indemnifying
Party notified Indemnitee of the offer of compromise or settlement,  or (ii) the
actual  out-of-pocket  amount that Indemnitee is obligated to pay as a result of
Indemnitee's continuing to pursue such claim, plus the reasonable  out-of-pocket
expenses (except for expenses  resulting from Indemnitee's  participation in any
defense controlled by Indemnifying Party) incurred by Indemnitee before the date
Indemnifying Party notified Indemnitee of the offer of compromise or settlement,
minus the reasonable out-of-pocket expenses incurred by Indemnifying Party after
such notice date.

     (d) If an  Indemnitee  becomes  aware of any  matter  that it  believes  is
indemnifiable  pursuant  to Article IX hereof and such  matter  involves a claim
made  by any  Purchasing  Party  or any  Selling  Party,  Indemnitee  will  give
Indemnifying  Party prompt  written  notice of such claim.  Such notice will (i)
provide (with  reasonable  specificity) the bases for which  indemnification  is
being asserted and (ii) set forth the actual or estimated  amount of Damages for
which  indemnification is being asserted.  Indemnifying Party will have a period
of thirty (30) calendar days (after the delivery of each notice required by this
Section 9.4(d)) within which to respond to such notice.  If  Indemnifying  Party
accepts full  responsibility  for the claim described in such notice or does not
respond  within such thirty (30) day period,  the actual or estimated  amount of
Damages  reflected in such notice will be  conclusively  deemed a liability that
Indemnifying  Party owes, and will pay (in cash) upon demand, to Indemnitee.  If
Indemnifying   Party  has  timely   disputed  such  claim,  as  provided  above,
Indemnifying  Party and Indemnitee agree to proceed in good faith to negotiate a
resolution  of such  dispute.  If all such  disputes  are not  resolved  through
negotiations  within sixty (60) calendar days  thereafter,  either  Indemnifying
Party or Indemnitee may initiate arbitration to resolve such disputes.

     9.5        Limitations        on        Indemnification        Obligations.
------------------------------------------  (a) Neither the Selling  Parties nor
Purchasing  Parties shall have any liability (for  indemnification or otherwise)
with respect to claims under  Section  9.2(a) or Section  9.3(a),  respectively,
until the total of all Damages with respect to such matters exceeds $250,000 and
then only for the amount by which such Damages exceed  $250,000 (the  "Basket").
However,  this Section 9.5(a) will not apply to matters arising from breaches of
Sections  2.1(c),  2.3,  2.16,  2.22,  3.3,  and 4.11,  and with  regard to such
Sections, the Indemnified Parties shall be entitled to seek compensation for all
Damages without regard to the Basket.

     (b) In computing  the amount of Damages  which are  sustained,  suffered or
incurred by an Indemnitee, the Indemnifying Party or Parties are to be given the
benefit of (i) insurance proceeds, if any (up to the maximum amount of Damages),
that the Indemnitee shall have the right to receive.

     (c) Two Million Dollars  ($2,000,000)  principal  amount of the Notes (from
the Sellers of Common Stock) shall be held by Purchaser as security for Sellers'
indemnification  obligations, but the holders of such Notes shall be entitled to
receive all interest  and  principal on such Notes so long as such holder of the
Notes shall not be in default of his or her  indemnification  obligations.  Such
Notes (or the excess over  claimed  indemnification)  shall be  delivered to the
holders of such Notes if no claim for  indemnification has been made (or if made
has been  resolved) on the second  anniversary  of the Closing Date.  Any Seller
receiving  Notes  may pay for his,  hers or its  indemnification  obligation  by
surrendering  Notes  issued to him,  her or it, which will be valued for payment
purposes at the principal amount thereof,  plus accrued but unpaid interest.  If
the Damages are less than the Notes, the outstanding  principal balance of Notes
shall remain  outstanding  as to that  portion  thereof  exceeding  the Damages.
Purchaser  will give such Seller  notice of the adjusted  outstanding  principal
amount of such Notes.

     (d)  Notwithstanding  anything to the  contrary in this  Agreement,  if the
Closing occurs, no claim for  indemnification  may be asserted by any Purchasing
Party with respect to any matter  discovered by or known to any Purchasing Party
on or before the Closing Date.

     (e) For purposes of this Article IX, if no agreement  can be reached  after
good faith  negotiation  between the  parties,  either  Purchaser,  on behalf of
Purchasing  Parties,  or Sellers  Representative,  on behalf of Selling Parties,
may, by written notice to the other, demand arbitration of the matter unless the
amount of the Damages is at issue in pending  litigation  with a third party, in
which event  arbitration shall not be commenced until such amount is ascertained
or both parties agree to arbitration;  and in either such event the matter shall
be settled by  arbitration  conducted by one  arbitrator.  Purchaser and Sellers
Representative  shall  agree  on the  arbitrator;  provided,  however,  that  if
Purchaser  and Sellers  Representative  cannot agree on the  arbitrator,  either
Purchaser or Sellers  Representative  can request that the American  Arbitration
Association  select  the  arbitrator.  Any  such  arbitration  shall  be held in
Sacramento,  California,  in each case under the commercial rules then in effect
of the American Arbitration Association. The arbitrator shall set a limited time
period  and  establish  procedures  designed  to  reduce  the  cost and time for
discovery  while  allowing  the  parties an  opportunity,  adequate  in the sole
judgment of the arbitrator,  to discover relevant  information from the opposing
parties about the subject matter of the dispute.  The arbitrator shall rule upon
motions  to compel or limit  discovery  and shall have the  authority  to impose
sanctions, including attorneys' fees and costs, to the same extent as a court of
law or equity, should the arbitrator determine that discovery was sought without
substantial  justification  or that discovery was refused or objected to without
substantial  justification.  The  decision of the  arbitrator  shall be written,
shall be in accordance with applicable law and with this Agreement, and shall be
supported  by written  findings of fact and  conclusions  of law which shall set
forth  the  basis  for the  decision  of the  arbitrator.  The  decision  of the
arbitrator  as to the validity  and amount of any claim  disputed by the parties
hereto shall be binding and conclusive upon the parties to this  Agreement,  and
notwithstanding  anything in Article IX hereof, the parties shall be required to
act in accordance  with such  decision.  Judgment upon any award rendered by the
arbitrator may be entered in any court having jurisdiction.

     (f) For purposes of this Section 9.5(f),  in any  arbitration  hereunder in
which  any  disputed  claim  or  the  amount  is at  issue,  the  party  seeking
indemnification  shall be  deemed  to be the  non-prevailing  party  unless  the
arbitrator awards the party seeking  indemnification more than one-half (1/2) of
the amount in dispute, in which case the Person against whom  indemnification is
sought shall be deemed to be the non-prevailing  party. The non-prevailing party
to an arbitration shall pay its own expenses, the fees of the arbitrator and the
expenses,  including attorneys' fees and costs, reasonably incurred by the other
party to the arbitration.

     9.6 Other  Indemnification  Provisions.  The parties  acknowledge and agree
         ----------------------------------
that,  except as  provided  in  Section  10.13,  the  foregoing  indemnification
provisions in this Article IX shall be the exclusive  remedy with respect to the
warranties, representations and covenants contained in this Agreement.

                                   Article X.
                               GENERAL PROVISIONS

     10.1 Notices.  All Notices and other  communications given or made pursuant
          -------
hereto shall be in writing and shall be deemed  given if  delivered  personally,
mailed by register or certified mail (postage prepaid, return receipt requested)
to the parties at the following  addresses (or at such other address for a party
as shall be specified by like notice) and shall be effective upon receipt:

(a) If to the Purchasing Parties:

                           Brighton Communications Corporation
                           401 Theodore Fremd Avenue
                           Rye, New York 10580

                  Copy to (which shall not constitute notice):

                           Steefel, Levitt & Weiss
                           One Embarcadero Center
                           30th Floor
                           San Francisco, CA 94111
                           Attn: Mark Fogelman, Esq.

(b) If to Sellers:

                           Robert H. Edgar, Sellers Representative
                           P.O. Box 846
                           Dorris, CA 96023

                  Copy to (which shall not constitute notice):

                           Downey Brand LLP
                           555 Capital Mall, 10th Floor
                           Sacramento, California 95814
                           Attn:  Joseph G. De Angelis, Esq.

(c) If to COTC:

                           California-Oregon Telecommunications Company
                           P.O. Box 847
                           Dorris, California 96023

                  Copy to (which shall not constitute notice):

                           Downey Brand LLP
                           555 Capital Mall, 10th Floor
                           Sacramento, California 95814
                           Attn:  Joseph G. De Angelis, Esq.

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

     10.3  Severability.  If any term or other  provision  of this  Agreement is
           ------------
invalid,  illegal or  incapable  of being  enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the  economic or legal  substance  of
the  transactions  contemplated  hereby is not affected in any manner adverse to
any party. Upon such  determination that any term or other provision is invalid,
illegal or incapable of being  enforced,  the parties hereto shall  negotiate in
good faith to modify this  Agreement so as to effect the original  intent of the
parties  as  closely  as  possible  in an  acceptable  manner  to the  end  that
transactions contemplated hereby are fulfilled to the extent possible.

     10.4 Entire Agreement.  This Agreement  constitutes the entire agreement of
          ----------------
the parties and supersedes all prior agreements and  undertakings,  both written
and oral,  between  the  parties,  or any of them,  with  respect to the subject
matter hereof.

     10.5  Assignment.  This  Agreement  shall not be transferred or assigned by
           ----------
operation of law or  otherwise  without the prior  written  consent of the other
parties.

     10.6 Parties in Interest.  This  Agreement  shall be binding upon and inure
          -------------------
solely to the  benefit of each party and nothing in this  Agreement,  express or
implied, is intended to or shall confer upon any other person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.

     10.7  Counterparts.   This  Agreement  may  be  executed  in  one  or  more
           ------------
counterparts,  and by the different  parties in separate  counterparts,  each of
which when  executed  shall be deemed to be an  original  but all of which taken
together shall constitute one and the same agreement.

     10.8  Amendment/Waiver.  This  Agreement  may not be  amended  except by an
           ----------------
instrument in writing signed by the parties  hereto.  No provision or obligation
in this Agreement may be waived except by an instrument in writing signed by the
waiving  party(s).  Any  instrument  amending  this  Agreement  or  waiving  any
provision or  obligation  herein shall be deemed to have been taken on behalf of
and signed by all Sellers if the  instrument in writing is signed by the Sellers
Representative.

     10.9 Governing  Law. This  Agreement  shall be governed by and construed in
          --------------
accordance  with the domestic  laws of the State of  California  without  giving
effect to any choice or conflict of law  provision or rule (whether of the State
of California or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of California.  The parties hereto
agree that any action  brought  in a court of law  hereunder  will be brought in
federal  court,  and not in state  court,  unless no federal  court has  subject
matter jurisdiction over such proceeding.

     10.10 Waiver of Jury Trial.

     (a) EACH  PARTY  ACKNOWLEDGES  AND AGREES  THAT ALL  DISPUTES  BETWEEN  THE
PARTIES  TO THIS  AGREEMENT  ARE TO BE SETTLED  BY  ARBITRATION  AS SET FORTH IN
SECTION 9.5(e).  HOWEVER,  EACH PARTY FURTHER  ACKNOWLEDGES  AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND WHICH FOR ANY REASON IS NOT
SETTLED BY ARBITRATION IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES. AS
A RESULT, EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT HE,
SHE OR IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY  LITIGATION  DIRECTLY OR
INDIRECTLY  ARISING  OUT OF OR RELATING TO THIS  AGREEMENT  OR THE  TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

     (b) EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS  REPRESENTED,  EXPRESSLY OR  OTHERWISE,  THAT
SUCH OTHER  PARTY  WOULD NOT,  IN THE EVENT OF  LITIGATION,  SEEK TO ENFORCE THE
FOREGOING  WAIVER,  (ii)  HE,  SHE OR IT  UNDERSTANDS  AND  HAS  CONSIDERED  THE
IMPLICATIONS OF SUCH WAIVER,  (iii) HE, SHE OR IT MAKES SUCH WAIVER VOLUNTARILY,
AND (iv) HE, SHE OR IT HAS BEEN INDUCED TO ENTER INTO THIS  AGREEMENT  BY, AMONG
OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 10.10.

     10.11 Remedies Cumulative. Except as provided in Article IX or as otherwise
           -------------------
provided herein,  any and all remedies herein  expressly  conferred upon a party
will be deemed  cumulative with and not exclusive of any other remedy  conferred
hereby,  or by law or equity upon such party, and the exercise by a party of any
one remedy will not preclude the exercise of any other remedy.

     10.12  Incorporation of Exhibits and Schedules.  The Exhibits and Schedules
            --------------------------------------
identified  in this  Agreement are  incorporated  herein by reference and made a
part hereof.

     10.13 Specific  Performance.  Each of the parties  acknowledges  and agrees
           ---------------------
that the other  parties  would be  damaged  irreparably  in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached.  Accordingly,  notwithstanding  the arbitration
provisions of Section 9.5(e),  each of the parties agrees that the other parties
shall be entitled to an injunction  or  injunctions  to prevent  breaches of the
provisions of this Agreement and to enforce  specifically this Agreement and the
terms and provisions  hereof.  The parties agree that such injunctive relief may
only be sought in a state or federal court located in Sacramento, California and
that such court shall have jurisdiction over the parties and the matter thereof.

     10.14  Presentment,  Demand and Notice.  Sellers  shall be under no duty or
            -------------------------------
obligation to make or give any presentment, demands for performances, notices or
nonperformance,   protests,  notices  of  protest  or  notices  of  dishonor  in
connection with any Obligation or Indebtedness  owing by any Purchasing Party to
any Seller under the Notes, the Guaranty Agreement or the Pledge Agreement.

                         [Signatures Follow Immediately]



<PAGE>



     IN WITNESS  WHEREOF,  the parties have caused this Agreement to be executed
as of the Execution Date by their respective officers thereunto duly authorized.

                           COTC

                                CALIFORNIA-OREGON TELECOMMUNICATIONS
                                COMPANY


                                By:     /s/Robert H. Edgar
                                        Name: Robert H. Edgar
                                        Title: President

                           PURCHASER

                                LYNCH TELEPHONE CORPORATION XI


                                By:     /s/Robert E. Dolan
                                        Name: Robert E. Dolan
                                        Title: President

                           COMPANY

                                BRIGHTON COMMUNICATIONS CORPORATION


                                By:     /s/Robert E. Dolan
                                        Name: Robert E. Dolan
                                        Title: President

                           PARENT

                                LYNCH INTERACTIVE CORPORATION


                                By:     /s/Robert E. Dolan
                                        Name: Robert E. Dolan
                                        Title: Chief Financial Officer


<PAGE>




                           SELLERS:

                                /s/E. Joe Graham
                                /s/Susan M. Graham
                                Susan M. Graham, as Co-Trustee of the Elzy
                                  Joe Graham and Susan M. Graham
                                Trust of 1977, Restated March 8, 2000

                                /s/Robert W. Edgar
                                Robert W. Edgar

                                /s/Ava L. Edgar
                                /s/Brian H. Edgar
                                Brian H. Edgar, as Co-Trustee of the Edgar
                                  Family Revocable Trust dated
                                October 3, 2001

                                /s/Scott N. Edgar
                                Scott N. Edgar, Co-Trustee of the Scott N. Edgar
                                    and Tanya L. Edgar 2002 Revocable Trust

                                /s/Tanya L. Edgar
                                Tanya L. Edgar, Co-Trustee of the Scott N. Edgar
                                and Tanya L. Edgar 2002 Revocable Trust

                                /s/Robert H. Edgar
                                Robert H. Edgar, as Co-Trustee of the Edgar
                                  Family Revocable Trust U/A dated
                                March 2, 1999

                                /s/Marion A. Edgar
                                Marion Edgar, as Co-Trustee of the Edgar Family
                                  Revocable
                                Trust U/A dated March 2, 1999




<PAGE>




                                TABLE OF CONTENTS

                                                                           Page


Article I.        THE STOCK SALES.............................................1

         1.1      Sale and Purchase...........................................1

         1.2      Purchase Price..............................................1

         1.3      Form of Purchase Price......................................2

         1.4      Payment of the Purchase Price...............................2

         1.5      Closing.....................................................2

         1.6      Transactions at the Closing Date............................2

         1.7      Post-Closing Adjustments....................................3

         1.8      Sellers Representative......................................5

Article II.       REPRESENTATIONS AND WARRANTIES CONCERNING COTC COMPANIES....6

         2.1      Organization and Qualification; Subsidiaries................6

         2.2      Articles of Incorporation and Bylaws........................7

         2.3      Capitalization..............................................7

         2.4      Authority...................................................8

         2.5      No Conflict; Required Filings and Consents..................8

         2.6      Compliance; Permits.........................................8

         2.7      Reports; Financial Statements...............................9

         2.8      Absence of Certain Changes or Events........................10

         2.9      Absence of Litigation.......................................10

         2.10     Employee Benefit Plans......................................10

         2.11     Title to Property...........................................12

         2.12     Environmental Matters.......................................12

         2.13     Absence of Agreements.......................................14

         2.14     Taxes.......................................................14

         2.15     Insurance...................................................16

         2.16     Broker/Expenses.............................................16

         2.17     Material Adverse Effect.....................................16

         2.18     Material Contracts/Licenses.................................16

         2.19     Intangible Property.........................................17

         2.20     State Takeover Statutes; Absence of Supermajority Provision.17

         2.21     Easements; Rights of Way....................................17

         2.22     Transactions with Affiliates................................17

         2.23     Disclosure..................................................17

Article III.      SELLERS' REPRESENTATIONS AND WARRANTIES....................18

         3.1      Authority...................................................18

         3.2      No Conflict; Required Filings and Consents..................18

         3.3      Title to Stock..............................................19

         3.4      Investment Purpose..........................................19

         3.5      Accredited Investor Status..................................19

         3.6      Reliance on Exemptions......................................19

         3.7      Information.................................................19

         3.8      No Governmental Review......................................19

         3.9      Transfer or Resale..........................................19

         3.10     Legends.....................................................20

Article IV.       REPRESENTATIONS AND WARRANTIES OF THE PURCHASING PARTIES....20

         4.1      Organization and Qualification..............................20

         4.2      Authority...................................................20

         4.3      No Conflict; Required Filings and Consents..................20

         4.4      Compliance; Permits.........................................21

         4.5      Absence of Certain Changes or Events........................21

         4.6      Absence of Litigation.......................................21

         4.7      Investment Purpose..........................................22

         4.8      Accredited Investor Status..................................22

         4.9      Information.................................................22

         4.10     SEC Filings.................................................22

         4.11     Broker/Expenses.............................................22

         4.12     Employees...................................................22

         4.13     Disclosure..................................................22

Article V.        PRE-CLOSING COVENANTS.......................................23

         5.1      Affirmative Covenants of Selling Parties....................23

         5.2      Negative Covenants of Selling Parties.......................24

         5.3      Access and Information......................................25

         5.4      Update Disclosure...........................................26

         5.5      Delivery of Stockholder List................................26

         5.6      Appropriate Action; Consents; Filings.......................26

         5.7      Government Consents.........................................26

         5.8      Expenses....................................................27

         5.9      Notification of Certain Matters.............................27

         5.10     Environmental Investigation.................................27

         5.11     Shareholder Indebtedness....................................28

         5.12     Marketable Securities.......................................28

         5.13     Distribution of Miscellaneous Assets........................28

         5.14     Vehicles Used By Sellers....................................29

Article VI.       POST-CLOSING COVENANTS OF PURCHASING PARTIES................29

         6.1      Financial Statements and Regulatory Filings.................29

         6.2      Certificates; Other Information.............................30

         6.3      Notices.....................................................30

         6.4      Preservation of Corporate Existence, Etc....................30

         6.5      Payment of Obligations......................................31

         6.6      Maintenance of Books and Records............................31

         6.7      Directorships...............................................31

         6.8      SEC Filings.................................................31

         6.9      Dividends and Affiliate Transactions........................31

Article VII.      CONDITIONS PRECEDENT TO CLOSING.............................31

         7.1      Conditions to Obligation of Each Party to Effect the Stock
                                           Sales..............................31

         7.2      Additional Conditions to Obligations of the Purchaser.......32

         7.3      Additional Conditions to Obligations of Sellers.............33

Article VIII.     TERMINATION, AMENDMENT AND WAIVER...........................34

         8.1      Termination.................................................34

         8.2      Effect of Termination.......................................35

         8.3      Waiver......................................................35

Article IX.       INDEMNIFICATION.............................................35

         9.1      Survival of Representations.................................35

         9.2      Indemnification by Sellers..................................35

         9.3      Indemnification by Purchaser................................36

         9.4      Indemnification Procedure...................................36

         9.5      Limitations on Indemnification Obligations..................38

         9.6      Other Indemnification Provisions............................39

Article X.        GENERAL PROVISIONS..........................................39

         10.1     Notices.....................................................39

         10.2     Headings....................................................40

         10.3     Severability................................................40

         10.4     Entire Agreement............................................41

         10.5     Assignment..................................................41

         10.6     Parties in Interest.........................................41

         10.7     Counterparts................................................41

         10.8     Amendment/Waiver............................................41

         10.9     Governing Law...............................................41

         10.10    Waiver of Jury Trial........................................41

         10.11    Remedies Cumulative.........................................42

         10.12    Incorporation of Exhibits and Schedules.....................42

         10.13    Specific Performance........................................42

         10.14    Presentment, Demand and Notice..............................42

EXHIBITS:
Exhibit A - Note
Exhibit B - Pledge Agreement
Exhibit C - Guaranty Agreement
Exhibit D - Opinion of Sellers' Counsel
Exhibit E - Opinion of Steefel, Levitt & Weiss
Exhibit F - Opinion of John Fikre

SCHEDULES:
Schedule A - List of Sellers and Allocation of Purchase Price
Schedule B - Definitions
Sellers Disclosure Schedule
Purchasers Disclosure Schedule




<PAGE>





                                   SCHEDULE B

                             ADDITIONAL DEFINITIONS

For purposes of this Agreement, the term:

     (a) "Affiliate" means a person that directly or indirectly,  through one or
more  intermediaries,  controls,  is controlled  by, or is under common  control
with, the first mentioned person; including, without limitation, any partnership
or joint venture in which any person (either  alone,  or though or together with
any other subsidiary) has, directly or indirectly, an interest of 5% or more.

     (b)  "Business  Day" means any day that is not a Saturday,  Sunday or legal
holiday on which  federally-chartered  banks are  required or  authorized  to be
closed.

     (c)  "Default"  means any  event of  default  or any event or  circumstance
which,  with the giving of  notice,  the lapse of time,  or both,  would (if not
cured or otherwise remedied during such time) constitute an Event of Default.

                  (d) "Dividends Paid Adjustment" means an amount equal to all
     dividends and distributions made by COTC to its stockholders during period
beginning on January 1, 2003 and continuing to the Closing that are not included
in the Marketable Securities Adjustment, the Excess Marketable Securities
Proceeds Adjustment or the Miscellaneous Asset Adjustment.

     (e) "Event of Default" means,  with respect to this  Agreement,  any of the
events or circumstances  specified as such in the Notes, and any material breach
of this Agreement by any  Purchasing  Party that is not cured within 30 Business
Days thereof.

     (f) "Final  Purchase  Price" means the Purchase Price adjusted for:  (i)the
Marketable Securities Adjustment, (ii) the Excess Marketable Securities Proceeds
Adjustment,  (iii) the Dividends  Paid  Adjustment,  and (iv) the  Miscellaneous
Asset Adjustment.

     (g)  "Indebtedness"  of an  person  means the  aggregate  amount of all (i)
indebtedness for money borrowed from others,  redemption  obligations in respect
of mandatorily redeemable preferred stock, capital lease obligations,  dividends
payable to its  stockholders,  and purchase money  indebtedness  of such person,
(ii) indebtedness of the type described in clause (i) above guaranteed, directly
or indirectly,  in any manner by such person, or in effect guaranteed,  directly
or indirectly, in any manner by such person through an agreement,  contingent or
otherwise,  to supply funds to, or in any other manner to invest in, the debtor,
or to  purchase  indebtedness,  or to  purchase  and  pay  for  property  if not
delivered or to pay for services if not performed,  primarily for the purpose of
enabling the debtor to make payment of the  indebtedness or to assure the owners
of the indebtedness against loss, but excluding endorsements of checks and other
instruments in the ordinary course,  (iii) indebtedness of the type described in
clause (i) above  secured by any lien upon property  owned by such person,  even
though such person has not in any manner  become  liable for the payment of such
indebtedness  and (iv) interest  expense accrued but unpaid,  and all prepayment
premiums, on or relating to any such indebtedness.

     (h) "Lien" means any security interest,  mortgage,  deed of trust,  pledge,
hypothecation,  assignment,  charge or deposit  arrangement,  encumbrance,  lien
(statutory  or  other)  or  preferential  arrangement  of  any  kind  or  nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any  conditional  sale or other title retention  agreement,  the
interest  of a  lessor  under  a  capital  lease,  any  financing  lease  having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor,  under the UCC or any  comparable  law) and any  contingent  or other
agreement to provide any of the  foregoing,  but not including the interest of a
lessor under an operating  lease if such lease is treated as an operating  lease
both under GAAP and under the Code for income tax purposes.

     (i) "Marketable Securities" means all of the direct investments in publicly
traded securities,  mutual funds and brokerage accounts of the COTC Companies in
the total fair market value of $3,286,834 as of December 31, 2002, which written
list of securities is set forth in Section B(i) of Sellers Disclosure Schedule.

     (j) "Marketable Securities Adjustment" means (i) the difference between (A)
the  Marketable  Securities  Valuation  as of the  Closing  Date,  and  (B)  the
Marketable  Securities  Valuation as of December 31, 2002, (ii) plus (A) the net
proceeds  received  from the sale or exchange  of  Marketable  Securities  after
December  31,  2002,  minus  (B) the  cost  basis  of  purchases  of  additional
Marketable  Securities  after December 31, 2002,  (iii) net of the aggregate tax
affect of the sale,  disposition or change in value of the Marketable Securities
from  December 31, 2002 to the Closing  Date.  For purposes of  determining  the
aggregate tax affect,  any tax benefit  realized by COTC Companies from the sale
or other  disposition  of the  Miscellaneous  Assets  shall be  offset  (without
duplication)  against  any  tax  benefit/detriment   resulting  from  the  sale,
exchange, disposition or change in value of the Marketable Securities.

     (k) "Marketable Securities Valuation" means the aggregate fair market value
of the Marketable Securities as of the Closing Date.

     (l)  "Material  Adverse  Effect"  means any effect or change  that would be
materially adverse to the business,  assets, condition (financial or otherwise),
operating  results,  operations,  or business prospects of COTC Companies on the
one hand,  or Purchasing  Parties on the other hand taken as a whole,  or on the
ability of any Party to consummate timely the transactions contemplated hereby.

     (m) "Material Adverse Effect  Post-Closing" means any effect or change that
would be materially  adverse to the business,  assets,  condition  (financial or
otherwise),  operating  results,  operations,  or  business  prospects  of  COTC
Companies,  taken as a whole, or Purchasing Parties, taken as a whole, or on the
ability of  Purchasing  Parties to timely pay all amounts  owing on the Notes in
accordance with their term, (regardless of whether or not such adverse effect or
change can be or has been cured at any time or whether Sellers have knowledge of
such effect or change on the date hereof),  including any adverse change, event,
development,  or effect  arising  from or relating  to (a)  general  business or
economic  conditions,  including such conditions related to the business of COTC
Companies or  Purchasing  Parties,  (b) national or  international  political or
social conditions, including the engagement by the United States in hostilities,
whether or not pursuant to the  declaration  of a national  emergency or war, or
the occurrence of any military or terrorist  attack upon the United States,  (c)
financial,  banking,  or  securities  markets,  (d)  changes  in  United  States
generally   accepted   accounting   principles,   (e)  changes  in  law,  rules,
regulations,  orders,  or other binding  directives  issued by any  governmental
entity, and (f) the taking of any action  contemplated by this Agreement and the
other agreements contemplated hereby.

     (n)  "Obligation"  means all  advances,  debts,  liabilities,  obligations,
covenants  and  duties  arising  under any  Transaction  Documents  owing by any
Purchasing  Party to any Seller,  whether  direct or indirect  (including  those
acquired by  assignment),  absolute  or  contingent,  due or to become due,  now
existing or hereafter arising.

     (o) "Permitted  Investment" means investments issued or fully guaranteed as
to principal  and interest by the United States (or any money market mutual fund
which  invests  solely in such  investments)  or  certificates  of  deposits  or
accounts fully insured by the Federal Deposit Insurance Corporation.

     (p) "Person" means an individual,  limited liability company,  corporation,
partnership,  association,  trust, unincorporated organization,  other entity or
group (as defined in Section 13(d) of the 1934 Act).

     (q)  "Subsidiary" or  "subsidiaries"  of any Person means any  corporation,
partnership,  joint  venture or other legal  entity of which any Person  (either
alone or through or  together  with any other  subsidiary),  owns,  directly  or
indirectly,  50% or more of the stock or other equity  interests  the holders of
which are generally  entitled to vote for the election of the board of directors
or other governing body of such corporation or other legal entity.

     (r)  "Transaction  Documents"  means  this  Agreement,   the  Exhibits  and
Schedules to this  Agreement,  and all other  documents  delivered in connection
with the transactions contemplated by this Agreement.

                         TERMS DEFINED IN THE AGREEMENT

The following are terms defined within this Agreement:

     1. "1933 Act" has the meaning set forth in Section 3.4.

     2. "1934 Act" has the meaning set forth in Section 4.10(b).

     3. "Acquisition Financing" has the meaning set forth in Section
        1.6(a)(iii).

     4. "Acquisition Lender" has the meaning set forth in Section 1.6(a)(iii).

     5. "Adjustment Report" has the meaning set forth in Section 1.7(a).

     6. "Agreement" has the meaning set forth in the Recital Section hereof.

     7. "Arbiter" has the meaning set forth in Section 1.7(c).

     8. "Balance Sheet" has the meaning set forth in Section 2.7(b).

     9. "Basket" has the meaning set forth in Section 9.5(a).

     10. "Broker" has the meaning set forth in Section 5.13(e)(ii).

     11. "Buyer Indemnified Persons" has the meaning set forth in Section 9.2.

     12. "Cal One Excess Proceeds" has the meaning set forth in Section
         5.13(e)(i).

     13. "Cal One Interest" has the meaning set forth in Section 5.13(e)(i).

     14. "Cash Portion" has the meaning set forth in Section 1.3.

     15. "Closing" has the meaning set forth in Section 1.5.

     16. "Closing Date" has the meaning set forth in Section 1.5.

     17. "Code" has the meaning set forth in Section 2.10(b).

     18. "Common Stock" has the meaning set forth in the Recital Section hereof.

     19. "Company" has the meaning set forth in the Recital Section hereof.

     20. "Damages" has the meaning set forth in Section 9.2.

     21. "Environmental Claims" for purposes of Section 2.12 has the meaning set
         forth in Section 2.12(b).

     22. "Environmental Investigation" has the meaning set forth in Section
         5.10.

     23. "Environmental Law" for purposes of Section 2.12 has the meaning set
         forth in Section 2.12(b).

     24. "Environmental Permits" for purposes of Section 2.12 has the meaning
         set forth in Section 2.12(b).

     25. "ERISA" has the meaning set forth in Section 2.10(a).

     26. "Excess Marketable Securities Proceeds Adjustment" has the meaning set
         for in Section 5.11(b).

     27. "Execution Date" has the meaning set forth in the Recital Section
         hereof.

     28. "Expenses" has the meaning set forth in Section 5.8.

     29. "FCC" has the meaning set forth in Section 2.5(b).

     30. "Financial Statements" has the meaning set forth in Section 2.7(b).

     31. "FuGasity Investment" has the meaning set forth in Section 5.13(a).

     32. "GAAP" has the meaning set forth in Section 2.7(b).

     33. "Government Consents" has the meaning set forth in Section 2.5(b).

     34. "Guaranty Agreement" has the meaning set forth in Section 1.3.

     35. "Hazardous Materials" has the meaning set forth in Section 2.12(b).

     36. Reserved.

     37. "Indemnifying Party" has the meaning set forth in Section 9.4.

     38. "Indemnitee" has the meaning set forth in Section 9.4.

     39. "Independent Auditor" has the meaning set forth in Section 6.1(a).

     40. "Intellectual Property" has the meaning set forth in Section 2.18(a).

     41. "IRS" has the meaning set forth in Section 2.10(a).

     42. "Laws" has the meaning set forth in Section 2.5(a).

     43. "Losing Party" has the meaning set forth in Section 1.7(d).

     44. "Material Contract" has the meaning set forth in Section 2.18(a).

     45. "Miscellaneous Asset Adjustment" has the meaning set forth in Section
         5.13.

     46. "Net Proceeds" has the meaning set forth in Section 5.13(e)(i).

     47. "Note Portion" has the meaning set forth in Section 1.3.

     48. "Notes" has the meaning set forth in Section 1.3.

     49. "Objection Notice" has the meaning set forth in Section 1.7(b).

     50. "Organizational Documents" has the meaning set forth in Section 2.2."

     51. "Parent" has the meaning set forth in the Recital Section hereof.

     52. "Parent SEC Documents" has the meaning set forth in Section 4.10(a).

     53. "Plans" has the meaning set forth in Section 2.10(a).

     54. "Pledge Agreement" has the meaning set forth in Section 1.3.

     55. "Preferred Stock" has the meaning set forth in the Recital Section
          hereof.

     56. "Prevailing Party" has the meaning set forth in Section 1.7(d).

     57. "PUC" has the meaning set forth in Section 2.5(b).

     58. "Purchase Price" has the meaning set forth in Section 1.2.

     59. "Purchased Stock" has the meaning set forth in the Recital Section
         hereof.

     60. "Purchaser" has the meaning set forth in the Recital Section hereof.

     61. "Purchaser Disclosure Schedule" has the meaning set forth in the
         preamble of Article IV.

     62. "Purchasing Parties" has the meaning set forth in the Recital Section
         hereof.

     63. "RCRA" has the meaning set forth in Section 2.12(b).

     64. "Release" for purposes of Section 2.12 has the meaning set forth in
         Section 2.12(b).

     65. "Requisite Sellers" has the meaning set forth in Section 8.1(a).

     66. "SEC" has the meaning set forth in Section 4.10(a).

     67. "Section 5.1(h) Financial Statements" has the meaning set forth in
         Section 2.7(b).

     68. "Seller" has the meaning set forth in the Recital Section hereof.

     69. "Sellers" has the meaning set forth in the Recital Section hereof.

     70. "Sellers' Counsel" has the meaning set forth in Section 7.2(e).

     71. "Sellers Disclosure Schedule" has the meaning set forth in the preamble
         of Article II.

     72. "Sellers Representative" has the meaning set forth in Section 1.8.

     73. "Seller Indemnified Persons" has the meaning set forth in Section 9.3.

     74. "Selling Parties" has the meaning set forth in the Recital Section
          hereof.

     75. "Stock Sales" has the meaning set forth in Section 1.1.

     76. "Subordination Agreement" has the meaning set forth in Section
         1.6(a)(iii).

     77. "COTC" has the meaning set forth in the Recital Section hereof.

     78. "COTC Company" and "COTC Companies" have the meanings set forth in the
         Recital Section hereof.

     79. "COTC Reports" has the meaning set forth in Section 2.7(a).

     80. "COTC Subsidiary" and "COTC Subsidiaries" have the meaning set forth in
         Section 2.1(a).

     81. "Tax" has the meaning set forth in Section 2.14(a).

     82. "Tax Returns" has the meaning set forth in Section 2.14(a).

     83. "Taxes" has the meaning set forth in Section 2.14(a).

     84. "Telephone Company" has the meaning set forth in Section 6.1(a).

     85. "Title IV Plan" has the meaning set forth in Section 2.10(b).


</TEXT>
</DOCUMENT>
