LENDINGTREE INC, S-1/A, 2000-02-10

LENDINGTREE INC
S-1/A, 2000-02-10
BUSINESS SERVICES, NEC

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 10, 2000

REGISTRATION NO. 333-91839
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 4 TO FORM S-1

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------

LENDINGTREE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 7370 25-1795344
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

------------------------

6701 CARMEL ROAD, SUITE 205
CHARLOTTE, NORTH CAROLINA 28226
(704) 541-5351
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)

------------------------

MR. DOUGLAS R. LEBDA
CHIEF EXECUTIVE OFFICER
LENDINGTREE, INC.
6701 CARMEL ROAD, SUITE 205
CHARLOTTE, NORTH CAROLINA 28226
(704) 541-5351
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)

------------------------

Copies to:

<TABLE>
<S> <C>
DAVID J. GOLDSCHMIDT, ESQ. MICHAEL J. SCHIAVONE, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP ALAN L. JAKIMO, ESQ.
FOUR TIMES SQUARE BROWN & WOOD LLP
NEW YORK, NEW YORK 10036 ONE WORLD TRADE CENTER
(212) 735-3000 NEW YORK, NEW YORK 10048
(212) 839-5300
</TABLE>

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. []

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [] ---------------

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [] ---------------

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [] ---------------

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. []

------------------------

CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------

<S> <C> <C> <C> <C>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE(1) FEE(1)(3)
Common Stock, par value $0.01 per share
(including the associated Rights to
purchase Series A Junior Participating
Preferred Stock)(2)..................... 4,197,500 $12 $50,370,000 $13,298
</TABLE>

- --------------------------------------------------------------------------------

(1) Estimated pursuant to Rule 457(o) under the Securities Act of 1933, as
amended, solely for the purpose of computing the amount of the registration
fee.

(2) The Rights to purchase shares of our Series A Junior Participating Preferred
Stock initially are attached to and trade with the shares of our common
stock being registered hereby. Value attributed to such Rights, if any, is
reflected in the market price of our common stock.

(3) The registration fee was paid previously.
----------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS
NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER
TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED FEBRUARY 10, 2000

PROSPECTUS

3,650,000 SHARES

[LENDINGTREE, INC. LOGO]

COMMON STOCK
----------------------
This is LendingTree, Inc.'s initial public offering. LendingTree, Inc. is
selling all of the shares.

We expect the public offering price to be between $10.00 and $12.00 per
share. Currently, no public market exists for the shares. The shares have been
approved for quotation on the Nasdaq National Market under the symbol "TREE."

INVESTING IN THE COMMON STOCK INVOLVES RISKS THAT ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 5 OF THIS PROSPECTUS.
----------------------

<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- -----
<S> <C> <C>
Public offering price...................................... $ $
Underwriting discount...................................... $ $
Proceeds, before expenses, to LendingTree, Inc. ........... $ $
</TABLE>

----------------------
The underwriters may also purchase up to an additional 547,500 shares from
LendingTree, Inc. at the public offering price, less the underwriting discount,
within 30 days from the date of this prospectus to cover over-allotments.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

The shares will be ready for delivery on or about , 2000.

----------------------
MERRILL LYNCH & CO.
LEHMAN BROTHERS
PRUDENTIAL VOLPE TECHNOLOGY
A UNIT OF PRUDENTIAL SECURITIES
----------------------
The date of this prospectus is , 2000.
<PAGE> 3

APPENDIX -- DESCRIPTION OF GRAPHICS

PROSPECTUS COVER

INSIDE FRONT COVER

The LendingTree logo is positioned in the center of the page with the caption
"Internet Loan Marketplace" placed below it. The LendingTree logo is
encapsulated by a cylinder with the caption "[i]close Marketplace Technology"
placed above and below the cylinder. On either side and above the cylinder are
two captions, "Consumer Demand" and "Lender Supply." Below these headings are
five elongated cubes containing the names of the principal types of loans
offered on the network and the methods by which consumers can access the
network.

The cubes below "Consumer Demand" read:
+ LendingTree.com(SM)
+ Co-Branded Loan Centers
+ Lender Websites
+ Affiliate Network
+ Other Links

The cubes below "Lender Supply" read:
+ Mortgages
+ Home Equity Loans
+ Automobile Loans
+ Credit Cards
+ Personal Loans

Attached to the end of each cube is an arrow which points in the direction of
the cylinder. Below the cylinder there are three boxes placed in a triangular
formation. Each box contains a brief description of one of the following;
"[i]close(SM) Technology," "Lender Supply," or "Consumer Demand."

The text of the [i]close(SM) Technology box: LendingTree's proprietary
[i]close(SM) technology powers the marketplace.

The text of the Lender Supply box: LendingTree's network of more than 90 lenders
provides product coverage and fosters competition.

The text of the Consumer Demand box: LendingTree collects consumer demand across
the Internet from multiple points of distribution.

INSIDE GATEFOLD (two pages)

The gatefold has the five steps a consumer will go through to use LendingTree's
services.

+ Step one illustrates consumer access.
+ Step two illustrates a loan request being completed on a credit request
form.
+ Step three demonstrates how the filtering process matches consumer's credit
requests with the lender's criteria.
+ Step four illustrates the lender evaluation process.
+ Step five illustrates the communication of the lender's offer and the
consumer's acceptance.

Steps one, two, four and five provide a graphical picture of an illustrative
webpage. Step three provides a graphical illustration of the filtering process.

The text associated with step one states: Consumers access the LendingTree
marketplace through LendingTree.com or other points of distribution and select
one of five loan categories.

The text associated with step two states: Consumers complete a single loan
request form.

The text associated with step three states: Through our proprietary filtering
process the consumer's credit request is matched to the preset underwriting
criteria of our lenders and transmitted to up to four lenders.

The text associated with step four states: Lenders evaluate and respond to
loan requests within one business day via a secure website.

The text associated with step five states: The LendingTree system automatically
notifies the consumer to return to the LendingTree website to view and compare
the terms of each offer and choose the loan that is best for them.
<PAGE> 4

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary..................................................... 1
Risk Factors................................................ 5
Forward-Looking Statements.................................. 14
Use of Proceeds............................................. 15
Dividend Policy............................................. 15
Capitalization.............................................. 16
Dilution.................................................... 17
Selected Financial and Operating Data....................... 18
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 19
Business.................................................... 26
Management.................................................. 39
Certain Relationships and Related Transactions.............. 54
Principal Stockholders...................................... 57
Description of Capital Stock................................ 59
Shares Eligible for Future Sale............................. 63
Important United States Federal Tax Considerations for
Non-U.S. Holders of Our Common Stock...................... 65
Underwriting................................................ 67
Legal Matters............................................... 71
Experts..................................................... 71
Where You Can Find More Information......................... 71
Index to Financial Statements............................... F-1
</TABLE>

----------------------

This prospectus contains estimates of market growth and other information
related to the Internet. These estimates have been included in studies published
by Forrester Research and International Data Corporation, which are market
research firms, and by the United States Federal Reserve and the U.S. Census
Bureau. These estimates assume that certain events, trends and activities will
occur. None of these entities guarantees the accuracy or completeness of its
information and estimates. We have not independently verified the information
and assumptions on which these market growth estimates are based. If any of
these entities is wrong about any of its assumptions, then its market estimates
may also be wrong.

You should rely only on the information contained in this prospectus. We
have not, and the underwriters have not, authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus is accurate only as of the date on
the front cover of this prospectus. Our business, financial condition, results
of operations, and prospects may have changed since that date.

----------------------

LendingTree(R) is a registered service mark of LendingTree, Inc.
[i]close(SM) is a service mark of LendingTree, Inc. Other service marks or
trademarks appearing in this prospectus are the property of their respective
holders.
<PAGE> 5

SUMMARY

This summary is not complete and does not contain all of the information
that you should consider before investing in our common stock. You should read
the entire prospectus carefully, including the more detailed information
regarding LendingTree, the risks of purchasing our common stock discussed under
"Risk Factors," and our financial statements and the accompanying notes.

We are an Internet-based loan marketplace for consumers and lenders. Using
a simple and powerful consumer proposition, "Lenders compete for your business,"
we collect consumer credit requests and compare these requests and related
credit information to the underwriting criteria of more than 90 participating
lenders in our network. Consumers can receive multiple offers in response to a
single credit request and then compare, review, and accept the loan offer that
best suits their needs. Lenders can generate new business that meets their
specific underwriting criteria at a cost that is lower than the cost associated
with offline loan originations. Our marketplace encompasses most consumer credit
categories, including mortgages, home equity loans, automobile loans, credit
cards, and personal loans. We power our website with our proprietary loan
marketplace technology platform, which we call [i]close(SM).

We are a marketplace that facilitates the lending process. Because we are
not a lender, we have reduced exposure to interest rate and market risks
generally associated with traditional lending activities. Our revenue model
depends on revenue generated from lenders participating in our network who pay
us fees based upon their receipt of credit requests, which we refer to as
transmission fees, and fees based upon loan closings, which we refer to as
closed-loan fees. We also license our [i]close technology to other companies who
create single and multi-lender online marketplaces. Credit requests not meeting
lenders' criteria on those marketplaces are routed to our lender network,
increasing our overall volume.

Our marketplace provides important benefits to consumers, including:

- Price. We foster a competitive bidding environment, encouraging lenders
to price loan offers aggressively as they compete for consumers'
business.

- Consumer Advocacy. Consumers view us as their advocate. Through the
range of online information and tools presented on our website, combined
with our support and service, we aim to reduce the confusion often
experienced by consumers during the borrowing process and the time that
it takes to obtain loans.

- Choice. We provide qualified consumers with up to four loan offers from
our network lenders.

- Convenience. We save consumers valuable time by enabling them to go
online, complete one credit request form, which we refer to as a
Qualification Form, and receive up to four loan offers.

- Content. We provide consumers with educational materials about the
borrowing process, answers to frequently asked questions, informative
articles, and interactive loan calculators.

- No Fees. Our service is free to consumers.

Our marketplace provides important benefits to lenders, including:

- New Business. Leveraging the reach of the Internet, we provide lenders
with access to a significantly larger audience of qualified consumers.

- Lower Acquisition Costs. Our fees are designed to be less than the cost
of acquiring customers through traditional and other online channels. Our
[i]close technology enables lenders to process credit requests more
efficiently and at significantly reduced costs.

- Market Information. We collect and distribute to our lenders valuable
information about the online lending marketplace. This information
enables our lenders to refine and improve their Internet lending
strategies and quickly respond to changing market conditions.

1
<PAGE> 6

Our goal is to be the predominant loan marketplace on the Internet. The key
elements of our strategy are to:

- strengthen our position as an online marketplace offering multiple loan
products from a wide variety of lenders;

- increase brand awareness and transaction volume;

- attract lenders offering an array of products across a wide range of
consumer credit profiles and geographic locations;

- expand transaction volume through online relationships;

- establish [i]close as the dominant loan marketplace technology; and

- assist our network lenders to increase their loan closing rates.

LendingTree commenced nationwide operations on July 1, 1998. Since that
time the LendingTree network has expanded to include more than 90 lenders. Non
Internet-based lenders that generated the highest number of closed loans on our
website during the fourth quarter of 1999 were Bank One, PNC Bank FSB, Provident
Bank and Sovereign Bank. Online lending companies that generated the highest
number of closed loans on our website during that same period were
AppOnline.com, giggo.com, MortgageSelect.com and Smart-Finance.com.

For the quarter ended December 31, 1999, we transmitted 68,200
Qualification Forms, representing $5.0 billion in loan demand, and our lenders
closed loans totaling $440 million. These numbers reflect significant growth
when compared to the quarter ended December 31, 1998, with 9,500 Qualification
Forms transmitted, representing $902 million in loan demand, which resulted in
$11 million in closed loans.

For the quarter ended December 31, 1999, total revenue was $2.9 million, an
increase of more than 22 times revenue of $0.1 million for the quarter ended
December 31, 1998. Our net loss was $8.8 million for the quarter ended December
31, 1999, nearly three times the $3.0 million net loss for the quarter ended
December 31, 1998. For more information, see the sections entitled "Summary
Financial and Operating Data" and "Selected Financial and Operating Data," as
well as our audited financial statements included elsewhere in this prospectus.

We intend to expend significant funds on building the LendingTree brand
identity through increased advertising and related promotional activity, hiring
additional personnel, and further developing our website, [i]close technology,
and network infrastructure.

You should read the section of this prospectus entitled "Risk Factors."
That section indicates among other things that:

- we have a history of significant losses;

- from our inception through December 31, 1999 our accumulated losses were
$32.1 million;

- we anticipate incurring significant losses in the foreseeable future; and

- we operate in a highly competitive online market with low barriers to
entry.

2
<PAGE> 7

THE OFFERING

<TABLE>
<S> <C>
Common stock offered by us................... 3,650,000 shares
Common stock to be outstanding
after the offering......................... 17,215,234 shares
Use of proceeds.............................. We estimate that the net proceeds from this
offering will be approximately $35.3 million.
We expect to use these net proceeds
principally for advertising and marketing, as
well as for general corporate purposes.
Risk factors................................. See "Risk Factors" beginning on page 5 for a
discussion of risks that you should consider
carefully before deciding to invest in shares
of our common stock.
Nasdaq National Market symbol................ "TREE"
</TABLE>

Throughout this prospectus, except where otherwise indicated, the number of
shares of common stock that will be outstanding after this offering is based on
the number of shares outstanding as of January 31, 2000. The number of
outstanding shares excludes:

- 857,885 shares issuable upon the exercise of outstanding warrants;

- 100,000 shares issuable upon the exercise of an option granted to our
Chief Executive Officer at an exercise price equal to the initial public
offering price that can only be exercised prior to the commencement of
trading of our common stock on the Nasdaq National Market;

- 444,500 shares reserved for issuance under our employee stock purchase
plan;

- 750,836 shares reserved for future grants under our 1999 stock option
plan; and

- 3,684,419 shares issuable at a weighted average exercise price of $5.21
per share upon exercise of stock options outstanding as of January 31,
2000.

All information in this prospectus:

- assumes that a 1.27-for-1 common stock split is effected before
completion of this offering;

- reflects the automatic conversion of all outstanding shares of our
convertible preferred stock into 10,150,673 shares of our common stock
upon the closing of this offering;

- except as otherwise indicated, includes accumulated dividends on our
convertible preferred stock which were convertible into 292,877 shares of
common stock as of January 31, 2000; and

- except as otherwise indicated, assumes that the underwriters do not
exercise their over-allotment option to purchase additional shares in
this offering.

LendingTree was incorporated in Delaware on June 7, 1996. Our principal
executive offices are located at 6701 Carmel Road, Suite 205, Charlotte, North
Carolina, 28226. Our telephone number is (704) 541-5351, and our website is
located at www.lendingtree.com. Information on our website is not a part of this
prospectus.

3
<PAGE> 8

SUMMARY FINANCIAL AND OPERATING DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

The following table sets forth summary financial and operating data for our
business. You should read this information together with our financial
statements and the accompanying notes included in this prospectus and the
information under "Management's Discussion and Analysis of Financial Condition
and Results of Operations." The "pro forma as adjusted" balance sheet data gives
effect to the automatic conversion of all outstanding shares of convertible
preferred stock and accumulated dividends through December 31, 1999 into common
stock and reflects our sale of shares of common stock offered by this
prospectus. The calculation of pro forma basic and diluted net loss per common
share excludes shares issuable upon the payment of accumulated dividends on our
convertible preferred stock.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1997 1998 1999
------ ---------- -----------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
REVENUE:
LendingTree network............................ $ 2 $ 273 $ 6,112
[i]close and other technology.................. -- 136 852
------ ---------- -----------
Total revenue.......................... 2 409 6,964
------ ---------- -----------
COST OF REVENUE:
LendingTree network............................ -- 235 2,231
[i]close and other technology.................. -- 149 312
------ ---------- -----------
Total cost of revenue.................. -- 384 2,543
------ ---------- -----------
Gross profit..................................... 2 25 4,421
------ ---------- -----------
OPERATING EXPENSES:
Product development............................ 293 1,051 1,109
Marketing and advertising...................... 54 2,494 18,611
Sales, general and administrative.............. 621 2,955 9,951
------ ---------- -----------
Total operating expenses............... 968 6,500 29,671
------ ---------- -----------
LOSS FROM OPERATIONS............................. (966) (6,475) (25,250)
Interest income, net........................... 3 41 505
------ ---------- -----------
Net loss....................................... $ (963) $ (6,434) $ (24,745)
====== ========== ===========
Basic and diluted net loss per common share.... $(1.20) $ (1.88) $ (7.74)
====== ========== ===========
Weighted average shares used in computing basic
and diluted net loss per common share....... 803,370 3,434,736 3,560,197
------- ---------- -----------
------- ---------- -----------
PRO FORMA PER COMMON SHARE DATA:
Pro forma basic and diluted net loss per common
share.......................................... $ (3.23)
===========
Pro forma weighted average basic and diluted
shares outstanding............................. 7,650,229
===========
OPERATING DATA:
Qualification Forms transmitted:
Number......................................... -- 18,247 185,792
Dollar volume (in thousands)................... $ -- $1,596,662 $16,209,918
Loans closed:
Number......................................... -- 712 27,155
Dollar volume (in thousands)................... $ -- $ 25,516 $ 940,707
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
------------------------
PRO FORMA
ACTUAL AS ADJUSTED
------- -----------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.................................. $ 2,419 $37,758
Short-term investments..................................... 27,053 27,053
Working capital............................................ 26,474 61,813
Total assets............................................... 33,767 69,106
Convertible preferred stock................................ 59,118 --
Total stockholders' equity................................. 27,737 63,076
</TABLE>

4
<PAGE> 9

RISK FACTORS

Any investment in our common stock involves a high degree of risk. You
should consider carefully the following information about these risks, together
with the other information contained in this prospectus, before you decide to
buy our common stock. If any of the following risks actually occur, our
business, financial condition, or results of operations would likely suffer. In
any such case, the market price of our common stock could decline, and you could
lose all or part of the money you paid to buy our common stock.

RISKS RELATED TO OUR FINANCIAL CONDITION

OUR LIMITED OPERATING HISTORY MAKES OUR BUSINESS AND PROSPECTS DIFFICULT TO
EVALUATE.

We have a limited operating history on which to base your evaluation of our
business and prospects. We were formed in 1996 and began serving consumers
across the United States in July 1998. There is no significant historical basis
to assess how we will respond to competitive, economic or technological
challenges. Our business and prospects must be considered in light of the risks
and uncertainties frequently encountered by companies in the early stages of
development, particularly companies like us who operate in new and rapidly
developing online marketplaces. Our failure to address these risks and
uncertainties could cause our operating results to suffer and result in the loss
of all or part of your investment.

WE HAVE A HISTORY OF LOSSES AND EXPECT LOSSES IN THE FUTURE.

We have never been profitable. We incurred losses from operations of
approximately $6.5 million in 1998 and $25.3 million in 1999. As of December 31,
1999, we had accumulated net losses of approximately $32.1 million. We currently
estimate that we will spend approximately $50.0 million during 2000 on marketing
and advertising, more than double what we spent in 1999.

We also intend to use the offering proceeds for general corporate purposes,
such as:

- enhancing our technology, including our filtering system, network
infrastructure, and the functionality of our website;

- hiring additional personnel; and

- establishing and developing online relationships.

As a result of these expenditures, we anticipate further losses for the
foreseeable future.

We forecast our future expense levels based on our operating plans and our
estimates of future revenue. We may find it necessary to accelerate expenditures
relating to our sales and marketing efforts or otherwise increase our financial
commitment to creating and maintaining brand awareness among consumers and
lenders. If our revenue grows at a slower rate than we anticipate, or if our
spending levels exceed our expectations or cannot be adjusted to reflect slower
revenue growth, we may not achieve or sustain profitability. If we fail to
become or remain profitable, the value of your investment could be significantly
reduced.

OUR BUSINESS MODEL IS UNPROVEN AND COULD FAIL.

Our revenue model and profit potential are unproven and we cannot assure
you that we will be able to become profitable. Our revenue model depends heavily
on revenue generated from lenders participating in our network who pay us fees
based upon their receipt of credit requests, which we refer to as transmission
fees, and fees based upon loan closings, which we refer to as closed-loan fees.
We also license our [i]close technology to other companies who create single and
multi-lender online marketplaces. To generate revenue we must rapidly achieve
broad market acceptance of our service by both lenders and consumers who have
traditionally used other means to lend and borrow money. In addition, we must
attract a sufficient number of consumers with credit profiles targeted by our
lenders. It is possible that our online loan marketplace model will not gain the
widespread acceptance necessary to support our business, in which case we may
find it necessary to alter our business model. We cannot accurately predict
what, if
5
<PAGE> 10

any, changes we would make to our business model in response to the
uncertainties in the online lending market. These changes might include shifting
all or a portion of our fees to customers or reducing fees currently charged to
lenders to expand volume more quickly. Shifting fees to consumers may not be
feasible, as other companies may be able to offer comparable services with no
fees. If we are not able to anticipate and adapt to changes in the industry or
if our business model is not successful, we may be unable to expand our business
and the value of your investment could be significantly reduced.

OUR OPERATING RESULTS MAY BE NEGATIVELY IMPACTED BY FLUCTUATIONS IN INTEREST
RATES.

Our business is cyclical. During 1999, more than 80% of our revenue was
derived from fees paid by lenders participating in our online marketplace. In
addition, during the quarter ended December 31, 1999, revenue earned from
refinanced mortgages, traditionally a market segment that is greatly impacted by
changes in interest rates, represented approximately 17% of our total revenue.
While interest rates during this period were rising, we were unable to assess
the extent of the impact on our business because of our limited operating
history. During future periods of rising interest rates we may experience a
decline in consumer traffic to our website and during periods of robust credit
demand, typically associated with falling interest rates, lenders may have less
incentive to use our marketplace. Either of these events could reduce our
revenue and we cannot assess the effects of interest rates on our business over
a broad range of interest rate environments.

YOU SHOULD NOT RELY ON OUR QUARTERLY OPERATING RESULTS AS AN INDICATION OF OUR
FUTURE RESULTS BECAUSE THEY ARE SUBJECT TO SIGNIFICANT FLUCTUATIONS AND THESE
RESULTS MAY NEGATIVELY IMPACT THE PRICE OF OUR COMMON STOCK.

Our quarterly operating results may fluctuate significantly in the future
due to a variety of factors that affect our revenue or expenses in any
particular quarter. This could cause the market price of our common stock to
decline. Our quarterly results will fluctuate in part based on the demand for
and supply of consumer loans which are a function of seasonal and other
fluctuations in interest rates and related economic factors, all of which are
outside of our control. These temporary fluctuations could adversely affect our
business. As a result, it is possible that in some future periods our results of
operations may be below the expectations of public market analysts and
investors. In addition, we plan to increase our operating expenses significantly
to expand our sales and marketing, administration, maintenance and technical
support, and product management groups. If revenue falls below our expectations
in any quarter and we are unable to quickly reduce our spending in response, our
operating results would be lower than expected.

In addition, we expect that as our business matures we will experience
seasonal fluctuations in our operating results due to fluctuations in consumer
credit markets during the year. For example, home buying behavior is seasonal.
Typically the second and third quarters of a year have a greater number of
mortgage closings as compared to the first and fourth quarters. Because of our
limited operating history, it has not yet been possible for us to assess the
impact of seasonal effects on our business.

OUR FAILURE TO OBTAIN SUFFICIENT FUNDS FROM SUBSEQUENT FINANCINGS MAY
SIGNIFICANTLY IMPEDE OUR GROWTH.

We must achieve and sustain rapid growth for our business model to succeed.
To accomplish this, we will need to raise additional funds in the future, from
equity or debt sources. Our future cash requirements may be substantial. If
additional financing is not available when required or is not available on
acceptable terms, we may be unable to successfully promote our brand name,
develop or enhance our service, take advantage of business opportunities or
respond to competitive pressures, any of which could have a material adverse
effect on our business and significantly reduce the value of your investment.

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<PAGE> 11

RISKS RELATED TO OUR MARKETS AND STRATEGY

OUR FUTURE SUCCESS IS DEPENDENT UPON INCREASED ACCEPTANCE OF THE INTERNET BY
CONSUMERS AND LENDERS AS A MEDIUM FOR LENDING.

If consumer and lender acceptance of our online marketplace does not
increase, our business will not succeed and the value of your investment may be
adversely affected. The online lending market is new and rapidly developing. The
adoption of online lending in general, and our marketplace in particular,
requires the acceptance of a new way of conducting business, exchanging
information, and applying for credit by consumers as well as acceptance by
lenders that have historically relied upon traditional lending methods. As a
result, we cannot be sure that we will be able to compete effectively with
traditional borrowing and lending methods.

IF POTENTIAL CONSUMERS PERCEIVE THERE ARE SECURITY OR PRIVACY RISKS ASSOCIATED
WITH OUR BUSINESS, DEMAND FOR OUR SERVICE WILL BE REDUCED.

The secure transmission of confidential personal and financial information,
such as personal address, social security number, and bank account information,
over public networks with consumer authorization is critical to consumer
acceptance of our business. Unauthorized access to or use of this information
could result in potential liability under federal and state privacy laws and
damages for which we would be liable. Usage of our service could decline if any
well-publicized compromise of security of information on our website or the
Internet in general were to occur. We and other Internet-based companies may not
be able to respond adequately to privacy concerns of potential users as advances
in computer capabilities and other technological developments occur.

IF WE ARE UNABLE TO EXPAND OUR BRAND RECOGNITION, CONSUMER AND LENDER DEMAND FOR
OUR SERVICE WILL BE LIMITED.

If we fail to promote and maintain our brand successfully or incur
significant expenses in promoting our brand and fail to generate a corresponding
increase in revenue as a result of our branding efforts, our business and the
value of your investment could be materially adversely affected. As of January
15, 2000, we had commitments to pay a minimum of approximately $15.0 million for
advertising and promotion through the end of 2001, and we project that our
actual spending over that period will be significantly higher. We believe that
continuing to build brand awareness of the LendingTree marketplace is critical
to achieving increased demand for our service. Brand recognition is a key
differentiating factor among providers of online lending services, and we
believe it will be increasingly important as competition intensifies. In order
to increase our brand awareness, we must succeed in our marketing efforts,
provide high-quality service, and increase the number of consumers using our
marketplace. If visitors to our website do not perceive our existing service to
be of high quality or if we alter or modify our existing service, introduce new
services, or enter into new business ventures that are not favorably received,
the value of our brand could be diluted, which could decrease the attractiveness
of our service to consumers and lenders.

IF OUR PARTICIPATING LENDERS DO NOT PROVIDE COMPETITIVE LEVELS OF SERVICE TO
CONSUMERS, OUR BRAND WILL BE HARMED AND OUR ABILITY TO ATTRACT CONSUMERS TO OUR
WEBSITE WILL BE LIMITED.

Our ability to provide a high-quality borrowing experience depends in part
on consumers receiving competitive levels of convenience, customer service,
pricing terms, and responsiveness from our participating lenders. If our
participating lenders do not provide consumers with competitive levels of
convenience, customer service, price, and responsiveness, the value of our brand
may be harmed and the number of consumers using our service may decline.

WE MAY HAVE DIFFICULTY INTEGRATING LENDERS INTO OUR ONLINE MARKETPLACE, WHICH
COULD IMPEDE OUR ABILITY TO OFFER A COMPETITIVE SERVICE TO CONSUMERS.

The failure to integrate lenders into our online marketplace could limit
the variety of products that we can offer to our customers. Integration of a
lender into our online marketplace requires a significant commitment of time and
resources on our part and on the part of the lender. This integration process
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<PAGE> 12

typically takes up to three months to complete. Potential lenders may not be
willing to invest the time and resources necessary to achieve this integration,
and we may not have sufficient personnel to devote the time necessary to
successfully integrate lenders into our online marketplace.

WE MAY HAVE DIFFICULTY ATTRACTING A COMPREHENSIVE GROUP OF LENDERS WHICH
COMPLEMENT OUR CURRENT CONSUMER CREDIT PRODUCT COVERAGE.

If we are unable to broaden the offering of consumer credit products on our
network for a wide array of credit profiles and locations, we may be unable to
attract additional consumers or may lose our existing consumers to other online
competitors. The success of our online marketplace depends on our ability to
attract and retain a comprehensive group of lenders to service consumer needs
across a wide array of product lines, consumer credit profiles, and geographic
locations. Lenders may limit the types of credit they offer due to licensing and
regulations, the types of products they offer, and consumer credit profiles. To
this end, some of the lenders in our network do not extend credit in some
states, others are unable to offer particular loan products, and still others do
not lend to consumers with particular credit profiles.

LENDERS IN OUR NETWORK ARE NOT PRECLUDED FROM OFFERING CONSUMER CREDIT PRODUCTS
OUTSIDE OUR MARKETPLACE.

If a significant number of our potential consumers are able to obtain loans
from our participating lenders without utilizing our service, our ability to
generate revenue may be limited. Because we do not have exclusive relationships
with the lenders whose loan products are offered on our online marketplace,
consumers may obtain offers and loans from these lenders without using our
service. Our lenders can offer their products directly to consumers through
brokers, mass marketing campaigns, or through other traditional methods of
credit distribution. These lenders can also offer their products over the
Internet, either directly to prospective borrowers, through one or more of our
online competitors, or both.

IF WE ARE UNABLE TO DEVELOP AND RETAIN OUR ONLINE RELATIONSHIPS, OUR BUSINESS
WILL BE HARMED.

If we are unable to establish or maintain online relationships that
increase consumer traffic to our website, our business and the value of your
investment could be materially adversely affected. We depend on establishing and
maintaining relationships with a large number of high-traffic websites for a
significant portion of our consumers. For example, in December 1999,
Autobytel.com generated approximately 40% of our automobile loan requests. The
loss of this contractual relationship would materially reduce our revenue in
this product area. There is intense competition for relationships with companies
maintaining these websites, and we may have to pay significant fees to establish
additional relationships or maintain existing relationships in the future. Even
if we enter into these relationships, they may not attract significant numbers
of consumers. As a result, we may be unable to enter into relationships with
these firms or websites on commercially reasonable terms or at all.

WE MAY NOT BE ABLE TO MANAGE OUR EXPANDING OPERATIONS EFFECTIVELY.

We have recently experienced a period of rapid expansion. In order to
execute our business plan, we must continue to expand significantly. Our
inability to expand our operations in an efficient manner could cause our
expenses to grow disproportionately to our revenue, our revenue to decline or
grow more slowly than expected, or could otherwise have a material adverse
effect on our business and the value of your investment. We had seven employees
in July 1998. As of December 31, 1999, that number had increased to 125. We
expect that the number of our employees will continue to increase for the
foreseeable future. Our anticipated future growth, combined with the
requirements we will face as a public company, will continue to place a
significant strain on our management, systems, and resources. We will need to
continue to expand and maintain close coordination among our technical,
accounting, finance, and sales and marketing departments. We may not succeed in
these efforts.

COMPETITION MAY REDUCE OUR MARKET SHARE AND HARM OUR PERFORMANCE.

Increased competition could result in reduced margins or loss of market
share, either of which could materially adversely affect our business, results
of operations, and financial condition. We operate in a new

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<PAGE> 13

industry that, like the broader electronic commerce market, is rapidly evolving,
highly competitive and has low barriers to entry. We expect this competition
will increase. Our current competitors include:

- online and offline lenders, brokers, and credit card issuers, many of
whom operate websites from which consumers can obtain online interest
rate quotes, such as E-LOAN, giggo.com, and iOwn.com; and

- online and offline referral agents that display rates and products for
multiple lenders and refer consumers to individual lenders, such as
Quicken.com, MSN HomeAdvisor, and getsmart.com.

In addition, current and potential new competitors could establish online
loan marketplaces that are competitive with ours.

Our ability to compete depends on many factors, including:

- pricing and breadth of product offering;

- time of market entry;

- brand awareness;

- variety, quantity, and quality of partners and online relationships;

- proprietary and scalable technology infrastructure;

- ease of use and convenience; and

- strength of relationships and depth of technology integration with
customers.

In addition, changes in the methods by which loans are made through traditional
channels of distribution may make electronic commerce a less attractive means
for obtaining loans and could reduce our ability to generate revenue.

Many of our existing competitors, as well as a number of potential new
competitors, have longer operating histories, greater name recognition, larger
customer bases, and significantly greater financial, technical, and marketing
resources than we do. These competitors may engage in more extensive product
development, undertake more far-reaching marketing campaigns, adopt more
aggressive pricing policies than our participating lenders, and make more
attractive offers to existing and potential employees and companies with which
we have relationships.

OUR BUSINESS COULD SUFFER IF WE LOSE THE SERVICES OF KEY EXECUTIVES.

If we lose the services of Douglas Lebda, our founder, Chief Executive
Officer, and a director, or any of our other executive officers or key
employees, our ability to expand our business would be seriously compromised and
the value of your investment may be adversely affected. Mr. Lebda has been
instrumental in determining our strategic direction and focus and in promoting
the concept of an Internet-based loan marketplace for consumers and lenders. We
do not maintain key person insurance on any of our key executives.

RISKS RELATED TO THE INTERNET AND OUR TECHNOLOGY INFRASTRUCTURE

WE MAY EXPERIENCE REDUCED VISITOR TRAFFIC, REDUCED REVENUE, AND HARM TO OUR
REPUTATION IN THE EVENT OF UNEXPECTED NETWORK INTERRUPTIONS CAUSED BY SYSTEM
FAILURES.

Any significant failure to maintain the satisfactory performance,
reliability, security, and availability of our website, filtering systems, or
network infrastructure may cause significant harm to our reputation, our ability
to attract and maintain a high volume of visitors to our website, and to attract
and retain participating consumers and lenders. Our revenue depends in large
part on the number of credit requests submitted by consumers. Any system
interruptions that result in the inability of consumers to submit these credit
requests, or more generally the unavailability of our service offerings, could
have an adverse impact on our revenue. In addition, we believe that consumers
who have a negative experience with our website may be reluctant to return or
recommend LendingTree to other potential consumers.

In the past, our website has experienced outages and decreased performance.
In the worst such instance to date, we experienced a service outage for a period
of approximately six hours due to a database

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<PAGE> 14

software failure. If similar outages occur in the future, they may severely harm
our reputation and our ability to offer our service.

Our computer hardware is located in leased facilities in Beltsville,
Maryland. A full backup system is located in Cupertino, California. If both of
these locations experienced a system failure, the performance of our website
would be harmed. These systems are also vulnerable to damage from fire, floods,
power loss, telecommunications failures, break-ins, and similar events. Our
insurance policies may not compensate us for any losses that may occur due to
any failures or interruptions in our systems. Any extended period of disruptions
could materially adversely affect our business, results of operations, and
financial condition.

BREACHES OF OUR NETWORK SECURITY COULD SUBJECT US TO INCREASED OPERATING COSTS
AS WELL AS LITIGATION AND OTHER LIABILITIES.

Any penetration of our network security or other misappropriation of our
users' personal information could cause interruptions in our operations and
subject us to liability. Claims against us could also be based on other misuses
of personal information, such as for unauthorized marketing purposes. These
claims could result in litigation and financial liability. Security breaches
could also damage our reputation. We rely on licensed encryption and
authentication technology to effect secure transmission of confidential
information. It is possible that advances in computer capabilities, new
discoveries, or other developments could result in a compromise or breach of the
technology that we use to protect consumer transaction data. We cannot guarantee
that our security measures will prevent security breaches. We may be required to
expend significant capital and other resources to protect against and remedy any
potential or existing security breaches and their consequences.

RISKS RELATED TO LEGAL UNCERTAINTY

FAILURE TO COMPLY WITH LAWS GOVERNING OUR SERVICE OR MATERIAL CHANGES IN THE
REGULATORY ENVIRONMENT RELATING TO THE INTERNET COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR BUSINESS.

The loan products available through our website are subject to extensive
regulation by various federal and state governmental authorities. Because of
uncertainties as to the applicability of these laws and regulations to the
Internet and, more specifically, to our business, and considering our business
has evolved and expanded in a relatively short period of time, we may not always
have been, and may not always be, in compliance with applicable federal and
state laws and regulations. Failure to comply with the laws and regulatory
requirements of federal and state regulatory authorities may result in, among
other things, revocation of required licenses or registrations, loss of approved
status, loss of exempt status, indemnification liability to lenders and others
doing business with us, administrative enforcement actions and fines, class
action lawsuits, cease and desist orders, and civil and criminal liability. The
occurrence of one or more of these events could materially affect our business,
results of operations and financial condition. We recently paid a settlement
relating to allegations that we conducted business in a state without the
appropriate registration.

As a computer loan origination system conducting business through the
Internet, we face an additional level of regulatory risk given that most of the
laws governing lending transactions have not been substantially revised or
updated to fully accommodate electronic commerce. Until these laws, rules, and
regulations are revised to clarify their applicability to transactions conducted
through electronic commerce, any company providing loan-related services through
the Internet or other means of electronic commerce

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<PAGE> 15

will face compliance uncertainty. Federal law, for example, generally prohibits
the payment or receipt of referral fees in connection with residential mortgage
loan transactions. The applicability of referral fee prohibitions to the
compensation provisions of fee arrangements used by online companies like us may
have the effect of reducing the types and amount of fees that we may charge in
connection with real estate-secured products.

Regulations promulgated by some states may impose compliance obligations on
any person who acquires 10% or more of our common stock, including requiring
that person to periodically file financial and other personal and business
information. Because we will be a public company following this offering, we
will be unable to control who purchases our common stock in the open market. If
any person acquires 10% or more of our common stock and refuses or fails to
comply with these requirements, we may not be able to obtain a license and
existing licensing arrangements in particular states may be jeopardized. The
inability to obtain, or the loss of, required licenses could have a material
adverse effect on our operations or financial condition.

The parties conducting business with us, such as lenders and affiliated
websites, similarly may be subject to federal and state regulation. These
parties act as independent contractors and not as our agents in their
solicitations and transactions with consumers. Consequently, we cannot ensure
that these entities will comply with applicable laws and regulations at all
times. Failure on the part of a lender or an affiliated website to comply with
these laws or regulations could result in, among other things, claims of
vicarious liability or negatively impact our reputation. The occurrence of one
or more of these events could materially adversely affect our business, results
of operations, and financial condition.

REGULATION OF THE INTERNET IS UNSETTLED, AND FUTURE REGULATIONS COULD INHIBIT
THE GROWTH OF THE INTERNET, DECREASE VISITORS TO OUR WEBSITE, AND OTHERWISE
MATERIALLY ADVERSELY AFFECT OUR BUSINESS.

Existing laws and regulations specifically regulate communications and
commerce on the Internet. Further laws and regulations that address issues such
as user privacy, pricing, online content regulation, taxation, and the
characteristics and quality of online products and services are under
consideration by federal, state, local, and foreign governments and agencies.
Several telecommunications companies have petitioned the Federal Communications
Commission to regulate Internet service providers and online services providers
in a manner similar to the regulation of long distance telephone carriers and to
impose access fees on such companies. This regulation, if imposed, could
increase the cost of transmitting data over the Internet. Moreover, it may take
years to determine the extent to which existing laws relating to issues such as
intellectual property ownership and infringement and personal privacy are
applicable to the Internet. Many of these laws were adopted prior to the advent
of the Internet and related technologies and, as a result, do not contemplate or
address the unique issues of the Internet and related technologies. The Federal
Trade Commission and government agencies in certain states have been
investigating Internet companies regarding their use of personal information. We
could incur additional expenses if any new regulations regarding the use of
personal information are introduced or if these agencies choose to investigate
our privacy practices. Any new laws or regulations relating to the Internet, or
new application or interpretation of existing laws, could inhibit the growth of
the Internet as a medium for commerce or credit procurement which could, in
turn, decrease the demand for our service or otherwise materially adversely
affect our business, results of operations, and financial condition.

WE MAY BE LIMITED OR RESTRICTED IN THE WAY WE ESTABLISH AND MAINTAIN OUR ONLINE
RELATIONSHIPS BY LAWS GENERALLY APPLICABLE TO OUR BUSINESS.

The Real Estate Settlement Procedures Act and related regulations generally
prohibit the payment or receipt of fees or any other item of value for the
referral of a real estate-secured loan to a loan broker or lender. The act and
the related regulations also prohibit fee shares or splits or unearned fees in
connection with the provision of residential real estate settlement services,
including mortgage brokerage or lending services. Notwithstanding these
prohibitions, RESPA permits payments for goods or facilities furnished or for
services actually performed, so long as those payments bear a reasonable
relationship to the market value of the goods, facilities, or services provided.
Failure to comply with RESPA may result in, among

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<PAGE> 16

other things, administrative enforcement actions, class action lawsuits, cease
and desist orders and civil and criminal liability.

The mortgage and home equity products offered through our marketplace are
residential real estate secured loans subject to these provisions of RESPA.
Consequently, our online relationships with lenders and other Internet companies
and websites that offer these products are subject to RESPA's prohibitions on
payment or receipt of fees for referrals and for unearned fees. We believe that
we have structured these relationships to comply with these regulations. The
applicability of RESPA's compensation provisions to these types of
Internet-based relationships, however, is unclear and the appropriate regulatory
agency has provided limited guidance to date on the subject.

AS AN ONLINE LOAN MARKETPLACE WE MAY BE LIABLE AS A RESULT OF INFORMATION
RETRIEVED FROM OUR WEBSITE OR THE WEBSITES OF COMPANIES WITH WHICH WE MAINTAIN
RELATIONSHIPS.

We may be subject to legal claims relating to information that is published
or made available on our website and the other websites linked to it. Our
service may subject us to potential liabilities or claims resulting from:

- lost or misdirected messages from our network lenders, consumers or
vendors;

- illegal or fraudulent use of e-mail; or

- interruptions or delays in transmission of Qualification Forms or
lenders' offers.

In addition, we could incur significant costs in investigating and
defending such claims, even if we ultimately are not found liable. If any of
these events occur, our business and the value of your investment could be
materially adversely affected.

FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS COULD HARM OUR
BRAND-BUILDING EFFORTS AND ABILITY TO COMPETE EFFECTIVELY.

Failure to protect our intellectual property could harm our brand and our
reputation, devalue our content in the eyes of our customers, and adversely
affect our ability to compete effectively. Further, enforcing or defending our
intellectual property rights, including our service marks, patent application,
copyrights and trade secrets, could result in the expenditure of significant
financial and managerial resources. We regard our intellectual property as
critical to our success. To protect the rights to our intellectual property, we
rely on a combination of patent, trademark and copyright law, trade secret
protection, confidentiality agreements, and other contractual arrangements with
our employees, affiliates, clients, and others. The protective steps we have
taken may be inadequate to deter misappropriation of our proprietary
information. We may be unable to detect the unauthorized use of, or take
appropriate steps to enforce, our intellectual property rights. We have applied
for a U.S. patent and filed a Patent Cooperation Treaty international patent
application on our [i]close technology and our online loan market process. While
the number of software and business method patents issued by the U.S. Patent and
Trademark Office has been growing substantially in recent years, there is still
a significant degree of uncertainty associated with these patents. It is
possible that our patent applications will be denied or granted in a very
limited manner such that they offer little or no basis for us to deter
competitors from employing similar technology or processes or allow us to defend
against third party claims of patent infringement.

RISKS RELATED TO THIS OFFERING, OUR STOCK PRICE, AND CORPORATE CONTROL

OUR COMMON STOCK MAY EXPERIENCE EXTREME PRICE AND VOLUME FLUCTUATIONS AND
INVESTORS IN OUR STOCK MAY NOT BE ABLE TO RESELL THEIR SHARES AT OR ABOVE THE
OFFERING PRICE.

We cannot predict the extent to which investors' interest in us will lead
to the development of a trading market in our common stock or how liquid the
market might become. If you purchase shares of our common stock in this
offering, you will pay a price that was not established in a competitive market,
but was negotiated between us and the underwriters. The stock market in general
and the market prices of shares in newly public technology companies,
particularly those such as ours that offer Internet-based
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<PAGE> 17

services, have been extremely volatile and have experienced fluctuations that
have often been unrelated or disproportionate to the operating performance of
such companies. The market price of our common stock could be highly volatile
and subject to wide fluctuations in response to many factors, some of which are
largely beyond our control. These factors include:

- quarterly variations in our results of operations;

- adverse business developments;

- changes in financial estimates by securities analysts;

- investor perception of us and online lending services in general;

- announcements by our competitors of new products and services; and

- general economic conditions, including interest rate fluctuations.

AN AGGREGATE OF APPROXIMATELY 13.6 MILLION SHARES, OR 78.8% OF OUR OUTSTANDING
STOCK, WILL BECOME ELIGIBLE FOR RESALE IN THE PUBLIC MARKET WITHIN ONE YEAR
AFTER THIS OFFERING, AND FUTURE SALES OF SUCH STOCK MAY CAUSE OUR STOCK PRICE TO
DECLINE.

Sales of substantial amounts of our common stock in the public market after
this offering could reduce the prevailing market prices for our common stock. Of
the 17.2 million shares of common stock to be outstanding upon the closing of
this offering, the 3.65 million shares offered by this prospectus will be freely
tradable without restriction or further registration, other than shares
purchased by our officers, directors, or other "affiliates" within the meaning
of Rule 144 under the Securities Act, which will be restricted from sale until
180 days after the date of this prospectus pursuant to agreements between these
affiliates and the underwriters. The 13.6 million remaining shares of our common
stock will become eligible for resale in the public market subject to the lapse
of applicable holding periods pursuant to Rule 144 as follows:

<TABLE>
<CAPTION>
NUMBER OF SHARES/
PERCENT OUTSTANDING
AFTER THE OFFERING DATE WHEN SHARES BECOME AVAILABLE FOR RESALE IN THE PUBLIC MARKET
- ------------------- -----------------------------------------------------------------
<S> <C>
5.2 million/30% 180 days after the date of this prospectus, pursuant to
agreements between the stockholders and the underwriters.
Approximately 3.8 million of these shares will also be subject to
sales volume restrictions under Rule 144 under the Securities
Act.
8.4 million/48% Upon expiration of applicable one-year holding periods under Rule
144, which will expire between August 2000 and November 2000,
subject to sales volume restrictions under Rule 144.
</TABLE>

Merrill Lynch may, in its sole discretion, release all or any portion of
the securities subject to the lock-up agreements prior to the expiration of
their 180 day term. Merrill Lynch may waive these restrictions at our request or
upon the request of a stockholder. In evaluating whether to grant such a
request, Merrill Lynch may consider a number of factors with a view toward
maintaining an orderly market for, and minimizing volatility in the market price
of, LendingTree's common stock. These factors include, among others, the number
of shares involved, the then recent trading volume and prices of the stock, the
length of time before the lock-up expires and the reasons for, and the timing
of, the request.

In addition, we intend to file a registration statement on Form S-8 under
the Securities Act approximately 90 days after the date of this offering to
register an aggregate of 4.9 million shares of common stock issued or reserved
for issuance under our various stock option plans. Some holders of our common
stock will also have demand and piggyback registration rights enabling them to
register their shares under the Securities Act for sale.

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<PAGE> 18

IT MAY BE DIFFICULT FOR A THIRD PARTY TO ACQUIRE OUR COMPANY, WHICH COULD
DEPRESS OUR STOCK PRICE.

Delaware corporate law and our amended and restated certificate of
incorporation and by-laws which will become effective upon the closing of this
offering, will contain provisions that could have the effect of delaying,
deferring, or preventing a change in control of LendingTree or our management
that stockholders may consider favorable or beneficial. These provisions could
discourage proxy contests and make it more difficult for you and other
stockholders to elect directors and take other corporate actions. These
provisions could also limit the price that investors might be willing to pay in
the future for shares of our common stock. These provisions include:

- authorization to issue "blank check" preferred stock, which is preferred
stock that can be created and issued by the board of directors without
prior stockholder approval, with rights senior to our common
stockholders;

- a staggered board of directors, so that it would take three successive
annual meetings to replace all directors;

- prohibition of stockholder action by written consent; and

- advance notice requirements for the submission by stockholders of
nominations for election to the board of directors and for proposing
matters that can be acted upon by stockholders at a meeting.

In addition, we will enter into a stockholder rights agreement which will
make it more difficult for a third party to acquire us without the support of
our board of directors and principal stockholders.

OUR EXECUTIVE OFFICERS AND DIRECTORS AND ENTITIES AFFILIATED WITH THEM, WHOSE
INTERESTS MAY DIFFER FROM OTHER STOCKHOLDERS, WILL HAVE THE ABILITY TO EXERCISE
SIGNIFICANT CONTROL OVER US.

Our executive officers, directors and entities affiliated with them will,
as a group, beneficially own approximately 49.1% of our common stock following
this offering. These stockholders will be able to exercise significant influence
over all matters requiring approval by our stockholders, including the election
of directors and the approval of significant corporate transactions, including a
change of control of our company. The interests of these stockholders may differ
from the interests of our other stockholders.

YOU WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL DILUTION OF THE VALUE OF YOUR
INVESTMENT.

The initial public offering price per share will be substantially higher
than the net tangible book value per share of the common stock outstanding
immediately prior to this offering. As a result, if you purchase shares in this
offering, you will incur immediate dilution of approximately $7.32 per share
from the price you paid per share. In the past, we issued options and warrants
to acquire common stock at prices significantly below the initial public
offering price. To the extent these outstanding options or warrants are
ultimately exercised, your investment will be further diluted.

FORWARD-LOOKING STATEMENTS

Many statements made in this prospectus under the captions "Prospectus
Summary," "Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Business," and elsewhere are
forward-looking statements that are not based on historical facts. The words
"expects," "anticipates," "estimates," "intends," "believes," and similar
expressions are intended to identify forward-looking statements. Because these
forward-looking statements involve risks and uncertainties, there are important
factors that could cause actual results to differ materially from those
expressed or implied by these forward-looking statements. The forward-looking
statements made in this prospectus are based on events through the date on which
the statements are made.

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<PAGE> 19

USE OF PROCEEDS

The net proceeds from the sale of the 3,650,000 shares of common stock
offered by this prospectus, assuming an initial public offering price of $11.00
per share, less the underwriting discount and estimated offering expenses, will
be approximately $35.3 million, or $40.9 million if the underwriters'
over-allotment option is exercised in full.

We intend to use approximately $29.0 million of the proceeds from this
offering for advertising and marketing to increase brand awareness and to
attract consumers to our marketplace. We intend to use the balance of the
offering proceeds for general corporate purposes.

We currently estimate that we will spend approximately $50.0 million during
2000 on marketing and advertising, more than double what we spent in 1999. Our
marketing expenses will be funded from the proceeds of the offering, our current
cash on hand, and revenue generated from our operations. The amount we actually
spend for this purpose will depend on a number of factors, including the growth
of our consumer base, the types of efforts we make to build our brand and
competitive developments in the home mortgage and consumer credit markets.
Therefore, we cannot specify with certainty the particular uses of the net
proceeds of this offering. Accordingly, management will have significant
flexibility and discretion in applying the net proceeds of this offering.
Pending any use, we will invest the net proceeds of this offering in short-term,
investment grade, interest-bearing securities.

From time to time, in the ordinary course of business, we evaluate possible
acquisitions of, or investments in, businesses, technologies, services, or
products that are complementary to our business. We are currently evaluating the
possible minority equity investment in several companies offering complementary
services. None of these potential investments are currently considered to be
pending or probable. A portion of the net proceeds may be used to fund future
acquisitions or investments.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock and
do not expect to pay any cash dividends for the foreseeable future. We currently
intend to retain future earnings, if any, to finance the expansion of our
business. Any future payment of dividends will be at the discretion of our board
of directors and will depend upon factors such as future earnings, capital
requirements, our financial condition, and general business conditions.

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<PAGE> 20

CAPITALIZATION

The following table shows our capitalization as of December 31, 1999:

- on an actual basis;

- on a pro forma basis to reflect the conversion of all of our outstanding
shares of convertible preferred stock and accumulated dividends as of
December 31, 1999 into shares of common stock upon the closing of this
offering; and

- on a pro forma as adjusted basis to reflect our sale of the 3,650,000
shares of common stock offered by us at an assumed initial public
offering price of $11.00 per share, less the underwriting discount and
estimated offering expenses.

You should read this information in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations," our
financial statements, and the accompanying notes and the other financial
information included in this prospectus.

The table excludes:

- 857,885 shares issuable upon the exercise of outstanding warrants as of
January 31, 2000;

- 750,836 shares reserved for future grants under our 1999 stock option
plan as of January 31, 2000;

- 444,500 shares reserved for issuance under our employee stock purchase
plan;

- accumulated dividends from January 1, 2000 to January 31, 2000 which will
convert into 70,481 shares of common stock; and

- 3,684,419 shares issuable at a weighted average exercise price of $5.21
per share upon exercise of stock options outstanding as of January 31,
2000.

<TABLE>
<CAPTION>
DECEMBER 31, 1999
------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
-------- --------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Stockholders' equity:
Convertible preferred stock, $.01 par value, 8%
cumulative, 10,467,194 shares authorized:
Series A -- 1,754,484 shares issued and outstanding
actual, none issued and outstanding pro forma and pro
forma as adjusted....................................... $ 9,884 $ -- $ --
Series D -- 6,238,172 shares issued and outstanding
actual, none issued and outstanding pro forma and pro
forma as adjusted....................................... 49,234 -- --
-------- -------- --------
Total convertible preferred stock....................... 59,118 -- --
-------- -------- --------
Common stock, $.01 par value, 38,100,000 shares
authorized, 4,070,655 shares issued and outstanding
actual; 14,443,724 shares issued pro forma; and
18,093,724 shares issued pro forma as adjusted.......... 41 144 181
Additional paid-in capital.............................. 9,423 68,438 103,740
Deferred compensation................................... (2,767) (2,767) (2,767)
Treasury stock, cost (948,971 shares)................... (5,978) (5,978) (5,978)
Unrealized gain, available for-sale-securities.......... 46 46 46
Accumulated deficit..................................... (32,146) (32,146) (32,146)
-------- -------- --------
Total stockholders' equity...................... 27,737 27,737 63,076
-------- -------- --------
Total capitalization............................ $ 27,737 $ 27,737 $ 63,076
======== ======== ========
</TABLE>

16
<PAGE> 21

DILUTION

Our pro forma net tangible book value as of December 31, 1999 was
approximately $27,737,000, or approximately $2.06 per share of common stock. Pro
forma net tangible book value per share represents the amount of our total
tangible assets reduced by the amount of our total liabilities and divided by
the total number of shares of common stock outstanding, after giving effect to
the conversion of all outstanding shares of convertible preferred stock and
accumulated dividends through December 31, 1999 into shares of common stock.
Assuming the sale by us of the 3,650,000 shares of common stock in this offering
at an assumed initial public offering price of $11.00 per share and after
deducting the underwriting discount and estimated offering expenses, the pro
forma net tangible book value of our common stock as of December 31, 1999 would
have been $63,076,000, or $3.68 per share. This represents an immediate increase
in pro forma net tangible book value of $1.62 per share to existing stockholders
and an immediate and substantial dilution in pro forma net tangible book value
of $7.32 per share to new public investors. The following table illustrates this
per share dilution:

<S> <C> <C>
Assumed initial public offering price per share............. $11.00
Pro forma net tangible book value per share as of December
31, 1999............................................... $2.06
Increase attributable to this offering.................... 1.62
-----
Adjusted pro forma net tangible book value per share after
this offering............................................. 3.68
------
Net tangible book value dilution per share to new public
investors................................................. $ 7.32
======
</TABLE>

The following table summarizes, on a pro forma basis as of December 31,
1999 described above, the differences between existing stockholders and new
public investors in this offering with respect to the number of shares of common
stock purchased from us, the total consideration paid for those shares and the
average price paid per share:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
--------------------- ----------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ------------ ------- -----------------
<S> <C> <C> <C> <C> <C>
Existing stockholders.......... 13,494,753 78.7% $ 61,222,000 60.4% $ 4.54
New public investors........... 3,650,000 21.3 40,150,000 39.6 11.00
---------- ----- ------------ -----
Total................ 17,144,753 100.0% $101,372,000 100.0%
========== ===== ============ =====
</TABLE>

The foregoing tables and calculations assume no exercise of outstanding
options or warrants and excludes treasury shares. As of December 31, 1999, there
were 2,970,996 shares of common stock issuable upon exercise of outstanding
options at a weighted average exercise price of $4.25 per share and 1,564,259
shares of common stock reserved for future grants under our stock option plan.
As of December 31, 1999, there were warrants outstanding to purchase 667,385
shares of common stock with a weighted average exercise price of $5.66 per
share. After December 31, 1999, we issued 713,423 options to purchase our common
stock at a weighted average exercise price of $9.25 per share. We have also
recently granted an option to purchase 100,000 shares of our common stock to our
Chief Executive Officer at an exercise price equal to the initial offering
price. As a result, options to purchase up to an additional 750,836 shares of
common stock may be issued under our stock option plan. The tables also exclude
additional preferred stock dividends accumulated from January 1, 2000 through
January 31, 2000 which will convert into 70,481 shares of common stock upon
consummation of this offering. We also issued two warrants to CNBC.com, each of
which grants CNBC.com the right to purchase 95,250 shares of our common stock at
an exercise price of approximately $7.87 per share. One warrant is immediately
exerciseable upon issuance and one becomes exerciseable on January 14, 2001,
subject to certain conditions. In addition, we may agree to issue additional
warrants to acquire common stock to companies with which we maintain
relationships. To the extent that these options or warrants are exercised, there
will be further dilution to new public investors.

17
<PAGE> 22

SELECTED FINANCIAL AND OPERATING DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

The following table sets forth selected financial and operating data for
our business. You should read the information together with our financial
statements and the accompanying notes included in this prospectus and the
information under "Management's Discussion and Analysis of Financial Condition
and Results of Operations." The statement of operations data for the years ended
December 31, 1997, 1998 and 1999, and the balance sheet data as of December 31,
1998 and 1999, are derived from, and are qualified by reference to, our
financial statements which have been audited by PricewaterhouseCoopers LLP and
are included elsewhere in this prospectus. The balance sheet data as of December
31, 1997 are derived from our financial statements which have been audited by
PricewaterhouseCoopers LLP and are not included in this prospectus. The
statement of operations data for the period from inception through December 31,
1996 and the balance sheet data as of December 31, 1996 are unaudited.
Historical results are not necessarily indicative of the results to be expected
in the future, and results of interim periods are not necessarily indicative of
results for the entire year. The calculation of pro forma basic and diluted net
loss per common share excludes shares issuable upon the payment of accumulated
dividends on our convertible preferred stock.

<TABLE>
<CAPTION>
PERIOD FROM YEAR ENDED DECEMBER 31,
INCEPTION THROUGH ----------------------------------
DECEMBER 31, 1996 1997 1998 1999
------------------ ------- ---------- -----------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
REVENUE:
LendingTree network....................................... $ -- $ 2 $ 273 $ 6,112
[i]close and other technology............................. -- -- 136 852
-------- ------- ---------- -----------
Total revenue...................................... -- 2 409 6,964
-------- ------- ---------- -----------
COST OF REVENUE:
LendingTree network....................................... -- -- 235 2,231
[i]close and other technology............................. -- -- 149 312
-------- ------- ---------- -----------
Total cost of revenue.............................. -- -- 384 2,543
-------- ------- ---------- -----------
Gross profit................................................ -- 2 25 4,421
-------- ------- ---------- -----------
OPERATING EXPENSES:
Product development....................................... -- 293 1,051 1,109
Marketing and advertising................................. -- 54 2,494 18,611
Sales, general and administrative......................... 4 621 2,955 9,951
-------- ------- ---------- -----------
Total operating expenses........................... 4 968 6,500 29,671
-------- ------- ---------- -----------
LOSS FROM OPERATIONS........................................ (4) (966) (6,475) (25,250)
Interest income, net...................................... -- 3 41 505
-------- ------- ---------- -----------
Net loss.................................................. $ (4) $ (963) $ (6,434) $ (24,745)
======== ======= ========== ===========
Basic and diluted net loss per common share............... $ (0.02) $ (1.20) $ (1.88) $ (7.74)
======== ======= ========== ===========
Weighted average shares used in computing basic and diluted
net loss per common share................................. 259,080 803,370 3,434,736 3,560,197
======== ======= ========== ===========
PRO FORMA PER COMMON SHARE DATA:
Pro forma basic and diluted net loss per common share..... $ (3.23)
===========
Pro forma weighted average basic and diluted shares
outstanding............................................. 7,650,229
===========
OPERATING DATA:
Qualification Forms transmitted:
Number.................................................... -- -- 18,247 185,792
Dollar volume (in thousands).............................. -- -- $1,596,662 $16,209,918
Loans closed:
Number.................................................... -- -- 712 27,155
Dollar volume (in thousands).............................. -- -- $ 25,516 $ 940,707
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------
1996 1997 1998 1999
---- ---- ------- -------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... $-- $402 $ 3,085 $ 2,419
Short-term investments...................................... -- -- -- 27,053
Working capital............................................. (1) 333 2,666 26,474
Total assets................................................ -- 424 3,687 33,767
Mandatorily redeemable preferred securities................. -- -- 4,631 --
Convertible preferred stock................................. -- -- -- 59,118
Total stockholders' equity (deficit)........................ (1) 353 (1,695) 27,737
</TABLE>

18
<PAGE> 23

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with
the financial statements and the notes to those statements that appear elsewhere
in this prospectus. The following discussion and analysis contains
forward-looking statements that reflect our plans, estimates, and beliefs. Our
actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below and elsewhere
in this prospectus, particularly in "Risk Factors."

OVERVIEW

LendingTree was founded on June 7, 1996. From June 1996 until July 1998, we
conducted research, developed core technology, and conducted initial lender
marketing efforts. Our website, www.lendingtree.com, commenced operations
nationally on July 1, 1998. Since that time, the LendingTree network has
expanded to include over 90 regional and national lenders. For the quarter ended
December 31, 1999, we transmitted 68,200 Qualification Forms representing $5.0
billion in loan demand and our lenders closed loans totaling $440 million. These
numbers reflect significant growth when compared to the quarter ended December
31, 1998, with 9,500 Qualification Forms transmitted, representing $902 million
in loan demand, which resulted in $11 million in closed loans.

We derive our revenue from two primary sources: fees from the LendingTree
network, and fees from licensing our [i]close technology. All of our revenue
from the network is derived from lenders. Our service is free to consumers.

Network revenue consists principally of transmission revenue and closing
revenue. Transmission revenue is earned and recognized when consumers complete
Qualification Forms that are transmitted to lenders. Fees are payable regardless
of whether Qualification Forms result in closed loans. Closing revenue is earned
and recognized when a loan is closed by a lender. Closing revenue generally lags
the transmission of Qualification Forms from several days to up to four months,
depending upon the loan type. In 1999, network revenue included: transmission
revenue, which equalled 32% of total revenue, closing revenue, which equalled
51% of total revenue, set-up fees, which equalled 4% of total revenue and
monthly maintenance fees, which equalled less than 1% of total revenue.

19
<PAGE> 24

We also generate revenue by licensing [i]close to third parties to create
single and multi-lender loan marketplaces. [i]close revenue is recognized on the
percentage-of-completion basis. In 1999, revenue from [i]close licenses
generated approximately 11% of our total revenue. In addition, our network
revenue includes transmission fees and closed-loan fees which originated from
customers of our [i]close licenses representing 15% of total revenue during this
period, bringing the total revenue derived directly or indirectly from [i]close
to approximately 26% of total revenue.

Other technology revenue consists of revenue generated from providing third
parties various software integration and hardware hosting services. Revenue
generated from other technology represented less than 1% of total revenue in
1999. Other technology revenue is recognized either on a
percentage-of-completion basis or on a fixed monthly rate, depending on the type
of service offered.

Currently, mortgages and home equity loans represent the largest portion of
our network revenue, contributing approximately $4.7 million of our total
revenue generated in 1999. During the same period, credit card revenue was
approximately $0.8 million. In addition, automobile loan and personal loan
revenue were approximately $0.3 million and less than $0.1 million,
respectively. No single lender currently represents more than 10% of our total
revenue. Revenue from credit cards, automobile loans and personal loans is
expected to increase as we increase our marketing focus on these products.
Revenue from some of our products may experience seasonal fluctuations. For
example, home buying is typically strongest in the second and third quarters of
each year, which may result in higher mortgage loan closing rates during those
periods. However, we do not have a sufficient operating history to forecast the
seasonality of our revenues with respect to any particular product offering.

Our network cost of revenue includes salary and benefit costs of the
borrower relations and lender implementation groups, credit scoring expenses,
revenue-sharing costs, consumer promotion costs, and the cost of hardware for
the LendingTree network. Our [i]close and other technology cost of revenue
includes direct costs of modifying our proprietary software for license to
[i]close users, as well as the related cost of hardware for these customers. All
of these expenses are recognized in the month that they are incurred.

Product development expenses primarily include costs incurred by us to
develop our proprietary software and filtering technologies and enhance, manage,
monitor, and operate our website. These expenses consist primarily of salaries
and benefits for our technology department, third-party software upgrades and,
from time to time, outside technology consultants and/or contractors. We intend
to continue to expand our online marketplace by adding other product offerings
and new lenders and, consequently, we expect these activities may require
additional personnel. Accordingly, we expect that our product development
expenses will continue to increase for the foreseeable future.

Marketing and advertising expenses consist primarily of costs of
advertising, trade shows, affiliate service fees, and indirect costs. Marketing
and advertising expenses also include costs, including salaries and benefits, of
all personnel involved in the marketing and advertising department as well as
outside advertising agency fees. All advertising costs are expensed as incurred.

Sales, general and administrative expenses consist primarily of salary,
benefits, and related expenses for our management, sales, administrative, legal,
and accounting personnel, expenses relating to our facilities, professional
fees, and other general corporate expenses. We expect that, in support of the
continued growth of our business and our operations as a public company, sales,
general and administrative expenses will continue to increase for the
foreseeable future.

Since our inception on June 7, 1996, we have incurred significant losses
and, as of December 31, 1999, we had an accumulated loss of $32.1 million. These
losses have resulted from the significant costs incurred for advertising,
employment expenses primarily for the development of our [i]close technology
platform, establishment of lender relationships, and integration of lenders
within our website. We intend to continue to invest heavily in advertising and
marketing. As a result, we believe that we will continue to incur substantial
operating losses for the foreseeable future.

20
<PAGE> 25

RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1999 AND 1998

REVENUE

Total revenue amounted to $7.0 million in 1999, an increase of $6.6 million
from $0.4 million in 1998.

LendingTree Network. LendingTree network revenue accounted for $6.1
million, or 88% of total revenue for the year ended December 31, 1999, compared
with 67% for the year ended December 31, 1998. Network revenue in 1999 increased
by $5.8 million from $0.3 million in 1998 primarily due to higher Qualification
Form and closed loan volume. Transmitted Qualification Form volume increased
over nine times from approximately 18,000 to approximately 186,000 during this
period while the number of loans closed increased nearly forty times from about
700 to over 27,000.

[i]close and Other Technology. [i]close and other technology revenue
accounted for $0.9 million, or 12% of total revenue for the year ended December
31, 1999, compared with $0.1 million for the year ended December 31, 1998. The
increase in [i]close and other technology revenue resulted primarily from the
issuance of [i]close licenses.

COST OF REVENUE

LendingTree Network. Cost of network revenue increased to $2.2 million for
the year ended December 31, 1999 up from $0.2 million for the year ended
December 31, 1998. This increase in cost was due to $1.2 million in
volume-related expenses such as credit scoring and network hardware expense,
$0.3 million from an increase in employment in the borrower relations
department, and $0.5 million from the introduction of revenue-share agreements
with other consumer websites such as priceline.com. Our network gross margin
increased to 64% from 14% for the years ended December 31, 1999 and 1998,
respectively.

[i]close and Other Technology. Cost of [i]close and other technology
revenue increased to $0.3 million for the year ended December 31, 1999 from $0.1
million for the year ended December 31, 1998. This increase is primarily due to
greater direct hours incurred for [i]close projects.

OPERATING EXPENSES

Product Development. Product development expense was $1.1 million for each
of the years ended December 31, 1999 and 1998.

Marketing and Advertising. Marketing and advertising expense increased to
$18.6 million for the year ended December 31, 1999 from $2.5 million for the
year ended December 31, 1998, an increase of $16.1 million. The increase is
primarily due to higher advertising expenses in order to build brand awareness
and increase volume to our marketplace.

Sales, General and Administrative. Sales, general and administrative
expense increased to $10.0 million for the year ended December 31, 1999, an
increase of $7.0 million from the year ended December 31, 1998. The increase is
primarily due to higher employee-related costs such as compensation, recruiting
and relocation expenses, rent for a larger facility, and professional fees.

YEARS ENDED DECEMBER 31, 1998 AND 1997

REVENUE

Total revenue amounted to $0.4 million in 1998, an increase of $0.4 million
from 1997, which resulted from the national launch of our website, on July 1,
1998.

LendingTree Network. LendingTree network revenue accounted for $0.3
million in 1998, compared with $2,000 in 1997.

21
<PAGE> 26

[i]close and Other Technology. [i]close and other technology revenue
accounted for $0.1 million in 1998, the first year [i]close was licensed.

COST OF REVENUE

LendingTree Network. Cost of LendingTree network revenue was $0.2 million
in 1998.

[i]close and Other Technology. Cost of [i]close and other technology
revenue was $0.1 million in 1998.

OPERATING EXPENSES

Product Development. Product development expense amounted to $1.1 million
in 1998 compared with $0.3 million in 1997. The increase is primarily due to
employment costs and technology consulting fees.

Marketing and Advertising. Marketing and advertising expense increased to
$2.5 million in 1998 from $0.1 million in 1997. The increase is primarily due to
higher advertising expenses.

Sales, General and Administrative. Sales, general and administrative
expense increased to $3.0 million in 1998, an increase of $2.3 million from
1997. The increase is primarily due to higher employee-related costs such as
compensation, recruiting and relocation expenses, rent, and professional fees.

22
<PAGE> 27

QUARTERLY RESULTS OF OPERATIONS

The following table sets forth a summary of our unaudited quarterly results
of operations for each of the eight quarters in the two-year period ended
December 31, 1999, as well as selected data expressed as a percentage of total
revenue for each quarter. This information has been derived from unaudited
interim financial statements. In management's opinion, this unaudited
information has been prepared on a basis consistent with financial statements
contained elsewhere in this prospectus and includes all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of the
information for the quarters presented. You should read this information in
conjunction with our financial statements and the accompanying notes included
elsewhere in this prospectus. Historical results for any quarter are not
necessarily indicative of the results to be expected for any future period.

<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------------------------------------------------------
MAR. 31, JUN. 30, SEPT. 30, DEC. 31, MAR. 31, JUN. 30, SEPT. 30, DEC. 31,
1998 1998 1998 1998 1999 1999 1999 1999
-------- -------- --------- -------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
REVENUE:
LendingTree network..... $ 15 $ 42 $ 100 $ 116 $ 475 $ 1,049 $ 1,874 $ 2,714
[i]close and other
technology............ -- -- 125 11 162 24 444 222
------- -------- -------- -------- ---------- ---------- ---------- ----------
Total revenue..... 15 42 225 127 637 1,073 2,318 2,936
------- -------- -------- -------- ---------- ---------- ---------- ----------
COST OF REVENUE:
LendingTree network..... 39 42 65 89 217 448 665 901
[i]close and other
technology............ -- -- 133 16 175 16 55 66
------- -------- -------- -------- ---------- ---------- ---------- ----------
Total cost of
revenue......... 39 42 198 105 392 464 720 967
------- -------- -------- -------- ---------- ---------- ---------- ----------
Gross profit.............. (24) -- 27 22 245 609 1,598 1,969
OPERATING EXPENSES:
Product development..... 223 420 69 339 142 394 272 301
Marketing and
advertising........... 105 274 649 1,466 2,883 2,956 6,230 6,542
Sales, general and
administrative........ 539 577 654 1,185 1,344 1,763 2,529 4,315
------- -------- -------- -------- ---------- ---------- ---------- ----------
Total operating
expenses........ 867 1,271 1,372 2,990 4,369 5,113 9,031 11,158
------- -------- -------- -------- ---------- ---------- ---------- ----------
LOSS FROM OPERATIONS...... (891) (1,271) (1,345) (2,968) (4,124) (4,504) (7,433) (9,189)
Interest income, net...... -- 25 16 -- 22 3 55 425
------- -------- -------- -------- ---------- ---------- ---------- ----------
Net loss.................. $ (891) $ (1,246) $ (1,329) $ (2,968) $ (4,102) $ (4,501) $ (7,378) $ (8,764)
======= ======== ======== ======== ========== ========== ========== ==========
AS A PERCENTAGE OF TOTAL REVENUE:
Revenue:
LendingTree network..... 100% 100% 44% 91% 75% 98% 81% 92%
[i]close and other
technology............ -- -- 56 9 25 2 19 8
------- -------- -------- -------- ---------- ---------- ---------- ----------
Total revenue..... 100 100 100 100 100 100 100 100
------- -------- -------- -------- ---------- ---------- ---------- ----------
Total cost of revenue..... 260 100 88 83 62 43 31 33
------- -------- -------- -------- ---------- ---------- ---------- ----------
Gross margin.............. (160) -- 12 17 38 57 69 67
Total operating
expenses................ 5,780 3,026 610 2,354 686 477 390 380
------- -------- -------- -------- ---------- ---------- ---------- ----------
Loss from operations...... (5,940)% (3,026)% (598)% (2,337)% (648)% (420)% (321)% (313)%
======= ======== ======== ======== ========== ========== ========== ==========
OPERATING DATA:
Qualification Forms
transmitted:
Number.................. 1,276 2,544 4,900 9,527 22,253 33,762 61,563 68,214
Dollar volume
(in thousands)........ $80,172 $190,747 $423,883 $901,859 $3,144,612 $3,289,217 $4,801,832 $4,974,257
Loans closed:
Number.................. 21 125 215 351 731 4,472 9,540 12,412
Dollar volume
(in thousands)........ $ 134 $ 4,308 $ 9,933 $ 11,142 $ 47,733 $ 187,163 $ 266,176 $ 439,635
</TABLE>

23
<PAGE> 28

Our total revenue has increased steadily over the last eight quarters,
primarily as a result of consistent growth in network revenue. [i]close and
other technology revenue has fluctuated based on the percentage of work
completed on the projects during a quarter. The growth in the cost of revenue
reflects the higher level of revenue.

Quarterly increases in operating expenses reflect the continued expansion
of our operations during the two-year period. The increase in marketing and
advertising is primarily due to higher advertising expenses in order to attract
more consumers to our website, and higher employee-related costs such as
compensation, recruiting and relocation expenses, rent for facilities, and
professional fees.

We expect to experience significant fluctuations in future quarterly
operating results due to a variety of factors, many of which are outside of our
control. Our limited operating history and the emerging nature of the markets in
which we compete makes it difficult for us to accurately forecast our operating
results. Our operating results in one or more future quarters may fall below the
expectations of securities analysts and investors, which could cause the price
of our common stock to decline.

LIQUIDITY AND CAPITAL RESOURCES

We have financed our operations primarily through private placements of
securities. Through December 31, 1999, proceeds from the sale of our securities
totaled approximately $64.0 million, net of financing fees. On September 20,
1999, we received approximately $50.0 million in gross proceeds from the sale of
Series D convertible preferred stock to a group of corporate and institutional
investors including Capital Z Partners, GE Capital, Goldman Sachs, priceline.com
and Marsh & McLennan Risk Capital. The investors who purchased the Series D
convertible preferred stock were allowed to designate three representatives to
serve on our board of directors. At that time, our stockholder's considered it
undesirable to increase the size of our board to accommodate these designees.
Five incumbent board members resigned, three of whom requested that we
repurchase some of their shares since they would no longer be able to oversee
their investments. Approximately $6.0 million of the proceeds from the sale of
Series D convertible preferred stock was used to repurchase 948,971 shares of
outstanding common stock owned by those resigning directors.

Net cash used in operating activities was $21.2 million, $5.7 million and
$0.6 million in 1999, 1998 and 1997, respectively. In each year the use of cash
primarily consisted of our net operating losses before non-cash items. Non-cash
items in each year included the issuance of common stock, stock options and
warrants, and increases in accounts receivable, partially offset by increases in
trade payables and accrued expenses.

Net cash used in investing activities was $28.1 million in 1999 and $0.2
million and less than $0.1 million in 1998 and 1997, respectively. Net cash used
in investing activities in these periods primarily consisted of capital
expenditures for the purchase of computer equipment and furniture.

Net cash provided by financing activities was $48.7 million in 1999 and
$8.6 million and $1.0 million in 1998 and 1997, respectively. Net cash provided
by financing activities for the year ended December 31, 1999 consisted primarily
of proceeds from the sale of preferred stock and convertible notes, offset by
the repurchase of common stock.

As of December 31, 1999, we had approximately $29.5 million in cash, cash
equivalents and short-term investments. We currently estimate that we will spend
approximately $50.0 million during 2000 on marketing and advertising, more than
double what we spent in 1999. As of January 15, 2000 we had commitments to pay a
minimum of approximately $15.0 million for advertising and promotion through
2001. We believe that the net proceeds from this offering, together with our
existing cash, cash equivalents, and short-term investments, will be sufficient
to meet our working capital and capital expenditure requirements for at least
the next 12 months. Without the proceeds of this offering, management would have
to reduce the extent of our plans for marketing and advertising during 2000. We
have no current plans to make additional equity offerings in 2000. After 2000,
we may be required to raise additional funds. Additional financing may not be
available when needed or, if available, such financing

24
<PAGE> 29

may not be on terms favorable to us. Consequently, management may have to reduce
advertising to conserve cash. If additional funds are raised through the
issuance of equity securities, our existing stockholders may experience
significant dilution.

MARKET-RELATED RISKS

We currently have no floating rate indebtedness, hold no derivative
instruments, and do not earn foreign-sourced income. Accordingly, changes in
interest rates or currency exchange rates do not have a direct effect on our
financial position. However, increases in interest rates generally reduce
consumer demand for real estate and other significant purchases and, therefore,
could affect the volume of business transacted in our marketplace.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133"). SFAS No. 133 establishes a new model
for accounting for derivatives and hedging activities and supercedes several
existing standards. SFAS No. 133, as amended by SFAS No. 137, is effective for
all fiscal quarters of fiscal years beginning after June 15, 2000. We do not
expect that the adoption of SFAS No. 133 will have a material impact on the
financial statements.

YEAR 2000 READINESS

Year 2000 computer problems may arise after the date of this prospectus.
Our business could be interrupted by any material year 2000-related failure of
our internal systems, the systems that carry Internet traffic to our online loan
marketplace, the systems of our lenders or online partners, or the systems used
by consumers to access our marketplace.

During 1998 and 1999 we conducted a review of the year 2000 readiness of
our information technology systems. These systems include software that we have
internally developed and software and hardware that we have obtained from
third-party vendors and licensors. Our review identified a limited number of
remediation steps that we completed prior to January 1, 2000. In 1999, we
performed full end-to-end testing of all key business functions in a simulated
operating environment to assure that our systems previously verified to be year
2000 compliant remained compliant as changes were made to them.

The aggregate costs associated with our year 2000 review and remediation
were approximately $500 in 1998 and $11,500 in 1999. We estimate that any costs
related to year 2000 issues in 2000 will also be immaterial. As of the date of
this prospectus, we have not experienced any year 2000-related systems failures
and, subsequent to January 1, 2000, we have received verbal assurances from all
of our largest lenders and [i]close licensees that they are year 2000 compliant
and that they have not experienced any year 2000-related systems failures in
connection with the January 1, 2000 date change. We intend to continue to
monitor our own systems for ongoing year 2000 compliance and conduct testing to
confirm the compliance of our system, as well as to confer with our lenders and
online partners and vendors about their ongoing year 2000 compliance.

Based on our efforts to date, we believe that we will not experience any
material year 2000 problems. There are, however, possible scenarios under which
year 2000 problems, if they occur, could materially affect us. The most
reasonably likely worst cases among these scenarios, include: the temporary
inability of one or more of our key lenders to receive consumer Qualification
Forms from us or to reply to consumers with loan offers; the temporary inability
of our online partners to direct consumer traffic to our marketplace; and a
failure of, or a degradation in, the Internet infrastructure that reduces
traffic to, or the performance of, our website. We do not intend to develop
contingency plans to address these or other potential worst-case scenarios.

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BUSINESS

OVERVIEW

We are a marketplace that facilitates the lending process. Because we are
not a lender, we have reduced exposure to interest rate and market risks
generally associated with traditional lending activities. Our revenue model
depends on revenue generated from lenders participating in our network who pay
us fees based upon their receipt of credit requests, which we refer to as
transmission fees, and fees based upon loan closings, which we refer to as
closed-loan fees. We earn revenues primarily through transaction fees paid by
lenders when Qualification Forms are transmitted to lenders and when loans are
closed. We also license our [i]close technology to other companies who create
single and multi-lender online marketplaces. Credit requests not meeting
lenders' criteria on those marketplaces are routed to our lender network,
increasing our overall volume.

We commenced nationwide operations on July 1, 1998. Since that time our
network has expanded to include more than 90 regional and national lenders. For
the quarter ended December 31, 1999, we transmitted 68,200 Qualification Forms,
representing $5.0 billion in loan demand, and our lenders closed loans totaling
$440 million. These numbers reflect significant growth when compared to the
quarter ended December 31, 1998, with 9,500 Qualification Forms transmitted,
representing $902 million in loan demand, which resulted in $11 million in
closed loans.

Non Internet-based lenders generating the highest number of closed loans on
our website during the fourth quarter of 1999 were Bank One, PNC Bank FSB,
Provident Bank and Sovereign Bank. Online lending companies generating the
highest number of closed loans on our website during the same period were
AppOnline.com, giggo.com, MortgageSelect.com and Smart-Finance.com. Our [i]close
technology powers the loan centers of Wachovia Bank, Fleet Bank, priceline.com,
CNBC.com, Autobytel.com, Bloomberg.com and PNC's Banking Center on iVillage.com,
and supplies the loan content and tools for a network of over 11,000 websites.

We believe our unique business model, growing consumer acceptance of our
website, our first mover advantage, the strength of the LendingTree brand, the
breadth of our lender network, our online relationships, and our [i]close
technology platform provide us with significant competitive advantages.

INDUSTRY BACKGROUND

GROWTH OF INTERNET USAGE AND ELECTRONIC COMMERCE

The Internet has emerged as a global medium for communication, information,
and commerce. International Data Corporation estimates that there were 63
million Internet users in the United States at the end of 1998 and anticipates
that this number will grow to approximately 177 million by the end of 2003,
representing a compound annual growth rate of 23%. As a result of the Internet's
increasing acceptance as a commercial medium, businesses have a growing
opportunity to conduct electronic commerce. International Data Corporation
estimates that in the United States, Internet commerce will increase from
approximately $37 billion in 1998 to approximately $708 billion by 2003,
representing a compound annual growth rate of 80%.

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CONSUMER LENDING MARKETS

Consumer lending markets are both large and highly fragmented. The United
States Federal Reserve estimates that as of year-end 1998 total outstanding debt
by households amounted to approximately $5.4 trillion and the U.S. Census Bureau
estimates that there were over 21,000 financial institutions providing consumer
credit in the United States. Forrester Research, a market research organization,
projected approximately $1.9 trillion in loan originations in the United States
during 1999. Forrester also projected that 1.3% of consumer loan originations
would be conducted online in 1999, growing to 9.5% by 2003, and that total
online credit originations will grow from $25.7 billion in 1999 to $167.6
billion in 2003, representing a compound annual growth rate of 60%.

The following table summarizes by consumer product category for the periods
presented, the dollar volume and number of online loan originations, as well as
the dollar volume of online originations as a percentage of total originations
in the United States, as projected by Forrester Research.

<TABLE>
<CAPTION>
PROJECTED
ONLINE
ORIGINATIONS
PROJECTED ONLINE PROJECTED ONLINE AS % OF
ORIGINATIONS ORIGINATIONS TOTAL $
(DOLLARS IN BILLIONS) (IN THOUSANDS) ORIGINATIONS
--------------------- ---------------- ------------
1999 2003 1999 2003 1999 2003
-------- --------- ------ ------ ---- -----
<S> <C> <C> <C> <C> <C> <C>
Mortgage...................................... $18.7 $ 91.2 116 599 1.5% 9.6%
Credit Card................................... 5.2 21.5 990 3,674 4.3 16.3
Automobile.................................... 0.8 21.4 36 952 0.2 4.7
Home Equity................................... 1.0 20.2 25 422 0.6 11.4
Student....................................... -- 13.3 12 3,261 0.1 25.3
----- ------ ----- -----
Total......................................... $25.7 $167.6 1,179 8,908
===== ====== ===== =====
</TABLE>

LIMITATIONS OF TRADITIONAL LOAN PROCESS AND OTHER ONLINE LENDING MODELS

For lenders, the traditional lending process is paper-intensive and
time-consuming, usually accompanied by high fixed costs and labor expense. It
generally involves defining loan product guidelines for specific segments of
consumers and establishing a pre-determined price for which the consumer
applies. This inefficient process results in significant marketing and
processing costs. In addition, the traditional lending process increases the
time it takes to implement a given lending strategy, thereby reducing
flexibility and the ability to respond to competition.

For consumers, the traditional loan process is time-consuming, requires
completion of multiple forms and can often be frustrating and confusing.
Consumers typically search through a variety of loan products from many
different lenders, apply to one lender at a time for that lender's offered
price, and then wait for that lender to approve or reject the application.
Online lending sites of our competitors generally mirror the traditional lending
process. Consumers visit a website, view a list of loan products, apply for one
product from one lender, and are either approved or rejected. While the consumer
proposition presented by online lending websites is the same as the traditional
offline process, the business models for online lending websites fall into two
categories:

- Lender/Broker Model. The operators of these websites generate revenue in
the same way as traditional lenders -- from a mark-up over their cost of
capital, whether the source of capital is a lender, secondary market
purchaser, or warehouse line of credit. In exchange for these mark-ups,
the lender/broker undertakes all of the underwriting, processing,
verification, and customer interaction. In addition, to the extent the
lenders/brokers fund originated loans with their own capital, they are
directly exposed to interest rate fluctuations.

- Referral Agent Model. The operators of these websites typically generate
revenue by providing referrals to lenders. Because referral agents
typically do not generate any revenue upon loan closings, there is little
incentive for these companies to ensure that lenders and consumers
consummate the loan transaction.

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We believe that the inefficiencies of the traditional lending process and
the shortcomings of other online business models, combined with the large and
recurring nature of consumer loan demand, offer a substantial opportunity for
our marketplace business model.

THE LENDINGTREE MARKETPLACE SOLUTION

The LendingTree marketplace enables consumers to receive up to four loan
offers in response to a single credit request while providing lenders with the
opportunity to generate new business that meets their specific underwriting
criteria at reduced acquisition costs.

THE LENDINGTREE PROCESS

The LendingTree process consists of the following steps:

- Credit Request. Consumers access our website at www.lendingtree.com and
select a loan product from our current offering of five loan categories,
which include mortgage, home equity, automobile, credit card, and
personal loans. Consumers complete a single Qualification Form for the
selected loan product with information such as income, net worth, loan
term preferences, and other personal data. Consumers also consent to our
use of their credit history.

- Qualification Form Filtering and Transmission. Our proprietary filtering
process matches the consumers' Qualification Forms, credit profile, and
geographic location to the preset underwriting criteria provided by the
lenders in our network. Lenders are able to immediately modify their
underwriting criteria directly through our website. Once Qualification
Forms pass the filters, they are transmitted to up to four lenders. In
the event that after being filtered, the Qualification Form meets the
lending criteria of more than four lenders, the four Lenders to whom the
Qualification Form is sent are randomly selected.

- Lender Evaluation and Response. Lenders evaluate and respond to the
Qualification Forms that pass through their filters. Currently, lenders
respond to approximately 85% of the Qualification Forms they receive
within one business day. In most cases, lenders approve the Qualification
Form.

- Communication of Offer. Once a lender evaluates a Qualification Form,
renders a decision and responds with an offer, the LendingTree system
automatically notifies the consumer via e-mail and displays the offers on
our website. The e-mail contains instructions to return to our website
and provides instructions directing them to our Check Status page where
consumers can view and compare the terms of each offer online, including:
interest rate, closing costs, monthly payment amount, and lenders' fees.

- Consumer Acceptance. The consumer has the ability to accept, reject, or
request more information about a loan offer. When the consumer selects
one of these options, the LendingTree system automatically notifies the
chosen lender and the remainder of the process is conducted offline. If
the consumer does not like any of the offers he or she can fill out a new
Qualification Form. However, consumers are prohibited from completing a
Qualification Form for the same loan type for 72 hours after they receive
responses from lenders.

- Ongoing Process Support. We provide active telephone follow-up and
support to both lenders and consumers during the loan transaction
process. This follow-up and support is designed to increase overall
satisfaction of the participants in our marketplace.

CONSUMER BENEFITS

Our marketplace provides important benefits to consumers, including:

- Price. Our growing network of more than 90 lenders fosters a competitive
bidding environment, encouraging lenders to price loan offers
aggressively as they compete for consumers' business.

- Consumer Service. Through the range of online information and tools
presented on our website, combined with our support and service, we aim
to reduce the confusion often experienced by consumers during the
borrowing process and the time that it takes to obtain loans.

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- Choice. We provide qualified consumers with up to four loan offers from
a national base of lenders.

- Convenience. In contrast to the traditional process of separately
applying to multiple local lenders for credit, our marketplace saves
consumers valuable time by enabling them to go online, complete one
Qualification Form, and receive multiple loan offers. In addition,
consumers can save a partially or fully completed Qualification Form and
return at a later time to complete the process or apply for another loan.

- Content. We provide consumers with educational materials about the
borrowing process, answers to frequently asked questions, informative
articles, and interactive loan calculators. Consumers can also purchase
related services, including credit reports and insurance.

- No Fees. Our service is free to consumers.

LENDER BENEFITS

Our marketplace provides important benefits to lenders, including:

- New Business. Leveraging the reach of the Internet, we provide lenders
with access to a significantly larger audience of qualified consumers.

- Lower Acquisition Costs. The fees we charge lenders are designed to be
less than the cost of acquiring customers through traditional and other
online channels. Additionally, our [i]close technology and integration
with our lenders' systems enables lenders to process credit requests more
efficiently and at significantly reduced costs.

- Market Information. Our involvement with lenders and consumers across
multiple credit categories provides us with valuable data about the
online lending marketplace. Within the guidelines of our privacy policy,
our account managers combine surveys, consumer feedback, and quarterly
reviews to provide valuable and timely information to lenders. We believe
that this enables our lenders to refine and improve their Internet
lending strategies and quickly respond to changing market conditions in
order to compete more effectively.

THE LENDINGTREE [i]CLOSE SOLUTION

We license our [i]close technology to other companies who create single and
multi-lender loan marketplaces. [i]close consists primarily of four integrated
technologies which we call our technology platform:

- Credit Request Forms. [i]close provides the lender with the
Qualification Form on a website where a consumer can complete the form.

- Proprietary Filtering Process. Once the consumer completes the
Qualification Form, [i]close technology processes the consumer's
information and directs it to a lender whose lending criteria matches the
borrower's loan profile.

- Lender Evaluation and Response. After receiving the consumer's credit
request, [i]close technology enables lenders to evaluate the consumer's
information and respond with loan offers.

- Viewing of Offers. [i]close allows consumers to return to a website and
view one or multiple offers online.

Our current [i]close customers are Wachovia Bank, Fleet Bank,
priceline.com, CNBC.com, Autobytel.com, Bloomberg.com and PNC's Banking Center
on iVillage.com. The benefits to our [i]close customers include:

- Minimal Upfront Cost. We believe that our proprietary technology results
in minimal upfront cost to lenders compared with internally developing a
web-based distribution channel. We believe that as lenders seek to
develop proprietary Internet capabilities, [i]close can meet their needs
in a faster, more cost-effective, and scalable manner.

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- Reduced Technology Obsolescence. We continually update [i]close as new
technologies develop. Lenders who use [i]close can take advantage of
these improvements and maintain the latest technology.

- Multi-lender Capability. We believe that over time, even single-lender
entities such as banks will consider offering other lenders' products on
their websites. Our [i]close solution is well-suited for this purpose.
For example, [i]close is utilized by PNC's Banking Center on the iVillage
community website where, in addition to access to PNC Bank, consumers
have access to our entire network of lenders. This multi-lender approach
not only increases consumer choice, but also provides additional
transaction revenue to the [i]close partner.

LENDINGTREE STRATEGY

Our mission is to be the predominant loan marketplace on the Internet. The
key elements of our strategy are to:

- STRENGTHEN LENDINGTREE'S POSITION AS A MULTI-PRODUCT LOAN
MARKETPLACE. We believe that no other loan marketplace or multi-lender
website offers the breadth of loan categories available on our website.
This multi-category strategy enables us to become consumers' primary
resource for all of their lifetime borrowing needs. We will continually
evaluate adding new loan products to our marketplace such as student
loans and small business loans. By becoming a consumer's primary lending
destination and fostering repeat usage we can increase revenue per
customer and decrease acquisition costs for each new loan.

- EXPAND LENDER COVERAGE AND PRODUCT OFFERINGS. We seek to provide
consumers throughout the United States with a competitive marketplace for
consumer credit products across a wide range of credit risk profiles. The
availability of multiple lenders for each type of loan product generally
provides qualified consumers with a choice of competitive offers. We
intend to expand our lender coverage by actively marketing our
marketplace solution to new lenders. We are also seeking to expand the
product offerings of lenders who are already participants in our network.

- EXPAND TRANSACTION VOLUME THROUGH ONLINE RELATIONSHIPS. We intend to
increase the number of transactions processed in our marketplace by
continuing to enter into agreements with online businesses that have a
high affinity to consumer lending. Currently we have contractual
relationships with well-known consumer Internet brands including
priceline.com, Autobytel.com and Bloomberg.com.

- INCREASE BRAND AWARENESS AND TRANSACTION VOLUME. We intend to
significantly expand our online and offline advertising to create
consumer awareness of LendingTree as the predominant online loan
marketplace and thereby build transaction volume. We are planning a major
advertising campaign in 2000 with the aim of making our marketplace "top
of mind" with consumers.

- ESTABLISH [I]CLOSE AS THE DOMINANT LOAN MARKETPLACE TECHNOLOGY. We
intend to increase our revenue by licensing [i]close to individual
lenders and other companies who create single and multi-lender websites.
We will do this through expansion of our sales force and industry-focused
marketing activities.

- INCREASE LOAN CLOSING RATES. We intend to increase loan closing rates
by:

- adding lenders to our network;

- increasing the level of automation of our lenders to shorten the loan
approval process; and

- continually improving our customer service and encouraging our
lenders to improve their customer service.

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LENDER RELATIONS

OUR LENDERS

During December 1999 we had more than 90 lenders participating in the
LendingTree marketplace across five principal products: mortgages, home equity,
automobile, credit card and personal loans. Below are the top lenders by the
number of closed loans in each category for the quarter ended December 31, 1999.
Collectively, these lenders, which are comprised of both non Internet-based
lenders and online lenders, contributed 54% of our revenue for that quarter.

MORTGAGE
- AppOnline (CMP Mortgage)
- iOwn.com
- mortgage.com
- MortgageSelect.com
- New Century Mortgage

HOME EQUITY
- Bank One
- Mellon Bank
- PNC Bank, FSB
- Provident Bank
- Sovereign Bank
AUTOMOBILE
- Auto Refinance Source, Inc.
- giggo.com
- SmartFinance.com
- Sovereign Bank
- Synergy Federal Savings Bank

CREDIT CARD
- Aspire Card Services
- First USA
- Merrick Bank

PERSONAL LOANS
- Chase
- The Dime Savings Bank
- Sovereign Bank
- Synergy Federal Savings Bank

LENDER SALES AND MARKETING

Our sales force consists of three lender development teams that cover the
following consumer loan categories: mortgage and home equity; automobile; and
credit cards and personal loans. Each team targets and establishes relationships
with lenders to ensure an adequate array of credit products to meet consumer
demand.

Our lender marketing objective is to support our lender sales efforts by
increasing awareness of LendingTree within the lending community through trade
advertising, public relations, and attendance at trade shows and industry
conferences.

LENDER ACCOUNT MANAGEMENT

We strive to provide a high level of support and service to lenders who are
on the LendingTree network and those that license our [i]close technology. We
provide each lender with comprehensive training on our marketplace technology as
well as a dedicated support team after the lender has joined our network. We
regularly review our lenders' online lending processes and make recommendations
to improve their performance.

We have developed a "best practices" program that helps lenders achieve
high levels of customer service and make competitive loan offers. We believe
that the most successful lenders in our network adhere to the following best
practices including:

- use of dedicated in-house teams to monitor their online loan activities;

- rapid response to consumer credit requests;

- proactive solicitation of customer feedback; and

- personalized service through outbound call centers.

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PRODUCT LINES

Our marketplace offers consumers the opportunity to obtain the following
loan products:

- Home Mortgage. As of November 1, 1999, we had 68 lenders providing home
mortgage loans.

- Home Equity. As of November 1, 1999, we had 37 lenders providing home
equity loans.

- Automobile Loans. As of November 1, 1999, we had 12 lenders providing
automobile loans. Until recently, our marketing efforts have focused
primarily on real estate borrowers and lenders. We have only recently
begun to actively pursue additional automobile lenders. As we increase
our marketing focus on automobile lenders and consumers, we expect this
product category to represent a greater portion of our revenue.

- Credit Cards. As of November 1, 1999, we had three credit card issuers.
We are in the process of adding more credit card issuers that will
complement our strategy of target marketing specific demographic
segments, such as college students and other affinity groups.

- Personal Loans. As of November 1, 1999, we had five lenders providing
personal loans. While personal loans are not currently a significant
revenue source for us, this product may contribute a greater portion of
our revenue as we increase our marketing efforts on lenders and
consumers.

CUSTOMER SERVICE

We employ a staff of customer relations managers whose responsibilities
include:

- responding to consumers' questions about the status of their credit
request, how to use our website, and other frequently-asked questions;
and

- acting as a liaison between consumers and lenders, to ensure consumers
receive prompt service from lenders.

We actively evaluate the effectiveness of our customer service efforts. For
example, for incoming telephone calls, we monitor the average speed of answering
such calls, the average length of the call, and the average amount of time spent
performing work in response to the call. We also respond to e-mail from
consumers and respond generally within 36 hours. Many of the e-mails and
telephone calls from consumers provide feedback on the performance of our
lenders. As part of our best practices program, this information is shared
directly with our lenders, within the guidelines of our privacy policy, to
improve their services and performance on our network.

RELATIONSHIPS

We have established contractual relationships with a number of high-traffic
consumer websites that utilize our online loan marketplace technology. These
relationships include:

- priceline.com. We have formed a relationship with priceline.com to
provide a "name your price" service for mortgage and home equity loans.
Priceline.com has made an equity investment in LendingTree. See "Certain
Relationships and Related Transactions."

- Autobytel.com. We provide the technology platform for the automobile
financing center on the Autobytel.com website.

- Bloomberg.com. Consumers can access our marketplace directly through
Bloomberg's website.

- CNBC.com. We have agreed with CNBC.com that we will be the exclusive
loan marketplace for residential mortgage, home equity and automobile
loans through the CNBC.com website and we will advertise on the CNBC
cable network channel. CNBC.com received warrants to purchase 190,500
shares of our common stock in connection with this transaction at an
exercise price of approximately $7.87 per share.

- PNC Banking Center on iVillage.com. We are the exclusive loan
marketplace provider on the PNC Banking Center on iVillage.com.

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CONSUMER MARKETING

Our principal marketing objectives are to build positive brand awareness
and increase volume on our marketplace. These efforts include offline
advertising, online advertising, and direct marketing. We also collect and
analyze consumer data to enhance our consumer marketing programs, subject to
compliance with our privacy policy.

CONSUMER OFFLINE ADVERTISING

- Radio Advertising. Our radio advertising directly increases transaction
volume on our website as well as consumer awareness of the LendingTree
brand. Radio advertising also allows us to test new geographic markets
for their receptiveness to our consumer proposition. We select radio
markets based on a variety of factors, including population density,
housing starts, Internet-enabled users, and mortgage activity. To date,
we have used radio advertising in over 30 U.S. markets.

- Print Advertising. We promote the LendingTree brand through strategic
placements in daily news publications, as well as weekly, bi-weekly, and
monthly periodicals. We have advertised in publications such as The Wall
Street Journal, USA Today, The New York Times, and The Washington Post.

- Outdoor Advertising. We also employ outdoor advertising as part of our
overall advertising strategy. Our strategy includes the use of several
media including billboards, bus and train advertising, and airport
terminals.

CONSUMER ONLINE ADVERTISING

- Online Advertising and Sponsorships. We purchase online advertising and
sponsorships on selected websites with high affinity to consumer credit
such as websites relating to real estate and personal finance. We also
sponsor keywords on major search engines. For example, when a search is
made for the keywords "loan" or "mortgage," a LendingTree banner
advertisement may appear.

- The LendingTree Affiliate Network. A core part of our marketing strategy
is to utilize the thousands of websites that provide content about
products and services that are complementary to those that we offer. Our
objective is to make these websites sources of low-cost Qualification
Forms for LendingTree. The LendingTree affiliate network is one of our
strategies to expand the distribution of our service across the Internet.
We pay a marketing fee to these affiliates in exchange for delivering
consumer Qualification Forms. More than 11,000 websites have joined the
LendingTree affiliate network.

DIRECT MARKETING

We believe that direct marketing is especially effective to increase loan
closure rates and develop lifetime relationships with consumers. Our direct
marketing is conducted through a variety of channels, within the guidelines of
our privacy policy, including:

- Direct E-mail. We use e-mail to prompt consumers to visit our website,
communicate with consumers throughout the lending process, and promote
loan closing.

- Cross Selling. Through our cross-sell efforts, consumers have the
opportunity to purchase related products and services at various points
in the loan process. Current cross-sell offerings include credit cards,
homeowners' insurance, and life insurance. We intend to increase the
breadth of our cross-sell efforts.

COMPETITION

The market for online loan shopping and related services is new and rapidly
developing. We believe that we have an important first mover advantage, but
current and potential new competitors could establish online loan marketplaces
that are competitive with ours. We expect competition from:

- online lenders/brokers such as E-LOAN, mortgage.com, QuickenMortgage,
iOwn.com, and NextCard;

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- traditional lenders and brokers, such as Washington Mutual and
Countrywide; and

- existing online referral agents such as GetSmart, Microsoft's
HomeAdvisor, Creditland, and MortgageAuction.com.

Some of these competitors are also participants in our marketplace.

We believe that the primary competitive factors in the online financial
services market are:

- pricing and breadth of product offering;

- time of market entry;

- brand awareness;

- variety, quantity, and quality of partners and online relationships;

- proprietary and scalable technology infrastructure;

- ease of use and convenience; and

- strength of relationships and depth of technology integration with
customers.

Our success depends upon capturing and maintaining a significant share of
consumers who obtain loans through the Internet. In order to do this, we must
continue to build on our first mover advantage, continue to increase brand
awareness among consumers and lenders, expand our network of lenders, establish
additional relationships, and continually upgrade our technology. As described
elsewhere in this prospectus, we are planning to significantly increase our
advertising program during 2000. Many of our current competitors, however, have
longer operating histories, greater name recognition, larger customer bases, and
significantly greater financial, technical, and marketing resources than we do.
In addition, participants in other areas of the financial services industry may
enter the consumer loan marketplace.

TECHNOLOGY

Our marketplace is supported by a proprietary technology platform that was
designed with an emphasis on scalability, performance, reliability, and
security. We use standard Microsoft languages and development tools such as
Visual Basic and Active Server Pages; we also use C++ and Perl. We use
Microsoft's SQL Server as our database engine and our website and database
servers run on the Windows NT operating system. Communications to our website
are protected with Secure Sockets Layer, an industry-standard protocol that
provides data encryption, server authentication, and message integrity. Our
website servers and database servers are protected by firewalls that separate
them from the Internet. For the years ended December 31, 1997, 1998 and 1999, we
spent approximately $0.3 million, $1.1 million and $1.1 million, respectively,
on company-sponsored research and development activities.

As an Internet company, our operations may be subject to system failures or
other service interruptions, which could materially harm our reputation and
impair our ability to offer services. We have established procedures to minimize
the likelihood of service interruptions, including periodic equipment and
software testing, data monitoring, and maintaining error records. We have also
instituted and tested a contingency plan to limit the duration of any database
or other software-related system failure.

Our website is hosted by Digex at its facilities in Beltsville, Maryland
and Cupertino, California. Digex operates with redundant communication lines,
emergency power backup, and 24-hour monitoring and engineering support. Physical
access to all of our servers at Digex is strictly controlled by a state-of-
the-art physical security architecture utilizing multi-redundant mechanics,
utilities, and environmental controls.

We believe that issues relating to privacy and use of personal information
relating to Internet users are becoming increasingly important as the Internet
and its commercial use grow. We have adopted a detailed privacy policy that
outlines how we use information concerning our consumers and the extent to which
lenders and other third parties may have access to this information. This policy
is prominently noted on our website. We do not sell or rent any personally
identifiable information about our customers to any

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third party. We use the information about our customers for internal purposes
only in order to improve our marketing and promotional efforts, to statistically
analyze site usage, and to improve content, product offering and site layout.

The privacy provisions of the recently-enacted Gramm-Leach-Bliley Act,
which are effective in November 2000:

- bar financial institutions from disclosing to unaffiliated third parties
nonpublic personal information collected from consumers, subject to
several exemptions;

- require financial institutions to develop and disclose consumer privacy
policies;

- empower federal regulators with the authority to regulate information
sharing and enforce the provisions of the law; and

- expressly allow states to pass stricter financial privacy laws.

Federal regulations implementing the statute are being developed. Since we
are likely to be deemed a financial institution under the Gramm-Leach-Bliley
Act, we may be required to amend our privacy policy and consumer authorizations
and disclosures to comply with the Gramm-Leach-Bliley Act and its implementing
regulations.

GOVERNMENT REGULATION

Many of the loan products available through our website are subject to
extensive regulation by various federal and state governmental authorities.
These rules impose restrictions on our marketing activities and compensation
arrangements with our participating lenders, many of whose activities are
similarly highly regulated. Federal and state rules regarding lending may, for
example:

- regulate the content of advertisements;

- limit the amount of fees we may receive from lenders and other websites;

- require additional disclosure to consumers;

- mandate protection of consumer privacy;

- regulate sales practices generally, including prohibiting discrimination;
and

- impose various qualification and licensing obligations on us.

Failure to comply with these requirements may result in, among other
things, revocation of required licenses or registrations, loss of approved
status, loss of exempt status, indemnification liability to lenders,
administrative enforcement actions, class action lawsuits, cease and desist
orders, and civil and criminal liability.

We believe we are in substantial compliance with these rules and
regulations, subject to the regulatory uncertainties discussed in the paragraphs
that follow. Our determination is based upon knowledge of our policies,
practices and procedures designed to achieve compliance with applicable laws and
regulations, including the employment of full-time in-house attorneys and
retention of external regulatory counsel, who advise us with respect to the
federal and state consumer protection laws and regulations applicable to our
operations.

As a computer loan origination system conducting business through the
Internet, we face an additional level of regulatory risk given the fact that
most statutes and regulations governing solicitation of lending transactions
have not been substantially revised or updated to fully accommodate electronic
commerce. Most of the federal and state laws, rules, and regulations governing
lending, for example, contemplate or assume paper-based transactions and do not
currently address the delivery of required disclosures and other documents
through electronic means. In addition, many of the federal and state rules
regarding licensing requirements and fees paid in connection with lending did
not originally contemplate that loan products would be made available through
non-lender third parties over the Internet. Until these laws, rules, and
regulations are revised to clarify their applicability to transactions conducted
through e-commerce, any company providing loan-related services through the
Internet or other means of e-commerce will face compliance uncertainty. In
addition, there is no assurance that revisions to the laws,

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<PAGE> 40

rules, and regulations will be adopted and, if adopted, will be timely or
adequate to eliminate this uncertainty. Management believes it has taken prudent
steps to mitigate these risks, as discussed in the preceding paragraph.

Many, but not all, states require licenses to solicit or broker to
residents of those states, loans secured by residential mortgages, and/or other
consumer loans, including credit card, automobile and personal loans.
LendingTree has obtained licenses to broker residential mortgage loans, or is
not required to be licensed, in the District of Columbia and all 50 states, with
the exceptions of Delaware where an application is currently pending. Similarly,
LendingTree has obtained licenses to broker consumer loans, or is not required
to be licensed, in all 50 states, with the exceptions of California, New Jersey
and Ohio, where applications for consumer loan licenses are pending, and
Tennessee, where LendingTree cannot obtain a license to broker consumer or home
equity loans because of residency requirements of that state. We are not
currently accepting credit requests for loan products from residents of states
in which we are not licensed to provide those products. In many of the states in
which we are licensed, we are subject to examination by regulators. We were
recently notified by a state banking regulatory agency that in its view, prior
to our being registered as a mortgage broker, we engaged in the business of
soliciting mortgage loans on properties located in the state. While we disagree
with the agency's interpretation, we determined that it was more advantageous to
resolve the dispute rather than enter into expensive, protracted litigation. In
resolving this matter, we paid a settlement in the amount of $175,000, and we
received a registration with the state agency as a mortgage broker.

In addition, any person who acquires 10% or more of our common stock may be
required to comply with applicable regulations promulgated by certain states
that may include requiring the person to periodically file financial information
and other personal and business information. If any person holding 10% or more
of our common stock refuses or fails to comply with these licensing
requirements, we may be unable to obtain a license or existing licensing
arrangements in particular states could be jeopardized. The inability to obtain,
or loss of, required licenses could have a material adverse effect on our
operations and financial condition.

In addition to licensing requirements, federal and state laws regulate
residential lending activities of brokers and lenders. At the federal level, our
services are regulated by the Truth in Lending Act and Regulation Z, the Equal
Credit Opportunity Act and Regulation B, the Fair Housing Act, the Fair Credit
Reporting Act, federal privacy laws, and the Real Estate Settlement Procedures
Act and Regulation X. These laws generally regulate the manner in which loan
services are made available, including advertising and other consumer
disclosures, payments for services, and the privacy and reporting of consumer
data. State and federal laws also prohibit unfair and deceptive trade practices
and require companies to adopt appropriate policies and practices to protect
consumer privacy.

Under the Truth in Lending Act, creditors are required to provide consumers
with uniform, understandable information concerning some of the terms and
conditions of loan and credit transactions being offered, which may include
disclosures in advertising. This particular federal law is generally applicable
to lenders and applies to us primarily in the context of advertising.

The Equal Credit Opportunity Act prohibits discrimination against
applicants on the basis of race, color, sex, age, religion, national origin, or
marital status, and the Fair Housing Act similarly prohibits discrimination in
residential lending. The regulations under the Equal Credit Opportunity Act also
restrict creditors from requesting various types of information from loan
applicants and require lenders to supply applicants with a notice, referred to
as an "adverse action notice," when the lender denies its applicants credit. Our
lenders are generally obligated to provide the required disclosures.

The Real Estate Settlement Procedures Act requires certain disclosures,
including a good faith estimate of closing costs and fees, as well as mortgage
servicing transfer practices. LendingTree believes that these requirements are
not applicable to its business as presently conducted. RESPA also prohibits the
payment or receipt of kickbacks or referral fees, fee shares or splits, or
unearned fees in connection with the provision of real estate settlement
services. It is a common practice for online financial service companies to
enter into advertising, marketing and distribution arrangements with other
Internet companies and websites whereby the financial service companies pay the
Internet companies fees for

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<PAGE> 41

advertising, marketing and distribution services and other goods and facilities
based on a number of factors, including the number of impressions,
click-throughs, completed loan applications or closed loans derived from these
arrangements. The applicability of RESPA's referral fee prohibitions to the
compensation provisions of these arrangements is unclear and the Department of
Housing and Urban Development has provided limited guidance to date on the
subject. Although LendingTree believes that it has structured its relationships
with Internet advertisers, marketers and distributors to comply with RESPA, some
level of risk is inherent absent amendments to the law or regulations, or
clarification from regulators. In addition, the applicability of referral fee
prohibitions to the compensation provisions on arrangements used by online
companies like us may have the effect of reducing the types and amount of fees
that we may charge or pay in connection with real-estate secured products.

The Fair Credit Reporting Act is a consumer privacy statute that generally
governs the assemblage, evaluation, maintenance, and dissemination of
information on consumers that has been collected for the purpose of evaluating
their qualifications for credit. The Fair Credit Reporting Act also requires
that users of consumer credit reports notify consumers when their loan
applications are denied on the basis of those consumer credit reports. In
addition, recent consumer privacy legislation enacted as part of the Gramm-
Leach-Bliley Act will restrict the dissemination of nonpublic consumer
information to nonaffiliated third parties absent consumer consent and will
require regulated institutions to maintain privacy policies when it becomes
effective during 2000.

At the state level, consumer protection laws applicable to LendingTree vary
by state, but typically regulate disclosures in advertising, require disclosures
and notices, prohibit unfair and deceptive trade practices and restrict
dissemination of non-public consumer information. The laws, rules and
regulations applicable to us undergo periodic modification and change.
Periodically, various laws, rules, and regulations are proposed, which, if
adopted, could impact us. These proposed laws, rules, and regulations, or other
applicable laws, rules, or regulations, if adopted, could make compliance more
difficult or expensive, restrict our ability to provide lending services,
further limit or restrict the amount of fees charged by us, or otherwise
adversely affect our business or prospects.

INTELLECTUAL PROPERTY

We regard our intellectual property as critical to our success. We rely on
a combination of patent, trademark and copyright law, and trade secret
protection to protect our proprietary rights. We pursue the protection of our
intellectual property in part through trademark and copyright registration. We
have registered "LendingTree" as a trademark in the United States and have
applied for trademark registration in the United States for "[i]close." We
consider the protection of our trademarks to be important for maintenance of our
brand identity and reputation. We cannot assure you that any of these
registrations or applications will not be successfully challenged by others or
invalidated through administrative process or litigation. Further, if our
trademark applications are not approved or granted due to the prior issuance of
trademarks to third parties or for other reasons, there can be no assurance that
we would be able to enter into arrangements with such third parties on
commercially reasonable terms allowing us to continue to use such trademarks. We
have applied for a U.S. patent and filed a Patent Cooperation Treaty
international patent application on our [i]close technology and our online loan
market process. It is possible that our patent applications will be denied or
granted in a very limited manner such that they offer little or no basis for us
to deter competitors from employing similar technology or processes or allow us
to defend LendingTree against third-party claims of patent infringement.
Further, effective patent, trademark, copyright, and trade secret protection may
not be available in every country in which we may offer our services.

A substantial portion of our intellectual property is licensed to third
parties. We license the right to use [i]close to well-known regional and
national lenders, other online companies that create single and multi-lender
online marketplaces, and consumer websites providing lending services. In
addition, a portion of the intellectual property used in our business is based
on licenses granted to us by third parties. We depend on the third party owners
from whom we license intellectual property and technology to protect those
rights, and therefore, cannot guarantee that the measures taken by these third
parties to protect their proprietary rights will be sufficient. In these
agreements, the licensors have generally agreed to defend,

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<PAGE> 42

indemnify and hold us harmless with respect to any claim by a third party that
the licensed property infringes any patent or other proprietary right. We cannot
assure you that these provisions will be adequate to protect us from
infringement claims.

In addition, we seek to protect our proprietary rights through the use of
confidentiality agreements and other contractual arrangements with our
employees, affiliates, clients, [i]close licensees, and others. We cannot assure
you that these agreements will provide adequate protection for our proprietary
rights in the event of any unauthorized use or disclosure, that employees of our
affiliates, clients, [i]close licensees, or others will maintain the
confidentiality of such proprietary information, or that such proprietary
information will not otherwise become known, or be independently developed, by
competitors. Occasionally, we have been, and expect to continue to be, subject
to claims in the ordinary course of our business, including claims alleging that
we have violated a patent or infringed a copyright, trademark or other
proprietary right belonging to a third party. We cannot assure you that the
steps we have taken to protect our proprietary rights will be adequate or that
third parties will not infringe or misappropriate our proprietary rights. Any
infringement claims, even if not meritorious, could result in the expenditure of
significant financial and managerial resources on our part, which could
materially adversely affect our business, results of operations, and financial
condition.

EMPLOYEES

As of December 31, 1999, we had 125 full-time employees. Of these, 31 were
in lender and borrower relations, 33 were in sales, marketing, and business
development, 33 were in technology and project management, 19 were in financial
and legal, and the remainder were in human resources and administrative
positions. None of our employees is represented under collective bargaining
agreements. We consider our relations with our employees to be good.

FACILITIES

Our principal executive offices are currently located in approximately
16,000 square feet of office space in Charlotte, North Carolina under a lease
that expires in 2004. We recently entered into a lease for approximately 38,000
square feet of office space in Charlotte for a 10-year term. We have also
entered into a contract to sublease our current office space.

LEGAL PROCEEDINGS

There are currently no material legal proceedings pending or, to our
knowledge, threatened against us.

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<PAGE> 43

MANAGEMENT

The following table sets forth, as of December 31, 1999, the name, age and
position within LendingTree of each of our directors, executive officers and key
employees.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Douglas Lebda................................... 29 Chief Executive Officer and Director
Keith Hall...................................... 46 Senior Vice President, Chief Financial Officer
and Treasurer
David Anderson.................................. 34 Senior Vice President of Operations
James Bennett, Jr. ............................. 31 Senior Vice President of Strategy and Corporate
Development
Richard Stiegler................................ 43 Chief Technology Officer
Steve Campbell.................................. 35 Chief Information Officer
Robert Flemma, Jr............................... 39 General Counsel
Thomas Reddin................................... 39 Chief Marketing Officer
Virginia Rebata................................. 46 Senior Vice President of Human Resources
James Carthaus.................................. 59 Director
Richard Field................................... 59 Director
Robert Kennedy.................................. 64 Director
Daniel Lieber................................... 37 Director
Adam Mizel...................................... 30 Director
W. James Tozer, Jr. ............................ 58 Director
Robert Wilson................................... 65 Chairman Emeritus
</TABLE>

DOUGLAS LEBDA founded LendingTree in June 1996. He has served as Chief
Executive Officer and a Director since September 1998. Prior to that time, Mr.
Lebda served as Chairman of the Board and President. Prior to founding
LendingTree, Mr. Lebda was with Price Waterhouse in various capacities since
1992.

KEITH HALL is Senior Vice President, Chief Financial Officer and Treasurer.
From 1997 until 1999, Mr. Hall was the chief financial officer of Broadway &
Seymour, Inc., a software product and services firm. Beginning in 1995, Mr. Hall
was the chief financial officer of Legent Corporation, a software company.
Between 1983 and 1995 Mr. Hall worked in various financial positions at United
Technologies Corporation, including chief financial officer at Carrier North
America. Mr. Hall has been with LendingTree since June 1999.

DAVID ANDERSON is Senior Vice President of Operations. From June 1988 until
March 1999, Mr. Anderson worked in various capacities at American Management
Systems Inc., an international business and information technology consulting
company, most recently as a senior principal. Mr. Anderson has been with
LendingTree since March 1999.

JAMES BENNETT, JR. is Senior Vice President of Strategy and Corporate
Development. From November 1996 until May 1998, Mr. Bennett was the vice
president for electronic development in the entertainment, communications, and
media group of Cahners Publishing. In June 1994, Mr. Bennett founded BookWire, a
business-to-business news and information website for the book publishing trade
and acted as publisher until November 1996. Mr. Bennett is a co-founder of
LendingTree and joined LendingTree full-time in May 1998. Mr. Bennett served as
a Director of LendingTree from June 1996 until September 1999.

RICHARD STIEGLER is Chief Technology Officer. From 1993 until 1997, Mr.
Stiegler served as vice president of Advanced Technology at Greenwich Capital
Markets. From 1987 until 1993, Mr. Stiegler was a vice president at Morgan
Stanley. Mr. Stiegler has been with LendingTree since November 1997.

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<PAGE> 44

STEVE CAMPBELL is Chief Information Officer. From 1987 until November 1999,
Mr. Campbell worked in various capacities with American Management Systems Inc.,
an international business and information technology consulting company, most
recently as the director of Software Development for the Consumer Financial
Services Group. Mr. Campbell has been with LendingTree since November 1999.

ROBERT FLEMMA, JR. is General Counsel. From 1998 to 1999, Mr. Flemma was a
private investor. From 1986 to 1997, Mr. Flemma was an attorney at Whyte
Hirschboeck Dudek S.C., where he was a partner and the administrative head of
the firm's consumer finance law team. Mr. Flemma joined LendingTree in October
1999.

THOMAS REDDIN is Chief Marketing Officer. From 1995 to 1999, he was vice
president, consumer marketing for Coca-Cola USA. Mr. Reddin was responsible for
leading the strategy and all marketing activities for Coca-Cola. Prior to
joining the Coca-Cola Company, Mr. Reddin spent 13 years with Kraft General
Foods in various brand management capacities. Mr. Reddin joined LendingTree in
December 1999.

VIRGINIA REBATA is Senior Vice President of Human Resources. Ms. Rebata has
over twenty years of human resources management experience. From 1998 to 1999,
Ms. Rebata was senior vice president of human resources for Planet Hollywood
International, Inc., an international restaurant chain. From 1997 to 1998, she
served as senior vice president of human resources of Fortis, Inc., a financial
services company. Prior to 1997, Ms. Rebata spent 13 years as vice president of
human resources for the Marriott Management Services Division of Marriott
International, an international hotel chain. Ms. Rebata joined LendingTree in
December 1999.

JAMES CARTHAUS has been a Director since December 1998 and is Chairman of
LendingTree's compensation committee. Since 1989, Mr. Carthaus has been the
chairman of a New York investment bank, Scott-Macon, Ltd. He is a former officer
of Citibank, a vice president and senior lending officer of a predecessor of
FleetBoston Financial and an executive vice president and director of Shearson
Lehman Brothers where he headed its financial services division. Mr. Carthaus is
currently a director and chairman of the investment committee of The Franciscan
Sisters of The Poor Foundation, Inc.

RICHARD FIELD has been a Director since August 1997. From 1978 until 1997,
Mr. Field worked at The Bank of New York in various capacities, most recently as
senior executive vice president of retail banking and a member of its policy
committee. Prior to 1978, Mr. Field served in various marketing capacities at
Chase Manhattan Corporation and Citicorp. Mr. Field is also a former member of
the executive committee for MasterCard International's board of directors and
the former chairman of MasterCard's U.S. board of directors.

ROBERT KENNEDY has been a Director since December 1998. Mr. Kennedy has
been the director of special projects of ULLICO, Inc. since 1994. Mr. Kennedy is
currently a director of SuperShuttle International, Inc. and is a member of the
advisory board of Euclid Funds.

DANIEL LIEBER has been a Director since September 1999. Mr. Lieber is a
partner at Equifin Capital Management, an investment firm, where he has worked
since October 1998. Prior to joining Equifin, Mr. Lieber was a senior vice
president at AT&T Capital. From 1995 to 1997, Mr. Lieber was a senior vice
president with GE Capital Services, RFS Ventures Group. Between 1993 and 1995,
he was employed as a vice president in the Management Consulting Group at
Bankers Trust.

ADAM MIZEL has been a Director since September 1999. Mr. Mizel co-founded
Capital Z Partners, an investment firm, in 1998 where he is currently a partner.
From 1994 to 1998, Mr. Mizel was a Managing Director of Zurich Centre
Investments, Inc.

W. JAMES TOZER, JR. has been a Director since August 1997. Since 1990, Mr.
Tozer has been the managing director of Vectra Management Group, a real estate
firm. He is a former senior vice president of Citibank, senior executive vice
president of Shearson Hayden Stone, senior executive vice president of Marine
Midland Bank, and president of Prudential-Bache Securities. He is chairman of
the executive committee of Draper Bank and Trust and was co-founder of Vectra
Bank of Colorado.

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<PAGE> 45

ROBERT WILSON is Chairman Emeritus. Mr. Wilson joined LendingTree shortly
after its founding. Between April 1997 and September 1999 he served in various
capacities, including chief executive officer, chairman of the board, and chief
financial officer. Following an active role in business development and capital
raising, Mr. Wilson retired from LendingTree in September 1999 and continues to
serve as a consultant. Mr. Wilson was a general partner at Goldman Sachs for 17
years, including three years as a president and managing director of Goldman,
Sachs International. He is currently a director of the Phoenix Home Life Mutual
Insurance Co., WorkPlus.com, inc. and co-founder and chairman of QuoteShip.com,
Inc. Mr. Wilson also serves on the International Advisory Board of BlueStone
Capital Partners, LP.

Several of our directors were elected to the board as designees of specific
stockholders pursuant to a stockholders' agreement that terminates as of the
closing of this offering. Adam Mizel and Dan Lieber were designated by Capital Z
Partners, Robert Kennedy was designated by The Union Labor Life Insurance
Company, and W. James Tozer, Jr. was designated by Richard Field and himself.

CLASSES OF DIRECTORS

We will adopt a provision in our certificate of incorporation which will
divide our board of directors into three classes, denominated as Class I, Class
II and Class III. Members of each class hold office for staggered three-year
terms. At each annual meeting of the stockholders of LendingTree commencing in
2001, the successors to the directors whose term expires at that meeting will be
elected to serve until the third annual meeting after their election or until
their successor has been elected and qualified. Messrs. Field and Tozer will
serve as Class I directors whose terms expire at the 2001 annual meeting of
stockholders. Messrs. Carthaus, Lieber, and Kennedy will serve as Class II
directors whose terms expire at the 2002 annual meeting of stockholders. Messrs.
Lebda and Mizel will serve as Class III directors whose terms expire at the 2003
annual meeting of stockholders. With respect to each class, a director's term
will be subject to the election and qualification of their successors, or their
earlier death, resignation or removal. These provisions, when taken in
conjunction with other provisions of our amended and restated certificate of
incorporation authorizing the board of directors to fill vacant directorships,
may delay a stockholder from removing incumbent directors and simultaneously
gaining control of the board of directors by filling the vacancies with its own
nominees.

BOARD COMMITTEES

The board of directors has a compensation committee that reviews and
recommends to the board the compensation arrangements provided to the management
of LendingTree and administers the stock option plan. The members of the
compensation committee are James Carthaus and Adam Mizel.

The board of directors has an audit committee that reviews LendingTree's
annual audit and meets with LendingTree's independent auditors to review
LendingTree's internal controls and financial management practices. The members
of the audit committee are Richard Field, Daniel Lieber, and Robert Kennedy.

DIRECTOR COMPENSATION

We do not currently pay cash fees to our directors for attending board or
committee meetings, but we reimburse directors for their reasonable expenses
incurred in connection with attending these meetings. Each non-employee director
who holds less than one percent of the common stock as of the closing of this
offering will be granted an option under the Amended and Restated 1999 Stock
Incentive Plan to purchase 15,000 shares of common stock. Following this
offering, a new non-employee director will be granted an option to purchase
15,000 shares of common stock upon his or her first election or appointment to
the board of directors, if he or she holds less than five percent of the common
stock at the time of his or her first election or appointment. In addition,
immediately following each annual stockholders' meeting following this offering,
each non-employee director who holds less than five percent of the common stock
at that time will be granted an option to purchase 5,000 shares of common stock.
These grants are

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<PAGE> 46

described more fully below, at "Executive Compensation -- Amended and Restated
1999 Stock Incentive Plan -- Outside Director Options."

Our directors are eligible to participate in a deferred compensation
program whereby a director may defer the income from director's fees, should we
begin to pay director's fees, and from the exercise of his or her stock options.
Under that plan, in the event of a change in control, we will be required to
fund a so-called "rabbi trust" sufficiently to pay the deferred compensation.

EXECUTIVE COMPENSATION

The following summary compensation table sets forth information concerning
compensation earned in 1999 by our Chief Executive Officer and the remaining
four most highly compensated executive officers as of the end of 1999 whose
salary and bonus for that year exceeded $100,000. Also included is information
with respect to two additional individuals who would have been named in the
Summary Compensation Table for 1999 except that they were not executive officers
as of the end of 1999.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
NUMBER OF
SECURITIES
ANNUAL COMPENSATION UNDERLYING
-------------------- OPTION/ ALL OTHER
SALARY BONUS SARS COMPENSATION
NAME AND PRINCIPAL POSITION ($) ($) (#) ($)
- --------------------------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C>
Douglas Lebda(1)........................... $154,000 $100,000 190,500 --
Chief Executive Officer
Keith Hall(2).............................. 79,000 75,000 114,300 --
Senior Vice President, Chief Financial
Officer and Treasurer
David Anderson(3).......................... 96,000 78,000 114,300 20,000
Senior Vice President of Operations
James Bennett, Jr.......................... 117,000 58,000 114,300 1,000
Senior Vice President of Strategy and
Corporate Development
Richard Stiegler(4)........................ 120,000 122,000(7) -- --
Chief Technology Officer
Mitchell York(5)........................... 101,000 25,000 -- 33,750(8)
Robert Wilson(6)........................... 88,000 -- -- 31,000(9)
</TABLE>

- ---------------
(1) On January 6, 2000, the compensation committee of the board of directors
approved an increase of Mr. Lebda's annual salary from $200,000 to $250,000.

(2) Mr. Hall joined LendingTree in June 1999.

(3) Mr. Anderson joined LendingTree in March 1999.

(4) On January 6, 2000, the compensation committee of the board of directors
approved an increase of Mr. Stiegler's annual salary from $120,000 to
$185,000.

(5) Mr. York terminated his employment with LendingTree effective as of October
1, 1999.

(6) Mr. Wilson resigned his positions with LendingTree effective as of September
20, 1999. He is currently providing consulting services to LendingTree for
annual compensation of $100,000 and reimbursable expenses.

(7) At our election up to one-half of Mr. Stiegler's bonus may be paid in common
stock equal in value to that portion of the bonus. $58,000 of Mr. Stiegler's
1999 bonus was paid in common stock.

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<PAGE> 47

(8) Amounts consist of amounts earned in 1999 pursuant to his agreement with us
described under "Employment/Consulting Arrangements -- Agreement with Mr.
York."

(9) Amounts consist of consulting fees earned in 1999 and reimbursable expenses
for 1999 pursuant to his agreement with us described under
"Employment/Consulting Arrangements -- Consulting Agreement with Mr.
Wilson."

The following table sets forth information concerning individual grants of
stock options made in 1999 to each of the officers and former officers named in
the Summary Compensation Table.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
INDIVIDUAL GRANTS ASSUMED ANNUAL
--------------------------------------------------------- RATES OF
NUMBER OF PERCENT OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SARS EXERCISE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM
OPTION/SARS EMPLOYEES IN PRICE EXPIRATION --------------------------
NAME GRANTED (#)(1) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ---- -------------- ---------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Douglas Lebda........ 190,500(2) 18.5% $6.06 09/02/09 $2,201,125 $4,102,438
Keith Hall........... 76,200(3) 11.1 4.72 06/14/09 968,876 1,701,415
38,100(4) 5.51 09/01/09 461,180 841,443
David Anderson....... 19,050(5) 11.1 4.72 03/15/09 238,192 413,221
95,250(6) 5.51 09/01/09 1,152,950 2,103,607
James Bennett, Jr.... 114,300(7) 11.1 5.51 09/01/09 1,383,540 2,524,328
Richard Stiegler..... --(8) -- -- -- -- --
Mitchell York........ 101,600(9) 11.1 4.72 (9) 787,344 950,173
12,700(10) 4.72 10/01/03 107,722 139,585
Robert Wilson........ 76,200(11) 7.4 5.20 08/10/07 817,636 1,331,658
</TABLE>

- ---------------
(1) All options, other than the grant to Mr. York relating to 12,700 shares of
common stock, were granted under LendingTree's 1998 Stock Option Plan,
which is described below, under "Stock Plans -- 1998 Stock Option Plan."
All options granted to Messrs. Lebda, Hall, Anderson, and Bennett have a
term of ten years and become vested in equal installments on each of the
first four anniversaries of the date of grant, except for the grant to Mr.
Anderson relating to 19,050 shares, which will become vested on each of the
first three anniversaries of the date of grant.

(2) 32,987 of the shares covered by the option will be eligible for incentive
stock option treatment, and the remainder of the shares will be subject to
the rules for non-qualified stock options. On January 6, 2000, LendingTree
granted an option to Mr. Lebda for 158,750 shares of common stock at an
exercise price of approximately $9.25 per share. This option expires
January 6, 2010. 13,753 of the shares covered by this option will be
eligible for incentive stock option treatment, and the remainder of the
shares will be subject to the rules for non-qualified stock options. In
February, LendingTree granted an option to Mr. Lebda for up to 100,000
shares of common stock at an exercise price equal to the initial public
offering price. This option will be exercisable prior to the commencement
of trading of our common stock on the Nasdaq National Market.

(3) All of the shares covered by the option will be eligible for incentive
stock option treatment.

(4) 7,254 of the shares covered by the option will be eligible for incentive
stock option treatment, and the remainder of the shares will be subject to
the rules for non-qualified stock options. On January 6, 2000, LendingTree
granted an option to Mr. Hall for 38,100 shares of common stock at an
exercise price of approximately $9.25 per share. This option expires
January 6, 2010. 9,525 of the shares covered by this option will be
eligible for incentive stock option treatment, and the remainder of the
shares will be subject to the rules for non-qualified stock options.

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<PAGE> 48

(5) All of the shares covered by the option will be eligible for incentive
stock option treatment.

(6) 56,242 of the shares covered by the option will be eligible for incentive
stock option treatment, and the remainder of the shares will be subject to
the rules for non-qualified stock options. This option expires January 6,
2010.

(7) 56,242 of the shares covered by the option will be eligible for incentive
stock option treatment, and the remainder of the shares will be subject to
the rules for non-qualified stock options.

(8) On January 6, 2000, LendingTree granted an option to Mr. Stiegler for
38,100 shares of common stock at an exercise price of approximately $9.25
per share. This option expires January 6, 2010. 35,059 of the shares
covered by this option will be eligible for incentive stock option
treatment, and the remainder of the shares will be subject to the rules for
non-qualified stock options.

(9) This grant was made as consideration for the cancellation of an incentive
stock option relating to 101,600 shares of common stock. The new option's
exercise price per share is the same as the exercise price per share of the
cancelled option. The vesting schedule and term of this option is the same
as the vesting schedule of the cancelled option, as follows:

- as to the 38,100 shares which vested on September 9, 1999, the
expiration date is September 9, 2001;

- as to the 38,100 shares which vest on September 9, 2000, the expiration
date is September 9, 2002; and

- as to the 25,400 shares which vest on September 9, 2001, the expiration
date is September 9, 2003.

Other terms of this option are described under "Employment/Consulting
Arrangements -- Agreement with Mr. York."

(10) This grant was made as consideration for the cancellation of a previously
granted non-qualified stock option relating to 12,700 shares of common
stock and was not granted under the terms of any of LendingTree's option
plans. The new option's exercise price per share is the same as the
exercise price per share of the cancelled option and the option is fully
exercisable as of the date of grant.

(11) This grant was made as consideration for the cancellation of a previously
granted non-qualified stock option relating to 76,200 shares of common
stock. The new option's exercise price per share is the same as the
exercise price per share of the cancelled option and the option is fully
exercisable as of the date of grant.

The following table sets forth information concerning the exercise of stock
options during 1999 by the officers and former officers named in the Summary
Compensation Table.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES ACQUIRED VALUE FISCAL YEAR-END FISCAL YEAR-END
NAME ON EXERCISE (#) REALIZED ($) EXCERCISABLE/UNEXERCISABLE (#) EXCERCISABLE/UNEXERCISABLE ($)
- ---- --------------- ------------ ------------------------------ ------------------------------
<S> <C> <C> <C> <C>
Douglas Lebda........ -- $ -- 123,093/241,300 $1,082,027/$1,235,300
Keith Hall........... -- -- 0/114,300 0/687,300
David Anderson....... -- -- 0/114,300 0/642,300
James Bennett, Jr.... -- -- 19,056/133,350 119,550/746,850
Richard Stiegler..... -- -- 46,567/16,933 417,636/106,264
Mitchell York........ 25,400 120,000 50,800/63,500 318,800/398,500
Robert Wilson........ -- -- 80,853/0 486,718/0
</TABLE>

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<PAGE> 49

STOCK PLANS

1997 STOCK OPTION PLAN

On January 15, 1997, we adopted the 1997 Stock Option Plan of LendingTree,
Inc., effective as of the same date. The purpose of the plan is to promote our
long-term growth and profitability by providing key people with incentives to
improve stockholder value and to contribute to our growth and financial success
and enabling us to attract, retain, and reward the best available persons for
positions of substantial responsibility.

GENERAL. A maximum of 1,556,890 shares of common stock is reserved for
issuance under the plan, subject to equitable adjustment upon the occurrence of
any stock dividend or other distribution, stock split, merger, consolidation,
combination, share repurchase or exchange, or other similar corporate
transaction or event. If an option granted under the plan expires or is
terminated for any reason without being exercised, the shares of common stock
underlying the grant will again be available for purposes of the plan. It is
currently anticipated that no further grants will be made under this plan.

ADMINISTRATION. The plan is administered by the compensation committee of
the board of directors. The compensation committee has full authority to
determine the persons to whom options will be granted, the type of options to be
granted, the number of shares to be made subject to options, the exercise price
and other terms and conditions of the options, and to interpret the plan and
prescribe, amend and rescind rules and regulations relating to the plan. Members
of the compensation committee who are either eligible for awards of stock
options or have been given stock options may vote on any matters affecting the
administration of the plan or the grant of options pursuant to the plan, except
that no such member may act upon the granting of an option to himself or
herself.

GRANTS. Options granted under the plan may be either "incentive stock
options," as such term is defined in Section 422 of the Internal Revenue Code,
or non-qualified stock options.

ELIGIBILITY. Options may be granted under the plan to employees,
directors, including directors who are not employees, and consultants, as
selected by the compensation committee.

TERMS AND CONDITIONS OF OPTIONS. The exercise price of a stock option
granted under the plan was determined by the compensation committee at the time
the option was granted, and the exercise price of an incentive stock option is
not less than the fair market value per share of common stock on the date of
grant. Stock options are exercisable at the times and upon the conditions that
the compensation committee has determined, as reflected in the applicable option
agreement. The exercise period may not exceed 10 years from the date of grant.

Unless earlier terminated pursuant to the provisions of the plan or the
grant agreement, options will terminate in their entirety, whether vested in
whole or in part, three years after the date the grantee is no longer employed
by or providing services to us for any reason other than death, disability or
retirement. If a grantee's employment or service terminates for cause, all
options held by the grantee will terminate upon termination. In the event that
the employment or service of a grantee terminates as a result of death,
disability or retirement, all options that are not exercisable at the time of
termination will terminate and all options that are exercisable at the time of
termination may be exercised for a period of three years immediately following
termination, but in no case after the options expire in accordance with their
terms.

In the event of a proposed change in control, the compensation committee
may:

- accelerate or change the exercise dates of any option;

- make arrangements with grantees for the payment of appropriate
consideration to them for the cancellation and surrender of any option;
and

- in any case where equity securities other than our common stock are
proposed to be delivered in exchange for or with respect to our common
stock, make arrangements providing that any option may become one or more
options with respect to such other securities.

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<PAGE> 50

In the event a change in control occurs, the vesting of any option that is
time-based only will be accelerated so that the unvested time-based portion of
the option will become 50% vested and exercisable.

In the event we dissolve or liquidate, other than pursuant to a plan of
merger or reorganization, then notwithstanding any restrictions on exercise set
forth in the plan or any option agreement:

- grantees will have the right to exercise their options at any time up to
10 days prior to the effective date of the liquidation or dissolution,
after which time all options will expire; and

- the compensation committee may make arrangements with the grantees for
the payment to them of appropriate consideration for the cancellation and
surrender of any option that is canceled or surrendered at any time up to
10 days prior to the effective date of the liquidation or dissolution.

1998 STOCK OPTION PLAN

On February 3, 1998, we adopted the 1998 Stock Option Plan of LendingTree,
Inc., effective as of the same date. The purpose of the plan is to promote our
long-term growth and profitability by providing key people with incentives to
improve stockholder value and to contribute to our growth and financial success
and enabling us to attract, retain and reward the best available persons for
positions of substantial responsibility.

GENERAL. A maximum of 1,187,450 shares of common stock is reserved for
issuance under the plan, subject to equitable adjustment upon the occurrence of
any stock dividend or other distribution, stock split, merger, consolidation,
combination, share repurchase or exchange, or other similar corporate
transaction or event. If an option granted under the plan expires or is
terminated for any reason without being exercised, the shares of common stock
underlying such grant will again be available for purposes of the plan. It is
currently anticipated that no further grants will be made under this plan.

ADMINISTRATION. The plan is administered by the compensation committee of
the board of directors. The compensation committee has full authority, subject
to the provisions of the plan, among other things, to determine the persons to
whom options will be granted, the type of options to be granted, the number of
shares to be made subject to options, the exercise price and other terms and
conditions of the options, and to interpret the plan and prescribe, amend and
rescind rules and regulations relating to the plan. Members of the compensation
committee who are either eligible for awards of stock options or have been given
stock options may vote on any matters affecting the administration of the plan
or the grant of options pursuant to the plan, except that no such member may act
upon the granting of an option to himself or herself.

GRANTS. Options granted under the plan may be either "incentive stock
options," as such term is defined in Section 422 of the Internal Revenue Code,
or non-qualified stock options.

ELIGIBILITY. Options may be granted under the plan to employees,
directors, including directors who are not employees, and consultants, as
selected by the compensation committee.

TERMS AND CONDITIONS OF OPTIONS. The exercise price of a stock option
granted under the plan was determined by the compensation committee at the time
the option was granted, and the exercise price of an incentive stock option was
not less than the fair market value per share of common stock on the date of
grant. Stock options are exercisable at the times and upon the conditions that
the compensation committee has determined, as reflected in the applicable option
agreement. The exercise period may not exceed 10 years from the date of grant.

Unless earlier terminated pursuant to the provisions of the plan or the
grant agreement, options will terminate in their entirety, whether vested in
whole or in part, three years after the date the grantee is no longer employed
by or providing services to us for any reason other than death, disability or
retirement. If a grantee's employment or service terminates for cause, all
options held by the grantee will terminate upon termination. In the event that
the employment or service of a grantee terminates as a result of death,
disability or retirement all options that are not exercisable at the time of
termination will terminate and all

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<PAGE> 51

options that are exercisable at the time of termination may be exercised for a
period of three years immediately following termination but in no case after the
options expire in accordance with their terms.

In the event of a proposed change in control, the compensation committee
may:

- accelerate or change the exercise dates of any option;

- make arrangements with grantees for the payment of appropriate
consideration to them for the cancellation and surrender of any option;
and

In the event we dissolve or liquidate, other than pursuant to a plan of
merger or reorganization, then notwithstanding any restrictions on exercise set
forth in the plan or any option agreement:

- grantees will have the right to exercise their options at any time up to
10 days prior to the effective date of such liquidation and dissolution,
after which time all options will expire; and

AMENDED AND RESTATED 1999 STOCK INCENTIVE PLAN

On September 21, 1999 we adopted the 1999 Stock Option Plan of LendingTree,
Inc., effective as of the same date. On January 21, 2000, we amended and
restated that plan, which was renamed the Amended and Restated 1999 Stock
Incentive Plan of LendingTree, Inc., effective as of the same date. The purpose
of the plan is to promote our long-term growth and profitability by providing
key people with incentives to improve stockholder value and to contribute to our
growth and financial success and by enabling us to attract, retain and reward
the best available persons for positions of substantial responsibility.

GENERAL. A maximum of 2,286,000 shares of common stock has been reserved
for issuance under the plan, subject to equitable adjustment upon the occurrence
of any stock dividend or other distribution, stock split, merger, consolidation,
combination, share repurchase or exchange, or other similar corporate
transaction or event. If an award granted under the plan expires or is
terminated for any reason, the shares of common stock underlying the award will
again be available for purposes of the plan.

TYPES OF AWARDS. The following awards may be granted under the plan:

- stock options, including incentive stock options and nonqualified stock
options;

- restricted stock;

- phantom stock;

- stock bonuses; and

- other stock-based awards.

ADMINISTRATION. The plan is administered by the compensation committee of
the board of directors. The compensation committee has full authority, subject
to the provisions of the plan, among other things, to determine the persons to
whom awards will be granted, to determine the type of award to be granted, the
number of shares to be made subject to awards, the exercise price and other
terms and conditions of the awards, and to interpret the plan and prescribe,
amend and rescind rules and regulations relating to the plan. The board of
directors or the compensation committee may delegate to any of our senior
management the authority to make grants of awards to our employees who are not
executive officers or directors of LendingTree.
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<PAGE> 52

ELIGIBILITY. Awards may be granted under the plan to employees, directors,
including directors who are not employees, and consultants of LendingTree or any
of our affiliates, as selected by the committee.

TERMS AND CONDITIONS OF OPTIONS. Stock options may be either "incentive
stock options," as that term is defined in Section 422 of the Internal Revenue
Code, or nonqualified stock options. The exercise price of a stock option
granted under the plan is determined by the compensation committee at the time
the option is granted, but the exercise price of an incentive stock option may
not be less than the fair market value per share of common stock on the date of
grant. Stock options are exercisable at the times and upon the conditions that
the compensation committee may determine, as reflected in the applicable option
agreement. The exercise period will be determined by the compensation committee,
but in the case of an incentive stock option, generally, the exercise period may
not exceed 10 years from the date of grant.

The option exercise price must be paid in full at the time of exercise, and
may be payable by one or more of the following methods:

- in cash or cash equivalents;

- the surrender of previously acquired shares of common stock that have
been held by the participant for at least six months prior to the date of
surrender;

- if so determined by the compensation committee as of the grant date,
authorization for LendingTree to withhold a number of shares otherwise
payable pursuant to the exercise of an option; or

- through a broker cashless exercise procedure approved by LendingTree.

The compensation committee may, in its sole discretion, authorize
LendingTree to make or guarantee loans to a participant to assist the
participant in exercising options.

The compensation committee may provide at the time of grant of an option
that the participant may elect to exercise all or any part of the option before
it becomes vested and exercisable. If the participant elects to exercise all or
part of a non-vested option, the participant will be issued shares of restricted
stock which will become vested in accordance with the vesting schedule set forth
in the original option agreement.

OUTSIDE DIRECTOR OPTIONS. Non-employee directors who, through the day of
the closing of this offering, own less than one percent of the voting power of
LendingTree or who, after the closing of this offering, own less than five
percent of the common stock, or "outside directors," will be eligible for
automatic grants of non-qualified options under the plan. Each outside director
who holds less than one percent of the common stock as of the closing of this
offering will be granted an option to purchase 15,000 shares of common stock.
Following this offering, each outside director will be granted upon his or her
first election or appointment to the board an option to purchase 15,000 shares
of common stock. In addition, immediately following each annual stockholders
meeting following this offering, each outside director will be granted an option
to purchase 5,000 shares of common stock. Each option granted under this program
to an outside director will have an exercise price equal to the fair market
value of the common stock on the date of grant and will become exercisable in
full on the second anniversary of the date of grant of the option, provided that
the director is still serving as a director as of the date of vesting of the
option. Each option granted to an outside director will expire on the tenth
anniversary of the date of grant. The other terms of the options granted to
outside directors will be consistent with the terms of options granted to
employees.

RESTRICTED STOCK. The plan provides for awards of common stock that are
subject to restrictions on transferability and other restrictions imposed by the
compensation committee. Except to the extent restricted under the award
agreement relating to the restricted stock, a participant granted restricted
stock will have all of the rights of a stockholder.

PHANTOM STOCK. The plan provides for awards of phantom stock, which upon
vesting, entitles the participant granted such an award to receive an amount in
cash equal to the fair market value of the number of shares subject to such
award. Vesting of all or a portion of a phantom stock award may be subject to
various conditions established by the compensation committee.

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<PAGE> 53

STOCK BONUSES; OTHER AWARDS. The plan provides that awards of shares of
common stock may be made to employees at the discretion of the compensation
committee. In addition, other awards valued in whole or in part by reference to,
or otherwise based on, common stock may be granted either alone or in addition
to other awards under the plan, in the compensation committee's discretion.

CHANGE IN CONTROL. In the event of a change in control, the time-based
portion of an outstanding award that is not vested and exercisable at the time
of the change in control will become 50% vested and exercisable. In addition to
the automatic acceleration, the compensation committee will have the discretion
to accelerate the vesting or exercisability of the remainder of any award
granted under the plan.

TERMINATION OF EMPLOYMENT. Unless otherwise determined by the compensation
committee, the unvested portion of awards granted under the plan will
immediately be cancelled upon termination of a participant's employment or
service with LendingTree. If a participant's employment or service terminates
other than because of death, disability or retirement, all options that are
exercisable at the time of termination may be exercised by the participant for
no longer than 90 days after the date of termination. If a participant's
employment or service terminates for cause, all options held by the participant
will immediately terminate. If a participant's employment or service terminates
as a result of death, all options that are exercisable at the time of death may
be exercised by the participant's heirs or distributees for one year, provided
that options granted to non-employee directors may provide for a post-death
exercise period of up to three years. If a participant's employment or service
terminates because of disability or retirement, all options that are exercisable
at the time of termination may be exercised for a period of one year immediately
following termination. In no case may an option be exercised after it expires in
accordance with its terms.

AMENDMENT, TERMINATION OF PLAN. The board of directors may modify or
terminate the plan or any portion of the plan at any time, except that an
amendment that requires stockholder approval in order for the plan to continue
to comply with any law, regulation or stock exchange requirement will not be
effective unless approved by our stockholders. No awards may be granted under
the plan after the day immediately preceding the tenth anniversary of its
adoption date.

Since the amount of benefits to be received by any plan participant who is
an employee of Lending Tree or any of its affiliates is determined by the
compensation committee, the amount of future benefits to be allocated to any
employee or group of employees under the plan in any particular year is not
determinable.

Mr. Carthaus is currently the only director eligible to be granted options
under the plan's outside director program for automatic grants of options. It is
anticipated that Mr. Carthaus will be granted options to purchase an aggregate
of 38,100 shares of common stock under this program during our next fiscal year.

EMPLOYEE STOCK PURCHASE PLAN

In January 2000, we adopted, and our stockholders approved, the
LendingTree, Inc. Employee Stock Purchase Plan. The employee stock purchase plan
is designed to encourage our employees to purchase shares of our common stock.

GENERAL. The employee stock purchase plan is intended to comply with the
requirements of Section 423 of the Internal Revenue Code, and to assure the
participants of the tax advantages provided thereby. The employee stock purchase
plan will be administered by a committee established by the board of directors
comprising solely of non-employee directors who are not eligible to participate
in the employee stock purchase plan. The committee may make such rules and
regulations and establish such procedures for the administration of the employee
stock purchase plan as it deems appropriate.

SHARES AVAILABLE. The committee has authorized for issuance under the plan
a total of 444,500 shares of common stock, plus an additional number of shares
to be added on the first day of our fiscal year beginning in 2001 equal to:

- 508,000 shares, or

- a lesser amount determined by the committee.

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<PAGE> 54

In each of the above cases, the number of shares subject to adjustment by
the committee in the event of a recapitalization, stock split, stock dividend or
similar corporate transaction.

ELIGIBILITY. Subject to procedural requirements, employees of LendingTree
who have at least six months of service and work more than 20 hours per week
will be eligible to participate in the employee stock purchase plan, except that
employees who own five percent or more of the common stock of LendingTree or any
subsidiary of LendingTree will not be eligible to participate. All of our
full-time employees will be eligible to participate in the first offering period
under the plan.

STOCK PURCHASES. Under the employee stock purchase plan, each eligible
employee will be permitted to purchase shares of the common stock through
regular payroll deductions or cash payments in an amount equal to 1% to 20% of
the employee's compensation for each payroll period. The fair market value of
the shares of common stock which may be purchased by any employee under this or
any other LendingTree plan that is intended to comply with Section 423 of the
Internal Revenue Code during any calendar year may not exceed $25,000.

The employee stock purchase plan provides for a series of consecutive,
overlapping offering periods that generally will be 24 months long. Successive
six-month purchase periods will run during each offering period. Offering
periods generally will commence on January 1 and July 1 of each year during the
term of the plan, and purchase periods will run from January 1 to June 30 and
from July 1 to December 31; provided, that the first offering period will begin
on the first day of regular trading and end on the last trading day on or before
December 31, 2001.

During each offering period, participating employees will be able to
purchase shares of common stock at a purchase price equal to 85% of the fair
market value of the common stock at either the beginning of each offering period
or the end of each purchase period within the offering period, whichever price
is lower.

To the extent permitted by applicable laws, regulations, or stock exchange
rules, if the fair market value of the shares at the end of any purchase period
is lower than the fair market value of the shares on the date the related
offering period began, then all participants in that offering period will be
automatically withdrawn from the offering period immediately after the exercise
of their option on the date the purchase period ends. The participants will
automatically be re-enrolled in the immediately following offering period when
that offering period begins.

The options granted to a participant under the employee stock purchase plan
are not transferable other than by will or the laws of descent and distribution,
and are exercisable, during the participant's lifetime, only by the participant.

AMENDMENT, TERMINATION OF PLAN. The employee stock purchase plan and all
offering periods under the plan will automatically terminate on the tenth
anniversary of the first offering period under the plan. The board of directors
may from time to time amend or terminate the employee stock purchase plan;
provided, that no such amendment or termination may adversely affect the rights
of any participant without the consent of such participant and, to the extent
required by Section 423 of the Internal Revenue Code or any other law,
regulation or stock exchange rule, no such amendment will be effective without
the approval of stockholders entitled to vote thereon. Additionally, the
committee may make such amendments as it deems necessary to comply with
applicable laws, rules and regulations.

Since the amount of benefits to be received by each participant in the
employee stock purchase plan is determined by his or her elections, the amount
of future benefits to be allocated to any individual or group of individuals
under the plan in any particular year is not determinable.

MANAGEMENT INCENTIVE PLAN

On January 21, 2000, we adopted the LendingTree, Inc. Management Incentive
Plan. The purposes of the management incentive plan are to reinforce corporate
business goals and to promote the achievement of annual and long-range financial
business and other objectives by providing for the payment of cash bonuses to
our officers and other key employees. The plan will be administered by the
compensation committee of our board of directors. The compensation committee
will have the authority to determine

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<PAGE> 55

who will participate in the plan and to determine the terms and conditions of
incentive awards granted under the plan. The payment of bonuses under the
management incentive plan will be based on the achievement during a performance
period determined by the compensation committee of certain performance goals set
by the compensation committee, which may include any or all or none of the
following:

- income, profits or earnings per share;

- increase in the volume of qualification forms submitted;

- increase in the number of loans closed;

- growth of revenue;

- reductions in expenses; or

- increases in the market price of the common stock or total return to our
stockholders.

Minimum bonuses will be based on achievement of 80% of the performance
goals and maximum bonuses will be based on achievement of 150% of the
performance goals. A bonus will be paid only if the participant is employed by
LendingTree or its affiliates on the day the bonus is to be paid. Under the
plan, no payment may be made to one of our executive officers that exceeds 150%
of the officer's annual base salary. In the event of a change in control, the
performance period in effect at the time of the change in control will be deemed
to have been completed, the maximum targets will be deemed to have been
attained, and a pro rata portion of the award will be paid in cash to the
participant.

EMPLOYMENT/CONSULTING ARRANGEMENTS

EMPLOYMENT AGREEMENT WITH MR. LEBDA. We have an employment agreement with
Douglas Lebda having a term commencing on September 2, 1999 and expiring on
September 2, 2003, unless earlier terminated as provided under the agreement. In
addition to providing for a current annual salary of $250,000 and benefits, Mr.
Lebda's agreement provides for his participation in our bonus programs, with a
maximum bonus opportunity equal to 50% of his salary, and for the grant of an
option to purchase 190,500 shares of common stock; this grant will be referred
to later as the "new option." In the event we terminate Mr. Lebda's employment
either without cause or for bad performance, or if Mr. Lebda terminates his
employment for good reason, Mr. Lebda is entitled to receive continuation of his
base salary until the first anniversary of the effective date of termination,
provided that the severance payments are to be reduced to the extent he receives
any earned compensation from any subsequent employment during the one-year
severance period. In the event Mr. Lebda's employment is terminated as a result
of any merger, acquisition, share exchange or other business combination, Mr.
Lebda is entitled to receive a lump sum payment in an amount equal to 12 months
of his then current base salary.

With respect to his stock options, if we terminate Mr. Lebda's employment
without cause, or Mr. Lebda terminates his employment for good reason or if his
employment is terminated as a result of a merger, acquisition, share exchange or
other business combination, all of Mr. Lebda's stock options will continue to
vest in accordance with their vesting schedules in effect prior to termination
and he will have a right to exercise the options for a period of 30 days
following the final vesting date. In the event we terminate Mr. Lebda's
employment for bad performance, his stock options, excluding the new option,
will vest in accordance with the schedule set forth in the agreement evidencing
the new option and he will have a right to exercise the options for a period of
30 days following the final vesting date. Mr. Lebda will be subject to a
non-compete and non-solicitation covenant for one year following termination of
his employment and will be required to give us a general release in order to
receive his severance payments.

EMPLOYMENT AGREEMENT WITH MR. REDDIN. We have an employment agreement with
Thomas Reddin, our Chief Marketing Officer, whose employment with us began on
December 10, 1999. Under his agreement, Mr. Reddin is entitled to an annual
salary of $200,000, a signing bonus of $65,000, and employee benefits, including
reasonable relocation expenses. During his first year of employment, we are
obligated to pay to Mr. Reddin a bonus equal to $70,000, payable in four
quarterly payments beginning March 31, 2000. During subsequent years, bonuses
will be incentive-based and will range from zero to 50%

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<PAGE> 56

of his salary. Mr. Reddin was granted on December 10, 1999 an option under the
1999 Stock Option Plan, which is now the Amended and Restated 1999 Stock
Incentive Plan, to purchase 285,750 shares of common stock at an exercise price
of approximately $5.51 per share. The option is intended to be an "incentive
stock option" within the meaning of Section 422 of the Internal Revenue Code and
will vest ratably on each of the first four anniversaries of his date of
employment. If Mr. Reddin's employment is terminated other than for cause, we
will be obligated to continue to pay him his salary and his first year's bonus
for one year or until he takes another full-time job, in which case, if his
subsequent employer is paying him less, we are obligated to pay the difference,
if any, between the salary and bonus paid to Mr. Reddin from the subsequent
employer and the salary he would have received from us. In addition, if his
employment is terminated other than for cause after his first year of
employment, Mr. Reddin will be entitled to additional vesting on a pro rata
portion of stock options previously granted to him based on the number of months
worked in the year of termination before his next anniversary. The stock options
that are or become exercisable at termination will remain exercisable for 90
days following termination. Mr. Reddin is also subject to covenants with respect
to LendingTree's confidential information and trade secrets during his
employment and for five years thereafter. If Mr. Reddin completes one year of
employment with us, he will be subject to non-competition and non-solicitation
covenants during his employment and for one year thereafter.

AGREEMENT WITH MR. YORK. Simultaneously with his resignation from all
positions, directorships and titles relating to LendingTree, we entered into an
agreement with Mitchell York with a one-year term commencing on October 1, 1999.
Under the terms of the agreement, LendingTree agrees to pay Mr. York $11,250 per
month for 12 months. Mr. York has given us a general release in order to receive
these monthly payments, which will be reduced on a dollar-for-dollar basis to
the extent that Mr. York receives compensation from any subsequent employment
before October 1, 2000. In addition, LendingTree agrees to pay Mr. York prorated
bonus amounts. Mr. York has agreed to cooperate with all of our financing
efforts and with any existing or future litigation against us. Further, Mr. York
is subject to a non-compete and non-solicitation covenant until October 1, 2000
and is obligated to refrain from making any disparaging statements with respect
to LendingTree or our officers, directors or employees. In connection with
entering into the agreement, we entered into two new stock option agreements
with Mr. York which cancel two previous stock option agreements, one of which
was a non-qualified stock option relating to 12,700 shares of common stock. The
other agreement was an incentive stock option, within the meaning of Section 422
of the Internal Revenue Code, relating to 101,600 shares of common stock. The
new option agreements are substantially similar to the old agreements, except
that the incentive stock option was replaced with a non-qualified stock option.

In the event that, within three years after the effective date of Mr.
York's agreement, a court finds that Mr. York has materially violated any of the
provisions of his non-compete, non-solicitation, and non-disparagement covenants
or that he has failed to cooperate with our financing efforts or failed to
assist us with any litigation matter, we will be relieved of all of our
obligations under the agreement and Mr. York will be required to repay all
payments and other benefits paid to him under his agreement. In the event that
the non-compete, non-solicitation and non-disparagement provisions of Mr. York's
agreement are found by a court to be unenforceable with respect to Mr. York, the
new option agreement relating to 101,600 shares of common stock will become null
and void, and any of Mr. York's vested and unvested options will be immediately
cancelled. Mr. York will also be required to return all shares of common stock
which he received pursuant to the exercise of the new option relating to 101,600
shares. We will then be required to return to Mr. York all sums paid to us in
connection with the exercise of the option.

CONSULTING AGREEMENT WITH MR. WILSON. In connection with his resignation
from all directorships and positions with us and in settlement of his then
current employment agreement, we entered into a consulting agreement with Robert
Wilson effective September 21, 1999 and expiring on October 12, 2002. Under the
terms of the agreement, LendingTree has agreed to pay Mr. Wilson a quarterly fee
in the amount of $25,000, prorated for a shorter period, as consideration for
his services as a consultant, which will not exceed the equivalent of 10 days'
full-time employment per year. Mr. Wilson also receives an annual allowance for
reimbursement of medical expenses and a reimbursement for any legal expenses

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<PAGE> 57

relating to LendingTree. Concurrently with entering into the agreement, we
purchased 539,750 shares of common stock from Mr. Wilson at approximately $6.30
per share and entered into a new option agreement with Mr. Wilson. The new
option agreement cancels Mr. Wilson's old option and grants Mr. Wilson a
non-qualified stock option to purchase 76,200 shares of common stock. The new
stock option is immediately exercisable in full at the same exercise price per
share, as the exercise price per share of the old stock option. Mr. Wilson has
agreed to cooperate with all of our financing efforts and with any existing or
future litigation against us. Further, Mr. Wilson is subject to a non-compete
and non-solicitation covenant until September 21, 2000 and is obligated to
refrain from filing or participating or assisting in any lawsuit, arbitration or
other legal action asserting any claims on his behalf against us, our directors,
officers or employees other than a claim for breach of his consulting agreement.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The compensation committee of the board of directors consists of James
Carthaus and Adam Mizel. No interlocking relationship exists between any member
of our board of directors or our compensation committee and any members of the
board of directors or compensation committee of any other company, and no such
interlocking relationship has existed in the past, except that Mr. Mizel is a
partner at Capital Z Partners and participates in compensation decisions for
Capital Z Partners.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

PRIVATE EQUITY FINANCINGS

PHOENIX STRATEGIC CAPITAL. In March 1998, we sold 564,444 shares of our
common stock at a price per share of approximately $3.54 to Phoenix Strategic
Capital for $2.0 million. Phoenix also provided us with a $1,000,000 line of
credit, $500,000 of which was utilized in November 1998 and repaid in December
1998. The line of credit provided by Phoenix expired on December 30, 1998. As
part of the line of credit transaction, Phoenix received a warrant to purchase
9,525 shares of our common stock with an exercise price of approximately $4.72
per share. Assuming an initial public offering price of $11.00 per share, the
value of the warrant as determined by the difference between the offering price
and the exercise price is approximately $60,000. In September 1999, we
repurchased 282,222 shares of our common stock at a price per share of
approximately $6.30 from Phoenix Strategic Capital for $1,777,776. Upon the
closing of this offering, Phoenix Strategic Capital will own approximately 1.7%
of our issued and outstanding common stock.

THE UNION LABOR LIFE INSURANCE COMPANY. In December 1998, we sold
convertible preferred stock and a warrant to purchase 260,000 additional shares
of Series A convertible preferred stock at an exercise price of $6.00 per share
to The Union Labor Life Insurance Company, on behalf of its Separate Account P
(ULSAP) for $5.0 million. In March 1999, we sold an additional 500,000 shares of
Series A convertible preferred stock and warrants to purchase 40,000 shares of
Series B convertible preferred stock at an exercise price of $9.00 per share to
ULSAP for $3.0 million. In September 1999, all of the warrants held by ULSAP
were exchanged for a warrant to purchase 381,000 shares of our common stock.
This warrant has an exercise price of $4.72 per share and expires in September
2005. Assuming an initial public offering price of $11.00, the value of this
warrant as determined by the difference between the offering price and the
exercise price is approximately $2,393,000. Upon the closing of this offering
and assuming the exercise of the warrant to purchase 381,000 shares of our
common stock, ULSAP will own approximately 12.6% of our issued and outstanding
common stock.

CAPITAL Z, GE CAPITAL, GOLDMAN SACHS AND PRICELINE.COM. In September 1999,
we sold 6,024,096 shares of our Series D convertible preferred stock at a price
per share of $8.30 to an affiliate of Capital Z, The Goldman Sachs Group, Inc.,
General Electric Capital Assurance Company, GE Capital Residential Connections
Corporation, priceline.com Incorporated and Marsh & McLennan Risk Capital Corp.
for aggregate consideration in the amount of $50 million. Capital Z, GE Capital,
The Goldman Sachs Group, Inc. and priceline.com, either directly or through an
affiliate, received 3,012,048, 1,204,819, 1,084,337 and 240,964 shares of Series
D convertible preferred stock, respectively. Upon the closing of this offering,
Capital Z, GE Capital, Goldman Sachs and priceline.com will own approximately
22.9%, 9.1%, 8.2% and 1.8%, respectively, of our issued and outstanding common
stock. In addition, we have a commercial relationship with priceline.com which
is summarized below.

INVESTMENTS BY DIRECTORS

In July 1998, we sold 42,333 shares of our common stock at a price of
approximately $4.72 per share to H. Eugene Lockhart for $200,000. Mr. Lockhart
served as a member of our board of directors until September 1999.

In November 1998, we sold 12,700 shares of our common stock at a price of
approximately $4.72 per share to James Carthaus for $60,000. Mr. Carthaus is a
member of our board of directors.

In May 1999, we sold 333,334 shares of Series A convertible preferred stock
at a price of $6.00 per share and warrants to purchase 33,020 shares of our
common stock for $2.0 million to W. James Tozer, Jr. and Richard Field, each of
whom serves as a member of our board of directors. These warrants have an
exercise price of approximately $7.87 per share and expire in May 2004. Assuming
an initial public offering price of $11.00, the value of the warrants as
determined by the difference between the offering price and the exercise price
is approximately $103,000.

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In July 1999, we issued an 8% $500,000 principal amount convertible
promissory note and a warrant to purchase 15,240 shares of our common stock at
an exercise price of approximately $7.87 per share to Garrity Investment LLC,
which is controlled by a family member of Douglas Lebda, our Chief Executive
Officer. This financing was part of our issuance of 8% convertible promissory
notes in an aggregate principal amount of $1,750,000 and warrants to purchase
53,340 shares of our common stock to five investors. In September 1999, all of
the promissory notes along with accrued interest were exchanged for 214,076
shares of our Series D convertible preferred stock, of which Garrity Investments
received 61,165 shares. Assuming an initial offering price of $11.00, the value
of the warrant held by Garrity Investment LLC as determined by the difference
between the offering price and the exercise price is approximately $48,000.

In September 1999, Robert G. Wilson, who served as our Chairman until
September 1999, received $3,400,000 upon our repurchase of 539,750 shares of our
common stock at a price per share of approximately $6.30. Donald Colby, who
served as a member of our board of directors until September 1999, received
$800,000 upon our repurchase of 127,000 shares of our common stock at a price
per share of approximately $6.30. Also in September 1999, we repurchased 282,222
shares of our common stock at a price per share of approximately $6.30 from
Phoenix Strategic Capital for $1,777,776. Richard Shaw was designated as a
member of our board of directors by Phoenix in March 1998 and served until
September 1999.

In January 2000, we granted options to Douglas Lebda to purchase up to
158,750 shares of our common stock at an exercise price of $9.25 per share which
vest over a four year period. In addition, we also granted Mr. Lebda an option
to purchase up to 100,000 shares of our common stock at an exercise price equal
to the initial public offering price. This option will expire prior to the
commencement of trading of our common stock on the Nasdaq National Market. In
connection with the exercise of this option, Mr. Lebda will issue to us a full
recourse promissory note for the full exercise price of the option. The note
will be secured by all of the shares purchased pursuant to the option. In
addition, to the extent that Mr. Lebda sells, transfers or encumbers any shares
of our common stock which he presently holds and the then current value of the
pledged shares is insufficient under the terms of the note, the proceeds from
such sale, transfer or encumbrance will be remitted to us and the principal
balance of the note will be reduced by such amount. Mr. Lebda presently holds
843,852 shares of our common stock. The note will bear interest at the average
monthly "applicable federal rate" as defined in Section 1274(d) of the Internal
Revenue Code compounded annually. The applicable federal rate, which is revised
monthly, is 6.56% for the month of February 2000. Interest on the unpaid
principal balance will be due on January 31 of each year, in arrears, and the
full principal balance will be due in two equal installments on January 31, 2004
and 2005, respectively.

On February 9, 2000 Douglas Lebda, Keith Hall and James Bennett, Jr.
exercised options to purchase 49,828, 8,700, and 8,700, shares of our common
stock, at exercise prices of $5.00, $7.00, and $7.00 per share, respectively. In
connection with these option exercises and the payment of related income taxes,
we agreed to lend Messrs. Lebda, Hall and Bennet $500,000, $100,000 and
$100,000, respectively, as permitted under our benefit plans. Each of these
loans is evidenced by a full recourse promissory note which bears interest at
the average monthly applicable federal rate, compounded annually, and is secured
by all of the shares purchased under the respective options. Interest on the
unpaid principal balance of each note is payable on February 9 of each year, in
arrears, and the full principal balance is due in three equal installments on
February 9, 2002, 2003 and 2004, respectively.

RELATIONSHIPS BETWEEN DIRECTORS AND STOCKHOLDERS

Robert Kennedy, a member of our board of directors, is the director of
special projects of ULLICO, Inc.

Daniel Lieber, who serves as a member of our board of directors, is a
partner of Equifin Capital Management, an entity associated with Capital Z.

Adam Mizel, who serves as a member of our board of directors, is a partner
of Capital Z.
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OTHER RELATIONSHIPS

PRICELINE.COM

In August 1998, we entered into an agreement with priceline.com in which
priceline.com granted to us a license to operate an area of the priceline.com
website through which we offered our business services and the non-exclusive
license to utilize priceline.com intellectual property. In return, we granted
priceline.com the non-exclusive license to utilize our intellectual property. We
also agreed to pay priceline.com a marketing fee equal to a percentage of the
monthly net revenue received by us in operating the loan center on their
website. In February 2000, we agreed with priceline.com to extend the term of
this agreement for at least six months and to modify some of the initial terms.
During 1999, we derived net revenue of $0.7 million from this arrangement and we
paid priceline.com $0.5 million. To enhance the variety of products available
through the priceline.com home finance service, we subsequently modified our
service to allow for multiple providers.

CNBC.COM

In January 2000, we entered into an agreement with CNBC.com, an interactive
media company. CNBC.com agreed to cooperate with us exclusively in developing
and operating a series of loan marketplace websites using our [i]close software.
These websites will appear to the consumer to be part of the CNBC.com website,
and will incorporate our loan marketplace content and transaction capability.
The agreement also includes joint marketing and promotional arrangements, and
contains provisions requiring us to conduct television advertising on the CNBC
cable network channel. In return, we granted CNBC.com the non-exclusive license
to our intellectual property and we agreed to pay CNBC.com a variable monthly
fee based on the number of completed Qualification Forms. In connection with
these arrangements, we are committed to pay CNBC.com a minimum of $4.9 million
during the two-year term of the agreement. In addition, on February 2, 2000 we
granted CNBC.com warrants to purchase up to 190,500 shares of our common stock,
or approximately 1.1% of our common stock, at an exercise price of approximately
$7.87 per share. Warrants to purchase 95,250 of these shares are currently
exercisable, while the balance will become exercisable on January 14, 2001,
assuming the agreement has not been previously terminated. CNBC.com is an
affiliate of GE Capital, which will own approximately 9.1% of our common stock
upon the consummation of this offering.

LOANTRADER.COM

On February 3, 2000, we consummated an equity investment in LoanTrader.com,
a wholesale lending service. In connection with this investment, we received
1,984,127 shares of LoanTrader's series A preferred stock for $2.5 million, or
approximately $0.79 per share. These shares represent approximately 8.5% of
LoanTrader's outstanding equity. We also received customary registration rights
and the right to designate a member of LoanTrader's board of directors.
Affiliates of Capital Z and Goldman Sachs also participated in this transaction
on substantially the same terms as LendingTree, and purchased 9,325,397 shares
and 1,984,127 shares of LoanTrader's series A preferred stock, respectively.
Capital Z and Goldman Sachs will be the beneficial owners of approximately 22.9%
and 8.2%, respectively, or our outstanding common stock upon completion of this
offering. Daniel Lieber and Adam Mizel, each a member of our board of directors,
are affiliated with Capital Z.

PRUDENTIAL SECURITIES INCORPORATED

Prudential Securities Incorporated, an underwriter, acted as placement
agent in connection with a private placement of our Series D convertible
preferred stock in September 1999. Prudential Securities Incorporated received a
warrant to purchase 127,000 shares of common stock at an exercise price of $7.52
per share. On January 25, 2000 Prudential Securities Incorporated agreed to
exchange the warrant for a new warrant to purchase 127,000 shares of common
stock at an exercise price equal to the public offering price of the shares
offered by this prospectus. This warrant is exercisable for a five-year period
ending on September 21, 2004. Other than the shares to be purchased by
Prudential Securities Incorporated as an underwriter in this offering,
Prudential Securities Incorporated has agreed that it will not transfer or
dispose of, directly or indirectly, shares of common stock or any securities
convertible into or exercisable or exchangeable for or repayable with shares of
common stock for one year after the date of this prospectus.

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<PAGE> 61

PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding beneficial ownership
of our common stock as of January 31, 2000. The percentage of beneficial
ownership is provided for the following:

- each stockholder who is known by us to beneficially own 5% or more of any
class of our capital stock;

- each of our present executive officers who are also named in the Summary
Compensation Table and each of our directors; and

- all of our executive officers and our directors as a group.

Percentage ownership is based on 17,215,234 shares outstanding as of
January 31, 2000, net of treasury stock, as adjusted to reflect the conversion
of all outstanding preferred stock and accumulated dividends into common stock.
Shares of common stock subject to options or warrants currently exercisable or
exercisable within 60 days of January 31, 2000, are deemed outstanding for the
purpose of computing the percentage ownership of the person holding such options
or warrants but are not outstanding for computing the percentage ownership of
another person. Unless otherwise indicated below, the persons and entities named
in the table have sole voting and sole investment power with respect to all
shares beneficially owned, subject to community property laws where applicable.

<TABLE>
<CAPTION>
PERCENTAGE OF SHARES
OF COMMON
NUMBER OF SHARES OF STOCK BENEFICIALLY OWNED
COMMON STOCK -------------------------------------------
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED BEFORE THE OFFERING AFTER THE OFFERING(1)
- ------------------------ ------------------- ------------------- ---------------------
<S> <C> <C> <C>
Capital Z Partners(2)........................... 3,937,562 29.0% 22.9%
ULSAP(3)........................................ 2,222,785 15.9% 12.6%
GE Capital(4)................................... 1,575,024 11.6% 9.1%
The Goldman Sachs Group, Inc.(5)................ 1,417,521 10.4% 8.2%
Douglas Lebda(6)................................ 1,087,285 7.9% 6.2%
Keith Hall...................................... 48,681 * *
David Anderson.................................. 12,700 * *
James Bennett, Jr.(7)........................... 148,590 1.1% *
Richard Stiegler(8)............................. 80,750 * *
James Carthaus(9)............................... 31,750 * *
Richard Field(10)............................... 841,964 6.0% 4.8%
Robert Kennedy(11).............................. 2,222,785 15.9% 12.6%
Daniel Lieber(12)............................... 3,937,562 29.0% 22.9%
Adam Mizel(13).................................. 3,937,562 29.0% 22.9%
W. James Tozer, Jr.(14)......................... 592,848 4.4% 3.4%
All executive officers and directors as a group
(11 persons).................................. 9,004,600 61.3% 49.1%
</TABLE>

- ------------------------
* represents less than 1%

(1) Assumes the underwriters' over-allotment option is not exercised.

(2) Capital Z Partners is located at 54 Thompson Street, New York, New York.
These shares are held by Specialty Finance Partners, an affiliate of
Capital Z Partners. Includes 112,261 shares of common stock to be received
upon the conversion of accumulated dividends on preferred stock.

(3) The Union Labor Life Insurance Company, on behalf of its Separate Account P
(ULSAP), is located at 111 Massachusetts Avenue, N.W., 8th Floor,
Washington, D.C. Includes a warrant to purchase 381,000 shares of common
stock with an exercise price of approximately $4.72 which is currently
exercisable. Includes 48,588 shares of common stock to be received upon the
conversion of accumulated dividends on preferred stock.

(4) GE Capital is located at 6601 Six Forks Road, Raleigh, North Carolina. Upon
the automatic conversion of the preferred stock at the closing of this
transaction, General Electric Capital Assurance Company will be the holder
of 315,004 shares of common stock and GE Capital Residential Connections
Corporation will be the holder of 1,260,020

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shares of common stock. Includes 8,981 and 35,924 shares of common stock to
be received upon the conversion of accumulated, unpaid dividends on
preferred stock held by General Electric Capital Assurance Company and GE
Capital Residential Connections Corporation, respectively.

(5) The Goldman Sachs Group, Inc. is located at 85 Broad Street, New York, New
York. Upon the automatic conversion of the preferred stock at the closing
of this transaction, The Goldman Sachs Group, Inc. will be the holder of
1,417,521 shares of common stock. Includes 40,414 shares of common stock to
be received upon the conversion of accumulated dividends on preferred
stock.

(6) Includes an option to purchase 97,693 shares of common stock with an
exercise price of approximately $1.43 per share, an option to purchase
25,400 shares of common stock with an exercise price of approximately $5.20
per share which are exercisable as of January 31, 2000, or will become
exercisable within 60 days thereafter, options to purchase 6,667 shares of
common stock with an exercise price of approximately $5.20 per share which
are exercisable as of January 31, 2000 or will become exercisable within 60
days thereafter and 857,524 shares of common stock, held directly by or
jointly with family members. Includes options granted subsequent to January
31, 2000 to purchase up to 100,000 shares of common stock with an exercise
price equal to the initial public offering price, which are exercisable
prior to the commencement of trading in our common stock on the Nasdaq
National Market.

(7) Includes an option to purchase 12,700 shares of common stock with an
exercise price of approximately $4.72 and an option to purchase 6,350
shares of common stock with an exercise price of approximately $4.72 per
share, which are exercisable as of January 31, 2000, or will become
exercisable within 60 days thereafter.

(8) Includes an option to purchase 38,100 shares of common stock with an
exercise price of approximately $1.43 and an option to purchase 8,467
shares of common stock with an exercise price of approximately $4.72 per
share, which are exercisable as of January 31, 2000, or will become
exercisable within 60 days thereafter.

(9) Includes an option to purchase 19,050 shares of common stock with an
exercise price of approximately $4.72 which is exercisable as of January
31, 2000, or will become exercisable within 60 days thereafter.

(10) Includes a warrant to purchase 16,510 shares of common stock with an
exercise price of approximately $7.87 which is currently exercisable and an
option to purchase 392,511 shares of common stock with an exercise price of
approximately $1.43 which is exercisable as of January 31, 2000, or will
become exercisable within 60 days thereafter. Includes 5,893 shares of
common stock to be received upon the conversion of accumulated dividends on
preferred stock.

(11) Includes 2,222,785 shares of common stock beneficially owned by ULSAP as to
which Robert Kennedy disclaims beneficial ownership.

(12) Includes 3,937,562 shares of common stock beneficially owned by Capital Z
Partners. Daniel Lieber is a partner at Equifin Capital Management, an
entity affiliated with Capital Z Partners.

(13) Includes 3,937,562 shares of common stock beneficially owned by Capital Z
Partners of which Adam Mizel is a partner.

(14) Includes a warrant to purchase 16,510 shares of common stock with an
exercise price of approximately $7.87 which is currently exercisable, as to
which Mr. Tozer disclaims beneficial ownership. Includes 5,893 shares of
common stock to be received upon the conversion of accumulated dividends on
preferred stock.

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DESCRIPTION OF CAPITAL STOCK

Our amended and restated certificate of incorporation which will become
effective upon the closing of this offering authorizes us to issue up to 100
million shares of common stock, $0.01 par value per share, and 10 million shares
of preferred stock, par value $0.01 per share. All of the outstanding capital
stock is and, upon completion of this offering, will be, fully paid and
non-assessable.

Upon the closing of this offering, we will have 17,215,234 shares of common
stock issued and outstanding, excluding treasury stock. This includes 10,443,550
shares of common stock to be issued upon the automatic conversion of all
outstanding shares of our convertible preferred stock, together with accumulated
dividends as of January 31, 2000.

COMMON STOCK

Subject to preferences that may apply to shares of preferred stock
outstanding at the time, the holders of outstanding shares of common stock are
entitled to receive dividends out of assets legally available for this purpose
at the times and in the amounts as the board of directors may occasionally
determine. Each stockholder is entitled to one vote for each share of common
stock held on all matters submitted to a vote of stockholders. Cumulative voting
for the election of directors is not provided for in our amended and restated
certificate of incorporation, which means that the holders of a majority of the
shares voted can elect all of the directors then standing for election. The
common stock is not entitled to preemptive rights and is not subject to
conversion or redemption. Upon the occurrence of a liquidation, dissolution or
winding-up of LendingTree, the holders of shares of common stock would be
entitled to share ratably in the distribution of all of LendingTree's assets
remaining available for distribution after satisfaction of all its liabilities
and the payment of the liquidation preference of any outstanding preferred
stock.

PREFERRED STOCK

The board of directors has the authority to provide by resolution for the
issuance of shares of preferred stock, in one or more classes or series, and to
fix the rights, preferences, privileges and restrictions of this preferred
stock, including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences and the number of shares constituting any
series or the designation of such series. The issuance of preferred stock could
have the effect of decreasing the market price of the common stock and could
adversely affect the voting and other rights of the holders of common stock.

WARRANTS

As of the date of this prospectus, the following warrants to purchase
shares of common stock are outstanding:

(1) a warrant to purchase up to 381,000 shares at an exercise price of
approximately $4.72 per share that is held by ULSAP;

(2) a warrant to purchase up to a total of 16,510 shares at an
exercise price of approximately $7.87 per share that is held by W. James
Tozer, Jr.;

(3) a warrant to purchase up to a total of 16,510 shares at an
exercise price of approximately $7.87 per share that is held by Richard
Field;

(4) a warrant to purchase up to 15,240 shares at an exercise price of
approximately $7.87 per share that is held by a family member of Douglas R.
Lebda;

(5) seven warrants to purchase an aggregate of 38,100 shares at an
exercise price of approximately $7.87 per share that are held by Hovde
Financial Institution Partners II, L.P., Hovde Investment Corp., L.L.C.,
William N. Schiebler, Barbara A. and Peter A. Georgescu, and John B.
Prince;

(6) a warrant to purchase up to 63,500 shares at an exercise price of
approximately $4.72 per share that is held by Seacris Group, Ltd.;

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(7) a warrant to purchase up to 127,000 shares that is held by
Prudential Securities at an exercise price equal to $7.52 per share which
was amended on January 25, 2000 such that the current exercise price is
equal to the public offering price of the shares offered by this
prospectus; and

(8) a warrant to purchase up to 9,525 shares at an exercise price of
approximately $4.72 per share that is held by Phoenix Strategic Capital.

(9) warrants to purchase up to 190,500 shares at an exercise price of
approximately $7.87 per share that are held by CNBC.com. Of these warrants,
warrants to purchase up to 95,250 shares are immediately exercisable, while
the balance will become exercisable on January 14, 2001.

Except as otherwise indicated, all of the warrants listed above are
currently exercisable and contain standard anti-dilution provisions.

OPTIONS

As of the date of this prospectus:

- options to purchase a total of 3,751,647 shares of common stock are
outstanding of which 1,201,265 have vested with exercise prices
ranging from $1.43 to $5.51 per share;

- an option granted to our Chief Executive Officer to purchase up to
100,000 shares of common stock at an exercise price equal to the
initial public offering price is outstanding which can only be
exercised prior to the commencement of trading of our common stock;
and

- up to 683,608 additional shares of common stock may be subject to
options granted in the future.

ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF DELAWARE LAW AND LENDINGTREE'S
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION AND BYLAWS

Some provisions of our amended and restated certificate of incorporation
and amended and restated bylaws, each of which will become effective after this
offering, may be deemed to have an anti-takeover effect and may delay or prevent
a tender offer or takeover attempt that a stockholder might consider in its best
interest, including those attempts that might result in a premium over the
market price for the shares held by stockholders.

CLASSIFIED BOARD OF DIRECTORS. Our board of directors will be divided into
three classes of directors serving staggered three-year terms. As a result,
approximately one-third of the board of directors will be elected each year.
These provisions, when coupled with the provision of our amended and restated
certificate of incorporation authorizing the board of directors to fill vacant
directorships or increase the size of the board of directors, may deter a
stockholder from removing incumbent directors and simultaneously gaining control
of the board of directors by filling the vacancies created by such removal with
its own nominees.

CUMULATIVE VOTING. Our amended and restated certificate of incorporation
will expressly deny stockholders the right to cumulate votes in the election of
directors.

STOCKHOLDER ACTION; SPECIAL MEETING OF STOCKHOLDERS. Our amended and
restated certificate of incorporation will eliminate the ability of stockholders
to act by written consent. It further provides that special meetings of our
stockholders may be called only by the chairman of the board of directors, the
president or a majority of the board of directors.

ADVANCE NOTICE REQUIREMENTS FOR STOCKHOLDER PROPOSALS AND DIRECTORS
NOMINATIONS. Our amended and restated bylaws will provide that stockholders
seeking to bring business before an annual meeting of stockholders, or to
nominate candidates for election as directors at an annual meeting of
stockholders, must provide timely notice in writing. To be timely, a
stockholder's notice must be delivered to or mailed and received at our
principal executive offices not less than 90 days prior to the anniversary date
of the immediately preceding annual meeting of stockholders. However, in the
event that the annual meeting is called for a date that is not within 30 days
before or after such anniversary date, notice by the stockholder in order to be
timely must be received not later than the close of business on the 10th day
following the

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<PAGE> 65

date on which notice of the date of the annual meeting was mailed to
stockholders or made public, whichever first occurs. In the case of a special
meeting of stockholders called for the purpose of electing directors, notice by
the stockholder in order to be timely must be received not later than the close
of business on the 10th day following the day on which notice of the date of the
special meeting was mailed or public disclosure of the date of the special
meeting was made, whichever first occurs. Our amended and restated bylaws will
also specify requirements as to the form and content of a stockholder's notice.
These provisions may preclude stockholders from bringing matters before an
annual meeting of stockholders or from making nominations for directors at an
annual meeting of stockholders.

AUTHORIZED BUT UNISSUED SHARES

The authorized but unissued shares of common stock and preferred stock will
be available for future issuance without stockholder approval. These additional
shares may be utilized for a variety of corporate purposes, including future
public offerings to raise additional capital, corporate acquisitions and
employee benefit plans. The existence of authorized but unissued shares of
common stock and preferred stock could render more difficult or discourage an
attempt to obtain control of LendingTree by means of a proxy contest, tender
offer, merger or otherwise.

AMENDMENTS; SUPERMAJORITY VOTE REQUIREMENTS

The Delaware General Corporation Law provides generally that the
affirmative vote of a majority of the shares entitled to vote on any matter is
required to amend a corporation's certificate of incorporation or bylaws, unless
either a corporation's certificate of incorporation or bylaws require a greater
percentage. Our amended and restated certificate of incorporation will impose
supermajority vote requirements in connection with business combination
transactions and the amendment of provisions of our amended and restated
certificate of incorporation and amended and restated bylaws, including those
provisions relating to the classified board of directors, action by written
consent and the ability of stockholders to call special meetings.

RIGHTS AGREEMENT

Under Delaware law, every corporation may create and issue rights entitling
the holders of such rights to purchase from the corporation shares of its
capital stock of any class or classes, subject to any provisions in its
certificate of incorporation. The price and terms of such shares must be stated
in the certificate of incorporation or in a resolution adopted by the board of
directors for the creation or issuance of such rights.

We have entered into a stockholder rights agreement. As with most
stockholder rights agreements, the terms of our rights agreement are complex and
not easily summarized, particularly as they relate to the acquisition of our
common stock and to exercisability. This summary may not contain all of the
information that is important to you. Accordingly, you should carefully read our
rights agreement, which has been filed as an exhibit to the registration
statement of which this prospectus forms a part.

Our rights agreement provides that each share of our common stock
outstanding after this offering will have one right to purchase one-hundredth of
a preferred share attached to it. The purchase price per one one-hundredth of a
preferred share under the stockholder rights agreement is four times the average
closing price of our common stock for the first five days of trading after the
consummation of this offering.

Initially, the rights under our rights agreement are attached to
outstanding certificates representing our common stock and no separate
certificates representing the rights will be distributed. The rights will
separate from our common stock and be represented by separate certificates
approximately 10 days after someone acquires or commences a tender offer for 15%
of our outstanding common stock.

After the rights separate from our common stock, certificates representing
the rights will be mailed to record holders of our common stock. Once
distributed, the rights certificates alone will represent the rights.

All shares of our common stock issued prior to the date the rights separate
from the common stock will be issued with the rights attached. The rights are
not exercisable until the date the rights separate from the common stock. The
rights will expire on the tenth anniversary of the date of the completion of
this offering unless earlier redeemed or exchanged by us.

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<PAGE> 66

If an acquiror obtains or has the rights to obtain 15% or more of our
common stock, then each right will entitle the holder to purchase a number of
shares of our common stock equal to two times the purchase price of each right.

Each right will entitle the holder to purchase a number of shares of common
stock of the acquiror having a then current market value of twice the purchase
price if an acquiror obtains 15% or more of our common stock and any of the
following occurs:

- we merge into another entity;

- an acquiring entity merges into us; or

- we sell more than 50% of our assets or earning power.

Under our rights agreement, any rights that are or were owned by an acquiror of
more than 15% of our outstanding common stock will be null and void.

Our rights agreement contains exchange provisions which provide that after
an acquiror obtains 15% or more, but less than 50% of our outstanding common
stock, our board of directors may, at its option, exchange all or part of the
then outstanding and exercisable rights for shares of our common stock. In such
an event, the exchange ratio is one common share per right, adjusted to reflect
any stock split, stock dividend or similar transaction.

Our board of directors may redeem all of the outstanding rights under our
rights agreement prior to the earlier of (1) the time that an acquiror obtains
15% or more of our outstanding common stock or (2) the final expiration date of
the rights agreement. The redemption price under our rights agreement is $0.01
per right, subject to adjustment. The right to exercise the rights will
terminate upon the action of our board ordering the redemption of the rights and
the only right of the holders of the rights will be to receive the redemption
price.

Holders of rights will have no rights as our stockholders including the
right to vote or receive dividends, simply by virtue of holding the rights.

Our rights agreement provides that the provisions of the rights agreement
may be amended by the board of directors prior to 10 days after someone acquires
or commences a tender offer for 15% of our outstanding common stock without the
approval of the holders of the rights. However, after that date, the rights
agreement may not be amended in any manner which would adversely effect the
interests of the holders of the rights, excluding the interests of any acquiror.
In addition, our rights agreement provides that no amendment may be made to
adjust the time period governing redemption at a time when the rights are not
redeemable.

Our rights agreement contains rights that have anti-takeover effects. The
rights may cause substantial dilution to a person or group that attempts to
acquire us without conditioning the offer on a substantial number of rights
being acquired. Accordingly, the existence of the rights may deter acquirors
from making takeover proposals or tender offers. However, the rights are not
intended to prevent a takeover, but rather are designed to enhance the ability
of our board to negotiate with an acquiror on behalf of all the stockholders. In
addition, the rights should not interfere with a proxy contest.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is First Union
National Bank. Its address is 1525 W. WT, Harris Blvd; 3C3, Charlotte, NC
28288-1153.

LISTING

The shares have been approved for quotation on the Nasdaq National Market,
subject to notice of issuance, under the symbol "TREE."

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<PAGE> 67

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of our common stock in the public market could
adversely affect prevailing market prices of our common stock. Furthermore,
since no shares will be available for sale shortly after this offering because
of contractual and legal restrictions on resale described below, sales of
substantial amounts of common stock in the public market after these
restrictions lapse could adversely affect the prevailing market price of our
common stock and our ability to raise equity capital in the future.

Upon completion of this offering, we will have outstanding a total of
17,215,234 shares of our common stock, assuming no exercise of the underwriters'
over-allotment option and no exercise of outstanding options. Of these shares,
all of the shares sold in this offering will be freely tradable without
restriction or further registration under the Securities Act, unless such shares
are purchased by "affiliates" as that term is defined in Rule 144 under the
Securities Act. The remaining shares of common stock held by existing
stockholders are "restricted securities" as that term is defined in Rule 144
under the Securities Act. Restricted securities may be sold in the public market
only if registered or if they qualify for an exemption from registration under
Rule 144 promulgated under the Securities Act, which rules are summarized below.

As a result of the contractual restrictions described below and the
provisions of Rule 144, the restricted securities will be available for sale in
the public market subject to the volume limitations and other conditions of Rule
144. These shares could be available for resale immediately upon the expiration
of the 180-day lock-up period.

LOCK-UP AGREEMENTS

Stockholders holding approximately 93% of our outstanding common stock,
including all of our officers and directors, have signed lock-up agreements
under which they agreed not to transfer or dispose of any shares of common stock
or any securities convertible into or exchangeable or exercisable for or
repayable with shares of common stock, for a period of 180 days after the date
of this prospectus. Transfers or dispositions can be made sooner with the prior
written consent of Merrill Lynch.

RULE 144

In general, under Rule 144, beginning 90 days after the date of this
prospectus, a person who has beneficially owned shares of our common stock for
at least one year would be entitled to sell within any three-month period a
number of shares that does not exceed the greater of:

- 1% of the number of shares of common stock then outstanding, which will
equal approximately 172,000 shares immediately after this offering; or

- the average weekly trading volume of the common stock on the Nasdaq
National Market during the four calendar weeks preceding the filing of a
notice on Form 144 with respect to such sale.

Sales under Rule 144 are also subject to manner of sale provisions and
notice requirements and to the availability of current public information about
us.

RULE 144(k)

Under Rule 144(k), a person who is not deemed to have been one of our
affiliates at any time during the 90 days preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years,
including the holding period of any prior owner other than an affiliate, is
entitled to sell such shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144. Therefore,
unless otherwise restricted, "144(k) shares" may be sold immediately upon the
completion of this offering.

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The following table indicates approximately when the 13.6 million shares of
our common stock that are not being sold in this offering, but which will be
outstanding at the time this offering is complete, will be eligible for sale
into the public market:

<TABLE>
<CAPTION>
NUMBER OF SHARES/
PERCENT OUTSTANDING
AFTER THE OFFERING DATE WHEN SHARES BECOME AVAILABLE FOR RESALE IN THE PUBLIC MARKET
- ------------------- -----------------------------------------------------------------
<S> <C>
5.2 million/30% 180 days after the date of this prospectus, pursuant to
agreements between the stockholders and the underwriters,
provided that Merrill Lynch can waive this restriction at any
time. Approximately 3.8 million of these shares will also be
subject to sales volume restrictions under Rule 144 under the
Securities Act.
8.4 million/48% Upon expiration of applicable one-year holding periods under Rule
144, which will expire between August 2000 and November 2000,
subject to sales volume restrictions under Rule 144.
</TABLE>

STOCK OPTIONS

Following the completion of this offering, we intend to file a registration
statement on Form S-8 under the Securities Act covering 4.9 million shares of
common stock issued or reserved for issuance under our various stock option
plans. The registration statement will become effective automatically upon
filing. As of January 31, 2000, options to purchase 3,684,419 shares of common
stock were issued and outstanding of which 1,201,265 shares have vested.
Accordingly, shares registered under the registration statement will, subject to
vesting provisions and Rule 144 volume limitations applicable to our affiliates,
be available for sale in the open market immediately after the 180-day lock-up
agreements expire.

REGISTRATION RIGHTS

On September 20, 1999, we entered into a registration rights agreement with
holders of our convertible preferred stock and common stock in which we granted
them registration rights in respect of 12.1 million shares of common stock. On
February 2, 2000, CNBC.com was made a party to the registration rights agreement
with respect to 190,500 shares issuable to CNBC.com upon the exercise of
outstanding warrants. A copy of the registration rights agreement has been filed
as an exhibit to the registration statement of which this prospectus forms a
part. Pursuant to the registration rights agreement, at any time after 180 days
after the consummation of this offering, previous holders of the preferred stock
who hold at least a total of approximately 10.4 million shares may request us to
register their shares under the Securities Act. All holders which are party to
the registration rights agreement may demand registration of their shares,
provided the demand relates to at least $500,000, we are then qualified to use
Form S-3, and the holders of the preferred stock did not exercise their demand
rights within the previous 180 days. We are not obligated to effect a
registration statement on Form S-3 more than once in any 180-day period.

These registration rights are subject to our right to delay the filing of a
registration statement in certain circumstances for up to 90 days.

In addition, the registration rights agreement provides these holders of
restricted stock with "piggyback" registration rights. If we propose to register
any common stock under the Securities Act, other than pursuant to this offering
or in connection with the registration of securities issued under an employee
benefit plan or in consideration for an acquisition, each of these holders may
require us to include all or a portion of their restricted stock in such
registration. However, the managing underwriter, if any, of any such offering
has rights to limit the number of shares of restricted stock proposed to be
included in such registration.

We would bear all registration expenses incurred in connection with these
registrations. Each participating seller of restricted stock would bear their
proportionate share of all underwriting discounts and selling commissions.

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IMPORTANT UNITED STATES FEDERAL TAX CONSIDERATIONS FOR
NON-U.S. HOLDERS OF OUR COMMON STOCK

The following is a general summary of the material United States federal
tax consequences of the purchase, ownership, and sale or other taxable
disposition of the common stock by any person or entity other than:

- a citizen or resident of the United States;

- a partnership, corporation or other entity created or organized in or
under the laws of the United States or of any political subdivision
thereof;

- a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of
the trust or the trust has a valid election in effect under applicable
U.S. Treasury regulations to be treated as a U.S. person; or

- an estate, the income of which is includible in gross income for United
States income tax purposes regardless of its source.

This summary does not address all tax considerations that may be relevant
to non-U.S. holders in light of their particular circumstances or to certain
non-U.S. holders that may be subject to special treatment under United States
federal income or estate tax laws. This summary is based upon the Internal
Revenue Code of 1986, existing, temporary and proposed regulations promulgated
thereunder and administrative and judicial decisions, all of which are subject
to change, possibly with retroactive effect. In addition, this summary does not
address the effect of any state, local or foreign tax laws. Each prospective
purchaser of common stock should consult its tax advisor with respect to the tax
consequences of purchasing, owning and disposing of the common stock.

DIVIDENDS

Dividends paid to a non-U.S. holder of common stock generally will be
subject to a withholding of United States federal income tax at a 30 percent
rate or such lower rate as may be specified by an applicable income tax treaty,
unless:

- the dividend is effectively connected with the conduct of a trade or
business of the non-U.S. holder within the United States; or

- if a tax treaty applies, it is attributable to a United States permanent
establishment of the non-U.S. holder.

In these cases, the dividend will be taxed at ordinary federal income tax
rates. If the non-U.S. holder is a corporation, such effectively connected
income may also be subject to an additional branch profits tax. A non-U.S.
holder may be required to satisfy certain certification requirements in order to
claim treaty benefits or otherwise claim a reduction of, or exemption from, the
withholding described above.

SALE OR OTHER DISPOSITION OF COMMON STOCK

A non-U.S. holder generally will not be subject to United States federal
income tax in respect of any gain recognized on the sale or other taxable
disposition of common stock, unless:

- the gain is effectively connected with the conduct of a trade or business
of the non-U.S. holder within the United States or, if a tax treaty
applies, is attributable to a United States permanent establishment of
the non-U.S. holder;

- in the case of a non-U.S. holder who is an individual and holds the
common stock as a capital asset, the holder is present in the United
States for 183 or more days in the taxable year of the disposition and
certain other tests are met;

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- the non-U.S. holder is subject to tax under the provisions of United
States federal income tax law applicable to certain United States
expatriates; or

- we are or have been during certain periods preceding the disposition a
"United States real property holding corporation" for United States
federal income tax purposes and certain other requirements are met. We
currently believe that we are not a United States real property holding
corporation and we do not anticipate that we will become one.

ESTATE TAX

Common stock owned or treated as owned by an individual non-U.S. holder at
the time of death will be includible in the individual's gross estate for United
States federal estate tax purposes, unless an applicable treaty provides
otherwise, and may be subject to United States federal estate tax.

BACKUP WITHHOLDING AND INFORMATION REPORTING

DIVIDENDS. United States backup withholding tax generally will not apply
to dividends paid on the common stock that are subject to the 30 percent or
reduced treaty rate of United States withholding tax previously discussed. We
must report annually to the Internal Revenue Service and to each non-U.S. holder
the amount of dividends paid to, and the tax withheld with respect to, such
holder, regardless of whether any tax was withheld. This information may also be
made available to the tax authorities in the non-U.S. holder's country of
residence.

SALE OR OTHER DISPOSITION OF COMMON STOCK. Upon the sale or other taxable
disposition of common stock by a non-U.S. holder to or through a United States
office of a broker, the broker must backup withhold at a rate of 31 percent and
report the sale to the Internal Revenue Service, unless the holder certifies its
non-U.S. holder status under penalties of perjury or otherwise establishes an
exemption. Upon the sale or other taxable disposition of common stock by a
non-U.S. holder to or through the foreign office of a United States broker, or a
foreign broker with a certain relationship to the United States, the broker must
report the sale to the Internal Revenue Service, but not backup withhold, unless
the broker has documentary evidence in its files that the seller is a non-U.S.
holder and certain other conditions are met or the holder otherwise establishes
an exemption.

Backup withholding is not an additional tax. Amounts withheld under the
backup withholding rules generally are allowable as a refund or credit against a
non-U.S. holder's United States federal income tax liability, if any, provided
that the required information is furnished to the Internal Revenue Service on a
timely basis.

The U.S. Treasury Department has issued regulations generally effective for
payments made after December 31, 2000 that will affect the procedures to be
followed by a non-U.S. holder in establishing such holder's status as a non-U.S.
holder for purposes of the withholding, backup withholding and information
reporting rules described herein. In general, such regulations do not
significantly alter the substantive withholding and information reporting
requirements, but unify current certification procedures and forms and clarify
reliance standards. Prospective investors should consult their tax advisors
concerning the effect of such regulations on an investment in the common stock.

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UNDERWRITING

GENERAL

We intend to offer our common stock through a number of underwriters.
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Lehman Brothers Inc. and
Prudential Securities Incorporated are acting as representatives of each of the
underwriters named below. Subject to the terms and conditions contained in a
purchase agreement among us and the underwriters, we have agreed to sell to the
underwriters, and the underwriters severally have agreed to purchase from us,
the number of shares listed opposite their names below.

<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
----------- ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................
Lehman Brothers Inc.........................................
Prudential Securities Incorporated..........................
----------
Total.......................................... 3,650,000
==========
</TABLE>

The underwriters have agreed to purchase all of the shares sold under the
purchase agreement if any of these shares are purchased. If an underwriter
defaults, the purchase agreement provides that the purchase commitments of the
nondefaulting underwriters may be increased or the purchase agreement may be
terminated.

We have agreed to indemnify the underwriters against specified liabilities,
including liabilities under the Securities Act, or to contribute to payments the
underwriters may be required to make because of those liabilities.

The underwriters are offering the shares, subject to prior sale, when, as
and if issued to and accepted by them, subject to approval of legal matters by
their counsel, including the validity of the shares, and other conditions
contained in the purchase agreement, such as receipt by the underwriters of
officer's certificates and legal opinions. The underwriters reserve the right to
withdraw, cancel or modify offers to the public and to reject orders in whole or
in part.

COMMISSIONS AND DISCOUNTS

The representatives have advised us that the underwriters propose initially
to offer the shares to the public at the initial public offering price on the
cover of this prospectus, and to dealers at that price less a concession not in
excess of $ per share. The underwriters may allow, and the dealers may
reallow, a discount not in excess of $ per share to other dealers.
After the initial public offering, the public offering price, concession and
discount may be changed.

We will sell the shares to the underwriters at a per-share price of
$ , which represents a $ discount from the public offering price of
$ . This discount, which equals % of the public offering price, is
the underwriters' compensation. The following table shows the public offering
price, underwriting discount and proceeds before expenses to LendingTree. In
addition, the table includes certain other items considered by the NASD to be
underwriting compensation for purposes of the NASD's

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Conduct Rules. This information assumes either no exercise or full exercise by
the underwriters of their over-allotment option.

<TABLE>
<CAPTION>
PER SHARE WITHOUT OPTION WITH OPTION
--------- --------------- -----------
<S> <C> <C> <C>
Public offering price.............................
Underwriting discount.............................
Proceeds, before expenses, to LendingTree.........
Other items.......................................
</TABLE>

As described in more detail below, Prudential Securities Incorporated holds
a warrant to purchase 127,000 shares of common stock at an exercise price equal
to the public offering price of the shares offered by this prospectus. The
compensation included in the table above in the line titled "other items"
represents the value of this warrant for NASD purposes computed in accordance
with a formula prescribed by the NASD's Conduct Rules.

The expenses of the offering, not including the underwriting discount, are
estimated at $2,000,000 and are payable by us, as set forth in the following
table.

<TABLE>
<S> <C>
SEC registration fee........................................ $ 13,298
NASD filing fee............................................. 5,537
Nasdaq National Market listing fee.......................... 100,000
Printing and engraving expenses............................. 500,000
Legal fees and expenses..................................... 500,000
Accounting fees and expenses................................ 300,000
Blue sky fees and expenses (including legal fees)........... 10,000
Transfer agent and registrar fees and expenses.............. 20,000
Premiums for director and officer insurance................. 250,000
Miscellaneous............................................... 306,165
----------
Total............................................. $2,000,000
----------
</TABLE>

OVER-ALLOTMENT OPTION

We have granted an option to the underwriters to purchase up to 547,500
additional shares at the public offering price less the underwriting discount.
The underwriters may exercise this option for 30 days from the date of this
prospectus solely to cover any over-allotments. If the underwriters exercise
this option, each will be obligated, subject to customary conditions contained
in the purchase agreement, to purchase a number of additional shares
proportionate to that underwriter's initial amount reflected in the above table.

RESERVED SHARES

At our request, the underwriters have reserved for sale, at the initial
public offering price, up to 438,000 shares offered by this prospectus for sale
to some of our directors, officers, employees and friends and to some of the
officers and employees of the institutions comprising the LendingTree network.
If these persons purchase reserved shares, this will reduce the number of shares
available for sale to the general public. Any reserved shares that are not
orally confirmed for purchase within one day of the pricing of this offering
will be offered by the underwriters to the general public on the same terms as
the other shares offered by this prospectus. Merrill Lynch is administering this
reserved share program.

Purchasers of shares pursuant to the reserved share program generally will
not be subject to lock-up agreements in respect of the shares so purchased
unless required by the Conduct Rules of the NASD. The NASD's conduct rules will
require that some purchasers of shares who are affiliated or associated with
NASD members or who hold senior positions at financial institutions or members
of their immediate families be subject to three-month lock-up agreements.

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NO SALES OF COMMON STOCK OR SIMILAR SECURITIES

We and our officers, directors and persons beneficially owning in the
aggregate approximately 93% of our outstanding common stock have agreed, with
limited exceptions, not to sell or transfer any common stock for 180 days after
the date of this prospectus without first obtaining the written consent of
Merrill Lynch. Specifically, we and these other individuals and entities have
agreed not to directly or indirectly

- offer, pledge, sell or contract to sell any common stock,

- sell any option or contract to purchase any common stock,

- purchase any option or contract to sell any common stock,

- grant any option, right or warrant for the sale of any common stock,

- lend or otherwise dispose of or transfer any common stock,

- request or demand that we file a registration statement related to the
common stock, or

- enter into any swap or other agreement that transfers all or any portion
of the economic consequence of ownership of any common stock, whether any
such swap or transaction is to be settled by delivery of shares or other
securities, in cash or otherwise.

This lockup provision applies to common stock and to securities convertible
into or exchangeable or exercisable for or repayable with common stock. It also
applies to common stock owned now or acquired later by the person executing the
agreement or for which the person executing the agreement later acquires the
power of disposition.

NASDAQ NATIONAL MARKET LISTING

The shares have been approved for quotation on the Nasdaq National Market,
subject to notice of issuance, under the symbol "TREE."

Before this offering, there has been no public market for our common stock.
The initial public offering price will be determined through negotiations
between us and the representatives. In addition to prevailing market conditions,
the primary factors considered in determining the initial public offering price
were:

- the valuation multiples of publicly traded companies that the
representatives believed to be comparable to us,

- our financial information,

- the history of, and the prospects for, our company and the industry in
which we compete,

- an assessment of (1) our management, (2) our past and present operations,
(3) the prospects for, and timing of, future revenue of our company and
(4) the present state of our development, and

- the above factors in relation to market values and various valuation
measures of other companies engaged in activities similar to ours.

An active trading market for the shares may not develop. It is also
possible that after the offering the shares will not trade in the public market
at or above the initial public offering price.

The underwriters do not expect to sell more than 5% of the shares in the
aggregate to accounts over which they exercise discretionary authority.

PRICE STABILIZATION, SHORT POSITIONS AND PENALTY BIDS

Until the distribution of the shares is completed, SEC rules may limit
underwriters and selling group members from bidding for and purchasing our
common stock. However, the representatives may engage in transactions that
stabilize the price of our common stock, such as bids or purchases to peg, fix
or maintain that price.

If the underwriters create a short position in the common stock in
connection with the offering, i.e., if they sell more shares than are listed on
the cover of this prospectus, the representatives may reduce that short position
by purchasing shares in the open market. The representatives may also elect to
reduce any

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<PAGE> 74

short position by exercising all or part of the over-allotment option described
above. Purchases of the common stock to stabilize its price or to reduce a short
position may cause the price of the common stock to be higher than it might be
in the absence of such purchases.

The representatives may also impose a penalty bid on underwriters and
selling group members. This means that if the representatives purchase shares in
the open market to reduce the underwriters' short position or to stabilize the
price of the shares they may reclaim the amount of the selling concession from
the underwriters and selling group members who sold those shares. The imposition
of a penalty bid may also affect the price of the shares in that it discourages
resales of those shares.

Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the common stock. In addition, neither
we nor any of the underwriters makes any representation that the representatives
will engage in these transactions or that these transactions, once commenced,
will not be discontinued without notice. These transactions may be effected on
the Nasdaq National Market, in the over-the-counter market or otherwise.

ELECTRONIC PROSPECTUS

Prudential Securities Incorporated facilitates the marketing of new issues
online through its PrudentialSecurities.com division. Clients of Prudential
Advisor(SM), a full service brokerage program, may view offering terms and a
prospectus online and place orders through their financial advisors.

OTHER RELATIONSHIPS

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LEGAL MATTERS

The validity of the shares of common stock offered by this prospectus will
be passed upon for LendingTree by Skadden, Arps, Slate, Meagher & Flom LLP, New
York, New York. Certain legal matters in connection with this offering will be
passed upon for the underwriters by Brown & Wood LLP, New York, New York.

EXPERTS

Our financial statements as of December 31, 1998 and 1999 and for the years
ended December 31, 1997, 1998 and the 1999 included in this prospectus have been
so included in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.

WHERE YOU CAN FIND MORE INFORMATION

We filed with the SEC a registration statement on Form S-1 under the
Securities Act with respect to the shares of common stock we propose to sell in
this offering. This prospectus, which constitutes part of the registration
statement, does not contain all of the information set forth in the registration
statement. For further information with respect to us and the common stock we
propose to sell in this offering, we refer you to the registration statement and
the exhibits and schedule filed as a part of the registration statement.
Statements contained in this prospectus regarding the contents of any contract
or any other document filed as an exhibit to the registration statement are not
necessarily complete, and, in each instance, we refer you to the copy of that
contract or other document filed as an exhibit to the registration statement. A
copy of the registration statement and the exhibits and schedule filed as a part
of the registration statement may be inspected without charge at the public
reference facilities maintained by the SEC in Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's regional offices located at the
Citicorp Center, 5000 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and Seven World Trade Center, 13th Floor, New York, New York 10048.
Copies of all or any part of the registration statement may be obtained from
those offices upon the payment of the fees prescribed by the SEC. You can obtain
information on the operation of the public reference facilities maintained by
the SEC by calling 1-800-SEC-0330. The SEC also maintains a World Wide website
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. The address of the
website is http://www.sec.gov.

71
<PAGE> 76

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants........................... F-2
Balance Sheets as of December 31, 1998 and 1999............. F-3
Statements of Operations for the years ended December 31,
1997, 1998 and 1999....................................... F-4
Statements of Changes in Shareholders' Equity (Deficit) for
the years ended December 31, 1997, 1998 and 1999.......... F-5
Statements of Cash Flows for the years ended December 31,
1997, 1998 and 1999....................................... F-7
Notes to Financial Statements............................... F-8
</TABLE>

F-1
<PAGE> 77

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of
LendingTree, Inc.

In our opinion, the accompanying balance sheets and the related statements of
operations, of changes in shareholders' equity (deficit) and of cash flows
present fairly, in all material respects, the financial position of LendingTree,
Inc. at December 31, 1998 and 1999, and the results of its operations and its
cash flows for the years ended December 31, 1997, 1998 and 1999, in conformity
with accounting principles generally accepted in the United States. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.

PRICEWATERHOUSECOOPERS LLP
Charlotte, North Carolina

January 26, 2000 except for the stock split described in

Note 2 which is as of February 3, 2000

F-2
<PAGE> 78

LENDINGTREE, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1998 1999
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 3,085,000 $ 2,419,000
Short-term investments.................................... -- 27,053,000
Accounts receivable, net of allowance for doubtful
accounts of $8,000 and $118,000 respectively........... 245,000 2,027,000
Prepaid expenses and other current assets................. 87,000 1,005,000
----------- ------------
Total current assets.............................. 3,417,000 32,504,000
Property and equipment, net (Note 3)........................ 210,000 1,086,000
Other assets................................................ 60,000 177,000
----------- ------------
Total assets...................................... $ 3,687,000 $ 33,767,000
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable.......................................... $ 736,000 $ 3,579,000
Accrued expenses (Note 4)................................. 15,000 2,451,000
----------- ------------
Total current liabilities......................... 751,000 6,030,000
----------- ------------
Commitments and contingencies (Note 7)...................... -- --
Mandatorily redeemable securities (Note 5):
Series A Convertible Preferred stock, $.01 par value, 8%
cumulative, 3,049,031 shares authorized, 833,334 shares
issued and outstanding at December 31, 1998............ 4,379,000 --
Series A Convertible Preferred stock warrants............. 252,000 --
Shareholders' equity (deficit) (Note 5):
Series A Convertible Preferred stock, $.01 par value, 8%
cumulative, 3,049,031 shares authorized, 1,754,484
shares issued and outstanding at December 31, 1999..... -- 9,884,000
Series B Convertible Preferred stock, $.01 par value,
911,450 shares authorized, none issued................. -- --
Series C Convertible Preferred stock, $.01 par value,
268,074 shares authorized, none issued................. -- --
Series D Convertible Preferred stock, $.01 par value, 8%
cumulative, 6,238,639 shares authorized, 6,238,172
shares issued and outstanding at December 31, 1999..... -- 49,234,000
Common stock, $.01 par value, 38,100,000 shares
authorized, 3,750,172, and 4,070,655 shares issued at
December 31, 1998 and 1999, respectively............... 38,000 41,000
Deferred compensation..................................... -- (2,767,000)
Treasury stock (948,971 shares at December 31, 1999)...... -- (5,978,000)
Additional paid-in-capital................................ 5,668,000 9,423,000
Unrealized gain on available-for-sale securities.......... -- 46,000
Accumulated deficit....................................... (7,401,000) (32,146,000)
----------- ------------
Total shareholders' equity (deficit).............. (1,695,000) 27,737,000
----------- ------------
Total liabilities and shareholders' equity
(deficit)....................................... $ 3,687,000 $ 33,767,000
=========== ============
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-3
<PAGE> 79

LENDINGTREE, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------------------------
1997 1998 1999
--------- ----------- ------------
<S> <C> <C> <C>
Revenue:
LendingTree network...................................... $ 2,000 $ 273,000 $ 6,112,000
[i]close and other technology............................ -- 136,000 852,000
--------- ----------- ------------
Total revenue.................................... 2,000 409,000 6,964,000
--------- ----------- ------------
Cost of revenue:
LendingTree network...................................... -- 235,000 2,231,000
[i]close and other technology............................ -- 149,000 312,000
--------- ----------- ------------
Total cost of revenue............................ -- 384,000 2,543,000
--------- ----------- ------------
Gross profit............................................... 2,000 25,000 4,421,000
--------- ----------- ------------
Operating expenses:
Product development...................................... 293,000 1,051,000 1,109,000
Marketing and advertising................................ 54,000 2,494,000 18,611,000
Sales, general and administrative........................ 621,000 2,955,000 9,951,000
--------- ----------- ------------
Total operating expenses......................... 968,000 6,500,000 29,671,000
--------- ----------- ------------
Loss from operations....................................... (966,000) (6,475,000) (25,250,000)
Interest income, net....................................... 3,000 41,000 505,000
--------- ----------- ------------
Net loss................................................... (963,000) (6,434,000) (24,745,000)
--------- ----------- ------------
Accretion of mandatorily redeemable preferred stock........ -- -- (131,000)
Dividends issued to preferred shareholders on conversion of
preferred stock warrants to common stock warrants........ -- -- (525,000)
Dividends on convertible preferred stock................... -- (24,000) (506,000)
Accumulated, undeclared dividends on convertible preferred
stock.................................................... -- -- (1,654,000)
--------- ----------- ------------
Net loss attributable to common shareholders............... $(963,000) $(6,458,000) (27,561,000)
========= =========== ============
Net loss per common share -- basic and diluted............. $ (1.20) $ (1.88) $ (7.74)
========= =========== ============
Weighted average shares used in basic and diluted net loss
per common share calculation............................. 803,370 3,434,736 3,560,197
========= =========== ============
Pro forma per common share data (unaudited) -- Note 2:
Pro forma basic and diluted net loss per common share.... $ (3.23)
============
Pro forma weighted average basic and diluted shares
outstanding........................................... 7,650,229
============
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-4
<PAGE> 80

LENDINGTREE, INC.

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
CONVERTIBLE PREFERRED
STOCK COMMON STOCK
----------------------- ------------------- ADDITIONAL
NUMBER OF NUMBER OF TREASURY PAID-IN ACCUMULATED UNREALIZED
SHARES AMOUNT SHARES AMOUNT STOCK CAPITAL DEFICIT GAINS
--------- ----------- --------- ------- ----------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1996...................... -- $ -- 259,080 $ 3,000 $ -- $ -- $ (4,000) $ --
Sale of common stock,
including exercise of
common stock options...... 1,125,928 11,000 1,012,000
Issuance of common stock in
lieu of
compensation/services
offered................... 1,269,365 13,000 30,000
Issuance of stock options... 251,000
Net loss.................... (963,000)
--------- ----------- --------- ------- ----------- ---------- ------------ -------
Balance at December 31,
1997...................... -- -- 2,654,373 27,000 -- 1,293,000 (967,000) --
Sale of common stock........ 1,041,401 10,000 3,918,000
Issuance of warrants in
conjunction with sales of
Series A Convertible
Preferred stock and line
of
credit.................... 56,000
Issuance of common stock in
lieu of
compensation/services
offered................... 54,398 1,000 210,000
Issuance of stock options... 215,000
Dividends on mandatorily
redeemable preferred
stock..................... (24,000)
Net loss.................... (6,434,000)
--------- ----------- --------- ------- ----------- ---------- ------------ -------
Balance at December 31,
1998...................... -- -- 3,750,172 38,000 -- 5,668,000 (7,401,000) --

TOTAL
SHAREHOLDERS'
DEFERRED EQUITY
COMPENSATION (DEFICIT)
------------ -------------
<S> <C> <C>
Balance at December 31,
1996...................... $ -- $ (1,000)
Sale of common stock,
including exercise of
common stock options...... 1,023,000
Issuance of common stock in
lieu of
compensation/services
offered................... 43,000
Issuance of stock options... 251,000
Net loss.................... (963,000)
------------ ------------
Balance at December 31,
1997...................... -- 353,000
Sale of common stock........ 3,928,000
Issuance of warrants in
conjunction with sales of
Series A Convertible
Preferred stock and line
of
credit.................... 56,000
Issuance of common stock in
lieu of
compensation/services
offered................... 211,000
Issuance of stock options... 215,000
Dividends on mandatorily
redeemable preferred
stock..................... (24,000)
Net loss.................... (6,434,000)
------------ ------------
Balance at December 31,
1998...................... -- (1,695,000)
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-5
<PAGE> 81

LENDINGTREE, INC.

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) -- (CONTINUED)

<TABLE>
<CAPTION>
CONVERTIBLE PREFERRED
STOCK COMMON STOCK
----------------------- ------------------- ADDITIONAL
NUMBER OF NUMBER OF TREASURY PAID-IN ACCUMULATED UNREALIZED
SHARES AMOUNT SHARES AMOUNT STOCK CAPITAL DEFICIT GAINS
--------- ----------- --------- ------- ----------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1998....................... -- -- 3,750,172 38,000 -- 5,668,000 (7,401,000) --
Exercise of common stock
options.................... 274,419 3,000 494,000
Issuance of common stock in
lieu of compensation....... 46,064 310,000
Sale of Series D Convertible
Preferred stock, net....... 6,024,096 47,457,000
Issuance of warrants in
conjunction with sale of
Series A Convertible
Preferred stock............ 25,000
Conversion of preferred stock
from mandatorily
redeemable................. 1,666,667 9,378,000
Conversion of preferred stock
warrants to common stock
warrants................... 303,000
Conversion of convertible
notes into Series D
Convertible Preferred
stock...................... 214,076 1,777,000
Repurchase of common stock... (5,978,000)
Issuance of stock options in
conjunction with consulting
and severance agreements... 684,000
Issuance of stock options to
employees at below fair
value...................... 2,576,000
Amortization of deferred
compensation...............
Accretion of mandatorily
redeemable preferred
stock...................... (131,000)
In-kind dividends on Series A
Convertible Preferred
stock...................... 87,817 506,000 (506,000)
Other comprehensive income:
Unrealized gain, available-
for-sale securities...... 46,000
Net loss................... (24,745,000)
Total comprehensive income...
--------- ----------- --------- ------- ----------- ---------- ------------ -------
Balance at December 31,
1999....................... 7,992,656 $59,118,000 4,070,655 $41,000 $(5,978,000) $9,423,000 $(32,146,000) $46,000
========= =========== ========= ======= =========== ========== ============ =======

TOTAL
SHAREHOLDERS'
DEFERRED EQUITY
COMPENSATION (DEFICIT)
------------ -------------
<S> <C> <C>
Balance at December 31,
1998....................... -- (1,695,000)
Exercise of common stock
options.................... 497,000
Issuance of common stock in
lieu of compensation....... 310,000
Sale of Series D Convertible
Preferred stock, net....... 47,457,000
Issuance of warrants in
conjunction with sale of
Series A Convertible
Preferred stock............ 25,000
Conversion of preferred stock
from mandatorily
redeemable................. 9,378,000
Conversion of preferred stock
warrants to common stock
warrants................... 303,000
Conversion of convertible
notes into Series D
Convertible Preferred
stock...................... 1,777,000
Repurchase of common stock... (5,978,000)
Issuance of stock options in
conjunction with consulting
and severance agreements... (335,000) 349,000
Issuance of stock options to
employees at below fair
value...................... (2,576,000) --
Amortization of deferred
compensation............... 144,000 144,000
Accretion of mandatorily
redeemable preferred
stock...................... (131,000)
In-kind dividends on Series A
Convertible Preferred
stock...................... --
Other comprehensive income:
Unrealized gain, available-
for-sale securities......
Net loss...................
Total comprehensive income... (24,699,000)
----------- -----------
Balance at December 31,
1999....................... $(2,767,000) $27,737,000
=========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-6
<PAGE> 82

LENDINGTREE, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1997 1998 1999
---------- ----------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss.................................................. $ (963,000) $(6,434,000) $(24,745,000)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization........................... -- 46,000 249,000
Provision for doubtful accounts......................... -- 8,000 129,000
Common stock issued in lieu of compensation/services
rendered.............................................. 43,000 210,000 310,000
Common stock options issued in lieu of
compensation/services rendered........................ -- -- 349,000
Amortization of deferred compensation................... -- -- 144,000
Issuance of stock options and warrants.................. 251,000 223,000 13,000
Issuance of Series D Convertible Preferred stock in lieu
of interest........................................... -- -- 27,000
Changes in assets and liabilities:
Accounts receivable................................... (2,000) (251,000) (1,911,000)
Prepaid expenses and other current assets............. -- (87,000) (918,000)
Other assets.......................................... (2,000) (58,000) (117,000)
Accounts payable...................................... 70,000 665,000 2,843,000
Accrued expenses...................................... -- 15,000 2,436,000
---------- ----------- ------------
Net cash used in operating activities.............. (603,000) (5,663,000) (21,191,000)
---------- ----------- ------------
Cash flows from investing activities:
Purchase of available-for-sale securities................. -- -- (27,007,000)
Purchase of property and equipment........................ (18,000) (231,000) (1,125,000)
---------- ----------- ------------
Net cash used in investing activities.............. (18,000) (231,000) (28,132,000)
---------- ----------- ------------
Cash flows from financing activities:
Proceeds from sales of common stock and warrants and
exercise of stock options............................... 1,023,000 3,921,000 497,000
Repurchase of common stock................................ -- -- (5,978,000)
Proceeds from issuance of convertible notes............... -- -- 1,750,000
Proceeds from sale of mandatorily redeemable Series A
Convertible Preferred stock and warrants, net of
offering costs.......................................... -- 4,656,000 4,931,000
Proceeds from sale of Series D Convertible Preferred
stock, net of offering costs............................ -- -- 47,457,000
---------- ----------- ------------
Net cash provided by financing activities.......... 1,023,000 8,577,000 48,657,000
---------- ----------- ------------
Net increase (decrease) in cash and cash equivalents........ 402,000 2,683,000 (666,000)
Cash and cash equivalents, beginning of period.............. -- 402,000 3,085,000
---------- ----------- ------------
Cash and cash equivalents, end of period.................... $ 402,000 $ 3,085,000 $ 2,419,000
========== =========== ============
Supplemental disclosure of cash flow information:
Interest paid............................................. $ -- $ -- $ --
Income taxes paid......................................... -- -- --
Supplemental schedule of non-cash financing activities (Note
2)
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-7
<PAGE> 83

LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS

1. THE COMPANY

LendingTree, Inc. (the "Company") was incorporated in the State of Delaware
on June 7, 1996.

The Company is an Internet-based loan marketplace for consumers and
lenders. Loan types include mortgage, home equity, automobile, credit cards and
personal loans.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Significant estimates include percentage complete under
long-term contracts and the valuation of the Company's common stock, options and
warrants. Actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents. As of December 31, 1999, cash equivalents
included amounts in an overnight repurchase agreement of $2,419,000.

Short-Term Investments

The aggregate fair values of the Company's short-term investments (all
available-for-sale investments in short-term corporate commercial paper) as of
December 31, 1999 were as follows:

<TABLE>
<CAPTION>
UNREALIZED AMORTIZED
FAIR VALUE HOLDING GAINS COST BASIS MATURITIES
----------- ------------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
$27,053,000 $46,000 $27,033,000 Less than 6 months
=========== ======= =========== ==================
</TABLE>

The specific identification cost basis is used to determine realized gains
on the Company's available-for-sale securities. The unrealized holding gain of
$46,000 is included as a separate component of shareholders' equity for the year
ended December 31, 1999. Investments in available-for-sale securities are
carried at fair value. There have been no realized gains or losses.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, accounts payable and
accounts receivable at December 31, 1998 and 1999 approximated their fair value
due to the short-term nature of these items. The carrying value of the Company's
short-term investments at December 31, 1999 approximated their fair values.

Property and Equipment

Property and equipment is primarily comprised of furniture and computer
equipment which are stated at cost less accumulated depreciation and are being
depreciated using the straight-line method over their estimated useful lives,
which range from one to five years. Leasehold improvements are depreciated over
the shorter of the lease period or the estimated useful life of the improvement.
Ordinary maintenance and repair costs are expensed as incurred.

F-8
<PAGE> 84
LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Impairment of Long-Lived Assets

The Company evaluates the recoverability of its property and equipment and
intangible assets in accordance with Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of," ("SFAS No. 121"). SFAS No. 121 requires recognition
of impairment of long-lived assets in the event the net book value of such
assets exceeds the future undiscounted cash flows attributable to such assets or
the business to which such assets relate. No impairments were required to be
recognized during the years ended December 31, 1997, 1998 or 1999.

Income Taxes

The Company accounts for income taxes using the liability method whereby
deferred tax assets or liabilities are recognized for the temporary differences
between financial reporting and tax bases of the Company's assets and
liabilities and for tax carryforwards. In estimating future tax consequences,
the Company generally considers all expected future events other than enactment
of changes in tax law or rates. If it is "more likely than not" that some
portion or all of a deferred tax asset will not be realized, a valuation
allowance is recorded.

Revenue Recognition

LendingTree network revenue is generated principally from the transmission
of qualification forms ("Transmission Revenue") and the closing of loans
("Closed Loan Revenue"). LendingTree network revenue also includes lender set-up
fees and monthly maintenance fees. Transmission Revenue is recognized at the
time qualification forms are transmitted, while Closed Loan Revenue is
recognized at the time the lender reports the activity to the Company, which may
be up to four months after the qualification form is transmitted. Revenue from
lender set-up fees is recognized upon completion of the lender's integration
with the LendingTree network. Monthly maintenance fees are recognized as the
service is provided.

[i]close and other technology revenue is related primarily to modifying the
Company's proprietary software for use by certain lenders and other third
parties. Revenue under such contracts is recognized as work is performed under
the percentage of completion method with progress generally measured using costs
incurred to date compared to total estimated costs to be incurred, as this
software requires significant modification and customization. Losses, if any,
are recognized when the liability is identified. Included in accounts
receivable, net, as of December 31, 1998 and 1999 is $105,000, and $10,000,
respectively, of unbilled revenue related to percentage of completion contracts.

Cost of Revenue

LendingTree network cost of revenue includes salary and benefit costs of
the borrower relations and implementation groups, credit agency scoring
expenses, revenue sharing costs, closed loan rebate costs, and the costs of
website hardware.

[i]close cost of revenue includes direct costs of modifying the Company's
proprietary software for licensing to lenders, as well as the cost of servers
related to these licenses. Revenue share expense in 1999 is approximately $0.5
million and is recorded in the period when the related revenue is recognized.
The Company's partner in these revenue share transactions is also a holder of
the Company's preferred stock.

Marketing and Advertising Expenses

Marketing and advertising expenses consist primarily of costs, including
salaries, of all personnel involved in marketing and advertising. Marketing and
advertising expenses also include costs of advertising,

F-9
<PAGE> 85
LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

trade shows, affiliate bounty fees, and certain indirect costs. All costs of
advertising the services and products offered by the Company are expensed as
incurred. Advertising expense totaled approximately $50,000, $1,812,000 and
$17,121,000 in the years ended December 31, 1997, 1998 and 1999, respectively.

Product Development Costs

Product development costs primarily include expenses incurred by the
Company to develop our proprietary software and to enhance, manage, monitor, and
operate the Company's website. Prior to January 1, 1999, the software
development costs component of product development costs were accounted for in
accordance with Statement of Financial Accounting Standards No. 86 "Accounting
for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed,"
which requires software development costs to be capitalized beginning when a
product's technological feasibility is established and ending when a product is
available for general release. Through December 31, 1998, completion of a
working model of the Company's product and general release have substantially
coincided. Costs incurred by the Company between the completion of the working
model and the point at which the product is ready for general release have been
insignificant.

In March 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position No. 98-1
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use" ("SOP 98-1"), which provides guidance regarding when software
developed or obtained for internal use should be capitalized. SOP 98-1 is
effective for financial statements for fiscal years beginning after December 15,
1998. The Company adopted SOP 98-1 effective January 1, 1999. With the adoption
of this standard, the Company began accounting for the software development
component of product development costs associated with internal use software in
accordance with SOP 98-1, which requires that certain costs incurred during the
application development stage be capitalized, while costs incurred during the
preliminary project stage and post-implementation/operation stage should be
expensed as incurred. Capitalized product development costs are amortized over
the estimated life of the related application. The adoption of SOP 98-1 did not
have a material impact on the Company's financial statements.

Stock-Based Compensation

The Company accounts for the effect of its stock-based compensation plans
for employees under Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," ("SFAS No. 123") using the optional
intrinsic value method. The intrinsic value method results in compensation cost
equal to the excess of the fair value of the stock over the exercise or purchase
price at the date of award. The Company also discloses the pro forma income
statement effect of its stock-based compensation plans as if the Company had
adopted the fair value approach. The fair value approach results in compensation
cost using an option-pricing model that takes into account the fair value price
at the grant date, the exercise price, the expected life of the award, the
expected dividends, and the risk-free interest rate expected over the life of
the award.

The Company accounts for the effect of its stock-based compensation for
non-employees under SFAS No. 123, using the fair value approach.

Risks and Uncertainties, Significant Customers and Concentrations

Since inception, the Company has incurred significant losses and had an
accumulated deficit of $32.1 million as of December 31, 1999. The losses and
accumulated deficit have resulted from the significant costs incurred for
advertising and employment expenses related to the development of [i]close and
establishing relationships with lenders. Because the Company plans to continue
to invest in advertising, product development, and marketing, the Company will
continue to incur substantial losses in the foreseeable future. Although the
Company has experienced significant revenue growth, the operating

F-10
<PAGE> 86
LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

results for future periods are subject to numerous uncertainties, and there can
be no assurance that revenue growth will continue or that the Company will be
able to achieve or sustain profitability. The Company plans to raise additional
equity capital through its IPO in order to continue to fund its operating needs.
However, if it is unable to successfully raise sufficient funds, management
believes it could reduce discretionary operating expenditures, including
advertising and marketing and certain overhead costs, to permit the Company to
continue as a going concern beyond December 31, 2000.

Financial instruments that potentially subject the Company to a
concentration of credit risk consist of cash and cash equivalents and accounts
receivable. Cash equivalents are invested in repurchase agreements on an
overnight basis with high credit quality financial institutions. Short term
investments are comprised of commercial paper from a diverse group of high
credit quality issuers.

For the year ended December 31, 1997, two lenders comprised all of the
Company's revenue. For the year ended December 31, 1998, four lenders comprised
27%, 13%, 12%, and 11% of the Company's revenue. For the year ended December 31,
1999, no lender exceeded 10% of the Company's revenue. All of the Company's
revenues are from transactions originating in the United States.

As of December 31, 1998, two lenders comprised 41% and 13% of the Company's
accounts receivable balance. As of December 31, 1999, no lender exceeded 10% of
the Company's accounts receivable balance. Concentrations of credit risk with
respect to accounts receivable are limited due to the large number of lenders
comprising the Company's customer base.

NET LOSS PER COMMON SHARE

Historical

The Company computes net loss per common share in accordance with Statement
of Financial Accounting Standards No. 128, "Earnings Per Share," ("SFAS No.
128") and SEC Staff Accounting Bulletin No. 98 ("SAB No. 98"). Under the
provisions of SFAS No. 128 and SAB No. 98, basic net loss per common share
("Basic EPS") is computed by dividing net loss available to common shareholders
by the weighted average number of common shares outstanding. Diluted net loss
available to common shareholders ("Diluted EPS") is computed by dividing net
loss by the weighted average number of common shares and dilutive potential
common shares then outstanding. Potential common shares consist of shares
issuable upon the exercise of stock options and warrants and shares issuable
upon conversion of convertible preferred stock.

The calculation of net loss per common share for years ended December 31,
1998 and 1999 does not include 786,656 and 5,165,545, respectively, of weighted
average potential common shares as their impact would be antidilutive.

Pro Forma (Unaudited)

Pro forma net loss per common share is calculated assuming the conversion
of all outstanding shares of preferred stock into common stock which converts
automatically upon completion of the Company's IPO into 10,150,673 shares of
common stock at December 31, 1999, therefore, accretion of discounts on
mandatorily redeemable preferred stock of $131,000 and dividends issued to
preferred shareholders on conversion of preferred stock warrants to common stock
warrants of $525,000 for the year ended December 31, 1999 and dividends on
convertible preferred stock for $2,160,000 during the year ended December 31,
1999, are excluded from the calculation of pro forma net loss per common share.
It is assumed that each series of preferred stock was converted as of January 1,
1998 or the date of issuance, if later.

The calculation of pro forma net loss per common share for the year ended
December 31, 1999 does not include 1,159,579, of weighted average potential
common shares, as their impact would be antidilutive.

F-11
<PAGE> 87
LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Stock Split

On January 5, 2000, the Board of Directors approved a 1.27-for-1 common
stock split which was effective February 3, 2000. The financial statements for
all periods presented have been restated to reflect the effect of this stock
split. In addition, the Board approved an amendment to the certificate of
incorporation to take effect as of the effective date of the registration
statement, increasing the authorized capital stock to 100,000,000 shares of
common stock and 10,000,000 shares of preferred stock, each with a par value of
$0.01 per share.

Comprehensive Income

Effective January 1, 1998, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS No. 130"). SFAS No. 130 establishes standards for reporting comprehensive
income and its components in financial statements. Comprehensive income, as
defined, includes all changes in equity during a period from non-owner sources.
The Company had no items of other comprehensive income for the years ended
December 31, 1997 or 1998. For the year ended December 31, 1999, the Company had
$46,000 of other comprehensive income related to unrealized gains on
available-for-sale securities.

Segment Reporting

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information," ("SFAS No. 131"). This statement
establishes standards for the way companies report information about operating
segments in annual financial statements. It also establishes standards for
related disclosures about products and services, geographic areas, and major
customers. The disclosures prescribed by SFAS No. 131 are effective for the year
ended December 31, 1998. Management has determined that the Company does not
have any separately reportable operating segments as of December 31, 1998 or
December 31, 1999.

Start-Up Costs

In April 1998, the Accounting Standards Executive Committee of the AICPA
issued Statement of Position No. 98-5, "Reporting on the Costs of Start-Up
Activities," ("SOP No. 98-5") which is effective for fiscal years beginning
after December 15, 1998. SOP No. 98-5 requires companies to expense as incurred
all pre-operating, startup and organizational costs that are not capitalizable
as long-lived assets. The Company adopted SOP No. 98-5 effective January 1,
1999. The adoption of SOP No. 98-5 had no impact on the Company's financial
condition or results of operations.

F-12
<PAGE> 88
LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Cash Flow Information

A supplemental schedule of non-cash financing activities follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1997 1998 1999
------- ------- ----------
<S> <C> <C> <C>
Accretion of mandatorily redeemable
preferred stock........................... $ -- $ -- $ 131,000
Dividends issued to preferred shareholders
on conversion of preferred stock warrants to
common stock warrants....................... $ -- $ -- $ 525,000
Dividends on convertible preferred stock.... $ -- $24,000 $ 506,000
Conversion of convertible notes and accrued
interest into Series D Convertible
Preferred stock........................... $ -- $ -- $1,777,000
Issuance of warrants in conjunction with
Series A financing and convertible
promissory notes.......................... $ -- $56,000 $ 63,000
</TABLE>

Reclassifications

Certain reclassifications were made to the December 31, 1997 and 1998
financial statements to conform them to the December 31, 1999 presentation.

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities," ("SFAS No. 133"). SFAS No. 133 establishes a new model
for accounting for derivatives and hedging activities and supercedes several
existing standards. SFAS No. 133, as amended by SFAS No. 137, is effective for
all fiscal quarters of fiscal years beginning after June 15, 2000. The Company
does not expect that the adoption of SFAS No. 133 will have a material impact on
the Company's financial statements.

3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
EXPECTED DECEMBER 31,
LIFE --------------------------
(YEARS) 1998 1999
-------- --------- -------------
<S> <C> <C> <C>
Computer hardware......................... 3 $174,000 $ 545,000
Office furniture and equipment............ 5 70,000 381,000
Computer systems software................. 1 5,000 420,000
-------- -------------
249,000 1,346,000
Accumulated depreciation.................. (39,000) (260,000)
-------- -------------
Net....................................... $210,000 $ 1,086,000
======== =============
</TABLE>

Depreciation expense for the years ended December 31, 1997, 1998 and 1999
was $0, $39,000 and $249,000, respectively.

F-13
<PAGE> 89
LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. ACCRUED EXPENSES

Accrued expenses are comprised of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1998 1999
------- ----------
<S> <C> <C>
Professional services and fees........................ $ -- $ 706,000
Advertising........................................... -- 460,000
Loss on sub-lease..................................... 454,000
Incentive and other compensation...................... 15,000 385,000
Deferred revenues..................................... -- 209,000
Other................................................. -- 237,000
------- ----------
Total accrued expenses...................... $15,000 $2,451,000
======= ==========
</TABLE>

5. SHAREHOLDERS' EQUITY

Common Stock

On March 24, 1998, the Company effected a 2-for-1 stock split in the form
of a stock dividend. All share and per share amounts have been restated to
reflect the stock split. The holder of each share of common stock is entitled to
one vote per share.

Preferred Stock

On September 20, 1999, the shareholders approved an amendment of the
Company's certificate of incorporation, under which the Company authorized
10,467,194 shares of preferred stock, $.01 par value per share, consisting of
four series of convertible preferred stock (the "Series A Preferred," "Series B
Preferred," "Series C Preferred" and "Series D Preferred" stock). Preferred
shareholders are entitled to cumulative dividends which accrue on a daily basis
at a rate of 8% per annum. Dividends to Series A Preferred shareholders are
payable quarterly, if and when declared, in additional shares of preferred stock
or in cash at the option of the Company and subject to certain conditions. It is
the Company's present intention to pay such dividends in shares of Series A
preferred stock. Dividends to Series D Preferred shareholders are paid in cash.
As of December 31, 1999, there was $1,654,000 of accumulated, undeclared
dividends related to the Series A and Series D Preferred stock. Accumulated
dividends on Series A Preferred stock have been calculated based on the
estimated fair value of the shares to be issued as of December 31, 1999 in
respect of such dividends.

The liquidation value of convertible preferred stock is $6.00, $9.00,
$12.00, and $8.30 per share for Series A Convertible Preferred, Series B
Convertible Preferred, Series C Convertible Preferred, and Series D Convertible
Preferred, respectively, plus accumulated dividends. If liquidation proceeds are
insufficient to pay such amounts, holders would share ratably in any proceeds on
liquidation based on the number of shares into which the preferred stock is
convertible. If such proceeds are in excess of $50 million, in addition to the
liquidation preference, the holders of preferred stock are entitled to
participate ratably with common shareholders on an as-if-converted basis.

Each holder of outstanding shares of preferred stock is entitled to the
number of votes equal to the number of whole shares of common stock into which
the shares are convertible. The holders of shares of preferred stock vote
together with holders of shares of common stock as a single class. The holders
in interest of a majority of the outstanding shares of preferred stock, voting
together as a single class, are entitled to elect one director to the Company's
Board of Directors.

F-14
<PAGE> 90
LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Each share of preferred stock is convertible, at the option of the holder,
into 1.27 shares of common stock, subject to certain anti-dilution provisions.
In addition, accumulated and unpaid dividends are convertible into shares of
common stock at an exchange rate equivalent to the per share liquidation value
of such stock divided by 1.27. Effective upon the closing of the sale of shares
of common stock by the Company pursuant to a qualified public offering, as
defined in the instrument governing the preferred stock, all outstanding shares
of preferred stock and accumulated undeclared dividends automatically convert to
shares of common stock.

Prior to September 20, 1999, the Company was required to redeem, in three
installments, commencing on the fourth anniversary of the date of issuance of
the first share of Series A Convertible Preferred, and continuing on the
immediately succeeding two anniversaries, the number of shares of preferred
stock held by all holders. The redemption price of a share of a series of
convertible preferred stock shall mean the original issue price of a share plus
all accrued and unpaid dividends thereon. In connection with the Series D
Convertible Preferred stock financing, the Series A Convertible Preferred
shareholders relinquished their rights to mandatory redemption. Accretion
related to the mandatory redemption feature ceased on September 20, 1999.

Convertible Promissory Notes

During June and July 1999, the Company entered into Convertible Promissory
Note Agreements (the "Notes") with certain individuals from which the Company
received a total of $1.75 million. The Company also issued 53,340 warrants to
purchase common stock at approximately $7.87 per share to the purchasers of
these Notes. These warrants were valued at approximately $19,000 using an option
valuation model. The value of these warrants was recognized as interest expense
during the year ended December 31, 1999.

These Notes were to be due on July 13, 2000 (the "maturity date") and bore
interest at 8% per annum, compounded quarterly. They could be prepaid at any
time without penalty.

Under the terms of the Notes, if the Company engaged in a subsequent
financing at any time before December 31, 1999, and provided that the financing
was for a minimum of $10,000,000, the principal outstanding under the Notes and
all accrued interest thereon would be immediately converted into shares of the
offered securities at a conversion price equal to the per share purchase price
of the offered securities. $500,000 of the amount received related to the Notes
was from a party related to an Executive Officer of the Company. This individual
invested under the same terms as other investors in the Notes. These Notes and
related accrued interest converted to Series D Convertible Preferred stock in
connection with the Series D Convertible Preferred stock sale described below.

Series D Sale

On September 20, 1999, the Company entered into a Series D Convertible
Preferred Stock Purchase Agreement (the "Series D Agreement") under which it
sold 6,024,096 shares of Series D Convertible Preferred stock at $8.30 per share
for total gross proceeds of approximately $50,000,000. The Company utilized
approximately $5,978,000 of these proceeds to repurchase 948,971 shares of
common stock (of which 666,750 shares were purchased from Board members for
approximately $4.2 million in connection with their departure from the Board)
which has been reflected as treasury stock in the accompanying financial
statements. The Company also incurred approximately $2,543,000 in offering
costs, which have been netted against the proceeds. The Company granted a
warrant to purchase 127,000 shares of common stock at approximately $7.52 per
share to a broker in connection with the Series D Agreement, the fair value of
which (approximately $458,000) was calculated using an option valuation model
and is included in offering costs. During January 2000, the company entered into
an agreement with the holder of this warrant. Upon successful completion of the
company's IPO, the exercise price of the warrant will be

F-15
<PAGE> 91
LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

increased to the price per share of common stock sold in the offering. The
Company will record a charge based upon the fair value of the new warrant issued
in excess of the existing warrant based upon an option valuation model.

In connection with the Series D Agreement, the following additional
transactions occurred:

- Series A Convertible Preferred shareholders gave up their mandatory
redemption rights.

- $1,750,000 of Convertible Notes plus accrued interest that were
outstanding at the closing converted into shares of Series D Convertible
Preferred stock at $8.30 per share. The Company issued a total of 214,076
shares to settle this obligation.

- A consulting agreement was entered into with a former member of the Board
of Directors and a severance agreement was entered into with a former
executive. Both individuals had their existing incentive stock options
cancelled, and new non-qualified stock options were issued at the current
fair value. They received 76,200 and 114,300 options, respectively, to
purchase common stock at approximately $4.72. The Company recorded
expense of $37,000 and $349,000, respectively, as determined using an
option valuation model, related to these two individuals during the year
ended December 31, 1999. Additional expense of $298,000 related to the
consulting agreement will be incurred ratably during the remaining three
years of the consulting agreement, and has been recorded as deferred
compensation as of December 31, 1999.

- All preemptive rights were terminated. All Board representation
agreements were terminated.

Series A Sale

Effective December 9, 1998, the Company entered into a Convertible
Preferred Stock and Warrant Purchase Agreement (the "Preferred Stock Agreement")
under which it sold, in the Initial Closing, 833,334 shares of Series A
Convertible Preferred stock at $6 per share and a warrant to purchase 260,000
shares of Series A Convertible Preferred stock with an exercise price of $6 per
share (the "Series A Warrant"). The Series A Warrant was recorded by allocating
the fair value of this warrant determined using an option valuation model, from
the proceeds received in the Initial Closing. Proceeds from the Initial Closing
totaled $4,656,000, net of expenses of approximately $344,000. In addition, the
Company issued a warrant to purchase 63,500 shares of common stock at
approximately $4.72 per share (the "Common Warrant") to a broker in connection
with the Agreement, the fair value of which (approximately $48,000) is included
in offering costs. The fair value of the common warrants was calculated
utilizing an option valuation model.

During March 1999 (the "Second Closing") the Company sold 500,000 shares of
Series A Convertible Preferred stock at a price of $6 per share and a warrant to
purchase 40,000 shares of Series B Convertible Preferred stock at $9 per share
(the "Series B Warrant"), for gross proceeds of $3,000,000. During May 1999 (the
"Third Closing") the Company sold 333,334 shares of Series A Convertible
Preferred stock at $6 per share for gross proceeds of $2,000,000. The Company
also granted a warrant to the investors in the Third Closing to purchase 33,020
shares of common stock at approximately $7.87 per share. The fair value of these
warrants was approximately $12,000 and was calculated using an option valuation
model.

Series A and B Warrants

In conjunction with the sale of Series D Convertible Preferred stock, the
Series A Convertible Preferred shareholders exchanged their Series A and Series
B Warrants for warrants to purchase 381,000 shares of common stock at
approximately $4.72 per share. The exchange has been reflected in the financial
statements as a distribution to the preferred shareholders equivalent to the
excess of the current fair value

F-16
<PAGE> 92
LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

of the new warrant over the carrying value of the existing warrants, and has
been included in the calculation of net loss attributable to common
shareholders. The new warrants issued were valued at approximately $828,000
utilizing an option valuation model.

Common Warrants

In addition to common warrants issued as described above, the Company also
issued a warrant to purchase 9,525 shares of common stock at approximately $4.72
per share in connection with a line of credit provided by a shareholder. The
fair value of this warrant (approximately $7,000) was recognized in expense
during the year ended December 31, 1998. This warrant was valued using an option
valuation model. The line of credit is no longer available and no amounts were
outstanding at December 31, 1998 or December 31, 1999.

At December 31, 1999, the Company had outstanding warrants to purchase
667,385 shares of common stock, with exercise prices ranging from approximately
$4.72 - $7.87. Expiration dates range from November 2003 through September 2005.

Stock Option Plans

During January 1997, the Board of Directors approved the 1997 Stock Option
Plan (the "1997 Plan") which provides for the granting of both incentive stock
options and non-qualified stock options to employees, officers, directors and
consultants of the Company. The 1997 Plan allows for a maximum of 1,556,890
shares for option grants to be issued prior to January 15, 2007. During February
1998, the Company established the 1998 Stock Option Plan (the "1998 Plan"). The
1998 Plan, as amended, authorized 1,187,450 shares for option grants to be
issued prior to February 2008. During September 1999, the Company established
the 1999 Stock Option Plan (the "1999 Plan"). The 1999 Plan, as amended,
authorized 2,286,000 shares for option grants prior to September 2009. The 1999
Plan permits the granting of any combination of incentive stock options and
nonqualified stock options.

Under all of the Company's stock option plans, the exercise price of any
incentive stock option shall not be less than the fair value of the stock on the
date of grant or less than 110% of the fair value in the case of optionees
holding more than 10% of the total combined voting power of all classes of stock
of the Company. Options under the Company's stock option plans are exercisable
for ten years from the date of grant, except for incentive stock options granted
to optionees holding more than 10% of the total combined voting power of all
classes of stock, which must be exercised within five years.

The Company's stock option plans generally provide for a four-year vesting
requirement with one-quarter of such shares vesting at the end of one full year
and on an annual basis thereafter. Upon a change of control, as defined, 50% of
all unvested stock options shall vest.

F-17
<PAGE> 93
LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

A summary of incentive stock options awarded to employees during the years
ended December 31, 1997, 1998 and 1999 follows:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE EXERCISE
NUMBER OF EXERCISE PRICE
OPTIONS PRICE RANGE
--------- -------- ----------
<S> <C> <C> <C>
OUTSTANDING AS OF DECEMBER 31, 1996............ -- $ -- $ --
Granted at fair value.......................... 479,563 0.35 0.02-1.43
Exercised...................................... (367,030) 0.02 0.02
--------
OUTSTANDING AS OF DECEMBER 31, 1997............ 112,533 1.43 1.43
Granted at fair value.......................... 571,695 4.56 1.43-5.20
Forfeited...................................... (65,087) 3.09 1.43-4.72
--------
OUTSTANDING AS OF DECEMBER 31, 1998............ 619,141 4.15 1.43-5.20
Granted at fair value.......................... 521,660 5.09 4.72-6.06
Granted below fair value....................... 530,466 5.68 5.51-6.53
Forfeited...................................... (218,377) 4.85 4.72-5.20
--------
OUTSTANDING AS OF DECEMBER 31, 1999............ 1,452,890 $4.93 $1.43-6.53
======== ===== ==========
Exercisable as of December 31, 1999............ 254,025 $3.22 $1.43-5.51
======== ===== ==========
</TABLE>

A summary of non-qualified stock options awarded during the years ended
December 31, 1997, 1998 and 1999 follows:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE EXERCISE
NUMBER OF EXERCISE PRICE
OPTIONS PRICE RANGE
--------- -------- ----------
<S> <C> <C> <C>
OUTSTANDING AS OF DECEMBER 31, 1996............. -- $ -- $ --
Granted at fair value........................... 938,262 1.43 1.43-1.57
---------
OUTSTANDING AS OF DECEMBER 31, 1997............. 938,262 1.43 1.43-1.57
Granted at fair value........................... 938,262 4.76 3.54-5.20
---------
OUTSTANDING AS OF DECEMBER 31, 1998............. 1,212,701 2.19 1.43-5.20
Granted at fair value........................... 287,752 5.81 4.72-6.06
Granted below fair value........................ 403,682 5.23 4.72-5.51
Exercised....................................... (274,419) 1.80 1.43-4.72
Forfeited....................................... (111,610) 4.80 4.72-5.20
---------
OUTSTANDING AS OF DECEMBER 31, 1999............. 1,518,106 3.56 $1.43-6.06
========= ===== ==========
Exercisable as of December 31, 1999............. 934,158 $2.30 $1.43-5.20
========= ===== ==========
</TABLE>

F-18
<PAGE> 94
LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes information about the Company's stock
options:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING AT DECEMBER 31, 1999
----------------------------------------
NUMBER REMAINING
EXERCISE PRICE OUTSTANDING CONTRACTUAL LIFE OPTIONS EXERCISABLE
- -------------- ----------- ---------------- -------------------
<C> <C> <S> <C>
$1.43 809,817 7.8 years 808,548
3.54 41,910 8.4 years 29,210
4.72 700,616 7.8 years 50,800
5.20 173,990 8.5 years 106,680
5.51 965,898 9.7 years 192,945
6.06 190,500 9.7 years --
6.54 88,265 9.8 years --
--------- ---------
2,970,996 1,188,183
========= =========
</TABLE>

Compensation costs recognized during the years ended December 31, 1997,
1998 and 1999 for stock-based compensation awards totaled $251,000, $215,000 and
$804,000, respectively. The weighted average fair value at date of grant for
options granted at fair value during the years ended December 31, 1997, 1998 and
1999 was $0.37, $0.83 and $1.10, respectively. The weighted average fair value
at the date of grant for options granted below fair value during the year ended
December 31, 1999 was $4.66. The fair value of each option grant was estimated
on the date of grant using the minimum value method based upon the following
assumptions: dividend yield -- 0%; risk free interest rate -- 6% (1997); 5.1%
(1998); 4.75 -- 5.75% (1999) and weighted average expected option term -- 5
years (1997); 4 years (1998); 5 years (1999). The Company has approximately $2.8
million of deferred compensation recorded on its December 31, 1999 balance sheet
that will be expensed over the vesting period of the related options
(principally four years).

Had compensation expense for the Company's employee options been recorded
based on the fair value of the options at the grant date, as prescribed by SFAS
No 123, the Company's net loss and net loss per common share -- basic and
diluted would have been as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------
1997 1998 1999
----------- ----------- ------------
<S> <C> <C> <C>
Net loss attributable to common shareholders....... $ (963,000) $(6,458,000) $(27,561,000)
Pro forma adjustment for stock compensation
expense.......................................... (150,000) (392,000) (748,000)
----------- ----------- ------------
Pro forma net loss attributable to common
shareholders..................................... $(1,113,000) $(6,850,000) $(28,309,000)
=========== =========== ============
Net loss per common share -- basic and diluted..... $ (1.20) $ (1.88) $ (7.74)
Pro forma adjustment for stock compensation
expense.......................................... (.19) (.11) 0.1
----------- ----------- ------------
Pro forma net loss per common share -- basic and
diluted.......................................... $ (1.39) $ (1.99) $ (7.95)
=========== =========== ============
</TABLE>

Because options vest over several years and additional options are expected
to be granted in subsequent years, the pro forma impact on periods presented may
not be representative of the pro forma effects on reported net income or loss in
future years.

F-19
<PAGE> 95
LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

6. INCOME TAXES

There is no current income tax provision or benefit for the years ended
December 31, 1997, 1998 or 1999 as the Company has generated net operating
losses for income tax purposes for which there is no carryback potential. There
is no deferred provision or benefit for income taxes recorded as the Company is
in a net deferred tax asset position for which a full valuation allowance has
been recorded due to uncertainty of realization.

Significant components of the Company's deferred tax assets and liabilities
at December 31, 1998 and 1999 consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1998 1999
----------- -----------
<S> <C> <C>
Deferred tax assets:
Domestic net operating loss carryforwards............... $ 2,683,000 $11,761,000
Stock compensation...................................... 182,000 406,000
Other................................................... 65,000 393,000
----------- -----------
Gross deferred tax assets............................ 2,930,000 12,560,000
Less: Valuation allowance............................ (2,926,000) (12,540,000)
----------- -----------
Net deferred tax assets.............................. 4,000 20,000
Deferred tax liabilities:
Fixed assets............................................ 4,000 20,000
----------- -----------
Total deferred tax liabilities.................. 4,000 20,000
----------- -----------
Net deferred tax asset (liability)................... $ -- $ --
=========== ===========
</TABLE>

The Company has net operating loss carryforwards for income tax purposes of
approximately $7 million available at December 31, 1998 and approximately $29
million available at December 31, 1999 to offset future federal and state
taxable income. These net operating loss carryforwards begin to expire in 2011.
Should the Company undergo an ownership change as defined in Section 382 of the
Internal Revenue Code, the Company's tax net operating loss carryforwards
generated prior to the ownership change may be subject to annual limitation
which could reduce or defer the utilization of these losses.

Taxes computed at the statutory Federal income tax rate of 34% are
reconciled to the provision for income taxes as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------------------------------------
1997 1998 1999
----------------------- ------------------------- -------------------------
% OF % OF % OF
AMOUNT PRETAX LOSS AMOUNT PRETAX LOSS AMOUNT PRETAX LOSS
--------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
U.S. Federal tax benefit at
statutory rate............... $(327,000) (34.0%) $(2,188,000) (34.0%) $(8,413,000) (34.0%)
State taxes (net of federal
benefit)..................... (50,000) (5.2) (317,000) (4.9) (1,222,000) (4.9)
Change in valuation
allowance.................... 376,000 39.0 2,550,000 39.6 9,615,000 38.8
Other nondeductible expenses... 1,000 0.2 (45,000) (0.7) 20,000 0.1
--------- ----- ----------- ----- ----------- -----
Provision for income taxes..... $ -- 0 % $ -- 0 % $ -- 0 %
========= ===== =========== ===== =========== =====
</TABLE>

F-20
<PAGE> 96
LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

7. COMMITMENTS AND CONTINGENCIES

The Company leases certain office facilities and equipment under operating
leases. These leases are generally renewable. During December 1999, the Company
entered into a lease agreement for a new facility in Charlotte, North Carolina.
The lease expires in July 2010. The minimum lease payment is approximately
$55,000 per month. In connection with this lease agreement, the Company
subleased its existing space in Charlotte, North Carolina. The estimated loss of
$454,000 on this sublease over the remaining term has been recognized as expense
in the income statement for the year ended December 31, 1999.

The following is a schedule of future minimum rental payments required
under the leases as of December 31, 1999:

<TABLE>
<S> <C>
2000..................................................... $ 946,000
2001..................................................... 992,000
2002..................................................... 822,000
2003..................................................... 688,000
2004..................................................... 683,000
Thereafter............................................... 4,380,000
----------
$8,511,000
==========
</TABLE>

Rent expense totaled $7,000, $109,000 and $534,000 for the years ended
December 31, 1997, 1998 and 1999.

The Company is subject to various legal matters in the ordinary course of
business. In the opinion of management, the ultimate outcome of any such matters
will not have a material adverse effect on the financial condition, results of
operations or cash flows of the Company.

As of December 31, 1999, the Company was committed to approximately $6.0
million related to advertising and promotion costs through 2001.

8. SUBSEQUENT EVENTS

Warrants and Co-Branded Site Agreement

During January 2000, the Company entered into an agreement for an initial
one year period with a third-party to co-brand a web site. In connection with
this agreement, the Company agreed to give two warrants to this third-party,
each warrant is for the purchase of 95,250 shares of the Company's common stock
at $7.87 per share. The first warrant, with an underlying fair value of $11.00
is vested and exercisable at the date of grant, and expense, calculated using an
option pricing model, will be recognized ratably for services provided by
CNBC.com over the initial one year period under the agreement. The second
warrant only vests if certain performance criteria are met by the third-party
during the first year of this agreement which will result in the extension of
the agreement for an additional year. Expense related to this warrant will be
recognized based upon the excess of the market value of the Company's common
stock in relation to the exercise price of the warrant at each balance sheet
date, until the warrant is fully vested. This amount could be significant in
relation to the Company's ongoing operations. In connection with this agreement,
the Company has committed to approximately $9.0 million related to advertising
and promotion costs through 2001.

Option Grants

In January 2000, the Company granted stock options to purchase 713,423
shares of common stock to employees at an exercise price of $9.25 per share.
Based on the difference between the strike price of these

F-21
<PAGE> 97
LENDINGTREE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

options and the fair market value at the date of grant ($11.00) which is the
mid-point of the initial public offering range, the Company will record a
deferred compensation charge of approximately $1.3 million and will amortize it
to expense over the options' four year vesting period.

Officer Loans (unaudited)

In February 2000, the Company entered into promissory notes and pledge
agreements with certain executive officers of the Company to provide a total of
approximately $600,000 to these officers for the purpose of exercising
non-qualified stock options and for paying the related withholding taxes on
such. The loans are to be repaid to the Company, plus interest at the federal
rate (as defined) in three equal installments on January 31, 2002, 2003 and
2004. The officers have pledged to the Company a security interest in the stock
issued as a result of these options being exercised. The pledged stock may not
be sold by the officers without prior written consent by the Company.

CEO Options and Loan

In January 2000, the Company granted an option to its Chief Executive
Officer to purchase up to 100,000 shares of its common stock at an exercise
price equal to the initial public offering price the option can only be
exercised prior to the commencement of trading of the Company's common stock. If
the Chief Executive Officer were to exercise these options, the Company will
enter into a promissory note and pledge agreement with him to provide for loan
equal to the number of shares purchased multiplied by the initial public
offering price. This loan is to be repaid to the Company, plus interest at the
federal rate (as defined) in two equal installments on January 31, 2004 and
2005. The Chief Executive Officer will pledge, to the Company, a security
interest in the stock issued as a result of this option being exercised. The
pledged stock may not be sold by the Chief Executive Officer without prior
written consent by the Company.

Preferred Stock Dividends (unaudited)

On January 31, 2000, the Company's Board of Directors declared dividends
through December 31, 1999 on its Series A and Series D convertible preferred
stock. The payment of the dividends will coincide with the Company's IPO and the
automatic conversion of all outstanding shares of preferred stock into common
stock and will result in the issuance of an additional 222,396 shares of common
stock.

Investment (unaudited)

In February 2000, the Company made a $2.5 million equity investment in a
wholesale lending service. The Company's minority investment represents
approximately 8.5% of the outstanding equity of that company.

Employee Stock Purchase Plan

The Board of Directors of the Company approved an Employee Stock Purchase
Plan in January 2000 and reserved for the issuance of 444,500 shares under the
plan.

F-22
<PAGE> 98

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

THROUGH AND INCLUDING (THE 25TH DAY AFTER THE DATE OF THIS
PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THESE SECURITIES, WHETHER OR
NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

3,650,000 SHARES

[LENDINGTREE, INC. LOGO]

COMMON STOCK

----------------------

PROSPECTUS

----------------------

MERRILL LYNCH & CO.

LEHMAN BROTHERS

PRUDENTIAL VOLPE TECHNOLOGY
A UNIT OF PRUDENTIAL SECURITIES

, 2000

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 99

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth an estimate of the costs and expenses, other
than the underwriting discounts and commissions, payable by the Registrant in
connection with the sale of the common stock being registered.

<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
----------
<S> <C>
SEC registration fee........................................ $ 13,298
NASD filing fee............................................. 5,537
Nasdaq National Market listing fee.......................... 95,000
Legal fees and expenses..................................... 500,000
Accounting fees and expenses................................ 300,000
Printing and engraving...................................... 500,000
Blue sky fees and expenses (including legal fees)........... 10,000
Transfer agent fees......................................... 20,000
Premiums for director and officer insurance................. 250,000
Miscellaneous............................................... 306,165
----------
Total............................................. $2,000,000
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 102 of the Delaware General Corporation Law ("DGCL"), as amended,
allows a corporation to eliminate the personal liability of directors of a
corporation to the corporation or its stockholders for monetary damages for a
breach of fiduciary duty as a director, except where the director breached his
duty of loyalty, failed to act in good faith, engaged in intentional misconduct
or knowingly violated a law, authorized the payment of a dividend or approved a
stock repurchase in violation of Delaware corporate law or obtained an improper
personal benefit.

Section 145 of the DGCL provides, among other things, that the Company may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding (other than
an action by or in the right of the Company) by reason of the fact that the
person is or was a director, officer, agent or employee of the Company or is or
was serving at the Company's request as a director, officer, agent, or employee
of another corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorneys' fees, judgment, fines and amounts paid in
settlement actually and reasonably incurred by the person in connection with
such action, suit or proceeding. The power to indemnify applies (a) if such
person is successful on the merits or otherwise in defense of any action, suit
or proceeding, or (b) if such person acted in good faith and in a manner he
reasonably believed to be in the best interest, or not opposed to the best
interest, of the Company, and with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The power to
indemnify applies to actions brought by or in the right of the Company as well,
but only to the extent of defense expenses (including attorneys' fees but
excluding amounts paid in settlement) actually and reasonably incurred and not
to any satisfaction of judgment or settlement of the claim itself, and with the
further limitation that in such actions no indemnification shall be made in the
event of any adjudication of negligence or misconduct in the performance of his
duties to the Company, unless the court believes that in light of all the
circumstances indemnification should apply.

Section 174 of the DGCL provides, among other things, that a director, who
willfully or negligently approves of an unlawful payment of dividends or an
unlawful stock purchase or redemption, may be held liable for such actions. A
director who was either absent when the unlawful actions were approved or
dissented at the time, may avoid liability by causing his or her dissent to such
actions to be entered in the books containing the minutes of the meetings of the
board of directors at the time such action occurred or immediately after such
absent director receives notice of the unlawful acts.

II-1
<PAGE> 100

Our Amended and Restated Certificate of Incorporation includes a provision
that eliminates the personal liability of its directors for monetary damages for
breach of fiduciary duty as a director, except for liability:

- for any breach of the director's duty of loyalty to LendingTree or its
stockholders;

- for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;

- under section 174 of the Delaware General Corporation Law regarding
unlawful dividends and stock purchases; or

- for any transaction from which the director derived an improper personal
benefit.

These provisions are permitted under Delaware law.

Our Amended and Restated Bylaws provide that:

- we must indemnify our directors and officers to the fullest extent
permitted by Delaware law;

- we may indemnify our other employees and agents to the same extent that
we indemnified our officers and directors, unless otherwise determined by
our Board of Directors; and

- we must advance expenses, as incurred, to our directors and executive
officers in connection with a legal proceeding to the fullest extent
permitted by Delaware Law.

The indemnification provisions contained in the Company's Amended and
Restated Certificate of Incorporation and Amended and Restated Bylaws are not
exclusive of any other rights to which a person may be entitled by law,
agreement, vote of stockholders or disinterested directors or otherwise. In
addition, the Company maintains insurance on behalf of its directors and
executive officers insuring them against any liability asserted against them in
their capacities as directors or officers or arising out of such status.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

From our inception in June of 1996, until October 1997, we were financed
through contributions from our founders and through issuances of common stock.
In return for their contributions, our founders received certain amounts of our
common stock. The number of shares and prices per share indicated below have
been adjusted to reflect a two for one stock split which occurred in March 1998
and a 1.27-for-1 stock split effected prior to this offering. The sales and
issuances of securities in each of these transactions and those that follow were
exempt from registration under the Securities Act pursuant to Section 4(2)
thereof, on the basis that the transactions did not involve a public offering.
No underwriters were involved in connection with these sales and issuances.

In October 1997, we sold 558,449 shares of our common stock at a price of
approximately $1.43 per share in exchange for an aggregate price of $800,000 to
ten investors, including 209,550 shares to Richard Field and 69,778 shares to W.
James Tozer, Jr., both of whom are currently directors, and 69,781 shares to
Donald Colby, a former director.

In November 1997, we issued 2,540 shares of our common stock at a price of
approximately $3.15 per share to a consultant in exchange for $8,000 of services
rendered.

In March 1998, we sold 564,443 shares of our common stock to Phoenix
Strategic Capital and an additional 282,224 shares of our common stock to
Theodore Kheel, Jeffrey Hughes, John Prince and William Shiebler at a price of
approximately $3.54 per share in exchange for an aggregate price of $3,000,000.

In March 1998, Phoenix Strategic Capital provided us with a $1.0 million
line of credit. In connection with this transaction Phoenix Strategic Capital
received a warrant to purchase 9,525 shares of our common stock at an exercise
price of approximately $4.72 per share.

II-2
<PAGE> 101

In July 1998, we sold 42,332 shares of our common stock at a price of
approximately $4.72 per share to H. Eugene Lockhart, a former director, in
exchange for $200,000.

In August 1998, we issued 2,937 shares of our common stock at a price of
approximately $4.72 per share to two persons in exchange for $13,875 of services
rendered.

In November 1998, we sold 152,400 shares of our common stock at a price of
approximately $4.72 per share to three investors for an aggregate price of
$720,000, including 12,700 shares which were sold to James Carthaus, who is
currently a director. We also issued 12,700 shares to an employee at a price of
approximately $4.72 per share in exchange for $60,000 of services rendered.

In December 1998, we sold 833,334 shares of our Series A convertible
preferred stock at a price of $6.00 per share and a warrant to purchase 260,000
shares of our Series A convertible preferred stock at an exercise price of $6.00
per share to The Union Labor Life Insurance Company, on behalf of its Separate
Account P (ULSAP), in exchange for an aggregate price of $5,000,000. We granted
a warrant to purchase 63,500 shares of our common stock at an exercise price of
approximately $4.72 per share to Seacris Group, Ltd. in exchange for services
rendered in connection with the December 1998 private placement. In March 1999,
we sold an additional 500,000 shares of our Series A convertible preferred stock
at a price of $6.00 per share and a warrant to purchase 40,000 shares of our
Series B convertible preferred stock at an exercise price of $9.00 per share to
ULSAP in exchange for a total price of $3,000,000.

In May 1999, we sold 333,334 shares of our Series A convertible preferred
stock at a price of $6.00 per share and warrants to purchase 33,020 shares of
our common stock at an exercise price of approximately $7.87 per share to W.
James Tozer, Jr. and Richard Field, both of whom are currently directors, in
exchange for an aggregate price of $2,000,000.

In July 1999, we issued 8% convertible promissory notes in an aggregate
principal amount of $1,750,000 and warrants to purchase 53,340 shares of our
common stock to Hovde Financial Institution Partners II, L.P., Hovde Investment
Corp., L.L.C., Norman Garrity, William N. Schiebler, Barbara A. and Peter A.
Georgescu, and John B. Prince in exchange for an aggregate price of $1,750,000
of which Norman Garrity, a family member of Douglas Lebda, provided $500,000 of
the financing and received a warrant to purchase 15,240 shares.

In July 1999, we issued 6,350 shares of our common stock at a price of
approximately $4.72 per share to an employee in exchange for $30,000 for
services rendered.

In September 1999, we sold 6,024,096 shares of our Series D convertible
preferred stock at a price per share of $8.30 for a total price of $50,000,000
to Capital Z, The Goldman Sachs Group, Inc., General Electric, priceline.com
Incorporated and Marsh & McLennan Risk Capital.

In connection with the September 1999 transaction, the warrants to purchase
series A and series B convertible preferred stock held by ULSAP were exchanged
for a warrant to purchase 381,000 shares of our common stock at an exercise
price of approximately $4.72 per share, and the convertible promissory notes
with a face amount of $1,750,000 held by investors were exchanged for 214,076
shares of Series D convertible preferred stock. We redeemed 282,222, 127,000 and
539,750 shares of common stock at a price per share of approximately $6.30, from
Phoenix Strategic Capital Corp., Donald Colby and Robert Wilson, respectively,
for a total price of $5,977,776. In addition, we granted a warrant to purchase
127,000 shares of common stock at an exercise price of approximately $7.52 per
share valued at $450,000 to Prudential Securities Inc. in exchange for services
rendered in connection with the September 1999 private placement. In January
2000, Prudential agreed to exchange the warrant for a new warrant to purchase
127,000 shares of common stock at an exercise price equal to the price paid by
public investors in the offering pursuant to its role as an underwriter.

In November 1999, we issued 78,633 shares of our Series A convertible
preferred stock to ULSAP and an aggregate of 9,184 shares of our Series A
convertible preferred stock to W. James Tozer, Jr. and Richard Field to satisfy
$527,000 of accrued dividends.

II-3
<PAGE> 102

In February 2000, we issued two warrants, each of which grants CNBC.com the
right to purchase 95,250 shares of common stock at an exercise price of
approximately $7.87 per share. One warrant will be immediately exerciseable and
one becomes exercisable on January 14, 2001.

From time to time, we have granted stock options to employees. No
underwriters were involved in connection with these sales and issuances. The
sales and issuances of these securities were exempt from registration under the
Securities Act pursuant to Rule 701 promulgated thereunder on the basis that
these options were offered and sold either pursuant to a written compensatory
benefit plan or pursuant to written contracts relating to consideration, as
provided by Rule 701 of the Securities Act. The following table sets forth
information regarding the grants during the past three fiscal years:

<TABLE>
<CAPTION>
NUMBER OF WEIGHTED AVERAGE
SHARES GRANTED EXERCISE PRICE
-------------- ----------------
<S> <C> <C>
January 1, 1997 through December 31, 1997...... 1,417,825 $1.07
January 1, 1998 through December 31, 1998...... 814,067 $4.70
January 1, 1999 through December 31, 1999...... 1,720,701 $5.43
</TABLE>

In March 1999, Mitchell York, our former president, exercised an option to
purchase 25,400 shares of our common stock for approximately $4.72 per share for
an aggregate of $120,000.

In September 1999, Donald Colby exercised an option to purchase 94,899
shares of our common stock for $1.43 per share. We repurchased 57,219 shares of
the common stock for a price of $6.30 share.

In January 2000, we agreed to issue to Douglas Lebda, our Chief Executive
Officer, an option to purchase up to 100,000 shares of our common stock with an
exercise price equal to the initial public offering price.

On February 9, 2000, Douglas Lebda, Keith Hall and James Bennett, Jr.
exercised options to purchase 49,828, 8,700, and 8,700 shares at exercise prices
of $5.00, $7.00, and $7.00 per share, respectively. In connection with these
option exercises and the payment of related income taxes, we agreed to loan
Messrs. Lebda, Hall and Bennett $500,000, $100,000 and $100,000, respectively.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits.

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ------ -----------
<C> <S>
1.1 Form of Purchase Agreement.
3.1** Form of Amended and Restated Certificate of Incorporation to
be in effect upon the closing of this offering.
3.2** Form of Amended and Restated Bylaws to be in effect upon the
closing of this offering.
4.1** Specimen Common Stock certificate.
4.2** Form of LendingTree's Rights Plan
5.1** Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
10.1** Employment Agreement between LendingTree, Inc. and Douglas
R. Lebda, dated September 2, 1999.
10.2** Employment Agreement between LendingTree, Inc. and Thomas J.
Reddin, dated November 26, 1999.
10.3** 1999 Stock Option Plan of LendingTree, Inc., dated November
20, 1999.
10.4** 1998 Stock Option Plan of LendingTree, Inc., dated February
3, 1998.
10.5** 1997 Stock Option Plan of CreditSource USA, Inc. (formerly
known as Lewisburg Ventures, Inc. and a predecessor to
LendingTree, Inc.), dated January 15, 1997.
</TABLE>

II-4
<PAGE> 103

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ------ -----------
<C> <S>
10.6 Internet, Marketing and Licensing Agreement between
LendingTree, Inc. and priceline.com Incorporated, dated as
of August 1, 1998.
10.6.1 Amendment No. 1 to Internet, Marketing and Licensing
Agreement between LendingTree, Inc. and priceline.com
Incorporated, dated as of January 26, 2000.
10.7** Registration Rights Agreement, dated September 20, 1999.
10.8** Warrant to Purchase 7,500 shares of Common Stock issued to
Phoenix Strategic Capital, dated November 30, 1998.
10.9** Warrant to Purchase 50,000 shares of Common Stock issued to
Seacris Group, Ltd., dated December 9, 1998.
10.10** Form of Warrant to purchase 13,000 shares of Common Stock
issued to Richard D. Field, dated May 25, 1999, as amended
September 20, 1999.
10.11** Warrant to Purchase 13,000 shares of Common Stock issued to
W. James Tozer, Jr., dated May 25, 1999, as amended
September 20, 1999.
10.12** Form of Warrant to grant a right to purchase an aggregate of
42,000 shares of Common Stock dated July 13, 1999.
10.13** Warrant to Purchase 300,000 shares of Common Stock issued to
The Union Labor Life Insurance Company, on behalf of its
Separate Account P, dated September 20, 1999.
10.14** Warrant to Purchase 100,000 shares of Common Stock issued to
Prudential, dated September 20, 1999.
10.15+ Co-Branded Site Agreement between LendingTree, Inc. and
CNBC.com LLC, dated as of January 14, 2000.
10.16** Warrant to Purchase 150,000 shares of Common Stock issued to
CNBC.com LLC, dated January 14, 2000.
10.17** Amended and Restated 1999 Stock Incentive Plan of
LendingTree, Inc.
10.18** Management Incentive Plan.
10.19** LendingTree, Inc. Deferred Compensation Plan for Employees.
10.20** LendingTree, Inc. Non-Employee Director Deferred
Compensation Plan.
10.21 Form of Promissory Note Issued by Douglas Lebda, for the
benefit of LendingTree, Inc.
10.22 Form of Pledge Agreement by Douglas Lebda for the benefit of
LendingTree, Inc.
10.23 LoanTrader.com, Inc. Series A Preferred Stock Purchase
Agreement, dated February 1, 2000.
23.1 Consent of PricewaterhouseCoopers LLP
23.2** Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1).
24.1** Powers of Attorney.
27.1** Financial Data Schedule.
</TABLE>

- ---------------
* To be supplied by amendment.

** Filed by previous amendment.

+ Confidential treatment has been requested for certain portions of this
document.

(b) Financial Statement Schedules.

None.

II-5
<PAGE> 104

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes to provide to the underwriters
at the closing specified in the purchase agreement, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424 (b)(1) or (4), or 497(h)
under the Securities Act of 1933, shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and this offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-6
<PAGE> 105

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Charlotte,
State of North Carolina, on this 10th day of February, 2000.

LENDINGTREE, INC.

By: /s/ DOUGLAS R. LEBDA
------------------------------------
Name: Douglas R. Lebda
Title: Chief Executive Officer and
Director

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated and on the date below:

<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
--------- -------- ----

<C> <S> <C>
/s/ DOUGLAS R. LEBDA Chief Executive Officer February 10, 2000
--------------------------------------------------- and Director (principal
Douglas R. Lebda executive officer)

* Senior Vice President, February 10, 2000
--------------------------------------------------- Chief Financial Officer
Keith B. Hall and Treasurer

* Vice President and February 10, 2000
--------------------------------------------------- Controller
Brian Regan

* Director February 10, 2000
---------------------------------------------------
James A. Carthaus

* Director February 10, 2000
---------------------------------------------------
Richard Field

* Director February 10, 2000
---------------------------------------------------
Robert Kennedy

* Director February 10, 2000
---------------------------------------------------
Daniel Charles Lieber

* Director February 10, 2000
---------------------------------------------------
Adam Mizel

* Director February 10, 2000
---------------------------------------------------
W. James Tozer, Jr.

*By: /s/ DOUGLAS R. LEBDA
---------------------------------------------
Douglas R. Lebda
Attorney-in-Fact
</TABLE>

II-7
<PAGE> 106

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
1.1 Form of Purchase Agreement.
3.1 ** Form of Amended and Restated Certificate of Incorporation to
be in effect upon the closing of this offering.
3.2 ** Form of Amended and Restated Bylaws to be in effect upon the
closing of this offering.
4.1 ** Specimen Common Stock certificate.
4.2 ** Form of LendingTree's Rights Plan
5.1 ** Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
10.1 ** Employment Agreement between LendingTree, Inc. and Douglas
R. Lebda, dated September 2, 1999.
10.2 ** Employment Agreement between LendingTree, Inc. and Thomas J.
Reddin, dated November 26, 1999.
10.3 ** 1999 Stock Option Plan of LendingTree, Inc., dated November
20, 1999.
10.4 ** 1998 Stock Option Plan of LendingTree, Inc., dated February
3, 1998.
10.5 ** 1997 Stock Option Plan of CreditSource USA, Inc. (formerly
known as Lewisburg Ventures, Inc. and a predecessor to
LendingTree, Inc.), dated January 15, 1997.
10.6 Internet, Marketing and Licensing Agreement between
LendingTree, Inc. and priceline.com Incorporated, dated as
of August 1, 1998.
10.6.1 Amendment No. 1 to Internet, Marketing and Licensing
Agreement between LendingTree, Inc. and priceline.com
Incorporated, dated as of January 26, 2000.
10.7 ** Registration Rights Agreement, dated September 20, 1999.
10.8 ** Warrant to Purchase 7,500 shares of Common Stock issued to
Phoenix Strategic Capital, dated November 30, 1998.
10.11** Warrant to purchase 13,000 shares of Common Stock issued to
W. James Tozer, Jr., dated May 25, 1999, as amended
September 20, 1999.
10.12** Form of Warrant to grant a right to purchase an aggregate of
42,000 shares of Common Stock dated July 13, 1999.
10.13** Warrant to Purchase 300,000 shares of Common Stock issued to
The Union Labor Life Insurance Company, on behalf of its
Separate Account P, dated September 20, 1999.
10.14** Warrant to Purchase 100,000 shares of Common Stock issued to
Prudential, dated September 20, 1999.
10.15+ Co-Branded Site Agreement between LendingTree, Inc. and
CNBC.com LLC, dated as of January 14, 2000.
10.16** Warrant to Purchase 150,000 shares of Common Stock issued to
CNBC.com LLC, dated January 14, 2000.
10.17** Amended and Restated 1999 Stock Incentive Plan of
LendingTree, Inc.
10.18** Management Incentive Plan.
10.19** LendingTree, Inc. Deferred Compensation Plan for Employees.
10.20** LendingTree, Inc. Non-Employee Director Deferred
Compensation Plan.
10.21 Form of Promissory Note Issued by Douglas Lebda for the
benefit of LendingTree, Inc.
10.22 Form of Pledge Agreement by Douglas Lebda for the benefit of
LendingTree, Inc.
10.23 LoanTrader.com, Inc. Series A Preferred Stock Purchase
Agreement, dated February 1, 2000.
23.1 Consent of PricewaterhouseCoopers LLP
</TABLE>

<PAGE> 107

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
23.2 ** Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1).
24.1 ** Powers of Attorney.
27.1 ** Financial Data Schedule.
</TABLE>

- ---------------
* To be supplied by amendment.

** Filed by previous amendment.

+ Confidential treatment has been requested for certain portions of this
document.

<PAGE> 1
Exhibit 1.1

LENDINGTREE, INC.
(a Delaware corporation)

____ Shares of Common Stock

PURCHASE AGREEMENT

Dated: February , 2000

<PAGE> 2
TABLE OF CONTENTS

PAGE
<S> <C>
SECTION 1. Representations and Warranties....................................................................... 2
(a) Representations and Warranties by the Company................................................... 3
(i) Compliance with Registration Requirements............................................. 3
(ii) Independent Accountants............................................................... 3
(iii) Financial Statements.................................................................. 4
(iv) No Material Adverse Change in Business................................................ 4
(v) Good Standing of the Company.......................................................... 4
(vi) Subsidiaries.......................................................................... 4
(vii) Capitalization........................................................................ 4
(viii) Authorization of Agreement............................................................ 5
(ix) Authorization and Description of Securities........................................... 5
(x) Absence of Defaults and Conflicts..................................................... 5
(xi) Absence of Labor Dispute.............................................................. 6
(xii) Absence of Proceedings................................................................ 6
(xiii) Accuracy of Exhibits.................................................................. 6
(xiv) Possession of Intellectual Property................................................... 6
(xv) Absence of Further Requirements....................................................... 6
(xvi) Possession of Licenses and Permits.................................................... 6
(xvii) Title to Property..................................................................... 7
(xviii) Investment Company Act................................................................ 7
(xix) Registration Rights................................................................... 7
(xx) Absence of Regulatory Violations...................................................... 7
(xxi) Absence of Regulatory Proceedings..................................................... 8
(xxii) Insurance Coverage.................................................................... 8
(xxiii) Internal Accounting Controls.......................................................... 8
(xxiv) Federal Income Tax Returns............................................................ 8
(b) Officer's Certificates.......................................................................... 8

SECTION 2. Sale and Delivery to Underwriters; Closing........................................................... 9

(a) Initial Securities.............................................................................. 9
(b) Option Securities............................................................................... 9
(c) Payment......................................................................................... 9
(d) Denominations; Registration..................................................................... 10

SECTION 3. Covenants of the Company............................................................................. 10

(a) Compliance with Securities Regulations and Commission Requests.................................. 10
(b) Filing of Amendments............................................................................ 10
(c) Delivery of Registration Statements............................................................. 11
(d) Delivery of Prospectuses........................................................................ 11
(e) Continued Compliance with Securities Laws....................................................... 11
(f) Blue Sky Qualifications......................................................................... 12
(g) Rule 158........................................................................................ 12
</TABLE>

i
<PAGE> 3

<TABLE>
<S> <C>
(h) Use of Proceeds................................................................................. 12
(i) Listing......................................................................................... 12
(j) Restriction on Sale of Securities............................................................... 12
(k) Reporting Requirements.......................................................................... 13
(l) Compliance with NASD Rules...................................................................... 13

SECTION 4. Payment of Expenses.................................................................................. 13

(a) Expenses........................................................................................ 13
(b) Termination of Agreement ....................................................................... 14

SECTION 5. Conditions of Underwriters' Obligations.............................................................. 14

(a) Effectiveness of Registration Statement......................................................... 14
(b) Opinions of Counsel for Company................................................................. 14
(c) Opinion of Counsel for Underwriters............................................................. 14
(d) Officers' Certificate........................................................................... 15
(e) Accountant's Comfort Letter..................................................................... 15
(f) Bring-down Comfort Letter....................................................................... 15
(g) Approval of Listing............................................................................. 15
(h) No Objection.................................................................................... 15
(i) Lock-up Agreements.............................................................................. 15
(j) Conditions to Purchase of Option Securities..................................................... 15
(i) Officers' Certificate................................................................. 16
(ii) Opinions of Counsel for Company....................................................... 16
(iii) Opinion of Counsel for Underwriters................................................... 16
(iv) Bring-down Comfort Letter............................................................. 16
(k) Additional Documents............................................................................ 16
(l) Termination of Agreement........................................................................ 16
SECTION 6. Indemnification...................................................................................... 16

(a) Indemnification of Underwriters................................................................. 17
(b) Indemnification of Company, Directors and Officers.............................................. 17
(c) Actions against Parties; Notification........................................................... 18
(d) Settlement without Consent if Failure to Reimburse.............................................. 18
(e) Indemnification for Reserved Securities......................................................... 18

SECTION 7. Contribution......................................................................................... 19

SECTION 8. Representations, Warranties and Agreements to Survive Delivery....................................... 20

SECTION 9. Termination of Agreement............................................................................. 20

(a) Termination; General............................................................................ 20
(b) Liabilities..................................................................................... 21

SECTION 10. Default by One or More of the Underwriters.......................................................... 21

SECTION 11. Notices............................................................................................. 21

SECTION 12. Parties............................................................................................. 22
</TABLE>

ii
<PAGE> 4

<TABLE>
<S> <C>
SECTION 13. GOVERNING LAW AND TIME.............................................................................. 22

SECTION 14. Effect of Headings.................................................................................. 22

SCHEDULES
Schedule A - List of Underwriters............................................................. Sch A-1
Schedule B - Pricing Information.............................................................. Sch B-1
Schedule C - List of Persons and Entities Subject to Lock-up.................................. Sch C-1

EXHIBITS
Exhibit A- Form of Opinion of Company's Counsel............................................. A-1
Exhibit B- Form of Opinion of Special Regulatory Counsel to Company......................... B-1
Exhibit C- Form of Lock-up Letter........................................................... C-1
</TABLE>

iii
<PAGE> 5
Draft of February 8, 2000

LendingTree, Inc.
(a Delaware corporation)

3,650,000 Shares of Common Stock
(Par Value $.01 Per Share)

PURCHASE AGREEMENT

____________, 2000
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Lehman Brothers Inc.
Prudential Securities Incorporated
as Representatives of the
several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209

Ladies and Gentlemen:

LendingTree, Inc., a Delaware corporation (the "Company"), confirms its
agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") and each of the other underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch, Lehman Brothers Inc. and Prudential Securities
Incorporated are acting as representatives (in such capacity, the
"Representatives"), with respect to the issuance and sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $.01 per share, of the
Company ("Common Stock") set forth in said Schedule A, and with respect to the
grant by the Company to the Underwriters, acting severally and not jointly, of
the option described in Section 2(b) hereof to purchase all or any part of
547,500 additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 3,650,000 shares of Common Stock (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 547,500 shares of
Common Stock subject to the option described in Section 2(b) hereof (the "Option
Securities") are hereinafter called, collectively, the "Securities."

The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
<PAGE> 6
The Company and the Underwriters agree that up to -- shares of the
Initial Securities to be purchased by the Underwriters (the "Reserved
Securities") shall be reserved for sale by the Underwriters to certain eligible
employees and persons having business and other relationships with the Company,
as part of the distribution of the Securities by the Underwriters, subject to
the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. and all
other applicable laws, rules and regulations. To the extent that such Reserved
Securities are not orally confirmed for purchase by such eligible employees and
persons having business and other relationships with the Company by the end of
the first business day after the date of this Agreement, such Reserved
Securities may be offered to the public as part of the public offering
contemplated hereby.

The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-91839) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in any such prospectus or in any such Term Sheet, as the
case may be, that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective (1) pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information" or (2) pursuant to paragraph (d) of Rule
434 is referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto and schedules thereto at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final prospectus in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is herein
called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall
refer to the preliminary prospectus dated --, 2000, together with the applicable
Term Sheet, and all references in this Agreement to the date of such Prospectus
shall mean the date of the applicable Term Sheet. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus, or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR").

SECTION 1. Representations and Warranties.

2
<PAGE> 7
(a) Representations and Warranties by the Company The Company represents
and warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:

(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
from the Company has been complied with.

At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Prospectus, any preliminary prospectus and any supplement thereto or
prospectus wrapper prepared in connection therewith, at their
respective times of delivery and at the Closing Time, complied and will
comply in all material respects with any applicable laws or regulations
of foreign jurisdictions in which the Prospectus and such preliminary
prospectus, as amended or supplemented, if applicable, are distributed
by the Company in connection with the offer and sale of Reserved
Shares. Neither the Prospectus nor any amendments or supplements
thereto (including any prospectus wrapper), at the time the Prospectus
or any such amendments or supplements were delivered and at the Closing
Time (and, if any Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If Rule 434 is used, the
Company will comply with the requirements of Rule 434 and the
Prospectus shall not be "materially different," as such term is used in
Rule 434, from the prospectus included in the Registration Statement at
the time it became effective. The representations and warranties in
this subsection shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto).

Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to

3
<PAGE> 8
the Underwriters for use in connection with this offering was identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.

(ii) Independent Accountants. The accountants who certified the financial
statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933
Act and the 1933 Act Regulations.

(iii) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly in all material respects the
financial position of the Company at the dates indicated and the
statement of operations, shareholders' equity (deficit) and cash flows
of the Company for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data
and the summary financial information included in the Prospectus
present fairly in all material respects the information shown therein
and have been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement.

(iv) No Material Adverse Change in Business. Since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by
the Company, other than those in the ordinary course of business, which
are material with respect to the Company, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock (other than dividends with
respect to the Series A and Series D Convertible Preferred Stock of the
Company).

(v) Good Standing of the Company. The Company has been duly organized and
is validly existing as a corporation in good standing under the laws of
the State of Delaware and has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as
a foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.

(vi) Subsidiaries. The Company has no subsidiaries.

4
<PAGE> 9
(vii) Capitalization. The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or
options referred to in the Prospectus). The shares of issued and
outstanding capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company arising by operation of law, under the
charter or bylaws of the Company or under any agreement to which the
Company is a party or by which it may be bound.

(viii) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.

(ix) Authorization and Description of Securities. The Securities to be
purchased by the Underwriters from the Company have been duly
authorized for issuance and sale to the Underwriters pursuant to this
Agreement, and, when issued and delivered by the Company pursuant to
this Agreement, against payment of the consideration set forth herein,
will be validly issued, fully paid and non-assessable; the Common Stock
conforms to all statements relating thereto contained in the Prospectus
and such description conforms to the rights set forth in the
instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and the
issuance of the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Company arising by
operation of law, under the charter or bylaws of the Company or under
any agreement to which the Company is a party or by which it may be
bound.

(x) Absence of Defaults and Conflicts. The Company is not in violation of
its charter or by-laws or in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company is a
party or by which it may be bound, or to which any of the property or
assets of the Company is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated in
this Agreement and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from
the sale of the Securities as described in the Prospectus under the
caption "Use of Proceeds") and compliance by the Company with its
obligations under this Agreement have been duly authorized by all
necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will

5
<PAGE> 10
such action result in any violation of the provisions of the charter or
by-laws of the Company or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company.

(xi) Absence of Labor Dispute. No labor dispute with the employees of the
Company exists or, to the knowledge of the Company, is imminent.

(xii) Absence of Proceedings. There is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company, which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which might reasonably be expected to result in
a Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets of the Company
or the consummation of the transactions contemplated in this Agreement
or the performance by the Company of its obligations hereunder; the
aggregate of all pending legal or governmental proceedings to which the
Company is a party or of which any of its property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, would
not reasonably be expected to result in a Material Adverse Effect.

(xiii) Accuracy of Exhibits. There are no contracts or documents which are
required to be filed as exhibits to the Registration Statement which
have not been so filed as required.

(xiv) Possession of Intellectual Property. Except as disclosed in the
Prospectus, the Company owns or possesses, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to conduct its businesses as now being conducted and as described in
the Prospectus, and the Company has not received any notice or is
otherwise aware of any infringement of or conflict with asserted rights
of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.

(xv) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or
decree of, any court or

6
<PAGE> 11
governmental authority or agency is necessary or required for the
performance by the Company of its obligations under this Agreement, in
connection with the offering, issuance or sale of the Securities under
this Agreement or the consummation of the transactions contemplated by
this Agreement, except such as have been already obtained or as may be
required under the 1933 Act or the 1933 Act Regulations and foreign or
state securities or blue sky laws.

(xvi) Possession of Licenses and Permits. Except as disclosed in the
Prospectus, the Company possesses such permits, certificates, licenses,
approvals, orders, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state or
local regulatory authorities, agencies or bodies (including, without
limitation, bank regulatory authorities) necessary to conduct its
business as now being conducted and as described in the Prospectus,
except where the failure to possess such Governmental Licenses would
not, singly or in the aggregate, have a Material Adverse Effect; the
Company is in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not
have a Material Adverse Effect; and the Company has not received any
notice of proceedings relating to the revocation or modification of any
such Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in
a Material Adverse Effect.

(xvii) Title to Property. The Company does not own any real property. The
Company has good title to all other properties owned by them, free and
clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
affect the value of such property in a manner material to the Company
and do not interfere with the use made and proposed to be made of such
property by the Company in a manner material to the Company; and all of
the leases and subleases material to the business of the Company, and
under which the Company holds properties described in the Prospectus,
are or will be in full force and effect as described in the Prospectus,
and the Company has no notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company under
any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company to the continued possession of
the leased or subleased premises under any such lease or sublease.

(xviii) Investment Company Act. The Company is not, and upon the issuance and
sale of the Securities as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus will not be,
an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended (the "1940 Act").

(xix) Registration Rights. There are no persons with registration rights or
other similar rights to have any securities registered pursuant to the
Registration Statement or

7
<PAGE> 12
otherwise registered by the Company under the 1933 Act, except pursuant
to the Registration Rights Agreement, dated September 20, 1999, among
the Company and the shareholders named therein and the joinder thereto
dated February , 2000 as described in the Prospectus, which rights are
not applicable to the offering contemplated by the Registration
Statement.

(xx) Absence of Regulatory Violations. Except as set forth in the
Prospectus, the Company is not in violation of any federal, state or
local law or regulation, including, but not limited to, the Truth in
Lending Act and Regulation Z, the Home Ownership and Equity Protection
Act of 1994, the Equal Credit Opportunity Act and Regulation B, the
Fair Housing Act, the Fair Credit Reporting Act and Regulation X, the
Home Mortgage Disclosure Act of 1975 and Regulation C, or the rules and
regulations promulgated thereunder, relating to the conduct of its
business as now being conducted and as described in the Prospectus,
except for such violations which, singly or in the aggregate, would not
result in a Material Adverse Effect.

(xxi) Absence of Regulatory Proceedings. Other than as set forth in the
Prospectus, neither the Company nor any of its officers or directors is
a party to or subject to the provisions of any regulatory action,
injunction, judgment, decree or order of any federal, state or local
regulatory authority, agency or body (including, without limitation,
any bank regulatory authority), nor is the Company aware of any charge,
action, suit, proceeding or investigation against the Company or any of
its officers or directors pending before or to the Company's knowledge
threatened by any federal, state or local regulatory authority, agency
or body (including, without limitation, any bank regulatory authority).

(xxii) Insurance Coverage. The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the business in which it is
engaged; and the Company has no reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a
Material Adverse Effect.

(xxiii) Internal Accounting Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.

(xxiv) Federal Income Tax Returns. All United States federal income tax
returns of the Company required by law to be filed have been filed and
all taxes shown by such returns or otherwise assessed, which are due
and payable, have been paid, except

8
<PAGE> 13
assessments against which appeals have been or will be promptly taken
and as to which adequate reserves have been provided. The Company has
filed all other tax returns that are required to have been filed by it
pursuant to applicable foreign, state, local or other law and has paid
all taxes due pursuant to such returns or pursuant to any assessment
received by the Company, except for such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been
provided. The charges, accruals and reserves on the books of the
Company in respect of any income and corporation tax liability for any
years not finally determined are adequate to meet any assessments or
re-assessments for additional income tax for any years not finally
determined.

(b) Officer's Certificates. Any certificate signed by any officer of
the Company delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company to each Underwriter
as to the matters covered thereby.

SECTION 2. Sale and Delivery to Underwriters; Closing.

(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule B, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.

(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional 547,500 shares of Common Stock
at the price per share set forth in Schedule B, less an amount per share equal
to any dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Representatives to the Company setting
forth the number of Option Securities as to which the several Underwriters are
then exercising the option and the time and date of payment and delivery for
such Option Securities. Any such time and date of delivery for the Option
Securities (a "Date of Delivery") shall be determined by the Representatives,
but shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the Option Securities, each
of the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter bears to the total number of Initial Securities, subject in
each case to such adjustments as the Representatives in their discretion shall
make to eliminate any sales or purchases of fractional shares.

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<PAGE> 14
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Brown &
Wood LLP, One World Trade Center, New York, New York 10048 or at such other
place as shall be agreed upon by the Representatives and the Company, at 9:00
A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by
Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time").

In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.

Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Merrill Lynch, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.

(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
two full business days before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.

SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:

(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Representatives immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order

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<PAGE> 15
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.

(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file any amendment to the Registration Statement
(including any filing under Rule 462(b)), any Term Sheet or any amendment,
supplement or revision to either the prospectus included in the Registration
Statement at the time it became effective or to the Prospectus, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters shall reasonably object.

(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.

(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the Securities
Exchange Act of 1934 (the "1934 Act"), such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.

(e) Continued Compliance with Securities Laws The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the Prospectus
will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend

11
<PAGE> 16
or supplement the Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request. The Underwriters shall
notify the Company upon their completion of the distribution of the Securities
as contemplated by the Prospectus.

(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.

(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.

(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."

(i) Listing. The Company will use its best efforts to effect and
maintain the quotation of the Securities on the Nasdaq National Market and will
file with the Nasdaq National Market all documents and notices required by the
Nasdaq National Market of companies that have securities that are traded in the
over-the-counter market and quotations for which are reported by the Nasdaq
National Market.

(j) Restriction on Sale of Securities. During a period of 180 days from
the date of the Prospectus, the Company will not, without the prior written
consent of Merrill Lynch, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Common Stock or any securities convertible
into or exercisable or

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<PAGE> 17
exchangeable for Common Stock or file any registration statement under the 1933
Act, other than a registration statement of Form S-8, with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder, (B) any
shares of Common Stock issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding (including the payment of
accrued dividends) on the date hereof and referred to in the Prospectus, (C) any
shares of Common Stock issued or options to purchase Common Stock granted
pursuant to existing employee benefit plans of the Company referred to in the
Prospectus or (D) any shares of Common Stock issued pursuant to any non-employee
director stock plan or dividend reinvestment plan. The Company agrees not to,
without the prior written consent of Merrill Lynch on behalf of the
Underwriters, release any stockholder or optionholder from any agreement with
the Company, whether by contract or by law, whereby such person or entity has
agreed not to sell or otherwise transfer or dispose of any Common Stock (or
other securities) of the Company for a period of up to 180 days following the
commencement of the public offering of the Common Stock by the Underwriters or
otherwise.

(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.

(l) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the
National Association of Securities Dealers, Inc. (the "NASD") or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of three
months following the date of this Agreement. The Underwriters will notify the
Company as to which persons will need to be so restricted. The Company further
agrees that it will ensure that any shares issued to Prudential Securities
Incorporated upon its exercise of its warrant to purchase 217,000 shares of
Common Stock (the "Prudential Shares") will be restricted as required by the
NASD or the NASD rules from sale, transfer, assignment, pledge or hypothecation
for a period of one year from the date of this Agreement. At the request of the
Underwriters, the Company will direct the transfer agent to place a stop
transfer restriction upon such securities for such period of time. Should the
Company release from such restrictions any of the Reserved Securities or the
Prudential Shares, the Company agrees to reimburse the Underwriters for any
reasonable expenses (including, without limitation, legal expenses) they incur
in connection with such release.

SECTION 4. Payment of Expenses.

(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required

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<PAGE> 18
in connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of the
transfer agent and registrar for the Securities, (ix) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the NASD of the terms of the sale of the
Securities, (x) the fees and expenses incurred in connection with the inclusion
of the Securities in the Nasdaq National Market, and (xi) all costs and expenses
of the Underwriters, including the fees and disbursements of counsel for the
Underwriters, in connection with matters related to the Reserved Securities
which are designated by the Company for sale to employees and others having a
business or other relationship with the Company.

(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.

SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:

(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).

(b) Opinions of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinions, dated as of Closing
Time, of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel for the
Company, and Negroni & Kromer, PLLC, special

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<PAGE> 19
regulatory counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of such
opinion letters for each of the other Underwriters, to the effect set forth in
Exhibit A and Exhibit B hereto, respectively, and to such further effect as
counsel to the Underwriters may reasonably request.

(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Brown & Wood LLP, counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters, with
respect to the matters set forth in [clauses (i), (ii), (v), (vi) (solely as to
preemptive or other similar rights arising by operation of law or under the
charter or by-laws of the Company), (viii) through (x), inclusive, (xii), (xiv)
(solely as to the information in the Prospectus under "Description of Capital
Stock--Common Stock") and the penultimate paragraph of Exhibit A hereto]. In
giving such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York, the federal
law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representatives. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and certificates of public officials.

(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the Chief Executive Officer
or a Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect that
(i) there has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or, to the
Company's knowledge, are contemplated by the Commission.

(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from PricewaterhouseCoopers
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.

(f) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from PricewaterhouseCoopers LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.

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<PAGE> 20
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for inclusion in the Nasdaq National Market, subject only to
official notice of issuance.

(h) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.

(i) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit C hereto signed by the persons listed on Schedule C hereto.

(j) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company hereunder shall be true and correct as of each Date of Delivery
and, at the relevant Date of Delivery, the Representatives shall have received:

(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the Chief Executive Officer or a Vice President of the
Company and of the chief financial or chief accounting officer of the
Company confirming that the certificate delivered at the Closing Time
pursuant to Section 5(d) hereof remains true and correct as of such
Date of Delivery.

(ii) Opinions of Counsel for Company. The favorable opinions
of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel for the
Company, and Negroni & Kromer, PLLC, special regulatory counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinions required by Section 5(b) hereof.

(iii) Opinion of Counsel for Underwriters. The favorable
opinion of Brown & Wood LLP, counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.

(iv) Bring-down Comfort Letter. A letter from
PricewaterhouseCoopers LLP, in form and substance satisfactory to the
Representatives and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the Representatives
pursuant to Section 5(f) hereof, except that the "specified date" in
the letter furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.

(k) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or

16
<PAGE> 21
warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Company in connection with the issuance and sale of
the Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and counsel for the Underwriters.

(l) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities, may be
terminated by the Representatives by notice to the Company at any time at or
prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.

SECTION 6. Indemnification.

(a) Indemnification of Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:

(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of (A) the violation of
any applicable laws or regulations of foreign jurisdictions resulting
from the offering of Reserved Securities and (B) any untrue statement
or alleged untrue statement of a material fact included in the
supplement or prospectus wrapper material distributed in foreign
jurisdictions in connection with the reservation and sale of the
Reserved Securities to eligible employees and persons having business
and other relationships with the Company or the omission or alleged
omission therefrom of a material fact necessary to make the statements
therein, when considered in conjunction with the Prospectus or
preliminary prospectus, not misleading;

(iii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission or in
connection with any

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<PAGE> 22
violation referred to in Section 6(a)(ii)(A) hereof; provided that
(subject to Section 6(d) below) any such settlement is effected with
the written consent of the Company; and

(iv) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission or in connection with any
violation referred to in Section 6(a)(ii)(A) hereof, to the extent that
any such expense is not paid under (i) or (ii) above;

provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through
Representatives expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule
434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).

(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).

(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the

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<PAGE> 23
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

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

(e) Indemnification for Reserved Securities. In connection with the
offer and sale of the Reserved Securities, the Company agrees, promptly upon a
request in writing, to indemnify and hold harmless the Underwriters from and
against any and all losses, liabilities, claims, damages and expenses incurred
by them as a result of the failure of eligible employees of, and certain other
persons having business or other relationships with, the Company to pay for and
accept delivery of Reserved Securities which, by the end of the first business
day following the date of this Agreement, were subject to a properly confirmed
agreement to purchase. The Underwriters agree to use their reasonable efforts to
sell any such Reserved Securities to other purchasers as part of the public
offering contemplated hereby and to apply the proceeds from any such sale
against any losses, liabilities, claims, damages and expenses incurred by the
Underwriters as a result of the failure of the Reserved Securities participants
to pay for and accept delivery of such Reserved Securities.

SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of

19
<PAGE> 24
the Company on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions, or in connection with any violation
of the nature referred to in Section 6(a)(ii)(A) which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.

The relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Securities pursuant to
this Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus, or, if Rule 434 is used, the corresponding location
on the Term Sheet, bear to the aggregate initial public offering price of the
Securities as set forth on such cover.

The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission or in connection with any violation of the nature referred
to in Section 6(a)(ii)(A).

The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.

Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.

No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall

20
<PAGE> 25

have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.

SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Company, and shall survive delivery of the Securities to
the Underwriters.

SECTION 9. Termination of Agreement.

(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the Nasdaq National Market, or if trading generally on the New
York Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the NASD or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.

(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.

SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:

21
<PAGE> 26

(a) if the number of Defaulted Securities does not exceed 10%
of the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or

(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the Underwriters to purchase and of the Company
to sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting Underwriter.

No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.

In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the
right to postpone Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.

SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281-1201 attention of Lee Shavel,
Director; and notices to the Company shall be directed to it at 6701 Carmel
Road, Suite 205, Charlotte, North Carolina 28226, attention of [General
Counsel].

SECTION 12. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.

22
<PAGE> 27

SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.

SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.

23
<PAGE> 28

If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.

Very truly yours,

LENDINGTREE, INC.

By: ________________________________
Name:
Title:

CONFIRMED AND ACCEPTED,
as of the date first above written:

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
LEHMAN BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED

By: _____________________________
Authorized Signatory

For themselves and as Representatives of the other
Underwriters named in Schedule A hereto.

24
<PAGE> 29

SCHEDULE A

<TABLE>
<CAPTION>
Number of
Name of Underwriter Initial Securities
------------------- ------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...........................
Lehman Brothers Inc.....................................
Prudential Securities Incorporated......................
----------
Total................................................... 3,650,000
==========
</TABLE>

Sch A-1
<PAGE> 30

SCHEDULE B
LendingTree, Inc.
3,650,000 Shares of Common Stock
(Par Value $.01 Per Share)

1. The initial public offering price per share for the
Securities, determined as provided in said Section 2, shall be $--.

2. The purchase price per share for the Securities to be paid
by the several Underwriters shall be $--, being an amount equal to the
initial public offering price set forth above less $-- per share;
provided that the purchase price per share for any Option Securities
purchased upon the exercise of the over-allotment option described in
Section 2(b) shall be reduced by an amount per share equal to any
dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities.

Sch B-1
<PAGE> 31

SCHEDULE C
List of persons and entities
subject to lock-up

David Anderson
Scott Barbour
Thomas Barnes
Paul Barrows
James F. Bennett, Jr.
J. Borthwick
Reginald Bowser
Capital Z Financial Services Fund II, L.P.
Capital Z Financial Services Private Fund II, L.P.
Steven Campbell
James A. Carthaus
Don Colby
Chris Cox
Kenneth D. Cron
Henry Donahue
Richard D. Field
Robert Flemma
Pamela Friedman
Financial Institution Partners II, L.P.
Hovde Investment Corp., L.L.C.
Garrity Investments LLC
General Electric Capital Assurance Company
GE Capital Residential Connections Corporation
Peter A. Georgescu
Barbara A. Georgescu
Brad Gilliam
The Goldman Sachs Group, Inc./Stone Street Fund 1999, L.P.
Kim Gorsuch
Keith Hall
Chris Harvey
Julianne Herbster
Hovde Financial Corp
Jeffrey P. Hughes
Jerry J. Jasinowski
Jeffrey Jones
Sonia Kappel
Theodore W. Kheel
Ejnar Knudsen
Douglas R. Lebda
Tara G. Lebda

Sch C-1
<PAGE> 32

Gene Lockhart
Joel Lowery
Roger Lynch
Jeffrey Lyons
Nelson Macy
Marsh & McLennan Capital Professionals Fund, L.P.
Marsh & McLennan Capital Technology Venture Fund, L.P.
Marsh & McLennan Capital Technology Professionals Venture Fund, L.P.
Marsh & McLennan Employees Securities Company, L.P.
Mark Mead
Michelle Miller
Robert Mnuchin
Diana Morgan
Matthew Packey
Phoenix Strategic Capital Corporation
David Pollet
Dana Poore
John Porta
J. Edward Powell
priceline.com Incorporated
Courtney Prince
John B. Prince
Matthew Prince
Prudential Securities Incorporated
Robert Racine
Virginia Rebata
Thomas Reddin
Brian Regan
Tamela Rich
Mike Ricks
Deborah Roth
Robert Sanderson
The Seacris Group, Ltd.
Andrew Seamons
Alfred L. Scott
Raju Shah
William N. Shiebler
Richard Stiegler
Richard Taylor
W. James Tozer, Jr.
The Union Labor Life Insurance Company

Sch C-2
<PAGE> 33
Neil Umhafer
Rebecca Whitaker
Robert G. Wilson
Steven Wilt
John Woody
Mitchell York
Zoel Management LTD

Sch C-3
<PAGE> 34

Exhibit A

FORM OF OPINION OF COMPANY'S SPECIAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)

[TO BE INSERTED]

A-1
<PAGE> 35

Exhibit B

FORM OF OPINION OF COMPANY'S SPECIAL REGULATORY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)

[TO BE INSERTED]

B-1
<PAGE> 36

[FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR
OTHER STOCKHOLDERS PURSUANT TO SECTION 5(i)]

Exhibit C

-- , 2000

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
LEHMAN BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209

Re: Proposed Public Offering by LendingTree, Inc.

Dear Sirs:

The undersigned, a stockholder [and an officer and/or director] of
LendingTree, Inc., a Delaware corporation (the "Company"), understands that
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), Lehman Brothers Inc. and Prudential Securities Incorporated
propose to enter into a purchase agreement (the "Purchase Agreement") with the
Company providing for the public offering of shares (the "Securities") of the
Company's common stock, par value $.01 per share (the "Common Stock"). In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder [and an officer and/or director] of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each underwriter to
be named in the Purchase Agreement, respectively, that, during a period of 180
days from the date of the Purchase Agreements, the undersigned will not, without
the prior written consent of Merrill Lynch, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company's
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction is to be settled by delivery
of Common Stock or other securities, in cash or otherwise.

C-1
<PAGE> 37

Very truly yours,

Signature: __________________________

Print Name: _________________________

C-2

<PAGE> 1
Exhibit 10.6

INTERNET MARKETING AND LICENSING AGREEMENT BETWEEN
LENDINGTREE, INC. AND PRICELINE.COM INCORPORATED

THIS INTERNET MARKETING AND LICENSING AGREEMENT (this "Agreement")
between LendingTree, Inc., a Delaware corporation with its principal place of
business at 6701 Carmel Road, Suite 205, Charlotte, NC 28226 ("LendingTree"),
and priceline.com Incorporated, a Delaware corporation with its principal place
of business at Five High Ridge Park, Stamford, CT 06903 ("Priceline"). This
Agreement shall be effective as of August 1, 1998 (the "Effective Date").

WITNESSETH:

WHEREAS, LendingTree has developed a multiple lender consumer loan
origination software program and a web site, currently located at
http://www.lendingtree.com, through which it acts as a mortgage loan broker or
loan broker offering consumers the opportunity to obtain competitive loan offers
from participating lenders in connection with various loan products, including
mortgage loans, home equity lines of credit, credit cards, automobile loans and
unsecured personal loans.

WHEREAS, Priceline has developed a web site, currently located at
http://www.priceline.com, which markets various products and services using a
"name your price" model. Priceline desires to make available to users of its web
site certain mortgage loan, home equity loan and home equity line of credit
products.

WHEREAS, LendingTree desires to expand its distribution channel for its
mortgage loan brokerage services via a co-branded web site hosted and marketed
by Priceline which employs Priceline's "name your price" model.

NOW, THEREFORE, in consideration of the premises, the mutual covenants,
agreements and respective representations and warranties contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

1. DEFINITIONS

1.1 "Derivatives" means (i) for copyrightable or copyrighted
material, any translation, abridgment, revision, or other form
in which such material may be recast, transformed, or adapted
and any new material derived from such existing copyrightable
material; (ii) for patentable or patented material, any
improvement thereon; and (iii) for material or information
which is confidential, proprietary or trade secret, any new
material or information derived from such existing
confidential, proprietary or trade secret material, including
new material or information that are or may be protected by
copyright, patent and/or trade secret or similar laws, or
agreements providing for non-disclosure of any of the
foregoing.

1.2 "Mortgage Content" means software applications and content, in
the form of various calculators and other interactive tools,
as well as articles regarding consumer credit and mortgages,
lender and product descriptions and other data, graphics, and
material provided by LendingTree from time to time for
incorporation into the Mortgage Web Pages.
<PAGE> 2
1.3 "Mortgage Loan" means a loan made to a consumer borrower that
is secured by a Mortgage, deed of trust or other lien on
residential real property located in the United States of
America, including but not limited to, a first mortgage loan,
subordinate lien mortgage loan, home equity loan, and home
equity line of credit.

1.4 "Mortgage Web Pages" means the area of the Priceline web site
through which LendingTree will offer its mortgage brokerage
services. The Mortgage Web Pages will be co-branded by the use
of both parties' trademarks, tradenames, logos, or
designations, as agreed to by the parties in accordance with
the terms of this Agreement.

1.5 "Net Revenue" means the total of all revenue earned and
received by LendingTree from lenders, including but not
limited to transmission fees and loan origination fees, as a
result of its mortgage brokerage services in operating the
Mortgage Web Pages ("Revenue"), minus the actual cost of (i)
credit scores and credit report fees incurred by LendingTree,
and (ii) LendingTree's operation of a dedicated Mortgage Web
Pages customer service center, in an amount equal to the
actual salaries, wages and payroll expenses paid by
LendingTree in connection with such customer service center
staff ("Staff Expenses"), plus actual telephone expenses for
the dedicated customer service center staff and overhead
expenses equal to thirty percent (30%) of such Staff Expenses
(items (i) and (ii) of this Section 1.5 being collectively
referred to herein as the "Revenue Deductions"). The parties
hereto acknowledge that in the start up of this relationship,
there are likely to be delays in LendingTree's receipt of
Revenue. As such, the parties intend and agree that any
Revenue Deductions related to these delays will be carried
forward and offset against Revenues received at a later date.

1.6 "Priceline Name Your Price/Conditional Purchase Model" means
the product distribution model utilized by Priceline on its
web site under which a consumer identifies a specific price
and terms under which he or she will purchase a product or
service, and Priceline attempts to find a seller willing to
sell the product or service to the consumer on the terms
identified by the consumer. In the context of this Agreement
and the Mortgage Web Pages, the term shall refer to a business
model in which (i) a consumer identifies Mortgage Loan terms,
including interest rate, points and loan term, under which he
or she is willing to obtain a specified Mortgage Loan. To the
extent permitted by applicable law, the Priceline Name Your
Price/Conditional Purchase Model may include the delivery to a
lender by the consumer of a fee to be used by that lender to
offset certain third party or other related costs or expenses,
all or a part of which fee may be forfeited by the consumer if
the loan fails to close due the substantial fault of the
consumer. In addition, the Priceline Name Your
Price/Conditional Purchase Model contemplates a counteroffer
process, wherein a lender, although unable to offer a consumer
the mortgage loan on the specific terms requested, is able to
provide the consumer with an acceptable counteroffer.

1.7 "LendingTree Model" means the product distribution model
utilized by LendingTree on its website wherein consumers
complete a qualification form encompassing product, rate, term
and other preferences, along with traditional loan application
data and other information that LendingTree may from time to
time request, which information is then submitted to a network
of participating lenders who have previously provided
LendingTree with credit related criteria for use in
LendingTree's proprietary filtering system. The qualification
form along with certain credit report and credit scoring

2
<PAGE> 3
information ("Consumer Information") is then presented to the
lenders who review that Consumer Information and bid for that
consumer's business.

1.8 "Proprietary Marks" means the trade names, servicemarks,
trademarks, tradenames, logos, emblems designations, and
indicia of origin specified in Exhibit A or subsequently
identified by written notice by the parties.

1.9 "Qualification Form" means a series of web pages utilized by
LendingTree on its web site to gather information from
consumers for the purpose of obtaining a prequalification or a
loan offer from a lender for a variety of consumer or mortgage
loans.

1.10 "Mortgage Web Pages Qualification Form" means a series of web
pages utilized or to be utilized by LendingTree in connection
with the Mortgage Web Pages.

1.11 "Technical Contact" means the primary person from each party
responsible for facilitating communications between
LendingTree and Priceline and coordinating development of the
Mortgage Web Pages.

1.12 "Software" means the computer software of LendingTree, which
provides an on-line qualification form, certain investor
information, filters and other mechanisms that may allow
consumers to qualify for various consumer loan products. The
term "Software" includes all interpretive script, source code,
object code, screen displays, user manuals and other
documentation, and all modifications, enhancements and
revisions thereto.

2. LICENSES AND OWNERSHIP

2.1 Priceline Licenses. During the term of this Agreement,
Priceline hereby grants to LendingTree (i) the exclusive right
and license in the United States to operate the Mortgage Web
Pages and (ii) the non-exclusive right and license in the
United States to utilize certain Priceline intellectual
property, including the Priceline Proprietary Marks, software
and the Priceline Name Your Price/Conditional Purchase
Marketing Model, in operating the Mortgage Web Pages
(collectively, the "Priceline Intellectual Property") in each
case subject to the terms and conditions of this Agreement.

2.2 LendingTree License. During the term of this Agreement,
LendingTree hereby grants to Priceline the non-exclusive right
and license in the United States to utilize certain
LendingTree intellectual property, including but not limited
to the LendingTree Proprietary Marks, Software, and Mortgage
Content for use by Priceline in carrying out its duties under
this Agreement in connection with the Mortgage Web Pages
(collectively, the "LendingTree Intellectual Property"), in
each case subject to the terms and conditions of this
Agreement.

2.3 Intellectual Property Rights. All LendingTree Intellectual
Property are and will remain the sole and exclusive property
of LendingTree and its suppliers, if any. All Priceline
intellectual property are and will remain the sole and
exclusive property of Priceline and its suppliers, if any. Any
Derivatives created by either party regarding the intellectual
property of the other party shall become the exclusive
property of the original owner of the underlying intellectual
property.

3
<PAGE> 4
3. PRICELINE'S DUTIES

3.1 Testing, Hosting, Design and Maintenance of the Mortgage Web
Pages. During the term of this Agreement, Priceline in
consultation with LendingTree will be responsible for testing,
hosting and maintaining the Mortgage Web Pages to be designed
by Priceline based upon the substantive Mortgage Content to be
provided by LendingTree as required in Section 4.1 of this
Agreement. Priceline will host the Mortgage Web Pages on
servers that it owns or controls. Priceline will use best
efforts to make available to the public vis-a-vis the
Internet on the priceline.com Internet site, the Mortgage Web
Pages on a continuous basis. In addition, Priceline will
provide, maintain and manage by itself, or through its
authorized third parties, all servers, telecommunication
devices, facilities, technical support, maintenance and
operations as is reasonably needed to facilitate continuous
Internet access to the Mortgage Web Pages as herein described.
A fuller description of the specifications for the Mortgage
Web Pages shall be set forth in Exhibit B sometime prior to
the date on which the Mortgage Web Pages commence operation
over the Internet.

3.2 Development Expense. Priceline will be responsible for all
internal and third party costs and expenses incurred by it and
LendingTree in connection with the development and testing of
the Mortgage Web Pages. Any costs or expenses paid or incurred
by LendingTree as permitted by this section 3.2 shall be
subject to the prior approval of Priceline, which approval
shall not be unreasonably withheld or delayed.

3.3 Advertising, Marketing and Promotion. Priceline will
advertise, market and promote the Mortgage Web Pages through
various media campaigns, including radio and print media (the
"Advertising Services"). LendingTree expressly acknowledges
and agrees that the Advertising Services may, in the
discretion of Priceline, be provided by Priceline in a
combination of (i) general brand advertising for the
priceline.com Internet site, (ii) advertising for the products
and services offered generally through such site, and (iii)
advertising that refers to particular products, including
those offered on the Mortgage Web Pages. All advertising
related to the Mortgage Web Pages will be subject to the prior
approval of LendingTree and its counsel, which consent and
approval shall not be unreasonably withheld or delayed.
Priceline is not obligated to expend any fixed sum with
respect to the provision of the Advertising Services, it being
understood that such Advertising Services will be provided by
Priceline as it determines, in its reasonable discretion.
Subject to the foregoing, the parties acknowledge and agree
that the annual market value of the Advertising Services will
be in an amount mutually agreed to by the parties, which
amount is currently projected to be approximately $12 million.

3.4 Lender Introductions. During the term of this Agreement,
Priceline will direct to LendingTree any inquiries from
lenders about the Mortgage Web Pages and opportunities to
offer mortgage loan products on the Mortgage Web Pages.

3.5 Legal Compliance. During the term of this Agreement, Priceline
shall be responsible for the compliance, in all material
respects, with federal, state and other laws and regulations
generally applicable to the priceline.com Internet site,
including all general advertising related thereto, including
general unfair and deceptive trade issues, consumer protection
issues and customer relations issues. Under no circumstances,
however, will Priceline be charged with responsibility for
compliance with federal, state or other laws or regulations

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applicable to mortgage brokers, the offering of Mortgage Loan
products or any and all disclosure, notice or other
requirements applicable to mortgage brokers or the provision
of Mortgage Loan services to consumers generally, such
compliance being the obligation of LendingTree as provided in
Section 4.6 of this Agreement.

4. LENDINGTREE'S DUTIES

4.1 Mortgage Web Pages Substantive Content; Mortgage Loan
Brokerage Services. With respect to the development of the
Mortgage Web Pages, it is expressly acknowledged and agreed to
between the parties that LendingTree will provide the
substantive Mortgage Content of the Mortgage Web Pages
Qualification Form related to the Mortgage Web Pages that are
to be developed by Priceline. The Mortgage Web Pages will
constitute the "front end" of LendingTree's mortgage brokerage
operations at the priceline.com Internet site. To the extent
permitted by applicable law, the Mortgage Web Pages will
incorporate the LendingTree Qualification Form and the
Priceline Name Your Price/Conditional Purchase Model. The
Mortgage Web Pages will have the same "look and feel" of other
areas of the priceline.com Internet site. The substantive
Mortgage Content utilized in the design and development of the
Mortgage Web Pages including, but not limited to, all issues
related to regulatory compliance shall be subject to the
review and approval of Priceline and its counsel, which shall
not be unreasonably withheld or delayed. A fuller description
of the specifications is set forth in Exhibit B. LendingTree
acknowledges and agrees that the Mortgage Web Pages as
designed by Priceline with the substantive content to be
provided by LendingTree will allow Mortgage Loans to be
offered through the Mortgage Web Pages by LendingTree in a
lawful manner that does not trigger any mortgage broker or
loan broker license or registration (or any consumer
disclosures, compliance or other requirements related thereto)
on the part of Priceline. LendingTree will operate the
Mortgage Web Pages and will act as the mortgage broker in
connection with all Mortgage Loan products offered on or
through the Mortgage Web Pages. LendingTree will at all times
maintain in all material respects compliance with applicable
federal and state laws and will maintain in good standing
requisite mortgage broker licenses, registrations, approvals
and exemptions, as applicable.

4.2 Lender Network Management. During the term of this Agreement,
LendingTree shall use best efforts to obtain and maintain
agreements with a sufficient number of lenders that offer
Mortgage Loan products through LendingTree on the Mortgage Web
Pages, as are necessary to support the LendingTree/Priceline
relationship. LendingTree agrees that lenders offering the
Mortgage Loan products on the Mortgage Web Pages shall,
collectively, have the ability to promptly and efficiently
process and close Mortgage Loans from Mortgage Web Pages
Qualification Forms, submitted from consumers/borrowers
representing eighty percent (80%) of the Priceline
consumer/borrower market (based upon FICO credit score).
Subject to the foregoing, the parties currently project that
the appropriate number of lenders is from five (5) up to and
including ten (10). LendingTree agrees that the minimum number
of lenders shall not be less than five (5) during the term of
this Agreement. LendingTree will accept recommendations from
Priceline regarding potential participating lenders and will
work in good faith to enter into agreements with such lenders
to enable them to offer their mortgage loan products through
LendingTree and the Mortgage Web Pages. LendingTree will be
responsible for

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all lender service issues, training of lender staff, and
analyzing lender performance. LendingTree will invoice lenders
and manage the collection of all fees.

No agreement entered into between LendingTree and any
participating lender in connection with the Mortgage Web Pages
will impose any obligation, duty or responsibility whatsoever
on Priceline, directly or indirectly, or limit or restrict in
any manner any of Priceline's legal rights or remedies,
including, without limitation, Priceline's right to terminate
this Agreement under Section 11 hereof.

4.3 Customer Service. LendingTree will operate a customer service
center dedicated to the Mortgage Web Pages with sufficient
staff and resources necessary to handle the volume of customer
inquiries generated from the Mortgage Web Pages in a prompt
and efficient manner and in accordance with applicable
federal, state and other laws and regulations. The parties
will work to establish appropriate interfaces between
Priceline's existing customer service center and the
LendingTree customer service center. In addition, the parties
will work together to develop introductory scripts for
customer service calls, subject to the review and approval of
their respective attorneys.

4.4 Content. As set forth in Sections 3.1 and 4.1 hereof,
LendingTree will provide the substantive Mortgage Content for
use on the Mortgage Web Pages.

4.5 Back-End Software. During the term of the Agreement,
LendingTree will provide and manage the "back-end" processing
software required to effect a system of communication between
Priceline and LendingTree and LendingTree and its lenders in
connection with the Mortgage Web Pages. LendingTree will
maintain back-end software processing capacity and reliability
at levels subject to the review and approval of Priceline.

4.6 Legal Compliance. During the term of this Agreement,
LendingTree shall be responsible for compliance, in all
material respects, with all applicable federal, state and
other laws and regulations for the Mortgage Web Pages or the
Mortgage Loan Products offered to consumers through the
Mortgage Web Pages, and will maintain in good standing
requisite mortgage broker licenses, registration, approvals
and exemptions relating to any of the foregoing. In addition,
LendingTree will review and approve all advertising developed
by Priceline that is specific to the Mortgage Web Pages to
achieve compliance with applicable federal, state and other
laws and regulations governing the offering of Mortgage Loan
products to the consumer. Further, LendingTree shall be
responsible for compliance with all consumer disclosure and
other laws and requirements applicable to all of the Mortgage
Web Pages and the Mortgage Loan products offered through the
Mortgage Web Pages, except that should Priceline launch any
advertising that impacts the Mortgage Web Pages, knowingly or
otherwise, without LendingTree's review and approval,
Priceline shall be solely responsible for any issues arising
out of that non-compliance.

5. EXCLUSIVITY; NON-COMPETITION

5.1 Exclusivity. During the term of this Agreement, Priceline
agrees not to offer any Mortgage Loans on its web site, either
directly or through a third party.

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5.2 Non-Competition. The parties hereto acknowledge and agree that
the LendingTree Model and Priceline Name Your
Price/Conditional Purchase Model (hereinafter, together, the
"Models") are similar in many of their components. To assist
the parties in complying with this Section 5.2, the parties
agree that the marketing of the Models is the optimum place to
draw the relevant distinctions. Consistent with the above, the
parties agree that during the term of this Agreement and
indefinitely after any termination of this Agreement, (i)
Priceline shall not market its mortgage services in a manner
that conflicts with LendingTree's marketing message which is
"by filling out one form, consumers get multiple offers from
lenders who bid for their business" and (ii) LendingTree shall
not market its mortgage services in a manner that conflicts
with Priceline's marketing message which is "consumers name
the price they want to pay for a mortgage and we will find a
lender to meet your price".

6. TECHNICAL CONTACTS

6.1 Technical Contacts. The Technical Contacts shall meet in
person or by phone as needed from time to time to assess the
status of the Mortgage Web Pages development effort and to
keep each other up to date on technology and new product
issues related to the Mortgage Web Pages. The Technical
Contacts shall be:

For LendingTree: Mr. Richard M. Stiegler, CTO
LendingTree, Inc.
6701 Carmel Road, Suite 205
Charlotte, North Carolina 28226

For Priceline: Mr. Richard Weinrod, CTO
priceline.com Incorporated
Five High Ridge Park
Stamford, CT 06903

6.2 Specifications Modification. The Technical Contacts may from
time to time modify the specifications for the Mortgage Web
Pages as described in Exhibit B to this Agreement provided the
changes are agreed to in writing by the authorized
representatives of the parties.

7. SCHEDULE

The target date for commencing operation of the Mortgage Web Pages
shall be September 15, 1998 (the "Target Date"). The parties agree to
use best efforts to ensure that the date of commencement is not later
than October 15, 1998.

8. CONSIDERATION

8.1 General. As compensation for the goods, services and
facilities provided by Priceline under this Agreement,
LendingTree shall pay to Priceline an amount equal to seventy
percent (70%) of the monthly Net Revenue earned and received
by LendingTree in operating the Mortgage Web Pages (the
"Priceline Compensation"). LendingTree's obligation to pay the
Priceline Compensation shall survive any termination of this
Agreement insofar and to the extent that Net Revenues are
earned and/or received by

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LendingTree after such termination. The parties acknowledge,
however, that for purposes of this Section 8.1, Net Revenue
will be limited to (i) those Mortgage Web Page Qualification
Forms that are in the then-participating lenders' pipeline for
a Mortgage Loan product, (ii) have been approved for a
Mortgage Loan but the transaction has not yet closed and/or
(iii) Net Revenue earned but not collected, in each case on or
as of the date of termination of this Agreement.

8.2 Regulatory Compliance. It is the intent of the parties that
the Priceline Compensation shall not exceed the reasonable
market value of the goods, services and facilities provided by
Priceline pursuant to this Agreement and that such
compensation shall at all times be in compliance with
applicable federal and state laws, including without
limitation, the Real Estate Settlement Procedures Act. In
furtherance of these objectives, the parties agree to
negotiate in good faith an alternative compensation
arrangement with substantially similar economic benefits if
Priceline or LendingTree, as applicable, reasonably determine
or believe that such compensation arrangement is no longer in
compliance with applicable federal, state or other laws and
regulations, or any court or government agency having
jurisdiction over the operations of either party restricts,
enjoins, or threatens to restrict, enjoin or impose sanctions
against either party as a result of the terms of this Section
8.

9. PROMOTION RIGHTS AND APPROVALS

9.1 General. Subject to the provisions of Section 3.3, both
parties may promote, advertise and market the Mortgage Web
Pages subject to the prior approval of the other party of (i)
the use of the other party's Proprietary Marks, and (ii) the
content and timing of any press releases. Such approval shall
not be unreasonably withheld or delayed by either party.

9.2 Press Releases. The parties agree to issue within two (2)
business days of the execution of this Agreement press
releases, either jointly, individually, or both, announcing
this Agreement and the parties' plans for the Mortgage Web
Pages.Each party shall obtain the prior written approval of
the other party for the issuance of any press release
regarding: (i) the parties' relationship under this Agreement,
or (ii) any other matters related to the Mortgage Web Pages
during the term of this Agreement. Any approval requested by
Priceline or LendingTree under this Section 9.2 shall not be
unreasonably withheld or delayed.

10. REPORTING AND PAYMENTS

10.1 LendingTree Reports, Payments; Audits. Within fifteen (15)
days following the end of each month, LendingTree shall
provide a report (the "LendingTree Report") to Priceline. The
LendingTree Report shall detail (i) any relevant information
regarding usage of the Mortgage Web Pages during the previous
month, including the number of visitors to the Mortgage Web
Pages, the number of Qualification Forms submitted by
consumers to LendingTree, and the number of loans closed that
had originated through the Mortgage Web Pages, (ii) the Net
Revenue of LendingTree during the previous month, including a
breakdown of the total Revenue earned and Revenue Deductions
taken by LendingTree in arriving at the amount of Net Revenue,
and (iii) a calculation of the amount of Priceline
Compensation due for the previous month. On or by the same
date,

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LendingTree will deliver to Priceline any payment of Priceline
Compensation owed for the previous month. Upon the request of
Priceline, LendingTree shall provide to Priceline all written
or other documentation used by LendingTree to make any
calculation or prepare any report described in this Section
10.1. Priceline shall have the right, during normal business
hours and upon reasonable notice, to audit the books and
records of LendingTree to verify the accuracy and completeness
of all reports provided under this Section 10.1. The cost of
any such audit shall be paid by Priceline unless the audit
reveals an underpayment by LendingTree of ten percent (10%) or
more of the applicable LendingTree Report. In such case, the
audit shall be paid for fully by LendingTree.

10.2 Priceline Reports; Audit. Within fifteen (15) days following
the end of each month, Priceline shall provide a report (the
"Priceline Report") which shall detail (i) the number of page
views or impressions on the Mortgage Web Pages during the
previous month, and (ii) the number of consumers who submitted
Qualification Forms to LendingTree via the Mortgage Web Pages
during the previous month. Upon the request of LendingTree,
Priceline shall provide all documentation used to prepare any
report described in this Section 10.2. LendingTree shall have
the right, during normal business hours and upon reasonable
notice, to audit the records of Priceline to verify the
accuracy and completeness of all reports provided under this
Section 10.2.

11. TERM AND TERMINATION

11.1 Initial Term. The term of this Agreement shall commence on the
Effective Date and will continue for a period of one (1) year
from the date on which the Mortgage Web Pages commence
operation over the Internet unless sooner terminated under
Section 11.4 below (the "Initial Term").

11.2 Subsequent Terms. Following expiration of the Initial Term,
this Agreement shall continue in effect until either party
terminates it as provided below. The Initial Term and any
subsequent terms are referred to herein as the "Term."

11.3 General Termination. After the Initial Term, this Agreement
may be terminated at any time during the Term by either party
giving ninety (90) days' prior written notice to the other
party. In the event that Priceline provides notice of
termination to LendingTree under this Section 11.3 for the
purpose of using a different third party mortgage broker to
operate the Mortgage Web Pages, LendingTree shall have a right
of first refusal to match the economic and other material
terms offered by such third party provided, however, that any
such right of first refusal shall be exercised by LendingTree
within ninety (90) calendar days after receipt of notice from
Priceline with respect to such third party offer. The parties
agree that the phrase "other material terms" is intended to
ensure that during the term of this Agreement, the LendingTree
network of lenders have the ability to promptly and
efficiently process and close Mortgage Loans from Mortgage Web
Pages Qualification Forms submitted from consumers/borrowers
representing eighty percent (80%) of the Priceline
consumer/borrower market (based upon FICO credit score.)
Priceline will be free to engage another third party if such
right is not exercised by notice received by Priceline from
LendingTree within such ninety (90) day period. Subject to the
limitations in Section 5 hereof, nothing set forth in this
Section 11.3 shall confer on or to LendingTree any right of
first refusal if Priceline elects

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to operate directly the Mortgage Web Pages and in connection
therewith, provides notice to terminate this Agreement.

11.4 Termination for Breach. During the Term of this Agreement,
either party will have the right to terminate this Agreement
immediately upon written notice if: (i) the other party
materially breaches any material term or condition of this
Agreement and fails to the cure such breach in full within
thirty (30) days after receiving written notice of the breach
from the non-breaching party; (ii) the other party becomes the
subject of a voluntary petition in bankruptcy or any voluntary
proceeding relating to insolvency, receivership, liquidation,
or composition for the benefit of creditors which voluntary
petition or proceeding is not dismissed within thirty (30)
days of filing of commencement; and (iii) the other party
becomes the subject of an involuntary petition in bankruptcy
or any other involuntary proceeding relating to insolvency,
receivership, liquidation, or composition for the benefit of
creditors. Without limiting the generality of the foregoing,
either party may terminate this Agreement immediately upon
notice if, in the case of Priceline, Priceline reasonably
believes or determines that LendingTree has failed to comply
in all material terms, with its obligations under Section 4.6,
or such noncompliance is determined by any order, decree,
judgment or any similar ruling having jurisdiction over
LendingTree's operation of the Mortgage Web Pages or, in the
case of LendingTree, LendingTree reasonably believes or
determines that Priceline has failed to comply in all material
terms, with its obligations under Section 3.5, or such
noncompliance is determined by any order, decree, judgment or
any similar ruling having jurisdiction over Priceline's
operation of the priceline.com Internet site. To the extent
that a breach contemplated by this Section 11.4 is curable,
such cure period may be extended by the mutual written consent
of the parties for an additional period of thirty (30) days,
if the cure cannot be achieved after good faith efforts during
the initial cure period.

11.5 Effect of Termination. Upon termination of this Agreement, all
rights and licenses granted by Priceline and LendingTree under
this Agreement to the other party shall immediately revert to
and be fully vested in Priceline and LendingTree, as
applicable. No termination of this Agreement, for any reason
whatsoever, shall terminate any of the rights and obligations
of the parties under this Agreement unless such right or
obligation is limited by the express terms and provisions of
this Agreement.

12. ARBITRATION

Any controversy or claim arising out of or relating to this Agreement
or any breach of this Agreement, including any controversy or claim as
to its arbitrability or rescission shall be finally settled by
arbitration before three (3) arbitrators, one chosen by each party and
the third selected by the two arbitrators chosen by the parties in
accordance with the commercial arbitration rules of the American
Arbitration Association ("AAA") in force at that time. Any arbitration
shall be conducted in the Borough of Manhattan, New York, unless the
parties mutually agree to another location. Any judgment upon the award
rendered by the arbitrators may be entered in any court of competent
jurisdiction. The arbitrators shall not, under any circumstances, have
any authority to award punitive or exemplary damages.

All expenses associated with obtaining and utilizing the services of
the AAA and the arbitrators shall be shared equally by the parties
hereto. The AAA and the arbitrators shall be made aware of this
provision and shall agree to request payment separately from the
parties for said services,

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including all expenses directly related to the arbitration, other than
the expense of witnesses, which shall be borne by the party producing
such witness.

Notwithstanding the foregoing, the parties shall bear their own
respective costs of preparing for and participating in the arbitration
including, without limitation, their attorneys' fees, expert and/or
witness fees, and their costs of complying with discovery requests.
Discovery is permitted by the Federal Rules of Civil Procedure as in
effect and will be allowed in connection with any such arbitration to
the extent consistent with the purpose of the arbitration and permitted
by the arbitrators.

The majority decision of the arbitration panel shall be binding,
enforceable and non-appealable. The decision of the arbitration panel
shall be in writing and shall set forth in reasonable detail the basis
for the panel's decision. Application may be made to any court of
competent jurisdiction for a judicial acceptance of the arbitration
award and enforcement, as the law of the state having jurisdiction may
require or allow.

No arbitration may be commenced by either party hereto for any
controversy or claim arising out of or relating to this Agreement
unless notice of a party's election to require arbitration is given
within one (1) year from the date of the occurrence allegedly giving
rise to the arbitration. The preceding sentence shall survive the
expiration or termination of this Agreement by either party for any
reason.

13. REPRESENTATIONS AND WARRANTIES

13.1 Representations and Warranties of LendingTree. LendingTree
represents and warrants as follows:

13.1.1 Authority. LendingTree is a corporation duly organized and
validly existing under the laws of the state of Delaware.
LendingTree has full corporate power and authority to transact
any and all business contemplated by this Agreement and
possesses all requisite authority, power, and material
licenses, permits and franchises to conduct its business
wherever conducted and to execute, deliver and comply with its
obligations under the terms of this Agreement. LendingTree has
taken all necessary action to authorize its execution,
delivery and performance of this Agreement.

13.1.2 Conflict with Existing Laws or Contracts. The execution and
delivery of this Agreement and the performance of its
obligations hereunder by LendingTree will not (i) conflict
with or violate (A) LendingTree's Certificate of Incorporation
or By-laws, or (B) any provision of any law or regulation or
any decree, demand or order to which LendingTree is subject,
or (ii) conflict with or result in a breach of or constitute a
default (or an event which, with notice or lapse of time, or
both, would constitute a default) under any of the terms,
conditions or provisions of any agreement or instrument to
which LendingTree is a party or by which it is bound or any
order or decree applicable to LendingTree or result in the
creation or imposition of any lien on any of its assets or
property.

13.1.3 Licenses and Consents. LendingTree, in connection with
performance of its duties related to the Mortgage Web Pages
under this Agreement, has obtained or will obtain all
necessary or required governmental licenses and consents
requisite for the transactions contemplated by this Agreement.
No consent, approval, authorization or order of any

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court or governmental agency or body is required for the
execution, delivery and performance by LendingTree of or
compliance by LendingTree with this Agreement, or if required,
such approval has been obtained prior to the date of this
Agreement.

13.1.4 Legal Action Against LendingTree. There is no claim, action,
suit, proceeding or investigation pending or, to the best of
LendingTree's knowledge, threatened against LendingTree which,
either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations,
financial condition, properties or assets of LendingTree, or
in any material impairment of the right or ability of
LendingTree to carry on its business substantially as now
conducted, or in any material liability on the part of
LendingTree, or which would draw into question the validity of
this Agreement, or any of the other instruments, documents or
agreements entered into by LendingTree in connection with this
Agreement, or of any action taken or to be taken in connection
with the obligations of LendingTree contemplated therein, or
which would be likely to impair materially the ability of
LendingTree to perform under the terms of this Agreement.

13.1.5 Binding on LendingTree; Enforceability. This Agreement,
assuming due authorization, execution and delivery hereof by
Priceline, and all the obligations of LendingTree hereunder,
shall constitute the legal, valid and binding obligations of
LendingTree, enforceable against LendingTree in accordance
with the terms hereof, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the enforcement of creditors'
rights in general and by general equity principles (regardless
of whether such enforcement is considered in a proceeding in
equity or at law).

13.1.6 Ownership of Intellectual Property. LendingTree owns the
copyright and any other rights to or has licensing rights to
all LendingTree Intellectual Property and to the knowledge of
LendingTree, such LendingTree Intellectual Property will not
infringe upon, misappropriate or violate any intellectual
property rights or any other right of any third party.
LendingTree has sufficient rights to the Intellectual Property
to grant to Priceline the rights set forth in this Agreement,
and to the knowledge of LendingTree, Priceline's exercise of
any such rights as authorized hereunder will not constitute an
infringement or misappropriation of any intellectual property
rights of any third party.

13.2 Representations and Warranties of Priceline. Priceline
represents and warrants as follows:

13.2.1 Authority. Priceline is a corporation duly organized and
validly existing under the laws of the state of Delaware.
Priceline has full power and authority to transact any and all
business contemplated by this Agreement and possesses all
requisite authority, power, and material licenses, permits and
franchises to conduct its business wherever conducted and to
execute, deliver and comply with its obligations under the
terms of this Agreement. Priceline has taken all necessary
action to authorize its execution, delivery and performance of
this Agreement.

13.2.2 Conflict with Existing Laws or Contracts. The execution and
delivery of this Agreement and the performance of its
obligations hereunder by Priceline will not (i) conflict with
or violate (A) Priceline's Articles of Organization or
By-laws, or (B) any provision of any

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law or regulation or any decree, demand or order to which
Priceline is subject, or (ii) conflict with or result in a
breach of or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default)
under any of the terms, conditions or provisions of any
agreement or instrument to which Priceline is a party or by
which it is bound or any order or decree applicable to
Priceline or result in the creation or imposition of any lien
on any of its assets or property.

13.2.3 Licenses and Consents. Except with respect to the mortgage
brokerage activity contemplated under this Agreement,
Priceline has obtained all necessary or required governmental
licenses and consents to the transactions contemplated by this
Agreement. Except with respect to the mortgage brokerage
activity contemplated under this Agreement, no consent,
approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and
performance by Priceline of or compliance by Priceline with
this Agreement, or if required, such approval has been
obtained prior to the date of this Agreement.

13.2.4 Legal Action Against Priceline. There is no claim, action,
suit, proceeding or investigation pending or, to the best of
Priceline's knowledge, threatened against Priceline which,
either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations,
financial condition, properties or assets of Priceline, or in
any material impairment of the right or ability of Priceline
to carry on its business substantially as now conducted, or in
any material liability on the part of Priceline, or which
would draw into question the validity of this Agreement or any
of the other instruments, documents or agreements entered into
by Priceline in connection with this Agreement, or of any
action taken or to be taken in connection with the obligations
of Priceline contemplated therein, or which would be likely to
impair materially the ability of Priceline to perform under
the terms of this Agreement.

13.2.5 Binding on Priceline; Enforceability. This Agreement, assuming
due authorization, execution and delivery hereof by
LendingTree, and all the obligations of Priceline hereunder,
shall constitute the legal, valid and binding obligations of
Priceline, enforceable against Priceline in accordance with
the terms hereof, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the enforcement of creditors' rights in
general and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in
equity or at law).

13.2.6 Ownership of Intellectual Property. Priceline owns the
copyright and any other rights to or has licensing rights to
all Priceline Intellectual Property and to the knowledge of
Priceline, such Priceline Intellectual Property does not
infringe upon, misappropriate or violate any intellectual
property rights or any other right of any third party.
Priceline has sufficient rights to the Intellectual Property
to grant to LendingTree the rights set forth in this
Agreement, and to the knowledge of Priceline, LendingTree's
exercise of any such rights as authorized hereunder will not
constitute an infringement or misappropriation of any
intellectual property rights of any third party.

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14. INDEMNIFICATION; LIMITATION OF LIABILITY

14.1 Indemnification for Actions Taken in Good Faith. Neither
LendingTree nor any directors, officers, employees or agents
of LendingTree (collectively, "LendingTree Indemnified
Parties") shall be liable to Priceline, any directors,
officers, employees or agents of Priceline (collectively,
"Priceline Indemnified Parties"), or any third party for, and
Priceline shall defend and indemnify the LendingTree
Indemnified Parties and hold each of them harmless from and
against, any action taken by the LendingTree Indemnified
Parties, or for their refraining from taking any action, in
good faith reliance upon information provided by Priceline,
pursuant to this Agreement; provided, however, that this
provision shall not protect any LendingTree Indemnified Party
against, and Priceline shall not be obligated to indemnify or
hold harmless any LendingTree Indemnified Party from or
against, any liability that would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence
in the performance of or failure to perform LendingTree's
obligations hereunder.

14.2 Indemnification for Actions Taken in Good Faith. None of the
Priceline Indemnified Parties shall be liable to the
LendingTree Indemnified Parties, or any third party for, and
LendingTree shall defend and indemnify the Priceline
Indemnified Parties and hold each of them harmless from and
against, any action taken by the Priceline Indemnified
Parties, or for their refraining from taking any action, in
good faith reliance upon information provided by LendingTree,
pursuant to this Agreement; provided, however, that this
provision shall not protect any Priceline Indemnified Party
against, and LendingTree shall not be obligated to indemnify
or hold harmless any Priceline Indemnified Party from or
against, any liability that would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence
in the performance of or failure to perform Priceline's
obligations hereunder.

14.3 General Indemnification by LendingTree. LendingTree shall
defend and indemnify the Priceline Indemnified Parties and
hold each of them harmless from and against any and all
claims, losses, damage, penalties, fines, forfeitures, legal
fees and expenses and related costs, expenses of litigation,
judgments, settlements and any other costs, fees and expenses
(each, a "Liability") that were caused by or resulted from, or
are otherwise arising from or related to, a breach of any of
LendingTree's duties, representations, warranties, covenants
and agreements contained in this Agreement, the LendingTree
Intellectual Property, or by LendingTree Indemnified Parties'
willful misfeasance, bad faith or negligence in the
performance of or failure to perform as provided in this
Agreement.

14.4 General Indemnification by Priceline. Priceline shall defend
and indemnify the LendingTree Indemnified Parties and hold
each of them harmless from and against any and all Liabilities
that were caused by or resulted from or are otherwise arising
from or related to, a breach of any of Priceline's duties,
representations, warranties, covenants and agreements
contained in this Agreement, the Priceline Intellectual
Property, or by Priceline Indemnified Parties' willful
misfeasance, bad faith, or negligence in the performance of or
failure to perform as provided in this Agreement.

14.5 Survival of Indemnifications. Subject to the provisions of
Section 12 of this Agreement, Priceline's and LendingTree's
respective obligations to indemnify any LendingTree

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<PAGE> 15
Indemnified Party or any Priceline Indemnified Party will
survive the expiration or termination of this Agreement by
either party for any reason.

14.6 Limitations of Liability; Consequential Damages. EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PARTIES DISCLAIM
ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION, ANY IMPLIED WARRANTIES WITH RESPECT TO THE
OPERATION OF THE SOFTWARE UTILIZED FOR THE MORTGAGE WEB PAGES,
THE MERCHANTABILITY OF SUCH SOFTWARE OR THE FITNESS OF THE
SOFTWARE FOR A PARTICULAR PURPOSE OR USE. NEITHER PARTY SHALL
BE LIABLE TO THE OTHER PARTY UNDER THIS AGREEMENT FOR ANY
LIABILITY WHATSOEVER, FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES (UNDER CONTRACT OR TORT THEORIES OF
LAW), INCLUDING BUT NOT LIMITED TO LOST DATA, LOST REVENUE OR
PROFITS OR LOST BUSINESS, HOWEVER ARISING, EVEN IF IT HAS BEEN
ADVISED OF OR HAS FORESEEN THE POSSIBILITY OF SUCH DAMAGES.

14.7 Limitation on Liability of Officers, Directors, Members,
Employees and Agents. Neither party shall make any claim
against the officers, directors, members, employees or agents
of the other party but instead shall look solely to the assets
of the other party for satisfaction of any liability of such
party under this Agreement.

14.8 Notice of Claims. Each party shall promptly notify the other
in writing of any and all litigation, claims, notices or
demands known to such party made against it or the other party
in connection with this Agreement. Each party shall cooperate
with the other in the defense or handling of any claim, action
or investigation relating to the subject matter of this
Agreement, provided that such cooperation shall not be deemed
an acceptance of responsibility therefor, except as provided
below. Any request for indemnification under this paragraph
shall be in writing and shall state with particularity the
specific facts supporting the request for indemnification and
a good faith estimate of the amount of the indemnification
requested. In the event responsibility for a request for
indemnification hereunder is unconditionally accepted in
writing, the party accepting such responsibility may, at its
option, elect to take up the defense or handling of any
pending claim, action or investigation and, in such event, the
party requesting indemnification shall promptly relinquish
control of such defense to the accepting party. Unless and
until a request for indemnification hereunder is
unconditionally accepted, the requesting party may retain
control of the defense or handling of the claim, action or
investigation. The failure of a party to accept a request for
indemnification under this paragraph shall not be binding upon
the requesting party and such party's retention of the control
of the defense or handling of the claim, action or
investigation shall not prejudice its right to seek
enforcement of this paragraph in court.

15. CHOICE OF LAW

15.1 Choice of Law. The parties agree that this Agreement shall be
construed and controlled by the laws of the State of New York
and the Commercial Arbitration Rules of the AAA. Should a
dispute arise under this Agreement, and should the arbitration
provisions herein become inapplicable, the parties agree that
jurisdiction over and venue of any suit arising

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<PAGE> 16
out of or relating to this Agreement shall be exclusively in
the state and federal courts of New York.

15.2 Attorneys' Fees. If either party employs attorneys to enforce
any right arising out of or relating to this Agreement, the
prevailing party shall be entitled to recover reasonable
attorneys' fees, in arbitration, litigation, or otherwise.

16. MISCELLANEOUS

16.1 Notices. All notices or communications required or permitted
under this Agreement will be in writing and be deemed given:
(i) five (5) business days after having been sent by
registered or certified mail, return receipt requested,
postage prepaid; (ii) one (1) business day after deposit with
a commercial overnight carrier, with written verification of
receipt; (iii) when sent via facsimile or electronic mail with
confirmation. Notice sent by any other method shall be
effective only upon actual receipt. All communications will be
sent to the parties at the addresses set forth below:

If to LendingTree: With a copy to:
Douglas R. Lebda Pamela S. Friedman
Chairman and President General Counsel
LendingTree, Inc. LendingTree, Inc.
6701 Carmel Road, Suite 205 6701 Carmel Road, Suite 205
Charlotte, NC 28226 Charlotte, NC 28226
Fx: 704.541.1824 Fx: 704.541.1824

If to Priceline: With a copy to:
Melissa M. Taub, Esq.
Cummings & Lockwood
Four Stamford Plaza
Stamford, CT 06904
Fx: 203.351.4299

No notice of change of address shall be effective unless made
in compliance with this Section 16.1.

16.2 Assignment. This Agreement shall not be assignable in whole or
in part by LendingTree or Priceline without the other party's
prior written consent, and any attempted assignment without
such consent shall be void. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and
permitted assigns. A change in control of either party, for
example, by merger or sale of stock, shall not be deemed to be
an assignment under this Agreement.

16.3 Waiver. No term or provision hereof will be deemed waived, and
no variation of terms or provisions hereof shall be deemed
consented to, unless such waiver or consent shall be in
writing and signed by the party against whom such waiver or
consent is sought to be enforced. Any delay, waiver or
omission by LendingTree or Priceline to exercise any right or
power arising from any breach or default of the other party in
any of the terms, provisions or covenants of this Agreement
shall not be construed to be a waiver by

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<PAGE> 17
LendingTree or Priceline of any subsequent breach or default
of the same or other terms, provisions or covenants on the
part of either party.

16.4 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto relating to the subject
matter hereof, except where expressly noted herein, and all
prior negotiations, agreements and understandings, whether
oral or written, are superseded or canceled hereby.

16.5 Modification. This Agreement and all Exhibits hereto may not
be amended or modified except by a writing signed by both
parties.

16.6 Severability. If any provision of this Agreement is declared
or found to be illegal, unenforceable or void, this Agreement
shall be construed as if not containing that provision, and
the rest of the Agreement shall remain in full force and
effect, and the rights and obligations of the parties hereto
shall be construed and enforced accordingly.

16.7 Independent Contractor. Each party, in performance of this
Agreement, is acting as an independent contractor, is not the
partner, joint venturer or agent of the other party and has no
authority to act on behalf of the other party except as
expressly provided in this Agreement.

16.8 Confidentiality. Each party agrees to keep all information
related to the other party confidential, as provided in the
Mutual Confidentiality Agreement signed by the parties on July
8, 1998. The provisions of the Mutual Confidentiality
Agreement shall continue in and during the Term and shall
survive termination of this Agreement for any reason
whatsoever.

16.9 Injunctive Relief. The parties acknowledge and agree that
their respective remedies at law for any breach by the other
party of its obligations hereunder may be inadequate, and the
parties agree and consent that temporary and permanent
injunctive relief may be granted in any action or proceeding
which may be brought to enforce any provision hereof without
the necessity of proof of actual damages.

16.10 Delays Beyond Control. Neither party will be liable for any
delay or failure of performance of any of its obligations
under this Agreement, except for the obligation to pay money,
during any period in which such performance is delayed by (i)
war, civil commotion and riots, fires, floods, serious work
stoppages; (ii) requirements or acts of any governmental
authority or agency or subdivision thereof; or (iii) acts of
God; provided, however, that the nonperforming party shall
promptly notify the other party of any such delay and shall
use its best efforts to resume performance as soon as
reasonably possible.

16.11 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.

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<PAGE> 18
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
signed, sealed and delivered by its duly authorized officer as of the date first
written above.

LENDINGTREE, INC.

By /s/ Douglas R. Lebda (SEAL)
---------------------------------------
Name: Douglas R. Lebda
Title: Chairman and President

PRICELINE.COM INCORPORATED

By /s/ Paul E. Francis (SEAL)
---------------------------------------
Name Paul E. Francis
Title Chief Financial Officer

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<PAGE> 19
EXHIBIT A

PROPRIETARY MARKS

Priceline Proprietary Marks:

The actual marks will be provided sometime prior to the date on which the
Mortgage Web Pages commence operation over the Internet.

LendingTree Proprietary Marks:

The Proprietary Marks covered under this Agreement include, but are not limited
to, the domain name (www.lendingtree.com), any logos now, heretofore or to be
used in the future and all of the content of the LendingTree website as it
appears now, heretofore or in the future. The actual marks will be provided
sometime prior to the date on which the Mortgage Web Pages commence operation
over the Internet.

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<PAGE> 20
EXHIBIT B

MORTGAGE WEB PAGES DEVELOPMENT SPECIFICATIONS

This Exhibit B will be completed sometime prior to the date on which
the Mortgage Web Pages commence operation over the Internet.

<PAGE> 1
Exhibit 10.6.1

AMENDMENT NO. 1 TO INTERNET MARKETING AND LICENSING AGREEMENT

This Amendment No. 1 to Internet Marketing and Licensing Agreement, dated as of
January 26, 2000 (the "Amendment") is entered into by and between priceline.com
Incorporated ("priceline") and LendingTree, Inc. ("LendingTree").

WHEREAS, Lending Tree and priceline are parties to that certain Internet
Marketing and Licensing Agreement dated as of August 1, 1998 (the "Agreement");
and

WHEREAS, the Parties desire to amend certain terms of the Agreement, including,
without limitation, extending the Initial Term of the Agreement for an
additional six (6) months and terminating the exclusivity provisions set forth
in Section 5.1 of the Agreement as provided below.

NOW, THEREFORE, in consideration of the premises, representations, warranties,
obligations, covenants, duties and agreements contained herein, and in the
Agreement, and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1. Definitions. Capitalized terms used herein but not otherwise
defined herein shall have the meanings ascribed to them in the
Agreement.

2. Amendments. The Agreement is hereby amended as follows:

a. Section 1.4 is hereby deleted in its entirety and
replaced with the following:

"1.4 "Mortgage Web Pages" means the area of the Priceline web
site and those web pages accessed from the Priceline web site which (i)
facilitate access exclusively to LendingTree's network of participating
lenders and (ii) through which LendingTree offers its mortgage
brokerage services. The term Mortgage Web Pages shall expressly exclude
those portions of the Priceline web site and web pages accessed from
the Priceline web site through which Priceline or one or more of its
affiliated entities or third parties, obtains or processes consumer
information, makes or brokers Mortgage Loans, or otherwise operates a
mortgage brokerage or similar service separate from the mortgage
brokerage services offered by LendingTree. The Mortgage Web Pages will
be co-branded by the use of

<PAGE> 2

both parties' trademarks, tradenames, logos, or designations, as agreed
to by the parties in accordance with the terms of this Agreement."

b. The third sentence of Section 3.1 is hereby amended to read in
its entirety as follows:

"Priceline will use commercially reasonable best efforts to make The
Mortgage Web Pages available to the public vis-a-vis the Internet on
the Priceline web site on a continuous basis in the states in which
Priceline markets the mortgage brokage services of Lending Tree."

c. Section 3.5 is hereby deleted in its entirety and replaced
with the following:

"3.5 Legal Compliance. During the term of this Agreement,
Priceline shall be responsible for the compliance, in all material
respects, with federal, state and other laws and regulations generally
applicable to the Priceline web site, including (i) all general
advertising related thereto, including general unfair and deceptive
trade issues, consumer protection issues and customer relations issues
and (ii) compliance with laws or regulations applicable to those
portions of the Priceline web site other than the Mortgage Web Pages.
LendingTree shall be responsible for compliance with federal, state or
other laws or regulations applicable to mortgage brokerage services
offered by LendingTree through the Mortgage Web Pages ."as provided in
section 4.6 of this Agreement.

d. The last sentence of Section 4.1 is hereby amended to read in
its entirety as follows:

"LendingTree will at all times maintain in all material
respects compliance with applicable federal and state laws and will
maintain in good standing requisite mortgage broker licenses,
registrations, approvals and exemptions, as applicable to operate the
Mortgage Web Pages."

e. The sixth sentence of the first paragraph of Section
4.2 is hereby amended to read in its entirety as
follows:

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<PAGE> 3

"LendingTree will be responsible for all lender service
issues, training of lender staff, and analyzing lender performance with
respect to all lenders who participate through the Mortgage Web Pages."

f. Section 5.1 is hereby deleted in its entirety and replaced
with the following:

"5.1 No Exclusivity. During the Term of this Agreement and
anytime thereafter, Priceline may, in its sole discretion, offer
additional Mortgage Loans and/or mortgage brokerage services on its
web site directly, or indirectly through one or more affiliated
entities or one or more third parties. Notwithstanding the foregoing,
during the Term of this Agreement, Priceline will use its commercially
reasonable best efforts to provide Lending Tree with thirty (30) days
advance notice of the addition of any new mortgage lender that
operates primarily through an Internet-based service; provided,
however, that upon Priceline's delivery of advance notice under this
Section 5.1, Lending Tree may elect, at its sole discretion and upon
not less than ninety (90) days' written notice to Priceline, to
terminate this Agreement at the conclusion of the term of this
Addendum as indicated in Section 11.1 below, unless Priceline foregoes
the addition of such mortgage lender."

"8.3 Other Goods or Services. LendingTree may, in its sole
discretion, provide software, technology and/or services to Priceline,
its affiliates or other third parties for the purpose of allowing such
parties to operate portions of or web pages accessed from the Priceline
web site other than the Mortgage Web Pages, provided, however, that
such parties enters into an acceptable agreement(s) with LendingTree.
LendingTree shall be under no obligation to provide and/or upon ninety
(90) days advance notice to Priceline may discontinue providing such
goods and/or services in the absence of such an agreement."

g. Section 11.1 is hereby deleted in its entirety and replaced
with the following:

"11.1 Initial Term. The term of this Agreement shall commence
on the Effective Date and will continue through July 26, 2000, unless
earlier terminated under Section 11.4 below (the "Initial Term")."

h. Section 11.3 is hereby deleted in its entirety and replaced
with the following:

"Commencing on the 90th day preceding the expiration of the
Initial Term and at all times thereafter, this Agreement may be
terminated by either party upon delivery of written notice of
termination to the other party, which termination shall become
effective not earlier than ninety (90) days following delivery of such
written notice."

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<PAGE> 4

i. Section 14.4 is hereby deleted in its entirety and replaced
with the following:

"14.4 General Indemnification by Priceline. Priceline shall
defend and indemnify the LendingTree Indemnified Parties and hold each
of them harmless from and against any and all Liabilities that were
caused by or resulted from or otherwise arising from or related to (i)
a breach of any of Priceline's duties, representations, warranties,
covenants and agreements contained in this Agreement, (ii) the
Priceline Intellectual Property, (iii) by Priceline Indemnified
Parties' willful misfeasance, bad faith, or negligence in the
performance of or failure to perform as provided in this Agreement, and
(iv) the operation and/or promotion by Priceline, any affiliate, or one
or more of its affiliated entities or one or more third parties of any
portion of the Priceline web site other than the Mortgage Web Pages."

3. No Other Amendments. Except as expressly amended herein, the Agreement
shall be unmodified and shall continue to be in full force and effect
in accordance with its terms. In addition, except as specifically
provided herein, this Amendment shall not be deemed a waiver of any
term or condition of the Agreement and shall not be deemed to prejudice
any right or rights which either party may now have or may have in the
future under or in connection with the Agreement or any of the
instruments or agreements referred to therein, as the same may be
amended from time to time. All references in the Agreement to the
Agreement shall hereafter be deemed a reference to the Agreement as
amended by this Amendment.

4. Counterparts. This Amendment may be executed in counterparts by the
parties, each of which shall be deemed an original and both of which
taken together shall be deemed one and the same instrument.

[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.

4
<PAGE> 5

PRICELINE.COM INCORPORATED LENDINGTREE, INC.

By: By:
------------------------ ------------------------

Name: Name:
------------------------ ------------------------

Title: Title:
------------------------ ------------------------

<PAGE> 1
EXHIBIT 10.15

CO-BRANDED SITE AGREEMENT

This Co-Branded Site Agreement (this "Agreement") is entered into as of
January 14, 2000 (the "Effective Date") by and between LendingTree, Inc.
("LendingTree"), a Delaware corporation, and CNBC.com LLC ("CNBC.com"), a
Delaware limited liability company.

WHEREAS, LendingTree has developed a multiple lender consumer loan
origination software program and Internet website, currently located at
www.lendingtree.com (the "LendingTree Site"), through which it operates a loan
request filtering service offering consumers the opportunity to obtain
competitive loan offers from participating lenders in connection with various
products, including first mortgage loans, home equity lines of credit, credit
cards, automobile loans and unsecured personal loans;

WHEREAS, CNBC.com is an interactive media company which operates the
CNBC.com website (the "CNBC.com Site"); and

WHEREAS, LendingTree desires to provide certain of its content and
services to CNBC.com for distribution and marketing through the CNBC.com Site,
and CNBC.com desires to conduct such distribution and marketing, subject to the
terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the above premises and other good
and valuable consideration received and to be received under this Agreement, the
sufficiency of which is acknowledged by the parties, the parties agree to the
following:

1. DEFINITIONS.

(a) "Above the Fold" shall mean situated within the portion of a
page that is designed to be visible to a user when loaded into and displayed by
a web browser running so that the browser occupies the full screen of a standard
SVGA monitor, without requiring the user to scroll horizontally or vertically
through the page.

(b) "Affiliate" shall mean any Person that is directly or
indirectly, through one or more intermediaries, Controlled by the National
Broadcasting Company, Inc ("NBC"). For purposes of this definition, "Controlled"
shall mean possessing, directly or indirectly, the power to direct or cause the
direction of the management, policies and operations of a Person, whether
through ownership of voting securities, by contract or otherwise.

(d) "Attribution Line" shall mean the line on each page of CNBC.com
which includes a link to CNBC.com's copyright notice, as such line may be
modified from time to time.

<PAGE> 2

(e) "Change of Control" shall mean the occurrence of any of the
following events with respect to LendingTree at any time during the Term: (i)
any Person or group (within the meaning of the Securities Exchange Act of 1934,
as amended) shall have become the beneficial owner of securities representing
more than forty percent (40%) of the aggregate voting power of the then
outstanding securities of LendingTree; (ii) any merger, consolidation or other
transaction between LendingTree and a Person immediately following which the
holders of common equity securities of LendingTree immediately prior to such
transaction do not own more than fifty percent (50%) of the common equity
securities of the surviving entity; (iii) a change or series of changes in the
Board of Directors of LendingTree such that a majority of the directors consists
of persons who (a) were not directors of LendingTree at the Effective Date and
(b) were not recommended to become directors by a majority of the then current
directors or by directors so recommended; or (iv) the sale of all or
substantially all of the assets of LendingTree.

(f) "CNBC.com Content" shall mean Content created, licensed or
otherwise obtained by NBC or CNBC.com which is provided by NBC or CNBC.com for
use within the Co-Branded Sites or any Promotional Content.

(g) "CNBC.com Marks" shall mean the trademarks, trade names, service
marks, logos, domain names and other identifiers owned, controlled by or
licensed by NBC or any Affiliate relating to CNBC.com which are specified on
Exhibit A attached hereto.

(h) "Confidential Information" shall mean all information disclosed
in connection with this Agreement which when provided hereunder is designated in
writing or by other reasonable means as confidential, including, without
limitation, all technical data, trade secrets, plans for products or services,
customer data or lists, marketing plans, financial documents or data, processes
and designs.

(i) "Content" shall mean applications, tools, text, audio, video,
photographs, graphics, links, headlines, summaries, features, stories, commodity
information, and other data or information.

(j) "Go Live Date" shall mean the date on which the Co-Branded Sites
are first posted on CNBC.com, for use by the general public, and other than in
beta or preview formats.

(k) "Intellectual Property Right" means any patent, copyright,
trademark, trade secret, trade dress, mask work, moral right, right of
attribution or integrity or other intellectual property or proprietary right
arising under the laws of any jurisdiction (including, without limitation, all
claims and causes of action for infringement, misappropriation or violation
thereof and all rights in any registrations and renewals).

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<PAGE> 3

(l) "LendingTree Competitor" shall mean an entity whose primary
business is the operation of a website offering consumers lending opportunities
in connection with first mortgage loans, home equity lines of credit, and
automobile loans.

(m) "LendingTree Content" shall mean Content created, licensed or
otherwise obtained by LendingTree which is available on the LendingTree Site,
which relates directly or indirectly to mortgage loans, home equity loans, auto
loans and/or lending generally, and which is provided by LendingTree for use
within the Co-Branded Sites and any Promotional Content.

(n) "LendingTree Marks" shall mean the trademarks, trade names,
service marks, logos, domain names and other identifiers owned, controlled by or
licensed by LendingTree which are specified on Exhibit A attached hereto.

(o) "Look and Feel" shall mean the overall appearance and
presentation of CNBC.com, including, without limitation, graphics, artwork,
color schemes, layout, navigation, mouseovers, organization and HTML developed
specifically for CNBC.com.

(p) "Person" shall mean an individual or a corporation, partnership,
limited liability company, joint venture, trust or any other entity or
organization.

(q) "Promotional Content" shall mean any e-mail or other promotional
material used in connection with the Co-Branded Sites which is intended to
promote use of the Co-Branded Sites.

(r) "Term" shall have the meaning specified therefor in Section 24.

(s) "User" shall mean any person that views or receives the
Co-Branded Sites.

(t) "User Data" shall mean all data collected or received by either
party with respect to Users' use of the Co-Branded Sites.

2. CO-BRANDED SITES.

(a) General. LendingTree and CNBC.com shall work together to develop
three (3) co-branded sites consisting of a mortgage site (the "Mortgage
Center"), a home equity site (the "Home Equity Loan Center") and an auto loan
site (the "Auto Loan Center"), each of which shall incorporate the CNBC.com Look
and Feel and navigation and appear to all Users to be a part of the CNBC.com
Site (collectively, the "Co-Branded Sites"). The Co-Branded Sites will each
contain all or a portion of the content available on the LendingTree Site which
relates directly or indirectly to mortgage loans, home equity loans, auto loans
and/or lending generally (the "Available LendingTree Content"). The specific
content to be used on the Co-Branded Sites will be selected by CNBC.com;
provided, that CNBC.com shall consult with LendingTree regarding such selection.
Except as otherwise provided herein, LendingTree reserves the right to carry the

3
<PAGE> 4

LendingTree Content on the LendingTree Site, and to make it generally available
to other third parties, at the same time it makes it available to CNBC.com.
LendingTree shall make available to CNBC.com for inclusion within the Co-Branded
Sites all Available LendingTree Content (including calculators, interactive
tools and written content). LendingTree agrees to make available to CNBC.com
users any and all promotions, discounts and special offers generally made
available to the users of other private label or co-branded sites maintained by
LendingTree.

(b) Updates and Upgrades. LendingTree will promptly incorporate into
the Co-Branded Sites all updates, upgrades and revisions for the LendingTree
Content. If LendingTree creates, purchases, licenses or otherwise acquires the
rights to any new Content which it incorporates into the LendingTree Site,
LendingTree will notify CNBC.com of the availability of such new Content and,
upon request from CNBC.com, add such new Content to the Co-Branded Sites as
LendingTree Content on a three-month exclusive basis; provided that (i)
LendingTree reserves the right to carry these new features and tools on the
LendingTree Site at the same time it makes them available to CNBC.com, and (ii)
LendingTree has the necessary right to grant such a license; provided, that
LendingTree shall use commercially reasonable efforts to obtain the foregoing
rights.

(c) Changes to CNBC.com. To the extent CNBC.com implements any
changes to its Look and Feel or navigation, LendingTree shall immediately
implement such changes on the Co-Branded Sites.

(d) Name. The Co-Branded Sites shall be known as the "Mortgage
Center", the "Home Equity Center", and the "Auto Loan Center" respectively, or
by such other names as may be selected by CNBC.com in consultation with
LendingTree.

3. EXCLUSIVITY.

(a) General. During the Term, except as otherwise provided herein,
LendingTree shall be the exclusive and only CNBC.com partner to receive links
from the CNBC.com Site (including the Co-Branded Sites) directly to loan
origination opportunities via the Internet in the residential mortgage loan,
home equity loan and auto loan categories (the "Exclusive Areas"), and CNBC.com
agrees not to build, sponsor, or co-brand, platforms similar to the Co-Branded
Sites with any entities that compete directly with LendingTree in the Exclusive
Areas. Notwithstanding the foregoing, CNBC.com shall retain the right to
develop, create, or engage third parties to create, areas of the CNBC.com Site,
or co-branded sites, devoted to other lending categories such as personal loans
and credit cards; provided, that CNBC.com shall give LendingTree not less than
one (1) week prior notice of CNBC.com's entering into formal negotiations with a
third party in respect thereof and shall negotiate in good faith with
LendingTree before entering into any such third party relationship. The
exclusivities delineated in this Section are intended to cover only links to
loan origination opportunities in the Exclusive Areas, and shall not prevent
CNBC.com from creating, licensing or otherwise providing related content (such
as current rates, commentary, etc.). Notwithstanding the foregoing, LendingTree

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<PAGE> 5

recognizes that CNBC.com retains the right to accept advertising, sponsorships,
and other promotions from LendingTree Competitors on CNBC.com, and that nothing
contained herein shall restrict CNBC.com's ability to provide editorial coverage
of the Exclusive Areas or any LendingTree Competitors; provided, that CNBC.com
shall not implement any sponsorships from LendingTree Competitors on any pages
upon which LendingTree Content appears (other than the home page of the CNBC.com
Site and the front pages of the Personal Finance Center and the Loan Center).

(b) Citibank and GE. At any time during the Term, CNBC.com may
request that LendingTree use its reasonable efforts to facilitate an enhanced
presence for Citibank and/or GE within one or more of the Co-Branded Sites in a
manner that delivers value to CNBC.com's users. Such enhanced presence(s) shall
not require the provision of any additional compensation or consideration to
LendingTree. In no way will either of these relationships eclipse or minimize
LendingTree's prominence on the Co-Branded Sites.

4. SELECTION OF CONTENT.

(a) Selection of Existing Content by CNBC.com. Within a reasonable
period of time after the Effective Date, CNBC.com shall identify for LendingTree
the LendingTree Content that it elects to include as part of the offerings made
available on each of the Co-Branded Sites. With respect to each Co-Branded Site,
CNBC.com may select only the LendingTree Content which relates directly or
indirectly to the subject matter of such Co-Branded Site, or which relates to
lending generally. LendingTree shall promptly include the selected LendingTree
Content within the applicable Co-Branded Sites, provided that such selection
does not, in LendingTree's reasonable and good faith judgment, violate
applicable law or any agreements between LendingTree and any providers or
licensors of such LendingTree Content.

(b) Selection of New Content by CNBC.com. Not less than ten (10)
days prior to the introduction of any new content or feature on the LendingTree
Site, LendingTree shall provide written notice of the availability of such
Content, which notice shall include a description thereof. Within ten (10) days
of receipt of each such notice, CNBC.com shall provide LendingTree with written
notice as to whether it elects to include such Content as part of the offerings
available within the Co-Branded Sites; provided, that if CNBC.com does not
provide such notice within such period, it shall be deemed to have elected to
include such Content within the Co-Branded Sites. If CNBC.com does elect to so
include, or is deemed to have elected to so include such Content, LendingTree
shall promptly include such Content within the Co-Branded Sites as LendingTree
Content.

(c) Removal of Content. Notwithstanding anything to the contrary
contained herein, CNBC.com shall have the right to require the removal by
LendingTree from the Co-Branded Sites of any Content which CNBC.com, in its good
faith discretion, (i) deems unacceptable or inconsistent with the attributes of
quality, trust or integrity associated with CNBC.com or the NBC family of
brands, or (ii) determines conflicts with, interferes with or is detrimental to

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CNBC.com's interests, reputation or business or which might subject CNBC.com or
any of its Affiliates to unfavorable regulatory action or liability for any
reason.

5. SITE DESIGN AND MODIFICATION; EDITORIAL CONTROL. LendingTree will be
responsible for proposing an initial site design for each of the Co-Branded
Sites and specifications therefor and submitting such proposal to CNBC.com
within a reasonable period of time but in no event later than fifteen (15) days
after the Effective Date. CNBC.com shall promptly comment and respond to each
such proposal and LendingTree shall prepare and submit a mockup of the site
design based upon such comments. This process shall be repeated until a final
site design mutually acceptable to the parties is developed. LendingTree shall
be responsible for developing and producing the final site design, and
implementing such final site design no later than sixty (60) days after the
Effective Date; provided, that if LendingTree does not agree with the site
design favored by CNBC.com at the expiration of such sixty (60) day period, then
CNBC.com's version of the site design shall be implemented but CNBC.com shall
work in good faith with LendingTree to accommodate LendingTree's concerns.
Subsequent to the implementation of the final site design, LendingTree shall
make changes as are reasonably requested by CNBC.com, and CNBC.com shall have
full and complete editorial and creative control and approval over the
presentation, look and feel of the Co-Branded Sites; provided, that the
LendingTree branding specified in Section 14 shall not be adversely affected;
and provided, further, that CNBC.com may not alter the calculators or the text
of articles which make up part of the LendingTree Content without LendingTree's
consent, such consent not to be unreasonably withheld.

6. NAVIGATION. CNBC.com will provide prominent navigational links within
the CNBC.com Site to drive traffic to the Co-Branded Sites; provided, that such
navigational links will not include LendingTree branding. Initially, navigation
to a central lending area (the "Loan Center") shall be accomplished via a direct
link from the home page of the CNBC.com Site, but such navigation shall be
transitioned to the Personal Finance Center currently scheduled to be launched
on CNBC.com in 2000. The links appearing on the front page of the Personal
Finance Center shall be Above the Fold at all times. The links to the Co-Branded
Sites from the Loan Center shall have prominence that is no less favorable than
links to other lending content or services appearing within the Loan Center
(other than advertising and editorial content) and will carry branding in
accordance with Section 13(a). Any other links to the Co-Branded Sites shall be
placed at CNBC.com's discretion.

7. MARKETING AND PROMOTION.

(a) General. All marketing and promotional efforts for the
Co-Branded Sites, and all Promotional Content used in connection therewith,
shall be subject to the approval of both parties. If either party wishes to
conduct a marketing or promotional campaign, then such party shall make a
proposal, including the actual Promotional Content to be used, via e-mail or
letter to a list of representatives of the other party (which list may be
modified from time to time upon written notice) for approval/modification. If no
objection or counter-proposal is received within ten (10) business days of
receipt, said proposal will be deemed approved. Campaigns signifi-

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cantly similar in content, timing, and target audience that have been previously
approved by a party will be deemed pre-approved by such party for purposes
hereof. Any objection shall be set forth in writing and shall state the grounds
for the objection. LendingTree acknowledges that the user experience of CNBC.com
is broader than the Co-Branded Sites and that CNBC.com has the right to restrict
or curtail any marketing or promotional campaign to the extent it believes such
campaign may be deemed by Users as too frequent, not of interest, in conflict
with other content available on CNBC.com or the applicable Affiliate Web Site,
or otherwise inappropriate. CNBC.com acknowledges that LendingTree may restrict
or curtail marketing or promotional campaigns it believes are inappropriate or
portray LendingTree or its services in a manner that is competitively
unfavorable.

(b) Sharing of Registration Information. The parties shall use good
faith efforts to cooperate regarding the sharing of the registration data in
order to optimize the marketing of the Co-Branded Sites and enhance the
experience of the Users of the Co-Branded Sites; provided, that any data so
exchanged would be subject to all applicable law, rules and regulations and the
privacy policies of the CNBC.com Site and LendingTree Site.

8. ADVERTISING AND SPONSORSHIPS.

(a) CNBC.com shall have sole and complete control over any and all
advertising and sponsorships that appear within the Co-Branded Sites and shall
be entitled to retain all revenues derived therefrom. CNBC.com and/or its
advertisers shall be responsible for the creation and development of all
advertisements and sponsorships for the Co-Branded Sites. Notwithstanding the
foregoing, LendingTree shall work with CNBC.com and its technology and
infrastructure vendors regarding all technical aspects of implementing all
advertising and sponsorships on the Co-Branded Sites, including without
limitation hosting, serving and tracking such advertising and sponsorships, and
ensuring that all such services are provided uniformly across the Co-Branded
Sites and the rest of the CNBC.com Site using CNBC.com's chosen ad serving
technology. LendingTree will not implement a separate ad servicing technology
within the Co-Branded Sites from that used on the CNBC.com site.

(b) LendingTree shall have sole and complete control over any and
all advertising and sponsorships that appear on the LendingTree Site, including
on pages linked from the Co-Branded Sites (the "Linked Pages"), and shall be
entitled to retain all revenues derived therefrom; provided, that all
advertising and sponsorships appearing on the linked pages shall be in
compliance with CNBC.com's then current standards and practices regarding
inappropriate advertising.

9. FEES.

(a) Click-Through Fees. As compensation for marketing, distribution
and other services and facilities provided by CNBC.com under this Agreement,
LendingTree shall pay to CNBC.com a fee equal to the amount specified on
Schedule 9(a) for each click-through made by

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a Unique Visitor to the Co-Branded Sites (each, a "Click-Through") (all such
fees collectively, the "Click-Through Fee"). The Click-Through Fee shall be
determined solely based on Click-Through rates as measured by CNBC.com. A
"Unique Visitor" shall mean a User who visits the Co-Branded Sites one or more
times during a one calendar week period. CNBC.com agrees to use commercially
reasonable efforts to implement any new methods now or hereafter developed to
track Click-Throughs. The Click-Through Fees shall be due and payable whether or
not the Click-Throughs results in a registration with the LendingTree Site or an
application being made to LendingTree for a loan.

(b) Offset. The Advertising Fee (defined below in subsection (c))
payable in respect of any particular calendar month shall be offset against the
Click-Through Fee payable with respect to that month such that LendingTree shall
only pay the Click-Through Fees for that month that exceed the Advertising Fee
for that month.

(c) Advertising Fee. Commencing with the calendar month in which the
Go Live Date occurs, LendingTree shall pay to CNBC.com a monthly fee of $125,000
(the "Advertising Fee") as compensation for the positioning provided to
LendingTree hereunder and the Marketing Support described in Section 11. By way
of example, if the Click-Through Fee is $150,000, LendingTree shall pay CNBC.com
a total of $150,000 (the $125,000 Advertising Fee and a $25,000 additional
Click-Through Fee); if the Click-Through Fee is $100,000, LendingTree shall only
pay CNBC.com a total of $125,000 (the $125,000 Advertising Fee). In the event
that the aggregate monthly Click-Through Fee exceeds the Advertising Fee,
LendingTree shall pay to CNBC.com the additional Click-Through Fee amount, which
amount shall be calculated as specified in subsection (a) above. The Advertising
Fee shall be due and payable monthly in advance no later than the fifth day of
the applicable month; provided, that with respect to the first month in which
the Advertising Fee is payable, it shall be due and payable five (5) days after
the Go Live Date. For overdue amounts due and payable hereunder, LendingTree
shall pay a late charge at the rate of the lesser of 1.5% per month or the
maximum rate allowed by law.

(d) Legal Compliance. All compensation paid by LendingTree pursuant
to this Agreement will comply and be in accordance with all Real Estate
Settlement Procedures Act ("RESPA") guidelines and all other applicable federal
and state laws, rules and regulations (collectively, "Applicable Law"). In the
event such compensation is determined not to be in compliance with Applicable
Law, then the parties shall negotiate in good faith for a period of sixty (60)
days regarding a new compensation plan that will provide CNBC.com with a level
of compensation that is comparable to that provided herein. In the event the
parties are unable to so agree, then either party may terminate this agreement
upon thirty (30) days prior written notice to the other party.

(e) Payments. CNBC.com shall invoice LendingTree monthly in arrears
for the Click-Through Fee, and LendingTree shall pay to CNBC.com the
Click-Through Fee within thirty (30) days following receipt of invoice.

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(f) Audit and Examination. LendingTree shall have the right, twice
each calendar year, at its expense, to have the records or reports rendered by
CNBC.com during the previous 12 months audited by independent certified public
accountants (an "Audit"), and each party agrees to cooperate with such
accountants in conducting such Audit. All out-of-pocket costs and expenses
incurred by CNBC.com in connection with the Audit shall be reimbursed by
LendingTree. Notwithstanding the foregoing, if as of the result of any Audit, it
is determined that the Click-Through Fee determined by CNBC.com hereunder for
any calendar quarter during the period covered by the Audit exceeds by five
percent (5%) or more the amount of such Click-Through Fee actually payable
according to the terms hereof during such calendar quarter within such period,
then CNBC.com shall reimburse LendingTree for all reasonable out-of-pocket costs
and expenses incurred by it in connection with such Audit. In any event,
CNBC.com shall immediately refund to LendingTree the amount of such overpayment
established by the audit to the extent actually paid by LendingTree, together
with interest calculated at an interest rate per annum equal to the Wall Street
Journal Prime plus two (2%) from the date the deficient amount should have been
paid until the date of payment.

10. WARRANTS. Simultaneously with the execution of this Agreement,
LendingTree and CNBC.com shall execute a Warrant Purchase Agreement and
ancillary agreements as described therein.

11. MARKETING SUPPORT.

(a) General. CNBC.com shall provide marketing, advertising and
promotional support ("Marketing Support") for the Co-Branded Sites through a
variety of media as may be selected by CNBC.com in its good faith discretion but
in consultation with LendingTree. Such Marketing Support (i) shall include
without limitation advertising on CNBC.com, integration into CNBC on-air
television programming (subject in all instances to CNBC's editorial
discretion), targeted e-mail to CNBC.com registered users, and such other
platforms as may become available to CNBC.com, (ii) shall be spread roughly
evenly over the course of the Initial Term, and (iii) except with respect to the
Co-op Support (as defined below), shall not involve any promotion of the
LendingTree brand directly. Such Marketing Support shall include: (x) such
number of banners, buttons and text links as is specified on Schedule 11(a) to
run on CNBC.com, as well as such other CNBC.com properties as may be selected by
CNBC.com and approved by LendingTree, such approval not to be unreasonably
withheld; (y) such number of targeted e-mail banners as is specified on Schedule
11(a); and (z) such amount of advertising inventory as is specified on Schedule
11(a) on the television networks controlled by CNBC.com's Affiliates as may be
selected by CNBC.com, and as approved by LendingTree, such approval not to be
unreasonably withheld ("Advertising Inventory"). In addition, CNBC.com shall
provide an amount of additional marketing support valued as specified on
Schedule 11(a) ("Additional Marketing Support"). Such Additional Marketing
Support shall be allocated among banners, buttons, text links, targeted e-mails
and television advertisement inventory at CNBC.com's discretion valued at then
current market rates. All banners, buttons and targeted e-mail banners shall be
subject to CNBC.com's standard advertiser terms and conditions. All Advertising

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Inventory shall be subject to the applicable television network's standard
advertiser terms and conditions, as the case may be. CNBC.com will also provide
monthly schedules to LendingTree of upcoming co-marketing/promotional campaigns
for the Exclusive Categories.

(b) Co-op Support. LendingTree shall pay an amount of
dollar-for-dollar cooperative television advertising support as specified on
Schedule 11(b) as part of the compensation for the Marketing Support described
in Subsection (a) above (the "Co-op Advertising Support"), with one-half of such
amount payable in the first year of the Initial Term and one-half of such amount
payable in the second year of the Initial Term; provided, that the portion of
the Marketing Support which is equivalent in value to the Co-op Support shall
include promotion of the LendingTree brand via LendingTree logos and
accompanying audio LendingTree mentions. Within [30 ] days of the end of each
month, CNBC.com shall provide LendingTree with a summary of the Marketing
Support provided by CNBC.com during such month along with an invoice for the
Co-op Advertising Support due and payable by LendingTree in respect thereof,
which invoice shall include a calculation showing the determination of the
amount so due and payable. With respect to television advertisement inventory,
CNBC.com shall calculate the Co-op Advertising Support amount using the then
current market rates. Each payment of Co-op Advertising Support shall be due and
payable no later than thirty (30) days from date of invoice. For overdue amounts
due and payable hereunder, LendingTree shall pay a late charge at the rate of
the lesser of 1.5% per month or the maximum rate allowed by law.

(c) Audit. LendingTree shall have the right, twice each calendar
year, at its expense, to have an independent certified public accountant audit
CNBC.com's Marketing Support to confirm that it has met its Co-op Advertising
Support obligations. In the event such audit reveals over-reporting of the
Marketing Support of 10% or more, CNBC.com shall promptly provide LendingTree
with make-goods to satisfy its obligations hereunder and shall refund any costs
LendingTree incurs in respect of the audit.

12. ADVERTISING BUY. During the Term of this Agreement, LendingTree shall
purchase an amount of advertising inventory on the CNBC television network in
accordance with the terms set forth in Exhibit D attached hereto.

13. BRANDING; ATTRIBUTION.

(a) LendingTree will receive attribution in conformance with
attribution standards set forth in Exhibit B attached hereto (the "Attribution
Standards"). LendingTree shall not incorporate any advertising, branding, logos,
links or other promotional material into the Co-Branded Sites or any Promotional
Content without the prior written consent of CNBC.com; provided however, that
CNBC.com shall integrate LendingTree's "powered by" tagline and/or logo (i) on
the Co-Branded Sites (x) directly beneath and adjacent to the "Mortgage Center",
"Auto Center" or "Home Equity Center" title, as the case may be, appearing on
each page of the Co-Branded Sites, and (y) in a point-size or graphic-size no
smaller than one-third (1/3) the point-size or graphic-size in which the
"Mortgage Center", "Auto Center" or "Home Equity Center" title, as

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the case may be, appears on such page; and (ii) on all three (3) links to the
Co-Branded Sites from the Loan Center (e.g. "Auto Loan Center-Powered by
LendingTree"). Any links from the Co-Branded Sites to the LendingTree Site,
including the appearance thereof and text appearing thereon, shall be mutually
agreed between CNBC.com and LendingTree. CNBC.com shall contractually obligate
each of its Affiliates to which it syndicates the Co-Branded Sites to provide
attribution and branding substantially similar to that specified in the
Attribution Standards and in this Section.

(b) Each page of the Loan Center and the Co-Branded Sites which
contains "Powered by Lending Tree" branding shall include a disclaimer in
eight-point font at the bottom of such page which contain the following language
or such other language as may be mutually agreed between the parties: "CNBC.com
shall not be responsible or liable for any products or services obtained by or
through the LendingTree.com website. The materials displayed on this site do not
constitute an offer or promise to make a loan, or an endorsement of
LendingTree.com or the products and services made available on the
LendingTree.com website."

(c) If the CNBC television network ("CNBC-TV") uses any LendingTree
Content or portions thereof on-air on CNBC-TV in a graphic or text format, it
will provide attribution to LendingTree in conformance with CNBC's then
prevailing attribution standards, which standards are subject to change in
CNBC-TV's sole discretion; provided, that CNBC-TV shall not be obligated to so
use such LendingTree Content.

14. TECHNICAL; HOSTING.

(a) General. Subject to Subsection (b) below, LendingTree shall act
as remote host system operator for the Co-Branded Sites using its hosting
facilities located at Digex in Reston, Virginia, and shall make the Co-Branded
Sites available and accessible via the World Wide Web. Such hosting services
shall include providing fully redundant Internet connectivity from LendingTree's
hosting facility to the public Internet. LendingTree's operation of the
Co-Branded Sites, including but not limited to its hosting services and
technical maintenance of the Co-Branded Sites hereunder, shall at all times
comply with generally-accepted industry standards for a high-quality
consumer-oriented content and e-commerce website. In addition, all hosting and
connectivity services provided by LendingTree hereunder shall be governed by the
Service Level Agreement attached hereto as Exhibit C.

(b) Transition to Hosting By CNBC.com. At any time during the Term,
CNBC.com may, upon providing written notice to LendingTree, elect to transfer
hosting and back-end support of the Co-Branded Sites to one or more of its then
current hosting providers. Upon receipt of such notice, LendingTree shall
promptly cooperate with CNBC.com and its hosting provider(s) regarding the
transition from LendingTree hosting systems to those of CNBC.com, and shall take
such further actions as are reasonably necessary in order to effect such
transition. Any hardware and third party software necessary for such transition
shall be purchased by CNBC.com. Upon the transmission of such notice, the
parties shall negotiate within thirty (30)

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days an agreement pursuant to which LendingTree shall (i) provide consulting and
integration services in connection with such migration at time and materials
rates to be negotiated between the parties, which time and materials rates shall
be competitive with those then available from third parties, (ii) license the
LendingTree Content to CNBC.com on a royalty-free basis, it being understood and
agreed that such license shall not include any LendingTree loan qualification
forms or LendingTree's core loan transaction platform, and (iii) transmit the
LendingTree Content to CNBC.com without charge in a timely fashion for
incorporation within the Co-Branded Sites such that the LendingTree Content
appearing on the Co-Branded Sites is always as up-to-date as the corresponding
content appearing on the LendingTree Site. As an interim measure in order to
cover the period between a notification by CNBC.com pursuant to this Section and
such time as the LendingTree Content has been fully migrated to the CNBC.com's
hosting provider(s), CNBC.com may elect to make the Co-Branded Sites available
to its users by framing elements of the LendingTree Site within a frame
embodying the CNBC.com look and feel, which frame is hosted by CNBC.com.
LendingTree agrees to cooperate with CNBC.com regarding the implementation of
such framing in a manner that provides CNBC.com's users with a high quality
experience.

(c) Performance Data. Both parties shall provide the other with
monthly reports detailing the performance of the Co-Branded Sites, including
such metrics as the volume of traffic from links on the CNBC.com Site to the
Co-Branded Sites. These reports shall be in a format, as may be reasonably
requested by the requesting party from time to time.

(d) LendingTree Site Data. LendingTree shall make available to
CNBC.com such aggregated data regarding the activities of Users on the
LendingTree Site as may be reasonably requested by CNBC.com, but in no event
less than the aggregated data provided to LendingTree's other partners, such
data to be broken down by Co-Branded Site as well as comparatively versus other
LendingTree partner sites. In addition, LendingTree shall provide CNBC.com with
the maximum amount of personalized data regarding the activities of Users on the
LendingTree Site as is consistent applicable law, rules and regulations and
LendingTree's privacy policy as in effect from time to time. All such data shall
be made available to CNBC.com in a reasonably convenient manner via a password
protected website, or via such other method as may be mutually agreed between
the parties. To the extent CNBC.com has any difficulties accessing or
interpreting such data, LendingTree shall use commercially reasonable efforts to
work together with CNBC.com to resolve any such difficulties.

15. SYNDICATION OF THE CO-BRANDED SITES. At any time during the Term,
CNBC.com may request that LendingTree Content from the Sites be syndicated to
the Affiliate Web Sites. LendingTree shall be entitled to recoup any actual and
reasonable incremental costs associated with implementing any such content
syndication, but shall not charge any additional fees or costs in connection
therewith. Upon any such request, LendingTree shall promptly provide CNBC.com
with an estimate of the incremental costs associated with such content
syndication, and CNBC.com shall then promptly notify LendingTree as to whether
the relevant Affiliate(s) wish to proceed. If such Affiliate(s) wish to proceed,
LendingTree shall work together with such

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Affiliate(s) to implement such content syndication as promptly as practicable,
and CNBC.com shall cause such Affiliate(s)to reimburse LendingTree for the
agreed upon incremental costs directly. Any syndication shall include all
essential LendingTree Content as set forth in Exhibit E.

16. PROPERTY AND PROPRIETARY RIGHTS.

(a) Ownership of Look and Feel. The look and feel of the Co-Branded
Sites, including, without limitation, HTML, graphics, artwork, and links
provided by or developed specifically for CNBC.com (the "Look and Feel"), and
all Intellectual Property Rights associated therewith shall be owned exclusively
by CNBC.com, and no right, title or interest in or to any of the same is
granted, transferred or assigned to LendingTree by this Agreement.

(b) Ownership of User Data. All User Data shall be owned jointly by
the parties. The parties agree to use such User Data only to the extent
permitted under (i) the privacy policies of the CNBC.com Site and LendingTree
Site, and (ii) any applicable federal and/or state law, rules and regulations.

(c) Ownership of Systems Development. All computer programming code
developed by LendingTree in connection with the implementation of the Co-Branded
Sites, other than the Look and Feel, and all Intellectual Property Rights
associated therewith, shall be owned exclusively by LendingTree.

(d) Ownership of Editorial Content. All rights in and to any and all
LendingTree Content, including any updates and upgrades, furnished by
LendingTree in connection with this Agreement shall remain in LendingTree. All
rights in and to any and all CNBC.com Content furnished by CNBC.com or any of
its Affiliates in connection with this Agreement shall remain in CNBC.com or
such Affiliate, as the case may be.

(e) Trademark License.

(i) Subject to all the terms and conditions of this
Agreement, CNBC.com hereby grants to LendingTree a revocable, nonexclusive,
non-transferable, non-sublicensable license to use the CNBC.com Marks solely
within the Co-Branded Sites and within Promotional Content as provided by
CNBC.com, in its sole discretion, from time to time. CNBC.com may change the
appearance and/or style of the CNBC.com Marks or add or subtract from the list
on Exhibit A, provided that unless required earlier by a court order or to avoid
potential infringement liability, LendingTree shall have five (5) days notice to
implement any such changes. LendingTree hereby acknowledges and agrees that (A)
the CNBC.com Marks are owned solely and exclusively by the National Broadcasting
Company, Inc. ("NBC"), CNBC.com or their Affiliates, (B) except as set forth
herein, LendingTree has no rights, title or interest in or to the CNBC.com
Marks, and (C) all use of the CNBC.com Marks by LendingTree shall inure to the
benefit of NBC, CNBC.com and/or their Affiliates. LendingTree agrees not to
apply for

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registration of the CNBC.com Marks (or any mark confusingly similar thereto)
anywhere in the world. LendingTree agrees that it shall not engage, participate
or otherwise become involved in, or knowingly permit, any activity or course of
action that diminishes and/or tarnishes the image and/or reputation of NBC,
CNBC.com or of any CNBC.com Mark. Upon written notice from CNBC.com that
CNBC.com, in its sole discretion, deems the use of any of the CNBC.com Marks to
be inconsistent with NBC's or CNBC.com's guidelines or standards, LendingTree
will cease such use of the applicable CNBC.com Mark(s) within three (3) days of
LendingTree's receipt of such written notice. CNBC.com shall use commercially
reasonable efforts to provide LendingTree with an alternate version of the use
of the applicable CNBC.com Mark(s) which complies with NBC's and CNBC.com's
guidelines or standards.

(ii) LendingTree acknowledges and agrees that the
presentation and image of CNBC.com Marks should be uniform and consistent with
respect to all services, activities, products, content and portions of the
CNBC.com Site. Accordingly, LendingTree agrees to use the CNBC.com Marks and the
CNBC.com Notice (as defined below) solely in the manner in which CNBC.com shall
specify from time to time in CNBC.com's sole discretion. All usage by
LendingTree of the CNBC.com Marks shall include the trademark symbol and shall
be in the following form: [CNBC.com Mark]?, [CNBC.com Mark](R) and/or [CNBC.com
Mark]SM. All literature and materials printed, distributed or electronically
transmitted by LendingTree and containing the CNBC.com Marks shall include the
following notice (the "CNBC.com Notice"):

[CNBC.com Mark] is a trademark or registered trademark of
[[NBC, Inc.][National Broadcasting Company, Inc. or the applicable
Affiliate] in the United States and/or in other countries.

(iii) Subject to all the terms and conditions of this
Agreement, LendingTree hereby grants to CNBC.com a revocable, nonexclusive,
non-transferable, non-sublicensable license to use the LendingTree Marks solely
within the Co-Branded Sites and within Promotional Content as provided by
LendingTree, in its sole discretion, from time to time. LendingTree may change
the appearance and/or style of the LendingTree Marks or add or subtract from the
list on Exhibit A, provided that unless required earlier by a court order or to
avoid potential infringement liability, CNBC.com shall have five (5) days notice
to implement any such changes. CNBC.com hereby acknowledges and agrees that (A)
the LendingTree Marks are owned solely and exclusively by LendingTree, (B)
except as set forth herein, CNBC.com has no rights, title or interest in or to
the LendingTree Marks, and (C) all use of the LendingTree Marks by CNBC.com
shall inure to the benefit of LendingTree. CNBC.com agrees not to apply for
registration of the LendingTree Marks (or any mark confusingly similar thereto)
anywhere in the world. CNBC.com agrees that it shall not engage, participate or
otherwise become involved in, or knowingly permit, any activity or course of
action that diminishes and/or tarnishes the image and/or reputation of
LendingTree or of any LendingTree Mark. Upon written notice from LendingTree
that LendingTree, in its sole discretion, deems the use of any of the
LendingTree Marks to be inconsistent with LendingTree's guidelines or standards,
CNBC.com will cease such use of the applicable LendingTree Mark(s) within three
(3) days of CNBC.com's receipt of such

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written notice. LendingTree shall use commercially reasonable efforts to provide
CNBC.com with an alternate version of the use of the applicable LendingTree
Mark(s) which complies with LendingTree's guidelines or standards.

(iv) CNBC.com acknowledges and agrees that the presentation
and image of LendingTree Marks should be uniform and consistent, and
accordingly, CNBC.com agrees to use the LendingTree Marks solely in the manner
in which LendingTree shall specify from time to time in LendingTree's sole
discretion; provided, that this Section shall in no event result in any
modification that would increase the size, prominence or related characteristics
of the branding granted to LendingTree hereunder.

17. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LENDINGTREE. LendingTree
hereby represents and warrants to CNBC.com, and covenants and agrees with
CNBC.com that: (a) it has the right, power and authority to enter into this
Agreement and perform its obligations as set forth herein; (b) it is under no
obligation or restriction, nor will it assume any such obligation or
restriction, that does or would interfere or conflict with its obligations under
this Agreement; (c) LendingTree has obtained or is exempt with respect to, or
will use its best efforts to obtain as soon as reasonably practicable, all
necessary permits and licenses in all jurisdictions in which LendingTree
conducts its business; (d) the services provided by LendingTree hereunder will
be rendered in a commercially reasonable manner in accordance with high industry
standards; (e) it is either the owner of all of the LendingTree Content or it
has the right to use, publish and license CNBC.com, its Affiliates and their
respective end users to access, use and publish such LendingTree Content as
permitted herein; (f) the amount of the compensation paid and to be paid to
CNBC.com by LendingTree under this Agreement is reasonably related to the value
of the goods, facilities and services actually provided or to be provided by
CNBC.com, without regard to the value or volume of mortgage loans resulting
therefrom; and (g) the Co-Branded Sites shall not contain or have attached to
them any virus, worm, Trojan horse or similar instrumentality.

18. REPRESENTATIONS, WARRANTIES AND COVENANTS OF CNBC.COM. CNBC.com hereby
represents and warrants to LendingTree, and covenants and agrees with
LendingTree that: (a) it has the right, power and authority to enter into this
Agreement and perform its obligations as set forth herein; (b) it is under no
obligation or restriction, nor will it assume any such obligation or
restriction, that does or would interfere or conflict with its obligations under
this Agreement; and (d) it is the owner of or has obtained the rights to use and
license to LendingTree the CNBC.com Marks, the CNBC.com Content, and the Look
and Feel.

19. INDEMNIFICATION.

(a) Infringement Indemnification. LendingTree shall indemnify,
defend and hold harmless CNBC.com, its Affiliates and their respective
shareholders, members, officers, agents, directors and employees (the "CNBC.com
Parties"), from and against any and all losses, claims, liabilities, damages,
costs and expenses (including, without limitation, reasonable attorneys' fees)
arising out of or incurred by the CNBC.com as a result of any actual or
threatened claim,

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<PAGE> 16

action, investigation, proceeding or suit (each, a "Claim") alleging that the
licensing, use, reproduction, display, publishing, distribution or other
exploitation of the LendingTree Content by any of the CNBC.com Parties in
accordance with the rights granted hereunder constitutes an infringement,
dilution or unauthorized use of any patent, copyright, trademark, trade secret,
proprietary information, right of privacy or any other proprietary right of any
third party. In the event some or all of the LendingTree Content is held by a
court of competent jurisdiction to infringe, an injunction is obtained against
use of any material portion of the LendingTree Content, or CNBC.com believes in
its good faith judgment that the LendingTree Content is infringing, then
LendingTree shall promptly, at its option and expense, either (i) procure for
CNBC.com the right to continue to use the infringing LendingTree Content as set
forth in this Agreement, (ii) replace or modify the infringing LendingTree
Content to make its use non-infringing while being capable of performing
essentially the same functions, or (iii) require CNBC.com to return or remove
the infringing LendingTree Content and cancel all rights thereto; provided that
LendingTree shall use its best efforts to implement (i) or (ii). If LendingTree
determines that it is unable to implement (i) or (ii) and therefore implements
(iii), then CNBC.com may, at its option, terminate this Agreement and/or be
entitled to recover all amounts paid by CNBC.com or any Affiliate in connection
with the infringing LendingTree Content.

(b) Infringement Indemnification. CNBC.com shall indemnify, defend
and hold harmless LendingTree, its Affiliates and their respective shareholders,
members, officers, agents, directors and employees (the "LendingTree Parties"),
from and against any and all losses, claims, liabilities, damages, costs and
expenses (including, without limitation, reasonable attorneys' fees) arising out
of or incurred by the LendingTree as a result of any actual or threatened Claim
alleging that the licensing, use, reproduction, display, publishing,
distribution or other exploitation of the CNBC.com Content by any of the
LendingTree Parties in accordance with the rights granted hereunder constitutes
an infringement, dilution or unauthorized use of any patent, copyright,
trademark, trade secret, proprietary information, right of privacy or any other
proprietary right of any third party. In the event some or all of the CNBC.com
Content is held by a court of competent jurisdiction to infringe, an injunction
is obtained against use of any material portion of the CNBC.com Content, or
LendingTree believes in its good faith judgment that the CNBC.com Content is
infringing, then CNBC.com shall promptly, at its option and expense, either (i)
procure for LendingTree the right to continue to use the infringing CNBC.com
Content as set forth in this Agreement, (ii) replace or modify the infringing
CNBC.com Content to make its use non-infringing while being capable of
performing essentially the same functions, or (iii) require LendingTree to
return or remove the infringing CNBC.com Content and cancel all rights thereto;
provided that CNBC.com shall use its best efforts to implement (i) or (ii). If
CNBC.com determines that it is unable to implement (i) or (ii) and therefore
implements (iii), then LendingTree may, at its option, terminate this Agreement
and/or be entitled to recover all amounts paid by LendingTree or any Affiliate
in connection with the infringing CNBC.com Content.

(c) Cross Indemnity. Each party (the "Indemnifying Party") shall
indemnify and hold harmless the other party, its affiliates, and their
respective officers, directors, members, employ-

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<PAGE> 17

ees and agents (the "Indemnified Party") from and against any and all Claims
instituted by third parties, as well as any and all losses, liabilities,
damages, costs and expenses (including reasonable attorneys fees) arising out of
or accruing from (a) any misrepresentation or breach of the Indemnifying Party's
representations and warranties set forth in this Agreement; and (b) any
non-compliance by the Indemnifying Party with any covenants, agreements or
undertakings of such party contained in or made pursuant to this Agreement.

(d) Permits and Licenses. LendingTree shall indemnify and hold
harmless the CNBC.com Parties from and against any and all Claims instituted by
third parties, as well as any and all losses, liabilities, damages, costs and
expenses (including reasonable attorneys fees) arising out of or accruing from
any failure of LendingTree to obtain all necessary permits and licenses in all
jurisdictions in which LendingTree conducts its business.

20. DISCLAIMER OF WARRANTIES. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN
THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTIES, EITHER EXPRESS,
IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF
TITLE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

21. LIMITATION OF LIABILITY. Except with respect to Section 19, each party's
liability for any and all claims arising in connection with this Agreement shall
not exceed the sum total of all payments made by each respective party
hereunder. TO THE MAXIMUM EXTENT PERMITTED BY LAW, NEITHER PARTY, NOR THEIR
RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS, AFFILIATES, AGENTS OR SUPPLIERS,
SHALL BE LIABLE FOR ANY CONSEQUENTIAL, SPECIAL, INCIDENTAL, OR INDIRECT DAMAGES,
OR LOST OR IMPUTED PROFITS OR ROYALTIES, LOST DATA OR COST OF PROCUREMENT OF
SUBSTITUTE GOODS OR SERVICES, WHETHER FOR BREACH OF WARRANTY OR ANY OBLIGATION
ARISING THEREFROM OR OTHERWISE, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY
(INCLUDING NEGLIGENCE OR STRICT LIABILITY), AND IRRESPECTIVE OF WHETHER THE
PARTY HAS ADVISED OR BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE.
BOTH PARTIES ACKNOWLEDGE AND AGREE THAT THE AMOUNTS PAYABLE HEREUNDER ARE BASED
IN PART UPON THESE LIMITATIONS, AND FURTHER AGREE THAT THESE LIMITATIONS SHALL
APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.

22. CONFIDENTIALITY.

(a) General. During the Term and for a period of two (2) years
thereafter, each party shall treat as confidential all Confidential Information
of the other party, shall not use such Confidential Information except as set
forth herein, and shall not disclose such Confidential Information to any third
party. Without limiting the foregoing, each of the parties shall use at least
the same degree of care which it uses to prevent the disclosure of its own
confidential

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<PAGE> 18

information of like importance to prevent the disclosure of Confidential
Information disclosed to it by the other party under this Agreement, but in no
event less than reasonable care. Each party shall promptly notify the other
party of any actual or suspected misuse or unauthorized disclosure of the other
party's Confidential Information. Upon expiration or termination of this
Agreement, each party shall return all Confidential Information received from
the other party. Any breach of the restrictions contained in this Section is a
breach of this Agreement that may cause irreparable harm to the non-breaching
party. Any such breach shall entitle the non-breaching party to injunctive
relief in addition to all legal remedies.

(b) Exclusions. Notwithstanding the above, neither party shall have
liability to the other with regard to any Confidential Information of the other
which (i) was in the public domain at the time it was disclosed or has entered
the public domain through no fault of the receiving party, (ii) was known to the
receiving party, without restriction, at the time of disclosure, (iii) is
disclosed with the prior written approval of the disclosing party, (iv) was
independently developed by the receiving party without any use of the
Confidential Information, as reasonably demonstrated by the receiving party, (v)
becomes known to the receiving party, without restriction, from a source other
than the disclosing party without breach of this Agreement by the receiving
party and otherwise not in violation of the disclosing party's rights, (vi) is
disclosed generally to third parties by the disclosing party without
restrictions similar to those contained in this Agreement, or (vii) is disclosed
pursuant to the order or requirement of a court, administrative agency, or other
governmental body; provided, that the receiving party shall provide prompt
notice thereof to the disclosing party to enable the disclosing party to seek a
protective order or otherwise prevent or restrict such disclosure. Each party
shall be entitled to disclose the existence of this Agreement, but agrees that
the terms and conditions of this Agreement shall be treated as Confidential
Information and shall not be disclosed to any third party; provided, that each
party may disclose the terms and conditions of this Agreement (A) as required by
any court or other governmental body, (B) as otherwise required by law, (C) to
legal counsel of the parties, (D) in confidence, to accountants, banks and
financing sources and their respective advisors, (E) if necessary in connection
with the enforcement of this Agreement or rights under this Agreement, or (F) in
confidence, in connection with an actual or proposed merger, acquisition or
similar transaction.

23. TERM AND TERMINATION.

(a) Term. The term of this Agreement (the "Term") shall commence on
the Effective Date and expire two (2) years from the Go Live Date. This
Agreement may be terminated by either party at the end of its applicable Term by
giving written notice to the other party at least ninety (90) days prior
thereto, but in default of such notice, the Term shall be automatically renewed
under the same terms and conditions for successive periods one (1) year each.

(b) Termination. This Agreement shall be subject to termination
under the following circumstances:

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<PAGE> 19

(i) If either party defaults in the performance of any
material provision of this Agreement, then the non-defaulting party may give
written notice to the defaulting party that if the default is not cured within
thirty (30) days, the Agreement will be terminated. If the non-defaulting party
gives such notice and the default is not cured during such thirty (30) day
period, then this Agreement shall automatically terminate at the end of such
period.

(ii) This Agreement shall terminate, without notice, (i) upon
the institution by or against either party of insolvency, receivership or
bankruptcy proceedings or any other proceedings for the settlement of such
party's debts, (ii) upon either party's making an assignment for the benefit of
creditors, or (iii) upon either party's dissolution or ceasing to do business.

(iii) In the event the average amount of the Click-Through Fee
generated by the Co-Branded Sites during the first nine (9) months of the first
year of the Term fails to exceed the amount per month specified on Exhibit
23(a), then LendingTree may terminate this Agreement by providing ninety (90)
days prior written notice of termination to CNBC.com at any time during the
final three (3) months of the first year of the Term.

(iv) Upon any Change of Control of LendingTree, by CNBC.com
upon thirty (30) days prior written notice to LendingTree.

(v) In the event that LendingTree does not obtain, on or
before 7:00 p.m. EST on January 21, 2000, the requisite shareholder approvals,
as described in Sections 6.3 and 6.4 of the Warrant Purchase Agreement, dated as
of the date hereof, between LendingTree and CNBC.com, or the Warrants have not
been issued prior to the effectiveness of LendingTree's initial public offering,
then CNBC.com may terminate this Agreement immediately upon written notice to
LendingTree.

(vi) In the event CNBC.com removes any of the licensed
LendingTree Content specified on Exhibit E hereto from the Exclusive Categories
pursuant to Sections 4(c) and 5, and LendingTree determines that such removal
materially adversely effects the quality of the Exclusive Categories.

(vii) In the event the compensation payable to CNBC.com is
determined not to be in compliance with RESPA, pursuant to the terms of Section
9(c).

(c) Consequences of Termination Resulting From CNBC.com Breach of
Section 3. If CNBC.com breaches Section 3 hereunder, CNBC.com shall refund to
LendingTree the amount specified on Schedule 23(c); provided, however, that such
refund shall constitute LendingTree's sole and exclusive remedy in connection
with such a breach. Notwithstanding anything stated herein, if this Agreement is
terminated for any reason by either party, all rights and licenses granted
pursuant to this Agreement shall immediately revert and be fully vested in
CNBC.com and LendingTree, as applicable. In such event, the parties shall return
to the other all intellectual property, software and related documentation, or
other goods provided hereunder.

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<PAGE> 20

24. MISCELLANEOUS.

(a) Binding Nature and Assignment. This Agreement shall be binding
on the parties hereto and their respective successors and assigns, but neither
party may assign this Agreement without the prior written consent of the other;
provided, however, that this Agreement may be assigned by either party without
the consent of the other in connection with a merger or sale of all or
substantially all of its assets, or to a direct or indirect parent, subsidiary
or affiliate.

(b) Compliance with Law. Each party shall comply with all applicable
laws, codes, ordinances, rules and regulations of the federal, state and local
governments, and of any and all political subdivisions and regulatory
authorities thereof. Each party shall obtain all necessary permits and licenses
required in connection with the performance of it obligations hereunder.

(c) Notices. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by courier, overnight delivery service or confirmed facsimile, or
forty-eight (48) hours after being deposited in the regular mail as certified or
registered mail with postage prepaid, if such notice is addressed to the party
to be notified at such party's address or facsimile number as set forth below:

If to CNBC.com:
CNBC.com
2200 Fletcher Avenue
Fort Lee, New Jersey 07024
Attn: VP Business Development
Facsimile: 201-346-5200

with a copy to:

National Broadcasting Company, Inc.
30 Rockefeller Plaza
New York, New York 10112
Attn: Interactive Media Counsel
Facsimile: 212-977-7165

If to LendingTree:

LendingTree.com, Inc.
6701 Carmel Road, Suite 205,
Charlotte, North Carolina 28226.
Attention: Douglas R. Lebda, Chairman and CEO
Facsimile: 704-541-1824

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<PAGE> 21

with a copy to:

LendingTree.com, Inc.
6701 Carmel Road, Suite 205,
Charlotte, North Carolina 28226.
Attention: Robert Flemma, General Counsel
Facsimile: 704-541-1824

Either party hereto may from time to time change its address for notification
purposes by giving the other prior written notice of the new address and the
date upon which it will become effective.

(d) Headings. The article and section headings used herein are for
reference and convenience only and shall not enter into the interpretation
hereof.

(e) Relationship of Parties. LendingTree, in furnishing services to
CNBC.com hereunder, is acting only as an independent contractor and assumes full
responsibilities for each of its employees and shall be solely responsible for
the payment of compensation to its personnel. This Agreement does not constitute
either party as the agent or legal representative of the other party and does
not create a partnership or joint venture between them.

(f) Severability. If any provision of this Agreement is declared or
found to be illegal, unenforceable or void, then both parties shall be relieved
of all obligations arising under such provision, but only to the extent that
such provision is illegal, unenforceable or void, it being the intent and
agreement of the parties that this Agreement shall be deemed amended by
modifying such provision to the extent necessary to make it legal and
enforceable while preserving its intent or, if that is not possible, by
substituting therefor another provision that is legal and enforceable and
achieves the same objective. If the remainder of this Agreement shall not be
affected by such declaration or finding and is capable of substantial
performance, then, each provision not so affected shall be enforced to the
extent permitted by law.

(g) Press Releases. CNBC.com agrees work together with LendingTree
to co-author a mutually agreeable press release related to this Agreement. To
the extent CNBC.com issues any press releases during the Term which describe
multiple strategic partnerships, it shall mention LendingTree if appropriate in
the circumstances. Except to the extent required by applicable law or as
otherwise specified herein, any use by one party of the other party's name,
trademarks or service marks in any press releases, customer lists, marketing
materials or other announcements concerning the matters covered by this
Agreement, or for promotional, advertising or other purposes, shall require the
other party's prior written approval.

(h) Waivers. No delay or omission by either party hereto to exercise
any right or power hereunder shall impair such right or power or be construed to
be a waiver thereof. A waiver by either of the parties hereto of any of the
covenants to be performed by the other or any

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<PAGE> 22

breach thereof shall not be construed to be a waiver of any succeeding breach
thereof or of any other covenant herein contained. All remedies provided for in
this Agreement shall be cumulative and in addition to and not in lieu of any
other remedies available to either party at law, in equity or otherwise.

(i) Force Majeure. If the performance of this Agreement or any
obligation hereunder is prevented, restricted or interfered with by reason of
fire or other casualty or accident, acts of God, severe weather conditions, war
or other violence, any law, order, proclamation, regulation, ordinance, demand
or requirement of any governmental agency, or any other act or condition beyond
the reasonable control of the parties hereto, the party whose performance is so
affected shall be excused from such performance; provided, that if either party
invokes this Section for any consecutive period of thirty (30) days or longer,
then the other party may immediately terminate this Agreement without penalty,
upon written notice to such invoking party.

(j) Survival of Terms. Termination or expiration of this Agreement
for any reason shall not terminate any rights, liabilities or obligations that
have either accrued prior to the effective date of termination of this Agreement
or which the parties have expressly agreed shall survive any such termination or
expiration.

(k) Entire Agreement. This Agreement and each Exhibit attached
hereto, each of which is incorporated herein for all purposes, constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof, and there are no written or oral representations, understandings or
agreements relative hereto which are not fully expressed herein. This Agreement
and such Exhibits are intended to be the sole and exclusive statement of the
agreement between the parties hereto with respect to the subject matter hereof
and any other terms or conditions included in any forms utilized or exchanged by
the parties hereto shall be of no force or effect and shall not be incorporated
herein or be binding unless expressly agreed to in writing by both parties
hereto. No change, amendment, waiver or discharge hereof shall be valid unless
in writing and signed by an authorized representative of the party against which
such change, amendment, waiver or discharge is sought to be enforced.

(l) Governing Law; Jurisdiction. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of New York, without giving effect to principles of conflicts of
law. Each of the parties to this Agreement consents to the exclusive
jurisdiction and venue of the state and federal courts of New York County, New
York.

(m) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

[Signatures appear on the following page.]

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<PAGE> 23

IN WITNESS WHEREOF, LendingTree and CNBC.com have each caused this Co-Branded
Site Agreement to be executed and delivered by its duly authorized officer, to
be effective as of the Effective Date.

CNBC.COM LLC LENDINGTREE.COM, INC.

- ------------------------------ -------------------------------
Signature Signature

- ------------------------------ -------------------------------
Printed Name Printed Name

- ------------------------------ -------------------------------
Title Title

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<PAGE> 24

Exhibit A to
Co-Branded Site Agreement

NBC Marks

To be provided by CNBC.com from time to time.

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<PAGE> 25

Exhibit B to
Co-Branded Site Agreement

Attribution Standards

A text link will appear below CNBC.com's Attribution Line on every page of the
Co-Branded Sites. The logo shall be 30x10 pixels and the attribution text link
shall be in 8-point font, and shall appear as follows:

The attribution text shall link to an attribution page (the "Attribution Page")
which shall reside on CNBC.com's servers. The Attribution Page shall contain
content to be mutually agreed upon by LendingTree and CNBC.com but shall not
contain a link to the LendingTree Site; provided, that the Attribution Page
shall not contain any other links, advertisements or promotions of third party
products or services, or any other material which is not directly relevant to
LendingTree, CNBC or CNBC.com. CNBC.com and LendingTree will mutually agree upon
standards for the timeliness of updates to the Attribution Page. Updates may
include, but are not limited to new copy or new graphical elements.

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<PAGE> 26

Exhibit C to
Co-Branded Site Agreement

Service Level Agreement

CNBC.com and LendingTree agree that this Service Level Agreement
specifies the standards applicable to the hosting and maintenance services
LendingTree is to provide pursuant to Section 15 of the Agreement (the
"Standards"). These Standards are intended to: (i) enable CNBC.com to understand
clearly what level of service to expect from LendingTree, (ii) enable
LendingTree to understand clearly what level of service to provide to CNBC.com,
and (iii) define what measures and actions should be taken if that level of
service is not provided.

1. Telephone Support. LendingTree shall make available via telephone at a
toll-free number between the hours of 8:00 a.m. and 6:00 p.m. ET, Monday through
Friday, excluding national holidays, qualified personnel to advise CNBC.com in
connection with any unavailability, malfunction or defect in the Co-Branded
Sites or any User's experience with the Co-Branded Sites.

2. Uptime. Except for regular scheduled maintenance which shall occur
between the hours of 2:00 a.m. and 5:00 a.m. ET, the Co-Branded Sites shall be
available and accessible to Users 99.5% of the time during the Term. For each
aggregate one (1) hour period within one (1) calendar day that the Co-Branded
Sites is not available to Users between the hours of 6:00 a.m. and 7:59 p.m. ET,
LendingTree shall pay to CNBC.com the amount of $500.00. For each aggregate one
(1) hour period within one (1) calendar day that the Co-Branded Sites are not
available to Users between the hours of 8:00 p.m. and 5:59 a.m. ET when the
CNBC.com Site is available, LendingTree shall pay to CNBC.com the amount of
$250.00.

3. Monitoring. LendingTree shall monitor the performance characteristics of
the Co-Branded Sites. LendingTree shall promptly notify CNBC.com of any problem
with the Co-Branded Sites and CNBC.com shall notify LendingTree of any problems
it learns of with the Co-Branded Sites. Upon learning of or receiving notice of
a problem with the Co-Branded Sites, LendingTree qualified personnel shall
promptly consult with CNBC.com to assign a severity level to the problem as
follows:

Severity Level 1 - The Co-Branded Sites are wholly or substantially
inoperable or interrupted.

Severity Level 2 - The Co-Branded Sites remain usable with some
limitation or degradation of functionality (i.e., normal activities are
measurable impacted).

Severity Level 3 - The Co-Branded Sites experience a minor error and the
impact to normal activities is minimal.

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<PAGE> 27

4. Remedying Problems. After classifying the severity of a problem as set
forth in Section 3 of this Exhibit C, LendingTree shall provide the following
resources to remedy such problem:

- - Severity Level 1 problems shall be given the highest priority of
resolution. LendingTree shall, immediately upon classifying a problem as
a Severity Level 1 problem, begin development of a resolution plan and
notify CNBC.com of the status of the problem and the remedy within thirty
(30) minutes. LendingTree shall use best efforts on a 24x7 basis to
resolve a Severity Level 1 problem. Resolution of Severity Level 1
problems shall occur within one (1) hour.

- - Severity Level 2 problems shall be given a medium priority of resolution.
LendingTree shall, within thirty (30) minutes of classifying a problem as
a Severity Level 2 problem, begin development of a resolution plan and
notify CNBC.com of the status of the problem and the proposed resolution.
LendingTree shall resolve Severity Level 2 problems within three (3)
hours.

- - Severity Level 3 problems shall be given the lowest priority of
resolution and LendingTree shall resolve Severity Level 3 problems within
five (5) hours.

If a permanent repair cannot be made, a temporary resolution (bypass and
recovery) will be implemented and a permanent repair implemented thereafter as
soon as possible. LendingTree shall maintain a sufficient staff and resources in
order to achieve the high level of service described in this Agreement and this
Exhibit C. In the event of multiple problems or requests from other partners of
LendingTree, resources shall be allocated on a priority basis to CNBC.com.

In the event that LendingTree fails to resolve any Severity Level 1 or 2 problem
within the resolution times set forth in Section 4 of this Exhibit C, then
LendingTree shall pay to CNBC.com $500.00 for each one (1) hour period beyond
the specified resolution time that the problem remains unresolved. In the event
that LendingTree fails to resolve any Severity Level 3 problem within the
resolution time specified in Section 4 of this Exhibit C, LendingTree shall pay
to CNBC.com $250.00 for each one (1) hour period beyond the specified resolution
time that the problem remains unresolved.

Any amounts payable by LendingTree pursuant to this Exhibit C shall be paid by
LendingTree to CNBC.com within ten (10) days of the occurrence of the event from
which the payment arises.

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<PAGE> 28

Exhibit D to
Co-Branded Site Agreement

Advertising Buy on CNBC Television Network

1. Gross expenditures:
a) 2000: $2,366,617
b) 2001: $2,366,617

2. HH CPM
a) 2000: *****
b) 2001: *****

3. *****
a) Business Day (MF 430a-730p) *****

4. Daypart Distribution
a) 100% Business Day

5. Cancellation Options
a) Each year is treated as separate one-year deals:
b) 70% total firm with 1st Qtr 100% firm and each subsequent Qtrs.
between 50%-75% firm to reach a yearly total of 70% firm.
c) Option notification date is 60 days prior to start of Qtr

6. Year #2 Negotiation
a) The 2001 buy must be negotiated and ordered by 6/23/00

Note: Due to inventory constraints, exact number of units and programs subject
to availabilities at the time of order.

- --------------

***** Confidential treatment has been requested for the redacted portions. The
confidential redacted portions have been filed separately with the
Securities and Exchange Commission.

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<PAGE> 29

Exhibit E to
Co-Branded Site Agreement

Essential LendingTree Content

Links to the LendingTree Site from the Co-Branded Sites as specified in Section
13(a).

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<PAGE> 30

Schedule 9(a) to
Co-Branded Site Agreement

Fee Per Click-Through

*****

- --------------

***** Confidential treatment has been requested for the redacted portions. The
confidential redacted portions have been filed separately with the
Securities and Exchange Commission.

30
<PAGE> 31

Schedule 11(a) to
Co-Branded Site Agreement

Marketing Support

1. Banners, buttons and text links: $70,000,000
2. Targeted e-mail banners: $30,000,000
3. Advertising inventory: $2,500,000
4. Additional Marketing Support: $1,000,000

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Schedule 11(b) to
Co-Branded Site Agreement

Co-op Support

$1,000,000

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<PAGE> 33

Schedule 23(a) to
Co-Branded Site Agreement

Termination Threshold

******

- --------------

***** Confidential treatment has been requested for the redacted portions. The
confidential redacted portions have been filed separately with the
Securities and Exchange Commission.

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<PAGE> 34

Schedule 23(c) to
Co-Branded Site Agreement

Refund Amount

******% of the Advertising Fees as of the date of such breach

- --------------

***** Confidential treatment has been requested for the redacted portions. The
confidential redacted portions have been filed separately with the
Securities and Exchange Commission.

<PAGE> 1
FORM OF PROMISSORY NOTE EXHIBIT 10.21

$__________ February_____, 2000

DOUGLAS R. LEBDA, a natural person residing in the State of North
Carolina (the "Borrower"), for value received, hereby promises to pay to
LENDINGTREE, INC. (the "Company"), or its assigns, the principal amount of
_____________________________ DOLLARS ($__________) (the "Loan"), of which
_______________________ DOLLARS ($__________) shall be paid on each of the
Maturity Dates, with interest (computed on the basis of the actual number of
days elapsed over a 360 day year) payable, from the date hereof, on the unpaid
balance of the Loan at a rate per annum equal to the Federal Rate, on January 31
of each year in which a principal balance is outstanding, in arrears. Payments
of princi pal and interest hereon shall be made in lawful money of the United
States of America at the address for such purpose specified in Section 9 or at
such other address as you or any subsequent holder of this Note may designate in
writing, without requiring any presentation or surrender of this Note, except if
this Note is paid or prepaid in full it shall be promptly surrendered to the
Borrower and canceled.

Section 1. Prepayment. At any time, or from time to time, the Borrower
may, at Borrower's option, or as required by Section 4(d) hereto, prepay all or
any part of this Note. In the event of any such prepayment, the Borrower shall
give written notice thereof to the holder of this Note not less than 10 days (or
three (3) business days if the prepayment is required by Section 4(d)) prior to
the date fixed for such prepayment. Each such notice shall set forth (a) the
date fixed for prepayment, (b) the aggregate principal amount of and accrued on
this Note to be prepaid on such date.

Section 2. Acceleration. In addition to the rights granted to the holder
of this Note under Section 3 hereof, if the Borrower's employment with the
Company is terminated for any reason, on the date which is 45 days from the date
such termination becomes effective, the holder of this Note shall have the
right to declare the entire principal of, and interest accrued on, this Note
then outstanding to be, and this Note shall thereupon become, forthwith due and
payable, without any presentment, demand, protest, or other notice of any kind,
all of which are hereby expressly waived, and the Borrower shall forthwith pay
to the holder of this Note the entire principal of, and interest accrued
interest on, this Note.

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Section 3. Representations and Warranties.

The Borrower represents and warrants that:

(a) When executed and delivered, this Note will constitute the
valid and legally binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms.

(b) The execution, delivery and performance of this Note will
not violate or conflict with or constitute a default under, or result in the
creation of any mortgage, lien, charge or encumbrance upon any of the properties
or assets of the Borrower pursuant to any term of any agreement, instrument,
judgment, decree, order, law, statute, rule or regulation applicable to the
Borrower or any of Borrower's respective properties or assets.

(c) The Borrower is not bound by or subject to any agreement,
instrument, judgment, decree, order, law, statute, rule or regulation under the
terms of or pursuant to which Borrower's obligation to pay interest or principal
of this Note, or to perform Borrower's obligations hereunder, is in any way
restricted.

Section 4. Covenants. The Borrower covenants and agrees that until the
principal amount of this Note, together with interest thereon and all other
obligations incurred hereunder, are paid in full:

(a) Payment of Principal and Interest. The Borrower shall duly
and punctually pay to the Company, when due, all principal of and interest on
this Note on the dates and in the manner provided herein. Principal or interest
shall be considered paid on the date it is due if the Company withholds on that
date money otherwise payable to the Borrower, in the amounts and at the times
required under this Note. The Borrower shall pay interest on overdue principal
from the due date at the Federal Rate plus 2.0% per annum; and pay interest,
including post-petition interest in the event of a proceeding under the
Bankruptcy Code, on overdue installments of interest at the same rate to the
extent lawful.

(b) No Transfer of Pledged Stock. The Borrower shall not
transfer any of the Pledged Stock except in accordance with the terms and
provisions of the Pledge Agreement.

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(c) Use of Proceeds. The Borrower shall use the proceeds from
the Loan solely for the purpose of acquiring the Pledged Stock and not use the
proceeds from the Loan, directly or indirectly, to purchase or carry margin
securities, as those terms are defined in the laws and regulation applicable to
margin loans as promulgated by the Securities and Exchange Commission and the
Board of Governors of the Federal Reserve System.

(d) Mandatory Prepayment. Within three (3) business days
after the receipt by the Borrower of any Net Proceeds, the Borrower shall apply
such Net Proceeds to as follows:

(i) if the Current Value of the Pledged Stock is equal
to or greater than the Minimum Collateral Value, the Net Proceeds Payable shall
be applied by the Borrower ratably to the prepayment of the Loans, and the
remainder of the Net Proceeds shall be retained by the Borrower; provided,
however, that if the Current Value of the Pledged Stock is less than the Minimum
Collateral Value, the Borrower must make prepayment pursuant to paragraph (ii)
below.

(ii) if the Current Value of the Pledged Stock is less
than the Minimum Collateral Value, the Net Proceeds shall be applied by the
Borrower ratably to the prepayment of the Loans until the Current Value of the
Pledged Stock is at least equal to the Minimum Collateral Value. If there are
any Net Proceeds remaining after such prepayment, they shall be applied pursuant
to paragraph (a) above.

Section 5. Remedies.

Each of the following shall be Events of Default under this Note:

(a) the Borrower defaults in the due and punctual payment of
all or any part of the principal of this Note when and as the same shall become
due and payable, whether at the stated maturity thereof, by notice of or demand
for prepayment, or otherwise;

(b) the Borrower defaults in the due and punctual payment of
any interest on this Note when and as such interest shall become due and payable
and such default shall have continued for a period of five days;

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(c) any representation or warranty made by the Borrower herein
shall prove to be untrue in any material respect as of the date of the issuance
or making thereof;

(d) the Borrower defaults in the performance or observance of
any other of the provisions contained in this Note and such default shall have
continued for a period of 30 days after the earlier of (i) the Borrower's
obtaining actual knowledge of such default or (ii) the Borrower's receipt of
written notice of such default;

(e) the Borrower shall default in the payment when due
(whether by scheduled maturity, by required prepayment, by acceleration, by
demand, or otherwise) of any indebtedness for borrowed money owing to any other
person, or any interest or premium thereon of any amount owing in respect of
such indebtedness, in excess of $50,000; or the Borrower shall default in the
performance or observance of any obligation or condition with respect to such
indebtedness or any other event shall occur or condition exist, if the effect of
such default, event or condition is to acceler ate the maturity of any such
indebtedness or to permit (without regard to any required notice or lapse of
time) the holder or holders thereof, or any trustee or agent for such holders,
to accelerate the maturity of any such indebtedness, or any such indebtedness
shall become or be declared to be due and payable prior to its stated maturity
other than as a result of a regularly scheduled payment date;

(f) there shall remain in force, undischarged, unbonded, or
unstayed, for more than thirty (30) days, any final judgment against the
Borrower that, with other outstanding final judgments, undischarged, against the
Borrower exceeds in the aggregate $50,000;

(g) the Borrower shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator; (ii) be generally unable to pay the Borrower's debts as such
debts become due; (iii) make a general assignment for the benefit of the
Borrower creditors; (iv) commence a voluntary case under the Bankruptcy Code;
(v) file a petition seeking to take advantage of any other law of any
jurisdiction relating to bankruptcy, insolvency, or composition or readjustment
of debts; (vi) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against the Borrower in an
involuntary case under the Bankruptcy Code; or (vii) take any action for the
purpose of effecting any of the foregoing;

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(h) a proceeding or case shall be commenced, without the
application or consent of the Borrower, in any court of competent jurisdiction,
seeking (i) the liquidation of the Borrower's assets, or the composition or
readjustment of the Borrower's debts, (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of any substantial part of the
Borrower's assets, or (iii) similar relief in respect of the Borrower under any
law of any jurisdiction relating to bankruptcy, insolvency, or the composition
or readjustment of debts, and such proceedings or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect for a period of
sixty (60) days; or an order for relief against the Borrower shall be entered
in an involuntary case under any bankruptcy, insolvency, composition,
readjustment of debt, liquidation of assets or similar law of any jurisdiction;

(i) the Borrower shall die or become incapacitated or
otherwise unable to fulfill his duties with the Company; or

(j) any provision of the Pledge Agreement shall for any reason
cease to be valid and binding on the Borrower or the Borrower shall so state in
writing; or the Pledge Agreement shall for any reason cease to create a valid
lien on any of the Collateral purported to be covered thereby, or such lien
shall cease to be a perfected and first priority lien with respect to the
Collateral, or the Borrower shall so state in writing;

If an Event of Default specified in clauses (g) and (h) of this Section 3 shall
exist, this Note shall automatically become immediately due and payable together
with interest accrued thereon, without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived.

If an Event of Default other than those specified in clauses (g) and (h) shall
exist, the holder of this Note may exercise any right, power or remedy permitted
to such holder by applicable law, and shall have, in particular, without
limiting the generality of the foregoing, the right to declare the entire
principal of, and interest accrued on, this Note then outstanding to be, and
this Note shall thereupon become, forthwith due and payable, without any
presentment, demand, protest, or other notice of any kind, all of which are
hereby expressly waived, and the Borrower shall forthwith pay to the holder of
this Note the entire principal of, and interest accrued on, this Note.

No course of dealing on the part of the holder of this Note nor any delay or
failure on the part of the holder of this Note to exercise any right shall
operate as a waiver of
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such right or otherwise prejudice such holder's rights, powers and remedies. If
the Borrower fails to comply with any provision of this Note the Borrower shall
pay to the holder, to the extent permitted by applicable law, such further
amounts as shall be sufficient to cover the costs and expenses, including but
not limited to reasonable attorneys' fees, incurred by such holder in collecting
any sums due on this Note or in otherwise assessing, analyzing or enforcing any
rights or remedies that are or may be available to it.

The Borrower further waives and agrees not to assert any rights or privileges it
may acquire under Section 9-112 of the New York Uniform Commercial Code and the
Borrower shall be liable for the deficiency if the proceeds of any sale or other
disposi tion of the Collateral are insufficient to pay all amounts to which the
holder of the Note is entitled, and the fees of any attorneys employed by the
holder of the Note to collect such deficiency.

Section 6. Security. In order to secure the payment and performance in
full of all of its obligations under this Note, the Borrower covenants and
agrees to pledge the Pledged Stock (as defined in the Pledge Agreement) owned by
the Borrower, substantially in accordance with the terms of the Pledge Agreement
attached hereto as Exhibit A.

Section 7. Right of Set-off. The Company is hereby authorized, at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all amounts at any time held and all indebtedness of other
amounts at any time owing by the Borrower to or for the credit or the account of
the Company regardless of the currency in which any such deposit, amount or
indebtedness may be denominated, against any and all of the obligations of the
Borrower now or hereafter existing, irrespective of whether or not the Company
shall have made any demand and al though such obligations may be unmatured. The
Company will promptly notify the Borrower after any such set-off and
application, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Company hereunder
are in additional to other rights and remedies (including, without limitation,
other rights of set-off) which the Company may have.

Section 8. Definitions and Principles of Construction.

(a) Defined Terms. As used in this Note, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

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"Applicable Factor" shall mean the result of the Net Proceeds divided by the
Current Value of the Other Stock prior to a Transfer Event.

"Applicable Share Price" shall mean the average closing sale price of the shares
of the Company for the ten trading days immediately preceding a Transfer Event.

"Bankruptcy Code" shall mean Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statutes.

"Collateral" shall have the meaning assigned to that term in the Pledge
Agreement.

"Credit Documents" shall mean this Note and the Pledge Agreement.

"Current Value" shall mean the product of the number of shares to be valued
multi plied by the Applicable Share Price.

"Federal Rate" shall mean the applicable federal rate, as defined under sections
1274(d) and 7872 of the Internal Revenue Code of 1986, as amended, compounded
annually.

"Loans" shall mean, collectively, the Loan and the loan evidenced by the
Supplementary Promissory Note, dated as of the date hereof, by the Borrower in
favor of the Company and attached as Exhibit A to the Pledge Agreement.

"Maturity Dates" shall mean January 31, 2004 and 2005, respectively.

"Material Adverse Effect" shall mean a material adverse effect on (i) the
properties, assets, condition (financial or otherwise) or earnings prospects of
Borrower, (ii) the ability of the Borrower to fully and timely perform the
Secured Obligations, (iii) the legality, validity, binding effect or
enforceability against the Borrower of any Credit Document or (iv) any material
rights, remedies and benefits available to, or conferred upon, the Company, any
holder of the Note or any agent (appointed in accordance with the Pledge
Agreement) under any Credit Document.

"Minimum Collateral Value" shall mean the product of the aggregate outstanding
principal and interest on the Loans multiplied by four (4).

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"Net Proceeds" shall mean any proceeds from a Transfer Event less all reasonable
fees and expenses incurred or to be incurred and all federal state, local and
foreign taxes assessed or to be assessed in connection with such Transfer Event.

"Net Proceeds Payable" shall mean the product of the Net Proceeds multiplied by
the Applicable Factor.

"Other Stock" shall mean all capital stock of the Company, other than the
Pledged Stock, now or hereafter owned by the Borrower.

"Pledge Agreement" shall mean the Pledge Agreement dated as of even date
herewith between the Borrower and the Company, as the same may be amended,
supplemented or otherwise modified from time to time.

"Pledged Stock" shall have the meaning assigned to that term in the Pledge
Agreement.

"Surplus" shall have the meaning assigned to that term in Section 10.

"Secured Obligations" shall have the meaning assigned to that term in the Pledge
Agreement.

"Transfer Event" shall mean (i) any transfer, sale or other disposition of all
or a portion of the Other Stock or (ii) any loan, borrowing or other financing
secured or guaranteed by all or a portion of the Other Stock.

(b) Principles of Construction. All references to sections and
exhibits are to sections and exhibits in or to this Note unless otherwise
specified. The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Note shall refer to this Note as a whole and not to any
particular provision of this Note.

Section 9. Notices.

The Borrower's address for all communications related to this Note shall be as
follows:

Douglas R. Lebda
9313 Olivia Lane
Charlotte, NC 28277

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The Company's address for all communications and payments related to this Note
shall be as follows:

LendingTree, Inc
6701 Carmel Road, Suite 205
Charlotte, North Carolina 28226
Attention: General Counsel

With a copy to:

LendingTree, Inc
6701 Carmel Road, Suite 205
Charlotte, North Carolina 28226
Attention: Chief Financial Officer

Section 10. Sale of Pledged Stock. In the event that, pursuant to Section
8 of the Pledge Agreement, the Pledgor sells a portion or all of the Pledged
Stock, the Company will deliver to the buyer the corresponding number of shares
of Pledged Stock against the aggregate amount of proceeds from such sale. In the
event that the aggregate amount of proceeds from such sale exceeds the amount of
principal and accrued interest (including, without limitation, fees, expenses or
otherwise) then outstanding on the Loan (the "Surplus"), the Company shall pay
the Pledgor the Surplus.

Section 11. Successors and Assigns.

This Note shall inure to the benefit of and be binding upon the successors and
assigns of the Company or any holder of this Note. The provisions hereof are
intended to be for the benefit of all holders, from time to time, of this Note,
and shall be enforceable by any such holder, whether or not an express
assignment to such holder of rights hereunder shall have been made by the holder
or any successor or assign. The Borrower may not assign this Note without the
prior written consent of the holder of this Note.

Section 12. Expenses. The Borrower agrees to pay all reasonable
out-of-pocket expenses incurred by the holder of this Note, including the
reasonable fees, charges and disbursement of counsel for such holder, in
connection with any amendment, waiver, supplement or modification to, or
enforcement or protection of such holder's rights under this Note.

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Section 13. No Waiver; Remedies Cumulative. No failure or delay on the
part of the Company in exercising any right, power or privilege hereunder and no
course of dealing between the Borrower and the Company shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or hereunder
or the exercise of any other right, power or privilege hereunder. The rights,
powers and remedies herein expressly provided are cumulative and not exclusive
of any rights, powers or remedies which the Company or the holder of this Note
would otherwise have. No notice to or demand on the Borrower in any case shall
entitle the Borrower to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Company to any
other or further action in any circumstances without notice or demand.

Section 14. GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW).

Section 15. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUN TERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS
AGREE MENT OR ANY MATTER ARISING HEREUNDER.

------------------------
Name: Douglas R. Lebda

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EXHIBIT A TO PROMISSORY NOTE

PLEDGE AGREEMENT

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EXHIBIT 10.22

FORM OF
PLEDGE AGREEMENT

This PLEDGE AGREEMENT (this "Agreement") is made as of this day of
February, 2000, between Douglas R. Lebda, a natural person residing in the State
of North Carolina (the "Pledgor"), and LendingTree, Inc., a Delaware corporation
(the "Company").

W I T N E S S E T H :

WHEREAS, the Pledgor desires that the Company make certain loans in an
aggregate principal amount of $_______________ (the "Loans") to Pledgor;

WHEREAS, it is a condition precedent to the Company making such loan to
the Pledgor that the Pledgor execute and deliver to the Company certain
promissory notes (the "Notes"), attached hereto as Exhibit A, in favor of the
Company as evidence of Pledgor's obligation to repay the Loans;

WHEREAS, Pledgor is a party to a lock-up agreement among ____________,
dated February __, 2000 (the "Lock-up Agreement"), which, among other things,
restricts the transferability of the shares for 180 days following an initial
public offering of the Company's common stock;

WHEREAS, it is a condition precedent to the Company making such loans
to the Pledgor that the Pledgor execute and deliver to the Company this
Agreement; and

WHEREAS, the Pledgor wishes to grant pledges, assignments and security
interests in favor of the Company as herein provided;

NOW, THEREFORE, in consideration of the premises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

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SECTION 1. Definitions.

Terms not otherwise defined herein have, as used herein, the
respective meanings provided for in the Notes. The following additional terms,
as used herein, have the following respective meanings:

"Collateral" has the meaning assigned to such term in Section 3(A).

"Company Stock" means the common stock of the Company, par value $0.01
per share listed on Schedule I hereto.

"Loans" has the meaning assigned to such term in the recitals hereof.

"Pledged Stock" means the Company Stock and any other capital stock
required to be pledged to the Company pursuant to Section 3(B).

"Secured Obligations" means (i) all principal of and interest
(including, without limitation, fees, expenses or otherwise and any interest
which accrues after the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency or reorganization of the Pledgor) on the
Loans as evidenced by the Notes and (ii) any amendments, restatements, renewals,
extensions or modifications of any of the foregoing.

"Security Interests" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.

"Surplus" has the meaning assigned to such term in Section 8.

Unless otherwise defined herein, or unless the context otherwise
requires, all terms used herein which are defined in the New York Uniform
Commercial Code as in effect on the date hereof shall have the meanings therein
stated.

SECTION 2. Representations and Warranties.

The Pledgor represents and warrants as follows:

(A) Title to Pledged Securities. The Pledgor owns all of the Pledged
Stock, free and clear of any Liens other than the Security Interests. All of the
Pledged Stock has been duly authorized and validly issued, and is fully paid and

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non-assessable, and is subject to no options to purchase or similar rights of
any person. The Pledgor is not and will not become a party to or otherwise bound
by any agreement, other than this Agreement and the Lock-up Agreement, which
restricts in any manner the rights of any present or future holder of any of the
Pledged Stock with respect thereto.

(B) Validity, Perfection and Priority of Security Interests. Upon the
delivery of the certificates representing the Pledged Stock to the Company in
accordance with Section 4 hereof, the Company will have valid and perfected
security interests in the Collateral subject to no prior lien. No registration,
recordation or filing with any governmental body, agency or official is required
in connection with the execution or delivery of this Agreement or necessary for
the validity or enforceability hereof or for the perfection or enforcement of
the Security Interests. The Pledgor has not performed or will not perform any
acts which might prevent the Company from enforcing any of the terms and
conditions of this Agreement or which would limit the Company in any such
enforcement.

(C) UCC Filing Locations. The primary residence and principal place
of business of Pledgor are located at the following address:

9313 Olivia Street
Charlotte, NC 28277

and

6701 Carmel Road, Suite 205
Charlotte, North Carolina 28226

SECTION 3. The Security Interests.

In order to secure the full and punctual payment of the Secured
Obligations in accordance with the terms thereof, and to secure the performance
of all the obligations of the Pledgor hereunder:

(A) The Pledgor hereby assigns and pledges to the Company and grants
to the Company a security interest in the Pledged Stock, and all of his rights
and privileges with respect to the Pledged Stock (whether such rights are fully
vested or may become fully vested in the future), and all income and profits
thereon, and all dividends and other payments and distributions with respect
thereto, and all proceeds of the foregoing (the "Collateral"). Contemporaneously
with the execution and delivery hereof, the Pledgor is delivering certificates
representing the Pledgor Stock in pledge hereunder.

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(B) In the event that the Company at any time, in connection with the
Pledged Stock, issues any additional or substitute shares of capital stock of
any class, including, but not limited to, issuing unrestricted shares to replace
restricted shares that have vested,` the Pledgor will immediately pledge and
deposit with the Company certificates representing all such shares as additional
security for the Secured Obligations. All such shares constitute Pledged Stock
and are subject to all provisions of this Agreement.

(C) The Security Interests are granted as security only and shall not
subject to, or transfer or in any way affect or modify, any obligation or
liability of the Pledgor with respect to any of the Collateral or any
transaction in connection therewith.

SECTION 4. Delivery of Pledged Stock.

All certificates representing Pledged Stock delivered to the Company by
the Pledgor pursuant hereto shall be in suitable form for transfer by delivery,
or shall be accompanied by duly executed instruments of transfer or assignment
in blank, with signatures appropriately guaranteed, and accompanied by any
required transfer tax stamps, all in form and substance satisfactory to the
Company.

SECTION 5. Filing; Further Assurances.

(A) The Pledgor agrees that it will, at its expense and in such
manner and form as the Company may require, execute, deliver, file and record
any financing statement, specific assignment or other paper and take any other
action that may be necessary or desirable, or that the Company may request, in
order to create, preserve, perfect or validate any Security Interest or to
enable the Company to exercise and enforce its rights hereunder with respect to
any of the Collateral. To the extent permitted by applicable law, the Pledgor
hereby authorizes the Company to execute and file, in the name of the Pledgor or
otherwise, Uniform Commercial Code financing statements (which may be carbon,
photographic, photostatic or other reproductions of this Agreement or of a
financing statement relating to this Agreement) which the Company in its sole
discretion may deem necessary or appropriate to further perfect the Security
Interests.

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(B) The Pledgor agrees that Pledgor will not change (i) Pledgor's
name or (ii) the location of Pledgor's primary residence or principal place of
business unless Pledgor shall have given the Company not less than 30 days'
prior notice thereof.

SECTION 6. Right to Receive Distributions on Collateral.

Prior to the occurrence of any Event of Default, the Pledgor shall be
entitled to receive all cash dividends, if any, on the Pledged Stock. Upon the
occurrence and during the continuance of an Event of Default, the Company shall
be entitled to retain all dividends and other payments and distributions made
upon or with respect to the Collateral and the Pledgor shall take all such
action as the Company may deem necessary or appropriate to give effect to such
right and all such dividends and other payments and distributions which are
received by the Pledgor shall be received in trust for the benefit of the
Company and shall, forthwith upon demand by the Company during the continuance
of an Event of Default, be paid over to the Company as Collateral in the same
form as received (with any necessary endorsement). After all Events of Default
that shall have occurred have been cured, the Company's right to retain
dividends, interest and other payments and distributions under this Section 6
shall cease and the Company shall pay over to the Pledgor any such Collateral
retained by the Company during the continuance of an Event of Default. Any
non-cash dividends and other payments or distributions shall be immediately
pledged to the Company hereunder.

SECTION 7. General Authority.

The Pledgor hereby irrevocably appoints the Company its true and lawful
attorney, with full power of substitution, in the name of the Pledgor, the
Company, or otherwise, for the sole use and benefit of the Company, but at the
expense of the Pledgor, to the extent permitted by law to exercise, at any time
and from time to time while an Event of Default has occurred and is continuing,
all or any of the following powers with respect to all or any of the Collateral:

(i)to demand, sue for, collect, receive and give acquittance
for any and all monies due or to become due upon or by virtue thereof,

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(ii)to settle, compromise, compound, prosecute or defend any
action proceeding with respect thereto,

(iii) to sell, transfer, assign or otherwise deal in or with
the same or the proceeds or avails thereof, as fully and effectually as
if the Company were the absolute owner thereof, and

(iv) to extend the time of payment of any or all thereof and
to make any allowance and other adjustments with reference thereto;

provided that the Company shall give the Pledgor not less than ten days' prior
written notice of the time and place of any sale or other intended disposition
of any of the Collateral except any Collateral which is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market. The Company and the Pledgor agree that such notice constitutes
"reasonable notification" within the meaning of Section 9-504(3) of the Uniform
Commercial Code.

SECTION 8. Sale of Pledged Stock.

The Pledgor shall not sell the Pledged Stock without the prior written
consent (which consent shall not be unreasonably withheld) of the Company. In
the event that the Pledgor sells a portion or all of the Pledged Stock, the
Company will deliver to the buyer the corresponding number of shares of Pledged
Stock against the aggregate amount of proceeds from such sale. In the event that
the aggregate amount of proceeds from such sale exceeds the aggregate amount of
principal and accrued interest (including, without limitation, fees, expenses or
otherwise) then outstanding on the Loans (the "Surplus"), the Company shall pay
the Pledgor the Surplus. If the aggregate amount of proceeds from such sale are
less than the amount of principal and accrued interest (including, without
limitation, fees, expenses or otherwise) then outstanding on the Loans, the
Pledgor shall remain liable for any deficiency. Notwithstanding anything to the
contrary in this Section 8, any sale of the Pledged Stock by the Pledgor must be
in accordance with the provisions and terms of the Lock-up Agreement.

SECTION 9. Remedies upon Event of Default.

If any Event of Default shall have occurred and be continuing, the
Company may exercise all the rights of a secured party under the Uniform
Commercial Code (whether or not in effect in the jurisdiction where such rights
are exercised)

6
<PAGE> 7

and, in addition, the Company may, without being required to give
any notice, except as herein provided or as may be required by applicable law,
(i) apply the cash, if any, then held by it as Collateral as specified in
Section 12 and (ii) if there shall be no such cash or if such cash shall be
insufficient to pay all the Secured Obligations in full, sell the Collateral or
any part thereof at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery, and at such
price or prices as the Company may deem satisfactory. The Company may be the
purchaser of any or all of the Collateral so sold at any public sale (or, if the
Collateral is of a type customarily sold in a recognized market or is of a type
which is the subject of widely distributed standard price quotations, at any
private sale). The Company is authorized, in connection with any such sale, if
it deems it advisable so to do, (i) to restrict the prospective bidders on or
purchasers of any of the Pledged Stock to a limited number of sophisticated
investors who will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or sale of any of
such Pledged Stock, (ii) to cause to be placed on certificates for any or all of
the Pledged Stock or on any other securities pledged hereunder a legend to the
effect that such security has not been registered under the Securities Act of
1933 and may not be disposed of in violation of the provision of said Act, and
(iii) to impose such other limitations or conditions in connection with any such
sale as the Company deems necessary or advisable in order to comply with said
Act or any other law. The Pledgor covenants and agrees that it will execute and
deliver such documents and take such other action as the Company deems necessary
or advisable in order that any such sale may be made in compliance with law.
Upon any such sale the Company shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold. Each purchaser at any
such sale shall hold the Collateral so sold absolutely and free from any claim
or right of whatsoever kind, including any equity or right of redemption of the
Pledgor which may be waived, and the Pledgor, to the extent permitted by law,
hereby specifically waives all rights of redemption, stay or appraisal which it
has or may have under any law now existing or hereafter adopted. The notice (if
any) of such sale required by Section 8 shall (1) in case of a public sale,
state the time and place fixed for such sale, (2) in case of sale at a broker's
board or on a securities exchange, state the board or exchange at which such
sale is to be made and the day on which the Collateral, or the portion thereof
so being sold, will first be offered for sale at such board or exchange, and (3)
in the case of a private sale, state the day after which such sale may be
consummated. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Company may fix in
the notice of such sale. At any such sale

7
<PAGE> 8

the Collateral may be sold in one lot as an entirety or in separate parcels, as
the Company may determine. The Company shall not be obligated to make any such
sale pursuant to any such notice. The Company may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral on credit or
for future delivery, the Collateral so sold may be retained by the Company until
the selling price is paid by the purchaser thereof, but the Company shall not
incur any liability in case of the failure of such purchaser to take up and pay
for the Collateral so sold and, in case of any such failure, such Collateral may
again be sold upon like notice. The Company, instead of exercising the power of
sale herein conferred upon it, may proceed by a suit or suits at law or in
equity to foreclose the Security Interests and sell the Collateral, or any
portion thereof, under a judgment or decree of a court or courts of competent
jurisdiction.

SECTION 10. Expenses.

The Pledgor agrees that it will forthwith upon demand pay to the
Company:

(i) the amount of any taxes which the Company may have been
required to pay by reason of the Security Interests or to free any of
the Collateral from any Lien thereon, and

(ii) the amount of any and all out-of-pocket expenses,
including the fees and disbursements of counsel and of any other
experts, which the Company may incur in connection with (w) the
administration or enforcement of this Agreement, including such
expenses as are incurred to preserve the value of the Collateral and
the validity, perfection, rank and value of any Security Interest, (x)
the collection, sale or other disposition of any of the Collateral, (y)
the exercise by the Company of any of the rights conferred upon it
hereunder or (z) any Event of Default.

Any such amount not paid on demand shall bear interest (computed on the basis of
the number of days elapsed over a year of 360 days) at a rate per annum equal to
2% plus the Federal Rate.

8
<PAGE> 9

SECTION 11. Limitation on Duty of Company in Respect of Collateral.

Beyond the exercise of reasonable care in the custody thereof, the
Company shall have no duty as to any Collateral in its possession or control or
in the possession or control of any agent or bailee or any income thereon or as
to the preservation of rights against prior parties or any other rights
pertaining thereto. The Company shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which it accords
its own property, and shall not be liable or responsible for any loss or damage
to any of the Collateral, or for any diminution in the value thereof, by reason
of the act or omission of any agent or bailee selected by the Company in good
faith.

SECTION 12. Application of Proceeds.

Upon the occurrence and during the continuance of an Event of Default,
the proceeds of any sale of, or other realization upon, all or any part of the
Collateral and any cash held shall be applied by the Company in the following
order of priorities:

first, to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and counsel
for the Company, and all expenses, liabilities and advances incurred or
made by the Company in connection therewith, and any other unreimbursed
expenses for which the Company is to be reimbursed pursuant to Section
12 of each Note or Section 10 hereof;

second, to the ratable payment of unpaid principal of the
Secured Obligations;

third, to the ratable payment of accrued but unpaid interest
on the Secured Obligations in accordance with the provisions of the
Notes;

fourth, to the ratable payment of all other Secured
Obligations, until all Secured Obligations shall have been paid in
full; and

finally, to payment to the Pledgor or its successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.

9
<PAGE> 10

SECTION 13. Appointment of Agents.

At any time or times, in order to comply with any legal requirement in
any jurisdiction, the Company may appoint a bank or trust company or one or more
other persons, to act as agent or agents on behalf of the Company with such
power and authority as may be necessary for the effectual operation of the
provisions hereof and may be specified in the instrument of appointment (which
may, in the discretion of the Company, include provisions for the protection of
such agent or agents similar to the provisions of Section 13).

SECTION 14. Termination of Security Interests; Release of Collateral.

Upon the repayment in full of all Secured Obligations, the Security
Interests shall terminate and all rights to the Collateral shall revert to the
Pledgor. At any time and from time to time prior to such termination of the
Security Interests, the Company may release any of the Collateral in accordance
with its discretion. Upon any such termination of the Security Interests or
release of Collateral, the Company will, at the expense of the Pledgor, execute
and deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence the termination of the Security Interests or the release of
such Collateral, as the case may be.

SECTION 15. Notices.

(A) All notices, communications and distributions hereunder shall be
given in accordance with Section 9 of each Note.

(B) The Company agrees to use its reasonable efforts to provide written
notice to the Pledgor at least ten (10) business days before any amounts become
due under this Agreement or either Note. No failure by the Company to provide
such notice shall excuse or waive the performance by the Pledgor of the
Pledgor's obligations under this Agreement or the Notes.

SECTION 16. Waivers, Non-Exclusive Remedies.

No failure on the part of the Company to exercise, and no delay in
exercising and no course of dealing with respect to, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise by the Company of any right under the Notes or this Agreement preclude
any other or further exercise thereof or the exercise of any other right. The
rights in this Agreement

10
<PAGE> 11

and the Notes are cumulative and are not exclusive of any other remedies
provided by law.

SECTION 17. Successors and Assigns.

This Agreement is for the benefit of the Company and its successors and
assigns, and in the event of an assignment of all or any of the Secured
Obligations, the rights hereunder, to the extent applicable to the indebtedness
so assigned, may be transferred with such indebtedness. This Agreement cannot be
assigned by the Pledgor without the written consent of the Company and its
successors and assigns.

SECTION 18. Changes in Writing.

Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only in writing signed by the Pledgor and
the Company.

SECTION 19. GOVERNING LAW.

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW), EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO
THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION OTHER THAN NEW
YORK ARE GOVERNED BY THE LAWS OF SUCH JURISDICTION.

SECTION 20. WAIVER OF TRIAL BY JURY.

TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER
ARISING HEREUNDER.

SECTION 21. Severability.

If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain

11
<PAGE> 12

in full force and effect in such jurisdiction and shall be liberally construed
in favor of the Company in order to carry out the intentions of the parties
hereto as nearly as may be possible; and (ii) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.

SECTION 22. Counterparts.

This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

[Remainder of page intentionally left blank]

12
<PAGE> 13

IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered as of the day and year first above
written.

By
----------------------
Name: Douglas R. Lebda

LENDINGTREE, INC

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

<PAGE> 14

SCHEDULE I TO PLEDGE AGREEMENT

Attached to and forming a part of that certain Pledge Agreement, dated as of
February __, 2000 made by Douglas R. Lebda to LendingTree, Inc.

Pledged Shares

Class of Stock Certificate Number of Shares
Pledgor Issuer or Interest No(s). Par Value or Interest
- ------- ------ -------------- ----------- --------- -----------

Douglas R. LendingTree, Common $0.01
Lebda Inc.

</TABLE>

14
<PAGE> 15

EXHIBIT A TO PLEDGE AGREEMENT

Promissory Notes

See Attached

<PAGE> 1
Exhibit 10.23

LOANTRADER, INC.
F/K/A DENOVONET, INC.

SERIES A PREFERRED
STOCK PURCHASE AGREEMENT

DATED FEBRUARY 1, 2000

<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Purchase and Sale of Stock.............................................................................. 1

1.1. Sale and Issuance of Series A Preferred Stock.................................................. 1

1.2. Closing........................................................................................ 1

2. Representations and Warranties of the Company........................................................... 1

2.1. Organization, Good Standing and Qualification.................................................. 2

2.2. Capitalization and Voting Rights............................................................... 2

2.3. Subsidiaries................................................................................... 3

2.4. Authorization.................................................................................. 3

2.5. Valid Issuance of Preferred and Common Stock................................................... 3

2.6. Governmental Consents.......................................................................... 3

2.7. Offering....................................................................................... 4

2.8. Litigation..................................................................................... 4

2.9. Proprietary Information Agreements............................................................. 4

2.10. Patents and Trademarks......................................................................... 4

2.11. Compliance with Other Instruments.............................................................. 5

2.12. Agreements; Action............................................................................. 5

2.13. Related-Party Transactions..................................................................... 6

2.14. Section 83(b) Elections........................................................................ 6

2.15. Financial Statements........................................................................... 6

2.16. Changes........................................................................................ 7

2.17. Tax Returns.................................................................................... 8

2.18. Permits........................................................................................ 9

2.19. Environmental and Safety Laws................................................................. 9

2.20. Disclosure.................................................................................... 9

2.21. Registration Rights........................................................................... 9

2.22. Corporate Documents; Minute Books............................................................. 9

2.23. Insurance..................................................................................... 9

2.24. Employee Benefit Plans........................................................................ 9

2.25. Labor Agreements and Actions.................................................................. 10

2.26. Assumptions or Guaranties of Indebtedness of Other Persons.................................... 10

2.27. Title to Property and Assets.................................................................. 10

2.28. No Undisclosed Agreements with Investors...................................................... 10

3. Representations and Warranties of the Investors........................................................ 10

3.1. Authorization................................................................................. 10

3.2. Purchase Entirely for Own Account............................................................. 11

3.3. Disclosure of Information..................................................................... 11

3.4. Investment Experience......................................................................... 11

3.5. Accredited Investor........................................................................... 11

3.6. Restricted Securities......................................................................... 11
</TABLE>

i
<PAGE> 3
<TABLE>
<S> <C>
3.7. Further Limitations on Disposition............................................................ 12

3.8. Legends....................................................................................... 12

3.9. Tax Advisors.................................................................................. 12

3.10. Investor Counsel.............................................................................. 13

4. California Commissioner of Corporations................................................................ 13

4.1. Corporate Securities Law...................................................................... 13

5. Conditions of Each Investor's Obligations at Closing................................................... 13

5.1. Representations and Warranties................................................................ 13

5.2. Performance................................................................................... 13

5.3. Compliance Certificate........................................................................ 13

5.4. Qualifications................................................................................ 14

5.5. Proceedings and Documents..................................................................... 14

5.6. Proprietary Information Agreements............................................................ 14

5.7. Bylaws........................................................................................ 14

5.8. Board of Directors............................................................................ 14

5.9. Opinion of Company Counsel.................................................................... 14

5.10. Investors' Rights Agreement................................................................... 14

5.11. Stock Transfer and Co-Sale Agreement.......................................................... 14

5.12. Management Advisory Agreement................................................................. 14

5.13. Voting Agreement.............................................................................. 15

5.14. Conversion of Convertible Notes............................................................... 15

5.15. Concurrent Closing............................................................................ 15

6. Conditions of the Company's Obligations at Closing..................................................... 15

6.1. Representations and Warranties................................................................ 15

6.2. Payment of Purchase Price..................................................................... 15

6.3. Qualifications................................................................................ 15

6.4. Investors' Rights Agreement................................................................... 15

6.5. Stock Transfer and Co-Sale Agreement.......................................................... 15

6.6. Management Advisory Agreement................................................................. 15

6.7. Voting Agreement.............................................................................. 16

7. Miscellaneous.......................................................................................... 16

7.1. Survival...................................................................................... 16

7.2. Successors and Assigns........................................................................ 16

7.3. Governing Law................................................................................. 16

7.4. Titles and Subtitles.......................................................................... 16

7.5. Notices....................................................................................... 16

7.6. Finder's Fee.................................................................................. 16

7.7. Expenses...................................................................................... 17

7.8. Amendments and Waivers........................................................................ 17

7.9. Effect of Amendment or Waiver................................................................. 17

7.10. Severability.................................................................................. 17
</TABLE>

ii
<PAGE> 4
<TABLE>
<S> <C>
7.11. Aggregation of Stock.......................................................................... 17

7.12. Entire Agreement.............................................................................. 17

7.13. Counterparts.................................................................................. 17

7.14. Other Engagements and Activities.............................................................. 18

7.15. Use of Name................................................................................... 18
</TABLE>

SCHEDULE A Schedule of Investors and Amount Invested

SCHEDULE B Schedule of Exceptions

EXHIBIT A Restated Certificate of Incorporation

EXHIBIT B Amended and Restated Investors' Rights Agreement

EXHIBIT C List of Stockholders

EXHIBIT D Opinion of Counsel for the Company

EXHIBIT E Amended and Restated Stock Transfer and Co-Sale Agreement

EXHIBIT F Management Advisory Agreement

EXHIBIT G Voting Agreement

iii
<PAGE> 5
PREFERRED STOCK PURCHASE AGREEMENT

THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is made on
the 1st day of February 2000, by and among LoanTrader, Inc. F/K/A DenovoNet,
Inc., a Delaware corporation (the "Company"), and the investors listed on
Schedule A hereto (each, an "Investor" and collectively, the "Investors"). THE
PARTIES HEREBY AGREE AS FOLLOWS:

1. Purchase and Sale of Stock.

1.1. Sale and Issuance of Series A Preferred Stock.

(a) The Company shall adopt and file with the Secretary of State of
Delaware on or before the Closing (as defined below) the Restated Certificate of
Incorporation in the form attached hereto as Exhibit A (the "Restated
Certificate").

(b) Subject to the terms and conditions of this Agreement, the
Investors agree, severally and not jointly, to purchase at the Closing (as
defined below) and the Company agrees to sell and issue to the Investors at the
Closing, that number of shares of the Company's Series A Preferred Stock set
forth opposite each Investor's name on Schedule A hereto for the purchase price
set forth thereon.

1.2. Closing. The purchase and sale of the Series A Preferred Stock
shall take place at the offices of Brobeck, Phleger & Harrison LLP, 38
Technology Drive, Irvine, California, at 10:00 A.M., on or before February 1,
2000, or at such other time and place as the Company and Investors acquiring in
the aggregate more than half the shares of Series A Preferred Stock sold
pursuant hereto mutually agree upon orally or in writing. At the Closing the
Company shall deliver to each Investor a certificate representing the Series A
Preferred Stock that such Investor is purchasing against payment of the purchase
price therefor by check, wire transfer, cancellation of indebtedness (including
accrued interest) or any combination thereof. In the event that payment by an
Investor is made, in whole or in part, by cancellation of indebtedness, then
such Investor shall surrender to the Company for cancellation at the Closing any
evidence of such indebtedness or shall execute an instrument of cancellation in
form and substance acceptable to the Company.

1.3 Use of Proceeds. The net proceeds from the sale of the Series
A Preferred Stock to the Investors hereunder shall be used for marketing,
technology development, working capital and other general corporate purposes.
Pending utilization for such purposes, the Company shall, (I) invest the net
proceeds in short-term, interest-bearing government securities or certificates
of deposit or their equivalent issued by a bank or trust company organized under
the laws of the United States or any state thereof, having capital, surplus and
undivided profits aggregating at least $100,000,000 or (ii) invest the net
proceeds as otherwise approved by the Board of Directors.

2. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Investor, except as set forth on a Schedule of
Exceptions (the

1.
<PAGE> 6
"Schedule of Exceptions") furnished each Investor and special counsel for the
Investors prior to execution hereof and attached hereto as Schedule B, which
exceptions shall be deemed to be representations and warranties as if made
hereunder the following. As used in Article 2 (except Sections 2.1 and 2.2) the
term "Company" includes the wholly owned subsidiary LoanTrader.Com, Inc. that
was merged into the Company on December 29, 1999.

2.1. Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted and as proposed to be conducted. The
Company is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a material adverse
effect on its business or properties.

2.2. Capitalization and Voting Rights. The authorized capital of the
Company will consist immediately after giving effect to the Closing of:

(a) Preferred Stock. Fourteen Million Five Hundred Thousand
(14,500,000) shares of Preferred Stock, par value $0.001 (the "Preferred
Stock"), of which Fourteen Million Five Hundred Thousand (14,500,000) shares
have been designated Series A Preferred Stock (the "Series A Preferred Stock")
and Thirteen Million Nine Hundred Sixty-seven Thousand Five Hundred and
Forty-three (13,967,543) of which will be sold pursuant to this Agreement. The
rights, privileges and preferences of the Series A Preferred Stock will be as
stated in the Company's Restated Certificate.

(b) Common Stock. Thirty One Million (31,000,000) shares of common
stock, par value $0.001 ("Common Stock"), of which Nine Million Three Hundred
Three Thousand Seven Hundred Thirty-one (9,303,731) shares are issued and
outstanding.

(c) Stockholders. The outstanding shares of Common Stock are owned by
the stockholders and in the numbers specified in Exhibit C hereto.

(d) Outstanding Common Stock. The outstanding shares of Common Stock
are all duly and validly authorized and issued, fully paid and nonassessable,
and were issued in compliance with all applicable state and federal laws
concerning the issuance of securities.

(e) Capitalization. Except for (i) the conversion privileges of the
Series A Preferred Stock to be issued under this Agreement, (ii) warrants to
purchase an aggregate of 518,750 shares of Common Stock have been issued to the
warrantholders listed on Schedule 2.2, (iii) the rights listed on Schedule 2.2
of the Schedule of Exceptions, and (iv) agreements to issue options to purchase
1,001,545 shares of Common Stock granted to employees, officers, directors or
consultants pursuant to the 1999 Stock Option/Stock Issuance Plan and 2000 Stock
Option/Stock Issuance Plan adopted by the Company (collectively the "Option
Plans"), there are not outstanding any options, warrants, rights (including
conversion or preemptive rights) or agreements for the purchase or acquisition
from the Company of any shares of its capital stock. In addition to the
aforementioned options, the Company has reserved an additional 4,093,470 shares
of its Common Stock for purchase upon exercise of options to be granted in the
future

2.
<PAGE> 7
under the Option Plans. The Company is not a party or subject to any
agreement or understanding, and, to the Company's knowledge, there is no
agreement or understanding between any persons and/or entities, which affects or
relates to the voting or giving of written consents with respect to any security
or by a director of the Company.

2.3. Subsidiaries. The Company does not presently own or control,
directly or indirectly, any interest in any other corporation, association, or
other business entity. The Company is not a participant in any joint venture,
partnership, or similar arrangement.

2.4. Authorization. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, the Investors' Rights Agreement (as
defined below), the Management Advisory Agreement (as defined below), and the
Stock Transfer and Co-Sale Agreement (as defined below) and the Voting Agreement
(as defined below) (the "Investors' Rights Agreement," the "Management Advisory
Agreement," the "Voting Agreement" and the "Stock Transfer and Co-Sale
Agreement" are referred to collectively as the "Related Documents") and the
performance of all obligations of the Company hereunder and thereunder, and the
authorization (or reservation for issuance), sale and issuance of the Series A
Preferred Stock being sold hereunder and the Common Stock issuable upon
conversion of the Series A Preferred Stock has been taken or will be taken prior
to the Closing. This Agreement and the Related Documents each constitute valid
and legally binding obligations of the Company, enforceable in accordance with
their respective terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies, and (iii) to the extent the indemnification provisions
contained in the Investors' Rights Agreement may be limited by applicable
federal or state securities laws.

2.5. Valid Issuance of Preferred and Common Stock. The Series A
Preferred Stock that is being purchased by the Investors hereunder, when issued,
sold and delivered in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly and validly issued, fully paid and
nonassessable and will be free of restrictions on transfer, other than
restrictions on transfer under this Agreement and the Related Documents and
under applicable state and federal securities laws. The Common Stock issuable
upon conversion of the Series A Preferred Stock purchased under this Agreement
has been duly and validly reserved for issuance and, upon issuance in accordance
with the terms of the Restated Certificate, will be duly and validly issued,
fully paid and nonassessable and will be free of restrictions on transfer, other
than restrictions on transfer under this Agreement and the Related Documents and
under applicable state and federal securities laws.

2.6. Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for such filings required pursuant to
applicable federal and state securities laws and blue sky laws, which filings
will be effected within the required statutory period.

3.
<PAGE> 8
2.7. Offering. Subject in part to the truth and accuracy of each
Investor's representations set forth in Section 3 of this Agreement, the offer,
sale and issuance of the Series A Preferred Stock as contemplated by this
Agreement are exempt from the registration requirements of the Securities Act of
1933, as amended (the "Act"), and the qualification or registration requirements
of the Law or other applicable blue sky laws, specifically including exemption
from the qualification requirements of the California Corporations Code by
virtue of Section 25102(f) thereof. Neither the Company nor any authorized agent
acting on its behalf will take any action hereafter that would cause the loss of
such exemptions.

2.8. Litigation. There is no action, suit, proceeding or investigation
pending, or to the Company's knowledge, currently threatened against the Company
that questions the validity of this Agreement or the Related Documents or the
right of the Company to enter into such agreement or to consummate the
transactions contemplated hereby or thereby, or that might result, either
individually or in the aggregate, in any material adverse changes in the
prospects, business, assets or condition of the Company, financially or
otherwise, or any change in the current equity ownership of the Company, nor is
the Company aware of any basis for the foregoing. The foregoing includes,
without limitation, actions, suits, proceedings or investigations pending or
threatened (or any basis therefor known to the Company) involving any of the
officers or directors of the Company or the prior employment of any of the
Company's employees, their use in connection with the Company's business of any
information or techniques allegedly proprietary to any of their former
employees, or their obligations under any agreements with prior employers. The
Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or that the Company intends to initiate.

2.9. Proprietary Information Agreements. Each employee, officer (other
than the Secretary) and consultant of the Company has executed a Proprietary
Information and Inventions Agreement in the form provided to special counsel to
the Investors. The Company, after reasonable investigation, is not aware that
any of its employees, officers or consultants are in violation thereof, and the
Company will use its best efforts to prevent any such violation.

2.10. Patents and Trademarks. The Company possesses (i) to its
knowledge (but without having conducted any special investigation or patent
search) all patents, patent rights and (ii) all trademarks, trademark rights,
service marks, service mark rights, trade names, trade name rights and
copyrights (collectively, the "Intellectual Property") necessary for its
business without any conflict with or infringement of the valid rights of others
and the lack of which could materially and adversely affect the operations or
condition, financial or otherwise, of the Company, and the Company has not
received any notice of infringement upon or conflict with the asserted rights of
others. The Schedule of Exceptions contains a complete list of all trademark and
patent and pending patent applications of the Company. The Company has a
valuable body of trade secrets, including know-how, concepts, and other
technical data (the "Proprietary Information") for the development, deployment
and marketing of its services. The Company has the right to use the Proprietary
Information free and clear of any rights, liens, encumbrances or claims of
others, except that the possibility exists that other persons may have

4.
<PAGE> 9
independently developed trade secrets or technical information similar or
identical to those of the Company. The Company is not aware of any such
independent development nor of any misappropriation of its Proprietary
Information. The Company is not aware that any of its employees is obligated
under any contract (including licenses, covenants or commitments of any nature)
or other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of his or her best
efforts to promote the interests of the Company or that would conflict with the
Company's business. Neither the execution nor the delivery of this Agreement or
the Related Documents, nor the carrying on of the Company's business by the
employees of the Company, nor the conduct of the Company's business as proposed,
will, to the best of the Company's knowledge, conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
any contract, covenant or instrument to which any of such employees is now
obligated. The Company does not believe it is or will be necessary to utilize
any inventions of any of its employees (or people it currently intends to hire)
made prior to their employment by the Company.

2.11. Compliance with Other Instruments. The Company is not in
violation of any provision of its Restated Certificate or Bylaws nor in any
material respect of any instrument, judgment, order, writ, decree or contract,
statute, rule or regulation to which the Company is subject and a violation of
which would have a material adverse effect on the condition, financial or
otherwise, or operations of the Company. The execution, delivery and performance
of this Agreement and the Related Documents and the consummation of the
transactions contemplated hereby and thereby will not result in any such
violation, or be in conflict with or constitute, with or without the passage of
time and giving of notice, either a default under any such provision or an event
that results in the creation of any lien, charge or encumbrance upon any assets
of the Company or the suspension, revocation, impairment, forfeiture or
nonrenewal of any material permit, license, authorization or approval applicable
to the Company, its business or operations or any of its assets or properties.

2.12. Agreements; Action.

(a) Except for agreements explicitly contemplated hereby and by the
Related Documents, there are no agreements, understandings or proposed
transactions between the Company and any of its officers, directors, affiliates
or any affiliate thereof.

(b) There are no agreements, understandings, instruments, contracts,
proposed transactions, judgments, orders, writs or decrees to which the Company
is a party or by which it is bound that may involve (i) obligations (contingent
or otherwise) of, or payments to the Company, in excess of $25,000, other than
obligations of, or payments to, the Company arising from purchase or sale
agreements entered into in the ordinary course of business, (ii) the license of
any patent, copyright, trade secret or other proprietary right to or from the
Company, other than licenses arising from the purchase of "off the shelf" or
other standard products, or (iii) provisions restricting or affecting the
development, manufacture or distribution of the Company's products or services,
or (iv) indemnification by the Company with respect to infringements of
proprietary rights, other than indemnification obligations arising from purchase
or sale agreements entered into in the ordinary course of business.

5.
<PAGE> 10
(c) The Company has not (i) declared or paid any dividends or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred any indebtedness for money borrowed or any
other liabilities individually in excess of $25,000 or, in the case of
indebtedness and/or liabilities individually less than $25,000, in excess of
$50,000 in the aggregate, (iii) made any loans or advances to any person, other
than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights.

(d) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.

(e) The Company is not a party to and is not bound by any contract,
agreement or instrument, or subject to any restriction under its Restated
Certificate or Bylaws that adversely affects its business as now conducted or as
proposed to be conducted, its properties or its financial condition.

(f) The Company has not engaged in the past three (3) months in any
discussion (i) with any representative of any corporation or corporations
regarding the consolidation or merger of the Company with or into any such
corporation or corporations, (ii) with any corporation, partnership, association
or other business entity or any individual regarding the sale, conveyance or
disposition of all or substantially all of the assets of the Company or a
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is disposed of, or (iii) regarding any
other form of acquisition, liquidation, dissolution or winding up of the
Company.

2.13. Related-Party Transactions. No employee, officer or director of
the Company or member of his or her immediate family is indebted to the Company,
nor is the Company indebted (or committed to make loans or extend or guarantee
credit) to any of them. To the best of the Company's knowledge, none of such
persons has any direct or indirect ownership interest in any firm or corporation
with which the Company is affiliated or with which the Company has a business
relationship, or any firm or corporation that competes with the Company, except
that employees, officers or directors of the Company and members of their
immediate families may own stock in publicly traded companies that may compete
with the Company. No member of the immediate family of any officer or director
of the Company is directly or indirectly interested in any material contract
with the Company.

2.14. Section 83(b) Elections. To the best of the Company's knowledge,
all individuals who have purchased unvested shares of the Company's Common Stock
have timely filed elections under Section 83(b) of the Code and any analogous
provisions of applicable state tax laws.

2.15. Financial Statements. The Company has delivered to the Investor
its unaudited financial statements (balance sheet and statement of operations,
statement of

6.
<PAGE> 11
stockholders' equity and statement of cash flows) at November 30, 1999 and for
the eleven months then ended (the "Financial Statements"). The Financial
Statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods indicated and
with each other, except that unaudited Financial Statements may not contain all
footnotes required by generally accepted accounting principles. The Financial
Statements fairly present the financial condition and operating results of the
Company as of the dates, and for the periods, indicated therein, subject in the
case of unaudited Financial Statements to normal year-end audit adjustments.
Except as set forth in the Financial Statements, the Company has no material
liabilities, contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to November 30, 1999 and (ii) obligations
under contracts and commitments incurred in the ordinary course of business and
not required under generally accepted accounting principles to be reflected in
the Financial Statements, which, in both cases, individually or in the
aggregate, are not material to the financial condition or prospects operating
results of the Company. Except as disclosed in the Financial Statements, the
Company is not a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation. The Company maintains and will continue to maintain
a standard system of accounting established and administered in accordance with
generally accepted accounting principles.

2.16. Changes. Since November 30, 1999, there has not been:

(a) any change in the assets, liabilities, financial condition,
prospects or operating results of the Company from that reflected in the
Financial Statements, except changes in the ordinary course of business that
have not been, in the aggregate, materially adverse;

(b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the assets, properties, financial
condition, prospects or operating results or business of the Company (as such
business is presently conducted and as it is proposed to be conducted);

(d) any satisfaction or discharge of any lien, claim or encumbrance or
payment of any obligation by the Company, except in the ordinary course of
business and that is not material to the assets, properties, financial
condition, prospects or operating results or business of the Company (as such
business is presently conducted and as it is proposed to be conducted);

(e) any material change or amendment to a material contract or
arrangement by which the Company or any of its assets or properties is bound or
subject;

(f) any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;

7.
<PAGE> 12
(g) any resignation or termination of employment of any key officer of
the Company; and the Company, to the best of its knowledge does not know of the
impending resignation or termination of employment of any such officer;

(h) material change in any compensation arrangement or agreement with
any employee;

(i) receipt of notice that there has been or is threatened to be a loss
of, or material order cancellation by, any major customer of the Company;

(j) any mortgage, pledge, transfer of a security interest in, or lien,
created by the Company, with respect to any of its material properties or
assets, except liens for taxes not yet due or payable;

(k) any loans or guarantees made by the Company to or for the benefit
of its employees, officers or directors, or any members of their immediate
families, other than travel advances made in the ordinary course of its business

(l) any declaration, setting aside or payment or other distribution in
respect of any of the Company's capital stock, or any direct or indirect
redemption, purchase or other acquisition of any of such stock by the Company;

(m) to the best of the Company's knowledge, any other event or
condition of any character that could reasonably be expected to have a material
adverse effect on the assets, properties, financial condition, prospects or
operating results or business of the Company (as such business is presently
conducted and as it is proposed to be conducted); or

(n) any agreement or commitment by the Company to do any of the things
described in this Section 2.15.

2.17. Tax Returns. The Company has filed all tax returns and reports as
required by law. These returns and reports are true and correct in all material
respects. The Company has paid all taxes and other assessments due, except those
contested by it in good faith which are listed in the Schedule of Exceptions.
The provision for taxes of the Company as shown in the Financial Statements is
adequate for taxes due or accrued as of the date thereof. The Company has not
elected pursuant to the Internal Revenue Code of 1986, as amended ("Code"), to
be treated as a Subchapter S corporation or a collapsible corporation pursuant
to Section 341(f) or Section 1362(a) of the Code, nor has it made any other
elections pursuant to the Code (other than elections which relate solely to
methods of accounting, depreciation or amortization) which would have a material
effect on the Company, its financial condition, its business as presently
conducted or proposed to be conducted or any of its properties or material
assets. The Company has never had any tax deficiency proposed or assessed
against it and has not executed any waiver of any statute of limitations on the
assessment or collection of any tax or governmental charge. None of the
Company's federal income tax returns and none of its state income or franchise
tax or sales or use tax returns has ever been audited by governmental
authorities. Since the date of the Financial Statements, the Company has not
incurred any taxes,

8.
<PAGE> 13
assessments or governmental charges other than in the ordinary course of
business, and the Company has made adequate provisions on its books of account
for all taxes, assessments and governmental charges with respect to its
business, properties and operations for such period. The Company has withheld or
collected from each payment made to each of its employees, the amount of all
taxes (including, but not limited to, federal income taxes, Federal Insurance
Contribution Act taxes and Federal Unemployment Tax Act taxes) required to be
withheld or collected therefrom, and has paid the same to the proper tax
receiving officers or authorized depositories.

2.18. Permits. The Company has all franchises, permits, licenses and
any similar authority necessary for the conduct of its business as currently
conducted, the lack of which could materially and adversely affect the business,
properties or financial condition of the Company. The Company is not in default
in any material respect under any of such franchises, permits, licenses or other
similar authority.

2.19. Environmental and Safety Laws. The Company is not in violation of
any applicable statute, law or regulation relating to the environment or
occupational health and safety, and no material expenditures are or will be
required in order to comply with any such existing statute, law or regulation.

2.20. Disclosure. The Company has fully provided each Investor with all
the information that such Investor has requested for deciding whether to
purchase the Series A Preferred Stock. Neither this Agreement (including all the
exhibits and schedules hereto) nor any other statements or certificates made or
delivered in connection herewith contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements herein
or therein not misleading in light of the circumstances under which they were
made.

2.21. Registration Rights. Except as provided in the Investors' Rights
Agreement, the Company has not granted or agreed to grant any registration
rights, including piggyback rights, to any person or entity.

2.22. Corporate Documents; Minute Books. Except for amendments
necessary to satisfy representations and warranties or conditions contained
herein (the forms of which amendments have been approved by the Investors), the
Restated Certificate and Bylaws of the Company are in the form previously
provided to special counsel for the Investors. The minute books of the Company
provided to the Investors contain a complete summary of all meetings of
directors and stockholders since the time of incorporation and reflect all
transactions referred to in such minutes accurately in all material respects.

2.23. Insurance. The Company has procured fire and casualty insurance
policies with such coverages in amounts (subject to reasonable deductibles)
customary for companies similarly situated.

2.24. Employee Benefit Plans. The Company does not have any Employee
Benefit Plan as defined in the Employee Retirement Income Security Act of 1974.

9.
<PAGE> 14
2.25. Labor Agreements and Actions. The Company is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the Company's
knowledge, has sought to represent any of the employees, representatives or
agents of the Company. There is no strike or other labor dispute involving the
Company pending, or to the Company's knowledge, threatened, that could have a
material adverse effect on the assets, properties, financial condition,
prospects or operating results or business of the Company, nor is the Company
aware of any labor organization activity involving its employees. The Company is
not aware that any officer or key employee, or that any group of key employees,
intends to terminate their employment with the Company, nor does the Company
have a present intention to terminate the employment of any of the foregoing.
The employment of each officer and employee of the Company is terminable at the
will of the Company. The Company is not a party to or bound by any currently
effective employment contract, deferred compensation agreement, bonus plan,
incentive plan, profit sharing plan, retirement agreement or other employee
compensation agreement. To its knowledge, the Company has complied in all
material respects with all applicable state and federal equal employment
opportunity and other laws related to employment.

2.26. Assumptions or Guaranties of Indebtedness of Other Persons. The
Company has not assumed, guaranteed, endorsed or otherwise become directly or
contingently liable on (including, without limitation liability by way of
agreement, contingent or otherwise, to purchase, to provide funds for payment,
to supply funds to or otherwise invest in any person or otherwise to assure any
creditor against loss) any indebtedness of any other person.

2.27. Title to Property and Assets.. The property and assets the
Company owns are owned by the Company free and clear of all mortgages, liens,
loans and encumbrances, except (i) for statutory liens for the payment of
current taxes that are not yet delinquent, and (ii) for liens, encumbrances and
security interests that arise in the ordinary course of business and minor
defects in title, none of which, individually or in the aggregate, materially
impair the Company's ownership or use of such property or assets. With respect
to the property and assets it leases, the Company is in material compliance with
such leases and, to its knowledge, holds a valid leasehold interest free of any
liens, claims or encumbrances, subject to clauses (i) and (ii) above.

2.28. No Undisclosed Agreements with Investors.. The Company has not
entered into any agreement with any of the Investors other than this Agreement,
the Related Documents and the agreements disclosed on Schedule 2.13.

3. Representations and Warranties of the Investors. Each Investor
severally and not jointly hereby represents, warrants and covenants that:

3.1. Authorization. Such Investor has full power and authority to enter
into this Agreement and the Related Documents to which each Investor is a party,
and each such agreement constitutes its valid and legally binding obligation,
enforceable in accordance with its terms.

10.
<PAGE> 15
3.2. Purchase Entirely for Own Account. This Agreement is made with
such Investor in reliance upon such Investor's representation to the Company,
which by such Investor's execution of this Agreement such Investor hereby
confirms, that the Series A Preferred Stock to be received by such Investor and
the Common Stock issuable upon conversion thereof (collectively, the
"Securities") will be acquired for investment for such Investor's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that such Investor has no present intention of selling,
granting any participation in or otherwise distributing the same. By executing
this Agreement, such Investor further represents that such Investor does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participation's to such person or to any third person,
with respect to any of the Securities.

3.3. Disclosure of Information. Such Investor believes it has received
all the information it considers necessary or appropriate for deciding whether
to purchase the Series A Preferred Stock. Such Investor further represents that
it has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Series A Preferred
Stock and the business, properties, prospects and financial condition of the
Company. The foregoing, however, does not limit or modify the representations
and warranties of the Company in Section 2 of this Agreement or the right of the
Investors to rely thereon.

3.4. Investment Experience. Such Investor is an investor in securities
of companies in the development stage and acknowledges that it is able to fend
for itself, can bear the economic risk of its investment, and has such knowledge
and experience in financial or business matters that it is capable of evaluating
the merits and risks of the investment in the Series A Preferred Stock. If other
than an individual, such Investor also represents it has not been organized for
the purpose of acquiring the Series A Preferred Stock.

3.5. Accredited Investor. Such Investor is an "accredited investor"
within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of
Regulation D, as presently in effect.

3.6. Restricted Securities. Such Investor understands that the
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such Securities may be resold without registration under
the Act only in certain limited circumstances. In the absence of an effective
registration statement covering the Securities (or the Common Stock issued on
conversion thereof) or an available exemption from registration under the Act,
the Series A Preferred Stock (and any Common Stock issued on conversion thereof)
must be held indefinitely. In this connection, such Investor represents that it
is familiar with SEC Rule 144, as presently in effect, and understands the
resale limitations imposed thereby and by the Act, including without limitation
the Rule 144 condition that current information about the Company be available
to the public. Such information is not now available and the Company has no
present plans to make such information available.

11.
<PAGE> 16
3.7. Further Limitations on Disposition. Without in any way limiting
the representations set forth above, such Investor further agrees not to make
any disposition of all or any portion of the Securities unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 3 and the Investors' Rights Agreement, and:

(a) There is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement; or

(b) (i) Such Investor shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and (ii) if requested by
the Company, such Investor shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company that such disposition will not
require registration of such shares under the Act. It is agreed that the Company
will not require opinions of counsel for transactions made pursuant to Rule 144
except in unusual circumstances.

(c) Notwithstanding the provisions of subsections (a) and (b) above, no
such registration statement or opinion of counsel shall be necessary for a
transfer to any wholly owned subsidiary or parent of, or to any corporation or
entity that is, within the meaning of the Act, controlled by or under common
control with, the transferring Investor, for a transfer by an Investor that is a
partnership to a partner of such partnership or a retired partner of such
partnership who retires after the date hereof, or to the estate of any such
partner or retired partner or the transfer by gift, will or intestate succession
of any partner to his or her spouse or to the siblings, lineal descendants or
ancestors of such partner or his or her spouse, if the transferee agrees in
writing to be subject to the terms hereof to the same extent as if he or she
were an original Investor hereunder.

3.8. Legends. It is understood that the certificates evidencing the
Securities may bear one or all of the following legends:

(a) "These securities have not been registered under the Securities Act
of 1933, as amended. They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with respect
to the securities under such Act or an opinion of counsel satisfactory to the
Company that such registration is not required or unless sold pursuant to Rule
144 of such Act."

(b) Any legend required by the laws of the State of California,
including any legend required by the California Department of Corporations and
Sections 417 and 418 of the California Corporations Code.

3.9. Tax Advisors. Such Investor has reviewed with such Investor's own
tax advisors the federal, state and local tax consequences of this investment,
where applicable, and the transactions contemplated by this Agreement. Each such
Investor is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents and understands that each
such Investor (and not the Company) shall be responsible for such

12.
<PAGE> 17
Investor's own tax liability that may arise as a result of this investment or
the transactions contemplated by this Agreement.

3.10. Investor Counsel. Such Investor acknowledges that such Investor
has had the opportunity to review this Agreement, the exhibits and the schedules
attached hereto and the transactions contemplated by this Agreement with such
Investor's own legal counsel. Each such Investor is relying solely on such
Investor's legal counsel and not on any statements or representations of the
Company or any of the Company's agents, including Brobeck, Phleger & Harrison
LLP, for legal advice with respect to this investment or the transactions
contemplated by this Agreement. Nothing contained in this Section 3.10 is
intended to affect, limit or qualify the opinion of Brobeck. Phleger & Harrison
LLP tendered to the Investors pursuant to Section 5.9 below.

4. California Commissioner of Corporations.

4.1. Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.

5. Conditions of Each Investor's Obligations at Closing. The
obligations of each Investor under subsection 1.1(b) of this Agreement are
subject to the fulfillment on or before Closing of each of the following
conditions, the waiver of which shall not be effective against any Investor who
does not consent in writing thereto:

5.1. Representations and Warranties. The representations and warranties
of the Company contained in Section 2 shall be true on and as of each Closing
with the same effect as though such representations and warranties had been made
on and as of the date of such Closing.

5.2. Performance. The Company shall have performed and complied with
all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before each Closing.

5.3. Compliance Certificate. The President of the Company shall deliver
to each Investor at the Closing a certificate stating that the conditions
specified in Sections 5.1 and 5.2 have been fulfilled and stating that there
shall have been no adverse changes in the business, affairs, operations,
properties, assets, prospects or condition of the Company since the date of the
Financial Statements.

13.
<PAGE> 18
5.4. Qualifications. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Securities pursuant to this Agreement shall be duly obtained and effective as of
each Closing.

5.5. Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at each Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to
Investors' special counsel, and they shall have received all such counterpart
original and certified or other copies of such documents as they may reasonably
request. This may include, without limitation, good standing certificates and
certification by the Company's Secretary regarding the Company's Certificate of
Incorporation and Bylaws and Board of Director and stockholder resolutions
relating to this transaction.

5.6. Proprietary Information Agreements. The Investors shall have
received evidence that each key employee of and consultant to the Company has
entered into a Proprietary Information and Inventions Agreement in the form
previously provided to special counsel for the Investors.

5.7. Bylaws. The Bylaws of the Company shall provide that the Board of
Directors of the Company shall consist of not less than three (3) nor more than
seven (7) members;

5.8. Board of Directors. The Company shall have taken all necessary
corporate action such that immediately following the Closing, the directors of
the Company shall be John Le, Roger Davisson, Roger Cohen, Fred Forster, Julian
Allen, Mani Sadeghi and Jamie Bennett.

5.9. Opinion of Company Counsel. Each Investor shall have received from
Brobeck, Phleger & Harrison LLP, counsel for the Company, an opinion, dated as
of such Closing, in the form attached hereto as Exhibit "D."

5.10. Investors' Rights Agreement. The Company and each Investor and
other parties thereto shall have entered into the Amended and Restated
Investors' Rights Agreement (the "Investors' Rights Agreement") restating the
terms of the existing Investors' Rights Agreement in the form attached as
Exhibit "B."

5.11. Stock Transfer and Co-Sale Agreement. The Company and each
Investor and each of the other parties thereto shall have entered into the
Amended and Restated Stock Transfer and Co-Sale Agreement (the "Stock Transfer
and Co-Sale Agreement") amending and restating the terms of the existing Stock
Transfer and Co-Sale Agreement in the form attached as Exhibit "E."

5.12. Management Advisory Agreement. The Company and Equifin Capital,
LLC, a Delaware limited liability company ("Equifin) shall have entered into the
Management

14.
<PAGE> 19
Advisory Agreement (the "Management Advisory Agreement") in the form attached as
Exhibit "F."

5.13. Voting Agreement. Each of the Company's stockholders and each
Investor who is participating in such Closing shall have executed a Voting
Agreement (the "Voting Agreement") in the form attached as Exhibit "H."

5.14. Conversion of Convertible Notes. Each of the outstanding
Convertible Notes issued by the Company in a total aggregate principal balance
of $877,000 shall have been converted into Series A Preferred Stock in
accordance with their terms, except that David Lambert shall be permitted to
convert $50,000 and receive repayment of the balance of $50,000 under his
Convertible Note at the Closing.

5.15. Concurrent Closing. Each of the other Investors shall have
concurrently funded their investment in the Series A Preferred Stock in the
amounts set forth on Schedule A hereto.

6. Conditions of the Company's Obligations at Closing. The obligations
of the Company to each Investor under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by that
Investor:

6.1. Representations and Warranties. The representations and warranties
of the Investor contained in Section 3 shall be true on and as of such Closing
with the same effect as though such representations and warranties had been made
on and as of such Closing.

6.2. Payment of Purchase Price. At the Closing, the Investors shall
have delivered the purchase price specified in Section 1.2, and Investors shall
collectively have acquired and paid for at the Closing at least NINE MILLION
shares of Series A Preferred Stock hereunder.

6.3. Qualifications. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Securities pursuant to this Agreement shall be duly obtained and effective as of
the Closing.

6.4. Investors' Rights Agreement. The Company and each Investor shall
have entered into the Investors' Rights Agreement.

6.5. Stock Transfer and Co-Sale Agreement. The Company, each Investor
and each of the other parties thereto shall have entered into the Stock Transfer
and Co-Sale Agreement.

6.6. Management Advisory Agreement. The Company and Equifin shall have
entered into the Management Advisory Agreement.

15.
<PAGE> 20
6.7. Voting Agreement. Each of the Company's stockholders and each
Investor shall have executed the Voting Agreement.

7. Miscellaneous.

7.1. Survival. The warranties, representations and covenants of the
Company and Investors contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and the Closing and shall
in no way be affected by any investigation of the subject matter thereof made by
or on behalf of the Investors or the Company.

7.2. Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any Securities). Nothing in this Agreement, express or implied,
is intended to confer upon any party, other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

7.3. Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.

7.4. Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

7.5. Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (iii) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (iv) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the address
as set forth on the signature page hereof or at such other address as such party
may designate by ten days advance written notice to the other parties hereto.

7.6. Finder's Fee. Except as disclosed in the Schedule of Exceptions
which discloses a commission to be paid to Sekits Capital, each party represents
that it neither is nor will be obligated for any finders' fee or commission in
connection with this transaction. Each Investor agrees to indemnify and to hold
harmless the Company from any liability for any commission or compensation in
the nature of a finders' fee (and the costs and expenses of defending against
such liability or asserted liability) for which such Investor or any of its
officers, partners, employees or representatives is responsible. The Company
agrees to indemnify and hold harmless each Investor from any liability for any
commission or compensation in the nature of a finders' fee (and the costs and
expenses of defending against such liability or asserted liability) for which
the Company or any of its officers, employees or representatives is responsible.

16.
<PAGE> 21
7.7. Expenses. Irrespective of whether the Closing is effected, each
party shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement, except that
if the Closing occurs, the Company shall reimburse the Investors for the fees of
Gunderson, Dettmer and other (non-legal) professional fees and costs incurred in
connection with this transaction in an amount not to exceed $50,000 upon
presentation of evidence of reasonably satisfactory of the out-of-pocket
expenses incurred by Investors. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, or any of the Related
Documents or the Restated Certificate, the prevailing party shall be entitled to
reasonable attorney's fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.

7.8. Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the holders of a majority of the
Common Stock not previously sold to the public that is issued or issuable upon
conversion of the Series A Preferred Stock sold pursuant to this Agreement. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each holder of any securities purchased under this Agreement at the time
outstanding (including securities into which such securities are convertible),
each future holder of all such securities and the Company.

7.9. Effect of Amendment or Waiver. Each Investor acknowledges that by
the operation of Section 7.8 hereof the holders of a majority of the Common
Stock not previously sold to the public that is issued or issuable upon
conversion of the Series A Preferred Stock will have the power to diminish or
eliminate all rights of such Investor under this Agreement.

7.10. Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.

7.11. Aggregation of Stock. All shares of the Series A Preferred Stock
or Common Stock issued upon conversion thereof held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement.

7.12. Entire Agreement. This Agreement and the documents referred to
herein constitute the entire agreement among the parties and no party shall be
liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein or therein.

7.13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

17.
<PAGE> 22
7.14. Other Engagements and Activities. The investments in the Company
being made by The Goldman Sachs Group, Inc., Stone Street Fund 2000, L.L.C., and
Bridge Street Special Opportunities Fund 2000, L.L.C. (each a "GS Entity")
pursuant to this Agreement, and any subsequent investments in the Company by any
GS Entity after the date hereof, is being made notwithstanding any engagement,
prior to or subsequent to the date hereof, by the Company, of any GS Entity as
financial advisor, agent or underwriter to the Company. Notwithstanding anything
in this Agreement and the Related Documents to the contrary, no GS Entity shall
be restricted in any way from engaging in any brokerage, investment advisory,
financial advisory, anti-raid advisory, financing, asset management, trading,
market making, arbitrage and other similar activities conducted in the ordinary
course of its business.

7.15. Use of Name. Neither the Company nor any of its affiliates shall
use the names of any GS Entity in any press release, notice or other publication
without the prior written consent of such GS Entity, which such consent shall
not be unreasonably withheld or delayed; provided, however, that such GS Entity
acknowledges and agrees that the Company may issue a press release upon the
Closing of the sale of the Series A Preferred Stock stating the total amount
invested in the Company in a list of participating Investors.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

18.
<PAGE> 23
[SIGNATURE PAGES TO SERIES A PREFERRED
STOCK PURCHASE AGREEMENT]

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

"COMPANY"
LOANTRADER, INC., a Delaware corporation
F/K/A DENOVONET, Inc
By:
-----------------------------------------------
John N. Le, President

Address: 18200 Von Karman Avenue
Suite 1075
Irvine, CA 92612

"INVESTORS"
SPECIALTY FINANCE PARTNERS

By: Capital Z Financial Services II, L.P.,
a general partner

By: Capital Z Partners, Ltd.
Its Ultimate general partner

---------------------------------------------

Name:
----------------------------------------

Title:
---------------------------------------

Address: One Market Plaza
Spear Street Tower
Suite 1715
San Francisco, CA 94105

LENDINGTREE, INC., a Delaware corporation

By:
-----------------------------------------------

Name:
----------------------------------------

Title:
---------------------------------------

Address: 6701 Carmel Road
Suite 205
Charlotte, NC 28226
<PAGE> 24
[SIGNATURE PAGES TO SERIES A PREFERRED
STOCK PURCHASE AGREEMENT]

THE GOLDMAN SACHS GROUP, INC

By:
-----------------------------------------------

Name:
----------------------------------------

Title:
---------------------------------------

Address: 85 Broad Street
10th Floor
New York, NY 10004
Attention: Tara Harrison
Fax: 212-357-5505

STONE STREET FUND 2000, L.L.C.

By:
-----------------------------------------------

Name:
----------------------------------------

Title:
---------------------------------------

Address: 85 Broad Street
10th Floor
New York, NY 10004
Attention: Tara Harrison
Fax: 212-357-5505

BRIDGE STREET SPECIAL OPPORTUNITIES
FUND 2000, L.L.C.

By:
-----------------------------------------------

Name:
----------------------------------------

Title:
---------------------------------------

Address: 85 Broad Street
10th Floor
New York, NY 10004
Attention: Tara Harrison
Fax: 212-357-5505
<PAGE> 25
[SIGNATURE PAGES TO SERIES A PREFERRED
STOCK PURCHASE AGREEMENT]

--------------------------------------------------
EUGENE LEVY

Address: 90 Riverside Drive
Apt 5E
New York, NY 10024
212-873-7990
<PAGE> 26
[SIGNATURE PAGES TO SERIES A PREFERRED
STOCK PURCHASE AGREEMENT]

NEW CENTURY MORTGAGE
CORPORATION, a California corporation

By:
-----------------------------------------------

Name:
----------------------------------------

Title:
---------------------------------------

Address: 18400 Von Karman
Suite 1000
Irvine, California 92612
Attention: Chief Executive Officer

F. & A. Revocable Trust

--------------------------------------------------
FREDRIC FORSTER, TRUSTEE

Address: 1221 Starboard Way
Corona del Mar CA 92625

JAMES W. DEARING FAMILY TRUST, A
TRUST AGREEMENT DATED
NOVEMBER 10, 1989

--------------------------------------------------
JAMES W. DEARING, TRUSTEE

Address: 111 S. Orange Grove Blvd.
Unit # 302
Pasadena, CA 91105

--------------------------------------------------
DAVID LAMBERT

Address: 1417 Queen Anne Ave., N. #311
Seattle, WA 98109

--------------------------------------------------
<PAGE> 27
[SIGNATURE PAGES TO SERIES A PREFERRED
STOCK PURCHASE AGREEMENT]

--------------------------------------------------
JAMES B. SHAFFER

Address: 12 Russell Road
Cumberland Foreside, ME 04110

--------------------------------------------------
JONATHAN PESKOFF

Address: c/o Credit Suisse First Boston
Technology Group
One Boston Place, 30th Floor
Boston, MA 02108

--------------------------------------------------
G. LARRY ENGEL

Address: c/o Brobeck, Phleger & Harrison LLP
Spear Street Tower
One Market
San Francisco, CA 94105

--------------------------------------------------
PAUL M. VAUGHN

Address: c/o Bingham, Dana & Gould
150 Federal Street
Boston, MA 02110
<PAGE> 28
[SIGNATURE PAGES TO SERIES A PREFERRED
STOCK PURCHASE AGREEMENT]

DAVISSON FAMILY TRUST

--------------------------------------------------
ROGER C. DAVISSON, TTEE. U/A DTD. 11/29/94
DAVISSON FAMILY TRUST

--------------------------------------------------
MAJORIE DAVISSON, TTEE. U/A DTD. 11/29/94 DAVISSON
FAMILY TRUST

Address: 15 Celestial Drive
Irvine, CA 92612

--------------------------------------------------
RALPH STERN

Address: 2241 Liane Lane
Santa Ana, CA 92705

Brobeck, Phleger & Harrison LLP

By:
-----------------------------------------------
RICHARD A. FINK, PARTNER

Address: 38 Technology Drive, Suite 100
Irvine, CA 92618
Attention: Richard A. Fink

--------------------------------------------------
ROGER M. COHEN

Address: 51 San Simeon
Laguna Niguel, CA 92677
<PAGE> 29
[SIGNATURE PAGES TO SERIES A PREFERRED
STOCK PURCHASE AGREEMENT]

--------------------------------------------------
RICHARD A. FINK

Address: 5492 Calle Chaparro
Rancho Santa Fe, CA 92067

--------------------------------------------------
KATHLENE W. LOWE, AS JOINT TENANTS WITH RIGHT OF
SURVIVORSHIP

--------------------------------------------------
RUSSELL H. LOWE, AS JOINT TENANTS WITH RIGHT OF
SURVIVORSHIP

Address: 24 Windflower
Irvine, CA 92612

--------------------------------------------------
DAVID H. BLAKE

Address: Graduate School of Management
University of California, Irvine
Irvine, CA 92697-3125

--------------------------------------------------
BRUCE R. HALLETT

Address: Brobeck, Phleger & Harrison LLP
38 Technology Drive, Suite 100
Irvine, CA 92618
<PAGE> 30
SCHEDULE A
LIST OF INVESTORS
AND
AMOUNT INVESTED

<TABLE>
<CAPTION>
NUMBER OF SHARES
NUMBER OF SHARES OF SERIES A TOTAL NUMBER OF
SERIES A PREFERRED STOCK SERIES A
PREFERRED STOCK ISSUED UPON PREFERRED STOCK
INVESTORS INVESTMENT ISSUED AMOUNT INVESTED IN CONVERTIBLE NOTES CONVERSION ISSUED
--------- ---------- ------ ------------------------------------ ---------- ------
PRINCIPAL ACCRUED INTEREST
--------- ----------------
<S> <C> <C> <C> <C> <C> <C>
SPECIALTY FINANCE
PARTNERS $11,750,000 9,325,397 $250,000 -- 198,413 9,523,810
THE GOLDMAN SACHS
GROUP, INC. $ 2,000,001.78 1,587,303 -- -- -- 1,587,303
STONE STREET
FUND 2000, LLC $ 249,999.12 198,412 198,412
BRIDGE STREET
SPECIAL
OPPORTUNITIES FUND
2000, LLC $ 249,999.12 198,412 198,412
LENDINGTREE, INC. $ 2,500,000 1,984,127 -- -- -- 1,984,127
EUGENE LEVY $ 10,000 7,937 7,937
$100,000
($50,000 paid at
DAVID LAMBERT -- -- CLOSING IN CASH) $2,027.40 41,292
JAMES B. SHAFFER -- -- 100,000 2,054.79 80,996
JONATHAN PESKOFF -- -- 12,000 230.14 9,706
G. LARRY ENGEL -- -- 25,000 506.85 20,244
PAUL M. VAUGHN -- -- 10,000 191.78 8,089
DAVISSON FAMILY
TRUST -- -- 100,000 2.027.40 80,974
F. & A. REVOCABLE
TRUST -- -- 25,000 506.35 20,244
RALPH STERN -- -- 100,000 2,027.40 80,974
NEW CENTURY
MORTGAGE
CORPORATION -- -- 50,000 958.90 40,444
BROBECK, PHLEGER &
HARRISON LLP -- -- 25,000 479.45 20,222
ROGER M. COHEN -- -- 25,000 479.45 20,222
RICHARD A. FINK -- -- 5,000 95.89 4,044
KATHLENE W. AND
RUSSELL; LOWE -- -- 15,000 287.67 12,133
</TABLE>
<PAGE> 31
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
DAVID H. BLAKE -- -- 25,000 178.08 19,893
BRUCE R. HALLETT -- -- 10,000 52.05 7,978
TOTAL $17,000,000 13,293,651 $827,000 $12,104.11 665,956 13,967,543
</TABLE>
<PAGE> 32
SCHEDULE B

SCHEDULE OF EXCEPTIONS

LIST OF OMITTED SCHEDULES*

Schedule 2.1 - Organization, Good Standing and Qualification
Schedule 2.2 - Capitalization and Voting Rights
Schedule 2.3 - Subsidiaries
Schedule 2.4 - Authorization
Schedule 2.5 - Valid Issuance of Preferred and Common Stock
Schedule 2.6 - Government Consents
Schedule 2.7 - Offering
Schedule 2.8 - Litigation
Schedule 2.9 - Proprietary Information Agreements
Schedule 2.10 - Patents and Trademarks
Schedule 2.11 - Compliance with Other Instruments
Schedule 2.12 - Agreements; Action
Schedule 2.13 - Related Party Transactions
Schedule 2.14 - Section 83(b) Election
Schedule 2.15 - Financial Statements
Schedule 2.16 - Changes
Schedule 2.17 - Tax Returns
Schedule 2.18 - Permits
Schedule 2.19 - Environmental and Safety Laws
Schedule 2.20 - Disclosure
Schedule 2.21 - Registration Rights
Schedule 2.22 - Corporate Documents; Minute Books
Schedule 2.23 - Insurance
Schedule 2.24 - Employee Benefit Plans
Schedule 2.25 - Labor Agreements and Actions
Schedule 2.26 - Assumptions or Guaranties of Other Persons
Schedule 2.27 - Title to Property and Assets
Schedule 7.6 - Finder's Fee

- --------

*LendingTree, Inc. agrees to supplementally furnish to the Commission upon
request a copy of any of the omitted schedules.
<PAGE> 33
EXHIBIT A

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

Omitted.
<PAGE> 34
EXHIBIT B

AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT

Omitted.
<PAGE> 35
EXHIBIT C

LIST OF STOCKHOLDERS
<TABLE>
<CAPTION>
STOCKHOLDER COMMON
- -------------------------------------------------- --------------
<S> <C>
John N. Le 2,880,000
Robert L. Palmer 1,600,000
Donald V. Tran 1,600,000
Linda Hays 64,646
David Duong 322,612
Peter G. Le 128,000
Nelson Calimquim 130,612
Fredric J. Forster 1,056,668
James Dearing 211,332
Roger Cohen 10,000
New Century Mortgage Corporation 1,005,861
Rick Fink 10,000
Brobeck, Phleger & Harrison LLP 284,000
--------------
TOTAL 9,303,731
</TABLE>

EXHIBIT D

OPINION OF COUNSEL FOR THE COMPANY

Omitted.

EXHIBIT E

AMENDED AND RESTATED STOCK TRANSFER
AND CO-SALE AGREEMENT

Omitted.

EXHIBIT F

MANAGEMENT ADVISORY AGREEMENT

Omitted.

EXHIBIT G

VOTING AGREEMENT

Omitted.

LendingTree, Inc. agrees to supplementally furnish to the Commission upon
request a copy of any of the omitted exhibits.

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Amendment
No. 4 to Form S-1 of our report dated January 26, 2000, except as to the stock
split described in Note 2 which is as of February 3, 2000, relating to the
financial statements of LendingTree, Inc., which appear in such Registration
Statement. We also consent to the references to us under the headings "Experts"
and "Selected Financial and Other Data" in such Registration Statement.

PRICEWATERHOUSECOOPERS LLP

Charlotte, North Carolina

February 8, 2000