{"id":43660,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/stock-purchase-agreement-concentric-network-corp-and.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"stock-purchase-agreement-concentric-network-corp-and","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/stock-purchase-agreement-concentric-network-corp-and.html","title":{"rendered":"Stock Purchase Agreement &#8211; Concentric Network Corp. and Southwestern Bell Internet Services Inc."},"content":{"rendered":"<pre>\n\n                          STOCK PURCHASE AGREEMENT\n\n                               by and between\n\n\n                  CONCENTRIC NETWORK CORPORATION, As Issuer\n\n\n                                     and\n\n\n                 SOUTHWESTERN BELL INTERNET SERVICES, INC.,\n                                 As Investor\n\n\n\n                              October 19, 1998\n\n \n                               TABLE OF CONTENTS\n                               -----------------\n                                                                        Page\n                                                                        ----\n \nSECTION 1.  Definitions................................................ -1-\n            1.1.  Defined Terms........................................ -1-\n            1.2.  Other Terms.......................................... -4-\n            1.3.  Other Definitional Provisions........................ -5-\n \nSECTION 2.  Issuance and Sale of Common Stock.......................... -5-\n \nSECTION 3.  Representations and Warranties of\n            ---------------------------------    \n            the Company................................................ -6-\n            -----------\n            (a)   Organization; Corporate Power........................ -6-\n            (b)   Capital Stock and Related Matters.................... -6-\n            (c)   Subsidiaries; Investments............................ -7-\n            (d)   Authorization; No Breach............................. -8-\n            (e)   Company Reports; Financial\n                  Statements........................................... -9-\n            (f)   No Material Adverse Change.......................... -10-\n            (g)   Absence of Certain Developments..................... -10-\n            (h)   Contracts and Commitments........................... -11-\n            (i)   Intellectual Property Rights........................ -12-\n            (j)   Litigation, etc. ................................... -14-\n            (k)   Brokerage........................................... -14-\n            (l)   Compliance with Laws................................ -14-\n            (m)   Affiliated Transactions............................. -15-\n \nSECTION 4.  Representations and Warranties of\n            --------------------------------\n            the Investor.............................................. -15-\n            ------------\n            (a)   Execution; Authorization; No\n                  Contravention....................................... -16-\n            (b)   Securities Act...................................... -16-\n            (c)   Brokerage........................................... -17-\n \nSECTION 5.  Covenants................................................. -17-\n            ---------    \n            (a)   Inspection Rights................................... -17-\n            (b)   Confidentiality..................................... -17-\n            (c)   Filings............................................. -18-\n            (d)   Reservation of Common Stock......................... -18-\n            (e)   Further Assurances.................................. -18-\n            (f)   Board Representations............................... -18-\n            (g)   Repurchases by the Company.......................... -19-\n \nSECTION 6.  Conditions................................................ -19-\n            ----------\n            6.1.  Conditions to Each Party's Obligation to\n                  Effect the Closing.................................. -19-\n                  (a)   Regulatory Consents........................... -19-\n                  (b)   Litigation.................................... -19-\n\n                                      -i-\n\n \n                  (c)   Trial Agreement............................... -20-\n            6.2.  Conditions to Obligations of\n                  Investor............................................ -20-\n                  (a)   Representations and Warranties................ -20-\n                  (b)   Performance of Obligations of the\n                        Company....................................... -20-\n                  (c)   Legal Opinion................................. -20-\n            6.3.  Conditions to Obligation of the\n                  Company............................................. -20-\n                  (a)   Representations and Warranties................ -20-\n                  (b)   Performance of Obligations of\n                        Investor...................................... -21-\n\nSECTION 7.  Termination............................................... -21-\n            -----------                                      \n            7.1.  Termination by Mutual Consent....................... -21-\n            7.2.  Termination by Either Investor or the Company....... -21-\n            7.3.  Termination by the Company.......................... -21-\n            7.4.  Termination by Investor............................. -21-\n            7.5.  Effect of Termination and\n                  Abandonment......................................... -22-\n\nSECTION 8.  Investor's Transfer Restrictions.......................... -22-\n            --------------------------------            \n\nSECTION 9.  The Company's Right of First Refusal...................... -23-\n            ------------------------------------        \n\nSECTION 10. Survival and Indemnification.............................. -24-\n            ----------------------------\n            Survival of Representations, Warranties, \n            Covenants and Agreement Knowledge of Breach; \n            Indemnification........................................... -24-\n\nSECTION 11. Miscellaneous............................................. -25-\n            -------------   \n           (a)    Expenses............................................ -25-\n           (b)    Public Disclosure................................... -25-\n           (c)    Successors and Assigns; Assignment.................. -26-\n           (d)    Remedies............................................ -26-\n           (e)    Amendments and Waivers.............................. -26-\n           (f)    Severability........................................ -26-\n           (g)    Counterparts........................................ -26-\n           (h)    Descriptive Headings................................ -26-\n           (i)    Governing Law....................................... -27-\n           (j)    Notices............................................. -27-\n           (k)    Entire Agreement.................................... -27-\n           (l)    Definition of Knowledge............................. -28-\n\n \n                           STOCK PURCHASE AGREEMENT\n\n\n          This Stock Purchase Agreement (the \"Agreement\") is entered into as of\n                                              ---------                        \nOctober 19, 1998 by and between CONCENTRIC NETWORK CORPORATION, a Delaware\ncorporation (the \"Company\"), and SOUTHWESTERN BELL INTERNET SERVICES, INC., a\n                  -------                                                    \nDelaware corporation (the \"Investor\").\n                           --------   \n\n                                  RECITALS:\n                                  -------- \n\n          WHEREAS, the Company desires to issue and sell to the Investor, and\nthe Investor desires to purchase and acquire from the Company the shares of\nCommon Stock and Warrants (as defined herein).\n\n                                  AGREEMENT:\n                                  --------- \n\n          NOW, THEREFORE, in consideration of the foregoing and the mutual\ncovenants and agreements contained herein and other good and valuable\nconsideration, the receipt and sufficiency of which are hereby acknowledged, the\nparties to this Agreement hereby agree as follows:\n\n     SECTION 1.  Definitions.\n                 ----------- \n\n          1.1. Defined Terms.  For the purposes of this Agreement, the\n               -------------                                          \nfollowing terms have the meanings set forth below:\n\n          \"Affiliate\" means any Person that directly or indirectly, through one\n           ---------                                                           \nor more intermediaries, has control of or is controlled by, or is under common\ncontrol with, the Person specified.\n\n          \"Agreement\" shall have the meaning set forth in the first paragraph\n           ---------                                                         \nof this Agreement.\n\n          \"Antitrust Authorization Condition\" shall have the meaning set forth\n           ---------------------------------                                  \nin Section 2(b).\n\n          \"Antitrust Division\" shall mean the Antitrust Division of the United\n           ------------------                                                 \nStates Department of Justice.\n\n          \"Audit Date\" shall have the meaning set forth in Section 3(e).\n           ----------                                                   \n\n \n          \"Balance Sheet Data\" shall have the meaning set forth in Section\n           ------------------                                             \n3(e).\n\n          \"Business\" means all business operations and activities currently\n           --------                                                        \nconducted by the Company and its Subsidiaries.\n\n          \"Common Stock\" means the common stock, par value $0.001 per share,\n           ------------                                                     \nof the Company.\n\n          \"Company\" shall have the meaning set forth in the first paragraph of\n           -------                                                            \nthis Agreement.\n\n          \"Company Reports\" shall have the meaning set forth in Section 3(e).\n           ---------------                                                   \n\n          \"Contracts\" shall have the meaning set forth in Section 3(i).\n           ---------                                                   \n\n          \"Deductible\" shall have the meaning set forth in Section 8.\n           ----------                                                \n\n          \"FTC\" shall mean the Federal Trade Commission.\n           ---                                          \n\n          \"GAAP\" shall have the meaning set forth in Section 3(e).\n           ----                                                   \n\n          \"HSR Act\" shall mean the Hart-Scott-Rodino Antitrust Improvements\n           -------                                                         \nAct of 1976, as amended.\n\n          \"Intellectual Property Rights\" means all (i) patents, patent\n           ----------------------------                               \napplications, patent disclosures and inventions, (ii) trademarks, service marks,\ntrade dress, trade names, logos and corporate names and registrations and\napplications for registration thereof together with all of the goodwill\nassociated therewith, (iii) copyrights (registered or unregistered) and\ncopyrightable works and registrations and applications for registration thereof,\n(iv) mask works and registrations and applications for registration thereof, (v)\ncomputer software, data, data bases and documentation thereof and (vi) trade\nsecrets and other confidential information (including, without limitation,\ntangible and intangible proprietary information, ideas, formulas, compositions,\ninventions (whether patentable or unpatentable and whether or not reduced to\npractice), processes, know-how, manufacturing and production \n\n                                      -2-\n\n \nprocesses and techniques, research and development information, drawings,\nschematics, specifications, designs, plans, proposals, technical data,\ntechnology, copyrightable works, financial and marketing plans and customer and\nsupplier lists and information).\n\n          \"Internex\" shall mean Internex Information Services, Inc.\n           --------                                                \n\n          \"Investor\" shall have the meaning set forth in the first paragraph\n           --------                                                         \nof this Agreement.\n\n          \"Lien\" means any mortgage, pledge, security interest, encumbrance,\n           ----                                                             \nlien or charge of any kind (including, without limitation, any conditional sale\nor other title retention agreement or lease in the nature thereof), any filing\nor agreement to file a financing statement as debtor under the Uniform\nCommercial Code of the applicable jurisdiction or any similar statute other than\nto reflect ownership by a third party of property leased to the Company or any\nSubsidiaries under a lease which is not in the nature of a conditional sale or\ntitle retention agreement.\n\n          \"Material Adverse Effect\"  shall mean a material adverse effect on the\n           -----------------------                                              \nfinancial condition, operating results, assets, operations or prospects of the\nCompany and its Subsidiaries taken as a whole.\n\n          \"Person\" means any individual, partnership, corporation, association,\n           ------                                                              \njoint stock company, trust, joint venture, unincorporated organization or\ngovernmental entity or department, agency or political subdivision thereof.\n\n          \"Preferred Stock\" shall have the meaning set forth in Section 3(b).\n           ---------------                                                   \n\n          \"Purchase Price\" shall have the meaning set forth in Section 2(a).\n           --------------                                                   \n\n          \"Regulatory Relief Date\" shall mean the date on which Investor or its\n           ----------------------                                              \nAffiliates have, in their sole reasonable judgment, obtained any or all\nnecessary federal and\/or state regulatory approvals to provide landline,\ninterLATA long-distance service in any of Investor's or its Affiliates' in-\nregion states pursuant to the Communications Act of 1934, as amended by the\nTelecommunications Act of 1996.\n\n                                      -3-\n\n \n          \"SEC\" shall mean the Securities and Exchange Commission.\n           ---                                                    \n\n          \"Securities Act\" means the Securities Act of 1933, as amended, and the\n           --------------                                                       \nrules and regulations of the Securities and Exchange Commission promulgated\nthereunder.\n\n          \"Securities Exchange Act\" means the Securities Exchange Act of 1934,\n           -----------------------                                            \nas amended, and the rules and regulations of the Securities and Exchange\nCommission promulgated thereunder.\n\n          \"Subsidiary\" of any specified Person or entity means a corporation or\n           ----------                                                          \nother entity of which the majority of the voting power of the equity securities\nor other equity interests is owned, directly or indirectly, by such specified\nPerson or entity or any Subsidiary of such specified Person or entity.\n\n          \"Transaction Documents\" means this Agreement and the Warrant\n           ---------------------                                      \nCertificate.\n\n          \"Warrant Certificate\" shall mean the certificate evidencing the\n           -------------------                                           \nWarrants, substantially in the form of Exhibit A.\n\n          \"Warrants\" shall mean the warrants to purchase Common Stock at an\n           --------                                                        \nexercise price of $21.00 per share, evidenced by the Warrant Certificate to be\nissued to the Investor.\n\n          \"Year 2000 Issue\" with respect to any person shall mean any\n           ---------------                                           \nsignificant risk that computer hardware, software or equipment containing\nembedded microchips utilized in the business or operations of such person will\nnot, in the case of dates or time periods occurring after December 31, 1999,\nfunction at least as effectively and reliably as in the case of times or time\nperiods occurring before January 1, 2000, including the making of accurate leap\nyear calculations.\n\n\n          1.2.    Other Terms.  Other terms may be defined elsewhere in the text\n                  -----------                                                   \nof this Agreement and, unless otherwise indicated, shall have such meaning\nindicated throughout this Agreement.\n\n                                      -4-\n\n \n          1.3.    Other Definitional Provisions.  (a) The words \"hereof\",\n                  -----------------------------                          \n\"herein\", and \"hereunder\" and words of similar import, when used in this\nAgreement, shall refer to this Agreement as a whole and not to any particular\nprovision of this Agreement.\n\n          (b)     The terms defined in the singular shall have a comparable\nmeaning when used in the plural, and vice versa.\n\n          (c)     The terms \"dollars\" and \"$\" shall mean United States Dollars.\n\n     SECTION 2.   Issuance and Sale of Common Stock.\n                  --------------------------------- \n\n          (a)     At the closing of the transactions contemplated hereby (the\n\"Closing\"), (i) the Company will issue and sell to the Investor 906,679 shares\nof Common Stock, subject to a reduction by the number of shares of Common Stock\nthe Investor purchases on the open market prior to the Closing and 906,679\nWarrants and will deliver to the Investor the certificate(s) for such Common\nStock and the Warrant Certificate and (ii) the Investor will purchase such\nshares and Warrants from the Company for an aggregate consideration consisting\nof $21,896,297.85 (less $24.15 times the number of shares of Common Stock\npurchased on the open market) (the \"Purchase Price\"), and will pay at the\n                                    --------------                       \nClosing the Purchase Price by wire transfer to the Company into the account\ndesignated by the Company no later than seven business days prior to the Closing\nDate (as hereinafter defined).\n\n          (b)     Subject to Section 6 hereof, the Closing will occur at the\nCompany's executive offices at 10:00 a.m. on the later of thirty days from the\nexecution of this Agreement or five business days after satisfaction of the\nAntitrust Authorization Condition (the \"Closing Date\").  As used herein, the\nterm \"Antitrust Authorization Condition\" shall mean that the waiting period\napplicable under the HSR Act to the issuance to the Investor of shares of Common\nStock and the exercise of the Warrants shall have expired or early termination\nshall have been granted with respect thereto.\n\n                                      -5-\n\n \n     SECTION 3.   Representations and Warranties of the Company.\n                  --------------------------------------------- \n\n          As a material inducement to the Investor to enter into this Agreement\nand purchase the Common Stock and Warrants hereunder, the Company hereby\nrepresents and warrants that as of the date hereof and as of the Closing:\n\n          (a)     Organization; Corporate Power.  The Company is a corporation\n                  -----------------------------                        \nduly organized, validly existing and in good standing under the laws of the\nState of Delaware and is qualified to do business in every jurisdiction in which\nit is required to be qualified, except where the failure to so qualify has not\nhad and would not reasonably be expected to have a Material Adverse Effect. The\nCompany possesses all requisite corporate power and authority and all licenses,\npermits and authorizations necessary to own and operate its properties and to\ncarry on the Business, subject to such exceptions as have not had and are not\nreasonably expected to have a Material Adverse Effect. The Company has delivered\nto Investor correct and complete copies of the Company's certificate of\nincorporation and by-laws reflecting all amendments made thereto at any time\nprior to the date of this Agreement.\n\n          (b)     Capital Stock and Related Matters.\n                  --------------------------------- \n\n          (i)     The authorized capital stock of the  Company consists of\n110,000,000 shares of Common Stock, of which 14,899,822 shares were issued and\noutstanding as of the date hereof and 10,000,000 shares of Preferred Stock,\n$.001 par value, of which 154,657 shares of Series B Preferred Stock (the\n\"Preferred Stock\") were issued and outstanding as of the date hereof.  Except as\ncontemplated by the Transaction Documents and except for 3,441,044 shares of\nCommon Stock reserved for issuance pursuant to employee and director stock\noption grants, 890,686 shares of Common Stock reserved pursuant to employee and\ndirector stock and option plans (as to which grants have not been made) and\nwarrants to purchase 2,512,757 shares of Common Stock, neither the Company nor\nany Subsidiary has outstanding any stock or securities convertible or\nexchangeable for any shares of its capital stock, nor does it have outstanding\nany rights, options or warrants to subscribe for or to purchase its capital\nstock or any stock or securities convertible into or exchangeable for its\ncapital stock or any stock appreciation rights or phantom stock plans, nor has\nit reserved any shares of capital stock for issuance upon exercise or conversion\nof any \n\n                                      -6-\n\n \nrights, options or warrants to subscribe for or to purchase its capital stock or\nany stock or securities convertible into or exchangeable for its capital stock.\nNeither the Company nor any Subsidiary is subject to any obligation (contingent\nor otherwise) to repurchase or otherwise acquire or retire any shares of its\ncapital stock or any warrants, options or other rights to acquire its capital\nstock. All of the outstanding shares of the Company's capital stock are, and the\nshares of Common Stock to be issued hereunder and upon exercise of the Warrants\nwill be upon such issuance and receipt by the Company of payment therefor, duly\nauthorized, validly issued, fully paid and nonassessable.\n\n          (ii)    There are no statutory stockholders  preemptive rights or\nsimilar contractual rights to which the Company is subject or rights of refusal\nto which the Company is subject with respect to the issuance of capital stock of\nthe Company.  Except as set forth in the Company Reports, the Company has not\nviolated any applicable federal or state securities laws in connection with the\noffer, sale or issuance of any of its capital stock, and the offer, sale and\nissuance of the Common Stock hereunder do not require registration under the\nSecurities Act, assuming the Investor's representation in Section 4(b) is true\nin all respects.  There are no agreements to which the Company or, to the\nknowledge of the officers of the Company, any holders of the capital stock of\nthe Company is a party with respect to the voting or transfer of the Company's\ncapital stock.\n\n          (iii)   The Company has authorized the  issuance and sale to the\nInvestor of the shares of Common Stock being sold to the Investor pursuant to\nSection 2 hereof (including those shares issuable upon exercise of the\nWarrants).\n\n          (c)     Subsidiaries; Investments.  Each of the Company's \n                  -------------------------                                     \nSubsidiaries, which are listed on Exhibit B hereto, is wholly owned by the\nCompany and is duly organized, validly existing and in good standing under the\nlaws of the state of its incorporation, possesses all requisite corporate power\nand authority and, except for such exceptions as have not had and are not\nreasonably expected to have a Material Adverse Effect, all licenses, permits and\nauthorizations necessary to own its properties and to carry on its businesses as\nnow being conducted and is qualified to do business in every jurisdiction in\nwhich it is required to be qualified, except where the failure to so qualify has\nnot had and is not reasonably expected to have a Material Adverse Effect. All of\nthe outstanding shares of capital \n\n                                      -7-\n\n \nstock of each Subsidiary are duly authorized, validly issued, fully paid and\nnonassessable, and all such shares are owned by the Company free and clear of\nany Lien. Neither the Company nor any Subsidiary owns or holds the right to\nacquire any shares of stock or any other security or interest in any other\nPerson.\n\n          (d)     Authorization; No Breach.  The execution, delivery and \n                  ------------------------                             \nperformance of the Transaction Documents by the Company have been duly\nauthorized by the Company. Each of the Transaction Documents has been duly\nexecuted by the Company and constitutes a valid and legally binding obligation\nof the Company, enforceable in accordance with its terms subject to bankruptcy,\ninsolvency, fraudulent transfer, reorganization, moratorium and similar laws of\ngeneral applicability relating to or affecting creditors' rights and to general\nequity principles. The execution and delivery of the Transaction Documents, and\nthe fulfillment of and compliance with the terms thereof by the Company, do not\nand shall not (i) conflict with or result in a breach of the terms, conditions\nor provisions of, (ii) constitute a default under, (iii) result in the creation\nof any Lien upon the Company's or any Subsidiary's capital stock or assets\npursuant to, (iv) give any third party the right to modify, terminate or\naccelerate any obligation under, (v) result in a violation of, or (vi) require\nany authorization, consent, approval, exemption or other action by or notice or\ndeclaration to, or filing with, any court or administrative or governmental body\nor agency or other Person pursuant to, the charter or bylaws of the Company or ,\nany Contract (as defined in Section 3(i)) or any law, statute, rule, regulation,\norder, judgment, decree, agreement, license or instrument to which the Company\nor any Subsidiary is subject, except for (A) any such conflict, breach, default,\nLien or right of modification, termination or acceleration (other than any of\nthe foregoing arising pursuant to the charter or bylaws of the Company) which\nwould not reasonably be expected to have a Material Adverse Effect or prejudice\nin any material respect the rights of the Investor under any of the Transaction\nDocuments or (B) the requirement to obtain any authorizations or take or make\nany related actions and filings required under state securities or \"blue sky\"\nlaws or to obtain any other authorization, consent, approval, action, notice,\ndeclaration or filing if the failure to do so would not reasonably be expected\nto have a Material Adverse Effect or prejudice in any material respect the\nrights of the Investor under any of the Transaction Documents.\n\n                                      -8-\n\n \n          (e)     Company Reports; Financial Statements. The Company has \n                  -------------------------------------                 \ndelivered or made available to the Investor (i) each registration statement,\nreport, proxy statement or information statement filed with the SEC since\nDecember 31, 1997 (the \"Audit Date\"), including the Company's Annual Report on \n                        ----------                                   \nForm 10-K for the year ended December 31, 1997, the Company's Quarterly Reports\non Form 10-Q for the quarters ended March 31, 1998 and June 30, 1998 and the\nCompany's proxy statement with respect to its 1998 annual meeting, the Company's\nreports on Form 8-K filed June 11, 1998, April 17, 1998 and February 18, 1998,\nin each case in the form (including exhibits, annexes and any amendments\nthereto) filed with the SEC (collectively, the \"Company Reports\").  As of their \n                                                ---------------            \nrespective dates, the Company Reports complied in all material respects with the\nrequirements of the Securities Act and the Securities Exchange Act and did not\ncontain any untrue statement of a material fact or omit to state a material fact\nrequired to be stated therein or necessary to make the statements made therein,\nin light of the circumstances in which they were made, not misleading. Each of\nthe balance sheets included in or incorporated by reference into the Company\nReports (including the related notes and schedules) fairly presents in all\nmaterial respects the financial position of the Company or Internex, as the case\nmay be, as of its date and each of the statements of operations, stockholders\nequity and cash flows included in or incorporated by reference into the Company\nReports (including any related notes and schedules) fairly presents in all\nmaterial respects the results of operations, net losses and cash flows, as the\ncase may be, of the Company or Internex, as the case may be, for the periods set\nforth therein (subject, in the case of unaudited statements, to the absence of\nnotes and normal year-end audit adjustments), in each case in accordance with\ngenerally accepted accounting principles (\"GAAP\") consistently applied during\n                                           ----                               \nthe periods involved, except as may be noted therein (the date of the most\nrecently filed balance sheet of the Company is hereinafter referred to as the\n\"Balance Sheet Date\").\n\n          (f)     No Material Adverse Change.  Since the Balance Sheet Date, \n                  --------------------------                          \nthere has been no material adverse change in the financial condition, operating\nresults, assets, operations, employee relations or customer or supplier\nrelations of the Company and its Subsidiaries, taken as a whole.\n\n                                      -9-\n\n \n          (g)     Absence of Certain Developments.\n                  ------------------------------- \n\n                  (i)   Except as expressly contemplated by the Transaction\nDocuments or as disclosed in the Company Reports since the Audit Date, neither\nthe Company nor any Subsidiary has:\n\n          (A)     issued any notes, bonds or other debt securities or any\n     capital stock or other equity securities or any securities convertible,\n     exchangeable or exercisable into any capital stock or other equity\n     securities (other than employee stock options and shares of Common Stock\n     issued upon the exercise thereof, shares of the Company's Series A\n     Preferred Stock and Series B Preferred Stock issued in connection with the\n     Company's dividend payment and exchange offer related to its outstanding\n     Shares of Preferred Stock and shares issued in connection with the\n     acquisition of its Subsidiaries);\n\n          (B)     borrowed any amount or incurred or become subject to any\n     liabilities, except liabilities incurred in the ordinary course of business\n     and liabilities under contracts entered into in the ordinary course of\n     business (including any capital lease obligations);\n\n          (C)     discharged or satisfied any material Lien or paid any material\n     obligation or liability, other than in the ordinary course of business;\n\n          (D)     declared or made any payment or distribution of cash or other\n     property to its stockholders with respect to its capital stock or other\n     equity securities or purchased or redeemed any shares of its capital stock\n     or other equity securities (including, without limitation, any warrants,\n     options or other rights to acquire its capital stock or other equity\n     securities) other than dividend payments made with respect to the Company's\n     Preferred Stock;\n\n          (E)     sold, assigned or transferred any material Intellectual\n     Property or disclosed any proprietary confidential information to any\n     Person (other than any such disclosure in the ordinary conduct of business\n     operations or which disclosure \n\n                                      -10-\n\n \n     was subject to a confidentiality agreement, which in either case does not\n     have a Material Adverse Effect);\n\n          (F)     suffered any extraordinary losses, waived any rights of\n     material value or canceled any material debts or claims, other than in the\n     ordinary course of business and consistent with past practice;\n\n          (G)     changed its accounting principles, practices or methods,\n     except as required by GAAP; or\n\n          (H)     suffered any loss, or threatened loss, of any supplier or\n     customer or group of related suppliers or customers which is reasonably\n     expected to have a Material Adverse Effect.\n\n          (h)     Contracts and Commitments.\n                  ------------------------- \n\n          (i)     All of the contracts, agreements and  instruments (a) filed as\nexhibits to the Company Reports which have not expired in accordance with their\nterms or (b) which have been entered into since the Audit Date and which will be\nfiled as exhibits to the Form 10-K for the year ended December 31, 1998 (the\n\"Contracts\") are valid and legally binding obligations of the Company or its\nSubsidiaries, as the case may be, and, to the knowledge of the Company, the\nother parties thereto, and, to the knowledge of the Company or the applicable\nSubsidiary, are enforceable in accordance with their terms subject to\nbankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and\nsimilar laws of general applicability relating to or affecting creditors' rights\nand to general equity principles.  To the knowledge of the Company or the\napplicable Subsidiary: (i) the Company and its Subsidiaries have performed in\nall material respects all obligations required to be performed by them under the\nContracts and are not in material default under or in material breach of any\nContract or in receipt of any claim of such default or breach; (ii) no event has\noccurred which with the passage of time or the giving of notice or both would\nresult in a material default, material breach or event of material noncompliance\nby the Company or any Subsidiary under any Contract; (iii) neither the Company\nnor any Subsidiary has any present expectation or intention of not fully\nperforming all its material obligations under the Contracts; (iv) neither the\nCompany nor any Subsidiary has knowledge of any \n\n                                      -11-\n\n \nmaterial breach or anticipated material breach by the other parties to any\nContract; and (v) neither the Company nor any Subsidiary has any written notice\nor other communication to the effect that any other party to any Contract\nintends to terminate such contract, agreement or instrument prior to the\nexpiration of the maximum stated term of such contract, agreement or instrument.\n\n          (ii)    A true and correct copy of each of the  Contracts which are\nreferred to in (i)(b) hereof, together with all amendments, waivers or other\nchanges thereto has been supplied or made available to the Investor through the\nSEC's EDGAR filing system.\n\n          (i)     Intellectual Property Rights.\n                  ---------------------------- \n\n          (i)     To the Company's knowledge, neither the Company nor any\nSubsidiary is, or as a result of the execution and delivery of this Agreement or\nthe performance of the Company's obligations hereunder will be, in violation of\nany license, sublicense or other agreement applicable to it and, to the\nCompany's knowledge, the Company or one of its Subsidiaries owns all right,\ntitle and interest to, or has the right to use pursuant to a valid license, all\nIntellectual Property Rights used in the Business, subject to such exceptions as\nhave not had and are not reasonably expected to have a Material Adverse Effect.\n\n          (ii)    To the Company's knowledge (A) there have been no claims made\nagainst the Company or any Subsidiary or threatened or, to the Company's\nknowledge, likely to be threatened by any Person, asserting the invalidity,\nmisuse or unenforceability of any Intellectual Property Rights referred to in\n(i) above or challenging the ownership, validity or effectiveness of any of the\nIntellectual Property Rights, which, if successful, would reasonably be expected\nto have a Material Adverse Effect, (B) to the Company's knowledge, neither the\nCompany nor any Subsidiary has received any notices of any material unauthorized\nuse, infringement or misappropriation by, or conflict with, any present or\nformer employee of the Company, principal shareholders, strategic partners or\nany other third party with respect to such Intellectual Property Rights\n(including, without limitation, any demand or request that the Company or any\nSubsidiary license any rights from a third party) which, if successful, would\nreasonably be expected to have a Material Adverse Effect, (C) to the Company's\nknowledge, the conduct of the Business has not \n\n                                      -12-\n\n \ninfringed, misappropriated or conflicted with and does not infringe,\nmisappropriate or conflict with any Intellectual Property Rights of other\nPersons, and (D) to the Company's knowledge, the Intellectual Property Rights\nowned by or licensed to the Company or its Subsidiaries have not been infringed,\nmisappropriated or conflicted by other Persons, except in the case of the clause\n(A) (B), (C) or (D) above for any infringement, misappropriation or conflict\nthat has not had and is not reasonably expected to have a Material Adverse\nEffect. No Intellectual Property Right or product is subject to any Lien and the\nCompany does not know of any fact that would render the Intellectual Property\nRights invalid. Except with respect to Intellectual Property Rights licensed by\nthe Company from third parties in the ordinary course of business, to the\nCompany's knowledge, no Intellectual Property Right is subject to any\noutstanding order, judgment, decree, stipulation or agreement restricting in any\nmanner the licensing or exploitation thereof by the Company or any Subsidiary.\nExcept for license agreements for the Company's products executed in the\nordinary course of business, without alteration or amendment of any material\nterm therein, and in accordance with the Company's past practices, to the\nCompany's knowledge neither the Company nor any Subsidiary has entered into any\nagreement to indemnify any other person against any charge of infringement\nrelating to any Intellectual Property Right. To the Company's knowledge, no\nemployee of the Company or any Subsidiary is in violation of any term of any\nconfidentiality or invention assignment agreement, employment contract (whether\nwritten or verbal), patent disclosure agreement or any other contract or\nagreement relating to the relationship of any such employee with the Company or\nany Subsidiary or any other party (including prior employers) because of the\nnature of the business conducted or proposed to be conducted by the Company or\nany Subsidiary. To the Company's knowledge, all registered trademarks, service\nmarks and copyrights held by the Company or its Subsidiaries are valid and\nsubsisting.\n\n          (j)     Litigation, etc.  Except as set forth in the Company Reports,\n                  ----------------                                             \nthere are no actions, suits, proceedings, orders, investigations or claims\npending (other than any such actions, suits, proceedings, orders, investigations\nand claims which may be pending but of which none of the Company, any of its\nSubsidiaries and their respective representatives have received notice) or, to\nthe Company's knowledge, threatened  against the Company or any Subsidiary (or\nto the Company's knowledge, pending or threatened \n\n                                      -13-\n\n \nagainst any of the officers or directors of the Company or any Subsidiary) at\nlaw or in equity, or before or by any governmental department, commission,\nboard, bureau, agency or instrumentality which seek to enjoin or prevent the\nconsummation of or otherwise relate specifically to the transactions\ncontemplated by the Transaction Documents or which have had or are reasonably\nexpected to have a Material Adverse Effect; neither the Company nor any\nSubsidiary is subject to any pending arbitration proceedings under collective\nbargaining agreements or otherwise or, to the Company's knowledge, any\ngovernmental investigations or inquiries (including, without limitation,\ninquiries as to the qualification to hold or receive any license or permit)\nwhich have had or are reasonably expected to have a Material Adverse Effect.\nNeither the Company nor any Subsidiary is subject to any judgment, order or\ndecree of any court or other governmental agency that requires or prohibits any\nconduct on the part of the Company or its Subsidiaries that affects the Business\nin a manner that would have a Material Adverse Effect.\n\n          (k)     Brokerage.  Except as set forth on Schedule 3(n) hereto, \n                  ---------                                            \nthere are no claims for brokerage commissions, finders' fees or similar\ncompensation in connection with the transactions contemplated by the Transaction\nDocuments for which the Investor will have any liability or responsibility based\non any arrangement or agreement binding upon the Company or any of its\nSubsidiaries.\n\n          (l)     Compliance with Laws.  To the Company's knowledge, neither the\n                  --------------------                                          \nCompany nor any Subsidiary has violated any law or any governmental rule, order\nor regulation or requirement which violation through the date hereof has had or\nwould reasonably be expected to have a Material Adverse Effect, and neither the\nCompany nor any Subsidiary has received notice of any such violation.  To the\nknowledge of the Company, the operation of the Business by the Company and its\nSubsidiaries complies and has complied in all material respects with the\nCommunications Act of 1934, as amended, and the rules, orders, regulations and\nother applicable requirements of the Federal Communications Commission and the\npublic utility commissions of the states in which the Business is conducted\nhaving jurisdiction over the Company or any of its Subsidiaries; provided,\nhowever, that no representation or warranty is made regarding the effect of\nfuture pronouncements or rulings by any applicable governmental body.\n\n                                      -14-\n\n \n          (m)     Affiliated Transactions.  Except as disclosed in the Company\n                  -----------------------                                     \nReports hereto, no officer, director or Affiliate of the Company or any\nSubsidiary or, to the knowledge of the Company, any individual related by blood,\nmarriage or adoption to any such individual or any entity in which any such\nPerson or individual owns a greater than 10% beneficial interest, is a party to\nany agreement, contract, commitment or transaction with the Company or any\nSubsidiary that is material to the Company and its Subsidiaries, taken as a\nwhole, or has any material interest in any material property used by the Company\nor any Subsidiary which is required to be filed or disclosed in the Company\nReports pursuant to Item 404 of Regulation S-K of the Act.\n\n          (n)     Year 2000.  The Company has reviewed its operations and those \n                  ---------                                          \nof its Subsidiaries with a view to assessing whether it or its Subsidiaries'\nrespective businesses, networks or products will, in the receipt, transmission,\nprocessing, manipulation, storage, retrieval, retransmission or other\nutilization of data, be vulnerable to a Year 2000 Issue and reasonably\nanticipates that it will on a timely basis successfully resolve any Year 2000\nIssue. Based on such review, the Company has no reason to believe that a\nMaterial Adverse Effect will occur with respect to it or  any Subsidiary's\nbusinesses or operations resulting from a Year 2000 Issue.\n\n     SECTION 4.   Representations and Warranties of the Investor.\n                  ---------------------------------------------- \n\n          As a material inducement to the Company to enter into this Agreement\nand issue and sell the Common Stock and Warrants hereunder, the Investor hereby\nrepresents and warrants that:\n\n          (a)     Execution; Authorization; No Contravention.  The Investor has \n                  ------------------------------------------               \nduly executed and delivered to the Company each Transaction Document to which it\nis a party, and each such Transaction Document constitutes a valid and legally\nbinding obligation of the Investor, enforceable against the Investor in\naccordance with its terms subject to bankruptcy, insolvency, fraudulent\ntransfer, reorganization, moratorium and similar laws of general applicability\nrelating to or affecting creditors' rights and to general equity principles. The\nexecution, delivery and performance by the Investor of each Transaction \n\n                                      -15-\n\n \nDocument to which it is a party and the consummation of the transactions\ncontemplated thereby: (a) are within the Investor's corporate power and\nauthority and have been duly authorized by all necessary corporate action on the\npart of the Investor; (b) do not and will not conflict with or contravene the\nterms of the Investor's certificate of incorporation or bylaws; (c) do not and\nwill not violate, conflict with or result in any breach or contravention of or\nrequire any consent, authorization, approval, exemption or other action by or\nnotice or declaration to, or filing with, any court or administrative or\ngovernmental body or agency or other Person pursuant to (i) any material\nagreement, lease or contract of such Investor, or (ii) any applicable statute or\nany rule or regulation of any governmental authority or any order or decree\napplicable to such Investor (other than as required by the HSR Act.\n\n          (b)     Securities Act.  The Investor is acquiring the Common Stock \n                  --------------                                      \nsolely for the purpose of investment and not with a view to, or for sale in\nconnection with, any distribution thereof in violation of the Securities Act.\nThe Investor acknowledges that the shares of Common Stock are not registered\nunder the Securities Act, and that such shares may not be transferred or sold\nexcept pursuant to the registration provisions of such Securities Act or\npursuant to an applicable exemption therefrom and pursuant to state securities\nlaws and regulations as applicable and are subject to substantial restrictions\non transferability under the terms of the Stockholders' Agreement. The Investor\nis knowledgeable, sophisticated and experienced in business and financial\nmatters of the type contemplated by the Transaction Documents and is able to\nbear the economic risks associated with its investment in the Company. The\nInvestor has been afforded access to information regarding the Company and its\nSubsidiaries and their respective financial condition, operating results,\nproperties, liabilities, operations and management sufficient to enable it to\nevaluate the risks and merits of its investment in the Company.\n\n          (c)     Brokerage.  There are no claims for brokerage commissions,\n                  ---------                                                 \nfinders' fees or similar compensation in connection with the transactions\ncontemplated by the Transaction Documents for which the Company will have any\nliability or responsibility based on any arrangement or agreement binding upon\nthe Investor.\n\n     SECTION 5.   Covenants.\n                  --------- \n\n                                      -16-\n\n \n          (a)     Inspection Rights.  The Company shall permit, and cause its\n                  -----------------                                          \nSubsidiaries to permit, the representatives designated by the Investor upon\nreasonable notice and during normal business hours, to (x) visit and inspect any\nof the properties of the Company and its Subsidiaries, (y) examine the corporate\nand financial records of the Company and its Subsidiaries and to make copies\nthereof, and (z) discuss the affairs, finances and accounts of any such\ncorporations with the directors, officers, key employees and (with the prior\nconsent of the Company, which will not be unreasonably withheld) independent\naccountants of the Company.\n\n          (b)     Confidentiality.  The Investor shall hold in confidence all\n                  ---------------                                            \ninformation and data obtained by it from the Company or any Subsidiary (whether\nin connection with the negotiation of the transactions contemplated by the\nTransaction Documents, pursuant to Section 5(a) or otherwise) and shall not\ndisclose such information to any Person without the prior written consent of the\nCompany (except that the Investor may disclose such information to those of its\nAffiliates, directors, officers and other representatives who require access to\nsuch information and who has executed a copy of the Company's standard\nConfidentiality and Proprietary Information Agreement, previously provided to\nInvestor, in order to enable the Investor to exercise its rights under the\nTransaction Documents and who agree to be subject to the restrictions set forth\nin this Section 5(b)); provided, however, that the provisions of this Section\n5(b) shall not apply to any information or data that can be shown (i) to be\ngenerally available to the public through no fault of the Investor or its\nAffiliates, directors, officers and other representatives or (ii) to have been\nlawfully obtained by the Investor from other sources not subject to a\nconfidentiality obligation to the Company.\n\n          (c)     Filings.  The Company and the Investor will promptly file \n                  -------                                                \nwith the FTC and the Antitrust Division a notification and report form and\nrelated documentary materials if and when required by the HSR Act in connection\nwith any of the transactions contemplated by this Agreement and the Transaction\nDocuments and promptly file any additional information requested as soon as\nreasonably practicable after receipt of request thereof. Each of the Company and\nthe Investor will use their reasonable best efforts to obtain as promptly as\npracticable after the date \n\n                                      -17-\n\n \nhereof early termination or expiration of any waiting period applicable under\nthe HSR Act to the transactions contemplated hereby.\n\n          (d)     Reservation of Common Stock.  The Company shall at all times\n                  ---------------------------                                 \nreserve and keep available out of its authorized but unissued shares of Common\nStock, solely for the purpose of the exercise of the Warrants, the number of\nshares of its Common Stock issuable upon the exercise of the Warrants.  All\nshares of Common Stock which are so issuable shall, when issued upon the\nexercise of the Warrants, be duly and validly issued, fully paid and\nnonassessable and free from all taxes, liens and charges.\n\n          (e)     Further Assurances.  If at any time after the Closing any \n                  ------------------                                    \nfurther action is necessary or desirable to carry out the purposes of this\nAgreement or the Transaction Documents, the proper officers or directors of the\nCompany or the Investor, as the case may be, shall execute and deliver any\nfurther instruments or documents and take all such necessary action that may\nreasonably be requested by the other party.\n\n          (f)     Board Representations.  The Investor shall be entitled to\n                  ---------------------                                    \ndesignate, at its option, either (i) one non-director delegate who shall be\nentitled to receive notice of and to attend all meetings of the Company's Board\nof Directors, as well as to receive all materials received by directors, but who\nshall not be a member of the Board of Directors, shall have no fiduciary duties\nto the Company, to the Board of Directors or stockholders of the Company and\nshall not be entitled to vote at meetings of the Board of Directors (an\n\"Observer\") or (ii) a designee that the Company agrees to use its best efforts\nto have the Company's Board of Directors nominate to serve on the Company's\nBoard of Directors.  Any Observer shall execute and deliver to the Company a\ncopy of the Company's standard Proprietary Information and Nondisclosure\nAgreement as a condition to receiving the information provided for hereunder.\n\n          (g)     Repurchases by the Company.  Provided that the Investor has \n                  --------------------------                               \nnot purchased any equity securities of the Company, except as contemplated\nhereby (including the Warrants), until the Regulatory Relief Date, the Company\nwill not reacquire or redeem any capital stock so that the ownership by Investor\nand its Affiliates would equal or exceed on a fully diluted basis 10% of all\nequity of the Company.\n\n                                      -18-\n\n \n     SECTION 6.   Conditions.\n                  ---------- \n\n          6.1.    Conditions to Each Party's Obligation to Effect the Closing.\n                  -----------------------------------------------------------  \nThe respective obligation of each party to effect the Closing is subject to the\nsatisfaction or waiver at or prior to the Closing of each of the following\nconditions:\n\n          (a)     Regulatory Consents.  The Antitrust Authorization Condition \n                  -------------------                                   \nshall have been satisfied and all notices, reports and other filings required to\nbe made prior to the Closing by the Company or Investor or any of their\nrespective Subsidiaries with, and all consents, registrations, approvals,\npermits and authorizations required to be obtained prior to the Closing by the\nCompany or Investor or any of their respective Subsidiaries from, any government\nor regulatory authority, agency, commission, body or other governmental entity\n(\"Governmental Entity\") in connection with the execution and delivery of this\n  -------------------                                                        \nAgreement and the consummation of the transactions contemplated hereby by the\nCompany and Investor shall have been made or obtained (as the case may be).\n\n          (b)     Litigation.  No court or Governmental Entity of competent\n                  ----------                                               \njurisdiction shall have enacted, issued, promulgated, enforced or entered any\nstatute, law, ordinance, rule, regulation, judgment, decree, injunction or other\norder (whether temporary, preliminary or permanent) that is in effect and\nrestrains, enjoins or otherwise prohibits the Closing or the exercise of the\nWarrants (collectively, an \"Order\"), and no Governmental Entity shall have\n                            -----                                         \ninstituted any proceeding or threatened to institute any proceeding seeking any\nsuch Order.\n\n          (c)     Trial Agreement.  At the time of Closing, no federal or state\n                  ---------------                                              \nregulatory agency or court shall have ruled that the Trial Agreement, executed\non the date hereof, violates any federal, state or local statute, rule or\nregulation, provided that there is no reasonable prospect that the Trial\nAgreement can be conformed to the ruling, while satisfying the original intent\nof the parties to the Trial Agreement.\n\n          6.2.    Conditions to Obligations of Investor. The obligations of\n                  -------------------------------------                    \nInvestor to effect the Closing are also subject to the satisfaction or waiver at\nor prior to the Closing of the following conditions:\n\n                                      -19-\n\n \n          (a)     Representations and Warranties.  The representations and\n                  ------------------------------                          \nwarranties of the Company set forth in this Agreement shall be true and correct\nas of the date of this Agreement and as of the Closing Date as though made on\nand as of the Closing Date (except to the extent any such representation or\nwarranty expressly speaks as of an earlier date), and Investor shall have\nreceived a certificate signed on behalf of the Company by the President or\nExecutive Vice President of the Company to such effect.\n\n          (b)     Performance of Obligations of the Company.  The Company shall \n                  -----------------------------------------          \nhave performed in all material respects all obligations required to be performed\nby it under this Agreement at or prior to the Closing Date.\n\n          (c)     Legal Opinion.  Investor shall have received an opinion of \n                  -------------                                       \nWilson Sonsini Goodrich &amp; Rosati, counsel to the Company, dated the Closing\nDate, regarding the due authorization, validity and fully paid and nonassessable\nstatus of the shares of Common Stock.\n\n          6.3.    Conditions to Obligation of the Company. The obligation of the\n                  ---------------------------------------                       \nCompany to effect the Closing is also subject to the satisfaction or waiver by\nthe Company at or prior to the Closing Date of the following conditions:\n\n          (a)     Representations and Warranties.  The representations and\n                  ------------------------------                          \nwarranties of Investor set forth in this Agreement shall be true and correct in\nall respects as of the date of this Agreement and as of the Closing Date as\nthough made on and as of the Closing Date, (except to the extent any such\nrepresentation and warranty expressly speaks as of an earlier date).\n\n          (b)     Performance of Obligations of Investor. Investor shall have\n                  --------------------------------------                     \nperformed in all material respects all obligations required to be performed by\nit under this Agreement at or prior to the Closing Date.\n\n     SECTION 7.   Termination.\n                  ----------- \n\n          7.1.    Termination by Mutual Consent.  This Agreement may be \n                  -----------------------------                            \nterminated at any time prior to the Closing, by mutual written consent of the\nCompany and Investor.\n\n                                      -20-\n\n \n          7.2.    Termination by Either Investor or the Company.  This Agreement\n                  ---------------------------------------------                 \nmay be terminated at any time prior to the Closing by either Investor or the\nCompany if (i) the Closing shall not have occurred by April 30, 1999, or (ii)\nany Order permanently restraining, enjoining or otherwise prohibiting the\nClosing shall become final and non-appealable; provided, that the right to\n                                                 --------                   \nterminate this Agreement pursuant to clause (i) above shall not be available to\nany party that has breached in any material respect its obligations under this\nAgreement in any manner that shall have proximately contributed to the\noccurrence of the failure of the Closing to occur.\n\n          7.3.    Termination by the Company.  This Agreement may be terminated \n                  --------------------------                         \nat any time prior to the Closing, by action of the Company if there has been a\nmaterial breach by Investor of any representation, warranty, covenant or\nagreement contained in this Agreement that is not curable or, if curable, is not\ncured within 15 days after written notice is given by the Company to Investor.\n\n          7.4.    Termination by Investor.  This Agreement may be terminated at\n                  -----------------------                                      \nany time prior to the Closing, by action of Investor if there has been a\nmaterial breach by the Company of any representation, warranty, covenant or\nagreement contained in this Agreement that is not curable or, if curable, is not\ncured within 15 days after written notice is given by Investor to the Company.\n\n          7.5.    Effect of Termination and Abandonment.  In the event of\n                  -------------------------------------                  \ntermination of this Agreement, this Agreement shall become void and of no effect\nwith no liability on the part of any party hereto (or of any of its directors,\nofficers, employees, agents, legal and financial advisors or other\nrepresentatives); provided, however, except as otherwise provided herein, no\n                  --------  -------                                         \nsuch termination shall relieve any party hereto of any liability or damages\nresulting from any breach of this Agreement.\n\n     SECTION 8.   Investor's Transfer Restrictions.\n                  -------------------------------- \n\n          (a)     The Investor shall not, directly or indirectly, sell,\ntransfer, pledge, contract to sell, sell any option or contract to purchase,\npurchase any option or contract to sell, grant any option, right or warrant to\npurchase or otherwise dispose of, any (x) shares of Common Stock purchased\nhereunder or upon exercise of the Warrant or (y) Warrants except: (i) to the\nCompany; (ii) to an \n\n                                      -21-\n\n \nAffiliate of Investor, so long as such Affiliate agrees to hold such shares\nsubject to all of the provisions of Sections 8 and 9 of this Agreement, and\nagrees to transfer such shares of Common Stock to the Investor or another\nAffiliate of Investor if it ceases to be an Affiliate; (iii) pursuant to a\nrights offering, dividend or other pro rata distribution to the stockholders of\nthe Investor; (iv) after the date which is the one year anniversary of the\nClosing, pursuant to Rule 144 promulgated under the Securities Act (including\nthe observance of the requirements of paragraph (f) of such rule, whether or not\notherwise applicable to such disposition, solely with respect to transactions\nthat would otherwise constitute a First Refusal Sale (as defined below)); (v)\nafter the date which is the one year anniversary of the Closing, in private\nplacement transactions exempt from the registration requirements of the\nSecurities Act; provided that in the event of a proposed transfer to one of the\nparties listed on Exhibit C hereto pursuant to this subsection (v) in one or\nmore transactions occurring during a 90-day period of 100,000 or more shares of\nCommon Stock or Warrants to acquire 100,000 shares or more of Common Stock (a\n\"First Refusal Sale\"), such transfer shall be subject to the provisions of\nSection 9 below; or (vi) in response to a bona fide public tender offer or\nexchange offer subject to Regulation 14D or Rule 13e-3 promulgated under the\nExchange Act for cash or other consideration which is made by or on behalf of\nthe Company.\n\n          (b)     Any attempted sale, transfer or other disposition by Investor\nor an Affiliate of Investor which is not in compliance with this Section 8 or\nSection 9 below shall be null and void.\n\n     SECTION 9.   The Company's Right of First Refusal.\n                  ------------------------------------ \n\n          (a)     Prior to the Investor effecting a First Refusal Sale pursuant\nto Section 8(a)(v), the Company shall have a first refusal right to purchase\nsuch shares on the following terms and conditions:\n\n          (i)     The Investor shall give prior notice (the \"Transfer Notice\")\nto the Company in writing of such intention, specifying the name of the proposed\npurchaser or transferee, the number of shares of Common Stock proposed to be\nsold or transferred, the proposed price therefor and the other material terms\nupon which such disposition is proposed to be made.\n\n                                      -22-\n\n \n          (ii)    The Company shall have the right, exercisable by written\nnotice given by the Company to the Investor within five (5) business days after\nreceipt of such Transfer Notice (the \"Response Notice\"), to purchase all, but\nnot less than all of the shares of Common Stock specified in such Transfer\nNotice for cash at the price per share or, if consideration other than cash is\nspecified in the Transfer Notice, in an amount in cash equal to the Fair Market\nValue of such non-cash consideration, as specified in the Transfer Notice. Fair\nMarket Value shall, with respect to securities which are traded, constitute the\naverage closing price over the twenty trading days prior to the date of the\nTransfer Notice and with respect to other consideration, shall be determined in\ngood faith by the Investor.\n\n          (iii)   If the Company exercises its right of first refusal hereunder,\nthe closing of the purchase of the shares of Common Stock with respect to which\nsuch right has been exercised shall take place within thirty (30) calendar days\nafter the Company gives the Response Notice to the Investor.  Upon exercise of\nits right of first refusal, the Company and the Investor shall be legally\nobligated to consummate the purchase and sale contemplated thereby and shall use\ntheir best efforts to secure any approvals required in connection therewith.\n\n          (iv)  If the Company does not exercise its right of first refusal\nhereunder within five business days or fails to close within the time period\nspecified in (iii) above (providing that nothing contained herein should relieve\nthe Company of liability for such breach), the Investor shall be free, during\nthe period of sixty (60) calendar days following (A) the expiration of such\nfive-day period or (B) such failure to close, to sell the shares of Common Stock\nspecified in such Transfer Notice to the proposed purchaser or transferee\nspecified in such Transfer Notice and on terms not less favorable to the\nInvestor than the terms specified in such Transfer Notice.\n\n          (b)     The Company may assign its right of first refusal hereunder to\nany other person.\n\n     SECTION 10.   Survival and Indemnification.\n                   ---------------------------- \n\n                                      -23-\n\n \n          Survival of Representations, Warranties, Covenants and Agreements;\n          ------------------------------------------------------------------\nKnowledge of Breach; Indemnification.  Notwithstanding any otherwise applicable\n------------------------------------                                           \nstatute of limitations, the representations and warranties of each of the\nInvestor and the Company, respectively, included or provided for herein shall\nsurvive the execution and delivery of this Agreement thirty (30) days after the\nreceipt by the Investor or the Company, as the case may be, of audited\nconsolidated financial statements for the other party, as of and for the year\nending December 31, 1998, together with a report thereon by the other party's\nindependent public accountants provided, however, that any representation,\n                               --------  -------                          \nwarranty, covenant or agreement contained in Sections 3(n) and 4(c) shall\nsurvive the execution and delivery of this Agreement until the expiration of the\napplicable statute of limitations (including any waivers or extensions thereof)\nwith respect to such matters; provided, however, that the provisions of this\nSection 10 shall constitute the exclusive remedy on the part of any party hereto\nin respect of a breach of the representations and warranties of the other party\ncontained in this Agreement. The covenants and other agreements contained in\nthis Agreement shall survive the execution and delivery of this Agreement\nexcept that covenants or agreements with a term specified therein shall\nterminate at the end of such term. Investor and the Company shall indemnify each\nother for breaches of the foregoing representations, warranties and covenants as\nto which the indemnified party has given notice during the periods of survival\nset forth above, provided, that, in no event shall the Investor be liable to the\n                 --------  ----                                                 \nCompany or the Company be liable to the Investor, as the case may be, pursuant\nto this Section 10, for any breach of the representations, warranties, covenants\nand agreements included or provided for herein or in any schedule or certificate\nor other document delivered pursuant to this Agreement, unless and until all\nclaims for which damages are recoverable hereunder by the Investor or the\nCompany, as the case may be, exceed $500,000 (the \"Deductible\"), in which case\n                                                   ----------                 \nthe Investor or the Company, as the case may be, shall be entitled to damages\nequal to such excess, but not more than the Purchase Price plus the charges and\nexpenses (including reasonable attorneys' fees and expenses) incurred by the\nparty sustaining such damages in connection with the Transaction Documents and\nthe transactions thereby.  Any payments pursuant to this Section 10 shall be\ntreated as an adjustment to the Purchase Price for all tax purposes.  The\nindemnification provided for by this Section 10 shall apply \n\n                                      -24-\n\n \nnotwithstanding any investigation made by or on behalf of any party.\n\n     SECTION 11.  Miscellaneous.\n                  ------------- \n\n          (a)     Expenses.  Except as otherwise expressly provided in this\n                  --------                                                 \nAgreement, the parties shall bear their own respective expenses (including, but\nnot limited to, all compensation and expenses of counsel, financial advisors,\nconsultants, actuaries and independent accountants) incurred in connection with\nthis Agreement and the transactions contemplated hereby and by the Transaction\nDocuments.\n\n          (b)     Public Disclosure.  Each party to this Agreement hereby agrees\n                  -----------------                                             \nwith the other party hereto that, except as may be required to comply with the\nrequirements of applicable law or the rules and regulations of each stock\nexchange or of the Nasdaq National Market or other automated quotation system\nupon which the securities of one of the parties is listed or to which such\nsecurities are admitted for trading no press release or similar public\nannouncement or communication will be made or caused to be made concerning the\nexecution or performance of this Agreement unless specifically approved in\nadvance by both parties hereto.\n\n          (c)     Successors and Assigns; Assignment. Except as otherwise \n                  ----------------------------------                 \nexpressly provided herein, all covenants and agreements contained in this\nAgreement by or on behalf of any of the parties hereto shall bind and inure to\nthe benefit of the respective successors and assigns of the parties hereto\nwhether so expressed or not. No party to this Agreement may assign any of its\nrights or obligations under this Agreement without the prior written consent of\nthe other party hereto, except that the Investor may designate, by written\nnotice to the Company, an Affiliate to acquire some or all of the shares of\nCommon Stock or Warrants hereunder; provided, however, that no such designation\nof an Affiliate shall relieve the Investor of its obligations under this\nAgreement. The Investor, any Affiliate and any sucessors and assigns shall be\ntreated as one entity for the purposes of this Agreement.\n\n          (d)     Remedies.  Any Person having any rights under any provision of\n                  --------                                                      \nthis Agreement will be entitled to proceed to enforce such rights specifically,\nto recover damages by reason of any breach of any provision of this Agreement\nand to exercise all other rights granted by law.\n\n                                      -25-\n\n \n          (e)     Amendments and Waivers.  This Agreement and any of the terms\n                  ----------------------                                      \ncontained herein may only be amended or modified by the Company and the Investor\nor their successor and assigns in writing.\n\n          (f)     Severability.  In the event that any one or more of the \n                  ------------                                         \nprovisions contained herein, or the application thereof in any circumstances, is\nheld invalid, illegal or unenforceable in any respect for any reason, the\nvalidity, legality and enforceability of any such provision in every other\nrespect and of the remaining provisions contained herein shall not be in any way\nimpaired thereby.\n\n          (g)     Counterparts.  This Agreement may be executed in one or more\n                  ------------                                                \ncounterparts, each of which shall be deemed to be an original and all of which\ntogether shall be deemed to constitute one and the same agreement.\n\n          (h)     Descriptive Headings.  The headings of the sections contained \n                  --------------------                               \nin this Agreement are solely for the purpose of reference, are not part of the\nagreement of the parties and shall not affect the meaning or interpretation of\nthis Agreement.\n\n          (i)     Governing Law.  This Agreement shall be governed by, and \n                  -------------                                        \nconstrued in accordance with, the internal laws of the State of Delaware without\ngiving effect to the conflict of laws provisions thereof.\n\n          (j)     Notices.  All notices, demands or other communications to be \n                  -------                                               \ngiven or delivered under or by reason of the provisions of this Agreement shall\nbe in writing and shall be deemed to have been given when delivered personally\nto the recipient, sent to the recipient by reputable overnight courier service\n(charges prepaid) or mailed to the recipient by certified or registered mail,\nreturn receipt requested and postage prepaid. Such notices, demands and other\ncommunications shall be sent to the Investor and to the Company at the addresses\nindicated below:\n\nif to the Investor, to:     Southwestern Bell Internet\n----------------------        Services, Inc.                        \n                            175 E. Houston\n                            San Antonio, Texas  78205\n                            Attention: Thomas W. Hartmann\n                            Facsimile: (210) 351-3488\n\n                                      -26-\n\n \n        with a copy to:     Sullivan &amp; Cromwell\n        --------------      1701 Pennsylvania Ave., N.W.\n                            Washington, D.C. 20006-5805\n                            Attention: Janet T. Geldzahler\n                            Facsimile: (202) 956-7515\n \nif to the Company, to:      Concentric Network Corporation\n---------------------       10590 N. Tantau Avenue    \n                            Cupertino, CA  95014\n                            Attention: Michael Anthofer\n                            Facsimile: (408) 342-2876\n\n        with copy to:       Wilson Sonsini Goodrich &amp; Rosati\n        ------------        650 Page Mill Road  \n                            Palo Alto, CA  94304\n                            Attention:   David Segre\n                            Facsimile:   (650) 496-7556\n\nor to such other address or to the attention of such other person as the\nrecipient party has specified by prior written notice to the sending party.\n\n          (k)     Entire Agreement.  This Agreement and the Schedules hereto \n                  ----------------                                         \nand the other Transaction Documents represent the entire agreement between the\nInvestor and the Company with respect to the subject matter hereof, and such\nagreements supersede all prior agreements between such parties with respect to\nthe subject matter hereof.\n\n          (l)     Definition of Knowledge.  For the purpose of this Agreement,\n                  -----------------------                                     \n\"knowledge of the Company\" or \"known\" or a similar phrase shall mean the actual\nknowledge of those individuals listed on Exhibit D.\n\n                                      -27-\n\n \n          IN WITNESS WHEREOF, the undersigned parties have duly executed this\nAgreement as of the date first above written.\n\n\n                    CONCENTRIC NETWORK CORPORATION\n\n                    By:       \/s\/ Michael F. Anhofer\n                             -------------------------\n                     Name:  Michael F. Anhofer\n                     Title: Senior V.P. and C.E.O.\n\n                    SOUTHWESTERN BELL INTERNET SERVICES, INC.\n\n                    By:       \/s Steven C. Hubbard\n                             -------------------------\n                     Name:  Steven C. Hubbard\n                     Title: CEO\/President\n\n                                      -28-\n\n \n                                                                       EXHIBIT A\n\n\n                        CONCENTRIC NETWORK CORPORATION\n\n\n                    Warrants for the Purchase of Shares of\n                Common Stock of Concentric Network Corporation\n         -----------------------------------------------------------------------\n\nNo. 1A                                                          906,679 Warrants\n\n\n          FOR VALUE RECEIVED, CONCENTRIC NETWORK CORPORATION, a Delaware\ncorporation (the \"Company\"), hereby certifies that Southwestern Bell Internet\nServices, Inc., a Delaware corporation (\"SBIS\"), or permitted assigns\n(collectively, the \"Holder\") is entitled, subject to the provisions of this\nwarrant certificate (including any substitute certificate issued pursuant to the\nterms hereof, this \"Warrant Certificate\") representing 906,679 warrants\n(\"Warrants\"), to purchase from the Company, at the times specified herein, one\nfully paid and non-assessable shares of Common Stock (as hereinafter defined) at\nthe Exercise Price, as defined below.  The number of shares of Common Stock to\nbe received upon the exercise of a Warrant and the Exercise Price are subject to\nadjustment from time to time, but only as hereinafter set forth.\n\n          Concurrently with the issuance of the Warrants, SBIS is purchasing\n906,679 shares of Common Stock, par value $.001 per share, of the Company\npursuant to a Stock Purchase Agreement, dated as of October 19, 1998 (the\n\"Purchase Agreement\").\n\n          1.   Definitions.  The following terms, as used herein, have the\n               -----------                                                \nfollowing meanings:\n\n          \"Affiliate\" of any specified Person means any other Person directly or\nindirectly controlling or controlled by or under direct or indirect common\ncontrol with such specified Person.\n\n          \"Aggregate Exercise Price shall have the meaning set forth in Section\n2(a) hereof.\n\n          \"Common Stock\" means the common stock, $0.001 par value, of the\nCompany, and (in accordance with Section 8 hereof) capital stock of any class or\nclasses into which such Common Stock or any such other class may thereafter be\nchanged or reclassified.\n\n          \"Exercise Price\" means $21.00 per share.\n\n          \"Exercise Subscription Form\" shall have the meaning set forth in\nSection 2(a) hereof.\n\n \n          \"Expiration Date\" means 4:00 p.m., New York City time, on _______,\n2001; provided, however, that if such day is a day on which banking institutions\nin the City of New York are authorized by law to close, the \"Expiration Date\"\nshall be on the next succeeding day that shall not be such a day.\n\n          \"Person\" means any individual, corporation, partnership, joint stock\ncompany, joint venture, association, trust, unincorporated organization,\ngovernment or any agency, department or political subdivision thereof, or any\nother entity.\n\n          \"Regulatory Relief\" means that SBC Communications Inc. or its\nAffiliates, in their sole reasonable judgment, have obtained any or all\nnecessary federal and\/or state regulatory approvals to provide landline,\ninterLATA long-distance service in any of SBIS' or its Affiliates' in-region\nstates pursuant to the Communications Act of 1934, as amended by the\nTelecommunications Act of 1996.\n\n          \"Securities Act\" means the Securities Act of 1933, as amended, and the\nrules and regulations of the Securities and Exchange Commission promulgated\nthereunder.\n\n          2.   Exercise and Duration of Warrants.\n               --------------------------------- \n\n          (a)  The Holder of this Warrant Certificate shall have the right to\nexercise any or all of the Warrants (but not as to a fractional share of Common\nStock) at any time, or from time to time until the Expiration Date by\npresentation and surrender hereof to the Company with the appropriate Exercise\nSubscription Form annexed hereto (the \"Exercise Subscription Form\") and an\nInvestment Representation Statement annexed hereto duly executed and accompanied\nby proper payment of the Exercise Price, as the case may be, multiplied by the\nnumber of shares of Common Stock specified in such form (the \"Aggregate Exercise\nPrice\"), all subject to the terms and conditions hereof.  Notwithstanding the\nforegoing, prior to receipt of Regulatory Relief, the Holder may only exercise\nWarrants to the extent that the total equity securities in the Company held by\nHolder and its Affiliates is consistent with the restrictions contained in the\nCommunications Act of 1934, as amended by the Telecommunications Act of 1996.\nEach Warrant not exercised prior to the Expiration Date shall become void and\nall rights in respect thereof shall cease as of such time.\n\n          (b)  The Aggregate Exercise Price must be paid in U.S. dollars in\ncash, wire transfer of immediately available funds, bank cashier's check or bank\ndraft payable to the order of the Company.  Upon receipt by the Company of this\nWarrant Certificate and a properly executed Exercise Subscription Form, together\nwith the Aggregate Exercise Price at the Company's office designated for such\npurpose, the Holder shall be deemed to be the holder of record of the shares of\nCommon Stock receivable upon such exercise, notwithstanding that the stock\ntransfer books of the Company shall then be closed or that certificates\nrepresenting such shares of Common Stock shall not then be actually delivered to\nthe Holder.  The Holder shall pay any and all documentary, stamp or similar\nissue taxes of the United States or any state thereof payable in respect of the\nissue or delivery of such shares of Common Stock.  The Company shall not be\nrequired to pay any tax or other charge that may be payable in respect of any\ntransfer \n\n                                      -2-\n\n \ninvolved in the issuance and delivery of any certificate in a name\nother than that of the record holder of the Warrants being exercised and in such\ncase the Company shall not be obligated to issue or deliver any stock\ncertificate until such tax or charge has been paid in full or it has been\nestablished to the satisfaction of the Company that no such tax or charge is\ndue.\n\n          (c)  Notwithstanding Sections 2(a) and 2(b) above, at the option of\nthe Holder of the Warrants, the Warrants may be exercised in the manner set\nforth in paragraph (2)(a) above, except that the Holder may, in lieu of paying\nthe Aggregate Exercise Price in the manner set forth in Section 2(b) above,\nexercise, without making any payment in cash, Warrants for that number of shares\nof Common Stock determined by dividing (i) the difference between (x) the\ncurrent market price per share of Common Stock (as defined in Section 8(b)\nbelow) on the day of exercise multiplied by the number of shares of Common Stock\nspecified in the Exercise Subscription Form and (y) the Aggregate Exercise Price\nby (ii) the current market price per share of Common Stock on the day of\nexercise.\n\n          (d)  If the Holder exercises less than all the Warrants, this Warrant\nCertificate shall be surrendered by the Holder to the Company and a new Warrant\nCertificate of the same tenor and for the unexercised number of Warrants which\nwas not surrendered shall be executed by the Company.  Subject to the provisions\nhereof regarding transfer of the Warrants, the Company shall register the new\nWarrant Certificate in such name or names as may be directed in writing by the\nHolder and deliver the new Warrant Certificate to the person or persons entitled\nto receive the same.\n\n          (e)  Upon surrender of this Warrant Certificate in conformity with the\nforegoing provisions, the Company shall transfer to the Holder of this Warrant\nCertificate appropriate evidence of ownership of any shares of Common Stock or\nother securities or property (including any money) to which the Holder is\nentitled, registered or otherwise placed in, or payable to the order of, such\nname or names as may be directed in writing by the Holder, and shall deliver\nsuch evidence of ownership and any other securities or property (including any\nmoney) to the person or persons entitled to receive the same, together with an\namount in cash in lieu of any fraction of a share of Common Stock as provided in\nSection 5 below.\n\n          (f)  Notwithstanding anything to the contrary contained herein, no\nHolder of these Warrants shall be entitled to exercise the same unless, at the\ntime of exercise, (i) either a registration statement under the Securities Act,\nshall have been filed with, and declared effective by, the Securities and\nExchange Commission or the issuance of shares of Common Stock upon the exercise\nof the Warrants is permitted pursuant to an available exemption from the\nregistration requirements of the Securities Act and (ii) all applicable\nrequirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as\namended, with respect to the issuance of shares of Common Stock upon the\nexercise of the Warrants shall have been satisfied.\n\n                                     -3- \n\n \n          3.   Restrictive Legend.  Any substitute Warrant Certificate and any\n               ------------------                                             \ncertificates evidencing shares of Common Stock issued pursuant to exercise of\nWarrants shall bear the following legend, unless such securities have been\nregistered under the Securities Act or unless the Company determines otherwise\nin compliance with applicable law:\n\n               \"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN\n     REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS\n     OF ANY STATE, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE\n     SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN\n     APPLICABLE EXEMPTION THEREUNDER.\"\n\n          4.   Reservation of Shares.  The Company hereby agrees that at all\n               ---------------------                                        \ntimes there shall be reserved for issuance and delivery upon exercise of the\nWarrants such number of its authorized but unissued shares of its Common Stock\nor other securities of the Company from time to time issuable upon exercise of\nthe Warrants as will be sufficient to permit the exercise in full of the\nWarrants.  All such shares of Common Stock shall be duly authorized and, when\nissued upon such exercise, shall be validly issued, fully paid and non-\nassessable, free and clear of all liens, security interests, charges and other\nencumbrances or restrictions on sale (other than restrictions on resale imposed\nunder applicable law) and free and clear of all preemptive or similar rights,\nexcept for any of the foregoing that may be imposed by or through the Holder of\nthe Warrants or the Person to whom shares of Common Stock or other securities\nare issued upon the exercise thereof.\n\n          5.   Fractional Shares.  No fractional shares or scrip representing\n               -----------------                                             \nfractional shares shall be issued upon the exercise of any Warrant.  With\nrespect to any fraction of a share called for upon any exercise hereof, the\nCompany shall pay to the Holder an amount in cash equal to such fraction\nmultiplied by the current market price per share of Common Stock on the day of\nexercise.\n\n          6.   Transfer, Loss of Warrant Certificate.\n               ------------------------------------- \n\n          (a)  Subject to the provisions of this Section 6 and Section 15, the\nCompany will, from time to time, register the transfer of any outstanding\nWarrant Certificate upon its records. Each taker and Holder of this Warrant\nCertificate by taking or holding the same, consents and agrees that prior to any\ntransfer of this Warrant Certificate, the holder hereof shall give written\nnotice to the Company of such holder's intention to effect such transfer.  Each\nsuch notice shall describe the manner and circumstances of the proposed transfer\nin sufficient detail.  The Company shall register such transfer upon surrender\nof such Warrant Certificate to the Company for transfer, accompanied by\nappropriate instruments of transfer duly executed by the holder or the holder's\nduly authorized attorney.  Upon any such registration of transfer, a new Warrant\nCertificate shall be issued in the name of the transferee, and the surrendered\nWarrant Certificate shall be canceled.  Each Warrant Certificate evidencing the\ntransferred Warrants shall bear, \n\n                                      -4-\n\n \nunless the same has been registered under the Securities Act, the restrictive\nlegend set forth in Section 3 herein.\n\n          (b)  Notwithstanding anything to the contrary contained in Section\n6(a), the Company shall not be obligated to register the transfer of any\noutstanding Warrant Certificate unless a registration statement under the\nSecurities Act, shall have been filed with, and declared effective by, the\nSecurities and Exchange Commission with respect to the transfer of the\napplicable Warrants or such transfer is permitted pursuant to an available\nexemption from the registration requirements of the Securities Act.\n\n          (c)  Any attempted or purported Transfer of Warrants in violation of\nparagraph 6(b) above shall not be effective to Transfer ownership of such\nWarrants to the purported Transferee thereof, who shall not be entitled to any\nrights as a Holder with respect to the Warrants purported to be Transferred.\nAll rights with respect to any Warrants attempted or purported to be Transferred\nin violation of the aforementioned provisions shall remain the property of the\nPerson who initially attempted or purported to transfer such Warrants in\nviolation thereof.  Upon a determination by the Board of Directors of the\nCompany that there has been or is threatened an attempted or purported Transfer\nof Warrants in violation of the aforementioned provisions, the Board of\nDirectors of the Company may take such action as it deems advisable, including,\nbut not limited to, refusing to give effect on the books of the corporation to\nsuch attempted or purported Transfer or instituting legal proceedings to enjoin\nor rescind the same.\n\n          (d)  Upon receipt by the Company of evidence satisfactory to it (in\nthe exercise of its reasonable discretion) of the loss, theft, destruction or\nmutilation of this Warrant Certificate, and (in the case of loss, theft or\ndestruction) of reasonably satisfactory indemnification, and upon surrender and\ncancellation of this Warrant Certificate, if mutilated, the Company shall\nexecute and deliver a new Warrant Certificate of like tenor and date.  Any such\nnew Warrant Certificate executed and delivered shall constitute an additional\ncontractual obligation on the part of the Company, whether or not the warrant so\nlost, stolen, destroyed or mutilated shall be at any time enforceable by anyone.\nThe provisions of this Section 6 are exclusive and shall preclude (to the extent\nlawful) all other rights or remedies with respect to the replacement of\nmutilated, lost, stolen, or destroyed Warrant Certificates.\n\n          7.   Rights of the Holder.  Prior to the exercise of any Warrant, the\n               --------------------                                            \nHolder shall not, by virtue hereof, be entitled to any rights of a stockholder\nof the Company, including, without limitation, the right to vote, to give or\nwithhold consent to any corporate action of the Company, to receive dividends or\nother distributions, to exercise any preemptive or similar right or to receive\nany notice of meetings of stockholders or any notice of any proceedings of the\nCompany except as may be specifically provided for herein.\n\n          8.   Anti-Dilution Provisions.  The Exercise Prices in effect at any\n               ------------------------                                       \ntime, and the number of shares of Common Stock which may be purchased upon the\nexercise hereof, shall be subject to change or adjustment as follows:\n\n                                      -5-\n\n \n          (a)  In case the Company shall (i) pay a dividend or make any other\n     distribution on or in respect of its Common Stock in shares of Common\n     Stock, (ii) subdivide its outstanding Common Stock, (iii) combine its\n     outstanding Common Stock into a smaller number of shares of Common Stock,\n     or (iv) issue by reclassification of its Common Stock (whether pursuant to\n     a merger or consolidation or otherwise) any other shares representing\n     common equity of the Company, then (x) the number of shares of Common Stock\n     theretofore issuable upon exercise of a Warrant shall be appropriately\n     adjusted so that the Holder of each Warrant exercised after the record date\n     fixing stockholders to be affected by such event shall be entitled to\n     purchase at the Exercise Price, as adjusted below, the number of shares of\n     Common Stock (or other shares representing common equity of the Company)\n     which he would have owned or have been entitled to receive after the\n     happening of any of the events described above, had such Warrant been\n     exercised immediately prior to such record date and (y) the Exercise\n     Price shall be adjusted by multiplying the Exercise Price by a fraction,\n     the numerator of which is equal to the number of shares of Common Stock\n     purchasable prior to the adjustment specified in (x) above and the\n     denominator of which is equal to the number of shares of Common Stock\n     purchasable after such adjustment.  An adjustment made pursuant to this\n     subparagraph shall become effective immediately after the record date in\n     the case of a dividend or distribution and shall become effective\n     immediately after the effective date in the case of a subdivision,\n     combination or reclassification.\n\n          (b)  The \"current market price per share of Common Stock\" at any date\n     shall be deemed to be the average of the daily Closing Prices (as defined\n     below) for 30 consecutive Trading Days (as defined below) immediately\n     preceding the day in question, after appropriate adjustment for stock\n     dividends, distributions, subdivisions, combinations or reclassifications\n     occurring within such 30-day period. The term \"Closing Price\" on any day\n     shall mean the reported last sale price per share of Common Stock on such\n     day or, in case no such sale takes place on such day, the average of the\n     reported closing bid and asked prices, in each case on the principal\n     national securities exchange on which the Common Stock is listed or\n     admitted to trading, or, if the Common Stock is not listed or admitted to\n     trading on any national securities exchange, the last quoted sale price or,\n     if not so quoted, the average of the closing bid and asked prices quoted on\n     the Nasdaq National Market or, if not so quoted, the average of the closing\n     bid and asked prices as furnished by any member of the National Association\n     of Securities Dealers, Inc. selected from time to time by the Company for\n     that purpose; and the term \"Trading Day\" shall mean a day on which the\n     principal national securities exchange on which the Common Stock is listed\n     or admitted to trading or, if the Common Stock is quoted on the Nasdaq\n     National Market, then the Nasdaq National Market, is open for the\n     transaction of business or, if the Common Stock is not listed or admitted\n     to trading on any national securities exchange or quoted on the Nasdaq\n     National Market, a Monday, Tuesday, Wednesday, \n\n                                      -6-\n\n \n     Thursday, or Friday on which banking institutions in the City of New York,\n     New York are not authorized or obligated by law or executive order to\n     close.\n\n          (c)  In the event that at any time, as a result of an adjustment made\n     pursuant to Sections 8(a) above, the Holder shall become entitled to\n     receive any shares of the capital stock of the Company other than Common\n     Stock, thereafter the number of such other shares so receivable upon\n     exercise of the Warrants shall be subject to adjustment from time to time\n     in a manner and on terms as nearly equivalent as practicable to the\n     provisions with respect to the Common Stock contained in Section 8(a).\n\n          (d)  In case:\n\n               (i)   the Company shall authorize the issuance to all holders of\n                     its Common Stock of rights or warrants to subscribe for or\n                     purchase shares of its Common Stock or of any other\n                     subscription rights or warrants; or\n\n               (ii)  the Company shall authorize the distribution to all holders\n                     of its Common Stock (whether pursuant to a merger or\n                     consolidation or otherwise) of evidences of its\n                     indebtedness or assets (other than dividends paid in or\n                     distributions of the Company's capital stock for which the\n                     Exercise Price shall have been adjusted pursuant to Section\n                     8(a) above); or\n\n               (iii) of any capital reorganization or reclassification of the\n                     Common Stock (other than a change in par value of the\n                     Common Stock) or of any consolidation or merger to which\n                     the Company is a party and for which approval of any\n                     stockholders of the Company is required (other than a\n                     consolidation or merger in which the Company is the\n                     continuing corporation and that does not result in any\n                     reclassification or change of the Common Stock\n                     outstanding), or of the conveyance or transfer of the\n                     properties and assets of the Company substantially as an\n                     entirety; or\n\n               (iv)  of the voluntary or involuntary dissolution, liquidation or\n                     winding-up of the Company; or\n\n               (v)   the Company proposes to take any action (other than actions\n                     of the character described in Section 8(a) above) that\n                     would require an adjustment of the Exercise Prices pursuant\n                     to this Section 8;\n\n                                      -7-\n\n \n     then the Company shall cause to be mailed by registered mail or overnight\n     courier to the Holder, at the earliest practicable time (and in any event\n     not less than 20 days prior to the applicable record or effective date\n     hereinafter specified), a notice stating (A) the date as of which the\n     holders of Common Stock of record to be entitled to receive any such\n     rights, warrants or distributions are to be determined, or (B) the date on\n     which any such reorganization, reclassification, consolidation, merger,\n     conveyance, transfer, dissolution, liquidation or winding-up is expected to\n     become effective, and the date as of which it is expected that holders of\n     Common Stock of record shall be entitled to exchange their shares of Common\n     Stock for securities or other property, if any, deliverable upon such\n     reorganization, reclassification, consolidation, merger, conveyance,\n     transfer, dissolution, liquidation or winding-up.\n\n          (e)  Whenever reference is made in this Section 8 to the issuance of\n     shares of Common Stock, the term \"Common Stock\" shall include any equity\n     securities of any class of the Company hereafter authorized which shall not\n     be limited to a fixed sum or percentage in respect of the right of the\n     holders thereof to participate in dividends or distributions of assets upon\n     the voluntary or involuntary liquidation, dissolution or winding-up of the\n     Company.\n\n          (f)  Notwithstanding any provision to the contrary in this Section 8,\n     the Exercise Price in effect at any time, and the number of shares of\n     Common Stock which may be purchased upon the exercise hereof, shall not be\n     subject to change or adjustment in either of the following cases:\n\n               (i)   In case the Company shall issue shares of Common Stock to\n          any Person, or rights, options or warrants to any Persons entitling\n          such Persons to subscribe for or purchase shares of Common Stock, at a\n          price per share at least equal to or greater than the current market\n          price per share of Common Stock as of the issue date such shares of\n          Common Stock or rights, options or warrants to any such Person; or\n\n               (ii)  In case the Company purchases any assets or securities (a\n          \"Purchase\") and provides all or some of the consideration for such\n          Purchase in shares of Common Stock.\n\nNotwithstanding any other provision contained in this Section 8, no adjustment\nto the Exercise Price need be made unless the adjustment would require an\nincrease or decrease of at least 1% in the Exercise Price as then in effect.\nAny adjustments that are not made as a result of this Section 8(g) shall be\ncarried forward and taken into account in any subsequent adjustment.\n\n          9.   Officers' Certificate.  Whenever any adjustment in the Exercise\n               ---------------------                                          \nPrice is made, the Company (A) shall as soon as reasonably practicable file in\nthe custody of its Secretary at its \n\n                                      -8-\n\n \nprincipal office, a statement describing the adjustment and the method of\ncalculation used, and may obtain the certificate of any independent firm of\npublic accountants of national recognition selected by the Board of Directors of\nthe Company which, if obtained, shall be presumptive evidence of the correctness\nof any such calculation that such adjustment was properly calculated in\naccordance with the provisions of Section 8 and (B) shall cause a copy of such\nstatement to be mailed by first class mail postage prepaid to the Holder.\n\n          10.  Consolidation or Merger.  In case of any consolidation of the\n               -----------------------                                      \nCompany with, or merger of the Company into, any other Person or any merger of\nanother Person into the Company (other than a consolidation or merger in which\nthe Company is the continuing corporation and that does not result in any\nreclassification or change of the Common Stock outstanding), the Holder of this\nWarrant Certificate shall have the right thereafter to exercise the Warrants for\nthe kind and amount of securities, cash and other property receivable upon such\nconsolidation or merger by a holder of the number of shares of Common Stock of\nthe Company for which the Warrants may have been exercised immediately prior to\nsuch consolidation or merger, assuming such holder of Common Stock of the\nCompany (i) is not a Person with which the Company consolidated or into which\nthe Company merged or which merged into the Company, as the case may be\n(\"Constituent Person\"), or an Affiliate of a Constituent Person and (ii) failed\nto exercise his rights of election, if any, as to the kind or amount of\nsecurities, cash and other property receivable upon such consolidation or merger\n(provided that if the kind or amount of securities, cash and other property\nreceivable upon such consolidation or merger is not the same for each share of\nCommon Stock of the Company held immediately prior to such consolidation or\nmerger by other than a constituent Person or an Affiliate thereof and in respect\nof which such rights of election shall not have been exercised (\"non-electing\nshare\"), then for the purpose of this Section 10 the kind and amount of\nsecurities, cash and other property receivable upon such consolidation or merger\nby each non-electing share shall be deemed to be the kind and amount so\nreceivable per share by a plurality of the nonelecting shares).  Adjustments for\nevents subsequent to the effective date of such a consolidation or merger shall\nbe as nearly equivalent as may be practicable to the adjustments provided for in\nthis Warrant Certificate.  In any such event, effective provisions shall be made\nin the certificate or articles of incorporation of the resulting or surviving\ncorporation or otherwise so that the provisions set forth herein for the\nprotection of the rights of Warrant holders shall thereafter continue to be\napplicable; and any such resulting or surviving corporation shall expressly\nassume the obligation to deliver, upon exercise, such shares of stock, other\nsecurities, cash and property.  The provisions of this Section 10 shall\nsimilarly apply to successive consolidations or mergers.\n\n          11.  Notices.  Any notice or other communication required or permitted\n               -------                                                          \nhereunder shall be in writing and shall be delivered personally, sent by\nfacsimile transmission or sent by certified, registered or express mail, postage\nprepaid.  Any notice shall be deemed given when so delivered personally, sent by\nfacsimile transmission or, if mailed, three (3) business days after the date of\ndeposit in the United States mail, by certified mail return receipt requested,\nas follows:\n\n                                      -9-\n\n \nIf to the Company:       Concentric Network Corporation\n                         10590 N. Tantau Avenue\n                         Cupertino, CA  95014\n                         Attention:      Michael Anthofer\n                         Facsimile:      (408) 342-2876\n\nIf to the Holder:        Southwestern Bell Internet Services, Inc.\n                         175 E. Houston\n                         San Antonio, Texas  78205\n                         Attention:  General Attorney,\n                                     Mergers &amp; Acquisitions\n                         Facsimile:  (210) 351-3488\n\nor such other address as shall have been furnished to the party giving or making\nsuch notice, demand or delivery.\n\n          12.  APPLICABLE LAW.  THIS WARRANT CERTIFICATE AND ALL RIGHTS ARISING\n               --------------                                                  \nHEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAW\nOF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS\nPROVISIONS THEREOF.\n\n          13.  Amendments; Waivers.  Any provision of this Warrant Certificate\n               -------------------                                            \nmay be amended or waived if, and only if, such amendment or waiver is in writing\nand signed, in the case of an amendment, by the Holder and the Company, or in\nthe case of a waiver, by the party against whom the waiver is to be effective.\nNo failure or delay by either party in exercising any right, power or privilege\nhereunder shall operate as a waiver thereof nor shall any single or partial\nexercise thereof preclude any other or further exercise thereof or the exercise\nof any other right, power or privilege.  The rights and remedies herein provided\nshall be cumulative and not exclusive of any rights or remedies provided by law.\n\n          14.  Agreement of Holder.  By acceptance of this Warrant Certificate\n               -------------------                                            \nand the Warrants represented thereby the Holder hereby agrees to be bound by the\nterms and conditions contained herein.\n\n          15.  Transfers.  Transfers of the Warrants shall be made in accordance\n               ---------                                                        \nwith Section 8 of the Purchase Agreement.\n\n                                     -10-\n\n \n          IN WITNESS WHEREOF, the Company has duly caused this Warrant\nCertificate to be signed and attested by its duly authorized officers and to be\ndated as of ____________, 1998.\n\n                         CONCENTRIC NETWORK CORPORATION\n\n\n\n                         By:___________________________\n                             Name:\n                             Title:\n\nAttest:\n\n\n\nBy:__________________________\n  Name:\n  Title:\n\n\n\nConsented to and Accepted:\n\nSOUTHWESTERN BELL INTERNET SERVICES, INC.\n\n\nBy:__________________________\n Name:\n Title:\n\n\n\n     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED\nUNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE \"SECURITIES ACT\"), OR\nSECURITIES LAWS OF ANY STATE, AND NEITHER THE SECURITIES NOR ANY INTEREST\nTHEREIN MAY BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION\nOR AN APPLICABLE EXEMPTION THEREUNDER.  NO HOLDER OF WARRANTS EVIDENCED BY THIS\nCERTIFICATE MAY TRANSFER SUCH WARRANTS OR ANY INTEREST THEREIN TO ANY PERSON\nOTHER THAN SBC COMMUNICATIONS INC. OR AN AFFILIATE OF SBC COMMUNICATIONS INC.\n\n                                     -11-\n\n \n                                ASSIGNMENT FORM\n\n           (To be executed if Holder desires to transfer a Warrant)\n\n\n          For Value Received, the undersigned hereby sells, assigns and\ntransfers to _________________________________________.\n\n________________________________________________________________________________\n           Please insert social security or other identifying number\n                                        \n________________________________________________________________________________\n\n________________________________________________________________________________\n\n________________________________________________________________________________\n               (Please print name and address including zip code)\n\n\nWarrants represented by this Warrant Certificate, and does hereby irrevocably\nappoint _______________________ Attorney, to transfer such rights on the books\nof the Company with full power of substitution.\n\nDate: ____________________.\n\n\n                                 ________________________________(1)\n                                 (Signature of Owner)\n\n                                 ___________________________________\n                                 (Street Address)\n\n                                 ___________________________________\n                                 (City)     (State)   (Zip Code)\n\n\n\n(1) The signature must correspond with the name as written upon the face of the\nwithin Warrant Certificate in every particular, without alteration or\nenlargement or any change whatever.\n\n                                     -12-\n\n \n                           EXERCISE SUBSCRIPTION FORM\n\n (To be executed only upon exercise for cash of Warrants at the Exercise Price)\n\n\nTo: Concentric Network Corporation\n\n          The undersigned irrevocably exercises Warrants for the purchase of\n__________ shares of common stock,  $0.001  par value, of Concentric Network\nCorporation (the \"Common Stock\") at the Exercise Price and herewith makes\npayment of $__________________________ (such payment being made in U.S. dollars\nin cash, wire transfer of immediately available funds, bank cashier's check or\nbank draft payable to the order of Concentric Network Corporation), all on the\nterms and conditions specified in the attached Warrant Certificate, and\nsurrenders this Warrant Certificate and all right, title and interest in the\nWarrants exercised hereby to Concentric Network Corporation and directs that the\nshares of Common Stock deliverable upon the exercise of these Warrants be\nregistered or placed in the name and at the address specified below and\ndelivered thereto.\n\n\nDate: __________________.\n\n\n                         ________________________________(1)\n                         (Signature of Owner)\n\n                         ___________________________________\n                         (Street Address)\n\n                         ___________________________________\n                         (City)     (State)   (Zip Code)\n\n\n\n(1) The signature must correspond with the name as written upon the face of the\nwithin Warrant Certificate in every particular, without alteration or\nenlargement or any change whatever.\n\n                                     -13-\n\n \nSecurities and\/or check to be issued to:\n\n\nPlease insert social security or identifying number:\n\n\nName:\n\n\nStreet Address:\n\n\nCity, State and Zip Code:\n\n\nAny unexercised Warrants evidenced by the\nwithin Warrant Certificate to be issued to:\n\n\n\nPlease insert social security or identifying number:\n\n\nName:\n\n\nStreet Address:\n\n\nCity, State and Zip Code:\n\n                                     -14-\n\n \n                           EXERCISE SUBSCRIPTION FORM\n\n (To be executed only upon cashless exercise of Warrants at the Exercise Price)\n\n\nTo:  Concentric Network Corporation\n\n          The undersigned irrevocably exercises Warrants for the purchase of\n__________ shares of common stock,  $0.001  par value, of Concentric Network\nCorporation (the \"Common Stock\") at the Exercise Price without any cash payment\npursuant to Section 2(c) of the attached Warrant Certificate and on the other\nterms and conditions specified therein, and surrenders this Warrant Certificate\nand all right, title and interest in the Warrants exercised hereby to Concentric\nNetwork Corporation and directs that the shares of Common Stock deliverable upon\nthe exercise of these Warrants be registered or placed in the name and at the\naddress specified below and delivered thereto.\n\n\nDate: ________________.\n\n\n                         ________________________________(1)\n                         (Signature of Owner)\n\n                         ___________________________________\n                         (Street Address)\n\n                         ___________________________________\n                         (City)     (State)   (Zip Code)\n\n\n\n(1) The signature must correspond with the name as written upon the face of the\nwithin Warrant Certificate in every particular, without alteration or\nenlargement or any change whatever.\n\n                                     -15-\n\n \nSecurities and\/or check to be issued to:\n\n\nPlease insert social security or identifying number:\n\n\nName:\n\n\nStreet Address:\n\n\nCity, State and Zip Code:\n\n\nAny unexercised Warrants evidenced by the\nwithin Warrant Certificate to be issued to:\n\n\nPlease insert social security or identifying number:\n\n\nName:\n\n\nStreet Address:\n\n\nCity, State and Zip Code:\n\n                                     -16-\n\n \n                                   EXHIBIT B\n\n                                  SUBSIDIARIES\n\n\nInterNex Information Services, Inc.\nDelta Internet Services, Inc.\nAnaServe, Inc.\n\n \n                                   EXHIBIT C\n\n\n\n                                   [Omitted]\n\n \n                                   EXHIBIT D\n\n\n\n                                   [Omitted]\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7174,8763],"corporate_contracts_industries":[9519],"corporate_contracts_types":[9622,9627],"class_list":["post-43660","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-concentric-network-corp","corporate_contracts_companies-sbc-communications-inc","corporate_contracts_industries-telecommunications__telephone","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43660","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43660"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43660"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43660"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43660"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}