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                                  FLASHCOM, INC.                      EXH. 10.16

                            SERIES B PREFERRED STOCK
                               PURCHASE AGREEMENT

        THIS SERIES B PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
entered into as of February 16, 2000, by and between FLASHCOM, INC., a Delaware
corporation (the "Company"), and each of the persons or entities listed on
Schedule A hereto, each of which is herein referred to as an "Investor," who
hereby agree as follows:

1. PURCHASE AND SALE OF STOCK.

        1.1 SALE AND ISSUANCE OF SERIES B PREFERRED STOCK.

               (a) The Company shall adopt and file with the Secretary of State
of the State of Delaware on or before the First Closing (as defined below) an
Amended and Restated Certificate of Incorporation in the form attached hereto as
Exhibit A (the "Restated Certificate").

               (b) Subject to the terms and conditions of this Agreement, each
Investor agrees, severally and not jointly, to purchase at the First Closing or
Second Closing, as applicable, and the Company agrees to sell and issue to each
Investor at such Closing, that number of shares of the Company's Series B
Preferred Stock set forth opposite each Investor's name on Schedule A hereto at
a purchase price of Six Dollars and Fifty-Seven Cents ($6.57) per share. The
Series B Preferred Stock will have the rights, preferences, privileges and
restrictions set forth in the Restated Certificate.

        1.2 CLOSINGS.

               (a) First Closing. The initial closing of the purchase and sale
of the Series B Preferred Stock to those Investors listed on Schedule A hereto
under the heading "First Closing" shall take place at the offices of Stradling
Yocca Carlson & Rauth, counsel to the Company, in Newport Beach, California, at
10:00 a.m. on February 18, 2000, or at such other time and place as the Company
and such Investors purchasing a majority of the shares of Series B Preferred
Stock to be sold to such Investors at such Closing shall mutually agree, either
orally or in writing (which time and place are designated as the "First
Closing").

               (b) Second Closing. A second closing of the purchase and sale of
the Series B Preferred Stock to those Investors listed on Schedule A hereto
under the heading "Second Closing" shall take place at the offices of Stradling
Yocca Carlson & Rauth, counsel to the Company, in Newport Beach, California, at
10:00 a.m. on February 29, 2000, or at such other time and place as the Company
and Investors purchasing a majority of the shares of Series B Preferred Stock to
be sold to such Investors at such Closing shall mutually agree, either orally or
in writing (which time and place are designated as the "Second Closing").

               (c) At each Closing, the Company shall deliver to each Investor
purchasing shares at such Closing a certificate representing the shares of
Series B Preferred Stock that such Investor is purchasing, against payment of
the purchase price therefor by check, wire transfer, cancellation of
indebtedness, conversion of convertible promissory notes, or any combination
thereof, or such other form of payment as shall be mutually agreed upon by such
Investor and the Company.

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2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

        The Company hereby represents and warrants to each Investor that, except
as set forth on a Schedule of Exceptions attached hereto as Exhibit B,
specifically identifying the relevant subparagraph(s) hereof, which exceptions
shall be deemed to be representations and warranties as if made hereunder:

        2.1 ORGANIZATION; GOOD STANDING, QUALIFICATION. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware, has all requisite corporate power and authority
to own and operate its properties and assets and to carry on its business as now
conducted and as presently proposed to be conducted, to execute and deliver this
Agreement, the Amended and Restated Investors' Rights Agreement (as defined in
Section 4.8), and the Amended and Restated Right of First Refusal and Co-Sale
Agreement (as defined in Section 4.9), to issue and sell the Series B Preferred
Stock and the Common Stock issuable upon conversion of the Series B Preferred
Stock, and to carry out the provisions of this Agreement, the Amended and
Restated Investors' Rights Agreement, the Amended and Restated Right of First
Refusal and Co-Sale Agreement, and the Restated Certificate. The Company is duly
qualified and is authorized to transact business and is in good standing as a
foreign corporation in each jurisdiction in which the nature of its activities
and of its properties (both owned and leased) makes such qualification
necessary, except where the failure to so qualify would not have a material
adverse effect on the business, properties, prospects, or financial condition of
the Company.

        2.2 AUTHORIZATION. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization, execution
and delivery of this Agreement, and the Amended and Restated Investors' Rights
Agreement, and the Amended and Restated Right of First Refusal and Co-Sale
Agreement, the performance of all obligations of the Company hereunder and
thereunder and the authorization, issuance (or reservation for issuance, as
applicable), sale, and delivery of the Series B Preferred Stock being sold
hereunder and the Common Stock issuable upon conversion of the Series B
Preferred Stock has been taken or will be taken prior to the Closing, and this
Agreement, the Amended and Restated Investors' Rights Agreement, and the Amended
and Restated Right of First Refusal and Co-Sale Agreement, when executed and
delivered, will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies, and (iii) to the extent that the
indemnification provisions contained in the Amended and Restated Investors'
Rights Agreement may be limited by applicable laws.

        2.3 VALID ISSUANCE OF PREFERRED AND COMMON STOCK. The Series B Preferred
Stock that is being purchased by the Investors hereunder, when issued, sold, and
delivered in accordance with the terms of this Agreement for the consideration
expressed herein, will be duly and validly issued, fully paid, and
nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement, the Amended and Restated
Investors' Rights Agreement and the Amended and Restated Right of First Refusal
and Co-Sale Agreement and under applicable state and federal securities laws.
The Common Stock issuable upon conversion of the Series B Preferred Stock has
been duly and validly reserved for issuance and, upon issuance in accordance
with the terms of the Restated Certificate, will be duly and validly issued,
fully paid, and nonassessable and will be free of restrictions on transfer other
than restrictions on transfer under this

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Agreement, the Amended and Restated Investors' Rights Agreement, the Amended and
Restated Right of First Refusal and Co-Sale Agreement and under applicable state
and federal securities laws.

        2.4 CAPITALIZATION AND VOTING RIGHTS. The authorized capital of the
Company will consist, immediately prior to the Closing, of:

               (a) Preferred Stock. 50,000,000 shares of Preferred Stock, $0.001
par value, of which 5,800,000 have been designated Series A Preferred Stock, of
which 5,771,679 are issued and outstanding and convertible into 17,315,037
shares of Common Stock, and 12,861,500 which have been designated Series B
Preferred Stock, none of which shall be outstanding prior to the First Closing,
and up to all of which shall be outstanding immediately following the Second
Closing. The rights, privileges and preferences of the Series A Preferred Stock
and Series B Preferred Stock are as stated in the Restated Certificate.

               (b) Common Stock. 100,000,000 shares of common stock, $0.001 par
value ("Common Stock"), of which 31,707,379 shares are issued and outstanding.

               (c) Immediately following the Closing, all issued and outstanding
shares of Series A Preferred Stock, Series B Preferred Stock and Common Stock
have been or will be duly authorized and validly issued, have been or will be
fully paid and nonassessable, and have been or will be issued in accordance with
the registration or qualification provisions of the Securities Act of 1933, as
amended (the "Securities Act") and any relevant state securities laws or
pursuant to valid exemptions therefrom. Except for (i) the conversion privileges
of the Series A Preferred Stock and the Series B Preferred Stock or (ii) as
otherwise disclosed on Schedule 2.4, there are not outstanding any options,
warrants, rights (including conversion or preemptive rights and rights of first
refusal), or agreements of any kind for the purchase or acquisition from the
Company of any of its securities. The Company has reserved 12,500,000 shares of
its Common Stock for purchase upon exercise of options and/or rights to purchase
to be granted in the future under the Company's 1999 Incentive Stock Option,
Nonqualified Stock Option and Restricted Stock Plan (the "1999 Plan"). Except as
disclosed on Schedule 2.4, the Company is not a party or subject to any
agreement or understanding, and, to the best of the Company's knowledge, there
is no agreement or understanding between any persons that affects or relates to
the voting or giving of written consents with respect to any security or the
voting by a director of the Company.

               (d) Schedule 2.4 sets forth a true, complete and correct list of
the holders of record of the Company's Common Stock and Series A Preferred
Stock, which list shall identify the name and address of each such holder and
the number of shares of Common and/or Series A Preferred Stock held by each such
holder. Schedule 2.4 also sets forth a true, complete and correct list of the
holders of record of the Company's outstanding warrants, options and other
rights to purchase or subscribe for shares of Common Stock or Preferred Stock.

        2.5 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in violation
or default (i) of any provision of its Amended and Restated Certificate of
Incorporation, as amended or Bylaws, as amended (ii) of any provision of any
mortgage, indenture, agreement, instrument, or contract to which it is a party
or by which it is bound, except where such violation or default would not have a
material adverse effect on the Company, or (iii) to the best of its knowledge,
of any federal or state, statute, rule, regulation or restriction. The
execution, delivery, and performance by the Company of this Agreement, the
Amended and Restated Investors' Rights Agreement, and the Amended and Restated
Right of First Refusal and Co-Sale Agreement, and the consummation of the
transactions

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contemplated hereby and thereby, will not result in any such violation or be in
material conflict with or constitute, with or without the passage of time or
giving of notice, either a material default under any such provision or an event
that results in the creation of any material lien, charge, or encumbrance upon
any assets of the Company or the suspension, revocation, impairment, forfeiture,
or nonrenewal of any material permit, license, authorization, or approval
applicable to the Company, its business or operations, or any of its assets or
properties.

        2.6 GOVERNMENTAL CONSENTS. No consent, approval, qualification, order or
authorization of, or filing with, any local, state, or federal governmental
authority is required on the part of the Company in connection with the
Company's valid execution, delivery, or performance of this Agreement, the
offer, sale or issuance of the Series B Preferred Stock by the Company, or the
issuance of Common Stock upon conversion of the Series B Preferred Stock, except
(i) the filing of the Restated Certificate with the Secretary of State of the
State of Delaware, and (ii) such filings as have been made prior to the Closing,
except any post-closing filings as may be required under applicable state
securities laws, which will be timely filed within the applicable periods
therefor. The Company has not offered shares of its Series B Preferred Stock or
any substantially similar securities of the Company for sale to, or solicited
any offers to buy from, or otherwise approached or negotiated in respect thereof
with, any person other than the Investors, and the Company will not take any
action that will cause the issuance and delivery of the shares of its Series B
Preferred Stock as contemplated hereby to constitute a violation of the
Securities Act or the California Corporate Securities Law of 1968, as amended
(the "California Securities Law").

        2.7 SUBSIDIARIES. The Company does not own or control, directly or
indirectly, any interest in any other corporation, partnership, limited
liability company, association, or other business entity. The Company is not a
participant in any joint venture, partnership, or similar arrangement.

        2.8 CONTRACTS AND OTHER COMMITMENTS. Except as set forth on Schedule
2.8, the Company does not have and is not bound by any contract, agreement,
lease, or other commitment, written or oral, absolute or contingent, other than
(i) contracts for the purchase of supplies and services that were entered into
in the ordinary course of business and that do not involve more than $50,000,
(ii) sales or services contracts entered into in the ordinary course of business
and that do not involve more than $50,000, (iii) contracts terminable at will by
the Company on no more than thirty (30) days' notice without material cost or
liability to the Company and (iv) contracts that are not material to the conduct
of the Company's business. All contracts, agreements and instruments to which
the Company is a party are valid, binding, and in full force and effect, without
any material breach by the Company or, to the best of the Company's knowledge,
any other party thereto and are enforceable by the Company in accordance with
their terms.

        2.9 RELATED-PARTY TRANSACTIONS. Except as set forth on Schedule 2.9, no
employee, officer, stockholder or director of the Company or member of his or
her immediate family is indebted to the Company, nor is the Company indebted (or
committed to make loans or extend or guarantee credit) to any of them, other
than (i) for payment of salary for services rendered, (ii) reimbursement for
reasonable expenses incurred on behalf of the Company, and (iii) for other
standard employee benefits made generally available to all employees including
stock option agreements outstanding under any stock option plan approved by the
Board of Directors of the Company. To the best of the Company's knowledge, none
of such persons has any direct or indirect ownership interest in any firm or
corporation with which the Company is affiliated or with which the Company has a
business relationship, or any firm or corporation that competes with the
Company. Except as set forth on Schedule 2.9, no officer, director, or
stockholder or any member of their immediate families is,

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directly or indirectly, interested in any contract with the Company (other than
such contracts as relate to any such person's ownership of capital stock or
other securities of the Company). Schedule 2.9 contains a list of all agreements
or transactions currently in effect between the Company and Brad Sachs, Andra
Sachs or any person or entity owned or controlled by either of them in which the
amount involved exceeds $60,000.

        2.10 REGISTRATION RIGHTS. Except as provided in the Amended and Restated
Investors' Rights Agreement, the Company is presently not under any obligation
and has not granted any rights to register under the Securities Act any of its
presently outstanding securities or any of its securities that may subsequently
be issued.

        2.11 LICENSES; PERMITS. The Company has all franchises, permits,
licenses, and any similar authority necessary for the conduct of its business as
now being conducted by it, the lack of which could materially and adversely
affect the business, properties, prospects, or financial condition of the
Company, and believes it can obtain, without undue burden or expense, any
similar authority for the conduct of its business as presently planned to be
conducted. The Company is not in default in any material respect under any of
such franchises, permits, licenses or other similar authority.

        2.12 LITIGATION. Except as set forth on Schedule 2.12, there is no
action, suit, proceeding, or investigation pending or, to the Company's
knowledge, currently threatened against the Company that questions the validity
of this Agreement, the Amended and Restated Investors' Rights Agreement, or the
Amended and Restated Right of First Refusal and Co-Sale Agreement or the right
of the Company to enter into such agreements, or to consummate the transactions
contemplated hereby or thereby, or that might result, either individually or in
the aggregate, in any adverse change in the assets, business, properties,
prospects, or financial condition of the Company, its properties or assets, or
in any material impairment of the right or ability of the Company to carry on
its business as now conducted or proposed to be conducted. The Company is not a
party to, named in or subject to, and none of its assets are bound by, any
order, writ, injunction, judgment, or decree of any court, government agency, or
instrumentality. There is no action, suit, proceeding or investigation initiated
by the Company currently pending or that the Company currently intends to
initiate.

        2.13 YEAR 2000 COMPLIANCE. All of the Company's products (including
products currently under development) record, store, process and calculate and
present calendar dates falling on and after January 1, 2000, and calculate any
information dependent on or relating to such dates in the same manner and with
the same functionality, data integrity and performance as the products record,
store, process, calculate and present calendar dates on or before December 31,
1999, or calculate any information dependent on or relating to such dates
(collectively "Year 2000 Compliant"). The Company's computer system and its
products have been tested and, based on the results of these tests, the Company
believes that its internal systems, including without limitation, its accounting
systems, as well as its products, are Year 2000 Compliant. The Company has not
conducted a review of the computer hardware and software systems of third
parties which may be affected by the Year 2000 problem.

        2.14 OFFERING. Subject in part to the truth and accuracy of each
Investor's representations set forth in this Agreement, the offer, sale and
issuance of the Series B Preferred Stock as contemplated by this Agreement are
exempt from the registration requirements of the Securities Act, and the
qualification requirements of the California Securities Law, and neither the
Company nor any authorized agent acting on its behalf will take any action
hereafter that would cause the loss of any such exemption.

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        2.15 TITLE TO PROPERTY AND ASSETS; LIENS. The Company has good and
marketable title to its properties and assets, in each case subject to no
mortgage, pledge, lien, lease, encumbrance, or charge, other than (a) liens
resulting from taxes which have not yet become delinquent, or (b) minor liens,
encumbrances, or defects of title which do not, individually or in the
aggregate, materially detract from the value of the property subject thereto or
materially impair the operations of the Company.

        2.16 FINANCIAL STATEMENTS. The Company has delivered to each Investor
its audited financial statements for the period from May 18, 1998 (inception) to
December 31, 1998, and for the period from January 1, 1999 to June 30, 1999 and
its unaudited financial statements for the eleven-month period ended November
30, 1999 (the "Financial Statements"). The Financial Statements fairly present
the financial condition and operating results of the Company as of the dates,
and for the periods, indicated therein. The Financial Statements have been
prepared in accordance with U.S. generally accepted accounting principles
consistently applied throughout the periods indicated, except that interim
financial statements are subject to normal year-end audit adjustments (which
will not be material either individually or in the aggregate) and lack
footnotes. Except as set forth on Schedule 2.16 or in the Financial Statements,
the Company has no material liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business consistent with past
practices subsequent to November 30, 1999 and (ii) obligations under contracts
and commitments incurred in the ordinary course of business consistent with past
practices, which, in both cases, individually or in the aggregate, are not
material to the financial condition or operating results of the Company. Except
as disclosed in the Financial Statements or on Schedule 2.16, the Company is not
a guarantor or indemnitor of any indebtedness of any other person, firm, or
corporation.

        2.17 CHANGES. Except as set forth on Schedule 2.17, since November 30,
1999, there has not been:

               (a) any change in the assets, liabilities, financial condition,
or operating results of the Company from that reflected in the Financial
Statements, except changes in the ordinary course of business consistent with
past practices that have not been, in the aggregate, materially adverse;

               (b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the business, properties,
prospects, or financial condition of the Company (as such business is presently
conducted and as it is presently proposed to be conducted);

               (c) any waiver or compromise by the Company of a material right
or of a material debt owed to it;

               (d) any satisfaction or discharge of any lien, claim, or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business consistent with past practices and that is not material to
the business, properties, prospects, or financial condition of the Company (as
such business is presently conducted and as it is presently proposed to be
conducted);

               (e) any material change to a material contract or arrangement by
which the Company or any of its assets is bound or subject;

               (f) any material change in any compensation arrangement or
agreement with any key employee, officer or director;

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               (g) any sale, assignment, or transfer of any patents, trademarks,
copyrights, trade secrets, or other intangible assets material to the Company;

               (h) any resignation or termination of employment of any key
employee of the Company; and the Company, to the best of its knowledge, does not
know of the impending resignation or termination of employment of any such
employee,

               (i) any mortgage, pledge, transfer of a security interest in, or
lien, created by the Company, with respect to any of its material properties or
assets, except for liens of the type described in Section 2.15;

               (j) any loans or guarantees made by the Company to or for the
benefit of its employees, stockholders, officers, or directors, or any members
of their immediate families, other than travel advances and other advances made
in the ordinary course of its business consistent with past practices;

               (k) any declaration, setting aside, or payment of any dividend or
other distribution of the Company's assets in respect of any of the Company's
capital stock, or any direct or indirect redemption, purchase, or other
acquisition of any of such stock by the Company;

               (l) any other event or condition of any character that might
materially and adversely affect the business, properties, prospects, or
financial condition of the Company (as such business is presently conducted and
as it is presently proposed to be conducted); or

               (m) any agreement or commitment by the Company to do any of the
things described in this Section 2.17.

        2.18 INTELLECTUAL PROPERTY. Except as set forth on Schedule 2.18, the
Company has sufficient title and ownership of all patents, patent applications,
licenses, trademarks, service marks, trade names, inventions, processes,
formulae, trade secrets, franchises, copyrights and other proprietary rights
(collectively, "Intellectual Property Rights") employed in or necessary for the
operation of its business as now conducted and as proposed to be conducted with
no known infringement of or conflict with the rights of others. Such ownership
and title are exclusive and not subject to termination without the Company's
consent. Except as set forth on Schedule 2.18, there are no outstanding options,
licenses, or agreements of any kind relating to the foregoing Intellectual
Property Rights, nor is the Company bound by or a party to any options, licenses
or agreements of any kind with respect to the Intellectual Property Rights of
any other person or entity. The Company is not aware of any third party that is
infringing or violating any of its Intellectual Property Rights. Except as set
forth on Schedule 2.18, the Company has not received any communications alleging
that the Company has violated or, by conducting its business as proposed, would
violate any of the Intellectual Property Rights of any other person or entity.
The Company does not believe it is or will be necessary to use any inventions of
any of its employees (or persons it currently intends to hire) made prior to
their employment by the Company.

        2.19 EMPLOYEES; EMPLOYEE COMPENSATION. To the best of the Company's
knowledge, after reasonable inquiry, no employee of the Company is obligated
under any contract (including licenses, covenants, or commitments of any nature)
or other agreement, or subject to any judgment, decree or order of any court or
administrative agency that would conflict with such employee's obligation to use
his or her best efforts to promote the interests of the Company or that would
conflict

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with the Company's business as conducted or as proposed to be conducted. To the
best of the Company's knowledge, after reasonable inquiry, no employee of the
Company is in violation of any term of any employment contract, proprietary
information and inventions agreement, non-competition agreement, or any other
contract or agreement relating to the relationship of any such employee with the
Company or any previous employer. Neither the execution nor delivery of this
Agreement, nor the carrying on of the Company's business by the employees of the
Company, nor the conduct of the Company's business as proposed, will, to the
best of the Company's knowledge, conflict with or result in a breach of the
terms, conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any of such employees is now obligated. The
Company has no collective bargaining agreements with any of its employees and to
the best of the Company's knowledge there is no labor union organizing activity
pending or threatened with respect to the Company. Except as set forth on
Schedule 2.19, there is no pension, health, profit sharing, bonus, stock
purchase, stock option, hospitalization, insurance, severance, or any other
employee benefit or welfare benefit plan with respect to any officer or employee
of the Company which is subject to the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"). The Company is not aware that any officer or key
employee, or that any group of key employees, intends to terminate their
employment with the Company, nor does the Company have a present intention to
terminate the employment of any of the foregoing. Subject to general principles
related to wrongful termination of employees, the employment of each officer and
employee of the Company is terminable at the will of the Company. Schedule 2.19
contains a true, complete and correct list of all employment agreements,
severance agreements, compensation plan agreements or arrangements or other
agreements or contractual obligations relating to the employment or service of
any of the Company's employees. True, complete and correct copies of all such
agreements have been delivered or made available to special counsel for the
Investors.

        2.20 PROPRIETARY INFORMATION.

               (a) The Company has taken all reasonable security measures to
protect the secrecy, confidentiality, and value of all trade secrets, know-how,
inventions, designs, processes, and technical data required to conduct its
business.

               (b) Each officer, employee, or consultant of the Company has
signed, and each such future officer, employee or consultant will sign, a
proprietary information agreement substantially in the Company's standard form
of such agreement (a copy of which form has been provided to the Investors'
counsel), each of which agreements remains in full force and effect as of the
date hereof. To the best of the Company's knowledge, none of the Company's
current or former officers, employees, or consultants is or will be in violation
thereof, and the Company will use its best efforts to prevent any such
violation.

        2.21 TAX RETURNS, PAYMENTS, AND ELECTIONS. The Company has filed all tax
returns (federal, state or local) it has been required to file prior to the date
hereof and the Company has paid all taxes that have been due and payable, and
the Company has no material liability for any federal, state or local taxes. The
Company has not elected to be treated as an S Corporation or a collapsible
corporation pursuant to Section 341(f) or Section 1362(a) of the Internal
Revenue Code of 1986, as amended ("Code"), nor has it made any other elections
pursuant to the Code (other than elections that relate solely to methods of
accounting, depreciation or amortization) that would have a material effect on
the Company, its financial condition, its business as presently conducted or
proposed to be conducted or any of its properties or material assets. The
Company has never had any tax deficiency proposed or assessed against it and has
not executed any waiver of any statute of limitations on the

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assessment or collection of any tax or governmental charge. The Company has
withheld or collected from each payment made to each of its employees, the
amount of all taxes, including, but not limited to, federal income taxes,
Federal Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes
required to be withheld or collected therefrom, and has paid the same to the
proper tax receiving officers or authorized depositaries, except where the
failure to do so would not have a material adverse effect on the Company.

        2.22 INSURANCE. The Company has adequate insurance, with financially
sound and reputable insurers, with respect to its properties, business and
operations, that are of a character customarily insured by entities engaged in
the same or a similar business similarly situated, against loss or damage of the
kinds customarily insured against by such entities, which insurance is of such
types as are customarily carried under similar circumstances by such other
entities. Schedule 2.22 sets forth a list of all of such insurance including
coverage amounts and deductibles.

        2.23 ENVIRONMENTAL AND SAFETY MATTERS. The operations of the Company (a)
have been, and are now, in compliance in all material respects with all
applicable environmental laws, (b) the Company has obtained all environmental,
health, and safety permits, licenses, and approvals necessary for its operation,
all such permits, licenses, and approvals are in effect, and the Company is in
compliance in all respects with the terms and conditions thereof, (c) with
respect to any property currently or formerly owned, leased, or operated by the
Company, the Company is not subject to any judicial or administrative
proceedings or any order from, or agreement with, any governmental authority,
and the Company has no knowledge of any pending or threatened investigation by
any governmental authority, relating to any violation or alleged violation of
any environmental law, any release or threatened release of a hazardous
substance into the environment, or any remedial action that may be necessary in
connection with any such violation or release, (d) the Company has not filed any
notice under any environmental law indicating past or present treatment,
storage, disposal or release of a hazardous substance into the environment, and
(e) the Company has not received notice of a claim that it may be liable as a
result of a release or threatened release of hazardous substances, and, to the
knowledge of the Company, there is no basis for any such claim, action, suit, or
investigation with respect to any environmental law.

        2.24 QUALIFIED SMALL BUSINESS STOCK. As of the Closing Date, the Series
B Preferred Stock and the shares of Common Stock issuable upon exercise thereof
should constitute "qualified small business stock" as defined in Section 1202(c)
of the Code, and the Company shall make all filings required under Section
1202(d)(1)(c) of the Code, any related Treasury Regulations and any state laws
or regulations.

        2.25 REAL PROPERTY HOLDING COMPANY. The Company is not and has not been
at any time a "United States real property holding corporation" as defined in
Section 897 of the Code.

        2.26 INVESTMENT COMPANY. The Company is not, and after the receipt of
the proceeds from the sale of the Shares hereunder will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.

        2.27 ACCOUNTING. The Company maintains a system of accounting
established and administered in accordance with generally accepted accounting
principles and has in place reasonable internal controls which are adequate and
appropriate for the Company.

                                       9
<PAGE>   10

        2.28 REGULATORY MATTERS. The Company's business as currently conducted
and as currently proposed to be conducted complies in all material respects with
applicable federal and state laws, rules, statutes, regulations and orders,
including without limitation any of the foregoing promulgated by the U.S.
Federal Communications Commission and state public utility commissions (or other
regulatory authorities having jurisdiction) relating to the provision of data
communications services and telecommunications services. The Company has
obtained all permits and regulatory approvals and authorizations necessary for
it to conduct its business as currently conducted and as currently proposed to
be conducted, except where the failure to have same would not have a material
adverse effect on the Company.

        2.29 OFFERING MEMORANDUM. The Confidential Private Placement Memorandum
dated December 7, 1999 prepared in connection with the Series B Preferred Stock
financing did not, as of the date thereof, and does not, as of the date hereof,
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that with respect to the projections contained in such Private
Placement Memorandum, the Company only represents that such projections were
prepared in good faith and that the Company believes that there is a reasonable
basis for such projections.

        2.30 DISCLOSURE. The Company has provided each Investor with all the
information that such Investor has requested for deciding whether to purchase
the Series B Preferred Stock. Neither this Agreement nor any other written
agreements or certificates made or delivered in connection herewith, taken as a
whole, contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements herein or therein not misleading.

3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.

        Each Investor hereby, severally and not jointly, represents and warrants
to the Company that:

        3.1 AUTHORIZATION. Such Investor has full power and authority to enter
into this Agreement, the Amended and Restated Investors' Rights Agreement and
the Amended and Restated Right of First Refusal and Co-Sale Agreement, and that
each such agreement, when executed and delivered, will constitute a valid and
legally binding obligation of such Investor, enforceable against such Investor
in accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies, and (iii) to the extent that the indemnification
provisions contained in the Amended and Restated Investors' Rights Agreement may
be limited by applicable laws.

        3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made with each
Investor in reliance upon such Investor's representation to the Company, which
by such Investor's execution of this Agreement such Investor hereby confirms,
that the Series B Preferred Stock to be purchased by such Investor, and the
Common Stock issuable upon conversion of the Series B Preferred Stock
(collectively, the "Securities") will be acquired for investment for such
Investor's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that such Investor has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, each Investor further
represents that such Investor does not have any contract, undertaking, agreement
or arrangement with any person to sell,

                                       10
<PAGE>   11

transfer or grant participation to such person or to any third person, with
respect to any of the Series B Preferred Stock or the Common Stock acquired on
conversion of the Series B Preferred Stock.

        3.3 RELIANCE UPON INVESTORS' REPRESENTATIONS. Such Investor understands
that the Series B Preferred Stock is not, and the Common Stock acquired on
conversion of the Series B Preferred Stock at the time of issuance may not be,
registered under the Securities Act on the ground that the sale provided for in
this Agreement and the issuance of the Securities hereunder is exempt from
registration under the Securities Act pursuant to Section 4(2) thereof, and that
the Company's reliance on such exemption is predicated on the Investors'
representations set forth herein.

        3.4 RECEIPT OF INFORMATION. Such Investor represents that such Investor
has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Series B Preferred
Stock and the business, properties, prospects, and financial condition of the
Company and to obtain additional information (to the extent the Company
possessed such information or could acquire it without unreasonable effort or
expense) necessary to verify the accuracy of any information furnished to such
Investor or to which such Investor had access. The foregoing, however, does not
limit or modify the representations and warranties of the Company in Section 2
of this Agreement or the right of the Investors to rely thereon.

        3.5 INVESTMENT EXPERIENCE. Such Investor represents that such Investor
is experienced in evaluating and investing in private placement transactions of
securities of companies in a similar stage of development, can bear the economic
risk of such Investor's investment, and has such knowledge and experience in
financial and business matters that such Investor is capable of evaluating the
merits and risks of the investment in the Series B Preferred Stock. If other
than an individual, Investor also represents such Investor has not been
organized for the purpose of acquiring the Series B Preferred Stock.

        3.6 ACCREDITED INVESTOR. Such Investor represents to the Company that
except as otherwise disclosed to the Company, in writing, prior to such
Investor's execution hereof, such Investor is an Accredited Investor as defined
in Rule 501(a) promulgated under the Securities Act.

        3.7 RESTRICTED SECURITIES. Such Investor understands that the Series B
Preferred Stock (and any Common Stock issued on conversion of the Series B
Preferred Stock) may not be sold, transferred, or otherwise disposed of without
registration under the Securities Act or an exemption therefrom, and that in the
absence of an effective registration statement covering the Series B Preferred
Stock and any Common Stock issued on conversion of the Series B Preferred Stock
or an available exemption from registration under the Securities Act, the Series
B Preferred Stock and any Common Stock issued on conversion of the Series B
Preferred Stock must be held indefinitely. In particular, such Investor is aware
that the Series B Preferred Stock (and any Common Stock issued on conversion of
the Series B Preferred Stock) may not be sold pursuant to Rule 144 promulgated
under the Securities Act unless all of the conditions of that Rule are met.
Among the conditions for use of Rule 144 may be the availability of current
information to the public about the Company. Such information is not now
available and the Company has no present plans to make such information
available.

        3.8 LEGENDS. To the extent applicable, each certificate or other
document evidencing any of the Series B Preferred Stock and any Common Stock
issued on conversion of the Series B Preferred Stock shall be endorsed with the
legends substantially in the form set forth below:

                                       11
<PAGE>   12

               (a) The following legend under the Securities Act:

                      "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
                      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
                      BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED
                      UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS THE
                      COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER
                      EVIDENCE, SATISFACTORY TO THE COMPANY AND ITS COUNSEL,
                      THAT SUCH REGISTRATION IS NOT REQUIRED."

               (b) Any legend imposed or required by the Company's Bylaws, the
Amended and Restated Right of First Refusal and Co-Sale Agreement or applicable
state securities laws.

4. CONDITIONS OF INVESTORS' OBLIGATIONS AT FIRST CLOSING.

        The obligations of each Investor purchasing shares at the First Closing
under subparagraph 1.1(b) of this Agreement are subject to the fulfillment on or
before the First Closing of each of the following conditions, the waiver of
which shall not be effective against any such Investor who does not consent in
writing thereto:

        4.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company contained in Section 2 shall be true on and as of the First
Closing with the same effect as though such representations and warranties had
been made on and as of the date of the First Closing.

        4.2 PERFORMANCE. The Company shall have performed and complied with all
agreements, obligations, and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the First Closing.

        4.3 COMPLIANCE CERTIFICATE; SECRETARY'S CERTIFICATE. The President of
the Company shall deliver to each Investor purchasing shares at the First
Closing a certificate certifying that the conditions specified in paragraphs
4.1, 4.2, 4.4 and 4.6 have been fulfilled. The Company shall have delivered a
certificate, executed on behalf of the Company by its Secretary, dated as of the
date of the First Closing, certifying the Board of Directors and stockholder
resolutions approving this Agreement and the other agreements to which the
Company is a party as indicated herein, and the issuance of the Series B
Preferred Stock, the reservation of the underlying Common Stock and certifying
the current versions of the Company's Amended and Restated Certificate of
Incorporation and Bylaws.

        4.4 QUALIFICATIONS. All authorizations, approvals, or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with and prior to the lawful issuance and
sale of the Series B Preferred Stock to the Investors purchasing shares at the
First Closing pursuant to this Agreement shall be duly obtained and effective as
of the First Closing.

        4.5 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at the First Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to the Investors purchasing shares at the First Closing,

                                       12
<PAGE>   13

who shall have received all such counterpart original and certified or other
copies of such documents as they may reasonably request.

        4.6 BYLAWS. The Bylaws of the Company shall provide that the size of the
Board of Directors shall be set from five (5) to nine (9) persons, with the
current number being fixed at seven (7) persons.

        4.7 AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT. The Company, the
holders of a majority of the Series A Preferred Stock, each Investor purchasing
shares at the First Closing and Brad Sachs (the "Founder") shall have executed
and delivered the Amended and Restated Investors' Rights Agreement in the form
attached hereto as Exhibit C (the "Amended and Restated Investors' Rights
Agreement").

        4.8 AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT.
The Company, each Investor purchasing shares at the First Closing and Brad Sachs
shall have executed and delivered the Amended and Restated Right of First
Refusal and Co-Sale Agreement in the form attached hereto as Exhibit D (the
"Amended and Restated Right of First Refusal and Co-Sale Agreement").

        4.9 RESTATED CERTIFICATE. The Company shall have filed the Restated
Certificate, in the form attached hereto as Exhibit A, with the Delaware
Secretary of State.

        4.10 OPINION OF COMPANY COUNSEL. The Investors purchasing shares at the
First Closing shall have received from Stradling Yocca Carlson & Rauth, a
Professional Corporation, counsel to the Company, an opinion dated as of the
date of the First Closing, in the form attached hereto as Exhibit E.

        4.11 WARRANT TO PURCHASE COMMON STOCK. The Company shall have executed
and delivered to each Investor purchasing shares at the First Closing a warrant
to purchase common stock of the Company in the form attached hereto as Exhibit
F.

        4.12 SETTLEMENT AGREEMENT. The settlement agreement dated February 11,
2000 among Andra Sachs, the Company and the other parties thereto in the form
provided to special counsel to the Investors, shall have been executed and
delivered by all parties thereto.

5. CONDITIONS OF INVESTORS' OBLIGATIONS AT SECOND CLOSING.

        The obligations of each Investor purchasing shares at the Second Closing
under subparagraph 1.1(b) of this Agreement are subject to the fulfillment on or
before the Second Closing of each of the following conditions, the waiver of
which shall not be effective against any such Investor who does not consent in
writing thereto:

        5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company contained in Section 2 shall be true on and as of the Second
Closing with the same effect as though such representations and warranties had
been made on and as of the date of the Second Closing.

        5.2 PERFORMANCE. The Company shall have performed and complied with all
agreements, obligations, and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Second Closing.

                                       13
<PAGE>   14

        5.3 COMPLIANCE CERTIFICATE; SECRETARY'S CERTIFICATE. The President of
the Company shall deliver to each Investor purchasing shares at the Second
Closing a certificate certifying that the conditions specified in paragraphs
5.1, 5.2, 5.4, 5.6 and 5.11 have been fulfilled. The Company shall have
delivered a certificate, executed on behalf of the Company by its Secretary,
dated as of the date of the Second Closing, certifying the Board of Directors
and stockholder resolutions approving this Agreement and the other agreements to
which the Company is a party as indicated herein, and the issuance of the Series
B Preferred Stock, the reservation of the underlying Common Stock and certifying
the current versions of the Company's Amended and Restated Certificate of
Incorporation and Bylaws.

        5.4 QUALIFICATIONS. All authorizations, approvals, or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with and prior to the lawful issuance and
sale of the Series B Preferred Stock pursuant to this Agreement (in addition to
those referenced in Section 5.12 below) shall be duly obtained and effective as
of the Second Closing.

        5.5 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at the Second Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to the Investors purchasing shares at the Second Closing, who shall
have received all such counterpart original and certified or other copies of
such documents as they may reasonably request.

        5.6 BOARD OF DIRECTORS. Effective as of the Second Closing, the
directors of the Company shall be Brad Sachs, David Helfrich, Todd Brooks, Kevin
Fong, Richard Rasmus, Andra Sachs and a designee of Behrman Capital.

        5.7 AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT. The Company, the
holders of a majority of the Series A Preferred Stock and each Investor
purchasing shares at the Second Closing (the "Founder") shall have executed and
delivered the Amended and Restated Investors' Rights Agreement in the form
attached hereto as Exhibit C (the "Amended and Restated Investors' Rights
Agreement").

        5.8 AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT.
The Company and each Investor purchasing shares at the Second Closing shall have
executed and delivered the Amended and Restated Right of First Refusal and
Co-Sale Agreement in the form attached hereto as Exhibit D (the "Amended and
Restated Right of First Refusal and Co-Sale Agreement").

        5.9 OPINION OF COMPANY COUNSEL. The Investors purchasing shares at the
Second Closing shall have received from Stradling Yocca Carlson & Rauth, a
Professional Corporation, counsel to the Company, an opinion dated as of the
date of the Second Closing, in the form attached hereto as Exhibit E.

        5.10 WARRANT TO PURCHASE COMMON STOCK. The Company shall have executed
and delivered to each Investor purchasing shares at the Second Closing a warrant
to purchase common stock of the Company in the form attached hereto as Exhibit
F.

                                       14
<PAGE>   15

        5.11 SETTLEMENT AGREEMENT. The settlement agreement dated February 11,
2000 among Andra Sachs, the Company and the other parties thereto in the form
provided to special counsel to the Investors, shall have been executed and
delivered by all parties thereto.

        5.12 HART-SCOTT-RODINO FILING. If any Investor's purchase of shares at
the Second Closing is subject to the filing requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, such filings
shall have been made and the waiting period with respect thereto shall have
expired or been terminated. The Company and any such Investor shall make such
filings as soon as practicable following the date hereof, and shall use their
commercially reasonable best efforts to cause early termination of any waiting
period under such Act.

        5.13 SATISFACTION OF OTHER CONDITIONS. The conditions set forth in
Sections 4.6, 4.9 and 4.12 above shall have been fulfilled by the Company.

6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT EACH CLOSING.

        The obligations of the Company to each Investor under this Agreement are
subject to the fulfillment on or before the Closing applicable to such Investor
of each of the following conditions by that Investor.

        6.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of each Investor contained in Section 3 shall be true on and as of the Closing
applicable to such Investor with the same effect as though such representations
and warranties had been made on and as of the date of such Closing.

        6.2 QUALIFICATIONS. All authorizations, approvals, or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with and prior to the lawful issuance and
sale of the Series B Preferred Stock pursuant to this Agreement shall be duly
obtained and effective as of such Closing.

        6.3 PURCHASE OF SHARES. The Company shall have received payment for all
of the shares of Series B Preferred Stock being sold at such Closing pursuant to
this Agreement.

        6.4 AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT. The Company, the
holders of Series A Preferred Stock, each Investor purchasing shares at such
Closing and the Founder shall have executed and delivered the Amended and
Restated Investors' Rights Agreement in the form attached hereto as Exhibit C.

        6.5 AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT.
The Company, holders of a majority of the shares of Series A Preferred Stock,
each Investor purchasing shares at such Closing and the Founder shall have
executed and delivered the Amended and Restated Right of First Refusal and
Co-Sale Agreement in the form attached hereto as Exhibit D.

        6.6 HART-SCOTT-RODINO FILING. If any Investor's purchase of shares at
the Second Closing is subject to the filing requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, such filings
shall have been made and the waiting period with respect thereto shall have
expired or been terminated. The Company and any such Investor shall make such
filings as soon as practicable following the date hereof, and shall use their
commercially reasonable best efforts to cause early termination of any waiting
period under such Act.

                                       15
<PAGE>   16

7. MISCELLANEOUS.

        7.1 ENTIRE AGREEMENT. This Agreement, the Amended and Restated
Investors' Rights Agreement, and the Amended and Restated Right of First Refusal
and Co-Sale Agreement constitute the entire agreements among the parties with
respect to the subject matter hereof and no party shall be liable or bound to
any other party in any manner by any warranties, representations, or covenants
except as specifically set forth herein or therein.

        7.2 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
permitted transferees of any shares of Series B Preferred Stock sold hereunder
or any Common Stock issued upon conversion thereof). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

        7.3 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.

        7.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

        7.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

        7.6 NOTICES. Unless otherwise provided, all notices and other
communications required or permitted under this Agreement shall be in writing
and shall be mailed by United States first-class mail, postage prepaid, sent by
facsimile or delivered personally by hand or by a courier addressed to the party
to be notified at the address or facsimile number indicated for such person on
Schedule A attached hereto, or at such other address or facsimile number as such
party may designate by ten (10) days' advance written notice to the other
parties hereto. All such notices and other written communications shall be
effective on the date of mailing, confirmed facsimile transfer or delivery.
Notwithstanding the foregoing, all notices and other communications to Intel
Corporation ("Intel") shall be sent to the following address:

                             Intel Corporation
                             2200 Mission College Blvd.
                             Mail Stop RN6-46
                             Santa Clara, California  95052
                             Attn:  M&A Portfolio Manager
                             Fax Number:  (408) 765-6038

                             With copies to:

                             Intel Corporation
                             2200 Mission College Blvd.
                             Santa Clara, California 95052

                                       16
<PAGE>   17

                             Attn:  General Counsel
                             Fax Number:  (408) 765-1859

        7.7 FINDER'S FEES. Except as set forth on Schedule 7.7, each party
represents that it neither is nor will be obligated for any finder's fee or
commission in connection with this transaction. Each Investor agrees to
indemnify and to hold harmless the Company from any liability for any commission
or compensation in the nature of a finder's fee (and the cost and expenses of
defending against such liability or asserted liability) for which the Investor
or any of its officers, partners, employees, or representatives is responsible.
The Company agrees to indemnify and hold harmless each Investor from any
liability for any commission or compensation in the nature of a finder's fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees, or
representatives is responsible.

        7.8 EXPENSES. The Company and each Investor shall pay all costs and
expenses that it incurs with respect to the negotiation, execution, delivery,
and performance of this Agreement; provided, however, that the Company will pay
the reasonable, documented fees and disbursements up to an aggregate of $40,000
of special legal counsel and certain outside consultants for the Investors in
connection with this transaction.

        7.9 ATTORNEYS' FEES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the Amended and Restated
Investors' Rights Agreement, the Amended and Restated Right of First Refusal and
Co-Sale Agreement or the Restated Certificate, the prevailing party shall be
entitled to reasonable attorneys' fees, costs, and disbursements in addition to
any other relief to which such party may be entitled.

        7.10 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the holders of a majority of the
Common Stock not previously sold to the public that is issued or issuable upon
conversion of the Series B Preferred Stock, voting as a single class. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each holder of any securities purchased under this Agreement at the time
outstanding (including securities into which such securities have been
converted), each future holder of all such securities, and the Company.
Notwithstanding anything herein to the contrary, no amendment or waiver to any
of the following sections or provisions of this Agreement shall be effective
without the written consent of Intel: (i) Section 7.12 and (ii) any other
provision or section of this Agreement that specifically mentions Intel.

        7.11 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

        7.12 DISPUTE RESOLUTION. If there arises a dispute between any party to
this Agreement, including, without limitation Intel, and any other party to this
Agreement regarding this Agreement, those parties agree to negotiate in good
faith to resolve the dispute between them regarding this Agreement. If the
negotiations do not resolve the dispute to the reasonable satisfaction of both
parties, then each party shall nominate one partner, member or senior officer of
the rank of Vice President or higher as its representative. These
representatives shall, within thirty (30) days of a written request by either
party to call such a meeting, meet in person and alone (except for one

                                       17
<PAGE>   18

assistant for each party) and shall attempt in good faith to resolve the
dispute. If the disputes cannot be resolved by such senior managers in such
meeting, the parties agree that they shall, if requested in writing by either
party, meet within thirty (30) days after such written notification for one day
with an impartial mediator and consider dispute resolution alternatives other
than litigation. If any alternative method of dispute resolution is not agreed
upon within thirty (30) days after the one day mediation, either party may begin
litigation proceedings. This procedure shall be a prerequisite before taking any
additional action hereunder.

        7.13 INFORMATION CONFIDENTIAL.

               (a) Disclosure of Terms. The terms and conditions of this
Agreement, the Amended and Restated Investors' Rights Agreement, the Amended and
Restated Right of First Refusal and Co-sale Agreement and any other agreement to
which the Investors are parties, the execution and delivery of which is
contemplated hereby (collectively, the "Financing Terms"), including their
existence, shall be considered confidential information and shall not be
disclosed by any party hereto to any third party except in accordance with the
provisions set forth below.

               (b) Press Releases, Etc. Within sixty (60) days of the closing of
the transaction contemplated by the Financing Terms, the Company may issue a
press release in the form provided by Intel disclosing that Intel has invested
in the Company; provided that the release does not disclose any of the Financing
Terms and the final form of the press release is approved in advance in writing
by Intel which approval shall not be unreasonably withheld. No other
announcement regarding Intel in a press release, conference, advertisement,
announcement, professional or trade publication, mass marketing materials or
otherwise to the general public may be made without such Intel's prior written
consent.

               (c) Permitted Disclosures. Notwithstanding the foregoing, (i) any
party may disclose any of the Financing Terms to its current or bona fide
prospective investors, employees, investment bankers, lenders, accountants and
attorneys, in each case only where such persons or entities are under
appropriate nondisclosure obligations whether by written agreement, position of
trust or confidence, fiduciary duty, or otherwise; (ii) any party may disclose
(other than in a press release or other public announcement described in
subsection (b)) solely the fact that the Investors are investors in the Company
to any third parties without the requirement for the consent of any other party
or nondisclosure obligations; and (iii) Intel may disclose its investment in the
Company and the Financing Terms to third parties or to the public at its sole
discretion and, if it does so, the other parties hereto shall have the right to
disclose to third parties any such information disclosed in a press release or
other public announcement by Intel.

        (d) Legally Compelled Disclosure. In the event that any party is
requested or becomes legally compelled (including without limitation, pursuant
to securities laws and regulations) to disclose the existence of this Agreement,
the Amended and Restated Investors' Rights Agreement, the Amended and Restated
Right of First Refusal and Co-Sale Agreement and any other agreement to which
the Investors are parties, the execution and delivery of which is contemplated
hereby, or any of the Financing Terms hereof in contravention of the provisions
of this Section 7.13, such party (the "Disclosing Party") shall provide the
other parties (the "Non-Disclosing Parties") with prompt written notice of that
fact so that the appropriate party may seek (with the cooperation and reasonable
efforts of the other parties) a protective order, confidential treatment or
other appropriate remedy. In such event, the Disclosing Party shall furnish only
that portion of the information which is legally

                                       18
<PAGE>   19

required and shall exercise reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded such information to the extent
reasonably requested by any Non-Disclosing Party.

               (e) Other Information. The provisions of this Section 7.13 shall
be in addition to, and not in substitution for, the provisions of any separate
nondisclosure agreement executed by any of the parties hereto with respect to
the transactions contemplated hereby. Additional disclosures and exchange of
confidential information between the Company and Intel (including without
limitation, any exchanges of information with any Intel board observer) shall be
governed by the terms of the Corporate Non-Disclosure Agreement No. 5710225,
dated May 4, 1999, executed by the Company and Intel, and any Confidential
Information Transmittal Records ("CITR") provided in connection therewith.

               (f) All notices under this Section 7.13 shall be made pursuant to
Section 7.6 of this Agreement.

                                       19
<PAGE>   20

            SIGNATURE PAGE TO FLASHCOM, INC. STOCK PURCHASE AGREEMENT

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

                                    FLASHCOM, INC.

                                    By: /s/ RICHARD RASMUS
                                        ----------------------------------------
                                            Richard Rasmus, President and
                                            Chief Operating Officer

                                    INVESTORS:

                                    Investor Name:
                                                  ------------------------------

                                    Signed:
                                           -------------------------------------

                                    Print Name:
                                               ---------------------------------

                                    Its:
                                        ----------------------------------------

                                    [The Agreement contains counterpart
                                    signature pages for each investor appearing
                                    in Schedule A hereto]

                                       20

<PAGE>   21

                                   SCHEDULE A

                                    INVESTORS

<TABLE>
<CAPTION>

NAME AND ADDRESSES OF INVESTORS                  NO. SHARES OF SERIES B
IN SERIES B PREFERRED STOCK                       PREFERRED PURCHASED         PURCHASE PRICE
---------------------------------------------------------------------------------------------------
<S>                                             <C>                           <C>

 FIRST CLOSING

 The New Economy Fund                                 1,522,070                $10,000,000
 c/o Capital Research and Management Company
 333 South Hope Street, 53rd Floor
 Los Angeles, California  90017

 SMALLCAP World Fund, Inc.                            1,484,018                  9,750,000
 c/o Capital Research and Management Company
 333 South Hope Street, 53rd Floor
 Los Angeles, California  90017

 American Variable Insurance Series Global               38,052                   250,000
 Small Capitalization Fund
 c/o Capital Research and Management Company
 333 South Hope Street, 53rd Floor
 Los Angeles, California  90017

 Blueprint Ventures Emerging Communications           1,225,800                  8,053,507
 Fund I, L.P.
 Embarcadero Center Four, Suite 580
 San Francisco, California  94115
 Attn:  Bart Schachter

 C.E. Unterberg, Towbin Private Equity                  456,621                  3,000,000
        Partners II, L.P.
 c/o C.E. Unterberg Towbin
 10 East 50th Street
 New York, New York  10022
 Attn:  Mark G. Hadlock

 Intel Corporation                                      552,548                  3,630,242
 2200 Mission College Blvd.
 Mail Stop RN6-46
 Santa Clara, California 95052
 Attn:  M&A Portfolio Manager

       With copies to:

       Intel Corporation
       2200 Mission College Blvd.
       Santa Clara, California 95052
       Attn:  General Counsel
</TABLE>

                                       1
<PAGE>   22

<TABLE>
<CAPTION>

NAME AND ADDRESSES OF INVESTORS                  NO. SHARES OF SERIES B
IN SERIES B PREFERRED STOCK                       PREFERRED PURCHASED         PURCHASE PRICE
---------------------------------------------------------------------------------------------------
<S>                                             <C>                           <C>

 BancBoston Capital Inc.                               456,621                  3,000,000
 435 Tasso Street, Suite 250
 Palo Alto, California  94301
 Attn:  Maia Heymann

 Carlyle High Yield Partners, L.P.                     456,621                  3,000,000
 520 Madison Avenue, 41st Floor
 New York, New York  10022
 Attn:  Greg Margolies

 Kohlberg, Kravis, Roberts & Co.                       350,076                  2,300,000
 2800 Sand Hill Road, Suite 200
 Menlo Park, California  94025
 Attn:  Adam Clammer

 The Raptor Global Portfolio Ltd.                      454,642                  2,987,000
 c/o Tudor Investment Corporation
 40 Rowes Wharf, 2nd Floor
 Boston, Massachusetts  02110
 Attn:  Rick Ganong

 Altar Rock Fund, L.P.                                   1,979                     13,000
 c/o Tudor Investment Corporation
 40 Rowes Wharf, 2nd Floor
 Boston, Massachusetts  02110
 Attn:  Rick Ganong

 Comdisco, Inc.                                        129,376                    850,000
 6111 North River Road
 Rosemont, Illinois  60018
 Attn:  Venture Group

 TW Trust                                               38,052                    250,002
 8144 Walnut Hill Lane, Suite 1010
 Dallas, Texas  95231
 Attn:  Connie Adair

 CVT Management LLC                                     30,441                    200,000
 7385 Caminito Bassano
 La Jolla, California  92037
 Attn:  Alex Roudi
</TABLE>

                                       2
<PAGE>   23

<TABLE>
<CAPTION>

NAME AND ADDRESSES OF INVESTORS                  NO. SHARES OF SERIES B
IN SERIES B PREFERRED STOCK                       PREFERRED PURCHASED         PURCHASE PRICE
---------------------------------------------------------------------------------------------------
<S>                                             <C>                           <C>

 Internet Investor LLC, Series 8                        30,441                   199,997
 450 Springfield Avenue, Suite 201
 Summit, New Jersey  07901
 Attn:  Frederick R. Krueger

 Bahram Nour-Omid and                                   30,441                   200,000
 Doris Nour-Omid, Trustees,
 Nour-Omid Family Trust
 2219 Tunbridge Court
 Los Angeles, California  90077

 Sean Tayebi                                            30,441                   200,000
 939 Coast Boulevard, #16D
 La Jolla, California  92037

 BridgeWest, LLC                                        76,104                   500,000
 c/o Kathy Munro
 4370 La Jolla Village Drive, Suite 400
 San Diego, California  92122

 Steve Lehman                                           76,104                   500,000
 25742 Simpson Place
 Calabasas, California  91302-3154

 Blackcross                                             76,104                   500,000
 369 San Miguel Drive, Suite 300
 Newport Beach, California  92660
 Attn: Blake Bertea

 Sean Stanfield                                         15,221                   100,000
 16751 Edgewater Lane
 Huntington Beach, California  92649

 Remington Industries                                   30,441                   200,000
 3848 McKinley Street
 Corona, California  91719
 Attn:  Jeff Silvers

 David Fuchs                                            30,441                   200,000
 1775 Newell Road
 Palo Alto, California  94303

 Kevin Wendle                                           30,441                   200,000
 10671 Chalon Road
 Los Angeles, California  90077
</TABLE>

                                       3
<PAGE>   24

<TABLE>
<CAPTION>

NAME AND ADDRESSES OF INVESTORS                  NO. SHARES OF SERIES B
IN SERIES B PREFERRED STOCK                       PREFERRED PURCHASED         PURCHASE PRICE
---------------------------------------------------------------------------------------------------
<S>                                             <C>                           <C>
 SECOND CLOSING

 Behrman Capital II L.P.                              3,003,417                19,732,450
 c/o Behrman Capital
 126 East 56th Street
 New York, NY  10022
 Attn:  Grant G. Behrman

       With copies to:

       Behrman Capital
       4 Embarcadero Center, Suite 3640
       San Francisco, CA  94111
       Attn:  William Matthes

 Strategic Entrepreneur Fund II L.P.                    40,723                   267,550
 c/o Behrman Capital
 126 East 56th Street
 New York, NY  10022
 Attn:  Grant G. Behrman

       With copies to:

       Behrman Capital
       4 Embarcadero Center, Suite 3640
       San Francisco, CA  94111
       Attn:  William Matthes

 Communication Ventures III, L.P.                      850,256                 5,586,180
 505 Hamilton Avenue, Ste. 305
 Palo Alto, California 94301

 Communication Ventures III CEO &                       42,513                   279,308
 Entrepreneurs Fund
 505 Hamilton Avenue, Ste. 305
 Palo Alto, California 94301

 Mayfield IX                                           863,990                 5,676,416
 2800 Sand Hill Road
 Menlo Park, California 94025

 Mayfield Associates Fund IV                            45,473                   298,760
 2800 Sand Hill Road
 Menlo Park, California 94025

 Flash Trust                                           308,220                 2,025,005
 c/o Mayfield Funds
 2800 Sand Hill Road
 Menlo Park, California 94025
</TABLE>

                                       4

<PAGE>   25
<TABLE>
<CAPTION>

NAME AND ADDRESSES OF INVESTORS                  NO. SHARES OF SERIES B
IN SERIES B PREFERRED STOCK                       PREFERRED PURCHASED         PURCHASE PRICE
---------------------------------------------------------------------------------------------------
<S>                                             <C>                           <C>

 SYCR Investment Partnership 2000                       39,052                   256,570
 660 Newport Center Drive, Suite 1600
 Newport Beach, California  92660

 SYCR Investment Fund II, LLC                            7,610                    50,000
 660 Newport Center Dr., Suite 1600
 Newport Beach, California 92660

 TOTAL:                                             12,824,351               $84,255,987
</TABLE>

                                       5
<PAGE>   26

                                    EXHIBIT A

                              RESTATED CERTIFICATE

                                      A-1
<PAGE>   27

                                    EXHIBIT B

                             SCHEDULE OF EXCEPTIONS

                                      B-1
<PAGE>   28

                                    EXHIBIT C

                AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT

                                      C-1

<PAGE>   29

                                    EXHIBIT D

                   AMENDED AND RESTATED RIGHT OF FIRST REFUSAL
                              AND CO-SALE AGREEMENT

                                      D-1

<PAGE>   30

                                    EXHIBIT E

                       FORM OF OPINION OF COMPANY COUNSEL

                                      E-1
<PAGE>   31

                                    EXHIBIT F

                                 FORM OF WARRANT

                                      F-1<PAGE>   1
                                    FLASHCOM, INC.                    EXH. 10.17

                AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT

        THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (this "Agreement")
is made and entered into as of the 18th day of February, 2000, by and between
Flashcom, Inc., a Delaware corporation (the "Company"), the persons identified
on Exhibit A-1 attached hereto (the "Series A Holders"), the persons identified
on Exhibit A-2 attached hereto (the "Series B Holders") and the persons
identified on Exhibit A-3 attached hereto (the "Founders").

                                 R E C I T A L S

        WHEREAS, in connection with the Company's issuance of 5,771,679 shares
of Series A Preferred Stock (the "Series A Shares") pursuant to that certain
Series A Preferred Stock Purchase Agreement (the "Series A Purchase Agreement")
dated as of June 8, 1999, the Company entered into an Investors' Rights
Agreement with the Series A Holders as a condition to the Closing thereunder.

        WHEREAS, in connection with the Company's issuance of up to 12,861,500
shares of Series B Preferred Stock (the "Series B Shares") pursuant to that
certain Series B Preferred Stock Purchase Agreement dated as of even date
herewith, the Company, the Series A Holders and the Series B Holders have agreed
to enter into this Amended and Restated Investors' Rights Agreement as a
condition to Closing thereunder.

        NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereto agree as follows:

        1. DEFINITIONS.

               As used herein:

               1.1 The term "Holder" means the Series A Holders and the Series B
Holders having the right to acquire Registrable Shares or any assignee thereof
in accordance with Section 2.10 hereof.

               1.2 The terms "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.

               1.3 For the purposes hereof, the term "Registrable Shares" means
and includes (i) the shares of common stock of the Company issued or issuable
upon conversion of the Series A Shares and the Series B Shares, (ii) the shares
of common stock issued or issuable upon exercise of the warrants dated as of May
7, November 9, December 1 and December 20, 1999 and February 14, 2000 issued to
certain of the Series A Holders, the Series B Holders, the Investors and their
respective affiliates, (iii) the shares of common stock issued to the Series A
Holders as the date hereof, and (iv) any common stock of the Company issued, or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued, as a result of a stock split, dividend or other distribution
with respect to or in exchange for or in replacement of the shares referenced in
(i), (ii) or (iii) above, excluding in all cases, however, any Registrable
Shares sold by a person in a transaction in which his or her rights under
Section 2 are not assigned.

<PAGE>   2

               1.4 The term "Ownership Percentage" means and includes, with
respect to each Holder of Registrable Shares requesting inclusion of Registrable
Shares in an offering pursuant to this Agreement, the number of Registrable
Shares held by such Holder divided by the aggregate of all Registrable Shares
held by all Holders requesting registration in such offering.

               1.5 The term "Piggyback Registrable Shares" means and includes
(i) Registrable Shares, and (ii) any common stock of the Company held by any
Founder or any common stock of the Company issued, or issuable upon conversion
or exercise of any warrant, right or other security which is issued, as a result
of a stock split, dividend, or other distribution with respect to or in exchange
for or in replacement of the shares of common stock held by any Founder.

               1.6 The term "Securities Act" means the Securities Act of 1933,
as amended.

               1.7 The term "Public Offering" means and includes the closing of
a firm commitment underwritten public offering pursuant to an effective
registration statement under the Securities Act, covering the offer and sale of
securities to the general public for the account of the Company.

        2. REGISTRATION RIGHTS.

               2.1 "PIGGY BACK" REGISTRATION. If at any time the Company shall
determine to register under the Securities Act (including pursuant to a demand
of any stockholder of the Company exercising registration rights other than
pursuant to Section 2.2 hereof) any of its common stock (other than a
registration relating solely to the sale of securities to participants in a
Company employee benefits plan, a registration on any form which does not
include substantially the same information as would be required to be included
in a registration statement covering the sale of Piggyback Registrable Shares or
a registration in which the only common stock being registered is common stock
issuable upon conversion of debt securities which are also being registered), it
shall send to each Holder and to each Founder written notice of such
determination and, if within fifteen (15) days after receipt of such notice,
such Holder or such Founder shall so request in writing, the Company shall use
its commercially reasonable best efforts to include in such registration
statement all or any part of the Piggyback Registrable Shares that such Holder
or such Founder requests to be registered. If such registration involves an
underwritten public offering and the total amount of securities, including
Piggyback Registrable Shares, requested by stockholders to be included in such
offering exceeds the amount of securities that the managing underwriter
determines in its sole discretion is compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities, including Piggyback Registrable Shares, which
the managing underwriter determines in its sole discretion will not jeopardize
the success of the offering (the securities so included to be apportioned in the
following order of priority (A) first, to the Company, (B) second, among the
Holders requesting to sell common stock issuable upon conversion of Series A
Shares and Series B Shares according to each such Holder's Ownership Percentage,
(C) third, to the Founders requesting to sell Piggyback Registrable Shares
according to the total amount of securities held by each such Founder, and (D)
fourth, to the extent additional securities may be included therein, pro rata
among the other selling stockholders according to the total amount of securities
owned by each such stockholder); provided, however, that in any registration
other than the initial Public Offering of the Company's common stock, the number
of shares requested to be included by the Holders shall not be reduced below 25%
of the total number of securities to be provided in the registration. For
purposes of the preceding parenthetical concerning apportionment, for any
selling stockholder which is a holder of Piggyback Registrable

                                       2
<PAGE>   3

Shares and which is a partnership or corporation, the partners, retired partners
and stockholders of such holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the
foregoing persons shall be deemed to be a single "selling stockholder," and any
pro-rata reduction with respect to such "selling stockholder" shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling stockholder" as defined in
this sentence. If any Holder or Founder disapproves of the terms of such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter. No incidental right under this Section 2.1 shall be
construed to limit any registration required under Section 2.2.

               2.2 REQUIRED REGISTRATION.

                      (a) At any time or times not earlier than the earlier of
either (i) 180 days after the completion by the Company of its initial Public
Offering or (ii) March 31, 2001, one or more Holders of at least 30% of the
shares of common stock issued or issuable upon conversion of the Series A Shares
and the Series B Shares may require the Company to register some or all of such
Holders' Registrable Shares, provided that each such registration covers an
offering with an aggregate offering price of at least $5,000,000. Such Holder(s)
shall notify the Company in writing that it or they intend to offer or cause to
be offered for public sale of all or any portion of the Registrable Shares, and
within ten (10) days of the receipt after such notice, the Company will so
notify all holders of Registrable Shares.

                      (b) Upon written request of any Holder given within thirty
(30) days after the receipt by such Holder from the Company of such
notification, the Company will use its commercially reasonable best efforts to
cause all or any part of the Registrable Shares that may be requested by any
Holder thereof (including the Holder or Holders giving the initial notice of
intent to offer (each an "Initiating Holder" and collectively the "Initiating
Holders")) to be registered under the Securities Act as expeditiously as
possible. The Company shall file a registration statement covering the
Registrable Shares so requested to be registered as soon as practical, but in
any event within sixty (60) days after receipt by the Company of the request of
the Initiating Holder.

                      (c) Notwithstanding anything contained in this Section 2.2
or Section 2.3 to the contrary, if the Company furnishes to the Holders
requesting any registration pursuant to such sections a certificate signed by
the President of the Company stating that, in the good faith judgment of the
Board of Directors of the Company, such registration would be detrimental to the
Company and that it is in the best interests of the Company to defer the filing
of a registration statement, then the Company shall have the right to defer the
filing of a registration statement with respect to such offering for a period of
not more than ninety (90) days from receipt by the Company of the request by the
Initiating Holder; provided, however, that the Company may not exercise such
right more than once in any twelve-month period.

                      (d) If the Initiating Holders intend to distribute the
Registrable Shares covered by their request by means of an underwriting, they
shall so advise the Company as part of their request and the Company shall
include such information in the written notice referred to above.

                      (e) If the registration to be effected pursuant to this
Section 2.2 is a registration in connection with the Company's initial Public
Offering, the underwriter shall be selected by the Company and shall be
reasonably acceptable to a majority in interest of the Initiating Holders. In
all subsequent registrations effected pursuant to this Section 2.2, the
underwriter shall be

                                       3
<PAGE>   4

selected by a majority in interest of the Initiating Holders and shall be
reasonably acceptable to the Company. In any event, the right of any Holder to
include his, her or its Registrable Shares in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Shares in the underwriting to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary form
with the underwriters selected for such underwriting.

                      (f) Notwithstanding the foregoing, if the underwriter
advises the Initiating Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the Initiating
Holders shall so advise all Holders of Registrable Shares which would otherwise
be underwritten pursuant hereto, and the number of shares of Registrable Shares
that may be included in the underwriting shall be allocated among the Holders
requesting inclusion in such underwriting pursuant to Section 2.2(b) above
according to each such Holder's Ownership Percentage. No shares proposed to be
registered by the Company or by any party other than the Holders requesting
inclusion in such registration pursuant to Section 2.2(b) above shall be
included in the underwriting unless all shares requested to be included in such
underwriting pursuant to Section 2.2(b) are included therein.

                      (g) Notwithstanding the foregoing, the Company shall not
be obligated to effect, or to take any action to effect, any registration
pursuant to this Section 2.2: (i) after the Company has effected three (3)
registrations pursuant to this Section 2.2 and such registrations have been
declared or ordered effective, (ii) during the period starting with the date
sixty (60) days prior to the Company's good faith estimate of filing of, and
ending on a date one hundred eighty (180) days after the effective date of, a
registration statement filed under the Securities Act (other than a registration
relating solely to the sale of securities to participants in a Company stock
plan), provided that the Company is actively employing in good faith its
commercially reasonable best efforts to cause such registration statement to
become effective, or (iii) if the Initiating Holders propose to dispose of
shares of Registrable Shares that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 2.3 below.

               2.3 REGISTRATION ON FORM S-3. In case the Company shall receive
from a Holder or Holders of (x) at least twenty percent (20%) of the shares of
common stock issued or issuable upon conversion of the Series A Shares or (y) at
least twenty percent (20%) of the Shares of Common Stock issued or issuable upon
conversion of the Series B Shares, a written request or requests that the
Company effect a registration on Form S-3 (or any similar form promulgated by
the Securities and Exchange Commission) and any related qualification or
compliance with respect to all or a part of the Registrable Securities owned by
such Holder or Holders, the Company will:

                      (a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders;
and

                      (b) as soon as practicable, use its commercially
reasonable best efforts to effect such registration and all such qualifications
and compliances as may be so requested and as would permit or facilitate the
sale and distribution of all or such portion of such Holder's or Holders'
Registrable Shares as are specified in such request, together with all or such
portion of the Registrable Shares of any other Holder or Holders joining in such
request as are specified in a written request given within twenty (20) days
after receipt of such written notice from the Company; provided, however, that
the Company shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this Section 2.3: (1) if Form S-3 is
not available for such

                                       4
<PAGE>   5

offering by the Holders; (2) if the Company shall furnish to the Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such Form S-3 registration
to be effected at such time, in which event the Company shall have the right to
defer the filing of the Form S-3 registration statement for a period of not more
than ninety (90) days after receipt of the request of the Holder or Holders
under this Section 2.3; provided, however, that the Company shall not utilize
this right more than once in any twelve month period; (3) if such Form S-3
registration covers an offering with reasonably anticipated aggregate proceeds
of less than $2,500,000; or (4) if the Company has effected two (2)
registrations pursuant to this Section 2.3 within the past twelve (12) months
and such registrations have been declared or ordered effective.

                      (c) Subject to the foregoing, the Company shall use its
commercially reasonable best efforts to file a registration statement covering
the Registrable Shares and other securities so requested to be registered as
soon as practicable after receipt of the request or requests of the Holders.
Registrations effected pursuant to this Section 2.3 shall not be counted as a
demand for registration effected pursuant to Section 2.2. If the Holders giving
the initial notice propose to offer the Registrable Shares by means of an
underwriting, the terms of Sections 2.2(d) and (e) shall apply.

               2.4 EFFECTIVENESS.

                      (a) The Company will use its commercially reasonable best
efforts to maintain the effectiveness for up to nine (9) months of any
registration statement pursuant to which any of the Registrable Shares are being
offered; provided, however, that: (i) such nine-month period shall be extended
for a period of time equal to the period the Holder refrains from selling any
securities included in such registration at the request of an underwriter of
common stock (or other securities) of the Company and (ii) in the case of any
registration of Registrable Shares on Form S-3 which are intended to be offered
on a continuous or delayed basis, such nine-month period shall be extended, if
necessary, to keep the registration statement effective until the earlier to
occur of (A) eighteen (18) months following the effectiveness of the
registration statement, or (B) the date that all such Registrable Shares are
sold, provided that Rule 415, or any successor rule under Securities Act,
permits an offering on a continuous or delayed basis, and provided further that
applicable rules under Securities Act governing the obligation to file a
post-effective amendment permit, in lieu of filing a post-effective amendment
which (I) includes any prospectus required by Section 10(a)(3) of Securities Act
or (II) reflects facts or events representing a material or fundamental change
in the information set forth in the registration statement, the incorporation by
reference of information required to be included in (I) and (II) above to be
contained in periodic reports filed pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in the
registration statement.

                      (b) The Company will from time to time amend or supplement
such registration statement and the prospectus contained therein as and to the
extent necessary to comply with the Securities Act and any applicable state
securities statute or regulation.

               2.5 INDEMNIFICATION.

                      (a) Indemnification of Holders. In the event that the
Company registers any of the Registrable Shares under the Securities Act, the
Company will indemnify and hold harmless each Holder and each underwriter of the
Registrable Shares so registered (including any

                                       5
<PAGE>   6

broker or dealer through whom such shares may be sold) and each person, if any,
who controls such Holder or any such underwriter within the meaning of Section
15 of the Securities Act from and against any and all losses, claims, damages,
expenses or liabilities (or any action in respect thereof), joint or several, to
which they or any of them become subject under the Securities Act, Exchange Act
or other federal or state law or under any other statute or at common law or
otherwise, and, except as hereinafter provided, will reimburse each such Holder,
each such underwriter and each such controlling person, if any, for any legal or
other expenses reasonably incurred by them or any of them, as such expenses are
incurred, in connection with investigating or defending any actions whether or
not resulting in any liability, insofar as such losses, claims, damages,
expenses, liabilities or actions arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement, in any preliminary or amended preliminary prospectus or
in the prospectus (or the registration statement or prospectus as from time to
time amended or supplemented by the Company); (ii) arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading; or (iii) any violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation under the
Securities Act, the Exchange Act or any state securities law; provided, however,
that the indemnity contained in this Section 2.5(a) will not apply where such
untrue statement or omission was made in such registration statement,
preliminary prospectus or prospectus in reliance upon and in conformity with
information furnished in writing to the Company in connection therewith by such
Holder of Registrable Shares, any such underwriter or any such controlling
person expressly for use therein. Promptly after receipt by any Holder of
Registrable Shares, any underwriter or any controlling person of notice of the
commencement of any action in respect of which indemnity may be sought against
the Company, such Holder of Registrable Shares, or such underwriter or such
controlling person, as the case may be, will notify the Company in writing of
the commencement thereof, and, subject to the provisions hereinafter stated, the
Company shall assume the defense of such action (including the employment of
counsel, who shall be counsel reasonably satisfactory to such Holder of
Registrable Shares, such underwriter or such controlling person, as the case may
be), and the payment of expenses insofar as such action shall relate to any
alleged liability in respect of which indemnity may be sought against the
Company. Such Holder of Registrable Shares, any such underwriter or any such
controlling person shall have the right to employ separate counsel in any such
action and to participate in the defense thereof in the event the representation
of such Holder, underwriter or controlling person by counsel retained by or on
the behalf of the Company would be inappropriate due to conflicts of interest
between any such person and any other party represented by such counsel in such
proceeding or action, in which case the Company shall pay, as incurred, the fees
and expenses of not more than one such separate counsel. The Company shall not
be liable to indemnify any person under this Section 2.5(a) for any settlement
of any such action effected without the Company's consent (which consent shall
not be unreasonably withheld). The Company shall not, except with the approval
of each party being indemnified under this Section 2.5(a) (which approval will
not be unreasonably withheld), consent to entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff to the parties being so indemnified of a release
from all liability in respect to such claim or litigation.

                      (b) Indemnification of Company. In the event that the
Company registers any of the Registrable Shares under the Securities Act, each
Holder of the Registrable Shares so registered will indemnify and hold harmless
the Company, each of its directors, each of its officers who have signed the
registration statement, each underwriter of the Registrable Shares so registered
(including any broker or dealer through whom any of such shares may be sold) and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act from and

                                       6
<PAGE>   7

against any and all losses, claims, damages, expenses or liabilities (or any
action in respect thereof), several but not joint, to which they or any of them
may become subject under the Securities Act or under any other statute or at
common law or otherwise, and, except as hereinafter provided, will reimburse the
Company and each such director, officer, underwriter or controlling person for
any legal or other expenses reasonably incurred by them or any of them, as such
expenses are incurred, in connection with investigating or defending any actions
whether or not resulting in any liability, insofar as such losses, claims,
damages, expenses, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
registration statement, in any preliminary or amended preliminary prospectus or
in the prospectus (or the registration statement or prospectus as from time to
time amended or supplemented) or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, but only to
the extent that any such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company in connection
therewith by such Holder, expressly for use therein; provided that in no event
shall the total amount for which any Holder shall be liable hereunder exceed the
net proceeds from the offering received by such Holder. Promptly after receipt
of notice of the commencement of any action in respect of which indemnity may be
sought against such Holder of Registrable Shares, the Company will notify such
Holder of Registrable Shares in writing of the commencement thereof, and such
Holder of Registrable Shares shall, subject to the provisions hereinafter
stated, assume the defense of such action (including the employment of counsel,
who shall be counsel reasonably satisfactory to the Company) and the payment of
expenses insofar as such action shall relate to the alleged liability in respect
of which indemnity may be sought against such Holder of Registrable Shares. The
Company and each such director, officer, underwriter or controlling person shall
have the right to employ separate counsel in any such action and to participate
in the defense thereof in the event the representation of the Company, any of
its officers or directors or any underwriter or controlling person by counsel
retained by or on the behalf of such Holder would be inappropriate due to
conflicts of interest between any such person and any other party represented by
such counsel in such proceeding or action, in which case such Holder shall pay,
as incurred, the fees and expenses of not more than one such separate counsel.
Notwithstanding the two preceding sentences, if the action is one in which the
Company may be obligated to indemnify any Holder of Registrable Shares pursuant
to Section 2.5, the Company shall have the right to assume the defense of such
action, subject to the right of such holders to participate therein as permitted
by Section 2.5. Such Holder shall not be liable to indemnify any person for any
settlement of any such action effected without such Holder's consent (which
consent shall not be unreasonably withheld). Such Holder shall not, except with
the approval of the Company (which approval shall not be unreasonably withheld),
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to the party being so indemnified of a release from all liability in respect to
such claim or litigation.

               2.6 CONTRIBUTION. If the indemnification provided for in Section
2.5 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or

                                       7
<PAGE>   8

the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission; provided that in no event shall contributions by a Holder
hereunder exceed the net proceeds from the offering received by such Holder. No
person guilty of fraudulent misrepresentation (with the meaning of Section 11(f)
of the Securities Act) shall be entitled to contributions from any person who is
not guilty of such fraudulent representation.

               2.7 EXCHANGE ACT REGISTRATION. With a view to making available to
the Holders the benefits of Rule 144 promulgated under Securities Act and any
other rule or regulation of the Securities and Exchange Commission (the "SEC")
that may at any time permit a Holder to sell securities of the Company to the
public without registration or pursuant to a registration on Form S-3, the
Company agrees to:

                      (a) use its commercially reasonable best efforts to make
and keep public information available, as those terms are understood and defined
in SEC Rule 144, at all times after ninety (90) days after the effective date of
the first registration statement filed by the Company for the offering of its
securities to the general public;

                      (b) take such reasonable action, including the voluntary
registration of its common stock under Section 12 of the Exchange Act, as is
necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Shares, such action to be taken as soon as practicable after the end
of the fiscal year in which the first registration statement filed by the
Company for the offering of its securities to the general public is declared
effective;

                      (c) file on a timely basis with the SEC all information
that the SEC may require under either of Section 13 or Section 15(d) of the
Exchange Act and, so long as it is required to file such information, take all
action that may be required as a condition to the availability of Rule 144 under
the Securities Act (or any successor exemptive rule hereinafter in effect) with
respect to the Company's common stock;

                      (d) furnish to any Holder forthwith upon request (i) a
written statement by the Company as to its compliance with the reporting
requirements of Rule 144, (ii) a copy of the most recent annual or quarterly
report of the Company as filed with the SEC, and (iii) any other reports and
documents that a Holder may reasonably request in availing itself of any rule or
regulation of the SEC allowing a Holder to sell any such Registrable Shares
without registration.

               2.8 FURTHER OBLIGATIONS OF THE COMPANY. Whenever the Company is
required hereunder to register Registrable Shares, it agrees that it shall also
do the following:

                      (a) Furnish to each selling Holder such copies of the
registration statement (including any amendments thereto) and each preliminary
and final prospectus and any other documents that such Holder may reasonably
request to facilitate the public offering of its Registrable Shares;

                      (b) Use its commercially reasonable best efforts to
register or qualify the Registrable Shares to be registered pursuant to this
Agreement under the applicable securities or "blue sky" laws of such
jurisdictions as any selling Holder may reasonably request; provided, however,
that the Company shall not be obligated to qualify to do business in any
jurisdiction where

                                       8
<PAGE>   9

it is not then so qualified or to take any action that would subject it to the
service of process in suits other than those arising out of the offer or sale of
the securities covered by the registration statement in any jurisdiction where
it is not then so subject;

                      (c) Notify each Holder of Registrable Shares covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under Securities Act of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;

                      (d) Cause all such Registrable Shares registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed;

                      (e) Provide a transfer agent and registrar for all
Registrable Shares registered pursuant hereunder and a CUSIP number for all such
Registrable Shares, in each case not later than the effective date of such
registration;

                      (f) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement;

                      (g) Furnish, at the request of any Holder requesting
registration of Registrable Shares pursuant to this Section 2, on the date that
such Registrable Shares are delivered to the underwriters for sale in connection
with a registration pursuant to this Section 2, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective:

                      (i) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Shares; and

                          (ii) "comfort" letters signed by the Company's
independent public accountants who have examined and reported on the Company's
financial statements included in the registration statement, to the extent
permitted by the standards of the American Institute of Certified Public
Accountants, covering substantially the same matters with respect to the
registration statement (and the prospectus included therein) and (in the case of
the accountants "comfort" letters) with respect to events subsequent to the date
of the financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' "comfort" letters delivered to the underwriters in
underwritten public offerings of securities, but only if and to the extent that
the Company is required to deliver or cause the delivery of such opinion or
"comfort" letters to the underwriters in an underwritten public offering of
securities;

                      (h) Permit each selling Holder or his counsel or other
representatives to inspect and copy such corporate documents and records as may
reasonably be requested by them; and

                                       9
<PAGE>   10

                      (i) Furnish to each selling Holder, upon request, a copy
of all documents filed and all correspondence from or to the SEC in connection
with any such offering unless confidential treatment of such information has
been requested of the SEC.

               2.9 EXPENSES. In the case of a registration under Sections 2.1,
2.2 or 2.3 the Company shall bear all costs and expenses of each such
registration, including, but not limited to, printing, legal and accounting
expenses, SEC filing fees, "blue sky" fees and expenses, and all NASD, stock
exchange listing and qualification fees (including (i) in connection with the
Company's initial Public Offering, reasonable fees and disbursements of counsel
for the Company in its capacity as counsel to the selling Holders hereunder;
provided, however, if Company counsel does not make itself available for this
purpose, the Company will pay the reasonable fees and disbursements of one
counsel for the selling Holders selected by them, and (ii) in connection with
any subsequent registrations pursuant to Section 2.2, reasonable fees and
disbursements of one counsel for the selling Holders selected by them not to
exceed $35,000); provided, however, that the Company shall have no obligation to
pay or otherwise bear (i) any portion of the underwriter's commissions or
discounts attributable to the Registrable Shares being offered and sold by the
Holders of Registrable Shares, or (ii) any of such expenses if the payment of
such expenses by the Company is prohibited by the laws of a state in which such
offering is qualified and only to the extent so prohibited; provided, however,
that the Company shall not be required to pay for any expenses of any
registration proceeding begun pursuant to Section 2.3 if the registration
request is subsequently withdrawn at the request of the Holders initiating such
registration (in which case, subject to the last provision of this Section 2.9
all Holders initiating such registration shall bear such expenses pro rata based
upon the total number of Registrable Shares requested to be included therein by
each such Holder); provided, further, that the Company shall not be required to
pay for any expenses of any registration proceeding begun pursuant to Section
2.2 if the registration request is subsequently withdrawn at the request of the
Initiating Holders (in which case, subject to the last provision of this Section
2.9 all Initiating Holders shall bear such expenses pro rata based upon the
total number of Registrable Shares requested to be included therein by each such
Holder), unless such Initiating Holders agree to forfeit their right to one
demand registration pursuant to Section 2.2; provided further, however, that if
at the time of such withdrawal of registration request under Section 2.2 or 2.3,
(a) the Initiating Holders have learned of a material adverse change in the
condition, business, or prospects of the Company not known to such Holders at
the time of their request, and (b) such Initiating Holders have withdrawn the
request with reasonable promptness following discovery of such material adverse
change, then such Initiating Holders shall not be required to pay any of such
expenses with respect to any registration under either Section 2.2 or 2.3, and
shall retain their rights pursuant to Section 2.2.

               2.10 TRANSFER OF REGISTRATION RIGHTS. The registration rights of
a Holder of Registrable Shares or of a Founder of Piggyback Registrable Shares,
under this Agreement may be transferred (i) in the case of an individual, to any
member of the immediate family of such individual or to any trust for the
benefit of the individual or any such family member or members, (ii) to any
partner or affiliate of a Holder, and (iii) to any transferee provided that the
transferee receives at least 100,000 Registrable Shares and/or Piggyback
Registrable Shares (as adjusted for stock splits, combinations and the like). In
the event of a transfer of registration rights as provided in (i), (ii) or (iii)
above, the transferee shall execute a counterpart to this Agreement and agree to
be bound by the terms of this Agreement. The transferor shall provide the
Company with written notice of such transfer within a reasonable time.
Notwithstanding the foregoing, the registration rights of a Holder or a Founder
under this Agreement may not be transferred to an entity, or a person controlled
by, under common control with or controlling such entity, which is a direct
competitor of the Company.

                                       10
<PAGE>   11

               2.11 NO SUPERIOR RIGHTS. The Company will not grant registration
rights to any person or entity without first obtaining the prior written consent
of the Holders of a majority of the Series A Shares and the Series B Shares,
voting together on an "as converted" basis as a single class.

               2.12 MARKET STAND-OFF AGREEMENT. Provided that all officers and
directors are also so bound, no Holder or Founder shall, to the extent requested
by the Company or any managing underwriter of the Company, sell or otherwise
transfer or dispose of (other than to donees who agree to be similarly bound)
any Registrable Shares during a period (the "Stand-Off Period") up to 180 days
following the effective date of a registration statement of the Company filed
under the Securities Act for the initial Public Offering (or such shorter period
as the Company or managing underwriter may authorize) except for securities sold
as part of the offering covered by such registration statement in accordance
with the provisions of this Agreement. In order to enforce the foregoing
covenant, the Company may impose stock transfer restrictions with respect to the
Registrable Shares of each Holder or Piggyback Registrable Shares held by each
Founder until the end of the Stand-Off Period. Notwithstanding the foregoing,
the obligations described in this Section 2.12 shall not apply to a registration
relating solely to employee benefit plans on Form S-8 or similar forms which may
be promulgated in the future, or a registration relating solely to an SEC Rule
145 transaction on Form S-4 or similar forms which may be promulgated in the
future.

               2.13 TERMINATION OF REGISTRATION RIGHTS. The obligations of the
Company to register any Holder's Registrable Shares pursuant to this Section 2
shall terminate five (5) years after the Company's initial Public Offering
("Initial Offering"). In addition, a Holder's registration rights shall expire
if (a) the Company has completed its Initial Offering and is subject to
provisions of the Exchange Act, (b) all Registrable Securities held by and
issuable to such Holder (and its affiliates, partners, former partners, members
and former members) may be sold under Rule 144(k), and (c) Registrable
Securities held by such Holder equal less than one percent (1%) of the
outstanding shares of common stock of the Company (on an as converted basis).

        3. RIGHT OF FIRST REFUSAL ON COMPANY ISSUANCES.

               3.1 PRO RATA RIGHT. The Company hereby grants to each Holder who
holds at least 200,000 Series A Shares, Series B Shares, or common stock issued
upon conversion thereof (as adjusted for any combinations, consolidations, stock
distributions or stock dividends with respect to such shares), the right of
first refusal to purchase a pro rata share of all New Securities (as defined in
paragraph 3.2 below) which the Company may, from time to time, propose to sell
and issue. A Holder's pro rata share, for purposes of this right of first
refusal, is a ratio, (A) the numerator of which is the number of shares of
common stock held by such Holder or issuable upon conversion of the Series A
Shares or Series B Shares, as the case may be, then held by such Holder on the
date of the Company's written notice pursuant to paragraph 3.3 below; and (B)
the denominator of which is the total number of shares of common stock then
outstanding (assuming full conversion and exercise of all securities convertible
or exercisable into shares of common stock). The Holder shall also be entitled
to a right of first refusal to purchase on a pro rata basis, any shares not
elected to be purchased by the other Holders pursuant to this Section 3.1 in
accordance with the terms set forth in Section 3.3 below. This right of first
refusal shall be subject to the following additional provisions of this Section
3. The right of first refusal in this Section 3.1 shall not be applicable (i) to
the issuance or sale of New Securities to employees, consultants, officers or
directors pursuant to any stock purchase plan or arrangement, stock option plan
or other stock incentive plan or agreement approved by the Board of Directors,
(ii) to or after consummation of an Initial Offering, (iii) to the issuance of
New Securities pursuant to the conversion or exercise of convertible or
exercisable securities, (iv) to

                                       11
<PAGE>   12

the issuance of New Securities in connection with a bona fide business
acquisition by the Company, whether by merger, consolidation, sale of assets,
sale or exchange of stock or otherwise, or (v) to the issuance of New Securities
in connection with debt financing transactions through a bank or other financial
institution or equipment lease financings.

               3.2 DEFINITION OF NEW SECURITIES. "New Securities" shall mean any
capital stock of the Company whether now authorized or not, and rights, options
or warrants to purchase capital stock, and securities of any type whatsoever
that are, or may become, convertible into or exercisable for shares of capital
stock.

               3.3 REQUIRED NOTICES. In the event the Company proposes to
undertake an issuance of New Securities, it shall give each Holder written
notice, pursuant to the provisions of Section 9 hereof, of the proposed
issuance, describing the type of New Securities, the price, the general terms
upon which the Company proposes to issue the same and the pro rata portion of
such New Securities such Holder is entitled to purchase. Each Holder shall have
thirty (30) days after the date of receipt of such notice to agree to purchase
such Holder's pro rata share of such New Securities for the price and upon the
general terms specified in the notice by giving written notice to the Company
and stating therein the quantity of New Securities to be purchased. In the event
the Holders fail to fully exercise the right of first refusal as to their pro
rata share of New Securities (the "Unexercised Securities") offered within said
thirty (30) day period, the Company shall give each Holder who has elected to
exercise such right of first refusal notice that it may elect to purchase all or
any portion of the Unexercised Securities upon similar terms as previously
offered. Each such Holder shall have thirty (30) days after the date of receipt
of such notice to agree to purchase all or any portion of the Unexercised
Securities by giving written notice to the Company and stating therein the
quantity of Unexercised Securities to be purchased; provided that if the Holders
in the aggregate elect to purchase more shares than are available as Unexercised
Securities, such securities shall be allocated to such Holders on a pro rata
basis according to each such Holder's Ownership Percentage.

               3.4 COMPANY'S RIGHT TO SELL. In the event the Holders in the
aggregate fail to exercise the right of first refusal as to all of the New
Securities offered within the 30 or 60 day period, as applicable, provided in
Section 3.3 above, the Company shall have sixty (60) days after the expiration
of such period to sell or enter into an agreement (pursuant to which the sale of
New Securities covered thereby shall be closed, if at all, within sixty (60)
days from the date of said agreement) and to sell all such New Securities
respecting which the Holders' options were not exercised, at a price and upon
general terms no more favorable in any material respect to the purchasers
thereof than specified in the Company's notice. In the event the Company has not
sold within said sixty (60) day period or entered into an agreement to sell all
such New Securities within said sixty (60) day period (or sold and issued all
such New Securities in accordance with the foregoing within sixty (60) days from
the date of said agreement), the Company shall not thereafter issue or sell any
New Securities, without first offering such securities to the Holders in the
manner provided above.

               3.5 ASSIGNMENT. The right of first refusal set forth in this
Section 3 is nonassignable, except that (a) such right is assignable by each
Holder to any wholly-owned subsidiary, to any entity under common investment
management with such Holder (in the case of any Holder that is an investment
company), or to any corporation, entity or other person which is, within the
meaning of the Securities Act, controlled by any such Holder, (b) such right is
assignable between and among any of the Holders, (c) upon the death of any
individual Holder, such right shall pass to the beneficiaries under the deceased
Holder's last will and testament or to the distributees of

                                       12
<PAGE>   13

the deceased Holder's estate, and (d) such right is assignable by a partnership
to its partners in connection with distributions to the partners and if so
assigned will be treated as one Holder for purposes of this Section 3.

               3.6 TERMINATION. The right of first refusal granted to Holders
pursuant to this Section 3 shall terminate upon the closing of the Company's
initial firm commitment underwritten public offering; provided that such right
shall not be applicable to the securities issued in such public offering.

        4. COVENANTS. The Company further agrees to the following covenants
which shall remain in effect until expiration as provided in Section 4.5 below:

               4.1 INFORMATION RIGHTS.

                      (a) The Company shall furnish to each Investor (provided
that such Investor agrees to maintain the confidentiality thereof, it being
understood that, in the case of Intel, such agreement is set forth in that
certain Corporate Non-Disclosure Agreement dated May 4, 1999), as soon as
practicable after the end of each fiscal year, and in any event within ninety
(90) days thereafter, audited consolidated balance sheets of the Company and its
subsidiaries, if any, as at the end of such fiscal year, and audited
consolidated statements of income and cash flows of the Company and its
subsidiaries, if any, for such fiscal year, prepared in accordance with
generally accepted accounting principles, all in reasonable detail and
accompanied by a report and opinion thereon, by independent public accountants
selected by the Company's Board of Directors.

                      (b) In addition to the information specified in Section
4.1(a) above, the Company shall furnish to any Holder of at least 1,000,000
Series A Shares, Series B Shares, or common stock issued upon conversion thereof
(as adjusted for any combinations, consolidations, stock distributions or stock
dividends with respect to such shares), the following reports provided such
Holder agrees to maintain the confidentiality of the following information to
the extent specified by the Board of Directors (it being understood that, in the
case of Intel, such agreement is set forth in that certain Corporate
Non-Disclosure Agreement dated May 4, 1999):

                          (i) As soon as practicable, but in any event within
forty-five (45) days after the end of each of the first three (3) quarters of
each fiscal year of the Company, an unaudited profit or loss statement and
statement of cash flows, and an unaudited balance sheet as of the end of such
fiscal quarter;

                          (ii) As soon as practicable, but in any event within
thirty (30) days after the end of each month an unaudited monthly profit and
loss statement and cash flow statement and balance sheet; and

                          (iii) As soon as practicable, but in any event at
least thirty (30) days before the end of each fiscal year, a budget and business
plan for the next fiscal year, in such manner and form as approved by the Board
of Directors of the Company, which financial plan shall include a projection of
income and a projected cash flow statement for such fiscal year and a projected
balance sheet as of the end of such fiscal year.

               (c) Provided the Holder continues to hold at least 1,000,000
Series A Shares, Series B Shares, or common stock issued upon conversion thereof
(as adjusted for any

                                       13
<PAGE>   14

combinations, consolidations, stock distributions or stock dividends with
respect to such shares), the Holder or Holder's representation shall have the
right during normal business hours, to visit and inspect the properties of the
Company, including its corporation and financial records, and to discuss its
business and finances with officers of the Company.

                      (d) The rights granted pursuant to this Section 4.1 may
not be assigned or otherwise conveyed by any Holder or by any subsequent
transferee of any such rights without the written consent of the Company, which
consent shall not be unreasonably withheld; provided that the Company may refuse
such written consent if the proposed transferee is a competitor of the Company;
and provided further, that no such written consent shall be required if the
transfer is in connection with the transfer of securities to any partner or
retired partner of any Holder that is a general or limited partnership or to any
such partner's estate.

                      (e) The rights granted pursuant to this Section 4.1 shall
terminate upon the Company's Initial Offering. Following the Company's Initial
Offering, the Company shall deliver to Intel copies of the Company's 10-K's,
10-Q's, 8-K's and Annual Reports to Stockholders promptly after such documents
are filed with the SEC.

               4.2 EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK. All options or
restricted stock issued pursuant to the Company's stock option plans and
restricted stock purchase plans shall be approved by the Board of Directors and
shall be subject to a vesting period of not less than four years, unless an
exception to the standard vesting is approved by the Board of Directors.
Additionally, unless otherwise approved by the Board of Directors, the Company
shall cause each employee who becomes a holder of shares of the Company's common
stock, whether through purchase of restricted stock or otherwise, to execute a
stock restriction agreement, pursuant to which the Company shall have right (but
not the obligation) to repurchase at the purchase price paid by the employee all
or any part of the shares held by the employee in the event the employee's
employment with the Company is terminated prior to 48 months from the date of
employment; provided, however, that on the first anniversary of employee's
employment with the Company, 25% of the employee's shares shall no longer be
subject to repurchase, and, provided further that each month following the first
anniversary of employee's employment with the Company, an additional 1.56% of
the employees shares no longer be subject to repurchase. All shares of common
stock held by employees of the Company shall be subject to a right of first
refusal granted to the Company.

               4.3 PROPRIETARY RIGHTS AGREEMENTS. Each officer, employee or
consultant of the Company will execute a proprietary information agreement in a
form approved by the Company's Board of Directors.

               4.4 APPROVAL OF EXPENDITURES. All agreements or transactions
involving expenditures in excess of $1,000,000 shall be reviewed and approved by
the Company's Board of Directors.

               4.5 ELECTION OF DIRECTOR. For so long as entities affiliated with
Behrman Capital ("Behrman Entities") hold at least 50% of the Series B Shares
originally purchased by them pursuant to that certain Series B Preferred Stock
Purchase Agreement dated February 16, 2000 (the "Series B Purchase Agreement")
or common stock issued upon conversion of such Series B Shares, all parties to
this Agreement that hold shares of Series B Preferred Stock shall, at any annual
or special meeting of stockholders at which directors of the Company are to be
elected, vote all such shares of Series B Preferred Stock in favor of the
election of the nominee of Behrman Capital. This Section 4.5 shall

                                       14
<PAGE>   15

apply with equal force to actions by written consent relating to the election of
directors of the Company.

               4.6 EXPIRATION OF COVENANTS. The covenants set forth in this
Section 4 shall expire and be of no further force or effect upon the Company's
Initial Offering.

        5. RIGHT OF PURCHASE IN INITIAL OFFERING.

               (a) Notwithstanding any other provisions of this Agreement, in
the event that the Company undertakes the initial Public Offering of its Common
Stock (the "Initial Offering"), the Company shall request, and use its
commercially reasonable best efforts to cause, the managing underwriter or
underwriters of the Initial Offering to establish a directed shares program (a
"Directed Shares Program"), pursuant to which a limited number of the securities
to be offered in the Initial Offering ("Directed Shares") would be offered to
"friends of the Company" at the initial public offering price. In the event that
any such Directed Shares Program were established, each Series B Holder would
have the right to purchase on a priority basis, at a minimum, such number of
Directed Shares determined by multiplying (i) such Series B Holder's Pro-Rata
Share (as defined in Section 3.1) by (ii) the total number of Directed Shares;
provided that the managing underwriter or underwriters may reduce the number of
Directed Shares included in any Directed Shares Program to the extent counsel to
the Company reasonably deems necessary to comply with applicable laws and
regulations, including without limitation those promulgated by the SEC and/or
The National Association of Securities Dealers, Inc. In the event that the
provisions of this Section 5 may be deemed an offer to sell securities, such
offer shall be void ab initio.

               (b) Each Series B Holder shall have the right to apportion their
participation in the Initial Offering pursuant to this Section 5 among any of
its partners, members, shareholders, affiliates or any other person or entity
under common investment management with such Series B Holder.

               (c) Each Series B Holder shall, as a condition to its
participation in any Directed Share Program, execute such other documents as may
be required of all participants in the Directed Share Program as deemed
necessary by the Company and the Underwriters.

               (d) The rights described in this Section 5 shall terminate and be
of no further force and effect following the consummation of the Company's
Initial Offering.

        6. ASSIGNABILITY. This Agreement shall be binding upon and inure to the
benefit of the respective heirs, successors and assigns of the parties hereto.

        7. LAW. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.

        8. AMENDMENT. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of (i) the Company, and (ii) the holders of a majority of the
Registrable Shares. Notwithstanding anything herein to the contrary, no
amendment or waiver to Section 16 of this Agreement shall be effective without
the written consent of Intel.

                                       15
<PAGE>   16

        9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

        10. NOTICE. Unless otherwise provided, any notice required or permitted
under this Agreement shall be in writing, shall be effective upon receipt or, if
earlier, (i) five (5) days after deposit with the U.S. postal service or other
applicable postal service, if delivered by registered or certified mail, postage
prepaid, return receipt requested, (ii) upon delivery, if delivered by hand,
(iii) one (1) business day after the day of deposit with Federal Express or
similar overnight courier, freight prepaid, if delivered by overnight courier or
(iv) one (1) business day after the day of facsimile transmission, if delivered
by facsimile transmission with copy by first class mail, postage prepaid, and
shall be addressed as follows:

If to Intel, to:             Intel Corporation
                             2200 Mission College Blvd.
                             Mail Stop RN6-46
                             Santa Clara, California  95052
                             Attn:  M&A Portfolio Manager
                             Fax Number:  (408) 765-6038

        with copies to:      Intel Corporation
                             2200 Mission College Blvd.
                             Santa Clara, California 95052
                             Attn:  General Counsel
                             Fax Number:  (408) 765-1859

If to any Series A Holder, to: The name and address set forth on Exhibit A-1
hereto.

If to any Series B Holder, to: The name and address set forth on Exhibit A-2
                               hereto.

If to a Founder, to:           The name and address set forth on Exhibit A-3
                               hereto.

If to the Company, to:         Flashcom, Inc.
                               5312 Bolsa Avenue
                               Huntington Beach, CA 92649
                               Attn:  General Counsel
                               Facsimile:  (714) 799-2412

        with a copy to:        K.C. Schaaf, Esq.
                               Stradling Yocca Carlson & Rauth
                               660 Newport Center Drive, Suite 1600
                               Newport Beach, CA  92660
                               Facsimile:  (949) 725-4100

               Each of the parties herewith shall be entitled to specify another
address by giving notice as aforesaid to each of the other parties hereto.

        11. TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

                                       16
<PAGE>   17

        12. SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

        13. AGGREGATION OF STOCK. All shares of Registrable Shares held or
acquired by affiliated entities or persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.

        14. ENTIRE AGREEMENT. This Agreement (including the Exhibits hereto, if
any) constitutes the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof.

        15. REFERENCES. Any references to forms or schedules governed by the
Securities Act or Exchange Act means such forms or schedules under the
Securities Act and Exchange Act as in effect on the date hereof or any successor
forms or schedules subsequently adopted by the SEC.

        16. DISPUTE RESOLUTION. If there arises a dispute between any party to
this Agreement, including, without limitation Intel, and any other party to this
Agreement regarding this Agreement, those parties agree to negotiate in good
faith to resolve the dispute between them regarding this Agreement. If the
negotiations do not resolve the dispute to the reasonable satisfaction of both
parties, then each party shall nominate one partner, member or senior officer of
the rank of Vice President or higher as its representative. These
representatives shall, within thirty (30) days of a written request by either
party to call such a meeting, meet in person and alone (except for one assistant
for each party) and shall attempt in good faith to resolve the dispute. If the
disputes cannot be resolved by such senior managers in such meeting, the parties
agree that they shall, if requested in writing by either party, meet within
thirty (30) days after such written notification for one day with an impartial
mediator and consider dispute resolution alternatives other than litigation. If
any alternative method of dispute resolution is not agreed upon within thirty
(30) days after the one day mediation, either party may begin litigation
proceedings. This procedure shall be a prerequisite before taking any additional
action hereunder.

        17. INFORMATION CONFIDENTIAL. The parties hereto are bound by the
confidentiality and non-disclosure provisions of Section 7.13 of the Series B
Purchase Agreement.

                                       17
<PAGE>   18

        IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Investors' Rights Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.

                                   FLASHCOM, INC.

                                   By: /s/ RICHARD RASMUS
                                       -----------------------------------------
                                           Richard Rasmus,
                                           President and Chief Operating Officer

                                   SERIES A HOLDERS:

                                   COMMUNICATIONS VENTURES III, L.P.

                                   By:  Com Ven III, LLC, its General Partner

                                   By:  /s/ CLIFF HIGGERSON
                                       -----------------------------------------
                                   Its: Member
                                        ----------------------------------------

                                   COMMUNICATIONS VENTURES III CEO &
                                   ENTREPRENEURS FUND

                                   By:  Com Ven III, LLC, its General Partner

                                   By:  /s/ CLIFF HIGGERSON
                                       -----------------------------------------
                                   Its: Member
                                       ----------------------------------------

<PAGE>   19

                                    MAYFIELD IX

                                    By: Mayfield IX Management, LLC, its General
                                        Partner

                                    By:  /s/ GEORGE A. PAVLOV
                                       -----------------------------------------
                                    Its: Authorized Signatory
                                        ----------------------------------------

                                    MAYFIELD ASSOCIATES FUND IV

                                    By: Mayfield IX Management, LLC, its General
                                        Partner

                                    By:  /s/ GEORGE A. PAVLOV
                                       -----------------------------------------
                                    Its: Authorized Signatory
                                        ----------------------------------------

                                    INTEL CORPORATION

                                    By:  /s/ ARVIND SODHANI
                                       -----------------------------------------
                                    Its: Vice President and Treasurer
                                        ----------------------------------------

                                    SYCR INVESTMENT FUND I, LLC

                                    By:  /s/ STEPHEN T. FREEMAN
                                       -----------------------------------------
                                    Its:
                                        ----------------------------------------

                                    /s/ K.C. SCHAAF
                                    --------------------------------------------
                                        K.C. Schaaf

                                    --------------------------------------------
                                        John McQuillan

                                       20
<PAGE>   20

SIGNATURE PAGE TO FLASHCOM, INC. AMENDED AND RESTATED INVESTORS' RIGHTS
AGREEMENT

                                    SERIES B HOLDERS:

                                    Investor Name:
                                                  ------------------------------
                                    Signature:
                                                  ------------------------------
                                    Print Name:
                                                  ------------------------------
                                    Its:
                                                  ------------------------------

                                    [The Agreement contains counterpart
                                     signature pages for each investor listed
                                     in Schedule A hereto]

<PAGE>   21

                                   EXHIBIT A-1

                 LISTING OF HOLDERS OF SERIES A PREFERRED STOCK

<TABLE>
<CAPTION>

NAME AND ADDRESSES OF HOLDERS                    NO. SHARES OF SERIES A
OF SERIES A PREFERRED STOCK                            PREFERRED
--------------------------------------------------------------------------

<S>                                            <C>
 Communication Ventures III, L.P.              1,682,553
 505 Hamilton Avenue, Ste. 305
 Palo Alto, California 94301

 Communication Ventures III CEO &              84,127
 Entrepreneurs Fund
 505 Hamilton Avenue, Ste. 305
 Palo Alto, California 94301

 Mayfield IX                                   2,685,323
 2800 Sand Hill Road
 Menlo Park, California 94025

 Mayfield Associates Fund IV                   141,333
 2800 Sand Hill Road
 Menlo Park, California 94025

 Intel Corporation                             1,059,996
 2200 Mission College Blvd.
 Mail Stop RN6-46
 Santa Clara, California 95052
 Attn:  M&A Portfolio Manager

 With copies to:

 Intel Corporation
 2200 Mission College Blvd.
 Santa Clara, California 95052
 Attn:  General Counsel

 SYCR Investment Fund I, LLC                   17,667
 660 Newport Center Dr., Suite 1600
 Newport Beach, California 92660

 K.C. Schaaf                                   12,367
 660 Newport Center Dr., Suite 1600
 Newport Beach, California 92660

 John McQuillan                                88,333
 c/o Ann Burnham
 McQuillan Ventures
 1620 Sudbury Road
 Concord, Massachusetts 01742
</TABLE>

<PAGE>   22

<TABLE>
<CAPTION>

                                   EXHIBIT A-2

                 LISTING OF HOLDERS OF SERIES B PREFERRED STOCK

NAME AND ADDRESSES OF INVESTORS                  NO. SHARES OF SERIES B
IN SERIES B PREFERRED STOCK                       PREFERRED PURCHASED
--------------------------------------------------------------------------
<S>                                              <C>
 FIRST CLOSING

 The New Economy Fund                                 1,522,070
 c/o Capital Research and Management Company
 333 South Hope Street, 53rd Floor
 Los Angeles, California  90017

 SMALLCAP World Fund, Inc.                            1,484,018
 c/o Capital Research and Management Company
 333 South Hope Street, 53rd Floor
 Los Angeles, California  90017

 American Variable Insurance Series Global              38,052
 Small Capitalization Fund
 c/o Capital Research and Management Company
 333 South Hope Street, 53rd Floor
 Los Angeles, California  90017

 Blueprint Ventures Emerging Communications           1,225,800
 Fund I, L.P.
 Embarcadero Center Four, Suite 580
 San Francisco, California  94115
 Attn:  Bart Schachter

 C.E. Unterberg, Towbin Private Equity                 456,621
 Partners II, L.P.
 c/o C.E. Unterberg Towbin
 10 East 50th Street
 New York, New York  10022
 Attn:  Mark G. Hadlock

 Intel Corporation                                     552,548
 2200 Mission College Blvd.
 Mail Stop RN6-46
 Santa Clara, California 95052
 Attn:  M&A Portfolio Manager

       With copies to:

       Intel Corporation
       2200 Mission College Blvd.
       Santa Clara, California 95052
       Attn:  General Counsel
</TABLE>

<PAGE>   23

<TABLE>
<CAPTION>

NAME AND ADDRESSES OF INVESTORS                  NO. SHARES OF SERIES B
IN SERIES B PREFERRED STOCK                       PREFERRED PURCHASED
--------------------------------------------------------------------------
<S>                                              <C>
 BancBoston Capital Inc.                               456,621
 435 Tasso Street, Suite 250
 Palo Alto, California  94301
 Attn:  Maia Heymann

 Carlyle High Yield Partners, L.P.                     456,621
 520 Madison Avenue, 41st Floor
 New York, New York  10022
 Attn:  Greg Margolies

 Kohlberg, Kravis, Roberts & Co.                       350,076
 2800 Sand Hill Road, Suite 200
 Menlo Park, California  94025
 Attn:  Adam Clammer

 The Raptor Global Portfolio Ltd.                      454,642
 c/o Tudor Investment Corporation
 40 Rowes Wharf, 2nd Floor
 Boston, Massachusetts  02110
 Attn:  Rick Ganong

 Altar Rock Fund, L.P                                    1,979
 c/o Tudor Investment Corporation
 40 Rowes Wharf, 2nd Floor
 Boston, Massachusetts  02110
 Attn:  Rick Ganong

 Comdisco, Inc.                                        129,376
 6111 North River Road
 Rosemont, Illinois  60018
 Attn:  Venture Group

 TW Trust                                               38,052
 8144 Walnut Hill Lane, Suite 1010
 Dallas, Texas  95231
 Attn:  Connie Adair

 CVT Management LLC                                     30,441
 7385 Caminito Bassano
 La Jolla, California  92037
 Attn:  Alex Roudi
</TABLE>

                                       2
<PAGE>   24

<TABLE>
<CAPTION>

NAME AND ADDRESSES OF INVESTORS                  NO. SHARES OF SERIES B
IN SERIES B PREFERRED STOCK                       PREFERRED PURCHASED
--------------------------------------------------------------------------
<S>                                              <C>
 Internet Investor LLC, Series 8                        30,441
 450 Springfield Avenue, Suit 201
 Summit, New Jersey  07901
 Attn:  Frederick R. Krueger

 Bahram Nour-Omid and                                   30,441
 Doris Nour-Omid Trustee,
 Nour-Omid Family Trust
 2219 Tunbridge Court
 Los Angeles, California  90077

 Sean Tayebi                                            30,441
 939 Coast Boulevard, #16D
 La Jolla, California  92037

 BridgeWest LLC                                         76,104
 c/o Kathy Munro
 4370 La Jolla Village Drive, Suite 400
 San Diego, California  92122

 Steve Lehman                                           76,104
 25742 Simpson Place
 Calabasas, California  91302-3154

 Blake Bertea                                           76,104
 Blackcross
 369 San Miguel Drive, Suite 300
 Newport Beach, California  92660

 Sean Stanfield                                         15,221
 16751 Edgewater Lane
 Huntington Beach, California  92649

 Remington Industries                                   30,441
 3848 McKinley Street
 Corona, California  91719
 Attn:  Jeff Silvers

 David Fuchs                                            30,441
 1775 Newell Road
 Palo Alto, California  94303

 Kevin Wendle                                           30,441
 10671 Chalon Road
 Los Angeles, California  90077
</TABLE>

                                       3
<PAGE>   25

<TABLE>
<CAPTION>

NAME AND ADDRESSES OF INVESTORS                  NO. SHARES OF SERIES B
IN SERIES B PREFERRED STOCK                       PREFERRED PURCHASED
--------------------------------------------------------------------------
 SECOND CLOSING
<S>                                              <C>
 Behrman Capital II L.P.                             3,003,417
 c/o Behrman Capital
 126 East 56th Street
 New York, NY  10022
 Attn:  Grant G. Behrman

       With copies to:

       Behrman Capital
       4 Embarcadero Center, Suite 3640
       San Francisco, CA  94111
       Attn:  William Matthes

 Strategic Entrepreneur Fund II L.P.                    40,273
 c/o Behrman Capital
 126 East 56th Street
 New York, NY  10022
 Attn:  Grant G. Behrman

       With copies to:

       Behrman Capital
       4 Embarcadero Center, Suite 3640
       San Francisco, CA  94111
       Attn:  William Matthes

 Communication Ventures III, L.P.                      850,256
 505 Hamilton Avenue, Ste. 305
 Palo Alto, California 94301

 Communication Ventures III CEO &                       42,513
 Entrepreneurs Fund
 505 Hamilton Avenue, Ste. 305
 Palo Alto, California 94301

 Mayfield IX                                           863,990
 2800 Sand Hill Road
 Menlo Park, California 94025

 Mayfield Associates Fund IV                            45,473
 2800 Sand Hill Road
 Menlo Park, California 94025

 Flash Trust                                           308,220
 c/o Mayfield Funds
 2800 Sand Hill Road
 Menlo Park, California 94025
</TABLE>

                                       4
<PAGE>   26

<TABLE>
<CAPTION>

NAME AND ADDRESSES OF INVESTORS                  NO. SHARES OF SERIES B
IN SERIES B PREFERRED STOCK                       PREFERRED PURCHASED
--------------------------------------------------------------------------
 SECOND CLOSING
<S>                                              <C>
 SYCR  Investment Partnership 2000                      39,052
 660 Newport Center Drive, Suite 1600
 Newport Beach, California  92660

 SYCR Investment Fund II, LLC                            7,610
 660 Newport Center Dr., Suite 1600
 Newport Beach, California 92660

 TOTAL:                                             12,824,351
                                                    ==========
</TABLE>

                                       5
<PAGE>   27

                                   EXHIBIT A-3

                               LISTING OF FOUNDERS

<TABLE>
<CAPTION>

        NAMES AND ADDRESSES OF FOUNDERS                     NO. OF SHARES OF COMMON STOCK
-------------------------------------------------         ----------------------------------

<S>                                                       <C>
                   Brad Sachs                                        11,250,000

                   Andra Sachs                                       11,250,000

</TABLE>

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