Document:

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EXHIBIT 10.1

                               FASTNET CORPORATION

             SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

                          DATED AS OF SEPTEMBER 5, 2001

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                               FASTNET CORPORATION

             SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
             -------------------------------------------------------

                          DATED AS OF SEPTEMBER 5, 2001

                                TABLE OF CONTENTS
                                -----------------

                                                                         Page
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ARTICLE I  PURCHASE, SALE AND TERMS OF SHARES..............................1

1.01. The Series A Convertible Preferred Shares; Definitions...............1
1.02. The Converted Shares.................................................1
1.03. The Warrants.........................................................2
1.04. The Shares...........................................................2
1.05. Purchase Price and Closings..........................................2
1.06. Use of Proceeds......................................................3
1.07. Representations and Warranties by the Purchasers.....................3
1.08. Purchase Price Allocation............................................5

ARTICLE II  CONDITIONS TO PURCHASERS' OBLIGATION...........................6

2.01. Representations and Warranties.......................................6
2.02. Performance..........................................................6
2.03. Documentation at Initial Closing.....................................6
2.04. Private Sale of Common Stock.........................................7
2.06. Board of Directors...................................................8
2.07. Qualifications.......................................................8
2.08. Consents, Waivers, Etc...............................................8
2.09. Due Diligence Results................................................8
2.10. No Adverse Changes...................................................8
2.11. Conditions Precedent to Subsequent Closing...........................8

ARTICLE III  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................9

3.01. Organization and Standing; Subsidiaries..............................9
3.02. Corporate Action....................................................10
3.03. NASDAQ Compliance...................................................11
3.04. Reporting Status....................................................11
3.05. Listing.............................................................11
3.06. No Manipulation of Stock............................................11
3.07. Company not an "Investment Company".................................12
3.08. Governmental Approvals..............................................12
3.09. Litigation..........................................................12
3.10. Certain Agreements of Officers and Key Employees....................13
3.11. Compliance with Other Instruments...................................13
3.12. Financial Information...............................................13
3.13. No Insolvency.......................................................14

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3.14. ERISA...............................................................14
3.15. Transactions with Affiliates........................................14
3.16. Assumptions or Guaranties of Indebtedness of Other Persons..........14
3.17. Investments in Other Persons........................................15
3.18. Securities Act of 1933..............................................15
3.19. Brokers or Finders..................................................15
3.20. Capitalization; Status of Capital Stock.............................15
3.21. Registration Rights.................................................16
3.22. Insurance...........................................................16
3.23. Books and Records...................................................16
3.24. Title to Assets; Patents............................................16
3.26. Computer Programs...................................................17
3.27. Intellectual Property Rights........................................18
3.28. Real Property Holding Corporation...................................18
3.29. Taxes...............................................................18
3.30. Other Agreements....................................................18
3.31. Disclosure..........................................................20

ARTICLE IV  -  DEFINITIONS AND ACCOUNTING TERMS...........................21

4.01. Certain Defined Terms...............................................21
4.02. Accounting Terms....................................................24

ARTICLE V  -  MISCELLANEOUS...............................................24

5.01. No Waiver; Cumulative Remedies......................................24
5.02. Amendments, Waivers and Consents....................................24
5.03. Addresses for Notices...............................................25
5.04. Costs, Expenses and Taxes...........................................25
5.05. Binding Effect; Assignment..........................................26
5.06. Prior Agreements....................................................26
5.07. Severability........................................................26
5.08. Governing Law.......................................................26
5.09. Headings............................................................26
5.10. Counterparts........................................................26
5.11. Further Assurances..................................................26
5.12. Indemnification.....................................................27

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EXHIBITS

  1.01             List of Purchasers
  1.01A            Terms of Series A Convertible Preferred Stock
  1.03             Form of Common Stock Purchase Warrant
  2.03B            Opinion of Morgan, Lewis & Bockius LLP
  2.03F            Shareholders Agreement
  2.03I            Investor Rights Agreement
  2.04-A           Common Stock Purchase Agreement between Founder and Edison
  2.04-B           Escrow Agreement between Founder, the Company and Edison
  3.01             Subsidiaries
  3.09             Litigation
  3.10             Agreements with Officers and Key Employees
  3.15             Transactions with Affiliates
  3.20             Capitalization
  3.24             Title to Assets
  3.26             Computer Programs
  3.29             Taxes
  3.30             Agreements

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                               FASTNET CORPORATION
                              3864 COURTNEY STREET
                          TWO COURTNEY PLACE, SUITE 130
                               BETHLEHEM, PA 18017

                                                         As of September 5, 2001

TO:  The Persons listed on Exhibit 1.01 hereto

         Re:      Series A Convertible Preferred Stock
                  ------------------------------------

Ladies and Gentlemen:

         FASTNET CORPORATION, a Pennsylvania corporation (the "Company"), agrees
with each of you as follows:

                                    ARTICLE I

                       PURCHASE, SALE AND TERMS OF SHARES

         1.01 THE SERIES A CONVERTIBLE PREFERRED SHARES; DEFINITIONS. The
Company has authorized the issuance and sale of up to 5,494,505 shares (the
"Series A Preferred Shares") of its previously authorized but unissued shares of
Series A Convertible Preferred Stock, no par value (the "Series A Preferred
Stock"), at a purchase price of $0.91 per share to the persons (collectively,
the "Purchasers" and, individually, a "Purchaser") and in the respective amounts
set forth in Exhibit 1.01 hereto. A copy of the Company's "Statement With
Respect Shares," which contains a description of the preferences, voting powers,
qualifications, and special or relative rights or privileges of the Series A
Preferred Stock, is attached hereto as Exhibit 1.01A hereto. Capitalized terms
in this Agreement are defined in Section 4.01.

         1.02. THE CONVERTED SHARES. The Company has authorized and has reserved
and covenants to continue to reserve a sufficient number of its previously
authorized but unissued shares of Common Stock to satisfy the rights of
conversion of the holders of the Series A Preferred Stock. Any shares of Common
Stock issuable upon conversion of the Series A Preferred Stock, and such shares
when issued, are herein referred to as the "Converted Shares."

         1.03. THE WARRANTS. The Company has also authorized the issuance to the
Purchasers at the Closings (as defined herein) Common Stock Purchase Warrants
(the "Warrants") for the purchase (subject to adjustment as provided therein) of
up to an aggregate of 1,373,627 shares of the Common Stock in the respective
amounts set forth on Exhibit 1.01 hereto under the heading "Warrants." The
Warrants shall be in the form set forth in Exhibit 1.03 hereto. The Company has
authorized and has reserved and covenants to reserve a sufficient number of its
previously authorized but unissued shares of Common Stock to satisfy the
exercise rights of the holders of the Warrants (the "Warrant Shares"). The term
"Warrants" shall also include any warrant delivered in exchange or replacement
therefor.

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       Series A Convertible Preferred Stock Purchase Agreement -- Page 2

         1.04. THE SHARES. The Series A Preferred Shares, the Converted Shares
and the Warrant Shares are sometimes collectively referred to herein as the
"Shares."

         1.05. PURCHASE PRICE AND CLOSINGS.

                  (a) THE INITIAL CLOSING. The Company agrees to issue and sell
to the Purchasers and, subject to and in reliance upon the representations,
warranties, covenants, terms and conditions of this Agreement, the Purchasers,
severally but not jointly, agree to purchase that number of the Series A
Preferred Shares and Warrants set forth opposite their respective names under
the heading "Initial Closing" in Exhibit 1.01. The aggregate purchase price of
the Series A Preferred Shares and Warrants being purchased by each Purchaser is
set forth opposite such Purchaser's name under the heading "Initial Closing" in
Exhibit 1.01. The purchase and sale shall take place at a closing (the "Initial
Closing") to be held on or before September 5, 2001, at 10:00 A.M., at Morgan,
Lewis & Bockius LLP, 1701 Market Street, Philadelphia, Pennsylvania 19103 or at
such other location and at such other time as may be mutually agreed upon,
subject to the satisfaction of all of the conditions to the Initial Closing
specified in Article II herein. At the Initial Closing, the Company will issue
and deliver certificates evidencing the Series A Preferred Shares and the
Warrants to be sold at the Initial Closing to each of the Purchasers (or its
nominee) against payment of the full purchase price therefor by wire transfer to
the Company.

         (b) SUBSEQUENT CLOSING. The Company and the Purchasers agree that if,
and within ten days after, Shareholder Approval (as defined in Section 5.13
hereof) is obtained, the Company shall issue and sell to the Purchasers and,
subject to and in reliance upon the representations, warranties, covenants,
terms and conditions of this Agreement, the Purchasers, severally but not
jointly, agree to purchase that number of the Series A Preferred Shares and
Warrants set forth opposite their respective names under the heading "Subsequent
Closing" in Exhibit 1.01. The aggregate purchase price of the Series A Preferred
Shares and Warrants being purchased by each Purchaser is set forth opposite such
Purchaser's name under the heading "Subsequent Closing" in Exhibit 1.01. The
purchase and sale shall take place at a closing (the "Subsequent Closing"; the
Initial Closing and the Subsequent Closing referred to herein as a "Closing" and
collectively as the "Closings") to be held on or before the tenth day after
Shareholder Approval is obtained, at 10:00 A.M., at Morgan, Lewis & Bockius LLP,
1701 Market Street, Philadelphia, Pennsylvania 19103 or at such other time as
may be mutually agreed upon, subject to the satisfaction of all of the
conditions to the Subsequent Closing specified in Article II herein. In
addition, the Company may issue and sell at the Subsequent Closing up to
2,988,084 shares of Series A Preferred Stock ("Additional Shares") and Warrants
for one share of Common Stock for each four Additional Shares sold (the
"Additional Warrants") to one or more investors (which may include the

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       Series A Convertible Preferred Stock Purchase Agreement -- Page 3

Purchasers, the "Additional Purchasers); provided, however, that Edison shall
have consented to such sale to the Additional Purchasers. The purchase price for
the Additional Shares to be sold to the Additional Purchasers hereunder shall be
$0.91 per share and $0.01 per Warrant Share. At the Subsequent Closing, the
Company will issue and deliver certificates evidencing the Series A Preferred
Shares and the Warrants to be sold at the Subsequent Closing to each of the
Purchasers and Additional Purchasers (or its nominee) against payment of the
full purchase price therefor by wire transfer to the Company. As a condition to
the Additional Purchaser's investment, the Additional Purchaser shall execute
and deliver to the Company and the other Purchasers a counterpart signature page
to this Agreement, the Investor Rights Agreement and the Shareholders Agreement
and the other documents reasonably required by the Company (the "Other
Documents"). All Purchasers agree to amend Exhibit 1.01 at the time of the
Subsequent Closing to properly reflect the number of Shares and Warrants being
purchased at that time. The Additional Purchasers shall be deemed to be, upon
execution and delivery of a counterpart of this Agreement and each of the Other
Documents, a "Purchaser" for all purposes under this Agreement, with all of the
rights and obligations thereof. The terms "Series A Preferred Shares",
"Purchaser" and "Purchasers", when used in this Agreement, shall respectively be
deemed to include such Additional Shares and Additional Warrants as are issued
and the Additional Purchaser.

         1.06. USE OF PROCEEDS. The Company shall use the proceeds for working
capital acquisitions and other general corporate purposes.

         1.07. REPRESENTATIONS AND WARRANTIES BY THE PURCHASERS. Each of the
Purchasers represents and warrants severally, but not jointly, that:

                  (a) AUTHORIZATION. Such Purchaser has full corporate,
partnership or limited liability company power, as applicable, and authority to
enter into this Agreement and the Other Documents, and to purchase the Series A
Preferred Shares, and the Agreement and the Other Documents, constitute valid
and legally binding obligations of each Purchaser, enforceable in accordance
with their terms. All action on the part of each Purchaser's officers,
directors, shareholders, members, partners, trustees or other governing body
necessary for the authorization, execution and delivery of this Agreement and
the Other Documents by such Purchaser, to the extent such Purchaser is a party
thereto, and the performance of all of such Purchaser's obligations hereunder
and thereunder has been taken. Each of this Agreement and the Other Documents
has been duly executed and delivered by such Purchaser. Neither the execution
and delivery of this Agreement and the Other Documents, nor the consummation by
such Purchaser of the transactions contemplated hereby, violates or conflicts
with any contract, commitment, agreement, understanding or arrangement of any
kind to which such Purchaser is a party or by which such Purchaser is bound.

                  (b) PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made
with such Purchaser in reliance upon such Purchaser's representation to the
Company, which by such Purchaser's execution of this Agreement such Purchaser
hereby confirms, that it will acquire the Series A Preferred Stock and the
Warrants to be acquired by it for its own account, not as a nominee or agent,
and that the Series A Preferred Stock and the Warrants are being and will be
acquired by it for the purpose of investment and not with a view to distribution
or resale thereof.

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       Series A Convertible Preferred Stock Purchase Agreement -- Page 4

                  (c) INVESTMENT EXPERIENCE. Such Purchaser is an investor in
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment
indefinitely and has such knowledge and experience in financial and business
matters that it its capable of evaluating the merits and risks of its investment
in the Series A Preferred Shares. Such Purchaser also represents it has not been
organized for the purpose of acquiring the Series A Preferred Shares. Such
Purchaser understands that the Company has no current intention of registering
the Series A Preferred Shares or the Converted Shares, except at contemplated by
the Investor Rights Agreement.

                  (d) ACCREDITED INVESTOR. Such Purchaser is an "accredited
investor" within the meaning of Securities and Exchange Commission Rule 501 of
Regulation D, as currently in effect.

                  (e) RESTRICTED SECURITIES. Such Purchaser understands that the
Series A Preferred Shares and the Converted Shares it is purchasing are
characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act,
only in certain limited circumstances. In this connection, such Purchaser
represents that it is familiar with SEC Rule 144, as currently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
Such Purchaser is aware that SEC Rule 144 is not currently available for use by
such Purchaser for immediate resale of any of the Series A Preferred Shares or
Converted Shares to be acquired by such Purchaser upon consummation of the
transactions contemplated herein.

                  (f) COMPANY INFORMATION. Each Purchaser has had access to the
Exchange Act Documents (as defined below) and has had an opportunity to discuss
the Company's business, management and financial affairs with directors,
officers and management of the Company and has had the opportunity to review the
Company's operations and facilities. Each Purchaser has also had the opportunity
to ask questions of, and receive answers from, the Company and its management
regarding the terms and conditions of this investment.

                  (g) RESIDENCE. If the Purchaser is an individual, then the
Purchaser resides in the state or province identified in the address of the
Purchaser set forth on Exhibit 1.01; if the Purchaser is a partnership,
corporation, limited liability company or other entity, the office or offices of
the Purchaser in which its investment decision was made is located at the
address or addresses of the Purchaser set forth on Exhibit 1.01.

                  (h) BROKERS' FEES. No Purchaser has taken any action which
would give rise to any claim by any other person for any brokerage commissions,
finders' fees or the like relating to this Agreement or the transactions
contemplated hereby.

                  (i) SECURITIES ACT RESTRICTIONS. The acquisition by each
Purchaser of the Series A Preferred Shares and the Warrants acquired by it shall
constitute a confirmation of the representations and warranties made by each
such Purchaser as at the date of such acquisition. Each of the Purchasers
further represents that it understands and agrees that, until registered under

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       Series A Convertible Preferred Stock Purchase Agreement -- Page 5

the Securities Act of 1933, as amended (the "Securities Act") or transferred
pursuant to the provisions of Rule 144 as promulgated by the Securities and
Exchange Commission (the "SEC"), all certificates evidencing any of the Shares
or the Warrants shall bear a legend, prominently stamped or printed thereon,
reading substantially as follows:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE
         SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
         NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD,
         ASSIGNED MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
         EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
         SECURITIES UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE
         SECURITIES LAWS, OR UPON RECEIPT BY THE COMPANY OF AN OPINION OF
         COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED
         FOR SUCH SALE, TRANSFER OR ASSIGNMENT."

         1.08. PURCHASE PRICE ALLOCATION. The Company and the Purchasers having
adverse interests and as a result of arm's length bargaining, agree that (i)
neither the Purchasers nor any of their partners, members or employees has
rendered or has agreed to render any services to the Company in connection with
this Agreement or the issuance of Warrants; (ii) the Warrants are not being
issued as compensation; and (iii) for the purpose, and within the meaning, of
Section 1273(c)(2) of the Internal Revenue Code of 1986, as amended (the
"Code"), the issue price of the Warrants is $0.01 per Warrant Share. The Company
and the Purchasers acknowledge that this allocation is based on the relative
fair market values of the Preferred Shares and Warrants. The Company and the
Purchasers recognize that this Agreement determines the original issue discount
to be taken into account by the Company and the Purchasers for federal income
tax purposes and they agree to adhere to this Agreement for such purposes.

                                   ARTICLE II

                      CONDITIONS TO PURCHASERS' OBLIGATION

         The obligation of each Purchaser to purchase and pay for the Series A
Preferred Stock and the Warrants to be purchased by it at the Initial Closing is
subject to the fulfillment to Edison's satisfaction of each of the following
conditions as of the applicable Closing date:

         2.01. REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Company set forth in Article III hereof shall be true and
correct in all material respects on the date of the Initial Closing.

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       Series A Convertible Preferred Stock Purchase Agreement -- Page 6

         2.02. PERFORMANCE. All covenants, agreements and conditions contained
in this Agreement to be performed or complied with by the Company at or prior to
the Initial Closing shall have been performed or complied with in all material
respects.

         2.03. DOCUMENTATION AT INITIAL CLOSING. The Purchasers shall have
received prior to or at the Initial Closing all of the following documents or
instruments, or evidence of completion thereof, each in form and substance
reasonably satisfactory to Edison and its counsel:

                  (a) A copy of the Articles of Incorporation of the Company, as
amended (the "Articles of Incorporation"), certified by the Department of State
of the Commonwealth of Pennsylvania as of a date not more than seven (7) days
prior to the Initial Closing date, together with a certified copy of the
Statement With Respect to Shares of the Series A Preferred Stock (the "Series A
Statement"), a copy of the resolutions of the Board of Directors evidencing the
adoption of the Series A Statement, the approval of this Agreement, the issuance
of the Series A Preferred Stock and the Warrants and the other matters
contemplated hereby, a copy of any required vote or consent of the shareholders
of the Company in connection with the transaction contemplated hereby and a copy
of the Bylaws of the Company, as amended, all of which shall have been certified
by the Secretary of the Company to be true, complete and correct, and certified
copies of all documents evidencing other necessary corporate or other action and
governmental approvals, if any, with respect to this Agreement and the Shares.

                  (b) An opinion of Morgan, Lewis & Bockius LLP, counsel to the
Company, in the form of Exhibit 2.03B attached hereto.

                  (c) A certificate of the Secretary of the Company certifying
the names of the officers of the Company authorized to sign this Agreement, the
certificates for the Series A Preferred Stock, the Warrants and the other
documents, instruments or certificates to be delivered pursuant to this
Agreement by the Company or any of its officers, together with the true
signatures of such officers. The Purchasers may conclusively rely on such
certificate until they shall receive a further certificate of the Secretary or
an Assistant Secretary of the Company canceling or amending the prior
certificate and submitting the signatures of the officers named in such further
certificate.

                  (d) A certificate of the President of the Company stating that
the representations and warranties of the Company contained in Article III
hereof and otherwise made by the Company in writing in connection with the
transactions contemplated hereby are true and correct in all material respects
and that all conditions required to be performed prior to or at the Initial
Closing have been performed in all material respects as of the Initial Closing.

                  (e) The Series A Statement of the Series A Preferred Stock of
the Company shall provide for the designation of the rights and preferences of
the Series A Preferred Stock, in the form set forth in Exhibit 1.01A attached
hereto.

                  (f) A Shareholders Agreement in the form set forth in Exhibit
2.03F (the "Shareholders Agreement") duly executed and delivered by the parties
named therein.

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       Series A Convertible Preferred Stock Purchase Agreement -- Page 7

                  (g) A Certificate of Good Standing for the Company certified
by the Department of State of the Commonwealth of Pennsylvania as of a date not
more than three (3) days prior to the Initial Closing date. Certificates of good
standing with respect to the Company, certified by the respective state officer
of the states in which the conduct of the Company's business requires it to be
licensed or qualified to transact business as a foreign corporation and in good
standing, in each case as of a date not more than three (3) days prior to the
Initial Closing date. A certificate of good standing or other document similar
in substance for each of the Company's Subsidiaries issued by the appropriate
government official of all of the jurisdictions of incorporation and
jurisdictions of foreign qualification or licensing of such Subsidiaries.

                  (h) Payment for the costs, expenses, taxes and filing fees
identified in Section 5.04.

                  (i) An Investor Rights Agreement in the form set forth in
Exhibit 2.03I (the "Investor Rights Agreement") duly executed and delivered by
the parties named therein.

         2.04 PRIVATE SALE OF COMMON STOCK. Sonny Hunt (the "Founder"), a holder
of Common Stock of the Company, shall have sold 456,169 shares of Common Stock
to Edison pursuant to a Common Stock Purchase Agreement in the form of Exhibit
2.04-A and acceptable to Edison in its sole discretion, and shall have escrowed
an additional 543,831 shares pursuant to an Escrow Agreement in the form of
Exhibit 2.04-B and acceptable to Edison in its reasonable discretion.

         2.05 [intentionally omitted]

         2.06. BOARD OF DIRECTORS. The Board of Directors of the Company at the
Initial Closing shall consist of seven (7) members, of which the two members
elected solely by the holders of the Series A Preferred Shares shall initially
be Bruce Luehrs and Brit Murdoch (the "Series A Preferred Directors").
Additionally, Bruce Luehrs shall be appointed by the Board of Directors to serve
on the Compensation Committee and Brit Murdoch shall be appointed by the Board
of Directors to serve on the Audit Committee of the Company.

         2.07. QUALIFICATIONS. As of the Closing, all authorizations, approvals
or permits of or filings with, any governmental authority, including state
securities or "Blue Sky" offices, that are required by law in connection with
the lawful sale and issuance of the Series A Preferred Stock and the Warrants
shall have been duly obtained by the Company and shall be effective as of the
Closing, except for any notice that may be required subsequent to the Closing
under applicable state and/or federal securities laws (which, if required, shall
be filed on a timely basis).

         2.08. CONSENTS, WAIVERS, ETC. Prior to the Initial Closing, the Company
shall have obtained all consents or waivers, if any, necessary to execute and
deliver this Agreement and issue the Series A Preferred Stock and the Warrants,
and to carry out the transactions contemplated hereby and thereby, and all such

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       Series A Convertible Preferred Stock Purchase Agreement -- Page 8

consents and waivers shall be in full force and effect. All corporate and other
action and governmental filings necessary to effectuate the terms of this
Agreement, the Series A Preferred Stock, the Warrants and other agreements and
instruments executed and delivered by the Company in connection herewith shall
have been made or taken, except for any post-sale filing that may be required
under federal or state securities laws. In addition to the documents set forth
above, the Company shall have provided to the Purchasers any other information
or copies of documents that the Purchasers may reasonably request.

         2.09. DUE DILIGENCE RESULTS. Edison shall have completed its due
diligence review of the Company to its satisfaction.

         2.10 NO ADVERSE CHANGES. Edison shall not have concluded that a
material adverse change in the financial condition or prospects of the Company
has occurred, nor that any fact exists nor has any event or circumstance
occurred which reasonably could give rise to such a material adverse change.

         2.11. CONDITIONS PRECEDENT TO SUBSEQUENT CLOSING.

                  (a) The Shareholder Approval shall have been obtained.

                  (b) Each of the representations and warranties of the Company
set forth in Article III hereof shall be true and correct in all material
respects on the date of the Subsequent Closing.

                  (c) All covenants, agreements and conditions contained in this
Agreement to be performed or complied with by the Company at or prior to the
Subsequent Closing shall have been performed or complied with.

                  (d) The Purchasers shall have received prior to or at the
Subsequent Closing all of the documents or instruments specified in Section
2.03, or evidence of completion thereof, each in form and substance satisfactory
to Edison and its counsel.

                  (e) The Founder shall have sold 543,831 shares of Common Stock
to Edison pursuant to a Common Stock Purchase Agreement in the form of Exhibit
2.04 and acceptable to Edison in its sole discretion.

                  (f) Prior to the Subsequent Closing, the Company shall have
obtained all consents or waivers, if any, necessary to issue the Series A
Preferred Stock and the Warrants to be issued at such Closing, and to carry out
the transactions contemplated hereby and thereby, and all such consents and
waivers shall be in full force and effect. All corporate and other action and
governmental filings necessary to effectuate the terms of this Agreement, the
Series A Preferred Stock, the Warrants and other agreements and instruments
executed and delivered by the Company in connection herewith shall have been
made or taken, except for any post-sale filing that may be required under
federal or state securities laws. In addition to the documents set forth above,
the Company shall have provided to the Purchasers any other information or
copies of documents that the Purchasers may reasonably request.

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       Series A Convertible Preferred Stock Purchase Agreement -- Page 9

                  (g) Edison shall not have concluded that an adverse change in
the financial condition or prospects of the Company has occurred, nor that any
fact exists nor has any event or circumstance occurred which reasonably could
give rise to such an adverse change.

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         For purposes of this Article III, unless otherwise specified or the
context otherwise requires, the term "Company" shall include the Company and
each of its Subsidiaries. The Company represents and warrants to the Purchasers
as follows:

         3.01. ORGANIZATION AND STANDING; SUBSIDIARIES.

                  (a) The Company is duly incorporated and validly subsisting
corporation in good standing under the laws of the Commonwealth of Pennsylvania
and has all requisite corporate power and authority for the ownership and
operation of its properties and for the carrying on of its business as now
conducted and as now proposed to be conducted and as described in the documents
filed by the Company under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since the end of its most recently completed fiscal year
through the date hereof, including, without limitation, its most recent report
on Form 10-K and its quarterly reports on 10-Q for the quarters ended March 31,
2001 and June 30, 2001 (the "Exchange Act Documents"). The Company is duly
licensed or qualified and in good standing as a foreign corporation authorized
to do business in all jurisdictions wherein the character of the property owned
or leased, or the nature of the activities conducted, by it makes such licensing
or qualification necessary, except in those jurisdictions in which failure to do
so, individually or in the aggregate, would not have a material adverse effect
on the Company or its business.

                  (b) The attached Exhibit 3.01 contains a list of all
Subsidiaries of the Company. Except for such Subsidiaries, the Company does not
(i) own of record or beneficially, directly or indirectly, (A) any shares of
capital stock or securities convertible into capital stock of any other
corporation or (B) any participating interest in any partnership, joint venture
or other non-corporate business enterprise, or (C) any assets comprising the
business or obligations of any other corporation, partnership, joint venture or
other non-corporate business enterprise or (ii) control, directly or indirectly,
any other entity.

                  (c) Each of the Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation and is duly licensed or qualified to
transact business as a foreign corporation and is in good standing in each
jurisdiction in which the nature of the business transacted by it or the
character of the properties owned or leased by it requires such licensing or
qualification, except in those jurisdictions in which failure to do so,

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 10

individually or in the aggregate, would not have a material adverse effect on
the Company or its business. Each of the Subsidiaries has the corporate power
and authority to own and hold its properties and to carry on its business as now
conducted and as proposed to be conducted. All of the outstanding shares of
capital stock of each of the Subsidiaries are owned beneficially and of record
by the Company, one of its other wholly owned Subsidiaries, or any combination
of the Company and/or one or more of its other wholly owned Subsidiaries, all as
specified in Exhibit 3.01, in each case free and clear of any liens, charges,
restrictions, claims or encumbrances of any nature whatsoever, except for those
disclosed in Exhibit 3.01; and, except as disclosed in Exhibit 3.01, there are
no outstanding subscriptions, warrants, options, convertible securities, or
other rights (contingent or other) pursuant to which any of the Subsidiaries is
or may become obligated to issue any shares of its capital stock to any person
other than the Company or one of the other Subsidiaries.

         3.02. CORPORATE ACTION. The Company has all necessary corporate power
and has taken all corporate action required to enter into and perform this
Agreement and any other agreements and instruments contemplated hereby or
executed in connection herewith (collectively, the "Financing Documents"). The
Financing Documents are valid and binding obligations of the Company,
enforceable in accordance with their respective terms. The issuance, sale and
delivery of the Series A Preferred Stock and the Warrants in accordance with
this Agreement, and the issuance and delivery of the Converted Shares upon
conversion of the Series A Preferred Stock, and the issuance and delivery of the
Warrant Shares upon exercise of the Warrants, have been duly authorized by all
necessary corporate action on the part of the Company. Sufficient authorized but
unissued shares of Common Stock have been reserved by appropriate corporate
action in connection with the prospective conversion of the Series A Preferred
Stock at the conversion price and at the prospective exercise price of the
Warrants. The Series A Preferred Stock, when issued, sold and delivered in
accordance with the terms of this Agreement, and upon receipt of the respective
purchase price, will be duly and validly issued, fully paid, non-assessable and
is not, the Converted Shares upon the conversion of the Series A Preferred Stock
will not be, and the Warrant Shares upon exercise of the Warrants will not be
subject to, any Lien, and will not conflict with any provision of any agreement
or instrument to which the Company is a party or by which it or its property is
bound.

         3.03. NASDAQ COMPLIANCE. The Company's Common Stock is registered
pursuant to Section 12(g) of the Exchange Act and listed on The Nasdaq Stock
Market, Inc. National Market (the "Nasdaq National Market"). The Company is
currently in full compliance with Nasdaq requirements and will not take any
action which will cause it to fail to comply.

         3.04 REPORTING STATUS. The Company has filed in a timely manner all
documents that the Company was required to file under the Exchange Act during
the 12 months preceding the date of this Agreement. The following documents
complied in all material respects with the SEC's requirements as of their
respective filing dates, and the information contained therein as of the date
thereof did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were made not
misleading:

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 11

                  (a)      the Company's Annual Report on Form 10-K filed with
                           the SEC on April 2, 2001, Definitive Proxy Statement
                           filed with the SEC on April 30, 2001, Quarterly
                           Reports on Form 10-Q filed with the SEC on May 15,
                           2001 and August 14, 2001 and the registrations on
                           Form S-8 filed with the SEC on July 13, 2001;

                  (b)      All other documents, if any, filed by the Company
                           with the SEC since June 30, 2001 pursuant to the
                           reporting requirements of the Exchange Act.

         3.05. LISTING. The Company has complied and shall continue to comply
with all requirements of the NASD with respect to the issuance of the Shares and
the listing thereof on the Nasdaq National Market, and the consummation of the
transactions contemplated hereby shall not violate any rule or regulation of, or
any agreement with, the NASD or the Nasdaq National Market.

         3.06. NO MANIPULATION OF STOCK. The Company has not taken and will not,
in violation of applicable law, take, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the Shares.

         3.07. COMPANY NOT AN "INVESTMENT COMPANY". The Company has been advised
of the rules and requirements under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). The Company is not, and immediately
after receipt of payment for the Shares will not be, an "investment company" or
an entity "controlled" by an "investment company" within the meaning of the
Investment Company Act and shall conduct its business in a manner so that it
will not become subject to the Investment Company Act.

         3.08. GOVERNMENTAL APPROVALS. Except for the filing of any notice
subsequent to a Closing that may be required under applicable state and/or
federal securities laws (which, if required, shall be filed on a timely basis),
no authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for the execution and delivery by the Company of this Agreement, for the offer,
issue, sale and delivery of the Series A Preferred Stock and the Warrants, for
the issue and delivery of the Converted Shares upon conversion of the Series A
Preferred Stock or for the issue and delivery of the Warrant Shares upon
exercise of the Warrants or for the performance by the Company of its
obligations under this Agreement.

         3.09. LITIGATION. Except as set forth in Exhibit 3.09, there is no
litigation or governmental proceeding or investigation pending or, to the
Company's knowledge, threatened against the Company affecting any of its
respective properties or assets, or against any officer, Key Employee or holder
of more than 5% of the capital stock of the Company (other than any Purchaser)
relating to such person's performance of duties for the Company or relating to
his stock ownership in the Company or otherwise relating to the business of the
Company, nor to the knowledge of the Company has there occurred any event or
does there exist any condition on the basis of which any such material

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 12

litigation, proceeding or investigation might properly be instituted. The
Company is not in default with respect to any order, writ, injunction, decree,
ruling or decision of any court, commission, board or other governmental agency.
There are no actions, suits, claims, investigations or proceedings pending or,
to the knowledge of the Company, threatened (or any basis therefor) which could
reasonably be expected to result, either in any case or in the aggregate, in any
material adverse effect on the business, operations, affairs or condition
(financial or otherwise) of the Company or in its properties or assets taken as
a whole, or which directly or indirectly challenge the validity of this
Agreement, any of the Shares, or any action taken or to be taken pursuant hereto
or thereto (each a "Material Adverse Effect"). The foregoing sentences include,
without limiting their generality, actions pending or, to the knowledge of the
Company, threatened (or any basis therefor) involving the prior employment of
any of the Company's officers or employees or their use in connection with the
Company's business of any information or techniques allegedly proprietary to any
of their former employers.

         3.10. CERTAIN AGREEMENTS OF OFFICERS AND KEY EMPLOYEES.

                  (a) Except as listed in Exhibit 3.10, the Company is not a
party to or obligated in connection with its business with respect to (i)
outstanding contracts with employees, agents, consultants, advisers, sales
representatives, distributors, sales agents or dealers or (ii) collective
bargaining agreements or contracts with any labor union or other representative
of employees or any employee benefits provided for by any such agreement.

                  (b) To the knowledge of the Company, no officer or Key
Employee of the Company is in violation of any term of any employment contract,
patent disclosure agreement, proprietary information agreement, noncompetition
agreement, or any other contract or agreement or any restrictive covenant
relating to the right of any such officer or Key Employee to be employed by the
Company because of the nature of the business conducted or to be conducted by
the Company or relating to the use of trade secrets or proprietary information
of others.

                  (c) To the knowledge of the Company, no officer of the Company
nor any Key Employee of the Company whose termination, either individually or in
the aggregate, would have a Material Adverse Effect, has expressed any present
intention of terminating his employment with the Company.

         3.11. COMPLIANCE WITH OTHER INSTRUMENTS. The Company is in compliance
with the terms and provisions of this Agreement and of its Articles of
Incorporation, as amended, and Bylaws, as amended, and with any material
provision of all mortgages, indentures, leases, agreements and other
instruments, if any, by which it is bound or to which it or any of its
respective properties or assets are subject. The Company is in compliance with
all judgments, decrees, governmental orders, statutes, rules or regulations by
which it is bound or to which any of its properties or assets are subject.
Neither the execution and delivery of this Agreement or the issuance of the
Shares, nor the consummation of any transaction contemplated by this Agreement,
has constituted or resulted in or will constitute or result in a material
default or violation of any term or provision of any of the foregoing documents,
instruments, judgments, agreements, decrees, orders, statutes, rules and
regulations.

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 13

         3.12. FINANCIAL INFORMATION. The financial statements of the Company
and the related notes contained in the Exchange Act Documents present fairly, in
accordance with generally accepted accounting principles, in all material
respects the financial position of the Company and its Subsidiaries as of the
dates indicated, and the results of its operations and cash flows for the
periods therein specified (the "Financial Statements"). Such Financial
Statements (including the related notes) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods therein specified, except as disclosed in the Exchange
Act Documents. The other financial information contained in the Exchange Act
Documents has been prepared on a basis consistent with the Financial Statements
of the Company. The Company does not have reasonable grounds to know of, any
material liability, contingent or otherwise, not adequately reflected in or
reserved against in the Financial Statements or in the notes thereto. Except as
set forth in the Financial Statements, since June 30, 2001, (i) there has been
no Material Adverse Change in the business, assets or condition, financial or
otherwise, operations or prospects of the Company or any of its Subsidiaries,
(ii) neither the business, condition, or operations of the Company nor any of
the properties or assets of the Company have been materially adversely affected
as the result of any legislative or regulatory change, any revocation or change
in any franchise, permit, license or right to do business, or any other event or
occurrence, whether or not insured against; and (iii) the Company has not
entered into any material transaction other than in the ordinary course of
business, made any dividend or distribution on its capital stock, or redeemed or
repurchased any of its capital stock.

         3.13. NO INSOLVENCY. No insolvency proceeding of any character,
including, without limitation, bankruptcy, receivership, reorganization,
composition or arrangement with creditors, voluntary or involuntary, affecting
the Company or any of its assets or properties, is pending or, to the knowledge
of the Company, threatened. The Company has not taken any action in
contemplation of, or that would constitute the basis for, the institution of any
such insolvency proceedings.

         3.14. ERISA. The Company has complied in all material respects with all
applicable laws relating to wages, hours and collective bargaining. Except as
listed in Exhibit 3.14, the Company has not maintained, sponsored, adopted, made
contributions to or obligated itself to make contributions to or to pay any
benefits or grant rights under or with respect to any "Employee Pension Benefit
Plan" as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), "Employee Welfare Benefit Plan" (as defined in
Section 3(1) of ERISA), "multi-employer plan" (as defined in Section 3(37) of
ERISA), plan of deferred compensation, medical plan, life insurance plan,
long-term disability plan, dental plan or other plan providing for the welfare
of any of the Company's or any Affiliate's employees or former employees or
beneficiaries thereof.

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 14

         3.15. TRANSACTIONS WITH AFFILIATES. Except as set forth on Exhibit 3.15
and except as contemplated hereby or consented to by the Purchasers in
accordance with this Agreement, there are no loans, leases, royalty agreements
or other continuing transactions between the Company and (a) any officer,
employee or director of the Company, or (b) any Person owning 5% or more of any
class of capital stock of the Company, or (c) any member of the immediate family
of such officer, employee, director or shareholder, or (d) any corporation or
other entity controlled by such officer, employee, director or shareholder or a
member of the immediate family of such officer, employee, director or
shareholder.

         3.16. ASSUMPTIONS OR GUARANTIES OF INDEBTEDNESS OF OTHER PERSONS.
Except as contemplated hereby or consented to by the Purchasers in accordance
with this Agreement, the Company has not assumed, guaranteed, endorsed or
otherwise become directly or contingently liable on (including, without
limitation, liability by way of agreement, contingent or otherwise, to purchase,
to provide funds for payment, to supply funds to or otherwise invest in the
debtor or otherwise to assure the creditor against loss), any Indebtedness of
any other Person.

         3.17. INVESTMENTS IN OTHER PERSONS. The Company has not made any loan
or advance to any Person, other than in the normal course of business and on an
arm's length basis on commercially reasonable terms and as reflected in the
Financial Statements, which, after giving effect to the transactions
contemplated hereby, is outstanding on the date of this Agreement, nor is it
committed or obligated to make any such loan or advance.

         3.18. SECURITIES ACT OF 1933. The Company has complied and will comply
with all applicable federal and state securities laws in connection with the
offer, issuance and sale of the Shares. Neither the Company nor anyone acting on
its behalf has or will sell, offer to sell or solicit offers to buy Shares, or
solicit offers with respect thereto from, or enter into any preliminary
conversations or negotiations relating thereto with, any Person, so as to bring
the issuance and sale of Shares under the registration provisions of the
Securities Act and applicable state securities laws.

         3.19. BROKERS OR FINDERS. No Person has or will have, as a result of
the transactions contemplated by this Agreement, any right, interest or valid
claim against or upon the Company for any commission, fee or other compensation
as a finder or broker because of any act or omission by the Company or any of
their respective agents.

         3.20. CAPITALIZATION; STATUS OF CAPITAL STOCK. The Company has a total
authorized capitalization consisting of (i) 50,000,000 shares of Common Stock,
no par value, of which 17,990,947 shares are issued and outstanding on the date
hereof; and (ii) 10,000,000 shares of preferred stock, no par value, 5,494,505
of which shares are designated as Series A Preferred Stock, of which no shares
are issued and outstanding on the date hereof, without giving effect to the
transactions contemplated hereby. All the outstanding shares of capital stock of
the Company have been duly authorized, and are validly issued, fully paid and
non-assessable. The Series A Preferred Stock, when issued and delivered in
accordance with the terms hereof and after payment of the purchase price
therefor, the Converted Shares, when issued and delivered upon conversion of the
Series A Preferred Stock pursuant to the Company's Articles of Incorporation, as
amended by the Series A Statement, and the Warrant Shares when issued and
delivered upon exercise of the Warrants, will be duly authorized, validly
issued, fully-paid and non-assessable. Except as otherwise set forth in Exhibit

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 15

3.20, no preemptive, conversion or other rights, options, warrants,
subscriptions or purchase rights of any nature to acquire from the Company
shares of capital stock or other securities are authorized, issued or
outstanding, nor is the Company obligated in any other manner to issue shares of
its capital stock or other securities except as contemplated by this Agreement.
Except as set forth in Exhibit 3.20, there are no restrictions on the transfer
of shares of capital stock of the Company other than those imposed by relevant
federal and state securities laws and as otherwise contemplated by this
Agreement, the Shareholders Agreement and the Investor Rights Agreement. Other
than as provided in this Section, there are no agreements, understandings,
trusts or other collaborative arrangements or understandings concerning the
voting of the capital stock of the Company. The offer and sale of all capital
stock and other securities of the Company issued before the Initial Closing
complied with or were exempt from all applicable federal and state securities
laws and, to the Company's knowledge, no shareholder has a right of rescission
with respect thereto.

         3.21. REGISTRATION RIGHTS. Except as listed on Exhibit 3.21 and except
for the rights granted to the Purchasers pursuant to the Investor Rights
Agreement, no Person has demand or other rights to cause the Company to file any
registration statement under the Securities Act relating to any securities of
the Company or any right to participate in any such registration statement.

         3.22. INSURANCE. The Company carries insurance covering its properties
and businesses customary for the type and scope of its properties and
businesses.

         3.23. BOOKS AND RECORDS. The books of account, ledgers, order books,
records and documents of the Company accurately and completely reflect all
material information relating to the business of the Company, the location and
collection of its assets, and the nature of all transactions giving rise to the
obligations or accounts receivable of the Company.

         3.24. TITLE TO ASSETS; PATENTS.

         (a) The Company has good and marketable title in fee to such of its
fixed assets, if any, as are real property, and good and marketable title to all
of its other assets and properties, free of any mortgages, pledges, charges,
Liens, security interests or other encumbrances of any kind, except for those
disclosed on Exhibit 3.24. All leases under which the Company is operating are
valid and subsisting and in full force and effect.

         (b) Set forth in Exhibit 3.24 is a list and brief description of all
patents, patent applications, trademarks, trademark applications, service marks,
service mark applications, trade names and registered copyrights, and
applications for such that are in the process of being prepared, owned by or
registered in the name of the Company, or of which the Company is a licensor or
licensee or in which the Company has any right, and in each case a brief
description of the nature of such right. Except as set forth in Exhibit 3.24,
there is no adverse claim that would interfere with the Company's right to use
the patents, patent rights, permits, licenses, trade secrets, trademarks,
trademark rights, trade names or trade name rights or franchises, copyrights,

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 16

inventions, software and Intellectual Property Rights being used in the
Company's business as now operated, the conduct of the Company's business as now
operated does not conflict and will not conflict with valid U.S. patents, patent
rights, permits, licenses, trade secrets, trademarks, trademark rights,
tradenames or tradename rights or franchises, copyrights, inventions, and U.S.
Intellectual Property Rights of any other Person. No product or process
presently used, manufactured, marketed, offered, sold or used by the Company
will violate any license or infringe on any U.S. Intellectual Property Rights of
any other Person; and, except as set forth in Exhibit 3.24, neither the
Company's property rights nor the present operation of the Company's business
conflicts with the rights of others. Except as set forth in Exhibit 3.24, no
claim is pending or, to the Company's knowledge, threatened to the effect that
any such intellectual property owned or licensed by the Company, or which the
Company otherwise has the right to use, is invalid or unenforceable by the
Company, and the Company has no reason to believe that any patents or
Intellectual Property Rights owned or used by the Company may be invalid. The
Company has no obligation to compensate any Person for the use of any such
patents or rights and the Company has not granted any Person any license or
other rights to use in any manner any of the patents or rights of the Company,
whether requiring the payment of royalties or not. The Company has not entered
into any agreement to indemnify any other Person against any charge of
infringement of any patent, trademark, trade name, service mark or copyright.

         3.25. [intentionally omitted]

         3.26. COMPUTER PROGRAMS.

                  (a) Set forth in Exhibit 3.26 is a list and brief description
of the Computer Programs (other than off-the-shelf Computer Programs) owned,
licensed or otherwise used by the Company in connection with the operation of
its business as currently conducted (such Computer Programs being referred to
herein as the "Company Software"), identifying with respect to each such
Computer Program whether it is owned, licensed or otherwise used by the Company.
Exhibit 3.26 identifies all material agreements relating to the Company Software
(the "Software Contracts") and further classifies each such Software Contract
under one of the following categories: (A) license to use third party software;
(B) development contract, work-for-hire agreement, or consulting agreement; (C)
distributor, dealer or value added reseller agreement; (D) license or sublicense
to a third party (including agreements with end-users); (E) maintenance, support
or enhancement agreement; or (F) other.

                  (b) Except as disclosed in Exhibit 3.26, the Computer Programs
included in the Company Software are (i) owned by the Company, (ii) currently in
the public domain or otherwise available to the Company without the approval or
consent of any third party, or (iii) licensed or otherwise used by the Company
pursuant to the terms of valid, binding written agreements (assuming the due
authorization and execution by all other parties thereto).

                  (c) No portion of the Company Software sold or licensed by the
Company directly or indirectly to end users contained, on the date of shipment
by the Company, no portion of the Company Software currently for sale or license
directly or indirectly to end users contains, and, to the knowledge of the
Company, no portion of any other Company Software contains any software routines
or hardware components designed to permit unauthorized access; or, without
permission, to disable or erase software, hardware or data.

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 17

                  (d) All personnel, including employees, agents, consultants,
and contractors, who have contributed to or participated in the conception and
development of any of the Company Software either (i) have been party to a
"work-for-hire" arrangement or agreement with the Company, whether in accordance
with applicable federal and state law, domestic or foreign, or otherwise, that
has accorded the Company full, effective, exclusive and original ownership of
all tangible and intangible property thereby arising, or (ii) have executed
appropriate instruments of assignment in favor of the Company as assignee that
have conveyed to the Company full, effective and exclusive ownership of all
tangible and intangible property thereby arising.

         3.27. INTELLECTUAL PROPERTY RIGHTS. The Company owns or possesses or
otherwise has the legally enforceable perpetual right to use, and has the right
to bring actions for infringement of, all U.S. Intellectual Property Rights
necessary or required for the conduct of its business as currently conducted,
including all U.S. Intellectual Property Rights pertaining to the Company
Software.

         3.28. REAL PROPERTY HOLDING CORPORATION. Since its date of
incorporation, the Company has not been, and as of the date of the Initial
Closing shall not be, a "United States real property holding corporation," as
defined in Section 897(c)(2) of the Code, and in Section 1.897-2(b) of the
Treasury Regulations issued thereunder. The Company has no current plans or
intentions which would cause the Company to become a "United States real
property holding corporation," and the Company has filed with the IRS all
statements, if any, with its United States income tax returns which are required
under Section 1.897-2(h) of the Treasury Regulations.

         3.29. TAXES. The Company has filed all tax returns, federal, state,
county and local, domestic and foreign, required to be filed by it (giving
effect to validly invoked extensions of time within which to file such returns),
and the Company has paid all taxes shown to be due by such returns as well as
all other taxes, assessments and governmental charges which have become due or
payable, including without limitation all taxes which the Company is obligated
to withhold from amounts owing to employees, creditors and third parties. The
Company has established adequate reserves for all taxes accrued but not yet
payable to the extent required by generally accepted accounting principles.
Except as set forth in Exhibit 3.29, all material tax elections of any type
which the Company has made as of the date hereof are set forth in the Financial
Statements. No deficiency assessment with respect to or, proposed adjustment of
the Company's federal, state, county or local taxes, domestic and foreign, is
pending or, to the knowledge of the Company, threatened. There is no tax lien
(other than for current taxes not yet due and payable), whether imposed by any
federal, state, county or local taxing authority, domestic or foreign,
outstanding against the assets, properties or business of the Company.

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 18

         3.30. OTHER AGREEMENTS. Except for the Software Contracts identified in
Exhibit 3.26 or as otherwise set forth in the attached Exhibit 3.30, the Company
is not a party to or otherwise bound by any written or oral ("Contracts"):

                  (a) distributor, dealer or manufacturer's representative
contract or agreement which is not terminable on less than ninety (90) days'
notice without cost or other liability to the Company (except for contracts
which, in the aggregate, are not material to the business of the Company);

                  (b) sales agreement which entitles any customer to a rebate or
right of set-off, to return any product to the Company after acceptance thereof
or to delay the acceptance thereof, or which varies in any material respect from
the Company's standard form contracts (except for contracts which, in the
aggregate, are not material to the business of the Company);

                  (c) agreement with any labor union in the United States (and,
to the Company's knowledge, no organizational effort is being made with respect
to any of its employees);

                  (d) agreement with any supplier containing any provision
permitting any party other than the Company to renegotiate the price or other
terms, or containing any pay-back or other similar provision, upon the
occurrence of a failure by the Company to meet its obligations under the
agreement when due or the occurrence of any other event (except for contracts
which, in the aggregate, are not material to the business of the Company);

                  (e) agreement for the future purchase of fixed assets or for
the future purchase of materials, supplies or equipment in excess of its normal
operating requirements;

                  (f) agreement for the employment of any officer, individual,
employee or other Person (whether of a legally binding nature or in the nature
of informal understandings) on a full-time or consulting basis which is not
terminable on notice without cost or other liability to the Company, except
accrued vacation pay (an "Employment Agreement");

                  (g) bonus, incentive, pension, profit-sharing, retirement,
hospitalization, insurance, stock purchase, stock option or similar plan,
agreement or understanding pursuant to which benefits are provided to any
employee of the Company (other than group insurance plans applicable to
employees generally or as otherwise required by law);

                  (h) agreement or indenture relating to the borrowing of money
or to the mortgaging or pledging of, or otherwise placing a lien or security
interest on, any material asset of the Company;

                  (i) agreement, or group of related agreements with the same
party or any group of affiliated parties, under which the Company has advanced
or agreed to advance money, has agreed to lease any real property as lessee or
lessor, or has agreed to lease any personal property as lessee or lessor if such
lease for personal property was not entered into in the ordinary course of
business;

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 19

                  (j) agreement or obligation (contingent or otherwise) to
issue, sell or otherwise distribute or to repurchase or otherwise acquire or
retire any shares of its capital stock or any of its other equity securities
(other than in connection with the transactions contemplated by this Agreement);

                  (k) assignment, license or other agreement with respect to any
form of intangible property, which assignment, license or other agreement was
entered into other than in the ordinary course of business;

                  (l) agreement under which it has granted any person
registration rights with respect to its capital stock (other than the Investor
Rights Agreement);

                  (m) agreement under which it has limited or restricted its
right to compete with any person in any respect; or

                  (n) except as set forth above, any other agreement or group of
related contracts with the same party involving more than $100,000, which
agreement or group of agreements is not terminable by the Company without
penalty upon notice of thirty (30) days or less, but excluding any agreement or
group of agreements with a customer of the Company for the sale, lease or rental
of the Company's products or services if such agreement or group of agreements
was entered into by the Company in the ordinary course of business.

Except as set forth on Exhibit 3.30, the Company and, to the Company's knowledge
after due inquiry, each other party thereto have in all material respects
performed all the actions required to be performed by them to date, have
received no notice of default and are not in material default under any lease,
agreement or contract now in effect to which the Company is a party or by which
it or its property may be bound. The Company has no present expectation or
intention of not fully performing all its respective material obligations under
each such lease, contract or other agreement, and the Company has no knowledge
of any material breach or anticipated breach by the other party to any contract
or commitment to which the Company is a party. The Company is in material
compliance with all of the terms and provisions of its articles of incorporation
and bylaws.

         3.31. DISCLOSURE. Neither this Agreement, the Exchange Act Documents
nor any other agreement, document, certificate or written statement furnished to
the Purchasers or their special counsel by or on behalf of the Company in
connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading. There is no fact
within the knowledge of the Company that has not been disclosed herein or in
writing to the Purchasers or in the Exchange Act Documents and which could have
a Material Adverse Effect. Without limiting the generality of the foregoing,
except as disclosed in the Exchange Act Documents, neither the Company nor any
of its Subsidiaries has any knowledge that there exists, or there is pending or
planned, any statute, rule, law, regulation, standard or code that would have a
Material Adverse Effect.

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 20

                                   ARTICLE IV

                        DEFINITIONS AND ACCOUNTING TERMS

         4.01. CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

         "Additional Shares" and "Additional Warranties" have the meanings
attributable to them in Section 1.05 of this Agreement.

         "Affiliate" means any Person who, directly or indirectly, controls, is
controlled by or is under common control with any other Person.

         "Agreement" means this Series A Convertible Preferred Stock Purchase
Agreement as from time to time amended and in effect between the parties,
including all Exhibits hereto.

         "Board of Directors" means the board of directors of the Company as
constituted from time to time.

         "Closing" has the meaning attributable to it in Section 1.04 of this
Agreement.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Common Stock" includes (a) the Company's Common Stock, no par value,
as authorized on the date of this Agreement, (b) any other capital stock of any
class or classes (however designated) of the Company, authorized on or after the
date hereof, the holders of which shall have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and
liquidating dividends after the payment of dividends and distributions on any
shares entitled to preference, and the holders of which shall ordinarily, in the
absence of contingencies or in the absence of any provision to the contrary in
the Articles of Incorporation, be entitled to vote for the election of a
majority of directors of the Company (even though the right so to vote has been
suspended by the happening of such a contingency or provision), and (c) any
other securities into which or for which any of the securities described in (a)
or (b) may be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.

         "Company" means and shall include, unless otherwise specified or the
context otherwise requires, FASTNET CORPORATION, a Pennsylvania corporation, and
each of its predecessors, successors and assigns.

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 21

         "Computer Programs" means (i) any and all computer programs (consisting
of sets of statements or instructions to be used directly or indirectly in a
computer in order to bring about a certain result), and (ii) all associated data
and compilations of data, regardless of their form or embodiment. "Computer
Programs" shall include, without limitation, all source code, object code and
natural language code therefor, all versions thereof, all screen displays and
designs thereof, all component modules, all descriptions, flow-charts and other
work product used to design, plan, organize and develop any of the foregoing,
and all documentation, including without limitation user manuals and training
materials, relating to any of the foregoing.

         "Consolidated" and "consolidating" when used with reference to any term
defined herein mean that term as applied to the accounts of the Company and its
Subsidiaries consolidated in accordance with generally accepted accounting
principles.

         "Converted Shares" has the meaning attributable to it in Section 1.02
of this Agreement.

         "Edison" shall mean Edison Venture Fund IV, L.P.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Exchange Act Documents" has the meaning attributable to it in Section
3.01(a).

         "Financial Statements" has the meaning attributable to it in Section
3.12.

          "Financing Documents" has the meaning attributable to it in Section
3.02.

         "Founder" has the meaning attributable to it in Section 2.04,.

         "Indebtedness" means all obligations, contingent and otherwise, which
should, in accordance with generally accepted accounting principles, be
classified upon the obligor's balance sheet (or the notes thereto) as
liabilities, but in any event including liabilities secured by any mortgage on
property owned or acquired subject to such mortgage, whether or not the
liability secured thereby shall have been assumed, and also including (i) all
guaranties, endorsements and other contingent obligations, in respect of
Indebtedness of others, whether or not the same are or should be so reflected in
said balance sheet (or the notes thereto), except guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business and (ii) the present value of any lease payments due
under leases required to be capitalized in accordance with applicable Statements
of Financial Accounting Standards, determined by discounting all such payments
at the interest rate determined in accordance with applicable Statements of
Financial Accounting Standards.

         "Initial Closing" has the meaning attributable to it in Section 1.05 of
this Agreement.

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 22

         "Intellectual Property Rights" means all of the following: (i) patents,
patent applications, patent disclosures and all related continuation,
continuation-in-part, divisional, reissue, re-examination, utility, model,
certificate of invention and design patents, patent applications, registrations
and applications for registrations, (ii) trademarks, service marks, trade dress,
logos, tradenames, service names and corporate names and registrations and
applications for registration thereof, (iii) copyrights and registrations and
applications for registration thereof, (iv) mask works and registrations and
applications for registration thereof, (v) trade secrets and confidential
business information, whether patentable or nonpatentable and whether or not
reduced to practice, know-how, manufacturing and product processes and
techniques, research and development information, copyrightable works,
financial, marketing and business data, pricing and cost information, business
and marketing plans and customer and supplier lists and information, (vi)
Computer Programs, (vii) other proprietary rights relating to any of the
foregoing (including without limitation associated goodwill and remedies against
infringements thereof and rights of protection of an interest therein under the
laws of all jurisdictions) and (viii) copies and tangible embodiments thereof.

         "Investment Company Act" means the Investment Company Act of 1940, as
amended.

         "Investor Rights Agreement" has the meaning attributable to it in
Section 2.03(i).

         "Key Employee" means and includes the President, chief executive
officer, chief financial officer, chief operating officer, chief technology
officer, or vice president of operations, research, development, sales or
marketing.

         "Lien" means, any mortgage, pledge, assessment, securities interest,
encumbrance, lien, lease, levy, claim or charge of any kind, including, without
limitation, any conditional sale or other title retention agreement, any lease
in the nature thereof and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction and including
any lien or charge arising by statute or other law.

         "Material Adverse Change" means a material adverse change in the
business, operations, affairs, or condition (financial or otherwise) of the
Company and its Subsidiaries, as a whole.

         "Material Adverse Effect" has the meaning attributable to it in Section
3.09.

         "Nasdaq National Market" and "NASD" have the meanings attributable to
them in Section 3.03.

         "Other Documents" has the meaning attributable to it in Section
1.05(b).

         "Person" means an individual, corporation, partnership, joint venture,
trust, or unincorporated organization, or a government or any agency or
political subdivision thereof.

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 23

         "Purchaser" and "Purchasers" has the meaning attributable to those
words in Section 1.01 of this Agreement and shall include the Purchasers and
also any other valid holder of any of the Series A Preferred Stock and any
Converted Shares issued or issuable upon conversion of such Series A Preferred
Stock.

         "SEC" means the U.S. Securities and Exchange Commission.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Series A Preferred Directors" has the meaning attributable to Section
2.06 of this Agreement.

         "Series A Preferred Stock" means the Series A Convertible Preferred
Stock of the Company, no par value, having the preferences, voting powers,
qualifications and special or relative rights or privileges set forth in Exhibit
1.01A hereto.

         "Series A Statement" has the meaning attributable to it in Section
2.03.

         "Shares" has the meaning attributable to it in Section 1.04 of this
Agreement.

         "Shareholders Agreement" has the meaning attributable in Section
2.03(f).

         "Subsequent Closing" has the meaning attributable to it in Section 1.05
of this Agreement.

         "Subsidiary" or "Subsidiaries" means any corporation or trust of which
the Company and/or any of its other Subsidiaries directly or indirectly owns at
the time outstanding shares of every class of such corporation or trust other
than directors' qualifying shares comprising at least fifty percent (50%) of the
voting power of such corporation or trust.

         "Warrant" and "Warrant Shares" have the meaning attributable to them in
Section 1.03 of this Agreement.

         4.02. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistently applied, and all financial data submitted pursuant to
this Agreement shall be prepared in accordance with such principles.

                                    ARTICLE V
                                  MISCELLANEOUS

         5.01. NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the part
of any party to this Agreement in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 24

         5.02. AMENDMENTS, WAIVERS AND CONSENTS. Except as otherwise provided in
this Agreement, changes in or additions to this Agreement may be made, and
compliance with any covenant or provision set forth herein may be omitted or
waived, with the written consent of the Company if the Company (i) shall obtain
consent thereto in writing from the holder or holders of at least a majority in
interest of the Series A Preferred Shares, and (ii) shall deliver copies of such
consent in writing to any holders of any Shares who did not execute such
consent. Any waiver or consent may be given subject to satisfaction of
conditions stated therein and any waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
Notwithstanding anything to the contrary contained herein, any amendment which
(i) increases any Purchaser's obligations hereunder, or (ii) grants to any one
or more Purchasers any rights more favorable than any rights granted to all
other Purchasers hereunder, must be approved by each Purchaser so as to be
effective against such Purchaser.

         5.03. ADDRESSES FOR NOTICES. All notices, requests, demands and other
communications provided for hereunder shall be in writing (including facsimile
communication) and mailed, faxed or delivered to each applicable party at the
address set forth in Exhibit 1.01 hereto or at such other address as to which
such party may inform the other parties in writing in compliance with the terms
of this Section.

         If to any other holder of the Shares: at such holder's address for
notice as set forth in the register maintained by the Company, or, as to each of
the foregoing, at the addresses set forth on Exhibit 1.01 hereto or at such
other address as shall be designated by such Person in a written notice to the
other parties complying as to delivery with the terms of this Section.

         If to the Company: at the address set forth on page 1 hereof, or at
such other address as shall be designated by the Company in a written notice to
the other parties complying as to delivery with the terms of this Section.

         All such notices, requests, demands and other communications shall,
when mailed (which mailing must be accomplished by first class mail, postage
prepaid; express overnight courier service; or registered mail, return receipt
requested) or transmitted by facsimile, be effective three days after deposited
in the mails or upon transmission by facsimile, respectively, addressed as
aforesaid, unless otherwise provided herein.

         5.04. COSTS, EXPENSES AND TAXES. The Company agrees to pay in
connection with the preparation, execution and delivery of this Agreement and
the issuance of the Preferred Shares, the fees and expenses of Testa, Hurwitz &
Thibeault, LLP, special counsel for the Purchasers; provided, however, after the
Company has paid $30,000 in fees and expenses, the Company will only be
obligated to pay fifty percent (50%) of any additional fees and expenses, with
the Purchasers paying the remaining fifty percent (50%). In addition, the
Company shall pay any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of this Agreement, the
issuance of the Preferred Shares and the other instruments and documents to be
delivered hereunder or thereunder, and agrees to hold the Purchasers harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes.

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 25

         5.05. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Company and the Purchasers and their respective
heirs, successors and valid assigns, except no party hereto shall have the right
to delegate any of its respective obligations hereunder or to assign its
respective rights hereunder or any interest herein without the prior written
consent of the holders of at least a majority in interest of the Shares.

         5.06. PRIOR AGREEMENTS. This Agreement constitutes the entire agreement
between the parties and supersedes any prior understandings or agreements
concerning the purchase and sale of the Shares.

         5.07. SEVERABILITY. The provisions of this Agreement and the terms of
the Series A Preferred Stock are severable and, in the event that any court of
competent jurisdiction shall determine that any one or more of the provisions or
part of a provision contained in this Agreement or the Preferred Stock shall,
for any reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision or part of a provision of this Agreement or the terms of the Series A
Preferred Stock; but this Agreement and the terms of the Series A Preferred
Stock shall be reformed and construed as if such invalid or illegal or
unenforceable provision, or part of a provision, had never been contained
herein, and such provisions or part reformed so that it would be valid, legal
and enforceable to the maximum extent possible.

         5.08. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the internal laws of the Commonwealth of
Pennsylvania, without regard to its principles of conflicts of laws.

         5.09. HEADINGS. Article, Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.

         5.10. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.

         5.11. FURTHER ASSURANCES. From and after the date of this Agreement,
upon the request of any Purchaser or the Company, the Company and the Purchasers
shall execute and deliver such instruments, documents and other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement and the Shares.

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 26

         5.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties set forth in this Agreement shall survive until the expiration of
twelve (12) months following the Subsequent Closing and be of no further force
or effect after such expiration, except with respect to any action commenced
prior to such expiration and except that the representations and warranties set
forth in Sections 3.20, 3.24, 3.26, 3.27 and 3.29 shall survive for the
applicable statutory period.

         5.13 SHAREHOLDER APPROVAL. The Company covenants and agrees that it
shall, promptly after the date hereof but in any event within 45 days of the
date hereof, convene a meeting of its shareholders at which it shall seek their
approval to issue the securities to be sold to the Purchasers (including any
Additional Purchasers) at the Subsequent Closing in light of the overall
transactions contemplated hereby (the "Shareholder Approval"). The Board of
Directors of the Company shall recommend the transactions contemplated hereby to
the Company's shareholders and request that they approve such issuance.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 27

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an instrument under seal as of the date first above written.

                                   **********

THE COMPANY:                                     PURCHASERS:

FASTNET CORPORATION                              EDISON VENTURE FUND IV, L.P.
                                                 By: EDISON PARTNERS IV, L.P.

By:
     Name:                                       By:
          ----------------------------             -----------------------------
    Title:                                         Bruce Luehrs, General Partner
           ---------------------------

                                                 STRATTECH PARTNERS I, L.P.
                                                 By: Strattech Partners, LLC

                                                 By:
                                                     Name:
                                                     Title:  Managing Director

<PAGE>
       Series A Convertible Preferred Stock Purchase Agreement -- Page 28

                                                                    EXHIBIT 1.01
                                                                    ------------

<TABLE>
<CAPTION>

                                 INITIAL CLOSING
                                 ---------------

                                     SERIES A PREFERRED      COMMON STOCK         AGGREGATE
    NAME OF PURCHASER                     SHARES           PURCHASE WARRANTS    PURCHASE PRICE
------------------------------------ ------------------    -----------------    --------------
<S>                                       <C>                    <C>            <C>
Edison Venture Fund IV, L.P.              2,088,684              522,171        $1,905,924.15
Strattech Partners I, L.P.                  417,737              104,434          $381,185.01

                         TOTAL:           2,506,421              626,605        $2,287,109.16

                               SUBSEQUENT CLOSING
                               ------------------

                                     SERIES A PREFERRED      COMMON STOCK         AGGREGATE
    NAME OF PURCHASER                     SHARES           PURCHASE WARRANTS    PURCHASE PRICE
------------------------------------ ------------------    -----------------    --------------

Edison Venture Fund IV, L.P.                658,569              164,642          $600,944.21
Strattech Partners I, L.P.                  131,714               32,929          $120,189.03

Additional Purchasers               Up to 2,197,801        Up to 549,451  Up to $2,005,493.42

                         TOTAL:           2,988,084              747,022        $2,726,626.66

</TABLE><PAGE>

EXHIBIT 10.2

                            INVESTOR RIGHTS AGREEMENT

                                September 5, 2001

To each of the several Purchasers named in Exhibit 1.01 to the Series A
Convertible Preferred Stock Purchase Agreement of even date herewith (the
"Investors")

         This will confirm that in consideration of (i) the Investors' agreement
on the date hereof to purchase up to an aggregate of 5,494,505 shares (the
"Preferred Shares") of Series A Convertible Preferred Stock, no par value
("Preferred Stock"), of FASTNET CORPORATION, a Pennsylvania corporation
(together with all of its subsidiaries, the "Company"), pursuant to the Series A
Convertible Preferred Stock Purchase Agreement of even date herewith (the
"Purchase Agreement") between the Company and the Investors and as an inducement
to the Investors to consummate the transactions contemplated by the Purchase
Agreement.

         1.       CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:

                  "BOARD OF DIRECTORS" shall mean the board of directors of the
Company as constituted from time to time.

                  "CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

                  "COMMISSION" shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.

                  "COMMON STOCK" shall mean the Common Stock, no par value, of
the Company, as constituted as of the date of this Agreement.

                  "CONVERSION SHARES" shall mean shares of Common Stock issued
or issuable upon conversion of the Preferred Shares and/or upon exercise of the
Warrants.

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.

                  "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.

<PAGE>
                       Investor Rights Agreement - Page 2

                  "INDEBTEDNESS" shall mean all obligations, contingent and
otherwise, which should, in accordance with generally accepted accounting
principles, be classified upon the obligor's balance sheet (or the notes
thereto) as liabilities, but in any event including liabilities secured by any
mortgage on property owned or acquired subject to such mortgage, whether or not
the liability secured thereby shall have been assumed, and also including (i)
all guaranties, endorsements and other contingent obligations, in respect of
Indebtedness of others, whether or not the same are or should be so reflected in
said balance sheet (or the notes thereto), except guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business and (ii) the present value of any lease payments due
under leases required to be capitalized in accordance with applicable Statements
of Financial Accounting Standards, determined by discounting all such payments
at the interest rate determined in accordance with applicable Statements of
Financial Accounting Standards.

                  "KEY EMPLOYEE" OR "KEY EMPLOYEES" shall mean and include the
President, chief executive officer, chief financial officer, chief operating
officer, chief technology officer, vice presidents of operations, research,
development, sales or marketing.

                  "MATERIAL ADVERSE CHANGE" shall mean a material adverse change
in the business, operations, affairs, or condition (financial or otherwise) of
the Company.

                  "PERSON OR PERSONS" shall mean an individual, corporation,
partnership, joint venture, trust, or unincorporated organization, or a
government or any agency or political subdivision thereof.

                  "REGISTRATION EXPENSES" shall mean the expenses so described
in Section 9.

                  "RESERVED EMPLOYEE SHARES" shall mean shares of Common Stock
issued pursuant to stock purchase, stock grant or stock option arrangements for
employees, directors or consultants or advisors of the Company, all under
arrangements approved by the Compensation Committee of the Board of Directors.

                  "RESTRICTED STOCK" shall mean the Conversion Shares; provided
that a Conversion Share shall only be treated as Restricted Stock if and so long
as (a) it has not been sold to or through a broker or dealer or underwriter in a
public distribution or a public securities transaction, (b) it has not been sold
in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions, and restrictive legends with respect thereto, if any, are
removed upon the consummation of such sale, and (c) it may not be publicly sold
pursuant to paragraph (k) of Rule 144 (or any similar provision then in force)
under the Securities Act.

                  "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.

                  "SELLING EXPENSES" shall mean the expenses so described in
Section 9.

<PAGE>
                       Investor Rights Agreement - Page 3

                  "SUBSIDIARY" OR "SUBSIDIARIES" shall mean any corporation or
trust of which the Company and/or any of its other Subsidiaries (as herein
defined) directly or indirectly owns at the time outstanding shares of every
class of such corporation or trust other than directors' qualifying shares
comprising at least fifty percent (50%) of the voting power of such corporation
or trust.

                  "WARRANTS" means the warrants exercisable for Common Stock
issued pursuant to the Purchase Agreement.

         2.       RESTRICTIVE LEGEND. Each certificate representing Preferred
Shares, Conversion Shares or Restricted Stock shall, except as otherwise
provided in this Section 2 or in Section 3, be stamped or otherwise imprinted
with a legend substantially in the following form:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE
         SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
         NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD,
         ASSIGNED MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
         EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
         SECURITIES UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE
         SECURITIES LAWS, OR UPON RECEIPT BY THE COMPANY OF AN OPINION OF
         COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED
         FOR SUCH SALE, TRANSFER OR ASSIGNMENT."

         3.       LEGENDS WITH RESPECT TO TRANSFERS. Each certificate for
Preferred Shares, Conversion Shares or Restricted Stock that is transferred to
another party shall bear the legend set forth in Section 2, except that such
certificate shall not bear such legend if (i) such transfer is in accordance
with the provisions of Rule 144 (or any other rule permitting public sale
without registration under the Securities Act), (ii) such transfer is effected
pursuant to a registration statement under the Securities Act or (iii) in the
opinion of counsel to the Company or an Investor the transferee and any
subsequent transferee (other than an affiliate of the Company) would be entitled
to transfer such securities in a public sale without registration under the
Securities Act.

         4.       [intentionally omitted]

         5.       INCIDENTAL REGISTRATION. If the Company at any time (other
than pursuant to Section 6) proposes to register any of its securities under the
Securities Act for sale to the public, whether for its own account or for the
account of other security holders or both (except with respect to corporate
reorganizations, transactions under Rule 145 of the Securities Act or
registration statements on Forms S-4, S-8 or another form not available for
registering the Restricted Stock for sale to the public), each such time it will
give written notice to all holders of outstanding Restricted Stock of its
intention so to do. Upon the written request of any such holder, received by the
Company within 30 days after the giving of any such notice by the Company, to
register any of its Restricted Stock, the Company will use its best efforts to
cause the Restricted Stock as to which registration shall have been so requested

<PAGE>
                       Investor Rights Agreement - Page 4

to be included in the securities to be covered by the registration statement
proposed to be filed by the Company, all to the extent requisite to permit the
sale or other disposition by the holder of such Restricted Stock so registered.
In the event that any registration pursuant to this Section 5 shall be, in whole
or in part, an underwritten public offering of Common Stock, the number of
shares of Restricted Stock to be included in such an underwriting may be reduced
(PRO RATA among the requesting holders based upon the number of shares of
Restricted Stock owned by such holders) if and to the extent that the managing
underwriter shall be of the opinion that such inclusion would materially
adversely affect the offering price of the securities to be sold by the Company
therein, PROVIDED, HOWEVER, that such number of shares of Restricted Stock shall
not be reduced until all shares to be included in such underwriting for the
account of any person other than the Company and the requesting holders of
Restricted Stock are first excluded, and PROVIDED, FURTHER, HOWEVER, that in no
event may less than twenty percent (20%) of the total number of shares of Common
Stock to be included in such underwriting be made available for shares of
Restricted Stock unless all other shares are first excluded from such offering
and the managing underwriter shall in good faith advise the holders proposing to
distribute their securities through such underwriting that such level of
participation would, in its opinion, materially adversely affect the offering
price and its ability to complete the offering and shall specify the number of
shares of Restricted Stock which, in its opinion, can be included in the
registration and underwriting without such an effect. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 5 prior to the effectiveness of such registration whether or not any
holder of Restricted Stock has elected to include securities in such
registration. The registration expenses of such withdrawn registration shall be
borne by the Company in accordance with Section 7 hereof.

         6.       REGISTRATION ON FORM S-3.

                  (a) If at any time (i) a holder or holders of Restricted Stock
request that the Company file a registration statement on Form S-3 or any
successor thereto for a public offering of all or any portion of the shares of
Restricted Stock held by such requesting holder or holders which has an
anticipated aggregate price to the public (prior to underwriters commissions and
discounts) that would exceed $1,000,000, and (ii) the Company is a registrant
entitled to use Form S-3 or any successor thereto to register such shares, then
the Company shall use its best efforts to register under the Securities Act on
Form S-3 or any successor thereto, for public sale in accordance with the method
of disposition specified in such notice, the number of shares of Restricted
Stock specified in such notice.

                  (b) Following receipt of any notice under this Section 6, the
Company shall immediately notify all holders of Restricted Stock and Preferred
Shares from whom notice has not been received and such holders shall then be
entitled within 30 days thereafter to request the Company to include in the
requested registration all or any portion of their shares of Restricted Stock.
The Company shall use its best efforts to register under the Securities Act, for
public sale in accordance with the method of disposition described in paragraph
(a) above, the number of shares of Restricted Stock specified in such notice
(and in all notices received by the Company from other holders within 30 days
after the giving of such notice by the Company).

<PAGE>
                       Investor Rights Agreement - Page 5

                  (c) The Company shall be entitled to include in any
registration statement referred to in this Section 6 shares of Common Stock to
be sold by the Company for its own account, except as and to the extent that, in
the opinion of the managing underwriter, such inclusion would adversely affect
the marketing of the Restricted Stock to be sold. No other shares may be
included in such registration statement. Except for registration statements on
Form S-4, S-8 or any successor thereto, the Company will not file with the
Commission any other registration statement with respect to its Common Stock,
whether for its own account or that of other shareholders, from the date of
receipt of a notice from requesting holders requesting sale pursuant to an
underwritten offering pursuant to this Section 6 until the completion of the
period of distribution of the registration contemplated thereby.

                  (d) If in the opinion of the managing underwriter the
inclusion of all of the Restricted Stock requested to be registered under this
Section 6 would adversely affect the marketing of such shares, shares to be sold
by the holders of Restricted Stock, if any, shall be excluded only after any
shares to be sold by the Company have been excluded, in such manner that the
shares to be sold shall be allocated among the selling holders PRO RATA based on
their ownership of Restricted Stock.

Notwithstanding anything to the contrary in this Section 6, the Company shall
not be required to effect any such registration, qualification or compliance
pursuant to this Section 6:

                  (i) if the Company has, within the six month period preceding
         the date of such request, already effected a registration on Form S-3
         for the holders of Restricted Stock pursuant to this Section 6;

                  (ii) if the Company shall furnish to the holders of Restricted
         Stock a certificate signed by the Chairman of the Board stating that in
         the good faith judgment of the Board of Directors, there exists at the
         time material non-public information relating to the Company the
         disclosure of which would be required in such registration statement,
         and which disclosure would be seriously detrimental to the Company and
         its shareholders, 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
         holders of Restricted Stock under this Section 6; provided, that such
         right to delay a request shall be exercised by the Company not more
         than once in any twelve month period;

                  (iii) in any particular jurisdiction in which the Company
         would be required to execute a general consent to service of process in
         effecting such registration, qualification or compliance (provided the
         Company has not already executed such a consent or is already qualified
         to do business in such jurisdiction).

         7.       REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of Sections 5 or 6 to use its best efforts to effect
the registration of any shares of Restricted Stock under the Securities Act, the
Company will, as expeditiously as possible:

<PAGE>
                       Investor Rights Agreement - Page 6

                  (a) prepare and file with the Commission a registration
statement with respect to such securities and use its commercially reasonable
efforts to cause such registration statement to become and remain effective for
the period of the distribution contemplated thereby (determined as hereinafter
provided);

                  (b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in paragraph (a) above and comply with the provisions of
the Securities Act with respect to the disposition of all Restricted Stock
covered by such registration statement in accordance with the sellers' intended
method of disposition set forth in such registration statement for such period;

                  (c) furnish to each seller of Restricted Stock and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale or other
disposition of the Restricted Stock covered by such registration statement;

                  (d) use its commercially reasonable efforts to register or
qualify the Restricted Stock covered by such registration statement under the
securities or "blue sky" laws of such jurisdictions as the sellers of Restricted
Stock or, in the case of an underwritten public offering, the managing
underwriter reasonably shall request, PROVIDED, HOWEVER, that the Company shall
not for any such purpose be required to qualify generally to transact business
as a foreign corporation in any jurisdiction where it is not so qualified or to
consent to general service of process in any such jurisdiction;

                  (e) use its commercially reasonable efforts to list the
Restricted Stock covered by such registration statement with any securities
exchange on which the Common Stock of the Company is then listed;

                  (f) provide a transfer agent and registrar for all such
Restricted Stock, not later than the effective date of such registration
statement;

                  (g) immediately notify each seller of Restricted Stock and
each underwriter under such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event of which the Company has knowledge as a
result of which the prospectus contained 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 light of the circumstances then existing. The holders
of Restricted Stock covered by such registration statement agree upon receipt of
such notice forthwith to cease making offers and sales of Restricted Stock
pursuant to such registration statement or deliveries of the prospectus
contained therein for any purpose until the Company has prepared and furnished
such amendment or supplement to the prospectus as may be necessary so that, as
thereafter delivered to purchasers of such Restricted Stock, such prospectus
shall not include any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing. The
Company shall use best efforts to prepare and furnish such amendment or
supplement to the prospectus within a commercially reasonable period of time;

<PAGE>
                       Investor Rights Agreement - Page 7

                  (h) use its best efforts to furnish on the date that such
Restricted Stock is delivered to the underwriters for sale, if such securities
are being sold through underwriters: (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 and to such seller and (ii) a letter
dated as of such date from the independent certified public accountants of the
Company, in form and substance as is customarily given by the independent
certified public accountants to underwriters in an underwritten public offering
addressed to the underwriters and to such seller;

                  (i) make available for inspection by each seller of Restricted
Stock, any underwriter participating in any distribution pursuant to such
registration statement, and any attorney, accountant or other agent retained by
such seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with such
registration statement, except that the Company may refuse to provide such
information or access to any person that the Board of Directors reasonably
concludes is a competitor of the Company;

                  (j) advise each selling holder of Restricted Stock, promptly
after it shall receive notice or obtain knowledge thereof, of the issuance of
any stop order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any proceeding for
such purpose and promptly use all reasonable efforts to prevent the issuance of
any stop order or to obtain its withdrawal if such stop order should be issued;

                  (k) cooperate with the selling holders of Restricted Stock and
the managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Restricted Stock to be sold, such
certificates to be in such denominations and registered in such names as such
holders or the managing underwriters may request at least two business days
prior to any sale of Restricted Stock; and

                  (l) permit Edison Venture Fund IV, L.P. ("Edison") or any
affiliate or limited partner of Edison that is a holder of Restricted Stock
which holder, in the sole and exclusive judgment, exercised in good faith, of
such holder, might be deemed to be a controlling person of the Company, to
participate in good faith in the preparation of such registration or comparable
statement and to require the insertion therein of material, furnished to the
Company in writing, which in the reasonable judgment of such holder and its
counsel should be included, subject to review by the Company and its counsel
after consultation with such holder.

         For purposes of Section 7(a) and 7(b) and of Section 6(c), the period
of distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Restricted Stock covered thereby and 120 days
after the effective date thereof.

<PAGE>
                       Investor Rights Agreement - Page 8

         In connection with each registration hereunder, the sellers of
Restricted Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as reasonably shall
be necessary in order to assure compliance with federal and applicable state
securities laws.

         In connection with each registration pursuant to Sections 5 or 6
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.

         8.       ASSIGNMENT OF REGISTRATION RIGHTS. The registration rights of
holders of Restricted Stock pursuant to Sections 5 and 6 hereof may be assigned
by a holder to a transferee or assignee of Restricted Stock which (a) is a
subsidiary, parent, general partner, limited partner, retired partner, member,
retired member or affiliate of such holder, (b) is a holder's immediate family
member or a trust for the benefit of an individual holder or immediate family
members, or (c) acquires at least 25% of the Restricted Stock held by the
transferring holder (as adjusted for stock splits and the like); PROVIDED,
HOWEVER, (i) the transferor shall, within ten (10) days after such transfer,
furnish to the Company written notice of the name and address of such transferee
or assignee and the securities with respect to which such registration rights
are being assigned, and (ii) such transferee shall agree to be subject to all
restrictions set forth in this Agreement.

         9.       EXPENSES. All expenses incurred by the Company in complying
with Sections 5 and 6, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or
"blue sky" laws, fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars, costs of insurance, and
fees and disbursements of one counsel for the sellers of Restricted Stock, but
excluding any Selling Expenses, are called "Registration Expenses". All
underwriting discounts and selling commissions applicable to the sale of
Restricted Stock are called "Selling Expenses". The Company shall not, however,
be required to pay for Registration Expenses regarding any registration
proceeding begun pursuant to Section 6, the request of which has been
subsequently withdrawn by the holders of Restricted Stock making such request
(and such holders will indemnify the Company against all such reasonable
Registration Expenses) unless (a) the withdrawal is based upon material adverse
information concerning the Company (including a material drop in the market
price of the Company's Common Stock) of which such holders of Restricted Stock
were not aware at the time of such request, or (b) such holders of Restricted
Stock agree to forfeit their right to one requested registration pursuant to
Section 6, in which event such right shall be forfeited by all holders of
Restricted Stock. If the holders of Restricted Stock are required to pay the
Registration Expenses, such expenses shall be borne by the holders of securities
(including Restricted Stock) requesting such registration in proportion to the
number of shares for which registration was requested.

<PAGE>
                       Investor Rights Agreement - Page 9

         The Company will pay all Registration Expenses in connection with each
registration statement under Sections 5 or 6. All Selling Expenses in connection
with each registration statement under Sections 5 or 6 shall be borne by the
participating sellers in proportion to the number of shares sold by each, or by
such participating sellers other than the Company (except to the extent the
Company shall be a seller) as they may agree.

         10.      INDEMNIFICATION AND CONTRIBUTION.

                  (a) In the event of a registration of any of the Restricted
Stock under the Securities Act pursuant to Sections 5 or 6, the Company will
indemnify and hold harmless each seller of such Restricted Stock thereunder,
each underwriter of such Restricted Stock thereunder and each other person, if
any, who controls such seller or underwriter within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such seller, underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Restricted Stock was
registered under the Securities Act pursuant to Sections 5 or 6, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each such seller, each
such underwriter and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, PROVIDED, HOWEVER,
that the indemnity agreement contained in this Section 10(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company; and PROVIDED,
FURTHER, HOWEVER, that the Company will not be liable in any such case if and to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by any such
seller (or such seller's partner, officer, director, or controlling person), any
such underwriter or any such controlling person in writing specifically for use
in such registration statement or prospectus.

                  (b) In the event of a registration of any of the Restricted
Stock under the Securities Act pursuant to Sections 5 or 6, each seller of such
Restricted Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer, director, underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Restricted Stock
was registered under the Securities Act pursuant to Sections 5 or 6, any

<PAGE>
                       Investor Rights Agreement - Page 10

preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and each such officer, director, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
PROVIDED, HOWEVER, that the indemnity agreement contained in this Section 10(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
each seller; PROVIDED, FURTHER, HOWEVER that such seller will be liable
hereunder in any such case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such, furnished
in writing to the Company by such seller specifically for use in such
registration statement or prospectus, and PROVIDED, FINALLY, HOWEVER, that the
liability of each seller hereunder shall be limited to the net proceeds received
by such seller from the sale of Restricted Stock covered by such registration
statement.

                  (c) Promptly after receipt by an indemnified party hereunder
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may have
to such indemnified party other than under this Section 10 and shall only
relieve it from any liability which it may have to such indemnified party under
this Section 10 if and to the extent the indemnifying party is prejudiced by
such omission. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 10 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected, PROVIDED,
HOWEVER, that, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, the indemnified party shall have the
right to select a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred.

                  (d) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either (i) any
holder of Restricted Stock exercising rights under this Agreement, or any
controlling person of any such holder, makes a claim for indemnification
pursuant to this Section 10 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 10 provides for indemnification in such case, or (ii) contribution

<PAGE>
                       Investor Rights Agreement - Page 11

under the Securities Act may be required on the part of any such selling holder
or any such controlling person in circumstances for which indemnification is
provided under this Section 10; then, and in each such case, the Company and
such holder will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion so that such holder is responsible for the portion represented
by the percentage that the public offering price of its Restricted Stock offered
by the registration statement bears to the public offering price of all
securities offered by such registration statement, and the Company is
responsible for the remaining portion; PROVIDED, HOWEVER, that, in any such
case, (A) no such holder will be required to contribute any amount in excess of
the public offering price of all such Restricted Stock offered by it pursuant to
such registration statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.

                  (e) The obligations of the Company and holders of Restricted
Stock under this Section 10 shall survive completion of any offering which
includes Restricted Stock in a registration statement and the termination of
this Agreement. No indemnifying party, in the defense of any such claim or
litigation, shall, except with the consent of each indemnified party, consent to
the entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a general release from all liability in respect to such
claim or litigation.

         11.      CHANGES IN COMMON STOCK OR PREFERRED STOCK. If, and as often
as, there is any change in the Common Stock or the Preferred Stock by way of a
stock split, stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustment shall be made in the provisions hereof so that the
rights and privileges granted hereby shall continue with respect to the Common
Stock and the Preferred Stock as so changed.

         12.      RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Restricted Stock to the public without registration,
at all times after 90 days after any registration statement covering a public
offering of securities of the Company under the Securities Act shall have become
effective, the Company agrees to:

                  (a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;

                  (b) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and

<PAGE>
                       Investor Rights Agreement - Page 12

                  (c) so long as a holder owns any Restricted Stock, furnish to
each holder of Restricted Stock forthwith upon request a written statement by
the Company as to its compliance with the reporting requirements of such Rule
144 and of the Securities Act and the Exchange Act, a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
so filed by the Company as such holder may reasonably request in availing itself
of any rule or regulation of the Commission allowing such holder to sell any
Restricted Stock without registration.

         13.      RIGHT OF FIRST REFUSAL

                  (a) RIGHT OF FIRST REFUSAL. The Company shall not issue, sell
or exchange, agree or obligate itself to issue, sell or exchange any (i) shares
of Common Stock, (ii) any other equity security of the Company, including
without limitation, Preferred Shares, (iii) any debt security of the Company
(other than debt with no equity feature) including without limitation, any debt
security which by its terms is convertible into or exchangeable for any equity
security of the Company, (iv) any security of the Company that is a combination
of debt and equity, or (v) any option, warrant or other right to subscribe for,
purchase or otherwise acquire any such equity security or any such debt security
of the Company, unless in each case the Company shall have first offered to sell
such securities (the "Offered Securities") to the Investors (each an "Offeree"
and collectively, the "Offerees") as follows: Each Offeree shall have the right
to purchase (x) that portion of the Offered Securities as the number of shares
of Restricted Stock then held by such Offeree bears to the total number of
shares of Restricted Stock held on such date by all Offerees (the "Basic
Amount"), and (y) such additional portion of the Offered Securities as such
Offeree shall indicate it will purchase should the other Offerees subscribe for
less than their Basic Amounts (the "Undersubscription Amount"), at a price and
on such other terms as shall have been specified by the Company in writing
delivered to such Offeree (the "Offer"), which Offer by its terms shall remain
open and irrevocable for a period of twenty (20) days from receipt of the offer.

                  (b) NOTICE OF ACCEPTANCE. Notice of each Offeree's intention
to accept, in whole or in part, any Offer made pursuant to Section 13(a) shall
be evidenced by a writing signed by such Offeree and delivered to the Company
prior to the end of the 20-day period of such offer, setting forth such of the
Offeree's Basic Amount as such Offeree elects to purchase and, if such Offeree
shall elect to purchase all of its Basic Amount, such Undersubscription Amount
as such Offeree shall elect to purchase (the "Notice of Acceptance"). If the
Basic Amounts subscribed for by all Offerees are less than the total Offered
Securities, then each Offeree who has set forth Undersubscription Amounts in its
Notice of Acceptance shall be entitled to purchase, in addition to the Basic
Amounts subscribed for, all Undersubscription Amounts it has subscribed for;
PROVIDED, HOWEVER, that should the Undersubscription Amounts subscribed for
exceed the difference between the Offered Securities and the Basic Amounts
subscribed for (the "Available Undersubscription Amount"), each Offeree who has
subscribed for any Undersubscription Amount shall be entitled to purchase only
that portion of the Available Undersubscription Amount as the Undersubscription
Amount subscribed for by such Offeree bears to the total Undersubscription
Amounts subscribed for by all Offerees, subject to rounding by the Board of
Directors to the extent it reasonably deems necessary.

<PAGE>
                       Investor Rights Agreement - Page 13

                  (c) CONDITIONS TO ACCEPTANCES AND PURCHASE.

                           (i) PERMITTED SALES OF REFUSED SECURITIES. In the
event that Notices of Acceptance are not given by the Offerees in respect of all
the Offered Securities, the Company shall have ninety (90) days from the
expiration of the period set forth in Section 13(a) to close the sale of all or
any part of such Offered Securities as to which a Notice of Acceptance has not
been given by the Offerees (the "Refused Securities") to the Person or Persons
specified in the Offer, but only in all respects upon terms and conditions,
including, without limitation, unit price and interest rates, which are no more
favorable, in the aggregate, to such other Person or Persons or less favorable
to the Company than those set forth in the Offer.

                           (ii) REDUCTION IN AMOUNT OF OFFERED SECURITIES. In
the event the Company shall propose to sell less than all the Refused Securities
(any such sale to be in the manner and on the terms specified in Section
13(c)(i) above), then each Offeree may, at its sole option and in its sole
discretion, reduce the number of, or other units of the Offered Securities
specified in its respective Notices of Acceptance to an amount which shall be
not less than the amount of the Offered Securities which the Offeree elected to
purchase pursuant to Section 13(b) multiplied by a fraction, (i) the numerator
of which shall be the amount of Offered Securities which the Company actually
proposes to sell, and (ii) the denominator of which shall be the amount of all
Offered Securities. In the event that any Offeree so elects to reduce the number
or amount of Offered Securities specified in its respective Notices of
Acceptance, the Company may not sell or otherwise dispose of more than the
reduced amount of the Offered Securities until such securities have again been
offered to the Offerees in accordance with Section 13(a).

                           (iii) CLOSING. Upon the closing of the sale to such
other Person or Persons of all or less than all the Refused Securities, the
Offerees shall purchase from the Company, and the Company shall sell to the
Offerees, the number of Offered Securities specified in the Notices of
Acceptance, as reduced pursuant to Section 13(c)(ii) if the Offerees have so
elected, upon the terms and conditions specified in the Offer. The purchase by
the Offerees of any Offered Securities is subject in all cases to the
preparation, execution and delivery by the Company and the Offerees of a
purchase agreement relating to such Offered Securities reasonably satisfactory
in form and substance to the Offerees and their respective counsel.

                  (d) FURTHER SALE. In each case, any Offered Securities not
purchased by the Offerees or other Person or Persons in accordance with Section
13(c) may not be sold or otherwise disposed of until they are again offered to
the Offerees under the procedures specified in Sections 13(a), 13(b) and 13(c).

                  (e) WAIVER OF RIGHT OF FIRST REFUSAL. The rights of the
Investors pursuant to this Section 13 may be waived as to all of such Investors
by the affirmative vote or written consent of holders of at least a majority in
interest of the then outstanding Restricted Stock, and any such waiver shall be
binding on all Investors, even if any of such Investors do not execute such
waiver and irrespective of whether one or more Investors participates in the
purchase of the Offered Securities.

<PAGE>
                       Investor Rights Agreement - Page14

                  (f) EXCEPTION. The rights of the Investors under this Section
13 shall not apply to:

                           (i) Common Stock issued as a stock split or as a
stock dividend to holders of Common Stock or upon any subdivision or combination
of shares of Common Stock,

                           (ii) Preferred Stock issued as a dividend to holders
of Preferred Stock upon any subdivision or combination of shares of Preferred
Stock,

                           (iii) the Conversion Shares,

                           (iv) any Reserved Employee Shares, and the shares of
Common Stock issuable upon exercise thereof,

                           (v) any shares of capital stock issued pursuant to
any of the rights, options, warrants or agreement outstanding on the date hereof
and listed on Schedule I hereto,

                           (vi) any securities issued pursuant to the
acquisition of another entity by the Company by merger (whereby the Company owns
no less than 51% of the voting power of such corporation) or purchase of
substantially all of such entity's stock or assets, if such merger or purchase
is approved by the Board of Directors (which approval shall include the
affirmative vote or consent of the directors elected by the holders of Preferred
Stock),

                           (vii) any securities issued in connection with a
strategic partnership, joint venture or other similar agreement, provided that
such is approved by a majority of the Board of Directors and such majority
includes the directors elected by the holders of Preferred Stock, and

                           (viii) any warrants to purchase Common Stock issued
in connection with a bank loan, lease, equipment financing arrangement or debt
financing with a financial institution or the issuance of Common Stock upon the
exercise of any such warrant provided that such is approved by a majority of the
Board of Directors and such majority includes the directors elected by the
holders of the Preferred Stock.

         14. COVENANTS OF THE COMPANY. For so long as at least 25% of the
Preferred Shares issued under the Purchase Agreement remain outstanding, the
Company will comply with the covenants set forth below:

                  (a) AFFIRMATIVE COVENANTS OF THE COMPANY OTHER THAN REPORTING
REQUIREMENTS. Without limiting any other covenants and provisions hereof, and
except to the extent the following covenants and provisions of this Section
14(a) are waived in any instance by the holders of a majority in interest of the
holders of Restricted Stock, the Company covenants and agrees that for so long
as any shares of Preferred Stock are outstanding it will perform and observe the
following covenants and provisions, and will cause each Subsidiary, if and when
such Subsidiary exists, to perform and observe such of the following covenants
and provisions as are applicable to such Subsidiary:

<PAGE>
                       Investor Rights Agreement - Page 15

                           (i) PRESERVATION OF CORPORATE EXISTENCE. Preserve and
maintain, and, unless the Company deems it not to be in its best interests,
cause each Subsidiary to preserve and maintain, its corporate existence, rights,
franchises and privileges in the jurisdiction of its incorporation, and qualify
and remain qualified, and cause each Subsidiary to qualify and remain qualified,
as a foreign corporation in each jurisdiction in which such qualification is
necessary or desirable in view of its business and operations or the ownership
or lease of its properties. Secure, preserve and maintain, and cause each
Subsidiary to secure, preserve and maintain, all licenses and other rights to
use intellectual property rights owned or possessed by it and deemed by the
Company to be necessary to the conduct of its business and the businesses of its
Subsidiaries, taken as a whole.

                           (ii) COMPLIANCE WITH LAWS. Comply, and cause each
Subsidiary to comply, with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, where noncompliance would
have a Material Adverse Effect.

                           (iii) INSPECTION. Permit, upon reasonable request and
notice, each of the Investors or any agents or representatives thereof, to
examine and make copies of and extracts from the books of account of, and visit
and inspect the properties of the Company and any Subsidiary, to discuss the
affairs, finances and accounts of the Company and any Subsidiary with any of its
officers, directors or Key Employees and independent accountants, and consult
with and advise the management of the Company and any Subsidiary as to their
affairs, finances and accounts, all at reasonable times during normal business
hours. Subject to the disclosure of information of a non-technical nature,
including financial information, which such Investor discloses to its partners
and/or shareholders generally, each Investor agrees that it will keep
confidential and will not disclose or divulge any confidential, proprietary or
secret information which such Investor may obtain from the Company pursuant to
financial statements, reports and other materials submitted by the Company as
required hereunder, or pursuant to visitation or inspection rights granted
hereunder unless such information is or becomes known to the Investor from a
source other than the Company or is or becomes publicly known, or unless the
Company gives its written consent to such Investor's release of such
information, except that no such written consent shall be required (and the
Investor shall be free to release such information to such recipient) if such
information is to be provided to the Investor's counsel or accountant, or to an
officer, director or partner of such Investor, provided that the Investor shall
inform the recipient of the confidential nature of such information, and shall
instruct the recipient to treat the information as confidential.

                           (iv) MAINTENANCE OF PROPERTIES. Maintain and
preserve, and cause each Subsidiary to maintain and preserve, all of its
properties and assets, necessary for the proper conduct of its business, in good
repair, working order and condition, ordinary wear and tear excepted.

                           (v) BUDGETS APPROVAL. Not later than 30 days prior to
the commencement of each fiscal year, prepare and submit to, and obtain the
approval of a majority of the Board of Directors of, a business plan and monthly
operating budgets in detail for the upcoming fiscal year, including capital and
operating expense budgets, cash flow projections and profit and loss
projections, all itemized in reasonable detail (including itemization of
provisions for officers' compensation).

<PAGE>
                       Investor Rights Agreement - Page 16

                           (vi) [intentionally omitted]

                           (vii) BY-LAWS. Within 180 days of this Agreement (and
at all times thereafter), cause the bylaws of the Company to provide that,
unless otherwise required by the laws of the Commonwealth of Pennsylvania any
two directors shall have the right to call a meeting of the Board of Directors.
At all times maintain provisions in the bylaws or articles of incorporation of
the Company indemnifying all directors against liability to the maximum extent
permitted under the laws of Commonwealth of Pennsylvania.

                           (viii) [intentionally omitted]

                           (ix) MEETINGS OF DIRECTORS. Hold meetings of the
Company's Board of Directors not less than four (4) times a year on a quarterly
basis.

                           (x) EXPENSES OF DIRECTORS. Promptly reimburse in
full, each director of the Company who is not an employee of the Company for all
of his reasonable, documented out-of-pocket expenses incurred in attending each
meeting of the Board of Directors of the Company or any committee thereof.

                           (xi) CONTINUED BUSINESS OPERATIONS. Use commercially
reasonable efforts to cause its officers and Key Employees to refrain from
carrying on any for-profit business activity outside of the Company.

                  (b) NEGATIVE COVENANTS OF THE COMPANY. Without limiting any
other covenants and provisions hereof, the Company covenants and agrees that,
for so long as any shares of Preferred Stock are outstanding, it will comply
with and observe the following covenants and provisions, and will cause each
Subsidiary, if and when such Subsidiary exists, to comply with and observe such
of the following covenants and provisions as are applicable to such Subsidiary,
and will not, without the written consent or waiver of a majority in interest of
the holders of Restricted Stock:

                           (i) RESTRICTIONS ON INDEBTEDNESS. Create, incur or
assume, or permit any Subsidiary to create, incur or assume, more than
$2,000,000 of additional Indebtedness after September 5, 2001, other than
Indebtedness (i) incurred to refinance existing Indebtedness of the Company
provided that the outstanding principal amount of the Indebtedness so retired
equals or exceeds the aggregate principal amount of the Indebtedness so incurred
or (ii) the conversion of any of the Company's capital leases existing on
September 5, 2001 into other Indebtedness provided that the aggregate amount
owed under such capital lease immediately prior to conversion equals or exceeds
the aggregate principal amount of the Indebtedness so incurred, or (iii)
incurred as trade payables in the ordinary course of the Company's business
consistent with past practices;

<PAGE>
                       Investor Rights Agreement - Page 17

                           (ii) DISTRIBUTIONS. Declare or pay any dividends,
purchase, redeem, retire, or otherwise acquire for value any of its capital
stock (or rights, options or warrants to purchase such shares) now or hereafter
outstanding, return any capital to its shareholders as such, or make any
distribution of assets to its shareholders as such, or permit any Subsidiary to
do any of the foregoing (such transactions being hereinafter referred to as
"Distributions"), except that any such Subsidiary may declare and make payment
of cash and stock dividends, return capital and make distributions of assets to
the Company, and except as specifically provided for in the Company's Amended
and Restated Articles of Incorporation, as amended (the "Articles"); PROVIDED,
HOWEVER, that nothing herein contained shall prevent the Company from:

                                    (x) effecting a stock split (except for a
reverse stock split) or declaring or paying any dividend consisting of shares of
any class of capital stock to the holders of shares of such class of capital
stock, or

                                    (y) redeeming any stock of a deceased
shareholder out of insurance held by the Company on that shareholder's life, or

                                    (z) repurchasing the shares of Common Stock
held by officers, employees, directors or consultants of the Company which are
subject to restrictive stock purchase agreements under which the Company has the
option to repurchase such shares upon the occurrence of certain events,
including the termination of employment, at a price not in excess of the
original purchase price paid to the Company by such officer, employee, director
or consultant for such shares,

if in the case of any such transaction the payment can be made in compliance
with the other terms of this Agreement.

                           (iii) CHANGE IN NATURE OF BUSINESS. Make or permit
any Subsidiary to make, any material change in the nature of its business as
contemplated in the Company's Quarterly Report on Form 10-Q for the period ended
June 30, 2001.

                           (iv) ISSUANCE OF RESERVED EMPLOYEE SHARES. Grant any
options or other rights to purchase Reserved Employee Shares unless authorized
by vote of the Company's Board of Directors or its Compensation Committee.

                           (v) AMENDMENTS TO THE EXISTING INVESTOR RIGHTS
AGREEMENT. Amend, modify, waive or change any provision or term of the of the
Investor Rights Agreement dated August 3, 1999, or admit any additional parties
thereto, without the prior written consent of the holders of a majority of the
Restricted Stock.

         15. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to you as follows:

                  (a) The execution, delivery and performance of this Agreement
by the Company have been duly authorized by all requisite corporate action and
will not violate any provision of law, or any rule or order of any court or
other agency of government, the Articles or By-laws of the Company or any

<PAGE>
                       Investor Rights Agreement - Page 18

provision of any indenture, agreement or other instrument to which it or any or
its properties or assets is bound, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company.

                  (b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.

         16. MISCELLANEOUS.

                  (a) All covenants and agreements contained in this Agreement
by or on behalf of any of the parties hereto shall bind and inure to the benefit
of the respective successors and assigns of the parties hereto (including
without limitation transferees of any Preferred Shares or Restricted Stock),
whether so expressed or not.

                  (b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered in person, mailed by
certified or registered mail, return receipt requested, or sent by telecopier or
telex, addressed as follows:

                  if to the Company or any other party hereto, at the address of
such party set forth in the Purchase Agreement;

                  if to any subsequent holder of Preferred Shares, Conversion
Shares or Restricted Stock, to it at such address as may have been furnished to
the Company in writing by such holder;

or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Preferred Shares,
Conversion Shares or Restricted Stock) or to the holders of Preferred Shares,
Conversion Shares or Restricted Stock (in the case of the Company) in accordance
with the provisions of this paragraph.

                  (c) This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Pennsylvania, without
regard to its principles of conflicts of laws.

                  (d) This Agreement may not be amended or modified, and no
provision hereof may be waived, without the written consent of the Company and
the holders of at least a majority in interest of the Restricted Stock.

                  (e) 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.

<PAGE>
                       Investor Rights Agreement - Page 19

                  (f) The Company shall not grant to any third party any
registration rights more favorable than or inconsistent with any of those
contained herein, so long as any of the registration rights under this Agreement
remains in effect.

                  (g) If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.

                  (h) The Additional Purchasers (as defined in the Purchase
Agreement) shall become parties to this Agreement, and shall be entitled to all
of the benefits to and shall be subject to all of the obligations of "Investors"
under this Agreement, all upon execution by such Additional Purchaser of a
counterpart signature page to this Agreement.

<PAGE>
                       Investor Rights Agreement - Page 20

         Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon this Agreement
shall be a binding agreement between the Company and you.

                                      Very truly yours,

                                      FASTNET CORPORATION

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

AGREED TO AND ACCEPTED as of the date first above written.

Investors named in Schedule I to the Purchase Agreement:

EDISON VENTURE FUND IV, L.P.
BY: Edison Partners IV, L.P.

By:
     -------------------------------------
     Bruce Luehrs, General Partner

STRATTECH PARTNERS I, L.P.
By:  Strattech Partners, LLC

By:
    --------------------------------------
    Name:
         ---------------------------------
    Title:   Managing Director

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