Common use of Capital Stock and Related Matters Clause in Contracts

Capital Stock and Related Matters. i. As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathnet) the authorized capital stock of the Company will consist of (a) 39,620,860 shares of preferred stock, of which 2,899,999 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 shares of Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock"), and (b) 60,000,000 shares of Common Stock, of which 2,977,593 shares will be issued and outstanding and 30,000,000 shares will be reserved for issuance upon conversion of the Preferred Stock. As of the Closing, neither the Company nor any Subsidiary will have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation features, nor shall it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plans, except for the Preferred Stock and except as set forth on Exhibit H. Exhibit H accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration date. As of the Closing, neither the Company nor any Subsidiary will be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except as set forth on Exhibit H. As of the Closing and immediately thereafter, all of the outstanding shares of the Company's capital stock shall be validly issued, fully paid and nonassessable. iv. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including the sale of the Shares pursuant to this Agreement. There are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except as set forth on Exhibit H.

Capital Stock and Related Matters. i. As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathnet) thereafter, the authorized capital stock of the Company will shall consist of (a) 39,620,860 413,965 shares of preferred stock, of which 2,899,999 shares are designated as Series A Convertible I Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will shall be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 (b) 336,021 shares of Series E Convertible II Preferred Stock (all of which 1,729,631 will shall be issued and outstanding, (c) 215,000 shares of Series III Preferred of which 200,032 shares shall be issued and outstanding, (collectivelyd) 2,884,598 shares of Series A Preferred all of which shall be issued and outstanding, (e) 4,000,000 shares of Series B Preferred of which [3,033,878] shall be issued and outstanding, and the "Preferred Stock")remainder of which shall be reserved for future issuances of Series B Preferred, and (bf) 60,000,000 15,000,000 shares of Common Stock, of which 2,977,593 4,097,171 shares will shall be issued and outstanding and 30,000,000 outstanding, 7,849,584 shares will shall be reserved for issuance upon conversion of the Preferred StockStock and 950,266 shares shall be reserved for issuance upon exercise of all other Equity Equivalents. All of the issued and outstanding shares of the Company's capital stock have been duly authorized, are validly issued, fully paid, and nonassessable, and are not subject to, nor were they issued in violation of, any preemptive rights or rights of first refusal. As of the First Closing, neither the Company nor any Subsidiary will shall have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation featuresEquity Equivalents, nor shall it the Company or any Subsidiary have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock Equity Equivalents or any stock appreciation rights oral or phantom stock planswritten agreement related thereto, except for the Preferred Stock and except as set forth on Exhibit H. Exhibit H the attached "CAPITALIZATION SCHEDULE." The CAPITALIZATION SCHEDULE accurately sets forth the following information with respect to all outstanding options Capital Stock and rights to acquire the Company's and Pathnet's capital stockEquity Equivalents: the holder, holder thereof; the class of series and number of shares coveredor Equity Equivalents owned; and in the case of Equity Equivalents, the class or series and number of shares of capital stock (or equivalent) obtainable upon exercise thereof, the exercise price (or equivalent) thereof, and the expiration datedate thereof. As of the First Closing, neither the Company nor any Subsidiary will shall be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stockEquity Equivalents, except as set forth on Exhibit H. As the CAPITALIZATION SCHEDULE and except pursuant to the Certificate of Incorporation. ii. There are no statutory or, to the Closing and immediately thereafter, all of the outstanding shares best of the Company's capital stock shall be validly issuedknowledge, fully paid and nonassessable. ivcontractual stockholders preemptive rights, rights of refusal or first offer or similar rights, or anti-dilution rights with respect to the issuance of the Series B Preferred hereunder or the issuance of the Common Stock upon the conversion of the Preferred Stock that have not been waived prior to the First Closing. The Company has not violated any applicable U.S. federal or state corporate or securities laws in connection with the offer, sale or issuance of any of its capital stock, including and, based on the sale representations of the Shares pursuant to this AgreementPurchasers set forth in SECTION 7D, the offer, sale and issuance of the Series B Preferred hereunder do not require registration under the Securities Act or any applicable state securities laws. There To the best of the Company's knowledge, there are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except as set forth on Exhibit H.the CAPITALIZATION SCHEDULE.

Capital Stock and Related Matters. i. As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathnet) thereafter, the authorized capital stock of the Company will consist of (ai) 39,620,860 1,000 shares of preferred stock, of which 2,899,999 shares are designated as Series A Convertible Preferred Stock Stock, $.01 par value (all the "Series A Preferred"), 1,000 of which will be are issued and outstanding), 4,788,030 (ii) 1,000 shares are designated as of Series B Convertible Preferred Stock Stock, $.01 par value (all the "Series B Preferred"), 1,000 of which will be are issued and outstanding), 8,176,686 (iii) 1,000 shares are designated as of the Series C Convertible Preferred Stock Stock, $.01 par value (all the "Series C Preferred"), 1,000 of which will be are issued and outstanding), 9,250,000 (iv) 1,667 shares will be designated as of the Series D Convertible Preferred Stock Stock, $.0l par value (the "Series D Preferred"), 1,667 of which 8,511,607 will be are issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 (v) 829,962 shares of Series E Convertible Preferred Stock (Preferred, 720,757 of which 1,729,631 will be are issued and outstanding) (collectively, the "Preferred Stock"), outstanding and (bvi) 60,000,000 20,000,000 shares of Common Stock, of which 2,977,593 1,146,895 shares will be are issued and outstanding and 30,000,000 outstanding, 304,950 shares will be have been reserved for issuance upon conversion of the Series A Preferred Stockand 399,400 shares have been reserved for issuance upon conversion of the Series B Preferred and 138,650 shares have been reserved for issuance upon conversion of the Series C Preferred and 335,100 shares have been reserved for issuance upon conversion of the Series D Preferred and 720,757 shares have been reserved for issuance upon conversion of the Series E Preferred and 300,000 shares have been reserved for the issuance by all necessary corporate action upon exercise of the Warrant. The 300,000 shares of Common Stock reserved for issuance upon exercise of the Warrant will represent, as of the Closing, in excess of 7.19% of the Company's Common Stock and options on a Fully-Diluted Basis, as set forth in EXHIBIT F hereto. As of the Closing, neither the Company nor any Subsidiary will have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation featuresstock, nor shall will it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plansstock, except for the Series A Preferred, the Series B Preferred, the Series C Preferred, the Series D Preferred, and the Series E Preferred Stock and except for this Warrant and any options, rights or warrants to purchase shares, of capital stock of the Company issued to members of the board of directors, employees, consultants and advisors of the Company, and GE Capital Equity Investments, Inc. as more fully set forth on Exhibit H. Exhibit H accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration dateSCHEDULE 5.2 attached hereto. As of the Closing, neither the Company nor any Subsidiary will be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except as set forth on Exhibit H. pursuant to the Certificate of Incorporation. As of the Closing and immediately thereafterClosing, all of the outstanding shares of the Company's capital stock shall will be validly issued, fully paid and nonassessable. iv. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including the sale of the Shares pursuant to this Agreement. There are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except as set forth on Exhibit H.

Capital Stock and Related Matters. i. As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing Date, and immediately thereafter (assuming that --------------------------------- after giving effect to the Company has completed the closing under each of transactions contemplated hereby and pursuant to the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of PathnetDocuments, (i) the authorized capital stock of the Company will consist of a total of 110,000,000 shares as follows: (a) 39,620,860 shares of preferred stock, of which 2,899,999 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 shares of Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock"), and (b) 60,000,000 100,000,000 shares of Common Stock, par value $.01 per share, of which 2,977,593 1,164,440 shares will be are issued and outstanding outstanding, the ownership and 30,000,000 the consideration paid for such shares will be is as set forth on Schedule 10C and (1) 259,960 shares of which are reserved for for the exercise of options to purchase such shares issued or issuable to officers, directors, consultants, independents contractors and employees of the Company and its Subsidiaries and other providers of services to the Company and its Subsidiaries and (2) 1,560,000 shares of which are reserved for issuance upon conversion of the Series A Convertible Preferred Stock. As of the Closing, neither the Company nor any Subsidiary will have outstanding any stock or securities convertible or exchangeable for any ; (b) 10,000,000 shares of its capital stock or containing any profit participation featuresConvertible Preferred Stock, nor shall it have par value $1.00 per share, of which (x) 2,000,000 shares are designated Series A Convertible Preferred Stock, of which 1,000,000 shares are issued and outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plansand (y) 2,500,000 shares are designated Series B Convertible Preferred Stock, except for the Preferred Stock of which 2,000,000 shares are issued and except as set forth on Exhibit H. Exhibit H accurately sets forth the following with respect to outstanding; (ii) all outstanding options issued and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration date. As of the Closing, neither the Company nor any Subsidiary will be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except as set forth on Exhibit H. As of the Closing and immediately thereafter, all of the outstanding shares of the Company's capital stock shall be have been duly and validly issued, fully paid and nonassessable. iv. The non-assessable; (iii) no shares of capital stock of the Company has not violated any applicable federal will be owned or state securities laws in connection with held by or for the offer, sale account of the Company or issuance of any of its capital stock, including the sale of the Shares pursuant to this Agreement. There are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except as set forth on Exhibit H.42

Capital Stock and Related Matters. i. As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement agreements with all the holders of the common stock of Pathnet) the authorized capital stock of the Company will consist of (a) 39,620,860 shares of preferred stock, of which 2,899,999 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit Hin Section 4C of the Disclosure Letter), and 4,506,145 shares of Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock"), and (b) 60,000,000 shares of Common Stock, of which 2,977,593 shares will be issued and outstanding and 30,000,000 shares will be reserved for issuance upon conversion of the Preferred Stock. As of the Closing, neither the Company nor any Subsidiary will have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation features, nor shall it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plans, except for the Preferred Stock and except as set forth on Exhibit H. Exhibit H in Section 4C of the Disclosure Letter. Section 4C of the Disclosure Letter accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration date. As of the Closing, neither the Company nor any Subsidiary will be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except as set forth on Exhibit H. As of the Closing and immediately thereafter, all of the outstanding shares of the Company's capital stock shall be validly issued, fully paid and nonassessable., iv. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including the sale of the Shares pursuant to this Agreement. There are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except as set forth on Exhibit H.in Section 4C of the Disclosure Letter.

Capital Stock and Related Matters. i. (i) As of the Agreement Datedate hereof, no shares of capital stock and without giving effect to any of the Company are issued and outstanding. ii. As of transactions contemplated hereby or by the Agreement DateOther Reorganization Agreements, the authorized capital stock of Pathnet LISN consists of (a) 10,000,000 270,000 shares of preferred stock common stock, (of which zero (0A) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all 50,000 of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred designated Class A Common Stock (all "Class A Common"), (B) 160,000 of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred designated Class B Common Stock (all "Class B Common"), and (C) 60,000 of which are issued and outstanding); and (e) 60,000,000 shares of designated Class C Common Stock (of which 2,977,593 are issued "Class C Common"), and outstanding). iii. As of the Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathnet) the authorized capital stock of the Company will consist of (a) 39,620,860 250,000 shares of preferred stock, (A) 200,000 of which 2,899,999 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as "Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 shares of Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred StockA Preferred"), and (bB) 60,000,000 50,000 of which are designated Series B Preferred Stock ("Series B Preferred"). No shares of Common StockClass A Common, 147,022.58 shares of which 2,977,593 Class B 57 Common, no shares will be of Class C Common, 90,879.51 shares of Series A Preferred, and no shares of Series B Preferred are issued and outstanding and 30,000,000 are held beneficially and of record by the LISN Shareholders as set forth on the LISN Capitalization Schedule attached hereto (free and clear of all Encumbrances, except Encumbrances pursuant to the LISN Shareholders Agreement, as defined below) and 3,398.30 shares will be of Class A Common are reserved for issuance upon conversion exercise of Existing LISN Employee Options. Other than the outstanding shares of LISN Common and LISN Preferred described above, LISN does not have and as of the Preferred Stock. As of the Closing, neither the Company nor any Subsidiary Closing Date will not have outstanding any stock or securities, or any stock or securities convertible into or exercisable or exchangeable for any shares of its capital stock or containing any profit participation features, nor shall it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities directly or indirectly convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plans, except for the Preferred Stock and except as set forth on Exhibit H. Exhibit H accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration date. As of the Closing, neither the Company nor any Subsidiary will be LISN is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except other than as set forth on Exhibit H. expressly provided in this Agreement and, as of the Closing, pursuant to the articles of incorporation. As of the date hereof and as of the Closing and immediately thereafter, all of the outstanding shares of the CompanyLISN's capital stock are or shall be validly issued, fully paid and nonassessable. Each of the Existing LISN Employee Options was issued pursuant to an option agreement in the form previously delivered to LISN and the terms thereof are set forth in such option agreement and the Stock Option Plan. iv. The Company has not violated any applicable federal or state securities laws in connection with (ii) Prior to the offer, sale or issuance of any of its capital stock, including the sale execution and delivery of the Shares pursuant to this Investor Rights Agreement. There , except for the Shareholder Agreement dated May 28, 1999, by and among LISN and the LISN Shareholders a party thereto (the "LISN Shareholders Agreement") and the Company's articles of incorporation, there are no agreements or understandings between the CompanyLISN's stockholders shareholders or between Pathnet's stockholders among any other Person and binding upon LISN with respect to the voting or transfer of the Company's or PathnetLISN's capital stock or with respect to any other aspect of the CompanyLISN's or Pathnet's affairs, except as set forth on Exhibit H.governance.

Capital Stock and Related Matters. i. As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Initial Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathnet) thereafter, the authorized capital stock of the Company will consist of (a) 39,620,860 101,500,000 shares of preferred stockPreferred Stock, of which 2,899,999 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 17,207,532 shares will be designated as Series D Convertible I Preferred Stock, 7,634,213 shares will be designated Series II Preferred Stock, 4,792,310 shares will be designated Series III Preferred Stock, 19,183,653 shares will be designated Series IV Preferred Stock, 21,000,000 shares will be designated Series V Preferred Stock, 4,600,000 shares will be designated Series V-1 Preferred Stock, of which 16,769,101 shares of Series I Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 438,392 shares of Series E Convertible I Preferred Stock (have been reserved for issuance under stock option agreements adopted by the Board of which 1,729,631 Directors, 7,634,207 shares of Series II Preferred Stock will be issued and outstanding) (collectively, the "and 4,792,300 shares of Series III Preferred Stock")Stock will be issued and outstanding, 19,183,653 shares of Series IV Preferred Stock will be issued and outstanding, 9,130,554 shares of Series V Preferred Stock will be issued and outstanding, 3,331,699 shares of Series V-1 Preferred Stock will be issued and outstanding, and (b) 60,000,000 106,500,000 shares of Common Stock, of which 2,977,593 2,510,442 shares will be issued and outstanding outstanding, 8,980,743 shares will be reserved for issuance under the Plan, the Stock Option Plans and 30,000,000 any new stock option, stock purchase or similar equity incentive plan adopted by the Board of Directors, 17,207,532 shares will be reserved for issuance upon conversion of the Series I Preferred Stock, 7,634,213 shares will be reserved for issuance upon conversion of the Series II Preferred Stock, 19,183,653 shares will be reserved for issuance upon conversion of the Series IV Preferred Stock, 21,000,000 shares will be reserved for issuance upon conversion of the Series V Preferred Stock, 4,600,000 shares will be reserved for issuance upon conversion of the Series V-1 Preferred Stock and 2,034,124 shares will be reserved for issuance upon exercise of the Existing Warrants. As of the Closing, neither the Company nor any Subsidiary will not have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation features, except for the Series I Preferred Stock, the Series II Preferred Stock, Series IV Preferred Stock, Series V Preferred Stock, Series V-1 Preferred Stock and the Existing Warrants, nor shall will it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plansstock, except for as contemplated in this Agreement or pursuant to the Preferred Stock and except as set forth on Exhibit H. Exhibit H accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration dateOption Plans. As of the Closing, neither the Company nor any Subsidiary will not be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except as set forth on Exhibit H. contemplated in this Agreement, the Plan, the Stock Option Plans and the Initial Restated Certificate of Incorporation, the Bridge Notes and the Bridge Warrants. As of the Closing and immediately thereafterClosing, all of the outstanding shares of the Company's ’s capital stock shall will be validly issued, fully paid and nonassessable. ivii. There are no statutory or, to the best of the Company’s knowledge, contractual stockholders preemptive rights or rights of refusal with respect to the issuance of the Series V Preferred Stock and Series V-1 Preferred Stock or the issuance of the Common Stock upon conversion of the Series V Preferred Stock and the Series V-1 Preferred Stock which have not been effectively waived. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including and based upon information provided by and representations made by the sale Shareholders, the issuance of the Shares pursuant to this AgreementSeries V Preferred Stock does not require registration under the Securities Act or any applicable state securities laws. There To the best of the Company’s knowledge, there are no agreements between the Company's stockholders or between Pathnet's ’s stockholders with respect to the voting or transfer of the Company's or Pathnet's ’s capital stock or with respect to any other aspect of the Company's or Pathnet's ’s affairs, except as set forth on Exhibit H.for the Voting Agreement.

Capital Stock and Related Matters. i. As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement agreements with all holders of the stock of Pathnet) the authorized capital stock of the Company will consist of (a) 39,620,860 shares of preferred stock, of which 2,899,999 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 shares of Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock"), and (b) 60,000,000 shares of Common Stock, of which 2,977,593 shares will be issued and outstanding and 30,000,000 shares will be reserved for issuance upon conversion of the Preferred Stock. As of the Closing, neither the Company nor any Subsidiary will have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation features, nor shall it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plans, except for the Preferred Stock and except as set forth on Exhibit H. Exhibit H accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration date. As of the Closing, neither the Company nor any Subsidiary will be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except as set forth on Exhibit H. As of the Closing and immediately thereafter, all of the outstanding shares of the Company's capital stock shall be validly issued, fully paid and nonassessable. iv. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including the sale of the Shares pursuant to this Agreement. There are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except as set forth on Exhibit H.

Capital Stock and Related Matters. i. (a) As of the Agreement Date, no shares date of capital stock of the Company are issued and outstanding. ii. As of the Agreement Datethis Agreement, the authorized capital stock of Pathnet MCK consists of (ai) 10,000,000 21,000,000 shares of preferred stock (stock: 14,985,733 of which zero are designated as Series A Redeemable Preferred Stock, 13,333,333 of which were issued as of June 27, 1996 and 1,652,400 of which were issued as of the date hereof and all of which are outstanding; 3,968,384 of which are designated Series B Convertible Preferred Stock, all of which were issued as of June 27, 1996 and are outstanding; 28,505 shares of Series C Redeemable Stock, none of which is issued or outstanding; and 1,672,354 shares of Series D Convertible Stock, none of which is issued or outstanding and (0ii) 25,000,000 shares of Common Stock, of which 2,491,406 shares are issued and outstanding); outstanding (b) 1,000,000 including 1,305,229 shares of Series Common Stock issued to officers, directors, employees and one former employee of the Company pursuant to restricted stock agreements). As of the date of this Agreement, the authorized capital stock of MCK Canada consists of 12,151,000 shares of Class A Convertible Preferred Stock (Common Stock, all of which are issued and outstanding); (c) 1,651,046 , and 20,000 shares of Series B Convertible Class E Redeemable Preferred Stock (Stock, all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathnet) the authorized capital stock of the Company Neither MCK nor any Subsidiary has, or will consist of (a) 39,620,860 shares of preferred stock, of which 2,899,999 shares are designated have as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 shares of Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock"), and (b) 60,000,000 shares of Common Stock, of which 2,977,593 shares will be issued and outstanding and 30,000,000 shares will be reserved for issuance upon conversion of the Preferred Stock. As of the Closing, neither the Company nor any Subsidiary will have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation features, nor shall does it have, or will it have as of the Closing, outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plans, except other than options to purchase 673,061 shares of Common Stock reserved for the Preferred Stock and except as set forth on Exhibit H. Exhibit H accurately sets forth the following with respect issuance pursuant to all outstanding options and rights to acquire the Company's 1996 Stock Option Plan, of which options to purchase 361,320 shares of Common Stock are presently issued and Pathnet's capital stock: the holderoutstanding and options to purchase 217,046 shares of Common Stock have been issued and exercised. Neither MCK nor any Subsidiary is, the number of shares covered, the exercise price and the expiration date. As or will be as of the Closing, neither the Company nor any Subsidiary will be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except pursuant to the Articles of Incorporation, the Amended and Restated Stockholders Agreement and the Put/Call Option Agreement dated as set forth on Exhibit H. As of June 27, 1996 by and among MCK, MDI and the Closing and immediately thereafter, all escrow agent named therein. All of the outstanding shares of the CompanyMCK's capital stock shall are validly issued, fully paid and nonassessable. The shares of Purchased Stock issued pursuant to this Agreement, when issued at the Closing in accordance with the terms of this Agreement, and the Conversion Shares, when issued upon conversion of the Series D Convertible Stock in accordance with the terms thereof, will be validly issued, fully paid and nonassessable. iv(b) There are no statutory or contractual shareholders' preemptive rights or rights of first refusal with respect to the sale or issuance of the Purchased Stock, which have not been waived in full. The Company MCK has not violated any applicable federal or state securities laws (federal, state, provincial or other) in connection with the offer, sale or issuance of any of its capital stock, including and the offer, sale and issuance of the Shares pursuant to this AgreementPurchased Stock hereunder do not require registration under the Securities Act or any applicable securities laws. There are no agreements between the Companyamong MCK's stockholders or between Pathnet's stockholders shareholders with respect to the voting or transfer of the Company's or Pathnet's MCK capital stock or with respect to any other aspect of the Company's or PathnetMCK's affairs, except for the Amended and Restated Stockholders Agreement. (c) The Disclosure Schedule sets forth a true and complete list of the record holders of debt and equity of MCK showing the number of shares of Common Stock or other securities of the Company held by each such holder as set forth on Exhibit H.of the date hereof and the consideration paid to MCK, if any, therefor.

Capital Stock and Related Matters. i. As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements respective Closings and under a similar contribution agreement with all holders of the stock of Pathnet) immediately thereafter, the authorized capital stock of the Company will consist of (ai) 39,620,860 1,000 shares of preferred stock, of which 2,899,999 shares are designated as Series A Convertible Preferred Stock Stock, $.01 par value (all the "Series A Preferred"), 1,000 of which will be are issued and outstanding), 4,788,030 (ii) 1,000 shares are designated as of Series B Convertible Preferred Stock Stock, $.01 par value (all the "Series B Preferred"), 1,000 of which will be are issued and outstanding), 8,176,686 (iii) 1,000 shares are designated as of the Series C Convertible Preferred Stock Stock, $.01 par value (all the "Series C Preferred"), 1,000 of which will be are issued and outstanding), 9,250,000 (iv) 1,667 shares will be designated as of the Series D Convertible Preferred Stock Stock, $.01 par value (the "Series D Preferred"), 1,667 of which 8,511,607 will be are issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 (v) 829,692 shares of Series E Convertible Preferred Stock (Preferred, none of which 1,729,631 will be are issued and outstanding) (collectively, outstanding prior to the "Preferred Stock"), Initial Closing and (bvi) 60,000,000 20,000,000 shares of Common Stock, of which 2,977,593 1,146,895 shares will be are issued and outstanding and 30,000,000 outstanding, 304,950 shares will be have been reserved for issuance upon conversion of the Series A Preferred Stockand 399,400 shares have been reserved for issuance upon conversion of the Series B Preferred and 138,650 shares have been reserved for issuance upon conversion of the Series C Preferred and 335,100 shares have been reserved for issuance upon conversion of the Series D Preferred and 720,757 shares have been reserved for issuance by all necessary corporate action upon conversion of the Series E Preferred. The 720,757 shares of Common Stock reserved for issuance upon conversion of the Series E Preferred will represent, as of each Closing, in excess of 18.6% of the Company's Common Stock and options on a Fully-Diluted Basis, as set forth in EXHIBIT D hereto. As of the each Closing, neither the Company nor any Subsidiary will have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation featuresstock, nor shall will it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plansstock, except for the Series A Preferred, the Series B Preferred, the Series C Preferred, the Series D Preferred, and the Series E Preferred Stock and except for the Option Shares and shares, or any options, rights or warrants to purchase shares, of capital stock of the Company issued to members of the board of directors, employees, consultants and advisors of the Company as more fully set forth on Exhibit H. Exhibit H accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration dateSCHEDULE 6.2 attached hereto. As of the each Closing, neither the Company nor any Subsidiary will be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except as set forth on Exhibit H. pursuant to the Certificate of Incorporation. As of the Closing and immediately thereaftereach Closing, all of the outstanding shares of the Company's capital stock shall will be validly issued, fully paid and nonassessable. iv. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including the sale of the Shares pursuant to this Agreement. There are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except as set forth on Exhibit H.

Capital Stock and Related Matters. i. (i) As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Initial Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathnet) thereafter, the authorized capital stock of the Company will shall consist of (a) 39,620,860 157,525,000 shares of preferred stockPreferred Stock, (x) 205,000 of which 2,899,999 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all Preferred, 164,143 of which will be issued outstanding immediately after the Initial Closing, and outstanding)40,000 shares of which shall be reserved for issuance for payment of dividends on the Series B Preferred, 8,176,686 shares (y) 12,320,000 of which are designated as Series C Convertible Preferred Stock (all Preferred, 11,106,784 of which will be issued outstanding immediately after the Initial Closing, and outstanding)1,275,000 shares of which shall be reserved for issuance for payment of dividends on the Series C Preferred, 9,250,000 shares will be and (z) 145,000,000 of which are designated as Series D Convertible Preferred Stock (C-2 Preferred, 95,630,988 of which 8,511,607 will be issued and outstanding, allocated among outstanding immediately after the holders thereof as set forth on Exhibit H)Initial Closing, and 4,506,145 25,100,000 shares of which shall be reserved for issuance for payment of dividends on the Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock")C-2 Preferred, and (b) 60,000,000 192,000,000 shares of Common Stock, of which 2,977,593 l5,286,656 shares will shall be issued and outstanding and 30,000,000 as of the Closing, 141,500,000 shares will shall be reserved for issuance upon conversion of the Series B Preferred, Series C Preferred Stockand Series C-2 Preferred (including shares of preferred stock paid as dividends on such shares), and 32,000,000 shares are reserved for issuance upon exercise of options granted or to be granted to directors, officers, employees, and consultants to the Company. As of the Closing, neither the Company nor any Subsidiary will not have outstanding any stock or securities convertible into or exchangeable for any shares share of its capital stock or containing any profit participation features, nor shall it have outstanding any rights or options to subscribe subscribe, for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plans, except for the Series B Preferred, the Series C Preferred Stock and the Series C-2 Preferred and except as set forth on Exhibit H. Exhibit H the attached “Capitalization Schedule.” The Capitalization Schedule accurately sets forth the following information with respect to all outstanding options and rights to acquire the Company's and Pathnet's ’s capital stock: the holder, the number of shares covered, the exercise price and the expiration date. The Capitalization Schedule accurately sets forth a list of all stockholders of the Company, which contains the name, class and number of shares of capital stock held by each stockholder of the Company. As of the Closing, neither the Company nor any Subsidiary will not be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire retire, any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except as for any redemption of the Series C-2 Preferred set forth on Exhibit H. in the Charter. As of the Closing and immediately thereafterClosing, all of the outstanding shares of the Company's ’s capital stock shall be validly issued, fully paid and nonassessable. The rights, privileges and preferences of the Series B Preferred, the Series C Preferred and the Series C-2 Preferred are as stated in the Charter. iv(ii) Except as set forth on the Capitalization Schedule, there are no statutory or contractual stockholders preemptive rights or rights of refusal with respect to the issuance of the Series C-2 Preferred hereunder or the issuance of the Common Stock upon conversion of the Series C-2 Preferred, and any such rights have been waived. The Company has not violated and will not violate any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including and, assuming that the Purchasers’ representations in Section 7C are true and correct, the offer, sale and issuance of the Shares pursuant to this AgreementSeries C-2 Preferred hereunder does not require registration under the Securities Act or any applicable state securities laws. There are no agreements between the Company's stockholders or between Pathnet's ’s stockholders with respect to the voting or transfer of the Company's or Pathnet's ’s capital stock or granting registration rights to any person with respect thereto or with respect to any other material aspect of the Company's or Pathnet's ’s affairs, except for the Stockholders Agreement, the Other Stockholders Agreement and the Registration Agreement. (iii) The Series C-2 Preferred that are being issued to the Purchasers hereunder, when issued, sold and delivered in accordance with the terms hereof for the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the Stockholders Agreement and applicable state and federal securities laws. The Series C-2 Preferred paid as set forth dividends on Exhibit H.the Series C-2 Preferred, and the Common Stock issuable upon conversion of Series C-2 Preferred has been duly and validly reserved for issuance, and upon issuance in accordance with the terms of the Charter, shall be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement, the Stockholders Agreement and applicable federal and state securities laws.

Capital Stock and Related Matters. i. As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing and --------------------------------- immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathnet) thereafter, the authorized capital stock of the Company will shall consist of (a) 39,620,860 seventeen million four hundred thousand (17,400,000) shares of preferred stock, of which 2,899,999 three hundred and fifty-two (352) shares are shall be designated as Series A Convertible Preferred Stock (all of which shall be issued and outstanding), six million three hundred ninety-nine thousand six hundred forty-eight (6,399,648) shares will be designated as Series B Preferred (five million seven hundred and thirty-five thousand two hundred and fifty- one (5,735,251) of which will be issued and outstanding), 4,788,030 ) and eleven million (11,000,000) shares are shall be designated as Series B Convertible C Preferred Stock (all 8,005,689 of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 shares of Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock"), and (b) 60,000,000 forty million (40,000,000) shares of Common Stock, of which 2,977,593 three million five hundred and two thousand six hundred fifty (3,502,650) shares will shall be issued and outstanding and 30,000,000 outstanding, 28,351,647 shares will shall be reserved for issuance upon conversion of the Notes, the Series C Preferred, the Series A Preferred Stockand the Series B Preferred, and two million three hundred and seven thousand nine hundred and seventy-two (2,307,972) shares shall be reserved for issuance pursuant to stock option plans. As of the Closing, neither the Company nor any Subsidiary will shall have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation features, nor shall it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plansstock, except for the Preferred Stock Notes, the Series C Preferred, Series A Preferred, the Series B Preferred, the Warrants and except as set forth on Exhibit H. Exhibit H the attached "Capitalization Schedule." The Capitalization Schedule accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration date. As of the Closing, neither the Company nor any Subsidiary will shall be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except as set forth on Exhibit H. the Capitalization Schedule, except in respect of the Senior Notes, the Warrants, Notes and except pursuant to the Certificate of Incorporation. As of the Closing and immediately thereafterClosing, all of the outstanding shares of the Company's capital stock shall be validly issued, fully paid and nonassessable. ivnonassessable and not subject to any preemptive rights except as set forth in the Stockholders Agreement (as defined below) and the Certificate of Incorporation. Except as set forth in (a) the Purchase Agreement dated October 3, 1997 between the Company and the Purchasers listed therein (as amended to the date hereof, the "Series C Purchase Agreement"), (b) the Purchase Agreement dated November 22, 1996 between the Company and the holders of the Series B Preferred (as amended to the date hereof, the "Series B Purchase Agreement"), (c) the Registration Agreement, (d) the Stockholders Agreement dated as of October 3, 1997 between the Company and the investors party thereto (as amended to the date hereof, the "Stockholders Agreement"), (e) the Purchase Agreement dated June 27, 1996 between the Company and the holders of the Series A Preferred (as amended to the date hereof, the "Series A Purchase Agreement") and (e) the Company's existing certificate of incorporation, all of which have been waived, there are no statutory or contractual stockholders preemptive rights or rights of refusal with respect to the issuance of the Notes hereunder or the issuance of any series of capital stock of the Company. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including and the offer, sale and issuance of the Shares pursuant to this AgreementNotes hereunder does not require registration under the Securities Act or any applicable state securities laws. There To the best of the Company's knowledge, there are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except for the Stockholders Agreements between the Company and certain of its stockholders, and the stock option agreements set forth on the Capitalization Schedule. Except as set forth on Exhibit H.in the Indenture, the Registration Agreement, the Warrant Agreement, and the Note Registration Agreement dated the date hereof between the Company and State Street Bank and Trust Company, as trustee (the "Notes Registration 18 Rights Agreement"), the Company is not under any obligation to register any of its currently outstanding securities or any of its securities which may hereafter be issued.

Capital Stock and Related Matters. i. As of (i) Immediately prior to the Agreement DateClosing, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathnet) the authorized capital stock of the Company will consist of (a) 39,620,860 38,183,850 shares of preferred stockPreferred Stock, of which 2,899,999 2,630,000 shares are will be designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 4,600,000 shares are will be designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 241,000 shares are will be designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 10,475,420 shares will be designated as Series D Convertible Preferred Stock (10,200,420 of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 3,558,096 shares of will be designated as Series E Convertible Preferred Stock (all of which 1,729,631 will be issued and outstanding), 6,679,334 shares will be designated as Series F Preferred Stock (all of which will be issued and outstanding), 5,000,000 shares will be designated as Series G Preferred (4,969,844 of which will be issued and outstanding) and 5,000,000 shares of Series H Preferred Stock (collectively, the "Preferred Stock"none of which will be issued and outstanding), ; and (b) 60,000,000 70,000,000 shares of Common Stock, of which 2,977,593 6,534,623 shares will be issued and outstanding and 30,000,000 outstanding, 2,630,000 shares will be reserved for issuance upon conversion of the Series A Preferred Stock, 5,366,309 shares will be reserved for issuance upon conversion of the outstanding Series B Preferred Stock, 10,475,420 shares will be reserved for issuance upon conversion of the outstanding or reserved Series D Preferred Stock, 3,558,096 shares will be reserved for issuance upon conversion of the outstanding Series E Preferred Stock, 6,679,334 shares will be reserved for issuance upon conversion of the outstanding Series F Preferred Stock, 4,959,844 shares will be reserved for issuance upon conversion of the outstanding Series G Preferred, 5,000,000 shares will be reserved for issuance upon conversion of the outstanding Series H Preferred and 5,504,624 shares will be reserved for future issuance to employees, directors or consultants pursuant to Executive Stock Agreements. As of the Closing, neither the Company nor any Subsidiary will not have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock stock, or containing any profit participation features, nor shall it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plansstock, except for the Series A Preferred Stock, Series B Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, Series G Preferred Stock and except as set forth on Exhibit H. Exhibit Series H accurately sets forth the following with respect Preferred Stock, a warrant to all outstanding purchase 275,000 shares of Series D Preferred Stock, and options to purchase an aggregate of approximately 4,077,809 shares of Common Stock held by employees and rights to acquire directors of, or consultants to, the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration date. As of the Closing, neither the Company nor any Subsidiary will not be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except as set forth on Exhibit H. pursuant to the Certificate of Incorporation and the Executive Stock Agreements. As of the Closing and immediately thereafterClosing, all of the outstanding shares of the Company's capital stock shall will be validly issued, fully paid and nonassessable. iv(ii) There are no statutory or contractual stockholders preemptive rights with respect to the issuance of the Series H Preferred hereunder or the issuance of the Common Stock upon conversion of the Series H Preferred, except the rights of Smith, Dougherty and the holders of at least 150,000 shares of the Ser▇▇▇ ▇ P▇▇▇▇▇▇▇▇ Stock, Series B Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock or Series G Preferred Stock, which rights will have been effectively waived prior to the Closing. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including and the offer, sale and issuance of the Shares pursuant to this AgreementSeries H Preferred hereunder does not require registration under the Securities Act or any applicable state securities laws. There To the best of the Company's knowledge, except for a certain voting agreement by and among Oak Investment Partners, Catalina Venture Partners, the Company, and certain entities managed by Chancellor Capital Management, Inc. dated as of April 14, 1989, there are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except as set forth on Exhibit H.stock.

Capital Stock and Related Matters. i. As of At the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As time of the Closing --------------------------------- and immediately thereafter after giving effect to the Acquisition and the transactions contemplated by this Agreement, (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathneti) the authorized capital stock of the Company will consist of (a) 39,620,860 500,000 shares of preferred stockClass A Voting Common Stock, par value $.01 per share, of which 2,899,999 5,250 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 (b) 100,000 shares of Series E Convertible Preferred Stock (Class B Voting Common Stock, par value $.01 per share, of which 1,729,631 5,100 shares will be issued and outstanding, (c) (collectively, the "Preferred Stock"), and (b) 60,000,000 100,000 shares of Class C Non-voting Common Stock, par value $.01 per share, of which 2,977,593 69,900 shares will be issued and outstanding, (d) 100,000 shares of Class D Non-voting Common Stock, par value $.01 per share, of which no shares will be issued and outstanding and 30,000,000 25,295 shares will be reserved for issuance upon conversion the exercise of the Warrants, (e) 100,000 shares of Class E Non-voting Common Stock, par value $.01 per share, of which no shares will be issued and outstanding, (f) 50,000 shares of Series A Preferred Stock. As , par value $.01 per share, of which 7,850 shares will be issued and outstanding, (g) 1,000 shares of Series B Preferred Stock, par value $.01 per share, none of which shares will be issued and outstanding, (h) 500 shares of Series C Preferred Stock, par value $.01 per share, of which 500 shares of Series C Preferred Stock will be issued to Electra and outstanding, and (i) 10,000 shares of Undesignated Preferred Stock, par value $.01 per share, of which no shares will be issued and outstanding; (ii) no shares of Common Stock will be owned or held by or for the account of the ClosingCompany; (iii) all of the outstanding shares of Common Stock and Preferred Stock (including without limitation the Series C Preferred Stock) will be validly issued and outstanding, neither fully paid and non-assessable and will be owned of record and, to the best knowledge of the Company, beneficially, free and clear of any Liens (except as may be contemplated by the Senior Loan Documents) by the individuals and entities and in the amounts set forth on Schedule 1 and Schedule 8.3 hereto; (iv) except ---------- ------------ for the Class A Voting Common Stock, the Class B Voting Common Stock, the Class C Non-voting Common Stock, the Class D Non-voting Common Stock, the Class E Non- voting Common Stock, the Series A Preferred Stock, the Series C Preferred Stock, and the Warrants, and except as set forth on Schedule 8.3 hereto, the Company nor any Subsidiary ------------ has no, and at the time of the Closing will have not have, outstanding any stock or securities convertible into or exchangeable for any shares of its capital stock Capital Stock, or containing any profit participation features, nor shall it have outstanding any rights (either preemptive or options other) to subscribe for or to purchase, or any outstanding options for the purchase its capital stock of, or any agreements providing for the issuance (contingent or otherwise) of, or any outstanding calls, commitments or claims of any character relating to, any Capital Stock or any stock or securities convertible into or exchangeable for its capital stock any Capital Stock of the Company, or any outstanding demand or piggyback registration rights to register any Capital Stock or any stock appreciation rights or phantom stock plans, except securities convertible into or exchangeable for the Capital Stock of the Company; (v) except with respect to the Warrants, the Series C Preferred Stock and except as set forth on Exhibit H. Exhibit H accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holderSeries A Preferred Stock, the number of shares covered, the exercise price and the expiration date. As of the Closing, neither the Company nor any Subsidiary will not be subject to any obligation (contingent or otherwiseother) to repurchase or repurchase, otherwise acquire or retire any shares of its capital stock Capital Stock; and (vi) the Company has no knowledge of any agreement (except as set forth in this Agreement or the Stockholders Agreement) restricting the transfer of any warrants, options or other rights to acquire its capital stockshares of the Company's Capital Stock, except as set forth on Exhibit H. As Schedule 8.3. Schedule ------------ -------- 8.3 sets forth the number of shares of Capital Stock, the holders thereof, and --- the percentage held by each holder of the issued and outstanding Capital Stock of the Company and each Subsidiary at the time of the Closing and immediately thereafter, all of after giving effect to the outstanding shares of Acquisition and the Company's capital stock shall be validly issued, fully paid and nonassessable. iv. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including the sale of the Shares pursuant to transactions contemplated by this Agreement. There are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except as set forth on Exhibit H..

Capital Stock and Related Matters. i. As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (ai) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathnet) thereafter, the authorized capital stock of the Company will shall consist of (a) 39,620,860 seventeen million four hundred thousand (17,400,000) shares of preferred stock, of which 2,899,999 three hundred and fifty two (352) shares are shall be designated as Series A Convertible Preferred Stock (all of which shall be issued and outstanding), six million three hundred ninety-nine thousand six hundred forty eight (6,399,648) shares will be designated as Series B Preferred (five million seven hundred and seventy six thousand eight hundred and nineteen (5,776,819) of which will be issued and outstanding), 4,788,030 ) and eleven million (11,000,000) shares are shall be designated as Series B Convertible C Preferred Stock (all none of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 shares of Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock"), and (b) 60,000,000 twenty nine million one hundred thousand (29,100,000) shares of Common Stock, of which 2,977,593 three million five hundred and two thousand five hundred (3,502,500) shares will shall be issued and outstanding outstanding, twenty three million two hundred and 30,000,000 forty seven thousand four hundred and sixty four (23,247,464) shares will shall be reserved for issuance upon conversion of the Notes, the Series C Preferred, the Series A Preferred Stockand the Series B Preferred, and two million three hundred and seven thousand nine hundred and seventy two (2,307,972) shares shall be reserved for issuance pursuant to stock option plans. As of the Closing, neither the Company nor any Subsidiary will shall have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation features, nor shall it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plansstock, except for the Preferred Stock Notes, the Series C Preferred, Series A Preferred, the Series B Preferred, and except as set forth on Exhibit H. Exhibit H the attached "Capitalization Schedule." The Capitalization Schedule accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration date. As of the Closing, neither the Company nor any Subsidiary will shall be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except as set forth on Exhibit H. the Capitalization Schedule, except in respect of the Notes and except pursuant to the Certificate of Incorporation. As of the Closing and immediately thereafterClosing, all of the outstanding shares of the Company's capital stock shall be validly issued, fully paid and nonassessable. iv(ii) Except as set forth in (a) the Purchase Agreement dated November 22, 1996 between the Company and the holders of the Series B Preferred (as amended to the date hereof, the "Series B Purchase Agreement"), (b) the ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, (▇) ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, (▇) the Purchase Agreement dated June 27, 1996 between the Company and the holders of the Series A Preferred (as amended to the date hereof, the "Series A Purchase Agreement") and (e) the Company's existing certificate of incorporation, all of which have been waived, there are no statutory or contractual stockholders preemptive rights or rights of refusal with respect to the issuance of the Notes hereunder, the issuance of the Series C Preferred or the issuance of any series of capital stock of the Company. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including and the offer, sale and issuance of the Shares pursuant to this AgreementNotes hereunder does not require registration under the Securities Act or any applicable state securities laws. There To the best of the Company's knowledge, there are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except for the Stockholders Agreement, the Amended and Restated Initial Stockholders Agreement dated June 27, 1996 between the Company and certain of its stockholders, and the stock option agreements set forth on the Capitalization Schedule. (iii) Except as set forth on Exhibit H.in the Amended and Restated Registration Agreement dated November 22, 1996 between the Company and certain of the Purchasers, which will be superseded by the Registration Agreement, the Company is not under any obligation to register any of its currently outstanding securities or any of its securities which may hereafter be issued.

Capital Stock and Related Matters. i. As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing Date, and immediately thereafter (assuming that after giving effect to the Company has completed the closing under each of transactions contemplated hereby and pursuant to the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of PathnetDocuments, (i) the authorized capital stock of the Company will consist of a total of 35,000,000 shares as follows: (a) 39,620,860 shares of preferred stock, of which 2,899,999 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 shares of Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock"), and (b) 60,000,000 30,000,000 shares of Common Stock, par value $.001 per share, of which 2,977,593 4,663,992 shares will be are issued and outstanding outstanding, the ownership and 30,000,000 the consideration paid for such shares will be is as set forth on Schedule 10C to Amendment No. 1 hereto and 1,397,238 shares of which are reserved for issuance upon conversion of the Series A Convertible Preferred Stock and 485,382 shares of which are reserved for issuance upon conversion of the Series C Convertible Preferred Stock and (b) 1,244,737 shares of Series A Convertible Preferred Stock. As , par value $.001 per share, of which 1,244,737 shares are issued and outstanding and 485,382 shares of Series C Convertible Preferred Stock, par value $.001 per share, of which 485,382 shares are issued and outstanding; (ii) all issued and outstanding shares shall have been duly and validly issued, fully paid and non-assessable; (iii) no shares of Common Stock or Series A or C Convertible Preferred Stock will be owned or held by or for the account of the ClosingCompany or any of its Subsidiaries; (iv) except as set forth on Schedule 10C to Amendment No. 1 hereto, neither the Company nor any Subsidiary of its Subsidiaries will have outstanding any stock or securities convertible into or exchangeable for any shares of its capital stock or containing any profit participation features, nor shall it have outstanding any rights (either preemptive or options other) to subscribe for or to purchase, or any options for the purchase its of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any other character relating to the issuance of, any capital stock stock, or any stock or securities convertible into or exchangeable for its any capital stock or any stock appreciation rights or phantom stock plans, except for the Preferred Stock and stock; (v) except as set forth on Exhibit H. Exhibit H accurately sets forth the following with respect Schedule 10C to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration dateAmendment No. As of the Closing1 hereto, neither the Company nor any Subsidiary of its Subsidiaries will be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, warrants or options or other rights to acquire purchase shares of its capital stock, ; (vi) except as set forth on Exhibit H. As Schedule 10C to Amendment No. 1 hereto, neither the Company nor any of its Subsidiaries is a party to any agreement (other than this Agreement and the Closing and immediately thereafter, all of Securityholders Agreement) restricting the outstanding shares of the Company's capital stock shall be validly issued, fully paid and nonassessable. iv. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance transfer of any shares of its capital stock; and (vii) neither the Company nor any of its Subsidiaries will have filed or be required to file, including the sale pursuant to Section 12 of the Shares pursuant Exchange Act, a registration statement relating to this Agreement. There are no agreements between the Company's stockholders any class of debt or between Pathnet's stockholders with respect to the voting or transfer equity securities as of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except as set forth on Exhibit H.date hereof."

Capital Stock and Related Matters. i. The authorized capital stock of the Company consists of 250,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock, $.01 par value per share. As of the Agreement Datedate hereof, no there are (i) 100,000 shares of Series A Convertible Preferred Stock issued and outstanding, (ii) 58,352,704 shares of Common Stock issued and outstanding, (iii) 14,285,714 shares of Common Stock issuable upon conversion of the Series A Convertible Preferred Stock, (iv) 18,960,074 shares of Common Stock issuable upon the exercise of outstanding stock options and warrants and upon the conversion or exchange of outstanding convertible or exchangeable securities, excluding the Series A Convertible Preferred Stock, (v) an aggregate of 10,000,000 shares of Common Stock reserved for issuance under the Company's Second Amended and Restated 1998 Stock Option Plan, of which 3,676,263 shares remain available for the grant of options and (vi) 367,500 shares of capital stock of the Company are held in the treasury of the Company. All issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 outstanding shares of preferred stock (of which zero (0) shares are issued Common Stock and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock have been duly authorized and are validly issued, fully paid, nonassessable and free of preemptive rights. The Shares, when issued to the Purchasers in accordance with this Agreement, will be duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing and immediately thereafter (assuming except that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathnet) the authorized capital stock of the Company will consist of (a) 39,620,860 shares of preferred stock, of which 2,899,999 shares are designated as Series A Convertible Preferred Stock (all of which Stock's preemptive rights will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof have been exercised as set forth in EXHIBIT F). Except as set forth above and on Exhibit H)SCHEDULE 5.6, and 4,506,145 shares of Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock"), and (b) 60,000,000 shares of Common Stock, of which 2,977,593 shares will be issued and outstanding and 30,000,000 shares will be reserved for issuance upon conversion as of the Preferred Stock. As of the Closingdate hereof, neither the Company nor any Subsidiary will have there are no outstanding any stock or securities convertible into or exchangeable for any shares of its capital stock of the Company or containing any profit participation featuresof its Subsidiaries, nor shall it have or any outstanding any rights (either preemptive or options other) to subscribe for or to purchase, or any outstanding options for the purchase its of, or any agreements providing for the issuance (contingent or otherwise) of, or any outstanding calls, commitments or claims of any character relating to, any capital stock of the Company or any of its Subsidiaries or any stock or securities convertible into or exchangeable for its any capital stock of the Company or any stock appreciation rights or phantom stock plans, except for the Preferred Stock and except of its Subsidiaries. Except as set forth on Exhibit H. Exhibit H accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holderSCHEDULE 5.6, the number of shares covered, the exercise price and the expiration date. As as of the Closingdate hereof, neither the Company nor any Subsidiary will be of its Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrantsconvertible securities, rights or options or other rights to acquire its capital stock, except as set forth on Exhibit H. As of the Closing and immediately thereaftertype described in the preceding sentence. Neither the Company nor any of its Subsidiaries is a party to, all or has knowledge of, any agreement restricting the transfer of the outstanding any shares of the Company's capital stock shall be validly issued, fully paid and nonassessable. iv. The Company has not violated any applicable federal or state securities laws in connection with which would affect the offer, sale or issuance of any of its capital stock, including the sale transferability of the Shares pursuant to this Agreement. There are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer Common Stock issuable upon conversion of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except Stock. Except as set forth on Exhibit H.SCHEDULE 5.6, as of the date hereof, the Company is not a party to or bound by any agreement or commitment pursuant to which the Company is or could be required to register any securities under the Securities Act of 1933.

Capital Stock and Related Matters. i. As of At the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As time of the Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of PathnetInitial Investment, (a) the authorized capital stock of the Company will consist of (ai) 39,620,860 500,000 shares of preferred stockClass A Voting Common Stock, par value $.01 per share, of which 2,899,999 5,250 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 (ii) 100,000 shares of Series E Convertible Preferred Stock (Class B Voting Common Stock, par value $.0l per share, of which 1,729,631 5,100 shares will be issued and outstanding, (iii) (collectively, the "Preferred Stock"), and (b) 60,000,000 100,000 shares of Class C Non-Voting Common Stock, par value $.01 per share, of which 2,977,593 69,900 shares will be issued and outstanding, (iv) 100,000 shares of Class D Non-Voting Common Stock, par value $.01 per share, of which no shares will be issued and outstanding and 30,000,000 27,484 shares will be reserved for issuance upon conversion the exercise of certain warrants held by Electra and The Provident Bank, (v) 100,000 shares of Class E Non-Voting Common Stock, par value $.01 per share, of which 1,648 shares will be issued and outstanding and 13,400 shares will be reserved for issuance upon exercise of certain management stock options, 490 shares will be reserved for issuance upon exercise of certain warrants held by The Provident Bank and 8,924 shares will be reserved for issuance upon exercise of the Warrants, (vi) 50,000 shares of Series A Preferred Stock. As , par value $.01 per share, of which 7,852 shares will be issued and outstanding, (vii) 1,000 shares of Series B Preferred Stock, par value $.01 per share, none of which shares will be issued and outstanding, (viii) 5,000 shares of Series C Preferred Stock, par value $.01 per share, of which 4,954 shares of Series C Preferred Stock will be issued to Electra and outstanding, and (ix) 10,000 shares of Series D Preferred Stock, par value $.01 per share, per share, of which 2,000 shares will be issued and outstanding, (b) no shares of Common Stock will be owned or held by or for the account of the ClosingCompany; (c) all of the issued and outstanding shares of the Company's Capital Stock will be validly issued and outstanding, neither fully paid and non-assessable and will be owned of record (other than shares attributable to ▇▇▇▇▇▇▇, which shall be owned of record by First Chicago, Custodian, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇) and, to the best knowledge of the Company, beneficially, free and clear of any Liens (except as may be contemplated by the Senior Loan Documents) by the individuals and entities and in the amounts set forth on Schedule 1 and Schedule 8.3 hereof; (d) ---------- ------------ except for the Class A Voting Common Stock, the Class B Voting Common Stock, the Class C Non-Voting Common Stock, warrants for the Class D Non-Voting Common Stock, the Class E Non-Voting Common Stock and certain warrants and options for the Class E Non-Voting Common Stock, the Series A Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock, and the Warrants, and except as set forth on Schedule 8.3 hereto, the Company nor any Subsidiary has no, and at the time of the ------------ Closing of the Initial Investment will have not have, outstanding any stock or securities convertible into or exchangeable for any shares of its capital stock Capital Stock, or containing any profit participation features, nor shall it have outstanding any rights (either preemptive or options other) to subscribe for or to purchase, or any outstanding options for the purchase its capital stock of, or any agreements providing for the issuance (contingent or otherwise) of, or any outstanding calls, commitments or claims of any character relating to, any Capital Stock or any stock or securities convertible into or exchangeable for its capital stock any Capital Stock of the Company, or any outstanding demand or piggyback registration rights to register any Capital Stock or any stock appreciation rights or phantom stock plans, except securities convertible into or exchangeable for the Capital Stock of the Company (other than rights of certain Purchasers which have been waived or are being waived simultaneously herewith); (e) except with respect to the Series C Preferred Stock, the Series A Preferred Stock and except as set forth on Exhibit H. Exhibit H accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holderSeries D Preferred Stock, the number of shares covered, the exercise price and the expiration date. As of the Closing, neither the Company nor any Subsidiary will not be subject to any obligation (contingent or otherwiseother) to repurchase or repurchase, otherwise acquire or retire any shares of its capital stock Capital Stock; and (f) the Company has no knowledge of any agreement (except as set forth in this Agreement, the Electra Securities Agreement or the Stockholders Agreement) restricting the transfer of any warrants, options or other rights to acquire its capital stockshares of the Company's Capital Stock, except as set forth on Exhibit H. As Schedule 8.3. Schedule 8.3 sets forth the ------------ ------------ number of shares of Capital Stock, the holders thereof, and the percentage held by each holder of the issued and outstanding Capital Stock of the Company and each Subsidiary at the time of the Closing and immediately thereafter, all of the outstanding shares of the Company's capital stock shall be validly issued, fully paid Initial Investment and nonassessable. iv. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including the sale of the Shares pursuant to this Agreement. There are no agreements between the Company's stockholders or between Pathnet's stockholders with respect after giving effect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except as set forth on Exhibit H.Initial Investment.

Capital Stock and Related Matters. i. As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing Date, and immediately thereafter (assuming that after giving effect to the Company has completed the closing under each of transactions contemplated hereby and pursuant to the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of PathnetDocuments, (i) the authorized capital stock of the Company will consist of a total of 50,000,000 shares as follows: (a) 39,620,860 shares of preferred stock, of which 2,899,999 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 shares of Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock"), and (b) 60,000,000 2,100,572 shares of Common Stock, par value $.001 per share, of which 2,977,593 6,741,413 shares will be are issued and outstanding, 2,042,986 shares of which are reserved for issuance upon the exercise of the Warrants, and 6,387,160 shares of which are reserved for issuance to holders of Warrants and options; (b) 25,000,000 shares of Preferred Stock, par value $.001 per share, of which 3,600 shares have been designated Series A Preferred Stock (2,000 shares of which are issued and outstanding and 30,000,000 of which 15,000 shares have been designated Series B Preferred Stock (15,000 shares of which are issued and outstanding); (ii) all issued and outstanding shares shall have been duly and validly issued, fully paid and non-assessable; (iii) no shares of capital stock of the Company will be reserved owned or held by or for issuance upon conversion the account of the Preferred Stock. As Company or any of the Closingits Subsidiaries; (iv) except as set forth on Schedule 10C, neither the Company nor any Subsidiary of the Guarantors will have outstanding any stock or securities convertible into or exchangeable for any shares of its capital stock or containing any profit participation features, nor shall it have outstanding any rights (either preemptive or options other) to subscribe for or to purchase, or any options for the purchase its of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any other character relating to the issuance of, any capital stock stock, or any stock or securities convertible into or exchangeable for its any capital stock or any stock appreciation rights or phantom stock plans, except for the Preferred Stock and stock; (v) except as set forth on Exhibit H. Exhibit H accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration date. As of the ClosingSchedule 10C, neither the Company nor any Subsidiary of the Guarantors will be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, warrants or options or other rights to acquire purchase shares of its capital stock, ; (vi) except as set forth on Exhibit H. As Schedule 10C, neither the Company nor any of the Closing Guarantors is a party to any agreement (other than this Agreement, the Securityholders Agreement and immediately thereafter, all of the outstanding shares of Registration Rights Agreement) restricting the Company's capital stock shall be validly issued, fully paid and nonassessable. iv. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance transfer of any shares of its capital stock, including the sale of the Shares pursuant to this Agreement. There are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, ; and (vii) except as set forth on Exhibit H.Schedule 10C and except for the Common Stock of the Company, neither the Company nor any of the Guarantors will have filed or be required to file, pursuant to Section 12 of the Exchange Act, a registration statement relating to any class of debt or equity securities as of the date hereof.

Capital Stock and Related Matters. i. As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement agreements with all the holders of the common stock of Pathnet) the authorized capital stock of the Company will consist of (a) 39,620,860 shares of preferred stock, of which 2,899,999 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit Hin Section 4C of the Disclosure Letter), and 4,506,145 shares of Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock"), and (b) 60,000,000 shares of Common Stock, of which 2,977,593 shares will be issued and outstanding and 30,000,000 shares will be reserved for issuance upon conversion of the Preferred Stock. As of the Closing, neither the Company nor any Subsidiary will have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation features, nor shall it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plans, except for the Preferred Stock and except as set forth on Exhibit H. Exhibit H in Section 4C of the Disclosure Letter. Section 4C of the Disclosure Letter accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration date. As of the Closing, neither the Company nor any Subsidiary will be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except as set forth on Exhibit H. As of the Closing and immediately thereafter, all of the outstanding shares of the Company's capital stock shall be validly issued, fully paid and nonassessable.or iv. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including the sale of the Shares pursuant to this Agreement. There are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except as set forth on Exhibit H.in Section 4C of the Disclosure Letter.

Capital Stock and Related Matters. i. As of Immediately following the Agreement DateClosing, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathnet) the authorized capital stock of the Company will consist of (ai) 39,620,860 600,000 shares of preferred stockClass A Voting Common Stock, par value $.01 per share, of which 2,899,999 5,250 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 (ii) 100,000 shares of Series E Convertible Preferred Stock (Class B Voting Common Stock, par value $.0l per share, of which 1,729,631 5,100 shares will be issued and outstanding, (iii) (collectively, the "Preferred Stock"), and (b) 60,000,000 100,000 shares of Class C Non-Voting Common Stock, par value $.01 per share, of which 2,977,593 69,900 shares will be issued and outstanding, (iv) 100,000 shares of Class D Non-Voting Common Stock, par value $.01 per share, of which no shares will be issued and outstanding and 30,000,000 27,484 shares will be reserved for issuance upon conversion the exercise of certain warrants held by Electra and The Provident Bank, (v) 200,000 shares of Class E Non-Voting Common Stock, par value $.01 per share, of which 1,648 shares will be issued and outstanding and 13,400 shares will be reserved for issuance upon exercise of certain management stock options, 1,315 shares will be reserved for issuance upon exercise of certain warrants held by The Provident Bank and 45,110 shares will be reserved for issuance upon exercise of the Warrants and certain other warrants, (vi) 50,000 shares of Series A Preferred Stock. As , par value $.01 per share, of which 7,852 shares will be issued and outstanding, (vii) 1,000 shares of Series B Preferred Stock, par value $.01 per share, none of which shares will be issued and outstanding, (viii) 5,000 shares of Series C Preferred Stock, par value $.01 per share, of which 4,954 shares of Series C Preferred Stock will be issued to Electra and outstanding, and (ix) 25,000 shares of Series D Preferred Stock, par value $.01 per share, per share, of which 21,125 shares will be issued and outstanding and 1,375 shares will be reserved for issuance upon the closing of unconsummated Subsequent Investments, (b) no shares of Common Stock will be owned or held by or for the account of the Company; (c) all of the issued and outstanding shares of the Company's Capital Stock will be validly issued and outstanding, fully paid and non-assessable and will be owned of record (other than shares attributable to ▇▇▇▇▇▇▇, which shall be owned of record by First Chicago, Custodian, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇) and, to the best knowledge of the Company, beneficially, free and clear of any Liens (except as may be contemplated by the Senior Loan Documents) by the individuals and entities and in the amounts set forth on Schedule 1 and Schedule 8.3 hereof; (d) except for the Class A Voting Common Stock, the Class B Voting Common Stock, the Class C Non-Voting Common Stock, warrants for the Class D Non-Voting Common Stock, the Class E Non-Voting Common Stock and certain warrants and options for the Class E Non-Voting Common Stock, the Series A Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock, and the Warrants, and except as set forth on Schedule 8.3 hereto, the Company has no, and at the time of the Initial Closing, neither the Company nor any Subsidiary will have not have, outstanding any stock or securities convertible into or exchangeable for any shares of its capital stock Capital Stock, or containing any profit participation features, nor shall it have outstanding any rights (either preemptive or options other) to subscribe for or to purchase, or any outstanding options for the purchase its capital stock of, or any agreements providing for the issuance (contingent or otherwise) of, or any outstanding calls, commitments or claims of any character relating to, any Capital Stock or any stock or securities convertible into or exchangeable for its capital stock any Capital Stock of the Company, or any outstanding demand or piggyback registration rights to register any Capital Stock or any stock appreciation rights or phantom stock plans, except securities convertible into or exchangeable for the Capital Stock of the Company (other than rights of certain Purchasers which have been waived or are being waived simultaneously herewith); (e) except with respect to the Series C Preferred Stock, the Series A Preferred Stock and except as set forth on Exhibit H. Exhibit H accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holderSeries D Preferred Stock, the number of shares covered, the exercise price and the expiration date. As of the Closing, neither the Company nor any Subsidiary will not be subject to any obligation (contingent or otherwiseother) to repurchase or repurchase, otherwise acquire or retire any shares of its capital stock Capital Stock; and (f) the Company has no knowledge of any agreement (except as set forth in this Agreement, the Electra Securities Agreement or the Stockholders Agreement) restricting the transfer of any warrants, options or other rights to acquire its capital stockshares of the Company's Capital Stock, except as set forth on Exhibit H. As Schedule 8.3. Schedule 8.3 sets forth the number of shares of Capital Stock, the holders thereof, and the percentage held by each holder of the issued and outstanding Capital Stock of the Company and each Subsidiary at the time of the Closing and immediately thereafter, all of the outstanding shares of the Company's capital stock shall be validly issued, fully paid Initial Investment and nonassessable. iv. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including the sale of the Shares pursuant to this Agreement. There are no agreements between the Company's stockholders or between Pathnet's stockholders with respect after giving effect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except as set forth on Exhibit H.Initial Investment.

Capital Stock and Related Matters. i. As of the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Initial Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement agreements with all the holders of the common stock of Pathnet) the authorized capital stock of the Company will consist of (a) 39,620,860 shares of preferred stock, of which 2,899,999 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit Hin Section 4C of the Disclosure Letter), and 4,506,145 shares of Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock"), and (b) 60,000,000 shares of Common Stock, of which 2,977,593 shares will be issued and outstanding and 30,000,000 shares will be reserved for issuance upon conversion of the Preferred Stock. As of the Initial Closing, neither the Company nor any Subsidiary will have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation features, nor shall it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plans, except for the Preferred Stock and except as set forth on Exhibit H. Exhibit H in Section 4C of the Disclosure Letter. Section 4C of the Disclosure Letter accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration date. As of the Initial Closing, neither the Company nor any Subsidiary will be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except as set forth on Exhibit H. the Section 4C of the Disclosure Letter. As of the Initial Closing and immediately thereafter, all of the outstanding shares of the Company's capital stock shall be validly issued, fully paid and nonassessable. iv. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including the sale of the Shares pursuant to this Agreement. There are no agreements between the Company's stockholders or between Pathnet's stockholders with respect to the voting or transfer of the Company's or Pathnet's capital stock or with respect to any other aspect of the Company's or Pathnet's affairs, except as set forth on Exhibit H.in Section 4C of the Disclosure Letter.

Capital Stock and Related Matters. i. As of (i) On the Agreement Date, no shares of capital stock of the Company are issued and outstanding. ii. As of the Agreement Datedate hereof, the authorized capital stock of Pathnet the Company consists of (a) 10,000,000 31,500,000 shares of preferred stock (stock, of which zero 31,500,000 shares are designated as Series A Preferred Stock and 30,150,753 of which are outstanding and held by certain of the Investors as set forth on the attached Capitalization Schedule and (0b) 195,000,000 shares of Common Stock, of which 105,762,189 shares are issued and outstanding); (b) 1,000,000 outstanding and held of record by the Selling Stockholders and other Persons as set forth on the attached Capitalization Schedule, 31,500,000 shares are reserved for issuance upon conversion of the Series A Convertible Preferred Stock (all and 21,516,196 shares are reserved for issuance upon exercise of which are stock options or vesting of restricted stock units issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding)or available for issuance under the Equity Incentive Plan. iii. As (ii) Immediately following the consummation of the Closing Investment Transaction and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathnet) Repurchase Transaction, the authorized capital stock of the Company will consist of (a) 39,620,860 52,878,666 shares of preferred stock, of which 2,899,999 shares 30,150,753 are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 outstanding shares will be designated as Series D Convertible A Preferred Stock (and held by certain of which 8,511,607 will be issued and outstanding, allocated among the holders thereof Investors as set forth on Exhibit H), the attached Capitalization Schedule and 4,506,145 22,727,913 shares of will be designated as Series E Convertible B Preferred Stock (and held by the Investors as set forth on the Schedule of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock"), Investors and (b) 60,000,000 210,307,804 shares of Common Stock, of which 2,977,593 83,034,276 shares will shall be issued and outstanding and 30,000,000 held of record by the Selling Stockholders and other Persons as set forth on the attached Capitalization Schedule, 52,878,666 shares will shall be reserved for issuance upon conversion of the Series A Preferred Stock. As and the Series B Preferred and 21,516,196 shares shall be reserved for issuance upon exercise of stock options or vesting of restricted stock units issued or available for issuance under the ClosingEquity Incentive Plan. (iii) Except as set forth on the Capitalization Schedule and except as provided in this Agreement, on the date hereof, neither the Company nor or any Subsidiary of its Subsidiaries will have authorized or outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation features, nor shall it have outstanding any rights (whether contract rights or otherwise) or options to subscribe for or to purchase or otherwise acquire its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plans, except for the Preferred Stock and except as set forth on Exhibit H. Exhibit H accurately sets forth the following with respect to all outstanding options and rights to acquire the Company's and Pathnet's capital stock: the holder, the number of shares covered, the exercise price and the expiration date. As of the Closing, neither Neither the Company nor or any Subsidiary will be of its Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except other than in connection with the Repurchase Transaction and as set forth on Exhibit H. As in the Certificate of the Closing and immediately thereafter, all Incorporation. All of the outstanding shares of the Company's ’s capital stock shall be were validly issued, issued and are fully paid and nonassessablenon-assessable. (iv) Except as set forth on the Capitalization Schedule and except as provided in the Investors’ Rights Agreement, there are no statutory or contractual shareholder preemptive rights or rights of first refusal or other similar restrictions with respect to the issuance of the Series B Preferred hereunder, the issuance of any Common Stock upon the conversion of the Preferred Stock or the consummation of the Repurchase Transaction, provided, however, the Common Stock issuable upon conversion of the Preferred Stock is subject to restrictions on transfer under applicable federal or state securities Laws. The Subject to the accuracy of the Investors’ representations and warranties in ARTICLE 8, and the representations and warranties made by all of the Company’s investors in connection with the offer, sale or issuance of all equity securities previously issued, the Company has not violated violated, in any material respect, any applicable federal or state securities laws Laws in connection with the offer, sale or issuance of any of its capital stock, including equity securities and the sale issuance of the Shares pursuant to this Series B Preferred hereunder and the issuance of Common Stock upon the conversion of the Preferred Stock does not require registration under the Securities Act or any applicable state securities Laws. Except as set forth in the Voting Agreement. There , there are no agreements or understandings between the Company's stockholders , on the one hand, and the Company’s shareholders or between Pathnet's stockholders any other Person on the other hand with respect to the voting or transfer of the Company's or Pathnet's ’s capital stock or with respect to any other aspect of the Company's ’s governance and, to the Company’s knowledge, there is no agreement among the Company’s shareholders or Pathnet's affairs, except as set forth on Exhibit H.among any other person with respect to the foregoing.

Capital Stock and Related Matters. i. As of Except as set forth on Schedule 4.4: (a) On the Agreement Datedate hereof and prior to giving effect to the transactions contemplated by this Agreement, no shares of (i) the authorized and issued capital stock of the Company consists solely of 17,000,000 shares of Participating Preferred Stock, $0.001 par value per share (“Participating Preferred Stock”), consisting of the Series A Preferred Stock and the Series A-1 Preferred Stock, of which 13,938,657 shares of Series A Preferred Stock are issued and outstanding and no shares of Series A-1 Preferred Stock are issued and outstanding. ii. As of the Agreement Date, the authorized capital stock of Pathnet consists of (a) 10,000,000 shares of preferred stock (of which zero (0) shares are issued and outstanding); (b) 1,000,000 shares of Series A Convertible Preferred Stock (all of which are issued and outstanding); (c) 1,651,046 shares of Series B Convertible Preferred Stock (all of which are issued and outstanding); (d) 2,819,549 shares of Series C Convertible Preferred Stock (all of which are issued and outstanding); and (e) 60,000,000 shares of Common Stock (of which 2,977,593 are issued and outstanding). iii. As of the Closing and immediately thereafter (assuming that the Company has completed the closing under each of the Related Contribution Agreements and under a similar contribution agreement with all holders of the stock of Pathnet) the authorized capital stock of the Company will consist of (a) 39,620,860 shares of preferred stock, of which 2,899,999 shares are designated as Series A Convertible Preferred Stock (all of which will be issued and outstanding), 4,788,030 shares are designated as Series B Convertible Preferred Stock (all of which will be issued and outstanding), 8,176,686 shares are designated as Series C Convertible Preferred Stock (all of which will be issued and outstanding), 9,250,000 shares will be designated as Series D Convertible Preferred Stock (of which 8,511,607 will be issued and outstanding, allocated among the holders thereof as set forth on Exhibit H), and 4,506,145 shares of Series E Convertible Preferred Stock (of which 1,729,631 will be issued and outstanding) (collectively, the "Preferred Stock"), and (b) 60,000,000 300,000,000 shares of Common Stock, of which 2,977,593 119,372,031 shares will be are issued and outstanding outstanding, (ii) Options to purchase 3,622,500 shares of Common Stock have been issued and 30,000,000 (iii) 13,938,657 shares will be of Common Stock are reserved for issuance upon conversion of the Preferred Stock. As of the Closing, neither the Company nor any Subsidiary will have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation features, nor shall it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plans, except for the Series A Preferred Stock and except as set forth on Exhibit H. Exhibit H accurately 3,622,500 shares of Common Stock are reserved for issuance upon conversion of the Options. Schedule 4.4 sets forth the following with respect to all number of issued and outstanding options shares of Series A Preferred Stock, Series A-1 Preferred Stock and rights to acquire Common Stock, the Company's names of the record owners thereof and Pathnet's capital stock: the holdernumber of shares of Series A Preferred Stock, Series A-1 Preferred Stock and Common Stock held by each such owner. Schedule 4.4 also sets forth the number of issued and outstanding Options, the number of shares coveredof Common Stock for which the Options may be exercised, the exercise price prices, the expiration dates and the expiration date. names of the record owners thereof. (b) As of the ClosingClosing and immediately after giving effect to the transactions contemplated hereby, neither (w) (i) the authorized and issued capital stock of the Company nor any Subsidiary will consists solely of 17,000,000 shares of Participating Preferred Stock, of which 13,938,657 shares of Series A Preferred Stock are issued and outstanding and 1,948,251 shares of Series A-1 Preferred Stock are issued and outstanding, and 300,000,000 shares of Common Stock, of which 141,021,880 shares are issued and outstanding, (ii) Options to purchase 3,622,500 shares of Common Stock have been issued and (iii) 15,886,908 shares of Common Stock are reserved for issuance upon conversion of the outstanding shares of Series A Preferred Stock and Series A-1 Preferred Stock and 3,622,500 shares of Common Stock are reserved for issuance upon conversion of the Options, (x) the Company shall not be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or Equity Securities, except as contemplated by the Charter upon the occurrence of certain events (none of which have yet occurred), (y) the Company shall not have outstanding any warrants, options or other rights to acquire its capital stockEquity Securities, except as set forth on Exhibit H. As of the Closing in this Section 4.4(b) and immediately thereafter, (z) all of the outstanding shares of the Company's ’s capital stock identified above shall be validly issued, fully paid and nonassessable. iv(c) There are no statutory or contractual shareholders preemptive rights or rights of refusal with respect to (i) the issuance of the Shares hereunder or the issuance of the Common Stock upon conversion of the Preferred Shares or (ii) the issuance by the Company of any other Equity Security, other than any such rights listed on Schedule 4.4, each of which have been waived prior to the date hereof. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, including and the offer, sale and issuance of the Shares pursuant to this Agreementhereunder do not require registration under the Securities Act or any applicable state securities laws. There are no agreements between the Company's stockholders ’s shareholders or between Pathnet's stockholders any of the Company’s shareholders and the Company, with respect to the voting or transfer of the Company's ’s capital stock, with respect to the issuance, purchase, redemption or Pathnet's capital stock sale of any Equity Security or with respect to any other aspect of the Company's ’s affairs other than the Stockholders Agreement or Pathnet's affairs, except as set forth on Exhibit H.Schedule 4.4. (d) The Shares purchased by the Purchaser hereunder will have the terms and provisions set forth in the Charter. Upon delivery to the Purchaser at the Closing of the share certificates with respect to the Shares, (i) the Purchaser will become the sole record legal and beneficial owner of such Shares and good and marketable title to such Shares will pass to the Purchasers, free and clear of any Liens, options, charges and transfer restrictions of any kind, except for those created by this Agreement, the Ancillary Agreements and applicable securities laws, and (ii) such Shares will be duly authorized, validly issued, fully paid and nonassessable. Upon the conversion of the Preferred Shares as provided in the Charter, (A) the Purchaser will become the sole record legal and beneficial owner of the shares of Common Stock issuable upon such conversion and good and marketable title to such shares of Common Stock will pass to the Purchaser, free and clear of any Liens, options, charges and transfer restrictions of any kind, except for those created by this Agreement, the Ancillary Agreements and applicable securities laws, and (B) such shares of Common Stock will be duly authorized, validly issued, fully paid and nonassessable. The Company currently has, and at all times will maintain, a sufficient number of authorized but unissued shares of Common Stock so that the Company will at all times have a sufficient number of authorized shares of Common Stock to issue upon the conversion in full of all of the Preferred Shares. (e) As of the Closing Date, (i) the “Accreted Value” (as defined in the Charter) with respect to each share of Series A Preferred Stock issued on August 20, 2004 is $21.4475, (ii) the “Unpaid Base Amount” (as defined in the Charter) with respect to each such share of Series A Preferred Stock is $19.01, (iii) the sum of all unpaid amounts previously declared in respect of each such share of Series A Preferred Stock as “Special Dividends” (as defined in the Charter) is $0 and (iv) the “Conversion Value” (as defined in the Charter) in respect of each such share of Series A Preferred Stock is $21.4475. (f) Other than as contemplated by Section 2.2 above, there are no declared and unpaid dividends on either the Series A Preferred Stock or the Common Stock.