CONCENTRIC NETWORK CORP, S-8, 1998-07-06

CONCENTRIC NETWORK CORP
S-8, 1998-07-06
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

Previous: EXCITE INC, S-3/A, 1998-07-06

Next: LYCOS INC, PRES14A, 1998-07-06

<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 6, 1998
REGISTRATION NO. 333-_______
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-8 AND FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

CONCENTRIC NETWORK CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 65-0257497
------------ ----------
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)

10590 NORTH TANTAU AVENUE
CUPERTINO, CALIFORNIA 95014
(ADDRESS, INCLUDING ZIP CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

DELTA INTERNET SERVICES, INC.
1996 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
WARRANT AGREEMENT
(FULL TITLE OF THE PLANS)

HENRY R. NOTHHAFT
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
CONCENTRIC NETWORK CORPORATION
10590 NORTH TANTAU AVENUE
CUPERTINO, CALIFORNIA 95014
(408) 342-2800
(NAME, ADDRESS, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)

COPY TO:
DAVID J. SEGRE, ESQ.
MICHELLE L. WHIPKEY, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(650) 493-9300

CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================================

PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO TO BE OFFERING PRICE AGGREGATE REGISTRATION
BE REGISTERED REGISTERED(1) PER SHARE OFFERING PRICE FEE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, $.001 PAR VALUE
TO BE ISSUED UNDER THE DELTA INTERNET SERVICES, INC. 1996
STOCK OPTION PLAN........................................ 66,498 SHARES $33.37(2) $2,219,039 $655
TO BE ISSUED UNDER A STOCK OPTION AGREEMENT................ 31,398 SHARES $18.98(3) $ 595,935 $176
ISSUED UNDER A WARRANT AGREEMENT........................... 817 SHARES $25.42(4) $ 20,769 $ 7
TOTAL 98,713 SHARES $2,835,743 $838
==================================================================================================================================
</TABLE>
(1) FOR THE SOLE PURPOSE OF CALCULATING THE REGISTRATION FEE, THE NUMBER OF
SHARES TO BE REGISTERED UNDER THIS REGISTRATION STATEMENT HAS BEEN BROKEN
DOWN INTO THREE SUBTOTALS.
(2) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE AMOUNT OF THE
REGISTRATION FEE PURSUANT TO RULE 457(H) UNDER THE SECURITIES ACT OF 1933,
AS AMENDED ("THE ACT"). THE PRICE OF $33.37 PER SHARE REPRESENTS THE
WEIGHTED AVERAGE EXERCISE PRICE OF THE 66,498 SHARES SUBJECT TO OPTIONS
OUTSTANDING UNDER THE DELTA INTERNET SERVICES, INC. 1996 STOCK OPTION PLAN.
(3) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE AMOUNT OF THE
REGISTRATION FEE PURSUANT TO RULE 457(H) UNDER THE ACT. THE PRICE OF $18.98
PER SHARE REPRESENTS THE AVERAGE EXERCISE PRICE OF THE 31,398 SHARES SUBJECT
TO OPTIONS OUTSTANDING UNDER A STOCK OPTION AGREEMENT.
(4) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE AMOUNT OF THE
REGISTRATION FEE PURSUANT TO RULE 457(H) UNDER THE ACT BASED ON THE
PURCHASE PRICE OF $25.42 PER SHARE COVERING 817 SHARES ISSUED UNDER THE
WARRANT AGREEMENT.
================================================================================
<PAGE>

PROSPECTUS
- ----------

CONCENTRIC NETWORK CORPORATION

817 SHARES

COMMON STOCK

This Prospectus relates to 817 shares of the Common Stock ("Common Stock"),
of Concentric Network Corporation, a Delaware corporation (the "Company"), which
may be offered from time to time by the Selling Stockholder named herein (the
"Selling Stockholder") for its own benefit. It is anticipated that the Selling
Stockholder will offer the shares for sale at prevailing prices in the over-the-
counter market on the date of sale. The Company will receive no part of the
proceeds of sales made hereunder. All expenses of registration incurred in
connection with this offering are being borne by the Company, but all selling
and other expenses incurred by the Selling Stockholder will be borne by such
Selling Stockholder. None of the shares offered pursuant to this Prospectus
have been registered prior to the filing of the Registration Statement of which
this Prospectus is a part.

______________________________________

The Selling Stockholder and any broker executing selling orders on behalf
of the Selling Stockholder may be deemed to be an "underwriter" within the
meaning of the Securities Act. Commissions received by any such broker may be
deemed to be underwriting commissions under the Securities Act.

The Common Stock of the Company is traded on The Nasdaq National Market
under the symbol "CNCX." On July 2, 1998, the last reported sale price of the
Company's Common Stock was $34.50 per share.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMIS-
SION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

______________________________________

The date of this Prospectus is July 6, 1998.

-2-
<PAGE>

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERING DESCRIBED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE SELLING STOCKHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH
PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.

The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus is delivered, upon written or oral request of
such person, a copy of any and all of the information that has been or may be
incorporated by reference in this Prospectus, other than exhibits to such
documents. Any such request should be directed to the attention of Peter
Bergeron, Secretary, at the Company's principal executive offices, 10590 N.
Tantau Road, Cupertino, California 95014, telephone number (408) 342-2800.

The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith, files reports, proxy and information statements and other
information with the Securities and Exchange Commission (the "Commission").
Copies of such materials can be obtained by mail from the Public Reference
Section of the Commission, at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, such reports, proxy
and information statements and other information can be inspected and copied at
the public reference facility referenced above and at the SEC's regional offices
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois,
60661-2511 and 7 World Trade Center, Suite 1300, New York, New York 10048. The
Commission maintains a web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding companies, such
as the Company, that file electronically with the Commission. The Company's
Common Stock is traded on the Nasdaq National Market. The foregoing materials
are also available for inspection at the National Association of Securities
Dealers, Inc., 1735 K Street N.W., Washington, D.C. 20006.

This Prospectus contains information concerning the Company and the sale of
its Common Stock by the Selling Stockholder, but does not contain all
information set forth in the Registration Statement which the Company has filed
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"). The Registration Statement, including various
exhibits, may be inspected at the Public Reference Section of the Commission at
450 Fifth Street, Washington, D.C. 20549.

-3-
<PAGE>

THE COMPANY

The Company was incorporated in Florida in 1991 under the name Engineered
Video Concepts, Inc., changed its name to Concentric Research Corporation in
1992 and commenced network operations in 1994. In 1995, the Company changed its
name to Concentric Network Corporation and reincorporated into Delaware in 1997.
Unless the context otherwise requires, "Concentric" and the "Company" refer to
Concentric Network Corporation. The address of the Company's principal
executive offices is 10590 North Tantau Avenue, Cupertino, California 95014,
and its telephone number at this address is (408) 342-2800.

SELLING STOCKHOLDER

The Selling Stockholder is not an executive officer or director of the
Company and beneficially owns less than 1% of the outstanding Common Stock of
the Company prior to this offering. All of the shares of Common Stock
beneficially owned by the Selling Stockholder were issued upon exercise of a
warrant granted in exchange for consulting services pursuant to the terms of a
Warrant Agreement. The following table shows the name of the Selling
Stockholder and the number of shares of Common Stock to be sold by it pursuant
to this Prospectus.

NAME NUMBER OF SHARES OFFERED
---- ------------------------
The Gantry Group, L.L.C. 817

PLAN OF DISTRIBUTION

The Company has been advised by the Selling Stockholder that it intends to
sell all or a portion of the shares offered hereby from time to time on The
Nasdaq National Market or in the over-the-counter market and that sales will be
made at prices prevailing at the time of such sales. The Selling Stockholder
may also make private sales directly or through a broker or brokers, who may act
as agent or as principal. In connection with any sales, the Selling Stockholder
and any brokers or dealers participating in such sales may be deemed to be
underwriters within the meaning of the Securities Act. The Company will receive
no part of the proceeds of sales made hereunder.

Any broker-dealer participating in such transactions as agent may receive
commissions from the Selling Stockholder (and, if such broker acts as agent for
the purchaser of such shares, from such purchaser). Usual and customary
brokerage fees will be paid by the Selling Stockholder. Broker-dealers may
agree with the Selling Stockholder to sell a specified number of shares at a
stipulated price per share, and, to the extent such a broker-dealer is unable to
do so acting as agent for the Selling Stockholder, to purchase as principal any
unsold shares at the price required to fulfill the broker-dealer commitment to
the Selling Stockholder. Broker-dealers who acquire shares as principal may
thereafter resell such shares from time to time in transactions (which may
involve crosses and block transactions and which may involve sales to and
through other broker-dealers, including transactions of the nature described
above) in the over-the-counter market, in negotiated transactions or otherwise
at market prices prevailing at the time of sale or at negotiated prices, and in
connection with such resales may pay to or receive from the purchasers of such
shares commissions computed as described above.

The Company has advised the Selling Stockholder that Regulation M
promulgated under the Exchange Act may apply to sales in the market, has
furnished the Selling Stockholder with a copy of this Regulation and has

-4-
<PAGE>

informed them of the need for delivery of copies of this Prospectus. The
Selling Stockholder may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act. Any commissions paid or
any discounts or concessions allowed to any such broker-dealers, and, if any
such broker-dealers purchase shares as principal, any profits received on the
resale of such shares, may be deemed to be underwriting discounts and
commissions under the Securities Act. Upon the Company's being notified by the
Selling Stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares through a cross or block trade, the Company
may, in its discretion, file a supplemental prospectus under Rule 424(c) under
the Securities Act, setting forth the name of the participating broker-
dealer(s), the number of shares involved, the price at which such shares were
sold by the Selling Stockholder, the commissions paid or discounts or
concessions allowed by the Selling Stockholder to such broker-dealer(s), and
where applicable, that such broker-dealer(s) did not conduct any investigation
to verify the information set out in this Prospectus.

Any securities covered by this Prospectus which qualify for sale pursuant
to Rule 144 under the Securities Act may be sold under that Rule rather than
pursuant to this Prospectus.

There can be no assurances that the Selling Stockholder will sell any or
all of the shares of Common Stock offered hereunder.

INFORMATION INCORPORATED BY REFERENCE

There are hereby incorporated by reference into this Registration Statement
and into the Prospectus relating to this Registration Statement the following
documents and information heretofore filed with the Commission:

1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, filed pursuant to Section 13(a) of the Exchange
Act;

2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998, filed pursuant to Section 13(a) of the Exchange Act;

3. The Company's Current Report on Form 8-K dated as of February 5, 1998,
filed with the Commission on February 18, 1998, as amended by
Registrant's Current Report on Form 8-K/A filed April 17, 1998;

4. The Company's Current Report on Form 8-K dated as of June 11, 1998,
filed with the Commission on June 11, 1998; and

5. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed with the commission
on July 25, 1997.

All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date hereof, and prior
to the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a part
of this Registration Statement from the date of filing of such reports and
documents.

-5-
<PAGE>

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby was passed upon
for the Company by Wilson Sonsini Goodrich & Rosati, Professional Corporation,
Palo Alto, California.

-6-
<PAGE>

CONCENTRIC NETWORK CORPORATION
REGISTRATION STATEMENT ON FORM S-8

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
---------------------------------------

The following documents filed by the Company with the commission are
incorporated by reference into this Registration Statement:

1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, filed pursuant to Section 13(a) of the Exchange Act;

2. The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1998, filed pursuant to Section 13(a) of the Exchange Act;

3. The Company's Current Report on Form 8-K dated as of February 5, 1998,
filed with the Commission on February 18, 1998, as amended by
Registrant's Current Report on Form 8-K/A filed April 17, 1998;

4. The Company's Current Report on Form 8-K dated as of June 11, 1998,
filed with the Commission on June 11, 1998; and

5. The description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission on July 25,
1997.

All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date
hereof, and prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be a part of this Registration Statement from the date of the filing of
such reports and documents.

ITEM 4. DESCRIPTION OF SECURITIES
-------------------------

Not applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
--------------------------------------

Not applicable.

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------

The Registrant has entered into indemnification agreements with its
directors and officers providing for limitations on a director's and officer's
liability for judgments, settlements, penalties, fines and expenses of defense
(including attorneys' fees, bonds and costs of investigation) arising out of or
in any way related to acts or omissions as a director or an officer, or in any
other capacity in which services are rendered to the Registrant. The Registrant
believes its indemnification agreements will assist it in attracting and
retaining qualified individuals to serve as directors and officers. The
agreements provide that a director or officer is not entitled to indemnification
under

II-1
<PAGE>

such agreements (i) if the director or officer is not relieved of liability
under applicable law, (ii) for violations of certain securities laws, or (iii)
for certain claims initiated by the officer of director. Due to the lack of
applicable case law, it is not clear whether indemnification is available in
case of a breach of the securities laws of the U.S.

As permitted by Section 145 of the Delaware General Corporation Law, the
Registrant's Amended and Restated Certificate of Incorporation includes a
provision that eliminates the personal liability of its directors for monetary
damages for breach or alleged breach of their duty of care. In addition, as
permitted by Section 145 of the Delaware General Corporation Law, the
Registrant's Bylaws, as amended, provide that: (i) the Registrant is required to
indemnify its directors and officers and persons serving in such capacities in
other business enterprises (including, for example, subsidiaries of the
Registrant) at the Registrant's request, to the fullest extent permitted by
Delaware law, including in those circumstances in which indemnification would
otherwise be discretionary; (ii) the Registrant may, in its discretion,
indemnify employees and agents in those circumstances where indemnification is
not required by law; (iii) the Registrant is required to advance expenses, as
incurred, to its directors and officers in connection with defending a
proceeding (except that it is not required to advance expenses to a person
against whom the Registrant brings a claim for breach of the duty of loyalty,
failure to act in good faith, intentional misconduct, knowing violation of law
or deriving an improper personal benefit); (iv) the rights conferred in the
Bylaws, as amended, are not exclusive, and the Registrant is authorized to enter
into indemnification agreements with its directors, officers and employees; and
(v) the Registrant may not retroactively amend the Bylaw provisions in a way
that is adverse to such directors, officers and employees.

The Registrant's policy is to enter into indemnification agreements with
each of its directors and officers that provide the maximum indemnity allowed to
directors and officers by Section 145 of the Delaware General Corporation Law
and the Bylaws, as amended, as well as certain additional procedural
protections. The indemnification provisions in the Bylaws, as amended, and the
indemnification agreements entered into between the Registrant and its directors
and officers may be sufficiently broad to permit indemnification of the
Registrant's directors and officers for liabilities arising under the Securities
Act.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
-----------------------------------

The issuance of the shares being offered by the Form S-3 resale prospectus
were deemed exempt from registration under the Securities Act in reliance upon
Section 4(2) of the Securities Act.

II-2
<PAGE>

ITEM 8. EXHIBITS
--------
EXHIBIT
NUMBER DOCUMENT
- ------- --------
4.1 Delta Internet Services, Inc. 1996 Stock Option Plan, and forms of
Agreements used thereunder.

4.2 Stock Option Agreement

4.3 Warrant Agreement and Warrant Certificate issued thereunder.

5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation,
with respect to the legality of the Securities being registered.

23.1 Consent of Counsel (contained in Exhibit 5.1).

23.2 Consent of Ernst & Young LLP, Independent Auditors.

23.3 Consent of Arthur Andersen, LLP, Independent Public Accountants

24.1 Power of Attorney (see page II-5).

ITEM 9. UNDERTAKINGS
------------

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act of 1934, as amended (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act of 1934, as amended), that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Securities Act of 1933, as amended, and is, therefore,

II-3
<PAGE>

unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933, as amended, and will be
governed by the final adjudication of such issue.

II-4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant, Concentric Network Corporation, certifies that is has reasonable
grounds to believe that it meets all of the requirements for filing on Form S-
8/S-3 and has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Cupertino, State
of California, on the 6th day of July 1998.

CONCENTRIC NETWORK CORPORATION

By: /s/ Henry R. Nothhaft
_______________________________________
Henry R. Nothhaft
Chairman, President and Chief Executive
Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Henry R. Nothhaft and Michael F. Anthofer
and each of them, acting individually, as his attorney-in-fact, with full power
of substitution, for him and in any and all capacities, to sign any and all
amendments to this Registration Statement (including post-effective amendments)
on Form S-8/S-3, and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming our signatures as they may be signed by our said
attorney to any and all amendments to the Registration Statement.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated:

Signature Title Date
- --------------------- -------------------------------------------- --------------
<S> <C> <C>
/s/ Henry R. Nothhaft
- --------------------- Chairman, President and Chief Executive
Henry R. Nothhaft Officer (Principal Executive Officer),
Director July 6, 1998

/s/ Michael F. Anthofer
- --------------------- Senior Vice President, Chief Financial
Michael F. Anthofer Officer (Principal Financial and Accounting
Officer) July 6, 1998

/s/ Gordon Martin
- --------------------- Director July 6, 1998
Gordon Martin

/s/ Vinod Khosla
- --------------------- Director July 6, 1998
Vinod Khosla

- --------------------- Director July , 1998
Franco Regis

/s/ Gary E. Rieschel
- --------------------- Director July 6, 1998
Gary E. Rieschel
</TABLE>

<PAGE>

EXHIBIT 4.1

DELTA INTERNET SERVICES, INC.
1996 STOCK OPTION PLAN
(as Adopted June 21, 1996)

1. Purpose. The Delta Internet Services, Inc. (the "Corporation") 1996
-------
Stock Option Plan (the "Plan") is intended to provide incentive to key
employees, officers, directors, consultants, advisors and others expected to
provide significant services to the Corporation, to encourage proprietary
interest in the Corporation, to encourage such key employees to remain in the
employ of the Corporation, to attract new employees with outstanding
qualifications, and to afford additional incentive to others to increase their
efforts in providing significant services to the Corporation.

2. Definitions.
-----------

a. "Award" shall mean the grant of an Option or a Stock
Appreciation Right pursuant to the Plan.

b. "Board" shall mean the Board of Directors of the Corporation.

c. "Code" shall mean the Internal Revenue Code of 1986, as amended.

d. "Committee" shall mean the committee, if any, appointed by the
Board in accordance with Section 4 of the Plan.

e. "Common Stock" shall mean the Common Stock, par value $0.01 per
share, of the Corporation.

f. "Corporation" shall mean Delta Internet Services, Inc., a
California corporation, and its Subsidiaries.

g. "Disability" shall mean the condition of an Employee or member of
the Board who is unable to perform his or her substantial and material job
duties due to injury or sickness or such other condition as the Board or
Committee may determine in its sole discretion.

h. "Eligible Persons" shall mean officers, directors and employees
of, and consultants and advisors to, the Corporation and other persons expected
to provide significant services to the Corporation. For purposes of this Plan,
a director or a consultant, vendor, customer, or other provider of significant
services to the Corporation shall be deemed to be an Employee, and will be
eligible to receive Non-statutory Stock Options only after finding the value of
the services rendered or to be rendered to the Corporation is at least equal to
the value of the options being granted.
<PAGE>

i. "Employee" shall mean an individual who is employed (within the
meaning of Code Section 3401 and the regulations thereunder) by the Corporation.

j. "Exercise Price" shall mean the price per Share of Common Stock,
determined by the Board or the Committee, at which an Award may exercised.

k. "Fair Market Value" shall mean the value of one (1) Share of
Common Stock, determined as follows:

(i) If the Shares are traded on an exchange, the price at which
Shares traded at the close of business on the date of valuation;

(ii) If the Shares are traded over-the-counter on the NASDAQ
System, the closing price if one is available, or the mean between the bid and
asked prices on said System at the close of business on the date of valuation;
and

(iii) If neither (1) nor (2) applies, the fair market value as
determined by the Board or the Committee in good faith. Such determination
shall be conclusive and binding on all persons.

l. "Incentive Stock Option" shall mean an option described in
Section 422(b) of the Code.

m. "Non-statutory Stock Option" shall mean an option not described
in Section 422(b) or 423(b) of the Code.

n. "Option" shall mean any Non-statutory Stock Option or Incentive
Stock Option granted pursuant to the Plan.

o. "Optionee" shall mean any Eligible Person who has received an
option.

p. "Participant" shall mean any Eligible Person granted an Award
under the Plan.

q. "Plan" shall mean the Delta Internet Services, Inc. 1996 Stock
Option Plan, as it may be amended from time to time.

r. "Purchase Price" shall mean the Exercise Price times the number
of Shares with respect to which an Award is exercised.

s. "Retirement" shall mean the voluntary termination of employment
by an Employee upon the attainment of age sixty-five (65) and the completion of
not less than twenty (20) years of service with the Corporation or a subsidiary
of the Corporation.

-2-
<PAGE>

t. "Share" shall mean one (1) share of Common Stock, adjusted in
accordance with Section 11 of the Plan (it applicable).

u. "Stock Appreciation Right" shall mean the right to receive a
number of Shares or a cash amount, or a combination of Shares and cash, based
upon the Fair Market Value, book value or other measure determined by the Board
or the Committee, as the case may be, pursuant to Section 8 of the Plan.

v. "Subsidiary" shall mean any corporation at least fifty percent
(50%) of the total combined voting power of which is owned by the Corporation or
by another Subsidiary.

w. "Termination of Employment" shall mean the time when the
employee-employer relationship or directorship between the Optionee and the
Corporation is terminated for any reason, with or without cause, including but
not limited to any termination by resignation, discharge, death or retirement;
provided, however, Termination of Employment shall not include a termination
where there is a simultaneous reemployment of the Optionee by the Corporation.
The Committee, in its absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Employment, including but not
limited to the question of whether any Termination of Employment was for cause
and all questions of whether particular leaves of absence constitute
Terminations of Employment. With respect to Incentive Stock Options, a leave of
absence shall constitute a Termination of Employment if, and to the extent that,
such leave of absence interrupts employment for the purposes of Section
422(a)(2) of the Code.

3. Effective Date. The Plan was adopted by the Board on June 21, 1996,
--------------
subject to the approval by the Corporation's shareholders. The Plan was
submitted to shareholders for their approval after receipt of Board approval and
was adopted by written consent dated June 21, 1996. The effective date of the
Plan shall be deemed to be June 21, 1996.

4. Administration. The Plan shall be administered by the Board or a
--------------
Committee of the Board consisting of two or more members of the Board. The
Board shall appoint one of the members of the Committee, if there be one, as
Chairman of the Committee. The Committee shall hold meetings at such times and
places as it may determine. Acts of a majority of the Board or Committee, or
acts reduced to or approved in writing by a majority of the members of the Board
or the Committee, shall be the valid acts of the Board or the Committee. The
Board, or the Committee if there be one, shall from time to time at its
discretion select the Eligible Employees and consultants who are to be granted
Awards, determine the number of Shares or cash, or the combination thereof, to
be applicable to such Award, and designate any Options as Incentive Stock
options or Non-statutory Stock Options, except that no Incentive Stock Option
may be granted to a non-employee director or a non-employee consultant. A
member of the Board or a Committee member shall in no event participate in any
determination relating to Awards held by or to be granted to such Board or
Committee member. The interpretation and construction by the Board, or by the
Committee if there be one, of any provision of the Plan or of any Award granted
thereunder shall be final. No member of the Board or of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any Award granted thereunder. In addition to any right of
indemnification

-3-
<PAGE>

provided by the Articles of Incorporation or Bylaws of the Corporation, such
person shall be indemnified and held harmless by the Corporation from any loss,
cost, liability or expense that may be imposed upon or reasonably incurred by
him in connection with any claim, suit, action or proceeding to which he may be
a party by reason of any action or omission under the Plan.

5. Participation. Only Eligible Persons shall be eligible to receive
-------------
grants of Awards under the Plan.

6. Stock. The stock subject to Options granted under the Plan shall be
-----
Shares of the Corporation's authorized but unissued or reacquired Common Stock.
The aggregate number of Shares which may be issued upon exercise of Awards under
the Plan shall not exceed 2,000,000 shares. The number of Shares subject to
Awards outstanding at any time shall not exceed the number of Shares remaining
available for issuance under the Plan. In the event that any outstanding Award
for any reason expires or is terminated, the Shares allocable to the unexercised
portion of such Award may again be made subject to any Award. The limitations
established by this Section 6 shall be subject to adjustment in the manner
provided in Section 11 hereof upon the occurrence of an event specified therein.

7. Terms and Conditions of Options.
-------------------------------

a. Stock Option Agreements. Options granted to Participants shall
-----------------------
be evidenced by written stock option agreements in such form as the Board or the
Committee shall from time to time determine. Such agreements shall comply with
and be subject to the terms and conditions set forth below.

b. Number of Shares. Each Option granted to a Participant shall
----------------
state the number of Shares to which it pertains and shall provide for the
adjustment thereof in accordance with the provisions of Section 11 hereof.

c. Exercise Price. Each Option granted to a Participant shall state
--------------
the Exercise Price. The Exercise Price for any Option shall not be less than
eighty-five percent (85%) of the Fair Market Value on the date of grant.

d. Medium and Time of Payment. The Purchase Price for each Option
--------------------------
granted to a Participant shall be payable in full in United States dollars upon
the exercise of the Option; provided, however, that if the applicable Option
-----------------
Agreement so provides the Purchase Price may be paid, (i) by the surrender of
Shares in good form for transfer, owned by the person exercising the Option and
having a Fair Market Value on the date of exercise equal to the Purchase Price,
or in any combination of cash and Shares, as long as the sum of the cash so paid
and the Fair Market Value of the Shares so surrendered equal the Purchase Price,
(ii) by cancellation of indebtedness owed by the Corporation to the Optionee,
(iii) with a full recourse promissory note executed by the Optionee, or (iv) any
combination of the foregoing. The interest rate and other terms and conditions
of such note shall be determined by the Board or the Committee. The Board or
the Committee may require that the Optionee pledge his or her Shares to the
Corporation for the purpose of securing the payment of

-4-
<PAGE>

such note. In no event shall the stock certificate(s) representing such Shares
by released to the Optionee until such note shall be been paid in full. In the
event the Corporation determines that it is required to withhold state or
Federal income tax as a result of the exercise of an Option, as a condition to
the exercise thereof, an Employee may be required to make arrangements
satisfactory to the Corporation to enable it to satisfy such withholding
requirements.

e. Term and Nontransferability of Options. Each Option shall state
--------------------------------------
the time or times which all or part thereof becomes exercisable, subject to the
following restrictions. No option shall be exercisable after the expiration of
ten (10) years from the date it was granted. No Option shall be exercisable
except by the Optionee. No Option shall be assignable or transferable, except
pursuant to a qualified domestic relations order as defined in Code Section
414(p) or, in the event of the Optionee's death, by will or the laws of descent
and distribution.

f. Termination of Employment, Except by Death, Disability or
---------------------------------------------------------
Retirement. Upon any Termination of Employment for any reason other than his or
- ----------
her death, Disability or Retirement, such Optionee shall have the right, subject
to the restrictions of (e) above, to exercise the Option at any time within
three (3) months after termination of employment, but only to the extent that,
at the date of termination of employment, the Optionee's right to exercise such
Option had accrued pursuant to the terms of the applicable option agreement and
had not previously been exercised; provided, however, that if the Optionee was
-------- -------
terminated as an Employee or removed as a member of the Board for cause (as
defined in the applicable option agreement or as determined by the Board or the
Committee) any Option not exercised in full prior to such termination shall be
canceled. For this purpose, the employment relationship shall be treated as
continuing intact while the Optionee is on military leave, sick leave or other
bona fide leave of absence (to be determined in the sole discretion of the Board
or the Committee). The foregoing notwithstanding, in the case of an Incentive
Stock Option, employment shall not be deemed to continue beyond the ninetieth
(90th) day after the Optionee's reemployment rights are guaranteed by statute or
by contract.

g. Death of Optionee. If an Optionee dies while an Employee or
-----------------
within three (3) months after any Termination of Employment other than for
cause, and has not fully exercised the Option, then the Option may be exercised
in full, subject to the restrictions of (e) above, at any time within twelve
(12) months after the Optionee's death, by the executors or administrators of
his or her estate or by any person or persons who have acquired the Option
directly from the Optionee by bequest or inheritance, but only to the extent
that, at the date of death, the Optionee's right to exercise such Option had
accrued and had not been forfeited pursuant to the terms of the applicable
Option Agreement and had not previously been exercised.

h. Disability of Optionee. Upon Termination of Employment for
----------------------
reason of Disability, such Optionee shall have the right, subject to the
restrictions of (e) above, to exercise the Option at any time within twelve (12)
months after termination of employment, but only to the extent that, at the date
of termination of employment, the Optionee's right to exercise such Option had
accrued pursuant to the terms of the applicable Option Agreement and had not
previously been exercised.

-5-
<PAGE>

i. Retirement of Optionee. Upon Retirement, an Optionee shall have
----------------------
the right, subject to the restrictions of (e) above, to exercise the Option at
any time within three (3) months after termination of employment, but only to
the extent that, at the date of termination of employment, the Optionee's right
to exercise such Option had accrued pursuant to the terms of the applicable
Option Agreement and had not previously been exercised.

j. Rights as a Stockholder. An Optionee, or a transferee of an
-----------------------
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by his or her Option until the date of the issuance of a stock
certificate for such Shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 11 hereof.

k. Modification, Extension and Renewal of Option. Within the
---------------------------------------------
limitations of the Plan, the Board or the Committee may modify, extend or renew
outstanding Options or accept the cancellation of outstanding Options (to the
extent not previously exercised) for the granting of new Options in substitution
therefor. The foregoing notwithstanding, no modification of an Option shall,
without the consent of the Optionee, alter or impair any rights or obligations
under any Option previously granted.

l. Other Provisions. The stock option agreements authorized under
----------------
the Plan may contain such other provisions not inconsistent with the terms of
the Plan (including, without limitation, restrictions upon the exercise of the
Option) as the Committee shall deem advisable.

8. Stock Appreciation Rights.
-------------------------

a. Grant. Stock Appreciation Rights related or unrelated to Options
-----
may be granted to Eligible Employees:

(i) at any time if unrelated to an Award or if related to an
Award other than an Incentive Stock Option; or

(ii) only at the time of grant of an Incentive Stock Option if
related thereto.

A Stock Appreciation Right may extend to all or a portion of the Shares covered
by a related Award.

b. Exercise of Stock Appreciation Rights. A Stock Appreciation
-------------------------------------
Right granted in connection with an Award shall be exercisable only at such time
or times, and to the extent, that a related Award is exercisable. A Stock
Appreciation Right granted in connection with an Incentive Stock Option may be
exercisable only when the Fair market Value of the Shares subject to the
Incentive Stock Option exceeds the Exercise Price of the Incentive Stock Option.

-6-
<PAGE>

c. Payment.
-------

(a) Upon the exercise of a Stock Appreciation Right, and if such
Stock Appreciation Right is related to an Award surrender of an exercisable
portion of the related Award, the Participant shall be entitled to receive
payment of an amount determined by multiplying:

(i) the difference obtained by subtracting (x) either (A) the
Purchase Price of a Share of Common Stock specified in the related Award, or (B)
if such Stock Appreciation Right is unrelated to an Award, the Fair Market Value
of a Share of Common Stock on the date of grant of the Stock Appreciation Right,
from (y) the Fair Market Value, book value or other measure specified in the
Award of such Stock Appreciation Right of a share of Common Stock on the date of
exercise of such Stock Appreciation Right, by

(ii) the number of shares as to which such Stock
Appreciation Right has been exercised.

(b) The Board or the Committee, as the case may be, in its sole
discretion, may require settlement of the amount determined under paragraph (a)
above solely in cash, solely in shares of Common Stock (valued at Fair Market
Value on the business day next preceding the date of exercise of such Stock
Appreciation Right), or partly in such shares and partly in cash.

d. Maximum Stock Appreciation Right Term. Each Stock Appreciation
-------------------------------------
Right and all rights and obligations thereunder shall expire on such date as
shall be determined by the Board or the Committee, but not later than ten (10)
years after the date of the Award thereof, and shall be subject to earlier
termination as provided in the related Award Agreement and Sections 7(f ), (g),
(h) and (i).

9. Limitation on Value of Exercisable Shares. In the case of Incentive
-----------------------------------------
Stock Options granted hereunder, the aggregate Fair Market Value (determined as
of the date of the grant thereof) of the Shares with respect to which Incentive
Stock Options become exercisable by any employee of the Company for the first
time during any calendar year (under this Plan and all other plans maintained by
the Corporation, its parent or its Subsidiaries) shall not exceed $100,000.

10. Term of Plan. Options may be granted pursuant to the Plan until the
------------
expiration of ten (10) years from the effective date of the Plan.

11. Recapitalizations. Subject to any required action by shareholders
-----------------
the number of Shares covered by the Plan as provided in Section 6 hereof, the
number of Shares covered by each outstanding Award and the Exercise Price
thereof shall be proportionately adjusted for any increase or decrease in the
number of issued Shares resulting from a subdivision or consolidation of Shares
or the payment of a stock dividend (but only of Common Stock) or any other
increase or decrease in the number of issued Shares effected without receipt of
consideration by the Corporation. Subject to any required action by
stockholders, if the Corporation is the surviving corporation in any merger or
consolidation, each outstanding Award shall pertain and apply to the securities
to which a holder of

-7-
<PAGE>

the number of Shares subject to the Award would have been entitled. In the event
of a merger or consolidation in which the Corporation is not the surviving
corporation, the date of exercisability of each outstanding Award shall be
accelerated to a date prior to such merger or consolidation, unless the
agreement of merger or consolidation provides for the assumption of the Award by
the successor to the Corporation. To the extent that the foregoing adjustments
relate to securities of the Corporation, such adjustments shall be made by the
Board or the Committee, whose determination shall be conclusive and binding on
all persons. Except as expressly provided in this Section 11, the Participant
shall have no rights by reason of subdivision or consolidation of shares of
stock of any class, the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or stock
of another corporation, and any issue by the Corporation of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number or Exercise Price of Shares subject to an Award. The grant of an
Award pursuant to the Plan shall not affect in any way the right or power to the
Corporation to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business assets.

12. Securities Law Requirements.
---------------------------

a. Legality of Issuance. The issuance of any Shares upon the
--------------------
exercise of any Award and the grant of any Award shall be contingent upon the
following:

(i) the Corporation and the Participant shall have taken all
actions required to register the Shares under the Securities Act of 1933, as
amended (the "Act"), and to qualify the Award and the Shares under any and all
applicable state securities or "blue sky" laws or regulations, or to perfect an
exemption from the respective registration and qualification requirements
thereof;

(ii) any applicable listing requirement of any stock exchange on
which the Common Stock is listed shall have been satisfied; and

(iii) any other applicable provision of state or federal law
shall have been satisfied.

b. Restrictions on Transfer. Regardless of whether the offering and
------------------------
sale of Shares under the plan has been registered under the Act or has been
registered or qualified under the securities laws of any state, the Corporation
may impose restrictions on the sale, pledge or other transfer of such Shares
(including the placement of appropriate legends on stock certificates) if, in
the judgment of the Corporation and its counsel, such restrictions are necessary
or desirable in order to achieve compliance with the provisions of the Act, the
securities laws of any state or any other law. In the event that the sale of
Shares under the Plan is not registered under the Act but an exemption is
available which required an investment representation or other representation,
each Participant shall be required to represent that such Shares are being
acquired for investment, and not

-8-
<PAGE>

with a view to the sale or distribution thereof, and to make such other
representations as are deemed necessary or appropriate by the Corporation and
its counsel. Any determination by the Corporation and its counsel in connection
with any of the matters set forth in this Section 12 shall be conclusive and
binding on all persons. Stock certificates evidencing Shares acquired under the
Plan pursuant to an unregistered transaction shall bear the following
restrictive legend and such other restrictive legends as are required or deemed
advisable under the provisions of any applicable law.

"THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN. REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). ANY TRANSFER OF SUCH SECURITIES
WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO
SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE ISSUER SUCH REGISTRATION IS
UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT."

c. Registration or Qualification of Securities. The Corporation
-------------------------------------------
may, but shall not be obligated to, register or qualify the issuance of Awards
and/or the sale of Shares under the Act or any other applicable law. The
Corporation shall not be obligated to take any affirmative action in order to
cause the issuance of Awards or the sale of Shares under the plan to comply with
any law.

d. Exchange of Certificates. If, in the opinion of the Corporation
------------------------
and its counsel, any legend placed on a stock certificate representing shares
sold under the Plan is no longer required, the holder of such certificate shall
be entitled to exchange such certificate for a certificate representing the same
number of Shares but lacking such legend.

13. Amendment of the Plan. The Board or the Committee may from time to
---------------------
time, with respect to any Shares at the time not subject to Awards, suspend or
discontinue the Plan or revise or amend it in any respect whatsoever except
that, without the approval of the Corporation's stockholders, no such revision
or amendment shall:

a. Materially increase the benefits accruing to participants under
the Plan;

b. Materially increase the number of Shares subject to the Plan;

c. Materially modify the requirements as to eligibility for
participation in the Plan; or

d. Amend this Section 13 to defeat its purpose.

Notwithstanding the foregoing, the Board may revise or amend the Plan
without stockholder approval in order to ensure the Plan's compliance with the
Code, any successor provisions of the Code or any other applicable law.

14. Application of Funds. The proceeds received by the Corporation from
--------------------
the sale of Common Stock pursuant to the exercise of an Award will be used for
general corporate purposes.

-9-
<PAGE>

15. Execution. To record the adoption of the Plan in the form set forth
---------
above by the Board as of June 21, 1996, the Corporation has caused this Plan to
be executed in the name and on behalf of the Corporation where provided below by
an officer of the Corporation thereunto duly authorized.

IN WITNESS WHEREOF, the Plan is adopted as of the effective date hereof.

DELTA INTERNET SERVICES, INC.,
a California corporation

By:/s/ Neal Barry
-----------------------------
Neal Barry,
President

-10-
<PAGE>

DELTA INTERNET SERVICES, INC.

1996 STOCK OPTION PLAN

STOCK OPTION AGREEMENT

This Agreement confirms the terms of your stock options granted to you by
Delta Internet Services, Inc., a California corporation (the "Corporation")
under its 1996 Stock Option Plan (the "Plan").

1. Grant of Rights.
---------------

You have been granted stock options (either incentive common stock
options ("ISOs") or non-statutory stock options ("NSOs") (the "Option" or
"Options") and/or stock appreciation rights ("SARs") (Options and SARs are
referred to collectively as the "Rights"), in any combination, as reflected in
the attached schedule ("Annex A"). The Corporation will amend Annex A from time
to time to reflect changes to the amounts, the vesting dates, the exercise
prices and the expiration dates of the Rights. The most recent amendment of
Annex A will replace any prior schedules.

2. Stock Options.
-------------

a. An "Option" is the right to purchase shares of the Corporation's
common stock during a defined period of time at a specified price (the
"Underlying Shares"). The Option will be characterized as either an ISO or an
NSO for tax purposes:

(a) ISO.
---

(i) An "ISO" is an option granted to an individual for any
reason connected with his or her employment by a corporation, as more fully
described in Section 422(b) of the Code. The principal benefit of an ISO is that
the recipient is not taxed on the receipt or exercise of the ISO; any tax is
imposed as capital gain when the employee sells the stock received on the
exercise of a qualifying ISO. Only actual employees of the Corporation may
receive ISOs (officers are generally deemed employees for this purpose.)

(ii) If you exercise an ISO at least two years after the
date of the grant you will not be taxed upon the exercise of the ISO, but will
be taxed only on the sale of the Stock. If you exercise the ISO within two
years from the date of the grant, the gain between the exercise price and the
fair market value of the Stock on the date of exercise will be taxed as ordinary
income.

(iii) The sale of the Stock for an amount greater than the
exercise price of the ISO will be taxable to you as either ordinary income or
long term capital gain, depending on the amount of time that has passed since
the date the Option was exercised. You should discuss the holding

<PAGE>

period and other requirements for ISO qualification with your own tax advisor
before exercising your ISO or selling your Shares.

(iv) The excess, if any, of the fair market value of the
shares of the Stock on the date of exercise over the Exercise Price will be
treated as a tax preference item for federal income tax purposes and, depending
upon your own personal income tax situation, you may be subject to the
alternative minimum tax in the year of exercise.

(v) You must notify the Corporation of the following
events within thirty (30) days after they occur: (i) the early exercise of the
Option; or (ii) disposition of the Underlying Shares.

(b) NSO.
---

(i) An "NSO" is any option other than an ISO, including an
Option initially granted as an ISO but with respect to which not all of the
statutory requirements have been met. If the Option is an NSO, you may be
subject to regular federal and state income tax liability upon the exercise of
the Option. You will be treated as having received compensation income (taxable
at ordinary income tax rates) equal to the excess, if any, of (i) the fair
market value of the Stock, at the close of trading on the business day before
the date of exercise over (ii) the Exercise Price.

(ii) If you sell the Underlying Shares on the same day that
you exercise them, fair market value will be the actual price per share at which
you sell the Underlying Shares. In all other cases, the fair market value will
be the price per share at the close of trading on the business day before the
date of exercise.

(iii) If you are an employee of the Corporation, your
employer may be required to withhold from your compensation or collect from you
and pay to the applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise.

(iv) Upon the sale of the Stock, any appreciation in the
value of the Stock from date the Option was exercised is taxable to you as
either ordinary income or long term capital gain, depending on the amount of
time that has passed since the date the Option was exercised. You should
discuss the holding period with your own tax advisor before exercising your NSO
or selling your Shares.

This is only is a brief summary of some of the federal and state tax
consequences relating to the exercise of a stock option and the disposition of
the Underlying Shares. THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. YOU
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE
UNDERLYING SHARES SO THAT YOU WILL FULLY UNDERSTAND THE TAX CONSEQUENCES BASED
ON YOUR PARTICULAR SITUATION.

-2-
<PAGE>

b. If you decide to exercise your Options to purchase the Underlying
Shares, the price will be the price per share shown on Annex A.

c. You may exercise your Options in whole or in part at any time
after the expiration of the vesting period provided in the Plan. You may
- -----
exercise your Options by giving the Corporation written notice of the number of
Shares that you wish to exercise. Your notice must be accompanied by the full
payment of the Purchase Price in any manner permitted under the Plan.

d. Your Option will expire if not exercised within ten (10) years
from the date of the grant. In addition, you may not exercise your Option if:
(i) Your Employment is terminated for cause; (ii) Three (3) months has passed
since the date of your Termination of Employment by reason of Retirement or
other than for cause (but only to the extent, at the date of the Termination of
Employment, your right to exercise the Options has accrued pursuant to the terms
of the grant and has not previously been exercised); or (iii) One (1) year has
passed since the date of your Termination of Employment by reason of death or
Disability.

Your Termination of Employment shall be the earlier of (i) the date
when your service in fact terminated or (ii) the date when you gave or received
written notice that your service is to terminate.

Termination for cause shall include, but not be limited to,
termination resulting from the conviction of a felony, misappropriation of
assets of the Corporation, continued or repeated insobriety, continued or
repeated absence from service during the usual working hours of your position
for reason other than disability or sickness, or refusal to carry out the
reasonable directions of the Corporation's executive officers or of the Board.
Termination of Employment includes the termination of the recipient's engagement
as independent contractor or director.

e. You shall not have any rights as a shareholder with respect to
any of the Underlying Shares of the Options until (i) you have exercised your
Options as described above and (ii) the Corporation has issued and delivered to
you a certificate representing the Underlying Shares. You will not be entitled
to receive dividends or other rights for which the record date is prior to the
date such stock certificates are issued.

f. You may sell the Underlying Shares you receive upon exercise of
your Options immediately, unless legal counsel to the Corporation determines
that the sale would violate federal or state securities laws.

Description of SARs.
-------------------

An "SAR" is an unfunded deferred obligation of the Corporation to pay
to the recipient of the SAR upon exercise an amount of cash equal to the excess,
if any, of (i) the fair market value of a share at the time of exercise of the
SAR over (ii) the fair market value at the time that the SAR was issued (or such
other stated value as set forth on Annex A). There are no tax consequences to
you upon the grant of an SAR. When you exercise your SAR and receive cash, you
will have ordinary

-3-
<PAGE>

compensation income. If you are an Employee, your employer
may be required to withhold from your compensation or collect from you and pay
to the applicable taxing authorities an amount equal to a percentage of this
compensation income.

a. An SAR vests as stated in Annex A.

b. An SAR shall be exercisable only at such time or times, and to
the extent, that a related Option is exercisable. A SAR granted in connection
with an ISO may be exercisable only when the Fair Market Value of the Shares
subject to the ISO exceeds the Exercise Price of the ISO.

c. An SAR will terminate if: (i) your Employment is terminated for
cause; (ii) three (3) months has passed since the date of your Termination of
Employment by reason of Retirement or other than for cause; or (iii) One (1)
year has passed since the date of your Termination of Employment by reason of
death or Disability.

3. Transferability.
---------------

Unless the Corporation otherwise consents in writing, the Rights (i)
shall be non-assignable and non-transferable, either voluntarily or by operation
of law, except pursuant to a qualified domestic relations order or by will or by
operation of the laws of descent and distribution, (ii) shall not be pledged or
hypothecated in any way, and (iii) shall be exercisable during your lifetime
only by you. Except as otherwise provided in this Agreement, any attempted
alienation, assignment, pledge, hypothecation, attachment, execution or similar
process, whether voluntary or involuntary, with respect to all or any part of
the Rights, shall be null and void and, at the Corporation's option, shall cause
all of your Rights to terminate. Any transfer, other than those described in
clauses (i), (ii), (iii) above, even if consented to by the Corporation, may
cause your Options not to be ISOs.

4. Effect of a Reorganization.
--------------------------

Any Rights awarded to you under this Agreement shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a subdivision or consolidation of Shares or the payment of
a stock dividend (but only of Common Stock) or any other increase or decrease in
the number of issued Shares effected without receipt of consideration by the
Corporation. If the Corporation is the surviving corporation in any merger or
consolidation, each outstanding Right shall pertain and apply to the securities
to which a holder of the number of Shares subject to the Right would have been
entitled. In the event of a merger or consolidation in which the Corporation is
not the surviving corporation, the date of exercisability of each outstanding
Right shall be accelerated to a date prior to such merger or consolidation,
unless the agreement of merger or consolidation provides for the assumption of
the Right by the successor to the Corporation. Except as expressly provided in
the Plan, you shall have no rights by reason of subdivision or consolidation of
shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class or by reason
of any dissolution, liquidation, merger or consolidation or spin-off of assets
or stock of another corporation, and any issue by the Corporation of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall not affect, and no adjustment by reason thereof shall

-4-
<PAGE>

be made with respect to, the number or Exercise Price of Shares subject to a
Right. The grant of a Right pursuant to the Plan shall not affect in any way the
right or power to the Corporation to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business assets.

5. Notices.
-------

You should address any notice to the Corporation in care of Mr. Neal
Barry, President of the Corporation. The Corporation will address any notice to
you at the address then currently on file with the Corporation. Notice shall be
deemed given when mailed in a correctly stamped and addressed envelope.

6. Miscellaneous.
-------------

The Corporation has provided you with a copy of the Plan. The
Corporation assumes that you have read and understood the Plan prior to entering
into this Agreement. The terms and definitions of the Plan are incorporated
into this Agreement. The terms of the Plan will control if there is any
conflict between the terms of this Agreement and the Plan. The Board, or the
Corporation's Stock Option Committee if there be one, has the power to interpret
the Plan and this Agreement and all actions taken and all interpretations and
determinations made by the Board or the Committee are final and binding. This
Agreement and the Plan constitute the entire agreement between the Corporation
and you and supersedes any prior agreements. This agreement may be exercised in
two or more counterparts all of which shall constitute one and the same
agreement. This Agreement shall be governed by and construed under the laws of
the State of California.

DELTA INTERNET SERVICES, INC.,
a California Corporation

Date:_____________ By:__________________________________

RECIPIENT OF GRANT _____________________________________
Name:
Address:

-5-
<PAGE>

DELTA INTERNET SERVICES, INC.

1996 STOCK OPTION PLAN

STOCK OPTION AGREEMENT

ANNEX A

Employee Name:

Date of Preparation:

OPTIONS

NUMBER TYPE EXPIRATION
GRANT DATE GRANTED (ISO/NSO) EXERCISE PRICE VESTING DATE DATE
- ----------- --------- --------- -------------- ------------ ----------

-6-
<PAGE>

DELTA INTERNET SERVICES, INC.
STOCK OPTION AGREEMENT
(NON-STATUTORY STOCK OPTION)

This Agreement is made and entered into effective as of ____________, 19__, by
and between DELTA INTERNET SERVICES, INC., a California corporation (the
"Corporation"), and ______________ (the "Optionee").

1. Grant of Option. The Corporation hereby grants to Optionee as of the
---------------
date hereof the right and option to purchase, on the terms and conditions
hereinafter set forth, all or any part of an aggregate of ___________ shares of
Common Stock (the "Option"), subject to adjustment in accordance with the
provisions of Paragraph 18 below. It is understood and acknowledged that the
Option is granted under the 1996 Stock Option Plan of the Corporation and are
designated as a Nonstatutory Stock Option which will not qualify as an Incentive
Stock Option under Section 422A of the Code.

2. Option Price. The price to be paid for Stock upon exercise of the
------------
Option or any part thereof shall be $____ per share (the "Purchase Price"),
which is equal to or greater than 85% of the Fair Market Value of one share of
Stock as of the date hereof

3. Right to Exercise. The right to exercise the Option shall accrue
-----------------
immediately.

4. Securities Law Requirements. No part of the Option shall be exercised
---------------------------
if counsel to the Corporation determines that any applicable registration
requirement under the Securities Act of 1933, as amended, or any other
applicable requirement of Federal or state law has not been met.

5. Term of Option. The Option shall terminate in any event on the
--------------
earliest of (a) ___________, ____, at 11:59 P.M., (b) the expiration of the
period described in Paragraph 6 below, (c) the expiration of the period
described in Paragraph 7 below, (d) the expiration of the period described in
Paragraph 8 below, or (e) the expiration of the period described in Paragraph 9
below.

6. Exercise Following Termination of Employment Except By Death,
-------------------------------------------------------------
Disability or Retirement. If the Optionee's service with the Corporation
- ------------------------
terminates for any reason other than death, disability or retirement, the Option
(to the extent it has not previously been exercised and is then exercisable) may
be exercised within the period of three (3) consecutive months commencing
immediately following the date of such termination (but not later than the
termination date set forth in Paragraph 5(a) above). The foregoing
notwithstanding, the Option shall cease to be exercisable on the date of such
termination if the termination is for cause. For this purpose, "cause" shall
mean conviction of a felony, misappropriation of assets of the Corporation or
any subsidiary, continued or repeated insobriety, continued or repeated absence
from service during the usual working hours of the Optionee's position for
reason other than disability or sickness, or refusal to carry out the reasonable
directions of the Corporation's Board of Directors.

would have been exercisable hereunder, the Option (to the extent it has not
previously been exercised and is then exercisable) may be exercised within
twelve (12) months after the date of Optionee's death (but not later than the
termination date set forth in Paragraph 5(a) above). The exercise may be made by
Optionee's representative or by the person entitled thereto under Optionee's
will or the laws of descent and distribution; provided that such representative
or such person consents in writing to abide by and be subject to the terms of
this Agreement and such writing is delivered to the President of the
Corporation.

8. Exercise Following Disability. If the Optionee's service with the
-----------------------------
Corporation terminates by reason of the Optionee's disability, the Option (to
the extent not previously exercised and is then exercisable) may be exercised
for a period of twelve (12) months after the date of termination for reason of
disability (but not later than the termination date set forth in Paragraph 5(a)
above).

9. Exercise Following Retirement. If the Optionee's service with the
-----------------------------
Corporation terminates by reason of retirement (the voluntary retirement of
employment upon attainment of 65 years of age and completion of 20 years of
service), the Option (to the extent it has not previously been exercised and is
then exercisable) may be exercised within three (3) consecutive months after the
date of the Optionee's retirement (but not later than the termination date set
forth in Paragraph 5(a) above).

10. Time of Termination of Service. For the purposes of this Agreement,
------------------------------
Optionee's service shall be deemed to have terminated on the earlier of (a) the
date when Optionee's service in fact terminated or (b) the date when the
Optionee gave or received written notice that his or her service is to
terminate.

11. Nontransferability. Unless the Corporation otherwise consents in
------------------
writing, the option and all rights and privileges granted hereunder shall be
non-assignable and non-transferable by the Optionee, either voluntarily or by
operation of law, except by will or by operation of the laws of descent and
distribution, shall not be pledged or hypothecated in any way, and shall be
exercisable during lifetime only by the Optionee. Except as otherwise provided
herein, any attempted alienation, assignment, pledge, hypothecation, attachment,
execution or similar process, whether voluntary or involuntary, with respect to
all or any part of the Option or any right thereunder, shall be null and void
and, at the Corporation's option, shall cause all of Optionee's rights under
this Agreement to terminate.

All certificates representing shares of Stock purchased upon the exercise
of the Option shall bear the following legend:

"THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT SEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). ANY TRANSFER OF SUCH SECURITIES
WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO
SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE ISSUER SUCH REGISTRATION IS
UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT."

-2-
<PAGE>

12. Effect of Exercise. Upon exercise of all or any part of the Option,
------------------
the number of shares of Stock subject to option under this Agreement shall be
reduced by the number of shares with respect to which such exercise is made.

13. Method of Exercise. Each exercise of the Option shall be by means of
------------------
a written notice of exercise in substantially the form prescribed from time to
time by the Board delivered to the Secretary of the Corporation at its principal
office and accompanied by payment in full of the option price for each share of
Stock purchased under the Option. Such notice shall specify the number of
shares of Stock with respect to which the Option is exercised and shall be
signed by the person exercising the Option. If the Option is exercised by a
person other than the Optionee, such notice shall be accompanied by proof,
reasonably satisfactory to the Corporation, of such person's right to exercise
the Option.

The Purchase Price specified in Paragraph 2 above shall be paid in full
upon the exercise of the Option (i) by cash, in United States dollars; by the
surrender of Shares in good form for transfer, owned by the person exercising
the Option and having a Fair Market Value on the date of exercise equal to the
Purchase Price, or in any combination of cash and Shares, as long as the sum of
the cash so paid and the Fair Market Value of the Shares so surrendered equal
the Purchase Price; (ii) by cancellation of indebtedness owed by the Corporation
to the Optionee; or (iii) by any combination of the foregoing. The Board of
Directors may, but is not obligated to, accept a secured recourse promissory
note of Optionee (bearing such rate of interest and such other terms as they may
reasonably determine) as payment of the exercise price; provided, however, no
-------- -------
stock certificate representing the shares be released until the note shall have
been paid in full.

14. Withholding Taxes. If the Optionee is an employee or former employee
-----------------
of the Corporation when all or part of the option is exercised, the Corporation
may require the Optionee to deliver payment of any withholding taxes (in
addition to the Option exercise price) in cash with respect to the difference
between the Option exercise price and the fair market value of the Stock
acquired upon exercise.

15. Issuance of Shares. Subject to the foregoing conditions, the
------------------
Corporation, as soon as reasonably practicable after receipt of a proper notice
of exercise and without transfer or issue tax or other incidental expense to the
person exercising the Option, shall deliver to such person at the principal
office of the Corporation, or such other location as may be acceptable to the
Corporation and such person, one or more certificates for the shares of Stock
with respect to which the option has been exercised. Such shares shall be fully
paid and nonassessable and shall be issued in the name of such person. However,
at the request of the Optionee, such shares may be issued in the names of the
Optionee and his or her spouse (a) as joint tenants with right of survivorship,
(b) as community property or (c) as tenants in common without right of
survivorship.

16. Limitation of Optionee's Right. Neither Optionee nor any person
------------------------------
entitled to exercise the Option shall be or have any of the rights of a
shareholder of the Corporation in respect of any share issuable upon the
exercise of the Option unless and until a certificate or certificates
representing shares of Stock shall have been issued and delivered upon exercise
of the Option in full or in part. No

-3-
<PAGE>

adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificates are issued.

17. Consent Required to Transfer. In connection with any underwritten
----------------------------
public offering by the Corporation of its equity securities pursuant to an
effective registration statement filed under the 1933 Act, including the
Corporation's initial public offering, Optionee shall not sell, make any short
sale of loan, hypothecate, pledge, grant any option for the purchase of, or
otherwise dispose or transfer for value or otherwise agree to engage in any of
the foregoing transactions with respect to, any Stock purchased under the Option
without the prior written consent of the Corporation or its underwriters. Such
limitations shall be in effect for such period of time from and after the
effective date of such registration statement as may be requested by the
Corporation or such underwriters.

18. Recapitalizations. Subject to any required action by shareholders,
-----------------
the number of shares of Stock covered by this Option and the Option Price hereof
specified in Paragraph 2 above shall be proportionately adjusted for any
increase of decrease in the number of issued shares of Stock resulting from a
subdivision or consolidation of Stock or the payment of a stock dividend (but
only of Stock) or any other increase or decrease in the number of issued shares
of Stock effected without receipt of consideration by the Corporation. Subject
to any required action by shareholders, if the Corporation is the surviving
corporation in any merger or consolidation, this Option shall pertain and apply
to the securities to which a holder of the number of Stock subject to the Option
would have been entitled. In the event of a merger or consolidation in which
the Corporation is not the surviving corporation, the date of exercisability of
this Option shall be accelerated to a date prior to such merger or consolidation
unless the agreement of merger or consolidation provides for the assumption of
the Option by the successor to the Corporation. To the extent that the
foregoing adjustments relate to securities of the Corporation, such adjustments
shall be made by the Board, whose determination shall be conclusive and binding
on all persons. Except as expressly provided in this Paragraph 18, the Optionee
shall have no rights by reason of subdivision or consolidation of shares of
stock of any class, the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or stock
of another corporation, and any issue by the Corporation of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number or Option Price of Stock subject to an Option.

19. Notices. Any notice to the Corporation contemplated by this Agreement
-------
shall be addressed to it in care of its President; any notice to the Optionee
shall be addressed to him or her at the address on file with the Corporation on
the date hereof or at such other address as Optionee may hereafter designate in
a writing delivered to the Corporation as provided herein.

20. Interpretation. The interpretation, construction, performance and
--------------
enforcement of this Agreement shall he within the sole discretion of the Board,
and the Board's determinations shall be conclusive and binding on all interested
persons.

-4-
<PAGE>

21. Governing Law. This Agreement has been made, executed and delivered
-------------
in, and the interpretation, performance and enforcement hereof shall be governed
by and construed under the laws of the State of California.

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement,
in the case of the Corporation by its duly authorized office, as the day and
year first above written.

DELTA INTERNET SERVICES, INC.,
a California corporation

By:_______________________________

"OPTIONEE"

By:_______________________________

-5-

<PAGE>

EXHIBIT 4.2

DELTA INTERNET SERVICES, INC.
STOCK OPTION AGREEMENT
(NON-STATUTORY STOCK OPTION)

This Agreement is made and entered into effective as of July 20, 1996, by
and between DELTA INTERNET SERVICES, INC., a California corporation (the
"Corporation") , and NEAL L. BARRY (the "Optionee").

2. Option Price. The price to be paid for stock upon exercise of the
------------
Option or any part thereof shall be $0.50 per share (the "Purchase Price"),
which is equal to or greater than 85% of the Fair Market Value of one share of
Stock as of the date hereof.

3. Right to Exercise. The right to exercise the Option shall accrue
-----------------
immediately.

5. Term of Option. The Option shall terminate in any event on the
--------------
earliest of (a) the 20th day of July, 2006, at 11:59 P.M., (b) the expiration of
the period described in Paragraph 6 below, (c) the expiration of the period
described in Paragraph 7 below, (d) the expiration of the period described in
Paragraph 8 below, or (e) the expiration of the period described in paragraph 9
below.

6. Exercise Following Termination of Employment, Except By Death,
--------------------------------------------------------------
Disability or Retirement. If the Optionee's service with the Corporation
- ------------------------
terminates for any reason other than death, disability or retirement, the Option
(to the extent it has not previously been exercised and is then exercisable) may
be exercised within the period of three (3) consecutive months commencing
immediately following the date of such termination (but not later than the
termination date set forth in Paragraph 5(a) above). The foregoing
notwithstanding, the Option shall cease to be exercisable on the date of such
termination if the termination is for cause. For this purpose, "cause" shall
mean conviction of a felony, misappropriation of assets of the Corporation or
any subsidiary, continued or repeated insobriety, continued or repeated absence
from service during the usual working hours of the Optionee's position for
reason other than disability or sickness, or refusal to carry out the reasonable
directions of the Corporation's Board of Directors.
<PAGE>

7. Exercise Following Death. If the Optionee's service with the
------------------------
Corporation terminates by reason of the Optionee's death, or if the Optionee
dies after termination of service but while the Option would have been
exercisable hereunder, the Option (to the extent it has not previously been
exercised and is then exercisable) may be exercised within twelve (12) months
after the date of Optionee's death (but not later than the termination date set
forth in Paragraph 5 (a) above). The exercise may be made by Optionee's
representative or by the person entitled thereto under Optionee's will or the
laws of descent and distribution; provided that such representative or such
person consents in writing to abide by and be subject no the terms of this
Agreement and such writing is delivered to the President of the Corporation.

All certificates representing shares of Stock purchased upon the exercise
of the Option shall bear the following legend:

"THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). ANY TRANSFER OF SUCH SECURITIES
WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO
SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE ISSUER SUCH REGISTRATION IS
UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT."

-2-
<PAGE>

13. Method of Exercise. Each exercise of the Option shall be by means of
------------------
a written notice of exercise in substantially the form prescribed from time to
time by the Board delivered to the Secretary of the Corporation at its principal
office and accompanied by payment in full of the option price for each share of
Stock purchased under the Option. Such notice shall specify the number of
shares of Stock with respect to which the Option is exercised and shall be
signed by the person exercising the Option. If the option is exercised by a
person other than the Optionee, such notice shall be accompanied by proof,
reasonably satisfactory to the Corporation, of such person's right to exercise
the option.

16. Limitation of Optionee's Rights. Neither Optionee nor any person
-------------------------------
entitled to exercise the Option shall be or have any of the rights of a
shareholder of the Corporation in respect of any share issuable upon the
exercise of the Option unless and until a certificate or certificates
representing shares of Stock shall have been issued and delivered upon exercise
of the Option in full or in part. No

-3-
<PAGE>

adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificates are issued.

17. Consent Required to Transfer. In connection with any underwritten
----------------------------
public offering by the Corporation of its equity securities pursuant to an
effective registration statement filed under the 1933 Act, including the
Corporation's initial public offering, Optionee shall not sell, make any short
sale of, loan, hypothecate, pledge, grant any option for the purchase of, or
otherwise dispose or transfer for value or otherwise agree to engage in any of
the foregoing transactions with respect to any Stock purchased under the Option
without the prior written consent of the Corporation or its underwriters. Such
limitations shall be in effect for such period of time from and after the
effective date of such registration statement as may be requested by the
Corporation or such underwriters.

18. Recapitalizations. Subject to any required action by shareholders,
-----------------
the number of shares of Stock covered by this Option and the Option Price hereof
specified in Paragraph 2 above shall be proportionately adjusted for any
increase of decrease in the number of issued shares of Stock resulting from a
subdivision or consolidation of Stock or the payment of a stock dividend (but
only of Stock) or any other increase or decrease in the number of issued shares
of Stock effected without receipt of consideration by the Corporation. Subject
to any required action by shareholders, if the Corporation is the surviving
corporation in any merger or consolidation, this Option shall pertain and apply
to the securities to which a holder of the number of Stock subject to the Option
would have been entitled. In the event of a merger or consolidation in which
the Corporation is not the surviving corporation, the date of exercisability of
this Option shall be accelerated to a date prior to such merger or
consolidation, unless the agreement of merger or consolidation provides for the
assumption of the Option by the successor to the Corporation. To the extent
that the foregoing adjustments relate to securities of the Corporation, such
adjustments shall be made by the Board, whose determination shall be conclusive
and binding on all persons. Except as expressly provided in this Paragraph 18,
the Optionee shall have no rights by reason of subdivision or consolidation of
shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class or by reason
of any dissolution, liquidation, merger or consolidation or spin-off of assets
or stock of another corporation, and any issue by the Corporation of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number or Option Price of Stock subject to an Option.

20. Interpretation. The interpretation, construction, performance and
--------------
enforcement of this Agreement shall lie within the sole discretion of the Board,
and the Board's determinations shall be conclusive and binding on all interested
persons.

-4-
<PAGE>

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement,
in the case of the Corporation by its duly authorized office, as the day and
year first above written.

DELTA INTERNET SERVICES, INC.,
a California corporation

By: /s/ Neal L. Barry
----------------------------------------------
Neal L. Barry, President

By: /s/ Irene Barry
----------------------------------------------
Irene Barry, Secretary

By: /s/ Stephen Alderman
----------------------------------------------
Stephen Alderman, Chief Financial Officer

"Optionee"

/s/ Neal L. Barry
--------------------------------------------------
Neal L. Barry

-5-

<PAGE>

EXHIBIT 4.3

DELTA INTERNET SERVICES, INC.
WARRANT AGREEMENT

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT MAY NOT BE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS AN EXEMPTION THEREFROM IS AVAILABLE.

This Warrant Agreement (this "Agreement") is entered into as of February
18, 1998 by and between DELTA INTERNET SERVICES, INC., a California corporation
(the "Company"), and The Gantry Group (the "Holder").

RECITALS
--------

WHEREAS, the Company has agreed to grant to Holder warrants to purchase
30,985 shares of Company Common Stock in exchange and in consideration for good
and valuable goods and services.

NOW, THEREFORE, BE IT RESOLVED, the parties agree hereto as follows:

1. DESCRIPTION; EXECUTION.
----------------------

(a) The Company agrees to issue to the Holder and the Holder agrees to
accept the Warrant Certificate evidencing the right to purchase 30,985 shares of
Company Common Stock at an initial purchase price of Sixty Seven Cents ($0.67)
per Share as to which the Warrant is exercisable. The Warrant Certificate shall
be substantially in the form annexed hereto as Exhibit A.

(b) This Agreement shall be executed on behalf of the Company by its
President. Upon delivery of this Warrant to the Holder, this Agreement shall be
binding upon the Company, and the Holder shall be entitled to all the benefits
set forth herein.

2. TERM OF WARRANT.
---------------

The Warrant shall become exercisable at any time after the date hereof, and
remain exercisable, subject to the conditions set forth in Section 3 until the
close of business on February 18, 2003 (the "Expiration Date").

3. EXERCISE OF WARRANT.
-------------------

(a) Subject to (b) below, at any time until the Expiration Date, the
Holder shall have the right to purchase from the Company (and the Company shall
promptly issue to the Holder) one fully-
<PAGE>

paid and nonassessable share of Common Stock at the Exercise Price (as defined
below) for each Warrant, by surrendering the appropriate Warrant Certificate and
the Subscription Form attached hereto to the Company at its executive offices
and paying the aggregate Exercise Price for the shares to be purchased, in cash,
by check, by cancellation of indebtedness or by delivery of shares of Company
Common Stock.

(b) The Warrant may be exercised in whole and in part but not in
increments of less than 100 shares. In case of a partial exercise, the Warrant
Certificate shall be surrendered and a new Warrant Certificate of the same tenor
and for the purchase of the number of shares not purchased upon such partial
exercise shall be issued by the Company to the Holder hereof. The Warrants
shall be deemed to have been exercised immediately prior to the close of
business on the date of their surrender for exercise as provided above, and the
person or entity entitled to receive the shares of Common Stock issuable upon
the exercise shall be treated for all purposes as the holder of such shares of
record as of the close of business on such date. Prior to any such exercise,
neither the Holder nor any person entitled to receive shares issuable upon
exercise shall be or have any of the rights of a shareholder of the Company. No
adjustment shall be made for dividends or other stockholder rights for which the
record date is prior to the date of exercise. As soon as practicable on or
after such date, the Company shall issue in the name of, and deliver to the
person or persons entitled to receive, a certificate or certificates for the
full number of shares of Common Stock issuable upon such exercise.

4. EXERCISE PRICE. The initial Exercise Price for each share of Common Stock
--------------
issuable pursuant to the Warrant shall be Sixty Seven Cents ($0.67) per Share,
adjusted as provided below. The Exercise Price may be paid, at the election of
the Holder, in cash, cashier's check and/or shares of Common Stock having a
Current Fair Market Value equal to the Exercise Price, including shares which
would be deliverable upon exercise of the Warrants.

5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES OF COMMON STOCK.
----------------------------------------------------------------

The number and kind of securities purchasable upon the exercise of the
Warrants and the Exercise Price shall be subject to adjustment from time to time
upon the happening of certain events, as follows:

a. Adjustments. The Exercise Price of the Warrant shall be subject to
-----------
adjustment as follows:

(a) In case the Company shall issue rights, options, warrants or
convertible securities to all or substantially all holders of its Common Stock,
without any charge to such holders, entitling the holder thereof to subscribe
for or purchase Stock at a price per share which is lower at the date of
issuance of such rights, options, warrants or securities than the then Current
Fair Market Value (as defined in Section 7 hereof), the price of shares of Stock
thereafter purchasable upon the exercise of the Warrant shall be reduced to a
price equal to an amount which would entitle the Holder to receive the same
number of shares of Common Stock and other securities that he would have
received had he exercised the Warrants immediately prior to such issuance.

-2-
<PAGE>

(b) For the purpose of this Section 5, the term "Common Stock" shall
mean (i) the class of stock designated as the Common Stock of the Company at the
date of this Agreement, or (ii) any other class of stock resulting from
successive changes or reclassifications of such Common Stock consisting solely
of changes in par value, or from par value to no par value, or from no par value
to par value.

b. No Adjustment for Dividends. Except as provided in Section 5.1
---------------------------
hereof, no adjustment in respect of any dividends or distributions out of
earnings shall be made during the term of a Warrant or upon the exercise of a
Warrant.

c. No Adjustment in Certain Cases. No adjustments shall be made pursuant
------------------------------
to Section 5 hereof in connection with the grant or exercise of presently
authorized or outstanding options to purchase Common Stock under the Company's
existing stock option plan or the exercise of presently outstanding warrants to
purchase Common Stock.

d. Preservation of Purchase Rights upon Reclassification, Consolidation,
---------------------------------------------------------------------
etc. In case of any consolidation of the Company with or merger of the Company
- ---
into another corporation or in case of any sale or conveyance to another
corporation of the property, assets or business of the Company as an entirety or
substantially as an entirety, the Company or such successor or purchasing
corporation, as the case may be, shall execute with the Holder an agreement that
the Holder shall have the right thereafter, upon payment of the Exercise Price
in effect immediately prior to such action, to purchase, upon exercise of each
Warrant, the kind and amount of shares and other securities and property which
it would have owned or have been entitled to receive after the occurrence of
such consolidation, merger, sale or conveyance had each Warrant been exercised
immediately prior to such action. In the event of a merger described in Section
368(a)(2)(E) of the Internal Revenue Code of 1986, as amended, in which the
Company is the surviving corporation, the right to purchase shares of Common
Stock under the Warrant shall terminate on the date of such merger and thereupon
the Warrant shall become null and void, but only if the controlling corporation
shall agree to substitute for the Warrant its warrant which entitle the holders
thereof to purchase upon their exercise the kind and amount of shares and other
securities and property which they would have owned or been entitled to receive
had the Warrant been exercised immediately prior to such merger. Any such
agreements referred to in this Subsection 5.4 shall provide for adjustments,
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in Section 5 hereof. The provisions of this Subsection 5.4 shall
similarly apply to successive consolidations, mergers, sales or conveyances.

6. REGISTRATION RIGHTS.
-------------------

a. Definitions.
-----------

(a) "Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act of 1933,
as amended (the "Securities Act").

(b) "Registrable Securities" shall mean (x) shares of Common Stock
issuable upon exercise of the Warrants and (y) any Common Stock issued as a
dividend or other distribution with

-3-
<PAGE>

respect to or in exchange for or in replacement of the shares referenced in (x)
above, provided, however, that Registrable Securities shall not include any
shares of Common Stock which have previously been registered or which have been
sold to the public.

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

(d) "Registration Expenses" shall mean all expenses incurred in
effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification, and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses of any regular or special audits incident to or required by any
such registration, but shall not include selling expenses and fees and
disbursements of counsel for the Holder.

(e) "Rule 144" shall mean Rule 144 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.

(f) "Rule 145" shall mean Rule 145 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.

b. "Piggyback" Registration. If the Company shall determine to register
-----------------------
any of its shares of Common Stock in a firm commitment public offering for its
own account, other than a registration relating solely to employee benefit
plans, or a registration relating solely to a Rule 145 transaction on Form S-4,
or a registration on any registration form that does not permit secondary sales,
the Company will:

(a) promptly give to Holder written notice thereof;

(b) use its best efforts to include in such registration (and any
related qualification under the blue sky laws or other compliance), except as
set forth in Section 6.3 below, and in any underwriting involved therein, all
the Registrable Securities specified in a written request or requests, made by
Holder within Twenty (20) days after the written notice from the Company
described in clause 6.2(a) above is given. Such written request may specify all
or a part of Holder's Registrable Securities; and

c. Underwriting. If the registration of which the Company gives notice
------------
is for a registered public offering involving an underwriting, the Company shall
so advise the Holder as a part of the written notice. In such event, the right
of the Holder to registration pursuant to this Section 6 shall be

-4-
<PAGE>

conditioned upon Holder's participation in such underwriting and the inclusion
of the Holder's Registrable Securities in the underwriting to the extent
provided herein. The Holder shall (together with the Company) enter into an
underwriting agreement in customary form with the representative of the
underwriter of underwriters selected by the Company.

d. Exclusion of Registrable Securities. Notwithstanding any other
-----------------------------------
provisions of this Section 6, if the representative of the underwriters advises
the Company that marketing factors require a limitation on the number of shares
to be underwritten, the representative may (subject to the limitations set forth
below) exclude all Registrable Securities from, or limit the number of
Registrable Securities to be included in, the registration and underwriting.
The Company shall so advise the Holder, and the number of shares of securities
that are entitled to be included in the registration and underwriting shall be
allocated first to the Company for securities being sold for its own account and
thereafter to the Holder, pro rata with any other holders of Common Stock having
registration rights. If the Holder does not agree to the terms of any such
underwriting, he shall be excluded therefrom by written notice from the Company
or the underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.

If shares are so withdrawn from the registration or if the number of
shares of Registrable Securities to be included in such registration was
previously reduced as a result of marketing factors, the Company shall then
offer to all persons who have retained the right to include securities in the
registration the right to include additional securities in the registration in
an aggregate amount equal to the number of shares so withdrawn, with such shares
to be allocated among the persons requesting additional inclusion pro rata
amongst those persons requesting inclusion.

e. Registration Procedures. In the case of each registration effected by
-----------------------
the Company pursuant to Section 6, the Company will keep Holder advised in
writing as to the initiation of each registration and as to the completion
thereof, at its expense, the Company will use its best efforts to:

(a) Keep such registration effective for a period of one hundred
twenty (120) days or until the Holder has completed the distribution described
in the registration statement relating thereto, whichever first occurs;
provided, however, that (x) such 120-days period shall be extended for a period
of time equal to the period the Holder refrains from selling any securities
included in such registration at the request of an underwriter of Common Stock
(or other securities) of the Company; and (y) in the case of any registration of
Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such 120-day period shall be extended, if
necessary, to keep the registration statement effective until all such
Registrable Securities are sold, provided that Rule 145, or any successor rule
under the Securities Act, permits an offering on a continuous or delayed basis,
and provided further that applicable rules under the Securities Act governing
the obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment that (I) includes any prospectus required by Section
10(a)(3) of the Securities Act or (II) reflects facts or events representing a
material or fundamental change in the information set forth in the registration
statement, the incorporation by reference of information required to be included
in (I) and (II) above to be contained in periodic reports filed pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 in the registration
statement.

-5-
<PAGE>

(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;

(c) Furnish such number of prospectuses and other documents incident
thereto, including any amendment of or supplement to the prospectus, as the
Holder from time to time may reasonably request;

(d) Notify the Holder at any time when a prospectus relating thereto
is required to be delivered under the Securities Act of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or incomplete in the light of the
circumstances then existing, and at the request of Holder, prepare and furnish
to the Holder a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or incomplete
in the light of the circumstances then existing;

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

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

(g) Otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission, and make available to its security holders,
as soon as reasonably practicable, an earnings statement covering the period of
at least twelve months, but not more than eighteen months, beginning with the
first month after the effective date of the Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act.

7. FRACTIONAL SHARES; ISSUANCE OF SHARES: LEGENDS.
----------------------------------------------

a. Fractional Shares. The Company shall not be required to issue
-----------------
fractional shares of Company Common Stock on the exercise of a Warrant. If any
fraction of a share of Stock would, except for the provisions of this Section 6,
be issuable on the exercise of a Warrant (or specified portion thereof), the
Company shall in lieu thereof pay an amount in cash equal to the then Current
Fair Market Value, multiplied by such fraction. For purposes of this Agreement,
the term "Current Fair Market Value" shall mean (i) if the Common Stock is
traded in the over-the-counter market and not in the NASDAQ Small Cap Market or
the National Market nor on any national securities exchange, the average of the
per share closing bid prices of the Common Stock on the 10 consecutive trading
days immediately preceding the date in question, as reported by NASDAQ or an
equivalent generally accepted

-6-
<PAGE>

reporting service, or (ii) if the Common Stock is traded in the NASDAQ Small Cap
Market or the National Market or on a national securities exchange, the average
for the 10 consecutive trading days immediately preceding the date in question
of the daily per share closing prices of the Common Stock in the NASDAQ Small
Cap Market or the National Market or on the principal stock exchange on which it
is listed, as the case may be, or (iii) if the class of Stock is not publicly
traded or quoted, the fair market value as determined by the Board of Directors
of the Company based on (with appropriate adjustments) the most recent purchases
of the Company's Stock and/or other relevant factors including the Company's
income and assets or evaluation reports received by the Company.

b. Issuance of Shares. All shares of Stock issued upon exercise of a
------------------
Warrant will be duly authorized, validly issued, fully paid and nonassessable.

c. Legends. If the Stock to be issued upon exercise of this Warrant has
-------
not been registered under the Securities Act of 1933, as amended, then the stock
certificates representing such shares of Common Stock shall bear a legend
substantially in the following form:

THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE STATE
SECURITIES LAWS AND ARE RESTRICTED SECURITIES. SUCH SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER THE ACT AND STATE SECURITIES LAWS.

8. TRANSFERABILITY.
---------------

The Warrant or the Shares of Company Common Stock underlying the Warrant
shall not be transferred, and the Company shall not be required to register any
transfer on the books of the Company, unless the Company shall have been
provided with an opinion of counsel satisfactory to it prior to such transfer
that registration under the Securities Act and applicable state securities laws
is not required in connection with the transaction resulting in such transfer.
Each new Warrant or Company Common Stock certificate issued upon any transfer as
above provided shall bear an appropriate investment legend, except that such
Warrant or Company Common Stock certificate shall not bear such restrictive
legend if the opinion of counsel referred to above is to further effect that
such legend is not required in order to establish compliance with the provisions
of the Securities Act or if such transfer is made in accordance with the
provisions of Rule 144(k) promulgated under the Securities Act. The Warrant may
also be transferred by will or devise and by the laws of descent.

Any attempt to transfer, sell or otherwise dispose of this Warrant (except
as provided above) shall be void and shall not convey any rights or privileges
to the transferee.

-7-
<PAGE>

9. MISCELLANEOUS.
-------------

a. Notices.
-------

All notices, requests, demands and other communications required or
permitted to be given hereunder shall be deemed to have been duly given if in
writing and delivered personally, given by prepaid telegram, or mailed first
class, postage prepaid, registered or certified mail, return receipt requested,
to the following addresses:

If to the Company: DELTA INTERNET SERVICES, INC.
731 E. Ball Road, Suite 204
Anaheim, California 92805
Attention: Mr. Stephen Alderman

With a copy to: Jeffers, Wilson, Shaff & Falk, LLP
18881 Von Karman Avenue, Suite 1400
Irvine, California 92612
Attention: Christopher A. Wilson, Esq.

If to the Holder: The Gantry Group, LLC
511 River Road
Carlisle, MA 01741
Attention: Ms. Dale Troppito, Partner

Any party may change the address to which such communications are to
be directed to it by giving written notice to the other party. Except as
otherwise provided in this Warrant, all notices shall be deemed to be given when
delivered in person, or if placed in the mail as aforesaid, then two (2) days
thereafter.

b. Modifications.
-------------

The parties may, by mutual consent, amend, modify, supplement and
waive any right under this Warrant in any manner agreed by them in writing at
any time.

c. Entire Agreement.
----------------

This Agreement, and any documents, instruments or agreements
specifically referred to herein, set forth the entire agreement and
understanding of the parties with respect to the transactions contemplated
hereby and supersede all prior agreements, arrangements and understandings
relating to the subject matter hereof.

-8-
<PAGE>

d. Headings.
--------

The section and paragraph headings contained in this Agreement are for
convenient reference only, and shall not in any way affect the meaning or
interpretation hereof.

e. Governing Law; Arbitration.
--------------------------

This Agreement shall be governed by and construed in accordance with
the laws of the State of California, without any regard to the choice of law
provisions thereof. Any dispute arising under this Agreement shall be resolved
by binding arbitration under the rules of commercial arbitration of the American
Arbitration Association in Orange County, California.

f. Severability.
------------

If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable, it shall be deemed severable from the remaining
provisions of this Agreement which shall remain in full force and effect.

g. Waiver.
------

No waiver of any provision of this Agreement or any breach thereof
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar) or any other breach hereunder nor shall such waiver
constitute a continuing waiver. Either party may waive performance of any
provision of this Agreement, the non-performance of which would otherwise
constitute a breach of this Agreement, including but not limited to the non-
performance of any condition precedent to such party's performance, without
affecting the enforceability of this Agreement or the provisions contained
herein.

h. Heirs; Successors and Assigns.
-----------------------------

The terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective heirs, successors and assigns of the
parties hereto. Holders may transfer and assign the Warrants only as provided
in Section 7 and any assignment in violation of the foregoing shall be void.

i. Attorneys' Fees.
---------------

If any legal action is instituted to enforce or interpret the terms of
this Agreement, the prevailing party in such action shall be entitled to actual
attorneys' fees in addition to any other relief to which the party is entitled.

-9-
<PAGE>

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

DELTA INTERNET SERVICES, INC.
a California corporation

By: /s/ Neal Barry
----------------------------
Neal Barry, President

"HOLDER"
The Gantry Group, LLC

By: /s/ Dale Troppito
----------------------------
Dale Troppito, Partner

-10-
<PAGE>

WARRANT
SUBSCRIPTION FORM
(TO BE EXECUTED ONLY UPON EXERCISE OF WARRANT)

The undersigned Holder of this Warrant hereby irrevocably exercises this
Warrant for the purchase of that number of shares of the Common Stock, no par
value, of Delta Internet Services, Inc., set forth below, up to a maximum of
30,985 shares (or such other number of shares as may be issuable upon the
exercise of this Warrant pursuant to the adjustment provisions hereof), and
hereby makes payment of the aggregate Exercise Price therefor which is also set
forth below, all on the terms and subject to the conditions specified in this
Warrant.

Number of Shares: __________
x $__________

Aggregate Purchase
Price paid: $__________

Dated: __________, 1998

The Gantry Group, LLC

By: __________________________________
Dale Troppito, Partner

Title: _______________________________

ACCEPTED:

DELTA INTERNET SERVICES, INC.
a California corporation

By: ___________________________

Title: ________________________

-11-
<PAGE>

WARRANT CERTIFICATE

WARRANT TO PURCHASE 30,985 SHARES
OF COMMON STOCK

VOID AFTER 5:00 P.M.,
CALIFORNIA TIME, ON FEBRUARY 18, 2003 (warrant date)

This certifies that, for value received The Gantry Group, the registered
holder hereof or assigns (the "Holder") is entitled to purchase from Delta
Internet Services, Inc., a California corporation (the "Company"), at any time
before 5:00 p.m. California Time, on February 18, 2003, at the exercise price
per share of $0.67 (the "Exercise Price") 30,985 shares of the Company's Common
Stock (the "Shares"). The number of Shares purchasable upon exercise of the
Warrant evidenced hereby and the Exercise Price per Share shall be subject to
adjustment from time to time as set forth in the Warrant Agreement referred to
below.

The Warrants evidenced hereby may be exercised in whole or in part by
presentation of this Warrant Certificate and simultaneous payment of the
Exercise Price (subject to adjustment) at the principal office of the Company in
Anaheim, California. Payment of such price shall be made at the option of the
Holder in cash or by certified check or bank draft or by delivery of shares of
Company Common Stock having a fair market value equal to the Exercise Price, all
as provided in the Warrant Agreement.

The Warrants evidenced hereby have been duly authorized and are, subject to
the terms and provisions contained in the Warrant Agreement (the "Warrant
Agreement") dated as of the date hereof between the Company and the Holder, to
all of which the Holder of this Warrant Certificate by acceptance hereof
consents. A copy of the Warrant Agreement may be obtained for inspection by the
Holder hereof upon written request to the Company.

Upon any partial exercise of the Warrants evidenced hereby, there shall be
issued to the Holder a new Warrant Certificate in respect of the Shares
evidenced hereby which shall not have been exercised. This Warrant Certificate
may be exchanged at the office of the Company by surrender of this Warrant
Certificate properly endorsed either separately or in combination with one or
more other Warrants for one or more new Warrants to purchase the same aggregate
number of Shares as here evidenced by the Warrant or Warrants exchanged. No
fractional Shares will be issued upon the exercise of rights to purchase
hereunder, but the Company shall pay the cash value of any fraction upon the
exercise of one or more Warrants. The Warrants evidenced hereby are not
transferable except in the manner and subject to the limitations set forth in
the Warrant Agreement.
<PAGE>

The number of shares of Common Stock issuable upon exercise of this Warrant
to acquire the Shares shall be subject to adjustment as provided in Section 5 of
the Warrant Agreement.

The Holder hereof may be treated by the Company and all other persons
dealing with this Warrant Certificate as the absolute owner hereof for all
purposes and as the person entitled to exercise the rights represented hereby,
any notice to the contrary notwithstanding, and until such transfer is entered
on such books, the Company may treat the Holder hereof as the owner for all
purposes.

DELTA INTERNET SERVICES, INC.
a California corporation

Dated: February 18, 1998 /s/ Neal Barry
------------------------------
Neal Barry, President

-2-

<PAGE>

EXHIBIT 5.1

July 6, 1998

Concentric Network Corporation
105920 North Tantau Avenue
Cupertino, California 95014

RE: REGISTRATION STATEMENT ON FORM S-8 AND FORM S-3

Ladies and Gentlemen:

We have acted as counsel to Concentric Network Corporation, a Delaware
corporation (the "Company" or "you") and have examined the Registration
Statement on Form S-8 and Form S-3 (the "Registration Statement") to be filed by
the Company with the Securities and Exchange Commission on or about July 6,
1998, in connection with the registration under the Securities Act of 1933, as
amended of 98,713 shares of the Company's Common Stock, par value $0.001 per
share (the "Shares"), of which 817 shares have been issued pursuant to a certain
warrant agreement, 31,398 shares are reserved for issuance under a Stock Option
Agreement and 66,498 shares are reserved for issuance under the Delta Internet
Services, Inc. 1996 Stock Option Plan. As your legal counsel, we have examined
the proceedings taken, and are familiar with the proceedings proposed to be
taken, by you in connection with the sale and issuance of the Shares.

In our opinion, the Shares, when issued and sold in the manner referred to
in the Registration Statement and in accordance with the resolutions adopted by
the Board of Directors of the Company, are or will be legally and validly
issued, fully paid and nonassessable.

We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and any subsequent amendment thereto.

Very truly yours,

WILSON SONSINI GOODRICH & ROSATI
Professional Corporation

/s/ Wilson Sonsini Goodrich & Rosati

<PAGE>

EXHIBIT 23.2

CONSENT OF ERNST & YOUNG, LLP, INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statements
(Form S-8 and Form S-3) pertaining to the Delta Internet Services, Inc. 1996
Stock Option Plan, Stock Option Agreement, and Warrant Agreement of our report
dated January 27, 1998, except for Note 12 as to which the date is March 31,
1998, with respect to the financial statements of Concentric Network Corporation
included in its Annual Report (Form 10-K) for the year ended December 31, 1997,
filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

San Jose, California
July 1, 1998

<PAGE>

EXHIBIT 23.3

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement (Form S-8 and Form S-3) of our
report dated January 26, 1998 on the financial statements of Internex
Information Services, Inc. for the year ended June 30, 1997 included in the
Annual Report (Form 10-K) of Concentric Network Corporation, for the year
ended December 31, 1997. It should be noted that we have not audited any
financial statements of Internex Information Services, Inc. for any period
subsequent to June 30, 1997 or performed any audit procedures subsequent to
the date of our report.

/s/ ARTHUR ANDERSEN LLP

San Jose, California
June 30, 1998