SCHEDULE 14A

                                 (Rule 14a-101)

                   INFORMATION REQUIRED IN PROXY STATEMENT

                            SCHEDULE 14A INFORMATION

               Proxy Statement Pursuant to Section 14(a) of the

            Securities Exchange Act of 1934 (Amendment No. _____ )

Filed by the Registrant |X|

Filed by a Party other than the Registrant |_|

Check the appropriate box:

|X|   Preliminary Proxy Statement

|_|   Confidential, For Use of the Commission Only (as permitted by Rule
      14a-6(e)(2))

|_|   Definitive Proxy Statement

|_|   Definitive Additional Materials

|_|   Soliciting Material Under Rule 14a-12

INTERNAP NETWORK SERVICES CORPORATION

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

|X|   No fee required.

|_|   Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1)   Title of each class of securities to which transaction applies:

(2)   Aggregate number of securities to which transaction applies:

(3)   Per unit price or other underlying value of transaction computed pursuant
      to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
      calculated and state how it was determined):

(4)   Proposed maximum aggregate value of transaction:

(5)   Total fee paid:

|_|   Fee paid previously with preliminary materials.

|_|   Check box if any part of the fee is offset as provided by Exchange Act
      Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
      paid previously. Identify the previous filing by registration statement
      number, or the form or schedule and the date of its filing.

(1)   Amount previously paid:

(2)   Form, Schedule or Registration Statement No.:

(3)   Filing Party:

(4)   Date Filed:


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                                 [Internap Logo]

                                 April __, 2003

Dear Internap Stockholder:

      I am pleased to invite you to Internap Network Services Corporation's 2003
Annual Meeting of Stockholders. This year's meeting will be held at 250 Williams
Street, Atlanta, Georgia 30303, on _________, _________, 2003, at 9:00 a.m.
local time.

      Details of the business to be conducted at the Annual Meeting are given in
the attached Notice of Annual Meeting and Proxy Statement.

      Whether or not you plan to attend the Annual Meeting, we hope you will
have your shares represented by marking, signing, dating and returning your
proxy card in the enclosed envelope as soon as possible. Your stock will be
voted in accordance with the instructions you have given in your proxy card. If
no instructions are given in your proxy card, proxies will be voted for each of
the proposals discussed in the attached Notice of Annual Meeting and Proxy
Statement. You may, of course, attend the Annual Meeting and vote in person even
if you have previously returned your proxy card.

                                     Very truly yours,

                                     Gregory A. Peters
                                     President and Chief Executive Officer


<PAGE>

                      INTERNAP NETWORK SERVICES CORPORATION
                               250 Williams Street
                             Atlanta, Georgia 30303

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                          TO BE HELD ON ________, 2003

TO THE STOCKHOLDERS OF INTERNAP NETWORK SERVICES CORPORATION:

      NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Internap
Network Services Corporation, a Delaware corporation, will be held on ________,
2003, at 9:00 a.m. local time at 250 Williams Street, Atlanta, Georgia 30303 for
the purposes of considering and voting upon:

      1.    A proposal to amend our certificate of incorporation and bylaws that
            will permit holders of our Series A preferred stock to take action
            by written consent in lieu of a meeting;

      2.    A proposal to amend our certificate of incorporation that will limit
            the liquidation rights of the holders of our Series A preferred
            stock upon certain events that have not been approved by our board
            of directors or that are otherwise outside of our control such that
            our Series A preferred stock would be classified as stockholders'
            equity under U.S. generally accepted accounting principles;

      3.    A proposal to amend our certificate of incorporation that will
            increase the authorized size of our Board of Directors to nine
            members;

      4.    A proposal to (i) ratify our 2002 Stock Compensation Plan; (ii)
            approve an amendment to the Plan to increase the maximum number of
            shares of common stock reserved for issuance thereunder by an
            additional 22,000,000 shares; and (iii) approve an amendment to the
            Plan such that the definitions of "change of control" and related
            provisions set forth therein conform to those definitions and
            provisions set forth in the executive employment agreements between
            us and six of our management executives;

      5.    A proposal to amend our 1999 Non-Employee Directors' Stock Option
            Plan that will increase the maximum number of shares of Common Stock
            reserved for issuance thereunder by an additional 3,000,000 shares;

      6.    A proposal to (i) ratify our Amended 1999 Equity Incentive Plan; and
            (ii) approve an amendment to the Plan such that the definitions of
            "change of control" and related provisions set forth therein conform
            to those definitions and provisions set forth in the executive
            employment agreements between us and six of our management
            executives;

      7.    A proposal to (i) ratify our Amended and Restated 1999 Stock
            Incentive Plan for Non-Officers; and (ii) approve an amendment to
            the Plan such that the definitions of "change of control" and
            related provisions set forth therein conform to those definitions
            and provisions set forth in the executive employment agreements
            between us and six of our management executives;

      8.    A proposal to (i) ratify our Amended and Restated 1998 Stock
            Option/Stock Issuance Plan; and (ii) approve an amendment to the
            Plan such that the definitions of "change of control" and related
            provisions set forth therein conform to those definitions and
            provisions set forth in the executive employment agreements between
            us and six of our management executives;

      9.    A proposal to (i) ratify our 2000 Non-Officer Equity Incentive Plan;
            and (ii) approve an amendment to the Plan such that the definitions
            of "change of control" and related provisions set forth therein
            conform to those definitions and provisions set forth in the
            executive employment agreements between us and six of our management
            executives;

      10.   A proposal to elect two directors to hold office until the 2006
            Annual Meeting of Stockholders and until the election and
            qualification of their successors or their earlier death,
            resignation or removal;

      11.   A proposal to ratify the re-appointment of PricewaterhouseCoopers
            LLP as independent accountants for our fiscal year ending December
            31, 2003; and


<PAGE>

      12.   Such other business as may properly come before the Annual Meeting
            or any adjournment or postponement thereof, including, without
            limitation, an adjournment or postponement for the purpose of
            seeking additional proxies for any of the proposals. The board of
            directors is not aware of any other business to be presented to a
            vote of the stockholders at the Annual Meeting.

      The foregoing items of business are more fully described in the proxy
statement accompanying this Notice and incorporated by reference herein.

      The board of directors has fixed the close of business on April 21, 2003
as the record date for the determination of stockholders entitled to notice of
and to vote at this Annual Meeting and at any adjournment or postponement
thereof. A list of stockholders entitled to vote at the Annual Meeting shall be
open for the examination of any stockholder, for any purpose germane to the
Annual Meeting, during ordinary business hours, for a period of at least ten
days prior to the Annual Meeting at our principal place of business.

                                     BY ORDER OF THE BOARD OF DIRECTORS

                                     Walter G. DeSocio
                                     Vice President - Chief Administrative
                                     Officer, General Counsel and Secretary

Atlanta, Georgia

April __, 2003

ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE READ THE ATTACHED PROXY
STATEMENT AND THEN PROMPTLY COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY
CARD IN ORDER TO ENSURE YOUR REPRESENTATION AT THE MEETING. A RETURN ENVELOPE
(WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT
PURPOSE. EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU
ATTEND THE MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD
BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST
OBTAIN FROM THE RECORD HOLDER A PROXY CARD ISSUED IN YOUR NAME.


<PAGE>

                      INTERNAP NETWORK SERVICES CORPORATION
                               250 Williams Street
                             Atlanta, Georgia 30303

                                 PROXY STATEMENT

                       FOR ANNUAL MEETING OF STOCKHOLDERS
                          TO BE HELD ON ________, 2003

                      INFORMATION ABOUT THE ANNUAL MEETING

      We are soliciting proxies on behalf of our board of directors, for use at
our Annual Meeting of Stockholders on ________, 2003, at 9:00 a.m. local time,
or at any adjournment or postponement of the Annual Meeting. The Annual Meeting
will be held at 250 Williams Street, Atlanta, Georgia 30303. When used in this
proxy statement, the terms "we," "us," "our," the "company," and "Internap"
refer to Internap Network Services Corporation.

      SEC rules require us to provide our Annual Report to stockholders who
receive this proxy statement. We will also provide copies of the Annual Report
to brokers, dealers, banks, voting trustees and their nominees for the benefit
of their beneficial owners of record. Additional copies of the Annual Report,
along with copies of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2002 (not including documents incorporated by reference) are
available to any stockholder without charge upon written request to Internap
Network Services Corporation to the attention of Walter G. DeSocio, Vice
President-Chief Administrative Officer, General Counsel and Secretary, 250
Williams Street, Atlanta, Georgia 30303. You may also obtain our Annual Report
on Form 10-K over the Internet at the SEC's website, www.sec.gov, or at our
website, www.Internap.com.

      The approximate date on which this proxy statement and form of proxy card
are first being sent or given to stockholders is April __, 2003.

                                  RECENT EVENTS

      On December 17, 2002, we held a special stockholders' meeting at which our
stockholders approved a proposal regarding a reverse stock split. The proposal
consisted of six separate amendments to our certificate of incorporation to
authorize our board of directors to effect a reverse stock split, ranging from a
one-for-five reverse stock split to a one-for-thirty reverse stock split, of all
of our issued and outstanding shares of common stock. Our board of directors
believes that effecting a reverse stock split may allow us to maintain our
listing on The NASDAQ SmallCap Market and might in the future allow us to
transfer our listing back to The NASDAQ National Market. If our board of
directors determines to implement a reverse stock split, you will be provided
with notice of the record date and other information regarding the reverse stock
split.

      If implemented by our board of directors, the reverse stock split will be
accomplished by converting all of our outstanding shares of common stock into a
proportionately fewer number of shares of common stock. Each stockholder's
proportionate ownership of the issued and outstanding shares of our common stock
would remain the same, however, except for minor changes which may result from
the treatment of fractional interests, as described below. Also, the reverse
stock split, if implemented, will affect the outstanding options and warrants to
purchase our common stock and certain other presently outstanding convertible
securities with respect to our common stock (including the shares of our common
stock issuable upon conversion of our Series A preferred stock), which contain
anti-dilution provisions. Additionally, all of our option plans with respect to
common stock include provisions requiring adjustments to the number of shares of
our common stock covered thereby and the exercise prices of options granted
under the plans, in the event of a reverse stock split. As a result, if the
reverse stock split is implemented prior to our Annual Meeting, the share data
contained in Proposals 4 through 9 will be adjusted to reflect the effects of
the reverse stock split.

      No fractional shares of common stock will be issued in connection with a
reverse stock split. If as a result of a reverse stock split, a stockholder of
record will hold a fractional share, the stockholder, in lieu of the issuance of
a fractional share, will be entitled to receive a payment in cash. However, the
terms of some of our stock option plans do not require us to, and we therefore
would not expect to, pay cash to optionholders in lieu of any fraction of 


<PAGE>

a share issuable upon the exercise of an option. The ownership of a fractional
interest will not give the holder thereof any voting, dividend or other right
except to receive the cash payment therefore.

      The reverse stock split also will result in a relative increase in the
available number of authorized but unissued shares of our common stock. The
reverse stock split is more fully described in our definitive proxy statement
dated November 8, 2002, and is available at the SEC's Internet website at
www.sec.gov.

                        GENERAL INFORMATION ABOUT VOTING

Who Can Vote

      Only holders of record of our common stock and our Series A preferred
stock at the close of business on April 21, 2003 will be entitled to notice of,
and to vote at, the Annual Meeting. At the close of business on April 21, 2003,
we had outstanding and entitled to vote _____ shares of common stock (including
_____ shares of common stock issuable upon conversion of _______ outstanding
shares of our Series A preferred stock). Each holder of record of our common
stock on April 21, 2003 will be entitled to one vote for each share held on all
matters to be voted upon at the Annual Meeting. Each holder of record of our
Series A preferred stock on April 21, 2003 will be entitled to the number of
votes equal to the number of shares of common stock into which such shares of
Series A preferred stock could then be converted pursuant to our certificate of
incorporation.

Quorum and Vote Required

      On all proposals, the presence, in person or by proxy, of a majority of
the outstanding shares of our common stock and our Series A preferred stock is
necessary to constitute a quorum at the Annual Meeting. With respect to
Proposals 1, 2 and 3, the presence, in person or by proxy, of a majority of the
outstanding shares of Series A preferred stock is also required. Although they
may or may not be present for purposes of determining whether the requisite vote
has been obtained for each of the proposals, proxies marked "abstain" and
proxies which are held by a broker who does not have discretionary power to vote
will be counted as present for determining whether a quorum is present at the
Annual Meeting.

      In voting with regard to each of Proposals 1-9 and 11, and any other
proposal that may properly come before the meeting or any adjournment or
postponement thereof, including, without limitation, an adjournment or
postponement for the purpose of seeking additional proxies for any of the
proposals, stockholders may vote in favor of the proposal or against the
proposal or may abstain from voting. The vote required to approve each of
Proposals 1 and 3 is governed by Delaware law and our certificate of
incorporation, and is the affirmative vote of the holders of (i) sixty-six and
two-thirds percent (66 2/3%) of the voting power of the outstanding shares of
our common stock and Series A preferred stock (voting on an as converted basis),
voting together as a single class, and (ii) a majority of the outstanding shares
of our Series A preferred stock, voting as a separate class. Abstentions and
broker non-votes will be considered present in determining whether a quorum is
present and will have the same legal effect as voting against Proposals 1 and 3.

      The vote required to approve Proposal 2 also is governed by Delaware law
and our certificate of incorporation, and is the affirmative vote of the holders
of (i) a majority voting power of the outstanding shares of our common stock and
our Series A preferred stock (voting on an as converted basis), voting together
as a single class, and (ii) a majority of the voting power of the outstanding
shares of our Series A preferred stock, voting as a separate class. Abstentions
and broker non-votes will be considered in determining whether a quorum is
present and will have the same legal effect as voting against Proposal 2.

      The vote required to approve Proposals 4 and 5 is governed by our
certificate of incorporation and the National Association of Securities Dealers,
Inc., or NASD, rules, and is the affirmative vote of the holders of (i) a
majority of the voting power of the outstanding shares of our common stock and
our Series A preferred stock (voting on an as converted basis), voting together
as a single class, and (ii) a majority of the voting power of the outstanding
shares of our Series A preferred stock, voting as a separate class. Abstentions
and broker non-votes will be considered in determining whether a quorum is
present and will have the same legal effect as voting against Proposals 4 and 5.


                                       2

<PAGE>

      The vote required to approve each of Proposals 6, 7, 8 and 9 is governed
by our bylaws and the NASD rules, and is the affirmative vote of the holders of
a majority of the outstanding shares of our common stock and our Series A
preferred stock present in person or by proxy at the Annual Meeting, voting
together as a single class. Abstentions and broker non-votes will be considered
present in determining whether a quorum is present and will have the same legal
effect as voting against Proposals 6, 7, 8 and 9.

      In voting with regard to Proposal 10, stockholders may vote in favor of
all nominees, withhold their votes as to all nominees or withhold their votes as
to specific nominees. The vote required to approve Proposal 10 is governed by
Delaware law and our bylaws and is a plurality of the votes of common stock and
Series A preferred stock represented and entitled to vote at the Annual Meeting,
voting together as a single class. As a result, in accordance with Delaware law,
votes that are withheld will be counted in determining whether a quorum is
present but will have no other effect on the election of directors.

      The vote required to approve Proposal 11 is governed by our bylaws, and is
the affirmative vote of the holders of a majority of the outstanding shares of
our common stock and our Series A preferred stock present in person or by proxy
at the Annual Meeting, voting together as a single class. As a result,
abstentions will be considered in determining whether a quorum is present and
the number of votes required to obtain the necessary majority vote and
therefore, will have the same legal effect as voting against the proposal.

      Under the rules of the New York and American Stock Exchanges, which we
refer to as the Exchanges, that govern most domestic stock brokerage firms,
member firms that hold shares in street name for beneficial owners may, to the
extent that such beneficial owners do not furnish voting instructions with
respect to any or all proposals submitted for stockholder action, vote in their
discretion upon proposals which are considered "discretionary" proposals under
the rules of the Exchanges. These votes by brokers are considered as votes cast
in determining the outcome of any discretionary proposal. We believe that
Proposals 3, 10 and 11 are discretionary. Member brokerage firms that have
received no instructions from their clients as to "non-discretionary" proposals
do not have discretion to vote on these proposals. If the brokerage firm returns
a proxy card without voting on a non-discretionary proposal because it received
no instructions, this is referred to as a "broker non-vote" on the proposal.

Granting A Proxy On The Internet

      You may grant a proxy to vote your shares by means of the Internet. The
Internet voting procedures below are designed to authenticate your identity, to
allow you to grant a proxy to vote your shares and to confirm that your
instructions have been recorded properly.

For shares registered in your name

      As a stockholder of record, you may go to http://www.voteproxy.com to
grant a proxy to vote your shares by means of the Internet. You will be required
to provide our number and control number contained on your proxy card. You will
then be asked to complete an electronic proxy card. The votes represented by
such proxy will be generated on the computer screen, and you will be prompted to
submit or revise them as desired.

For shares registered in the name of a broker or bank

      Most beneficial owners whose stock is held in street name receive
instructions for granting proxies from their banks, brokers or other agents,
rather than a proxy card. A number of brokers and banks are participating in a
program provided through ADP Investor Communication Services that offers the
means to grant proxies to vote shares by means of the telephone and Internet. If
your shares are held in an account with a broker or bank participating in the
ADP Investor Communication Services program, you may grant a proxy to vote those
shares telephonically by calling the telephone number shown on the instruction
form received from your broker or bank, or via the Internet at ADP Investor
Communication Services' Web site at http://www.bsg.adp.com.

General information for all shares voted via the Internet

      We must receive votes submitted via the Internet by 2:00 p.m., Eastern
Daylight Time, on [________, 2003]. Submitting your proxy via the Internet will
not affect your right to vote in person should you decide to attend the Annual
Meeting.


                                       3

<PAGE>

Revocability of proxies

      Any stockholder delivering a proxy has the power to revoke it at any time
before it is voted by (i) giving written notice to Walter G. DeSocio, Vice
President-Chief Administrative Officer, General Counsel and Secretary, at 250
Williams Street, Atlanta, Georgia 30303, (ii) executing and delivering to Mr.
DeSocio a proxy card bearing a later date, or (iii) voting in person at the
Annual Meeting. Please note, however, that under the rules of the Exchanges, any
beneficial owner of our common stock or our Series A preferred stock whose
shares are held in a street name by a member brokerage firm may revoke his or
her proxy and vote his or her shares in person at the Annual Meeting only in
accordance with applicable rules and procedures of the Exchanges, as employed by
the beneficial owner's brokerage firm.

Cost of this Proxy

      We will bear the entire cost of solicitation of proxies, including the
costs of preparing, assembling, printing and mailing this proxy statement, the
proxy card and any additional information furnished to stockholders. We will
furnish copies of solicitation materials to banks, brokerage houses, fiduciaries
and custodians holding in their names shares of our common stock or our Series A
preferred stock beneficially owned by others to forward to such beneficial
owners. We may reimburse persons representing beneficial owners of common stock
or our Series A preferred stock for their costs of forwarding solicitation
materials to such beneficial owners. We have engaged W.F. Doring Co., a
professional proxy solicitation firm, to solicit proxies on our behalf and
anticipate the cost of those services will be $8,000. We may supplement the
original solicitation of proxies by mail, by telephone, telegram or personal
solicitation by our directors, officers or other regular employees. We will not
pay any additional compensation to directors, officers or other regular
employees for such services.


                                       4

<PAGE>

                                   PROPOSAL 1

             Amendment to Certificate of Incorporation and Bylaws to
            Permit Holders of Series A Preferred Stock to Take Action
                     By Written Consent in Lieu of a Meeting

      Our board of directors has unanimously approved, declared advisable and
recommends that the stockholders approve, an amendment to our certificate of
incorporation, which we refer to in this description as the Certificate
Amendment and a related amendment to our bylaws, which we refer to as the Bylaws
Amendment, pursuant to which the holders of our Series A preferred stock would
be permitted to take action by written consent in lieu of a meeting.

General

      On February 27, 2003, our board of directors adopted and declared
advisable, subject to appropriate stockholder approval, the Certificate
Amendment and the Bylaws Amendment, which together we refer to as the Consent
Amendments as set forth in Appendix A hereto. The Company had previously
received approval for the Consent Amendments at a special meeting of our holders
of Series A preferred stock held on February 21, 2002 and at the 2002 Annual
Meeting of Stockholders held on May 14, 2002, at which the holders of our common
stock voting separately as a class approved the Consent Amendments. In late
November 2002, we became aware that the Consent Amendments may not have been
validly effected under Delaware law because although the holders of Series A
preferred stock voting separately as a class and the holders of our common stock
voting separately as a class approved the Consent Amendments, the Consent
Amendments were not also approved by the requisite vote of the holders of our
Series A preferred stock (voting on an as-converted basis) and our common stock,
voting together as a single class, at the 2002 Annual Meeting.

Summary Description of Amendments

      The following is a summary of the Consent Amendments. The complete text of
the Consent Amendments (as well as the text of the provisions the Consent
Amendments are replacing) is attached as Appendix A hereto.

Certificate Amendment

      Article V, Section D of our certificate of incorporation provides that no
action shall be taken by our stockholders (including both holders of our common
stock and holders of our Series A preferred stock) except at an annual meeting
or special meeting. The Certificate Amendment would revise Article V, Section D
to permit the holders of our Series A preferred stock to take any action that
may be taken or that is required by statute to be taken at any annual or special
meeting, without a meeting, without prior notice and without a vote, so long as
such action is taken in accordance with the bylaws. The proposed Certificate
Amendment would, however, continue to require that any action to be taken by
holders of our common stock be taken only at an annual or special meeting.

Bylaws Amendment

      Section 13 of our bylaws provides that no action shall be taken by our
stockholders (including both holders of our common stock and holders of our
Series A preferred stock) except at an annual or special meeting. Section 13
also specifically states that no action shall be taken by our stockholders by
written consent. The Bylaws Amendment would revise Section 13 to permit the
holders of our Series A preferred stock to take any action that may be taken or
that is required by statute to be taken at any annual or special meeting by
written consent in lieu of a meeting. The Bylaws would, however, continue to
require that any action taken by holders of our common stock be taken at an
annual or special meeting and would also continue to specifically prohibit
holders of our common stock from taking action by written consent.

Reason for Permitting Series A Stockholder Action By Written Consent

      By amending our certificate of incorporation and bylaws as described
above, we will have greater flexibility, speed and cost efficiency when
soliciting approvals from holders of our Series A preferred stock.


                                       5

<PAGE>

Recommendation of the Board of Directors

      The Board of Directors unanimously recommends that you vote "FOR" the
proposal to amend our certificate of incorporation and bylaws to permit the
holders of Series A preferred stock to act by written consent in lieu of a
meeting.


                                       6

<PAGE>

                                   PROPOSAL 2


                    AMENDMENT TO CERTIFICATE OF INCORPORATION
                   TO AMEND DEFINITION OF "LIQUIDATION EVENT"

      Our board of directors has approved and declared advisable, and recommends
that the stockholders approve, an amendment to our certificate of incorporation
that would limit the number of events giving rise to the liquidation rights of
the holders of our Series A preferred stock, which in this description we refer
to as the Liquidation Event Amendment.

General

      On February 27, 2003, our board of directors unanimously adopted, subject
to stockholder approval, the Liquidation Event Amendment as set forth in
Appendix B hereto. During September and October 2002, we solicited and received
the written consent of the holders of more than a majority of our shares of
Series A preferred stock to the Liquidation Event Amendment. In late November
2002, it came to our attention that the written consent may not have been
sufficient to validly effect the Liquidation Event Amendment under Delaware law
because although the holders of more than a majority of our shares of Series A
preferred stock voting as a single class approved the Liquidation Event
Amendment, the Liquidation Event Amendment was not also approved by the holders
of our Series A preferred stock (voting on an as-converted basis) and our common
stock, voting together as a single class. As a result, we are now soliciting the
vote of the holders of our common stock and our Series A preferred stock for
Proposal 2.

Effect of Liquidation Event Amendment

      The effect of the Liquidation Event Amendment will be to reduce the number
of circumstances constituting a "deemed liquidation event" under the terms of
our Series A preferred stock. The Liquidation Event Amendment would generally
limit the occurrence of a "deemed liquidation event" to certain events that have
been approved by our board of directors or that are otherwise under our control.
Upon the occurrence of a liquidation, including a "deemed liquidation event",
the holders of our Series A preferred stock would be entitled to be paid out of
our assets legally available for distribution or the consideration received in
such transaction certain preferential distributions before any distributions
could be made to the holders of our common stock. More specifically, upon a
liquidation of our company, the holders of our Series A preferred stock would be
entitled to receive an amount equal to the original issue price of our Series A
preferred stock, adjusted as provided in our certificate of incorporation, plus
any declared and unpaid dividends thereon. Such amount is currently equal to
$32.00 per share of Series A preferred stock or approximately $92,405,161 in the
aggregate for all outstanding shares of Series A preferred stock. After
receiving such preferential distribution upon a liquidation, holders of our
Series A preferred stock would then be entitled to participate ratably with the
holders of our common stock in any of our remaining assets or consideration
received in such transaction until such holders of our Series A preferred stock
shall have received three times their original issue price, adjusted as provided
in our certificate of incorporation. By limiting the number of circumstances
that would constitute a "deemed liquidation event", the number of circumstances
that would result in such a preferential distribution to the holders of our
Series A preferred stock would be correspondingly reduced.

Reasons for Liquidation Event Amendment

      The Liquidation Event Amendment has been approved and declared advisable
by our board of directors in order to permit the shares of Series A preferred
stock to be treated as a component of stockholders' equity for purposes of U.S.
generally accepted accounting principles, or GAAP. Because of certain features
of the definition of "deemed liquidation event" currently contained in our
certificate of incorporation, our shares of Series A preferred stock are not
treated under GAAP as a component of stockholders' equity. Our level of
stockholders' equity is important for purposes of our NASDAQ listing because it
is one of the listing criteria for continuation of our listing on the NASDAQ
SmallCap Market and for possible transfer of our listing back to the NASDAQ
National Market. As of December 31, 2002, our stockholders' equity was $1.8
million. Increasing our stockholders' equity would provide flexibility in
meeting one of several core listing requirements for continued listing on the
NASDAQ SmallCap Market or meeting the higher stockholders' equity criterion for
listing on the NASDAQ National Market.


                                       7

<PAGE>

Other Considerations Relating to the Liquidation Event Amendment

      Although our board of directors has declared the Liquidation Event
Amendment advisable and believes that the potential advantages of adopting the
Liquidation Event Amendment outweigh any disadvantages that might result, the
Liquidation Event Amendment could be viewed as having an adverse impact on the
holders of our Series A preferred stock and a potential beneficial impact on the
holders of our common stock. The Liquidation Event Amendment would require that
the holders of our shares of Series A preferred stock forfeit certain rights
that they have to construe as "deemed liquidation events" certain events that
are not approved by our board of directors or not effected voluntarily by us.

Recommendation of the Board of Directors

      The Board of Directors unanimously recommends that you vote "FOR" the
proposal to amend our certificate of incorporation to amend the definition of
"Liquidation Event."


                                       8

<PAGE>

                                   PROPOSAL 3

                  AMENDMENT TO CERTIFICATE OF INCORPORATION TO
        INCREASE THE AUTHORIZED SIZE OF THE COMPANY'S BOARD OF DIRECTORS
                                 TO NINE MEMBERS

      Our board of directors has approved, declared advisable and recommends
that stockholders approve, an amendment to our certificate of incorporation
providing for the increase in the authorized maximum size of our board of
directors to nine members.

General

      Our board of directors regularly reviews the state of our corporate
governance policies and procedures, including, through the board's nominations
committee, an evaluation of the board's size, composition and functions. At a
meeting on February 27, 2003, the board of directors adopted a resolution,
subject to stockholder approval, setting forth an amendment to our certificate
of incorporation to increase the maximum number of directors from seven to nine.
Our board of directors currently consists of three classes of directors and
seven members in total. Currently, subject to certain conditions set forth in
our certificate of incorporation, the holders of our Series A preferred stock
have the right, voting as a separate class, to elect two directors to our board
of directors and to fill any vacancy caused by the resignation, death of removal
of such directors. Mr. Fredric Harman and Mr. Eugene Eidenberg are presently
serving as our Series A directors. If Proposal 3 is approved by shareholders and
the certificate of incorporation is amended as described herein, our board of
directors may in the future increase the authorized number of directors from
seven to some number greater than seven, but no more than nine, in accordance
with our bylaws. Upon such increase, our board of directors will fill the
vacancy caused by any such increase in the authorized number of directors and
determine the class of directors (Class I, Class II or Class III) such director
shall join. The company currently has three classes of directors, with Class I
consisting of two directors, Class II consisting of two directors and Class III
consisting of three directors.

Reasons for Increasing the Size of the Board of Directors

      We believe that our board of directors should consist of a significant
majority of directors who are not affiliated with Internap. We also believe that
our directors should possess the breadth and depth of experience and skills
necessary for proper oversight of our affairs and adequate participation of
unaffiliated directors in key committees of the board, particularly those
committees the composition of which are subject to applicable listing
requirements or regulations or could in the future be subject to such
requirements or regulations.

      While no individual has been formally recommended by our board's
nominations committee for election at this time, the proposed authorization will
provide flexibility for the board to make future appointments as and when
suitable candidates are identified. This will also facilitate our ability to
address evolving governance standards and facilitate compliance with any new
rules, regulations or standards issued or adopted by the Securities and Exchange
Commission or by NASDAQ.

Summary Description of the Amendment

      Currently, the last sentence of Article IV, Subsection (D)(3)(c)(i) of our
certificate of incorporation states: "[t]he Board of Directors shall consist of
no more than seven (7) members." If approved, Proposal 3 would revise this
sentence as follows: "The Board of Directors shall consist of no more than nine
(9) members."

      If Proposal 3 is approved, and the board of directors increases the
authorized number of directors from seven to some number greater than seven, but
no more than nine, in accordance with our bylaws, the vacancies on the board of
directors resulting from the increase in the number of directors shall be filled
by the affirmative vote of a majority of the directors then in office, although
less than a quorum. Any director so elected shall hold office for the remainder
of the term of the class for which the vacancy was created or until such
director's successor has been elected and qualified or until such directors
earlier death, resignation or removal.


                                       9

<PAGE>

Recommendation of the Board of Directors

      The Board of Directors unanimously recommends that you vote "FOR" the
proposal to amend our certificate of incorporation to increase the authorized
size of the Board of Directors to nine members.


                                       10

<PAGE>

                                   PROPOSAL 4

    APPROVAL OF 2002 STOCK COMPENSATION PLAN AND AMENDMENTS TO INCREASE BY
 22,000,000 SHARES THE NUMBER OF SHARES OF COMMON STOCK RESERVED FOR ISSUANCE
         THEREUNDER AND TO CHANGE THE DEFINITION OF CHANGE IN CONTROL

General

      In September 2002, our board of directors approved and adopted the 2002
Stock Compensation Plan, which we refer to in this description as the 2002 Plan,
in connection with a tender offer made to our employees in November 2002
providing, subject to certain conditions, for the surrender and cancellation of
certain stock options and the future issuance of replacement stock options. The
purposes of the 2002 Plan are to attract and retain the best available personnel
for the company, to provide additional incentives to our personnel and to align
the interests of our personnel with our interests. Currently the maximum number
of shares that may be issued under the 2002 Plan is 32,000,000 shares, less the
number of shares then subject to option under our other stock option plans,
which as of April 7, 2003 was 2,078,533. On February 27, 2003, our board of
directors adopted, subject to appropriate stockholder approval, a resolution
requesting ratification of the 2002 Plan and an amendment to the 2002 Plan to
increase by 22,000,000 shares the number of shares of common stock reserved for
issuance thereunder. THE 22,000,000 SHARES WILL BE REDUCED PROPORTIONALLY TO
REFLECT THE EFFECTS OF ANY REVERSE STOCK SPLIT, WHETHER EFFECTED PRIOR TO OR
AFTER THE ANNUAL MEETING. In addition, our board of directors has approved, and
recommends that stockholders approve, an amendment to the 2002 Plan such that
the definition of "change in control" and related provisions conform to the
corresponding definitions and provisions set forth in executive employment
agreements dated as of December 31, 2002, between us and seven executives,
including all of our executive officers.

Reasons for Ratification and Increasing the Number of Shares Reserved for
Issuance

      We have determined that approval of the 2002 Plan by our stockholders is
advisable for several reasons. Shareholder approval would allow us to comply
with specified exclusions from limitations imposed under the Internal Revenue
Code of 1986, as amended, on the deductibility by us of certain compensation
expenses. Such approval also would be consistent with customary practice
relative to stock compensation plans and would afford participants in those
plans certain benefits that are consistent with our interests.

      Since we announced in June 2002 the decision to relocate our corporate
headquarters from Seattle, Washington, to Atlanta, Georgia, we have recruited a
substantial number of new employees, including the majority of our senior
executives and other executive-level employees. In connection with that
relocation and other personnel changes, and consistent with our philosophy that
aligning the interests of employees and the company is an important factor for
business success, we granted options to newly recruited employees and to a
significant percentage of existing employees not located in our Atlanta
headquarters office. We continue to recruit key employees and expect to do so
for the foreseeable future. In addition, we expect that stock options and other
equity-based compensation will be a significant component of bonus and long-term
compensation for existing employees, particularly at and above the executive
level. We also may require additional shares for compensation use in connection
with future acquisitions or other business combinations. The Compensation
Committee of our board of directors and our board evaluated all of the foregoing
factors in reaching a determination to increase the number of shares available
for option grants and awards under the 2002 Plan.

      As of January 31, 2003, an aggregate of 1,618,285 shares of common stock
have been purchased or options with respect thereto have been granted under the
2002 Plan.

Reasons for Amending the Change in Control Provisions

      On December 17, 2002, the Compensation Committee of our board of directors
authorized our execution of employment agreements with six named executives.
Since April 2002, we have recruited a significant number of executive-level
employees, including all but one of our executive officers. In the fall of 2002,
the Compensation Committee of our board determined that it would be in our best
interests to ensure that key members of our executive management team were
provided with at-will employment agreements that provided, among other things,


                                       11

<PAGE>

certain severance payments and benefits in the event of involuntary termination
without cause and certain other severance payments and benefits in the event of
involuntary termination without cause or constructive termination following
specified events constituting a "change in control." The executive employment
agreements are described in greater detail in the "Executive Employment
Agreements" section of this proxy statement.

      Because the term "change in control" is not consistently defined between
the executive employment agreements and the 2002 Plan, if an event occurred that
constituted a change in control under the executive employment agreements but
did not constitute a change in control under the 2002 Plan, it would be unclear
whether we could perform our obligations under the executive employment
agreements without violating the terms and conditions of the 2002 Plan.

      The board of directors believes that the amendment is necessary to assure
that the provisions of the executive employment agreements are valid and binding
agreements and that we are able to perform our obligations and commitments under
the executive employment agreements. The board of directors believes that it is
important for the performance of our executive officers to have confidence in
their employment agreements and that such agreements will not be determined to
be unenforceable or preempted as a result of an unintended inconsistency with
the 2002 Plan.

Summary Description of the 2002 Stock Compensation Plan and Proposed Amendments

      The following is a summary of the principal features of the 2002 Plan.
However, the summary does not purport to be a complete description of all the
provisions of the 2002 Plan. A copy of the full text of the 2002 Plan will be
furnished to any stockholder without charge upon written request made to Walter
G. DeSocio the Secretary of Internap. A copy of the proposed amendment to the
2002 Plan is contained in Appendix D attached to this proxy statement.

Introduction

      The 2002 Plan is intended to help us attract and retain the best
personnel, to provide additional incentive to our personnel, and to promote our
success.

Stock Subject to Awards

      The stock currently subject to the awards under the 2002 Plan is our
authorized but unissued or reacquired common stock, par value $.001 per share.
Currently, up to 32,000,000 shares of our common stock are authorized for
issuance under the 2002 Plan (which would under the current terms of the 2002
Plan increase to 50,000,000 shares upon approval of the plan by our Series A
preferred stockholders), less the number of shares of our common stock subject
to options and other equity awards under the SwitchSoft Systems, Inc. Founders
1996 Stock Option Plan, the SwitchSoft Systems, Inc. 1997 Stock Option Plan, the
Internap Network Services Corporation 1998 Stock Option/Stock Issuance Plan, the
Internap Network Services Corporation Amended 1999 Equity Incentive Plan, the
Internap Network Services Corporation 1999 Non-Employee Directors' Stock Option
Plan, the Internap Network Services Corporation 1999 Stock Incentive Plan For
Non-Officers (formerly the CO SPACE, Inc. 1999 Stock Incentive Plan), and the
Internap Network Services Corporation 2000 Non-Officer Equity Incentive Plan.
Under the proposed amendment, up to 54,000,000 shares of our common stock would
be authorized for issuance under the 2002 Plan (the increase upon approval by
our Series A preferred stockholders would be eliminated), less the shares
subject to options and other equity awards under the plans listed above. In the
event that any award expires or becomes unexercisable without having been
exercised in full, the shares not acquired under the award will again become
available for issuance under the 2002 Plan, and shares subject to unvested stock
bonuses which expire or terminate will again become available for issuance under
the 2002 Plan. The number of awards issued and the number of awards available
for issuance under the 2002 Plan may be adjusted as described below in the event
of a capital reorganization.

      On April 7, 2003, the closing price of our common stock as reported on the
NASDAQ SmallCap Market was $.40 per share.


                                       12

<PAGE>

Types of Awards

      The 2002 Plan permits grants of nonqualified stock options, restricted
stock bonuses, and rights to acquire restricted stock.

Administration

      The 2002 Plan is administered by our board of directors, or one or more
committees, or a combination thereof, as determined by the board. If permitted
under law, the board may also authorize one or more of our employees to grant
options under the plan. In this summary, we will refer to the administrative
body of the 2002 Plan as the committee. Among other powers and duties, the
committee interprets plan provisions; establishes rules for operation of the
2002 Plan; determines who will be granted awards from among the eligible
individuals; determines the type of award, the price of any award where
applicable, the provisions of each award granted, and the number of shares
underlying each award; and has the power to modify or amend awards.

      Our board of directors has named our Compensation Committee as the
committee authorized to administer the 2002 Plan.

Eligibility for Awards

      General. In consideration of their services, our directors, employees and
consultants are eligible for all awards permitted under the 2002 Plan.
Consultants include any person engaged by us to render consulting or advisory
services and who is compensated for those services, but excluding our officers
and directors. Consultants also include any member of the board of directors or
governing body of any of our affiliates. No employee, director or consultant is
eligible to receive options for more than 10,000,000 shares of our stock during
any calendar year.

      Limitation on Grants to Officers and Directors. The aggregate number of
shares of our stock issued under the 2002 Plan to our officers (as defined under
Rule 16a-1(f) of the Exchange Act) and directors cannot exceed 50% of the shares
reserved under the 2002 Plan, as determined at the time of an award issuance to
an officer or director, but shares for awards granted to officers not previously
employed by us as an inducement to enter an employment contract with us are not
counted in this limit. Furthermore, during each period beginning August 14, 2002
and ending August 14 of each year on and after 2005 through the term of the 2002
Plan, less than 50% of the shares subject to awards granted during each such
period may be granted to officers and directors, but shares for awards granted
to officers not previously employed by us as an inducement to enter an
employment contract with us are not counted in this limit.

      As of April 7, 2003, there were approximately 7 directors, 5 officers, 323
employees (excluding officers and directors who are also employees) and 14
consultants eligible to receive grants under the 2002 Plan.

Options Granted

      As of April 7, 2003, we have granted no options under the 2002 Plan.

Terms of Options

      Options granted under the 2002 Plan have terms and conditions as
determined by the committee, subject to the provisions and limitations described
below:

      Option Price. The exercise price of each option granted under the 2002
Plan is determined by the committee.


                                       13

<PAGE>

      Vesting. Exercisability and vesting of options is determined by the
committee, and may include performance criteria. Vesting may be tolled during an
unpaid leave of absence.

      Term of Options. The term of an option will not be more than ten years
from the date of grant unless otherwise provided in the option agreement.

      Termination of Employment or Service. Following a termination of
employment or service for any reason, all unexercised options that were
exercisable on the date employment or service terminated remain exercisable (not
extending beyond expiration of the options' term) for:

            o     such period of time as may be provided in the option
                  agreement, if the termination is for any reason other than
                  death or disability;

            o     12 months, or such other period of time as may be provided in
                  the option agreement, if the termination is due to disability;
                  and

            o     18 months, or such other period of time as may be provided in
                  the option agreement, if the termination is due to death.

      The committee has full power to extend the exercisability of options
following termination of employment or service, up to the date of expiration.

      Exercise of Options. Payment of the exercise price is made in any form
determined by the committee, including cash, check, promissory note, by
surrender to us of shares of our common stock that have either been held for
more than six months or were not acquired from us, retention of shares,
broker-assisted cashless exercise, subscription agreement, or any other form of
legal consideration permitted under law.

      Buy-Out. The committee is permitted to offer to buy out, in cash or shares
of our common stock, an option previously granted, on such terms and conditions
as the committee decides.

Terms of Restricted Stock Bonuses

      Restricted stock bonuses granted under the 2002 Plan have terms and
conditions as determined by our board of directors, subject to the provisions
described below:

      Grant. Restricted stock bonuses may be granted in consideration for past
services actually rendered.

      Vesting. A restricted stock bonus award may be subject to reacquisition by
us under the provisions of a vesting schedule.

      Termination of Employment or Service. Upon a termination of employment or
service with us for any reason, we may reacquire the unvested portion of a
restricted stock bonus award under the terms of the agreement governing the
award.

Terms of Restricted Stock Purchase Awards

      Restricted stock purchase awards granted under the 2002 Plan have terms
and conditions as determined by our board of directors, subject to the
provisions described below:

      Purchase Price. The purchase price of restricted stock under restricted
stock purchase awards under the 2002 Plan is determined by the board. The
purchase price is to be paid in cash, under a deferred payment or similar
arrangement if the board decides, or in any other form of legal consideration
that may be acceptable to the board in its discretion.

      Vesting. Restricted stock issued under a restricted stock purchase award
may be subject to reacquisition under the provisions of a vesting schedule.

      Termination of Employment or Service. Upon a termination of employment or
service with us for any reason, we may reacquire the unvested portion of a
restricted stock purchase award.


                                       14

<PAGE>

Fair Market Value

      Fair market value is generally the closing sale price of our common stock
(or the closing bid, if no sales were reported) quoted for the relevant date (or
preceding business day if not available for the relevant date) on the NASDAQ
SmallCap Market, as published in The Wall Street Journal.

Change in Control

      In the event of a change in control, each outstanding option shall be
assumed or an equivalent option substituted by the successor or its parent or
subsidiary. If the successor does not agree to assume the option or substitute
an equivalent option, the option automatically terminates upon consummation of
the change in control.

      Current Provisions. Under current provisions, the term "change in control"
is not explicitly defined, but would include a proposed merger or consolidation
of us with or into another corporation, or a sale, exchange, lease or similar
transfer of all or substantially all of our assets.

      Proposed Amendment. Under the proposed amendment, "change in control"
would be defined as:

      The acquisition by any individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act of beneficial ownership within
the meaning of Rule 13d-3 of the Exchange Act, of 30% or more of either our then
outstanding shares of common stock or the combined voting power entitled to vote
on election of our directors, but excluding:

   o  acquisition directly from us other than by virtue of the exercise of a
      conversion privilege unless the converted security was acquired from us,

   o  any acquisition by us,

   o  any acquisition by an employee benefit plan or related trust sponsored or
      maintained by us or any company we control,

   o  any acquisition by a corporation in a transaction in which all or
      substantially all of the beneficial owners of our common stock before the
      transaction beneficially own, directly or indirectly, more than 60% of the
      outstanding shares of common stock of the resulting corporation (in this
      definition, the resulting corporation includes any parent owning our
      assets through its subsidiaries following a transaction), in substantially
      the same proportions as their ownership of our common stock before the
      transaction,

   o  any acquisition by a corporation in a transaction in which all or
      substantially all of the beneficial owners of the combined voting power
      entitled to vote on election of our directors before the transaction
      beneficially own, directly or indirectly, more than 60% of the combined
      voting power of the then outstanding voting securities entitled to vote
      generally in the election of directors of the resulting corporation, in
      substantially the same proportions as their ownership of such voting stock
      before the transaction,

   o  any acquisition by a corporation in a transaction in which no entity
      (other than us, our employee benefit plan or related trust, or the
      resulting corporation in the transaction) will beneficially own, directly
      or indirectly, 50% or more of the outstanding shares of common stock of
      the resulting corporation or 50% or more of the combined voting power of
      the outstanding securities of the resulting corporation entitled to vote
      in the election of directors, unless such ownership resulted solely from
      ownership of our securities before the transaction, and

   o  any acquisition by a corporation in a transaction in which members of the
      incumbent board (as described below) will immediately after consummation
      of the transaction constitute at least a majority of the board of the
      resulting corporation.

      A change in the composition of our board of directors such that
individuals who constitute the board as of December 31, 2002, excluding members
elected pursuant to the terms of our Series A Convertible Preferred Stock, which
we refer to as the incumbent board, cease for any reason to constitute at least
a majority of our board (excluding the Series A directors); however, any
director whose election or nomination was approved by a vote of at least a
majority of the incumbent board will be considered to be included as a member of
the incumbent board, and 


                                       15

<PAGE>

any individual whose initial assumption of office as a director occurs as a
result of or in connection with either an actual or threatened election contest
as defined in Rule 14a-11 under the Exchange Act, or other actual or threatened
solicitation of proxies or consents on behalf of an entity other than our board
of directors, will not be considered a member of the incumbent board.

      Our stockholders' approval of a merger, reorganization, consolidation or
sale or other disposition of all or substantially all our assets, or if any such
transaction is subject to governmental consent, the obtaining of such consent,
excluding the following:

            o     a transaction in which all or substantially all of the
                  beneficial owners of our common stock before the transaction
                  beneficially own, directly or indirectly, more than 60% of the
                  outstanding shares of common stock of the resulting
                  corporation (in this definition, the resulting corporation
                  includes any parent owning our assets through its subsidiaries
                  following a transaction), in substantially the same
                  proportions as their ownership of our common stock before the
                  transaction,

            o     a transaction in which all or substantially all of the
                  beneficial owners of the combined voting power entitled to
                  vote on election of our directors before the transaction
                  beneficially own, directly or indirectly, more than 60% of the
                  combined voting power of the then outstanding voting
                  securities entitled to vote generally in the election of
                  directors of the resulting corporation, in substantially the
                  same proportions as their ownership of such voting stock
                  before the transaction,

            o     a transaction in which no entity (other than us, our employee
                  benefit plan or related trust, or the resulting corporation in
                  the transaction) will beneficially own, directly or
                  indirectly, 50% or more of the outstanding shares of common
                  stock of the resulting corporation or 50% or more of the
                  combined voting power of the outstanding securities of the
                  resulting corporation entitled to vote in the election of
                  directors, unless such ownership resulted solely from
                  ownership of our securities before the transaction, and

            o     a transaction in which individuals who were members of the
                  incumbent board will immediately after consummation of the
                  transaction constitute at least a majority of the board of the
                  resulting corporation.

      The approval by our stockholders of our complete dissolution or
liquidation.

      The amendment also confirms that an award may specify that upon a Change
in Control, vesting under such award may be accelerated and the time for
exercise may be extended and that the Board may add such rights to previously
granted awards by amendment.

      The amendment will become effective upon the date of stockholder approval.

Amendment and Termination

      Except as prohibited by applicable law or otherwise expressly provided in
an award agreement, the board may amend, alter, suspend or discontinue the 2002
Plan at any time, but no amendment, alteration, suspension or discontinuance or
termination of the 2002 Plan will be made which would impair grantee rights
under outstanding awards without the grantee's consent. No amendment will affect
options already granted unless the award recipient and the board consent in
writing. The board may amend the terms of outstanding awards at any time, but
the grantee's rights will not be materially impaired and his or her obligations
will not be materially increased without the grantee's written consent.

Adjustments

      Subject to any required stockholder action, in the event of a stock split,
reverse stock split, stock dividend, spinoff, combination or reclassification of
our common stock, or any other increase or decrease in the number of shares or
change in the price or characteristic of shares of our common stock effected
without our receiving consideration, the board will make an appropriate
adjustment to the number of shares subject to the 2002 Plan, and to the number
of securities and price per share of outstanding awards. In the event of any
distribution to our stockholders of property other than dividends payable in
cash or our common stock, without our receiving consideration, the committee may
appropriately adjust the price per share of common stock covered by outstanding
awards.


                                       16

<PAGE>

Dissolution or Liquidation

      If we are dissolved or liquidated, the board must notify optionees at
least 15 days before the dissolution or liquidation, and all outstanding awards
under the 2002 Plan automatically terminate immediately before the dissolution
or liquidation.

Transferability

      Unless otherwise provided by the committee, options are not transferable
except by will or by the laws of descent and distribution. The committee may in
its discretion grant transferable options. Rights to acquire shares of our stock
under a restricted stock bonus agreement are transferable as set forth in the
stock bonus agreement (which is subject to the committee's discretion). Rights
to acquire shares of our stock under a restricted stock purchase agreement are
transferable as set forth in the restricted stock purchase agreement (which is
subject to the committee's discretion).

Federal Income Tax Consequences

      The following is a brief general description of the consequences under the
Internal Revenue Code, or IRC, of the receipt or exercise of options under the
2002 Plan:

      Incentive Stock Options. The 2002 Plan does not provide for the grant of
incentive stock options.

      Nonqualified Stock Options. Neither we nor the option holder has income
tax consequences from the issuance of nonqualified stock options. Generally, in
the tax year when an option holder exercises nonqualified stock options, the
option holder recognizes ordinary income in the amount by which the fair market
value of the shares at the time of exercise exceeds the option price for such
shares. We generally will have a deduction in the same amount as the ordinary
income recognized by the option holder in our tax year in which or with which
the option holder's tax year (of exercise) ends.

      If an option holder exercises a nonqualified stock option by paying the
option price with previously acquired shares of our common stock, additional
rules apply.

      Limitation on Company Deductions. No federal income tax deduction is
allowed for compensation paid to a "covered employee" in any of our taxable
years beginning on or after January 1, 1994, to the extent that such
compensation exceeds $1,000,000. For this purpose, "covered employees" are
generally defined as our chief executive officer and our four highest
compensated officers whose annual salary and bonus exceeds $100,000, and the
term "compensation" generally includes amounts includable in gross income as a
result of the exercise of stock options, or the receipt of stock options. This
deduction limitation does not apply to compensation that is (1) commission-based
compensation, (2) performance-based compensation, (3) compensation which would
not be includable in an employee's gross income, and (4) compensation payable
under a written binding contract in existence on February 17, 1993, and not
materially modified thereafter.

      Compensation attributable to a stock option will generally satisfy the
limitation exception for performance-based compensation if:

            o     the grant or award is made by a "compensation committee" (a
                  committee composed of "outside" directors);

            o     the "material terms" (including which employees are eligible
                  to receive compensation, the maximum number of shares that may
                  be granted to an optionee and the exercise price of the
                  options) of the plan under which the option or right is
                  granted are disclosed to stockholders and approved by a
                  majority of the stockholder vote;

            o     the "compensation committee" certifies that performance goals
                  were in fact satisfied before the compensation is paid; and

            o     under the terms of the option or right, the amount of
                  compensation the employee could receive is based solely on an
                  increase in the value of the stock after the date of the grant
                  or award.


                                       17

<PAGE>

      Stock options granted under the 2002 Plan may satisfy these requirements,
depending on their terms and conditions.

      The foregoing discussion is not a complete discussion of all federal
income tax aspects of the 2002 Plan. Some of the provisions contained in the IRC
have only been summarized, and additional qualifications and refinements may be
contained in regulations which will be issued in the future by the Internal
Revenue Service. Furthermore, subsequent legislative changes or changes in
administrative or judicial interpretation could alter significantly the tax
treatment discussed herein. No discussion of state income tax law has been
included. Each employee should consult his or her own tax advisors with respect
to the tax consequences of participation in the 2002 Plan and disposition of
shares acquired under the 2002 Plan.

      ERISA. The 2002 Plan is not, and is not intended to be, an employee
benefit plan or qualified retirement plan. The 2002 Plan is not, therefore,
subject to the Employee Retirement Income Security Act of 1974, as amended, or
Section 401(a) of the IRC.

Recommendation of the Board of Directors

      The Board of Directors unanimously recommends that you vote "FOR" the
proposal to approve the 2002 Stock Compensation Plan and the amendments to the
2002 Stock Compensation Plan to increase by 22,000,000 shares the number of
shares of common stock reserved for issuance thereunder and to change the
definition of change in control.


                                       18

<PAGE>

                                   PROPOSAL 5

       AMENDMENT TO THE 1999 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN TO
     INCREASE BY 3,000,000 SHARES THE NUMBER OF SHARES OF COMMON STOCK
                        RESERVED FOR ISSUANCE THEREUNDER

      Our board of directors has approved, and recommends that stockholders
approve, an amendment to the Internap Network Services Corporation 1999
Non-Employee Directors' Stock Option Plan, which we refer to in this description
as the NEDSOP, increasing by 3,000,000 shares the number of shares of common
stock reserved for issuance under the NEDSOP. THE 3,000,000 SHARES WILL BE
REDUCED PROPORTIONALLY TO REFLECT THE EFFECTS OF ANY REVERSE STOCK SPLIT,
WHETHER EFFECTED PRIOR TO OR AFTER THE ANNUAL MEETING.

General

      On July 22, 1999, our board of directors approved and adopted, subject to
stockholder approval, the NEDSOP. The NEDSOP was approved by our stockholders on
August 23, 1999. Currently, a maximum of 500,000 shares of the company's common
stock may be issued under the NEDSOP. 

Reasons for Increasing the Number of Shares Reserved for Issuance

      Our board of directors believes that the amendment is necessary to assure
that a sufficient reserve of common stock remains available for issuance under
the NEDSOP to allow us to continue to utilize equity incentives to attract and
retain the services of non-employee directors having the requisite skills and
experience to serve as members of our board of directors. Consequently, we
believe that the use of shares under the NEDSOP will provide us with a means for
competing for and obtaining the services of such qualified persons.

      Under the proposed amendment to the NEDSOP, we will be authorized to grant
options to purchase up to 3,500,000 shares of our common stock, an increase of
3,000,000 shares from the level currently authorized. Our board of directors
anticipates that the 3,000,000 additional shares, combined with shares currently
available for grant under the NEDSOP, should be sufficient for non-employee
director grants for the foreseeable future.

      The amendment will become effective upon the date of stockholder approval.

Summary Description of the 1999 Non-Employee Directors' Stock Option Plan

      The following is a summary of the principal features of the NEDSOP.
However, the summary does not purport to be a complete description of all the
provisions of the NEDSOP. A copy of the full text of the NEDSOP will be
furnished to any stockholder without charge upon written request made to Walter
G. DeSocio the Secretary of Internap. A copy of the proposed amendment to the
NEDSOP is contained in Appendix E attached to this proxy statement.

Introduction to the 1999 Non-Employee Directors Stock Option Plan

      The NEDSOP is intended to help us secure and retain the services of
quality non-employee directors and to provide additional incentives for those
individuals to increase their efforts on our behalf.

Stock Subject to Awards

      The stock currently subject to the awards under the NEDSOP is our common
stock, par value $.001 per share. Up to 500,000 shares of our common stock are
authorized for issuance under the NEDSOP. In the event that an option expires or
otherwise terminates without being exercised, the shares not acquired under the
option will again become available for issuance under the plan. The number of
awards issued and the number of awards available for issuance under the NEDSOP
may be adjusted as described below in the event of a capital reorganization.

      On April 7, 2003, the closing price of our common stock as reported on the
NASDAQ SmallCap Market was $.40 per share.


                                       19

<PAGE>

Types of Awards

      The NEDSOP permits grants of nonqualified stock options, which are options
that do not qualify as incentive stock options under IRC Section 422, and
therefore are taxed under IRC Section 83.

Administration

      The NEDSOP is administered by our board of directors. Among other powers
and duties, the board interprets plan provisions; establishes rules for
operation of the NEDSOP; and determines the provisions of each option granted.

Eligibility for Awards

      In consideration of their services, each person who is a non-employee
director is eligible for all awards permitted under the NEDSOP.

      As of April 7, 2003, there were 6 directors eligible to receive grants
under the NEDSOP.

Options Granted

      As of April 7, 2003, current directors who are not executive officers have
been granted an aggregate of 560,000 options. Each nominee for election as a
director has been granted options as follows: Gregory A. Peters -- no options
and Robert D. Shurtleff -- 140,000 options. Robert D. Shurtleff received or is
to receive 5% of the options under the NEDSOP.

Terms of Options

      Options granted under the NEDSOP have terms and conditions as determined
by the board, subject to the following:

      Formula Grants to Directors. The NEDSOP provides for automatic option
grants to non-employee directors according to a formula under the plan. Under
the formula, as of the date of initial election or appointment as a
non-employee, such non-employee director will automatically receive an option to
purchase 40,000 shares. As of the day following the annual stockholders meeting
each year, each director who is then a non-employee director and who has been a
non-employee director for at least six months will automatically receive an
option to purchase 10,000 shares.

      Option Price. The exercise price of each option shall be 100% of the fair
market value of the stock subject to the option on the date the option is
granted. Notwithstanding the foregoing, an option may be granted with an
exercise price lower than that set forth in the preceding sentence if the option
is granted pursuant to an assumption or substitution for another option in a
manner satisfying the provisions of IRC Section 424(a).

      Vesting. The options are fully vested and exercisable upon receipt.

      Term of Options. The term of any option cannot be more than ten years from
the date of grant.

      Termination of Employment or Service. Upon a termination of service with
us, all unexercised options remain exercisable (not extending beyond expiration
of the options' term) for:

            o     three months, if the termination is for any reason other than
                  death or disability;

            o     one year, if the termination is due to disability; and

            o     18 months, if the termination is due to death or if the
                  optionee dies within three months after termination of service
                  other than due to death.

      Exercise of Options. Payment of the exercise price is generally made in
cash, or, if the committee decides, by cashless exercise, by surrender to us of
shares of our common stock, according to a deferred payment or other 


                                       20

<PAGE>

arrangement or by any other form of legal consideration that may be acceptable
to the board and provided in the option agreement.

Fair Market Value

      Fair market value is generally the closing sales or bid price of our
common stock quoted for the last business day before the relevant date for which
prices are available on the NASDAQ SmallCap Market, as published in The Wall
Street Journal.

Change of Control

      In the event of a sale, lease or other disposition of all or substantially
all of our assets, a merger or consolidation in which we are not the surviving
corporation, or a reverse merger in which we are the surviving corporation but
in which our shares are converted into other property, any surviving corporation
or acquiring corporation may assume or continue outstanding awards or may
substitute similar awards for those outstanding under the NEDSOP.

Amendment and Termination

      Our board of directors may amend or terminate the NEDSOP at any time, and
the NEDSOP automatically expires on July 21, 2009. However, awards already
granted will not be affected by termination of the plan. The committee may
amend, modify or terminate any outstanding awards under the NEDSOP, but the
grantee's consent is required unless the committee determines that the action
would not materially and adversely affect the grantee. No amendment will be
effective without shareholder approval if necessary to satisfy Rule 16b-3 or any
NASDAQ or Securities Exchange listing requirements, and the board may decide to
submit any other amendment for shareholder approval.

Adjustments

      In the event of changes in our common stock without our receiving
consideration, through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction, the board will make an appropriate
adjustment to the classes and number of shares subject to the NEDSOP, and to the
class of shares, number of securities and price per share of outstanding awards.

Dissolution or Liquidation

      If we are dissolved or liquidated, all outstanding awards under the NEDSOP
automatically terminate immediately before the dissolution or liquidation.

Transferability

      Options may not be transferred except by will or by the laws of descent
and distribution.

Federal Income Tax Consequences

      The receipt or exercise of options under the NEDSOP has the consequences
described under the sub-heading Nonqualified Stock Options under the federal
income tax consequences discussion in Proposal 4 above.

      The foregoing discussion is not a complete discussion of all federal
income tax aspects of the NEDSOP. Some of the provisions contained in the IRC
have only been summarized, and additional qualifications and refinements may be
contained in regulations that will be issued in the future by the Internal
Revenue Service. Furthermore, subsequent legislative changes or changes in
administrative or judicial interpretation could alter significantly the tax
treatment discussed herein. No discussion of state income tax law has been
included. Each employee should consult his or her own tax advisors with respect
to the tax consequences of participation in the NEDSOP and disposition of shares
acquired under the NEDSOP.


                                       21

<PAGE>

      ERISA. The NEDSOP is not, and is not intended to be, an employee benefit
plan or qualified retirement plan. The NEDSOP is not, therefore, subject to the
Employee Retirement Income Security Act of 1974, as amended, or Section 401(a)
of the IRC.

Recommendation of the Board of Directors

      The Board of Directors unanimously recommends that you vote "FOR" the
proposal to amend the 1999 Non-Employee Directors' Stock Plan to increase by
3,000,000 shares the number of shares of common stock reserved for issuance
thereunder.


                                       22

<PAGE>

                                   PROPOSAL 6

       RATIFICATION OF AMENDED 1999 EQUITY INCENTIVE PLAN AND AMENDMENT
            TO CHANGE THE AMENDED DEFINITION OF CHANGE IN CONTROL

Introduction to the Amended 1999 Equity Incentive Plan

      The Internap Network Services Corporation Amended 1999 Equity Incentive
Plan, or EIP, is intended to help us secure and retain the services of quality
directors, employees and consultants and to provide incentives for those
individuals to exert maximum efforts for our success. Currently, up to
23,095,275 shares have been authorized for issuance under the EIP. Our board of
directors has approved, and recommends that stockholders approve, an amendment
to the EIP such that the definition of "change in control" and related
provisions conform to the corresponding definitions and provisions set forth in
executive employment agreements dated as of December 31, 2002, between us and
seven executives, including all of our executive officers. The EIP as originally
adopted was approved by our stockholders at the time of its adoption, but has
since been amended, and we have determined that stockholder approval of the EIP
as amended is advisable at this time.

Reasons for Ratification and Amendment to Definition of Change in Control

      We have determined that ratification of the EIP by our stockholders is
advisable because such approval would be consistent with customary practice
relative to stock compensation plans and would afford participants in those
plans certain benefits that are consistent with our interests. Our board of
directors believes that the EIP provides an attractive method for key employees
to purchase our common stock and provides key employees with an important
benefit. Our board of directors believes that stock options play an important
role in providing eligible employees and qualifying third parties with an
incentive and inducement to contribute fully and to further the growth and
development of the company and its affiliates because it aligns those
individuals' interests with the interests of our stockholders.

      On December 17, 2002, the Compensation Committee of our board of directors
authorized our execution of employment agreements with seven named executives,
including all of our executive officers. From April 2002, we have recruited a
significant number of executive-level employees, including all but one of our
executive officers. In the fall of 2002, the Compensation Committee of our board
determined that it would be in our best interests to ensure that key members of
our executive management team were provided with at-will employment agreements
that provided, among other things, certain severance payments and benefits in
the event of involuntary termination without cause and certain other severance
payments and benefits in the event of involuntary termination without cause or
constructive termination following specified events constituting a "change in
control." The executive employment agreements are described in greater detail in
the Executive Employment Agreement Subheading under the section of this proxy
statement entitled Director and Executive Compensation.

      Because the term "change in control" is not consistently defined between
the executive employment agreements and the EIP, if an event occurred that
constituted a change in control under the executive employment agreements but
did not constitute a change in control under the EIP, it would be unclear
whether we could perform our obligations under the executive employment
agreements without violating the terms and conditions of the EIP. The board of
directors believes that the amendment is necessary to assure that the provisions
of the executive employment agreements are valid and binding agreements and that
we are able to perform our obligations and commitments under the executive
employment agreements. The board of directors believes that it is important for
the performance of our executive officers to have confidence in their employment
agreements and that such agreements will not be determined to be unenforceable
or preempted as a result of an unintended inconsistency with the EIP.

Summary Description of the Amended 1999 Equity Incentive Plan and Proposed
Amendment

      The following is a summary of the principal features of the EIP. However,
the summary does not purport to be a complete description of all the provisions
of the EIP. A copy of the full text of the EIP will be furnished to any
stockholder without charge upon written request made to Walter G. DeSocio the
Secretary of Internap. A copy of the proposed amendment to the EIP is contained
in Appendix F attached to this proxy statement.


                                       23

<PAGE>

Stock Subject to Awards

      The stock currently subject to the awards under the EIP is our unissued or
reacquired common stock, par value $.001 per share. Up to 6,500,000 shares of
our common stock were initially authorized for issuance under the EIP, but each
year the available shares are automatically increased by 3.5% of the total
number of shares of our stock outstanding on the anniversary of the EIP's
effective date, although each increase is not to exceed 6,500,000. At this time,
the authorized shares under the EIP have been increased to a total of 23,095,205
shares. In the event that any award expires or otherwise terminates without
having been exercised in full, the shares not acquired under the award will
again become available for issuance under the EIP. The number of awards issued
and the number of awards available for issuance under the EIP may be adjusted as
described below in the event of a capital reorganization

      On April 7, 2003, the closing price of our common stock as reported on the
NASDAQ SmallCap Market was $.40 per share.

Types of Awards

      The EIP permits grants of incentive stock options under IRC Section 422,
nonqualified stock options, stock bonuses, and rights to acquire restricted
stock.

Administration

      The EIP is administered by our board of directors, except when our board
of directors has delegated its authority to a committee of board members. The
board may decide to limit members of the committee to "outside directors" within
the meaning of Section 162(m) of the IRC and "non-employee directors" for
purposes of Rule 16b-3 of the Exchange Act. In this summary, we will refer to
the administrative body of the EIP as the committee. Among other powers and
duties, the committee interprets plan provisions; establishes rules for
operation of the EIP; determines who will be granted awards from among the
eligible individuals; and determines the type of award, the provisions of each
award granted, and the number of shares underlying each award.

      Our board of directors has named our Compensation Committee, which
consists exclusively of independent directors in compliance with the provisions
of Section 162(m) of the IRC and Section 16 of the Exchange Act, as the
committee authorized to administer the EIP.

Eligibility for Awards

      The EIP provides for grants of incentive stock options to employees in
consideration of their services as employees. In addition, in consideration of
their services, our directors, employees and consultants are eligible for all
other awards permitted under the EIP. Consultants include (i) any person engaged
by us to render consulting or advisory services and who is compensated for those
services, or (ii) any person who is a member of the board of directors of a
parent or subsidiary of Internap Network Services Corporation, excluding any
such board member who is not compensated by us for services or who is merely
paid a director's fee for services. No employee is eligible to receive options
for more than 3,000,000 shares of our stock during any calendar year.

      As of April 7, 2003, there were approximately 7 directors, 326 employees
(excluding directors who are also employees) and 14 consultants eligible to
receive grants under the EIP.

Options Granted

      As of April 7, 2003, we have granted options under the EIP to the named
executive officers in the following amounts: Eugene Eidenberg -- 1,200,000
options, Ali Marashi -- 1,992,256 options. As of April 7, 2003, the current
executive officers, as a group, have been granted a total of 5,942,256 options
under the EIP, and current directors who are not executive officers have been
granted an aggregate of 8,000,000 options. Each nominee for election as a
director has been granted options as follows: Gregory A. Peters -- 7,400,000
options, Robert D. Shurtleff -- no options. Gregory A. Peters received or is to
receive 5% of the options. All other employees have been granted a total of
8,328,063 options.


                                       24

<PAGE>

Terms of Options

      Options granted under the EIP have terms and conditions as determined by
the committee, subject to the limitations described below:

      Option Price. The exercise price of each incentive stock option granted
under the EIP generally cannot be less than the fair market value of a share of
the common stock on the date of grant. The exercise price of each nonqualified
stock option generally cannot be less than 85% of the fair market value of a
share of our common stock on the date of grant. Exercise prices may be lower for
options we issue in replacement of another company's options that we assume as
part of a corporate transaction.

      Vesting. Exercisability and vesting of options may be periodic and/or
based on other terms and conditions such as performance, and is determined by
the committee. In addition, options may be exercisable but not vested, and
subject to repurchase (of shares that would not otherwise be exercisable) upon
termination of employment. The repurchase price could either be fair market
value at the time of repurchase or another price not less than the exercise
price paid by the optionee.

      Term of Options. The term of any incentive stock option cannot be more
than 10 years from the date of grant.

      Termination of Employment or Service. Upon a termination of employment or
service with us for cause, all unexercised options terminate immediately.
Following a termination of employment or service for any other reason, all
unexercised options that were exercisable on the date employment or service
terminated remain exercisable (not extending beyond expiration of the options'
term) for:

            o     three months, or such other period of time as may be provided
                  in the option agreement, if the termination is for any reason
                  other than death or disability;

            o     12 months, or such other period of time as may be provided in
                  the option agreement, if the termination is due to disability;
                  and

            o     18 months, or such other period of time as may be provided in
                  the option agreement, if the termination is due to death or,
                  if the option agreement so provides, if the optionee dies
                  within a period specified in the option agreement after
                  termination of employment or service other than due to death
                  (with respect to options that were exercisable on the date of
                  death).

      Unless otherwise specified in the option agreement, upon a change in
control in which an option is assumed, continued or substituted as described
below, then upon termination of employment or service without cause within 13
months following the effective date of the change in control, the option (or any
substituted award) automatically vests and becomes fully exercisable, and
remains exercisable until it expires in accordance with its terms. Limitations
apply if any payment or benefit to an optionee would constitute a "parachute
payment" under IRC section 280G.

      Exercise of Options. Payment of the exercise price is generally made in
cash, or, if the committee decides (which decision must be made at the time of
grant in the case of an incentive stock option), by surrender to us of shares of
our common stock, by a deferred payment or similar arrangement, or any other
form of legal consideration acceptable to the committee.

      Re-Load Options. The committee is permitted to include in an option
agreement a provision that the optionee will receive a re-load option upon
exercise of the underlying option and payment of the exercise price in shares of
our stock. Under such provision, the optionee would receive a re-load option for
a number of shares of stock equal to the number of shares surrendered upon
exercise of the underlying option. The re-load option would have an expiration
date the same as the underlying option, and would have an exercise price equal
to the fair market value of a share on the date the optionee exercised the
underlying option and received the re-load option. Re-load options are otherwise
subject to the terms and limitations of the EIP.


                                       25

<PAGE>

Terms of Stock Bonuses

      Stock bonuses granted under the EIP have terms and conditions as
determined by the committee, subject to the provisions described below:

      Grant. The committee may grant stock bonuses in consideration for past
services actually rendered.

      Vesting. A stock bonus award may be subject to repurchase under the
provisions of a vesting schedule. The repurchase price could either be fair
market value at the time of repurchase or another price not less than any
purchase price paid by the award recipient.

      Termination of Employment or Service. Upon a termination of employment or
service with us for any reason, we may reacquire the unvested portion of a stock
bonus award. Unless otherwise specified in the stock bonus agreement, upon a
change in control in which a stock bonus award is assumed, continued or
substituted as described below, then upon termination of employment or service
without cause within 13 months following the effective date of the change in
control, the award (or any substituted award) automatically vests and becomes
fully exercisable, and remains exercisable until it expires in accordance with
its terms.

Terms of Restricted Stock Awards

      Restricted stock awards granted under the EIP have terms and conditions as
determined by the committee, subject to the limitations described below:

      Purchase Price. The purchase price of restricted stock under the EIP
cannot be less than 85% of the fair market value of our stock on the date the
award is made or at the time the purchase is consummated. The purchase price is
generally paid in cash at the time of purchase, or, if the committee decides, by
a deferred payment or similar arrangement, or any other form of legal
consideration acceptable to the committee.

      Vesting. Restricted stock may be subject to repurchase under the
provisions of a vesting schedule. The repurchase price could either be fair
market value at the time of repurchase or another price not less than the
purchase price paid by the award recipient.

      Termination of Employment or Service. Upon a termination of employment or
service with us for any reason, we may reacquire the unvested portion of a
restricted stock award. Unless otherwise specified in the restricted stock
agreement, upon a change in control in which a restricted stock award is
assumed, continued or substituted as described below, then upon termination of
employment or service without cause within 13 months following the effective
date of the change in control, the award (or any substituted award)
automatically vests and becomes fully exercisable, and remains exercisable until
it expires in accordance with its terms.

Fair Market Value

      Fair market value is generally the closing sale price of our common stock
(or the closing bid, if no sales were reported) quoted for the relevant date on
the NASDAQ SmallCap Market, as published in The Wall Street Journal.

Acceleration of Vesting and Change in Control

      The committee has the power at any time to accelerate the time at which an
award may be exercised, or the vesting of an award. In the event we experience a
change in control, any surviving corporation or acquiring corporation may assume
or continue outstanding awards or may substitute similar awards for those
outstanding under the EIP. If the surviving corporation or acquiring corporation
does not either assume or continue outstanding awards or substitute similar
awards for those outstanding under the EIP, awards held by active directors,
employees and consultants will automatically become fully vested and
exercisable, and all awards (including those held by terminated directors,
employees and consultants) will terminate on the date of change in control if
not exercised before then. In the event any person, entity or group within the
meaning of Section 13(d) or 14(d) of the Exchange Act (excluding any employee
benefit plan or related trust we or our parent or subsidiary maintains) acquires
beneficial ownership within the meaning of Rule 13d-3 under the Exchange Act of
securities representing at least 


                                       26

<PAGE>

50% of the combined voting power entitled to vote on election of our directors,
then all awards held by active directors, employees and consultants will
automatically become fully vested and exercisable and remain exercisable until
they expire in accordance with their terms. Limitations apply if any payment or
benefit to an optionee would constitute a "parachute payment" under IRC section
280G.

      Current Change in Control Definition. Under current provisions, "change in
control" (or "corporate transaction") is defined as a sale, lease or other
disposition of all or substantially all of our assets, a merger or consolidation
in which we are not the surviving corporation, or a reverse merger in which we
are the surviving corporation but in which our shares are converted into other
property.

      Proposed Amendment. Under the proposed amendment, "change in control"
would be defined as:

      The acquisition by any individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act of beneficial ownership within
the meaning of Rule 13d-3 of the Exchange Act, of 30% or more of either our then
outstanding shares of common stock or the combined voting power entitled to vote
on election of our directors, but excluding:

            o     acquisition directly from us other than by virtue of the
                  exercise of a conversion privilege unless the converted
                  security was acquired from us,

            o     any acquisition by us,

            o     any acquisition by an employee benefit plan or related trust
                  sponsored or maintained by us or any company we control,

            o     any acquisition by a corporation in a transaction in which all
                  or substantially all of the beneficial owners of our common
                  stock before the transaction beneficially own, directly or
                  indirectly, more than 60% of the outstanding shares of common
                  stock of the resulting corporation (in this definition, the
                  resulting corporation includes any parent owning our assets
                  through its subsidiaries following a transaction), in
                  substantially the same proportions as their ownership of our
                  common stock before the transaction,

            o     any acquisition by a corporation in a transaction in which all
                  or substantially all of the beneficial owners of the combined
                  voting power entitled to vote on election of our directors
                  before the transaction beneficially own, directly or
                  indirectly, more than 60% of the combined voting power of the
                  then outstanding voting securities entitled to vote generally
                  in the election of directors of the resulting corporation, in
                  substantially the same proportions as their ownership of such
                  voting stock before the transaction,

            o     any acquisition by a corporation in a transaction in which no
                  entity (other than us, our employee benefit plan or related
                  trust, or the resulting corporation in the transaction) will
                  beneficially own, directly or indirectly, 50% or more of the
                  outstanding shares of common stock of the resulting
                  corporation or 50% or more of the combined voting power of the
                  outstanding securities of the resulting corporation entitled
                  to vote in the election of directors, unless such ownership
                  resulted solely from ownership of our securities before the
                  transaction, and

            o     any acquisition by a corporation in a transaction in which
                  members of the incumbent board (as described below) will
                  immediately after consummation of the transaction constitute
                  at least a majority of the board of the resulting corporation.

      A change in the composition of our board of directors such that
individuals who constitute the board as of December 31, 2002, excluding members
elected pursuant to the terms of our Series A Convertible Preferred Stock, which
we refer to as the incumbent board, cease for any reason to constitute at least
a majority of our board (excluding the Series A directors); however, any
director whose election or nomination was approved by a vote of at least a
majority of the incumbent board will be considered to be included as a member of
the incumbent board, and any individual whose initial assumption of office as a
director occurs as a result of or in connection with either an actual or
threatened election contest as defined in Rule 14a-11 under the Exchange Act, or
other actual or threatened 


                                       27

<PAGE>

solicitation of proxies or consents on behalf of an entity other than our board
of directors, will not be considered a member of the incumbent board.

      Our stockholders' approval of a merger, reorganization, consolidation or
sale or other disposition of all or substantially all our assets, or if any such
transaction is subject to governmental consent, the obtaining of such consent,
excluding the following:

            o     a transaction in which all or substantially all of the
                  beneficial owners of our common stock before the transaction
                  beneficially own, directly or indirectly, more than 60% of the
                  outstanding shares of common stock of the resulting
                  corporation (in this definition, the resulting corporation
                  includes any parent owning our assets through its subsidiaries
                  following a transaction), in substantially the same
                  proportions as their ownership of our common stock before the
                  transaction,

            o     a transaction in which all or substantially all of the
                  beneficial owners of the combined voting power entitled to
                  vote on election of our directors before the transaction
                  beneficially own, directly or indirectly, more than 60% of the
                  combined voting power of the then outstanding voting
                  securities entitled to vote generally in the election of
                  directors of the resulting corporation, in substantially the
                  same proportions as their ownership of such voting stock
                  before the transaction,

            o     a transaction in which no entity (other than us, our employee
                  benefit plan or related trust, or the resulting corporation in
                  the transaction) will beneficially own, directly or
                  indirectly, 50% or more of the outstanding shares of common
                  stock of the resulting corporation or 50% or more of the
                  combined voting power of the outstanding securities of the
                  resulting corporation entitled to vote in the election of
                  directors, unless such ownership resulted solely from
                  ownership of our securities before the transaction, and

            o     a transaction in which individuals who were members of the
                  incumbent board will immediately after consummation of the
                  transaction constitute at least a majority of the board of the
                  resulting corporation.

      The approval by our stockholders of our complete dissolution or
liquidation.

      The amendment also confirms that an award may specify that upon a Change
in Control, vesting under such award may be accelerated and the time for
exercise may be extended and that the Board may add such rights to previously
granted awards by amendment.

      The amendment will become effective upon the date of stockholder approval.

Amendment and Termination

      The committee may amend the EIP and the terms of any outstanding awards at
any time. However, if necessary to satisfy the requirements of IRC Section 422,
Rule 16b-3 of the Exchange Act or any NASDAQ or other securities exchange
listing requirements, shareholder approval of any plan amendment is required.
The committee may also decide to submit other EIP amendments to stockholders for
approval. No amendment will impair the rights under awards already granted
unless the award recipient consents in writing. The committee may terminate the
EIP at any time, and the EIP will automatically terminate ten years after
original approval.

Adjustments

      In the event of changes in our common stock without our receiving
consideration, through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction, the committee will make an
appropriate adjustment to the classes and number of shares subject to the EIP,
to the maximum number of shares permitted to be awarded to any person, and to
the class of shares, number of securities and price per share of outstanding
awards.

Dissolution or Liquidation

      If we are dissolved or liquidated, all outstanding awards under the EIP
automatically terminate immediately before the dissolution or liquidation.


                                       28

<PAGE>

Transferability

      Incentive stock options are not transferable except by will or by the laws
of descent and distribution. Nonqualified stock options are transferable to the
extent provided in the governing option agreement, or if the option agreement
does not provide for transferability, nonqualified stock options are not
transferable except by will or by the laws of descent and distribution. Rights
to acquire shares of our stock under a stock bonus agreement are transferable as
set forth in the stock bonus agreement (which is subject to the committee's
discretion). Rights to acquire shares of our stock under a restricted stock
agreement are transferable as set forth in the restricted stock agreement (which
is subject to the committee's discretion).

Federal Income Tax Consequences

      The following is a brief general description of the consequences under the
Internal Revenue Code, or IRC, of the receipt or exercise of options under the
EIP:

      Incentive Stock Options. An option holder has no tax consequences upon
issuance or, generally, upon exercise of an incentive stock option. An option
holder will recognize income when he or she sells or exchanges the shares
acquired upon exercise of an incentive stock option. This income will be taxed
at the applicable capital gains rate if the sale or exchange occurs after the
expiration of the requisite holding periods. Generally, the requisite holding
periods expire two years after the date of grant of the incentive stock option
and one year after the date of acquisition of our common stock pursuant to the
exercise of the incentive stock option.

      If an option holder disposes of the common stock acquired pursuant to
exercise of an incentive stock option before the expiration of the requisite
holding periods, the option holder will recognize compensation income in an
amount equal to the difference between the option price and the lesser of (i)
the fair market value of the shares on the date of exercise and (ii) the price
at which the shares are sold. This amount will be taxed at ordinary income
rates. If the sale price of the shares is greater than the fair market value on
the date of exercise, the difference will be recognized as gain by the option
holder and taxed at the applicable capital gains rate. If the sale price of the
shares is less than the option price, the option holder will recognize a capital
loss equal to the excess of the option price over the sale price. For these
purposes, the use of shares acquired upon exercise of an incentive stock option
to pay the option price of another option (whether or not it is an incentive
stock option) will be considered a disposition of the shares.

      An option holder may have tax consequences upon exercise of an incentive
stock option if the aggregate fair market value of shares of the common stock
subject to incentive stock options which first become exercisable by an option
holder in any one calendar year exceeds $100,000. If this occurs, the excess
shares will be treated as though they are subject to a nonqualified stock option
instead of an incentive stock option. Upon exercise of an option with respect to
these shares, the option holder will have the tax consequences described below
with respect to the exercise of nonqualified stock options.

      Finally, except to the extent that an option holder has recognized income
with respect to the exercise of an incentive stock option, as described in the
preceding paragraphs, the amount by which the fair market value of a share of
our common stock at the time of exercise of the incentive stock option exceeds
the option price will be included in determining an option holder's alternative
minimum taxable income, and may cause the option holder to incur an alternative
minimum tax liability in the year of exercise.

      There will be no tax consequences to us upon issuance or, generally, upon
exercise of an incentive stock option. However, to the extent that an option
holder recognizes ordinary income upon exercise, as described above, we
generally will have a deduction in the same amount.

      Nonqualified Stock Options. Neither we nor the option holder has income
tax consequences from the issuance of nonqualified stock options. Generally, in
the tax year when an option holder exercises nonqualified stock options, the
option holder recognizes ordinary income in the amount by which the fair market
value of the shares at the time of exercise exceeds the option price for such
shares. We generally will have a deduction in the same amount as the ordinary
income recognized by the option holder in our tax year in which or with which
the option holder's tax year (of exercise) ends.


                                       29

<PAGE>

      If an option holder exercises a nonqualified stock option by paying the
option price with previously acquired shares of our common stock, additional
rules apply.

      Limitation on Company Deductions. No federal income tax deduction is
allowed for compensation paid to a "covered employee" in any of our taxable
years beginning on or after January 1, 1994, to the extent that such
compensation exceeds $1,000,000. For this purpose, "covered employees" are
generally defined as our chief executive officer and our four highest
compensated officers whose annual salary and bonus exceeds $100,000, and the
term "compensation" generally includes amounts includable in gross income as a
result of the exercise of stock options, or the receipt of stock options. This
deduction limitation does not apply to compensation that is (1) commission-based
compensation, (2) performance-based compensation, (3) compensation which would
not be includable in an employee's gross income, and (4) compensation payable
under a written binding contract in existence on February 17, 1993, and not
materially modified thereafter.

      Compensation attributable to a stock option will generally satisfy the
limitation exception for performance-based compensation if:

            o     the grant or award is made by a "compensation committee" (a
                  committee composed of "outside" directors);

            o     the "material terms" (including which employees are eligible
                  to receive compensation, the maximum number of shares that may
                  be granted to an optionee and the exercise price of the
                  options) of the plan under which the option or right is
                  granted are disclosed to stockholders and approved by a
                  majority of the stockholder vote;

            o     the "compensation committee" certifies that performance goals
                  were in fact satisfied before the compensation is paid; and

            o     under the terms of the option or right, the amount of
                  compensation the employee could receive is based solely on an
                  increase in the value of the stock after the date of the grant
                  or award.

      Stock options granted under the EIP may satisfy these requirements,
depending upon the specific terms, provisions, restrictions and limitations of
such options.

      The foregoing discussion is not a complete discussion of all federal
income tax aspects of the EIP. Some of the provisions contained in the IRC have
only been summarized, and additional qualifications and refinements may be
contained in regulations which will be issued in the future by the Internal
Revenue Service. Furthermore, subsequent legislative changes or changes in
administrative or judicial interpretation could alter significantly the tax
treatment discussed herein. No discussion of state income tax law has been
included. Each employee should consult his or her own tax advisors with respect
to the tax consequences of participation in the EIP and disposition of shares
acquired under the EIP.

      ERISA. The EIP is not, and is not intended to be, an employee benefit plan
or qualified retirement plan. The EIP is not, therefore, subject to the Employee
Retirement Income Security Act of 1974, as amended, or Section 401(a) of the
IRC. 

Recommendation of the Board of Directors

      The Board of Directors unanimously recommends that you vote "FOR" the
ratification of the 1999 Equity Incentive Plan and approval of the amendment to
the 1999 Equity Incentive Plan to change the definition of change in control.


                                       30

<PAGE>

                                   PROPOSAL 7

      RATIFICATION OF AMENDED AND RESTATED 1999 STOCK INCENTIVE PLAN FOR
                           NON-OFFICERS AND AMENDMENT
                TO CHANGE THE DEFINITION OF CHANGE IN CONTROL

Introduction to the 1999 Stock Incentive Plan for Non-Officers

      The Amended and Restated Internap Network Services Corporation 1999 Stock
Incentive Plan for Non-Officers (formerly known as the CO SPACE Stock Incentive
Plan), or SIP, is intended to help us secure and retain the services of quality
non-officer employees, consultants and advisors, and to provide additional
incentives for those individuals to increase their efforts on our behalf. Up to
1,346,840 shares have been authorized for issuance under the SIP, which we
assumed in connection with the merger agreement dated May 26, 2000, between us
and CO SPACE, Inc. Our board of directors has approved, and recommends that
stockholders approve, an amendment to the SIP such that the definition of
"change in control" and related provisions conform to the corresponding
definitions and provisions set forth in executive employment agreements dated as
of December 31, 2002, between us and seven executives, including all of our
executive officers.

Reasons for Ratification and Amendment to Definition of Change in Control

      We have determined that ratification of the SIP by our stockholders is
advisable because such approval would be consistent with customary practice
relative to stock compensation plans and would afford participants in those
plans certain benefits that are consistent with our interests. Our board of
directors believes that the SIP provides an attractive method for key employees
to purchase our common stock and provides key employees with an important
benefit. Our board of directors believes that stock options play an important
role in providing eligible employees and qualifying third parties with an
incentive and inducement to contribute fully and to further the growth and
development of the company and its affiliates because it aligns those
individuals' interests with the interests of our stockholders.

      On December 17, 2002, the Compensation Committee of our board of directors
authorized our execution of employment agreements with seven named executives,
including all of our executive officers. From April 2002, we have recruited a
significant number of executive-level employees, including all but one of our
executive officers. In the fall of 2002, the Compensation Committee of our board
determined that it would be in our best interests to ensure that key members of
our executive management team were provided with at-will employment agreements
that provided, among other things, certain severance payments and benefits in
the event of involuntary termination without cause and certain other severance
payments and benefits in the event of involuntary termination without cause or
constructive termination following specified events constituting a "change in
control." The executive employment agreements are described in greater detail in
the "Executive Employment Agreements" section of this proxy statement.

      Although the SIP is designed for the benefit of non-officers, one or more
of our executive officers currently holds shares issued under the SIP.
Therefore, because the term "change in control" is not consistently defined
between the executive employment agreements and the SIP, if an event occurred
that constituted a change in control under the executive employment agreements
but did not constitute a change in control under the SIP, it would be unclear
whether we could perform our obligations under the executive employment
agreements without violating the terms and conditions of the SIP. The board of
directors believes that the amendment is necessary to assure that the provisions
of the executive employment agreements are valid and binding agreements and that
we are able to perform our obligations and commitments under the executive
employment agreements. The board of directors believes that it is important for
the performance of our executive officers to have confidence in their employment
agreements and that such agreements will not be determined to be unenforceable
or preempted as a result of an unintended inconsistency with the SIP.

Summary Description of the 1999 Stock Incentive Plan for Non-Officers and
Proposed Amendment

      The following is a summary of the principal features of the SIP. However,
the summary does not purport to be a complete description of all the provisions
of the SIP. A copy of the full text of the SIP will be furnished to 


                                       31

<PAGE>

any stockholder without charge upon written request made to Walter G. DeSocio
the Secretary of Internap. A copy of the proposed amendment to the SIP is
contained in Appendix G attached to this proxy statement.

Stock Subject to Awards

      The stock currently subject to the awards under the SIP is our common
stock, par value $0.001 per share. Up to 1,346,840 shares of our common stock
are authorized for issuance under the SIP. The number of awards issued and the
number of awards available for issuance under the SIP may be adjusted as
described below in the event of a capital reorganization.

      On April 7, 2003, the closing price of our common stock as reported on the
NASDAQ SmallCap Market was $.40 per share.

Types of Awards

      The SIP permits grants of nonqualified stock options, which are options
that do not qualify as incentive stock options under IRC Section 422, and
therefore are taxed under IRC Section 83. The SIP also permits grants of awards
of our stock in the form of bonus shares, deferred stock awards and performance
share awards. In addition, the SIP permits grants of rights to make direct
purchases of restricted stock.

Administration

      The SIP is administered by our board of directors, except when our board
of directors has delegated its authority to a committee of two or more board
members. The board may also delegate administrative authority under the SIP to
one of our officers who is also a board member. In this summary, we will refer
to the administrative body of the SIP as the committee. Among other powers and
duties, the committee interprets plan provisions; establishes rules for
operation of the SIP; determines who will be granted awards from among the
eligible individuals; and determines the type of award, the provisions of each
award granted, and the number of shares underlying each award.

      Our board of directors has named our Compensation Committee as the
committee authorized to administer the SIP.

Eligibility for Awards

      In consideration of their services, our employees, consultants and
advisors (and those of our parents or subsidiaries) are eligible for all awards
permitted under the SIP. However, no person is eligible who holds a position of
vice president or higher, who would be considered an officer or director under
Rule 4460(i)(1)(A) of the National Association of Securities Dealers Manual, who
would be subject to Section 16(b) of the Exchange Act, or whose eligibility
would require stockholder approval of the SIP under any law or regulation or
rules of any stock exchange or market system on which our stock is listed. If
not inconsistent with any law or regulation or rules of any stock exchange or
market system on which our stock is listed, awards under the SIP may also be
granted as an inducement to enter an employment contract with us or our parent
or subsidiaries.

      As of April 7, 2003, there were approximately 322 employees, 14
consultants and no advisors eligible to receive grants under the SIP.

Options Granted

      As of April 7, 2003, we have granted options under the SIP to the named
executive officers in the following amounts: Ali Marashi - 50,000 options. As of
April 7, 2003, the current executive officers, as a group, have been granted a
total of 50,000 options under the SIP, and current directors who are not
executive officers have been granted no options. Neither nominee for election as
a director has been granted options under the SIP. All other employees have been
granted a total of 2,003,343 options.


                                       32

<PAGE>

Terms of Options

      Options granted under the SIP have terms and conditions as determined by
the committee, subject to the following:

      Option Price. The exercise price of an option is determined by the
committee.

      Vesting. Unless otherwise specified by the committee, options become
exercisable as to 25% of the shares on the first anniversary of the date of
grant, and the remaining 75% vest in 36 equal monthly installments commencing
one month after the first anniversary of grant. The committee may also specify
any other conditions to the exercise of an option. The committee has the right
to accelerate the exercisability of any option at any time.

      Term of Options. The term of any option cannot be more than 10 years from
the date of grant.

      Termination of Employment or Service. Upon a termination of employment or
service with us for cause, all unexercised options terminate immediately.
Following a termination of employment or service for any other reason, all
unexercised options that were exercisable on the date employment or service
terminated remain exercisable (not extending beyond expiration of the options'
term) for:

         o  three  months,  if the  termination  is for any reason  other than
            death or disability;

         o  one year, if the termination is due to disability; and

         o  180 days, if the termination is due to death or if the optionee dies
            within 30 days after termination of employment other than due to
            death (with respect to options that were exercisable on the date of
            death).

      Unless otherwise specified in the option agreement, upon termination of
service following a change in control in which an option is assumed, continued
or substituted as described below, then upon termination of employment or
service without cause within 13 months following the effective date of the
change of control, the option (or any substituted award) automatically vests and
becomes fully exercisable, and remains exercisable until it expires in
accordance with its terms. Limitations apply if any payment or benefit to an
optionee would constitute a "parachute payment" under IRC section 280G.

      Exercise of Options. Payment of the exercise price is generally made in
cash, or, if the committee decides, by cashless exercise, by surrender to us of
shares of our common stock that have been held for at least six months, by
delivery of a promissory note, or a combination of any of the foregoing.

Terms of Awards of Stock and Restricted Stock Rights

      Stock awards and rights to purchase restricted stock granted under the SIP
have terms and conditions as determined by the committee. The committee may
establish rules in a stock rights agreement with respect to misconduct committed
by a grantee. The committee may also apply transfer restrictions, rights of
first refusal, vesting provisions, and repurchase rights, and other restrictions
applicable to shares issued in respect of an award as the committee decides. The
committee determines the purchase price applicable to any rights to acquire
restricted stock.

      Unless otherwise specified in the agreement governing an award, upon a
change in control in which an award is assumed, continued or substituted as
described below, then upon termination of employment or service without cause
within 13 months following the effective date of the change of control, the
award (or any substituted award) automatically vests and becomes fully
exercisable, and remains exercisable until it expires in accordance with its
terms.

Fair Market Value

      Fair market value is the closing bid price last quoted for the relevant
date by the applicable national securities exchange or quotation service.


                                       33

<PAGE>

Acceleration of Vesting and Change of Control

      In the event we experience a change of control (or corporate transaction),
any surviving corporation or acquiring corporation may assume or continue
outstanding awards or may substitute similar awards for those outstanding under
the SIP. If the surviving corporation or acquiring corporation does not either
assume or continue outstanding awards or substitute similar awards for those
outstanding under the SIP, awards held by active directors, employees and
consultants will automatically become fully vested and exercisable, and all
awards (including those held by terminated directors, employees and consultants)
will terminate on the date of change of control if not exercised before then. In
the event any person, entity or group within the meaning of Section 13(d) or
14(d) of the Exchange Act (excluding any employee benefit plan or related trust
we or our parent or subsidiary maintains) acquires beneficial ownership within
the meaning of Rule 13d-3 under the Exchange Act of securities representing at
least 50% of the combined voting power entitled to vote on election of our
directors, then all awards held by active directors, employees and consultants
will automatically become fully vested and exercisable and remain exercisable
until they expire in accordance with their terms. Limitations apply if any
payment or benefit to an optionee would constitute a "parachute payment" under
IRC section 280G. The foregoing provisions will not apply if an agreement
governing an award specifies otherwise.

      Current Change in Control/Corporate Transaction Definition. Under current
provisions, "change in control" (or "corporate transaction") is defined as a
sale, lease or other disposition of all or substantially all of our assets, a
merger or consolidation in which we are not the surviving corporation, or a
reverse merger in which we are the surviving corporation but in which our shares
are converted into other property.

      Proposed Amendment. Under the proposed amendment, "change in control" and
"corporate transaction" would be defined the same. Change in control and
corporate transaction would be defined as:

      The acquisition by any individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act of beneficial ownership within
the meaning of Rule 13d-3 of the Exchange Act, of 30% or more of either our then
outstanding shares of common stock or the combined voting power entitled to vote
on election of our directors, but excluding:

            o     acquisition directly from us other than by virtue of the
                  exercise of a conversion privilege unless the converted
                  security was acquired from us,

            o     any acquisition by us,

            o     any acquisition by an employee benefit plan or related trust
                  sponsored or maintained by us or any company we control,

            o     any acquisition by a corporation in a transaction in which all
                  or substantially all of the beneficial owners of our common
                  stock before the transaction beneficially own, directly or
                  indirectly, more than 60% of the outstanding shares of common
                  stock of the resulting corporation (in this definition, the
                  resulting corporation includes any parent owning our assets
                  through its subsidiaries following a transaction), in
                  substantially the same proportions as their ownership of our
                  common stock before the transaction,

            o     any acquisition by a corporation in a transaction in which all
                  or substantially all of the beneficial owners of the combined
                  voting power entitled to vote on election of our directors
                  before the transaction beneficially own, directly or
                  indirectly, more than 60% of the combined voting power of the
                  then outstanding voting securities entitled to vote generally
                  in the election of directors of the resulting corporation, in
                  substantially the same proportions as their ownership of such
                  voting stock before the transaction,

            o     any acquisition by a corporation in a transaction in which no
                  entity (other than us, our employee benefit plan or related
                  trust, or the resulting corporation in the transaction) will
                  beneficially own, directly or indirectly, 50% or more of the
                  outstanding shares of common stock of the resulting
                  corporation or 50% or more of the combined voting power of the
                  outstanding securities of the resulting corporation entitled
                  to vote in the election of directors, 


                                       34

<PAGE>

                  unless such ownership resulted solely from ownership of our
                  securities before the transaction, and

            o     any acquisition by a corporation in a transaction in which
                  members of the incumbent board (as described below) will
                  immediately after consummation of the transaction constitute
                  at least a majority of the board of the resulting corporation.

      A change in the composition of our board of directors such that
individuals who constitute the board as of December 31, 2002, excluding members
elected pursuant to the terms of our Series A Convertible Preferred Stock, which
we refer to as the incumbent board, cease for any reason to constitute at least
a majority of our board (excluding the Series A directors); however, any
director whose election or nomination was approved by a vote of at least a
majority of the incumbent board will be considered to be included as a member of
the incumbent board, and any individual whose initial assumption of office as a
director occurs as a result of or in connection with either an actual or
threatened election contest as defined in Rule 14a-11 under the Exchange Act, or
other actual or threatened solicitation of proxies or consents on behalf of an
entity other than our board of directors, will not be considered a member of the
incumbent board.

      The approval by our stockholders of our complete dissolution or
liquidation.

      Our stockholders' approval of a merger, reorganization, consolidation or
sale or other disposition of all or substantially all our assets, or if any such
transaction is subject to governmental consent, the obtaining of such consent,
excluding the following:

            o     a transaction in which all or substantially all of the
                  beneficial owners of our common stock before the transaction
                  beneficially own, directly or indirectly, more than 60% of the
                  outstanding shares of common stock of the resulting
                  corporation, in substantially the same proportions as their
                  ownership of our common stock before the transaction,

            o     a transaction in which all or substantially all of the
                  beneficial owners of the combined voting power entitled to
                  vote on election of our directors before the transaction
                  beneficially own, directly or indirectly, more than 60% of the
                  combined voting power of the then outstanding voting
                  securities entitled to vote generally in the election of
                  directors of the resulting corporation, in substantially the
                  same proportions as their ownership of such voting stock
                  before the transaction,

            o     a transaction in which no entity (other than us, our employee
                  benefit plan or related trust, or the resulting corporation in
                  the transaction) will beneficially own, directly or
                  indirectly, 50% or more of the outstanding shares of common
                  stock of the resulting corporation or 50% or more of the
                  combined voting power of the outstanding securities of the
                  resulting corporation entitled to vote in the election of
                  directors, unless such ownership resulted solely from
                  ownership of our securities before the transaction, and

            o     a transaction in which individuals who were members of the
                  incumbent board will immediately after consummation of the
                  transaction constitute at least a majority of the board of the
                  resulting corporation.

      The amendment also confirms that an award may specify that upon a Change
in Control, vesting under such award may be accelerated and the time for
exercise may be extended and that the Board may add such rights to previously
granted awards by amendment.

      The amendment will become effective upon the date of stockholder approval.

Amendment and Termination

      Our board of directors may amend or terminate the SIP at any time, and the
SIP automatically expires on June 28, 2009. However, awards already granted will
not be affected by termination of the plan. The committee may amend, modify or
terminate any outstanding awards under the SIP, but the grantee's consent is
required unless the committee determines that the action would not materially
and adversely affect the grantee.

Adjustments

      In the event of changes in our common stock without our receiving
consideration, through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction, the committee will make an
appropriate adjustment to the classes and number of shares subject to the 


                                       35

<PAGE>

SIP, and to the class of shares, number of securities and price per share of
outstanding awards (except as otherwise provided in the agreement governing an
award).

Dissolution or Liquidation

      If we are dissolved or liquidated, all outstanding awards under the SIP
automatically terminate immediately before the dissolution or liquidation,
except as otherwise provided in an agreement governing an award.

Transferability

      Options may be transferred to the extent provided in the option agreement
for estate planning purposes. Otherwise, no awards are assignable or
transferable except by will or the laws of descent and distribution. Any attempt
to transfer an award in a way not permitted under the SIP renders the award null
and void.

Federal Income Tax Consequences

      The following is a brief general description of the consequences under the
Internal Revenue Code, or IRC, of the receipt or exercise of options under the
SIP:

      Incentive Stock Options. The SIP does not provide for the grant of
incentive stock options.

      Nonqualified Stock Options. Neither we nor the option holder has income
tax consequences from the issuance of nonqualified stock options. Generally, in
the tax year when an option holder exercises nonqualified stock options, the
option holder recognizes ordinary income in the amount by which the fair market
value of the shares at the time of exercise exceeds the option price for such
shares. We generally will have a deduction in the same amount as the ordinary
income recognized by the option holder in our tax year in which or with which
the option holder's tax year (of exercise) ends.

      If an option holder exercises a nonqualified stock option by paying the
option price with previously acquired shares of our common stock, additional
rules apply.

      Limitation on Company Deductions. No federal income tax deduction is
allowed for compensation paid to a "covered employee" in any of our taxable
years beginning on or after January 1, 1994, to the extent that such
compensation exceeds $1,000,000. For this purpose, "covered employees" are
generally defined as our chief executive officer and our four highest
compensated officers whose annual salary and bonus exceeds $100,000, and the
term "compensation" generally includes amounts includable in gross income as a
result of the exercise of stock options, or the receipt of stock options. This
deduction limitation does not apply to compensation that is (1) commission-based
compensation, (2) performance-based compensation, (3) compensation which would
not be includable in an employee's gross income, and (4) compensation payable
under a written binding contract in existence on February 17, 1993, and not
materially modified thereafter.

      Compensation attributable to a stock option will generally satisfy the
limitation exception for performance-based compensation if:

            o     the grant or award is made by a "compensation committee" (a
                  committee composed of "outside" directors);

            o     the "material terms" (including which employees are eligible
                  to receive compensation, the maximum number of shares that may
                  be granted to an optionee and the exercise price of the
                  options) of the plan under which the option or right is
                  granted are disclosed to stockholders and approved by a
                  majority of the stockholder vote;

            o     the "compensation committee" certifies that performance goals
                  were in fact satisfied before the compensation is paid; and

            o     under the terms of the option or right, the amount of
                  compensation the employee could receive is based solely on an
                  increase in the value of the stock after the date of the grant
                  or award.

      Awards granted under the SIP are not designed to satisfy these
requirements.


                                       36

<PAGE>

      The foregoing discussion is not a complete discussion of all federal
income tax aspects of the SIP. Some of the provisions contained in the IRC have
only been summarized, and additional qualifications and refinements may be
contained in regulations that will be issued in the future by the Internal
Revenue Service. Furthermore, subsequent legislative changes or changes in
administrative or judicial interpretation could alter significantly the tax
treatment discussed herein. No discussion of state income tax law has been
included. Each employee should consult his or her own tax advisors with respect
to the tax consequences of participation in the SIP and disposition of shares
acquired under the SIP.

      ERISA. The SIP is not, and is not intended to be, an employee benefit plan
or qualified retirement plan. The SIP is not, therefore, subject to the Employee
Retirement Income Security Act of 1974, as amended, or Section 401(a) of the
IRC.

Recommendation of the Board of Directors

      The Board of Directors unanimously recommends that you vote "FOR" the
ratification of the Amended and Restated 1999 Stock Incentive Plan for
Non-Officers and the approval of the amendment to the Amended and Restated 1999
Stock Incentive Plan for Non-Officers to change the definition of change in
control.


                                       37

<PAGE>

                                   PROPOSAL 8

  RATIFICATION OF THE AMENDED AND RESTATED 1998 STOCK OPTION/STOCK ISSUANCE PLAN
       AND AMENDMENT TO CHANGE THE DEFINITION OF CHANGE IN CONTROL

Introduction to the Amended and Restated 1998 Stock Option/Stock Issuance Plan

      The Internap Network Services Corporation Amended and Restated 1998 Stock
Option/Stock Issuance Plan, or 1998 Plan, is intended to provide eligible
individuals who are responsible for our management, growth and financial success
or who otherwise render valuable services to us with the opportunity to acquire
(or increase) a proprietary interest in the company, and thereby encourage them
to remain in our service. Currently, up to 4,035,000 shares have been authorized
for issuance under the 1998 Plan. Our board of directors has approved, and
recommends that stockholders approve, an amendment to the 1998 Plan such that
the definition of "change in control" and related provisions conform to the
corresponding definitions and provisions set forth in executive employment
agreements dated as of December 31, 2002, between us and seven executives,
including all of our executive officers.

Reasons for Ratification and Amendment to Definition of Change in Control

      We have determined that ratification of the 1998 Plan as amended by our
stockholders is advisable because such approval would be consistent with
customary practice relative to stock compensation plans and would afford
participants in those plans certain benefits that are consistent with our
interests. Our board of directors believes that the 1998 Plan provides an
attractive method for key employees to purchase our common stock and provides
key employees with an important benefit. Our board of directors believes that
stock options play an important role in providing eligible employees and
qualifying third parties with an incentive and inducement to contribute fully
and to further the growth and development of the company and its affiliates
because it aligns those individuals' interests with the interests of our
stockholders.

      On December 17, 2002, the Compensation Committee of our board of directors
authorized our execution of employment agreements with seven named executives,
including all of our executive officers. From April 2002, we have recruited a
significant number of executive-level employees, including all but one of our
executive officers. In the fall of 2002, the Compensation Committee of our board
determined that it would be in our best interests to ensure that key members of
our executive management team were provided with at-will employment agreements
that provided, among other things, certain severance payments and benefits in
the event of involuntary termination without cause and certain other severance
payments and benefits in the event of involuntary termination without cause or
constructive termination following specified events constituting a "change in
control." The executive employment agreements are described in greater detail in
the "Executive Employment Agreements" section of this proxy statement.

      Because the term "change in control" is not consistently defined between
the executive employment agreements and the 1998 Plan, if an event occurred that
constituted a change in control under the executive employment agreements but
did not constitute a change in control under the 1998 Plan, it would be unclear
whether we could perform our obligations under the executive employment
agreements without violating the terms and conditions of the 1998 Plan. The
board of directors believes that the amendment is necessary to assure that the
provisions of the executive employment agreements are valid and binding
agreements and that we are able to perform our obligations and commitments under
the executive employment agreements. The board of directors believes that it is
important for the performance of our executive officers to have confidence in
their employment agreements and that such agreements will not be determined to
be unenforceable or preempted as a result of an unintended inconsistency with
the 1998 Plan.

Summary Description of the Amended and Restated 1998 Stock Option/Stock Issuance
Plan and Proposed Amendment

      The following is a summary of the principal features of the 1998 Plan.
However, the summary does not purport to be a complete description of all the
provisions of the 1998 Plan. A copy of the full text of the 1998 Plan will be
furnished to any stockholder without charge upon written request made to Walter
G. DeSocio the Secretary 


                                       38

<PAGE>

of Internap. A copy of the proposed amendment to the 1998 Plan is contained in
Appendix H attached to this proxy statement.

Stock Subject to Awards

      The stock currently subject to the awards under the 1998 Plan is our
unissued or reacquired common stock, par value $.001 per share. Up to 4,035,000
shares of our common stock have been authorized for issuance under the 1998
Plan. In the event that any options are not exercised or are surrendered prior
to expiration or termination, or any options are canceled in accordance with
provisions described below, the shares not acquired under the award will again
become available for issuance under the 1998 Plan. The number of awards issued
and the number of awards available for issuance under the 1998 Plan may be
adjusted as described below in the event of a capital reorganization.

      On April 7, 2003, the closing price of our common stock as reported on the
NASDAQ SmallCap Market was $.40 per share.

Types of Awards

      The 1998 Plan permits grants of incentive stock options under IRC Section
422, nonqualified stock options and stock issuances.

Administration

      The 1998 Plan is administered by our board of directors, except when our
board of directors has delegated its authority to a committee of board members.
The board may decide to limit members of the committee to "outside directors"
within the meaning of Section 162(m) of the IRC and "non-employee directors" for
purposes of Rule 16b-3 of the Exchange Act. In this summary, we will refer to
the administrative body of the 1998 Plan as the committee. Among other powers
and duties, the committee interprets plan provisions; establishes rules for
operation of the 1998 Plan; and determines who among the eligible individuals
will receive awards under the 1998 Plan, the number of shares covered by an
award, the exercisability and vesting provisions of an award, and the term of an
award.

      Our board of directors has named our Compensation Committee, which
consists exclusively of independent directors in compliance with the provisions
of Section 162(m) of the IRC and Section 16 of the Exchange Act, as the
committee authorized to administer the 1998 Plan.

Eligibility for Awards

      In consideration of their services, the 1998 Plan provides for grants of
options and share issuances to the following: (i) key employees of the company
or its parent or subsidiary corporations who render services that contribute to
our success and growth, or that reasonably may be anticipated to contribute to
our future success and growth; (ii) the non-employee members of our board of
directors or a board of directors of our parent or subsidiary corporations;
(iii) consultants and independent contractors who provide valuable services to
the company or its parent or subsidiary corporations. No employee is eligible to
receive options for more than 2,000,000 shares of our stock during any calendar
year.

      As of April 7, 2003, there were approximately 6 non-employee directors,
327 employees and 14 consultants and independent contractors eligible to receive
grants under the 1998 Plan.

Options Granted

      As of April 7, 2003, we have granted options under the 1998 Plan to the
named executive officers in the following amounts: Eugene Eidenberg -- 400,000
options. As of April 7, 2003, the current executive officers, as a group, have
been granted a total of 400,000 options under the 1998 Plan, and current
directors who are not executive officers have been granted an aggregate of
400,000 options. Neither nominee for election as a director has been granted
options. All other employees have been granted a total of 12,295,052 options.


                                       39

<PAGE>

Terms of Options

      Options granted under the 1998 Plan have terms and conditions as
determined by the committee, subject to the provisions described below:

      Option Price. The exercise price of options is determined by the
committee, but the exercise price of each incentive stock option granted under
the 1998 Plan cannot be less than the fair market value of a share of our common
stock on the date of grant.

      Vesting. Exercisability and vesting of options is determined by the
committee. Vesting and exercisability may be accelerated as described below.

      Termination of Employment or Service. Upon termination of employment or
service with us for cause, all options terminate immediately. Upon a termination
of employment or service with us for any other reason, all unexercised options
that were exercisable on the date employment or service terminated remain
exercisable (not extending beyond expiration of the options' term) for the
period of time provided in the option agreement, not to exceed 12 months. Any
option that is exercisable on the date of death of the optionee may be exercised
within one year of the optionee's death, but not beyond expiration of the
option's term. The committee has discretion under the 1998 Plan to permit
outstanding options to be exercised, following termination of employment during
the period during which an optionee's options remain exercisable, for which the
option would have become exercisable during such period had termination of
employment or service not occurred. The committee also has discretion to extend
the period of exercisability of options following termination of employment or
service, but not beyond the expiration of the options' term.

      Unless otherwise specified in the option agreement, following a change in
control in which an option is assumed, continued or substituted as described
below, then upon termination of employment or service without cause within 13
months following the effective date of the change in control, the option (or any
substituted award) automatically vests and becomes fully exercisable, and
remains exercisable until it expires in accordance with its terms. Limitations
apply if any payment or benefit to an optionee would constitute a "parachute
payment" under IRC section 280G.

      Term of Options. The term of any option cannot be more than ten years from
the date of grant.

      Exercise of Options. Payment of the exercise price can be made in cash,
check, by surrender of shares of our stock held for a minimum period, or by
cashless exercise. The committee may permit payment through a company loan or in
installments, and loans may be subject to forgiveness in the discretion of the
committee.

      Re-Grant Options. The committee is permitted at any time, with the consent
of affected optionees, to cancel outstanding options and grant new options in
substitution for the canceled options. In the case of incentive stock options,
the substitute options will have an exercise price at least 100% of the fair
market value of our common stock on the new grant date.

Terms of Stock Issuances

      Stock issuances granted under the 1998 Plan have terms and conditions as
determined by the committee, subject to the provisions described below:

      Grant and Consideration. The committee may grant direct issuances of our
stock under the 1998 Plan, for such consideration as the committee determines
from time to time. The consideration received by us for stock issuances may be
less than 100% of the fair market value of the issued shares. The form of
consideration acceptable under the 1998 Plan is cash, check, promissory note, or
services rendered. The committee may permit payment through a company loan or in
installments, and loans may be subject to forgiveness in the discretion of the
committee.

      Vesting. The committee determines any vesting provisions of the stock
subject to a stock issuance award. Unvested shares may not be transferred, but a
recipient is entitled to vote unvested shares and to receive dividends payable
with respect to unvested shares.


                                       40

<PAGE>

      Termination of Employment or Service. Upon a termination of employment or
service with us for any reason, we may reacquire the unvested portion of a stock
issuance award. Unless otherwise specified in the stock issuance agreement,
following a change in control in which a stock issuance award is assumed,
continued or substituted as described below, then upon termination of employment
or service without cause within 13 months following the effective date of the
change in control, the award (or any substituted award) automatically vests and
becomes fully exercisable, and remains exercisable until it expires in
accordance with its terms. Limitations apply if any payment or benefit to an
optionee would constitute a "parachute payment" under IRC section 280G.

Fair Market Value

      Fair market value is generally the closing selling price of our common
stock quoted for the relevant date (or the most recent preceding date for which
a quote is available, if there is no reported sale on the relevant date) on the
NASDAQ SmallCap Market.

Acceleration of Vesting and Change in Control

      The committee has the power at any time to accelerate the time at which an
award may be exercised, or the vesting of an award. In the event we experience a
change in control or corporate transaction, any surviving corporation or
acquiring corporation may assume or continue outstanding awards or may
substitute similar awards for those outstanding under the 1998 Plan. If the
surviving corporation or acquiring corporation does not either assume or
continue outstanding awards or substitute similar awards for those outstanding
under the 1998 Plan, awards held by active directors, employees and consultants
will automatically become fully vested and exercisable, and all awards
(including those held by terminated directors, employees and consultants) will
terminate on the date of change in control or corporate transaction if not
exercised before then. In the event any person, entity or group within the
meaning of Section 13(d) or 14(d) of the Exchange Act (excluding any employee
benefit plan or related trust we or our parent or subsidiary maintains) acquires
beneficial ownership within the meaning of Rule 13d-3 under the Exchange Act of
securities representing at least 50% of the combined voting power entitled to
vote on election of our directors, then all awards held by active directors,
employees and consultants will automatically become fully vested and exercisable
and remain exercisable until they expire in accordance with their terms.
Limitations apply if any payment or benefit to an optionee would constitute a
"parachute payment" under IRC section 280G.

      Current Change in Control Definition. Under current provisions, "change in
control" (or "corporate transaction") is defined as a sale, lease or other
disposition of all or substantially all of our assets, a merger or consolidation
in which we are not the surviving corporation, or a reverse merger in which we
are the surviving corporation but in which our shares are converted into other
property.

      Proposed Amendment. Under the proposed amendment, "change in control"
would be defined as:

      The acquisition by any individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act of beneficial ownership within
the meaning of Rule 13d-3 of the Exchange Act, of 30% or more of either our then
outstanding shares of common stock or the combined voting power entitled to vote
on election of our directors, but excluding:

            o     acquisition directly from us other than by virtue of the
                  exercise of a conversion privilege unless the converted
                  security was acquired from us,

            o     any acquisition by us,

            o     any acquisition by an employee benefit plan or related trust
                  sponsored or maintained by us or any company we control,

            o     any acquisition by a corporation in a transaction in which all
                  or substantially all of the beneficial owners of our common
                  stock before the transaction beneficially own, directly or
                  indirectly, more than 60% of the outstanding shares of common
                  stock of the resulting corporation (in this definition, the
                  resulting corporation includes any parent owning our assets
                  through its subsidiaries following a transaction), in
                  substantially the same proportions as their ownership of our
                  common stock before the transaction,


                                       41

<PAGE>

            o     any acquisition by a corporation in a transaction in which all
                  or substantially all of the beneficial owners of the combined
                  voting power entitled to vote on election of our directors
                  before the transaction beneficially own, directly or
                  indirectly, more than 60% of the combined voting power of the
                  then outstanding voting securities entitled to vote generally
                  in the election of directors of the resulting corporation, in
                  substantially the same proportions as their ownership of such
                  voting stock before the transaction,

            o     any acquisition by a corporation in a transaction in which no
                  entity (other than us, our employee benefit plan or related
                  trust, or the resulting corporation in the transaction) will
                  beneficially own, directly or indirectly, 50% or more of the
                  outstanding shares of common stock of the resulting
                  corporation or 50% or more of the combined voting power of the
                  outstanding securities of the resulting corporation entitled
                  to vote in the election of directors, unless such ownership
                  resulted solely from ownership of our securities before the
                  transaction, and

            o     any acquisition by a corporation in a transaction in which
                  members of the incumbent board (as described below) will
                  immediately after consummation of the transaction constitute
                  at least a majority of the board of the resulting corporation.

      A change in the composition of our board of directors such that
individuals who constitute the board as of December 31, 2002, excluding members
elected pursuant to the terms of our Series A Convertible Preferred Stock, which
we refer to as the incumbent board, cease for any reason to constitute at least
a majority of our board (excluding the Series A directors); however, any
director whose election or nomination was approved by a vote of at least a
majority of the incumbent board will be considered to be included as a member of
the incumbent board, and any individual whose initial assumption of office as a
director occurs as a result of or in connection with either an actual or
threatened election contest as defined in Rule 14a-11 under the Exchange Act, or
other actual or threatened solicitation of proxies or consents on behalf of an
entity other than our board of directors, will not be considered a member of the
incumbent board.

      The approval by our stockholders of our complete dissolution or
liquidation.

      Our stockholders of a merger, reorganization, consolidation or sale or
other disposition of all or substantially all our assets, or if any such
transaction is subject to governmental consent, the obtaining of such consent,
excluding the following:

            o     a transaction in which all or substantially all of the
                  beneficial owners of our common stock before the transaction
                  beneficially own, directly or indirectly, more than 60% of the
                  outstanding shares of common stock of the resulting
                  corporation (in this definition, the resulting corporation
                  includes any parent owning our assets through its subsidiaries
                  following a transaction), in substantially the same
                  proportions as their ownership of our common stock before the
                  transaction,

            o     a transaction in which all or substantially all of the
                  beneficial owners of the combined voting power entitled to
                  vote on election of our directors before the transaction
                  beneficially own, directly or indirectly, more than 60% of the
                  combined voting power of the then outstanding voting
                  securities entitled to vote generally in the election of
                  directors of the resulting corporation, in substantially the
                  same proportions as their ownership of such voting stock
                  before the transaction,

            o     a transaction in which no entity (other than us, our employee
                  benefit plan or related trust, or the resulting corporation in
                  the transaction) will beneficially own, directly or
                  indirectly, 50% or more of the outstanding shares of common
                  stock of the resulting corporation or 50% or more of the
                  combined voting power of the outstanding securities of the
                  resulting corporation entitled to vote in the election of
                  directors, unless such ownership resulted solely from
                  ownership of our securities before the transaction, and

            o     a transaction in which individuals who were members of the
                  incumbent board will immediately after consummation of the
                  transaction constitute at least a majority of the board of the
                  resulting corporation.


                                       42

<PAGE>

      A "corporate transaction" would be defined under the amendment as a
"change in control".

      The amendment also confirms that an award may specify that upon a Change
in Control, vesting under such award may be accelerated and the time for
exercise may be extended and that the Board may add such rights to previously
granted awards by amendment.

      The amendment will become effective upon the date of stockholder approval.

Amendment and Termination

      The committee may amend the 1998 Plan at any time. However, shareholder
approval is required for any amendment that would materially increase the number
of shares authorized under the 1998 Plan, materially increase the benefits
accruing to participants in the 1998 Plan, or materially modify the eligibility
requirements for participation. No amendment will impair the rights under awards
already granted unless the award recipient consents in writing. The 1998 Plan
will automatically terminate ten years after original approval.

Adjustments

      In the event of changes in our common stock without our receiving
consideration, through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction, the committee will make an
appropriate adjustment to the classes and number of shares subject to the 1998
Plan, to the maximum number of shares permitted to be awarded to any person, and
to the class of shares, number of securities and price per share of outstanding
awards.

Dissolution or Liquidation

      If we are dissolved or liquidated, all outstanding awards under the 1998
Plan automatically terminate immediately before the dissolution or liquidation.

Transferability

      Options are not transferable except by will or by the laws of descent and
distribution. Shares subject to a stock issuance grant are not transferable
until vested, except that a grantee may make a gift of unvested shares to his or
her spouse, parents, issue or a trust for such individuals if the recipient of
the gift agrees to be bound by the terms of the stock issuance award.

Federal Income Tax Consequences

      The following is a brief general description of the consequences under the
Internal Revenue Code, or IRC, of the receipt or exercise of options under the
1998 Plan:

      Incentive Stock Options. An option holder has no tax consequences upon
issuance or, generally, upon exercise of an incentive stock option. An option
holder will recognize income when he or she sells or exchanges the shares
acquired upon exercise of an incentive stock option. This income will be taxed
at the applicable capital gains rate if the sale or exchange occurs after the
expiration of the requisite holding periods. Generally, the requisite holding
periods expire two years after the date of grant of the incentive stock option
and one year after the date of acquisition of our common stock pursuant to the
exercise of the incentive stock option.

      If an option holder disposes of the common stock acquired pursuant to
exercise of an incentive stock option before the expiration of the requisite
holding periods, the option holder will recognize compensation income in an
amount equal to the difference between the option price and the lesser of (i)
the fair market value of the shares on the date of exercise and (ii) the price
at which the shares are sold. This amount will be taxed at ordinary income
rates. If the sale price of the shares is greater than the fair market value on
the date of exercise, the difference will be recognized as gain by the option
holder and taxed at the applicable capital gains rate. If the sale price of the
shares is less than the option price, the option holder will recognize a capital
loss equal to the excess of the option price over the sale price. For these
purposes, the use of shares acquired upon exercise of an incentive stock option
to pay the option price of another option (whether or not it is an incentive
stock option) will be considered a disposition of the shares.

      An option holder may have tax consequences upon exercise of an incentive
stock option if the aggregate fair market value of shares of the common stock
subject to incentive stock options which first become exercisable by an option
holder in any one calendar year exceeds $100,000. If this occurs, the excess
shares will be treated as 


                                       43

<PAGE>

though they are subject to a nonqualified stock option instead of an incentive
stock option. Upon exercise of an option with respect to these shares, the
option holder will have the tax consequences described below with respect to the
exercise of nonqualified stock options.

      Finally, except to the extent that an option holder has recognized income
with respect to the exercise of an incentive stock option, as described in the
preceding paragraphs, the amount by which the fair market value of a share of
our common stock at the time of exercise of the incentive stock option exceeds
the option price will be included in determining an option holder's alternative
minimum taxable income, and may cause the option holder to incur an alternative
minimum tax liability in the year of exercise.

      There will be no tax consequences to us upon issuance or, generally, upon
exercise of an incentive stock option. However, to the extent that an option
holder recognizes ordinary income upon exercise, as described above, we
generally will have a deduction in the same amount.

      Nonqualified Stock Options. Neither we nor the option holder has income
tax consequences from the issuance of nonqualified stock options. Generally, in
the tax year when an option holder exercises nonqualified stock options, the
option holder recognizes ordinary income in the amount by which the fair market
value of the shares at the time of exercise exceeds the option price for such
shares. We generally will have a deduction in the same amount as the ordinary
income recognized by the option holder in our tax year in which or with which
the option holder's tax year (of exercise) ends.

      If an option holder exercises a nonqualified stock option by paying the
option price with previously acquired shares of our common stock, additional
rules apply.

      Limitation on Company Deductions. No federal income tax deduction is
allowed for compensation paid to a "covered employee" in any of our taxable
years beginning on or after January 1, 1994, to the extent that such
compensation exceeds $1,000,000. For this purpose, "covered employees" are
generally defined as our chief executive officer and our four highest
compensated officers whose annual salary and bonus exceeds $100,000, and the
term "compensation" generally includes amounts includable in gross income as a
result of the exercise of stock options, or the receipt of stock options. This
deduction limitation does not apply to compensation that is (1) commission-based
compensation, (2) performance-based compensation, (3) compensation which would
not be includable in an employee's gross income, and (4) compensation payable
under a written binding contract in existence on February 17, 1993, and not
materially modified thereafter.

      Compensation attributable to a stock option will generally satisfy the
limitation exception for performance-based compensation if:

            o     the grant or award is made by a "compensation committee" (a
                  committee composed of "outside" directors);

            o     the "material terms" (including which employees are eligible
                  to receive compensation, the maximum number of shares that may
                  be granted to an optionee and the exercise price of the
                  options) of the plan under which the option or right is
                  granted are disclosed to stockholders and approved by a
                  majority of the stockholder vote;

            o     the "compensation committee" certifies that performance goals
                  were in fact satisfied before the compensation is paid; and

            o     under the terms of the option or right, the amount of
                  compensation the employee could receive is based solely on an
                  increase in the value of the stock after the date of the grant
                  or award.

      Stock options granted under the 1998 Plan may satisfy these requirements,
depending upon the specific terms, provisions, restrictions and limitations of
such options.

      The foregoing discussion is not a complete discussion of all federal
income tax aspects of the 1998 Plan. Some of the provisions contained in the IRC
have only been summarized, and additional qualifications and refinements may be
contained in regulations which will be issued in the future by the Internal
Revenue Service. Furthermore, subsequent legislative changes or changes in
administrative or judicial interpretation could alter significantly the tax
treatment discussed herein. No discussion of state income tax law has been
included. Each 


                                       44

<PAGE>

employee should consult his or her own tax advisors with respect to the tax
consequences of participation in the 1998 Plan and disposition of shares
acquired under the 1998 Plan.

      ERISA. The 1998 Plan is not, and is not intended to be, an employee
benefit plan or qualified retirement plan. The 1998 Plan is not, therefore,
subject to the Employee Retirement Income Security Act of 1974, as amended, or
Section 401(a) of the IRC.

Recommendation of the Board of Directors

      The Board of Directors unanimously recommends that you vote "FOR" the
proposal to ratify the Amended and Restated 1998 Stock Option/Stock Issuance
Plan and approve the amendment to the Amended and Restated 1998 Stock
Option/Stock Issuance Plan to change the definition of change in control.


                                       45

<PAGE>

                                   PROPOSAL 9

   RATIFICATION OF 2000 NON-OFFICER EQUITY INCENTIVE PLAN AND AMENDMENT TO
                  CHANGE THE DEFINITION OF CHANGE IN CONTROL

Introduction to the 2000 Non-Officer Equity Incentive Plan

      The Internap Network Services Corporation 2000 Non-Officer Equity
Incentive Plan, or 2000 Plan, is intended to provide a means by which selected
employees and consultants may benefit from increases in the value of our common
stock, and to help us secure and retain the services of employees and
consultants and provide incentives for them to exert maximum efforts for our
success. Up to 4,500,000 shares have been authorized for issuance under the 2000
Plan. Our board of directors has approved, and recommends that stockholders
approve, an amendment to the 2000 Plan such that the definition of "change in
control" and related provisions conform to the corresponding definitions and
provisions set forth in executive employment agreements dated as of December 31,
2002, between us and seven executives, including all of our executive officers.

Reasons for Ratification and Amendment to Definition of Change in Control

      We have determined that ratification of the 2000 Plan by our stockholders
is advisable because such approval would be consistent with customary practice
relative to stock compensation plans and would afford participants in those
plans certain benefits that are consistent with our interests. Our board of
directors believes that the 2000 Plan provides an attractive method for
employees to purchase our common stock and provides employees with an important
benefit. Our board of directors believes that stock options play an important
role in providing eligible employees and qualifying third parties with an
incentive and inducement to contribute fully and to further the growth and
development of the company and its affiliates because it aligns those
individuals' interests with the interests of our stockholders.

      On December 17, 2002, the Compensation Committee of our board of directors
authorized our execution of employment agreements with seven named executives,
including all of our executive officers. From April 2002, we have recruited a
significant number of executive-level employees, including all but one of our
executive officers. In the fall of 2002, the Compensation Committee of our board
determined that it would be in our best interests to ensure that key members of
our executive management team were provided with at-will employment agreements
that provided, among other things, certain severance payments and benefits in
the event of involuntary termination without cause and certain other severance
payments and benefits in the event of involuntary termination without cause or
constructive termination following specified events constituting a "change in
control." The executive employment agreements are described in greater detail in
the "Executive Employment Agreements" section of this proxy statement.

      Although the 2000 Plan is designed for the benefit of non-officers, one or
more of our executive officers currently holds shares issued under the 2000
Plan. Therefore, because the term "change in control" is not consistently
defined between the executive employment agreements and the 2000 Plan, if an
event occurred that constituted a change in control under the executive
employment agreements but did not constitute a change in control under the 2000
Plan, it would be unclear whether we could perform our obligations under the
executive employment agreements without violating the terms and conditions of
the 2000 Plan. The board of directors believes that the amendment is necessary
to assure that the provisions of the executive employment agreements are valid
and binding agreements and that we are able to perform our obligations and
commitments under the executive employment agreements. The board of directors
believes that it is important for the performance of our executive officers to
have confidence in their employment agreements and that such agreements will not
be determined to be unenforceable or preempted as a result of an unintended
inconsistency with the 2000 Plan.

Summary Description of the 2000 Non-Officer Equity Incentive Plan and Proposed
Amendment

      The following is a summary of the principal features of the 2000 Plan.
However, the summary does not purport to be a complete description of all the
provisions of the 2000 Plan. A copy of the full text of the 2000 Plan will be
furnished to any stockholder without charge upon written request made to Walter
G. DeSocio the Secretary 


                                       46

<PAGE>

of Internap. A copy of the proposed amendment to the 2000 Plan is contained in
Appendix I attached to this proxy statement.

Stock Subject to Awards

      The stock currently subject to the awards under the 2000 Plan is our
common stock, par value $0.001 per share. Up to 4,500,000 shares of our common
stock are authorized for issuance under the 2000 Plan. In the event that any
award expires or otherwise terminates without having been exercised in full, the
shares not acquired under the award will again become available for issuance
under the 2000 Plan. The number of awards issued and the number of awards
available for issuance under the 2000 Plan may be adjusted as described below in
the event of a capital reorganization

      On April 7, 2003, the closing price of our common stock as reported on the
NASDAQ SmallCap Market was $.40 per share.

Types of Awards

      The 2000 Plan permits grants of nonqualified stock options, which are
options not intended to meet the requirements of IRC Section 422, and thus are
subject to taxation under IRC Section 83. The 2000 Plan also permits grants of
stock bonuses and rights to acquire restricted stock.

Administration

      The 2000 Plan is administered by our board of directors, except when our
board of directors has delegated its authority to a committee of board members.
In this summary, we will refer to the administrative body of the 2000 Plan as
the committee. Among other powers and duties, the committee interprets plan
provisions; establishes rules for operation of the 2000 Plan; determines who
will be granted awards from among the eligible individuals; and determines the
type of award, the provisions of each award granted, and the number of shares
underlying each award.

      Our board of directors has named our Compensation Committee as the
committee authorized to administer the 2000 Plan.

Eligibility for Awards

      In consideration of their services, our employees and consultants are
eligible for all awards permitted under the 2000 Plan. Consultants include any
person engaged by us to render consulting or advisory services and who is
compensated for those services. However, no person is eligible who holds a
position of vice president or higher, who would be considered an officer or
director under Rule 4460(i)(1)(A) of the National Association of Securities
Dealers Manual, who would be subject to Section 16(b) of the Exchange Act, or
whose eligibility would require stockholder approval of the 2000 Plan under any
law or regulation or rules of any stock exchange or market system on which our
stock is listed. If not inconsistent with any law or regulation or rules of any
stock exchange or market system on which our stock is listed, awards under the
2000 Plan may also be granted as an inducement to enter an employment contract
with us or our parent or subsidiaries companies.

      As of April 7, 2003, there were approximately 327 employees and 14
consultants eligible to receive grants under the 2000 Plan.

Options Granted

      As of April 7, 2003, we have granted options under the 2000 Plan to the
named executive officers in the following amounts: Ali Marashi -- 23,200
options. As of April 7, 2003, the current executive officers, as a group, have
been granted a total of 23,200 options under the 2000 Plan, and current
directors who are not executive officers have been granted no options. Neither
nominee for election as a director has been granted options. All other employees
have been granted a total of 11,450,085 options.


                                       47

<PAGE>

Terms of Options

      Options granted under the 2000 Plan have terms and conditions as
determined by the committee, subject to the provisions and limitations described
below:

      Option Price. The exercise price of each option generally cannot be less
than 85% of the fair market value of a share of our common stock on the date of
grant. Exercise prices may be lower for options we issue in replacement of
another company's options that we assume as part of a corporate transaction.

      Vesting. Exercisability and vesting of options may be periodic and/or
based on other terms and conditions such as performance, and is determined by
the committee. In addition, options may be exercisable but not vested, and
subject to repurchase (of shares that would not otherwise be exercisable) upon
termination of employment.

      Term of Options. The term of any option cannot be more than 10 years from
the date of grant.

      Termination of Employment or Service. Following a termination of
employment or service for any reason, all unexercised options that were
exercisable on the date employment or service terminated remain exercisable (not
extending beyond expiration of the options' term) for:

            o     three months, or such other period of time as may be provided
                  in the option agreement, if the termination is for any reason
                  other than death or disability;

            o     12 months, or such other period of time as may be provided in
                  the option agreement, if the termination is due to disability;
                  and

            o     18 months, or such other period of time as may be provided in
                  the option agreement, if the termination is due to death or,
                  if the option agreement so provides, if the optionee dies
                  within a period specified in the option agreement after
                  termination of employment or service other than due to death
                  (with respect to options that were exercisable on the date of
                  death).

      Unless otherwise specified in the option agreement, upon a change in
control in which an option is assumed, continued or substituted as described
below, then upon termination of employment or service without cause within 13
months following the effective date of the change in control, the option (or any
substituted award) automatically vests and becomes fully exercisable, and
remains exercisable until it expires in accordance with its terms. Limitations
apply if any payment or benefit to an optionee would constitute a "parachute
payment" under IRC section 280G.

      Exercise of Options. Payment of the exercise price is generally made in
cash, or, if the committee decides, by surrender to us of shares of our common
stock, by a deferred payment or similar arrangement, or any other form of legal
consideration acceptable to the committee. Unless otherwise provided in the
option agreement, if the purchase price is paid by surrender of shares of our
common stock that were acquired from us, the shares must have been held for more
than six months.

Terms of Stock Bonuses

      Stock bonuses granted under the 2000 Plan have terms and conditions as
determined by the committee, subject to the provisions and limitations described
below:

      Grant. The committee may grant stock bonuses in consideration for past
services actually rendered.

      Vesting. A stock bonus award may be subject to repurchase under the
provisions of a vesting schedule.

      Termination of Employment or Service. Upon a termination of employment or
service with us for any reason, we may reacquire the unvested portion of a stock
bonus award. Unless otherwise specified in the stock bonus agreement, upon a
change in control in which a stock bonus award is assumed, continued or
substituted as described below, then upon termination of employment or service
without cause within 13 months following the effective date of the change in
control, the award (or any substituted award) automatically vests and becomes
fully exercisable, and remains exercisable until it expires in accordance with
its terms.


                                       48

<PAGE>

Terms of Restricted Stock Awards

      Restricted stock awards granted under the 2000 Plan have terms and
conditions as determined by the committee, subject to the limitations described
below:

      Purchase Price. The purchase price of restricted stock under the 2000 Plan
cannot be less than 85% of the fair market value of our stock on the date the
award is made or at the time the purchase is consummated. The purchase price is
generally paid in cash at the time of purchase, or, if the committee decides, by
a deferred payment or similar arrangement, or any other form of legal
consideration acceptable to the committee.

      Vesting. Restricted stock may be subject to repurchase under the
provisions of a vesting schedule.

      Termination of Employment or Service. Upon a termination of employment or
service with us for any reason, we may reacquire the unvested portion of a
restricted stock award. Unless otherwise specified in the restricted stock
agreement, upon termination of service following a change in control in which a
restricted stock award is assumed, continued or substituted as described below,
then upon termination of employment or service without cause within 13 months
following the effective date of the change in control, the award (or any
substituted award) automatically vests and becomes fully exercisable, and
remains exercisable until it expires in accordance with its terms.

Fair Market Value

      Fair market value is generally the closing sale price of our common stock
(or the closing bid, if no sales were reported) quoted on the NASDAQ SmallCap
Market, as published in The Wall Street Journal, for the last market trading day
prior to the relevant date.

Acceleration of Vesting and Change in Control

      The committee has the power at any time to accelerate the time at which an
award may be exercised, or the vesting of an award. In the event we experience a
change in control, any surviving corporation or acquiring corporation may assume
or continue outstanding awards or may substitute similar awards for those
outstanding under the 2000 Plan. If the surviving corporation or acquiring
corporation does not either assume or continue outstanding awards or substitute
similar awards for those outstanding under the 2000 Plan, awards held by active
directors, employees and consultants will automatically become fully vested and
exercisable, and all awards (including those held by terminated directors,
employees and consultants) will terminate on the date of change in control if
not exercised before then. In the event any person, entity or group within the
meaning of Section 13(d) or 14(d) of the Exchange Act (excluding any employee
benefit plan or related trust we or our parent or subsidiary maintains) acquires
beneficial ownership within the meaning of Rule 13d-3 under the Exchange Act of
securities representing at least 50% of the combined voting power entitled to
vote on election of our directors, then all awards held by active directors,
employees and consultants will automatically become fully vested and exercisable
and remain exercisable until they expire in accordance with their terms.
Limitations apply if any payment or benefit to an optionee would constitute a
"parachute payment" under IRC section 280G.

      Current Change in Control Definition. Under current provisions, "change in
control" is defined as a sale, lease or other disposition of all or
substantially all of our assets, a merger or consolidation in which we are not
the surviving corporation, or a reverse merger in which we are the surviving
corporation but in which our shares are converted into other property.

      Proposed Amendment. Under the proposed amendment, "change in control"
would be defined as:

      The acquisition by any individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act of beneficial ownership within
the meaning of Rule 13d-3 of the Exchange Act, of 30% or more of either our then
outstanding shares of common stock or the combined voting power entitled to vote
on election of our directors, but excluding:

            o     acquisition directly from us other than by virtue of the
                  exercise of a conversion privilege unless the converted
                  security was acquired from us,


                                       49

<PAGE>

            o     any acquisition by us,

            o     any acquisition by an employee benefit plan or related trust
                  sponsored or maintained by us or any company we control,

            o     any acquisition by a corporation in a transaction in which all
                  or substantially all of the beneficial owners of our common
                  stock before the transaction beneficially own, directly or
                  indirectly, more than 60% of the outstanding shares of common
                  stock of the resulting corporation (in this definition, the
                  resulting corporation includes any parent owning our assets
                  through its subsidiaries following a transaction), in
                  substantially the same proportions as their ownership of our
                  common stock before the transaction,

            o     any acquisition by a corporation in a transaction in which all
                  or substantially all of the beneficial owners of the combined
                  voting power entitled to vote on election of our directors
                  before the transaction beneficially own, directly or
                  indirectly, more than 60% of the combined voting power of the
                  then outstanding voting securities entitled to vote generally
                  in the election of directors of the resulting corporation, in
                  substantially the same proportions as their ownership of such
                  voting stock before the transaction,

            o     any acquisition by a corporation in a transaction in which no
                  entity (other than us, our employee benefit plan or related
                  trust, or the resulting corporation in the transaction) will
                  beneficially own, directly or indirectly, 50% or more of the
                  outstanding shares of common stock of the resulting
                  corporation or 50% or more of the combined voting power of the
                  outstanding securities of the resulting corporation entitled
                  to vote in the election of directors, unless such ownership
                  resulted solely from ownership of our securities before the
                  transaction, and

            o     any acquisition by a corporation in a transaction in which
                  members of the incumbent board (as described below) will
                  immediately after consummation of the transaction constitute
                  at least a majority of the board of the resulting corporation.

      A change in the composition of our board of directors such that
individuals who constitute the board as of December 31, 2002, excluding members
elected pursuant to the terms of our Series A Convertible Preferred Stock, which
we refer to as the incumbent board, cease for any reason to constitute at least
a majority of our board (excluding Series A directors); however, any director
whose election or nomination was approved by a vote of at least a majority of
the incumbent board will be considered to be included as a member of the
incumbent board, and any individual whose initial assumption of office as a
director occurs as a result of or in connection with either an actual or
threatened election contest as defined in Rule 14a-11 under the Exchange Act, or
other actual or threatened solicitation of proxies or consents on behalf of an
entity other than our board of directors, will not be considered a member of the
incumbent board.

      Our stockholders' approval of a merger, reorganization, consolidation or
sale or other disposition of all or substantially all our assets, or if any such
transaction is subject to governmental consent, the obtaining of such consent,
excluding the following:

            o     a transaction in which all or substantially all of the
                  beneficial owners of our common stock before the transaction
                  beneficially own, directly or indirectly, more than 60% of the
                  outstanding shares of common stock of the resulting
                  corporation (in this definition, the resulting corporation
                  includes any parent owning our assets through its subsidiaries
                  following a transaction), in substantially the same
                  proportions as their ownership of our common stock before the
                  transaction,

            o     a transaction in which all or substantially all of the
                  beneficial owners of the combined voting power entitled to
                  vote on election of our directors before the transaction
                  beneficially own, directly or indirectly, more than 60% of the
                  combined voting power of the then outstanding voting
                  securities entitled to vote generally in the election of
                  directors of the resulting corporation, in substantially the
                  same proportions as their ownership of such voting stock
                  before the transaction


                                       50

<PAGE>

            o     a transaction in which no entity (other than us, our employee
                  benefit plan or related trust, or the resulting corporation in
                  the transaction) will beneficially own, directly or
                  indirectly, 50% or more of the outstanding shares of common
                  stock of the resulting corporation or 50% or more of the
                  combined voting power of the outstanding securities of the
                  resulting corporation entitled to vote in the election of
                  directors, unless such ownership resulted solely from
                  ownership of our securities before the transaction, and

            o     a transaction in which individuals who were members of the
                  incumbent board will immediately after consummation of the
                  transaction constitute at least a majority of the board of the
                  resulting corporation.

      The approval by our stockholders of our complete dissolution or
liquidation.

      The amendment also confirms that an award may specify that upon a Change
in Control, vesting under such award may be accelerated and the time for
exercise may be extended and that the Board may add such rights to previously
granted awards by amendment.

      The amendment will become effective upon the date of stockholder approval.

Amendment and Termination

      The committee may amend the 2000 Plan and the terms of any outstanding
awards at any time. However, if necessary to satisfy the requirements of IRC
Section 422, Rule 16b-3 of the Exchange Act or any NASDAQ or other securities
exchange listing requirements, shareholder approval of any plan amendment is
required. The committee may also decide to submit other 2000 Plan amendments to
stockholders for approval. No amendment will impair the rights under awards
already granted unless the award recipient consents in writing. The committee
may terminate the 2000 Plan at any time, and the 2000 Plan will automatically
terminate 10 years after original approval.

Adjustments

      In the event of changes in our common stock without our receiving
consideration, through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction, the committee will make an
appropriate adjustment to the classes and number of shares subject to the 2000
Plan, and to the class of shares, number of securities and price per share of
outstanding awards.

Dissolution or Liquidation

      If we are dissolved or liquidated, all outstanding awards under the 2000
Plan automatically terminate immediately before the dissolution or liquidation.

Transferability

      Options are transferable to the extent provided in the governing option
agreement, or if the option agreement does not provide for transferability,
options are not transferable except by will or by the laws of descent and
distribution. Rights to acquire shares of our stock under a stock bonus
agreement are transferable as set forth in the stock bonus agreement (which is
subject to the committee's discretion). Rights to acquire shares of our stock
under a restricted stock agreement are transferable as set forth in the
restricted stock agreement (which is subject to the committee's discretion).

Federal Income Tax Consequences

      The following is a brief general description of the consequences under the
Internal Revenue Code, or IRC, of the receipt or exercise of options under the
2000 Plan:

      Incentive Stock Options. The 2000 Plan does not provide for the grant of
incentive stock options.

      Nonqualified Stock Options. Neither we nor the option holder has income
tax consequences from the issuance of nonqualified stock options. Generally, in
the tax year when an option holder exercises nonqualified stock options, the
option holder recognizes ordinary income in the amount by which the fair market
value of the shares at the time of exercise exceeds the option price for such
shares. We generally will have a deduction in the 


                                       51

<PAGE>

same amount as the ordinary income recognized by the option holder in our tax
year in which or with which the option holder's tax year (of exercise) ends.

      If an option holder exercises a nonqualified stock option by paying the
option price with previously acquired shares of our common stock, additional
rules apply.

      Limitation on Company Deductions. No federal income tax deduction is
allowed for compensation paid to a "covered employee" in any of our taxable
years beginning on or after January 1, 1994, to the extent that such
compensation exceeds $1,000,000. For this purpose, "covered employees" are
generally defined as our chief executive officer and our four highest
compensated officers whose annual salary and bonus exceeds $100,000, and the
term "compensation" generally includes amounts includable in gross income as a
result of the exercise of stock options, or the receipt of stock options. This
deduction limitation does not apply to compensation that is (1) commission-based
compensation, (2) performance-based compensation, (3) compensation which would
not be includable in an employee's gross income, and (4) compensation payable
under a written binding contract in existence on February 17, 1993, and not
materially modified thereafter.

      Compensation attributable to a stock option will generally satisfy the
limitation exception for performance-based compensation if:

            o     the grant or award is made by a "compensation committee" (a
                  committee composed of "outside" directors);

            o     the "material terms" (including which employees are eligible
                  to receive compensation, the maximum number of shares that may
                  be granted to an optionee and the exercise price of the
                  options) of the plan under which the option or right is
                  granted are disclosed to stockholders and approved by a
                  majority of the stockholder vote;

            o     the "compensation committee" certifies that performance goals
                  were in fact satisfied before the compensation is paid; and

            o     under the terms of the option or right, the amount of
                  compensation the employee could receive is based solely on an
                  increase in the value of the stock after the date of the grant
                  or award.

      Awards granted under the 2000 Plan are not designed to satisfy these
requirements.

      The foregoing discussion is not a complete discussion of all federal
income tax aspects of the 2000 Plan. Some of the provisions contained in the IRC
have only been summarized, and additional qualifications and refinements may be
contained in regulations which will be issued in the future by the Internal
Revenue Service. Furthermore, subsequent legislative changes or changes in
administrative or judicial interpretation could alter significantly the tax
treatment discussed herein. No discussion of state income tax law has been
included. Each employee should consult his or her own tax advisors with respect
to the tax consequences of participation in the 2000 Plan and disposition of
shares acquired under the 2000 Plan.

      ERISA. The 2000 Plan is not, and is not intended to be, an employee
benefit plan or qualified retirement plan. The 2000 Plan is not, therefore,
subject to the Employee Retirement Income Security Act of 1974, as amended, or
Section 401(a) of the IRC.

Recommendation of the Board of Directors

      The Board of Directors unanimously recommends that you vote "FOR" the
ratification of the 2000 Non-Officer Equity Incentive Plan and approval of the
amendment to the 2000 Non-Officer Equity Incentive Plan to change the definition
of change in control.


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<PAGE>

                                   PROPOSAL 10

                              ELECTION OF DIRECTORS

      Our board of directors presently consists of seven members. The board is
divided into three classes, with the directors in each class serving a
three-year term. The terms are staggered so that the term of one class expires
at each Annual Meeting. The directors in Class I, Mr. Gregory A. Peters and Mr.
Robert D. Shurtleff, Jr., hold office until this annual meeting of stockholders.
The directors in Class II, Fredric W. Harman and Kevin L. Ober, hold office
until the 2004 annual meeting of stockholders. The directors in Class III, Mr.
Eugene Eidenberg, Mr. William J. Harding and Mr. Anthony C. Naughtin, hold
office until the 2005 annual meeting of stockholders. No family relationships
exist among any of our directors or executive officers. Currently, subject to
certain conditions set forth in our certificate of incorporation, the holders of
our Series A preferred stock have the right, voting as a separate class, to
elect two directors to our board of directors or to fill any vacancy caused by
the resignation, death of removal of such directors. Mr. Fredric Harman and Mr.
Eugene Eidenberg are presently serving as our Series A directors.

      The board of directors has nominated Gregory A. Peters and Robert D.
Shurtleff, Jr. for re-election as Class I directors to serve until the 2006
annual meeting of stockholders and until their successors are elected and have
been qualified, or until such directors' death, resignation or removal. The
persons nominated for election to Class I have agreed to serve if elected, and
management has no reason to believe they will be unable to serve.

      The Board of Directors unanimously recommends that you vote "FOR" the
named nominees.

Executive Officers and Directors

      The following table sets forth certain information regarding our executive
officers and directors as of December 31, 2002:

Name                              Age    Position
----                              ---    --------

Gregory A. Peters (1)........      41    President, Chief Executive
                                         Officer and Director
Eugene Eidenberg (2).........      63    Executive Chairman and Director
David L. Abrahamson (3) .....      41    Chief Marketing Officer and Vice
                                         President, Sales
Walter G. DeSocio (4) .......      47    Vice President - Chief
                                         Administrative Officer, General
                                         Counsel and Secretary
Ali Marashi (5)..............      34    Vice President and Chief
                                         Technology Officer
William P. Betz (6) .........      39    Acting Vice President, Sales
John Scanlon (7).............      43    Vice President of Finance and
                                         Administration Chief Financial
                                         Officer and Secretary
William J. Harding...........      55    Director
Fredric W. Harman............      42    Director
Anthony C. Naughtin..........      47    Director
Kevin L. Ober................      41    Director
Robert D. Shurtleff, Jr......      48    Director

----------
(1)   Effective April 2, 2002, Mr. Peters began serving as President and Chief
      Executive Officer.
(2)   Effective April 2, 2002, Mr. Eidenberg ceased serving as Chief Executive
      Officer and began serving as Executive Chairman, and effective February
      27, 2003 began serving as Non-Executive Chairman.
(3)   Effective October 31, 2002, Mr. Abrahamson began serving as Chief
      Marketing Officer and effective January 10, 2003 began also serving as
      Vice President, Sales.
(4)   Effective September 30, 2002, Mr. DeSocio began serving as Vice President
      and General Counsel and effective December 17, 2002 began serving as Vice
      President - Chief Administrative Officer, General Counsel and Secretary.
(5)   Effective August 1, 2002, Mr. Marashi began serving as Vice President and
      Chief Technology Officer.
(6)   Effective April 1, 2002, Mr. Betz began serving as Acting Vice President,
      Sales and effective January 10, 2003 resigned from the Company.
(7)   Effective February 13, 2002, Mr. Scanlon began serving as Vice President
      of Finance and Administration, Chief Financial Officer and Secretary.
      Effective December 17, 2002, Mr. Scanlon ceased serving as Secretary and
      effective January 31, 2003 ceased serving as Vice President of Finance and
      Administration and Chief Financial Officer.


                                       53

<PAGE>

      Gregory A. Peters has served as President and Chief Executive Officer
since April 2002 and as a director since May 2002. Prior to joining Internap,
Mr. Peters founded and was President and Chief Executive Officer of Mahi
Networks from 1999 to 2002. Prior to that, Mr. Peters was the Vice President of
International Operations and Corporate Officer for Advanced Fibre Communications
from 1997 to 1999. From 1996 to 1997, Mr. Peters was the Vice President of
International Operations and Corporate Officer for ADTRAN. Mr. Peters holds a
Bachelor of Science degree in Business Administration from the University of
Georgia, and a Masters in International Management from the American Graduate
School of International Management, Thunderbird Campus.

      Eugene Eidenberg has served as a director and chairman of the board of
directors since November 1997. From July 2001 until April 2002, Mr. Eidenberg
served as the Company's Chief Executive Officer. Mr. Eidenberg has been a
Managing Director of Granite Venture Associates LLC since 1999 and has served as
a Principal of Hambrecht & Quist Venture Associates since 1998 and was an
advisory director at the San Francisco investment-banking firm of Hambrecht &
Quist from 1995 to 1998. Mr. Eidenberg served for 12 years in a number of senior
management positions with MCI Communications Corporation. His positions at MCI
included Senior Vice President for Regulatory and Public Policy, President of
MCI's Pacific Division, Executive Vice President for Strategic Planning and
Corporate Development and Executive Vice President for MCI's international
businesses. Mr. Eidenberg is currently a director of several private companies.
Mr. Eidenberg holds a Ph.D. and a Master of Arts degree from Northwestern
University and a Bachelor of Arts degree from the University of Wisconsin.

      David L. Abrahamson has served as the Company's Chief Marketing Officer
and Vice President, Sales since January 2003 and as Chief Marketing Officer
since October 2002. Before that time, Mr. Abrahamson was Senior Vice President
of BellSouth's e-Business Services. In this role, he led BellSouth's e-business
applications and services organization where he was responsible for developing
and managing BellSouth's Internet data center products and services. Previously,
he was at Sprint where he held numerous management positions in accounting,
operations and finance before becoming a key marketing executive in the consumer
business unit. Mr. Abrahamson graduated from Iowa State University with a
Bachelor's degree in Accounting and Business and obtained a Master's degree from
Kansas University.

      Walter G. DeSocio has served as Vice President - Chief Administrative
Officer, General Counsel and Secretary of the Company since December 2002 and as
Vice President and General Counsel since September 2002. Before his appointment,
Mr. DeSocio was General Counsel and head of regulatory affairs at Concert, the
multi-billion dollar global communications business owned by AT&T Corporation
and BT Group. Prior to Concert, Mr. DeSocio was AT&T's Chief Regional Counsel
for Europe, Middle East and Africa, with legal responsibility for all of AT&T's
international business activity outside the United States. He was also an
Associate in the New York City office of Dewey Ballantine. Mr. DeSocio earned
his Bachelor of Arts degree from Colgate University, his J.D. from New York
University Law School and L.L.M. valedictory honors from Cambridge University
(Corpus Christi College) in England.

      Ali Marashi has served as Vice President and Chief Technology Officer
since August 2002. Since joining Internap in 2000, Mr. Marashi has also served
as Vice President, Technical Services, Vice President of Engineering, Director
of Network Technology and Director of Backbone Engineering. Prior to joining
Internap, Mr. Marashi was a lead Network Engineer for Networks and Distributed
Computing at the University of Washington from July 1997 to March 2000, where he
was responsible for senior-level design, development, and technical leadership
and support for all networking initiatives and operations. Prior to that, Mr.
Marashi was co-founder and Vice President of Engineering for interGlobe
Networks, Inc., a TCP/IP consulting firm, from 1995 to July 1997. Mr. Marashi
holds a Bachelor of Science in Computer Engineering from the University of
Washington.

      William P. Betz served as Acting Vice President, Sales from April 2002
until January 2003. Mr. Betz joined Internap as the Regional Vice President of
Sales for the Eastern Region and the Senior Sales manager of Washington, D.C. in
1998. Prior to joining Internap, Mr. Betz held increasingly senior sales
management positions at MCI / WorldCom from 1991 to 1998, the last being
Executive Sales Manager for Global Accounts. Mr. Betz holds a Bachelor of Arts
degree in Political Science from Middlebury College in Vermont.

      John Scanlon became Vice President of Finance and Administration, Chief
Financial Officer and Secretary in February 2002. Mr. Scanlon ceased serving as
Secretary of the Company in December 2002 and ceased serving as Vice President
of Finance and Administration and Chief Financial Officer in January 2003. Since
joining 


                                       54

<PAGE>

Internap in 1999, Mr. Scanlon served as Vice President, Service Planning,
Director of Carrier Relations and Vice President of Product Marketing. Prior to
joining Internap, Mr. Scanlon served as the President of Flat Rate
Communications, Inc., which was acquired by Viatel. Mr. Scanlon continued on as
a General Manager of Viatel after the acquisition. Prior to his work with Flat
Rate, Mr. Scanlon spent over a decade at MCI Telecommunications as its Vice
President and Director of Strategic Development, Director of Business
Development and Director of Finance and Information Systems. Mr. Scanlon holds a
Master in Business Administration with honors from St. Mary's College and a
Bachelor of Science in Business Administration, Financial Management from Oregon
State University.

      William J. Harding, age 55, has served as a director since January 1999.
Dr. Harding is a Managing Member of Morgan Stanley Venture Partners III, LLC and
a Managing Director of Morgan Stanley & Co., Inc. He joined Morgan Stanley &
Co., Inc. in October 1994. Dr. Harding is currently a Director of Commerce One,
Inc. and several private companies. Prior to joining Morgan Stanley, Dr. Harding
was a General Partner of several venture capital partnerships affiliated with
J.H. Whitney & Co. Previously, Dr. Harding was associated with Amdahl
Corporation from 1976 to 1985, serving in various technical and business
development roles. Prior to Amdahl, Dr. Harding held several technical positions
with Honeywell Information Systems. Dr. Harding holds a Bachelor of Science in
Engineering Mathematics and a Master of Science in Systems Engineering from the
University of Arizona, and a Ph.D. in Engineering from Arizona State University.
Dr. Harding also served as an officer in the Military Intelligence Branch of the
United States Army Reserve.

      Fredric W. Harman, age 42, has served as a director since January 1999.
Since 1994, Mr. Harman has served as a Managing Member of the General Partners
of venture capital funds affiliated with Oak Investment Partners. Mr. Harman
served as a General Partner of Morgan Stanley Venture Capital, L.P. from 1991 to
1994. Mr. Harman serves as a director of aQuantive, Inc. (formerly Avenue A),
Inktomi Corporation, Primus Knowledge Solutions and several privately held
companies. Mr. Harman holds a Bachelor of Science degree and a Master degree in
electrical engineering from Stanford University and a Master of Business
Administration from Harvard University.

      Anthony C. Naughtin, age 47, co-founded Internap and served as our Chief
Executive Officer from May 1996 until July 2001, and as our President from May
1996 until May 2001. Mr. Naughtin also has served as a director since October
1997. Prior to founding Internap, he was Vice President for Commercial Network
Services at ConnectSoft, Inc., an Internet and e-mail software developer, from
May 1995 to May 1996. From February 1992 to May 1995, Mr. Naughtin was the
Director of Sales at NorthWestNet, an NSFNET regional network. Mr. Naughtin has
served as a director of Counterpane Internet Security, Inc. since March 2001, as
a director of Network Clarity, Inc. since July 2002 and as a director of the
Washington Software Alliance since November 2001. He also participates on the
advisory boards of Terabeam Corporation, ThruPoint, Inc., 360Networks, Inc. and
the University of Washington School of Business. Mr. Naughtin holds a Bachelor
of Arts in Communications from the University of Iowa and is a graduate of the
Creighton School of Law.

      Kevin L. Ober, age 41, has served as a director since October 1997. From
February 2000 to the present Mr. Ober has been involved in various business
activities including sitting on the boards of several start-up companies
including PictureIQ and HealthRadius. From November 1993 to January 2000 Mr.
Ober was a member of the investment team at Vulcan Ventures Inc. Prior to
working at Vulcan Ventures, Mr. Ober served in various positions at Conner
Peripherals, Inc., a computer hard disk drive manufacturer. Mr. Ober holds a
Master of Business Administration from Santa Clara University and Bachelor of
Science degree in business administration from St. John's University.

      Robert D. Shurtleff, Jr., age 48, has served as a director since January
1997. In 1999, Mr. Shurtleff founded S.L. Partners, a strategic consulting group
focused on early stage companies. From 1988 to 1998, Mr. Shurtleff held various
positions at Microsoft Corporation, including Program Management and Development
Manager and General Manager. Mr. Shurtleff is currently a director of four
private companies and also serves on technical advisory boards of several
private companies and venture capital firms. Prior to working at Microsoft
Corporation, Mr. Shurtleff worked at Hewlett Packard Company from 1979 to 1988.
Mr. Shurtleff holds a Bachelor of Arts degree in computer science from the
University of California at Berkeley.


                                       55

<PAGE>

                     BOARD OF DIRECTORS COMMITTEES AND MEETINGS

      The board of directors conducts its business through meetings of the full
board and through committees of the board, consisting of an Audit Committee, a
Compensation Committee and a Nominations Committee.

      During the fiscal year ended December 31, 2002, the board of directors
held 17 meetings, the Audit Committee held six meetings, the Compensation
Committee held two meetings and the Nominations Committee held two meetings.
During the fiscal year ended December 31, 2002, each member of our board of
directors attended at least 75% of the meetings of the board of directors and of
the committees on which he served that were held during the period for which he
was a director or committee member, except that Mr. Harman only was able to
attend 66.7% of the meetings of the Audit Committee.

The Audit Committee

      The Audit Committee meets with our independent accountants at least
annually to review the results of the annual audit and discuss the financial
statements, recommends to the board of directors the independent accountants to
be retained, oversees the independence of the independent accountants, evaluates
the independent accountants' performance and receives and considers the
independent accountants' comments as to controls, adequacy of staff and
management performance and procedures in connection with audit and financial
controls. The Audit Committee is composed of three directors, William J.
Harding, Fredric W. Harman and Kevin L. Ober, all of whom are independent as
independence is defined in NASD Rule 4200(a)(14). The Audit Committee meets at
least quarterly to discuss quarterly financial results prior to their public
release. The Audit Committee operates in accordance with a written Audit
Committee charter which was adopted in 2001 and amended and restated in 2002.
The amended and restated Audit Committee charter is attached as Appendix J to
this proxy statement.

The Compensation Committee

      The Compensation Committee reviews and recommends to the board of
directors the compensation and benefits of all our officers and establishes and
reviews general policies relating to compensation and benefits for our
employees. The Compensation Committee consists of two non-employee directors,
Kevin L. Ober and Robert D. Shurtleff, Jr.

The Nominations Committee

      The Nominations Committee is responsible for assisting the board of
directors in identifying and attracting highly qualified individuals to serve as
directors and selecting director nominees and recommending them to the board for
election at annual meetings of stockholders. The Nominations Committee consists
of Eugene Eidenberg, Fredric W. Harman and Gregory A. Peters.


                                       56

<PAGE>

                              SECURITY OWNERSHIP OF
                   CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth as of January 31, 2003 (except as otherwise
noted) information regarding the beneficial ownership of our common stock by (i)
each person known by us to beneficially own more than 5% of our common stock
(assuming conversion of all shares of Series A preferred stock into shares of
our common stock); (ii) each of our directors; (iii) each of our named executive
officers named in the summary compensation table herein; and (iv) all of our
directors and named executive officers as a group. Except as otherwise noted, we
believe that the beneficial owners of our common stock listed below, based on
information furnished by such owners, have sole voting and investment power with
respect to such shares of our common stock.


<TABLE>
<CAPTION>
                                                                Common Stock Beneficially Owned
                                                                -------------------------------
                                                                     Number         Percent
Name and Address of Beneficial Owner                               of Shares     of Class (a)
------------------------------------                               ---------     ------------
<S>                                                                <C>                <C>  
Oak Investment Partners VIII, L.P. and related persons or
entities (1)..................................................     24,481,885         15.2%
c/o Oak Investment Partners VIII, L.P.
525 University Avenue, Suite 1300
Palo Alto, CA 94301
Fredric W. Harman (1).........................................     24,481,885         15.2%

Morgan Stanley Venture Capital III, Inc. and related persons
or entities (2)...............................................     16,988,076         10.6%
c/o Morgan Stanley Venture Partners
1585 Broadway, 38th Floor
New York, NY 10036
William J. Harding (2)........................................     16,988,076         10.6%

Capital Ventures International (3)............................     15,244,091          9.5%
c/o Heights Capital Management, Inc.
425 California Street, Suite 1000
San Francisco, CA 94104

Granite Ventures, LLC and related persons or entities (4).....      9,922,398          6.2%
c/o Granite Ventures, LLC
One Bush Street
San Francisco, CA 94104
Eugene Eidenberg (4)..........................................      9,922,398          6.2%

INT Investments, Inc. (5).....................................      8,508,372          5.3%
Cay House
P.O. Box N7776 Lyford Cay
New Providence, Bahamas

David L. Abrahamson...........................................         27,000          *

David T. Benton (6)...........................................         93,449          *

William P. Betz (7)...........................................        217,379          *

Robert A. Gionesi (8).........................................        132,822          *

Ali Marashi (9)...............................................        316,123          *

Anthony C. Naughtin (10)......................................      4,378,439          2.7%

Kevin L. Ober (11)............................................        190,000          *

Gregory A. Peters (12)........................................        850,000          *

John M. Scanlon (13)..........................................        648,900          *

Robert D. Shurtleff, Jr. (14).................................      1,776,888          1.1%

All directors and executive officers as a group (14 persons)
(15)..........................................................     60,023,359         37.3%
</TABLE>


----------
(a)   Based on 161,014,992 shares of common stock outstanding as of January 31,
      2003.
*     Less than 1%


                                       57

<PAGE>

(1)   Consists of 9,279,725 shares held by Oak Investment Partners VIII, L.P.,
      218,465 shares held by Oak VIII Affiliates Fund L.P., 14,586,478 shares
      held by Oak Investment Partners X, L.P., 234,165 shares held by Oak X
      Affiliates Fund, L.P., 94,853 shares held by Mr. Harman, an aggregate of
      8,199 shares held in trust for the benefit of Mr. Harman's three minor
      children and 60,000 shares issuable upon the exercise of options held by
      Mr. Harman that are exercisable within 60 days of January 31, 2003. Shares
      held by Oak Investment Partners X, L.P. and Oak X Affiliates Fund, L.P.
      consist of Series A preferred stock (on an "as converted" basis) and
      2,964,129 shares issuable on exercise of warrants that are exercisable
      within 60 days of January 31, 2003. Mr. Harman disclaims beneficial
      ownership of the shares held by Oak Investment Partners VIII, L.P., Oak
      VIII Affiliates Fund L.P., Oak Investment Partners X, L.P., Oak X
      Affiliates Fund, L.P., except to the extent of his proportionate ownership
      therein, and of the shares held in trust for his three minor children. Oak
      Investment Partners VIII, L.P. and Oak VIII Affiliates Fund L.P., Oak
      Investment Partners X, L.P. and Oak X Affiliates Fund, L.P. disclaim
      beneficial ownership of shares held by Mr. Harman.
(2)   Consists of 14,096,103 shares held by Morgan Stanley Venture Partners III,
      L.P., 1,353,417 shares held by Morgan Stanley Venture Investors III, L.P.,
      616,702 shares held by The Morgan Stanley Venture Partners Entrepreneur
      Fund, L.P., (together, the "Funds"), 541,344 shares held by Morgan Stanley
      Venture Capital III, Inc., 240,510 shares held directly by Dr. Harding and
      140,000 shares issuable upon the exercise of options held directly by Dr.
      Harding that are exercisable within 60 days of January 31, 2003. Shares
      held by the Funds consist of common stock, Series A preferred stock (on an
      "as converted" basis) and 1,778,475 shares issuable on exercise of
      warrants that are exercisable within 60 days of January 31, 2003. Dr.
      Harding is an individual managing member of Morgan Stanley Venture
      Partners III, L.L.C., and the general partner of each of the Funds (the
      "General Partner"). The General Partner is controlled by Morgan Stanley
      Venture Capital III, Inc. ("MSVC III, Inc."), a wholly-owned subsidiary of
      Morgan Stanley. Dr. Harding disclaims beneficial ownership of any of the
      securities owned by the Funds except to the extent of his proportionate
      pecuniary interest therein and disclaims beneficial ownership of any of
      the securities owned by MSVC III, Inc. The Funds and MSVC III, Inc.
      disclaim beneficial ownership of shares held by Dr. Harding. Pursuant to a
      letter agreement dated March 10, 2000 among the Funds and us, the Funds
      have irrevocably agreed with us to vote all shares of our common stock
      they beneficially own in excess of 9.9% of our outstanding common stock in
      proportion to votes cast by all other stockholders, as determined by us
      and excluding all shares of common stock beneficially owned by the Funds.
(3)   Consists of Series A preferred stock (on an "as converted" basis) and
      3,048,818 shares issuable on exercise of warrants that are exercisable
      within 60 days of January 31, 2003.
(4)   Consists of 4,384,883 shares held by H&Q Internap Investors, L.P.,
      2,215,466 shares held by TI Ventures, LP, 1,693,365 shares held by Todd US
      Investors, LLC, 25,213 shares held by Granite Ventures, LLC, 180,705
      shares held by Mr. Eidenberg and 139,433 shares held by Mr. Eidenberg as
      trustee of the Eugene Eidenberg Trust September 1997, the Anna Chavez
      Educational Trust and the Anna Chavez Separate Property Trust. Also
      includes 1,250,000 shares issuable upon the exercise of options held by
      Mr. Eidenberg that are exercisable within 60 days of January 31, 2003.
      Shares held by H&Q Internap Investors, L.P. consist of common stock,
      Series A preferred stock (on an as converted basis) and 375,206 shares
      issuable on exercise of warrants that are exercisable within 60 days of
      January 31, 2003. Shares held by Todd US Investors, LLC consist of Series
      A preferred stock (on an as converted basis) and 338,673 shares issuable
      on exercise of warrants that are exercisable within 60 days of January 31,
      2003. Mr. Eidenberg disclaims beneficial ownership of the shares held by
      H&Q Internap Investors, L.P., TI Ventures, LP, Todd US Investors, LLC,
      Granite Ventures, LLC the Anna Chavez Educational Trust, the Anna Chavez
      Separate Property Trust and Granite Ventures LLC.
(5)   Consists of Series A preferred stock (on an "as converted" basis) and
      1,701,674 shares issuable on exercise of warrants that are exercisable
      within 60 days of January 31, 2003.
(6)   Includes 325 shares held by Mr. Benton's spouse and 45,423 shares issuable
      on the exercise of options that are exercisable within 60 days of January
      31, 2003.
(7)   Includes 202,379 shares issuable on the exercise of options that are
      exercisable within 60 days of January 31, 2003.
(8)   Includes 22,160 shares held by Mr. Gionesi's spouse, 15,534 shares held by
      trusts of which Mr. Gionesi or his spouse are co-trustees.
(9)   Includes 315,949 shares issuable on the exercise of options that are
      exercisable within 60 days of January 31, 2003.
(10)  Includes 1,539,087 shares held by Crossroads Associates, LLC, 400,000
      shares held by Crossroads Associates II, LLC, and 18,000 shares held by
      Mr. Naughtin as trustee of the Eric Weaver Gift Protection Trust, the Hugh
      Naughtin Gift Protection Trust, and the Rose Naughtin Gift Protection
      Trust. Mr. Naughtin disclaims beneficial ownership of the 18,000 shares
      held by him as trustee of the Eric Weaver Gift Protection Trust, the Hugh
      Naughtin Gift Protection Trust and the Rose Naughtin Gift Protection
      Trust.
(11)  Includes 140,000 shares issuable on the exercise of options that are
      exercisable within 60 days of January 31, 2003.
(12)  Includes 850,000 shares issuable on the exercise of options that are
      exercisable within 60 days of January 31, 2003.
(13)  Includes 643,100 shares issuable on the exercise of options that are
      exercisable within 60 days of January 31, 2003.
(14)  Includes 166,500 shares held by Robert D. Shurtleff, Jr. as trustee of the
      Shurtleff Family Trust, 195,813 shares issuable upon exercise of warrants
      held by Mr. Shurtleff exercisable within 60 days of January 31, 2003 and
      140,000 shares issuable on exercise of options that are exercisable within
      60 days of January 31, 2003. Mr. Shurtleff disclaims beneficial ownership
      of the shares held by the Shurtleff Family Trust.
(15)  Shares held by the group consist of common stock, Series A preferred stock
      (on an "as converted" basis), 5,473,415 shares of issuable on exercise of
      warrants that are exercisable within 60 days of January 31, 2003 and
      4,845,284 shares issuable on exercise of options that are exercisable
      within 60 days of January 31, 2003.


                                       58

<PAGE>

                       DIRECTOR AND EXECUTIVE COMPENSATION

Compensation of Directors

      Effective January 1, 2003, our directors receive annual cash compensation
of $30,000 for their services on the board of directors and any committees of
the board of directors. They are reimbursed for certain expenses in connection
with attendance at board of directors and committee meetings. Non-employee
directors receive an annual option to purchase 20,000 shares of common stock
under our 1999 Nonemployee Directors' Stock Option Plan. Subject to shareholder
approval of Proposal 5 described in this proxy statement, new non-employee
directors will also receive an initial grant of 250,000 shares of common stock.

Compensation of Executive Officers

      The table below sets forth summary information concerning compensation
paid by us during the fiscal years ended December 31, 2002, 2001 and 2000, to
(i) our Chief Executive Officer and President; and (ii) four of our executive
officers other than the Chief Executive Officer whose salary and bonus for
fiscal year 2002 exceeded $100,000, and who served as an executive officer
during fiscal year 2002. We collectively refer to the officers in the table
below as the named executive officers.

                           Summary Compensation Table



<TABLE>
<CAPTION>
                                                                                       Long-Term
                          Annual Compensation                                         Compensation
                          -------------------                                          Securities
           Name and                                                  Other Annual      Underlying          All Other
      Principal Position        Year    Salary ($)    Bonus ($)      Compensation      Options (#)       Compensation
      ------------------        ----    ----------    ---------      ------------      -----------       ------------
<S>                             <C>    <C>            <C>            <C>               <C>               <C>
Gregory A. Peters (1)           2002   $ 266,315 (2)   $    --          $  --            2,400,000          $  --
   President and Chief          2001          --            --             --                   --             -- 
   Executive Officer            2000          --            --             --                   --             -- 
                                
Eugene Eidenberg (3)            2002     179,244            --             --                   --             --
   Executive Chairman           2001     187,658 (4)        --             --            1,200,000             -- 
                                2000          --            --             --               20,000             -- 
                                
John M. Scanlon (5)             2002     225,196            --             --              400,000             --
   Chief Financial Officer      2001     192,083        36,603             --              425,740             -- 
   and Vice President of        2000     167,724        23,417             --              137,100             -- 
   Finance and Administration   
                                
Ali Marashi                     2002     177,874            --             --            1,627,816             --
   Vice President and Chief     2001     150,000        16,290             --              302,440             -- 
   Technology Officer           2000     105,461        28,096             --              135,200             -- 
                                
William Betz (6)                2002     239,833            --             --               10,000             --
   Acting Vice President,       2001     208,189            --             --               49,994             -- 
   Sales                        2000          --            --             --               12,500             -- 
</TABLE>

                                
----------
(1)   Effective April 2, 2002, Mr. Peters began serving as President and Chief
      Executive Officer.
(2)   Includes $15,520 for relocation expenses.
(3)   Effective April 2, 2002, Mr. Eidenberg began serving as Executive Chairman
      and ceased serving as Chief Executive Officer, and effective February 27,
      2003 began serving as Non-Executive Chairman.
(4)   Includes $27,401 in costs for Seattle residence.
(5)   Effective December 17, 2002, Mr. Scanlon ceased serving as Secretary and
      effective January 31, 2003 ceased serving as Vice President of Finance and
      Administration and Chief Financial Officer.
(6)   Effective April 1, 2002, Mr. Betz began serving as Acting Vice President,
      Sales and effective January 10, 2003 resigned from the Company.


                                       59

<PAGE>

                                  Stock Options

      The following table sets forth information regarding options granted to
the named executive officers during the fiscal year ended December 31, 2002:

                        Option Grants in Last Fiscal Year

                                Individual Grants


<TABLE>
<CAPTION>
                                                                                         Potential Realizable Value at 
                              Number of      % of Total                                  Assumed Annual Rates of Stock 
                               Shares          Options                                   Price Appreciation for Option 
                             Underlying      Granted to     Exercise                              Term ($) (6)         
                               Options      Employees in    Price Per                    ----------------------------- 
      Name                   Granted (2)     Fiscal Year    ($/Share)   Expiration Date     5% ($)         10% ($)
      ----                   -----------     -----------    ---------   ---------------     ------         -------
<S>                         <C>             <C>             <C>         <C>              <C>              <C>     
Gregory A. Peters           2,400,000 (1)       20.4%        $ 0.77       3/28/2012        $     --       $641,993
Eugene Eidenberg                   --             --             --              --              --             --
John M. Scanlon               400,000 (2)        3.4%          1.04       2/13/2012              --             --
Ali Marashi                    21,500 (3)          *           1.13       2/21/2012              --             --
                            1,606,316 (4)       13.7%          0.48       2/21/2012         275,576        895,516
William Betz                   10,000 (5)          *           1.13       2/21/2012              --             --
*Less than 1%
</TABLE>


----------
(1)   600,000 shares vest as of March 28, 2003. The remaining shares vest in
      equal increments each month thereafter for 36 months subject to
      acceleration based upon a termination without cause or voluntary
      termination for good reason within 12 months after a change in control.
(2)   83,333 shares vested as of December 13, 2002. 100,000 shares vest on
      December 13, 2003, December 13, 2004 and December 13, 2005 and the
      remaining 16,667 shares vest on February 13, 2006.
(3)   Vest in equal increments each month for 24 months beginning February 21,
      2002, subject to acceleration based upon a termination without cause or
      voluntary termination for good reason within 12 months after a change in
      control.
(4)   Vest in equal increments each month for 24 months beginning July 17, 2002,
      subject to acceleration based upon a termination without cause or
      voluntary termination for good reason within 12 months after a change of
      control.
(5)   417 shares vested as of March 21, 2002. The remaining shares vest in equal
      increments each month thereafter for 23 months.
(6)   The 5% and 10% assumed annual rates of compounded stock price appreciation
      are mandated by rules of the SEC. There can be no assurance provided to
      any named executive officer or any other holder of our securities that the
      actual stock price appreciation over the option term will be at the
      assumed 5% or 10% levels or at any other defined level. All options were
      granted at an exercise price equal to the fair market value of our common
      stock, as determined by the board of directors on the date of grant. The
      closing price of our common stock on April 7, 2003 was $0.40 per share.

Option Exercises and Year-End Option Values

      The following table sets forth information as of December 31, 2002,
regarding options held by the named executive officers. There were no stock
appreciation rights outstanding at December 31, 2002.

             Aggregated Option Exercises In The Last Fiscal Year
                        And Fiscal Year-End Option Values


<TABLE>
<CAPTION>
                                                            Number of Securities           Value of Unexercised
                                                       Underlying Unexercised Options      In-The-Money Options
                                                           at Fiscal Year-End (#)         at Fiscal Year-End ($)
                                                           ----------------------         ----------------------
                          Shares
                       Acquired on          Value
       Name            Exercise (#)      Realized ($)     Exercisable    Unexercisable  Exercisable     Unexercisable
       ----            ------------      ------------     -----------    -------------  -----------     -------------
<S>                    <C>               <C>              <C>            <C>            <C>             <C>
Gregory A. Peters          --                --                  --        2,400,000           --               --
Eugene Eidenberg           --                --             858,333          441,667      400,000               --
John M. Scanlon            --                --             567,996          554,844           --               --
Ali Marashi                --                --             279,163        1,786,293           --               --
William Betz               --                --             114,923           71,321       86,250           13,750
</TABLE>


      In the table above, the value of the unexercised in-the-money options is
based on the fair market value of our common stock, based upon the last reported
sales price of the common stock on December 31, 2002 minus the per share
exercise price multiplied by the number of shares.


                                       60

<PAGE>

Equity Compensation Plan Information

      The following table provides certain information with respect to all of
our equity compensation plans in effect as of December 31, 2002.

       Securities Authorized for Issuance Under Equity Compensation Plans


<TABLE>
<CAPTION>
                                                                                        (c) Number of Securities
                                                                                         Remaining Available for
                                (a) Number of Securities to    (b) Weighted-average       Issuance Under Equity
                                be Issued Upon Exercise of      Exercise Price of          Compensation Plans
                                   Outstanding Options,        Outstanding Options,       (Excluding Securities
        Plan Category               Warrants and Rights        Warrants and Rights      Reflected in Column (a))
        -------------               -------------------        -------------------      ------------------------
<S>                             <C>                            <C>                      <C>       
Equity compensation plans
approved by security holders ...            580,000                 $ 11.69 (1)                  3,019,709
Equity compensation plans not
approved by security holders             22,741,000                    2.03                      8,344,000
Total...........................         23,321,000                    2.27                     11,363,709
</TABLE>


----------
(1)   Calculation based upon exercise prices of outstanding options, warrants
      and rights and an assumed purchase price equal to 85% of fair market value
      of the Company's common stock on April 7, 2003 pursuant to the 1999
      Employee Stock Purchase Plan for the total number of shares issuable under
      that plan.

Summaries of Plans Not Approved by Our Stockholders

SwitchSoft Systems, Inc. Founders 1996 Stock Option Plan

      We assumed the SwitchSoft Systems, Inc. Founders 1996 Stock Option Plan,
which we refer to as the 1996 Plan, in connection with the acquisition of
VPNX.com, Inc. Although some grants are still outstanding under this plan, we do
not intend to issue any additional grants from the 1996 Plan. The 1996 Plan
provides for grants of incentive stock options and nonqualified stock options
for which up to 1,041,050 shares have been authorized. Employees are eligible to
receive incentive stock options and employees, directors and independent
contractors are eligible for nonqualified options. Terms and conditions of
options are determined by our board or a committee appointed by the board. The
exercise price cannot be less than 85% of fair market value at grant in the case
of a nonqualified option, or 100% in the case of an incentive stock option, and
will be paid in cash, by check, or through a deferred payment arrangement
approved by our board, or by delivery of other property if authorized by our
board. The term of an option is limited to 10 years from grant. The options vest
at a rate at least 20% per year. Upon termination of employment other than due
to death or disability, options may generally be exercised for one month or a
longer period determined by our board of directors. Upon termination due to
death or disability, options may generally be exercised for 12 months or a
longer period determined by our board of directors. If we are the surviving
corporation in any merger, business combination, reorganization or
reconsolidation, options under the 1996 Plan will be appropriately adjusted. If
we are not the surviving corporation, outstanding options terminate unless
assumed or replaced with substitute options. The board may amend the 1996 Plan
at any time, but shareholder approval is required if the amendment would
increase the shares available, materially modify the eligibility requirements,
or materially increase the benefits accruing to plan participants, and optionee
consent is required for the amendment to alter or impair the rights of existing
optionees. The 1996 Plan automatically terminates ten years after its adoption.

SwitchSoft Systems, Inc. 1997 Stock Option Plan

      We assumed the SwitchSoft Systems, Inc. 1997 Stock Option Plan, which we
refer to as the 1997 Plan, in connection with the acquisition of VPNX.com, Inc.
Although some grants are still outstanding under this plan, we do not intend to
issue any additional grants from the 1997 Plan. The 1997 Plan provides for
grants of incentive stock options and nonqualified stock options for which up to
1,746,450 shares have been authorized. Employees are eligible to receive
incentive stock options and employees, directors and independent contractors are
eligible for nonqualified options. Terms and conditions of options are
determined by our board or a committee appointed by the board. The exercise
price cannot be less than 85% of fair market value at grant in the case of a
nonqualified option, 


                                       61

<PAGE>

or 100% in the case of an incentive stock option, and will be paid in cash, by
check, or through a deferred payment arrangement approved by our board, or by
delivery of other property if authorized by our board. The term of an option is
limited to 10 years from grant. The options vest at a rate at least 20% per
year. Upon termination of employment other than due to death or disability,
options may generally be exercised for one month or a longer period determined
by our board of directors. Upon termination due to death or disability, options
may generally be exercised for 12 months or a longer period determined by our
board of directors. If we are the surviving corporation in any merger, business
combination, reorganization or reconsolidation, options under the 1997 Plan will
be appropriately adjusted. If we are not the surviving corporation, outstanding
options terminate unless assumed or replaced with substitute options. The board
may amend the 1997 Plan at any time, but shareholder approval is required if the
amendment would increase the shares available, materially modify the eligibility
requirements, or materially increase the benefits accruing to plan participants,
and optionee consent is required for the amendment to alter or impair the rights
of existing optionees. The 1997 Plan automatically terminates ten years after
its adoption.

      Brief summaries of the material features of our 2002 Stock Compensation
Plan, Amended 1999 Equity Incentive Plan, Amended and Restated 1999 Stock
Incentive Plan for Non-Officers, Amended and Restated 1998 Stock Option/Stock
Issuance Plan and 2000 Non-Officer Equity Incentive Plan are provided in
Proposals 4, 6, 7, 8 and 9, respectively.

Executive Employment Agreements

Agreement with Mr. Peters

      Effective March 28, 2002, Mr. Peters entered into an at-will employment
agreement with us. The agreement provides that Mr. Peters serves as our
President and Chief Executive Officer and receives an annual base salary of
$350,000. Mr. Peters is eligible for a discretionary bonus ranging from 50% to
150% of his base salary based on performance. Under the agreement, Mr. Peters
was required to relocate to Seattle, WA no later than October 1, 2002, and
received a relocation allowance up to $100,000 (plus a gross-up payment to cover
taxes on any taxable portion of the relocation allowance), which was repayable
to us in part if Mr. Peters terminated employment without good reason before
March 28, 2003. In addition, we paid for housing searches for Mr. Peters and his
spouse in connection with the relocation. The agreement provides that Mr. Peters
would receive an option to purchase 2,400,000 shares of our stock under our
Amended 1999 Equity Incentive Plan, which would vest with respect to 25% of the
shares on the first anniversary of grant and monthly in 1/48 increments
thereafter, would have a term of ten years, would have an exercise price equal
to the closing price of our common stock on the date of grant, and would remain
exercisable for one year following termination of his employment other than for
cause. The agreement also provides for a performance-based stock option grant of
1,000,000 shares under our Amended 1999 Equity Incentive Plan or our 1998 Stock
Option/Stock Issuance Plan, which would vest with respect to 100% of the shares
on the sixth anniversary of grant or earlier if certain performance goals are
met, would have an exercise price equal to the closing price of our stock on the
date of grant, would have a term of ten years, and would remain exercisable for
one year following termination of Mr. Peters' employment other than for cause.
The agreement provides that Mr. Peters receives 18 days of combined vacation and
sick leave per year, plus three personal days. In addition, we reimbursed Mr.
Peters up to $7,500 plus a tax bonus up to $5,500 for attorneys' fees in
connection with Mr. Peters' negotiation of his employment agreement. The
agreement also requires Mr. Peters to execute a confidentiality, non-raiding,
invention assignment and non-competition agreement with us, which survives
termination of Mr. Peters' employment.

      Severance Upon Termination Without Cause or Due to Good Reason. Upon our
termination of Mr. Peters' employment without cause, or Mr. Peters' voluntary
termination for good reason, Mr. Peters receives a cash severance payment equal
to twelve months of his then current base salary, on the condition that Mr.
Peters executes a release of claims.

      Severance Upon Change in Control. In the event that Mr. Peters' employment
is terminated without cause or he resigns for good reason, in either case within
13 months of a change in control (as defined in the agreement), in lieu of the
otherwise applicable severance payments, Mr. Peters will receive a cash
severance payment equal to 12 months of his then-current base salary and
then-current earned discretionary bonus, and 100% of his unvested stock options
become fully vested and exercisable, on the condition that Mr. Peters executes a
release of claims. 


                                       62

<PAGE>

Limitations apply if any payment under the agreement would be considered a
parachute payment under IRC section 280G.

      Other Severance. If Mr. Peters terminates employment with us and requests
a waiver of non-competition provisions but we unreasonably refuse to waive the
non-competition provisions, Mr. Peters receives a payment of 12 months of his
base salary less any severance payments he is otherwise entitled to under the
agreement, on the condition that Mr. Peters executes a release of claims. Such
severance payments are to be paid pro rata over the remaining period of the
non-competition provisions.

Agreement with Mr. Eidenberg

      Effective July 25, 2001, Mr. Eidenberg began serving as our Chief
Executive Officer and we entered into an at-will employment agreement with Mr.
Eidenberg. Under this agreement, Mr. Eidenberg's employment could be terminated
by us or by Mr. Eidenberg at any time, with or without cause and with or without
notice. Under the agreement, Mr. Eidenberg received a base salary of $29,066.66
per month and accrued 10 days of paid time off after each six months of
employment. The agreement also entitled Mr. Eidenberg to receive an option under
our 1999 Equity Incentive Plan to purchase 1,000,000 shares of our common stock
at fair market value on the date of grant, 250,000 of which were vested on the
date of grant, 250,000 of which vested on January 25, 2000, and 500,000 of which
will vest on July 25, 2003, subject to acceleration based on meeting certain
corporate objectives or in the event of a change in control. The option remains
exercisable for three years following termination of Mr. Eidenberg's employment
for any reason. The agreement also required us to reimburse Mr. Eidenberg up to
$4,100 per month for housing costs during his employment as Chief Executive
Officer and to reimburse up to $7,500 for Mr. Eidenberg's attorneys' fees
incurred in reviewing the agreement. Limitations apply if any payment under the
agreement would be considered a parachute payment under IRC section 280G. Mr.
Eidenberg's employment agreement also contains a confidentiality provision,
assignment of inventions, and a one-year noncompetition covenant.

      On April 2, 2002, Mr. Eidenberg ceased serving as our Chief Executive
Officer and became our Executive Chairman. Effective as of that date, Mr.
Eidenberg agreed to devote one-third of his time to Company matters in his
capacity as Executive Chairman and in consideration therefor his base salary was
correspondingly reduced to one-third of his base salary immediately prior to
April 2, 2003. The remaining provisions of Mr. Eidenberg's employment agreement
continued without modification.

Arrangement with Mr. Scanlon

      Effective October 31, 2002, we entered into a letter agreement with John
Scanlon to provide for automatic termination of his employment with the Company
no later than January 31, 2003. Prior to the effective date of the letter
agreement, we had announced that Mr. Scanlon would not be relocating to Atlanta
and would leave the Company upon appointment of his successor. The letter
agreement provides for Mr. Scanlon to receive six months' base salary and
certain other customary severance benefits. The receipt of severance benefits by
Mr. Scanlon is conditioned on his execution and delivery to us of a previously
agreed upon release and settlement agreement. Pursuant to the letter agreement,
Mr. Scanlon remains subject to certain confidentiality obligations and, for a
period of one year after termination, certain non-competition obligations in
favor of the Company.

Agreement with Mr. Marashi

      Effective December 31, 2002, we entered into an at-will employment
agreement with Mr. Ali Marashi. The agreement provides that Mr. Marashi will
serve as our Vice President and Chief Technology Officer, and will receive an
annual base salary of $190,000, which may be increased or decreased by our chief
executive officer in consultation with our board or compensation committee. The
agreement also provides that Mr. Marashi will receive a bonus of up to 50% of
his base salary, based on the satisfaction of performance goals, in the event we
adopt a bonus plan for executives and senior officers. We have not implemented
such a bonus plan at this time. Any bonus may be payable in shares of our common
stock or other equity securities, including restricted stock and stock options.
The agreement provides that Mr. Marashi will accrue 20 days of combined
vacation/sick leave annually and will receive three personal days each year. The
agreement also contains a provision requiring Mr. Marashi to maintain the
confidentiality of our confidential information, a non-competition provision for
one year following 


                                       63

<PAGE>

termination of employment (which may be waived), and a provision prohibiting
solicitation of our employees within one year following termination of
employment. Our employment of Mr. Marashi may be terminated under the agreement
by us or by Mr. Marashi, at any time, with or without advance notice.

      Severance upon Termination Without Cause. The agreement provides that if
Mr. Marashi's employment is terminated by us without cause, he will receive from
us a cash severance payment equal to one year of his then-current base salary.
In addition, upon our termination of Mr. Marashi's employment without cause, his
unvested options and any other unvested equity compensation he received from us
will terminate, and his vested options will remain exercisable no later than
three months after termination of his employment.

      Severance Following Change in Control. Furthermore, pursuant to the
agreement, in the event that Mr. Marashi's employment is terminated without
cause or he resigns for good reason, in either case within 12 months of a change
in control (as such term is defined in the agreement), he will receive a cash
severance payment equal to 24 months of his then-current base salary and
then-current maximum target bonus, and 100% of his unvested stock options and
additional equity compensation shall become vested, free of restrictions (if
any), and immediately exercisable for the remaining term of the relevant grant
or award. In addition, he will continue to receive health care and life
insurance coverage for 24 months as if he were an active employee (subject to
the employee portion of premiums for such coverages).

             COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

      The Compensation Committee of the board of directors consists of Kevin L.
Ober and Robert D. Shurtleff, Jr., each of whom is a non-employee director. The
Compensation Committee is responsible for establishing and administering
compensation policies and programs for our executive officers. This report
reflects our compensation philosophy.

Executive Officer Compensation

      Our executive compensation program has been designed to (i) ensure that
compensation provided to executive officers is closely aligned with its business
objectives and financial performance; (ii) enable us to attract and retain those
officers and other key executives who contribute to our long-term success; and
(iii) maximize stockholder value.

      Executive compensation generally consists of three components: (i) base
salary; (ii) annual cash bonus; and (iii) long-term incentive awards. The Chief
Executive Officer annually recommends executive officer compensation levels to
the Compensation Committee. The Compensation Committee makes the final
determination of executive compensation levels but relies on the Chief Executive
Officer's annual recommendations because it believes the Chief Executive Officer
is the most qualified person to make assessments about individual performance.

      The Compensation Committee annually reviews and establishes each executive
officer's compensation package by considering (i) the extent to which specified
corporate objectives for the preceding year were attained; (ii) the experience
and contribution levels of the individual executive officer; and (iii) to a
lesser extent, the salary and bonus levels of executive officers in similar
positions in companies in the same or related industries as Internap.

      In early 2002, the Compensation Committee recognized that the many
restructuring and other cost-cutting steps required to be taken during the
course of that year rendered impractical the establishment of specified
corporate objectives. In light of the selection of a new Chief Executive Officer
in April 2002 and the decision in June 2002 to relocate our headquarters from
Seattle, Washington to Atlanta, Georgia, the Compensation Committee continued to
view as impractical the establishment of such objectives.

      During 2002, in particular the latter half of that year, the Compensation
Committee worked closely with the Chief Executive Officer and our human
resources employees to recruit a number of executives to join the Company. In
2002, apart from the Chief Executive Officer, one current employee, Ali Marashi,
became our Vice President and Chief Technology Officer. In evaluating and
approving the compensation packages for our executive officers, the Compensation
Committee took into account numerous factors, including the scope of the
relevant position, level of experience and type and length of industry
experience.


                                       64

<PAGE>

      For 2003, the Compensation Committee has decided not to establish specific
objectives, including financial performance goals, for its executive officers
against which bonus compensation would be paid and not to implement a bonus
program for such officers. There is no assurance that the Compensation Committee
will establish such objectives or such a program or pay bonus compensation in
the future.

      The Compensation Committee also grants stock options to executive officers
to provide long-term incentives that are aligned with the creation of increased
stockholder value over time. Options typically are granted at fair market value
at the date of grant, have a ten year term and generally vest 25% on the first
anniversary of vesting commencement date and in equal 36 monthly installments
thereafter.

      Most stock option grants to executive officers occur in conjunction with
the executive officer's acceptance of employment with us. The Compensation
Committee, however, reviews stock option levels for all executive officers
throughout each fiscal year in light of long-term strategic and performance
objectives, each executive officer's current and anticipated contributions to
our future performance and the value of such executive's current stock option
package. When determining the number of stock options to be awarded to an
executive officer, the Compensation Committee considers the executive officer's
current contribution to our performance, the executive officer's past option
awards and their current value, the executive officer's anticipated contribution
in meeting our long-term strategic performance goals and comparisons to formal
and informal surveys of executive stock option grants made by other Internet
infrastructure companies.

Compensation of the Chief Executive Officer

      The Compensation Committee reviews our Chief Executive Officer's
compensation annually using the same criteria and policies as are employed for
other executive officers. In April 2002, Mr. Eidenberg resigned as Chief
Executive Officer and Mr. Peters began serving as Chief Executive Officer. In
addition, pursuant to an employment agreement dated March 28, 2002 between Mr.
Peters and us, Mr. Peters was granted a stock option to purchase 2,400,000
shares of common stock with a ten year term, with vesting for 25% of such shares
on the first anniversary of vesting and in equal installments over the 36 months
thereafter, and a performance-based option to purchase 1,000,000 shares with the
same vesting terms. Effective December 31, 2002, the Company and Mr. Peters
entered into an at-will employment agreement as described above under the
heading "Executive Employment Agreements." The agreement provides that we will
grant to Mr. Peters an option to purchase an additional 5,000,000 shares of
common stock on or before March 15, 2003, and on February 27, 2003 we effected
the grant. The agreement further provides that, subject to shareholder approval
necessary to increase the amount of shares under our stock compensation plans,
we will grant Mr. Peters an option to purchase an additional 2,200,000 shares of
common stock on or before December 31, 2003.

Limitations on the Deductibility of Executive Compensation

      Compensation payments in excess of $1 million to the Chief Executive
Officer or the other five most highly compensated executive officers are subject
to a limitation on deductibility by us under Section 162(m) of the Internal
Revenue Code of 1986, as amended. Certain performance-based compensation is not
subject to the limitation on deductibility. The Compensation Committee does not
expect cash compensation in 2003 to our Chief Executive Officer or any other
executive officer to be in excess of $1 million. We intend to maintain
qualification of our 2002 Stock Compensation Plan, Amended and Restated 1998
Stock Option/Stock Issuance Plan, Amended 1999 Equity Incentive Plan for the
performance-based exception to the $1 million limitation on deductibility of
compensation payments.

      The Compensation Committee believes its executive compensation philosophy
serves Internap's interests and the interests of our stockholders.

                              Compensation Committee:

                              Kevin L. Ober
                              Robert D. Shurtleff, Jr.


                                       65

<PAGE>

Compensation Committee Interlocks and Insider Participation

      None of our executive officers or directors serve as a member of the board
of directors or compensation committee of any entity that has one or more of its
executive officers serving as a member of our board of directors or Compensation
Committee.


                                       66

<PAGE>

                             STOCK PERFORMANCE GRAPH

      The graph set forth below compares cumulative total return to our
stockholders from an investment in our common stock with the cumulative total
return of the NASDAQ Composite Index and the Goldman/Sachs Internet Index,
resulting from an initial assumed investment of $100 in each and assuming the
reinvestment of any dividends, ending at December 31, 2000, December 31, 2001,
and December 31, 2002, respectively.

                 Comparison of Cumulative Total Return Among
      Internap Network Services Corporation, the NASDAQ Composite Index
                      and the Goldman/Sachs Internet Index

     [THE FOLLOWING WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL]

                         9/29/99       12/31/00       12/29/01       12/31/02 
                         ========      ========       ========       ======== 
                                                                              
Internap Network         $    100      $    27         $   4          $   1   
Services                                                                      
NASDAQ Composite         $    100      $    90         $   71         $   49  
Index                                                                         
Goldman/Sachs            $    100      $    40         $   23         $   16  
Internet Index                                                                


                                       67

<PAGE>

                             AUDIT COMMITTEE REPORT

      The primary function of the Audit Committee is to assist the board of
directors in its oversight and monitoring of our financial reporting and
auditing process. In October 2002, our board of directors adopted an updated
Audit Committee Charter that sets forth the responsibilities of the Audit
Committee. A copy of the Audit Committee Charter is filed as Appendix J to this
Proxy Statement.

      Management has primary responsibility for our financial statements and the
overall reporting process, including our system of internal controls. The
independent auditors audit the annual financial statements prepared by
management, express an opinion as to whether those financial statements fairly
present our financial position, results of operations and cash flows in
conformity with accounting principles generally accepted in the United States,
and discuss with the Audit Committee any issues they believe should be raised
with the Audit Committee. The Audit Committee monitors these processes, relying,
without independent verification, on the information provided to it and on the
representations made by management and the independent auditors.

      Representatives of PricewaterhouseCoopers LLP, our independent auditors,
attended each meeting of the Audit Committee. The Audit Committee reviewed and
discussed with management and PricewaterhouseCoopers LLP our audited financial
statements for the year ended December 31, 2002 and our unaudited quarterly
financial statements for the quarters ended March 31, June 30 and September 30,
2002. The Audit Committee also discussed with PricewaterhouseCoopers LLP the
matters required to be discussed by Statement on Auditing Standards No. 61
(Communications with Audit Committees).

      The Audit Committee also received the written disclosures and the letter
from PricewaterhouseCoopers LLP that are required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees) and has
discussed with PricewaterhouseCoopers LLP its independence. The Audit Committee
considered whether the services provided by PricewaterhouseCoopers LLP for the
year ended December 31, 2002 are compatible with maintaining their independence.
The Audit Committee has determined to engage PricewaterhouseCoopers LLP as our
independent auditors for the year ending December 31, 2003.

      Based upon its review of the audited financial statements and the
discussions noted above, the Audit Committee recommended that the board of
directors include the audited financial statements in our Annual Report on Form
10-K for the year ended December 31, 2002 for filing with the SEC.

                                  Audit Committee:

                                  William J. Harding
                                  Fredric W. Harman
                                  Kevin L. Ober

                     CERTAIN RELATIONSHIPS AND TRANSACTIONS

      On January 1, 2002, we entered into a consulting agreement with Lyford Cay
Securities Corp., an affiliate of one of our stockholders, INT Investments,
Inc., that beneficially owns more than 5% of our outstanding common stock. Under
the terms of this consulting agreement, which was completed in 2002, we paid
Lyford Cay Securities Corp. $400,000 to provide us with financial advisory and
strategic advice.

      In 2002, we engaged Korn/Ferry International, a national executive
recruiting firm, to assist in the identification and recruitment of senior
executives. We also entered into agreements with other nationally known
recruiting firms for additional senior executive searches. For the 2002 fiscal
year, we paid Korn/Ferry $262,096 in connection with executive placements.
Gregory A. Peters, our President and Chief Executive Officer, is the son-in-law
of a managing director of Korn/Ferry.

      We have entered into indemnification agreements with our directors and
executive officers for the indemnification of and advancement of expenses to
such persons to the fullest extent permitted by law. We also intend to enter
into these agreements with our future directors and executive officers.


                                       68

<PAGE>

             SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section 16(a) of the Securities Exchange Act of 1934, as amended, and
regulations of the SEC thereunder require our directors, officers and persons
who own more than 10% of our common stock, as well as certain affiliates of such
persons, to file initial reports of their ownership of our common stock and
subsequent reports of changes in such ownership with the SEC. Directors,
officers and persons owning more than 10% of our common stock are required by
SEC regulations to furnish us with copies of all Section 16(a) reports they
file.

      Based solely on a review of the copies of such reports furnished to us and
written representations that no other reports were required, during the fiscal
year ended December 31, 2002, all Section 16(a) filing requirements applicable
to our officers, directors and greater than ten percent stockholders were
complied with, except for the following:

      David L. Abrahamson, the Company's Chief Marketing Officer and Vice
President, Sales, timely filed a Form 3 but inadvertently did not include in
that report direct shareholdings. This error was corrected by amending the Form
3 report.

      David T. Benton, the Company's former Vice President, Service Delivery,
did not complete three Form 4 filings regarding same day stock option exercise
and sale transactions within the time period allowed. This error was corrected
by the reporting of these transactions in his year-end Form 5.

      John M. Scanlon, the Company's former Vice President of Finance and
Administration, Chief Financial Officer and Secretary, did not complete one Form
4 filing regarding a stock option grant within the time period allowed. This
error was corrected by the reporting of this transaction in his year-end Form 5.

      Walter G. DeSocio, the Company's Vice President, Chief Administrative
Officer, General Counsel and Secretary, did not complete a Form 3 filing within
the time period allowed. This omission was corrected in his year-end Form 5.
Also during fiscal 2002, Mr. DeSocio timely reported a transaction regarding a
stock option grant but reported an incorrect exercise price on part of the
options granted. This error was corrected by amending the Form 4 report.


                                       69

<PAGE>

                                   PROPOSAL 11

             RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS

      Our board of directors has selected PricewaterhouseCoopers LLP as its
independent accountants for the fiscal year ending December 31, 2003 and has
further directed that management submit the selection of the independent
accountants for ratification by the stockholders at the Annual Meeting.
PricewaterhouseCoopers LLP has audited our financial statements since our
inception in 1996. Representatives of PricewaterhouseCoopers LLP are expected to
be present at the Annual Meeting, will have an opportunity to make a statement
if they so desire and will be available to respond to appropriate questions.

      Stockholder ratification of the selection of PricewaterhouseCoopers LLP as
our independent accountants is not required by our bylaws or otherwise. However,
the board of directors is submitting the selection of PricewaterhouseCoopers LLP
to the stockholders for ratification as a matter of good corporate governance.
If the stockholders fail to ratify the selection, the Audit Committee and the
board of directors will reconsider whether to retain that firm. Even if the
selection is ratified, the Audit Committee and the board of directors in their
discretion may direct the appointment of different independent accountants at
any time during the year if they determine that such a change would be in the
best interests of us and our stockholders.

Audit Fees

      During the fiscal year ended December 31, 2002, the aggregate fees billed
by PricewaterhouseCoopers LLP for the audit of our financial statements for such
fiscal year and for the reviews of our interim financial statements were
$217,500.

Financial Information Systems Design and Implementation Fees

      During the fiscal year ended December 31, 2002, no fees were billed by
PricewaterhouseCoopers LLP for information technology consulting.

All Other Fees

      During fiscal year ended December 31, 2002, the aggregate fees billed by
PricewaterhouseCoopers LLP for professional services other than audit fees were
$250,238. Substantially all of these fees were for services traditionally
provided by accountants, such as review of tax returns, consultation on tax
accounting matters and other special purpose audits.

      The Audit Committee has determined the rendering of all other non-audit
services by PricewaterhouseCoopers LLP is compatible with maintaining the
independence of our independent accountants.

      The Board of Directors unanimously recommends that you vote "FOR" the
ratification of the selection of our independent accountants.


                                       70

<PAGE>

               STOCKHOLDERS' PROPOSALS FOR 2004 ANNUAL MEETING

      Proposals of stockholders, including nominations for the board of
directors, intended to be presented at the 2004 Annual Meeting of Stockholders
must be received by us at our executive offices in Atlanta, Georgia, on or
before February 17, 2004 to be eligible for inclusion in our proxy statement and
form of proxy relating to that meeting and to be introduced for action at the
meeting. In accordance with our bylaws, for business to be properly brought
before a meeting, but not included in the proxy, a stockholder must submit a
proposal, including nominations for the board of directors, not earlier than
February 17, 2004 and not later than March 19, 2004.

               OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING

      Our board of directors knows of no matters other than those referred to in
the accompanying Notice of Annual Meeting of Stockholders which may properly
come before the Annual Meeting. However, if any other matter should be properly
presented for consideration and voting at the Annual Meeting or any adjournments
thereof, it is the intention of the persons named as proxies on the enclosed
form of proxy card to vote the shares represented by all valid proxy cards in
accordance with their judgment of what is in the best interest of Internap.

                                    BY ORDER OF THE BOARD OF DIRECTORS

                                    Walter G. DeSocio
                                    Vice President - Chief Administrative
                                    Officer, General Counsel and Secretary

April __, 2003

                  ------------------------------------------


                                       71

<PAGE>


                                   APPENDIX A


             AMENDMENT TO CERTIFICATE OF INCORPORATION AND BYLAWS TO
    PERMIT SERIES A PREFERRED STOCKHOLDERS TO TAKE ACTION BY WRITTEN CONSENT

CERTIFICATE OF INCORPORATION, ARTICLE V, SECTION D

Current:

      "D. No action shall be taken by the stockholders of the Corporation except
at an Annual Meeting or special meeting of the stockholders called in accordance
with the Bylaws."

Proposed Amendment:

      "D. No action shall be taken by the stockholders of the Corporation except
at an Annual Meeting or special meeting of the stockholders called in accordance
with the Bylaws. Notwithstanding the foregoing, any action that may be taken or
that is required by statute to be taken by the holders of the Company's Series A
Preferred Stock at any annual or special meeting, may be taken without a
meeting, without prior notice and without a vote, if taken in accordance with
the procedures contained in the Bylaws."

BYLAWS, SECTION 13

Current:

      "Section 13. Action Without Meeting. No action shall be taken by the
stockholders except at an annual or special meeting of stockholders called in
accordance with these Bylaws, and no action shall be taken by the stockholders
by written consent."

Proposed Amendment:

      "Section 13. Action Without Meeting.

      (a) Common Stockholders. No action shall be taken by the common
stockholders except at an annual or special meeting of stockholders called in
accordance with these Bylaws, and no action shall be taken by the common
stockholders by written consent.

      (b) Series A Preferred Stockholders.

      (i) Unless otherwise provided in the Certificate of Incorporation, any
action that may be taken or that is required by statute to be taken by the
holders of the Company's Series A Preferred Stock (each a "Series A Holder," and
collectively, the "Series A Holders") at any annual or special meeting, may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, or by electronic transmission setting forth the action so taken,
shall be signed by the holders of outstanding Series A Preferred Stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted.

      (ii) Every written consent or electronic transmission shall bear the date
of signature of each Series A Holder who signs the consent, and no written
consent or electronic transmission shall be effective to take the corporate
action referred to therein unless, within sixty (60) days of the earliest dated
consent delivered to the corporation in the manner herein required, written
consents or electronic transmissions signed by a sufficient number of Series A
Holders to take action are delivered to the corporation by delivery to its
registered office in the State of Delaware, its principal place of business or
an officer or agent of the corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to a
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested.

      (iii) Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those Series A
Holders who have not consented in writing or by electronic transmission 


                                      A-1

<PAGE>

and who, if the action had been taken at a meeting, would have been entitled to
notice of the meeting if the record date for such meeting had been the date that
written consents signed by a sufficient number of Series A Holders to take
action were delivered to the corporation as provided in Section 228(c) of the
DGCL. If the action which is consented to is such as would have required the
filing of a certificate under any section of the DGCL if such action had been
voted on by Series A Holders at a meeting thereof, then the certificate filed
under such section shall state, in lieu of any statement required by such
section concerning any vote of the Series A Holders, that written consent has
been given in accordance with Section 228 of the DGCL.

      A telegram, cablegram or other electronic transmission consenting to an
action to be taken and transmitted by a Series A Holder or proxyholder, shall be
deemed to be written, signed and dated for the purposes of this section,
provided that any such telegram, cablegram or other electronic transmission sets
forth or is delivered with information from which the corporation can determine
(1) that the telegram, cablegram or other electronic transmission was
transmitted by the Series A Holder or proxyholder or by a person or persons
authorized to act for the Series A Holder and (2) the date on which such Series
A Holder or proxyholder or authorized person or persons transmitted such
telegram, cablegram or electronic transmission. The date on which such telegram,
cablegram or electronic transmission is transmitted shall be deemed to be the
date on which such consent was signed. No consent given by telegram, cablegram
or other electronic transmission shall be deemed to have been delivered until
such consent is reproduced in paper form and until such paper form shall be
delivered to the corporation by delivery to its registered office in the state
of Delaware, its principal place of business or an officer or agent of the
corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to a corporation's registered office
shall be made by hand or by certified or registered mail, return receipt
requested. Notwithstanding the foregoing limitations on delivery, consents given
by telegram, cablegram or other electronic transmission may be otherwise
delivered to the principal place of business of the corporation or to an officer
or agent of the corporation having custody of the book in which proceedings of
meetings of stockholders are recorded if, to the extent and in the manner
provided by resolution of the board of directors of the corporation. Any copy,
facsimile or other reliable reproduction of a consent in writing may be
substituted or used in lieu of the original writing for any and all purposes for
which the original writing could be used, provided that such copy, facsimile or
other reproduction shall be a complete reproduction of the entire original
writing."


                                      A-2

<PAGE>


                                   APPENDIX B


               AMENDMENT TO CERTIFICATE OF INCORPORATION TO AMEND
                        DEFINITION OF "LIQUIDATION EVENT"

      Following is the text of the proposed amendment to Article IV, Section
(D)(2)(c) of our certificate of incorporation (amended language is indicated in
bold type):

Deemed Liquidation Event. For purposes of this Section (IV)(D)(2), each of the
following events shall be deemed a liquidation event:

      (i)   (A) any consolidation or merger of the Corporation with or into any
            other corporation or other entity or person, or any other corporate
            reorganization, effected by the Corporation with the approval of the
            Board of Directors of the Corporation, in which the stockholders of
            the Corporation immediately prior to such consolidation, merger or
            reorganization, own less than fifty percent (50%) of the
            Corporation's voting power immediately after such consolidation,
            merger or reorganization; or (B) a transaction or series of
            transactions, effected with the approval of the Board of Directors
            of the Corporation, in which a person or group of persons (as
            defined in Rule 13d-5(b)(1) of the Securities and Exchange Act of
            1934, as amended (the "Exchange Act")), acquires beneficial
            ownership (as determined in accordance with Rule 13d-3 of the
            Exchange Act) of more than fifty percent (50%) of the Common Stock
            or voting power of the Corporation (each, an "Acquisition"),
            excluding, in each case, 

            (1)   any transaction solely to effect a holding company
                  reorganization or to change the Corporation's domicile; or

            (2)   any transaction pursuant to which the Series A Stock was first
                  acquired from the Corporation; or

            (3)   any change in ownership caused by a change in the applicable
                  Series A Conversion Price (as defined herein); or

      (ii)  a sale, lease or disposition of all or substantially all of the
            assets of the Corporation (an "Asset Transfer"); provided that an
            Asset Transfer shall not include any sale, lease or disposition not
            effected voluntarily by the Corporation (including, without
            limitation, actions taken in response to a contractual obligation or
            court order).


                                      B-1

<PAGE>


                                   APPENDIX C


  AMENDMENT TO CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED SIZE OF
                     OUR BOARD OF DIRECTORS TO NINE MEMBERS

      Following is the text of the proposed amendment to Article IV, Subsection
(D)(3)(c)(i) of our certificate of incorporation (amended language in is bold
type):

      The Board of Directors shall consist of no more than nine (9) members.


                                      C-1

<PAGE>


                                   APPENDIX D

                                 FIRST AMENDMENT
                  TO THE INTERNAP NETWORK SERVICES CORPORATION
                          2002 STOCK COMPENSATION PLAN

      This First Amendment to the Internap Network Services Corporation 2002
Stock Compensation Plan (the "Plan") is made and entered into by Internap
Network Services Corporation (the "Company").

                             W I T N E S S E T H:

      WHEREAS, the Company maintains the Plan, which is administered by the
Compensation Committee of the Board of Directors of the Company (the "Board"),
to provide for grants of incentive compensation to its employees, directors and
consultants; and

      WHEREAS, the Board has determined that it is advisable to amend the Plan
at this time to increase the number of shares available for the issuance of
awards under the Plan, subject to shareholder approval, and to add provisions
regarding a "change in control" under the Plan; and

      WHEREAS, Section 15 of the Plan permits the Board to amend the Plan at any
time; and

      WHEREAS, the Board adopted resolutions approving the First Amendment, on
February 27, 2003;

      NOW, THEREFORE, the Company hereby amends the Plan as follows:

                                       1.

      Effective as of the date of shareholder approval of this First Amendment,
Section 3 of the Plan shall be amended to read as follows:

            "3. Shares Subject to the Plan. Subject to the provisions of Section
      13 of the Plan, the maximum aggregate number of Shares that may be issued
      under the Plan is fifty-four million (54,000,000) less the number of
      Shares subject to options and other equity awards under the Other Plans.
      The maximum number of Shares with respect to which Options may be granted
      to any Participant in any fiscal year shall be 10,000,000. The Shares
      subject to the Plan may be authorized but unissued, or reacquired shares
      of Common Stock.

            If an Option should expire or become unexercisable for any reason
      without having been exercised in full, the unpurchased Shares which were
      subject thereto shall become available for future grant under the Plan
      (unless the Plan shall have been terminated). Notwithstanding any other
      provision of the Plan, shares issued under the Plan and later repurchased
      by the Company shall not become available for future grant or sale under
      the Plan; provided, however, that any Shares subject to unvested stock
      bonuses which expire or terminate shall revert to and again become
      available for issuance under the Plan."

                                       2.

      Effective as of ____________, 2003, the Plan shall be amended to add the
following new Section 2(e1) after present Section 2(e):

            "(e1) `Change in Control' means the happening of any of the
      following events:

                  (i) An acquisition by any individual, entity or group (within
      the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (an
      `Entity') of beneficial ownership (within the meaning of Rule 13d-3
      promulgated under the Exchange Act) of 30% or more of either (A) the then
      outstanding shares of common stock of the Company (the `Outstanding
      Company Common Stock') or (B) the combined voting power of the then
      outstanding voting securities of the Company entitled to vote generally in
      the election of directors (the `Outstanding Company Voting Securities');
      excluding, however, the following: 


                                      D-1

<PAGE>

      (1) any acquisition directly from the Company, other than an acquisition
      by virtue of the exercise of a conversion privilege unless the security
      being so converted was itself acquired directly from the Company, (2) any
      acquisition by the Company, (3) any acquisition by any employee benefit
      plan (or related trust) sponsored or maintained by the Company or any
      corporation controlled by the Company, or (4) any acquisition by any
      corporation pursuant to a transaction which complies with clauses (A), (B)
      and (C) of subsection (iii) of this Section;

                  (ii) A change in the composition of the Board such that the
      individuals who, as of the Applicable Date (as defined in this Section
      2(e1)(ii)), constitute the Board, excluding the members of the Board
      (`Series A Directors') who have been elected pursuant to the terms of the
      Company's Series A Convertible Preferred Stock (such Board, excluding the
      Series A Directors, shall be hereinafter referred to as the `Incumbent
      Board'), cease for any reason to constitute at least a majority of the
      members of the Board who are not Series A Directors; provided, however,
      that for purposes of this definition, (A) any individual who becomes a
      member of the Board subsequent to the Applicable Date, whose election, or
      nomination for election, by the Company's stockholders was approved by a
      vote of at least a majority of those individuals who are members of the
      Board and who were also members of the Incumbent Board (or deemed to be
      such pursuant to this proviso), excluding the Series A Directors, shall be
      considered as though such individual were a member of the Incumbent Board,
      (B) any such individual whose initial assumption of office occurs as a
      result of or in connection with either an actual or threatened election
      contest (as such terms are used in Rule 14a-11 of Regulation 14A
      promulgated under the Exchange Act) or other actual or threatened
      solicitation of proxies or consents by or on behalf of an Entity other
      than the Board shall not be so considered as a member of the Incumbent
      Board and (C) the term `Applicable Date' shall mean the date of grant of
      the affected Stock Award unless the terms of such Stock Award specify
      another date;

                  (iii) The approval by the stockholders of the Company of a
      merger, reorganization or consolidation or sale or other disposition of
      all or substantially all of the assets of the Company (each, a `Corporate
      Transaction') or, if consummation of such Corporate Transaction is
      subject, at the time of such approval by stockholders, to the consent of
      any government or governmental agency, the obtaining of such consent
      (either explicitly or implicitly by consummation); excluding however, such
      a Corporate Transaction pursuant to which (A) all or substantially all of
      the individuals and entities who are the beneficial owners, respectively,
      of the Outstanding Company Common Stock and Outstanding Company Voting
      Securities immediately prior to such Corporate Transaction will
      beneficially own, directly or indirectly, more than 60% of, respectively,
      the outstanding shares of common stock, and the combined voting power of
      the then outstanding voting securities entitled to vote generally in the
      election of directors, as the case may be, of the corporation resulting
      from such Corporate Transaction (including, without limitation, a
      corporation or other Person which as a result of such transaction owns the
      Company or all or substantially all of the Company's assets either
      directly or through one or more subsidiaries (a "Parent Company")) in
      substantially the same proportions as their ownership, immediately prior
      to such Corporate Transaction, of the Outstanding Company Common Stock and
      Outstanding Company Voting Securities, as the case may be, (B) no Entity
      (other than the Company, any employee benefit plan (or related trust) of
      the Company, such corporation resulting from such Corporate Transaction
      or, if reference was made to equity ownership of any Parent Company for
      purposes of determining whether clause (A) above is satisfied in
      connection with the applicable Corporate Transaction, such Parent Company)
      will beneficially own, directly or indirectly, 50% or more of,
      respectively, the outstanding shares of common stock of the corporation
      resulting from such Corporate Transaction or the combined voting power of
      the outstanding voting securities of such corporation entitled to vote
      generally in the election of directors unless such ownership resulted
      solely from ownership of securities of the Company prior to the Corporate
      Transaction, and (C) individuals who were members of the Incumbent Board
      will immediately after the consummation of the Corporate Transaction
      constitute at least a majority of the members of the board of directors of
      the corporation resulting from such Corporate Transaction (or, if
      reference was made to equity ownership of any Parent Company for purposes
      of determining whether clause (A) above is satisfied in connection with
      the applicable Corporate Transaction, of the Parent Company); or

                  (iv) The approval by the stockholders of the Company of a
      complete liquidation or dissolution of the Company."


                                      D-2

<PAGE>

                                       3.

      Effective as of ____________, 2003, the Plan shall be amended to add the
following new Section 13A after present Section 13:

            "13A. Changes in Control. Notwithstanding anything in this Plan to
      the contrary, a Stock Award under this Plan may provide that upon or after
      a Change in Control, subject to such conditions as may be approved by the
      Administrator and specified in the Stock Award, vesting of all or a
      portion of such award may be accelerated and the time for exercise of
      vested rights under such award may be extended (but not beyond the maximum
      times permitted under this Plan). In accordance with Section 16 of this
      Plan, the Board may also amend existing Stock Awards to provide for such
      rights."

                                       4.

      Except as specifically amended hereby, the Plan shall remain in full force
and effect. Pursuant to Section 16 of the Plan, the Board intends that this
amendment shall apply to all outstanding Stock Awards as of the date of its
adoption ("Prior Awards"), provided that (i) the provisions of new Section 13A
shall apply to such Prior Awards only to the extent expressly specified by the
Board and (ii) for purposes of applying new Section 2(e1) to a Prior Award, the
Applicable Date shall be December 31, 2002, unless another date is specified by
the Board.

      IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this First Amendment on the date set forth below.

                                    INTERNAP NETWORK SERVICES CORPORATION

                                    By:______________________________________

                                    Name:____________________________________

                                    Title:___________________________________

                                    Date:____________________________________


                                      D-3

<PAGE>

                                   APPENDIX E

                                 FIRST AMENDMENT
                  TO THE INTERNAP NETWORK SERVICES CORPORATION
                 1999 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

      This First Amendment to the Internap Network Services Corporation 1999
Non-Employee Directors' Stock Option Plan (the "Plan") is made and entered into
by Internap Network Services Corporation (the "Company").

                             W I T N E S S E T H:

      WHEREAS, the Company maintains the Plan, which is administered by the
Compensation Committee of the Board of Directors of the Company (the "Board"),
to provide for grants of incentive compensation to its non-employee directors;
and

      WHEREAS, the Board has determined that it is advisable to amend the Plan
at this time to increase the number of shares available for the issuance of
awards under the Plan; and

      WHEREAS, Section 12 of the Plan permits the Board to amend the Plan at any
time; and

      WHEREAS, the Board adopted resolutions approving the First Amendment on
February 27, 2003;

      NOW, THEREFORE, the Company hereby amends the Plan as follows:

                                       1.

      Effective as of the date of shareholder approval of this First Amendment,
Section 4(a) of the Plan shall be amended to read as follows:

           "(a) Share Reserve. Subject to the provisions of Section 11 relating
      to adjustments upon changes in stock, the stock that may be issued
      pursuant to Options shall not exceed in the aggregate three million, five
      hundred thousand (3,500,000) shares of Common Stock."

                                       2.

      Except as specifically amended hereby, the Plan shall remain in full force
and effect.

      IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this First Amendment on the date set forth below.

                                    INTERNAP NETWORK SERVICES CORPORATION

                                    By:______________________________________

                                    Name:____________________________________

                                    Title:___________________________________

                                    Date:____________________________________


                                      E-1

<PAGE>

                                   APPENDIX F

                                 FIRST AMENDMENT
                  TO THE INTERNAP NETWORK SERVICES CORPORATION
                       AMENDED 1999 EQUITY INCENTIVE PLAN

      This First Amendment to the Internap Network Services Corporation Amended
1999 Equity Incentive Plan (the "Plan") is made and entered into by Internap
Network Services Corporation (the "Company").

                             W I T N E S S E T H:

      WHEREAS, the Company maintains the Plan, which is administered by the
Compensation Committee of the Board of Directors of the Company (the "Board"),
to provide for grants of incentive compensation to its employees, directors and
consultants; and

      WHEREAS, the Board has determined that it is advisable to amend the Plan
at this time to modify the provisions regarding "change in control" under the
Plan; and

      WHEREAS, Section 12 of the Plan permits the Board to amend the Plan at any
time;

      NOW, THEREFORE, the Company hereby amends the Plan as follows:

                                       1.

      Effective as of ____________, 2003, the Plan shall be amended to add the
following new Section 2(c1) after present Section 2(c):

            "(c1) `Change in Control' means the happening of any of the
      following events:

                  (i) An acquisition by any individual, entity or group (within
      the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (an
      `Entity') of beneficial ownership (within the meaning of Rule 13d-3
      promulgated under the Exchange Act) of 30% or more of either (A) the then
      outstanding shares of common stock of the Company (the `Outstanding
      Company Common Stock') or (B) the combined voting power of the then
      outstanding voting securities of the Company entitled to vote generally in
      the election of directors (the `Outstanding Company Voting Securities');
      excluding, however, the following: (1) any acquisition directly from the
      Company, other than an acquisition by virtue of the exercise of a
      conversion privilege unless the security being so converted was itself
      acquired directly from the Company, (2) any acquisition by the Company,
      (3) any acquisition by any employee benefit plan (or related trust)
      sponsored or maintained by the Company or any corporation controlled by
      the Company, or (4) any acquisition by any corporation pursuant to a
      transaction which complies with clauses (A), (B) and (C) of subsection
      (iii) of this Section;

                  (ii) A change in the composition of the Board such that the
      individuals who, as of the Applicable Date (as defined in this Section
      2(e1)(ii)), constitute the Board, excluding the members of the Board
      (`Series A Directors') who have been elected pursuant to the terms of the
      Company's Series A Convertible Preferred Stock (such Board, excluding the
      Series A Directors, shall be hereinafter referred to as the `Incumbent
      Board'), cease for any reason to constitute at least a majority of the
      members of the Board who are not Series A Directors; provided, however,
      that for purposes of this definition, (A) any individual who becomes a
      member of the Board subsequent to the Applicable Date, whose election, or
      nomination for election, by the Company's stockholders was approved by a
      vote of at least a majority of those individuals who are members of the
      Board and who were also members of the Incumbent Board (or deemed to be
      such pursuant to this proviso), excluding the Series A Directors, shall be
      considered as though such individual were a member of the Incumbent Board,
      (B) any such individual whose initial assumption of office occurs as a
      result of or in connection with either an actual or threatened election
      contest (as such terms are used in Rule 14a-11 of Regulation 14A
      promulgated under the Exchange Act) or other actual or threatened
      solicitation of proxies or consents by or on behalf of an Entity other
      than the 


                                      F-1

<PAGE>

      Board shall not be so considered as a member of the Incumbent Board and
      (C) the term `Applicable Date' shall mean the date of grant of the
      affected Stock Award unless the terms of such Stock Award specify another
      date;

                  (iii) The approval by the stockholders of the Company of a
      merger, reorganization or consolidation or sale or other disposition of
      all or substantially all of the assets of the Company (each, a `Corporate
      Transaction') or, if consummation of such Corporate Transaction is
      subject, at the time of such approval by stockholders, to the consent of
      any government or governmental agency, the obtaining of such consent
      (either explicitly or implicitly by consummation); excluding however, such
      a Corporate Transaction pursuant to which (A) all or substantially all of
      the individuals and entities who are the beneficial owners, respectively,
      of the Outstanding Company Common Stock and Outstanding Company Voting
      Securities immediately prior to such Corporate Transaction will
      beneficially own, directly or indirectly, more than 60% of, respectively,
      the outstanding shares of common stock, and the combined voting power of
      the then outstanding voting securities entitled to vote generally in the
      election of directors, as the case may be, of the corporation resulting
      from such Corporate Transaction (including, without limitation, a
      corporation or other Person which as a result of such transaction owns the
      Company or all or substantially all of the Company's assets either
      directly or through one or more subsidiaries (a "Parent Company")) in
      substantially the same proportions as their ownership, immediately prior
      to such Corporate Transaction, of the Outstanding Company Common Stock and
      Outstanding Company Voting Securities, as the case may be, (B) no Entity
      (other than the Company, any employee benefit plan (or related trust) of
      the Company, such corporation resulting from such Corporate Transaction
      or, if reference was made to equity ownership of any Parent Company for
      purposes of determining whether clause (A) above is satisfied in
      connection with the applicable Corporate Transaction, such Parent Company)
      will beneficially own, directly or indirectly, 50% or more of,
      respectively, the outstanding shares of common stock of the corporation
      resulting from such Corporate Transaction or the combined voting power of
      the outstanding voting securities of such corporation entitled to vote
      generally in the election of directors unless such ownership resulted
      solely from ownership of securities of the Company prior to the Corporate
      Transaction, and (C) individuals who were members of the Incumbent Board
      will immediately after the consummation of the Corporate Transaction
      constitute at least a majority of the members of the board of directors of
      the corporation resulting from such Corporate Transaction (or, if
      reference was made to equity ownership of any Parent Company for purposes
      of determining whether clause (A) above is satisfied in connection with
      the applicable Corporate Transaction, of the Parent Company); or

                  (iv) The approval by the stockholders of the Company of a
      complete liquidation or dissolution of the Company."

                                       2.

            Effective as of ____________, 2003, the Plan shall be amended to add
the following new Section 11(d1) after present Section 11(d):

            "(d1) Further Provisions Regarding Changes in Control.
      Notwithstanding anything in this Plan to the contrary, a Stock Award under
      this Plan may provide that upon or after a Change in Control, subject to
      such conditions as may be approved by the plan administrator (as
      identified under Section 3) and specified in the Stock Award, vesting of
      all or a portion of such award may be accelerated and the time for
      exercise of vested rights under such award may be extended (but not beyond
      the maximum times permitted under this Plan). In accordance with Section
      12(e) of this Plan, the Board may also amend existing Stock Awards to
      provide for such rights."

                                       3.

      Except as specifically amended hereby, the Plan shall remain in full force
and effect. Pursuant to Section 12(e) of the Plan, the Board intends that this
amendment shall apply to all outstanding Stock Awards as of the date of its
adoption ("Prior Awards"), provided that (i) the provisions of new Section
11(d1) shall apply to such Prior Awards only to the extent expressly specified
by the Board and (ii) for purposes of applying new Section 2(c1) to a Prior
Award, the Applicable Date shall be December 31, 2002, unless another date is
specified by the Board.


                                      F-2

<PAGE>

      IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this First Amendment on the date set forth below.

                                    INTERNAP NETWORK SERVICES CORPORATION

                                    By:______________________________________

                                    Name:____________________________________

                                    Title:___________________________________

                                    Date:____________________________________


                                      F-3

<PAGE>

                                     APPENDIX G

                                 FIRST AMENDMENT
      TO THE AMENDED AND RESTATED INTERNAP NETWORK SERVICES CORPORATION
                  1999 STOCK INCENTIVE PLAN FOR NON-OFFICERS
            (formerly known as the CO SPACE Stock Incentive Plan)
                 (as amended and restated September 20, 2000)

      This First Amendment to the Amended and Restated Internap Network Services
Corporation 1999 Stock Incentive Plan for Non-Officers (formerly known as the CO
SPACE Stock Incentive Plan) (the "Plan") is made and entered into by Internap
Network Services Corporation (the "Company").

                             W I T N E S S E T H:

      WHEREAS, the Company maintains the Plan, which is administered by the
Compensation Committee of the Board of Directors of the Company (the "Board"),
to provide for grants of incentive compensation to its non-officer employees and
consultants; and

      WHEREAS, the Board has determined that it is advisable to amend the Plan
at this time to modify the provisions regarding "changes in control" under the
Plan; and

      WHEREAS, Section 15 of the Plan permits the Board to amend the Plan at any
time;

      NOW, THEREFORE, the Company hereby amends the Plan as follows:

                                       1.

      Effective as of ____________, 2003, subsection D of Section 8 of the Plan
shall be amended to read as follows:

            "D. Acceleration of Vesting. The Committee shall have the right to
      accelerate the date of exercise of any installment of any Option, despite
      the fact that such acceleration may cause the application of Sections 280G
      and 4999 of the Code if a Change in Control, as defined below in paragraph
      13C, occurs."

                                       2.

      Effective as of ____________, 2003, subsection C of Section 13 of the Plan
shall be amended to read as follows:

            "C. Certain Changes in Control. In the event of a `Change in
      Control' or `Corporate Transaction,' any surviving corporation or
      acquiring corporation may assume or continue any Stock Rights outstanding
      under the Plan or may substitute similar Stock Rights (including an award
      to acquire the same consideration paid to the shareholders in the Change
      in Control or Corporate Transaction) for those outstanding under the Plan.
      In the event any surviving corporation or acquiring corporation refuses to
      assume or continue such Stock Rights or to substitute similar Stock Rights
      for those outstanding under the Plan, then with respect to Stock Rights
      held by participants whose Service has not terminated, the vesting of such
      Stock Rights (and, if applicable, the time during which such Stock Rights
      may be exercised) shall be accelerated in full, and the Stock Rights shall
      terminate if not exercised (if applicable) at or prior to such event. With
      respect to any other Stock Rights outstanding under the Plan, such Stock
      Rights shall terminate if not exercised (if applicable) prior to such
      event.

                A `Change in Control' or `Corporate Transaction' shall mean the
      happening of any of the following events:

          (i) An acquisition by any individual, entity or group (within the
      meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (an `Entity')
      of beneficial ownership (within the meaning of Rule 13d-3 


                                      G-1

<PAGE>

      promulgated under the Exchange Act) of 30% or more of either (A) the then
      outstanding shares of common stock of the Company (the `Outstanding
      Company Common Stock') or (B) the combined voting power of the then
      outstanding voting securities of the Company entitled to vote generally in
      the election of directors (the `Outstanding Company Voting Securities');
      excluding, however, the following: (1) any acquisition directly from the
      Company, other than an acquisition by virtue of the exercise of a
      conversion privilege unless the security being so converted was itself
      acquired directly from the Company, (2) any acquisition by the Company,
      (3) any acquisition by any employee benefit plan (or related trust)
      sponsored or maintained by the Company or any corporation controlled by
      the Company, or (4) any acquisition by any corporation pursuant to a
      transaction which complies with clauses (A), (B) and (C) of subsection
      (iii) of this Section;

            (ii) A change in the composition of the Board such that the
      individuals who, as of the Applicable Date (as defined in this Section
      2(e1)(ii)), constitute the Board, excluding the members of the Board
      (`Series A Directors') who have been elected pursuant to the terms of the
      Company's Series A Convertible Preferred Stock (such Board, excluding the
      Series A Directors, shall be hereinafter referred to as the `Incumbent
      Board'), cease for any reason to constitute at least a majority of the
      members of the Board who are not Series A Directors; provided, however,
      that for purposes of this definition, (A) any individual who becomes a
      member of the Board subsequent to the Applicable Date, whose election, or
      nomination for election, by the Company's stockholders was approved by a
      vote of at least a majority of those individuals who are members of the
      Board and who were also members of the Incumbent Board (or deemed to be
      such pursuant to this proviso), excluding the Series A Directors, shall be
      considered as though such individual were a member of the Incumbent Board,
      (B) any such individual whose initial assumption of office occurs as a
      result of or in connection with either an actual or threatened election
      contest (as such terms are used in Rule 14a-11 of Regulation 14A
      promulgated under the Exchange Act) or other actual or threatened
      solicitation of proxies or consents by or on behalf of an Entity other
      than the Board shall not be so considered as a member of the Incumbent
      Board and (C) the term `Applicable Date' shall mean the date of grant of
      the affected Stock Right unless the terms of such Stock Right specify
      another date;

            (iii) The approval by the stockholders of the Company of a merger,
      reorganization or consolidation or sale or other disposition of all or
      substantially all of the assets of the Company (each, a `Defined
      Transaction') or, if consummation of such Defined Transaction is subject,
      at the time of such approval by stockholders, to the consent of any
      government or governmental agency, the obtaining of such consent (either
      explicitly or implicitly by consummation); excluding however, such a
      Defined Transaction pursuant to which (A) all or substantially all of the
      individuals and entities who are the beneficial owners, respectively, of
      the Outstanding Company Common Stock and Outstanding Company Voting
      Securities immediately prior to such Defined Transaction will beneficially
      own, directly or indirectly, more than 60% of, respectively, the
      outstanding shares of common stock, and the combined voting power of the
      then outstanding voting securities entitled to vote generally in the
      election of directors, as the case may be, of the corporation resulting
      from such Defined Transaction (including, without limitation, a
      corporation or other Person which as a result of such transaction owns the
      Company or all or substantially all of the Company's assets either
      directly or through one or more subsidiaries (a "Parent Company")) in
      substantially the same proportions as their ownership, immediately prior
      to such Defined Transaction, of the Outstanding Company Common Stock and
      Outstanding Company Voting Securities, as the case may be, (B) no Entity
      (other than the Company, any employee benefit plan (or related trust) of
      the Company, such corporation resulting from such Defined Transaction
      or, if reference was made to equity ownership of any Parent Company for
      purposes of determining whether clause (A) above is satisfied in
      connection with the applicable Defined Transaction, such Parent Company)
      will beneficially own, directly or indirectly, 50% or more of,
      respectively, the outstanding shares of common stock of the corporation
      resulting from such Defined Transaction or the combined voting power of
      the outstanding voting securities of such corporation entitled to vote
      generally in the election of directors unless such ownership resulted
      solely from ownership of securities of the Company prior to the Defined
      Transaction, and (C) individuals who were members of the Incumbent Board
      will immediately after the consummation of the Defined Transaction
      constitute at least a majority of the members of the board of directors of
      the corporation resulting from such Defined Transaction (or, if reference
      was made to equity ownership of


                                      G-2

<PAGE>

      any Parent Company for purposes of determining whether clause (A) above is
      satisfied in connection with the applicable Defined Transaction, of the
      Parent Company); or

            (iv) The approval by the stockholders of the Company of a complete
      liquidation or dissolution of the Company."

                                       3.

      Effective as of ____________, 2003, the Plan shall be amended to add the
following new Section 13D1 after present Section 13D:

                  "D1. Further Provisions Regarding Changes in Control.
      Notwithstanding anything in this Plan to the contrary, a Stock Right under
      this Plan may provide that upon or after a Change in Control, subject to
      such conditions as may be approved by the Administrator and specified in
      the Stock Right, vesting of all or a portion of such Stock Right may be
      accelerated and the time for exercise of vested rights under such award
      may be extended (but not beyond the maximum times permitted under this
      Plan). In accordance with Section 17 of this Plan, the Board may also
      amend existing Stock Rights to provide for such rights."

                                       4.

      Except as specifically amended hereby, the Plan shall remain in full force
and effect. Pursuant to Section 17 of the Plan, the Board intends that this
amendment shall apply to all outstanding Stock Awards as of the date of its
adoption ("Prior Awards"), provided that (i) the provisions of new Section 13D1
shall apply to such Prior Awards only to the extent expressly specified by the
Board and (ii) for purposes of applying the definition of "Change in Control" in
revised Section 13C to a Prior Award, the Applicable Date shall be December 31,
2002, unless another date is specified by the Board.

      IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this First Amendment on the date set forth below.

                                    INTERNAP NETWORK SERVICES CORPORATION

                                    By:______________________________________

                                    Name:____________________________________

                                    Title:___________________________________

                                    Date:____________________________________


                                      G-3

<PAGE>

                                   APPENDIX H

                                 FIRST AMENDMENT
                  TO THE INTERNAP NETWORK SERVICES CORPORATION
                      1998 STOCK OPTION/STOCK ISSUANCE plan
                  (as amended and restated September 20, 2000)

      This First Amendment to the Internap Network Services Corporation 1998
Stock Option/Stock Issuance Plan (the "Plan") is made and entered into by
Internap Network Services Corporation (the "Company").

                             W I T N E S S E T H:

      WHEREAS, the Company maintains the Plan, which is administered by the
Compensation Committee of the Board of Directors of the Company (the "Board"),
to provide for grants of incentive compensation to its key employees,
non-employee directors and consultants; and

      WHEREAS, the Board has determined that it is advisable to amend the Plan
at this time to modify the provisions regarding "changes in control" under the
Plan; and

      WHEREAS, Article IV, Section 3(a) of the Plan permits the Board to amend
the Plan at any time;

      NOW, THEREFORE, the Company hereby amends the Plan as follows:

                                       1.

      Effective as of ________, 2003, the definition of Change in Control under
Article I, Section 6, shall be amended to read as follows:

          "Change in Control means the happening of any of the following events:

                  (a) An acquisition by any individual, entity or group (within
      the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (an
      `Entity') of beneficial ownership (within the meaning of Rule 13d-3
      promulgated under the Exchange Act) of 30% or more of either (i) the then
      outstanding shares of common stock of the Company (the `Outstanding
      Company Common Stock') or (ii) the combined voting power of the then
      outstanding voting securities of the Company entitled to vote generally in
      the election of directors (the `Outstanding Company Voting Securities');
      excluding, however, the following: (A) any acquisition directly from the
      Company, other than an acquisition by virtue of the exercise of a
      conversion privilege unless the security being so converted was itself
      acquired directly from the Company, (B) any acquisition by the Company,
      (C) any acquisition by any employee benefit plan (or related trust)
      sponsored or maintained by the Company or any corporation controlled by
      the Company, or (D) any acquisition by any corporation pursuant to a
      transaction which complies with clauses (i), (ii) and (iii) of subsection
      (c) of this Section;

                  (b) A change in the composition of the Board such that the
      individuals who, as of the Applicable Date (as defined in this Section
      2(e1)(ii)), constitute the Board, excluding the members of the Board
      (`Series A Directors') who have been elected pursuant to the terms of the
      Company's Series A Convertible Preferred Stock (such Board, excluding the
      Series A Directors, shall be hereinafter referred to as the `Incumbent
      Board'), cease for any reason to constitute at least a majority of the
      members of the Board who are not Series A Directors; provided, however,
      that for purposes of this definition, (i) any individual who becomes a
      member of the Board subsequent to the Applicable Date, whose election, or
      nomination for election, by the Company's stockholders was approved by a
      vote of at least a majority of those individuals who are members of the
      Board and who were also members of the Incumbent Board (or deemed to be
      such pursuant to this proviso), excluding the Series A Directors, shall be
      considered as though such individual were a member of the Incumbent Board,
      (ii) any such individual whose initial assumption of office occurs as a
      result of or in connection with either an actual or threatened election
      contest (as such terms are used in Rule 14a-11 of Regulation 14A
      promulgated under the Exchange Act) or other actual or threatened
      solicitation of proxies or consents by or on behalf of an Entity other
      than the 


                                      H-1

<PAGE>

      Board shall not be so considered as a member of the Incumbent Board and
      (iii) the term `Applicable Date' shall mean the date of grant of the
      affected Stock Award unless the terms of such Stock Award specify another
      date;

                  (c) The approval by the stockholders of the Company of a
      merger, reorganization or consolidation or sale or other disposition of
      all or substantially all of the assets of the Company (each, a `Defined
      Transaction') or, if consummation of such Defined Transaction is subject,
      at the time of such approval by stockholders, to the consent of any
      government or governmental agency, the obtaining of such consent (either
      explicitly or implicitly by consummation); excluding however, such a
      Defined Transaction pursuant to which (i) all or substantially all of the
      individuals and entities who are the beneficial owners, respectively, of
      the Outstanding Company Common Stock and Outstanding Company Voting
      Securities immediately prior to such Defined Transaction will beneficially
      own, directly or indirectly, more than 60% of, respectively, the
      outstanding shares of common stock, and the combined voting power of the
      then outstanding voting securities entitled to vote generally in the
      election of directors, as the case may be, of the corporation resulting
      from such Defined Transaction (including, without limitation, a
      corporation or other Person which as a result of such transaction owns the
      Company or all or substantially all of the Company's assets either
      directly or through one or more subsidiaries (a "Parent Company")) in
      substantially the same proportions as their ownership, immediately prior
      to such Defined Transaction, of the Outstanding Company Common Stock and
      Outstanding Company Voting Securities, as the case may be, (ii) no Entity
      (other than the Company, any employee benefit plan (or related trust) of
      the Company, such corporation resulting from such Defined Transaction or,
      if reference was made to equity ownership of any Parent Company for
      purposes of determining whether clause (i) above is satisfied in
      connection with the applicable Defined Transaction, such Parent Company)
      will beneficially own, directly or indirectly, 50% or more of,
      respectively, the outstanding shares of common stock of the corporation
      resulting from such Defined Transaction or the combined voting power of
      the outstanding voting securities of such corporation entitled to vote
      generally in the election of directors unless such ownership resulted
      solely from ownership of securities of the Company prior to the Defined
      Transaction, and (iii) individuals who were members of the Incumbent Board
      will immediately after the consummation of the Defined Transaction
      constitute at least a majority of the members of the board of directors of
      the corporation resulting from such Defined Transaction (or, if reference
      was made to equity ownership of any Parent Company for purposes of
      determining whether clause (i) above is satisfied in connection with the
      applicable Defined Transaction, of the Parent Company); or

                  (d) The approval by the stockholders of the Company of a
      complete liquidation or dissolution of the Company."

                                       2.

      Effective as of ________, 2003, the definition of Corporate Transaction
under Article I, Section 6, shall be amended to read as follows:

          "Corporate Transaction means a Change in Control."

                                       3.

            Effective as of ____________, 2003, the first full sentence of
Article IV, Section 3(a) of the Plan is amended to read as follows:

     "The Board shall have complete and exclusive power and authority to amend
      or modify the Plan or any Stock Award under the Plan in any or all
      respects whatsoever; provided, that no such amendment or modification
      shall adversely affect the rights and obligations of the holder of a Stock
      Award with respect to a Stock Award at the time outstanding under the
      Plan, nor adversely affect the rights of a Participant with respect to
      Common Stock issued under the Plan prior to such action, unless the holder
      of such Stock Award or the affected Participant consents to such
      amendment."

                                       4.


                                      H-2

<PAGE>

      Effective as of ____________, 2003, Article V(b) of the Plan shall be
amended to read as follows:

            "(b) Changes in Control. In the event of a Change in Control or
      Corporate Transaction, then any surviving corporation or acquiring
      corporation may assume or continue any Stock Awards outstanding under the
      Plan or may substitute similar stock awards (including an award to acquire
      the same consideration paid to the shareholders in the Change in Control
      Corporate Transaction) for those outstanding under the Plan. In the event
      any surviving corporation or acquiring corporation refuses to assume or
      continue such Stock Awards or to substitute similar stock awards for those
      outstanding under the Plan, then with respect to Stock Awards held by
      Participants whose Service has not terminated, the vesting of such Stock
      Awards (and, if applicable, the time during which such Stock Awards may be
      exercised) shall be accelerated in full, and the Stock Awards shall
      terminate if not exercised (if applicable) at or prior to such event. With
      respect to any other Stock Awards outstanding under the Plan, such Stock
      Awards shall terminate if not exercised (if applicable) prior to such
      event."

                                       5.

      Effective as of ___________, 2003, the Plan shall be amended to add the
following new Article V(c1) after present Article V(c):

            "(c1) Further Provisions Regarding Changes in Control.
      Notwithstanding anything in this Plan (other than Article II, Section
      1(c)(4)) to the contrary, a Stock Award under this Plan may provide that
      upon or after a Change in Control, subject to such conditions as may be
      approved by the Plan Administrator and specified in the Stock Award,
      vesting of all or a portion of such award may be accelerated and the time
      for exercise of vested rights under such award may be extended (but not
      beyond the maximum times permitted under this Plan). In accordance with
      Article IV, Section 3(a) of this Plan, the Board may also amend existing
      Stock Awards to provide for such rights."

                                       6.

      Except as specifically amended hereby, the Plan shall remain in full force
and effect. Pursuant to Article IV, Section 3(a) of the Plan as amended, the
Board intends that this amendment shall apply to all outstanding Stock Awards as
of the date of its adoption ("Prior Awards"), provided that (i) the provisions
of new Article V(c1) shall apply to such Prior Awards only to the extent
expressly specified by the Board and (ii) for purposes of applying subsection
(b) of the new definition "Change in Control" in Article I, Section 6 to a Prior
Award, the Applicable Date shall be December 31, 2002, unless another date is
specified by the Board.

      IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this First Amendment on the date set forth below.

                                    INTERNAP NETWORK SERVICES CORPORATION

                                    By:______________________________________

                                    Name:____________________________________

                                    Title:___________________________________

                                    Date:____________________________________


                                      H-3

<PAGE>

                                   APPENDIX I

                                SECOND AMENDMENT
                  TO THE INTERNAP NETWORK SERVICES CORPORATION
                     2000 NON-OFFICER EQUITY INCENTIVE PLAN

      This Second Amendment to the Internap Network Services Corporation 2000
Non-Officer Equity Incentive Plan (the "Plan") is made and entered into by
Internap Network Services Corporation (the "Company").

                             W I T N E S S E T H:

      WHEREAS, the Company maintains the Plan, which is administered by the
Compensation Committee of the Board of Directors of the Company (the "Board"),
to provide for grants of incentive compensation to its non-officer employees and
consultants; and

      WHEREAS, the Board has determined that it is advisable to amend the Plan
at this time to modify the provisions regarding "change in control" under the
Plan; and

      WHEREAS, Section 12 of the Plan permits the Board to amend the Plan at any
time;

      NOW, THEREFORE, the Company hereby amends the Plan as follows:

                                       1.

      Effective as of ______________, 2003, the Plan shall be amended to add the
following new Section 2(c1) after present Section 2(c):

            "(c1) "Change in Control" means the happening of any of the
      following events:

                  (i) An acquisition by any individual, entity or group (within
      the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (an
      `Entity') of beneficial ownership (within the meaning of Rule 13d-3
      promulgated under the Exchange Act) of 30% or more of either (A) the then
      outstanding shares of common stock of the Company (the `Outstanding
      Company Common Stock') or (B) the combined voting power of the then
      outstanding voting securities of the Company entitled to vote generally in
      the election of directors (the `Outstanding Company Voting Securities');
      excluding, however, the following: (1) any acquisition directly from the
      Company, other than an acquisition by virtue of the exercise of a
      conversion privilege unless the security being so converted was itself
      acquired directly from the Company, (2) any acquisition by the Company,
      (3) any acquisition by any employee benefit plan (or related trust)
      sponsored or maintained by the Company or any corporation controlled by
      the Company, or (4) any acquisition by any corporation pursuant to a
      transaction which complies with clauses (A), (B) and (C) of subsection
      (iii) of this Section;

                  (ii) A change in the composition of the Board such that the
      individuals who, as of the Applicable Date (as defined in this Section
      2(e1)(ii)), constitute the Board, excluding the members of the Board
      (`Series A Directors') who have been elected pursuant to the terms of the
      Company's Series A Convertible Preferred Stock (such Board, excluding the
      Series A Directors, shall be hereinafter referred to as the `Incumbent
      Board'), cease for any reason to constitute at least a majority of the
      members of the Board who are not Series A Directors; provided, however,
      that for purposes of this definition, (A) any individual who becomes a
      member of the Board subsequent to the Applicable Date, whose election, or
      nomination for election, by the Company's stockholders was approved by a
      vote of at least a majority of those individuals who are members of the
      Board and who were also members of the Incumbent Board (or deemed to be
      such pursuant to this proviso), excluding the Series A Directors, shall be
      considered as though such individual were a member of the Incumbent Board,
      (B) any such individual whose initial assumption of office occurs as a
      result of or in connection with either an actual or threatened election
      contest (as such terms are used in Rule 14a-11 of Regulation 14A
      promulgated under the Exchange Act) or other actual or threatened
      solicitation of proxies or consents by or on behalf of an Entity other
      than the Board shall not be so considered as a member of the Incumbent
      Board and (C) the term `Applicable Date' 


                                      I-1

<PAGE>

      shall mean the date of grant of the affected Stock Award unless the terms
      of such Stock Award specify another date;

                  (iii) The approval by the stockholders of the Company of a
      merger, reorganization or consolidation or sale or other disposition of
      all or substantially all of the assets of the Company (each, a `Corporate
      Transaction') or, if consummation of such Corporate Transaction is
      subject, at the time of such approval by stockholders, to the consent of
      any government or governmental agency, the obtaining of such consent
      (either explicitly or implicitly by consummation); excluding however, such
      a Corporate Transaction pursuant to which (A) all or substantially all of
      the individuals and entities who are the beneficial owners, respectively,
      of the Outstanding Company Common Stock and Outstanding Company Voting
      Securities immediately prior to such Corporate Transaction will
      beneficially own, directly or indirectly, more than 60% of, respectively,
      the outstanding shares of common stock, and the combined voting power of
      the then outstanding voting securities entitled to vote generally in the
      election of directors, as the case may be, of the corporation resulting
      from such Corporate Transaction (including, without limitation, a
      corporation or other Person which as a result of such transaction owns the
      Company or all or substantially all of the Company's assets either
      directly or through one or more subsidiaries (a "Parent Company")) in
      substantially the same proportions as their ownership, immediately prior
      to such Corporate Transaction, of the Outstanding Company Common Stock and
      Outstanding Company Voting Securities, as the case may be, (B) no Entity
      (other than the Company, any employee benefit plan (or related trust) of
      the Company, such corporation resulting from such Corporate Transaction
      or, if reference was made to equity ownership of any Parent Company for
      purposes of determining whether clause (A) above is satisfied in
      connection with the applicable Corporate Transaction, such Parent Company)
      will beneficially own, directly or indirectly, 50% or more of,
      respectively, the outstanding shares of common stock of the corporation
      resulting from such Corporate Transaction or the combined voting power of
      the outstanding voting securities of such corporation entitled to vote
      generally in the election of directors unless such ownership resulted
      solely from ownership of securities of the Company prior to the Corporate
      Transaction, and (C) individuals who were members of the Incumbent Board
      will immediately after the consummation of the Corporate Transaction
      constitute at least a majority of the members of the board of directors of
      the corporation resulting from such Corporate Transaction (or, if
      reference was made to equity ownership of any Parent Company for purposes
      of determining whether clause (A) above is satisfied in connection with
      the applicable Corporate Transaction, of the Parent Company); or

                  (iv) The approval by the stockholders of the Company of a
      complete liquidation or dissolution of the Company."

                                       2.

      Effective as of ____________, 2003, Section 11(c) of the Plan shall be
 amended to read as follows:

            "(c) Changes in Control. In the event of a Change in Control, then
      any surviving corporation or acquiring corporation may assume or continue
      any Stock Awards outstanding under the Plan or may substitute similar
      stock awards (including an award to acquire the same consideration paid to
      the shareholders in the transaction described in this subsection 11(c))
      for those outstanding under the Plan. In the event any surviving
      corporation or acquiring corporation refuses to assume or continue such
      Stock Awards or to substitute similar stock awards for those outstanding
      under the Plan, then with respect to Stock Awards held by Participants
      whose Continuous Service has not terminated, the vesting of such Stock
      Awards (and, if applicable, the time during which such Stock Awards may be
      exercised) shall be accelerated in full, and the Stock Awards shall
      terminate if not exercised (if applicable) at or prior to such event. With
      respect to any other Stock Awards outstanding under the Plan, such Stock
      Awards shall terminate if not exercised (if applicable) prior to such
      event."

                                       3.

      Effective as of ___________, 2003, the Plan shall be amended to add the
following new Section 11(d1) after present Section 11(d):


                                      I-2

<PAGE>

            "(d1) Further Provisions Regarding Changes in Control.
      Notwithstanding anything in this Plan to the contrary, a Stock Award under
      this Plan may provide that upon or after a Change in Control, subject to
      such conditions as may be approved by the Administrator and specified in
      the Stock Award, vesting of all or a portion of such award may be
      accelerated and the time for exercise of vested rights under such award
      may be extended (but not beyond the maximum times permitted under this
      Plan). In accordance with Section 12(c) of this Plan, the Board may also
      amend existing Stock Awards to provide for such rights."

                                         4.

      Except as specifically amended hereby, the Plan shall remain in full force
and effect. Pursuant to Section 12(c) of the Plan, the Board intends that this
amendment shall apply to all outstanding Stock Awards as of the date of its
adoption ("Prior Awards"), provided that (i) the provisions of new Section
11(d1) shall apply to such Prior Awards only to the extent expressly specified
by the Board and (ii) for purposes of applying new Section 2(c1) to a Prior
Award, the Applicable Date shall be December 31, 2002, unless another date is
specified by the Board.

      IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this Second Amendment as of the date set forth below.

                                    INTERNAP NETWORK SERVICES CORPORATION

                                    By:______________________________________

                                    Name:____________________________________

                                    Title:___________________________________

                                    Date:____________________________________


                                      I-3

<PAGE>

                                   APPENDIX J

               AMENDED AND RESTATED CHARTER OF THE AUDIT COMMITTEE

PURPOSE

      The purpose of the Audit Committee (the "Committee") of the Board of
Directors (the "Board") of Internap Network Services Corporation, a Delaware
corporation (the "Company"), will be to (i) study, review and evaluate the
Company's accounting, auditing and reporting practices, including internal audit
and control functions; (ii) serve as a focal point for communication between
non-committee directors, the independent accountants and the Company's
management; and (iii) monitor transactions between the Company and its
employees, officers and members of the Board, or any affiliates of the
foregoing.

COMPOSITION

      The Audit Committee shall consist of at least three members of the Board
of Directors. The members of the Committee will be appointed by and serve at the
discretion of the Board and shall satisfy the independence and experience
requirements of the federal securities laws, the Securities and Exchange
Commission and the NASDAQ National Market. Specifically, each member of the
Audit Committee shall be "independent", as defined in the Sarbanes-Oxley Act of
2002 (the "Sarbanes-Oxley Act"), and at least one member of the Audit Committee
shall be a "financial expert", as such term is used in Section 407 of the
Sarbanes-Oxley Act.

1. FUNDING

      The Company shall provide for appropriate funding, as determined by the
Committee, for the payment of compensation (1) to the registered public
accounting firm employed by the Company for the purpose of rendering or issuing
an audit report, and (2) to any other advisors employed by the Committee.

FUNCTIONS AND AUTHORITY

      The operation of the Committee will be subject to the provisions of the
Bylaws of the Company, the Delaware General Corporation Law, the federal
securities laws and the corporate laws of any other state that may apply to the
Company in the future, each as in effect from time to time. The Committee will
have the full power and authority to carry out the following responsibilities:

      1.    Make recommendations to the Board annually regarding the firm of
            certified public accountants to be employed by the Company as its
            independent auditors for the ensuing year, which firm is ultimately
            accountable to the Committee as representatives of the Company's
            shareholders, and take all appropriate courses of action to be taken
            in connection with services performed for the Company by the
            independent auditors.
      2.    Review the engagement of the independent auditors, including the
            scope, extent and procedures of the audit, the compensation to be
            paid therefor and all other matters the Committee deems appropriate.
            Such independent auditors shall report directly to the Committee.
      3.    Evaluate the performance of the independent auditors and, if so
            determined by the Committee, to replace the independent auditors.
            The Committee shall be directly responsible for the appointment,
            compensation and oversight of the independent auditors, including
            the resolution of any disagreements with management and the auditors
            regarding financial reporting.
      4.    Receive written statements from the independent auditors delineating
            all relationships between the auditors and the Company consistent
            with Independence Standards Board Standard No. 1, to consider and
            discuss with the auditors any disclosed relationships or services
            that could affect the auditors' objectivity and independence and
            otherwise to take appropriate action to oversee the independence of
            the auditors.
      5.    Discuss with the independent auditors the results of the annual
            audit and the quarterly reviews, including the auditors' assessment
            of the quality, not just acceptability, of accounting principles,
            critical accounting policies, the reasonableness of significant
            judgments, the nature of significant risks and exposures, the
            adequacy of the disclosures in the financial statements and any
            other 


                                      J-1

<PAGE>

            matters required to be communicated to the Committee by the
            independent auditors under generally accepted accounting standards.
      6.    Have familiarity, through the individual efforts of its members,
            with the accounting and reporting principles and practices applied
            by the Company in preparing its financial statements, including
            without limitation, the policies for recognition of revenues in
            financial statements.
      7.    Review with management and the independent auditors, upon completion
            of their audit or quarterly review, as the case may be, financial
            results for the year or quarter, as reported in the Company's
            financial statements, or other disclosures.
      8.    Assist and interact with the independent auditors to enable them to
            perform their duties in the most efficient and cost effective
            manner.
      9.    Evaluate the cooperation received by the independent auditors during
            their audit or quarterly review examination, including their access
            to all requested records, data and information, and elicit the
            comments of management regarding the responsiveness of the
            independent auditors to the Company's needs.
      10.   Review the Company's balance sheet, profit and loss statement and
            statements of cash flows and stockholders' equity for each annual
            and interim period, and any changes in accounting policy that have
            occurred during such period.
      11.   Review and approve all professional services provided to the Company
            by its independent auditors and consider the possible effect of such
            services on the independence of such auditors. In addition, the
            Committee shall have the authority to, and shall be required to in
            its sole discretion, approve (1) all audit services and (2) all
            permissible non-audit services provided to the Company by its
            outside auditors, as required by Section 202 of the Sarbanes-Oxley
            Act.
      12.   Establish procedures for (1) the receipt, retention and treatment of
            complaints received by the Company regarding accounting, internal
            accounting controls or auditing matters and (2) the confidential,
            anonymous submission by employees of the Company of concerns
            regarding questionable accounting or auditing matters.
      13.   Engage its own independent legal counsel and other advisers as it
            deems necessary to carry out its duties. The Company shall provide
            the necessary funding for the Committee to engage such advisers, as
            provided above.
      14.   Consult with the independent auditors and discuss with management
            the scope and quality of internal accounting and financial reporting
            controls in effect.
      15.   Review the reports provided to the Committee by the Company's
            outside auditors pursuant to Section 204 of the Sarbanes-Oxley Act.
      16.   Prepare the report required by the rules of the Securities and
            Exchange Commission to be included in the Company's annual proxy
            statement.
      17.   Investigate, review and report to the Board the propriety and
            ethical implications of any transactions, as reported or disclosed
            to the Committee by the independent auditors, employees, officers,
            members of the Board or otherwise, between the Company and any
            employee, officer or member of the Board of the Company or any
            affiliates of the foregoing.
      18.   Perform such other functions and have such power as may be necessary
            or convenient in the efficient and lawful discharge of the
            foregoing.

MEETINGS

      The Committee will hold at least one regular meeting per calendar quarter
and additional meetings as the Committee deems appropriate. The President, Chief
Executive Officer, Chairman of the Board and Chief Financial Officer may attend
any meeting of the Committee, except for portions of the meetings where his, her
or their presence would be inappropriate, as determined by the Committee
Chairman. In particular, the Committee shall consider when and to the extent
meetings are appropriate between the Committee and the Company's outside
auditors that are not in the presence of the Company's management.

MINUTES AND REPORTS

      Minutes of each meeting will be kept and distributed to each member of the
Committee, members of the Board who are not members of the Committee and the
Secretary of the Company. The Chairman of the Committee will report to the Board
from time to time, or whenever so requested by the Board.


                                      J-2

<PAGE>

                                     APPENDIX K

                      INTERNAP NETWORK SERVICES CORPORATION
                          2002 STOCK COMPENSATION PLAN
                          ADOPTED ON SEPTEMBER 10, 2002

      1. Purpose of the Plan. The purposes of this Internap Network Services
Corporation 2002 Stock Compensation Plan (the "Plan") are to attract and retain
the best available personnel for the Company and its Affiliates, to provide
additional incentive to personnel of the Company and its Affiliates and to
promote the success of the Company's and its Affiliates' businesses. Options
granted under the Plan shall be nonstatutory stock options.

      2. Definitions. As used herein, the following definitions shall apply:

            (a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.

            (b) "Affiliate" means any Person that directly or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with the Company, whether now or hereafter existing.

            (c) "Affiliated Group" means the group consisting of the Company and
its Affiliates.

            (d) "Applicable Laws" means the legal requirements relating to the
administration of stock compensation plans under applicable U.S. state corporate
laws, U.S. federal and applicable state securities laws, the Code, any stock
exchange rules or regulations and the applicable laws of any other country or
jurisdiction where stock awards are granted, as such laws, rules, regulations
and requirements shall be in place from time to time.

            (e) "Board" means the Board of Directors of the Company.

            (f) "Code" means the U.S. Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.

            (g) "Committee" means the committee of one or more members of the
Board appointed by the Board in accordance with paragraph (a) of Section 4 of
the Plan.

            (h) "Common Stock" means the common stock of the Company.

            (i) "Company" means Internap Network Services Corporation, a
Delaware corporation.

            (j) "Consultant" means any person, including an advisor, who is
engaged by the Company or any Affiliate to render consulting or advisory
services and is compensated for such services. However, the term "Consultant"
shall not include any Officers and/or Directors. The term "Consultant" shall
also include a member of the board of directors or governing body of any
Affiliate.

            (k) "Director" means a member of the Board.

            (l) "Disability" means the inability of an individual, in the
opinion of a qualified physician acceptable to the Company, to perform the major
duties of that individual's position with the Company or an Affiliate of the
Company because of the sickness or injury of the individual, or as may be
otherwise defined under applicable local laws.

            (m) "Employee" means any person (including if appropriate, any
Officer or Director) employed by the Company or an Affiliate, with the status of
employment determined based upon such minimum number of hours or periods worked
as shall be determined by the Administrator in its discretion, subject to any
requirements of the Code and Applicable Law. A Service Provider shall not cease
to be an Employee in the case of 


                                      K-1

<PAGE>

(i) any leave of absence approved by the Company or an Affiliate or (ii)
transfers between locations of the Company or an Affiliate, or between the
Company and an Affiliate or any successor. The payment of a director's fee by
the Company or an Affiliate shall not be sufficient to constitute "employment"
by the Company or an Affiliate.

            (n) "Exchange Act" means the U.S. Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.

            (o) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

                  (i) If the Common Stock is listed on any established stock
      exchange or a national market system, including without limitation the
      National Market System of the National Association of Securities Dealers,
      Inc. Automated Quotation ("NASDAQ") System, its Fair Market Value shall be
      the closing sales price for such stock (or the closing bid, if no sales
      were reported), as quoted on such exchange or system on the day of
      determination or, if the stock exchange or national market system on which
      the Common Stock trades is not open on the day of determination, the last
      business day prior to the day of determination;

                  (ii) If the Common Stock is quoted on the NASDAQ System (but
      not on the National Market System thereof) or regularly quoted by a
      recognized securities dealer but selling prices are not reported, its Fair
      Market Value shall be the mean between the high bid and low asked prices
      for the Common Stock on the day of determination or, if the stock exchange
      or national market system on which the Common Stock trades is not open on
      the day of determination, the last business day prior to the day of
      determination; or

                  (iii) In the absence of an established market for the Common
      Stock, the Fair Market Value thereof shall be determined in good faith by
      the Administrator issuing the Stock Award.

            (p) "Nonstatutory Stock Option" means an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.

            (q) "Officer" means an "officer" as such term is defined for the
purposes of Section 16 of the Exchange Act under Rule 16a-1(f) promulgated by
the Securities and Exchange Commission under the Exchange Act (or any successor
provision thereto).

            (r) "Option" means a stock option granted pursuant to the Plan.

            (s) "Optioned Stock" means the Common Stock subject to an Option.

            (t) "Optionee" means the holder of an outstanding Option.

            (u) "Other Plans" means the SwitchSoft Systems, Inc. Founders 1996
Stock Option Plan, the SwitchSoft Systems, Inc. 1997 Stock Option Plan, the
Internap Network Services Corporation 1998 Stock Option/Stock Issuance Program,
the Internap Network Services Corporation Amended 1999 Equity Incentive Plan,
the Internap Network Services Corporation 1999 Non-Employee Directors' Stock
Option Plan, the Internap Network Services Corporation 1999 Stock Incentive Plan
For Non-Officers (formerly the CO SPACE, Inc. 1999 Stock Incentive Plan), and
the Internap Network Services Corporation 2000 Non-Officer Equity Incentive
Plan.

            (v) "Participant" means a person to whom a Stock Award is granted
pursuant to the Plan, or if applicable to such other person who holds an
outstanding Stock Award.

            (w) "Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a joint-stock company, a trust, any
unincorporated organization, or a government or political subdivision thereof.


                                      K-2

<PAGE>

            (x) "Plan" means this Internap Network Services Corporation 2002
Stock Compensation Plan.

            (y) "Securities Act" means the U.S. Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.

            (z) "Service Provider" means an Employee, Director or Consultant.

            (aa) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 below.

            (bb) "Stock Award" means any right granted under the Plan, including
an Option, a restricted stock bonus and a right to acquire restricted stock.

      3. Shares Subject to the Plan. Subject to the provisions of Section 13 of
the Plan, prior to obtaining the approval for this Plan from the Company's
Series A preferred stockholders, the maximum aggregate number of Shares that may
be issued under the Plan is thirty-two million (32,000,000) less the number of
Shares subject to options and other equity awards under the Other Plans.
Subsequent to obtaining approval for this Plan from the Company's Series A
preferred stockholders, the maximum aggregate number of Shares that may be
issued under the Plan is fifty million (50,000,000) less the number of Shares
subject to options and other equity awards under the Other Plans. The maximum
number of Shares with respect to which Options may be granted to any Participant
in any fiscal year shall be 10,000,000. The Shares subject to the Plan may be
authorized but unissued, or reacquired shares of Common Stock.

      If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall become available for future grant under the Plan (unless the Plan shall
have been terminated). Notwithstanding any other provision of the Plan, shares
issued under the Plan and later repurchased by the Company shall not become
available for future grant or sale under the Plan; provided, however, that any
Shares subject to unvested stock bonuses which expire or terminate shall revert
to and again become available for issuance under the Plan.

      4. Administration of the Plan.

            (a) General. The Plan shall be administered by the Board or one or
more Committees, or a combination thereof, as determined by the Board. The Plan
may be administered by different administrative bodies with respect to different
classes of Participants and, if permitted by Applicable Laws, the Board may
authorize one or more Employees (who may (but need not) be Officers) to grant
Options to Service Providers. A Committee may delegate some or all of its
authority to a Person or group of more than one Person to the extent not
prohibited by Applicable Laws. Any delegation of authority, whether by the Board
or a Committee thereof, may be revoked at any time by the delegating party.

            (b) Committee Composition. If a Committee has been appointed
pursuant to this Section 4, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time to time the
Board may increase the size of any Committee and appoint additional members
thereof, remove members (for any reason or no reason, with or without cause, and
with or without notice) and appoint new members in substitution therefor, fill
vacancies (however caused) and remove all members of a Committee and thereafter
directly administer the Plan, all to the extent permitted by Applicable Laws.

            (c) Powers of the Administrator. Subject to the provisions of the
Plan and in the case of a Committee, other Person or group of Persons the
specific duties delegated by the Board or Committee to such Committee, Person,
or group of Persons, the Administrator shall have the authority, in its
discretion:

                  (i) to determine the Fair Market Value of the Common Stock, in
      accordance with Section 2(o) of the Plan;


                                      K-3

<PAGE>

                  (ii) to select the Service Providers to whom Stock Awards may
      from time to time be granted hereunder;

                  (iii) to determine whether and to what extent Stock Awards are
      granted hereunder;

                  (iv) to determine the number of shares of Common Stock to be
      covered by each Stock Award granted hereunder;

                  (v) to approve forms of agreement for use under the Plan;

                  (vi) to determine the terms and conditions, not inconsistent
      with the terms of the Plan, of any Option granted hereunder, which terms
      and conditions include, but are not limited to, the exercise or purchase
      price, the time or times when Options may be exercised (which may be based
      on performance criteria), any vesting acceleration or waiver of forfeiture
      restrictions, and any restriction or limitation regarding any Option,
      Optioned Stock or other Stock Award, based in each case on such factors as
      the Administrator, in its sole discretion, shall determine;

                  (vii) to determine whether and under what circumstances an
      Option may be settled in cash under Section 9(f) instead of Common Stock;

                  (viii) to modify or amend each Stock Award;

                  (ix) to adopt rules, procedures, and sub-plans to the Plan
      relating to the operation and administration of the Plan to accommodate
      the specific requirements of local laws and procedures in foreign
      jurisdictions, but unless otherwise superseded by the terms of such rules,
      procedures or sub-plans, the provisions of this Plan shall govern the
      operation of such rules, procedures or sub-plans; and

                  (x) to make all other determinations deemed necessary or
      advisable for administering the Plan.

            (d) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Participants and their successor in interest.

      5. Eligibility.

            (a) Recipients of Grants. Stock Awards may be granted to Service
Providers. A Service Provider who has been granted a Stock Award under the Plan
may, if he or she is otherwise eligible, be granted additional Stock Awards.

            (b) Type of Option. Each Option granted under the Plan shall be
designated in the written option agreement as a Nonstatutory Stock Option.

            (c) Restrictions on Eligibility. Notwithstanding the foregoing, the
aggregate number of Shares issued pursuant to Stock Awards granted under the
Plan to Officers and Directors cannot exceed fifty percent (50%) of the number
of Shares reserved for issuance under the Plan as determined at the time of each
such issuance to an Officer or Director, except that there shall be excluded
from this calculation Shares issued to Officers not previously employed by the
Company pursuant to Stock Awards granted as an inducement essential to such
individuals entering into employment contracts with the Company. In addition,
during the periods commencing on August 14, 2002 and ending on (i) August 14,
2005 and (ii) and on each August 14 thereafter for the remaining Term of the
Plan (as described in Section 6 hereof), less than fifty percent (50%) of the
Shares subject to Stock Awards granted in such periods may be granted to
Officers and Directors, except that there shall be excluded from this
calculation Shares subject to Stock Awards granted to Officers not previously
employed by the Company pursuant to Stock Awards granted as an inducement
essential to such individuals entering into employment contracts with the
Company.


                                      K-4

<PAGE>

            (d) Consultants.

                  (i) A Consultant shall not be eligible for the grant of a
      Stock Award if, at the time of grant, a Form S-8 Registration Statement
      under the Securities Act ("Form S-8") is not available to register either
      the offer or the sale of the Company's securities to such Consultant
      because of the nature of the services that the Consultant is providing to
      the Company, or because the Consultant is not a natural person, or as
      otherwise provided by the rules governing the use of Form S-8, unless the
      Company determines both (i) that such grant (A) shall be registered in
      another manner under the Securities Act (e.g., on a Form S-3 Registration
      Statement) or (B) does not require registration under the Securities Act
      in order to comply with the requirements of the Securities Act, if
      applicable, and (ii) that such grant complies with the securities laws of
      all other relevant jurisdictions.

                  (ii) Form S-8 generally is available to consultants and
      advisors only if (i) they are natural persons; (ii) they provide bona fide
      services to the issuer; and (iii) the services are not in connection with
      the offer or sale of securities in a capital-raising transaction, and do
      not directly or indirectly promote or maintain a market for the issuer's
      securities.

            (e) No Employment or Other Service Rights. Nothing in the Plan or
any instrument executed or Stock Award granted pursuant thereto shall confer
upon any Participant any right to continue to serve the Company or an Affiliate
in the capacity in effect at the time the Stock Award was granted or shall
affect the right of the Company or an Affiliate to terminate (i) the employment
of an Employee at any time, for any reason or no reason, with or without notice
and with or without cause, (ii) the service of a Consultant pursuant to the
terms of such Consultant's agreement with the Company or an Affiliate or (iii)
the service of a Director pursuant to the Bylaws of the Company or an Affiliate,
and any applicable provisions of the corporate law of the state in which the
Company or the Affiliate is incorporated, as the case may be.

      6. Term of Plan. The Plan (as amended and restated hereby) became
effective as of August 14, 2002 and shall continue in effect until terminated
under Section 15 of the Plan.

      7. Term of Option. The term of each Option shall be the term stated in the
written option agreement; provided, however, that the term shall be no more than
ten (10) years from the date of grant thereof, unless otherwise provided in the
option agreement.

      8. Option Exercise Price and Consideration.

            (a) The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option granted under the Plan shall be determined by
the Administrator. Options may be granted with a per Share exercise price which
is either above or below the Fair Market Value per Share on the date of grant,
at the discretion of the Administrator.

            (b) The consideration to be paid by the Optionee (or permitted
transferee as provided for in Section 10) for the Shares to be issued upon
exercise of an Option by the Optionee (or permitted transferee), including the
method of payment, shall be determined by the Administrator and may consist
entirely of (1) cash, (2) check, (3) promissory note, (4) other Shares which (x)
in the case of Shares acquired upon exercise of an Option either have been owned
by the Optionee for more than six months on the date of surrender or were not
acquired, directly or indirectly, from the Company, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised, (5) authorization from the
Company to retain from the total number of Shares as to which the Option is
exercised that number of Shares having a Fair Market Value on the date of
exercise equal to the exercise price for the total number of Shares as to which
the Option is exercised, (6) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or broker loan proceeds required to pay the exercise
price, (7) by delivering an irrevocable subscription agreement for the Shares
which irrevocably obligates the Optionee to take and pay for the Shares not more
than twelve months after the date of delivery of the subscription agreement, (8)
any combination of the foregoing methods of payment, (9) or such other
consideration and method of payment for the issuance of Shares to the extent
permitted under Applicable Laws. In making its determination as to the type of
consideration to accept, 


                                      K-5

<PAGE>

the Administrator shall consider whether acceptance of such consideration may be
reasonably expected to benefit the Company. At any time that the Company is
incorporated in Delaware, if the Optionee (or permitted transferee as provided
for in Section 10) is permitted by the Company to pay the exercise price for the
issuance of the applicable Shares by deferred payment or promissory note, then
the Optionee (or permitted transferee) must pay an amount at least equal to the
Common Stock's "par value," as defined in the Delaware General Corporation Law
in cash or cash equivalents rather than by deferred payment or promissory note.

      In the case of any promissory note, such promissory note will be a full
recourse promissory note, shall provide for interest to be compounded at least
annually and to be charged at the market rate of interest necessary to avoid a
charge to earnings for financial accounting purposes, and shall be on such
further terms as the Board shall determine. No promissory note shall be
permitted if the exercise of an Option using a promissory note would be a
violation of any Applicable Law.

      9. Exercise of Option.

            (a) Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, consistent with the terms of the Plan, and
reflected in the written option agreement, including vesting requirements and/or
performance criteria with respect to the Company and/or the Optionee. With
respect to Options granted under the Plan, the Administrator shall have the
discretion to determine whether and to what extent the vesting of such Options
shall be tolled during any unpaid leave of absence or transfer from one member
of the Affiliated Group to another member of the Affiliated Group; provided
however that in the absence of such determination, vesting of such Options shall
be tolled during any such leave, to the extent permitted by Applicable Laws.

      An Option may not be exercised for a fraction of a Share.

      An Option shall be deemed to be exercised when written or electronic
notice of such exercise has been given to the Company in accordance with the
terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company or its authorized agent. Full payment may, as authorized
by the Administrator, consist of any consideration and method of payment
allowable under Section 8(b) of the Plan and as set forth in the written option
agreement. Until the Company or its duly authorized agent has issued the stock
certificate evidencing such Shares (or transmitted such Shares via electronic
delivery to the Optionee's brokerage account), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such stock certificate or electronic Share
delivery promptly upon exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued or the date the Shares are electronically delivered to the
Optionee's brokerage account, as applicable, except as provided in Section 13 of
the Plan.

      Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

            (b) Termination of Employment. With respect to Options granted under
the Plan, in the event of termination of an Optionee's service with the Company
and its Affiliates, such Optionee may, but only within such period of time as
determined by the Board or the Committee and set forth in the option agreement
(but in no event later than the expiration date of the term of such Option as
set forth in the option agreement), exercise his or her Option to the extent
that Optionee was entitled to exercise it at the date of such termination;
unless such Option is amended while it remains outstanding. To the extent that
Optionee was not entitled to exercise the Option at the date of such
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate. With
respect to Options granted under the Plan, the Board (or its delegate), in its
sole discretion, shall determine whether a termination shall be deemed to occur
and this Section 9(b) shall apply if (i) the Optionee is a Consultant or
non-employee Director at the time of grant and subsequently becomes an Employee,
(ii) the Optionee is an Employee at the time of grant and subsequently becomes a
Consultant or non-employee Director or (iii) the Optionee transfers from one
member of the Affiliated Group to another member of the Affiliated Group.


                                      K-6

<PAGE>

            (c) Disability of Optionee. Notwithstanding the provisions of
Section 9(b) above, with respect to Options granted under the Plan, in the event
of termination of an Optionee's service with the Company and its Affiliates as a
result of his or her Disability, such Optionee may, but only within twelve (12)
months from the date of such termination or as otherwise determined by the Board
or the Committee and set forth in the option agreement (but in no event later
than the expiration date of the term of such Option as set forth in the option
agreement), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such Option to the extent so entitled within the time specified herein, the
Option shall terminate. With respect to Options granted under the Plan, the
Board (or its delegate), in its sole discretion, shall determine whether a
termination shall be deemed to occur and this Section 9(c) shall apply if (i)
the Optionee is a Consultant or non-employee Director at the time of grant and
subsequently becomes an Employee, (ii) the Optionee is an Employee at the time
of grant and subsequently becomes a Consultant or non-employee Director or (iii)
the Optionee transfers from one member of the Affiliated Group to another member
of the Affiliated Group.

            (d) Death of Optionee. In the event of Optionee's death while a
Service Provider, with respect to Options granted under the Plan, his or her
Option may be exercised, at any time within twelve (12) months following the
date of death or as otherwise determined by the Board or the Committee and set
forth in the option agreement (but in no event later than the expiration date of
the term of such Option as set forth in the option agreement), by the Optionee's
estate, by a person who acquired the right to exercise the Option by bequest or
inheritance or by the laws of descent and distribution or by a beneficiary
designated to exercise the Option upon the Optionee's death pursuant to Section
10, but only to the extent the Optionee was entitled to exercise the Option at
the date of death. To the extent that Optionee was not entitled to exercise the
Option at the date of death, or if Optionee's estate, the person who acquired
the right to exercise the Option by bequest or inheritance or by the laws of
descent and distribution or the beneficiary designated to exercise the Option
upon the Optionee's death pursuant to Section 10 does not exercise such Option
to the extent so entitled within the time specified herein, the Option shall
terminate.

            (e) Extension of Exercise Period. The Administrator shall have full
power and authority to extend the period of time for which an Option is to
remain exercisable following termination of an Optionee's status as a Service
Provider from the periods set forth in Sections 9(b), 9(c) and 9(d) above or in
the option agreement to such greater time as the Administrator shall deem
appropriate, provided that in no event shall such Option be exercisable later
than the date of expiration of the term of such Option as set forth in the
option agreement.

            (f) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

      10. Non-Transferability of Options. Unless otherwise provided by the
Administrator, Options are not transferable in any manner otherwise than by will
or by the laws of descent or distribution, and may be exercised during the
lifetime of the Optionee only by the Optionee. Notwithstanding the foregoing,
the Optionee may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a beneficiary who, in the event of the
death of the Optionee, shall thereafter be entitled to exercise the Option. The
Administrator may in its discretion grant transferable Nonstatutory Stock
Options pursuant to option agreements specifying (i) the manner in which such
Nonstatutory Stock Options are transferable and (ii) that any such transfer
shall be subject to Applicable Laws.

      11. Taxes.

            (a) As a condition of the exercise of an Option granted under the
Plan, the Optionee (or in the case of the Optionee's death, the person
exercising the Option) shall make such arrangements as the Administrator may
require for the satisfaction of any applicable federal, state, local or foreign
withholding tax obligations and/or social charges ("Tax-Related Items") that may
arise in connection with the grant, vesting or exercise of the Option and the
issuance of Shares ("Taxable Event"). The Company shall not be required to issue
any Shares under the Plan until such obligations are satisfied.


                                      K-7

<PAGE>

            (b) In the case of an Optionee who is an Employee and in the absence
of any other arrangement, the Employee shall be deemed to have directed the
Company to withhold or collect from his or her compensation an amount sufficient
to satisfy such obligations regarding Tax-Related Items from the next payroll
payment otherwise payable after the date of a Taxable Event.

            (c) In the case of an Optionee other than an Employee (or in the
case of an Employee where the next payroll payment is not sufficient to satisfy
such obligations regarding Tax-Related Items, with respect to any remaining tax
obligations), in the absence of any other arrangement and to the extent
permitted under the Applicable Laws, the Optionee shall be deemed to have
elected to have the Company withhold from the Shares to be issued upon exercise
of the Option that number of Shares having a Fair Market Value determined as of
the applicable Tax Date (as defined below) equal to the minimum statutory
withholding rates for U.S. federal, state and foreign tax purposes, including
payroll taxes, applicable to the Taxable Event. For purposes of this Section 11,
the Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined under the
Applicable Laws (the "Tax Date").

            (d) If permitted by the Administrator, in its discretion, an
Optionee may satisfy his or her obligations regarding Tax-Related Items by
surrendering to the Company Shares that have a Fair Market Value determined as
of the applicable Tax Date equal to the minimum statutory withholding rates for
U.S. federal, state and foreign tax purposes, including payroll taxes,
applicable to the Taxable Event.

            (e) Any election or deemed election by an Optionee to have Shares
withheld to satisfy obligations regarding Tax-Related Items under Section 11(c)
or (d) above shall be irrevocable as to the particular Shares as to which the
election is made and shall be subject to the consent or disapproval of the
Administrator. Any election by an Optionee under Section 11(d) above must be
made on or prior to the applicable Tax Date.

            (f) In the event an election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Company shall have the
authority to establish an escrow to hold the shares until the latest applicable
Tax Date.

      12. Provisions of Stock Awards Other Than Options.

            (a) Restricted Stock Bonus Awards. Each restricted stock bonus
agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate. The terms and conditions of restricted stock
bonus agreements may change from time to time, and the terms and conditions of
separate restricted stock bonus agreements need not be identical, but each
restricted stock bonus agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

                  (i) Consideration. A restricted stock bonus may be awarded in
      consideration for past services actually rendered to the Company or an
      Affiliate for its benefit.

                  (ii) Vesting. Shares awarded under the restricted stock bonus
      agreement may, but need not, be subject to a share reacquisition option in
      favor of the Company in accordance with a vesting schedule to be
      determined by the Board.

                  (iii) Termination of Participant's Service. In the event a
      Participant's service terminates, the Company may reacquire any or all of
      the Shares held by the Participant which have not vested as of the date of
      termination under the terms of the restricted stock bonus agreement.

                  (iv) Transferability. Rights to acquire Shares under the
      restricted stock bonus agreement shall be transferable by the Participant
      only upon such terms and conditions as are set forth in the restricted
      stock bonus agreement, as the Board shall determine in its discretion, so
      long as Shares awarded under the restricted stock bonus agreement remain
      subject to the terms of the restricted stock bonus agreement.


                                      K-8

<PAGE>

            (b) Restricted Stock Purchase Awards. Each restricted stock purchase
agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate. The terms and conditions of restricted stock
purchase agreements may change from time to time, and the terms and conditions
of separate restricted stock purchase agreements need not be identical, but each
restricted stock purchase agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

                  (i) Purchase Price. The purchase price under each restricted
      stock purchase agreement shall be such amount as the Board shall determine
      and designate in such restricted stock purchase agreement.

                  (ii) Consideration. The purchase price of Shares acquired
      pursuant to the restricted stock purchase agreement shall be paid either:
      (i) in cash at the time of purchase; (ii) at the discretion of the Board,
      according to a deferred payment or other similar arrangement with the
      Participant; or (iii) in any other form of legal consideration that may be
      acceptable to the Board in its discretion.

                  (iii) Vesting. Shares awarded under the restricted stock
      purchase agreement may, but need not, be subject to a share repurchase
      option in favor of the Company in accordance with a vesting schedule to be
      determined by the Board.

                  (iv) Termination of Participant's Service. In the event a
      Participant's service terminates, the Company may repurchase or otherwise
      reacquire any or all of the Shares held by the Participant which have not
      vested as of the date of termination under the terms of the restricted
      stock purchase agreement.

                  (v) Transferability. Rights to acquire Shares under the
      restricted stock purchase agreement shall be transferable by the
      Participant only upon such terms and conditions as are set forth in the
      restricted stock purchase agreement, as the Board shall determine in its
      discretion, so long as Shares awarded under the restricted stock bonus
      agreement remain subject to the terms of the restricted stock purchase
      agreement.

      13. Adjustments Upon Changes in Capitalization, Dissolution or
Liquidation, or Merger or Asset Sale.

            (a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of Shares covered by each outstanding
Option and the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, as well as the price per share of Common Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number, or other changes in the price or other characteristics,
of issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, spinoff combination or reclassification of the Common
Stock, or any other increase or decrease in the number, or other change in the
price or characteristic, of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option.

            (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least fifteen (15) days prior to such proposed action. To the extent it has
not been previously exercised, the Option will terminate immediately prior to
the consummation of such proposed action.


                                      K-9

<PAGE>

            (c) Merger or Sale of Assets. In the event of a proposed merger or
consolidation of the Company with or into another corporation or a sale,
exchange, lease or similar transfer of all or substantially all of the Company's
assets, each outstanding Option shall be assumed or an equivalent option shall
be substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the successor corporation does not agree to assume
the Option or to substitute an equivalent option, in which case such Option
shall terminate upon the consummation of the merger or sale of assets.

            (d) Certain Distributions. In the event of any distribution to the
Company's stockholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per share of Common Stock covered by each
outstanding Option to reflect the effect of such distribution.

      14. Time of Granting Stock Awards. The date of grant of a Stock Award
shall, for all purposes, be the date on which the Administrator makes the
determination granting such Stock Award, or such other date as is determined by
the Board. Notice of the determination shall be given to each Service Provider
to whom a Stock Award is so granted within a reasonable time after the date of
such grant.

      15. Amendment and Termination of the Plan.

            (a) Amendment and Termination. Except to the extent prohibited by
Applicable Laws and unless otherwise expressly provided in a Stock Award
agreement or in the Plan, the Board may at any time amend, alter, suspend or
discontinue the Plan, but no amendment, alteration, suspension or discontinuance
or termination (other than an adjustment made pursuant to Section 13 above)
shall be made which would impair the rights of any Participant under any grant
theretofore made, without his or her consent.

            (b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.

      16. Amendment of Stock Awards. The Board at any time, and from time to
time, may amend the terms of any one or more Stock Awards; provided, however,
that the affected Participant's rights under any Stock Award shall not be
materially impaired and his or her obligations under any Stock Award shall not
be materially increased, by any such amendments unless (i) the Company requests
the consent of the Participant and (ii) the Participant consents in writing.

      17. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of Applicable Laws, including, without limitation, the
Securities Act of 1933, the Exchange Act, and the requirements of any stock
exchange upon which the Shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance. The
inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company's counsel to be necessary
to the lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such Shares
as to which such requisite authority shall not have been obtained.

      As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.

      18. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

      19. Agreements. Options shall be evidenced by written agreements in such
form as the Board shall approve from time to time.


                                      K-10

<PAGE>

      20. Code References. All references to any federal statute, rule,
regulation or form are to the federal statute, rule, regulation or form in
effect at the time or to any successor to such federal statute, rule, regulation
or form.

      21. Choice of Law. The law of the State of Delaware shall govern all
questions concerning the construction, validity and interpretation of this Plan,
without regard to such state's conflict of laws rules.


                                      K-11

<PAGE>

                                   APPENDIX L

                 1999 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

                 ADOPTED BY THE BOARD OF DIRECTORS JULY 22, 1999
                    APPROVED BY STOCKHOLDERS AUGUST 23, 1999
                          EFFECTIVE DATE: JULY 22, 1999
                         TERMINATION DATE: JULY 21, 2009

      1. PURPOSES.

            (a) Eligible Option Recipients. The persons eligible to receive
Options are the Non-Employee Directors of the Company.

            (b) Available Options. The purpose of the Plan is to provide a means
by which Non-Employee Directors may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of Nonstatutory
Stock Options.

            (c) General Purpose. The Company, by means of the Plan, seeks to
retain the services of its Non-Employee Directors, to secure and retain the
services of new Non-Employee Directors and to provide incentives for such
persons to exert maximum efforts for the success of the Company and its
Affiliates.

      2. DEFINITIONS.

            (a) "Affiliate" means any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing, as those terms
are defined in Sections 424(e) and (f), respectively, of the Code.

            (b) "Annual Grant" means an Option granted annually to all
Non-Employee Directors who meet the specified criteria pursuant to Subsection
6(b) of the Plan.

            (c) "Annual Meeting" means the annual meeting of the stockholders of
the Company.

            (d) "Board" means the Board of Directors of the Company.

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

            (f) "Common Stock" means the common stock of the Company.

            (g) "Company" means Internap Network Services Corporation, a
Washington corporation.

            (h) "Consultant" means any person, including an advisor, (i) engaged
by the Company or an Affiliate to render consulting or advisory services and who
is compensated for such services or (ii) who is a member of the Board of
Directors of an Affiliate. However, the term "Consultant" shall not include
either Directors of the Company who are not compensated by the Company for their
services as Directors or Directors of the Company who are merely paid a
director's fee by the Company for their services as Directors.

            (i) "Continuous Service" means that the Optionholder's service with
the Company or an Affiliate, whether as an Employee, Director or Consultant, is
not interrupted or terminated. The Optionholder's Continuous Service shall not
be deemed to have terminated merely because of a change in the capacity in which
the Optionholder renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Optionholder
renders such service, provided that there is no interruption or termination of
the Optionholder's Continuous Service. For example, a change in status from a
Non-Employee Director of the Company to a Consultant of an Affiliate or an
Employee of the Company will not constitute an interruption of Continuous
Service. The Board or the chief executive officer of the Company, in that
party's sole discretion, may 


                                      L-1

<PAGE>

determine whether Continuous Service shall be considered interrupted in the case
of any leave of absence approved by that party, including sick leave, military
leave or any other personal leave.

            (j) "Director" means a member of the Board of Directors of the
Company.

            (k) "Disability" means the inability of a person, in the opinion of
a qualified physician acceptable to the Company, to perform the major duties of
that person's position with the Company or an Affiliate of the Company because
of the sickness or injury of the person.

            (l) "Employee" means any person employed by the Company or an
Affiliate. Mere service as a Director or payment of a director's fee by the
Company or an Affiliate shall not be sufficient to constitute "employment" by
the Company or an Affiliate.

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

            (n) "Fair Market Value" means, as of any date, the value of the
Common Stock determined as follows:

                  (i) If the Common Stock is listed on any established stock
      exchange or traded on the NASDAQ National Market or the NASDAQ SmallCap
      Market, the Fair Market Value of a share of Common Stock shall be the
      closing sales price for such stock (or the closing bid, if no sales were
      reported) as quoted on such exchange or market (or the exchange or market
      with the greatest volume of trading in the Common Stock) on the last
      market trading day prior to the day of determination, as reported in The
      Wall Street Journal or such other source as the Board deems reliable.

                  (ii) In the absence of such markets for the Common Stock, the
      Fair Market Value shall be determined in good faith by the Board.

            (o) "Initial Grant" means an Option granted to a Non-Employee
Director pursuant to Subsection 6(a) of the Plan.

            (p) "IPO Date" means the effective date of the initial public
offering of the Common Stock.

            (q) "Non-Employee Director" means a Director who is not employed by
the Company or an Affiliate.

            (r) "Nonstatutory Stock Option" means an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

            (s) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

            (t) "Option" means a Nonstatutory Stock Option granted pursuant to
the Plan.

            (u) "Option Agreement" means a written agreement between the Company
and an Optionholder evidencing the terms and conditions of an individual Option
grant. Each Option Agreement shall be subject to the terms and conditions of the
Plan.

            (v) "Optionholder" means a person to whom an Option is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.

            (w) "Plan" means this Internap Network Services Corporation 1999
Non-Employee Directors' Stock Option Plan.


                                      L-2

<PAGE>

            (x) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act
or any successor to Rule 16b-3, as in effect from time to time.

            (y) "Securities Act" means the Securities Act of 1933, as amended.

      3. ADMINISTRATION.

            (a) Administration by Board. The Board shall administer the Plan.
The Board may not delegate administration of the Plan to a committee.

            (b) Powers of Board. The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:

                  (i) To determine the provisions of each Option to the extent
      not specified in the Plan.

                  (ii) To construe and interpret the Plan and Options granted
      under it, and to establish, amend and revoke rules and regulations for its
      administration. The Board, in the exercise of this power, may correct any
      defect, omission or inconsistency in the Plan or in any Option Agreement,
      in a manner and to the extent it shall deem necessary or expedient to make
      the Plan fully effective.

                  (iii) To amend the Plan or an Option as provided in Section
      12.

                  (iv) To terminate or suspend the Plan as provided in Section
      13.

                  (v) Generally, to exercise such powers and to perform such
      acts as the Board deems necessary or expedient to promote the best
      interests of the Company which are not in conflict with the provisions of
      the Plan.

      4. SHARES SUBJECT TO THE PLAN.

            (a) Share Reserve. Subject to the provisions of Section 11 relating
to adjustments upon changes in stock, the stock that may be issued pursuant to
Options shall not exceed in the aggregate five hundred thousand (500,000) shares
of Common Stock.

            (b) Reversion of Shares to the Share Reserve. If any Option shall
for any reason expire or otherwise terminate, in whole or in part, without
having been exercised in full, the stock not acquired under such Option shall
revert to and again become available for issuance under the Plan.

            (c) Source of Shares. The stock subject to the Plan may be unissued
shares or reacquired shares, bought on the market or otherwise.

      5. ELIGIBILITY.

      Nondiscretionary Options as set forth in Section 6 shall be granted under
the Plan to all Non-Employee Directors.

      6. NON-DISCRETIONARY GRANTS.

            (a) Initial Grants. On the IPO Date, each person who is then a
Non-Employee Director shall automatically be granted an Initial Grant to
purchase forty thousand (40,000) shares of Common Stock on the terms and
conditions set forth herein. After the IPO Date, each person who is elected or
appointed for the first time to be a Non-Employee Director shall automatically,
upon the date of his or her initial election or appointment to be a Non-Employee
Director by the Board or stockholders of the Company, be granted an Initial
Grant to purchase forty thousand (40,000) shares of Common Stock on the terms
and conditions set forth herein.


                                      L-3

<PAGE>

            (b) Annual Grants. On the day following each Annual Meeting
commencing with the Annual Meeting in 2000, each person who is then a
Non-Employee Director and has been a Non-Employee Director for at least six (6)
months automatically shall be granted an Annual Grant to purchase ten thousand
(10,000) shares of Common Stock on the terms and conditions set forth herein.

      7. OPTION PROVISIONS.

      Each Option shall be in such form and shall contain such terms and
conditions as required by the Plan. Each Option shall contain such additional
terms and conditions, not inconsistent with the Plan, as the Board shall deem
appropriate. Each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of each of the
following provisions:

            (a) Term. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.

            (b) Exercise Price. The exercise price of each Option shall be one
hundred percent (100%) of the Fair Market Value of the stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, an
Option may be granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section
424(a) of the Code.

            (c) Consideration. The purchase price of stock acquired pursuant to
an Option may be paid in cash or by check at the time the Option is exercised
or, to the extent permitted by the Option Agreement and applicable statutes and
regulations, (i) by delivery to the Company of other Common Stock, (ii)
according to a deferred payment or other arrangement or (iii) by any other form
of legal consideration that may be acceptable to the Board and provided in the
Option Agreement.

      In the case of any deferred payment arrangement (i) interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement and (ii) at any time the Company is
incorporated in Delaware, payment of the Common Stock's par value shall not be
made by deferred payment.

            (d) Transferability. An Option shall not be transferable except by
will or by the laws of descent and distribution and shall be exercisable during
the lifetime of the Optionholder only by the Optionholder. Notwithstanding the
foregoing, the Optionholder may, by delivering written notice to the Company, in
a form satisfactory to the Company, designate a third party who, in the event of
the death of the Optionholder, shall thereafter be entitled to exercise the
Option.

            (e) Vesting. Options shall be fully vested and exercisable upon
receipt.

            (f) Termination of Continuous Service. In the event an
Optionholder's Continuous Service terminates (other than upon the Optionholder's
death or Disability), the Optionholder may exercise his or her Option but only
within such period of time ending on the earlier of (i) the date three (3)
months following the termination of the Optionholder's Continuous Service, or
(ii) the expiration of the term of the Option as set forth in the Option
Agreement. If, after termination, the Optionholder does not exercise his or her
Option within the time specified in the Option Agreement, the Option shall
terminate.

            (g) Extension of Termination Date. If the exercise of the Option
following the termination of the Optionholder's Continuous Service (other than
upon the Optionholder's death or Disability) would be prohibited at any time
solely because the issuance of shares would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in Subsection
7(a) or (ii) the expiration of a period of three (3) months after the
termination of the Optionholder's Continuous Service during which the exercise
of the Option would not be in violation of such registration requirements.


                                      L-4

<PAGE>

            (h) Disability of Optionholder. In the event an Optionholder's
Continuous Service terminates as a result of the Optionholder's Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise it as of the date of termination), but only within such
period of time ending on the earlier of (i) the date twelve (12) months
following such termination or (ii) the expiration of the term of the Option as
set forth in the Option Agreement. If, after termination, the Optionholder does
not exercise his or her Option within the time specified herein, the Option
shall terminate.

            (i) Death of Optionholder. In the event (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death or (ii)
the Optionholder dies within the three-month period after the termination of the
Optionholder's Continuous Service for a reason other than death, then the Option
may be exercised by the Optionholder's estate, by a person who acquired the
right to exercise the Option by bequest or inheritance or by a person designated
to exercise the Option upon the Optionholder's death, but only within the period
ending on the earlier of (1) the date eighteen (18) months following the date of
death or (2) the expiration of the term of such Option as set forth in the
Option Agreement. If, after death, the Option is not exercised within the time
specified herein, the Option shall terminate.

      8. COVENANTS OF THE COMPANY.

            (a) Availability of Shares. During the terms of the Options, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Options.

            (b) Securities Law Compliance. The Company shall seek to obtain from
each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to grant Options and to issue and sell shares of
Common Stock upon exercise of the Options; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Option or any stock issued or issuable pursuant to any such
Option. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such Options unless and until such authority is obtained.

      9. USE OF PROCEEDS FROM STOCK.

      Proceeds from the sale of stock pursuant to Options shall constitute
general funds of the Company.

      10. MISCELLANEOUS.

            (a) Stockholder Rights. No Optionholder shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
subject to such Option unless and until such Optionholder has satisfied all
requirements for exercise of the Option pursuant to its terms.

            (b) No Service Rights. Nothing in the Plan or any instrument
executed or Option granted pursuant thereto shall confer upon any Optionholder
any right to continue to serve the Company as a Non-Employee Director or shall
affect the right of the Company or an Affiliate to terminate (i) the employment
of an Employee with or without notice and with or without cause, (ii) the
service of a Consultant pursuant to the terms of such Consultant's agreement
with the Company or an Affiliate or (iii) the service of a Director pursuant to
the Bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be.

            (c) Investment Assurances. The Company may require an Optionholder,
as a condition of exercising or acquiring stock under any Option, (i) to give
written assurances satisfactory to the Company as to the Optionholder's
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Option; and (ii) to give
written assurances satisfactory to the Company stating that the Optionholder is
acquiring the stock subject to the Option for the Optionholder's own account and
not with any present intention of selling or otherwise distributing the stock.
The foregoing requirements, and any assurances


                                      L-5

<PAGE>

given pursuant to such requirements, shall be inoperative if (A) the issuance of
the shares upon the exercise or acquisition of stock under the Option has been
registered under a then currently effective registration statement under the
Securities Act or (B) as to any particular requirement, a determination is made
by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may, upon
advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to comply
with applicable securities laws, including, but not limited to, legends
restricting the transfer of the stock.

            (d) Withholding Obligations. The Optionholder may satisfy any
federal, state or local tax withholding obligation relating to the exercise or
acquisition of stock under an Option by any of the following means (in addition
to the Company's right to withhold from any compensation paid to the
Optionholder by the Company) or by a combination of such means: (i) tendering a
cash payment; (ii) authorizing the Company to withhold shares from the shares of
the Common Stock otherwise issuable to the Optionholder as a result of the
exercise or acquisition of stock under the Option; or (iii) delivering to the
Company owned and unencumbered shares of the Common Stock. Notwithstanding the
foregoing, the Company shall not be authorized to withhold shares of Common
Stock at rates in excess of the minimum statutory withholding rates for federal
and state tax purposes, including payroll taxes.

      11. ADJUSTMENTS UPON CHANGES IN STOCK.

            (a) Capitalization Adjustments. If any change is made in the stock
subject to the Plan, or subject to any Option, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject both to the
Plan pursuant to Subsection 4(a) and to the nondiscretionary Options specified
in Section 5, and the outstanding Options will be appropriately adjusted in the
class(es) and number of securities and price per share of stock subject to such
outstanding Options. The Board shall make such adjustments, and its
determination shall be final, binding and conclusive. (The conversion of any
convertible securities of the Company shall not be treated as a transaction
"without receipt of consideration" by the Company.)

            (b) Dissolution or Liquidation. In the event of a dissolution or
liquidation of the Company, then all outstanding Options shall terminate
immediately prior to such event.

            (c) Change in Control. In the event of (i) a sale of all or
substantially all of the assets of the Company, (ii) a merger or consolidation
in which the Company is not the surviving corporation or (iii) a reverse merger
in which the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise, then any surviving corporation or acquiring corporation may assume
any Options outstanding under the Plan or may substitute similar Options
(including an option to acquire the same consideration paid to the stockholders
in the transaction described in this Subsection 11(c)) for those outstanding
under the Plan.

      12. AMENDMENT OF THE PLAN AND OPTIONS.

            (a) Amendment of Plan. The Board at any time, and from time to time,
may amend the Plan. However, except as provided in Section 11 relating to
adjustments upon changes in stock, no amendment shall be effective unless
approved by the stockholders of the Company to the extent stockholder approval
is necessary to satisfy the requirements of Rule 16b-3 or any NASDAQ or
securities exchange listing requirements.

            (b) Stockholder Approval. The Board may, in its sole discretion,
submit any other amendment to the Plan for stockholder approval.

            (c) No Impairment of Rights. Rights under any Option granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Optionholder and (ii) the
Optionholder consents in writing.


                                      L-6

<PAGE>

            (d) Amendment of Options. The Board at any time, and from time to
time, may amend the terms of any one or more Options; provided, however, that
the rights under any Option shall not be impaired by any such amendment unless
(i) the Company requests the consent of the Optionholder and (ii) the
Optionholder consents in writing.

      13. TERMINATION OR SUSPENSION OF THE PLAN.

            (a) Plan Term. The Board may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate on the day before the
tenth (10th) anniversary of the date the Plan is adopted by the Board or
approved by the stockholders of the Company, whichever is earlier. No Options
may be granted under the Plan while the Plan is suspended or after it is
terminated.

            (b) No Impairment of Rights. Suspension or termination of the Plan
shall not impair rights and obligations under any Option granted while the Plan
is in effect except with the written consent of the Optionholder.

      14. EFFECTIVE DATE OF PLAN.

      The Plan shall become effective on the IPO Date, but no Option shall be
exercised unless and until the Plan has been approved by the stockholders of the
Company, which approval shall be within twelve (12) months before or after the
date the Plan is adopted by the Board.

      15. CHOICE OF LAW.

      All questions concerning the construction, validity and interpretation of
this Plan shall be governed by the law of the State of Washington, without
regard to such state's conflict of laws rules.


                                      L-7

<PAGE>

                                   APPENDIX M

                       AMENDED 1999 EQUITY INCENTIVE PLAN

                              ADOPTED JUNE 19, 1999
                    APPROVED BY SHAREHOLDERS AUGUST 23, 1999
            AS AMENDED BY THE BOARD OF DIRECTORS ON DECEMBER 9, 1999
                         TERMINATION DATE: JUNE 18, 2009

      1. PURPOSES.

            (a) Eligible Stock Award Recipients. The persons eligible to receive
Stock Awards are the Employees, Directors and Consultants of the Company and its
Affiliates.

            (b) Available Stock Awards. The purpose of the Plan is to provide a
means by which eligible recipients of Stock Awards may be given an opportunity
to benefit from increases in value of the Common Stock through the granting of
the following Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock
Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.

            (c) General Purpose. The Company, by means of the Plan, seeks to
retain the services of the group of persons eligible to receive Stock Awards, to
secure and retain the services of new members of this group and to provide
incentives for such persons to exert maximum efforts for the success of the
Company and its Affiliates.

      2. DEFINITIONS.

            (a) "Affiliate" means any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing, as those terms
are defined in Sections 424(e) and (f), respectively, of the Code.

            (b) "Board" means the Board of Directors of the Company.

            (c) "Cause" shall have such meaning as is defined in the
Optionholder's employment or consulting agreement with the Company. If the
Optionholder does not have an employment or consulting agreement with the
Company, or if such agreement does not define the term "cause," then the term
"cause" shall mean: (i) misconduct or dishonesty that materially adversely
affects the Company, including without limitation (A) an act materially in
conflict with the financial interests of the Corporation, (B) an act that could
damage the reputation or customer relations of the Company, (C) an act that
could subject the Company to liability, (D) an act constituting sexual
harassment or other violation of the civil rights of coworkers, (E) failure to
obey any lawful instruction of the Board or any officer of the Company and (F)
failure to comply with, or perform any duty required under, the terms of any
confidentiality, inventions or non-competition agreement the Optionholder may
have with the Company, or (ii) acts constituting the unauthorized disclosure of
any of the trade secrets or confidential information of the Company, unfair
competition with the Company or the inducement of any customer of the Company to
breach any contract with the Company. The right to exercise any Option shall be
suspended automatically during the pendency of any investigation by the Board or
its designee, and/or any negotiations by the Board or its designee and the
Optionholder, regarding any actual or alleged act or omission by the
Optionholder of the type described in this section.

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

            (e) "Committee" means a committee of one or more members of the
Board appointed by the Board in accordance with subsection 3(c).

            (f) "Common Stock" means the common stock of the Company.


                                      M-1

<PAGE>

            (g) "Company" means Internap Network Services Corporation, a
Washington corporation.

            (h) "Consultant" means any person, including an advisor, (i) engaged
by the Company or an Affiliate to render consulting or advisory services and who
is compensated for such services or (ii) who is a member of the Board of
Directors of an Affiliate. However, the term "Consultant" shall not include
either Directors who are not compensated by the Company for their services as
Directors or Directors who are merely paid a director's fee by the Company for
their services as Directors.

            (i) "Continuous Service" means that the Participant's service with
the Company or an Affiliate, whether as an Employee, Director or Consultant, is
not interrupted or terminated. The Participant's Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant
renders such service, provided that there is no interruption or termination of
the Participant's Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director will not
constitute an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party's sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave.

            (j) "Covered Employee" means the chief executive officer and the
four (4) other highest compensated officers of the Company for whom total
compensation is required to be reported to stockholders under the Exchange Act,
as determined for purposes of Section 162(m) of the Code.

            (k) "Director" means a member of the Board of Directors of the
Company.

            (l) "Disability" means (i) before the Listing Date, the inability of
a person, in the opinion of a qualified physician acceptable to the Company, to
perform the major duties of that person's position with the Company or an
Affiliate of the Company because of the sickness or injury of the person and
(ii) after the Listing Date, the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.

            (m) "Employee" means any person employed by the Company or an
Affiliate. Mere service as a Director or payment of a director's fee by the
Company or an Affiliate shall not be sufficient to constitute "employment" by
the Company or an Affiliate.

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

            (o) "Fair Market Value" means, as of any date, the value of the
Common Stock determined as follows:

                  (i) If the Common Stock is listed on any established stock
      exchange or traded on the NASDAQ National Market or the NASDAQ SmallCap
      Market, the Fair Market Value of a share of Common Stock shall be the
      closing sales price for such stock (or the closing bid, if no sales were
      reported) as quoted on such exchange or market (or the exchange or market
      with the greatest volume of trading in the Common Stock) on the day of
      determination, as reported in The Wall Street Journal or such other source
      as the Board deems reliable.

                  (ii) In the absence of such markets for the Common Stock, the
      Fair Market Value shall be determined in good faith by the Board.

                  (iii) Prior to the Listing Date, the value of the Common Stock
      shall be determined in a manner consistent with Section 260.140.50 of
      Title 10 of the California Code of Regulations.

            (p) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.


                                      M-2

<PAGE>

            (q) "Listing Date" means the first date upon which any security of
the Company is listed (or approved for listing) upon notice of issuance on any
securities exchange or designated (or approved for designation) upon notice of
issuance as a national market security on an interdealer quotation system if
such securities exchange or interdealer quotation system has been certified in
accordance with the provisions of Section 25100(o) of the California Corporate
Securities Law of 1968.

            (r) "Non-Employee Director" means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or a subsidiary, does
not receive compensation (directly or indirectly) from the Company or its parent
or a subsidiary for services rendered as a consultant or in any capacity other
than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act ("Regulation S-K")), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3.

            (s) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

            (t) "Officer" means (i) before the Listing Date, any person
designated by the Company as an officer and (ii) on and after the Listing Date,
a person who is an officer of the Company within the meaning of Section 16 of
the Exchange Act and the rules and regulations promulgated thereunder.

            (u) "Option" means an Incentive Stock Option or a Nonstatutory Stock
Option granted pursuant to the Plan.

            (v) "Option Agreement" means a written agreement between the Company
and an Optionholder evidencing the terms and conditions of an individual Option
grant. Each Option Agreement shall be subject to the terms and conditions of the
Plan.

            (w) "Optionholder" means a person to whom an Option is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.

            (x) "Outside Director" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (within the
meaning of Treasury Regulations promulgated under Section 162(m) of the Code),
is not a former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time and is not currently receiving direct or indirect remuneration from
the Company or an "affiliated corporation" for services in any capacity other
than as a Director or (ii) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.

            (y) "Participant" means a person to whom a Stock Award is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Stock Award.

            (z) "Plan" means this Internap Network Services Corporation 1999
Equity Incentive Plan.

            (aa) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
Act or any successor to Rule 16b-3, as in effect from time to time.

            (bb) "Securities Act" means the Securities Act of 1933, as amended.

            (cc) "Stock Award" means any right granted under the Plan, including
an Option, a stock bonus and a right to acquire restricted stock.


                                      M-3

<PAGE>

            (dd) "Stock Award Agreement" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.

            (ee) "Ten Percent Shareholder" means a person who owns (or is deemed
to own pursuant to Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any of its Affiliates.

      3. ADMINISTRATION.

            (a) Administration by Board. The Board shall administer the Plan
unless and until the Board delegates administration to a Committee, as provided
in subsection 3(c). Any interpretation of the Plan by the Board and any decision
by the Board under the Plan shall be final and binding on all persons.

            (b) Powers of Board. The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:

                  (i) To determine from time to time which of the persons
      eligible under the Plan shall be granted Stock Awards; when and how each
      Stock Award shall be granted; what type or combination of types of Stock
      Award shall be granted; the provisions of each Stock Award granted (which
      need not be identical), including the time or times when a person shall be
      permitted to receive Common Stock pursuant to a Stock Award; and the
      number of shares of Common Stock with respect to which a Stock Award shall
      be granted to each such person.

                  (ii) To construe and interpret the Plan and Stock Awards
      granted under it, and to establish, amend and revoke rules and regulations
      for its administration. The Board, in the exercise of this power, may
      correct any defect, omission or inconsistency in the Plan or in any Stock
      Award Agreement, in a manner and to the extent it shall deem necessary or
      expedient to make the Plan fully effective.

                  (iii) To amend the Plan or a Stock Award as provided in
      Section 12.

                  (iv) Generally, to exercise such powers and to perform such
      acts as the Board deems necessary or expedient to promote the best
      interests of the Company which are not in conflict with the provisions of
      the Plan.

      (c) Delegation to Committee.

                  (i) General. The Board may delegate administration of the Plan
      to a Committee or Committees of one (1) or more members of the Board, and
      the term "Committee" shall apply to any person or persons to whom such
      authority has been delegated. If administration is delegated to a
      Committee, the Committee shall have, in connection with the administration
      of the Plan, the powers theretofore possessed by the Board, including the
      power to delegate to a subcommittee any of the administrative powers the
      Committee is authorized to exercise (and references in this Plan to the
      Board shall thereafter be to the Committee or subcommittee), subject,
      however, to such resolutions, not inconsistent with the provisions of the
      Plan, as may be adopted from time to time by the Board. The Board may
      abolish the Committee at any time and revest in the Board the
      administration of the Plan.

                  (ii) Committee Composition when Common Stock is Publicly
      Traded. At such time as the Common Stock is publicly traded, in the
      discretion of the Board, a Committee may consist solely of two or more
      Outside Directors, in accordance with Section 162(m) of the Code, and/or
      solely of two or more Non-Employee Directors, in accordance with Rule
      16b-3. Within the scope of such authority, the Board or the Committee may
      (1) delegate to a committee of one or more members of the Board who are
      not Outside Directors the authority to grant Stock Awards to eligible
      persons who are either (a) not then Covered Employees and are not expected
      to be Covered Employees at the time of recognition of income resulting
      from such Stock Award or (b) not persons with respect to whom the Company
      wishes to comply 


                                      M-4

<PAGE>

      with Section 162(m) of the Code and/or) (2) delegate to a committee of one
      or more members of the Board who are not Non-Employee Directors the
      authority to grant Stock Awards to eligible persons who are not then
      subject to Section 16 of the Exchange Act.

      4. SHARES SUBJECT TO THE PLAN.

            (a) Share Reserve. Subject to the provisions of Section 11 relating
to adjustments upon changes in Common Stock, the Common Stock that may be issued
pursuant to Stock Awards shall not exceed in the aggregate six million five
hundred thousand (6,500,000) shares of Common Stock. As of the first nine (9)
anniversaries of the effective date of the Plan, the number of shares of Common
Stock that may be issued pursuant to Stock Awards will automatically be
increased by the lesser of (i) three and one-half percent (3 1/2%) of the total
number of shares of Common Stock outstanding on such anniversary date, or (ii)
six million five hundred thousand (6,500,000) shares.

            (b) Reversion of Shares to the Share Reserve. If any Stock Award
shall for any reason expire or otherwise terminate, in whole or in part, without
having been exercised in full, the shares of Common Stock not acquired under
such Stock Award shall revert to and again become available for issuance under
the Plan.

            (c) Source of Shares. The shares of Common Stock subject to the Plan
may be unissued shares or reacquired shares, bought on the market or otherwise.

            (d) Share Reserve Limitation. Prior to the Listing Date and to the
extent then required by Section 260.140.45 of Title 10 of the California Code of
Regulations, the total number of shares of Common Stock issuable upon exercise
of all outstanding Options and the total number of shares of Common Stock
provided for under any stock bonus or similar plan of the Company shall not
exceed the applicable percentage as calculated in accordance with the conditions
and exclusions of Section 260.140.45 of Title 10 of the California Code of
Regulations, based on the shares of Common Stock of the Company that are
outstanding at the time the calculation is made.

      5. ELIGIBILITY.

            (a) Eligibility for Specific Stock Awards. Incentive Stock Options
may be granted only to Employees. Stock Awards other than Incentive Stock
Options may be granted to Employees, Directors and Consultants.

            (b) Ten Percent Shareholders.

                  (i) A Ten Percent Shareholder shall not be granted an
      Incentive Stock Option unless the exercise price of such Option is at
      least one hundred ten percent (110%) of the Fair Market Value of the
      Common Stock at the date of grant and the Option is not exercisable after
      the expiration of five (5) years from the date of grant.

                  (ii) Prior to the Listing Date, a Ten Percent Shareholder
      shall not be granted a Nonstatutory Stock Option unless the exercise price
      of such Option is at least (i) one hundred ten percent (110%) of the Fair
      Market Value of the Common Stock at the date of grant or (ii) such lower
      percentage of the Fair Market Value of the Common Stock at the date of
      grant as is permitted by Section 260.140.41 of Title 10 of the California
      Code of Regulations at the time of the grant of the Option.

                  (iii) Prior to the Listing Date, a Ten Percent Shareholder
      shall not be granted a restricted stock award unless the purchase price of
      the restricted stock is at least (i) one hundred percent (100%) of the
      Fair Market Value of the Common Stock at the date of grant or (ii) such
      lower percentage of the Fair Market Value of the Common Stock at the date
      of grant as is permitted by Section 260.140.41 of Title 10 of the
      California Code of Regulations at the time of the grant of the Option. 


                                      M-5

<PAGE>

            (c) Section 162(m) Limitation. Subject to the provisions of Section
11 relating to adjustments upon changes in the shares of Common Stock, no
Employee shall be eligible to be granted Options covering more than three
million (3,000,000) shares of Common Stock during any calendar year. This
subsection 5(c) shall not apply prior to the Listing Date and, following the
Listing Date, this subsection 5(c) shall not apply until (i) the earliest of:
(1) the first material modification of the Plan (including any increase in the
number of shares of Common Stock reserved for issuance under the Plan in
accordance with Section 4); (2) the issuance of all of the shares of Common
Stock reserved for issuance under the Plan; (3) the expiration of the Plan; or
(4) the first meeting of shareholders at which Directors are to be elected that
occurs after the close of the third calendar year following the calendar year in
which occurred the first registration of an equity security under Section 12 of
the Exchange Act; or (ii) such other date required by Section 162(m) of the Code
and the rules and regulations promulgated thereunder.

            (d) Consultants.

                  (i) Prior to the Listing Date, a Consultant shall not be
      eligible for the grant of a Stock Award if, at the time of grant, either
      the offer or the sale of the Company's securities to such Consultant is
      not exempt under Rule 701 of the Securities Act ("Rule 701") because of
      the nature of the services that the Consultant is providing to the
      Company, or because the Consultant is not a natural person, or as
      otherwise provided by Rule 701, unless the Company determines that such
      grant need not comply with the requirements of Rule 701 and will satisfy
      another exemption under the Securities Act as well as comply with the
      securities laws of all other relevant jurisdictions.

                  (ii) From and after the Listing Date, a Consultant shall not
      be eligible for the grant of a Stock Award if, at the time of grant, a
      Form S-8 Registration Statement under the Securities Act ("Form S-8") is
      not available to register either the offer or the sale of the Company's
      securities to such Consultant because of the nature of the services that
      the Consultant is providing to the Company, or because the Consultant is
      not a natural person, or as otherwise provided by the rules governing the
      use of Form S-8, unless the Company determines both (i) that such grant
      (A) shall be registered in another manner under the Securities Act (e.g.,
      on a Form S-3 Registration Statement) or (B) does not require registration
      under the Securities Act in order to comply with the requirements of the
      Securities Act, if applicable, and (ii) that such grant complies with the
      securities laws of all other relevant jurisdictions.

      6. OPTION PROVISIONS.

      Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and, if certificates are issued, a separate certificate or certificates
will be issued for shares of Common Stock purchased on exercise of each type of
Option. The provisions of separate Options need not be identical, but each
Option shall include (through incorporation of provisions hereof by reference in
the Option or otherwise) the substance of each of the following provisions:

            (a) Term. Subject to the provisions of subsection 5(b) regarding Ten
Percent Shareholders, no Option granted prior to the Listing Date shall be
exercisable after the expiration of ten (10) years from the date it was granted,
and no Incentive Stock Option granted on or after the Listing Date shall be
exercisable after the expiration of ten (10) years from the date it was granted.

            (b) Exercise Price of an Incentive Stock Option. Subject to the
provisions of subsection 5(b) regarding Ten Percent Shareholders, the exercise
price of each Incentive Stock Option shall be not less than one hundred percent
(100%) of the Fair Market Value of the Common Stock subject to the Option on the
date the Option is granted. Notwithstanding the foregoing, an Incentive Stock
Option may be granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section
424(a) of the Code.

            (c) Exercise Price of a Nonstatutory Stock Option. Subject to the
provisions of subsection 5(b) regarding Ten Percent Shareholders, the exercise
price of each Nonstatutory Stock Option granted prior to the Listing Date shall
be not less than eighty-five percent (85%) of the Fair Market Value of the
Common Stock subject to the Option on the date the Option is granted. The
exercise price of each Nonstatutory Stock Option granted on or 


                                      M-6

<PAGE>

after the Listing Date shall be not less than eighty-five percent (85%) of the
Fair Market Value of the Common Stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock Option
may be granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.

            (d) Consideration. The purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (i) in cash at the time the Option is exercised
or (ii) at the discretion of the Board at the time of the grant of the Option
(or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to
the Company of other Common Stock, (2) according to a deferred payment or other
similar arrangement with the Optionholder (including an arrangement involving a
promissory note issued by the Optionholder) or (3) in any other form of legal
consideration that may be acceptable to the Board; provided, however, that at
any time that the Company is incorporated in Delaware, payment of the Common
Stock's "par value," as defined in the Delaware General Corporation Law, shall
not be made by deferred payment.

      In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.

            (e) Transferability of an Incentive Stock Option. An Incentive Stock
Option shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. Notwithstanding the foregoing, the Optionholder may,
by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option.

            (f) Transferability of a Nonstatutory Stock Option. A Nonstatutory
Stock Option granted prior to the Listing Date shall not be transferable except
by will or by the laws of descent and distribution and, to the extent provided
in the Option Agreement, to such further extent as permitted by Section
260.140.41(d) of Title 10 of the California Code of Regulations at the time of
the grant of the Option, and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder. A Nonstatutory Stock Option granted on or
after the Listing Date shall be transferable to the extent provided in the
Option Agreement. If the Nonstatutory Stock Option does not provide for
transferability, then the Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.

            (g) Vesting Generally. The total number of shares of Common Stock
subject to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this subsection 6(g) are subject to any Option provisions
governing the minimum number of shares of Common Stock as to which an Option may
be exercised.

            (h) Minimum Vesting Prior to the Listing Date. Notwithstanding the
foregoing subsection 6(g), to the extent that the following restrictions on
vesting are required by Section 260.140.41(f) of Title 10 of the California Code
of Regulations at the time of the grant of the Option, then:

                  (i) Options granted prior to the Listing Date to an Employee
      who is not an Officer, Director or Consultant shall provide for vesting of
      the total number of shares of Common Stock at a rate of at least twenty
      percent (20%) per year over five (5) years from the date the Option was
      granted, subject to reasonable conditions such as continued employment;
      and


                                      M-7

<PAGE>

                  (ii) Options granted prior to the Listing Date to Officers,
      Directors or Consultants may be made fully exercisable, subject to
      reasonable conditions such as continued employment, at any time or during
      any period established by the Company.

            (i) Termination of Continuous Service. In the event an
Optionholder's Continuous Service terminates (other than upon the Optionholder's
death or Disability or for Cause), the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option
as of the date of termination) but only within such period of time ending on the
earlier of (i) the date three (3) months following the termination of the
Optionholder's Continuous Service (or such longer or shorter period specified in
the Option Agreement, which period shall not be less than thirty (30) days for
Options granted prior to the Listing Date unless such termination is for cause),
or (ii) the expiration of the term of the Option as set forth in the Option
Agreement. If, after termination, the Optionholder does not exercise his or her
Option within the time specified in the Option Agreement, the Option shall
terminate. In the event an Optionholder's Continuous Service terminates for
Cause, then his or her Option shall terminate immediately upon such event.

            (j) Extension of Termination Date. An Optionholder's Option
Agreement may also provide that if the exercise of the Option following the
termination of the Optionholder's Continuous Service (other than upon the
Optionholder's death or Disability or for Cause) would be prohibited at any time
solely because the issuance of shares of Common Stock would violate the
registration requirements under the Securities Act, then the Option shall
terminate on the earlier of (i) the expiration of the term of the Option set
forth in subsection 6(a) or (ii) the expiration of a period of three (3) months
after the termination of the Optionholder's Continuous Service during which the
exercise of the Option would not be in violation of such registration
requirements.

            (k) Disability of Optionholder. In the event that an Optionholder's
Continuous Service terminates as a result of the Optionholder's Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the Option Agreement, which period shall not be less than six (6) months for
Options granted prior to the Listing Date) or (ii) the expiration of the term of
the Option as set forth in the Option Agreement. If, after termination, the
Optionholder does not exercise his or her Option within the time specified
herein, the Option shall terminate.

            (l) Death of Optionholder. In the event (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death or (ii)
the Optionholder dies within the period (if any) specified in the Option
Agreement after the termination of the Optionholder's Continuous Service for a
reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholder's estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
option upon the Optionholder's death pursuant to subsection 6(e) or 6(f), but
only within the period ending on the earlier of (1) the date eighteen (18)
months following the date of death (or such longer or shorter period specified
in the Option Agreement, which period shall not be less than six (6) months for
Options granted prior to the Listing Date) or (2) the expiration of the term of
such Option as set forth in the Option Agreement. If, after death, the Option is
not exercised within the time specified herein, the Option shall terminate.

            (m) Early Exercise. The Option may, but need not, include a
provision whereby the Optionholder may elect at any time before the
Optionholder's Continuous Service terminates to exercise the Option as to any
part or all of the shares of Common Stock subject to the Option prior to the
full vesting of the Option. Subject to the "Repurchase Limitation" in subsection
10(h), any unvested shares of Common Stock so purchased may be subject to a
repurchase option in favor of the Company or to any other restriction the Board
determines to be appropriate.

            (n) Right of Repurchase. Subject to the "Repurchase Limitation" in
subsection 10(h), the Option may, but need not, include a provision whereby the
Company may elect, prior to the Listing Date, to repurchase all or any part of
the vested shares of Common Stock acquired by the Optionholder pursuant to the
exercise of the Option.


                                      M-8

<PAGE>

            (o) Right of First Refusal. The Option may, but need not, include a
provision whereby the Company may elect, prior to the Listing Date, to exercise
a right of first refusal following receipt of notice from the Optionholder of
the intent to transfer all or any part of the shares of Common Stock received
upon the exercise of the Option. Except as expressly provided in this subsection
6(o), such right of first refusal shall otherwise comply with any applicable
provisions of the Bylaws of the Company.

            (p) Re-Load Options. Without in any way limiting the authority of
the Board to make or not to make grants of Options hereunder, the Board shall
have the authority (but not an obligation) to include as part of any Option
Agreement a provision entitling the Optionholder to a further Option (a "Re-Load
Option") in the event the Optionholder exercises the Option evidenced by the
Option Agreement, in whole or in part, by surrendering other shares of Common
Stock in accordance with this Plan and the terms and conditions of the Option
Agreement. Any such Re-Load Option shall (i) provide for a number of shares of
Common Stock equal to the number of shares of Common Stock surrendered as part
or all of the exercise price of such Option; (ii) have an expiration date which
is the same as the expiration date of the Option the exercise of which gave rise
to such Re-Load Option; and (iii) have an exercise price which is equal to one
hundred percent (100%) of the Fair Market Value of the Common Stock subject to
the Re-Load Option on the date of exercise of the original Option.
Notwithstanding the foregoing, a Re-Load Option shall be subject to the same
exercise price and term provisions heretofore described for Options under the
Plan.

               
      Any such Re-Load Option may be an Incentive Stock Option or a Nonstatutory
Stock Option, as the Board may designate at the time of the grant of the
original Option; provided, however, that the designation of any Re-Load Option
as an Incentive Stock Option shall be subject to the one hundred thousand dollar
($100,000) annual limitation on the exercisability of Incentive Stock Options
described in subsection 10(d) and in Section 422(d) of the Code. There shall be
no Re-Load Options on a Re-Load Option. Any such Re-Load Option shall be subject
to the availability of sufficient shares of Common Stock under subsection 4(a)
and the "Section 162(m) Limitation" on the grants of Options under subsection
5(c) and shall be subject to such other terms and conditions as the Board may
determine which are not inconsistent with the express provisions of the Plan
regarding the terms of Options.

      7. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.

            (a) Stock Bonus Awards. Each stock bonus agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem
appropriate. The terms and conditions of stock bonus agreements may change from
time to time, and the terms and conditions of separate stock bonus agreements
need not be identical, but each stock bonus agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions:

                  (i) Consideration. A stock bonus may be awarded in
      consideration for past services actually rendered to the Company or an
      Affiliate for its benefit.

                  (ii) Vesting. Subject to the "Repurchase Limitation" in
      subsection 10(h), shares of Common Stock awarded under the stock bonus
      agreement may, but need not, be subject to a share repurchase option in
      favor of the Company in accordance with a vesting schedule to be
      determined by the Board.

                  (iii) Termination of Participant's Continuous Service. Subject
      to the "Repurchase Limitation" in subsection 10(h), in the event a
      Participant's Continuous Service terminates, the Company may reacquire any
      or all of the shares of Common Stock held by the Participant which have
      not vested as of the date of termination under the terms of the stock
      bonus agreement.

                  (iv) Transferability. For a stock bonus award made before the
      Listing Date, rights to acquire shares of Common Stock under the stock
      bonus agreement shall not be transferable except by will or by the laws of
      descent and distribution and shall be exercisable during the lifetime of
      the Participant only by the Participant. For a stock bonus award made on
      or after the Listing Date, rights to acquire shares of Common Stock under
      the stock bonus agreement shall be transferable by the Participant only
      upon such terms and conditions as are set forth in the stock bonus
      agreement, as the Board shall determine in its 


                                      M-9

<PAGE>

      discretion, so long as Common Stock awarded under the stock bonus
      agreement remains subject to the terms of the stock bonus agreement.

            (b) Restricted Stock Awards. Each restricted stock purchase
agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate. The terms and conditions of the restricted
stock purchase agreements may change from time to time, and the terms and
conditions of separate restricted stock purchase agreements need not be
identical, but each restricted stock purchase agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions:

                  (i) Purchase Price. Subject to the provisions of subsection
      5(b) regarding Ten Percent Shareholders, the purchase price under each
      restricted stock purchase agreement shall be such amount as the Board
      shall determine and designate in such restricted stock purchase agreement.
      For restricted stock awards made prior to the Listing Date, the purchase
      price shall not be less than eighty-five percent (85%) of the Common
      Stock's Fair Market Value on the date such award is made or at the time
      the purchase is consummated. For restricted stock awards made on or after
      the Listing Date, the purchase price shall not be less than eighty-five
      percent (85%) of the Common Stock's Fair Market Value on the date such
      award is made or at the time the purchase is consummated.

                  (ii) Consideration. The purchase price of Common Stock
      acquired pursuant to the restricted stock purchase agreement shall be paid
      either: (i) in cash at the time of purchase; (ii) at the discretion of the
      Board, according to a deferred payment or other similar arrangement with
      the Participant; or (iii) in any other form of legal consideration that
      may be acceptable to the Board in its discretion; provided, however, that
      at any time that the Company is incorporated in Delaware, then payment of
      the Common Stock's "par value," as defined in the Delaware General
      Corporation Law, shall not be made by deferred payment.

                  (iii) Vesting. Subject to the "Repurchase Limitation" in
      subsection 10(h), shares of Common Stock acquired under the restricted
      stock purchase agreement may, but need not, be subject to a share
      repurchase option in favor of the Company in accordance with a vesting
      schedule to be determined by the Board.

                  (iv) Termination of Participant's Continuous Service. Subject
      to the "Repurchase Limitation" in subsection 10(h), in the event a
      Participant's Continuous Service terminates, the Company may repurchase or
      otherwise reacquire any or all of the shares of Common Stock held by the
      Participant which have not vested as of the date of termination under the
      terms of the restricted stock purchase agreement.

                  (v) Transferability. For a restricted stock award made before
      the Listing Date, rights to acquire shares of Common Stock under the
      restricted stock purchase agreement shall not be transferable except by
      will or by the laws of descent and distribution and shall be exercisable
      during the lifetime of the Participant only by the Participant. For a
      restricted stock award made on or after the Listing Date, rights to
      acquire shares of Common Stock under the restricted stock purchase
      agreement shall be transferable by the Participant only upon such terms
      and conditions as are set forth in the restricted stock purchase
      agreement, as the Board shall determine in its discretion, so long as
      Common Stock awarded under the restricted stock purchase agreement remains
      subject to the terms of the restricted stock purchase agreement. 

      8. COVENANTS OF THE COMPANY.

            (a) Availability of Shares. During the terms of the Stock Awards,
the Company shall keep available at all times the number of shares of Common
Stock required to satisfy such Stock Awards.

            (b) Securities Law Compliance. The Company shall seek to obtain from
each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to grant Stock Awards 


                                      M-10

<PAGE>

and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking shall not require the Company to
register under the Securities Act the Plan, any Stock Award or any Common Stock
issued or issuable pursuant to any such Stock Award. If, after reasonable
efforts, the Company is unable to obtain from any such regulatory commission or
agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell Common Stock upon
exercise of such Stock Awards unless and until such authority is obtained.

      9. USE OF PROCEEDS FROM STOCK.

      Proceeds from the sale of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company.

      10. MISCELLANEOUS.

            (a) Acceleration of Exercisability and Vesting. The Board shall have
the power to accelerate the time at which a Stock Award may first be exercised
or the time during which a Stock Award or any part thereof will vest in
accordance with the Plan, notwithstanding the provisions in the Stock Award
stating the time at which it may first be exercised or the time during which it
will vest.

            (b) Shareholder Rights. No Participant shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
of Common Stock subject to such Stock Award unless and until such Participant
has satisfied all requirements for exercise of the Stock Award pursuant to its
terms.

            (c) No Employment or other Service Rights. Nothing in the Plan or
any instrument executed or Stock Award granted pursuant thereto shall confer
upon any Participant any right to continue to serve the Company or an Affiliate
in the capacity in effect at the time the Stock Award was granted or shall
affect the right of the Company or an Affiliate to terminate (i) the employment
of an Employee with or without notice and with or without cause, (ii) the
service of a Consultant pursuant to the terms of such Consultant's agreement
with the Company or an Affiliate or (iii) the service of a Director pursuant to
the Bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be.

            (d) Incentive Stock Option $100,000 Limitation. To the extent that
the aggregate Fair Market Value (determined at the time of grant) of Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by any Optionholder during any calendar year (under all plans of the
Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof which exceed such limit (according to the order in
which they were granted) shall be treated as Nonstatutory Stock Options.

            (e) Investment Assurances. The Company may require a Participant, as
a condition of exercising or acquiring Common Stock under any Stock Award, (i)
to give written assurances satisfactory to the Company as to the Participant's
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant's own
account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (iii) the issuance of the shares
of Common Stock upon the exercise or acquisition of Common Stock under the Stock
Award has been registered under a then currently effective registration
statement under the Securities Act or (iv) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the Common Stock.


                                      M-11

<PAGE>

            (f) Withholding Obligations. To the extent provided by the terms of
a Stock Award Agreement, the Participant may satisfy any federal, state or local
tax withholding obligation relating to the exercise or acquisition of Common
Stock under a Stock Award by any of the following means (in addition to the
Company's right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold shares of Common Stock from the shares of
Common Stock otherwise issuable to the Participant as a result of the exercise
or acquisition of Common Stock under the Stock Award in an amount not to exceed
the minimum amount of tax required to be withheld by law; or (iii) delivering to
the Company owned and unencumbered shares of Common Stock. Notwithstanding the
foregoing, the Company shall not be authorized to withhold shares of Common
Stock at rates in excess of the minimum statutory withholding rates for federal
and state tax purposes, including payroll taxes.

            (g) Information Obligation. Prior to the Listing Date, to the extent
required by Section 260.140.46 of Title 10 of the California Code of
Regulations, the Company shall deliver financial statements to Participants at
least annually. This subsection 10(g) shall not apply to key Employees whose
duties in connection with the Company assure them access to equivalent
information.

            (h) Repurchase Limitation. The terms of any repurchase option shall
be specified in the Stock Award and may be either at Fair Market Value at the
time of repurchase or at not less than the original purchase price. To the
extent required by Section 260.140.41 and Section 260.140.42 of Title 10 of the
California Code of Regulations at the time a Stock Award is made, any repurchase
option contained in a Stock Award granted prior to the Listing Date to a person
who is not an Officer, Director or Consultant shall be upon the terms described
below:

                  (i) Fair Market Value. If the repurchase option gives the
      Company the right to repurchase the shares of Common Stock upon
      termination of employment at not less than the Fair Market Value of the
      shares of Common Stock to be purchased on the date of termination of
      Continuous Service, then (i) the right to repurchase shall be exercised
      for cash or cancellation of purchase money indebtedness for the shares of
      Common Stock within ninety (90) days of termination of Continuous Service
      (or in the case of shares of Common Stock issued upon exercise of Stock
      Awards after such date of termination, within ninety (90) days after the
      date of the exercise) or such longer period as may be agreed to by the
      Company and the Participant (for example, for purposes of satisfying the
      requirements of Section 1202(c)(3) of the Code regarding "qualified small
      business stock") and (ii) the right terminates when the shares of Common
      Stock become publicly traded.

                  (ii) Original Purchase Price. If the repurchase option gives
      the Company the right to repurchase the shares of Common Stock upon
      termination of Continuous Service at the original purchase price, then (i)
      the right to repurchase at the original purchase price shall lapse at the
      rate of at least twenty percent (20%) of the shares of Common Stock per
      year over five (5) years from the date the Stock Award is granted (without
      respect to the date the Stock Award was exercised or became exercisable)
      and (ii) the right to repurchase shall be exercised for cash or
      cancellation of purchase money indebtedness for the shares of Common Stock
      within ninety (90) days of termination of Continuous Service (or in the
      case of shares of Common Stock issued upon exercise of Options after such
      date of termination, within ninety (90) days after the date of the
      exercise) or such longer period as may be agreed to by the Company and the
      Participant (for example, for purposes of satisfying the requirements of
      Section 1202(c)(3) of the Code regarding "qualified small business
      stock").

      11. ADJUSTMENTS UPON CHANGES IN STOCK.

            (a) Capitalization Adjustments. If any change is made in the Common
Stock subject to the Plan, or subject to any Stock Award, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to subsection 4(a) and the maximum number of securities subject to
award to any person pursuant to subsection 5(c), and the outstanding Stock
Awards will be appropriately adjusted in the class(es) and number of securities
and price per share of Common Stock subject 


                                      M-12

<PAGE>

to such outstanding Stock Awards. The Board shall make such adjustments, and its
determination shall be final, binding and conclusive. (The conversion of any
convertible securities of the Company shall not be treated as a transaction
"without receipt of consideration" by the Company.)

            (b) Dissolution or Liquidation. In the event of a dissolution or
liquidation of the Company, then all outstanding Stock Awards shall terminate
immediately prior to such event.

            (c) Certain Changes in Control. In the event of (i) a sale, lease or
other disposition of all or substantially all of the assets of the Company, (ii)
a merger or consolidation in which the Company is not the surviving corporation
or (iii) a reverse merger in which the Company is the surviving corporation but
the shares of Common Stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise (collectively, a "Change in Control"), then any
surviving corporation or acquiring corporation may assume or continue any Stock
Awards outstanding under the Plan or may substitute similar stock awards
(including an award to acquire the same consideration paid to the shareholders
in the transaction described in this subsection 11(c)) for those outstanding
under the Plan. In the event any surviving corporation or acquiring corporation
refuses to assume or continue such Stock Awards or to substitute similar stock
awards for those outstanding under the Plan, then with respect to Stock Awards
held by Participants whose Continuous Service has not terminated, the vesting of
such Stock Awards (and, if applicable, the time during which such Stock Awards
may be exercised) shall be accelerated in full, and the Stock Awards shall
terminate if not exercised (if applicable) at or prior to such event. With
respect to any other Stock Awards outstanding under the Plan, such Stock Awards
shall terminate if not exercised (if applicable) prior to such event.

            (d) Termination of Service Following a Change in Control. Unless
otherwise specified in the applicable Stock Award Agreement, in the event of the
occurrence of a Change in Control and provided that a Participant's Stock Award
remains in effect following such Change in Control or is assumed, continued or
substituted for any similar stock award in connection with the Change in
Control, then, if such Participant's Continuous Service is terminated by the
Company without Cause within thirteen (13) months following the effective date
of the Change in Control, all Stock Awards held by such Participant (or any
substituted stock awards) shall, as of the date of such termination of
Continuous Service, vest in full and become fully exercisable (if applicable) to
the extent not previously vested or exercisable. Such Stock Awards shall remain
exercisable until they expire in accordance with their terms.

            (e) Securities Acquisition. After the Listing Date, in the event of
an acquisition by any person, entity or group within the meaning of Section
13(d) or 14(d) of the Exchange Act, or any comparable successor provisions
(excluding any employee benefit plan, or related trust, sponsored or maintained
by the Company or an Affiliate) of the beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule)
of securities of the Company representing at least fifty percent (50%) of the
combined voting power entitled to vote in the election of Directors, then with
respect to Stock Awards held by Participants whose Continuous Service has not
terminated, the vesting of such Stock Awards (and, if applicable, the time
during which such Stock Awards may be exercised) shall be accelerated in full.
Such Stock Awards shall remain exercisable until they expire in accordance with
their terms.

            (f) Parachute Payments. If any payment or benefit Optionholder would
receive in connection with a Change in Control from the Company or otherwise
("Payment") would (i) constitute a "parachute payment" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and
(ii) but for this sentence, be subject to the excise tax imposed by Section 4999
of the Code (the "Excise Tax"), then such Payment shall be reduced to the
Reduced Amount. The "Reduced Amount" shall be either (x) the largest portion of
the Payment that would result in no portion of the Payment being subject to the
Excise Tax or (y) the largest portion, up to and including the total, of the
Payment, whichever amount, after taking into account all applicable federal,
state and local employment taxes, income taxes, and the Excise Tax (all computed
at the highest applicable marginal rate), results in Optionholder's receipt, on
an after-tax basis, of the greater amount of the Payment notwithstanding that
all or some portion of the Payment may be subject to the Excise Tax. If a
reduction in payments or benefits constituting "parachute payments" is necessary
so that the Payment equals the Reduced Amount, reduction shall occur in the
following order unless the Optionholder elects in writing a different order
(provided, however, that such election shall be subject to Company approval if
made on or after the effective date of the Change of Control): reduction of cash
payments; cancellation of accelerated vesting of stock awards; reduction 


                                      M-13

<PAGE>

of employee benefits. In the event that acceleration of vesting of stock award
compensation is to be reduced, such acceleration of vesting shall be cancelled
in the reverse order of the date of grant of the Optionholder's stock awards
unless the Optionholder elects in writing a different order for cancellation.

      The accounting firm engaged by the Company for general audit purposes as
of the day prior to the effective date of the Change in Control shall perform
the foregoing calculations. If the accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting
the Change in Control, the Company shall appoint a nationally recognized
accounting firm to make the determinations required hereunder. The Company shall
bear all expenses with respect to the determinations by such accounting firm
required to be made hereunder.

      The accounting firm engaged to make the determinations hereunder shall
provide its calculations, together with detailed supporting documentation, to
the Company and Optionholder within fifteen (15) calendar days after the date on
which Optionholder's right to a Payment arises (if requested at that time by the
Company or Optionholder) or at such other time as requested by the Company or
Optionholder. If the accounting firm determines that no Excise Tax is payable
with respect to a Payment, either before or after the application of the Reduced
Amount, it shall furnish the Company and Optionholder with an opinion reasonably
acceptable to Optionholder that no Excise Tax will be imposed with respect to
such Payment. Any good faith determination of the accounting firm made hereunder
shall be final, binding and conclusive upon the Company and Optionholder.

      12. AMENDMENT OF THE PLAN AND STOCK AWARDS.

            (a) Amendment of Plan. The Board at any time, and from time to time,
may amend the Plan. However, except as provided in Section 11 relating to
adjustments upon changes in Common Stock, no amendment shall be effective unless
approved by the shareholders of the Company to the extent shareholder approval
is necessary to satisfy the requirements of Section 422 of the Code, Rule 16b-3
or any NASDAQ or securities exchange listing requirements.

            (b) Shareholder Approval. The Board may, in its sole discretion,
submit any other amendment to the Plan for shareholder approval, including, but
not limited to, amendments to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations thereunder regarding the
exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to certain executive officers.

            (c) Contemplated Amendments. It is expressly contemplated that the
Board may amend the Plan in any respect the Board deems necessary or advisable
to provide eligible Employees with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.

            (d) No Impairment of Rights. Rights under any Stock Award granted
before amendment of the Plan shall not be impaired by any amendment of the Plan
unless (i) the Company requests the consent of the Participant and (ii) the
Participant consents in writing.

            (e) Amendment of Stock Awards. The Board at any time, and from time
to time, may amend the terms of any one or more Stock Awards; provided, however,
that the rights under any Stock Award shall not be impaired by any such
amendment unless (i) the Company requests the consent of the Participant and
(ii) the Participant consents in writing.

      13. TERMINATION OR SUSPENSION OF THE PLAN.

            (a) Plan Term. The Board may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate on the day before the
tenth (10th) anniversary of the date the Plan is adopted by the Board or
approved by the shareholders of the Company, whichever is earlier. No Stock
Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.


                                      M-14

<PAGE>

            (b) No Impairment of Rights. Suspension or termination of the Plan
shall not impair rights and obligations under any Stock Award granted while the
Plan is in effect except with the written consent of the Participant.

      14. EFFECTIVE DATE OF PLAN.

               
      The Plan shall become effective as determined by the Board, but no Stock
Award shall be exercised (or, in the case of a stock bonus, shall be granted)
unless and until the Plan has been approved by the shareholders of the Company,
which approval shall be within twelve (12) months before or after the date the
Plan is adopted by the Board.

      15. CHOICE OF LAW.

      The law of the State of Washington shall govern all questions concerning
the construction, validity and interpretation of this Plan, without regard to
such state's conflict of laws rules.


                                      M-15

<PAGE>

                                   APPENDIX N

                   1999 STOCK INCENTIVE PLAN FOR NON-OFFICERS

   (ORIGINALLY ADOPTED ON JUNE 28, 1999 AS THE CO SPACE STOCK INCENTIVE PLAN,
       AMENDED ON DECEMBER 22, 1999, JANUARY 11, 2000, AND MARCH 30, 2000
              AND ASSUMED BY INTERNAP NETWORK SERVICES CORPORATION
           IN CONNECTION WITH THE MERGER AGREEMENT DATED MAY 26, 2000.
        AMENDED AND RESTATED AS THE INTERNAP NETWORK SERVICES CORPORATION
        1999 STOCK INCENTIVE PLAN FOR NON-OFFICERS ON SEPTEMBER 20, 2000)

      1. Purpose. This 1999 Stock Incentive Plan For Non-Officers (the "Plan")
is intended to provide incentives: (a) to non-officer employees and consultants
of Internap Network Services Corporation, a Delaware corporation (the
"Company"), and any present or future parent or subsidiaries of the Company
(collectively, "Related Corporations") by providing them with opportunities to
purchase stock in the Company pursuant to Non-Qualified Stock Options ("NSOs")
that do not qualify as Incentive Stock Options under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") and (b) to non-officer employees
and consultants of the Company and Related Corporations by providing them with
opportunities to receive awards of stock in the Company whether such stock
awards are in the form of bonus shares, deferred stock awards, or of performance
share awards (the "Awards"), and (c) to non-officer employees and consultants of
the Company and Related Corporations by providing them with opportunities to
make direct purchases of restricted stock in the Company ("Restricted Stock
Purchases"). Non-Qualified Options are referred to hereafter as "Option."
Options, Awards and authorizations to make Restricted Stock Purchases are
referred to hereafter individually as a "Stock Right" and collectively as "Stock
Rights." Documents evidencing the award of Stock Rights may be referred to
collectively as "Stock Rights Agreements." As used herein, the terms "parent"
and "subsidiary" mean "parent corporation" and "subsidiary corporation",
respectively, as those terms are defined in Section 424 of the Code.

      2. Administration of the Plan.

            (a) Board or Committee Administration. The Plan shall be
administered by the Board of Directors of the Company (the "Board"). The Board
may appoint a Compensation Committee or a Stock Incentive Plan Committee (as the
case may be, the "Committee") of two (2) or more of its members to administer
the Plan and to grant Stock Rights hereunder, provided such Committee is
delegated such powers in accordance with state law. (All references in this Plan
to the "Committee" shall mean the Board if no such Compensation Committee or
Stock Incentive Plan Committee has been so appointed).

            (b) Authority of Board or Committee. Subject to the terms of the
Plan, the Committee shall have the authority to: (i) determine the employees of
the Company and Related Corporations to whom Options may be granted; (ii)
determine the time or times at which Options or Awards may be granted or
Restricted Stock Purchases made; (iii) determine the exercise price of shares
subject to each Option, which price shall not be less than the minimum price
specified in paragraph 6, and the purchase price of shares subject to each
Restricted Stock Purchase or Award; (iv) determine (subject to paragraph 7) the
time or times when each Option shall become exercisable and the duration of the
exercise period; (v) determine whether restrictions such as repurchase options
are to be imposed on shares subject to Options, Awards and Restricted Stock
Purchases and the nature of such restrictions, if any; (vi) impose such other
terms and conditions with respect to capital stock issued pursuant to Stock
Rights not inconsistent with the terms of this Plan as it deems necessary or
desirable; and (vii) interpret the Plan and prescribe and rescind rules and
regulations relating to it.

      The interpretation and construction by the Committee of any provisions of
the Plan or of any Stock Right granted under it shall be final unless otherwise
determined by the Board. The Committee may from time to time adopt such rules
and regulations for carrying out the Plan as it may deem best. No member of the
Board or the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Stock Right granted under it.


                                      N-1

<PAGE>

            (c) Delegation of Authority to Grant Awards to Officer. Without
limiting the foregoing, the Board, in its discretion, may also delegate to a
single officer of the Company who is a member of the Board (to the extent
consistent with state law) all or part of the Board's or Committee's authority
and duties with respect to the granting of Stock Rights to individuals. Such
officer (the "Delegated Officer") shall act as a one member committee of the
Board, and shall in any event be subject to the same limitations as are
applicable to the Committee. References to the Committee in this Plan shall also
include the Delegated Officer, but only to the extent consistent with the
authorities and duties delegated to the Delegated Officer by the Board. The
Board may revoke or amend the terms of a delegation at any time but such action
shall not invalidate any prior actions of the Delegated Officer that were
consistent with the terms of the Plan.

            (d) Committee Actions. The Committee may select one of its members
as its chairman and shall hold meetings at such time and places as it may
determine. Acts by a majority of the Committee, acting at a meeting (whether
held in person or by teleconference), or acts reduced to or approved in writing
by all of the members of the Committee, shall be the valid acts of the
Committee. From time to time the Board may increase the size of the Committee
and appoint additional members thereof, remove members (with or without cause)
and appoint new members in substitution therefor, fill vacancies however caused,
or remove all members of the Committee and thereafter directly administer the
Plan, subject to compliance with paragraph 2A.

      3. Eligible Employees and Others. Stock Rights may be granted to any
employee, consultant or advisor of the Company or any Related Corporation.
However, notwithstanding any other provision herein to the contrary, no person
shall be eligible for a Stock Right under the Plan (i) who holds a position of
vice president or higher of the Company or Related Corporations, (ii) who would
be considered an "officer" or " director" within the meaning of those terms
under Rule 4460(i)(1)(A) of the National Association of Securities Dealers
Manual (or such amended or successor rule), (iii) who would be considered a
person subject to Section 16b of the Exchange Act of 1934, as amended (and
regulations promulgated thereunder), or (iv) whose eligibility would require
approval of the Plan by the stockholders of the Company under any law or
regulation or the rules of any stock exchange or market system upon which the
Common Stock may then be listed. If not inconsistent with any such law,
regulation or rule, a Stock Right may be granted to a person, not previously
employed by the Company or a Related Corporation, as an inducement essential to
entering into an employment contract with the Company or a Related Corporation.

      The Committee may take into consideration a recipient's individual
circumstances in determining whether to grant a Stock Right. Granting a Stock
Right to any individual or entity shall neither entitle that individual or
entity to, nor disqualify him from, participation in any other grant of Stock
Rights.

      4. Stock. The stock subject to Stock Rights shall be the common stock of
the Company (the "Common Stock"), or shares of Common Stock reacquired by the
Company in any manner. The aggregate number of shares which may be issued
pursuant to the Plan is 1,346,840, subject to adjustment as provided in
paragraph 13.

      5. Granting of Stock Rights. Stock Rights may be granted under the Plan at
any time after June 29, 1999 and prior to June 28, 2009. The date of grant of a
Stock Right under the Plan will be the date specified by the Committee at the
time it grants the Stock Right or such date that is specified in the instrument
or agreement evidencing such Stock Right; provided, however, that such date
shall not be prior to the date on which the Committee acts to approve the grant.

      6. Minimum Option Price.

            (a) Price for Incentive Stock Options. Incentive Stock Options shall
not be granted under this Plan.

            (b) Determination of Fair Market Value. "Fair Market Value" shall be
determined as of the last business day for which the prices or quotes discussed
in this sentence are available prior to the date such Option is granted and
shall mean (i) the average (on that date) of the high and low prices of the
Common Stock on the principal national securities exchange on which the Common
Stock is traded, if the Common Stock is then traded on a national securities
exchange; or (ii) the last reported sale price (on that date) of the Common
Stock on the NASDAQ National Market List, if the Common Stock is not then traded
on a national securities exchange; or (iii) the closing bid price (or average of
bid prices) last quoted (on that date) by an established quotation service for


                                      N-2

<PAGE>

over-the-counter securities, if the Common Stock is not then traded on a
national securities exchange and is not reported on the NASDAQ National Market
List.

      7. Option Duration. Subject to earlier termination as provided in
paragraphs 9, 10, and 13, each Option shall expire on the date specified by or
shall have such duration as may be specified by the Committee and set forth in
the original stock option agreement granting such Option, but not more than ten
years from the date of grant. Options shall expire on the date specified in the
agreement granting such Options, subject to extension as determined by the
Committee.

      8. Exercise of Option. Subject to the provisions of paragraphs 9 through
13, each Option granted under the Plan shall be exercisable as follows:

            (a) Vesting. Unless otherwise specified by the Committee, Options
granted to employees shall vest in accordance with the following schedule: (a)
as to 25% of the shares subject to the Option, on the first anniversary of the
date of grant of the Option; and (b) as to the remaining 75% of the shares
subject to the Option, in 36 equal monthly installments (such monthly vesting
dates shall commence one months following such first annual anniversary on the
exact day of the month as the date of such first annual anniversary, and
continue at one month intervals thereafter, except with respect to any month
that does not have such date, in which case the date in such month shall be the
last day of such month). The Committee may also specify such other conditions
precedent as it deems appropriate to the exercise of an Option.

            (b) Full Vesting of Installments. Once an installment becomes
exercisable it shall remain exercisable until expiration or termination of the
Option, unless otherwise specified by the Committee.

            (c) Partial Exercise. Each Option or installment may be exercised at
any time or from time to time, in whole or in part, for up to the total number
of shares with respect to which it is then exercisable, provided that the
Committee may specify a certain minimum number or percentage of the shares
issuable upon exercise of any Option that must be purchased upon any exercise.

            (d) Acceleration of Vesting. The Committee shall have the right to
accelerate the date of exercise of any installment of any Option, despite the
fact that such acceleration may cause the application of Sections 280G and 4999
of the Code if a Change in Control Event, as defined below in paragraph 13C,
occurs.

      9. Termination of Employment. Nothing in the Plan shall be deemed to give
any grantee of any Stock Right the right to be retained in employment or other
service by the Company or any Related Corporation for any period of time.

      Notwithstanding anything contained in this paragraph 9 to the contrary,
the Board or Committee may establish rules in particular stock option agreements
with respect to Misconduct, committed by a grantee of a Stock Right. Misconduct
shall have the same meaning as the term Cause, as defined below.

      In the event that grantee's Service terminates (other than upon death or
Disability or for Cause), the grantee may exercise his or her Option (to the
extent that the grantee was entitled to exercise such Option as of the date of
termination) but only within such period of time ending on the earlier of (i)
the date three (3) months following the termination of the grantee's Service, or
(ii) the expiration of the term of the Option as set forth in the Option. If,
after termination, the grantee does not exercise his or her Option within the
time specified in the Option, the Option shall terminate. In the event an
grantee's Service terminates for Cause, then his or her Option shall terminate
immediately upon such event.

      10. Death; Disability.

            (a) Death. If an optionee ceases to be employed by the Company and
all Related Corporations by reason of his death, or if the employee dies within
the thirty (30) day period after the employee ceases to be employed by the
Company and all Related Corporations, any Option of his may be exercised, to the
extent of the number of shares with respect to which he could have exercised it
on the date of his death, by his estate, personal representative or beneficiary
who has acquired the Option by will or by the laws of descent and 


                                      N-3

<PAGE>

distribution, at any time prior to the earlier of the specified expiration date
of the Option or one hundred and eighty (180) days from the date of such
optionee's death.

            (b) Disability. If an optionee ceases to be employed by the Company
and all Related Corporations by reason of his disability, he shall have the
right to exercise any Option held by him on the date of termination of
employment, to the extent of the number of shares with respect to which he could
have exercised it on that date, at any time prior to the earlier of the
specified expiration date of the Option or one (1) year from the date of the
termination of the optionee's employment. For the purposes of the Plan, the term
"disability" shall mean "permanent and total disability" as defined in Section
22(e)(3) of the Code or successor statute.

      11. Assignability. Except for Options which may be transferred for estate
planning purposes to the extent provided in the instrument or agreement granting
such Options, no Stock Right shall be assignable or transferable by the grantee
except by will or by the laws of descent and distribution, and during the
lifetime of the grantee each Stock Right shall be exercisable only by him. No
Stock Right, nor the right to exercise any portion thereof, shall be subject to
execution, attachment, or similar process, assignment, or any other alienation
or hypothecation. Upon any attempt so to transfer, assign, pledge, hypothecate,
or otherwise dispose of any Stock Right, or of any right or privilege conferred
thereby, contrary to the provisions thereof or hereof or upon the levy of any
attachment or similar process upon any Stock Right, right or privilege, such
Stock Right and such rights and privileges shall immediately become null and
void. The foregoing shall not be construed to restrict the ability to assign or
transfer shares of Common Stock issued upon the exercise or award of a Stock
Right to the extent that the instrument or agreement granting such Stock Right
permits such assignment or transfer.

      12. Terms and Conditions of Stock Rights. Stock Rights shall be evidenced
by instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof to the extent applicable
and may contain such other provisions as the Committee deems advisable which are
not inconsistent with the Plan. Without limiting the foregoing, such provisions
may include transfer restrictions, rights of refusal, vesting provisions, and
repurchase rights with respect to shares of Common Stock issuable upon exercise
of Stock Rights, and such other restrictions applicable to shares of Common
Stock issuable upon exercise of Stock Rights as the Committee may deem
appropriate. The Committee may from time to time confer authority and
responsibility on one or more of its own members and/or one or more officers of
the Company to execute and deliver such instruments. The proper officers of the
Company are authorized and directed to take any and all action necessary or
advisable from time to time to carry out the terms of such instruments.

      13. Adjustments. Upon the occurrence of any of the following events, an
individual's rights with respect to Stock Rights granted to him hereunder shall
be adjusted as hereinafter provided, unless otherwise specifically provided in
the written agreement between the optionee and the Company relating to such
Stock Right:

            (a) Capitalization Adjustments. If any change is made in the Common
Stock subject to the Plan, or subject to any Stock Rights, without the receipt
of consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to subsection 4 and the outstanding Stock Rights will be appropriately
adjusted in the class(es) and number of securities and price per share of Common
Stock subject to such outstanding Stock Rights. The Board shall make such
adjustments, and its determination shall be final, binding and conclusive. (The
conversion of any convertible securities of the Company shall not be treated as
a transaction "without receipt of consideration" by the Company.)

            (b) Dissolution or Liquidation. In the event of a dissolution or
liquidation of the Company, then all outstanding Stock Rights shall terminate
immediately prior to such event.

            (c) Certain Changes in Control. In the event of (i) a sale, lease or
other disposition of all or substantially all of the assets of the Company, (ii)
a merger or consolidation in which the Company is not the surviving corporation
or (iii) a reverse merger in which the Company is the surviving corporation but
the shares of Common Stock outstanding immediately preceding the merger are
converted by virtue of the merger into other 


                                      N-4

<PAGE>

property, whether in the form of securities, cash or otherwise (collectively, a
"Change in Control" or "Corporate Transaction"), then any surviving corporation
or acquiring corporation may assume or continue any Stock Rights outstanding
under the Plan or may substitute similar stock awards (including an award to
acquire the same consideration paid to the shareholders in the transaction
described in this subsection 13C) for those outstanding under the Plan. In the
event any surviving corporation or acquiring corporation refuses to assume or
continue such Stock Rights or to substitute similar stock awards for those
outstanding under the Plan, then with respect to Stock Rights held by
participants whose Service has not terminated, the vesting of such Stock Rights
(and, if applicable, the time during which such Stock Rights may be exercised)
shall be accelerated in full, and the Stock Rights shall terminate if not
exercised (if applicable) at or prior to such event. With respect to any other
Stock Rights outstanding under the Plan, such Stock Rights shall terminate if
not exercised (if applicable) prior to such event.

            (d) Termination of Service Following a Change in Control. Unless
otherwise specified in the applicable Stock Rights Agreement, in the event of
the occurrence of a Change in Control and provided that a participant's Stock
Right remains in effect following such Change in Control or is assumed,
continued or substituted for any similar stock award in connection with the
Change in Control, then, if such participant's Service is terminated by the
Company without Cause within thirteen (13) months following the effective date
of the Change in Control, all Stock Rights held by such participant (or any
substituted stock awards) shall, as of the date of such termination of Service,
vest in full and become fully exercisable (if applicable) to the extent not
previously vested or exercisable. Such Stock Rights shall remain exercisable
until they expire in accordance with their terms.

      The term "Cause" shall have such meaning as is defined in the grantee's
employment or consulting agreement with the Company or a Related Corporation. If
the grantee does not have an employment or consulting agreement with the Company
or a Related Corporation, or if such agreement does not define the term "cause,"
then the term "cause" shall mean: (i) misconduct or dishonesty that materially
adversely affects the Company or a Related Corporation, including without
limitation (A) an act materially in conflict with the financial interests of the
Company or a Related Corporation, (B) an act that could damage the reputation or
customer relations of the Company or a Related Corporation, (C) an act that
could subject the Company or a Related Corporation to liability, (D) an act
constituting sexual harassment or other violation of the civil rights of
coworkers, (E) failure to obey any lawful instruction of the Board or any
officer of the Company or of a Related Corporation and (F) failure to comply
with, or perform any duty required under, the terms of any confidentiality,
inventions or non-competition agreement the grantee may have with the Company or
a Related Corporation, or (ii) acts constituting the unauthorized disclosure of
any of the trade secrets or confidential information of the Company or a Related
Corporation, unfair competition with the Company or a Related Corporation or the
inducement of any customer of the Company or a Related Corporation to breach any
contract with the Company or a Related Corporation. The right to exercise any
Option shall be suspended automatically during the pendency of any investigation
by the Board or its designee, and/or any negotiations by the Board or its
designee and the grantee, regarding any actual or alleged act or omission by the
grantee of the type described in this section.

      The term "Service" means the performance of services for the Company or a
Related Corporation by an individual. An individual shall be deemed to remain in
Service for so long as such individual renders services to the Company or a
Related Corporation on a periodic basis in the capacity of an employee or an
independent consultant or advisor.

            (e) Securities Acquisition. In the event of an acquisition by any
person, entity or group within the meaning of Section 13(d) or 14(d) of the
Exchange Act of 1934, as amended (the "Exchange Act"), or any comparable
successor provisions (excluding any employee benefit plan, or related trust,
sponsored or maintained by the Company or an Affiliate) of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act,
or comparable successor rule) of securities of the Company representing at least
fifty percent (50%) of the combined voting power entitled to vote in the
election of Directors, then with respect to Stock Rights held by participants
whose Service has not terminated, the vesting of such Stock Rights (and, if
applicable, the time during which such Stock Rights may be exercised) shall be
accelerated in full. Such Stock Rights shall remain exercisable until they
expire in accordance with their terms.

            (f) Parachute Payments. If any payment or benefit participant would
receive in connection with a Change in Control from the Company or otherwise
("Payment") would (i) constitute a "parachute payment" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and
(ii) but 


                                      N-5

<PAGE>

for this sentence, be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then such Payment shall be reduced to the Reduced
Amount. The "Reduced Amount" shall be either (x) the largest portion of the
Payment that would result in no portion of the Payment being subject to the
Excise Tax or (y) the largest portion, up to and including the total, of the
Payment, whichever amount, after taking into account all applicable federal,
state and local employment taxes, income taxes, and the Excise Tax (all computed
at the highest applicable marginal rate), results in participant's receipt, on
an after-tax basis, of the greater amount of the Payment notwithstanding that
all or some portion of the Payment may be subject to the Excise Tax. If a
reduction in payments or benefits constituting "parachute payments" is necessary
so that the Payment equals the Reduced Amount, reduction shall occur in the
following order unless the participant elects in writing a different order
(provided, however, that such election shall be subject to Company approval if
made on or after the effective date of the Change of Control): reduction of cash
payments; cancellation of accelerated vesting of stock awards; reduction of
employee benefits. In the event that acceleration of vesting of stock award
compensation is to be reduced, such acceleration of vesting shall be cancelled
in the reverse order of the date of grant of the participant's stock awards
unless the participant elects in writing a different order for cancellation.

      The accounting firm engaged by the Company for general audit purposes as
of the day prior to the effective date of the Change in Control shall perform
the foregoing calculations. If the accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting
the Change in Control, the Company shall appoint a nationally recognized
accounting firm to make the determinations required hereunder. The Company shall
bear all expenses with respect to the determinations by such accounting firm
required to be made hereunder.

      The accounting firm engaged to make the determinations hereunder shall
provide its calculations, together with detailed supporting documentation, to
the Company and participant within fifteen (15) calendar days after the date on
which participant's right to a Payment arises (if requested at that time by the
Company or participant) or at such other time as requested by the Company or
participant. If the accounting firm determines that no Excise Tax is payable
with respect to a Payment, either before or after the application of the Reduced
Amount, it shall furnish the Company and participant with an opinion reasonably
acceptable to participant that no Excise Tax will be imposed with respect to
such Payment. Any good faith determination of the accounting firm made hereunder
shall be final, binding and conclusive upon the Company and participant.

            (g) Issuances of Securities and Non-Stock Dividends. Except as
expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares subject to Options. No adjustments shall be made for
dividends paid in cash or in property other than securities of the Company (and,
in the case of securities of the Company, such adjustments shall be made
pursuant to the foregoing subparagraph A).

            (h) Fractional Shares. No fractional shares shall be issued under
the Plan, and the optionee shall receive from the Company cash in lieu of such
fractional shares.

            (i) Adjustments. Upon the happening of any of the foregoing events
described in subparagraphs A, B or C above, the class and aggregate number of
shares set forth in paragraph 4 hereof that are subject to Stock Rights which
previously have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Committee or the board of directors of the surviving entity shall determine
the specific adjustments to be made under this paragraph 13 and its
determination shall be conclusive.

      If any person or entity owning Common Stock obtained by exercise of a
Stock Right made hereunder receives shares or securities or cash in connection
with a corporate transaction described in this section as a result of owning
such Common Stock, such shares or securities or cash shall be subject to all of
the conditions and restrictions applicable to the Common Stock with respect to
which such shares or securities or cash were issued, unless otherwise determined
by the Committee or the Board of Directors of the surviving entity.

            (j) Pooling-of-Interests Accounting. If the Company proposes to
engage in a Corporate Transaction or Change in Control intended to be accounted
for as a pooling-of-interests, and in the event that the 


                                      N-6

<PAGE>

provisions of this Plan or of any agreement hereunder, or any actions of the
Board taken in connection with such Corporate Transaction or Change in Control,
are determined by the Company's or the surviving entity's independent public
accountants to cause such Change in Control or Corporate Transaction to fail to
be accounted for as a pooling-of-interests, then such provisions or actions may
be amended or rescinded at the election of the Committee, without the consent of
any grantee, to be consistent with pooling-of-interests accounting treatment for
such Corporate Transaction or Change in Control.

      14. Means of Exercising Options. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address. Such notice shall identify the Option being exercised
and specify the number of shares as to which such Option is being exercised,
accompanied by full payment of the purchase price therefor either (a) in United
States dollars in cash or by check, or (b) at the discretion of the Committee,
by delivery of an irrevocable and unconditional undertaking, satisfactory in
form and substance to the Company, by a creditworthy broker to deliver promptly
to the Company sufficient funds to pay the exercise price, or delivery to the
Company of a copy of irrevocable and unconditional instructions, satisfactory in
form and substance to the Company, to a creditworthy broker to deliver promptly
to the Company cash or a check sufficient to pay the exercise price, or (c) at
the discretion of the Committee through delivery of shares of Common Stock
having a fair market value equal as of the date of the exercise to the cash
exercise price of the Option, provided, however, that such shares of Common
Stock delivered must have been acquired by the holder of the Option more than
six months prior to the exercise of the Option, or (d) at the discretion of the
Committee, by delivery of the grantee's personal recourse note bearing interest
payable not less than annually at no less than 100% of the applicable Federal
rate, as defined in Section 1274(d) of the Code, or (e) at the discretion of the
Committee, by any combination of (a), (b) (c) and (d) above. The holder of an
Option shall not have the rights of a shareholder with respect to the shares
covered by his Option until the date of issuance of a stock certificate to him
for the shares subject to the Option. Except as expressly provided above in
paragraph 13 with respect to changes in capitalization and stock dividends, no
adjustment shall be made for dividends or similar rights for which the record
date is before the date such stock certificate is issued.

      15. Term and Amendment of Plan. The Plan shall expire on June 28, 2009
(except as to Options outstanding on that date). The Board may terminate or
amend the Plan in any respect at any time; provided, however that Stock Rights
outstanding on such date shall not be affected by the termination of the Plan.

      16. Section 162(m): Section 162(m) does not apply to grants of Stock
Rights under this Plan.

      17. Amendment of Stock Rights. The Board or Committee may amend, modify or
terminate any outstanding Stock Rights including, but not limited to,
substituting therefor another Stock Right of the same or a different type, and
changing the date of exercise or realization, provided, that, except as
otherwise provided in paragraphs 9 or 10, the grantee's consent to such action
shall be required unless the Board or Committee determines that the action,
taking into account any related action, would not materially and adversely
affect the grantee.

      18. Application of Funds. The proceeds received by the Company from the
sale of shares pursuant to Options granted and Restricted Stock Purchases
authorized under the Plan shall be used for general corporate purposes.

      19. Governmental Regulation. The Company's obligation to sell and deliver
shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.

      20. Withholding of Additional Income Taxes. Upon the exercise of a
Non-Qualified Option, the making of a Restricted Stock Purchase for less than
its fair market value, the granting of an Award, or the vesting of restricted
Common Stock acquired on the exercise of a Stock Right hereunder, the Company,
in accordance with Section 3402(a) of the Code, may require the grantee or
purchaser to pay additional withholding taxes in respect of the amount that is
considered compensation includible in such person's gross income. The Committee
in its discretion may condition (i) the exercise of an Option, (ii) the making
of a Restricted Stock Purchase for less than its fair market value, (iii) the
granting of an Award, or (iv) the vesting of restricted Common Stock acquired by
exercising a Stock Right, on the grantee's payment of such additional
withholding taxes.


                                      N-7

<PAGE>

      21. Governing Law; Construction. The validity and construction of the Plan
and the instruments evidencing Options shall be governed by the laws of the
state of Washington. In construing this Plan, the singular shall include the
plural and the masculine gender shall include the feminine and neuter, unless
the context otherwise requires.


                                      N-8

<PAGE>

                                   APPENDIX O

           AMENDED AND RESTATED 1998 STOCK OPTION/STOCK ISSUANCE PLAN
                     AMENDED AND RESTATED SEPTEMBER 20, 2000

                                   ARTICLE I

                               GENERAL PROVISIONS

      Section 1. PURPOSE

      This 1998 Stock Option/Stock Issuance Plan is intended to promote the
interests of Internap Network Services Corp. (the "Corporation") by providing
eligible individuals who are responsible for the management, growth and
financial success of the Corporation or who otherwise render valuable services
to the Corporation with the opportunity to acquire a proprietary interest, or
increase their proprietary interest, in the Corporation and thereby encourage
them to remain in the service of the Corporation.

      Capitalized terms used herein shall have the meanings ascribed to such
terms in Section 6 of this Article I.

      Section 2. STRUCTURE OF THE PLAN

      The Plan shall be divided into two separate components: the Option Grant
Program specified in Article II and the Stock Issuance Program specified in
Article III. The provisions of Articles I, IV and V of the Plan shall apply to
both the Option Grant Program and the Stock Issuance Program and shall
accordingly govern the interests of all individuals in the Plan.

      Section 3. ADMINISTRATION OF THE PLAN

            (a) The Plan shall be administered by the Board. The Board at any
time may appoint a Committee and delegate to such Committee some or all of the
administrative powers allocated to the Board pursuant to the provisions of the
Plan. Members of the Committee shall serve for such period of time as the Board
may determine and shall be subject to removal by the Board at any time. The
Board at any time may terminate the functions of the Committee and reassume all
powers and authority previously delegated to the Committee.

            (b) The Plan Administrator (either the Board or the Committee, to
the extent the Committee is at the time responsible for the administration of
the Plan) shall have full power and authority (subject to the provisions of the
Plan) to establish such rules and regulations as it may deem appropriate for the
proper plan administration and to make such determinations under, and issue such
interpretations of, the Plan and any outstanding option grants or share
issuances as it may deem necessary or advisable. Decisions of the Plan
Administrator shall be final and binding on all parties who have an interest in
the Plan or any outstanding option or share issuance.

            (c) At such time as the Common Stock is publicly traded, in the
discretion of the Board, a Committee may consist solely of two or more Outside
Directors, in accordance with Section 162(m) of the Code, and/or solely of two
or more Non-Employee Directors, in accordance with Rule 16b-3. Within the scope
of such authority, the Board or the Committee may (1) delegate to a committee of
one or more members of the Board who are not Outside Directors the authority to
grant Stock Awards to eligible persons who are either (a) not then Covered
Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Stock Award or (b) not persons with
respect to whom the Corporation wishes to comply with Section 162(m) of the Code
and/or) (2) delegate to a committee of one or more members of the Board who are
not Non-Employee Directors the authority to grant Stock Awards to eligible
persons who are not then subject to Section 16 of the Exchange Act.


                                      O-1

<PAGE>

      Section 4. OPTION GRANTS AND SHARE ISSUANCES

            (a) The persons eligible to receive option grants pursuant to the
Option Grant Program (each an "Optionee") and/or share issuances under the Stock
Issuance Program (each a "Participant") are limited to the following:

                  (1) key employees (including officers and directors) of the
Corporation (or its Parent or Subsidiary corporations, if any) who render
services that contribute to the success and growth of the Corporation (or its
Parent or Subsidiary corporations), or that reasonably may be anticipated to
contribute to the future success and growth of the Corporation (or its Parent or
Subsidiary corporations);

                  (2) the non-employee members of the Board or the non-employee
members of the board of directors of any Parent or Subsidiary corporations; and

                  (3) those consultants or independent contractors who provide
valuable services to the Corporation (or its Parent or Subsidiary corporations,
if any).

            (b) The Plan Administrator shall have full authority to determine:
(i) with respect to the option grants made under the Plan, which eligible
individuals are to receive option grants, the number of shares to be covered by
each such grant, the status of the granted option as either an Incentive Option
or a Non-Statutory Option, the time or times at which each granted option is to
become exercisable and the maximum term for which the option may remain
outstanding, and (ii) with respect to share issuances under the Stock Issuance
Program, the number of shares to be issued to each Participant, the vesting
schedule (if any) to be applicable to the issued shares, and the consideration
to be paid by the individual for such shares.

            (c) The Plan Administrator shall have the absolute discretion either
to grant options in accordance with Article II of the Plan or to effect share
issuances in accordance with Article III of the Plan.

      Section 5. STOCK SUBJECT TO THE PLAN

            (a) The stock issuable under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired Common Stock (the "Common
Stock"). The maximum number of shares that may be issued over the term of the
Plan shall not exceed four million thirty-five thousand (4,035,000) shares of
Common Stock. The total number of shares issuable under the Plan shall be
subject to adjustment from time to time in accordance with the provisions of
Section 5(c).

            (b) Shares subject to (i) the portion of one or more outstanding
options that are not exercised or surrendered prior to expiration or termination
and (ii) outstanding options canceled in accordance with the
cancellation-regrant provisions of Section 5 of Article II will be available for
subsequent option grants or stock issuances under the Plan. Shares issued under
either the Option Grant Program or the Stock Issuance Program (whether as vested
or unvested shares) that are repurchased by the Corporation shall not be
available for subsequent option grants or stock issuances under the Plan.

            (c) If any change is made in the Common Stock subject to the Plan,
or subject to any Stock Award, without the receipt of consideration by the
Corporation (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Corporation), the Plan will be appropriately adjusted in
the class(es) and maximum number of securities subject to the Plan pursuant to
Article I, Section 5(a) and the maximum number of securities subject to award to
any person pursuant to subsection 5(e), and the outstanding Stock Awards will be
appropriately adjusted in the class(es) and number of securities and price per
share of Common Stock subject to such outstanding Stock Awards. The Board shall
make such adjustments, and its determination shall be final, binding and
conclusive. (The conversion of any convertible securities of the Corporation
shall not be treated as a transaction "without receipt of consideration" by the
Corporation.)


                                      O-2

<PAGE>

            (d) Common Stock issuable under the Plan, whether under the Option
Grant Program or the Stock Issuance Program, may be subject to such restrictions
on transfer, repurchase rights or other restrictions as may be determined by the
Plan Administrator.

            (e) Subject to the provisions of Article I, Section 5(c) relating to
adjustments upon changes in the shares of Common Stock, no Employee shall be
eligible to be granted options covering more than two million (2,000,000) shares
of Common Stock during any calendar year.

      Section 6. DEFINITIONS

      The following definitions shall apply to the respective capitalized terms
used herein:

      Board means the Board of Directors of Internap Network Services Corp.

      Cause shall have such meaning as is defined in the Participant's
employment or consulting agreement with a Participating Company. If the
Participant does not have an employment or consulting agreement with a
Participating Company, or if such agreement does not define the term "Cause,"
then the term "Cause" shall mean: (i) misconduct or dishonesty that materially
adversely affects a Participating Company, including without limitation (A) an
act materially in conflict with the financial interests of a Participating
Company, (B) an act that could damage the reputation or customer relations of a
Participating Company, (C) an act that could subject a Participating Company to
liability, (D) an act constituting sexual harassment or other violation of the
civil rights of coworkers, (E) failure to obey any lawful instruction of the
Board or any officer of a Participating Company and (F) failure to comply with,
or perform any duty required under, the terms of any confidentiality, inventions
or non-competition agreement the Participant may have with a Participating
Company, or (ii) acts constituting the unauthorized disclosure of any of the
trade secrets or confidential information of a Participating Company, unfair
competition with a Participating Company or the inducement of any customer of a
Participating Company to breach any contract with a Participating Company. The
right to exercise any Option shall be suspended automatically during the
pendency of any investigation by the Board or its designee, and/or any
negotiations by the Board or its designee and the Participant, regarding any
actual or alleged act or omission by the Participant of the type described in
this section.

      Change in Control means the transaction described in Article V, Section
(b), which is referred to as a Change in Control or Corporate transaction.

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

      Committee means either the Compensation Committee of the Board or another
committee comprised of two or more members thereof and appointed pursuant to the
Plan to function as the Plan Administrator.

      Corporation means Internap Network Services Corp., a Washington
corporation.

      Corporate Transaction means the transaction described in Article V,
Section (b), which is referred to as a Change in Control or Corporate
Transaction.

      Covered Employee means the chief executive officer and the four (4) other
highest compensated officers of the Corporation for whom total compensation is
required to be reported to shareholders under the Exchange Act, as determined
for purposes of Section 162(m) of the Code.

      Employee means an individual who is in the employ of the Corporation or
one or more Parent or Subsidiary corporations. An optionee shall be considered
to be an Employee for so long as such individual remains in the employ of the
Corporation or one or more Parent or Subsidiary corporations, subject to the
control and direction of the employer entity as to both the work to be performed
and the manner and method of performance.

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

      Exercise Date shall be the date on which written notice of the exercise of
an outstanding option under the Plan is delivered to the Corporation. Such
exercise shall be effected pursuant to a stock purchase agreement 


                                      O-3

<PAGE>

incorporating any repurchase rights or first refusal rights retained by the
Corporation with respect to the Common Stock purchased under the option.

      Fair Market Value of a share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

            (a) If the Common Stock is at the time listed or admitted to trading
on any stock exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the stock exchange
determined by the Plan Administrator to be the primary market for the Common
Stock. If there is no reported sale of Common Stock on such exchange on the date
in question, then the Fair Market Value shall be the closing selling price on
the exchange on the last preceding date for which such quotation exists.

            (b) If the Common Stock is not at the time listed or admitted to
trading on any stock exchange but is traded in the over-the-counter market, the
Fair Market Value shall be the mean between the highest bid and the lowest asked
prices (or if such information is available the closing selling price) per share
of Common Stock on the date in question in the over-the-counter market, as such
prices are reported by the National Association of Securities Dealers through
its NASDAQ National Market System or any successor system. If there are no
reported bid and asked prices (or closing selling price) for the Common Stock on
the date in question, then the mean between the highest bid and lowest asked
prices (or closing selling price) on the last preceding date for which such
quotations exist shall be determinative of Fair Market Value.

            (c) If the Common Stock is at the time neither listed nor admitted
to trading on any stock exchange nor traded in the over-the-counter market, or
if the Plan Administrator determines that the valuation provisions of
subsections (a) and (b) above will not result in a true and accurate valuation
of the Common Stock, then the Fair Market Value shall be determined by the Plan
Administrator after taking into account such factors as the Plan Administrator
shall deem appropriate under the circumstances.

      Incentive Option means an incentive stock option that satisfies the
requirements of Section 422 of the Code.

      Non-Employee Director means a Director who either (i) is not a current
Employee or Officer of the Corporation or its parent or a subsidiary, does not
receive compensation (directly or indirectly) from the Corporation or its parent
or a subsidiary for services rendered as a consultant or in any capacity other
than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act ("Regulation S-K")), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3.

      Non-Statutory Option means an option not intended to meet the statutory
requirements prescribed for an Incentive Option.

      Officer means a person who is an officer of the Corporation within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

      Outside Director means a Director who either (i) is not a current employee
of the Corporation or an "affiliated corporation" (within the meaning of
Treasury Regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Corporation or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Corporation or an "affiliated
corporation" at any time and is not currently receiving direct or indirect
remuneration from the Corporation or an "affiliated corporation" for services in
any capacity other than as a Director or (ii) is otherwise considered an
"outside director" for purposes of Section 162(m) of the Code.

      Parent corporation means any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
such corporation in the unbroken chain (other than the Corporation) owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.


                                      O-4

<PAGE>

      Participating Company means the Corporation, a Parent, or a Subsidiary.

      Permanent Disability means the inability of an individual to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expect to result in death or which has lasted or
can be expected to last for a continuous period of not less than 12 months.

      Plan means this 1998 Stock Option/Stock Issuance Plan.

      Plan Administrator means the Board or the Committee, to the extent the
Committee is responsible for plan administration in accordance with Article I,
Section 3.

      Rule 16b-3 means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.

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

      Service means the performance of services for the Corporation or one or
more Parent or Subsidiary corporations by an individual in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant or advisor, unless a different meaning is specified in the option
agreement evidencing the option grant, the purchase agreement evidencing the
purchased option shares or the issuance agreement evidencing any direct stock
issuance. An optionee shall be deemed to remain in Service for so long as such
individual renders services to the Corporation or any Parent or Subsidiary
corporation on a periodic basis in the capacity of an Employee, a non-employee
member of the board of directors or an independent consultant or advisor.

      Stock Award means any right granted under the Plan including an Incentive
Stock Option, Non-Statutory Option or stock issuance.

      Stock Award Agreement means any written agreement between the Corporation
and the holder of a Stock Award evidencing the terms and conditions of the Stock
Award. Each Stock Award Agreement shall be subject to the terms and conditions
of the Plan.

      Subsidiary corporation means each corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each such corporation (other than the last corporation) in the unbroken chain
owns, at the time of the determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

      Ten Percent Shareholder means the owner of stock (as determined under
Section 424(d) of the Code) possessing ten percent (10%) or more of the total
combined voting power of all classes of stock of the Corporation or any Parent
or Subsidiary corporation.

                                   ARTICLE II

                              OPTION GRANT PROGRAM

      Section 1. TERMS AND CONDITIONS OF OPTIONS

      Options granted pursuant to the Plan shall be authorized by action of the
Plan Administrator and, at the discretion of the Plan Administrator, may be
either Incentive Options or Non-Statutory Options. Each granted option shall be
evidenced by one or more instruments in the form approved by the Plan
Administrator; provided, that each such instrument shall comply with and
incorporate the terms and conditions specified below. In addition, each
instrument evidencing an Incentive Option shall be subject to the applicable
provisions of Section 2 of this Article II.

            (a) Option Price.

                  (1) The option price per share shall be fixed by the Plan
Administrator.


                                      O-5

<PAGE>

                  (2) The option price shall become immediately due upon
exercise of the option, and subject to the provisions of Article IV, Section 2,
shall be payable in cash or check drawn to the Corporation's order. Should the
Corporation's outstanding Common Stock be registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "1934 Act") at the time the
option is exercised, then the option price may also be paid as follows:

                        (A) in shares of Common Stock held by the optionee for
            the requisite period necessary to avoid a charge to the
            Corporation's earnings for financial reporting purposes and valued
            at Fair Market Value on the Exercise Date; or

      (B) through a special sale and remittance procedure pursuant to which the
Optionee is to (i) provide irrevocable written instructions to a designated
brokerage firm to effect the immediate sale of the purchased shares and remit to
the Corporation, out of the sale proceeds, an amount sufficient to cover the
aggregate option price payable for the purchased shares plus all applicable
Federal and State income and employment taxes required to be withheld by the
Corporation by reason of such purchase and (ii) concurrently provide written
directives to the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to effect the sale transaction.

            (b) Term and Exercise of Options. Each option granted under the Plan
shall be exercisable at such time or times, during such period, and for such
number of shares as shall be determined by the Plan Administrator and set forth
in the notice of grant and stock option agreement evidencing such option. No
option granted under the Plan, however, shall have a term in excess of ten (10)
years from the grant date. During the lifetime of the Optionee, the option shall
be exercisable only by the Optionee and shall not be assignable or transferable
by the Optionee otherwise than by will or by the laws of descent and
distribution following the Optionee's death.

            (c) Termination of Service.

                  (1) Should the Optionee cease to remain in Service for any
reason (including death or Permanent Disability) while holding one or more
outstanding options under the Plan, then except to the extent otherwise provided
pursuant to Section 6 of this Article II, each such option shall remain
exercisable for the limited period of time (not to exceed twelve (12) months
after the date of such cessation of Service) specified by the Plan Administrator
in the option agreement. In no event, however, shall any such option be
exercisable after the specified expiration date of the option term. During such
limited period of exercisability, the option may not be exercised for more than
that number of shares (if any) for which such option is exercisable on the date
of the Optionee's cessation of Service. Upon the expiration of such period or
(if earlier) upon the expiration of the option term, the option shall terminate
and cease to be exercisable.

                  (2) Any option granted to an Optionee under the Plan and
exercisable in whole or in part on the date of the Optionee's death may be
subsequently exercised by the personal representative of the Optionee's estate
or by the person or persons to whom the option is transferred pursuant to the
Optionee's will or in accordance with the laws of descent and distribution. The
maximum number of shares for which such option may be exercised shall be limited
to the number of shares (if any) for which the option is exercisable on the date
of the Optionee's cessation of Service. Any such exercise of the option must be
effected prior to the earlier of the first anniversary of the date of the
Optionee's death or the specified expiration date of the option term. Upon the
occurrence of either such event, the option shall terminate and cease to be
exercisable.

                  (3) Notwithstanding subsections (1) and (2) above, the Plan
Administrator shall have discretion, exercisable either at the time the option
is granted or at the time the Optionee ceases Service, to allow one or more
outstanding options held by the Optionee to be exercised, during the limited
period of exercisability following the Optionee's cessation of Service, not only
with respect to the number of shares for which the option is exercisable at the
time of the Optionee's cessation of Service but also with respect to one or more
subsequent installments of purchasable shares for which the option otherwise
would have become exercisable had such cessation of Service not occurred.


                                      O-6

<PAGE>

                  (4) Notwithstanding any provision of this Article II or any
other provision of this Plan to the contrary, any options granted under this
Plan shall terminate as of the date the Optionee ceases to be in the Service of
the Corporation if the Optionee was terminated for "cause" or could have been
terminated for "cause." If the Optionee has an employment or consulting
agreement with the Corporation, the term "cause" shall have the meaning given
that term in such employment or consulting agreement. If the Optionee does not
have an employment or consulting agreement with the Corporation, or if such
agreement does not define the term "cause," the term "cause" shall mean: (A)
misconduct or dishonesty that materially adversely affects the Corporation,
including without limitation (i) an act materially in conflict with the
financial interests of the Corporation, (ii) an act that could damage the
reputation or customer relations of the Corporation, (iii) an act that could
subject the Corporation to liability, (iv) an act constituting sexual harassment
or other violation of the civil rights of coworkers, (v) failure to obey any
lawful instruction of the Board or any officer of the Corporation and (vi)
failure to comply with, or perform any duty required under, the terms of any
confidentiality, inventions or non-competition agreement the Optionee may have
with the Corporation, or (B) acts constituting the unauthorized disclosure of
any of the trade secrets or confidential information of the Corporation, unfair
competition with the Corporation or the inducement of any customer of the
Corporation to breach any contract with the Corporation. The right to exercise
any option shall be suspended automatically during the pendency of any
investigation by the Board or its designee, and/or any negotiations by the Board
or its designee and the Optionee, regarding any actual or alleged act or
omission by the Optionee of the type described in this section.

            (d) Shareholder Rights. An Optionee shall have none of the rights of
a shareholder with respect to any shares covered by the option until such
Optionee shall have exercised the option and paid the option price.

            (e) Repurchase Rights. The shares of Common Stock issued under the
Plan shall be subject to certain repurchase rights of the Corporation in
accordance with the following provisions:

                  (1) (A) The Plan Administrator shall have the discretion to
authorize the issuance of unvested shares of Common Stock under the Plan. Should
the optionee cease Service or should the Corporation consummate a Corporate
Transaction while the optionee is holding such unvested shares, the Corporation
shall have the right to repurchase, at the option price paid per share, all or
(at the discretion of the Corporation and with the consent of the Optionee) any
portion of those such shares. The terms and conditions upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise and the appropriate vesting schedule for the purchased shares) shall be
established by the Plan Administrator and set forth in an instrument evidencing
such right.

      (B) The repurchase right shall be assignable to any person or entity
selected by the Corporation, including one or more of the Corporation's
shareholders. If the selected assignee is other than a Parent or Subsidiary
corporation, however, then the assignee must make a cash payment to the
Corporation, upon the assignment of the repurchase right, in an amount equal to
the amount by which the Fair Market Value of the unvested shares at the time
subject to the assigned right exceeds the aggregate repurchase price payable for
such unvested shares.

      (C) Upon the occurrence of a Corporate Transaction, the Plan Administrator
may, at its sole discretion, (i) terminate all or any outstanding repurchase
rights under the Plan and thereby cause the shares subject to such rights to
vest immediately in full, (ii) arrange for all or any of the repurchase rights
to be assigned to the successor corporation (or parent thereof) in connection
with the Corporate Transaction or (iii) exercise the Corporation's right to
repurchase any unvested shares contemporaneously with the consummation of the
Corporate Transaction if such right is provided in the instrument pursuant to
which such unvested shares were issued.

                  (2) Until such time as the Corporation's outstanding shares of
Common Stock are first registered under Section 12(g) of the 1934 Act, the
Corporation shall have the right of first refusal with respect to any proposed
sale or other disposition by the Optionee (or any successor in interest by
reason of purchase, gift or other mode of transfer) of any shares of Common
Stock issued under the Plan. Such right of first refusal shall be exercisable by
the Corporation (or its assignees) in accordance with the terms and conditions
established by the Plan Administrator and set forth in the instrument evidencing
such right.


                                      O-7

<PAGE>

      Section 2. INCENTIVE OPTIONS

      The terms and conditions specified below shall be applicable to all
Incentive Options granted under the Plan. Incentive Options may be granted only
to individuals who are Employees. Options that are specifically designated as
Non-Statutory Options when issued under the Plan shall not be subject to the
following terms and conditions.

            (a) Option Price. The option price per share of the Common Stock
subject to an Incentive Option shall in no event be less than one hundred
percent (100%) of the Fair Market Value of a share of Common Stock on the grant
date; provided, if the individual to whom the option is granted is at the time a
Ten Percent Shareholder, then the option price per share shall not be less than
one hundred ten percent (110%) of the Fair Market Value of the Common Stock on
the grant date.

            (b) Dollar Limitation. The aggregate Fair Market Value (determined
as of the respective date or dates of grant) of the Common Stock for which one
or more options granted to any Employee under this Plan (or any other option
plan of the Corporation or any Parent or Subsidiary corporation) may for the
first time become exercisable as incentive stock options under the Federal tax
laws during any one calendar year shall not exceed the sum of one hundred
thousand dollars ($100,000). To the extent the Employee holds two or more such
options which become exercisable for the first time in the same calendar year,
the foregoing limitation on the exercisability thereof as Incentive Options
under the Federal tax laws shall be applied on the basis of the order in which
such options are granted.

            (c) Option Term for Ten Percent Shareholder. No option granted to a
Ten Percent Shareholder shall have a term in excess of five (5) years from the
grant date.

      Except as modified by the preceding provisions of this Section 2, all the
provisions of the Plan shall be applicable to the Incentive Options granted
hereunder.

      Section 3. CORPORATE TRANSACTION

            (a) The exercisability as incentive stock options under the Federal
tax laws of any options accelerated in connection with the Corporate Transaction
shall remain subject to the applicable dollar limitation of subsection 2(b) of
this Article II.

            (b) The grant of options under this Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.

      Section 4. CANCELLATION AND NEW GRANT OF OPTIONS

      The Plan Administrator shall have the authority to effect, at any time and
from time to time, with the consent of the affected Optionees, the cancellation
of any or all outstanding options under the Plan and to grant in substitution
therefor new options under the Plan covering the same or different numbers of
shares of Common Stock but having, in the case of an Incentive Option, an option
price per share not less than one hundred percent (100%) of such Fair Market
Value per share of Common Stock on the new grant date, or, in the case of a Ten
Percent Shareholder, not less than one hundred and ten percent (110%) of such
Fair Market Value.

      Section 5. EXTENSION OF EXERCISE PERIOD

      The Plan Administrator shall have full power and authority to extend
(either at the time the option is granted or at any time that the option remains
outstanding) the period of time for which the option is to remain exercisable
following the Optionee's cessation of Service, from the limited period set forth
in the option agreement, to such greater period of time as the Plan
Administrator may deem appropriate under the circumstances. In no event,
however, shall such option be exercisable after the specified expiration date of
the option term.


                                      O-8

<PAGE>

                                  ARTICLE III

                             STOCK ISSUANCE PROGRAM

      Section 6. TERMS AND CONDITIONS OF STOCK ISSUANCES

      Shares of Common Stock shall be issuable under the Stock Issuance Program
through direct and immediate issuances without any intervening stock option
grants. Each such stock issuance shall be evidenced by a Stock Issuance
Agreement ("Issuance Agreement") that complies with the terms and conditions of
this Article III.

            (a) Issue Price.

                  (1) Shares may, in the absolute discretion of the Plan
Administrator, be issued for consideration with a value less than one-hundred
percent (100%) of the Fair Market Value of the issued shares.

                  (2) Shares shall be issued under the Plan for such
consideration as the Plan Administrator shall from time to time determine,
provided that in no event shall shares be issued for consideration other than:

      (A) cash or check payable to the Corporation,

      (B) a promissory note in favor of the Corporation, which may be subject to
cancellation by the Corporation in whole or in part upon such terms and
conditions as the Plan Administrator shall specify, or

      (C) services rendered.

            (b) Vesting Schedule.

                  (1) In the discretion of the Plan Administrator, the interest
of a Participant in the shares of Common Stock issued to such Participant under
the Plan may be fully and immediately vested upon issuance or may vest in one or
more installments in accordance with the vesting provisions of subsection (b)(4)
below. Except as otherwise provided in subsection (b)(2), the Participant may
not transfer any issued shares in which such Participant does not have a vested
interest. Accordingly, all unvested shares issued under the Plan shall bear the
restrictive legend specified in Article IV, Section 1, until such legend is
removed in accordance with such section. Regardless of whether or not a
Participant's interest in such shares is vested, such Participant shall be
entitled to exercise all the rights of a shareholder with respect to the shares
of Common Stock issued to Participant hereunder, including the right to vote
such shares and to receive any cash dividends or other distributions paid or
made with respect to such shares. Any new, additional or different shares of
stock or other property (including money paid other than as a regular cash
dividend) that the holder of unvested Common Stock may have the right to receive
with respect to such unvested shares by reason of a stock dividend, stock split,
reclassification or other change affecting the outstanding Common Stock as a
class without the Corporation's receipt of consideration therefor shall be
issued subject to (i) the same vesting requirements under subsection (b)(4)
applicable to the unvested Common Stock and (ii) such escrow arrangements as the
Plan Administrator shall deem appropriate.

                  (2) As used in this Article III, the term "transfer" shall
include (without limitation) any sale, pledge, encumbrance, gift or other
disposition of such shares. A Participant shall have the right to make a gift of
unvested shares acquired under the Stock Issuance Program to Participant's
spouse, parents or issue or to a trust established for such spouse, parents or
issue, provided the donee of such shares delivers to the Corporation, at the
time of such donee's acquisition of the gifted shares, a written agreement to be
bound by all the provisions of the Plan and the Issuance Agreement executed by
the Participant.

                  (3) Should the Participant cease Service for any reason while
Participant's interest in the Common Stock remains unvested, then the
Corporation shall have the right to repurchase, at the original purchase price
paid by the Participant, all or (at the discretion of the Corporation and with
the consent of the Participant) any portion of the shares in which the
Participant is not at the time vested, and the Participant shall thereafter
cease to have any further shareholder rights with respect to the repurchased
shares.


                                      O-9

<PAGE>

                  (4) Any shares of Common Stock issued under the Stock Issuance
Program that are not vested at the time of such issuance shall vest in one or
more installments thereafter. The elements of the vesting schedule,
specifically, the performance or service objectives to be completed or achieved,
the number of installments in which the shares are to vest, the interval or
intervals (if any) that are to lapse between installments and the effect that
death, Permanent Disability or other event designated by the Plan Administrator
is to have upon the vesting schedule, shall be determined by the Plan
Administrator and specified in the Issuance Agreement.

                  (5) In its discretion, the Plan Administrator may elect not to
exercise, in whole or in part, its repurchase rights with respect to any
unvested Common Stock or other assets that would otherwise at the time be
subject to repurchase pursuant to the provisions of subsection (b)(3) above.
Such an election shall result in the immediate vesting of the Participant's
interest in the shares of Common Stock as to which the election applies.

                  (6) No shares of Common Stock or other assets shall be issued
or delivered under this Plan unless and until, in the opinion of counsel for the
Corporation (or its successor in the event of any Corporate Transaction), there
shall have been compliance with all applicable requirements of the securities
exchange on which stock of the same class is then listed and all other
requirements of Federal and state law or of any regulatory bodies having
jurisdiction over such issuance and delivery.

            (c) Right of First Refusal. The Plan Administrator may also in its
discretion establish as a term and condition of the issuance of one or more
shares of Common Stock under the Stock Issuance Program that the Corporation
shall have a right of first refusal with respect to any proposed disposition by
the Participant (or any successor in interest by reason of purchase, gift or
other mode of transfer) of one or more shares of such Common Stock. Such right
of first refusal shall be exercisable by the Corporation (or its assignees) in
accordance with the terms and conditions specified in the instrument evidencing
such right.

                                   ARTICLE IV

                                  MISCELLANEOUS

      Section 7. Stock Legend. Each certificate representing shares of Common
Stock (or other securities) issued pursuant to the Plan may bear a restrictive
legend substantially as follows:

      (1) "This certificate and the shares represented hereby may not be sold,
assigned, transferred, encumbered, or in any manner disposed of except in
conformity with the terms of written agreements between the Corporation and the
registered holder of the shares (or the predecessor in interest to the shares).
Upon written request, the Corporation will furnish without charge a copy of such
agreements to the holder hereof."

      Section 8. LOANS

            (a) The Plan Administrator, in its discretion, may assist any
Optionee or Participant (including an Optionee or Participant who is an officer
or director of the Corporation) in the exercise of one or more options granted
to such Optionee under the Article II Option Grant Program or the purchase of
one or more shares issued to such Participant under the Article III Stock
Issuance Program, including the satisfaction of any Federal and State income and
employment tax obligations arising therefrom, by

                  (1) authorizing the extension of a loan from the Corporation
to such Optionee or Participant, or

                  (2) permitting the Optionee or Participant to pay the option
price or purchase price for the purchased Common Stock in installments over a
period of years.

            (b) The terms of any loan or installment method of payment
(including the interest rate and terms of repayment applicable thereto) shall be
established by the Plan Administrator. Loans or installment payments may be
granted with or without security or collateral; provided, that any loan made to
a consultant or other non-employee advisor must be secured by property other
than the purchased shares of Common Stock. In all events the maximum credit
available to each Optionee or Participant may not exceed the sum of (i) the
aggregate option 


                                      O-10

<PAGE>

price or purchase price payable for the purchased shares (less the par value of
such shares rounded up to the nearest whole cent) plus (ii) any Federal and
State income and employment tax liability incurred by the Optionee or
Participant in connection with such exercise or purchase.

            (c) The Plan Administrator, in its discretion, may determine that
one or more loans extended under the financial assistance program shall be
subject to forgiveness by the Corporation in whole or in part upon such terms
and conditions as the Board deems appropriate.

      Section 9. AMENDMENT OF THE PLAN AND AWARDS

            (a) The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects whatsoever; provided, that no
such amendment or modification shall adversely affect the rights and obligations
of an Optionee with respect to options at the time outstanding under the Plan,
nor adversely affect the rights of any Participant with respect to Common Stock
issued under the Plan prior to such action, unless the Optionee or Participant
consents to such amendment. In addition, the Board shall not, without the
approval of the Corporation's shareholders, amend the Plan to (i) materially
increase the maximum number of shares issuable under the Plan (except for
permissible adjustments under Article I, Section 5(c)), (ii) materially increase
the benefits accruing to individuals who participate in the Plan, or (iii)
materially modify the eligibility requirements for participation in the Plan.

            (b) Options to purchase shares of Common Stock may be granted under
the Option Grant Program and shares of Common Stock may be issued under the
Stock Issuance Program, which in both instances are in excess of the number of
shares then available for issuance under the Plan, provided any excess shares
actually issued under the Option Grant Program or the Stock Issuance Program are
held in escrow until the Corporation's shareholders approve an amendment that
sufficiently increases the number of shares of Common Stock available for
issuance under the Plan. If such shareholder approval is not obtained within
twelve (12) months after the date the initial excess stock option grants or
direct stock issuances are made, then any unexercised options representing such
excess shall terminate and cease to be exercisable and the Corporation shall
promptly refund to the Optionees and Participants the option or purchase price
paid for any excess shares issued under the Plan and held in escrow, together
with interest (at the applicable Short Term Federal Rate) thereon for the period
the shares were held in escrow.

      Section 10. EFFECTIVE DATE AND TERM OF PLAN

            (a) The Plan shall become effective when adopted by the Board, but
no option granted under the Plan shall become exercisable, and no shares shall
be issuable under the Stock Issuance Program, unless and until the Plan shall
have been approved by the Corporation's shareholders. If such shareholder
approval is not obtained within twelve (12) months after the date of the Board's
adoption of the Plan, then all options previously granted under the Plan shall
terminate, and no further options shall be granted and no shares shall be issued
under the Stock Issuance Program. Subject to such limitation, the Plan
Administrator may grant options under the Plan at any time after the effective
date and before the date fixed herein for termination of the Plan.

            (b) The Plan shall terminate upon the earlier of (i) ten years after
the adoption of the Plan or (ii) the date on which all shares available for
issuance under the Plan have been issued or canceled pursuant to the exercise of
options granted under Article II or the issuance of shares under Article III. If
the date of termination is determined under clause (i) above, then no options
outstanding on such date under Article II and no shares issued and outstanding
on such date under Article III shall be affected by the termination of the Plan,
and such securities shall thereafter continue to have force and effect in
accordance with the provisions of the stock option agreements evidencing such
Article II options and the stock purchase agreements evidencing the issuance of
such Article III shares.

      Section 11. USE OF PROCEEDS

      Any cash proceeds received by the Corporation from the issuance of shares
of Common Stock under the Plan shall be used for general corporate purposes.


                                      O-11

<PAGE>

      Section 12. WITHHOLDING

      The Corporation's obligation to deliver shares upon the exercise of any
options granted under Article II or upon the purchase of any shares issued under
Article III shall be subject to the satisfaction of all applicable Federal,
state and local income and employment tax withholding requirements.

      Section 13. REGULATORY APPROVALS

      The implementation of the Plan, the granting of any options under the
Option Grant Program, the issuance of any shares under the Stock Issuance
Program, and the issuance of Common Stock upon the exercise of the option grants
made hereunder shall be subject to the Corporation's procurement of all
approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the options granted under it, and the Common Stock issued
pursuant to it.

      Section 14. ACCELERATION OF EXERCISABILITY AND VESTING

      The Board shall have the power to accelerate the time at which a Stock
Award may first be exercised or the time during which a Stock Award or any part
thereof will vest in accordance with the Plan, notwithstanding the provisions in
the Stock Award stating the time at which it may first be exercised or the time
during which it will vest.

                                   ARTICLE V

                   CHANGE IN CONTROL OR CORPORATE TRANSACTIONS

            (a) Dissolution or Liquidation. In the event of a dissolution or
liquidation of the Corporation, then all outstanding Options shall terminate
immediately prior to such event.

            (b) Certain Changes in Control. In the event of (i) a sale, lease or
other disposition of all or substantially all of the assets of the Corporation,
(ii) a merger or consolidation in which the Corporation is not the surviving
corporation or (iii) a reverse merger in which the Corporation is the surviving
corporation but the shares of Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise (collectively, a "Change in Control" or
"Corporate Transaction"), then any surviving corporation or acquiring
corporation may assume or continue any Stock Awards outstanding under the Plan
or may substitute similar stock awards (including an award to acquire the same
consideration paid to the shareholders in the transaction described in this
paragraph) for those outstanding under the Plan. In the event any surviving
corporation or acquiring corporation refuses to assume or continue such Stock
Awards or to substitute similar stock awards for those outstanding under the
Plan, then with respect to Stock Awards held by Participants whose Service has
not terminated, the vesting of such Stock Awards (and, if applicable, the time
during which such Stock Awards may be exercised) shall be accelerated in full,
and the Stock Awards shall terminate if not exercised (if applicable) at or
prior to such event. With respect to any other Stock Awards outstanding under
the Plan, such Stock Awards shall terminate if not exercised (if applicable)
prior to such event.

            (c) Termination of Service Following a Change in Control. Unless
otherwise specified in the applicable Stock Award Agreement, in the event of the
occurrence of a Change in Control and provided that a participant's Stock Award
remains in effect following such Change in Control or is assumed, continued or
substituted for any similar stock award in connection with the Change in
Control, then, if such participant's Service is terminated by the Corporation
without Cause within thirteen (13) months following the effective date of the
Change in Control, all Stock Awards held by such participant (or any substituted
stock awards) shall, as of the date of such termination of Service, vest in full
and become fully exercisable (if applicable) to the extent not previously vested
or exercisable. Such Stock Awards shall remain exercisable until they expire in
accordance with their terms. For the purposes of this section, Cause shall have
the same meaning as is defined in Article II, Section 1(c)(4).

            (d) Securities Acquisition. In the event of an acquisition by any
person, entity or group within the meaning of Section 13(d) or 14(d) of the
Exchange Act, or any comparable successor provisions (excluding any employee
benefit plan, or related trust, sponsored or maintained by the Corporation or an
Affiliate) 


                                      O-12

<PAGE>

of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act, or comparable successor rule) of securities of the Corporation
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of Corporation's Board of Directors, then with respect
to Stock Awards held by Participants whose Service has not terminated, the
vesting of such Stock Awards (and, if applicable, the time during which such
Stock Awards may be exercised) shall be accelerated in full. Such Stock Awards
shall remain exercisable until they expire in accordance with their terms.

            (e) Parachute Payments. If any payment or benefit a Participant
would receive in connection with a Change in Control from the Corporation or
otherwise ("Payment") would (i) constitute a "parachute payment" within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), and (ii) but for this sentence, be subject to the excise tax imposed by
Section 4999 of the Code (the "Excise Tax"), then such Payment shall be reduced
to the Reduced Amount. The "Reduced Amount" shall be either (x) the largest
portion of the Payment that would result in no portion of the Payment being
subject to the Excise Tax or (y) the largest portion, up to and including the
total, of the Payment, whichever amount, after taking into account all
applicable federal, state and local employment taxes, income taxes, and the
Excise Tax (all computed at the highest applicable marginal rate), results in
Participant's receipt, on an after-tax basis, of the greater amount of the
Payment notwithstanding that all or some portion of the Payment may be subject
to the Excise Tax. If a reduction in payments or benefits constituting
"parachute payments" is necessary so that the Payment equals the Reduced Amount,
reduction shall occur in the following order unless the Participant elects in
writing a different order (provided, however, that such election shall be
subject to Corporation approval if made on or after the effective date of the
Change of Control): reduction of cash payments; cancellation of accelerated
vesting of stock awards; reduction of employee benefits. In the event that
acceleration of vesting of stock award compensation is to be reduced, such
acceleration of vesting shall be cancelled in the reverse order of the date of
grant of the Participant's stock awards unless the Participant elects in writing
a different order for cancellation.

      The accounting firm engaged by the Corporation for general audit purposes
as of the day prior to the effective date of the Change in Control shall perform
the foregoing calculations. If the accounting firm so engaged by the Corporation
is serving as accountant or auditor for the individual, entity or group
effecting the Change in Control, the Corporation shall appoint a nationally
recognized accounting firm to make the determinations required hereunder. The
Corporation shall bear all expenses with respect to the determinations by such
accounting firm required to be made hereunder.

      The accounting firm engaged to make the determinations hereunder shall
provide its calculations, together with detailed supporting documentation, to
the Corporation and Participant within fifteen (15) calendar days after the date
on which Participant's right to a Payment arises (if requested at that time by
the Corporation or Participant) or at such other time as requested by the
Corporation or Participant. If the accounting firm determines that no Excise Tax
is payable with respect to a Payment, either before or after the application of
the Reduced Amount, it shall furnish the Corporation and Participant with an
opinion reasonably acceptable to Participant that no Excise Tax will be imposed
with respect to such Payment. Any good faith determination of the accounting
firm made hereunder shall be final, binding and conclusive upon the Corporation
and Participant.


                                      O-13

<PAGE>

                                   APPENDIX P

                     2000 NON-OFFICER EQUITY INCENTIVE PLAN

      1. PURPOSES.

            (a) Available Stock Awards. The purpose of the Plan is to provide a
means by which selected Employees and Consultants of the Company and its
Affiliates may be given an opportunity to benefit from increases in value of
Common Stock through the granting of the following Stock Awards: (i)
Nonstatutory Stock Options, (ii) stock bonuses and (iii) rights to acquire
restricted stock.

            (b) General Purpose. The Company, by means of the Plan, seeks to
retain the services of the persons eligible to receive Stock Awards, to secure
and retain the services of new members of this group and to provide incentives
for such persons to exert maximum efforts for the success of the Company and its
Affiliates.

      2. DEFINITIONS.

            (a) "Affiliate" means any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing, as those terms
are defined in Sections 424(e) and (f), respectively, of the Code.

            (b) "Board" means the Board of Directors of the Company.

            (c) "Cause" shall have such meaning as is defined in the
Optionholder's employment or consulting agreement with the Company. If the
Optionholder does not have an employment or consulting agreement with the
Company, or if such agreement does not define the term "cause," then the term
"cause" shall mean: (i) misconduct or dishonesty that materially adversely
affects the Company, including without limitation (A) an act materially in
conflict with the financial interests of the Company, (B) an act that could
damage the reputation or customer relations of the Company, (C) an act that
could subject the Company to liability, (D) an act constituting sexual
harassment or other violation of the civil rights of coworkers, (E) failure to
obey any lawful instruction of the Board or any officer of the Company and (F)
failure to comply with, or perform any duty required under, the terms of any
confidentiality, inventions or non-competition agreement the Optionholder may
have with the Company, or (ii) acts constituting the unauthorized disclosure of
any of the trade secrets or confidential information of the Company, unfair
competition with the Company or the inducement of any customer of the Company to
breach any contract with the Company. The right to exercise any Option shall be
suspended automatically during the pendency of any investigation by the Board or
its designee, and/or any negotiations by the Board or its designee and the
Optionholder, regarding any actual or alleged act or omission by the
Optionholder of the type described in this section.

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

            (e) "Committee" means a committee of one or more members of the
Board appointed by the Board in accordance with subsection 3(c).

            (f) "Common Stock" means the common stock of the Company.

            (g) "Company" means Internap Network Services Corporation, a
Washington corporation.

            (h) "Consultant" means any person, including an advisor, engaged by
the Company or an Affiliate to render consulting or advisory services and who is
compensated for such services.

            (i) "Continuous Service" means that the Participant's service with
the Company or an Affiliate, whether as an Employee, Director or Consultant, is
not interrupted or terminated. The Participant's Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant
renders such service, provided that there is no interruption or termination of
the 


                                      P-1

<PAGE>

Participant's Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director will not
constitute an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party's sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave.

            (j) "Director" means a member of the Board of Directors of the
Company.

            (k) "Disability" means the permanent and total disability of a
person within the meaning of Section 22(e)(3) of the Code.

            (l) "Employee" means any person employed by the Company or an
Affiliate.

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

            (n) "Fair Market Value" means, as of any date, the value of the
Common Stock determined as follows:

                  (i) If the Common Stock is listed on any established stock
      exchange or traded on the NASDAQ National Market or the NASDAQ SmallCap
      Market, the Fair Market Value of a share of Common Stock shall be the
      closing sales price for such stock (or the closing bid, if no sales were
      reported) as quoted on such exchange or market (or the exchange or market
      with the greatest volume of trading in the Common Stock) on the last
      market trading day prior to the day of determination, as reported in The
      Wall Street Journal or such other source as the Board deems reliable.

                  (ii) In the absence of such markets for the Common Stock, the
      Fair Market Value shall be determined in good faith by the Board.

            (o) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

            (p) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

            (q) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

            (r) "Option" means a Nonstatutory Stock Option granted pursuant to
the Plan.

            (s) "Option Agreement" means a written agreement between the Company
and an Optionholder evidencing the terms and conditions of an individual Option
grant. Each Option Agreement shall be subject to the terms and conditions of the
Plan.

            (t) "Optionholder" means a person to whom an Option is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.

            (u) "Participant" means a person to whom a Stock Award is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Stock Award.

            (v) "Plan" means this Internap Network Services Corporation 2000
Non-Officer Equity Incentive Plan.

            (w) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect with respect to the Company at the time
discretion is being exercised regarding the Plan.


                                      P-2

<PAGE>

            (x) "Securities Act" means the Securities Act of 1933, as amended.

            (y) "Stock Award" means any right granted under the Plan, including
an Option, a stock bonus and a right to acquire restricted stock.

            (z) "Stock Award Agreement" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.

      3. ADMINISTRATION.

            (a) Administration by Board. The Board shall administer the Plan
unless and until the Board delegates administration to a Committee, as provided
in subsection 3(c).

            (b) Powers of Board. The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:

                  (i) To determine from time to time which of the persons
      eligible under the Plan shall be granted Stock Awards; when and how each
      Stock Award shall be granted; what type or combination of types of Stock
      Award shall be granted; the provisions of each Stock Award granted (which
      need not be identical), including the time or times when a person shall be
      permitted to receive Common Stock pursuant to a Stock Award; and the
      number of shares of Common Stock with respect to which a Stock Award shall
      be granted to each such person.

                  (ii) To construe and interpret the Plan and Stock Awards
      granted under it, and to establish, amend and revoke rules and regulations
      for its administration. The Board, in the exercise of this power, may
      correct any defect, omission or inconsistency in the Plan or in any Stock
      Award Agreement, in a manner and to the extent it shall deem necessary or
      expedient to make the Plan fully effective.

                  (iii) To amend the Plan or a Stock Award as provided in
      Section 12.

                  (iv) Generally, to exercise such powers and to perform such
      acts as the Board deems necessary or expedient to promote the best
      interests of the Company which are not in conflict with the provisions of
      the Plan.

            (c) Delegation to Committee. The Board may delegate administration
of the Plan to a Committee or Committees of one (1) or more members of the
Board, and the term "Committee" shall apply to any person or persons to whom
such authority has been delegated. If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board, including the power to
delegate to a subcommittee any of the administrative powers the Committee is
authorized to exercise (and references in this Plan to the Board shall
thereafter be to the Committee or subcommittee), subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may be adopted
from time to time by the Board. The Board may abolish the Committee at any time
and revest in the Board the administration of the Plan.

            (d) Effect of Board's Decision. All determinations, interpretations
and constructions made by the Board in good faith shall not be subject to review
by any person and shall be final, binding and conclusive on all persons.

      4. SHARES SUBJECT TO THE PLAN.

            (a) Share Reserve. Subject to the provisions of Section 11 relating
to adjustments upon changes in Common Stock, the Common Stock that may be issued
pursuant to Stock Awards shall not exceed in the aggregate one million
(1,000,000) shares of Common Stock.


                                      P-3

<PAGE>

            (b) Reversion of Shares to the Share Reserve. If any Stock Award
shall for any reason expire or otherwise terminate, in whole or in part, without
having been exercised in full, the shares of Common Stock not acquired under
such Stock Award shall revert to and again become available for issuance under
the Plan.

            (c) Source of Shares. The shares of Common Stock subject to the Plan
may be unissued shares or reacquired shares, bought on the market or otherwise.

      5. ELIGIBILITY.

            (a) Stock Awards may be granted only to Employees and Consultants.
However, notwithstanding any other provision herein to the contrary, no person
shall be eligible for a Stock Award under the Plan (i) who holds a position of
vice president or higher of the Company or an Affiliate, (ii) who would be
considered an "officer" or " director" within the meaning of those terms under
Rule 4460(i)(1)(A) of the National Association of Securities Dealers Manual (or
such amended or successor rule), (iv) who would be considered a person subject
to Section 16b of the Exchange Act (and regulations promulgated thereunder), or
(v) whose eligibility would require approval of the Plan by the stockholders of
the Company under any law or regulation or the rules of any stock exchange or
market system upon which the Common Stock may then be listed. If not
inconsistent with any such law, regulation or rule, a Stock Award may be granted
to a person, not previously employed by the Company or an Affiliate, as an
inducement essential to entering into an employment contract with the Company or
an Affiliate.

            (b) A Consultant shall not be eligible for the grant of a Stock
Award if, at the time of grant, a Form S-8 Registration Statement under the
Securities Act ("Form S-8") is not available to register either the offer or the
sale of the Company's securities to such Consultant because of the nature of the
services that the Consultant is providing to the Company, or because the
Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such
grant (A) shall be registered in another manner under the Securities Act (e.g.,
on a Form S-3 Registration Statement) or (B) does not require registration under
the Securities Act in order to comply with the requirements of the Securities
Act, if applicable, and (ii) that such grant complies with the securities laws
of all other relevant jurisdictions.

      6. OPTION PROVISIONS.

      Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. No Option shall be an Incentive
Stock Option. The provisions of separate Options need not be identical, but each
Option shall include (through incorporation of provisions hereof by reference in
the Option or otherwise) the substance of each of the following provisions:

            (a) Term. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.

            (b) Exercise Price of an Option. The exercise price of each Option
shall be not less than eighty-five percent (85%) of the Fair Market Value of the
Common Stock subject to the Option on the date the Option is granted.
Notwithstanding the foregoing, an Option may be granted with an exercise price
lower than that set forth in the preceding sentence if such Option is granted
pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.

            (c) Consideration. The purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (i) in cash at the time the Option is exercised
or (ii) at the discretion of the Board (1) by delivery to the Company of other
Common Stock, (2) according to a deferred payment or other similar arrangement
with the Optionholder or (3) in any other form of legal consideration that may
be acceptable to the Board. Unless otherwise specifically provided in the
Option, the purchase price of Common Stock acquired pursuant to an Option that
is paid by delivery to the Company of other Common Stock acquired, directly or
indirectly from the Company, shall be paid only by shares of the Common Stock of
the Company that have been held for more than six (6) months (or such longer or
shorter period of time required to avoid a charge to earnings for financial
accounting purposes). At any time that the Company is 


                                      P-4

<PAGE>

incorporated in Delaware, payment of the Common Stock's "par value," as defined
in the Delaware General Corporation Law, shall not be made by deferred payment.

      In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.

            (d) Transferability of an Option. An Option shall be transferable to
the extent provided in the Option Agreement. If the Option does not provide for
transferability, then the Option shall not be transferable except by will or by
the laws of descent and distribution and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder. Notwithstanding the
foregoing, the Optionholder may, by delivering written notice to the Company, in
a form satisfactory to the Company, designate a third party who, in the event of
the death of the Optionholder, shall thereafter be entitled to exercise the
Option.

            (e) Vesting Generally. The total number of shares of Common Stock
subject to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this subsection 6(e) are subject to any Option provisions
governing the minimum number of shares of Common Stock as to which an Option may
be exercised.

            (f) Termination of Continuous Service. In the event an
Optionholder's Continuous Service terminates (other than upon the Optionholder's
death or Disability), the Optionholder may exercise his or her Option (to the
extent that the Optionholder was entitled to exercise such Option as of the date
of termination) but only within such period of time ending on the earlier of (i)
the date three (3) months following the termination of the Optionholder's
Continuous Service (or such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. If, after termination, the Optionholder does not exercise his
or her Option within the time specified in the Option Agreement, the Option
shall terminate.

            (g) Extension of Termination Date. An Optionholder's Option
Agreement may also provide that if the exercise of the Option following the
termination of the Optionholder's Continuous Service (other than upon the
Optionholder's death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in subsection
6(a) or (ii) the expiration of a period of three (3) months after the
termination of the Optionholder's Continuous Service during which the exercise
of the Option would not be in violation of such registration requirements.

            (h) Disability of Optionholder. In the event that an Optionholder's
Continuous Service terminates as a result of the Optionholder's Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the Option Agreement) or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, after termination, the Optionholder does not
exercise his or her Option within the time specified herein, the Option shall
terminate.

            (i) Death of Optionholder. In the event (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death or (ii)
the Optionholder dies within the period (if any) specified in the Option
Agreement after the termination of the Optionholder's Continuous Service for a
reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholder's estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
Option upon the Optionholder's death pursuant to subsection 6(d), but only
within the period ending on the earlier of (1) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the
Option Agreement) or (2) the expiration of the term of such Option as set forth
in the Option Agreement. If, after death, the Option is not exercised within the
time specified herein, the Option shall terminate.


                                      P-5

<PAGE>

            (j) Early Exercise. The Option may, but need not, include a
provision whereby the Optionholder may elect at any time before the
Optionholder's Continuous Service terminates to exercise the Option as to any
part or all of the shares of Common Stock subject to the Option prior to the
full vesting of the Option. Any unvested shares of Common Stock so purchased may
be subject to a repurchase option in favor of the Company or to any other
restriction the Board determines to be appropriate.

      7. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.

            (a) Stock Bonus Awards. Each stock bonus agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem
appropriate. The terms and conditions of stock bonus agreements may change from
time to time, and the terms and conditions of separate stock bonus agreements
need not be identical, but each stock bonus agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions:

                  (i) Consideration. A stock bonus may be awarded in
      consideration for past services actually rendered to the Company or an
      Affiliate for its benefit.

                  (ii) Vesting. Shares of Common Stock awarded under the stock
      bonus agreement may, but need not, be subject to a share repurchase option
      in favor of the Company in accordance with a vesting schedule to be
      determined by the Board.

                  (iii) Termination of Participant's Continuous Service. In the
      event a Participant's Continuous Service terminates, the Company may
      reacquire any or all of the shares of Common Stock held by the Participant
      which have not vested as of the date of termination under the terms of the
      stock bonus agreement.

                  (iv) Transferability. Rights to acquire shares of Common Stock
      under the stock bonus agreement shall be transferable by the Participant
      only upon such terms and conditions as are set forth in the stock bonus
      agreement, as the Board shall determine in its discretion, so long as
      Common Stock awarded under the stock bonus agreement remains subject to
      the terms of the stock bonus agreement.

            (b) Restricted Stock Awards. Each restricted stock purchase
agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate. The terms and conditions of the restricted
stock purchase agreements may change from time to time, and the terms and
conditions of separate restricted stock purchase agreements need not be
identical, but each restricted stock purchase agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions:

                  (i) Purchase Price. The purchase price under each restricted
      stock purchase agreement shall be such amount as the Board shall determine
      and designate in such restricted stock purchase agreement. The purchase
      price shall not be less than eighty-five percent (85%) of the Common
      Stock's Fair Market Value on the date such award is made or at the time
      the purchase is consummated.

                  (ii) Consideration. The purchase price of Common Stock
      acquired pursuant to the restricted stock purchase agreement shall be paid
      either: (i) in cash at the time of purchase; (ii) at the discretion of the
      Board, according to a deferred payment or other similar arrangement with
      the Participant; or (iii) in any other form of legal consideration that
      may be acceptable to the Board in its discretion; provided, however, that
      at any time that the Company is incorporated in Delaware, then payment of
      the Common Stock's "par value," as defined in the Delaware General
      Corporation Law, shall not be made by deferred payment.

                  (iii) Vesting. Shares of Common Stock acquired under the
      restricted stock purchase agreement may, but need not, be subject to a
      share repurchase option in favor of the Company in accordance with a
      vesting schedule to be determined by the Board.


                                      P-6

<PAGE>

                  (iv) Termination of Participant's Continuous Service. In the
      event a Participant's Continuous Service terminates, the Company may
      repurchase or otherwise reacquire any or all of the shares of Common Stock
      held by the Participant which have not vested as of the date of
      termination under the terms of the restricted stock purchase agreement.

                  (v) Transferability. Rights to acquire shares of Common Stock
      under the restricted stock purchase agreement shall be transferable by the
      Participant only upon such terms and conditions as are set forth in the
      restricted stock purchase agreement, as the Board shall determine in its
      discretion, so long as Common Stock awarded under the restricted stock
      purchase agreement remains subject to the terms of the restricted stock
      purchase agreement.

      8. COVENANTS OF THE COMPANY.

            (a) Availability of Shares. During the terms of the Stock Awards,
the Company shall keep available at all times the number of shares of Common
Stock required to satisfy such Stock Awards.

            (b) Securities Law Compliance. The Company shall seek to obtain from
each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to grant Stock Awards and to issue and sell shares
of Common Stock upon exercise of the Stock Awards; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain
from any such regulatory commission or agency the authority which counsel for
the Company deems necessary for the lawful issuance and sale of Common Stock
under the Plan, the Company shall be relieved from any liability for failure to
issue and sell Common Stock upon exercise of such Stock Awards unless and until
such authority is obtained.

      9. USE OF PROCEEDS FROM STOCK.

      Proceeds from the sale of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company.

      10. MISCELLANEOUS.

            (a) Acceleration of Exercisability and Vesting. The Board shall have
the power to accelerate the time at which a Stock Award may first be exercised
or the time during which a Stock Award or any part thereof will vest in
accordance with the Plan, notwithstanding the provisions in the Stock Award
stating the time at which it may first be exercised or the time during which it
will vest.

            (b) Stockholder Rights. No Participant shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
of Common Stock subject to such Stock Award unless and until such Participant
has satisfied all requirements for exercise of the Stock Award pursuant to its
terms.

            (c) No Employment or other Service Rights. Nothing in the Plan or
any instrument executed or Stock Award granted pursuant thereto shall confer
upon any Participant any right to continue to serve the Company or an Affiliate
in the capacity in effect at the time the Stock Award was granted or shall
affect the right of the Company or an Affiliate to terminate (i) the employment
of an Employee with or without notice and with or without cause, (ii) the
service of a Consultant pursuant to the terms of such Consultant's agreement
with the Company or an Affiliate or (iii) the service of a Director pursuant to
the Bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be.

            (d) Investment Assurances. The Company may require a Participant, as
a condition of exercising or acquiring Common Stock under any Stock Award, (i)
to give written assurances satisfactory to the Company as to the Participant's
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, 


                                      P-7

<PAGE>

the merits and risks of exercising the Stock Award; and (ii) to give written
assurances satisfactory to the Company stating that the Participant is acquiring
Common Stock subject to the Stock Award for the Participant's own account and
not with any present intention of selling or otherwise distributing the Common
Stock. The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (1) the issuance of the shares of Common
Stock upon the exercise or acquisition of Common Stock under the Stock Award has
been registered under a then currently effective registration statement under
the Securities Act or (2) as to any particular requirement, a determination is
made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may, upon
advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to comply
with applicable securities laws, including, but not limited to, legends
restricting the transfer of the Common Stock.

            (e) Withholding Obligations. To the extent provided by the terms of
a Stock Award Agreement, the Participant may satisfy any federal, state or local
tax withholding obligation relating to the exercise or acquisition of Common
Stock under a Stock Award by any of the following means (in addition to the
Company's right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold shares of Common Stock from the shares of
Common Stock otherwise issuable to the Participant as a result of the exercise
or acquisition of Common Stock under the Stock Award, provided, however, that no
shares of Common Stock are withheld with a value exceeding the minimum amount of
tax required to be withheld by law; or (iii) delivering to the Company owned and
unencumbered shares of Common Stock.

      11. ADJUSTMENTS UPON CHANGES IN COMMON STOCK.

            (a) Capitalization Adjustments. If any change is made in the Common
Stock subject to the Plan, or subject to any Stock Award, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to subsection 4(a) and the outstanding Stock Awards will be
appropriately adjusted in the class(es) and number of securities and price per
share of Common Stock subject to such outstanding Stock Awards. The Board shall
make such adjustments, and its determination shall be final, binding and
conclusive. (The conversion of any convertible securities of the Company shall
not be treated as a transaction "without receipt of consideration" by the
Company.)

            (b) Dissolution or Liquidation. In the event of a dissolution or
liquidation of the Company, then all outstanding Stock Awards shall terminate
immediately prior to such event.

            (c) Certain Changes in Control. In the event of (i) a sale, lease or
other disposition of all or substantially all of the assets of the Company, (ii)
a merger or consolidation in which the Company is not the surviving corporation
or (iii) a reverse merger in which the Company is the surviving corporation but
the shares of Common Stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise (collectively, a "Change in Control"), then any
surviving corporation or acquiring corporation may assume or continue any Stock
Awards outstanding under the Plan or may substitute similar stock awards
(including an award to acquire the same consideration paid to the shareholders
in the transaction described in this subsection 11(c)) for those outstanding
under the Plan. In the event any surviving corporation or acquiring corporation
refuses to assume or continue such Stock Awards or to substitute similar stock
awards for those outstanding under the Plan, then with respect to Stock Awards
held by Participants whose Continuous Service has not terminated, the vesting of
such Stock Awards (and, if applicable, the time during which such Stock Awards
may be exercised) shall be accelerated in full, and the Stock Awards shall
terminate if not exercised (if applicable) at or prior to such event. With
respect to any other Stock Awards outstanding under the Plan, such Stock Awards
shall terminate if not exercised (if applicable) prior to such event.

            (d) Termination of Service Following a Change in Control. Unless
otherwise specified in the applicable Stock Award Agreement, in the event of the
occurrence of a Change in Control and provided that a Participant's Stock Award
remains in effect following such Change in Control or is assumed, continued or


                                      P-8

<PAGE>

substituted for any similar stock award in connection with the Change in
Control, then, if such Participant's Continuous Service is terminated by the
Company without Cause within thirteen (13) months following the effective date
of the Change in Control, all Stock Awards held by such Participant (or any
substituted stock awards) shall, as of the date of such termination of
Continuous Service, vest in full and become fully exercisable (if applicable) to
the extent not previously vested or exercisable. Such Stock Awards shall remain
exercisable until they expire in accordance with their terms.

            (e) Securities Acquisition. In the event of an acquisition by any
person, entity or group within the meaning of Section 13(d) or 14(d) of the
Exchange Act, or any comparable successor provisions (excluding any employee
benefit plan, or related trust, sponsored or maintained by the Company or an
Affiliate) of the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act, or comparable successor rule) of securities
of the Company representing at least fifty percent (50%) of the combined voting
power entitled to vote in the election of Directors, then with respect to Stock
Awards held by Participants whose Continuous Service has not terminated, the
vesting of such Stock Awards (and, if applicable, the time during which such
Stock Awards may be exercised) shall be accelerated in full. Such Stock Awards
shall remain exercisable until they expire in accordance with their terms.

            (f) Parachute Payments. If any payment or benefit Optionholder would
receive in connection with a Change in Control from the Company or otherwise
("Payment") would (i) constitute a "parachute payment" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and
(ii) but for this sentence, be subject to the excise tax imposed by Section 4999
of the Code (the "Excise Tax"), then such Payment shall be reduced to the
Reduced Amount. The "Reduced Amount" shall be either (x) the largest portion of
the Payment that would result in no portion of the Payment being subject to the
Excise Tax or (y) the largest portion, up to and including the total, of the
Payment, whichever amount, after taking into account all applicable federal,
state and local employment taxes, income taxes, and the Excise Tax (all computed
at the highest applicable marginal rate), results in Optionholder's receipt, on
an after-tax basis, of the greater amount of the Payment notwithstanding that
all or some portion of the Payment may be subject to the Excise Tax. If a
reduction in payments or benefits constituting "parachute payments" is necessary
so that the Payment equals the Reduced Amount, reduction shall occur in the
following order unless the Optionholder elects in writing a different order
(provided, however, that such election shall be subject to Company approval if
made on or after the effective date of the Change of Control): reduction of cash
payments; cancellation of accelerated vesting of stock awards; reduction of
employee benefits. In the event that acceleration of vesting of stock award
compensation is to be reduced, such acceleration of vesting shall be cancelled
in the reverse order of the date of grant of the Optionholder's stock awards
unless the Optionholder elects in writing a different order for cancellation.

      The accounting firm engaged by the Company for general audit purposes as
of the day prior to the effective date of the Change in Control shall perform
the foregoing calculations. If the accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting
the Change in Control, the Company shall appoint a nationally recognized
accounting firm to make the determinations required hereunder. The Company shall
bear all expenses with respect to the determinations by such accounting firm
required to be made hereunder.

      The accounting firm engaged to make the determinations hereunder shall
provide its calculations, together with detailed supporting documentation, to
the Company and Optionholder within fifteen (15) calendar days after the date on
which Optionholder's right to a Payment arises (if requested at that time by the
Company or Optionholder) or at such other time as requested by the Company or
Optionholder. If the accounting firm determines that no Excise Tax is payable
with respect to a Payment, either before or after the application of the Reduced
Amount, it shall furnish the Company and Optionholder with an opinion reasonably
acceptable to Optionholder that no Excise Tax will be imposed with respect to
such Payment. Any good faith determination of the accounting firm made hereunder
shall be final, binding and conclusive upon the Company and Optionholder.

      12. AMENDMENT OF THE PLAN AND STOCK AWARDS.

            (a) Amendment of Plan. The Board at any time, and from time to time,
may amend the Plan. However, except as provided in Section 12 relating to
adjustments upon changes in stock, no amendment shall be effective unless
approved by the stockholders of the Company to the extent stockholder approval
is necessary for 


                                      P-9

<PAGE>

the Plan to satisfy the requirements of Rule 16b-3 under the Exchange Act or any
NASDAQ or securities exchange listing requirements. The Board may in its sole
discretion submit such amendment to the Plan for stockholder approval.

            (b) No Impairment of Rights. Rights under any Stock Award granted
before amendment of the Plan shall not be impaired by any amendment of the Plan
unless (i) the Company requests the consent of the Participant and (ii) the
Participant consents in writing.

            (c) Amendment of Stock Awards. The Board at any time, and from time
to time, may amend the terms of any one or more Stock Awards; provided, however,
that the rights under any Stock Award shall not be impaired by any such
amendment unless (i) the Company requests the consent of the Participant and
(ii) the Participant consents in writing.

      13. TERMINATION OR SUSPENSION OF THE PLAN.

            (a) Plan Term. The Board may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate on the day before the
tenth (10th) anniversary of the date the Plan is adopted by the Board. No Stock
Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.

            (b) No Impairment of Rights. Suspension or termination of the Plan
shall not impair rights and obligations under any Stock Award granted while the
Plan is in effect except with the written consent of the Participant.

      14. EFFECTIVE DATE OF PLAN.

      The Plan shall become effective as determined by the Board.

      15. CHOICE OF LAW.

      The laws of the State of Washington shall govern all questions concerning
the construction, validity and interpretation of this Plan, without regard to
such state's conflict of laws rules.


                                      P-10

<PAGE>

                      INTERNAP NETWORK SERVICES CORPORATION
              PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
                       2003 ANNUAL MEETING OF STOCKHOLDERS

Revocable Proxy                  COMMON STOCK

      The undersigned hereby appoints Gregory A. Peters and Walter G. DeSocio,
and each of them, proxies, with full power of substitution, to act for and in
the name of the undersigned to vote all shares of common stock of Internap
Network Services Corporation (the "Company") which the undersigned is entitled
to vote at the 2003 Annual Meeting of Stockholders of the Company, to be held at
250 Williams Street, Atlanta, Georgia, on _______, ________, 2003, at 9:00 a.m.
(local time), and at any and all adjournments thereof, with all powers that the
undersigned would possess if personally present, upon and in respect of the
following matters and in accordance with the following instructions, with
discretionary authority as to any and all other matters that may properly come
before the meeting.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE BELOW-LISTED
PROPOSALS

      1) A proposal to amend the Company's certificate of incorporation and
bylaws that will permit holders of the Company's Series A preferred stock to
take action by written consent in lieu of a meeting.

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      2) A proposal to amend the Company's certificate of incorporation that
will limit the liquidation rights of the holders of the Company's Series A
preferred stock upon the occurrence of certain events.

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      3) A proposal to amend the Company's certificate of incorporation that
will increase the authorized size of the Company's Board of Directors to nine
members.

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      4) A proposal to (i) ratify the Company's 2002 Stock Compensation Plan;
(ii) approve an amendment to the 2002 Stock Compensation Plan to increase the
maximum number of shares of common stock reserved for issuance thereunder by an
additional 22,000,000 shares; and (iii) approve an amendment to the 2002 Stock
Compensation Plan to change the definition of "change in control".

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      5) A proposal to amend the Company's 1999 Non-Employee Directors' Stock
Option Plan to increase the maximum number of shares of common stock reserved
for issuance thereunder by an additional 3,000,000 shares.

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      6) A proposal to (i) ratify the Company's Amended 1999 Equity Incentive
Plan; and (ii) approve an amendment to the Amended 1999 Equity Incentive Plan to
change the definition of "change in control".


                                       1

<PAGE>

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      7) A proposal to (i) ratify the Company's 1999 Stock Incentive Plan for
Non-Officers; and (ii) approve an amendment to the 1999 Stock Incentive Plan for
Non-Officers to change the definition of "change in control".

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      8) A proposal to (i) ratify the Company's Amended and Restated 1998 Stock
Option/Stock Issuance Plan; and (ii) approve an amendment to the Amended and
Restated 1998 Stock Option/Stock Issuance Plan to change the definition of
"change in control".

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      9) A proposal to (i) ratify the Company's 2000 Non-Officer Equity
Incentive Plan; and (ii) approve an amendment to the 2000 Non-Officer Equity
Incentive Plan to change the definition of "change in control".

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      10) A proposal to elect as directors the two nominees listed below to
serve until the 2006 Annual Meeting of Stockholders and until their successors
are elected and qualified or their earlier death, resignation or removal (except
as marked to the contrary below).

      |_|  FOR ALL NOMINEES listed below              |_| WITHHOLD AUTHORITY to 
      (except as marked to the contrary below).           vote for all nominees
                                                          listed below.

      INSTRUCTION: To withhold authority to vote for any individual nominee,
      strike a line through the nominee's name in the list below.

      Gregory A. Peters
      Robert D. Shurtleff, Jr.

      11) A proposal to ratify the re-appointment of PricewaterhouseCoopers LLP
as independent accountants of the Company for the fiscal year ending December
31, 2003.

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      In their discretion, the proxies are authorized to vote upon such other
business as properly may come before the Annual Meeting and any and all
adjournments thereof.

     PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD IN THE ENCLOSED
                              POSTAGE-PAID ENVELOPE

          (Continued, and to be signed and dated, on the reverse side)


                                       2

<PAGE>

                         (Continued from the other side)

PROXY SOLICITED BY THE BOARD OF DIRECTORS

      This proxy card will be voted as directed. If no instructions are
specified, this proxy card will be voted "FOR" each of the proposals listed on
the reverse side of this proxy card. If any other business is presented at the
Annual Meeting, this proxy card will be voted by the proxies in their best
judgment. At the present time, the board of directors knows of no other business
to be presented at the Annual Meeting.

      The undersigned may elect to withdraw this proxy card at any time prior to
its use by: (i) giving written notice to Walter G. DeSocio, Vice President-Chief
Administrative Officer, General Counsel and Secretary of the Company, (ii)
executing and delivering to Mr. DeSocio a duly executed proxy card bearing a
later date or, (iii) appearing at the Annual Meeting and voting in person.

                                              __________________________________

                                              Signature


                                              __________________________________
                                              Signature, if shares held jointly


                                              Date:_______________________, 2003

      Please mark, date and sign exactly as your name appears on this proxy
card. When shares are held jointly, both holders should sign. When signing as
attorney, executor, administrator, trustee, guardian or custodian, please give
your full title. If the holder is a corporation or a partnership, the full
corporate or partnership name should be signed by a duly authorized officer.

      Do you plan to attend the Annual Meeting?   |_| YES   |_| NO


                                       3

<PAGE>

                      INTERNAP NETWORK SERVICES CORPORATION
              PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
                       2003 ANNUAL MEETING OF STOCKHOLDERS

Revocable Proxy            SERIES A PREFERRED STOCK

      The undersigned hereby appoints Gregory A. Peters and Walter G. DeSocio,
and each of them, proxies, with full power of substitution, to act for and in
the name of the undersigned to vote all shares of Series A preferred stock of
Internap Network Services Corporation (the "Company") which the undersigned is
entitled to vote at the 2003 Annual Meeting of Stockholders of the Company, to
be held at 250 Williams Street, Atlanta, Georgia, on _______, ________, 2003, at
9:00 a.m. (local time), and at any and all adjournments thereof, with all powers
that the undersigned would possess if personally present, upon and in respect of
the following matters and in accordance with the following instructions, with
discretionary authority as to any and all other matters that may properly come
before the meeting.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE BELOW-LISTED
PROPOSALS

      1) A proposal to amend the Company's certificate of incorporation and
bylaws that will permit holders of the Company's Series A preferred stock to
take action by written consent in lieu of a meeting.

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      2) A proposal to amend the Company's certificate of incorporation that
will limit the liquidation rights of the holders of the Company's Series A
preferred stock upon the occurrence of certain events.

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      3) A proposal to amend the Company's certificate of incorporation that
will increase the authorized size of the Company's Board of Directors to nine
members.

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      4) A proposal to (i) ratify the Company's 2002 Stock Compensation Plan;
(ii) approve an amendment to the 2002 Stock Compensation Plan to increase the
maximum number of shares of common stock reserved for issuance thereunder by an
additional 22,000,000 shares; and (iii) approve an amendment to the 2002 Stock
Compensation Plan to change the definition of "change in control".

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      5) A proposal to amend the Company's 1999 Non-Employee Directors' Stock
Option Plan to increase the maximum number of shares of Common Stock reserved
for issuance thereunder by an additional 3,000,000 shares.

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN


                                       4

<PAGE>

      6) A proposal to (i) ratify the Company's Amended 1999 Equity Incentive
Plan; and (ii) approve an amendment to the Amended 1999 Equity Incentive Plan to
change the definition of "change in control".

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      7) A proposal to (i) ratify the Company's 1999 Stock Incentive Plan for
Non-Officers; and (ii) approve an amendment to the 1999 Stock Incentive Plan for
Non-Officers to change the definition of "change in control".

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      8) A proposal to (i) ratify the Company's Amended and Restated 1998 Stock
Option/Stock Issuance Plan; and (ii) approve an amendment to the Amended and
Restated 1998 Stock Option/Stock Issuance Plan to change the definition of
"change in control".

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      9) A proposal to (i) ratify the Company's 2000 Non-Officer Equity
Incentive Plan; and (ii) approve an amendment to the 2000 Non-Officer Equity
Incentive Plan to change the definition of "change in control".

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      10) A proposal to elect as directors the two nominees listed below to
serve until the 2006 Annual Meeting of Stockholders and until their successors
are elected and qualified or their earlier death, resignation or removal (except
as marked to the contrary below).

      |_|  FOR ALL NOMINEES listed below              |_| WITHHOLD AUTHORITY to 
      (except as marked to the contrary below).           vote for all nominees
                                                          listed below.

      INSTRUCTION:  To withhold authority to vote for any individual nominee,
      strike a line through the nominee's name in the list below.

      Gregory A. Peters
      Robert D. Shurtleff, Jr.

      11) A proposal to ratify the re-appointment of PricewaterhouseCoopers LLP
as independent accountants of the Company for the fiscal year ending December
31, 2003.

      |_|  FOR             |_|  AGAINST               |_|  ABSTAIN

      In their discretion, the proxies are authorized to vote upon such other
business as properly may come before the Annual Meeting and any and all
adjournments thereof.

     PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD IN THE ENCLOSED
                              POSTAGE-PAID ENVELOPE

          (Continued, and to be signed and dated, on the reverse side)


                                       5

<PAGE>

                         (Continued from the other side)

PROXY SOLICITED BY THE BOARD OF DIRECTORS

      This proxy card will be voted as directed. If no instructions are
specified, this proxy card will be voted "FOR" each of the proposals listed on
the reverse side of this proxy card. If any other business is presented at the
Annual Meeting, this proxy card will be voted by the proxies in their best
judgment. At the present time, the board of directors knows of no other business
to be presented at the Annual Meeting.

      The undersigned may elect to withdraw this proxy card at any time prior to
its use by: (i) giving written notice to Walter G. DeSocio, Vice President-Chief
Administrative Officer, General Counsel and Secretary of the Company, (ii)
executing and delivering to Mr. DeSocio a duly executed proxy card bearing a
later date or, (iii) appearing at the Annual Meeting and voting in person.

                                              __________________________________
                                              Signature


                                              __________________________________
                                              Signature, if shares held jointly


                                              Date:_______________________, 2003

      Please mark, date and sign exactly as your name appears on this proxy
card. When shares are held jointly, both holders should sign. When signing as
attorney, executor, administrator, trustee, guardian or custodian, please give
your full title. If the holder is a corporation or a partnership, the full
corporate or partnership name should be signed by a duly authorized officer.

      Do you plan to attend the Annual Meeting?   |_| YES   |_| NO


                                       6

<PAGE>

INFORMATION ABOUT THE ANNUAL MEETING.........................................1

GENERAL INFORMATION ABOUT VOTING.............................................2

PROPOSAL 1 AMENDMENT TO CERTIFICATE OF INCORPORATION AND BYLAWS TO
      PERMIT HOLDERS OF SERIES A PREFERRED STOCK TO TAKE ACTION BY
      WRITTEN CONSENT IN LIEU OF A MEETING...................................5

PROPOSAL 2 AMENDMENT TO CERTIFICATE OF INCORPORATION TO AMEND
      DEFINITION OF "LIQUIDATION EVENT"......................................7

PROPOSAL 3 AMENDMENT TO CERTIFICATE OF INCORPORATION TO INCREASE THE
      AUTHORIZED SIZE OF THE COMPANY'S BOARD OF DIRECTORS TO NINE
      MEMBERS................................................................9

PROPOSAL 4 APPROVAL OF 2002 STOCK COMPENSATION PLAN AND AMENDMENTS TO
      INCREASE BY 22,000,000 SHARES THE NUMBER OF SHARES OF COMMON
      STOCK RESERVED FOR ISSUANCE THEREUNDER AND TO CHANGE THE
      DEFINITION OF CHANGE IN CONTROL.......................................11

PROPOSAL 5 AMENDMENT TO THE 1999 NON-EMPLOYEE DIRECTORS' STOCK OPTION
      PLAN TO INCREASE BY 3,000,000 SHARES THE NUMBER OF SHARES OF
      COMMON STOCK RESERVED FOR ISSUANCE THEREUNDER.........................19

PROPOSAL 6 RATIFICATION OF AMENDED 1999 EQUITY INCENTIVE PLAN AND
      AMENDMENT TO CHANGE THE AMENDED DEFINITION OF CHANGE IN CONTROL.......23

PROPOSAL 7 RATIFICATION OF 1999 STOCK INCENTIVE PLAN FOR NON-OFFICERS
      AND AMENDMENT TO CHANGE THE DEFINITION OF CHANGE IN CONTROL...........31

PROPOSAL 8 RATIFICATION OF THE AMENDED AND RESTATED 1998 STOCK
      OPTION/STOCK ISSUANCE PLAN AND AMENDMENT TO CHANGE THE DEFINITION
      OF CHANGE IN CONTROL..................................................38

PROPOSAL 9 RATIFICATION OF 2000 NON-OFFICER EQUITY INCENTIVE PLAN AND
      AMENDMENT TO CHANGE THE DEFINITION OF CHANGE IN CONTROL...............46

PROPOSAL 10 ELECTION OF DIRECTORS...........................................53

BOARD OF DIRECTORS COMMITTEES AND MEETINGS..................................56

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..............57

DIRECTOR AND EXECUTIVE COMPENSATION.........................................59

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION.....................64

STOCK PERFORMANCE GRAPH.....................................................67

AUDIT COMMITTEE REPORT......................................................68

CERTAIN RELATIONSHIPS AND TRANSACTIONS......................................68

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.....................69

PROPOSAL 11 RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS ...........70

STOCKHOLDERS' PROPOSALS FOR 2004 ANNUAL MEETING.............................71

OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING.......................71

APPENDIX A AMENDMENT TO CERTIFICATE OF INCORPORATION AND BYLAWS TO
      PERMIT SERIES A PREFERRED STOCKHOLDERS TO TAKE ACTION BY WRITTEN
      CONSENT..............................................................A-1

APPENDIX B AMENDMENT TO CERTIFICATE OF INCORPORATION TO AMEND
      DEFINITION OF "LIQUIDATION EVENT"....................................B-1


                                      -i-

<PAGE>

APPENDIX C AMENDMENT TO CERTIFICATE OF INCORPORATION TO INCREASE THE
      AUTHORIZED SIZE OF OUR BOARD OF DIRECTORS TO NINE MEMBERS............C-1

APPENDIX D FIRST AMENDMENT TO THE INTERNAP NETWORK SERVICES CORPORATION
      2002 STOCK COMPENSATION PLAN.........................................D-1

APPENDIX E FIRST AMENDMENT TO THE INTERNAP NETWORK SERVICES CORPORATION
      1999 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN.......................E-1

APPENDIX F FIRST AMENDMENT TO THE INTERNAP NETWORK SERVICES CORPORATION
      AMENDED 1999 EQUITY INCENTIVE PLAN...................................F-1

APPENDIX G FIRST AMENDMENT TO THE AMENDED AND RESTATED INTERNAP NETWORK
      SERVICES CORPORATION 1999 STOCK INCENTIVE PLAN FOR NON-OFFICERS
      (FORMERLY KNOWN AS THE CO SPACE STOCK INCENTIVE PLAN) (AS AMENDED
      AND RESTATED SEPTEMBER 20, 2000).....................................G-1

APPENDIX H FIRST AMENDMENT TO THE INTERNAP NETWORK SERVICES CORPORATION
      1998 STOCK OPTION/STOCK ISSUANCE PLAN (AS AMENDED AND RESTATED
      SEPTEMBER 20, 2000)..................................................H-1

APPENDIX I SECOND AMENDMENT TO THE INTERNAP NETWORK SERVICES
      CORPORATION 2000 NON-OFFICER EQUITY INCENTIVE PLAN...................I-1

APPENDIX J AMENDED AND RESTATED CHARTER OF THE AUDIT COMMITTEE.............J-1

APPENDIX K INTERNAP NETWORK SERVICES CORPORATION  2002 STOCK
      COMPENSATION PLAN ADOPTED ON SEPTEMBER 10, 2002......................K-1

APPENDIX L 1999 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN ADOPTED BY
      THE BOARD OF DIRECTORS JULY 22, 1999 APPROVED BY STOCKHOLDERS
      AUGUST 23, 1999 EFFECTIVE DATE: JULY 22, 1999 TERMINATION DATE:
      JULY 21, 2009........................................................L-1

APPENDIX M AMENDED 1999 EQUITY INCENTIVE PLAN ADOPTED JUNE 19, 1999
      APPROVED BY SHAREHOLDERS AUGUST 23, 1999 AS AMENDED BY THE BOARD
      OF DIRECTORS ON DECEMBER 9, 1999 TERMINATION DATE: JUNE 18, 2009.....M-1

APPENDIX N 1999 STOCK INCENTIVE PLAN FOR NON-OFFICERS (ORIGINALLY
      ADOPTED ON JUNE 28, 1999 AS THE CO SPACE STOCK INCENTIVE PLAN,
      AMENDED ON DECEMBER 22, 1999, JANUARY 11, 2000, AND MARCH 30,
      2000 AND ASSUMED BY INTERNAP NETWORK SERVICES CORPORATION IN
      CONNECTION WITH THE MERGER AGREEMENT DATED MAY 26, 2000. AMENDED
      AND RESTATED AS THE INTERNAP NETWORK SERVICES CORPORATION 1999
      STOCK INCENTIVE PLAN FOR NON-OFFICERS ON SEPTEMBER 20, 2000).........N-1

APPENDIX O AMENDED AND RESTATED 1998 STOCK OPTION/STOCK ISSUANCE PLAN
      AMENDED AND RESTATED SEPTEMBER 20, 2000..............................O-1

APPENDIX P 2000 NON-OFFICER EQUITY INCENTIVE PLAN..........................P-1

INTERNAP NETWORK SERVICES CORPORATION PROXY SOLICITED BY THE BOARD OF
      DIRECTORS FOR THE 2003 ANNUAL MEETING OF STOCKHOLDERS (COMMON
      STOCK).................................................................1

INTERNAP NETWORK SERVICES CORPORATION PROXY SOLICITED BY THE BOARD OF
      DIRECTORS FOR THE 2003 ANNUAL MEETING OF STOCKHOLDERS (SERIES A
      PREFERRED STOCK).......................................................4


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