Exhibit 10.01

 

CONVERSION AND LOCK-UP LETTER AGREEMENT

 

February 9, 2005

 

Cogent Communications Group, Inc.

1051 31st Street, N.W.

Washington, DC  20007

 

Re:                               COGENT COMMUNICATIONS GROUP INC.

 

Ladies and Gentlemen:

 

THIS CONVERSION AND LOCK-UP LETTER AGREEMENT (this “Agreement”) is made as of
the 9th day of February, 2005 by and among (i) Cogent Communications Group,
Inc., a Delaware corporation (the “Company”) and (ii) those stockholders of the
Company whose names are set forth on Schedule I hereto (the “Stockholders”).

 

The Company understands that the Stockholders propose to convert their shares of
the Company’s Series F Participating Convertible Preferred Stock, par value
$.001 per share (the “Series F Preferred Stock”), Series G Participating
Convertible Preferred Stock, par value $.001 per share (the “Series G Preferred
Stock”), Series I Participating Convertible Preferred Stock, par value $.001 per
share (the “Series I Preferred Stock”), Series J Participating Convertible
Preferred Stock, par value $.001 per share (the “Series J Preferred Stock”),
Series K Participating Convertible Preferred Stock, par value $.001 per share
(the “Series K Preferred Stock”), Series L Participating Convertible Preferred
Stock, par value $.001 per share (the “Series L Preferred Stock”) and Series M
Participating Convertible Preferred Stock, par value $.001 per share (the
“Series M Preferred Stock” and together with the Series F Preferred Stock, the
Series G Preferred Stock, the Series I Preferred Stock, the Series J Preferred
Stock, the Series K Preferred Stock, and the Series L Preferred Stock, the
“Preferred Stock”) into shares of the Company’s common stock, par value $.001
per share (the “Common Stock”) and with respect to such shares of Preferred
Stock that are converted into shares of Common Stock and any other shares of
Common Stock now or hereafter beneficially owned by the Stockholders, which
conversion will occur concurrently with the conversion of all outstanding shares
of the Company’s Series H Participating Convertible Preferred Stock, par value
$.001 per share, the undersigned Stockholders hereby irrevocably agree as
follows:

 

(i)                                     that the public trading price of the
Company’s Common Stock on the American Stock Exchange at the close of the third
(3rd) business day after the issuance by the Company of a press release
disclosing that the holders of Preferred Stock intend to convert such shares of
Preferred Stock into shares of Common Stock (the “Announcement”) shall be the
price at which the value of each Stockholder’s shares in the Company, including
shares of Common Stock and shares of Preferred Stock (on an
as-if-converted-to-Common Stock basis), is determined (the “Controlling Price”)
for purposes only of Section (iii) hereof;

 

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(ii)                                  that on the fifth (5th) business day after
the Announcement, each Stockholder shall deliver to the Company written notice
(“Written Notice”) of such Stockholder’s dollar value of Common Stock owned,
including in such dollar amount the assumed conversion of all of such
Stockholder’s shares of Preferred Stock, at the Controlling Price (the
“Stockholder’s Value”) and furthermore, such Written Notice shall include such
Stockholder’s intention of pursuing the course of action mandated by
Section (iii)(x), (iii)(y) or (iii)(z) of this Agreement, as the case may be;

 

(iii)                               that (x) if the Stockholder’s Value is equal
to or greater than fifty million dollars ($50,000,000) and if such Stockholder
is not otherwise exempt from making an HSR Filing (as defined below), then such
Stockholder shall make all necessary filings under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder (“HSR Filing”) within ten (10) business days of providing Written
Notice, or (y) if the Stockholder’s Value is less than fifty million dollars
($50,000,000) but equal to or greater than twenty five million dollars
($25,000,000) and if such Stockholder is not otherwise exempt from making an HSR
Filing, then such Stockholder shall either elect to make an HSR Filing within
ten (10) business days of providing Written Notice or elect to convert such
Stockholder’s shares of Preferred Stock into shares of Common Stock, the
conversion of which shall occur immediately after all of the holders of
Preferred Stock who have elected to make an HSR Filing have made such HSR
Filing, or (z) if the Stockholder’s Value is less than twenty five million
dollars ($25,000,000), then such Stockholder is not required to take any action;

 

 (iv)                           that the Stockholders will not, without the
unanimous prior written consent of the Company and all the other Stockholders,
directly or indirectly, during a period of one hundred eighty (180) days from
the date of this Agreement (the “Lock-Up Period”), issue, sell, offer or agree
to sell, grant any option for the sale of, pledge, make any short sale or
maintain any short position, establish or maintain a “put equivalent position”
(within the meaning of Rule 16-a-1(h) under the Securities Exchange Act of 1934,
as amended (“The Act”) enter into any swap, derivative transaction or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock (whether any such transaction is
to be settled by delivery of Common Stock, other securities, cash or other
consideration) or otherwise dispose of, any Common Stock (or any securities
convertible into, exercisable for or exchangeable for Common Stock) or interest
therein of the Company (all of the foregoing transactions shall together be
known as “Transactions”), provided, however, that (x) prohibitions with respect
to any Transactions shall not apply to the number of shares of Common Stock set
forth next to each Stockholder’s name on Schedule II hereto (the “Exempted
Shares”) and furthermore that (y) Transactions (including without limitation
distribution to the general partner or limited partners of a Stockholder) may
only be made with respect to such number of Exempted Shares in any calendar
month as set forth on Schedule III hereto and provided, further, that the
foregoing prohibitions shall not apply to a Permitted UFO Transfer;

 

(v)                                 that the Stockholders authorize the Company
during the Lock-Up Period to cause the transfer agent (1) to decline to transfer
and/or (2) to note stop transfer restrictions on the transfer books and records
of the Company and/or (3) to place appropriate legends on the certificates with
respect to any shares of Common Stock and any securities convertible into
exercisable or exchangeable for Common Stock for which the undersigned is the
record holder and, in the case of any such share or securities for which the
undersigned is the beneficial but not

 

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the record holder, agrees to cause the record holder to cause the transfer agent
(1) to decline to transfer and/or (2) to note stop transfer restrictions on such
books and records with respect to such shares or securities and/or (3) to place
appropriate legends on the certificates; and

 

(vi)                              that the Stockholders will, upon the sale of
any shares of Common Stock or any other transaction requiring filing a Form 4
under Section 16 of The Act on or before April 26, 2005, enter into a settlement
agreement with the Company in the form attached hereto as Schedule IV (the
“Settlement Agreement”) prior to the filing of such Form 4 with the SEC with
respect to such sale or transaction, and will deliver payment to the Company
within five (5) business days of entering into the Settlement Agreement the
amount equal to the short swing profits captured by such Stockholder as a result
of such sale requiring a Form 4 filing, calculated pursuant to Section 16 of The
Act.

 

The undersigned Stockholders further agree, from the date hereof until the end
of the Lock-Up Period, that the undersigned will not exercise and will waive
his, her or its rights, if any, to require the Company to register its Common
Stock and to receive notice thereof, and further acknowledges that the Company
reserves the right to diligently pursue and prosecute any of the undersigned
acting in contravention of the foregoing; provided, however, that the foregoing
prohibition shall not apply to any registration initiated by the Company for
which the undersigned Stockholders are entitled to receive notice thereof and to
exercise “piggyback” registration rights.

 

A “Permitted UFO Transfer” shall mean a transfer by UFO Communications, Inc., of
all, but not less than all of the capital stock of the Company that it holds at
the time of the transfer to any one or more of Paladin Capital Partners Fund,
L.P., Kline Hawkes Pacific Friends Fund, LLC, or Kline Hawkes Pacific, L.P.,
pursuant to which the number of Exempted Shares allocated to UFO Communicatons,
Inc. is reduced to zero and the number of Exempted Shares allocated to the
transferee(s) is not increased.

 

The undersigned Stockholders hereby represent and warrant that the undersigned
has full power and authority to enter into this Agreement, and that, upon
request, the undersigned will execute any additional documents necessary in
connection with enforcement hereof.  Any obligations of the undersigned shall be
binding upon the successors and assigns of the undersigned.

 

This Agreement shall terminate and be of no further force and effect upon the
consummation of a firmly underwritten public offering of the Common Stock
pursuant to an effective registration statement under the Securities Act of
1933, as amended.

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

Very truly yours,

 

 

 

 

 

 

 

OAK INVESTMENT PARTNERS IX,

 

LIMITED PARTNERSHIP

 

 

 

 

By:

Oak Associates IX, LLC, its General Partner

 

 

 

 

By:

 

 

 

Name: Edward Glassmeyer

 

Title: Managing Member

 

 

 

 

 

 

OAK IX AFFILIATES FUND, LIMITED PARTNERSHIP

 

 

 

 

By:

Oak IX Affiliates, LLC, its General Partner

 

 

 

 

By:

 

 

 

Name: Edward Glassmeyer

 

Title: Managing Member

 

 

 

 

 

 

 

OAK IX AFFILIATES FUND-A, LIMITED PARTNERSHIP

 

 

 

 

By:

Oak Associates IX, LLC, its General Partner

 

 

 

 

By:

 

 

 

Name: Edward Glassmeyer

 

Title: Managing Member

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

JERUSALEM VENTURE PARTNERS III, L.P.

 

 

 

 

By:

Jerusalem Partners III, L.P., its General Partner

 

By:

Jerusalem Venture Partners Corporation, its

 

 

General Partner

 

 

 

 

By:

 

 

 

Name: Erel Margalit

 

 

 

 

 

 

JERUSALEM VENTURE PARTNERS III

 

(ISRAEL), L.P.

 

 

 

 

By:

Jerusalem Venture Partners III (Israel) Management Company Ltd., its General
Partner

 

 

 

 

By:

 

 

 

Name: Erel Margalit

 

 

 

 

 

 

JERUSALEM VENTURE PARTNERS

 

ENTREPRENEURS FUND III, L.P.

 

 

 

 

By:

Jerusalem Partners III, L.P., its General Partner

 

By:

Jerusalem Venture Partners Corporation, its

 

 

General Partner

 

 

 

 

By:

 

 

 

Name: Erel Margalit

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

 

JERUSALEM VENTURE PARTNERS IV, L.P.

 

 

 

 

By:

Jerusalem Partners IV, L.P., its General Partner

 

By:

JVP Corp IV, its General Partner

 

 

 

 

By:

 

 

 

Name: Erel Margalit

 

 

 

 

 

 

 

JERUSALEM VENTURE PARTNERS IV (Israel), L.P.

 

 

 

 

By:

Jerusalem Partners IV – Venture Capital, L.P.,

 

 

its General Partner

 

By:

JVP Corp IV, its General Partner

 

 

 

 

By:

 

 

 

Name: Erel Margalit

 

 

 

 

JERUSALEM VENTURE PARTNERS IV-A, L.P.

 

 

 

 

By:

Jerusalem Venture Partners IV, L.P., its General

 

 

Partner

 

By:

JVP Corp IV, its General Partner

 

 

 

 

By:

 

 

 

Name: Erel Margalit

 

 

 

 

JERUSALEM VENTURE PARTNERS

 

ENTREPRENEURS FUND IV, L.P.

 

 

 

 

By:

Jerusalem Venture Partners IV, L.P., its General

 

 

Partner

 

By:

JVP Corp IV, its General Partner

 

 

 

 

By:

 

 

 

Name: Erel Margalit

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

 

WORLDVIEW TECHNOLOGY PARTNERS III, L.P.

 

 

 

WORLDVIEW TECHNOLOGY INTERNATIONAL III, L.P.

 

 

 

WORLDVIEW STRATEGIC PARTNERS III, L.P.

 

 

 

WORLDVIEW III CARRIER FUND, L.P.

 

 

 

By:

Worldview Capital III, L.P., its General Partner

 

 

 

By:

 

 

 

Name: James Wei

 

 

 

 

 

WORLDVIEW TECHNOLOGY

 

PARTNERS IV, L.P.

 

 

 

WORLDVIEW TECHNOLOGY

 

INTERNATIONAL IV, L.P.

 

 

 

WORLDVIEW STRATEGIC PARTNERS IV, L.P.

 

 

 

By:

Worldview Capital IV, L.P., its General Partner

 

 

 

By:

 

 

 

Name: James Wei

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

 

BCP CAPITAL, L.P.

 

 

 

 

By:

BCP General LLC, its General Partner

 

 

 

 

By:

 

 

 

Name:

Steven D. Brooks

 

Title:

Managing Director

 

 

 

 

 

 

 

BCP CAPITAL QPF, L.P.

 

 

 

 

By:

BCP General LLC, its General Partner

 

 

 

 

By:

 

 

 

Name:

Steven D. Brooks

 

Title:

Managing Director

 

 

 

 

 

 

 

BCP AFFILIATES FUND LLC

 

 

 

 

By:

BCP Capital Management LLC, its Manager

 

 

 

 

By:

 

 

 

Name:

Steven D. Brooks

 

Title:

Managing Director

 

 

 

 

 

 

 

[BROADVIEW BCPSBS

 

 

 

 

 

 

By:

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

]

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

 

[BOULDER VENTURES III, L.P.

 

 

 

By:

 

 

 

Name: Andrew E. Jones

 

Title: General Partner

 

 

 

 

 

BOULDER VENTURES III (ANNEX), L.P.

 

 

 

By:

 

 

 

Name: Andrew E. Jones

 

Title: General Partner]

 

 

 

 

 

BOULDER VENTURES IV, L.P.

 

 

 

By:

 

 

 

Name: Andrew E. Jones

 

Title: General Partner

 

 

 

 

 

BOULDER VENTURES IV (ANNEX), L.P.

 

 

 

By:

 

 

 

Name: Andrew E. Jones

 

Title: General Partner

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

 

NAS PARTNERS I L.L.C.

 

 

 

 

By:

Nassau Capital LLC, its General Partner

 

 

 

 

By:

 

 

 

Name: Randall A. Hack

 

Title: Managing Member

 

 

 

 

 

 

NASSAU CAPITAL PARTNERS IV L.P.

 

 

 

 

By:

Nassau Capital LLC, its General Partner

 

 

 

 

By:

 

 

 

Name: Randall A. Hack

 

Title: Managing Member

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

 

CISCO SYSTEMS CAPITAL CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

TITLE:

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

 

BNP EUROPE TELECOM & MEDIA FUND II, LP

 

 

 

By:

 

 

 

Name: Shawna Morehouse & Martin Laidlaw

 

Title: Authorized Signatories

 

By: General Business, Finance and Investment Ltd., its General Partner, and

 

By: Commerce Advisory Services Ltd, as Director and Partnership Secretary

 

 

 

 

 

NATIO VIE DEVELOPPEMENT 3, FCPR

 

 

 

By:

 

 

 

Name: Bernard d’Hotelans

 

Title: Directeur Associe

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

 

UFO COMMUNICATIONS, INC.

 

 

 

 

 

By:

 

 

 

Name: Jay Ferguson

 

 

 

TITLE: CHAIRMAN

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

 

PALADIN CAPITAL PARTNERS FUND, L.P.

 

 

 

 

By:

Paladin General Holdings, LLC

 

 

Its General Partner

 

 

 

 

 

 

 

By:

 

 

 

Name: Frank J. Hanna, Jr.

 

Title: President

 

 

 

 

 

 

 

WORLDWIDE INVESTMENTS, LLC

 

 

 

 

By: Worldwide Assets, Inc., its Sole Member

 

 

 

 

By:

 

 

 

Name: Frank J. Hannah

 

Title: Chairman & Chief Executive Officer

 

 

 

 

 

 

2001 PENN. AVE. INVESTMENTS, LLC

 

 

 

 

 

 

By:

 

 

 

Name: Michael R. Steed

 

Title: President

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

 

KLINE HAWKES PACIFIC, L.P.

 

 

 

 

By:

Kline Hawkes Pacific Advisors, LLC, its General Partner

 

 

 

 

By:

 

 

 

Name: Jay Ferguson

 

Title: Member

 

 

 

 

 

 

KLINE HAWKES PACIFIC FRIENDS FUND, LLC

 

 

 

 

By:

Kline Hawkes Pacific Advisors, LLC, its Managing Member

 

 

 

 

By:

 

 

 

Name: Jay Ferguson

 

Title: Member

 

 

 

 

 

 

BROADMARK CAPITAL, L.L.C.

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name: Joseph L. Schocken

 

Title: President

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

 

GLOBAL ACCESS TELECOMMUNICATIONS, INC.

 

 

 

 

 

By:

 

 

 

Name: John E. Jones

 

 

 

TITLE: VICE PRESIDENT

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

 

COLUMBIA VENTURES CORPORATION

 

 

 

 

 

By:

 

 

 

Name: Kenneth Peterson

 

 

 

TITLE: CHIEF EXECUTIVE OFFICER

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

 

APPLEGREEN CAPITAL, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

TITLE:

 

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[Signature Page to Conversion and Lock-Up Letter Agreement]

 

 

KARSTEN BLUE

 

 

 

 

 

 

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Schedule I

 

Stockholders Party to the Agreement

Oak Investment Partners IX, Limited Partnership

Oak IX Affiliates Fund, Limited Partnership

Oak IX Affiliates Fund-A Limited Partnership

Boulder Ventures III (Annex), LP

Boulder Ventures III, LP

Boulder Ventures IV (Annex), LP

Boulder Ventures IV, LP

BCP Capital QPF, L.P.

BCP Capital, L.P.

BCP Affiliates Fund LLC

Broadview BCPSBS

Nassau Capital Partners IV, LP

NAS Partners I, LLC

Worldview Technology Partners III, LP

Worldview Technology International III, LP

Worldview Strategic Partners III, LP

Worldview III Carrier Fund, LP

Worldview Technology Partners IV, LP

Worldview Technology International IV, LP

Worldview Strategic Partners IV, LP

Jerusalem Venture Partners III, LP

Jerusalem Venture Partners Entrepreneurs Fund, III, LP

Jerusalem Venture Partners III (Israel) LP

Jerusalem Venture Partners IV, LP

Jerusalem Venture Partners IV-A, LP

Jerusalem Venture Partners Entrepreneurs Fund IV, L.P.

Jerusalem Venture Partners IV (Israel), LP

Cisco Systems Capital Corporation

BNP -Europe Telecom & Media Fund II, LP

Natio Vie Development 3, FCPR

Kline Hawkes Pacific, L.P.

Kline Hawkes Pacific Friends Fund, LLC

Paladin Capital Partners Fund, L.P.

UFO Communications, Inc

Global Access Telecommunications, Inc.

Columbia Ventures Corporation

Applegreen Capital, Inc

Broadmark Capital

2001 Penn. Ave. Investments, LLC

Worldwide Investments, LLC

Karsten Blue

 

 

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Schedule II

 

Stockholder

 

Number of Exempted Shares

 

Oak Investment Partners IX, Limited Partnership

 

1,978,706

 

Oak IX Affiliates Fund, Limited Partnership

 

21,380

 

Oak IX Affiliates Fund-A Limited Partnership

 

47,142

 

Boulder Ventures III (Annex), LP

 

255

 

Boulder Ventures III, LP

 

8,258

 

Boulder Ventures IV (Annex), LP

 

379,159

 

Boulder Ventures IV, LP

 

29,817

 

BCP Capital QPF, L.P.

 

761,044

 

BCP Capital, L.P.

 

162,745

 

BCP Affiliates Fund LLC

 

12,037

 

Broadview BCPSBS

 

26

 

Nassau Capital Partners IV, LP

 

439,636

 

NAS Partners I, LLC

 

6,286

 

Worldview Technology Partners III, LP

 

759,852

 

Worldview Technology International III, LP

 

187,284

 

Worldview Strategic Partners III, LP

 

16,793

 

Worldview III Carrier Fund, LP

 

41,741

 

Worldview Technology Partners IV, LP

 

417,589

 

Worldview Technology International IV, LP

 

68,104

 

Worldview Strategic Partners IV, LP

 

3,480

 

Jerusalem Venture Partners III, LP

 

982,589

 

Jerusalem Venture Partners Entrepreneurs Fund, III, LP

 

75,152

 

Jerusalem Venture Partners III (Israel) LP

 

27,921

 

Jerusalem Venture Partners IV, LP

 

1,324,033

 

Jerusalem Venture Partners IV-A, LP

 

11,245

 

Jerusalem Venture Partners Entrepreneurs Fund IV, L.P.

 

11,877

 

Jerusalem Venture Partners IV (Israel), LP

 

31,952

 

Cisco Systems Capital Corporation

 

1,471,766

 

BNP -Europe Telecom & Media Fund II, LP

 

1,746,049

 

Natio Vie Development 3, FCPR

 

100,348

 

Kline Hawkes Pacific, L.P.

 

169,295

 

Kline Hawkes Pacific Friends Fund, LLC

 

5,712

 

Paladin Capital Partners Fund, L.P.

 

129,783

 

UFO Communications, Inc

 

73,588

 

Global Access Telecommunications, Inc.

 

111,627

 

Columbia Ventures Corporation

 

1,337,969

 

Applegreen Capital, Inc

 

1,527

 

Broadmark Capital

 

4,549

 

2001 Penn. Ave. Investments, LLC

 

2,542

 

Worldwide Investments, LLC

 

2,542

 

Karsten Blue

 

12,403

 

 

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Schedule III

 

Stockholder

 

Maximum number of Exempted Shares that
may be subject to a Transaction per calendar
 month

 

Oak Investment Partners IX, Limited Partnership

 

329,784

 

Oak IX Affiliates Fund, Limited Partnership

 

3,563

 

Oak IX Affiliates Fund-A Limited Partnership

 

7,857

 

Boulder Ventures III (Annex), LP

 

42

 

Boulder Ventures III, LP

 

1,376

 

Boulder Ventures IV (Annex), LP

 

63,193

 

Boulder Ventures IV, LP

 

4,969

 

BCP Capital QPF, L.P.

 

126,841

 

BCP Capital, L.P.

 

27,124

 

BCP Affiliates Fund LLC

 

2,006

 

Broadview BCPSBS

 

4

 

Nassau Capital Partners IV, LP

 

73,273

 

NAS Partners I, LLC

 

1,048

 

Worldview Technology Partners III, LP

 

126,642

 

Worldview Technology International III, LP

 

31,214

 

Worldview Strategic Partners III, LP

 

2,799

 

Worldview III Carrier Fund, LP

 

6,957

 

Worldview Technology Partners IV, LP

 

69,598

 

Worldview Technology International IV, LP

 

11,351

 

Worldview Strategic Partners IV, LP

 

580

 

Jerusalem Venture Partners III, LP

 

163,765

 

Jerusalem Venture Partners Entrepreneurs Fund, III, LP

 

12,525

 

Jerusalem Venture Partners III (Israel) LP

 

4,653

 

Jerusalem Venture Partners IV, LP

 

220,672

 

Jerusalem Venture Partners IV-A, LP

 

1,874

 

Jerusalem Venture Partners Entrepreneurs Fund IV, L.P.

 

1,979

 

Jerusalem Venture Partners IV (Israel), LP

 

5,325

 

Cisco Systems Capital Corporation

 

245,294

 

BNP -Europe Telecom & Media Fund II, LP

 

291,008

 

Natio Vie Development 3, FCPR

 

16,725

 

Kline Hawkes Pacific, L.P.

 

28,216

 

Kline Hawkes Pacific Friends Fund, LLC

 

952

 

Paladin Capital Partners Fund, L.P.

 

21,630

 

UFO Communications, Inc

 

12,265

 

Global Access Telecommunications, Inc.

 

18,604

 

Columbia Ventures Corporation

 

222,995

 

Applegreen Capital, Inc

 

255

 

Broadmark Capital

 

758

 

2001 Penn. Ave. Investments, LLC

 

424

 

Worldwide Investments, LLC

 

424

 

Karsten Blue

 

2,067

 

 

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Schedule IV

 

SETTLEMENT AGREEMENT AND RELEASE

 

This Settlement Agreement and Release (the “Agreement”) is made and entered into
on              , 200    by and between Cogent Communications Group, Inc., a
Delaware corporation (the “Company”), and                 (the “Investor”), and
inures to the benefit of the above-named parties’ current, former and future
parents, subsidiaries, predecessors, successors, joint venturers, related and/or
affiliated persons, trust beneficiaries, directors, officers, stockholders,
attorneys, accountants, insurers, reinsurers, agents, employees and assigns, as
applicable.

 

RECITALS

 

WHEREAS, the Investor is subject to certain reporting and restrictive
requirements relating to trading the Company’s securities, including Section 16
of the Securities Exchange Act of 1934 (the “Act”);

 

WHEREAS, the Company and the Investor hereby acknowledge that a certain
transaction made by the Investor on               , 200    with respect to the
Company’s securities (the “Transaction”) require the Investor to deliver payment
to the Company the amount of $               , which has been agreed upon by the
Company and the Investor (the “Settlement Amount”), pursuant to Section 16(b) of
the Act;

 

WHEREAS, the Company and the Investor hereby acknowledge the accuracy of the
Settlement Amount; and

 

WHEREAS, both the Company and the Investor wish to resolve any past or current
disputes and claims between them arising from or related to Section 16(b) of the
Act and related securities trading policies of the Company as of the date
hereof.

 

NOW,  THEREFORE, THE PARTIES AGREE AS FOLLOWS:

 

1.                                       The Recitals and identification of the
parties to, and beneficiaries of, this Agreement are incorporated by reference
as though fully set forth herein;

 

2.                                       The Investor agrees to deliver to the
Company in accordance with the terms hereof, the full dollar amount of the
Settlement Amount no later than five (5) business days after entering into this
Agreement (the “Payment Date”).  Notwithstanding the foregoing, if the Investor
fails to deliver the Settlement Amount on the Payment Date, the Investor hereby
agrees that such Settlement Amount shall accrue interest at a rate of eight
percent (8%) from the Payment Date until paid in full;

 

3.                                       The Company for itself and its current,
former and future parents, subsidiaries, predecessors, successors, joint
venturers, related and/or affiliated persons, trust beneficiaries, directors,
officers, stockholders, attorneys, accountants, insurers, reinsurers, agents,
employees and assigns (whether express, by implication, or by operation of law)
and the Investor, fully and forever release and discharge each other with
respect to any and all claims, liabilities, causes of action that either party
had or now has, either directly or indirectly, relating to Section 16(b) of the
Act or any policies of the Company relating to trading in the Company’s
securities;

 

4.                                       The parties acknowledge and agree that
if any provision of this Agreement is found to be unenforceable, it will not
affect the enforceability of the remaining provisions and the courts may enforce
all remaining provisions to the full extent permitted by law;

 

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5.                                       This Agreement contains the entire
agreement of the parties and supersedes any prior agreements on the subject
matter thereof.  The parties further acknowledge and agree that parole evidence
shall not be required to interpret the intent of the parties;

 

6.                                       The parties acknowledge that each has
read and understands this Agreement and that each is signing this Agreement
voluntarily, without coercion, and based upon his or its own judgment, and not
in reliance upon any representations or promises made by the other party, other
than those contained within this Agreement;

 

7.                                       Each party represents and warrants
that, as of the date of the execution of this Agreement, he or it has the sole
right and authority to execute this Agreement, and that such party has not sold,
assigned, transferred, conveyed or otherwise disposed of any claims or demands
relating to any right surrendered by virtue of this Agreement. Each party
further represents and warrants that he or it has had the opportunity to consult
with, and has consulted, legal counsel in connection with the negotiation and
execution of this Agreement. Each party and its signatory represents that the
signatory is either a party or a business representative or assignee of, and is
fully authorized to execute this Agreement on behalf of, the party for whom he
or she signs; and

 

8.                                       This Agreement may be signed in
counterparts, and said counterparts shall be treated as though signed as one
document.

 

[Signature page to follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
on the date hereof.

 

 

 

COGENT COMMUNICATIONS GROUP, INC.

 

 

 

 

 

 

By:

 

Title:

 

 

 

 

 

[INVESTOR]

 

 

 

 

 

 

By:

 

Title:

 

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