WWW.EXFILE.COM, INC. -- 14680 -- DSL.NET, INC. -- EXHIBIT 10.1 TO FORM 8-K


     

    EXHIBIT
      10.1

     

    


    THE
      ISSUANCE AND SALE OF THIS NOTE HAS NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS. THIS NOTE MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      (I)
      IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) IF REASONABLY REQUESTED
      BY
      THE COMPANY, AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE
      HOLDER), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION
      IS
      NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
      144A UNDER SAID ACT, AND (C) THE PRIOR APPROVAL OF THE BORROWER (AS NOTED IN
      SECTION 8, BELOW).

    


    SUBORDINATED
      SECURED
      PROMISSORY NOTE

     

     

    
      	$1,182,000	
               October
                30,
                2006

            


    

            

    


    FOR
      VALUE
      RECEIVED, the undersigned, DSL.net, Inc., a Delaware corporation ("Borrower"),
      hereby promises to pay to MDS Acquisition, Inc., a Delaware corporation
      ("Lender"),
      or
      order, the principal sum of One Million One Hundred Eighty Two Thousand Dollars
      ($1,182,000), together with accrued interest as provided herein. This Note
      is
      being issued pursuant to Section 1(c) of the Purchase Agreement, dated as of
      August 22, 2006, between Borrower, Lender and Lender’s parent company, MegaPath
      Inc. (the “Purchase
      Agreement”).
      This
      note constitutes a “Subsequent Closing Note” under the Purchase Agreement and a
“Note” under the Security Agreement (as defined below). 

    


    A.  Interest.
      Interest shall accrue with respect to the principal sum hereunder at eight
      percent (8%) per annum. However, if an Event of Default, as defined herein,
      occurs and is continuing, then interest shall accrue at ten percent (10%) per
      annum. Interest payable hereunder shall be calculated on the basis of a three
      hundred sixty (360) day year for actual days elapsed. 

    


    B.  Payment.

    


    1.  Scheduled
      Payment.
      The
      principal indebtedness, together with all accrued interest, shall be payable
      in
      full on December 31, 2007 (the “Maturity
      Date”).

    


    2.  Prepayment.
      Borrower shall not have the right to prepay, in whole or in part, the principal
      of this Note without the prior written consent of Lender, given in its sole
      discretion.

    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    3.  Form
      of Payment.
      Principal and interest and all other amounts due hereunder are to be paid in
      lawful money of the United States of America in federal or other immediately
      available funds.

    


    C.  Security
      Interest and Subordination.

    


    1.  Security
      Interest.
      Borrower’s
      obligations hereunder shall
      be
“Obligations,” as defined in
      the
      Security Agreement, dated as of August 28, 2006, between Borrower and Lender
      (the “Security
      Agreement”),
      and
      shall be secured by the Collateral, as defined in the Security
      Agreement.

    


    2.  Subordination.
      Lender’s Lien against the Collateral is subordinated to prior existing Liens
      granted to other lenders to Borrower, to the extent provided in the
      Subordination Agreement, dated as of August 28, 2006, by and among Borrower,
      Lender and Laurus Master Fund, Ltd. (the “Subordination
      Agreement”).

     

    D.  Events
      of Default.
      During
      the continuance of an Event of Default, as defined in the Security Agreement,
      Lender shall have the right to exercise its rights and remedies with respect
      to
      Borrower and the Collateral as provided in the Security Agreement.

    


    E.  Other
      Provisions.
      

     

    1.  Definitions.
      Capitalized terms used herein without definition shall have the meanings
      assigned to them in the Security Agreement.

    


    2.  Governing
      Law; Venue.
      This
      Note shall be governed by the laws of the State of Delaware, without giving
      effect to conflicts of law principles. All actions or proceedings arising in
      connection with this Note shall be conducted in accordance with Section 8(a)
      of
      the Purchase Agreement.

    


    3.  Notices.
      Any
      notice or communication required or desired to be served, given or delivered
      hereunder shall be in the form and manner specified below, and shall be
      addressed to the party to be notified as provided in Section 8(f) of the
      Purchase Agreement.

    


    4.  Lender's
      Rights; Borrower Waivers.
      Lender's acceptance of partial or delinquent payment from Borrower hereunder,
      or
      Lender's failure to exercise any right hereunder, shall not constitute a waiver
      of any obligation of Borrower hereunder, or any right of Lender hereunder,
      and
      shall not affect in any way the right to require full performance at any time
      thereafter. Borrower waives presentment, diligence, demand of payment, notice,
      protest and all other demands and notices in connection with the delivery,
      acceptance, performance, default or enforcement of this Note. In any action
      on
      this Note, Lender need not produce or file the original of this Note, but need
      only file a photocopy of this Note certified by Lender to be a true and correct
      copy of this Note in all material respects.

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    5.  Enforcement
      Costs.
      Borrower shall pay all costs and expenses, including reasonable and documented
      attorneys' fees and expenses Lender expends or incurs in connection with the
      enforcement of this Note, the collection of any sums due hereunder, any actions
      for declaratory relief in any way related to this Note, or the protection or
      preservation of any rights of the holder hereunder.

    


    6.  Severability.
      Whenever possible each provision of this Note shall be interpreted in such
      manner as to be effective and valid under applicable law, but if any provision
      is prohibited by or invalid under applicable law, it shall be ineffective to
      the
      extent of such prohibition or invalidity, without invalidating the remainder
      of
      the provision or the remaining provisions of this Note.

     

    7.  Amendment
      Provisions.
      This
      Note may not be amended or modified, nor may any of its terms be waived, except
      by written instruments signed by Borrower and Lender.

    


    8.  Binding
      Effect.
      This
      Note shall be binding upon, and shall inure to the benefit of, Borrower and
      Lender and their respective successors and assigns; provided,
      however,
      that
      (i) Borrower's rights and obligations shall not be assigned or delegated without
      Lender's prior written consent, given in its sole discretion, and any purported
      assignment or delegation without such consent shall be void ab initio,
      and
      (ii) Lender may not assign, transfer or otherwise convey this Note to any Person
      that is not an Affiliate of Lender.

    


    9.  Time
      of Essence.
      Time is
      of the essence of each and every provision of this Note.

    


    10.  Headings.
      Section
      headings used in this Note have been set forth herein for convenience of
      reference only. Unless the contrary is compelled by the context, everything
      contained in each section hereof applies equally to this entire
      Note.

     

    
      	 	 	 
	 	
              DSL.net,
                Inc.

            
	 
 	 
 	 
 
	 	By:  	/s/ David
              F. Struwas
	 	
              
Name:
              David F. Struwas
	 	Title:
              President & Chief Executive Officer


    

    


    Acknowledged
      & Agreed to:

    


    MDS
      Acquisition, Inc. 

    


    


    


    By:
      /s/
      Paul
      Milley                                     
   

    Name:
      Paul Milley

    Title:
      CFO

     

    
      
        
        

      

      
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