WWW.EXFILE.COM, INC. -- 14531 -- DSL.NET, INC. -- EXHIBIT 10.4 TO FORM 10-Q


    EXHIBIT
      10.04

    


    AMENDMENT
      AGREEMENT

    


     

    This
      AMENDMENT AGREEMENT, dated as of June 2, 2006 (this “Agreement”), is entered
      into by and among DSL.NET, INC., a Delaware corporation (the “Company”),
      DUNKNIGHT TELECOM PARTNERS LLC, a Delaware limited liability company (“DK”),
      KNIGHT VISION FOUNDATION (“KVF;” together with DK, the “Investors”), and
      DUNKNIGHT TELECOM PARTNERS LLC, as administrative agent (the “Agent”), under
      that certain Agency, Guaranty and Security Agreement dated as of November 2,
      2005 (as amended, modified and/or supplemented from time to time, collectively,
      the “Security Agreement”). Capitalized terms used herein without definition
      shall have the meanings ascribed to such terms in that certain Securities
      Purchase Agreement dated as of November 2, 2005 (as amended, modified and/or
      supplemented from time to time, the “Purchase Agreement;” together with the
      Transaction Documents referred to therein, as amended, collectively, the “2005
      Loan Documents”). 

     

    WHEREAS,
      reference is made to the following Transaction Documents: (i) that
      certain Debenture in the original principal amount of $8,000,000 dated November
      2, 2005 and that certain Debenture in the original principal amount of
      $4,375,000 dated February 1, 2006, each issued by the Company to DK (as
      amended, modified and/or supplemented, the “DK
      Debentures”);
      and
      (ii) that
      certain Debenture in the original principal amount of $625,000, dated
      February 1, 2006, issued by the Company to KVF (as amended, modified and/or
      supplemented, the “KVF
      Debenture;”
      together with the DK Debentures, the “Debentures”);
      and


    


    WHEREAS,
      the Investors have agreed effective as of the date hereof to extend the Maturity
      Date of the Debentures, and, in consideration thereof, the Company has agreed
      to
      issue to the Investors an aggregate of three million nine hundred thousand
      (3,900,000) unregistered, restricted shares of common stock of the Company
      (the
“New
      Shares”),
      allocated between the Investors as set forth on Schedule
      1
      attached
      hereto;

    


    NOW,
      THEREFORE, in consideration of the above, and for other good and valuable
      consideration, the receipt and sufficiency of which is hereby acknowledged,
      each
      of the Company, the Investors and the Agent agree as follows:

    


    1.         
      Amendment
      to Debentures.
      Each of
      the Debentures is hereby amended by extending the “Maturity Date,” as such term
      is defined in each Debenture, from September 4, 2006 to December 4, 2006. For
      the avoidance of doubt, the Maturity Date under each of the Debentures is hereby
      restated as December 4, 2006.

    


    2. 
New
      Shares.
      Immediately following the execution and delivery of this Agreement by each
      of
      the Company, the Investors and the Agent, the Company hereby 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    agrees
      to
      issue to the Investors the New Shares in the amounts specified on Schedule
      1
      hereto,
      subject to securities laws legends applicable to transactions of this type.
      Each
      of the Investors, severally, hereby represents, warrants, and acknowledges
      to
      the Company that (a) the New Shares are being acquired for the account of such
      Investor, for purposes of investment, and not with a view to the distribution
      thereof, as those terms are used in the Securities Act of 1933, as amended
      (the
      "Securities
      Act"),
      and
      the rules and regulations promulgated thereunder; (b) such Investor has
      sufficient knowledge and experience in financial and business matters so as
      to
      be capable of evaluating the merits and risks of its investment decision to
      acquire the New Shares pursuant to the terms of this Agreement; (c) such
      Investor has received copies of such documents and such other information as
      it
      has deemed necessary in order to make an informed investment decision with
      respect to the purchase of the New Shares; (d) such Investor understands, and
      has the financial capability of assuming, the economic risk of an investment
      in
      the New Shares for an indefinite period of time; and (e) no broker, agent,
      dealer or finder of any kind has been retained in connection with this Agreement
      (and the Company shall not be responsible for, and such Investor shall indemnify
      the Company for, any compensation of any kind which might be claimed as owing
      to
      any of such third parties). 

    


    3. 
Common
      Stock Sale Limitation.
      Notwithstanding anything contained herein to the contrary (including, without
      limitation, the provisions of Section 8 hereof), the Investors shall not be
      entitled to sell any New Shares, in whole or in part, prior to the date that
      is
      three hundred sixty five (365) days after the date hereof (the “Lock-up
      Period”).
      Notwithstanding the forgoing, the Lock-up Period shall become null and void
      without any notice to the Company upon the occurrence and during the continuance
      of an Event of Default (as defined in the 2005 Loan Documents). 

    


    4. 
Effective
      Date.
      The
      transactions contemplated hereby shall be effective as of the date first above
      written (the “Effective
      Date”),
      when
      each of the following conditions has been satisfied: (i) each of the Company,
      the Investors and the Agent shall have executed, and the Company shall have
      delivered to each of the Investor its respective counterpart to, this Agreement,
      (ii) the issuance by the Company to the Investors of the New Shares, and the
      receipt by the Investors of the stock certificates evidencing the New Shares,
      shall have occurred, and (iii) the transactions contemplated by Section 7,
      below, shall have occurred. 

    


    5. 
Affect
      of Amendment.
      Except
      as specifically set forth in this Agreement, there are no other amendments,
      modifications or waivers to the 2005 Loan Documents, and all of the other forms,
      terms and provisions of the 2005 Loan Documents remain in full force and effect.
      From and after the Effective Date, all references in the 2005 Loan Documents
      to
      the Debentures shall be deemed to be references to Debentures, as amended
      hereby, and all references in the 2005 Loan Documents to the Maturity Date
      shall
      be deemed to be references to the Maturity Date set forth in Section 1 of this
      Agreement. 

    


    6. 
Representations
      by the Company.
      The
      Company hereby represents and warrants to the Investors that (i) no Event of
      Default (as defined in the 2005 Loan

     

    
      
         

      

      
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    Documents)
      exists and is continuing on the date hereof, (ii) on the date hereof, all
      representations and warranties made by the Company in the 2005 Loan Documents
      are in all material respects true, correct and complete as of the date hereof
      as
      if made as of the date hereof, except for those representations and warranties
      which were made as of a date certain, which such representations and warranties
      were true, correct and complete as of the respective dates made. 

    


    7. 
Other
      Agreements; Waivers; Consent.
      The
      Investors and the Agent hereby acknowledge that commensurate with the parties’
execution and delivery of this Agreement and the consummation of the
      transactions contemplated hereby, the Company will be entering into similar
      arrangements with Laurus Master Fund, Ltd (“Laurus”)
      to (i)
      extend the maturity date of the Company’s outstanding secured notes to Laurus
      (the “Laurus
      Notes”)
      from
      August 1, 2006 to November 1, 2006, (ii) increase the interest rate under the
      Laurus Notes commencing August 2, 2006 to 10% per annum, and (iii) issue to
      Laurus an aggregate of 1,500,000 shares of Company common stock (the
“Laurus
      New Shares”)
      with
      substantially the same rights and restrictions as are set forth herein with
      respect to the New Shares (such transactions hereinafter being referred to
      as
      the “Laurus
      Amendment Transactions”).
      In
      connection with the transactions contemplated by this Agreement and the Laurus
      Amendment Transactions, each of the Investors and the Agent hereby consents
      to
      the Laurus Amendment Transactions.

    


    8.         
      Piggy-Back
      Registration Rights.
      The
      Company hereby agrees that if at any time before the New Shares may be sold
      by
      the Investors pursuant to Rule 144(k) promulgated under the Securities Act,
      there is not an effective registration statement covering all of the New Shares
      and the Company shall determine to prepare and file with the Securities and
      Exchange Commission a registration statement relating to an offering for its
      own
      account or the account of others under the Securities Act, of any of its equity
      securities, other than on Form S-4 or Form S-8 (each as promulgated under
      the Securities Act) or their then equivalents relating to equity securities
      to
      be issued solely in connection with any acquisition of any entity or business
      or
      equity securities issuable in connection with stock option or other employee
      benefit plans, then the Company shall send to DK (on behalf of the Investors)
      written notice of such determination and, if within fifteen (15) days of DK’s
      receipt of such notice, Investors holding an aggregate of in excess of 50%
      of
      the New Shares so request in writing that their New Shares be included in such
      registration statement, the Company shall include in such registration statement
      all or any part of such New Shares not otherwise subject to an effective
      registration statement and requested by DK on behalf of the Investors to be
      included in such registration statement, to the extent the Company may do so
      without violating registration rights of others which exist as of the date
      of
      this Agreement, subject to customary underwriter cutbacks applicable to all
      holders of registration rights and subject to the Investors’ delivery to the
      Company of all customary representations, waivers and indemnities applicable
      to
      selling stockholders in a registration statement. For avoidance of doubt, the
      registration rights provided to the Investors hereunder will rank pari
      passu
      with the
      registration rights to be provided by the Company to Laurus in respect to the
      Laurus New Shares to be issued by the Company as contemplated by Section 7
      hereof.

    


    
      
         

      

      
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    9.         
      Form
      8-K.
      The
      Company hereby agrees to file a Current Report on Form 8-K, completed as
      appropriate, with the Securities and Exchange Commission disclosing the terms
      and conditions set forth in this Agreement as soon as practicable, but no later
      than the fourth (4th)
      business day following the date hereof. 

    


    10.       
      Binding
      Affect.
      This
      Agreement shall be binding upon the parties hereto and their respective
      successors and permitted assigns and shall inure to the benefit of and be
      enforceable by each of the parties hereto and its successors and permitted
      assigns. THIS
      AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY
      THE
      LAW OF THE STATE OF NEW YORK.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original, but all of which shall constitute one instrument. 

     

     

    
 

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    IN
      WITNESS WHEREOF,
      each of
      the Company, the Investors and the Agent has caused this Agreement to be signed
      in its name as of the date first above written.

     

     

    DSL.NET,
      INC.

    


    By:
      /s/
      David F.
      Struwas                            
   

    Name:
      David F. Struwas

    Title:
      President & CEO

    


    


     

    


    DUNKNIGHT
      TELECOM PARTNERS LLC (individually and as Administrative
      Agent)

     

    


    By:
      /s/
      Keir
      Kleinknecht                            
   

    Name:
      Keir Kleinknecht

    Title:
      Sole Managing Member

    


    KNIGHT
      VISION FOUNDATION

     

    


    By:
      /s/
      Peter
      Kleinknecht                          
   

    Name:
      Peter Kleinknecht

    Title:
      President

     

     

     

    Agreed
      and acknowledged:

     

    Laurus
      Master Fund, Ltd,
      as
      First
      Lien Lender, pursuant to the Subordination
      Agreement

     

    By:
      /s/ David
      Grin                                       

Name: David Grin

    Title:
      Director

    


     

    
      
         

      

      
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    Schedule
      1

    


    Allocation
      of New Shares

    


    

      
        	
                Investor:

              	
                New
                  Shares Allocation:

              
	 	 
	
                DunKnight
                  Telecom Partners LLC

              	
                3,712,500
                  shares

              
	 	 
	
                Knight
                  Vision Foundation

              	
                187,500
                  shares

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
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