Document:

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                                                                   EXHIBIT 10.35

                             EMPLOYMENT AGREEMENT

     This AGREEMENT, dated 2, Jan , 2002, is between ZymoGenetics, Inc., a
Washington corporation ("Company") and Mark Young ("Executive").
                         -------                    ----------

     1.  Employment. Company will employ Executive and Executive will accept
         ----------
employment as Sr. Vice President, Technical Operations, of the Company.
Executive accepts employment upon the terms and conditions contained in this
Agreement and for the period (hereinafter called the "Term of Employment")
                                                      ------------------
specified in Section 3 below.

     2.  Duties. Executive shall, during the Term of Employment, serve the
         ------
Company under the direction of the President of the Company.  Executive shall
perform the duties of his position faithfully, diligently and competently and to
the best of his ability, and shall devote his full business time to his
employment. Executive shall perform such other duties as are assigned to him by
the President or the Board of Directors of the Company.  Executive shall not
engage in any other business activity (except the management of personal
investments which in the aggregate do not interfere with the performance of
Executive's duties) without first obtaining the written consent of Company, such
consent not to be unreasonably withheld.

     3.  Term of Employment; Termination.
         -------------------------------

     Executive's Term of Employment shall be two years from the date of this
Agreement, unless extended or earlier terminated as provided below.

     (a) Termination or Extension of Term of Employment By Company

     The Company shall employ Executive, for a period commencing on the date
hereof and terminating as follows:

          (i) Two years from the date hereof, if at least thirty (30) days prior
to such date either the Company or Executive has, at its election, notified the
other in writing that this Agreement shall terminate on such date.  If notice of
termination is not given, this Agreement shall be deemed to extend from year to
year.  It can then be terminated by written notice at least thirty (30) days
prior to the annual renewal date.

          (ii) With or without "Cause" (as defined below), Company may terminate
the employment of Executive at any time upon giving "Notice of Termination" (as
defined below).
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     (b)  By Executive

     Executive may terminate his employment at any time, for any reason, upon
giving Notice of Termination.

     (c)  Automatic Termination

     This Agreement and Executive's employment hereunder shall terminate
automatically upon the death or total disability of Executive.  The term "total
                                                                          -----
disability" as used herein shall mean Executive's inability to perform the
----------
duties set forth in paragraph 1 hereof for a period or periods aggregating
ninety (90) calendar days in any 12-month period as a result of physical or
mental illness, loss of legal capacity or any other cause beyond Executive's
control, unless Executive is granted a leave of absence by the Board of
Directors of Company.  Executive and Company hereby acknowledge that Executive's
ability to perform the duties specified in paragraph 2 hereof is of the essence
of this Agreement.  Termination hereunder shall be deemed to be effective (a) at
the end of the calendar month in which Executive's death occurs or (b)
immediately upon a determination by the Board of Directors of Company of
Executive's total disability, as defined herein.

     (d)  Notice

     The term "Notice of Termination" shall mean at least thirty (30) days'
               ---------------------
written notice of termination, by either party, of Executive's employment,
during which period Executive's employment and performance of services will
continue; provided, however, that Company may, upon notice to Executive and
without reducing Executive's compensation during such period, excuse Executive
from any or all of his duties during such period.  Such a reduction in duties
shall not constitute "good reason" for voluntary termination so as to trigger
termination payments in accordance with subparagraph 4.2.  The effective date of
the termination (the "Termination Date") of Executive's employment hiseunder
                      ----------------
shall be the date on which such 30-day period expires.

     4.  Termination Payments
         --------------------

     In the event of termination of the employment of Executive, all
compensation and benefits set forth in this Agreement shall terminate except as
specifically provided in this paragraph 4:

                                      -2-
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     4.1  Termination by Company

     (a)  Upon termination by Company, Company shall pay Executive any unpaid
annual base salary which has accrued for services already performed as of the
Termination Date.

     (b)  If Company terminates Executive's employment without Cause, as defined
below, Executive shall be entitled to receive termination payments equal to
twelve (12) months annual base salary.  The termination payments shall be
calculated according to Executive's base salary as of the date of Notice of
Termination and the termination payments will be paid semi-monthly in equal
parts in accordance with the same time schedule that Company or a "Successor
                                                                   ---------
Company" (as defined in the Stock Option Agreement and incorporated by reference
-------
herein) makes its customary payroll.  Company or a Successor Company may deduct
customary withholdings including social security, federal and state income
taxes, and state disability insurance from these severance payments; however,
any and all such obligations shall be Executive's responsibility.  Company will
issue and file appropriate Form 1099 or similar tax documents in connection with
any termination payments.  The termination payments described in this paragraph
are expressly contingent upon Executive's full compliance with the terms of his
Employee Inventions and Proprietary Information Agreement with Company (the
"Inventions Agreement"), a copy of which is attached hereto.  In the event
---------------------
Executive were to materially breach this Inventions Agreement, his right to any
termination payments under this paragraph shall be extinguished, Company (and
any Successor Company) shall cease payments, and Executive shall immediately
return to Company or to any Successor Company any severance payments already
made.  If Executive is terminated by either Company or any Successor Company for
Cause, Executive shall not be entitled to receive any of the foregoing benefits,
other than those set forth in clause (a) above.

     4.2  Termination by Executive

     In the case of the termination of Executive's employment by Executive for
"good reason," as defined below, Executive shall be entitled to the termination
payments as set forth in clauses 4.1(a) and (b).  In the case of termination of
Executive's employment by Executive for any other reason, Executive shall not be
entitled to any termination payments or accelerated vesting benefit, other than
as set forth in clause 4.1(a), above.

                                      -3-
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     4.3  Termination as a Result of Death or Total Disability

     In the event of termination of Executive's employment pursuant to
subparagraph 3(c), Executive or his estate shall be paid the compensation set
forth in clause 4.1(a) and shall not be entitled to any of the benefits under
clauses 4.1(b).

     4.4  "Good Reason"

     "Good reason" shall mean the occurrence of any of the following events,
      -----------
without the consent of the Executive:

     a)  a demotion or other material reduction in the nature or status of
         Executive's responsibilities; provided, however, that a change in the
         person or office to which Executive reports, without a corresponding
         reduction in duties, status and and responsibilities, shall not
         constitute "good reason;"

     b)  a non-voluntary reduction in the Executive's annual base salary;

     c)  requirement by a Successor Company that the Executive relocate his
         principal place of employment to a location that is more than 50 miles
         from the principal place of employment where Executive was employed; or

     d)  the failure of Company to obtain a satisfactory agreement from any
         Successor Company to assume and perform the obligations under this
         Agreement.

     4.5  Cause

     Wherever reference is made in this Agreement to termination being with or
without Cause, "Cause" shall include, without limitation, the occurrence of one
                ------
or more of the following events:

     a)  willful misconduct, insubordination, or dishonesty in the performance
         of Executive's duties or other knowing and material violation of
         Company's or a Successor Company's policies and procedures in effect
         from time to time which results in a material adverse effect on Company
         or a Successor Company;

     b)  willful actions (or intentional failures to act) in bad faith by
         Executive with respect to Company or a Successor Company that
         materially impair Company's or a Successor Company's business, goodwill
         or reputation;

                                      -4-
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     c)  conviction of Executive of a felony involving an act of dishonesty,
         moral turpitude, deceit or fraud, or the commission of acts that could
         reasonably be expected to result in such a conviction; or

     d)  any material violation by Executive of Executive's Inventions Agreement
         with Company.

     5.  Compensation and Fringe Benefits.
         --------------------------------

     (a) The Company shall, during the Term of Employment, pay to the Executive
as compensation for the performance of his duties and obligations a salary of
$250,000 per annum.  This compensation is subject to annual review and
adjustment, as appropriate in the judgment of the Company.  The compensation
payable pursuant to this Section 5(a) shall be payable in equal semi-monthly
installments on the last day of each such pay period.

     (b) The Executive shall be enrolled and participate in any retirement,
group insurance and other fringe benefit plans and arrangements which are
applicable to the similarly situated personnel of the Company and in effect from
time to time, if the Executive is eligible therefor, in each case in accordance
with and subject to the provisions thereof.

     (c)  Stock Options

          (i)    Executive has been granted a ten-year stock option under the
Company's Amended and Restated 2000 Stock Incentive Plan, dated August 23, 2000,
which allows Executive to purchase 80,000 shares of the Company's common stock.

          (ii)   Executive shall be eligible to receive future grants of stock
options pursuant to the Company's stock-based bonus program; and

          (iii)  Executive shall be eligible to receive future periodic (i.e.,
non bonus-related) grants under the Company's stock incentive programs.

     (d) Executive will also receive the following executive perquisites for the
duration of this contract:

          (i)    Company-paid term life insurance policy in the amount of
$200,000; and

          (ii)   Company-paid use of either a laptop computer or personal
computer, to be upgraded bi-annually at the time this contract is renewed; and

                                      -5-
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          (iii)  Company-paid annual executive health physical, to be
administered by a physician selected by the Company; and

          (iv)   Company-paid expenses for a residential phone and cellular
phone.

     6.   Expenses.  All travel and other reasonable expenses incident to the
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rendering of service by the Executive hereunder will be paid by the Company.  If
such expenses are paid in the first instance by the Executive, the Company will
reimburse him upon presentation of proper expense accounts.  Reimbursement
requests, along with supporting documentation, should be submitted within sixty
(60) days of incurring the expense.

     7.   Non-competition.
          ---------------

     (a)  Upon termination of Executive's employment with the Company for any
reason, and for a period of twelve (12) consecutive months after leaving his
employment with the Company, Executive will not directly or indirectly work or
otherwise engage in research, manufacture, sale or distribution of any product,
method or matter:

          (i)  For any business, whose commercial efforts are in competition
with the products manufactured or marketed by the Company during Executive's
employment with the Company or under research or development by the Company
during Executive's employment with the Company (and on which the Company has
expended at least $500,000); or

          (ii) For any research institution whose research efforts pertain to
the same products manufactured or marketed by the Company during Executive's
employment with the Company or under research or development by the Company
during Executive's employment with the Company (and on which the Company has
expended at least $500,000), unless the Executive is not involved in any manner
in the design, conduct or supervision of such research efforts, or unless such
research is being conducted solely for scientific and not for commercial
purposes.  The executive shall be deemed to be connected with a business if such
business is carried on by partnership in which he is a general or limited
partner, consultant or employee, or a corporation or association of which he is
a shareholder, officer, director, employee, member, consultant or agent;
provided, that nothing herein shall prevent the purchase or ownership by the
Executive of shares of less than 1% of the outstanding shares in a publicly or
privately held corporation.

                                      -6-
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     Said twelve (12) months' period shall commence on the day on which the
Executive actually leaves his employment with the Company, even if this date is
prior to the expiration of any given notice of termination.

     (b)  The Company's Board of Directors may, at its own discretion, by
express or written consent, release the Executive from the restriction in
paragraph 6(a).

     (c)  For a period of one (1) year after the employment of the Executive is
terminated for any reason, Executive will not directly or indirectly, either for
Executive's account or as representative or agent for any other person, firm,
corporation or entity, solicit the services of, or entice away, any Executive of
the Company, or the Executive of any company affiliated with the Company.

     (d)  In the event that Executive during said period described in paragraph
6(a) violates any of the Executive's obligations towards the Company, including
but not limited to the Executive accepting a position with a competing
enterprise or Executive violating terms of paragraph 6(c), payment of Severance
or Salary Continuation shall cease automatically without notice, regardless of
whether the Company takes legal action or otherwise tries to enforce its rights.
The Company reserves all rights it may have under contract or law to relief or
damages in addition to termination of the above-described payments.

     8.   Binding Effect.  This Agreement shall be binding upon and inure to the
          --------------
benefit of the Company and the Executive and their respective heirs, legal or
personal representatives, successors and assigns.

     9.   Rights of Assignment or Delegation.  This Agreement is personal to the
          ----------------------------------
Executive and shall not be assignable.  Company may assign its rights hereunder
to (a) any corporation resulting from any merger, consolidation, or other
reorganization to which Company is a party or (b) any corporation, partnership,
association, or other person to which Company may transfer all or substantially
all of the assets in business of Company existing at such time.  All the terms
and provisions of this Agreement shall be binding upon and shall inure to the
benefit and be enforceable by the parties hereto and their respective successors
and permitted assigns.

     10.  Waiver.  No delay or failure by any party in exercising, protecting or
          -------
enforcing any of its rights, titles, interests, or remedies hereunder and no
course of dealing or performance with respect thereto, shall constitute a
waiver.  The express waiver by a party of any right, title, interest, or remedy
in a particular instance or circumstance shall not constitute a waiver in any
other instance or circumstance.  All rights and remedies shall be cumulative and
not exclusive or any rights or remedies.

                                      -7-
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     11.  Arbitration.  Any controversies or claims arising out of or relating
          -----------
to this Agreement shall be finally and fully settled by arbitration of the City
of Seattle, Washington in accordance with the Employment Arbitration Rules of
the American Arbitration Association then in effect (the "AAA Rules"), conducted
by one arbitrator, mutually agreed upon by Company and Executive or chosen in
accordance with the AAA Rules, except the parties thereto shall have any right
to discovery would be permitted by the Federal Rules of Civil Procedure for a
period of 90 days following the commencement of such arbitration and the
arbitrator shall resolve any dispute which arises in connection with such
discovery.  The prevailing parties shall be entitled to costs, expenses,
reasonable attorneys' fees, and judgment upon the award rendered by the
arbitrator.  The award may be entered in any court having jurisdiction.

     12.  Amendments in Writing.  No amendment, modification, waiver,
          ---------------------
termination or discharge of any provision of this Agreement, nor consent to any
departure by either party, shall in any event be effective unless the same shall
be in writing, specifically identifying this Agreement and the provision
intended to be amended, modified, waived, terminated, or discharged and assigned
by Company and Executive.  Each such amendment, modification, waiver,
termination, or discharge shall be effective only in the specific instance and
for the specific purpose for which given.  No provision of this Agreement shall
be varied, contradicted, or explained by any oral agreement, course of dealing
or performance or any other matter not set forth in agreement in writing and
signed by Company and Executive.

     13.  Notices.  Any notice required or desired to be given hereunder shall
          -------
be in writing and shall be deemed sufficiently given when delivered or when
mailed by first class certified or registered mail, postage prepaid, to the
party for whom intended at the following address:

     To the Company:

               Dr. Bruce L. A. Carter
               CEO and President
               ZymoGenetics, Inc.
               1201 Eastlake Avenue East
               Seattle, WA 98102

     To the Executive:

               Mark Young
               Sr. Vice President, Technical Operations
               315 First Avenue West #510
               Seattle, WA 98119

                                      -8-
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or to such other address, as to either party, as such party shall from time to
time designate by like notice to the other.

     14.  Entire Agreement.  This Agreement will, upon the commencement of the
          ----------------
Term of Employment, supersede all prior agreements between the Executive and the
Company, except the Employee Inventions and Proprietary Information Agreement
dated November 5, 2001, and any such prior agreements and the terms and
conditions thereof shall hereafter be null, void and of no effect.

     15.  Governing Law.  This Agreement is made under and shall be governed by
          -------------
and construed in accordance with the internal laws of the State of Washington.

     16.  Severability.  If any provision of this Agreement shall be held
          ------------
invalid, illegal or unenforceable in any jurisdiction, for any reason, including
without limitation, the duration of such provision, it's geographical scope or
the extent of the activities prohibited or required by it, then, to the full
extent permitted by law (a) all other provisions hereof shall remain in full
force and effect and such jurisdiction shall be liberally construed in order to
carry out the intent of the parties as nearly as may be possible, (b) such
invalidity, illegality, or unenforcability shall not effect the validity,
legality or enforceability of any other provision, and (c) any court or
arbitrator having jurisdiction there over shall have the power to reform such
provision to the extent necessary for such provision to be enforceable under
applicable law.

     17.  Multiple Copies.  This Agreement may be executed in two or more
          ---------------
counterparts of like tenor and effect, each of which shall be deemed an original
but all of which together shall constitute one and the same instrument.

                              ZYMOGENETICS, INC.

                              By: /s/ Bruce L.A. Carter
                                 ----------------------
                              Dr. Bruce L. A. Carter, President and CEO

                              EXECUTIVE:

                              /s/ Mark Young
                              --------------
                              Mark Young

                                      -9-EXHIBIT 4.01
                                                                    ------------

                             DESIGNATION OF SERIES Y
                           CONVERTIBLE PREFERRED STOCK

                                       OF

                                  DSL.NET, INC.

            DSL.net, Inc., a company organized and existing under the General
Corporation Law of the State of Delaware (hereinafter called the "Corporation"),
hereby certifies that the following resolution was adopted by the Board of
Directors of the Corporation as required by Section 151 of the General
Corporation Law by action of the Board of Directors of the Corporation at a
meeting held on December 23, 2001:

            RESOLVED that, pursuant to the authority vested in the Board of
Directors of the Corporation and in accordance with the General Corporation Law
of the State of Delaware and the provisions of the Corporation's Amended and
Restated Certificate of Incorporation, a new series of preferred stock, par
value $.00l per share, of the Corporation is hereby created and designated as
the "Series Y Convertible Preferred Stock," with the designation and number of
shares thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations and restrictions thereof, as follows:

            A.   Designation and Amount. A total of 15,000 shares of the
Corporation's previously undesignated preferred stock, par value $.001 per
share, shall be designated as "Series Y Convertible Preferred Stock" (the
"Series Y Preferred Stock"). Such number of shares may be increased or decreased
by resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series Y Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance (i) upon the exercise of outstanding options, rights or warrants for
the purchase of Series Y Preferred Stock or (ii) upon the conversion of any
outstanding securities issued by the Corporation convertible into Series Y
Preferred Stock.

                 1.   Dividend Provisions. The holders of shares of Series Y
Preferred Stock shall be entitled to receive dividends out of funds legally
available therefor, in cash or, at the sole option of the Corporation, but only
in case of a dividend payment under clause (ii) below, in shares of the
Corporation's common stock, par value $.0005 per share (the "Common Stock"),
measured at the fair market value of the Common Stock at the time the dividend
is declared, prior and in preference to any declaration or payment of any
dividend (payable other than in Common Stock or other securities and rights
convertible into or entitling the holder thereof to receive, directly or
indirectly, additional shares of Common Stock) on the Common Stock, at the rate
of $120 per share per annum (the "Accruing Dividends") (as adjusted for any
stock splits, stock dividends, recapitalizations or the like affecting the
Series Y Preferred Stock after the date of the filing of this Designation of
Series Y Convertible Preferred Stock (the "Series Y Certificate of Designation")
<PAGE>
with the Secretary of State of the State of Delaware), when and if declared by
the Board of Directors. Accruing Dividends shall accrue on a monthly basis on
each share of the Series Y Preferred Stock from the date of original issuance of
such share, whether or not earned or declared and shall be cumulative.
Notwithstanding the foregoing, accrued but unpaid dividends shall be paid on
each outstanding share of the Series Y Preferred Stock upon the earliest to
occur of (i) any liquidation, dissolution, winding up or Change of Control (as
defined in subsection 2(c)(i)), which payment shall be made as provided in
Section 2; (ii) any conversion of such share of the Series Y Preferred Stock
into Common Stock; or (iii) any redemption of such share of the Series Y
Preferred Stock, which payment shall be made as provided in Section 6. The
holders of a majority of the then outstanding shares of Series Y Preferred Stock
may waive any dividend or dividend preference that such holders shall be
entitled to receive under this Section 1 by giving the Corporation written
notice of such waiver. For the purpose of this Section 1, "fair market value"
shall be determined in accordance with Section 2(c)(ii) hereof.

                 2.   Liquidation Preference.

                      (a)  In the event of any liquidation, dissolution or
winding up of the Corporation, either voluntary or involuntarily, the holders of
Series Y Preferred Stock shall be entitled to receive, prior and in preference
to any distribution of any of the assets of the Corporation to the holders of
Common Stock and any other class or series of preferred stock (whenever
designated or created) that is junior to the Series Y Preferred Stock with
respect to the liquidation, dissolution or winding up of the Corporation by
reason of their ownership thereof, an amount per share equal to the sum of
$1,000.00 (the "Original Series Y Issue Price") plus, in the case of each share,
an amount equal to all Accruing Dividends thereon unpaid (whether or not
declared) computed to the date payment thereon is made (subject to adjustment of
such fixed dollar amounts for any stock splits, stock dividends, combinations,
recapitalizations or the like affecting the Series Y Preferred Stock after the
date of the filing of this Series Y Certificate of Designation with the
Secretary of State of the State of Delaware). If upon the occurrence of such
event, the assets and funds available for distribution to the holders of shares
of Series Y Preferred Stock and any other class or series of preferred stock
(whenever designated or created) that is on parity with the Series Y Preferred
Stock shall be insufficient to permit the payment to such holders of the full
aforesaid preferential amounts, then the entire assets and funds of the
Corporation legally available for distribution shall be distributed ratably
among the holders of the Series Y Preferred Stock and any other such class or
series of Preferred Stock in proportion to the amount of such preferential
amounts due on the shares of Series Y Preferred Stock and any other such class
or series of Preferred Stock owned by each such holder. The Corporation's Series
X Convertible Preferred Stock, par value $.001 per share (the "Series X
Preferred Stock"), shall rank on parity with the Series Y Preferred Stock with
respect to the liquidation, dissolution or winding up of the Corporation.

                      (b)  Upon completion of the distribution required by
subsection (a) of this Section 2 and any other distribution required by the
Corporation's certificate of incorporation (including any certificate of
designation for another class or series of preferred stock), all of the

                                       -2-
<PAGE>
remaining assets of the Corporation available for distribution to stockholders,
if any, shall be distributed among the holders of shares of Series X Preferred
Stock, Series Y Preferred Stock, Common Stock and any other class or series of
stock of the Corporation (whenever designated or created) that is not limited to
a fixed sum or percentage in respect of the rights of the holders thereof to
participate on the distribution of assets upon the liquidation, dissolution or
winding up of the Corporation pro rata based on the number of shares of Common
Stock then held by each such holder (assuming full conversion of all convertible
or exchangeable stock, including the Series X Preferred Stock and Series Y
Preferred Stock, into shares of Common Stock, regardless of whether or not such
shares are then convertible).

                      (c)  (i) For purposes of this Section 2, a liquidation,
dissolution or winding up of the Corporation shall be deemed to be occasioned
by, or to include, (A) the acquisition of the Corporation by another entity by
means of any transaction or series of related transactions (including, without
limitation, any reorganization, merger or consolidation) if, following such
transaction, the holders of the outstanding voting power of the Corporation
prior to the transaction cease to hold, directly or indirectly, a majority of
the outstanding voting power of the surviving entity or (B) a sale of all or
substantially all of the assets of the Corporation, unless in case of either
clause (A) or (B) the holders of a majority of the then outstanding shares of
Series Y Preferred Stock elect to the contrary by giving written notice thereof
to the Corporation at least three days before the effective date of such event.
If such notice is given, the provisions of subsection 3(h) below shall apply. In
connection with any such transaction contemplated by the first sentence of this
paragraph, all consideration payable to the stockholders of the Corporation, in
connection with a merger or consolidation, or all consideration payable to the
Corporation, together with all other available assets of the Corporation (net of
obligations owed by the Corporation), in the case of an asset sale, shall be
paid to and deemed (to the fullest extent permitted by law) distributed (in the
case of a merger or consolidation) or available for distribution and payment as
provided herein (in the case of a sale of assets), as applicable, to the holders
of capital stock of the Corporation in accordance with the preference and
priorities set forth in this Section 2, with such preferences and priorities
specifically intended to be applicable in any such Change of Control transaction
as if the same were a liquidation, dissolution or winding up. If applicable, the
Corporation shall either (x) cause the agreement and plan of merger or
consolidation to provide as a consequence of such merger or consolidation for
the conversion of the outstanding shares of Series Y Preferred Stock into the
right to receive an amount either in cash, or, in the case of a merger or
consolidation for stock, stock of the surviving corporation equal to the
applicable amount payable under this Section 2; or (y) immediately concurrent
with the consummation with the sale of all or substantially all of the assets of
the Corporation, cause the redemption of all outstanding shares of the Series Y
Preferred Stock for an amount either in cash or, in the case of a sale of assets
for stock, stock of the surviving corporation equal to the applicable amount
payable under this Section 2. The occurrence of any event set forth in clause
(A) or (B) of the first sentence of this subsection 2(c)(i) is sometimes
referred to as a "Change of Control."

                                       -3-
<PAGE>
                           (ii)  In any of such events, if the consideration
received by the Corporation or its stockholders is other than cash or
securities, its value will be deemed its fair market value, as determined in
good faith by the Board of Directors. Any securities shall be valued as follows:

                                 (A) Securities not subject to investment letter
or other similar restrictions on free marketability covered by (B) below:

                                     (1) If traded on a securities exchange or
            through the Nasdaq Stock Market, the value shall be deemed to be the
            average of the closing prices of the securities on such exchange or
            system over the ten (10) day period ending three (3) days prior to
            the closing;

                                     (2) If actively traded over-the-counter,
            the value shall be deemed to be the average of the closing bid or
            sale prices (whichever is applicable) over the ten (10) day period
            ending three (3) days prior to the closing; and

                                     (3) If there is no active public market,
            the value shall be the fair market value thereof, as determined in
            good faith by the Board of Directors.

                                 (B) The method of valuation of securities
subject to investment letter or other restrictions on free marketability (other
than restrictions arising solely by virtue of a stockholder's status as an
affiliate or former affiliate or by virtue of any securities law or regulation)
shall be to make an appropriate discount from the market value determined as
above in (A) (1), (2) or (3) to reflect the approximate fair market value
thereof, as determined in good faith by the Board of Directors.

                           (iii) In the event the requirements of this
subsection 2(c) are not complied with, the Corporation shall forthwith either:

                                 (A) cause such closing to be postponed until
such time as the requirements of this Section 2 have been complied with; or

                                 (B) cancel such transaction, in which event the
rights, preferences and privileges of the holders of shares of Series Y
Preferred Stock shall revert to and be the same as such rights, preferences and
privileges existing immediately prior to the date of the first notice referred
to in subsection 2(c)(iv) hereof.

                           (iv)  The Corporation shall give each holder of
record of shares of Series Y Preferred Stock written notice of such impending
transaction not later than twenty (20) days prior to the stockholders' meeting
called to approve such transaction, or twenty (20) days prior to the closing of
such transaction, whichever is earlier, and shall also notify such holders in
writing of the final approval of such transaction. The first of such notices

                                       -4-
<PAGE>
shall describe the material terms and conditions of the impending transaction
and the provisions of this Section 2, and the Corporation shall thereafter give
such holders prompt notice of any material changes. The transaction shall in no
event take place sooner than twenty (20) days after the Corporation has given
the first notice provided for herein or sooner than ten (10) days after the
Corporation has given notice of any material changes provided for herein;
provided, however, that such periods may be shortened upon the written consent
of the holders of a majority of the then outstanding shares of Series Y
Preferred Stock.

                 3.   Conversion. From and after the date on which the
Corporation's certificate of incorporation is amended to increase the number of
authorized shares of Common Stock to at least 250,000,000 shares, the holders of
shares of the Series Y Preferred Stock shall have conversion rights as follows
(the "Conversion Rights"):

                      (a)  Right to Convert.

                           (i)   Each share of Series Y Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the Corporation or any transfer agent
for such stock, into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing the Original Series Y Issue Price by
the Conversion Price applicable to such share, determined as hereafter provided,
in effect on the date the certificate is surrendered for conversion. The initial
Conversion Price per share for shares of Series Y Preferred Stock shall be
$0.50; provided, however, that the Conversion Price shall be subject to
adjustment as set forth in subsection 3(d).

                      (b)  Automatic Conversion. Each share of Series Y
Preferred Stock shall automatically be converted into shares of Common Stock at
the applicable Conversion Price at the time in effect immediately upon the close
of business on the date on which the closing sale price of the Corporation's
Common Stock on the Nasdaq Stock Market has exceeded $2.50 per share (as
adjusted for any stock splits, stock dividends, recapitalizations or the like
affecting the Common Stock after the date of the filing of this Series Y
Certificate of Designation with the Secretary of State of the State of Delaware
(the "Filing Date")) for a period of 45 consecutive trading days; provided,
however, that such period of 45 consecutive trading days must commence and end
following the date that is 180 days after the Filing Date.

                      (c)  Mechanics of Conversion. Before any holder of shares
Series Y Preferred Stock shall be entitled to convert the same into shares of
Common Stock, he or she shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Corporation or of any transfer
agent for such Series Y Preferred Stock, and shall give written notice to the
Corporation at its principal corporate office of the election to convert the
same and shall state therein the name or names in which the certificate or
certificates for shares of Common Stock are to be issued. The Corporation shall,
as soon as practicable thereafter, issue and deliver at such office to such
holder of shares of Series Y Preferred Stock, or to the nominee or nominees of
such holder, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid. Such conversion shall

                                       -5-
<PAGE>
be deemed to have been made immediately prior to the close of business on the
date of such surrender of the shares of Series Y Preferred Stock to be
converted, and the person or persons entitled to receive the shares of Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock as of such date. If the
conversion is in connection with an underwritten offering of securities
registered pursuant to the Securities Act of 1933, the conversion may, at the
option of any holder tendering shares of Series Y Preferred Stock for
conversion, be conditioned upon the closing with the underwriters of the sale of
securities pursuant to such offering, in which event the persons entitled to
receive the Common Stock upon conversion of shares of Series Y Preferred Stock
shall not be deemed to have converted such shares until immediately prior to the
closing of such sale of securities.

                      (d)  Adjustment of Price Upon Issuance of Common Stock.
Except as provided in subsection 3(e), if and whenever the Corporation shall
issue or sell, or is, in accordance with subsections 3(d)(i) through 3(d)(vii),
deemed to have issued or sold, any shares of Common Stock for a consideration
per share less than the Conversion Price in effect immediately prior to the time
of such issue or sale, then, immediately upon such issue or sale, the Conversion
Price shall be reduced to the price per share at which the Corporation issued or
sold, or is deemed to have issued or sold, such shares of Common Stock.

            For purposes of this subsection (d), the following subsections
3(d)(i) through 3(d)(vii)) shall also be applicable:

            (i)  Issuance of Rights or Options. In case at any time the
Corporation shall in any manner grant any warrants or other rights to subscribe
for or to purchase, or any options for the purchase of, Common Stock or any
stock or security convertible into or exchangeable for Common Stock (such
warrants, rights or options being called "Options" and such convertible or
exchangeable stock or securities being called "Convertible Securities") whether
or not such Options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share for which Common
Stock is issuable upon the exercise of such Options or upon the conversion or
exchange of such Convertible Securities (determined by dividing (A) the total
amount, if any, received or receivable by the Corporation as consideration for
the granting of such Options, plus the minimum aggregate amount of additional
consideration payable to the Corporation upon the exercise of all such Options,
plus, in the case of such Options which relate to Convertible Securities, the
minimum aggregate amount of additional consideration, if any, payable upon the
issue or sale of such Convertible Securities and upon the conversion or exchange
thereof, by (B) the total maximum number of shares of Common Stock issuable upon
the exercise of such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options) shall be less
than the Conversion Price in effect immediately prior to the time of the
granting of such Options, then the total maximum number of shares of Common
Stock issuable upon the exercise of such Options or upon conversion or exchange
of the total maximum amount of such Convertible Securities issuable upon the
exercise of such Options shall be deemed to have been issued for such price per
share as of the date of granting of such Options or the issuance of such
Convertible Securities and thereafter shall be deemed to be outstanding. Except

                                       -6-
<PAGE>
as otherwise provided in subsection 3(d)(iii), no adjustment of the Conversion
Price shall be made upon the actual issue of such Common Stock or of such
Convertible Securities upon exercise of such Options or upon the actual issue of
such Common Stock upon conversion or exchange of such Convertible Securities.

            (ii) Issuance of Convertible Securities. In case the Corporation
shall in any manner issue or sell any Convertible Securities, whether or not the
rights to exchange or convert any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon
such conversion or exchange (determined by dividing (A) the total amount
received or receivable by the Corporation as consideration for the issue or sale
of such Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the conversion or
exchange thereof, by (B) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities)
shall be less than the Conversion Price in effect immediately prior to the time
of such issue or sale, then the total maximum number of shares of Common Stock
issuable upon conversion or exchange of all such Convertible Securities shall be
deemed to have been issued for such price per share as of the date of the issue
or sale of such Convertible Securities and thereafter shall be deemed to be
outstanding, provided that (a) except as otherwise provided in subsection
3(d)(iii), no adjustment of the Conversion Price shall be made upon the actual
issue of such Common Stock upon conversion or exchange of such Convertible
Securities and (b) if any such issue or sale of such Convertible Securities is
made upon exercise of any Options to purchase any such Convertible Securities
for which adjustments of the Conversion Price have been or are to be made
pursuant to other provisions of this subsection 3(d)(iii), no further adjustment
of the Conversion Price shall be made by reason of such issue or sale.

            (iii) Change in Option Price or Conversion Rate. Upon the happening
of any of the following events, namely, if the purchase price provided for in
any Option referred to in subsection 3(d)(i), the additional consideration, if
any, payable upon the conversion or exchange of any Convertible Securities
referred to in subsection 3(d)(i) or 3(d)(ii), or the rate at which Convertible
Securities referred to in subsection 3(d)(i) or 3(d)(ii) are convertible into or
exchangeable for Common Stock shall change at any time (including, but not
limited to, changes under or by reason of provisions designed to protect against
dilution), the Conversion Price in effect at the time of such event shall
forthwith be readjusted to the Conversion Price which would have been in effect
at such time had such Options or Convertible Securities still outstanding
provided for such changed purchase price, additional consideration or conversion
rate, as the case may be, at the time initially granted, issued or sold, but
only if as a result of such adjustment the Conversion Price then in effect
hereunder is thereby reduced; and on the termination of any such Option or any
such right to convert or exchange such Convertible Securities, the Conversion
Price then in effect hereunder shall forthwith be increased to the Conversion
Price which would have been in effect at the time of such termination had such
Option or Convertible Securities, to the extent outstanding immediately prior to
such termination, never been issued.

                                       -7-
<PAGE>
            (iv) Stock Dividends. In case the Corporation shall declare a
dividend or make any other distribution upon any stock of the Corporation (other
than the Common Stock) payable in Common Stock, Options or Convertible
Securities, then any Common Stock, Options or Convertible Securities, as the
case may be, issuable in payment of such dividend or distribution shall be
deemed to have been issued or sold at a price per share equal to $.0005;
provided, however, that no adjustment shall be made in connection with (i)
dividends payable in shares of Common Stock payable pro rata to holders of the
Series Y Preferred Stock and to holders of any other class or series of stock,
whether or not paid to holders of any other class of stock, or (ii) dividends
payable in shares of Series Y Preferred Stock.

            (v)  Consideration for Stock. In case any shares of Common Stock,
Options or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount received by the
Corporation therefor, without deduction therefrom of any expenses incurred or
any underwriting commissions or concessions paid or allowed by the Corporation
in connection therewith. In case any shares of Common Stock, Options or
Convertible Securities shall be issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by the
Corporation shall be deemed to be the fair value of such consideration as
determined in good faith by the Board of Directors of the Corporation, without
deduction of any expenses incurred or any underwriting commissions or
concessions paid or allowed by the Corporation in connection therewith. In case
any Options shall be issued in connection with the issue and sale of other
securities of the Corporation, together comprising one integral transaction in
which no specific consideration is allocated to such Options by the parties
thereto, such Options and other securities shall each be deemed to have been
issued for such consideration as determined in good faith by the Board of
Directors of the Corporation.

            (vi) Record Date. In case the Corporation shall take a record of the
holders of shares of its Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in shares of Common Stock,
Options or Convertible Securities or (B) to subscribe for or purchase shares of
Common Stock, Options or Convertible Securities, then such record date shall be
deemed to be the date of the issue or sale of the shares of Common Stock deemed
to have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of
subscription or purchase, as the case may be; provided, however, if such
dividend or distribution is not fully made on the date fixed therefor, the
Conversion Price for the Series Y Preferred Stock shall be recomputed
accordingly and thereafter the Conversion Price for the Series Y Preferred Stock
shall be adjusted pursuant to this paragraph as of the time of actual payment of
such dividends, distributions or granting of rights, if any.

            (vii) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Corporation, and the disposition of any such shares shall be
considered an issue or sale of Common Stock for the purpose of this subsection
3(d).
                                       -8-
<PAGE>
                      (e)  Certain Issues of Common Stock Excepted. Anything
herein to the contrary notwithstanding, the Corporation shall not be required to
make any adjustment of the Conversion Price in the case of (A) the issuance, or
deemed issuance, of shares of Common Stock to directors, officers, employees or
consultants of the Corporation or a subsidiary of the Corporation in connection
with their service as directors of the Corporation or a subsidiary of the
Corporation, their employment by the Corporation or a subsidiary of the
Corporation or their retention as consultants by the Corporation or a subsidiary
of the Corporation under the Corporation's Amended and Restated 1999 Stock Plan,
the Vector Internet Services Inc. 1997 Stock Option Plan, the Vector Internet
Services Inc. 1999 Stock Option Plan, the Corporation's 1999 Employee Stock
Purchase Plan or the Company's 2001 Stock Option and Incentive Plan (the
"Plans"), plus such additional number of shares issued or issuable to directors,
officers, employees or consultants of the Corporation or a subsidiary of the
Corporation under any amendment of the Plans, or under other plans, adopted or
assumed by the Corporation with the approval of the Board of Directors of the
Corporation (including a majority of the Series X Directors (as defined in
Section 4(b) of the Certificate of Designation of Series X Convertible Preferred
Stock filed with the Secretary of State of the State of Delaware on November 14,
2001) (the "Series X Certificate of Designation")), plus such number of shares
of Common Stock which are repurchased by the Corporation from such persons
pursuant to contractual rights held by the Corporation and at repurchase prices
not exceeding the respective original purchase prices paid by such persons to
the Corporation therefor, (B) the issuance of shares of Common Stock upon
exercise of the warrant to purchase 27,770 shares of Common Stock (appropriately
adjusted to reflect the occurrence of any event described in subsection 3(f))
issued to VantagePoint Venture Partners 1996, L.P., (C) the issuance of shares
of Common Stock upon exercise of the warrant to purchase 55,544 shares of Common
Stock (appropriately adjusted to reflect the occurrence of any event described
in subsection 3(f)) issued to VantagePoint Communications Partners, L.P., (D)
the issuance, or deemed issuance, of shares of Common Stock pursuant to a
merger, consolidation or stock or asset acquisition approved by the
Corporation's Board of Directors, including a majority of the Series X
Directors; (E) the issuance of shares of Common Stock upon the conversion of the
Series X Preferred Stock or Series Y Preferred Stock; (F) the issuance of up to
an aggregate of 20,000 shares of Series X Preferred Stock (including the 10,000
shares issued prior to the Filing Date) ; and (G) the issuance, or deemed
issuance, of securities of the Corporation for any purpose and in any amount as
approved by the Corporation's Board of Directors, which approval shall include a
majority of the Series X Directors and the approval of the Series Y Director (as
defined in the Stockholders Agreement dated as of December 24, 2001 among the
Company, holders of the Series X Preferred Stock and holders of the Series Y
Preferred Stock).

                      (f)  Subdivision or Combination of Common Stock. In case
the Corporation shall at any time subdivide (by any stock split, stock dividend
or otherwise) its outstanding shares of Common Stock into a greater number of
shares, the Conversion Price in effect immediately prior to such subdivision
shall be proportionately reduced, and, conversely, in case the outstanding
shares of Common Stock shall be combined into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination shall be
proportionately increased.

                                       -9-
<PAGE>
                      (g)  Recapitalizations. If at any time or from time to
time there shall be a recapitalization of the Common Stock (other than a
subdivision, combination or merger or sale of assets transaction provided for
elsewhere in this Section 3 or in Section 2), provision shall be made so that
the holders of the Series Y Preferred Stock shall thereafter be entitled to
receive upon conversion of the Series Y Preferred Stock the number of shares of
stock or other securities or property of the corporation or otherwise, to which
a holder of Common Stock deliverable upon conversion of such Series Y Preferred
Stock would have been entitled on such recapitalization. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 3 with respect to the rights of the holders of the Series Y
Preferred Stock after the recapitalization to the end that the provisions of
this Section 3 (including adjustment of the Conversion Price then in effect and
the number of shares purchasable upon conversion of the Series Y Preferred
Stock) shall be applicable after that event in as nearly equivalent a way as
practicable.

                      (h)  Adjustment for Merger or Reorganization. In case of
any consolidation or merger of the Corporation with or into another corporation
or the sale of all or substantially all of the assets of the Corporation to
another corporation (other than a consolidation, merger, or sale that is treated
as a liquidation under subsection 2(c) above), each share of Series Y Preferred
Stock shall thereafter be convertible into the number of shares of stock or
other securities or property to which a holder of the number of shares of Common
Stock of the Corporation deliverable upon conversion of such Series Y Preferred
Stock would have been entitled upon such consolidation, merger or conveyance.

                      (i)  No Impairment. Without the approval of the holders of
a majority of the then outstanding shares of Series Y Preferred Stock, the
Corporation will not, by amendment of its certificate of incorporation or
through any reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, but will at all times in
good faith assist in the carrying out of all the provisions of this Series Y
Certificate of Designation and in the taking of all such action as may be
necessary or appropriate in order to protect the Conversion Rights of the
holders of shares of Series Y Preferred Stock against impairment.

                      (j)  No Fractional Shares. No fractional shares shall be
issued upon the conversion of any share or shares of the Series Y Preferred
Stock, and the number of shares of Common Stock to be issued shall be rounded to
the nearest whole share, determined on the basis of the total number of shares
of Series Y Preferred Stock the holder is at the time converting into Common
Stock and the number of shares of Common Stock issuable upon such aggregate
conversion.

                      (k)  Certificate as to Adjustments. Upon the occurrence of
each adjustment or readjustment of the applicable Conversion Price for the
Series Y Preferred Stock pursuant to this Section 3, the Corporation, at its
expense, shall promptly compute such adjustment or readjustment in accordance

                                      -10-
<PAGE>
with the terms hereof and prepare and furnish to each holder of Series Y
Preferred Stock a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The Corporation shall, upon the written request at any time of any holder of
Series Y Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (1) such adjustment and readjustment, (2) the
applicable Conversion Price for the Series Y Preferred Stock at the time in
effect, and (3) the number of shares of Common Stock and the amount, if any, of
other property that at the time would be received upon the conversion of a share
of the Series Y Preferred Stock.

                      (l)  Notices of Record Date. In the event of any taking by
the Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the Corporation
shall mail to each holder of Series Y Preferred Stock, at least ten (10) days
prior to the date specified therein or such shorter period agreed upon by
written consent of the holders of a majority of the outstanding shares of the
Series Y Preferred Stock, a notice specifying the date on which any such record
is to be taken for the purpose of such dividend, distribution or right, and the
amount and character of such dividend, distribution or right.

                      (m)  Reservation of Stock Issuable Upon Conversion. From
and after the date on which the Corporation's certificate of incorporation is
amended to increase the number of authorized shares of Common Stock to at least
250,000,000 shares, the Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the conversion of the shares of the Series Y Preferred
Stock, such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of the Series Y
Preferred Stock; and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Series Y Preferred Stock, in addition to such other
remedies as shall be available to the holder of such Series Y Preferred Stock,
the Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes,
including, without limitation, engaging in best efforts to obtain the requisite
shareholder approval of any necessary amendment to this Series Y Certificate of
Designation or its certificate of incorporation.

                      (n)  Notices. Any notice required by the provisions of
this Series Y Certificate of Designation to be given to the holders of shares of
Series Y Preferred Stock shall be deemed given if delivered in person, certified
or registered mail, return receipt requested, telecopier or telex, addressed to
each holder of any shares of Series Y Preferred Stock at the address of such
holder as shown on the books of the Corporation.

                 4.   Voting Rights. The holder of each share of Series Y
Preferred Stock shall have the right to 978.5 votes (appropriately adjusted to

                                      -11-
<PAGE>
reflect the occurrence of any event described in subsection 3(f)). Each holder
of Series Y Preferred Stock shall be entitled, notwithstanding any provision
hereof, to notice of any stockholders' meeting in accordance with the by-laws of
the Corporation. Except as may otherwise be provided in the Corporation's
certificate of incorporation (including this Series Y Certificate of
Designation) or required by law, the Series Y Preferred Stock shall vote or act
together with all other classes and series of capital stock of the Corporation
(including the Common Stock) as a single class on all actions to be taken by the
stockholders of the Corporation.

                 5.   Protective Provisions. So long as at least 25% of the
shares of Series Y Preferred Stock originally issued are outstanding, the
Corporation shall not, nor shall it allow any of its subsidiaries, without first
obtaining the approval of the holders of at least a majority of the then
outstanding shares of Series Y Preferred Stock, voting as a separate series:

                      (a)  alter or change the rights, preferences or privileges
of the shares of Series Y Preferred Stock as set forth in this Series Y
Certificate of Designation, so as to affect adversely the shares;

                      (b)  authorize any reclassification of the Series Y
Preferred Stock; or

                      (c)  authorize or issue, or obligate itself to issue, (i)
any other equity security, including any other security convertible into or
exercisable for any equity security, having rights, preferences or privileges
senior to the Series Y Preferred Stock or (ii) during the six month period
beginning on the Filing Date, any other equity security, including any other
security convertible into or exercisable for any equity security, having rights,
preferences or privileges pari passu with the Series Y Preferred Stock.

                 6.   Redemption. The shares of Series Y Preferred Stock shall
be redeemed as follows:

                      (a)  Optional Redemption. At any time on or after January
1, 2005, the holders of at least a majority of the then outstanding shares of
the Series Y Preferred Stock may request that the Corporation redeem all (and
not less than all) of the outstanding shares of Series Y Preferred Stock
pursuant to the terms of this Section 6 (the "Series Y Redemption Request").
Upon receipt of the Series Y Redemption Request, the Corporation shall promptly
notify the holders of the Series X Preferred Stock of the Series Y Redemption
Request. Upon receipt of a Redemption Request (in such case as defined under the
Series X Certificate of Designation), the Corporation shall promptly notify the
holders of the Series Y Preferred Stock of such Redemption Request. Upon receipt
of the Series Y Redemption Request, the Corporation shall redeem from any source
of funds legally available therefor the outstanding shares of the Series Y
Preferred Stock in full on a date that is no more than 120 days after the date
of the Redemption Notice, as defined in Section 6(c) below (the "Redemption
Date").

                      (b)  Redemption Price and Payment. The Series Y Preferred
Stock to be redeemed on the Redemption Date shall be redeemed by paying for each

                                      -12-
<PAGE>
share in cash an amount (such amount being referred to as the "Redemption
Price") equal to $1,000 (as such amount may be adjusted for any stock splits,
stock dividends, recapitalizations or the like affecting the Series Y Preferred
Stock) plus, in the case of each share, an amount equal to all Accruing
Dividends unpaid thereon (whether or not declared) and any other dividends
declared but unpaid thereon, computed to the date payment thereof is made
available.

                      (c)  Redemption Mechanics. At least 20 but not more than
60 days prior to the Redemption Date, written notice (the "Redemption Notice")
shall be given by the Corporation to each holder of record (at the close of
business on the business day next preceding the day on which the Redemption
Notice is given) of shares of Series Y Preferred Stock notifying such holder of
the redemption and specifying the Redemption Price, such Redemption Date, the
number of shares of Series Y Preferred Stock to be redeemed from such holder and
the place where said Redemption Price shall be payable and calling upon such
holder to surrender to the Corporation, in the manner and at the place
designated his certificate or certificates representing the shares to be
redeemed. On or after the Redemption Date, each holder of Series Y Preferred
Stock shall surrender to the Corporation the certificate or certificates
representing such shares, in the manner and at the place designated in the
Redemption Notice, and thereupon the Redemption Price of such shares shall be
payable to the order of the person whose name appears on such certificate or
certificates as the owner thereof and each surrendered certificate shall be
canceled. The Redemption Notice shall be addressed to each holder at his address
as shown by the records of the Corporation. From and after the close of business
on the Redemption Date, unless there shall have been a default in the payment of
the Redemption Price, all rights of holders of shares of Series Y Preferred
Stock (except the right to receive the Redemption Price) shall cease with
respect to the shares to be redeemed on such Redemption Date, and such shares
shall not thereafter be transferred on the books of the Corporation or be deemed
to be outstanding for any purpose whatsoever. If, on the Redemption Date, the
funds of the Corporation legally available for redemption of shares of (A)
Series Y Preferred Stock, (B) Series X Preferred Stock and (C) any other class
or series of preferred stock (whenever designated or created) that (1) entitles
the holders thereof to cause the Corporation to redeem such shares and (2) is on
parity with the Series Y Preferred Stock with respect to redemption by the
Corporation, are insufficient to redeem the total number of shares of Series Y
Preferred Stock, Series X Preferred Stock and any other class or series of
preferred stock to be redeemed on such Redemption Date, the holders of such
shares shall share ratably in any funds legally available for redemption of such
shares according to the respective amounts which would be payable to them if the
full number of shares to be redeemed on such Redemption Date were actually
redeemed. The shares of Series Y Preferred Stock, Series X Preferred Stock and
any other class or series of preferred stock required to be redeemed but not so
redeemed shall remain outstanding and entitled to all rights and preferences
provided herein. At any time thereafter when additional funds of the Corporation
are legally available for the redemption of such shares of Series Y Preferred
Stock, Series X Preferred Stock and any other class or series of preferred
stock, such funds will be used, at the end of the next succeeding fiscal
quarter, to redeem the balance of such shares, or such portion thereof for which
funds are then legally available, on the basis set forth above. The Series X
Preferred Stock shall rank on parity with the Series Y Preferred Stock with
respect to redemption by the Corporation.

                                      -13-
<PAGE>
                      (d)  Redeemed or Otherwise Acquired Shares to be Retired.
Any shares of Series Y Preferred Stock redeemed pursuant to this Section 6 or
otherwise acquired by the Corporation in any manner whatsoever shall be canceled
and shall not under any circumstances be reissued; and the Corporation may from
time to time take such appropriate corporate action as may be necessary to
reduce accordingly the number of authorized shares of Series Y Preferred Stock.

                      (e)  Waiver of Redemption. Any redemption of shares of
Series Y Preferred Stock required to be made by the Corporation by the
Redemption Date may be waived or postponed by the vote or written consent of the
holders of at least a majority of the shares of Series Y Preferred Stock then
outstanding.

                 7.   Status of Converted Stock. In the event any shares of
Series Y Preferred Stock shall be converted pursuant to Section 3 hereof, the
shares so converted shall be canceled and shall not be issuable by the
Corporation.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -14-
<PAGE>

            IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation to be signed by a duly authorized officer of the Corporation as of
this 28th day of December, 2001.

                                                      DSL.net, Inc.

                                                      By: /s/ Stephen Zamansky
                                                          --------------------

                                      -15-

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