Document:

WWW.EXFILE.COM, INC. -- 14531 -- DSL.NET, INC. -- EXHIBIT 10.1 TO FORM 10-Q

    EXHIBIT
      10.01

    

    

    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”),
      and
      LAURUS MASTER FUND, LTD., a Cayman Islands company ("Laurus").
      Capitalized
      terms used herein without definition shall have the meanings ascribed to such
      terms in (i) that
      certain Security Agreement, dated as of August 31, 2004 (as amended, modified
      and supplemented from time to time, the “Security
      Agreement”
and,
      together with the Ancillary Agreements referred to therein, the “2004
      Loan Documents”),
      and
      (ii)
      that certain Subordination Agreement, dated as of November 2, 2005, by and
      among
      Laurus, as First Lien Collateral Agent and as First Lien Lender (as defined
      therein), DunKnight Telecom Partners, LLC, a Delaware limited liability company,
      as Second Lien Collateral Agent (as defined therein), the Second Lien Lenders
      (as defined therein) (as amended, modified or supplemented from time to time,
      the “Subordination
      Agreement”
and,
      together with the 2004 Loan Documents, the “Loan
      Documents”),
      as
      applicable.
      

     

    WHEREAS,
      reference is made to the following Ancillary Agreements: (i) that
      certain Secured Revolving Note, dated
      as
      of August 31, 2004 and issued by the Company to Laurus (as amended, modified
      and/or supplemented, the “Revolving
      Note”);
      (ii) that
      certain Secured Convertible Minimum Borrowing Note, dated
      as
      of August 31, 2004 and issued by the Company to Laurus (as amended, modified
      and/or supplemented, the “MB
      Note”)
      (the
      Revolving Note and the MB Note are collectively referred to herein as the
“Notes”);
      

    

    WHEREAS,
      Laurus has agreed effective as of the date hereof to (i) extend the Maturity
      Date contained in each of the Notes and (ii) amend the Contract Rate contained
      in each of the Notes, and, in consideration thereof, the Company has agreed
      to
      issue to Laurus one million five hundred thousand (1,500,000) unregistered,
      restricted shares of the common stock of the Company (the “New
      Shares”);

    

    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 and Laurus agree as follows:

    

    The
      Company and Laurus hereby agree that:

     

    1.  Amended
      and Restated Revolving Note.
      The
      Revolving Note is hereby amended and restated in the form attached hereto as
      Exhibit
      A
      (the
“Amended
      and Restated Revolving Note”).
      For
      the avoidance of doubt, the amendment and restatement of the Revolving Note
      as
      set forth in this Section 1 shall be in substitution for and not in satisfaction
      of the Revolving Note.

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    2.  Amended
      and Restated MB Note.
      The MB
      Note is hereby amended and restated in the form attached hereto as Exhibit
      B
      (the
“Amended
      and Restated MB Note”).
      For
      the avoidance of doubt, the amendment and restatement of the MB Note as set
      forth in this Section 2 shall be in substitution for and not in satisfaction
      of
      the MB Note.

    

    3.     
      New
      Shares.
      Immediately following the execution and delivery of this Agreement by each
      of
      the Company and Laurus, the Company hereby agrees to issue to Laurus the New
      Shares, subject to securities laws legends applicable to transactions of this
      type. Laurus hereby represents, warrants, and acknowledges to the Company that
      (a) the New Shares are being acquired for the account of Laurus, 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) Laurus 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) Laurus 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) Laurus 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 Laurus shall indemnify the Company for, any compensation of any kind which
      might be claimed as owing to any of such third parties. 

    

    4.     
      Common
      Stock Sale Limitation.
      Notwithstanding anything contained herein to the contrary (including, without
      limitation, the provisions of Section 9 hereof), Laurus 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 any Loan Document). 

    

    5.     
      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
      and
      Laurus shall have executed, and the Company shall have delivered to Laurus
      its
      respective counterpart to, this Agreement, (ii) the issuance by the Company
      to
      Laurus of the New Shares, and the receipt by Laurus of the stock certificates
      evidencing the New Shares, shall have occurred, (iii) the execution by the
      Company of, and receipt by Laurus of, the Amended and Restated Revolving Note
      and the Amended and Restated MB Note, and (iv) the transactions contemplated
      by
      Section 8, below, shall have occurred. 

    

    6.     
      Effect
      of Amendment.
      Except
      as specifically set forth in this Agreement, there are no other amendments,
      modifications or waivers to the Loan Documents, and all 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    of
      the
      other forms, terms and provisions of the Loan Documents remain in full force
      and
      effect. From and after the Effective Date, all references in the Loan Documents
      to the Secured Revolving Note and Secured Minimum Borrowing Note shall be deemed
      to be references to the Amended and Restated Secured Revolving Note and the
      Amended and Restated Secured Minimum Borrowing Note, as contemplated herein.
      

    

    7.     
      Representations
      of the Company.
      The
      Company hereby represents and warrants to Laurus that (i) no Event of Default
      (as defined in any Loan Document) exists and is continuing on the date hereof,
      (ii) on the date hereof, all representations and warranties made by the Company
      in the 2004 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. 

    

    8.  Other
      Agreements; Wavers, Consent.
      Laurus
      hereby acknowledges 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 DunKnight Telecom
      Partners LLC and its co-investor, Knight Vision Foundation (collectively,
“DK”),
      to
      extend the maturity date of the Company’s outstanding debentures (the
“DK
      Debentures”)
      to DK
      from September 4, 2006 to December 4, 2006, and, in connection therewith, the
      Company will issue to DK an aggregate of 3,900,000 shares of Company common
      stock (the “DK
      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 “DK
      Amendment Transactions”).
      In
      connection with the transactions contemplated by this Agreement and the DK
      Amendment Transactions, Laurus hereby: (a) waives all economic anti-dilution
      rights to which Laurus would otherwise be entitled under the MB Note and/or
      the
      Revolving Note arising solely as a result of the issuance of the New Shares
      and
      the DK New Shares, and (b) consents to the above-described extension of the
      maturity date of the DK Debentures and the issuance of the DK New
      Shares.

    

    9.  Piggy-Back
      Registration Rights.
      The
      Company hereby agrees that if at any time before the New Shares may be sold
      by
      Laurus 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 Laurus written notice of such
      determination and, if within fifteen (15) days of its receipt of such notice,
      Laurus so requests in writing that 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 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    requested
      by Laurus 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, subject to Laurus’ 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 Laurus hereunder will rank pari
      passu
      with the
      registration rights to be provided by the Company to DK in respect to the DK
      New
      Shares to be issued by the Company as contemplated by Section 9
      hereof.

    

    10.   
       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. 

    

    11.   
       Binding
      Effect.
      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
      enforce-able 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. 

    
 

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    

    IN
      WITNESS WHEREOF,
      each of
      the Company and Laurus has caused this Agreement signed in its name effective
      as
      of the date first above written.

    

    

    DSL.NET,
      INC.

    

    By:
      /s/
      David F.
      Struwas                               
  

    Name:
      David F. Struwas

    Title:
      President & CEO

     

    

    

    

    

    LAURUS
      MASTER FUND, LTD.

     

    

    By:
      /s/
      David
      Grin                                          
   

    Name:
      David Grin

    Title:
      Director

    

    

    Agreed
      and acknowledged:

     

     

     

    
      DUNKNIGHT
        TELECOM PARTNERS
        LLC,
as
        Second
        Lien Collateral Agent, pursuant to the Subordination
        Agreement

    By:
/s/
      Keir
      Kleinknecht                              
 

    Name:
      Keir Kleinknecht

    
      Title:
        Manager

    

    

     

    

    

    

    
 

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
 

    EXHIBIT
      A

    

    Form
      of Amended and Restated Revolving Note

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    EXHIBIT
      B

    

    Form
      of Amended and Restated MB Note

    

    
 

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        7WWW.EXFILE.COM, INC. -- 14531 -- DSL.NET, INC. -- EXHIBIT 10.2 TO FORM 10-Q

    EXHIBIT
      10.02

     

    THIS
      NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
      LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE
      MAY
      NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
      EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY
      APPLICABLE STATES SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO DSL.NET, INC. THAT SUCH REGISTRATION IS NOT
      REQUIRED.

     

     

    AMENDED
      AND RESTATED SECURED CONVERTIBLE MINIMUM BORROWING
      NOTE

     

    FOR
      VALUE
      RECEIVED, DSL.NET, INC., a Delaware corporation (the “Borrower”),
      promises to pay to LAURUS MASTER FUND, LTD., c/o Ironshore Corporate Services
      Ltd., P.O. Box 1234 G.T., Queensgate House, South Church Street, Grand Cayman,
      Cayman Islands, Fax: 345-949-9877 (the “Holder”)
      or its
      registered assigns, on order, the sum of Four Million Dollars Two Hundred Fifty
      Thousand Dollars ($4,250,000) without duplication of any amounts owing by
      Borrower to Holder under the Revolving Note, together with any accrued and
      unpaid interest hereon, on November 1, 2006 (the “Maturity
      Date”).

     

    Capitalized
      terms used herein without definition shall have the meanings ascribed to such
      terms in the Security Agreement between Borrower and the Holder dated as of
      August 31, 2004 (as amended, modified and supplemented from time to time, the
      “Security
      Agreement”).

     

    The
      following terms shall apply to this Amended and Restated Secured Convertible
      Minimum Borrowing Note (this “Note”):

     

     

     

    ARTICLE
      I

    INTEREST
      RATE

     

    1.1       Contract
      Rate.
      Subject
      to Sections 5.3 and 6.7 hereof, interest payable on this Note shall accrue
      at a
      rate per annum equal to (a) seven percent (7%) through August 1, 2006 and (b)
      ten percent (10.00%) after August 1, 2006 (the “Contract
      Rate”).
      

     

    1.2     
      Contract
      Rate and Payments.
      Interest shall be (i) calculated on the basis of a 360 day year, and (ii)
      payable monthly, in arrears, commencing on October 1, 2004 and on the first
      business day of each consecutive calendar month thereafter until the Maturity
      Date (and on the Maturity Date), whether by acceleration or otherwise (each,
      a
“Contract
      Rate Payment Date”).
       

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
      II  

    ADVANCES,
      PAYMENTS UNDER NOTE

     

    2.1.  Mechanics
      of Advances.
      All
      Loans evidenced by this Note shall be made in accordance with the terms and
      provisions of the Security Agreement.

     

    2.2.  Fixed
      Conversion Price.
      For
      purposes hereof, subject to Section 3.5 hereof, the initial “Fixed
      Conversion Price”
means
      $0.28 (105% of the average of the closing price of the Common Stock for the
      ten
      (10) trading days immediately prior to the date hereof). 

     

    2.3.  Payments
      in Common Stock.
      Subject
      to Sections 2.4 and 3.2, if the average closing price of the Common Stock on
      the
      Principal Market is at least 115% of the Closing Price, with the product rounded
      to the nearest penny, for any period of ten (10) consecutive trading days (each,
      a “Determination
      Period”),
      then
      on the next trading day following the completion of each such Determination
      Period, the Holder shall provide the Borrower with written notice (a
“Call
      Notice”)
      requiring the conversion at the Fixed Conversion Price of all (or such lesser
      amount as may be necessary to comply with the provisions of Section 3.2) of
      the
      outstanding interest and principal of this Note as of the date set forth in
      the
      Call Notice (the “Call
      Date”)
      (it
      being acknowledged and agreed that Holder shall specify any limitation imposed
      by Section 3.2 in its Call Notice, and, so long as a Determination Period shall
      be continuing, as soon as Holder reduces its holdings of Common Stock so as
      not
      to be in violation of Section 3.2, Holder shall deliver a subsequent Call Notice
      requiring the conversion of the remaining outstanding interest and principal
      of
      this Note up to the limitations of Section 3.2). The Call Date associated with
      any Call Notice shall be at least three (3) trading days following the date
      of
      the Call Notice. On the Call Date, the Borrower shall deliver to the Holder
      certificates evidencing the shares of Common Stock issued in satisfaction of
      the
      principal and interest being retired. Notwithstanding the foregoing, the
      Borrower’s issuance of shares of Common Stock in payment of its obligations
      under this Note pursuant to this Section 2.3 shall be subject to the limitation
      that the number of shares of Common Stock to be issued in connection with any
      Call Notice shall not exceed thirty percent (30%) of the aggregate dollar
      trading volume (the “Trading
      Volume Limitation”)
      of the
      Common Stock (as such volume is reported by Bloomberg, L.P.) during the
      Determination Period corresponding to such Call Notice. Notwithstanding anything
      herein to the contrary, the parties agree that if any conversion hereunder
      is
      limited by the Trading Volume Limitation and the closing price of the Common
      Stock on the Principal Market shall continue to be at least 115% of the Closing
      Price beyond the Determination Period for which an initial Call Notice shall
      have been delivered, a new Determination Period shall occur each trading day
      thereafter on a rolling ten (10) trading day basis until such time as the Common
      Stock on the Principal Market shall cease to trade at least at 115% of the
      Closing Price; provided, however, that if new Trading Volume Limitation(s)
      shall
      be calculated on a rolling basis for a five (5) trading day period, no more
      than
      an aggregate of two (2) conversions at such new Trading Volume Limitation(s)
      may
      be made during any calendar month. For purposes hereof, the “Closing Price”
means $0.27. 

     

    2.4.  No
      Effective Registration.
      Notwithstanding anything to the contrary herein, no repayment of any amount
      hereunder in shares of Common Stock shall be made if at any time from the Call
      Date for such payment through the date upon which such payment is made by
      delivery of certificates for shares of Common Stock there fails to exist an
      effective

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    current
      Registration Statement (as defined in the Registration Rights Agreement)
      covering the shares of Common Stock to be issued, or if an Event of Default
      (as
      defined in Article V hereof) hereunder exists and is continuing, unless such
      requirement is otherwise waived in writing by the Holder in whole or in part
      at
      the Holder’s option.

     

    2.5.  Optional
      Prepayment in Cash.
      (a)
      Subject to Section 2.5(b) hereof, the Borrower will have the option of prepaying
      this Note in whole or in part (“Optional
      Prepayment ”)
      by
      paying to the Holder a sum of money equal to the sum of (i) one hundred fifteen
      percent (115%) of the outstanding principal amount of this Note to be prepaid
      and (ii) any accrued and unpaid interest on such outstanding principal amount
      of
      this Note and any and all other sums due accrued or payable to Holder under
      the
      Note, the Security Agreement or any other Ancillary Agreement (as defined in
      the
      Security Agreement) (the “Prepayment Amount”)
      on the
      day written notice of redemption (the “Notice
      of Prepayment ”)
      is
      given to the Holder

     

    (b)     
      If a Registration Statement (as defined in the Registration Rights Agreement)
      covering the Securities has been filed as required by the Registration Rights
      Agreement and has been declared and remains effective, the Borrower will have
      the option irrespective of 2.5(a) above of prepaying this Note in whole or
      in
      part by paying to the Holder a sum of money equal to the sum of (i) one hundred
      five percent (105%) of the outstanding principal amount of this Note to be
      prepaid by delivering a Notice of Prepayment to the Holder and (ii) any accrued
      and unpaid interest on such outstanding principal amount of this Note and any
      and all other sums due accrued or payable to Holder under this Note, the
      Security Agreement or any other Ancillary Agreement (as defined in the Security
      Agreement). 

     

    (c)      
      Any Notice of Prepayment delivered pursuant to this Section 2.5 shall specify
      the date for such Optional Prepayment (the “Prepayment
      Payment Date”)
      which
      date shall be seven (7) days after the date of the Notice of Prepayment (the
      “Prepayment
      Period”).
      A
      Notice of Prepayment shall not be effective with respect to any portion of
      this
      Note for which the Holder has previously delivered a Notice of Conversion
      (defined below) pursuant to Section 3.1, or for conversions made by the Holder
      pursuant to Section 3.1 during the Prepayment Period. The Prepayment Amount
      shall be determined as if such Holder’s conversion elections had been completed
      immediately prior to the date of the Notice of Prepayment. On the Prepayment
      Payment Date, the Prepayment Amount (plus any additional interest and fees
      accruing on the Notes during the Prepayment Period) must be irrevocably paid
      in
      full in immediately available funds to the Holder. In the event the Borrower
      fails to pay the Prepayment Amount on the Prepayment Payment Date, then such
      Prepayment Notice will be null and void.

     

     

    ARTICLE
      III

    HOLDER’S
      CONVERSION RIGHTS

     

    3.1.  Optional
      Conversion.
      Subject
      to the terms of this Article III, the Holder shall have the right, but not
      the
      obligation, at any time until the Maturity Date, or thereafter during an Event
      of Default, and, subject to the limitations set forth in Section 3.2 hereof,
      to
      convert all or any portion of the outstanding principal amount under this Note
      and/or accrued interest and fees due and payable into fully paid and
      nonassessable shares of the Common Stock

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    at
      the
      then applicable Fixed Conversion Price. The shares of Common Stock to be issued
      upon such conversion are herein referred to as the “Conversion
      Shares.”

     

    3.2      
      Conversion
      Limitation.
      

    

    A.      
      4.99%
      Limitation.
      Notwithstanding anything contained herein to the contrary, the Holder shall
      not
      be entitled to convert pursuant to the terms of Section 3.1 of this Note an
      amount that would be convertible into that number of shares of Common Stock
      which, when added to the number of shares of Common Stock otherwise beneficially
      owned by such Holder (with respect to such Holder, such number of shares of
      Common Stock herein referred to as the Holder’s “Beneficial
      Ownership”)
      including those issuable upon exercise of Warrants held by such Holder would
      exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the
      time of conversion. For the purposes of the immediately preceding sentence,
      beneficial ownership shall be determined in accordance with Section 13(d) of
      the
      Exchange Act and Regulation 13d-3 thereunder. In connection with any obligation
      of the Borrower to issue to the Holder shares of Common Stock pursuant to the
      terms hereof, the Holder will inform the Borrower of such Holder’s Beneficial
      Ownership. Subject to Section 3.2 B below, the conversion limitation described
      in this Section 3.2A shall automatically become null and void without any notice
      to Borrower upon the occurrence and during the continuance beyond any applicable
      grace period of an Event of Default, or upon 75 days prior notice to the
      Borrower by the Holder.

     

    B.      
      19.99%
      Limitation.
      Notwithstanding anything contained herein to the contrary, the number of shares
      of Common Stock issuable by the Borrower and acquirable by the Holder at a
      price
      below $0.24 per share pursuant to the terms of this Note, the Security Agreement
      or any Ancillary Agreement, shall not exceed an aggregate of 19.99% of the
      total
      issued and outstanding shares (calculated in accordance with applicable
      Principal Market rules and regulations) of the Borrower’s Common Stock (subject
      to appropriate adjustment for stock splits, stock dividends, or other similar
      recapitalizations affecting the Common Stock) or otherwise violate the
      Borrower’s obligations under the rules and regulations of the Principal Market
      (the “Maximum
      Common Stock Issuance”),
      unless Stockholder approval shall first be obtained in accordance with Section
      13(u) of the Security Agreement. Borrower shall not be obligated to issue such
      shares of Common Stock in excess of the Maximum Common Stock Issuance unless
      and
      until the Borrower obtains the Stockholder Approval in accordance with Section
      13(u) of the Security Agreement and applicable Principal Market rules and
      regulations.

    

    3.3      
      Mechanics
      of Holder’s Conversion.
      In the
      event that the Holder elects to convert this Note into Common Stock, the Holder
      shall give notice of such election by delivering an executed and completed
      notice of conversion (“Notice
      of Conversion”)
      to the
      Borrower and such Notice of Conversion shall provide a breakdown in reasonable
      detail of the principal amount, accrued interest and fees that are being
      converted and include the Holder’s then current Beneficial Ownership. On each
      Conversion Date (as hereinafter defined) and in accordance with its Notice
      of
      Conversion, the Holder shall make the appropriate reduction to the principal
      amount, accrued interest and fees as entered in its records and shall provide
      written notice thereof to the Borrower within two (2) business days after the
      Conversion Date. Each date on which a Notice of Conversion is delivered or
      telecopied to the Borrower in accordance with the 

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    provisions
      hereof shall be deemed a Conversion Date (the “Conversion
      Date”).
      A
      form of Notice of Conversion to be employed by the Holder is annexed hereto
      as
      Exhibit A. Pursuant to the terms of the Notice of Conversion, the Borrower
      will
      issue instructions to the transfer agent accompanied by an opinion of counsel
      within three (3) business days of the date of the delivery to Borrower of the
      Notice of Conversion and shall cause the transfer agent to transmit the
      certificates representing the Conversion Shares to the Holder by crediting
      the
      account of the Holder’s designated broker with the Depository Trust Corporation
      (“DTC”)
      through its Deposit Withdrawal Agent Commission (“DWAC”)
      system
      within three (3) business days after receipt by the Borrower of the Notice
      of
      Conversion (the “Delivery
      Date”).
      In
      the case of the exercise of the conversion rights set forth herein the
      conversion privilege shall be deemed to have been exercised and the Conversion
      Shares issuable upon such conversion shall be deemed to have been issued upon
      the date of receipt by the Borrower of the Notice of Conversion. The Holder
      shall be treated for all purposes as the record holder of such Common Stock,
      unless the Holder provides the Borrower written instructions to the
      contrary.

    

    3.4      
      Late
      Payments.
      The
      Borrower understands that a delay in the delivery of the shares of Common Stock
      in the form required pursuant to this Article III beyond the Delivery Date
      could
      result in economic loss to the Holder. As compensation to the Holder for such
      loss, the Borrower agrees to pay late payments to the Holder for late issuance
      of such shares in the form required pursuant to this Article III upon conversion
      of this Note, in the amount equal to $500 per business day after the Delivery
      Date. The Borrower shall pay any payments incurred under this Section in
      immediately available funds upon demand. 

     

    3.5      
      Adjustment
      Provisions.
      The
      Fixed Conversion Price and number and kind of shares or other securities to
      be
      issued upon conversion determined pursuant to Section 2.2 shall be subject
      to
      adjustment from time to time upon the happening of certain events while this
      conversion right remains outstanding, as follows:

     

    A.  Reclassification,
      etc.
      If the
      Borrower at any time shall, by reclassification or otherwise, change the Common
      Stock into the same or a different number of securities of any class or classes,
      this Note, as to the unpaid principal amount and accrued interest thereon,
      shall
      thereafter be deemed to evidence the right to purchase an adjusted number of
      such securities and kind of securities as would have been issuable as the result
      of such change with respect to the Common Stock (i) immediately prior to or
      (ii)
      immediately after such reclassification or other change at the sole election
      of
      the Holder.

     

    B.  Stock
      Splits, Combinations and Dividends.
      If the
      shares of Common Stock are subdivided or combined into a greater or smaller
      number of shares of Common Stock, or if a dividend is paid on the Common Stock
      or any preferred stock issued by the Borrower in shares of Common Stock, the
      Fixed Conversion Price and for the purposes of Section 2.3 hereof, the Closing
      Price, shall be proportionately reduced in case of subdivision of shares or
      stock dividend or proportionately increased in the case of combination of
      shares, in each such case by the ratio which the total number of shares of
      Common Stock outstanding immediately after such event bears to the total number
      of shares of Common Stock outstanding immediately prior to such
      event.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    C.  Share
      Issuances.
      Subject
      to the provisions of this Section 3.5, if the Borrower shall at any time prior
      to the conversion or repayment in full of the Principal Amount issue any shares
      of Common Stock or securities convertible into Common Stock to a person other
      than the Holder (except
      pursuant to: (i) Subsections A or B above; (ii) securities issued, or deemed
      issued (as provided below), to directors, officers, employees or consultants
      of
      the Borrower or a subsidiary of the Borrower in connection with their service
      as
      directors of the Borrower or a subsidiary of the Borrower, their employment
      by
      the Borrower or a subsidiary of the Borrower or their retention as consultants
      by the Borrower or a subsidiary of the Borrower under any stock agreement and/or
      stock plan adopted by the Borrower, plus such number of shares of Common Stock
      which are repurchased by the Borrower from such persons pursuant to contractual
      rights held by the Borrower and at repurchase prices not exceeding the
      respective original purchase prices paid by such persons to the Borrower
      therefor; (iii) shares of Common Stock issuable upon exercise of options,
      warrants or other obligations outstanding as of the date hereof; (iv)
shares
      of
      Common Stock issuable upon the conversion of the Borrower’s Preferred Stock in
      existence on the date hereof; and (v) shares of Common Stock issued as payment
      of interest in accordance with the terms of the notes issued pursuant to that
      Note and Warrant Purchase Agreement dated as of July 18, 2003 by and among
      the
      Borrower and the investors named therein) for a consideration per share (the
      “Offer
      Price”)
      less
      than the Fixed Conversion Price in effect at the time of such issuance, then
      the
      Fixed Conversion Price shall be immediately reset pursuant to the formula
      below:

     

    If
      the
      Corporation issues any additional shares pursuant to Section 3.5C above then,
      and thereafter successively upon each such issue, the Fixed Conversion Price
      shall be adjusted by multiplying the then applicable Fixed Conversion Price
      by
      the following fraction: 

     

    

    
      	
               

              A
                +
                B

            
	
               

              (A
                + B) + [((C - D) x B) / C]

            

    

     

    A
      = Total
      amount of shares convertible pursuant to this Note.

     

    B
      =
      Actual shares sold in the offering

     

    C
      = Fixed
      Conversion Price

     

    D
      =
      Offering price

     

    For
      purposes hereof, the issuance of any security of the Borrower convertible into
      or exercisable or exchangeable for Common Stock shall result in an adjustment
      to
      the Fixed Conversion Price at the time of issuance of such securities.
      Notwithstanding the immediately foregoing, no adjustment to the then applicable
      Fixed Conversion Price shall be made if such adjustment, as calculated pursuant
      to this Section 3.5(C), would result in a change to the then applicable Fixed
      Conversion Price of less than $0.01. 

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

     

    D.  Computation
      of Consideration.
      For
      purposes of any computation respecting consideration received pursuant to
      Subsection C above, the following shall apply:

     

    (a)  in
      the
      case of the issuance of shares of Common Stock for cash, the consideration
      shall
      be the amount of such cash, provided that in no case shall any deduction be
      made
      for any commissions, discounts or other expenses incurred by the Borrower for
      any underwriting of the issue or otherwise in connection therewith;

     

    (b)  in
      the
      case of the issuance of shares of Common Stock for a consideration in whole
      or
      in part other than cash, the consideration other than cash shall be deemed
      to be
      the fair market value thereof as determined in good faith by the Board of
      Directors of the Borrower (irrespective of the accounting treatment thereof);
      and 

     

    (c)  Upon
      any
      such exercise, the aggregate consideration received for such securities shall
      be
      deemed to be the consideration received by the Borrower for the issuance of
      such
      securities plus the additional minimum consideration, if any, to be received
      by
      the Borrower upon the conversion or exchange thereof (the consideration in
      each
      case to be determined in the same manner as provided in clauses (a) and (b)
      of
      this Subsection (D)).

     

    3.6      
      Reservation
      of Shares.
      During
      the period the conversion right exists, the Borrower will reserve from its
      authorized and unissued Common Stock a sufficient number of shares to provide
      for the issuance of Common Stock upon the full conversion of this Note. The
      Borrower represents that upon issuance, such shares will be duly and validly
      issued, fully paid and non-assessable. The Borrower agrees that its issuance
      of
      this Note shall constitute full authority to its officers, agents, and transfer
      agents who are charged with the duty of executing and issuing stock certificates
      to execute and issue the necessary certificates for shares of Common Stock
      upon
      the conversion of this Note.

     

    3.7      
      Registration
      Rights.
      The
      Holder has been granted registration rights with respect to the shares of Common
      Stock issuable upon conversion of this Note as more fully set forth in a
      Registration Rights Agreement .

     

     

    ARTICLE
      IV

    EVENTS
      OF DEFAULT

     

    The
      occurrence of any of the events set forth in Sections 4.1 and 4.2, inclusive,
      shall be an Event of Default (“Event
      of Default”):

     

    4.1      
      Failure
      to Pay Principal, Interest or other Fees.
      The
      Borrower fails to pay when due any installment of principal, interest or other
      fees hereon or on any other promissory note issued pursuant to the Security
      Agreement, or the Borrower fails to pay when due any amount due under any other
      promissory note issued by the Borrower, when due in accordance with the terms
      of
      such note. 

     

    4.2      
      Other
      Events of Default.
      The
      occurrence of any other Event of Default as set forth in Section 19 of the
      Security Agreement.

    
 

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    DEFAULT
      RELATED PROVISIONS

     

    4.3      
      Payment
      Grace Period.
      The
      Borrower shall have a three (3) business day grace period to pay any monetary
      amounts due under this Note.

    

     

    4.4      
      Conversion
      Privileges.
      The
      conversion obligations set forth in Article II and the conversion privileges
      set
      forth in Article III shall remain in full force and effect immediately from
      the
      date hereof and until this Note is paid in full.

     

     

    ARTICLE
      V

    DEFAULT
      PAYMENTS

     

    5.1.  Default
      Payment.
      If an
      Event of Default occurs and is continuing beyond any applicable grace period,
      the Holder, at its option, may elect, in addition to all rights and remedies
      of
      Holder under the Security Agreement and all obligations of Borrower under the
      Security Agreement, to require the Borrower to make a Default Payment
      (“Default
      Payment”).
      The
      Default Payment shall be 112% of the outstanding principal amount of the Note,
      plus accrued but unpaid interest, all other fees then remaining unpaid, and
      all
      other amounts payable hereunder. The Default Payment shall be applied first
      to
      any fees due and payable to Holder pursuant to the Notes or the Ancillary
      Agreements, then to accrued and unpaid interest due on the Notes and then to
      outstanding principal balance of the Notes. 

     

    5.2.  Default
      Payment Date and Default Notice Period.
      The
      Default Payment shall be due and payable on the fifth business day after an
      Event of Default as defined in Article IV (“Default
      Payment Date”)
      has
      occurred and is continuing beyond any applicable grace period. The period
      between date upon which of an Event of Default has occurred and is continuing
      beyond any applicable grace period and the Default Payment Date shall be the
      “Default
      Period.”
If
      during the Default Period, the Borrower cures the Event of Default, the Event
      of
      Default will no longer exist and any additional rights the Holder had triggered
      by the occurrence and continuance of an Event of Default will no longer exist
      including, without limitation, the right to receive the Default Payment. If
      the
      Event of Default is not cured during the Default Notice Period, all amounts
      payable hereunder shall be due and payable on the Default Payment Date, all
      without further demand, presentment or notice, or grace period, all of which
      hereby are expressly waived. 

     

    5.3.  
      Default Interest Rate.
      Following the occurrence and during the continuance of an Event of Default,
      interest on this Note shall automatically be increased to the Default Rate,
      and
      all outstanding Obligations under this Note, including unpaid interest, shall
      continue to accrue interest from the date of such Event of Default at such
      interest rate applicable to such Obligations until such Event of Default is
      cured or waived.

     

    5.4.  Cumulative
      Remedies.
      The
      remedies under this Note shall be cumulative.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    ARTICLE
      VI

    MISCELLANEOUS

     

    6.1.  Failure
      or Indulgence Not Waiver.
      No
      failure or delay on the part of the Holder hereof in the exercise of any power,
      right or privilege hereunder shall operate as a waiver thereof, nor shall any
      single or partial exercise of any such power, right or privilege preclude other
      or further exercise thereof or of any other right, power or privilege. All
      rights and remedies existing hereunder are cumulative to, and not exclusive
      of,
      any rights or remedies otherwise available.

     

    6.2.  Notices.
      Any
      notice herein required or permitted to be given shall be in writing and provided
      in accordance with the terms of the Security Agreement.

     

    6.3.  Amendment
      Provision.
      The
      term “Note” and all reference thereto, as used throughout this instrument, shall
      mean this instrument as originally executed, or if later amended or
      supplemented, then as so amended or supplemented, and any successor instrument
      as it may be amended or supplemented.

     

    6.4.  Assignability.
      This
      Note shall be binding upon the Borrower and its successors and assigns, and
      shall inure to the benefit of the Holder and its successors and assigns, and
      may
      be assigned by the Holder in accordance with the requirements of the Security
      Agreement.

     

    6.5.  Cost
      of Collection.
      If
      default is made in the payment of this Note, the Borrower shall pay the Holder
      hereof reasonable costs of collection, including reasonable attorneys’
fees.

     

    6.6.  Governing
      Law.
      This
      Note shall be governed by and construed in accordance with the laws of the
      State
      of New York, without regard to principles of conflicts of laws. Any action
      brought by either party against the other concerning the transactions
      contemplated by this Agreement shall be brought only in the state courts of
      New
      York or in the federal courts located in the state of New York. Both parties
      and
      the individual signing this Note on behalf of the Borrower agree to submit
      to
      the jurisdiction of such courts. The prevailing party shall be entitled to
      recover from the other party its reasonable attorney’s fees and costs. In the
      event that any provision of this Note is invalid or unenforceable under any
      applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law. Any such provision which
      may prove invalid or unenforceable under any law shall not affect the validity
      or unenforceability of any other provision of this Note. Nothing contained
      herein shall be deemed or operate to preclude the Holder from bringing suit
      or
      taking other legal action against the Borrower in any other jurisdiction to
      collect on the Borrower’s obligations to Holder, to realize on any collateral or
      any other security for such obligations, or to enforce a judgment or other
      court
      order in favor of Holder.

     

    6.7.  Maximum
      Payments.
      Nothing
      contained herein shall be deemed to establish or require the payment of a rate
      of interest or other charges in excess of the maximum permitted by applicable
      law. In the event that the rate of interest required to be paid or other

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    charges
      hereunder exceed the maximum permitted by such law, any payments in excess
      of
      such maximum shall be credited against amounts owed by the Borrower to the
      Holder and thus refunded to the Borrower.

     

    6.8.  Security
      Interest and Guarantee.
      The
      Holder has been granted a security interest in certain assets of the Borrower
      and its Subsidiaries as more fully described in the Security
      Agreement.

     

    6.9.  Construction.
      Each
      party acknowledges that its legal counsel participated in the preparation of
      this Note and, therefore, stipulates that the rule of construction that
      ambiguities are to be resolved against the drafting party shall not be applied
      in the interpretation of this Note to favor any party against the
      other.

     

     

     

    [Balance
      of page intentionally left blank; signature page follows.]

    
 

     

    
 

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF,
      the
      Borrower has caused this Amended and Restated Secured Convertible Minimum
      Borrowing Note to be signed in its name effective as of this 2nd day of June,
      2006.

     

     

     

     

     

     

    DSL.NET,
      INC. 

     

     

    By: /s/
      Walter
      Keisch                
  

    Name:
      Walter Keisch

    Title:
      CFO

     

     

     

     

    WITNESS:

     

    /s/
      Jodi P.
      Dottori                      

    Jodi
      P.
      Dottori

    
 

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    NOTICE
      OF CONVERSION

     

     

    (To
      be
      executed by the Holder in order to convert the Note)

     

     

    The
      undersigned hereby elects to convert $_________ of the principal and $_________
      of the interest due on the Secured Convertible Minimum Borrowing Note issued
      by
      DSL.NET, INC. on August 31, 2004, as amended, into Shares of Common Stock of
      DSL.NET, INC. (the “Borrower”) according to the conditions set forth in such
      Note, as of the date written below.

     

     

    
      	
               

              Date
                of Conversion:

            	 
	
               

              Conversion
                Price:

            	 
	
               

              Shares
                To Be Delivered:

            	 
	
               

              Signature:

            	 
	
               

              Print
                Name:

            	 
	
               

              Address:

            	 
	
               

               

            	 
	
               

              Holder
                DWAC instructions

            	
               

               

            
	 	 

    

     

    
 

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}]]