Document:

Exhibit
10.4

 

COGENT COMMUNICATIONS
GROUP, INC.

 

Participating Convertible
Preferred Stock Purchase Agreement

 

Dated as of June 26, 2003

 

 

Table of Contents

 

	
  1.

  	
  Sale of the
  Shares

  
	
   

  	
   

  
	
   

  	
  A.

  	
  Sale of Shares.

  
	
   

  	
  B.

  	
  Closing

  
	
   

  	
  C.

  	
  Delivery.

  
	
   

  	
  D.

  	
  Charter
  Amendment; Certificate of Designation; Terms of Investor Preferred Stock

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Conditions to
  Obligations at the Closing.

  
	
   

  	
   

  
	
   

  	
  A.

  	
  Conditions
  to Investors’ Obligations at the Closing

  
	
   

  	
  B.

  	
  Conditions
  to the Company’s Obligations at the Closing

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Representations
  and Warranties of the Company

  
	
   

  	
   

  
	
   

  	
  A.

  	
  Organization.

  
	
   

  	
  B.

  	
  Due Authorization.

  
	
   

  	
  C.

  	
  No Conflicts.

  
	
   

  	
  D.

  	
  Capitalization;
  Status of Capital Stock.

  
	
   

  	
  E.

  	
  Legal Proceedings.

  
	
   

  	
  F.

  	
  No Violations.

  
	
   

  	
  G.

  	
  Governmental Permits, Etc.

  
	
   

  	
  H.

  	
  No Brokers.

  
	
   

  	
  I.

  	
  Financial
  Statements.

  
	
   

  	
  J.

  	
  Additional
  Information.

  
	
   

  	
  K.

  	
  No
  General Solicitation.

  
	
   

  	
  L.

  	
  No
  Integrated Offering.

  
	
   

  	
  M.

  	
  Internal Accounting
  Controls.

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Representations
  and Warranties by the Investors

  
	
   

  	
   

  
	
   

  	
  A.

  	
  Due Organization
  and Authorization.

  
	
   

  	
  B.

  	
  Investment Representations.

  
	
   

  	
  C.

  	
  Restriction on Sale
  of the Shares.

  
	
   

  	
  D.

  	
  Legend.

  
	
   

  	
  E.

  	
  No Brokers.

  
	
   

  	
   

  
	
  5.

  	
  Covenants

  
	
   

  	
   

  
	
   

  	
  A.

  	
  Escrow

  
	
   

  	
  B.

  	
  Stockholder
  Consent and Information Statement.

  
	
   

  	
  C.

  	
  Rights Offering.

  
	
   

  	
  D.

  	
  Additional
  Covenant.

  
	
   

  	
  E.

  	
  Reservation of Shares

  
	
   

  	
  F.

  	
  Financial
  Information.

  
	
   

  	
  G.

  	
  Covenants
  Upon the Company No Longer Being a Reporting Company

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Certain
  Defined Terms.

  
	
   

  	
   

  
	
  7.

  	
  Accounting Terms.

  

 

 

	
  8.

  	
  Attribution of Knowledge.

  
	
   

  	
   

  
	
  9.

  	
  Miscellaneous.

  
	
   

  	
   

  
	
   

  	
  A.

  	
  No Waiver; Cumulative
  Remedies

  
	
   

  	
  B.

  	
  Amendments,
  Waivers, Consents and Joinder

  
	
   

  	
  C.

  	
  Notices

  
	
   

  	
  D.

  	
  Costs,
  Expenses and Taxes

  
	
   

  	
  E.

  	
  Binding Effect; Assignment

  
	
   

  	
  F.

  	
  Survival of
  Representations and Warranties

  
	
   

  	
  G.

  	
  Prior Agreements

  
	
   

  	
  H.

  	
  Governing Law

  
	
   

  	
  I.

  	
  Headings

  
	
   

  	
  J.

  	
  Counterparts

  
	
   

  	
  K.

  	
  Further Assurances

  
	
   

  	
  L.

  	
  Severability

  
	
   

  	
  M.

  	
  Exculpation Among Investors

  
	
   

  	
  N.

  	
  Attorneys’ Fees

  
	
   

  	
  O.

  	
  California Securities Law

  
	
   

  	
  P.

  	
  Termination.

  

 

	
  EXHIBITS

  
	
  A

  	
  Schedule
  of Investors

  
	
  B

  	
  Form of Second Amended and Restated Stockholders
  Agreement

  
	
  C

  	
  Form of Third Amended and Restated Registration
  Rights Agreement

  
	
  D

  	
  Form of Fourth Amended and Restated Certificate of
  Incorporation

  
	
  E

  	
  Form of Certificates of Designation

  
	
  F

  	
  Exchange Agreement

  
	
  G

  	
  Escrow Agreement

  
	
  H

  	
  Joinder Agreement

  

 

 

PARTICIPATING CONVERTIBLE

PREFERRED STOCK PURCHASE AGREEMENT

 

THIS PARTICIPATING
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”) is
made and entered into as of this 26th day of June, 2003, by and between COGENT
COMMUNICATIONS GROUP, INC. (the “Company”) and each of those Persons,
severally and not jointly, (a) whose names are set forth on the Schedule of
Investors attached hereto as Exhibit A (the “Existing Investors”),
and (b) such other Persons who participate in the Rights Offering (as defined
below) and execute the Joinder Agreement (as defined below) (the “Rights
Offering Investors”).  Such Persons
identified in clauses (a) and (b) above are hereinafter collectively referred
to as “Investors” and each individually as an “Investor.”

 

RECITALS

 

WHEREAS, the Company has
authorized the sale and issuance of an aggregate number of shares of its
Participating Convertible Preferred Stock, par value $.001 per share (the “Investor
Preferred Stock”) equal to the aggregate number of shares set forth on Exhibit
A plus such additional shares as may be issued pursuant to the Rights
Offering;

 

WHEREAS, in connection
with the sale and issuance of the Shares (as defined below), the Company has
authorized the sale and issuance of eleven thousand (11,000) shares (the “CSCC
Shares”) of its Series F Participating Convertible Preferred Stock (the “Series
F Preferred Stock”), par value $.001 per share, to Cisco Systems Capital
Corporation, a Nevada corporation (“CSCC”), and the adoption of the 2003
Incentive Award Plan of Cogent Communications Group, Inc. (the “Cogent
Employee Stock Plan”), for the benefit of its eligible employees,
consultants and directors which provides for the issuance of up to fifty-four
thousand and one (54,001) shares of its Series H Participating Convertible
Preferred Stock (the “Series H Preferred Stock”), par value $.001 per
share, on the terms and conditions set forth therein;

 

WHEREAS, the Investors
wish to purchase shares of the Investor Preferred Stock on the terms and
conditions set forth herein;

 

WHEREAS, the Company
wishes to issue and sell shares of the Investor Preferred Stock to the
Investors on the terms and conditions set forth herein and this Agreement
constitutes an agreement for the issuance of securities; and

 

WHEREAS, in connection
with the sale and issuance of the Shares, the Company, CSCC and the Investors
will enter into the Company’s Second Amended and Restated Stockholders
Agreement in the form set forth as Exhibit B hereto (the “Stockholders
Agreement”), and the Company, the Investors and CSCC will enter into the
Company’s Third Amended and Restated Registration Rights Agreement in the form
set forth as Exhibit C hereto (the “Registration Rights Agreement”).

 

NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.              Sale of the Shares.

 

A.           Sale
of Shares. On the basis of the representations, warranties, covenants
and agreements contained herein and subject to the terms and conditions of this
Agreement, the

 

 

Company at the Closing (as hereinafter defined) agrees to issue and
sell to the Investors, and the Investors, severally but not jointly, agree to
purchase from the Company, shares of the Investor Preferred Stock (the “Shares”)
at a purchase price of $1,000 per share (the “Purchase Price”) in the
respective amounts and in the respective series (and with the respective
conversion ratios for each such series) set forth on Exhibit A hereto or
on the Joinder Agreement executed by such Investor, as the case may be.

 

B.             Closing.
The consummation of the purchase and sale of the Shares shall take place at a
closing (the “Closing”) to be held at the offices of Latham &
Watkins, 555 Eleventh Street, N.W., Suite 1000, Washington, D.C., on the day
that is two (2) business days after all of the conditions set forth in Section
2 are satisfied or waived and conditions contained in Article IV of the
Exchange Agreement (as defined below) are satisfied or waived in writing, at
10:00 a.m., or at such location, on such other date and at such time as may be
mutually agreed upon by the Company and the Investors.

 

C.             Deposits Into Escrow.  Upon the execution of this Agreement,
the Company, the Existing Investors, Cisco, CSCC and Suntrust Bank, a Georgia
banking corporation (the “Escrow Agent”) shall enter into an escrow agreement
in the form attached hereto as Exhibit G (the “Escrow Agreement”).

 

(1)          Immediately upon
execution of this Agreement, the Company shall deliver to Escrow Agent to hold
pursuant to the Escrow Agreement the following:

 

A.           the documents and other
property set forth in Section 1.5(a) of the Exchange Agreement;

 

B.             originals of a
certificate of the Secretary or other appropriate officer of the Company, dated
as of the date hereof, certifying (A) copies of the certificate or articles of
incorporation and bylaws of Company and the resolutions adopted by Company and
other actions taken or adopted by Company (or any shareholders of Company)
authorizing the transactions contemplated hereby, and (B) the incumbency,
authority and signatures of each officer of Borrower authorized to execute and
deliver this Agreement and act with respect thereto;

 

(2)          Immediately upon
execution of this Agreement, each of the Existing Investors shall deliver to
Escrow Agent to hold pursuant to the Escrow Agreement the following:

 

A.           an amount equal to the
Purchase Price set forth opposite such Existing Investor’s name on Exhibit A
hereto (in the aggregate, the “Escrowed Cash”);

 

B.             original counterpart
signatures of the General Release and the Option Agreement (as those terms are
defined in the Exchange Agreement), in each case duly executed by each of the
Existing Investors;

 

C.             original counterpart
signatures of the Stockholders Agreement duly executed by each of the Existing
Investors; and

 

D.            original counterpart
signatures of the Registration Rights Agreement duly executed by each of the
Existing Investors.

 

2

 

D.            Delivery.

 

(1)          Pursuant to, and subject
to the terms of, the Escrow Agreement, at the Closing, the Escrow Agent shall
deliver (i) to each Existing Investor that number of Shares set forth beside
such Existing Investor’s name on Exhibit A hereto and such documents as
set forth in Section I.B.1.c of the Escrow Agreement (the “Investor
Receivables”) and (ii) to the Company the Escrowed Cash (less (x) the
amount of the Cash Payment (as defined in the Exchange Agreement) which is
earmarked for delivery to, and shall be delivered directly to CSCC in respect
of the reduction of outstanding principal amount of the Original Notes, (y) the
Fee Payment (as defined in the Escrow Agreement), and (z) the Investor Fee
Payment (as defined in the Escrow Agreement)) and the documents and other
property as set forth in Section I.B.1.b. of the Escrow Agreement (the “Company
Receivables”).

 

(2)          At the Closing, the
Company shall deliver (i) to each Rights Offering Investor that number of
Shares set forth beside such Rights Offering Investor’s name on Schedule A
to the Joinder Agreement executed by such Rights Offering Investor and copies
of the Stockholders Agreement and Registration Rights Agreement (each as defined
below) executed by the Company.

 

(3)          At the Closing, each
Rights Offering Investor shall deliver to the Company an amount equal to the
Purchase Price set forth opposite such Rights Offering Investor’s name on Schedule
A to the Joinder Agreement executed by such Rights Offering Investor and a
copy of the Stockholders Agreement and Registration Rights Agreement executed
by such Rights Offering Investor.

 

E.              Charter Amendment; Certificate of
Designation; Terms of Investor Preferred Stock.  Prior to the Closing, the Company shall file
with the Secretary of State of the State of Delaware (i) an amended and
restated certificate of incorporation, in the form set forth on Exhibit D
hereto (as so restated, the “Charter Amendment”) and (ii) several
Certificates of Designation which shall include the designations and the
powers, preferences, and rights, and the qualifications, limitations or
restrictions thereof, of each series of the Investor Preferred Stock, each
substantially in the form set forth on Exhibit E hereto (as so restated
and as modified to reflect the specific series designations and conversion
ratios set forth on Exhibit A as applicable to such series, the “Certificates
of Designation”).

 

2.              Conditions to Obligations at the
Closing.  

 

A.           Conditions to Investors’
Obligations at the Closing. The obligation of each Investor to
purchase and pay for the Shares at the Closing is subject to the following
conditions (except to the extent any particular condition is not fulfilled as
the result of the breach of this Agreement by an Investor, in which case such
condition shall not apply to such obligation of such Investor):

 

(1)          Each of the
representations and warranties of the Company set forth in Section 3 hereof
shall be true, complete and correct in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date, as certified by the Chief Executive
Officer of the Company in a certificate provided to the Investors.

 

(2)          All covenants,
agreements and conditions contained in this Agreement to be performed by the
Company on or prior to the Closing shall have been performed or complied with,
as certified by the Chief Executive Officer of the Company in a certificate
provided to the Investors.

 

3

 

(3)          The Company shall have
delivered to the Investors (1) a copy of the Charter Amendment, certified by
the Secretary of State of the State of Delaware, (2) a copy of its Bylaws (the
“Bylaws”), as certified by the Secretary of the Company, (3) resolutions
approved by the Board of Directors authorizing the transactions contemplated
hereby and in full force and effect at the time of Closing, (4) resolutions
approved by the Company’s stockholders authorizing the filing of the Charter
Amendment and approving the transactions contemplated hereby and in full force
and effect at the time of Closing, and (5) good standing certificates
(including tax good standing) with respect to the Company from the applicable
authority in Delaware dated a recent date before the Closing.

 

(4)          The Investors shall have
received an opinion of Latham & Watkins, counsel to the Company, in form
and substance acceptable to the Investors.

 

(5)          The Investor Receivables
shall have been released from escrow to the Investors.

 

(6)          The Investors shall have
received a certificate of the Secretary of the Company certifying that the
Investor Receivables have been deposited with the Escrow Agent.

 

(7)          The Company shall have
obtained all necessary consents of and made all required filings with any
governmental authority or agency or third party required to be obtained prior
to the Closing under applicable law and relating to the consummation of the
transactions contemplated hereby, including the filing of an information
statement with the SEC, compliance with all requirements of the SEC with
respect thereto, the mailing of such information statement to the Company’s
stockholders and requisite time shall have passed since mailing.

 

(8)          No Proceeding (as
defined below) shall be pending, this Agreement shall not have been terminated
pursuant to Section 9.P below, and no temporary restraining order, preliminary
or permanent injunctions or other order issued by any court of competent jurisdiction
or other legal or regulatory restraint or provision challenging the
transactions contemplated hereby or materially limiting or restricting the
conduct or operation of the business of the Company prior to or following the
Closing shall be in effect, nor shall any proceeding brought by an
administrative agency or commission or other governmental authority or
instrumentality seeking any of the foregoing be pending.

 

(9)          The stockholders of the
Company shall have approved the transactions contemplated hereby and by the
Exchange Agreement (provided that each of the Investors hereby agrees to
provide such approval).

 

(10)    The Company shall have entered
into an Exchange Agreement with Cisco Systems, Inc., CSCC, Cogent
Communications, Inc and Cogent Internet, Inc. substantially in the form
attached hereto as Exhibit F (the “Exchange Agreement”), pursuant
to which, among other things certain of the Company’s indebtedness to CSCC will
be canceled, the Warrants will be canceled, Series F Preferred Stock will be
issued to CSCC (such transaction herein referred to as the “Cisco Exchange”),
CSCC shall have performed its obligations thereunder and pursuant to the Escrow
Agreement (as defined below), and the transactions contemplated by the Exchange
Agreement shall have been consummated.

 

(11)    The Company shall have
delivered to the Escrow Agent certificates, in the names of each Existing
Investor representing the Shares to be purchased by each Existing

 

4

 

Investor as set forth on Exhibit A hereto; provided,
however, that (i) the Company hereby covenants and agrees that it shall
not so deliver such certificates (and such certificates shall not otherwise be
delivered to the Escrow Agent) or file the Charter Amendment and the
Certificates of Designation with the Secretary of State of the State of
Delaware unless and until the holder or holders of at least two-thirds of the
outstanding Shares of the Investor Preferred Stock (on an as-if issued basis)
shall have confirmed to the Company in a writing (making reference to this
Section 2.A(10)) that all other conditions contained in this Section 2.A. have
been duly satisfied in full or waived in writing by each of the Investors; and
(ii) the Investors hereby covenant and agree that, upon the satisfaction or
waiver all other conditions contained in this Section 2.A., they will provide
the foregoing written confirmation to the Company (it being understood and
agreed that (x) the Investors shall in connection therewith be entitled to rely
upon any certificates, representations, warranties or other statements made by
the Company, including any certificate provided under Section 2.A.(1) hereof
and (y) the Company shall not be required pursuant to the foregoing clause (x)
to provide any such certificate, representation, warranty or other statement
that is not otherwise contemplated by another provision of this Agreement).

 

(12)    The holders of at least two
thirds of the outstanding shares of the Company’s Series A Participating
Convertible Preferred Stock, par value $.001 per share (the “Series A
Preferred Stock”), the Company’s Series B Participating Convertible
Preferred Stock, par value $.001 per share (the “Series B Preferred Stock”),
the Company’s Series C Participating Convertible Preferred Stock, par value
$.001 per share (the “Series C Preferred Stock”), the Company’s Series D
Participating Convertible Preferred Stock, par value $.001 per share (the “Series
D Preferred Stock”), and the Company’s Series E Participating Convertible
Preferred Stock, par value $.001 per share (the “Series E Preferred Stock”),
voting as a single class, shall have elected to convert all outstanding shares
of the Series A Preferred Stock, the Series B Preferred Stock, the Series C
Preferred Stock, the Series D Preferred Stock and the Series E Preferred Stock
into Common Stock (as defined below) pursuant to Article 4(B)(3)(m) of the
Company’s Third Amended and Restated Certificate of Incorporation, and all such
shares shall have been converted into Common Stock (as defined below) pursuant
thereto.

 

B.             Conditions to the Company’s
Obligations at the Closing. The obligation of the Company to
issue and sell the Shares at the Closing is subject to the following
conditions:

 

(1)          Each of the
representations and warranties of the Investors set forth in Section 4 hereof
shall be true, complete and correct in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date.

 

(2)          All covenants,
agreements and conditions contained in this Agreement to be performed by the
Investors on or prior to the Closing shall have been performed or complied
with.

 

(3)          The Company Receivables
shall have been released from escrow to the Company.

 

(4)          The Company shall have
received a certificate of each of the Investors certifying that the Company
Receivables have been deposited with the Escrow Agent.

 

(5)          The stockholders of the
Company shall have approved the transactions contemplated hereby.

 

5

 

(6)          CSCC shall have
performed all of its obligations under, and complied in all material respects
with, the Exchange Agreement and the Escrow Agreement (as defined below).

 

(7)          The Company shall have
obtained all necessary consents of and made all required filings with any
governmental authority or agency or third party required to be obtained prior
to the Closing under applicable law and relating to the consummation of the
transactions contemplated hereby, including the filing of an information
statement with the SEC and the mailing of such information statement to the
Company’s stockholders.

 

(8)          The holders of at least
two thirds of the outstanding shares of the Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred
Stock and the Series E Preferred Stock, voting as a single class, shall have
elected to convert all outstanding shares of the Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred
Stock and the Series E Preferred Stock into Common Stock (as defined below)
pursuant to Article 4(B)(3)(m) of the Company’s Third Amended and Restated
Certificate of Incorporation, and all such shares shall have been converted
into Common Stock (as defined below) pursuant thereto.

 

3.              Representations and Warranties of
the Company. The Company, on its own behalf and on behalf of
its Subsidiaries, hereby represents and warrants to the Investors as follows,
except to the extent (i) disclosed with reasonable specificity on the exhibits
attached hereto, and (ii) with respect to Sections 3.E, 3.F, 3.G and 3.I,
disclosed with reasonable specificity on the SEC Filings (as defined below)
other than (x) those sections of the SEC Filings entitled or captioned “Risk
Factors” and (y) specific disclosures in those documents which are filed as
exhibits to, or incorporated by reference in, such SEC Filings.  Without limiting the generality of the
foregoing clause (y), the mere filing or incorporation by reference of an
exhibit to such SEC Filings shall not be deemed to adequately disclose an
exception to a representation or warranty made herein (unless the
representation or warranty has to do with the existence of the exhibit itself,
as opposed to the contents thereof).

 

A.           Organization.
The Company and its Subsidiaries are duly organized, validly existing and in
good standing under the laws of the State of Delaware.  Each of the Company and its Subsidiaries has
full power and authority to own and operate its respective properties and to
conduct its respective business as currently conducted and each is registered
or qualified to do business and is in good standing in each jurisdiction in
which it owns or leases property or transacts business and where the failure to
be so qualified would have a material adverse effect upon their financial
condition, properties or operations taken as a whole.

 

B.             Due Authorization. The Company has all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement and any other agreements and instruments contemplated
hereby or executed in connection herewith, including, without limitation, the
Stockholders Agreement and the Registration Rights Agreement (collectively, the
“Related Agreements”), to execute and file the Charter Amendment and the
Certificates of Designation after receipt of the stockholder approval described
in clause (i) of the second following sentence, and to issue the Shares and the
CSCC Shares in accordance with the terms hereof and thereof.  The Charter Amendment has been duly
authorized by the Company’s Board of Directors, which has recommended that the
Company’s stockholders approve the Charter Amendment.  The execution and delivery of this Agreement and the Related
Agreements by the Company and the execution and filing of the Certificates of
Designation by the Company and the consummation by it of the transactions
contemplated hereby and thereby, including, without

 

6

 

limitation, the issuance of the Shares and the
reservation for issuance and the issuance of all Conversion Shares (as defined
below) issuable upon conversion of the Shares, have been duly authorized by the
Company’s Board of Directors and no further consent or authorization is
required by the Company, its Board of Directors or its stockholders.  This Agreement and the Related Agreements
have been duly executed and delivered by the Company, and constitute the valid
and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law).  None of the Charter Amendment,
the Third Amended and Restated Certificate of Incorporation or the Certificates
of Designation shall have been amended prior to the Closing Date.

 

C.             No Conflicts.

 

(1)   Except as set forth on Schedule
3.C, the execution, delivery and performance of this Agreement and the
Related Agreements by the Company, the performance by the Company of its
obligations under the Certificates of Designation and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without
limitation, the reservation for issuance and issuance of the Conversion Shares)
will not:

 

A.           result in a violation
of the Certificate of Incorporation (after giving effect to the Charter
Amendment and the Certificates of Designations), or the Bylaws;

 

B.             conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or incremental, additional or
varied rights under, any material agreement, indenture or instrument
(including, without limitation, any stock option, employee stock purchase or
similar plan or any employment or similar agreement) to which the Company or
any of its Subsidiaries is a party (including, without limitation, triggering
the application of any change of control or similar provision (whether “single
trigger” or “double trigger”));

 

C.             result in the
creation or imposition of any lien, encumbrance, claim, security interest or
restriction whatsoever upon any of the material properties or assets of the
Company; or

 

D.            result in a violation
of any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and the rules and regulations of the
American Stock Exchange) applicable to the Company or any of its Subsidiaries
or by which any property or asset of the Company or any of its Subsidiaries is
bound or affected.

 

(2)          Neither the Company nor
its Subsidiaries is in violation of any term of its Certificate of
Incorporation or Bylaws or, in the case of Subsidiaries, their organizational
charter or bylaws, respectively.

 

(3)          The business of the
Company and its Subsidiaries is not being conducted in violation of any law,
ordinance or regulation of any foreign, federal, state or local government or
governmental agency, department, or body, except where such violations would
not result, either individually or in the aggregate, in a material adverse
effect on the business or operations of the Company.

 

7

 

(4)          Except for (A) the
filing with the SEC and the dissemination to stockholders of the Company’s
information statement as required under the Exchange Act (as defined below),
(B) as may be required by any applicable state securities laws, or (C) the
filing of the Charter Amendment and the Certificates of Designation with the
Secretary of State of the State of Delaware, the Company is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any foreign, federal, state or local government or
governmental agency, department, or body in order for it to execute, deliver or
perform any of its obligations under or contemplated by this Agreement and the
Related Agreements or to perform its obligations under the Certificates of
Designation, in each case in accordance with the terms hereof or thereof.  All consents, authorizations, orders,
filings and registrations which the Company is required to obtain as described
in the preceding sentence shall have been obtained or effected on or prior to
the Closing Date and shall not be the subject of any pending or, to the
knowledge of the Company, threatened attack by appeal, direct proceeding or
otherwise.  The Company is not, and as
of the Closing Date will not be, in violation of the listing requirements of
the American Stock Exchange, and the Conversion Shares shall be authorized for
listing thereon.

 

D.            Capitalization; Status of Capital
Stock.

 

(1)          Immediately prior to the
Closing and without giving effect to the issuance of the Company’s capital
stock contemplated by this Agreement, the Exchange Agreement or the Cogent
Employee Stock Plan, but giving effect to the conversion of the Company’s
outstanding preferred stock into common stock, the Company will have a total
authorized capitalization consisting of:

 

A.           395,000,000 shares of common stock, par value $.001 (the “Common
Stock”) of which (a) 14,228,077 shares are issued and outstanding, (b)
1,490,000 shares remain reserved for issuance pursuant to stock purchase, stock
grant or stock option arrangements for employees, directors or consultants of
the Company, (c) 1,791,051 shares remain reserved for issuance to holders of
shares of the common stock of Allied Riser, (d) 710,216 shares remain reserved
for issuance pursuant to warrants granted to Cisco Systems Capital Corporation
in connection with the credit agreement between the Company and Cisco Systems
Capital Corporation,  (e) 155,809 shares
remain reserved for issuance pursuant to warrants granted in connection with
certain agreements between Allied Riser and certain landlords relating to
building access rights, (f) 68,199,901 shares are reserved for issuance upon
conversion of the Series F Preferred Stock, (g) 254,947,501 shares are reserved
for issuance upon conversion of the Investors Preferred Stock, and (h)
41,539,253 shares are reserved for issuance upon conversion of the Series H
Preferred Stock).

 

B.             120,000 shares of the
Company’s preferred stock, $.001 par value per share (the “Preferred Stock”),
of which (a) 13,999 shares are authorized but unissued Preferred Stock, (b)
11,000 shares are designated as Series F Preferred Stock, of which no shares
are issued and outstanding, (c) at least 41,000 shares are designated as Series
G Preferred Stock, of which no shares are issued and outstanding, and (d)
54,001 shares are designated as Series H Preferred Stock, of which no shares
are issued and outstanding.

 

(2)          All the outstanding shares of capital stock of the Company
have been duly authorized, and are validly issued, fully paid and
non-assessable and were issued in compliance with all applicable state and
federal laws concerning the issuance of securities.  The Shares, when issued and delivered in accordance with the
terms hereof, will be (i) duly authorized, validly issued, fully-paid and
non-assessable, (ii) free from all taxes, liens and charges with respect to the
issuance thereof and (iii) entitled to the rights and preferences set forth in
the

 

8

 

Certificate
of Designation.  Such shares of Common
Stock issuable upon conversion of the Shares, when issued and delivered upon
conversion of any of the Shares (the “Conversion Shares”), will be
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof, with the holders being entitled to
all rights accorded to a holder of Common Stock.  Subject only to accuracy of the representations set forth in
Section 4, the issuance by the Company of the Shares is exempt from registration
under the Securities Act (as defined below) and all applicable state securities
laws.

 

(3)          Except as otherwise set forth in Schedule 3.D.(3),
no options, warrants, subscriptions, convertible securities, phantom stock,
stock appreciation rights or other rights (contingent or otherwise) of any
nature to acquire from the Company shares of capital stock or other securities
are authorized, issued or outstanding, nor is the Company obligated in any
other manner to issue shares of its capital stock or other securities except as
contemplated by this Agreement.  Except
as set forth in Schedule 3.D.(3), there are no restrictions on the
transfer of shares of capital stock of the Company other than those imposed by
relevant federal and state securities laws and as otherwise contemplated by
this Agreement, the Exchange Agreement, the Stockholders Agreement and the
Registration Rights Agreement.

 

E.              Legal Proceedings.
Except as disclosed in the SEC Filings (as defined below), there is no material
legal or governmental proceeding pending or, to the knowledge of the Company,
threatened or contemplated to which the Company is or may be a party or of
which the business or property of the Company is or may be subject.

 

F.              No Violations. Except as disclosed in the
SEC Filings, the Company is not in violation of its certificate of
incorporation or its by-laws, in violation of any law, administrative
regulation, ordinance or order of any court or governmental agency, arbitration
panel or authority applicable to the Company, which violation, individually or
in the aggregate, would have a material adverse effect on the business or
financial condition of the Company, or in default in any material respect in
the performance of any obligation, agreement or condition contained in any material
bond, debenture, note or any other evidence of indebtedness in any indenture,
mortgage, deed of trust or any other agreement or instrument to which the
Company is a party or by which the Company is bound or by which the properties
of the Company are bound or affected.

 

G.             Governmental Permits, Etc.
Except as disclosed in the SEC Filings, the Company has all necessary
franchises, licenses, certificates and other authorizations from any foreign,
federal, state or local government or governmental agency, department, or body
that are currently necessary for the operation of the business of the Company
as currently conducted, the absence of which would have a material adverse
effect on the business or operations of the Company.

 

H.            No
Brokers.The Borrowers represent that
there are no brokers or finders entitled to compensation in connection with the
transactions contemplated hereby.

 

I.                 Financial Statements.
Except as disclosed in the SEC Filings, the financial statements of the Company
and the related notes contained in the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2002 and its Quarterly Reports on Form 10-Q
for the quarter ended March 31, 2003 present fairly the financial position of
the Company as of the dates indicated therein and its results of operations and
cash flows for the periods therein specified. Such financial statements
(including the related notes) have been prepared in

 

9

 

accordance
with United States generally accepted accounting principles applied on a
consistent basis throughout the periods therein specified.

 

J.                Additional Information.

 

(1)          The Company has filed in a timely manner all documents that
the Company was required to file (i) under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”) and (ii) under the Securities Act, as of
the date hereof.  The following
documents (including all exhibits included therein and financial statements and
schedules thereto and documents incorporated by reference) (collectively, the “SEC
Filings”) complied in all material respects with the requirements of the
Exchange Act as of their respective filing dates, and the information contained
therein was true and correct in all material respects as of the date of such
documents, and each of the following documents as of the date thereof did not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading:

 

A.     the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2002 and its Quarterly Reports on Form 10-Q for the
quarters ended March 31, 2003; and

 

B.       all other documents, if any, filed by the Company with the
Securities and Exchange Commission (the “SEC”) since the filing of the
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2003
pursuant to the reporting requirements of the Exchange Act.

 

(2)          As of their respective dates, the financial statements of
the Company included in the SEC Filings complied as to form (and will comply as
to form) in all material respects with U.S. generally accepted accounting
principles (“GAAP”) and the published rules and regulations of the SEC
with respect thereto.  Such financial
statements have been prepared in accordance with GAAP, consistently applied,
during the periods involved (except in the case of unaudited interim statements,
to the extent they may exclude footnotes or may be condensed or summary
statements or as otherwise, in each case, may be permitted by the SEC on Form
10-Q under the Exchange Act) and fairly present in all material respects the
consolidated financial position of the Company as of the dates thereof and the
consolidated results of its operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).  Ernst & Young LLP,
which has examined certain of such financial statements, is an independent
certified public accounting firm within the meaning of the Securities Act.

 

(3)          Prior to the date hereof, the Company delivered to the
Investors financial projections (the “Projections”).  The assumptions used in preparation of the
Projections were reasonable when made and continue to be reasonable.  The Projections have been prepared in good
faith and the Projections give effect to the transactions contemplated by this
Agreement and the Related Agreements. 
The Investors acknowledge that the Projections contain assumptions about
future events and that actual results during the period or periods covered may
differ materially from the data and results contained in such Projections.

 

(4)          Since December 31, 2002, except as specified in the SEC Filings,
the Company has not incurred or suffered any liability or obligation, matured
or unmatured, contingent or otherwise, except in the ordinary course of
business and except any such liability or

 

10

 

obligation
that has not had and could not reasonably be expected to have, individually or
in the aggregate, a material adverse effect on the business or financial
condition of the Company.  Without
limiting the foregoing, except as specified in the SEC Filings, the Company has
no material liabilities or obligations that would reasonably be expected to be
disclosed in order to comply with Section 13(j) of the Exchange Act or any
proposed rules promulgated by the SEC thereunder, including the rules regarding
contractual commitments and contingent liabilities and commitments proposed in
SEC Release No. 33-8144; 34-46767.

 

K.            No General Solicitation.
Neither the Company, nor any of its affiliates, nor any person acting on its or
their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D under the Securities Act) in
connection with the offer or sale of the Shares.

 

L.              No Integrated Offering.
Neither the Company, nor any of its affiliates, nor any person acting on its or
their behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under circumstances that
would require registration of the Shares under the Securities Act or cause this
offering of the Shares to be integrated with prior offerings by the Company for
purposes of the Securities Act or any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of
the American Stock Exchange, nor will the Company or any of its Subsidiaries
take any action or steps that would require registration of the Shares or
Conversion Shares under the Securities Act or cause the offering of the Shares
to be integrated with other offerings.

 

M.         Internal Accounting Controls.
The Company and each of its Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset and liability accountability, (iii)
access to assets or incurrence of liability is permitted only in accordance
with management’s general or specific authorization and (iv) the reported
accountability for its assets is compared with existing assets at reasonable
intervals.

 

4.              Representations
and Warranties by the Investors.  Each of the
Investors represents and warrants to the Company severally, but not jointly, as
follows:

 

A.           Due Organization and
Authorization. Such Investor is a limited
partnership, other limited liability entity, business trust or other entity
duly organized and validly existing under the laws of the jurisdiction of its
organization and is in good standing under such laws. Such Investor has all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement and all of the Related Agreements to be delivered by such
Investor pursuant hereto, and this Agreement has been, and when delivered in
accordance with the terms hereof the Related Agreements will be, duly
authorized and validly executed and delivered by such Investor and this
Agreement constitutes, and when delivered in accordance with the terms hereof
each Related Agreement will constitute, the valid and binding agreement of such
Investor enforceable against such Investor in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

 

11

 

B.             Investment Representations.
As of the date hereof and as of the Closing Date, such Investor: (i) is an
“accredited investor” as defined in Rule 501 of Regulation D promulgated under
the Securities Act of 1933, as amended (the “Securities Act”); (ii) is
acquiring the Shares for its own account for investment and with no present
intention of distributing any of such Shares other than to an affiliate of such
Investor; (iii) will not, directly or indirectly, voluntarily offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Shares, except in
compliance with the Securities Act and the rules and regulations promulgated
thereunder; (iv) has received and reviewed copies of the SEC Filings to the
extent it deems necessary to make its investment decision; (v) has had an
opportunity to ask questions and receive answers from the management of the
Company regarding the Company, its business and the offering of the Shares; and
(vi) in connection with such Investor’s decision to accept the Shares in
connection with the Exchange, relied solely upon the documents described in
Section 3.J. and the representations and warranties of the Company contained
herein.

 

C.             Restriction on Sale of the
Shares. Such Investor agrees not to
make any sale of the Shares or any Conversion Shares except pursuant to an
effective registration statement under the Securities Act or an exemption from
the registration requirements thereof, including without limitation pursuant to
Rule 144 of the Securities Act.

 

D.            Legend.  Such Investor represents that it understands and agrees that,
until registered under the Securities Act or transferred pursuant to the
provisions of Rule 144 promulgated thereunder, all certificates evidencing the
Shares and the Conversion Shares, whether upon initial issuance or upon any
transfer thereof, shall bear a legend prominently stamped or printed therein,
reading substantially as follows:

 

“The securities represented by this
certificate have not been registered under the Securities Act of 1933 or
applicable state securities laws.  These
securities have been acquired for investment and not with a view to
distribution or resale, and may not be sold mortgaged, pledged, hypothecated or
otherwise transferred without an effective registration statement for such
securities under the Securities Act of 1933 and applicable state securities
laws, or the availability of an exemption from the registration provisions of
the Securities Act of 1933 and applicable state securities laws.”

 

Upon presentation by such Investor of evidence reasonably
satisfactory to the Company that it is eligible to sell or otherwise transfer
its Shares or Conversion Shares pursuant to Rule 144(k) of the Exchange Act,
the Company shall remove or cause to be removed at its sole cost and expense
the legend from the certificate or certificates evidencing such Investor’s
Shares or Conversion Shares.

 

E.              No
Brokers. Such Investor represents
that there are no brokers or finders entitled to compensation in connection
with the transactions contemplated hereby.

 

5.              Covenants.

 

A.           Subsequent Escrow Deposits.  As soon as reasonably practicable after the filing of the Charter
Amendment and the Certificates of Designation, the Company shall deliver

 

12

 

to the
Escrow Agent certificates representing the Shares to be purchased by each such
Existing Investor pursuant to this Agreement.

 

B.             Stockholder  Consent and Information Statement.  Promptly after the execution of this Agreement, the Company file
with the SEC an information statement relating to the stockholder approval of
the Charter Amendment, which shall have been previously reviewed by the
Investors and their special counsel (and with respect to which the Company
shall use its reasonable efforts to accept the comments of the Investors and
counsel).  The Company shall promptly
notify the Investors of any comments by the SEC on such information statement
and shall provide the Investors with a copy of such comments.  The Company shall cause such information
statement to be mailed to the holders of its common stock as promptly as
possible after such filing, all in accordance with applicable law and the rules
and regulations of the American Stock Exchange and the Exchange Act.  The Company shall pay all fees and expenses
in connection with satisfying its obligations under this Section 5.B.

 

C.             Rights Offering.  As soon as reasonably practicable after the
execution of hereof, the Company shall commence an offering of Investor
Preferred Stock to holders of its preferred stock identified by the Company as
“Accredited Investors” on the same terms and conditions as are set forth in
this Agreement (the “Rights Offering”). 
Participants in the Rights Offering shall be permitted to purchase a
separate series of Investor Preferred Stock in a minimum amount of $510,490 for
each one percent of common stock owned by the participant prior to the
transactions contemplated by this Agreement on an as converted to common stock,
fully diluted basis.  The conversion
ratios of each series of the Investor Preferred Stock purchased by the
Investors and any participant in the Rights Offering shall be adjusted so that
the ownership of the common stock of the Company (on an as converted, fully
diluted basis) by the Investors and all such participants shall be apportioned
among the Investors and all such participants based on the accrued liquidation
value attributable to the capital stock of the Company owned by such Investors
and Rights Offering participants immediately prior to the consummation of the
transactions contemplated hereby. 
Accordingly, if participants in the Rights Offering purchase Investor
Preferred Stock, it will dilute, pro rata, the percentage ownership of the
Company represented by the Investor Preferred Stock purchased by the Existing
Investors hereunder.  The Company shall
use its best efforts to complete the Rights Offering as expeditiously as
possible and in no event later than thirty (30) days after the date hereof.

 

D.            Additional Covenant.  The Company and the Investors agree and
covenant to use their best efforts to cause the consummation of the
transactions contemplated by this Agreement. 
The Company and the Investors agree and covenant not to take any action
that is inconsistent with their obligations under this Agreement in any
material respect that could reasonably be expected to hinder or delay the
consummation of this transactions contemplated by this Agreement.  The Company agrees and covenants, subject to
the performance by the other parties hereto of their obligations under this
Agreement, to comply with the terms of the Exchange Agreement and otherwise to
use its best efforts to cause the consummation of the transactions contemplated
by the Exchange Agreement.

 

E.              Reservation of Conversion Shares.  After the Closing and for so long as Shares are outstanding, the
Company covenants and agrees to continue to reserve, free of preemptive rights
and other preferential rights, a sufficient number of its previously authorized
but unissued shares of its Common Stock to satisfy the rights of conversion of
the holders of the Shares.

 

13

 

F.              Financial Information.

 

(1)          The Company agrees to send the following to each Investor:
(A) unless the following are filed with the SEC through EDGAR and are available
to the public through EDGAR (in which case the Company will endeavor to provide
e-mail or other notice of such filing), within two (2) days after the filing
thereof with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly
Reports on Form 10-Q, any Current Reports on Form 8-K and any registration
statements (other than on Form S-8) or amendments filed pursuant to the
Securities Act; (B) on the same day as the release thereof, copies of any
notices and other information made available or given to the stockholders of
the Company generally, contemporaneously with the making available or giving
thereof to the stockholders; and (C) from time to time, such other financial
data and information relating to the Company and its Subsidiaries as any
Investor may reasonably request (subject to appropriate confidentiality
procedures).

 

(2)          The Company shall permit each Investor and its designated
representatives, upon reasonable notice, to visit and inspect any of the
properties of the Company or any of its Subsidiaries, to examine the books of
account of the Company and its Subsidiaries (and to make copies thereof and
extracts therefrom), and to discuss the affairs, finances and accounts of the
Company and its Subsidiaries with, and to be advised as to the same by, their
officers, all at such reasonable times and intervals during normal business
hours as any such Investor may reasonably request.

 

G.             Covenants Upon the Company
No Longer Being
a Reporting Company.  Commencing upon the date when the Company is
no longer a reporting company under the Exchange Act, the Company covenants and
agrees to perform and observe each of the following covenants and provisions.

 

(1)                                  Inspection.  Permit, upon reasonable request and notice, each of the Investors
or any agents or representatives thereof, to examine and make copies of and
extracts from the records and books of account of, and visit and inspect the
properties of the Company and any Subsidiary, to discuss the affairs, finances
and accounts of the Company and any Subsidiary with any of its officers, directors
or executive officers and independent accountants, and consult with and advise
the management of the Company and any Subsidiary as to their affairs, finances
and accounts, all at reasonable times during normal business hours.

 

(2)                                  Monthly Reports.  As soon as available and in any event within thirty (30) days
after the end of each calendar month, provide to the Investors consolidated
balance sheets of the Company and its Subsidiaries as of the end of such month
and consolidated statements of income and retained earnings of the Company and
its Subsidiaries for such month and for the period commencing at the end of the
previous fiscal year and ending with the end of such month, duly certified
(subject to year-end audit adjustments) by the chief financial officer of the
Company as having been prepared in accordance with generally accepted
accounting principles, consistently applied.

 

(3)                                  Quarterly Reports.  As soon as available and in any event within forty-five (45) days
after the end of each of the first three quarters of each fiscal year of the
Company, provide to the Investors, in a form acceptable to holders of at least
two-thirds of the outstanding shares of Investor Preferred Stock, consolidated
balance sheets of the Company and its Subsidiaries as of the end of such
quarter and consolidated statements of income and cash flows of the Company and
its Subsidiaries for such quarter, duly certified (subject to year-end audit
adjustments) by the chief financial officer of the Company as having been
prepared in accordance with generally accepted accounting principles,
consistently applied.

 

14

 

(4)                                  Annual Reports.  As soon as available and in any event within ninety (90) days
after the end of each fiscal year of the Company, provide to the Investors a
copy of the annual audited financial statement for such year for the Company
and its Subsidiaries, including therein consolidated balance sheets of the
Company and its Subsidiaries as of the end of such fiscal year and consolidated
statements of income and of the Company and its Subsidiaries for such fiscal
year, setting forth in each case in comparative form the corresponding figures
for the preceding fiscal year, all such consolidated statements to be duly
certified by the chief financial officer of the Company and by such independent
public accountants of recognized national standing approved by the Audit
Committee of the Board of Directors to prepare such reports.

 

(5)                                  Annual Budget.  As soon as available, and in no event later than December 15th of
each calendar year, provide to the Investors a business plan, annual budget and
monthly operating budgets for the forthcoming fiscal year in a form and with
such detail as may be acceptable to holders of at least two-thirds of the
outstanding shares of Investor Preferred Stock.

 

(6)                                  Other Information.  Provide to each of the Investors such other information
respecting the business, properties or the condition or operations, financial
or other, of the Company or any of its Subsidiaries as any such Investor may
from time to time reasonably request.

 

6.              Certain
Defined Terms. 
As
used in this Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms
of the terms defined):

 

A.           “Board of Directors” means the board of directors of
the Company as constituted from time to time.

 

B.             “Key Employee” means
the chief executive officer of the Company.

 

C.             “Person” means an
individual, corporation, partnership, joint venture, limited liability company,
trust, or unincorporated organization, or a government or any agency or
political subdivision thereof.

 

D.            “Subsidiary” shall
mean, with respect to any Person, any corporation, limited liability company,
partnership, association, joint venture or other business entity of which (i)
if a corporation, (x) fifty percent (50%) or more of the total voting power of
shares of stock entitled to vote in the election of directors thereof or (y)
fifty percent (50%) or more of the value of the equity interests is at the time
owned or controlled, directly or indirectly, by the Person or one or more of
its other subsidiaries, or (ii) if a limited liability company, partnership,
association or other business entity, fifty percent (50%) or more of the
partnership or other similar ownership interests thereof is at the time owned
or controlled, directly or indirectly, by the Person or one or more of its
subsidiaries.  The Person shall be deemed
to have fifty percent (50%) or greater ownership interest in a limited
liability company, partnership, association or other business entity if the
Person is allocated fifty percent (50%) or more of the limited liability
company, partnership, association or other business entity gains or losses or
shall be or control the Person managing such limited liability company,
partnership, association or other business entity.

 

15

 

7.              Accounting
Terms. 
All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP consistently applied, and all financial data submitted
pursuant to this Agreement shall be prepared in accordance with such
principles.

 

8.              Attribution of
Knowledge. 
With
respect to any representation or warranty set forth in this Agreement that is
expressly qualified by reference to the knowledge of the Company or any
Subsidiary, (A) the Company and such Subsidiary confirms that it has made due
and diligent inquiry as to the matters that are the subject of such
representation and warranty; and (B) such references shall include all matters
and information of which David Schaeffer or any person who is (or was during
the relevant period) serving as a Key Employee of the Company or such
Subsidiary had actual knowledge or should have known had the Company or such
Subsidiary observed the procedures described in clause (A).

 

9.              Miscellaneous.

 

A.           No Waiver; Cumulative
Remedies.  No failure or delay on the part of any party to this Agreement in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder. 
The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

 

B.             Amendments, Waivers,
Consents and Joinder.  Any provision in this Agreement to the
contrary notwithstanding, and except as hereinafter provided, changes in or
additions to this Agreement may be made, and compliance with any covenant or
provision set forth herein may be omitted or waived, if the Company (1) shall
obtain consent thereto in writing from the holder or holders of at least
two-thirds of the outstanding shares of the Investor Preferred Stock (such
holder or holders determined during the term of the Escrow Agreement on an
as-if issued basis), and (2) shall deliver copies of such consent in writing to
any holders who did not execute such consent. 
Any waiver or consent may be given subject to satisfaction of conditions
stated therein and any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.  Notwithstanding anything to the contrary
contained herein, any amendment which (1) increases any Investor’s obligations
hereunder, or (2) grants to any one or more Investors any rights more favorable
than any rights granted to all other Investors hereunder, must be approved by
each Investor so as to be effective against such Investor.  Any Person agreeing to participate in the
Rights Offering (a “Participating Investor”) shall become a party to
this Agreement by executing the Joinder Agreement in the form attached hereto
as Exhibit H (the “Joinder Agreement”).  Any Joinder Agreement executed by a Participating Investor shall
take effect and shall amend this agreement to the extent necessary to make such
participating Person a party to this Agreement immediately upon its execution
and delivery to the Company.

 

C.             Notices.
Any notice, request, claim, demand, waiver, consent, approval or other
communication which is required or permitted hereunder shall be in writing and
shall be deemed given if delivered personally, by facsimile transmission with
receipt of delivery (one business day after confirmation in the case of
transmissions to non-U.S. residents), or sent by registered or certified mail,
postage prepaid, return receipt requested, or by internationally recognized
overnight courier service (two business days after deposit with such overnight
courier service in the case of deliveries to non-U.S. residents), as follows:
if to the Company, to Cogent Communications Group, Inc. 1015 31st
Street, N.W., Suite 330, Washington, DC 20007, Attn:  David Schaeffer, fax number (202) 338-8798, and if to any
Investor, to the address for notices set

 

16

 

forth on Exhibit
A hereof with a copy to Finn Dixon & Herling LLP, One Landmark Square,
Stamford, CT  06901, attention Michael
Herling, Esq.

 

D.            Costs, Expenses and Taxes.  The Company will
pay its own expenses in connection with the transactions contemplated hereby,
whether or not such transactions shall be consummated.  The Company shall also reimburse each
Investor for all reasonable fees and expenses of counsel for such Investor
incurred by such Investor in connection with the purchase of the Investor
Preferred Stock, the preparation and negotiation of documents and agreements in
connection with the purchase of the Investor Preferred Stock and their
enforcing their rights against the Company under this Agreement.

 

E.              Binding Effect; Assignment.  This Agreement
shall be binding upon and inure to the benefit of the Company and the Investors
and their respective heirs, successors and assigns and may be assigned by the
Investors to their affiliates, except that the Company shall not have the right
to delegate any of its respective obligations hereunder or to assign its
respective rights hereunder or any interest herein.

 

F.              Survival of Representations
and Warranties.  All representations and warranties made in this Agreement or any
other instrument or document delivered in connection herewith or therewith,
shall survive the execution and delivery hereof or thereof.

 

G.             Prior Agreements.  This Agreement,
together with the Escrow Agreement, the Exchange Agreement and the General
Release constitutes the entire agreement between the parties and supersedes any
prior understandings or agreements concerning the purchase and sale of the
Shares.

 

H.            Governing Law.  This Agreement
shall be construed and enforced in accordance with and governed by the laws of
the State of New York, without reference to its conflict of laws provisions.

 

I.                 Headings.  Section and
subsection headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.

 

J.                Counterparts.  This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one and the same instrument, and any
of the parties hereto may execute this Agreement by signing any such
counterpart.

 

K.            Further Assurances.  From and after
the date of this Agreement, upon the request of any Investor or the Company,
the Company and the Investors shall execute and deliver such instruments,
documents and other writings as may be reasonably necessary or desirable to
confirm and carry out and to effectuate fully the intent and purposes of this
Agreement.

 

L.              Severability.  The provisions of
this Agreement and the terms of the Investor Preferred Stock are severable and,
if any court of competent jurisdiction shall determine that any one or more of
the provisions or part of a provision contained in this Agreement or the
Investor Preferred Stock shall, for any reason, be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement or the terms of the Investor Preferred Stock; but this Agreement
and the terms of the Investor Preferred Stock shall be reformed and construed
as if such invalid or illegal or unenforceable provision, or part of a
provision, had never been contained herein, and

 

17

 

such
provisions or part reformed so that it would be valid, legal and enforceable to
the maximum extent possible.

 

M.         Exculpation Among Investors.  Each Investor
acknowledges that it is not relying upon any Person, firm, or corporation,
other than the Company and its officers and directors, in making its investment
or decision to invest in the Company. 
Each Investor agrees that no Investor nor the respective controlling
Persons, officers, directors, partners, agents, or employees of any Investor shall
be liable to any other Investor for any action heretofore or hereafter taken or
omitted to be taken by any of them in connection with the Shares and Conversion
Shares.

 

N.            Attorneys’ Fees.  In the event that
any suit or action is instituted to enforce any provision in this Agreement,
the prevailing party in such dispute shall be entitled to recover from the
losing party all fees, costs and expenses of enforcing any right of such
prevailing party under or with respect to this Agreement, including without
limitation, such reasonable fees and expenses of attorneys and accountants,
which shall include, without limitation, all fees, costs and expenses of
appeals.

 

O.            California Securities Law.  THE SALE OF THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM
SUCH QUALIFICATION IS UNLAWFUL.  PRIOR
TO ACCEPTANCE OF SUCH CONSIDERATION BY THE COMPANY, THE RIGHTS OF ALL PARTIES
TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING
OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION BEING AVAILABLE

 

P.              Termination.

 

(1)          Termination Upon Occurrence
of Proceeding.  Anything contained in this Agreement to the
contrary notwithstanding, if a Proceeding (as defined below) shall occur at any
time prior to the time (if any) that a distribution of property is made
pursuant to Section I.B.1 of the Escrow Agreement, then (i) this Agreement
shall automatically terminate and upon such termination the obligation of each
Investor to purchase and pay for the Shares shall automatically terminate,
without the need for the giving of any notice, and (ii) Oak Investment Partners
IX, Limited Partnership and Jerusalem Venture Partners III, L.P., as agents for
the Investors, shall have the right to cause a certificate to be sent to the
Escrow Agent pursuant to clause (ii) of Section I.B.2 of the Escrow
Agreement.  A “Proceeding” shall
mean the occurrence of any of the following: 
(i) a petition commencing any voluntary or involuntary case under any
chapter of the federal Bankruptcy Code is filed with respect to the Company or
any of its Subsidiaries, (ii) the Company or any of its Subsidiaries is
adjudicated an insolvent or bankrupt, (iii) any other case or proceeding,
voluntary or involuntary, is commenced with respect to the Company or any of
its Subsidiaries (as debtor) under any bankruptcy, insolvency, reorganization,
liquidation, composition, arrangement or similar statute, (iv) any assignment
for the benefit of creditors is commenced with respect to the Company or any of
its Subsidiaries, or (v) any receiver, custodian, trustee or the like is
appointed with respect to all or a substantial part of the properties of the
Company or any of its Subsidiaries.

 

18

 

(2)          Other Termination.  This Agreement shall also automatically terminate in the event
that (i) property is distributed for any other reason pursuant to Section I.B.2
of the Escrow Agreement or (ii) the Exchange Agreement is terminated pursuant
to Section 6.1 thereof and, in either event, upon such termination the obligation
of each Investor to purchase and pay for the Shares shall automatically
terminate without the need for the giving of any notice.

 

(3)          Termination of Exchange
Agreement.  The Company covenants to the Investors that
the Company shall not agree to a termination of the Exchange Agreement pursuant
to clause (i) of Section 6.1 thereof without the prior written consent of the
holders(s) of at least two thirds of the outstanding shares of the Investor
Preferred Stock (on an as-if issued basis).

 

19

 

IN WITNESS WHEREOF, the parties hereto have caused this
Participating Convertible Preferred Stock Purchase Agreement to be executed as
of the date first above written.

 

 

	
  THE COMPANY:

  
	
   

  
	
  COGENT COMMUNICATIONS GROUP, INC.

  
	
   

  
	
  By:

  	
    /s/David Schaeffer

  	
   

  
	
   

  	
  By: David Schaeffer

  	
   

  
	
   

  	
  Its:  President and Chief Executive Officer

  

 

	
   

  	
  INVESTORS:

  
	
   

  	
   

  
	
   

  	
  OAK INVESTMENT PARTNERS IX,

  
	
   

  	
  LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Oak Associates IX, LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Edward Glassmeyer

  	
   

  
	
   

  	
   

  	
  Name: Edward Glassmeyer

  
	
   

  	
   

  	
  Title: Managing Member

  
	
   

  	
   

  
	
   

  	
  OAK IX AFFILIATES FUND, LIMITED

  PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Oak IX Affiliates, LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Edward Glassmeyer

  	
   

  
	
   

  	
   

  	
  Name: Edward Glassmeyer

  
	
   

  	
   

  	
  Title: Managing Member

  
	
   

  	
   

  
	
   

  	
  OAK IX AFFILIATES FUND-A, LIMITED

  PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Oak Associates IX, LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Edward Glassmeyer

  	
   

  
	
   

  	
   

  	
  Name: Edward Glassmeyer

  
	
   

  	
   

  	
  Title: Managing Member

  
							

 

 

[Signature Page to Participating Convertible Preferred Stock
Purchase Agreement - Continued]

 

	
   

  	
  JERUSALEM VENTURE PARTNERS III,

  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Jerusalem Partners III, L.P.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Jerusalem Venture Partners Corporation,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Erel Margalit

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  JERUSALEM VENTURE PARTNERS III

  
	
   

  	
  (ISRAEL), L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Jerusalem Venture Partners III

  (Israel) Management Company Ltd.,

  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Erel Margalit

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  JERUSALEM VENTURE PARTNERS

  
	
   

  	
  ENTREPRENEURS FUND III, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Jerusalem Partners III, L.P.,

  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Jerusalem Venture Partners Corporation,

  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Erel Margalit

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
							

 

 

	
   

  	
  JERUSALEM VENTURE PARTNERS IV,

  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Jerusalem Partners IV, L.P.,

  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  JVP Corp IV, its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Erel Margalit

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  JERUSALEM VENTURE PARTNERS IV

  (Israel), L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Jerusalem Partners IV - Venture

  Capital, L.P., its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  JVP Corp IV, its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Erel Margalit

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
							

 

 

	
   

  	
  JERUSALEM VENTURE PARTNERS IV-

  A, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Jerusalem Partners IV, L.P.,

  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  JVP Corp IV, its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Erel Margalit

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  JERUSALEM VENTURE PARTNERS

  
	
   

  	
  ENTREPRENEURS FUND IV, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Jerusalem Partners IV, L.P.,

  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  JVP Corp IV,

  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Erel Margalit

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

 

	
  WORLDVIEW TECHNOLOGY PARTNERS III, L.P.

  
	
   

  
	
  WORLDVIEW TECHNOLOGY INTERNATIONAL III, L.P.

  
	
   

  
	
  WORLDVIEW STRATEGIC PARTNERS III, L.P.

  
	
   

  
	
  WORLDVIEW III CARRIER FUND, L.P.

  
	
   

  
	
  By:

  	
  Worldview Capital III, L.P.,

  
	
   

  	
  its General Partner

  
	
   

  
	
  By:

  	
  Worldview Equity I, L.L.C.,

  
	
   

  	
  its General Partner

  
	
   

  
	
  By:

  	
    /s/James N. Strawbridge

  	
   

  
	
   

  	
  Name: James N. Strawbridge

  
	
   

  	
  Title: Attorney-in-fact for James Wei

  
	
   

  
	
  WORLDVIEW TECHNOLOGY PARTNERS IV, L.P.

  
	
   

  
	
  WORLDVIEW TECHNOLOGY INTERNATIONAL IV, L.P.

  
	
   

  
	
  WORLDVIEW STRATEGIC PARTNERS IV, L.P.

  
	
   

  
	
  By:

  	
  Worldview Capital IV, L.P.,

  
	
   

  	
  its General Partner

  
	
   

  
	
  By:

  	
  Worldview Equity I, L.L.C.,

  
	
   

  	
  its General Partner

  
	
   

  
	
  By:

  	
    /s/James N. Strawbridge

  	
   

  
	
   

  	
  Name: James N. Strawbridge

  
	
   

  	
  Title: Attorney-in-fact for James Wei

  
					

 

 

	
   

  	
  BROADVIEW CAPITAL PARTNERS L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Broadview Capital Partners

  Management LLC, its General

  Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Stephen J. Bachman

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Stephen J. Bachmann

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
  BROADVIEW CAPITAL PARTNERS

  QUALIFIED PURCHASER FUND L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Broadview Capital Partners Management LLC, its General
  Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Stephen J. Bachman

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Stephen J. Bachmann

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
  BROADVIEW CAPITAL PARTNERS

  AFFILIATES FUND LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Broadview Capital LLC,

  its Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Stephen J. Bachman

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Stephen J. Bachmann

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
						

 

 

	
   

  	
  BOULDER VENTURES III, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Andrew E. Jones

  	
   

  
	
   

  	
   

  	
  Name: Andrew E. Jones

  
	
   

  	
   

  	
  Title: General Partner

  
	
   

  	
   

  
	
   

  	
  BOULDER VENTURES III (ANNEX),

  L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Andrew E. Jones

  	
   

  
	
   

  	
   

  	
  Name: Andrew E. Jones

  
	
   

  	
   

  	
  Title: General Partner

  
					

 

 

	
   

  	
  NAS PARTNERS I L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Randall A. Hack

  	
   

  
	
   

  	
   

  	
  Name: Randall A. Hack

  
	
   

  	
   

  	
  Title: Sr. Managing Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NASSAU CAPITAL PARTNERS IV L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Nassau Capital LLC,

  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Randall A. Hack

  	
   

  
	
   

  	
   

  	
  Name: Randall A. Hack

  
	
   

  	
   

  	
  Title: Sr. Managing Partner

  
	
   

  	
   

  
	
   

  	
    /s/David Schaeffer

  	
   

  
	
   

  	
  David Schaeffer

  
						

 

 

EXHIBIT A

 

Schedule of Investors

 

 

	
  Name of Investor and

  Address for Notice

  	
   

  	
  Series of

  Preferred

  Stock

  	
   

  	
  Number

  of

  Shares

  	
   

  	
  Aggregate

  Purchase

  Price

  	
   

  	
  Conversion

  Price

  	
   

  
	
  Oak Investment Partners IX, LP(1)

  	
   

  	
  G-1

  	
   

  	
  9,665

  	
   

  	
  $

  	
  9,665,000

  	
   

  	
  $

  	
  0.1702596

  	
   

  
	
  Oak IX Affiliates Fund, LP(1)

  	
   

  	
  G-1

  	
   

  	
  103

  	
   

  	
  $

  	
  103,000

  	
   

  	
  $

  	
  0.1702596

  	
   

  
	
  Oak IX Affiliates Fund-A, LP(1)

  	
   

  	
  G-1

  	
   

  	
  232

  	
   

  	
  $

  	
  232,000

  	
   

  	
  $

  	
  0.1702596

  	
   

  
	
  Worldview Technology Partners
  III, L.P.(2)

  	
   

  	
  G-2

  	
   

  	
  5,883

  	
   

  	
  $

  	
  5,883,000

  	
   

  	
  $

  	
  0.1734667

  	
   

  
	
  Worldview Technology
  International III, L.P.(2)

  	
   

  	
  G-2

  	
   

  	
  1,450

  	
   

  	
  $

  	
  1,450,000

  	
   

  	
  $

  	
  0.1734667

  	
   

  
	
  Worldview Strategic Partners III,
  L.P.(2)

  	
   

  	
  G-2

  	
   

  	
  130

  	
   

  	
  $

  	
  130,000

  	
   

  	
  $

  	
  0.1734667

  	
   

  
	
  Worldview III Carrier Fund,
  L.P.(2)

  	
   

  	
  G-2

  	
   

  	
  330

  	
   

  	
  $

  	
  330,000

  	
   

  	
  $

  	
  0.1734667

  	
   

  
	
  Worldview Technology Partners IV,
  L.P.(2)

  	
   

  	
  G-2

  	
   

  	
  1,887

  	
   

  	
  $

  	
  1,887,000

  	
   

  	
  $

  	
  0.1734667

  	
   

  
	
  Worldview Technology
  International IV, L.P.(2)

  	
   

  	
  G-2

  	
   

  	
  306

  	
   

  	
  $

  	
  306,000

  	
   

  	
  $

  	
  0.1734667

  	
   

  
	
  Worldview Strategic Partners IV,
  L.P.(2)

  	
   

  	
  G-2

  	
   

  	
  14

  	
   

  	
  $

  	
  14,000

  	
   

  	
  $

  	
  0.1734667

  	
   

  
	
  Jerusalem Venture Partners III,
  L.P.(3)

  	
   

  	
  G-3

  	
   

  	
  2,263

  	
   

  	
  $

  	
  2,263,000

  	
   

  	
  $

  	
  0.0569517

  	
   

  
	
  Jerusalem Venture Partners
  Entrepreneur Fund III, L.P.(3)

  	
   

  	
  G-4

  	
   

  	
  174

  	
   

  	
  $

  	
  174,000

  	
   

  	
  $

  	
  0.0569445

  	
   

  
	
  Jerusalem Venture Partners III
  (Israel), L.P.(4)

  	
   

  	
  G-5

  	
   

  	
  63

  	
   

  	
  $

  	
  63,000

  	
   

  	
  $

  	
  0.0567226

  	
   

  
	
  Jerusalem Venture Partners IV,
  L.P.(3)

  	
   

  	
  G-6

  	
   

  	
  9,601

  	
   

  	
  $

  	
  9,601,000

  	
   

  	
  $

  	
  0.3011057

  	
   

  
	
  Jerusalem Venture Partners IV-A,
  L.P.(3)

  	
   

  	
  G-7

  	
   

  	
  82

  	
   

  	
  $

  	
  82,000

  	
   

  	
  $

  	
  0.2995877

  	
   

  
	
  Jerusalem Venture Partners
  Entrepreneurs Fund IV, L.P.(3)

  	
   

  	
  G-8

  	
   

  	
  86

  	
   

  	
  $

  	
  86,000

  	
   

  	
  $

  	
  0.2903967

  	
   

  
	
  Jerusalem Venture Partners IV
  (Israel), L.P.(4)

  	
   

  	
  G-9

  	
   

  	
  231

  	
   

  	
  $

  	
  231,000

  	
   

  	
  $

  	
  0.2973683

  	
   

  
	
  Boulder Ventures IV (Annex),
  LP(5)

  	
   

  	
  G-10

  	
   

  	
  1,410

  	
   

  	
  $

  	
  1,410,000

  	
   

  	
  $

  	
  0.1504472

  	
   

  
	
  Boulder Ventures IV, LP(5)

  	
   

  	
  G-10

  	
   

  	
  90

  	
   

  	
  90,000

  	
   

  	
  $

  	
  0.1504472

  	
   

  
	
  Broadview Capital Partners(6)

  	
   

  	
  G-11

  	
   

  	
  5,500

  	
   

  	
  $

  	
  5,500,000

  	
   

  	
  $

  	
  0.1707242

  	
   

  
	
  Nassau Capital Partners(7)

  	
   

  	
  G-12

  	
   

  	
  1,300

  	
   

  	
  $

  	
  1,300,000

  	
   

  	
  $

  	
  0.0848670

  	
   

  
	
  David Schaeffer(8)

  	
   

  	
  G-13

  	
   

  	
  200

  	
   

  	
  $

  	
  200,000

  	
   

  	
  $

  	
  0.0509230

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  41,000

  	
   

  	
  $

  	
  41,000,000

  	
   

  	
   

  	
   

  

 

	
  (1) Notices should be sent to:

  	
  One Gorham Island

  	
   

  	
   

  
	
   

  	
  Westport, CT 06880

  	
   

  	
   

  
	
   

  	
  Attention: Ed Glassmeyer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (2) Notices should be sent to:

  	
  435 Tasso Street, #120

  	
   

  	
   

  
	
   

  	
  Palo Alto, CA 94301

  	
   

  	
   

  
	
   

  	
  Attention:  James
  Wei

  	
   

  	
   

  

 

 

	
  (3)

  	
  Notices should be sent to:

  	
  41 Madison Avenue

  	
   

  	
   

  
	
   

  	
  25th floor

  	
   

  	
   

  
	
   

  	
  New York, NY 10010

  	
   

  	
   

  
	
   

  	
  Attention: Michael Carus

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (4)

  	
  Notices should be sent to:

  	
  Jerusalem Technology Park

  	
   

  	
   

  
	
   

  	
  Building One

  	
   

  	
   

  
	
   

  	
  Mahla, Jerusalem 91487

  	
   

  	
   

  
	
   

  	
  Attention:  Erel
  Margalit

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (5)

  	
  Notices should be sent to:

  	
  4750 Owings Mills Blvd.

  	
   

  	
   

  
	
   

  	
  Owings Mills, MD 
  21117

  	
   

  	
   

  
	
   

  	
  Attention: Andy Jones

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (6)

  	
  Subject
  to further allocation among affiliates of Broadview Capital Partners;
  provided that the weighted average conversion price arrived at pursuant to
  such further allocation will equal the conversion price set forth for such
  Investor above.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Notices
  should be sent to:

  	
  950 Tower Lane, 18th Floor

  	
   

  	
   

  
	
   

  	
  Foster City, CA 94404

  	
   

  	
   

  
	
   

  	
  Attn: David Kapnick

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (7)

  	
  Subject to further allocation among affiliates of Nassau
  Capital Partners; provided that the weighted average conversion price arrived
  at pursuant to such further allocation will equal the conversion price set
  forth for such Investor above.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Notices should be sent to:

  	
  22 Chambers Street

  	
   

  	
   

  
	
   

  	
  Princeton, NJ 
  08542

  	
   

  	
   

  
	
   

  	
  Attn: Randall A. Hack

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (8)

  	
  Notices should be sent to:

  	
  Cogent Communications Group, Inc.

  	
   

  	
   

  
	
   

  	
  1015 31st Street, N.W.

  	
   

  	
   

  
	
   

  	
  Suite 330

  	
   

  	
   

  
	
   

  	
  Washington, DC 20007

  	
   

  	
   

  
	
   

  	
  Attn:  David
  Schaeffer

  	
   

  	
   

  
						

 

 

Schedule 3.C

 

none

 

 

Schedule 3.D.(3)

 

The Company has options, warrants and convertible
securities outstanding that are convertible into an aggregate 1,953,566 shares
of Common Stock.THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE COMMON STOCK OF THE COMPANY
ISSUABLE UPON EXERCISE OF SUCH WARRANTS HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER ANY STATE SECURITIES
LAWS, AND MAY NOT BE PLEDGED, SOLD, ASSIGNED OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE
COMPANY OR AN OPINION REASONABLY SATISFACTORY TO THE COMPANY OF COUNSEL TO THE
HOLDER THAT SAID SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED OR TRANSFERRED, AS
THE CASE MAY BE, WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND
ANY APPLICABLE STATE SECURITIES LAW. BY ITS ACCEPTANCE HEREOF, THE HOLDER OF THE
WARRANTS REPRESENTED BY THIS CERTIFICATE REPRESENTS THAT IT IS ACQUIRING THIS
WARRANT FOR INVESTMENT PURPOSES.

                                CINEMA RIDE, INC.
                               Warrant Certificate
                            to Purchase Common Stock
                           Expiring September 30, 2004

        This Warrant Certificate certifies that ________________________ (the
"Initial Holder") or registered assigns, is the registered holder of Warrants
expiring as set forth herein (the "Warrants") to purchase common stock, $.01 par
value per share (the "Common Stock"), of Cinema Ride, Inc., a Delaware
corporation (the "Company"). Each Warrant entitles the holder upon exercise to
receive from the Company one fully paid and non-assessable share of Common Stock
(a "Warrant Share") at the purchase price per share (the "Exercise Price") of:
___________ warrants at $0.50 per share; ___________ warrants at $1.00 per
share; ___________ warrants at $1.50 per share; __________ warrants at $2.00 per
share; and ___________ warrants at $2.50 per share, payable in cash, by
certified or bank check, upon surrender of this Warrant Certificate and payment
of the applicable Exercise Price at the office or agency of the Company, but
only subject to the conditions set forth herein. The foregoing Exercise Price
and the number of Warrant Shares issuable upon exercise of the Warrants are
subject to adjustment upon the occurrence of certain events set forth herein.

        NO WARRANT MAY BE EXERCISED AFTER 5:00 P.M., LOS ANGELES TIME ON
September 30, 2004 AND TO THE EXTENT NOT EXERCISED BY SUCH TIME, SUCH WARRANTS
SHALL BECOME VOID.

        The Warrants are subject to the following additional terms:

        SECTION 1. Registration of Transfers and Exchanges. Subject to
compliance with the terms of this Warrant Certificate, the Company shall from
time to time register the transfer of this Warrant Certificate upon the records
to be maintained by it for that purpose, upon surrender thereof accompanied (if
so required by it) by a written instrument or instruments of transfer in form
satisfactory to the Company, duly executed by the registered holder hereof or by
the duly appointed legal representative thereof or by a duly authorized
attorney. Upon any such registration or transfer, a new Warrant Certificate
shall be issued to the transferee(s) and the surrendered Warrant Certificate
shall be canceled by the Company.

        The holder of the Warrants represented by this Warrant Certificate
agrees that prior to any proposed transfer of the Warrants or of the Warrant
Shares, if such transfer is not made pursuant to an effective Registration
Statement under the Securities Act of 1933, as amended (the "Act"), such holder
shall deliver to the Company an opinion of counsel, reasonably satisfactory in
form and substance to the Company, and from counsel reasonably satisfactory to
the Company, that the Warrants or Warrant Shares may be so sold without
registration under the Act.

        The Warrant holder agrees that each certificate representing Warrant
Shares will bear the following legend:

         "The securities evidenced or constituted hereby have been acquired for
         investment purposes and have not been registered under the Securities
         Act of 1933, as amended. Such securities may not be sold, transferred,
         pledged or hypothecated unless the registration provisions of said Act
         and any applicable state securities or "blue sky" laws have been
         complied with or the Company has received an opinion of counsel
         reasonably satisfactory to the Company that such registration is not
         required."

        The Company may deem and treat the registered holder hereof as the
absolute owner of the Warrants (notwithstanding any notation of ownership or
other writing hereon made by anyone), for the purpose of any exercise hereof, of
any distribution to the holder hereof, and for all other purposes, and the
Company shall not be affected by any notices to the contrary. The Warrants do
not entitle the holder hereof to any rights of a stockholder of the Company.

        The holder of this Warrant Certificate is entitled to certain
registration rights with respect to the Warrants and the Warrant Shares
purchasable upon exercise hereof. Said registration rights are set forth in full
in a Registration Rights Agreement, dated of even date herewith, between the
Company and the Initial Holder.

        SECTION 2. Terms of Warrants; Exercise of Warrants. Subject to the terms
contained herein, the holder of this Warrant Certificate shall have the right,
which may be exercised at any time until 5:00 p.m., Los Angeles time, on
September 30, 2004 to purchase and receive from the Company the number of
validly issued, fully paid and non-assessable Warrant Shares which the holder
may at the time and from time to time be entitled to receive on exercise of the
Warrants represented by this Warrant Certificate and payment of the applicable
Exercise Price then in effect for such Warrant Shares. Each Warrant not
exercised prior to 5:00 p.m., Los Angeles time, on September 30, 2004 shall
become void, and all rights hereunder and all rights in respect thereof
hereunder shall cease as of such time.

        A Warrant may be exercised upon surrender to the Company at its
principal office of this Warrant Certificate with the form of election to
purchase attached hereto duly completed and signed, and upon payment to the
Company for the account of the Company of the applicable Exercise Price, as
adjusted as herein provided, for the number of Warrant Shares in respect of
which such Warrants are then exercised. Payment of the aggregate Exercise Price
shall be made in cash, by certified or official bank check payable to the order
of the Company

        Subject to the provisions of Section 3 hereof, upon such surrender of
this Warrant Certificate and payment of the applicable Exercise Price, the
Company shall issue and cause to be delivered with all reasonable dispatch to
the holder of this Warrant Certificate a certificate or certificates for the
number of full Warrant Shares issuable upon the exercise of such Warrants,
together with cash as provided in Section 7. Such certificate or certificates
for the Warrant Shares shall be deemed to have been issued and, subject to
applicable federal and state securities laws and regulations, any person so
designated to be named therein shall be deemed to have become a holder of record
of such Warrant Shares as of the date of the surrender of this Warrant
Certificate and payment of the applicable Exercise Price. Such certificate or
certificates for the Warrant Shares shall bear the legend set forth in Section 1
hereto. If the exercise is for less than all the Warrant Shares, a new Warrant
Certificate shall be issued for the remaining Warrant Shares.

        The Warrants shall be exercisable only as to the entire group applicable
to each Warrant price.

        SECTION 3. Payment of Taxes. The Company will pay any documentary stamp
taxes attributable to the initial issuance of Warrant Shares upon the exercise
of such holder's Warrants.

        SECTION 4. Mutilated or Missing Warrant Certificates. In case this
Warrant Certificate shall be mutilated, lost, stolen or destroyed, the Company
may in its discretion issue, in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants, but only upon receipt of evidence satisfactory to the Company of such
loss, theft or destruction of such Warrant Certificate and indemnity, if
requested, also satisfactory to it. An applicant for such substitute Warrant
Certificate shall also comply with such other reasonable requirements and pay
such other reasonable charges as the Company may prescribe.

        SECTION 5. Reservation of Warrant Shares. The Company will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued Common Stock or its authorized and issued Common
Stock held in its treasury, for the purpose of enabling it to satisfy any
obligation to issue Warrant Shares upon exercise of Warrants, the maximum number
of shares of Common Stock which may then be deliverable upon the exercise of all
outstanding Warrants.

        The Company or, if appointed, the transfer agent for the Common Stock
(the "Transfer Agent") and every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid will be irrevocably authorized and directed at all times to
reserve such number of authorized shares as shall be required for such purpose.
The Company will keep a copy of this Warrant Certificate on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Company will supply such Transfer Agent with
duly executed certificates for such purposes and will provide or otherwise make
available any cash which may be payable as provided in Section 7. The Company
will furnish such Transfer Agent a copy of all notices of adjustments and
certificates related thereto transmitted to the holder pursuant to Section 8
hereof.

        Before taking any action which would cause an adjustment to the Exercise
Price in accordance with Section 6 hereof, the Company will take any corporate
action which may, in the opinion of its counsel (which may be counsel employed
by the Company), be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.

        The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants will, upon issue, be validly issued, fully paid,
nonassessable, free of preemptive rights and free from all taxes, liens, charges
and security interests with respect to the issue thereof, other than those
created by the holder of such Warrants.

        SECTION 6. Adjustment of Exercise Prices and Number of Warrant Shares
Issuable. The Exercise Price and the number of Warrant Shares issuable upon the
exercise of each Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 6. The Exercise Price shall
be adjusted simultaneously upon occurrence of such events. For purposes of this
Section 6, "Common Stock" means shares now or hereafter authorized of any class
of common stock of the Company and any other stock of the Company, however
designated, that has the right (subject to any prior rights of any class or
series of preferred stock) to participate in any distribution of the assets or
earnings of the Company without limit as to per share amount.

               6.1 In case the Company shall at any time after the date of
original issuance hereof do any of the following: (I) pay a dividend or make a
distribution on its capital stock in shares of Common Stock, (ii) subdivide its
outstanding shares of Common Stock, (iii) combine its out-standing shares of
Common Stock into a smaller number of shares, or (iv) issue by reclassification
of its Common Stock any shares of capital stock of the Company; then immediately
after the distribution date of such stock dividend or the effective date of such
subdivision, split-up, combination or reclassification, as the case may be, the
number of shares of Common Stock which the registered holder of this Warrant is
entitled to purchase hereunder and the Exercise Price of such shares of Common
Stock shall be appropriately adjusted so that the registered holder hereof shall
be entitled to purchase the number of shares of Common Stock that such holder
would have held after such stock dividend, subdivision, split-up, combination or
reclassification, as the case may be, at the aggregate Exercise Price such
holder would have paid for such shares of Common Stock, if such holder had
exercised the Warrants represented by this Warrant Certificate prior to such
event.

               6.2 In case of any consolidation or merger to which the Company
is a party other than a merger or consolidation in which the Company is the
continuing corporation, or in case of any sale or conveyance to another
corporation of the property of the Company- as an entirety or substantially as
an entirety, or in case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company), lawful and adequate provisions shall be
made whereby the registered holder of this Warrant Certificate shall thereafter
have the right to purchase and receive upon the basis and upon the terms and
conditions specified in this Warrant Certificate and in lieu of the shares of
Common Stock immediately theretofore purchasable hereunder and receivable upon
the exercise of the Warrants, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for a number of outstanding
shares of Common Stock equal to the number of outstanding shares of Common Stock
immediately theretofore purchasable and receivable upon the exercise of the
Warrants represented by this Warrant Certificate, and in any such case
appropriate provision shall be made with respect to the rights and interests of
the registered holder of this Warrant Certificate to the end that the provisions
hereof (including without limitation, to the extent provided herein, provisions
for adjustments of the Exercise Price and of the number of shares of Common
Stock purchasable and receivable upon the exercise of the Warrants represented
by this Warrant Certificate) shall thereafter be applicable, as nearly as may
be, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise hereof. The Company will not effect any such
consolidation, merger or sale, unless prior to the consummation thereof the
successor entity (if other than the Company) resulting from such consolidation
or merger or the entity purchasing such assets shall assume by written
instrument executed and delivered to the registered holder of this Warrant
Certificate, the obligation to deliver to such holder such shares of stock,
securities or assets as, in accordance with the foregoing provision, such
registered holder of this Warrant Certificate may be entitled to purchase.
Notice of any such consolidation, merger, statutory exchange, sale or
conveyance, and of the provisions so proposed to be made, shall be mailed to the
registered holder of this Warrant Certificate not less than forth-five (45) days
prior to such event or promptly upon the Company's receiving notice thereof. A
sale of all or substantially all of the assets of the Company for a
consideration consisting primarily of securities shall be deemed a consolidation
or merger for the foregoing purposes.

               6.3 Before taking any action which would cause an adjustment
reducing either the Exercise Price below the then par value of the shares of
Common Stock issuable upon the exercise of the Warrants, the Company will take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable shares of such Common Stock at such adjusted Exercise Price.

               6.4 In case at any time or from time to time, conditions arise by
reason of action taken by the Company, which in the opinion of its Board of
Directors or the holder of this Warrant Certificate, are not adequately covered
by the provisions of this Warrant Certificate, and might adversely affect the
exercise rights of the holder of this Warrant Certificate, then the Board of
Directors of the Company shall appoint a firm of independent certified public
accountants of recognized national standing (which may be the firm regularly
retained by the Company), who shall give their opinion upon the adjustment, if
any, on a basis consistent with the standards established in the other
provisions of this Warrant Certificate, necessary with respect to the Exercise
Price or the number of Warrant Shares issuable upon exercise of the Warrants, so
as to preserve, without dilution, the exercise rights of the holder of this
Warrant Certificate and the number of Warrant Shares issuable upon exercise of
the Warrants by the holder hereof to the extent contemplated by this Section 6.
Upon receipt of such opinion, which shall be conclusive and binding on the
Company and the holder, the Board of Directors of the Company shall forthwith
make the adjustments provided therein.

        SECTION 7. Fractional Interests. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the time by the same holder,
the number of full Warrant Shares which shall be issuable upon the exercise
thereof shall be computed on the basis of the aggregate number of Warrant Shares
purchasable on exercise of the Warrants so presented. If any fraction of a
Warrant Share would, except for the provisions of this Section 7, be issuable
upon exercise of any Warrants (or specified portion thereof), the Company shall
issue a full Warrant Share in lieu of such fractional share.

        SECTION 8. Notices to the Warrant Holder. Upon any adjustment of the
Exercise Price and/or the number of Warrant Shares issuable upon exercise of the
Warrants pursuant to Section 6, the Company shall promptly thereafter cause to
be given to the Warrant holder, a certificate setting forth the Exercise Price
and/or the number of Warrant Shares issuable upon exercise of the Warrants after
such adjustment and setting forth in reasonable detail the method of calculation
and the facts upon which such calculations are based. Where appropriate, such
notice to the Warrant holder may be given in advance and included as a part of
the notice required to be mailed under the other provisions of this Section 8.

        In case:

         8.1 the Company shall authorize the issuance to holders of shares of
Common Stock of rights, options or warrants to subscribe for or purchase shares
of Common Stock or of any other subscription rights or warrants; or

         8.2 the Company shall authorize the distribution to holders of shares
of Common Stock of evidences of its indebtedness or assets (other than cash
dividends or cash distributions payable out of consolidated earnings); or

         8.3 of any consolidation or merger to which the Company is a party and
for which approval of any stock-holders of the Company is required, or of the
conveyance or transfer of the properties and assets of the Company substantially
as an entirety, or of any reclassification or change of Common Stock issuable
upon exercise of the Warrants (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination), or a tender offer or exchange offer for shares of
Common Stock; or

         8.4 of the voluntary or involuntary dissolution, liquidation or winding
up of the Company; or

         8.5 the Company proposes to take any action which would require an
adjustment of the Exercise Price or the number of Warrant Shares issuable upon
exercise of the Warrants pursuant to Section 6; then the Company shall promptly
give to the registered holders of the Warrant Certificates at their respective
addresses appearing on the Warrant register by first-class mail, postage
prepaid, a written notice describing the specific details of such contemplated
action, including, without limitation (I) the date as of which the holders of
record of shares of Common Stock to be entitled to receive any such rights,
options, warrants or distribution are to be determined, or (ii) the initial
expiration date set forth in any tender offer or exchange offer for shares of
Common Stock, or (iii) the date on which any such consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up is expected to
become effective or consummated, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange such
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up.

        SECTION 9. Notices. Any notice, request, instruction or other document
to be given hereunder shall be in writing, shall be deemed to have been duly
given or delivered when delivered personally or telecopied (receipt confirmed,
with a copy sent by certified or registered mail as set forth herein) or sent by
certified or registered mail, postage prepaid, return receipt requested, or by
Federal Express or other reputable overnight delivery service, to the address of
the party set forth below or to such address as the party to whom notice is to
be given may provide in a written notice to the Company, a copy of which written
notice shall be on file with the Secretary of the Company:

                      To the Company:

                      Cinema Ride, Inc.
                      12001 Ventura Place, Suite 340
                      Studio City, California 91604
                      Attention:  President

                      To the Registered Holder:

                      At the address of such Registered Holder on the register
                      maintained pursuant to Section 1 hereof.

         SECTION 10. Amendments. This Warrant Certificate may only be amended or
modified by a written instrument executed by the Company and the
registered holders of 100% of the issued and outstanding Warrants.

         SECTION 11. Governing Law. This Warrant Certificate shall be governed
by and construed under the laws of the State of California, without reference to
choice or conflict of laws principles.

         SECTION 12. No Cashless Exercise. There shall be no cashless exercise
of this Warrant.

<PAGE>

        IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed and delivered by its Secretary.

Dated:                                 CINEMA RIDE, INC., a Delaware corporation

                                    By:-----------------------------------------
                                       Mitch Francis
                                       President

<PAGE>

                                CINEMA RIDE, INC.

                                  PURCHASE FORM

Number of Warrants exercised _______________

         The undersigned hereby irrevocably elects to exercise the right
represented by this Warrant Certificate to purchase________________ shares of
Common Stock and herewith tenders in payment for such shares $______________ in
cash in accordance with the terms hereof. The undersigned requests that a
certificate representing such shares be registered and delivered as follows:

Name:
                      -------------------------------------------

Address:
                      -------------------------------------------

Delivery Address:
                      -------------------------------------------
(if different)
                      -------------------------------------------

<PAGE>

                                   ASSIGNMENT

                 (To be signed only upon assignment of Warrant)
                 ----------------------------------------------

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

------------------------------------------------------------

------------------------------------------------------------
(Name and Address of Assignee Must be Printed or Typewritten)

                                 --------/--------/---------

                         (Insert Social Security No. or
                      other identifying number of Assignee)

the within Warrant, hereby irrevocably constituting and appointing
______________ attorney to transfer said Warrant on the books of the Company
with full power of substitution in the premises.

        DATED: _______________, ____             ______________________________
                                                 Signature of Registered Holder

Signature Guaranteed:                            NOTE: The above  signature must
                                                 correspond with  the  name as
                                                 written  on the face of this
                                                 Warrant Certificate.

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