Document:

Exhibit 10.3

 

COGENT
COMMUNICATIONS GROUP, INC.

 

SIXTH AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT

 

 

September 15, 2004

 

To each of the several
holders of Series F Preferred Stock (the “Series F Purchasers”), each
sub-series of Series G Preferred Stock (collectively, the “Series G
Purchasers”), Series I Preferred Stock (the “Series I Purchasers”),
Series J Preferred Stock (the “Series J Purchasers”), Series K Preferred
Stock (the “Series K Purchasers”), and Series L Preferred Stock (the “Series
L Purchasers”) collectively, the Series F, G, I, J, K, and L Purchasers
shall be known as the “Purchasers”):

 

Dear Sirs:

 

This will confirm that
the Company covenants and agrees with each of you as follows:

 

1.             Certain
Definitions.  As used in this
Agreement, the following terms shall have the following respective meanings:

 

“Commission”
shall mean the Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.

 

“Common Stock”
shall mean the Common Stock, par value $.001 per share, of the Company, as
constituted as of the date of this Agreement.

 

“Company”
shall mean Cogent Communications Group, Inc.

 

“Conversion
Shares” shall mean shares of Common Stock issued or issuable upon
conversion of the Preferred Stock, and any shares of
capital stock received in respect thereof.

 

“Exchange Act”
shall mean the Securities Exchange Act of 1934 or any similar federal statute,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time.

 

“Preferred
Stock” shall mean the Series F Preferred Stock, the Series G Preferred
Stock, the Series I Preferred Stock, the Series J Preferred Stock and the
Series K Preferred Stock.

 

“Registration
Expenses” shall mean the expenses so described in Section 8.

 

“Restricted
Stock” shall mean (i) the Conversion Shares, excluding Conversion Shares
which have been (a) registered under the Securities Act pursuant to an

 

 

effective
registration statement filed thereunder and disposed of in accordance with the
registration statement covering them or (b) publicly sold pursuant to
Rule 144 under the Securities Act, and (ii) any shares of Common Stock
issued or distributed in respect of the securities described in clause (i).

 

“Securities Act”
shall mean the Securities Act of 1933 or any similar federal statute, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.

 

“Selling
Expenses” shall mean the expenses so described in Section 8.

 

“Series F
Preferred Stock” shall mean the Series F Participating Convertible
Preferred Stock, par value $.001 per share, of the Company, constituted as of
July 31, 2003.

 

“Series G
Preferred Stock” shall mean the Series G Participating Convertible
Preferred Stock of the Company, constituted as of July 31, 2003.

 

“Series I
Preferred Stock” shall mean the Series I Participating Convertible
Preferred Stock of the Company, constituted as of January 5, 2004.

 

“Series J
Preferred Stock” shall mean the Series J Participating Convertible
Preferred Stock of the Company, constituted as of March 30, 2004.

 

“Series K
Preferred Stock” shall mean the Series K Participating Convertible
Preferred Stock of the Company constituted as of August 12, 2004.

 

“Series L
Preferred Stock” shall mean the Series L Participating Convertible
Preferred Stock of the Company, issued as of the date of this Agreement.

 

2.             Restrictive
Legend.  Each certificate
representing Preferred Stock, Conversion Shares or Restricted Stock shall,
except as otherwise provided in this Section 2 or
in Section 3, be stamped or otherwise imprinted with a legend
substantially in the following form:

 

“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.”

 

A certificate shall not bear such legend if in the
opinion of counsel reasonably satisfactory to the Company the securities being
sold thereby may be publicly sold without registration

 

 

under the Securities Act.

 

3.             Notice
of Proposed Transfer.  Prior to any
proposed transfer of any Preferred Stock, Conversion Shares or Restricted Stock
(other than under the circumstances described in Sections 4, 5 or 6), the
holder thereof shall give written notice to the Company of its intention to
effect such transfer.  Each such notice
shall describe the manner of the proposed transfer and, if requested by the
Company, shall be accompanied by an opinion of counsel reasonably satisfactory
to the Company to the effect that the proposed transfer may be effected without
registration under the Securities Act, whereupon the holder of such stock shall
be entitled to transfer such stock in accordance with the terms of its notice; provided,
however, that no such opinion of counsel shall be required for a
transfer to one or more partners of the transferor (in the case of a transferor
that is a partnership), to one or more members of the transferor (in the case
of a transferor that is a limited liability company) or to an affiliated
corporation (in the case of a transferor that is a corporation);  provided, further, however,
that any transferee other than a partner, member or affiliate of the transferor
shall execute and deliver to the Company a representation letter in form
reasonably satisfactory to the Company’s counsel to the effect that the
transferee is acquiring Restricted Stock for its own account, for investment
purposes and without any view to distribution thereof.  Each certificate for Preferred Stock or
Conversion Shares transferred as above provided shall bear the legend set forth
in Section 2, except that such certificate shall not bear such legend if
(i) such transfer is in accordance with the provisions of Rule 144
(or any other rule permitting public sale without registration under the
Securities Act) or (ii) the opinion of counsel referred to above is to the
further effect that the transferee and any subsequent transferee (other than an
affiliate of the Company) would be entitled to transfer such securities in a
public sale without registration under the Securities Act.  The restrictions provided for in this
Section 3 shall not apply to securities which are not required to bear the
legend prescribed by Section 2 in accordance with the provisions of that
Section.

 

4.             Required
Registration.

 

(a)           Subject to
Section 13(f) of this Agreement, at any time after the earlier of (i) July 31,
2006 and (ii) the date that is six (6) months after the first public offering
after the date hereof of securities by the Company, holders of Restricted Stock
constituting more than 50% of the total number of shares of Restricted Stock
then outstanding may request the Company to register under the Securities Act
all or any portion of the shares of Restricted Stock held by such requesting
holder or holders for sale in the manner specified in such notice.  For purposes of this Section 4 and
Sections 5, 6, 13(a) and 13(d), the term “Restricted Stock” shall be
deemed to include the number of shares of Restricted Stock which would be
issuable to a holder of Preferred Stock upon conversion of all shares of
Preferred Stock held by such holder at such time; provided, however,
that the only securities which the Company shall be required to register
pursuant hereto shall be shares of Common Stock; provided, further,
however, that, in any underwritten public offering contemplated by this
Section 4 or Sections 5 and 6, the holders of Preferred Stock shall
be entitled to sell such Preferred Stock to the underwriters for conversion and
sale of the shares of Common Stock issued upon conversion thereof and holders
of a majority of the Preferred Stock being so registered shall have the right
to approve the managing underwriter(s) selected by the

 

 

Company in connection with such underwritten public
offering. 
Notwithstanding anything to the contrary contained herein, the Company
shall not be obligated to effect a registration (i) during the 180 day
period commencing with the effective date of a registration statement filed by
the Company covering the first firm commitment underwritten public offering
after the date hereof or (ii) if the Company delivers notice to the holders of
the Restricted Stock within thirty (30) days of any registration request of the
Company’s intent to file a registration statement for an underwritten public
offering within ninety (90) days.

 

(b)           Following
receipt of any notice under this Section 4, the Company shall immediately
notify all holders of Restricted Stock and Preferred Stock from whom notice has
not been received and such holders shall then be entitled within 30 days
thereafter to request the Company to include in the requested registration all
or any portion of their shares of Restricted Stock.  The Company shall use its best efforts to
register under the Securities Act, for public sale in accordance with the
method of disposition described in paragraph (a) above, the number of shares of
Restricted Stock specified in such notice (and in all notices received by the
Company from other holders within 30 days after the giving of such notice
by the Company).  The Company shall be
obligated to register Restricted Stock pursuant to this Section 4 on three
occasions only; provided, however, that such obligation shall be
deemed satisfied only when a registration statement covering all shares of
Restricted Stock specified in notices received as aforesaid for sale in
accordance with the method of disposition specified by the requesting holders
shall have become effective and, if such method of disposition is a firm
commitment underwritten public offering, all such shares shall have been sold
pursuant thereto.

 

(c)           The
Company (or at the option of the Company, the holders of Common Stock) shall be
entitled to include in any registration statement referred to in this
Section 4, for sale in accordance with the method of disposition specified
by the requesting holders, shares of Common Stock to be sold by the Company or
such other holders for its own account, except as and to the extent that, in
the opinion of the managing underwriter (if such method of disposition shall be
an underwritten public offering), such inclusion would adversely affect the
marketing of the Restricted Stock to be sold. 
Subject to Section 4(a) and except for registration statements on
Form S-4, S-8 or any successor thereto, the Company will not file with the
Commission any other registration statement with respect to its Common Stock,
whether for its own account or that of other stockholders, from the date of
receipt of a notice from requesting holders pursuant to this Section 4 until
the completion of the period of distribution of the registration contemplated
thereby.

 

(d)           If, in the
opinion of the managing underwriter, the inclusion of all of the Restricted
Stock requested to be registered under this Section would adversely affect the
marketing of such shares, the Company shall only include the number of shares
that, in the reasonable opinion of such underwriter, can be sold without having
an adverse effect on the marketing of such shares, to be allocated to each
stockholder of the Company on a pro rata basis
based on the total number of shares held by such holder and requested to be
included in the registration; provided, however, that the number
of shares of Restricted Stock to be included in such underwriting and
registration shall not be reduced unless all other securities of the Company
are first excluded from the underwriting and registration.

 

 

5.             Incidental
Registration.  Subject to Section
13(f) of this Agreement, if the Company at any time (other than pursuant to
Section 4 or Section 6) proposes to register any of its securities
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Forms S-4, S-8 or another form not available
for registering the Restricted Stock for sale to the public), each such time it
will give written notice to all holders of outstanding Restricted Stock of its
intention so to do.  Upon the written
request of any such holder, received by the Company within 30 days after
the giving of any such notice by the Company, to register any of its Restricted
Stock, the Company will use its best efforts to cause the Restricted Stock as
to which registration shall have been so requested to be included in the
securities to be covered by the registration statement proposed to be filed by
the Company, all to the extent requisite to permit the sale or other
disposition by the holder (in accordance with its written request) of such
Restricted Stock so registered.  In the
event that any registration pursuant to this Section 5 shall be, in whole
or in part, an underwritten public offering of Common Stock, if the managing
underwriter determines in good faith that marketing factors require a
limitation of the number of shares to be underwritten, the number of shares
that may be included in the underwriting shall be allocated, first, to the
Company; second, to the holders of Restricted Stock invoking the rights under
this Section 5 on a pro rata basis
based on the total number of shares of Restricted Stock held by such holders;
and third, to any stockholder of the Company (other than such holders) on a pro rata basis.  No
such reduction shall reduce the amount of securities of the selling holders
included in the registration below thirty percent (30%) of the total amount of
securities included in such registration. 
In no event will shares of any other selling stockholder be included in
such registration that would reduce the number of shares which may be included
by holders of Restricted Stock without the written consent of the holders of
not less than sixty-six and two-thirds percent (66 2/3%) of the Restricted
Stock proposed to be sold in the offering. 
If any such holder disapproves of the terms of any such underwriting,
such holder may elect to withdraw therefrom by written notice to the Company
and the underwriter, delivered at least ten (10) business days prior to the
effective date of the registration statement. 
Any shares of Restricted Stock excluded or withdrawn from such
underwriting shall be excluded and withdrawn from the registration.  For any holder which is a partnership or
corporation, the partners, retired partners and stockholders of such holder, or
the estates and family members of any such partners and retired partners and
any trusts for the benefit of any of the foregoing person shall be deemed to be
a single holder, and any pro rata
reduction with respect to such holder shall be based upon the aggregate amount
of shares carrying registration rights owned by all entities and individuals
included in such holder, as defined in this sentence.  Notwithstanding the foregoing provisions, the
Company may withdraw any registration statement referred to in this
Section 5 without thereby incurring any liability to the holders of
Restricted Stock.

 

6.             Registration
on Form S-3.  Subject to Section
13(f) of this Agreement, if at any time (i) a holder or holders of
Restricted Stock then outstanding request that the Company file a registration
statement on Form S-3 or any successor thereto for a public offering of
all or any portion of the shares of Restricted Stock held by such requesting
holder or holders, and (ii) the Company is a registrant entitled to use
Form S-3 or any successor

 

 

thereto to register such shares, then the Company
shall use its best efforts to register under the Securities Act on Form S-3
or any successor thereto for public sale in accordance with the method of
disposition specified in such notice, the number of shares of Restricted Stock
specified in such notice.  Whenever the
Company is required by this Section 6 to use its best efforts to effect
the registration of Restricted Stock, each of the procedures and requirements
of Section 4 (including but not limited to the requirement that the
Company notify all holders of Restricted Stock from whom notice has not been
received and provide them with the opportunity to participate in the offering)
shall apply to such registration; provided, however, that there
shall be no limitation on the number of registrations on Form S-3 which
may be requested and obtained under this Section 6 and registrations
effected pursuant to this Section 6 shall not be counted as demands for
registration or registrations effected pursuant to Sections 4 or 5,
respectively.

 

(b)           Notwithstanding
anything to the contrary set forth in this Agreement, the Company’s obligation
under this Agreement to register Restricted Stock under the Securities Act on
registration statements (“Registration Statements”) may, upon the
reasonable determination of the Board of Directors made not more than twice in
the aggregate (and not more than once with respect to a Registration Statement
on Form S-1 and not more than once with respect to a Registration
Statement on Form S-3 and including any delay pursuant to the last
sentence of Section 4(a)) during any 12-month period, be suspended in the event
and during such period as unforeseen circumstances (including without
limitation (i) an underwritten primary offering by the Company (which
includes no secondary offering) if the Company is advised in writing by its
underwriters that the registration of the Restricted Stock would have a
material adverse effect on the Company’s offering, or (ii) pending
negotiations relating to, or consummation of, a transaction or the occurrence
of an event which would require additional disclosure of material information
by the Company in Registration Statements or such other filings, as to which
the Company has a bona fide business purpose for preserving confidentiality or
which renders the Company unable to comply with the Commission’s requirements)
exist (such unforeseen circumstances being hereinafter referred to as a “Suspension
Event”) which would make it impractical or unadvisable for the Company to
file the Registration Statements or such other filings or to cause such to
become effective.  Such suspension shall
continue only for so long as such event is continuing but in no event for a
period longer than (i) one hundred and twenty (120) days, in the case of a
Registration Statement on Form S-1 (or any successor thereto) or (ii) ninety
(90) days, in the case of a Registration Statement on Form S-3 (or any
successor thereto).  The Company shall
notify the Purchasers of the existence and nature of any Suspension Event.

 

7.             Registration
Procedures.  If and whenever the
Company is required by the provisions of Sections 4, 5 or 6 to use its
best efforts to effect the registration of any shares
of Restricted Stock under the Securities Act, the Company will, as
expeditiously as possible:

 

(a)           prepare
and file with the Commission a registration statement (which, in the case of an
underwritten public offering pursuant to Section 4, shall be on Form S-1
or other form of general applicability satisfactory to the managing underwriter
selected as therein provided) with respect to such securities and use its best efforts
to cause such

 

 

registration statement to become
and remain effective for the period of the distribution contemplated thereby
(determined as hereinafter provided);

 

(b)           prepare
and file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary
to keep such registration statement effective for the period specified in
paragraph (a) above and comply with the provisions of the Securities Act
with respect to the disposition of all Restricted Stock covered by such
registration statement in accordance with the sellers’ intended method of
disposition set forth in such registration statement for such period;

 

(c)           furnish to
each seller of Restricted Stock and to each underwriter such number of copies
of the registration statement and each such amendment and supplement thereto
(in each case including all exhibits) and the prospectus included therein
(including each preliminary prospectus) as such persons reasonably may request
in order to facilitate the public sale or other disposition of the Restricted
Stock covered by such registration statement;

 

(d)           use its
best efforts to register or qualify the Restricted Stock covered by such
registration statement under the securities or “blue sky” laws of such
jurisdictions as the sellers of Restricted Stock or, in the case of an
underwritten public offering, the managing underwriter reasonably shall
request; provided, however, that the Company shall not for any
such purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent to
general service of process in any such jurisdiction;

 

(e)           use its best efforts to list the Restricted Stock covered by
such registration statement with any securities exchange on which the Common
Stock of the Company is then listed;

 

(f)            immediately
notify each seller of Restricted Stock and each underwriter under such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event of which the Company has knowledge as a result of which the prospectus
contained in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and promptly prepare and furnish to
such seller a reasonable number of copies of a prospectus supplemented or
amended so that, as thereafter delivered to the purchasers of such Restricted
Stock, such prospectus shall not include 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 not misleading in light of the circumstances then
existing;

 

(g)           if the offering is underwritten and at the request of any
seller of Restricted Stock, use its best efforts to furnish on the date that Restricted
Stock is delivered to the underwriters for sale pursuant to such
registration:  (i) an opinion dated
such date of

 

 

counsel representing the Company for the purposes of
such registration, addressed to the underwriters and to such seller, to such
effect as reasonably may be requested by counsel for the underwriters, and
(ii) a letter dated such date from the independent public accountants
retained by the Company, addressed to the underwriters and to such seller,
stating that they are independent public accountants within the meaning of the
Securities Act and that, in the opinion of such accountants, the financial
statements of the Company included in the registration statement or the
prospectus, or any amendment or supplement thereof, comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act, and such letter shall additionally cover such other financial matters
(including information as to the period ending no more than five business days
prior to the date of such letter) with respect to such registration as such
underwriters reasonably may request;

 

(h)           make
available for inspection by each seller of Restricted Stock, any underwriter
participating in any distribution pursuant to such registration statement, and
any attorney, accountant or other agent retained by such seller or underwriter,
reasonable access to all financial and other records, pertinent corporate
documents and properties of the Company, as such parties may reasonably
request, and cause the Company’s officers, directors and employees to supply
all information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;

 

(i)            cooperate
with the selling holders of Restricted Stock and the managing underwriters, if
any, to facilitate the timely preparation and delivery of certificates
representing Restricted Stock to be sold, such certificates to be in such
denominations and registered in such names as such holders or the managing
underwriters may request at least two business days prior to any sale of
Restricted Stock; and

 

(j)            permit
any holder of Restricted Stock which holder, in the sole and exclusive
judgment, exercised in good faith, of such holder, might be deemed to be a
controlling person of the Company, to participate in good faith in the
preparation of such registration or comparable statement and to require the
insertion therein of material, furnished to the Company in writing, which in
the reasonable judgment of such holder and its counsel should be included and
to permit any other holder of Restricted Stock participating in the
registration to review such registration or comparable statement during its
preparation.

 

For purposes of Section 7(a) and 7(b) and of
Section 4(c), the period of distribution of Restricted Stock in a firm
commitment underwritten public offering shall be deemed to extend until each
underwriter has completed the distribution of all securities purchased by it,
and the period of distribution of Restricted Stock in any other registration
shall be deemed to extend until the earlier of the sale of all Restricted Stock
covered thereby and 180 days after the effective date thereof.

 

In connection with each registration hereunder, the
sellers of Restricted Stock will furnish to the Company in writing such
information requested by the Company with respect to themselves and the
proposed distribution by them as reasonably shall be necessary in order to
assure compliance with federal and applicable state securities laws and to make
the registration statement correct, accurate and complete in all respects with
respect to such

 

 

sellers; provided,
however, that this requirement shall not be
deemed to limit any disclosure obligation arising out of any seller’s
relationship to the Company if one of such seller’s agents or affiliates is an
officer, director or control person of the Company.  In addition, the sellers shall, if requested
by the Company, execute such other agreements, which are reasonably satisfactory
to them and which shall contain such provisions as may be customary and
reasonable in order to accomplish the registration of the Restricted Stock.

 

In connection with each registration pursuant to
Sections 4, 5 or 6 covering an underwritten public offering, the Company
and each seller agree to enter into a written agreement with the managing
underwriter selected in the manner herein provided in such form and containing
such provisions as are customary in the securities business for such an arrangement
between such underwriter and companies of the Company’s size and investment
stature.

 

8.             Expenses.  All expenses incurred by the Company in
complying with Sections 4, 5 and 6, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
(including counsel fees) incurred in connection with complying with state
securities or “blue sky” laws, fees and expenses of one counsel for the selling
holders of Restricted Stock in connection with the registration of Restricted
Stock, fees of the National Association of Securities Dealers, Inc., transfer
taxes, fees of transfer agents and registrars, costs of any insurance which
might be obtained, but excluding any Selling Expenses, are called “Registration
Expenses.”  All underwriting
discounts and selling commissions applicable to the sale of Restricted Stock
and the fees and expenses of more than one counsel for the selling holders of
Restricted Stock in connection with the registration of Restricted Stock are
called “Selling Expenses.”

 

The Company will pay all Registration Expenses
incurred in connection with each of the first five Registration Statements
filed pursuant to Sections 4, 5 or 6. 
All Selling Expenses incurred in connection with each of the first five
Registration Statements filed pursuant to Sections 4, 5 or 6, and all
Selling Expenses and Registration Expenses incurred in connection with each
Registration Statement filed pursuant to Sections 4, 5 or 6 thereafter, shall
be borne by the participating sellers in proportion to the number of shares
sold by each, or by such participating sellers other than the Company (except
to the extent the Company shall be a seller) as they may agree.

 

9.             Indemnification.

 

(a)           To
the extent permitted by law, in the event of a registration of any of the
Restricted Stock under the Securities Act pursuant to Sections 4, 5 or 6,
the Company will indemnify and hold harmless each holder of Restricted Stock,
its partners, members, officers and directors, each underwriter of such
Restricted Stock thereunder and each other person, if any, who controls such
seller or underwriter within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which such holder,
officer, director, underwriter or controlling person may become subject under
the Securities Act, Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or

 

 

actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Restricted Stock was registered under the Securities Act
pursuant to Sections 4, 5 or 6, any preliminary prospectus (but only to
the extent not corrected in the final prospectus) or final prospectus contained
therein, or any amendment or supplement thereof, (ii) any blue sky application
or other document executed by the Company specifically for that purpose or
based upon written information furnished by the Company filed in any state or
other jurisdiction in order to qualify any or all of the Restricted Stock under
the securities laws thereof (any such application, document or information
herein called a “Blue Sky Application”), (iii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (iv) any violation by
the Company or its agents of any rule or regulation promulgated under the
Securities Act or Exchange Act applicable to the Company or its agents and
relating to action or inaction required of the Company in connection with such
registration, or (v) any failure to register or qualify the Restricted Stock in
any state where the Company or its agents has affirmatively undertaken or
agreed in writing that the Company (the undertaking of any underwriter chosen
by the Company being attributed to the Company) will undertake such registration
or qualification on the seller’s behalf (provided that in such instance the
Company shall not be so liable if it has undertaken its best efforts to so
register or qualify the Restricted Stock) and will reimburse each such holder,
and such partner, member, officer and director, each such underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by any such seller, any such
underwriter or any such controlling person in writing specifically for use in
such registration statement, prospectus or Blue Sky Application.

 

(b)           To the
extent permitted by law, in the event of a registration of any of the
Restricted Stock under the Securities Act pursuant to Sections 4, 5 or 6,
each seller of such Restricted Stock thereunder, severally and not jointly,
will indemnify and hold harmless the Company, each person, if any, who controls
the Company within the meaning of the Securities Act, each officer of the
Company who signs the registration statement, each director of the Company,
each other holder of Restricted Stock, each underwriter and each person who controls
any underwriter within the meaning of the Securities Act, against all losses,
claims, damages or liabilities, joint or several, to which the Company or such
officer, director, other seller, underwriter or controlling person may become
subject under the Securities Act, Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in the registration statement under which such
Restricted Stock was registered under the Securities Act pursuant to
Sections 4, 5 or 6, any preliminary prospectus (but only to the extent not
corrected in the final prospectus) or final prospectus contained therein, or any
amendment or supplement thereof, or any Blue Sky Application or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements

 

 

therein not misleading, and will reimburse the Company
and each such officer, director, other seller, underwriter and controlling
person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage, liability
or action; provided, however, that such seller will be liable
hereunder in any such case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such,
furnished in writing to the Company by such seller specifically for use in such
registration statement, prospectus or Blue Sky Application; and provided,
further, however, that the liability of each seller hereunder
shall be limited to the proportion of any such loss, claim, damage, liability
or expense which is equal to the proportion that the public offering price of
the shares sold by such seller under such registration statement bears to the
total public offering price of all securities sold thereunder, but not in any
event to exceed the net proceeds received by such seller from the sale of
Restricted Stock covered by such registration statement.

 

(c)           Promptly
after receipt by an indemnified party hereunder of notice of the commencement
of any action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party hereunder, notify the indemnifying party
in writing thereof, but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to such indemnified party
other than under this Section 9 and shall only relieve it from any
liability which it may have to such indemnified party under this Section 9
if and to the extent the indemnifying party is prejudiced by such
omission.  In case any such action shall
be brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel satisfactory to such indemnified party, and, after
notice from the indemnifying party to such indemnified party of its election so
to assume and undertake the defense thereof, the indemnifying party shall not
be liable to such indemnified party under this Section 9 for any legal
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation and of liaison
with counsel so selected; provided, however, that, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that the interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party, the indemnified party
shall have the right to select a separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as incurred. No
indemnifying party, in the defense of any such claim or litigation shall,
except with the consent of each indemnified party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation, and no indemnified party shall consent to entry of any judgment or
settle such claim or litigation without the prior written consent of the
indemnifying party, which consent shall not be unreasonably withheld.

 

(d)           If the
indemnification provided for in this Section 9 is held by a court

 

 

of competent jurisdiction to be unavailable to an
indemnified party with respect to any losses, claims, damages or liabilities
referred to herein, the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall to the extent permitted by applicable law
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability in such proportion as is appropriate
to reflect the relative fault of the indemnifying party on the one hand and of
the indemnified party on the other in connection with the violation that
resulted in such loss, claim, damage or liability, as well as any other
relevant equitable considerations.  The
relative fault of the indemnifying party and of the indemnified party shall be
determined by a court of law by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the indemnifying party or by the indemnified party and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission; provided, however, that in no event
shall any contribution by a holder of Restricted Stock hereunder, when combined
with amounts paid or payable pursuant to Section 9(b), exceed the net proceeds
from the offering received by such holder.

 

(e)           The
obligations of the Company and holders of Restricted Stock under this
Section 9 shall survive completion of any offering of Restricted Stock by
a registration statement and the termination of this Agreement.

 

10.           Changes
in Common Stock, Series F Preferred Stock, Series G Preferred Stock, Series I Preferred Stock, Series J Preferred Stock, Series K
Preferred Stock, or Series L Preferred Stock.  If, and as often as, there is any change in
the Common Stock, Series F Preferred Stock, Series G Preferred Stock, Series I
Preferred Stock, Series J Preferred Stock, Series K Preferred Stock, or Series
L Preferred Stock by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made
in the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Common Stock, Series F Preferred Stock, Series G Preferred
Stock, Series I Preferred Stock, Series J Preferred Stock, Series K Preferred
Stock, or Series L Preferred Stock as so changed.

 

11.           Rule
144 Reporting.  With a view to making
available the benefits of certain rules and regulations of the Commission which
may at any time permit the sale of the Restricted Stock to the public without
registration, at all times after any registration statement covering a public
offering of securities of the Company under the Securities Act shall have
become effective, the Company agrees to:

 

(a)           make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;

 

(b)           use its
best efforts to file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and

 

 

(c)           furnish to
each holder of Restricted Stock forthwith upon request a written statement by
the Company as to its compliance with the reporting requirements of such
Rule 144 and of the Securities Act and the Exchange Act, a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents so filed by the Company as such holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing such
holder to sell any Restricted Stock without registration.

 

12.           Representations
and Warranties of the Company.  The
Company represents and warrants to you as follows:

 

(a)           The
execution, delivery and performance of this Agreement by the Company have been
duly authorized by all requisite corporate action and will not violate any
provision of law, any order of any court or other agency of government, the
articles of organization or By-laws of the Company or any provision of any
indenture, agreement or other instrument to which it or any or its properties
or assets is bound, conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any such indenture,
agreement or other instrument or result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of the properties
or assets of the Company.

 

(b)           This
Agreement has been duly executed and delivered by the Company and constitutes
the legal, valid and binding obligation of the Company, enforceable in
accordance with its terms.

 

13.           Miscellaneous.

 

(a)           All
covenants and agreements contained in this Agreement by or on behalf of any of
the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto (including without limitation
transferees of any Preferred Stock or Restricted Stock), whether so expressed
or not; provided, however, that registration rights conferred
herein on the holders of Preferred Stock or Restricted Stock shall only inure
to the benefit of a transferee of Preferred Stock or Restricted Stock if
(i) there is transferred to such transferee at least twenty five percent
(25%) of the shares of Restricted Stock (appropriately adjusted for any
subdivision or combination) originally issued to a Purchaser, (ii) such
transferee is a member, former member, partner, retired partner, family member
or trust for the benefit of any individual holder, stockholder or affiliate of
a party hereto or (iii) such transferee acquires at least 2,500,000 shares
(appropriately adjusted for any subdivision or combination) of Preferred Stock
on an as converted to shares of Common Stock basis; provided, further,
however, that the Company is given written notice thereof.

 

(b)           All
notices, requests, consents and other communications hereunder shall be in
writing and shall be mailed by certified or registered mail, return receipt
requested, postage prepaid, or by recognized overnight delivery service of
international reputation or, in the case of non-U.S. residents, telexed or sent
by recognized overnight delivery service of international reputation or,
addressed as follows:

 

 

If to the Company,
to:

 

Cogent
Communications Group, Inc.

1015 31st Street,
N.W.

Washington, DC
20007,

Attention:  Robert Beury

 

with
copies to:

 

Latham &
Watkins, LLP

555 Eleventh St.,
N.W., Suite 1000

Washington, D.C.
20004

Attention: David
McPherson

 

If to any other
party hereto, to their respective addresses set forth on Schedule I hereto;

 

If to any subsequent holder of Preferred Stock or
Restricted Stock, to it at such address as may have been furnished to the
Company in writing by such holder;

 

or, in any case, at such other address or addresses as
shall have been furnished in writing to the Company (in the case of a holder of
Preferred Stock or Restricted Stock) or to the holders of Preferred Stock or
Restricted Stock (in the case of the Company) in accordance with the provisions
of this paragraph.

 

(c)           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.

 

(d)           This
Agreement may not be amended or modified, and no provision hereof may be
waived, without the written consent of the Company and the holders of at least
two-thirds of the outstanding shares of Restricted Stock.  Notwithstanding the foregoing, no such
amendment or modification shall be effective if and to the extent that such
amendment or modification either (a) creates any additional affirmative
obligations to be complied with by any or all of the Purchasers or (b) grants
to any one or more Purchasers any rights more favorable than any rights granted
to all other Purchasers or otherwise treats any one or more Purchasers
differently than all other Purchasers.

 

(e)           This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

 

(f)             If
requested in writing by the underwriters for the first underwritten public
offering of securities of the Company after the date hereof, each holder of
Restricted Stock who is a party to this Agreement shall agree not to sell
publicly any shares of

 

 

Restricted Stock or any other shares of Common Stock
(other than shares of Restricted Stock or other shares of Common Stock being
registered in such offering or any shares purchased in the open market after
the Company’s public offering), without the consent of such underwriters, for a
period of not more than 180 days following the consummation of such public
offering; provided, however, that all holders of at least one
percent (1%) of the then outstanding Common Stock and all officers and
directors of the Company shall also have agreed not to sell publicly their
Common Stock under the circumstances and pursuant to the terms set forth in
this Section 13(f).

 

(g)           If any
provision of this Agreement shall be held to be illegal, invalid or
unenforceable, such illegality, invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render illegal,
invalid or unenforceable any other provision of this Agreement, and this
Agreement shall be carried out as if any such illegal, invalid or unenforceable
provision were not contained herein.

 

(h)           This
Agreement shall amend and restate in its entirety the Fifth Amended and
Restated Registration Rights Agreement, dated August 12, 2004, by and among the
Company and the other parties thereto (the “Prior Registration Rights
Agreement”), the parties hereto constitute the Company and the holders of
at least two-thirds of the outstanding shares of Restricted Stock (as defined
in the Prior Registration Rights Agreement) immediately prior to the execution
of this Agreement.

 

(i)            After the date of this Agreement, the Company shall
not, without the prior written consent of the holders of at least two-thirds of
the Restricted Stock then outstanding, enter into any agreement with any holder
or prospective holder of any securities of the Company that would grant such
holder registration rights pari passu
or senior to those granted to the holders hereunder, other than a registration
related to stock issued upon conversion of debt securities assumed by the
Company in connection with its acquisition of Allied Riser Communications
Corporation.

 

(j)            All
registration rights granted under Sections 4, 5, and 6 shall terminate and be
of no further force and effect upon the earlier of (i) three (3) years after
the date the Company first effects a registration pursuant to Section 4 or (ii)
five (5) years from the date hereof.  In
addition, the registration rights of a holder of Restricted Stock shall expire
if all Restricted Stock held by and issuable to such holder (and its affiliates)
may be sold under Rule 144 during any ninety (90) day period.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

Please indicate
your acceptance of the foregoing by signing and returning the enclosed
counterpart of this letter, whereupon this Agreement shall be a binding
agreement between the Company and you.

 

Please indicate your
acceptance of the foregoing by signing and returning the enclosed counterpart
of this letter, whereupon this Agreement shall be a binding agreement between
the Company and you.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COGENT COMMUNICATIONS
  GROUP,

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/David Schaeffer

  	
   

  
	
   

  	
  By:
  David Schaeffer

  
	
   

  	
  Its:
  Chief Executive Officer

  

 

 

[Signature Page to Sixth Amended
and Restated Registration Rights Agreement]

 

 

	
   

  	
  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 Sixth Amended
and Restated Registration Rights Agreement]

 

 

	
   

  	
  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: Erel Margalit

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JERUSALEM VENTURE
  PARTNERS III

  
	
   

  	
  (ISRAEL), L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Jerusalem Venture
  Partners III (Israel) Management

  Company Ltd., its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Erel Margalit

  	
   

  
	
   

  	
  Name: Erel Margalit

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  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: Erel Margalit

  
					

 

 

[Signature Page to Sixth Amended
and Restated Registration Rights Agreement]

 

 

	
   

  	
  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: Erel Margalit

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  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: Erel Margalit

  
	
   

  	
   

  
	
   

  	
  JERUSALEM VENTURE PARTNERS IV-A, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Jerusalem Venture
  Partners IV, L.P., its General

  
	
   

  	
   

  	
  Partner

  
	
   

  	
  By:

  	
  JVP Corp IV, its
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Erel Margalit

  	
   

  
	
   

  	
  Name: Erel Margalit

  
					

 

 

[Signature Page to Sixth Amended
and Restated Registration Rights Agreement]

 

 

	
   

  	
  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:

  	
  /s/James Wei

  	
   

  
	
   

  	
  Name: 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:

  	
  /s/James Wei

  	
   

  
	
   

  	
  Name: James Wei

  
					

 

 

[Signature Page to Sixth Amended
and Restated Registration Rights Agreement]

 

 

	
   

  	
  BCP CAPITAL, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BCP General LLC, its
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Steven D. Brooks

  	
   

  
	
   

  	
  Name:

  	
  Steven D. Brooks

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
  BCP CAPITAL QPF, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BCP General LLC, its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Steven D. Brooks

  	
   

  
	
   

  	
  Name:

  	
  Steven D. Brooks

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
  BCP AFFILIATES FUND LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BCP Capital Management LLC, its Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Steven D. Brooks

  	
   

  
	
   

  	
  Name:

  	
  Steven D. Brooks

  
	
   

  	
  Title:

  	
  Managing Director

  
					

 

 

[Signature Page to Sixth Amended
and Restated Registration Rights Agreement]

 

 

	
   

  	
  BOULDER VENTURES IV, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Andrew E. Jones

  	
   

  
	
   

  	
  Name: Andrew E. Jones

  
	
   

  	
  Title: General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BOULDER VENTURES IV (ANNEX), L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Andrew E. Jones

  	
   

  
	
   

  	
  Name: Andrew E. Jones

  
	
   

  	
  Title: General Partner

  

 

 

[Signature Page to Sixth Amended
and Restated Registration Rights Agreement]

 

 

	
   

  	
  NAS PARTNERS I L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Nassau Capital LLC,

  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Randall A. Hack

  	
   

  
	
   

  	
  Name:

  	
  Randall A. Hack

  
	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NASSAU CAPITAL PARTNERS IV L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Nassau Capital LLC,

  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Randall A. Hack

  	
   

  
	
   

  	
  Name:

  	
  Randall A. Hack

  
	
   

  	
  Title:

  	
  Managing Member

  
					

 

 

[Signature Page to Sixth Amended
and Restated Registration Rights Agreement]

 

 

	
   

  	
  BNP EUROPE TELECOM & MEDIA FUND II, LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Shawna Morehouse  /s/Martin Wm. Laidlaw

  	
   

  
	
   

  	
  Name: Shawna Morehouse & Martin Laidlaw

  
	
   

  	
  Title: Authorized Signatories

  
	
   

  	
  By: General Business, Finance and
  Investment Ltd.,

  
	
   

  	
  its General Partner and By: Commerce
  Advisory

  Services Ltd, as Director and Partnership Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIO VIE DEVELOPPEMENT 3, FCPR

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Bernard d’Hotelans

  	
   

  
	
   

  	
  Name: Bernard d’Hotelans

  
	
   

  	
  Title: Directeur Associe

  
					

 

 

[Signature Page to Sixth Amended
and Restated Registration Rights Agreement]

 

 

	
   

  	
  By:

  	
  /s/David Schaeffer

  	
   

  
	
   

  	
  David Schaeffer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE SCHAEFFER DESCENDENTS TRUST

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Ruth Schaeffer

  	
   

  
	
   

  	
  Ruth Schaeffer

  

 

 

[Signature Page to Sixth Amended
and Restated Registration Rights Agreement]

 

 

	
   

  	
  UFO COMMUNICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Jay Ferguson

  	
   

  
	
   

  	
  Name: Jay Ferguson

  
	
   

  	
  Title: Chairman

  

 

 

[Signature Page to Sixth Amended
and Restated Registration Rights Agreement]

 

 

	
   

  	
  PALADIN CAPITAL PARTNERS FUND, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Paladin
  General Holdings, LLC

  
	
   

  	
   

  	
  Its
  General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Michael
  R. Steed

  	
   

  
	
   

  	
  Name:
  Michael R. Steed

  
	
   

  	
  Title:
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WORLDWIDE
  INVESTMENTS, LLC

  
	
   

  	
   

  
	
   

  	
  By:
  Worldwide Assets, Inc., its Sole Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Frank
  J. Hanna, Jr.

  	
   

  
	
   

  	
  Name:

  	
  Frank
  J. Hannah, Jr.

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  2001
  PENN. AVE. INVESTMENTS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Michael
  R. Steed

  	
   

  
	
   

  	
  Name:
  Michael R. Steed

  
	
   

  	
  Title:
  President

  
							

 

 

[Signature Page to Sixth Amended
and Restated Registration Rights Agreement]

 

 

	
   

  	
  KLINE HAWKES PACIFIC, L.P.

  
	
   

  	
   

  
	
   

  	
  By:  Kline
  Hawkes Pacific Advisors, LLC,

  
	
   

  	
  its General
  Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Jay Ferguson

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Jay Ferguson

  	
   

  
	
   

  	
  Title:

  	
  Member

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KLINE HAWKES PACIFIC
  FRIENDS FUND, LLC

  
	
   

  	
  By:  Kline
  Hawkes Pacific Advisors, LLC,

  
	
   

  	
  its Managing
  Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Jay Ferguson

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Jay Ferguson

  	
   

  
	
   

  	
  Title:

  	
  Member

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BROADMARK CAPITAL, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Joseph L. Schocken

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Joseph L. Schocken

  	
   

  
	
   

  	
  Title:

  	
    President

  	
   

  
												

 

 

[Signature Page to Sixth Amended
and Restated Registration Rights Agreement]

 

 

	
   

  	
  GLOBAL ACCESS TELECOMMUNICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/John E. Jones

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  John E. Jones

  	
   

  
	
   

  	
  Title:

  	
  Vice PresidentExhibit 10.1

 

RPMG

Renewable
Products Marketing Group

 

 

ETHANOL FUEL

MARKETING AGREEMENT

 

 

 

ETHANOL
FUEL MARKETING AGREEMENT

 

THIS AGREEMENT, entered into
this 25th day of August, 2004, by and between RENEWABLE PRODUCTS MARKETING
GROUP, LLC, a Minnesota limited liability company, hereinafter referred to as “RENEWABLE
PRODUCTS”; and UNITED WISCONSIN GRAIN PRODUCERS, LLC, a Wisconsin limited
liability company, hereinafter referred to as “UWGP.”

 

WITNESSETH:

 

WHEREAS, RENEWABLE
PRODUCTS is a Minnesota limited liability company formed for the purpose of
marketing ethanol for its members and others, and,

 

WHEREAS, UWGP is a Wisconsin
limited liability company formed for the purpose of constructing a plant in
Friesland, Wisconsin for the production of fuel grade ethanol, and,

 

WHEREAS, the parties
believe that it would be in their mutual best interests for RENEWABLE PRODUCTS
to market, sell and distribute all of the ethanol produced by UWGP at its plant
in Friesland, Wisconsin; and

 

WHEREAS, the parties
desire to enter into this Agreement, for purposes of setting out the terms and
conditions of the business arrangement;

 

NOW, THEREFORE, In
consideration of the mutual covenants and promises herein contained, the
parties hereto agree as follows:

 

1.                                       Exclusive
Marketing Representative. That if UWGP constructs a
facility for the production of fuel grade ethanol, RENEWABLE PRODUCTS shall,
subject to the terms and conditions of this Agreement, be the sole marketing
representative for the entire production of said facility. Notwithstanding the
foregoing, any ethanol production resulting from future expansion at UWGP’s
ethanol facility in Friesland, Wisconsin or resulting from UWGP’s direct or
indirect ownership or operation of other ethanol facilities shall not be
subject to this Agreement.

 

2.                                       Plant
Construction/Ethanol Specifications. That UWGP promises and agrees to proceed, with due diligence, toward the
planning, financing and construction of a facility for the production of fuel
grade ethanol with a capacity of approximately 40 million gallons per year, ,
and conforming to the specifications described in A.S.T.M. 4806 and such other
specifications that may be, from time-to-time, promulgated by the industry for
E-Grade denatured fuel ethanol. UWGP contemplates that said facility will be in production by March 2005,
and will make every good faith effort to begin production by that time. All of
the ethanol marketed by RENEWABLE PRODUCTS and sold to its customers will be of
merchantable quality and will be fit for its intended purpose. All such fuel
grade ethanol will conform to the specifications described in A.S.T.M. 4806 and
such other specifications that may be, from time to time, promulgated by the
industry for E-Grade denatured fuel ethanol.

 

3.                                       Rail and Truck
Loading Facilities. That the facility to be constructed and operated
by UWGP, as aforesaid,
shall include reasonable and convenient railcar and tank truck

 

2

 

access
at the facility of a size and design appropriate to handle production of
approximately 40 million gallons of ethanol per year. All such railcar and tank
truck loading facilities shall meet all industry and governmental safety
standards and shall be capable of delivering a minimum design capacity of 400
gallons of product per minute to railcars and/or tank trucks. UWGP will be solely
responsible for all demurrage charges for railcars incurred on its site and for
demurrage charges on railcars unable to be delivered at UWGP’s ethanol facility
due to insufficient railcar siding capacity. UWGP shall provide
personnel reasonably needed to load trucks or rail cars at its facility in a
timely manner. Demurrage charged to trucks or railcars resulting from
operations beyond the control of UWGP and incurred off-site will not be charged
directly to UWGP.

 

4.                                       Storage
Capacity. That the facility to be constructed and operated
by UWGP as aforesaid shall have
sufficient storage capacity for not less than 10 days ethanol production.

 

5.                                       Best Efforts to
Market. That since RENEWABLE PRODUCTS shall have the exclusive right to
market all the fuel grade ethanol produced by UWGP
during the term of this agreement as described in Section 1
herein, RENEWABLE PRODUCTS promises and agrees to use its best efforts and good
faith to market all such fuel grade ethanol; provided, however, that RENEWABLE
PRODUCTS’ obligation hereunder shall be excused in case of fire, flood, other
natural calamity, labor dispute or any adverse governmental statute,
regulations or decree (including any court order or decree), directly affecting
Renewable Products ability to market products.

 

6.                                       Risk of Loss. That
RENEWABLE PRODUCTS will be responsible for the marketing (subject to the terms
of this agreement) of all such fuel grade ethanol produced by UWGP as described in Section 1 herein, from the time the common
carrier or customer takes custody of the product at UWGP’s facility in
either a railcar and/or tank truck. In addition, RENEWABLE PRODUCTS shall bear
the risk of loss for all such product that has been accepted for shipment by
the common carrier.

 

7.                                       Specific
Marketing Tasks. RENEWABLE PRODUCTS shall be totally responsible
for the marketing, sale and delivery of all the production from UWGP’s facility during the term of this agreement, including, but not
limited to:

 

•                  Obtaining
sufficient railcar, tank trucks and other transport as may be needed to handle
said production;

•                  Negotiating the
rates and tariffs to be charged for delivery of such production to the
customer;

•                  Promoting and
advertising the sale of fuel grade ethanol as appropriate;

•                  Ascertaining
that such production is delivered where contracted and intended;

•                  Handling all
purchase agreements with consumers and any complaints in connection therewith;
and

•                  Collecting all
accounts and undertaking any legal collection procedures as may be necessary.

 

8.                                       Negotiation of
Ethanol Price. That RENEWABLE PRODUCTS will use its
best efforts to obtain the best price for all fuel grade ethanol sold by it
pursuant to the terms of this Agreement. Within six (6) months of anticipated
start-up operations, UWGP shall
inform RENEWABLE PRODUCTS whether its ethanol will be marketed under
the pooling or non-pooling

 

3

 

ethanol
marketing arrangement described in this Agreement. Upon expiration of the
Initial Term of this Agreement and in the event the Agreement is renewed,
RENEWABLE PRODUCTS shall consult with UWGP to compare and discuss the ethanol
marketing results produced by the pooling or non-pooling arrangement selected
by UWGP prior to commencement of operations and UWGP shall elect whether to
begin or continue using either the pooling or non-pooling ethanol marketing
arrangement for the duration of the Renewal Term.

 

9.                                       Ethanol
Marketing Under Pooling Arrangement. Notwithstanding that UWGP is not currently a member of RENEWABLE
PRODUCTS, at the direction of UWGP,
RENEWABLE PRODUCTS shall market the ethanol production of UWGP under the pooling arrangement
maintained by the members of RENEWABLE PRODUCTS. Under such pooling
arrangement, UWGP will pay RENEWABLE
PRODUCTS $.0075 (3/4 of one cent) per gallon for each gallon of ethanol sold by RENEWABLE
PRODUCTS to the pool for the account of UWGP.
Payment of the ethanol selling price shall be made by RENEWABLE
PRODUCTS to UWGP as follows:

 

(a)                                  The Actual
Price for Ethanol Sold to RENEWABLE PRODUCTS by UWGP. RENEWABLE PRODUCTS agrees to pay UWGP a price for all ethanol sold to RENEWABLE PRODUCTS by UWGP under this Agreement that is
equal to the “Actual Pooled Netback Ethanol Selling Price,” as defined in this Section 9.
For purposes of this Agreement, the Actual Pooled Netback Ethanol Selling Price
will be calculated as follows:

 

(i)                                     The Estimated
Delivered Ethanol Selling Price. Each week, RENEWABLE PRODUCTS shall calculate
the estimated delivered ethanol selling price per gallon of all of the UWGP ethanol that RENEWABLE PRODUCTS
sells to its customers through operation of the ethanol pool. This amount will
hereinafter be referred to as the “Estimated Delivered Ethanol Selling Price.”

 

(ii)                                  The Pooled
Average Delivered Ethanol Selling Price. Based upon the Estimated Delivered
Ethanol Selling Price calculated for each pool participant, RENEWABLE PRODUCTS
shall calculate the Pooled Average Delivered Ethanol Selling Price which shall
be a weighted average of each pool participant’s Estimated Delivered Ethanol
Selling Price averaged in direct proportion to the volume of ethanol supplied
to the pool by each pool participant for the week in which the estimate is
calculated.

 

(iii)                               The Deduction
for Estimated Direct Ethanol Distribution Expense. Each week, RENEWABLE
PRODUCTS shall calculate the estimated distribution expenses directly incurred
in connection with distributing the ethanol sold under this Agreement for the
account of UWGP (the “Estimated
Direct Ethanol Distribution Expense”). The Estimated Direct Ethanol
Distribution Expense will include, but not necessarily be limited to, all of
RENEWABLE PRODUCTS’ transportation costs, rail car costs, throughput costs,
storage costs, demurrage at unloading locations, inventory costs and other
distribution costs directly incurred in connection with distributing the
ethanol sold under this Agreement for the account of UWGP.

 

4

 

(iv)                              The Pooled
Average Direct Ethanol Distribution Expense. Based upon the Estimated Direct
Ethanol Distribution Expense calculated for each pool participant, RENWABLE
PRODUCTS shall calculate the Pooled Average Direct Ethanol Distribution Expense
which shall be a weighted average of each pool participant’s Estimated Direct
Ethanol Distribution Expense averaged in direct proportion to the volume of
ethanol supplied to the pool by each pool participant for the week in which the
estimate is calculated.

 

(v)                                 The Estimated
Pooled Netback Ethanol Selling Price. The difference between the Pooled Average
Estimated Delivered Ethanol Selling Price, and the Pooled Average Direct
Ethanol Distribution Expense shall be the Estimated Pooled Netback Ethanol
Selling Price to be paid to UWGP
by RENEWABLE PRODUCTS for the applicable week.

 

(b)                                 The Actual
Pooled Netback Ethanol Selling Price for Ethanol Sold to Renewable Products by UWGP.

 

(i)                                     The Actual
Pooled Netback Ethanol Selling Price. The Actual Pooled Netback Ethanol Selling
Price cannot be determined before UWGP
sells ethanol to RENEWABLE PRODUCTS under this Agreement, because the Actual
Pooled Netback Ethanol Selling Price is based upon the estimated delivery price
and estimated distribution expense for the ethanol supplied by each pool
participant. Because of that, RENEWABLE PRODUCTS will establish an estimated
delivered price and estimated distribution expense for UWGP’S ethanol for each week during the term of this Agreement, in
order to establish an estimated delivered price and estimated distribution
expense for UWGP’S ethanol which
will be sold and marketed by RENEWABLE PRODUCTS. RENEWABLE PRODUCTS shall
reconcile the estimates with actual selling prices and distribution expenses as
provided in subparagraph (iii) below.

 

(ii)                                  Invoices and
Payments Between UWGP and
RENEWABLE PRODUCTS. UWGP will
invoice RENEWABLE PRODUCTS, upon shipment, at the applicable Estimated Pooled
Netback Ethanol Selling Price for all ethanol sold to RENEWABLE PRODUCTS by UWGP under this Agreement. RENEWABLE
PRODUCTS will pay UWGP for all
such ethanol within 7 to 10 business days from the date of delivery, with
delivery occurring at the time the common carrier takes possession of the
ethanol.

 

(iii)                               Calculation of
Actual Selling Prices After Each Month. At the end of each month, promptly
after the information necessary to calculate the Actual Pooled Netback Ethanol
Selling Price becomes available, RENEWABLE PRODUCTS will calculate the Actual
Pooled Netback Ethanol Selling Price for the preceding month. RENEWABLE
PRODUCTS will provide that Actual Pooled Netback Ethanol Selling Price to UWGP, along with a summary of the
calculations used by RENEWABLE PRODUCTS to arrive at the Actual Pooled Netback
Ethanol Selling Price.

 

5

 

(iv)                              Reconciliation
of Estimated Selling Prices and Actual Selling Prices After Each Month. Within
ten (10) days after RENEWABLE PRODUCTS provides UWGP with the Actual Pooled Netback Ethanol Selling Price for the
preceding month, the parties will reconcile the difference between the
Estimated Pooled Netback Ethanol Selling Price and the Actual Pooled Netback
Ethanol Selling Price for the preceding month. If the Estimated Pooled Netback
Ethanol Selling Price exceeded the Actual Pooled Netback Ethanol Selling Price,
then UWGP will refund to
RENEWABLE PRODUCTS the overpayments that it previously received from RENEWABLE
PRODUCTS, within ten (10) days after the completion of this actual and
estimated selling price reconciliation. In lieu of UWGP directly refunding any amounts to RENEWABLE PRODUCTS by
separate payment, and RENEWABLE PRODUCTS directly refunding any amounts to UWGP by separate payment, under this Section 8,
the parties may offset the required amounts on their next respective monthly
payments.

 

On the other hand, if the Estimated Pooled
Netback Ethanol Selling Price was less than the Actual Pooled Netback Ethanol
Selling Price, then RENEWABLE PRODUCTS will pay UWGP the additional amounts owed to UWGP, within ten (10) days after the completion of this actual and
estimated selling price reconciliation.

 

(c)                                  Most Favorable
Terms. If RENEWABLE PRODUCTS enters into any ethanol marketing agreement with
any current or future ethanol pool participant, RENEWABLE PRODUCTS shall
provide to UWGP a copy of such agreement and UWGP shall have the opportunity to
receive the same rights and benefits conferred under such other agreement. In
no event shall RENEWABLE PRODUCTS enter into any pooling agreement, without
UWGP’s consent, which shall adversely affect or reduce the rights or increase
the obligations of UWGP with respect to this Agreement.

 

10.                                 Non-Pooling
Marketing Arrangement. For any and all ethanol produced by UWGP and marketed by RENEWABLE
PRODUCTS using the non-pooling marketing arrangement, RENEWABLE PRODUCTS shall
pay to UWGP the net proceeds of
sale based upon the price per gallon of ethanol paid by the customer to
RENEWABLE PRODUCTS. Such payment shall be made from RENEWABLE PRODUCTS to UWGP within ten (10) days of the date
on which the ethanol is shipped for delivery to such customer from UWGP as
evidenced by the issuance date on the bill of lading. The net proceeds of sale
will be the gross price minus freight costs. Payment shall generally be made by
wire transfer or by other electronic transfer, directly to the account of UWGP, as UWGP shall direct. Profits realized by RENEWABLE PRODUCTS from
exchanges made on behalf of UWGP will
be paid to UWGP, unless UWGP has entered the pooling
arrangement set forth in paragraph 9 herein.

 

11.                                 Ownership in
RENEWABLE PRODUCTS. At any time during the term of this Agreement,
UWGP may elect to become a member of RENEWABLE PRODUCTS on the terms and
conditions set forth in Exhibit A to this Agreement.

 

12.                                 Accounts
Receivable/Rail Car Leases/Termination of Contract. It will be
the responsibility of RENEWABLE PRODUCTS to do all billing in regard to the
sale of ethanol, to collect all receivables and to be responsible for any bad
accounts. All risks associated with accounts receivables shall be borne by
RENEWABLE PRODUCTS. RENEWABLE PRODUCTS will lease approximately 45 railcars to
be used by UWGP and will bill UWGP for

 

6

 

the
lease payments, which payments shall be due within two (2) business days of
receipt of the bill. RENEWABLE PRODUCTS, may at its discretion deduct said
amounts from any payments due UWGP as described
in paragraphs 9 and 10. If this contract is terminated, by non-renewal or
otherwise, the lease for the rail cars leased by RENEWABLE PRODUCTS for the transport
of UWGP’s ethanol will be assigned to UWGP, who will be
obligated to the terms and conditions of said lease. RENEWABLE PRODUCTS shall
provide UWGP the opportunity to review and approve of the terms
and conditions of any such rail car lease as well as the terms and conditions
of any amendments or modifications to any such rail car lease before RENEWABLE
PRODUCTS first executes the same. The parties understand that the assignment of
the lease is subject to the approval of the lessor of the rail cars.

 

13.                                 No “Take or Pay.” The parties
agree that this is not a “take or pay contract” and that RENEWABLE PRODUCTS’
liability is limited to ethanol passing custody at UWGP’s facility.

 

14.                                 Term. The term of
this agreement shall commence on the first day of the month that UWGP initially ships ethanol and shall
continue for a period of 12 months thereafter (the “Initial Term”). The parties
shall be at liberty to negotiate a renewal of this Agreement. Any such renewal
shall be referred to hereafter as a “Renewal Term.” If the parties fail to
agree to a Renewal Term within 45 days of expiration of the Initial Term, UWGP
shall be released from any and all obligations hereunder and shall be free to
negotiate and engage any other ethanol marketing firm(s) to market any and all
ethanol produced by UWGP.

 

15.                                 Termination. This Agreement may be
terminated under the circumstances set out below.

 

(a)                                  Termination for
Intentional Misconduct. If either party engages in intentional misconduct
reasonably likely to result in significant adverse consequences to the other
party, the party harmed or likely to be harmed by the intentional misconduct
may terminate this Agreement immediately, upon written notice to the party
engaging in the intentional misconduct.

 

(b)                                 Termination for
Uncured Breach. If one of the parties breaches the terms of this Agreement, the
other party may give the breaching party a notice in writing which specifically
sets out the nature and extent of the breach, and the steps that must be taken
to cure the breach. After receiving the written notice, the breaching party
will then have thirty (30) days to cure the breach, if the breach does not
involve a failure to market and distribute the ethanol as required by this
Agreement.

 

If the breach does involve a
failure to market and distribute the ethanol as required by this Agreement,
then the breaching party will have five (5) days after receiving the written
notice to cure the breach. If the breaching party does not cure any breach
within the applicable cure period, then the non-breaching party will have the
right to terminate this Agreement immediately.

 

(c)                                  Termination at
the End of the Initial Term or Any Renewal Term. Either party may terminate
this Agreement at the end of the Initial Term, or at the end of any Renewal
Term, by providing the other party with a written notice of intent to
terminate. Such a written notice of intent to terminate must specify the
proposed termination date,

 

7

 

and must be received by the non-terminating
party at least three (3) months before the proposed termination date.

 

(d)                                 Termination by Mutual Written Agreement. This
Agreement may also be terminated upon any terms and under any conditions which
are mutually agreed upon in writing by the parties.

 

15.                                 Licenses and
Permits. At all times from the commencement of this contract, UWGP will have all of the
licenses and permits necessary to operate its production facilities and
Renewable Products has and will have at all times during the term of this
Agreement, all of the licenses and permits necessary to perform its obligations
under this Agreement.

 

16.                                 Expected Volume. During the
term of this Agreement, or any renewals thereof, UWGP agrees to have RENEWABLE PRODUCTS market all of the ethanol produced by UWGP it at its production facility. The average
monthly volume of ethanol produced by UWGP is estimated to be approximately 3,333,000 gallons.

 

17.                                 Estimated
12-Month Volume. As of the effective date of this Agreement, UWGP will provide RENEWABLE PRODUCTS with UWGP’s best estimate of its anticipated monthly
ethanol production for the next twelve (12) months, to assist RENEWABLE
PRODUCTS in developing appropriate marketing strategies for the ethanol to be
produced by UWGP.

 

18.                                 Updated Monthly
Volume Estimates. On or before the first day of each month, UWGP will provide RENEWABLE PRODUCTS with its
updated best estimate of UWGP’s anticipated monthly ethanol production for the next twelve (12)
months, so that RENEWABLE PRODUCTS will have ethanol production estimates from UWGP twelve (12) months into the future during
the entire time that this Agreement is in effect.

 

19.                                 Good and
Marketable Title. UWGP represents that it will have good and marketable title to all
of the ethanol marketed for it by RENEWABLE PRODUCTS and that said ethanol will
be free and clear of all liens and encumbrances.

 

20.                                 Establishment
of Price and Other Sale Terms. When RENEWABLE PRODUCTS
sells the ethanol marketed pursuant to the terms of this agreement to its
customers, the parties understand and agree that the ethanol sales prices and
all other terms and conditions of ethanol sales to customers under this
agreement will be established by RENEWABLE PRODUCTS. RENEWABLE PRODUCTS may
make these decisions, without the need of obtaining consent from UWGP. Notwithstanding
the foregoing, RENEWABLE PRODUCTS agrees to use its best efforts to communicate
with UWGP the terms and conditions of ethanol sales and shall
implement either the pooling or non-pooling ethanol marketing arrangement at
the sole direction of UWGP as described in Section 8 herein.

 

21.                                 Independent
Contractor. Nothing contained in this agreement will make
RENEWABLE PRODUCTS the agent of UWGP for any
purpose whatsoever. RENEWABLE PRODUCTS and its employees shall be deemed to be
independent contractors, with full control over the manner and method of
performance of the services they will be providing on behalf of UWGP under this
agreement.

 

22.                                 Separate
Entities. The parties hereto are separate entities and
nothing in this agreement or otherwise shall be construed to create any rights
or liabilities of either party to this

 

8

 

agreement
with regard to any rights, privileges, duties or liabilities of any other party
to this agreement.

 

23.                                 Working
Relationship. Because the parties hereto have not done business
together in the past in the manner described in this agreement, they have not
yet attempted to develop efficient and effective procedures related to
ordering, delivering ethanol and shipping ethanol and, therefore, agree to work
together promptly and in good faith to develop effective and efficient policies
and procedures to cover these matters.

 

24.                                 Ethanol
Shortage/Open Market Purchase. If UWGP is unable to deliver its estimated monthly
ethanol production because actual ethanol production is 20% or more below its
estimated monthly ethanol production, and if as a consequence of the
non-delivery and in order to meet its sale obligation to third parties,
RENEWABLE PRODUCTS is required to purchase ethanol in the market place,
RENEWABLE PRODUCTS shall purchase ethanol in the market place at such
reasonable price and in such reasonable quantity as is required to meet its
delivery obligations; provided, however, that prior to making such purchases,
RENEWABLE PRODUCTS shall communicate the terms and conditions of such purchases
to UWGP and shall obtain the consent of UWGP to such purchases which consent
shall not be unreasonable withheld. If it does so, and as a result thereof incurs
a financial loss, UWGP will reimburse RENEWABLE PRODUCTS for any such loss. Under such
circumstances, if RENEWABLE PRODUCTS realizes a financial gain, it will pay
such gain to UWGP.

 

25.                                 Testing of
Samples. At the request of RENEWABLE PRODUCTS, UWGP agrees to
provide RENEWABLE PRODUCTS with samples of its ethanol produced at its
production facility so that it may be tested for product quality on a regular
basis. Any and all costs of third party testing shall be paid for by RENEWABLE
PRODUCTS.

 

26.                                 Insurance. During the
entire term of this Agreement, UWGP will maintain
insurance coverage. At a minimum, UWGP’s insurance
coverage must include:

 

(a)                                  Comprehensive
general product and public liability insurance, naming RENEWABLE PRODUCTS as an
additional named insured, with liability limits of at least $5 million in the
aggregate.

 

(b)                                 Property and
casualty insurance adequately insuring its production facilities and its other
assets against theft, damage and destruction on a replacement cost basis.

 

(c)                                  RENEWABLE
PRODUCTS as a named insured under the comprehensive general product and public
liability insurance policy and the property and casualty insurance policy.

 

(d)                                 Workers’
compensation insurance to the extent required by law.

 

UWGP will not change its insurance coverage during the term of this
Agreement, if such change results in a failure to maintain the minimums set out
above.

 

27.                                 Audit Right. The parties
hereto agree that, upon request in writing, either party may require the other
to make available its books and records, at reasonable intervals, in order to

 

9

 

audit those books and records and to account for all dealings,
transactions and sums relevant to this Agreement. Any such independent public
accountants hired by either party will be subject to the same confidentiality
obligations that the parties are subject to under Section 28 of this
Agreement. Each party agrees to inform its accountants of those confidentiality
obligations.

 

28.                                 Handling of
Confidential Information. The parties acknowledge that they will be
exchanging information about their businesses under this Agreement which is
confidential and proprietary, and the parties agree to handle that confidential
and proprietary information in the manner described in this Section 28.

 

(a)                                  Definition of
Confidential Information. For purposes of this Agreement, the term “Confidential
Information” will mean information related to the business operations of UWGP
or RENEWABLE PRODUCTS that meets all of the following criteria:

 

(i)                                     The information
must not be generally known to the public, and must not be a part of the public
domain.

 

(ii)                                  The information
must belong to the party claiming it is confidential, and must be in that party’s
possession.

 

(iii)                               The information
must have been protected and safeguarded by the party claiming it is
confidential by measures that were reasonable under the circumstances before
the information was disclosed to the other party.

 

(iv)                              The disclosure
of the information to third parties must be likely to result in adverse
consequences to the party claiming it is confidential.

 

(v)                                 Written
information must be clearly designated in writing as “CONFIDENTIAL INFORMATION”
by the party claiming it is confidential before it is disclosed to the other
party, except that all information about costs and prices will always be
considered Confidential Information under this Agreement, without the need for
specifically designating it as such.

 

(vi)                              Verbal
Confidential Information which is disclosed to the other party must be
summarized in writing, designated in writing as “CONFIDENTIAL INFORMATION,” and
transmitted to the other party within ten (10) days of the verbal disclosure.

 

(b)                                 Limitations on
the Use of Confidential Information. Each party agrees that it will not use any
Confidential Information that it obtains about the other party for any purpose,
other than to perform its obligations under this Agreement.

 

(c)                                  The Duty not to Disclose Confidential Information. The parties
agree that they will not disclose any Confidential Information about each other
to any person or organization, other than their respective legal counsel and
accountants, without first getting written consent to do so from the other
party. Notwithstanding the foregoing, if a party or anyone to whom such party
transmits Confidential Information in accordance with this Agreement is
requested or required (by deposition, interrogatories, requests for

 

10

 

information or documents in legal
proceedings, subpoenas, civil investigative demand or similar process, SEC
filings or administrative proceedings) in connection with any proceeding, to
disclose any Confidential Information, such party will give the disclosing
party prompt written notice of such request or requirement so that the
disclosing party may seek an appropriate protective order or other remedy
and/or waive compliance with the provisions of this Agreement, and the
receiving party will cooperate with the disclosing party to obtain such
protective order. If such protective order or other remedy is not obtained or
the disclosing party waives compliance with the relevant provisions of this
Agreement, the receiving party (or such other persons to whom such request is
directed) will furnish only that portion of the Confidential Information which,
in the opinion of legal counsel, is legally required to be disclosed, and upon
the disclosing party’s request, use commercially reasonable efforts to obtain
assurances that the confidential treatment will be accorded to such
information. This will be the case both while this Agreement is in effect and
for a period of five (5) years after it has been terminated.

 

(d)                                 The Duty to
Notify the Other Party in Cases of Improper Use or Disclosure. Each party
agrees to immediately notify the other party if either party becomes aware of
any improper use of or any improper disclosure of the Confidential Information
of the other party at any time while this Agreement is in effect, and for a
period of five (5) years after it has been terminated.

 

(e)                                  Protection of
the Confidential Information. Each party agrees to develop effective procedures
for protecting the Confidential Information that it obtains from the other
party, and to implement those procedures with the same degree of care that it
uses in protecting its own Confidential Information.

 

(f)                                    Return of the Confidential Information. Immediately
upon the termination of this Agreement, each party agrees to return to the
other party all of the other party’s Confidential Information that is in its possession or
under its control.

 

29.                                 Indemnifications
and Hold Harmless - UWGP. If a third party makes a claim against RENEWABLE PRODUCTS or any person
or organization related to it as the result of the actions or omissions of UWGP or any person or organization related to UWGP including, but not limited to, claims
relating to the quality of ethanol produced by UWGP, then UWGP agrees to indemnify RENEWABLE PRODUCTS and its related persons and
organizations and to hold them harmless from any liabilities, damages, costs
and/or expenses, including costs of litigation and reasonable attorneys fees
which they incur as a result of any claims, arising solely from the marketing
of UWGP’s
ethanol under this Agreement, made against them by third parties.

 

30.                                 Indemnifications
and Hold Harmless—RENEWABLE PRODUCTS. The indemnification
obligations of the parties under this agreement will be mutual and RENEWABLE
PRODUCTS, therefore, makes the same commitment to indemnify UWGP and its
related persons or organizations that UWGP has made to
RENEWABLE PRODUCTS in the preceding paragraph.

 

31.                                 Survival of
Terms/Dispute Resolution. All representations, warranties and
agreements made in connection with this agreement will survive the termination
of this agreement. The parties will, therefore, be able to pursue claims related
to those representations,

 

11

 

warranties
and agreements after the termination of this agreement, unless those claims are
barred by the applicable statute of limitations. Similarly, any claims that the
parties have against each other that arise out of actions or omissions that
take place while this agreement is in effect will survive the termination of
this agreement. This means that the parties may pursue those claims even after
the termination of this agreement, unless applicable statutes of limitation bar
those claims. The parties agree that, should a dispute between them arise in
connection with this agreement, the parties will complete, in good faith, a
mediation session prior to the filing of any action in any court. Such
mediation session shall occur at a place that is mutually agreeable, and shall
be conducted by a mediator to be selected by mutual agreement of the parties.

 

32.                                 Choice of Law. The parties
agree that this agreement will be governed by, interpreted under and enforced
in accordance with Wisconsin law.

 

33.                                 Assignment. Neither party
may assign its rights or obligations under this agreement without the written
consent of the other party, which consent will not be unreasonably withheld. Notwithstanding
the foregoing, RENEWABLE PRODUCTS consents to any collateral assignment of this
Agreement by UWGP to a lender in connection with UWGP securing the debt financing
necessary to fund construction and start-up operations of the plant.

 

34.                                 Entire
Agreement. This Agreement constitutes the entire agreement
between the parties covering everything agreed upon or understood in the
transaction. There are no oral promises, conditions, representations,
understandings, interpretations, or terms of any kind as conditions or
inducements to the execution hereof or in effect between the parties , except
as expressed in this Agreement. No change or addition shall be made to this
Agreement except by a written document signed by all parties hereto.

 

35.                                 Execution of
Counterparts. This Agreement may be executed by the parties on
any number of separate counterparts, and by each party on separate
counterparts, each of such counterparts being deemed by the parties to be an
original instrument; and all of such counterparts, taken together, shall be
deemed to constitute one and the same instrument.

 

36.                                 Duplicate
Counterpart Includes Facsimile. The parties specifically
agree and acknowledge that a duplicate hereof shall include, but not be limited
to, a counterpart produced by virtue of a facsimile (“fax”) machine.

 

37.                                 Binding Effect. This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and there respective heirs, personal representatives, successors and
assigns.

 

38.                                 Notices. Any notice or
other communication required or permitted hereunder shall be in writing and
shall be considered delivered in all respects when it has been delivered by
hand or mailed by first class mail postage prepaid, addressed as follows:

 

TO:                            RENEWABLE
PRODUCTS MARKETING GROUP, L.L.C.

809 East Main Street

Belle Plaine, MN 56011

 

12

 

TO:                            UNITED
WISCONSIN GRAIN PRODUCERS, LLC

P.O. Box 247

Friesland, WI 53935

 

Physical address:

TO:                            UNITED
WISCONSIN GRAIN PRODUCERS, LLC

W1231 Tessman Rd.

Cambria, WI 53923

 

With a copy to:

 

William E. Hanigan, Esq.

Brown, Winick, Graves et al.

666 Grand Avenue, Suite 2000

Des Moines, IA 50309

 

13

 

IN WITNESS WHEREOF, the parties hereto have set
their hands the day and year first written above.

 

 

	
   

  	
  RENEWAL PRODUCTS MARKETING

  
	
   

  	
  GROUP, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/C. Stephen Bleyl

  	
   

  
	
   

  	
  Its

  	
  CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNITED WISCONSIN GRAIN PRODUCERS,

  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Kevin Roche

  	
   

  
	
   

  	
  Its

  	
  President

  	
   

  

 

14

 

EXHIBIT A

 

TERMS AND CONDITIONS OF OWNERSHIP IN RPMG

 

While UWGP may request to become an owner in RENEWABLE
PRODUCTS at any time during the term of the Agreement, UWGP shall be eligible
for ownership in RENEWABLE PRODUCTS no earlier than the last day of the ninth
(9th) month of plant operations as measured from the first date on
which UWGP delivers ethanol to RENEWABLE PRODUCTS for distribution. The
ownership of UWGP in RENEWABLE PRODUCTS shall be subject to the approval of
each then-current owner in RENEWABLE PRODUCTS.

 

If UWGP is accepted as an owner, UWGP shall be bound
by all of the terms and conditions of the operating agreement of RENEWABLE
PRODUCTS to the extent such terms and conditions do not contradict the
following terms and conditions of ownership as have been specifically
negotiated between UWGP and RENEWABLE PRODUCTS as of the date of this
Agreement:

 

(1)                                  Upon acceptance
of UWGP as an owner in of RENEWABLE PRODUCTS, UWGP shall make a capital
contribution to RENEWABLE PRODUCTS consisting of the following two payments:

 

(a)      a lump sum payment of $105,000 shall be contributed to
RENEWABLE PRODUCTS by UWGP immediately upon UWGP’s becoming an owner in
RENEWABLE PRODUCTS;; and

 

(b)      a payment of $500,000 shall be contributed to RENEWABLE
PRODUCTS by UWGP, which shall be contributed by one of the following three (3)
methods:

 

(i)    as a lump sum payment;

 

(ii)   as a monthly offset against the aggregate pooling fee payable by
UWGP to RENEWABLE PRODUCTS under this Agreement; or

 

(iii)  as any combination of both (i) and (ii) subject to the approval of
RENEWABLE PRODUCTS.

 

(2)                                  If UWGP elects
to contribute the $500,000 as a monthly offset pursuant to subparagraph
1(b)(ii) above, the monthly offset shall be calculated as follows:

 

(a)                   The parties
shall determine the total gallons of ethanol produced by UWGP for the current
month within 10 business days of the close of such month;

 

(b)                  The parties
shall then determine the difference between:

 

(i)    the per gallon pooling fee payable under Section 9 of this
Agreement ($0.0075); and

 

 

15

 

(ii)   the per gallon operating expenses of RENEWABLE PRODUCTS’ measured
by the expenses incurred for the month in which production is being measured,
which shall be determined within 10 business days of the close of such month;

 

(c)                   The parties
shall multiply the total monthly production of UWGP times the amount determined
in subparagraph 2(b) above.

 

(d)                  The calculation
set forth in this subparagraph (2) can be illustrated by the following example:

 

	
  Total Monthly Ethanol
  Production

  	
   

  	
  4,000,000

  	
   gallons

  
	
   

  	
   

  	
   

  	
   

  
	
  Pooling Fee

  	
   

  	
  $

  	
  0.0075

  	
   per gallon

  
	
   

  	
   

  	
   

  	
   

  
	
  Operating Expenses

  	
   

  	
  $

  	
  0.0025

  	
   per gallon

  
	
   

  	
   

  	
   

  	
   

  
	
  Difference to be
  multiplied times Monthly Production Amount

  	
   

  	
  $

  	
  0.0050

  	
   per gallon

  
	
   

  	
   

  	
   

  	
   

  
	
  Offset Amount (4,000,000 x
  $0.0050)

  	
   

  	
  $

  	
  20,000

  	
   

  

 

(3)                                  The monthly
offset shall be applied toward the $500,000 capital contribution amount and shall
reduce the outstanding balance of same.

 

(4)                                  UWGP shall be
eligible, at any time, to make lump sum payments of any amount to reduce the
outstanding balance of its capital contribution.

 

 

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16

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