Document:

Exhibit
10.2

 

COGENT
COMMUNICATIONS GROUP, INC.

 

FIFTH
AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT

 

August 12, 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”), and Series K Preferred Stock (the “Series K Purchasers”)
collectively, the Series F, G, I, J, and K Purchasers shall be known as the “Purchasers”):

 

Dear Sirs:

 

This will confirm that as a condition to closing under
the Merger Agreement (the “Merger Agreement”) by and among Cogent
Communications Group, Inc. (the “Company”), the Company’s subsidiary
Marvin Internet, Inc. (“Merger Sub”) and UFO Group, Inc. (“UFO Group”),
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, issued
pursuant to the Merger Agreement, constituted 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 or Series K 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, or Series K 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, or Series K 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)                        Upon
and after the Closing (as defined in the Merger Agreement), this Agreement
shall amend and restate in its entirety the Fourth Amended and Restated
Registration Rights Agreement, dated March 30, 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 Fifth 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 Fifth 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

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  JERUSALEM VENTURE PARTNERS III (ISRAEL), L.P.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Jerusalem Venture Partners III (Israel) Management
  Company Ltd.,

  its General l Partner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Erel Margalit

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Erel Margalit

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  JERUSALEM VENTURE PARTNERS ENTREPRENEURS FUND III,
  L.P.

  	
   

  
	
   

  	
   

  
	
  By: 
  Jerusalem Partners III, L.P., its General Partner

  	
   

  
	
  By: 
  Jerusalem Venture Partners Corporation, its General Partner

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Erel Margalit

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Erel Margalit

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
							

 

 

[Signature
Page to Fifth 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

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  JERUSALEM VENTURE PARTNERS IV (Israel), L.P.

  	
   

  
	
   

  	
   

  
	
  By: 
  Jerusalem Partners IV - Venture Capital, L.P.,  its General Partner

  	
   

  
	
  By:

  	
  JVP Corp IV, its General Partner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Erel Margalit

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Erel Margalit

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  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

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  JERUSALEM VENTURE PARTNERS ENTREPRENEURS FUND IV,
  L.P.

  	
   

  
	
   

  	
   

  
	
  By: 
  Jerusalem Partners IV, L.P., its General Partner

  	
   

  
	
  By:  JVP Corp
  IV, its General Partner

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Erel Margalit

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Erel Margalit

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
										

 

 

[Signature
Page to Fifth 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

  	
   

  	
   

  
	
  Title:

  	
  Member

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  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

  	
   

  	
   

  
	
  Title:

  	
  Member

  	
   

  	
   

  
							

 

 

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

 

	
  BNP EUROPE TELECOM & MEDIA FUND II, LP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Shawna Morehouse

  	
   

  	
   

  
	
  Name: Jennifer Fischetti and Richard Hastings

  	
   

  
	
  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 Fifth Amended and Restated Registration Rights Agreement]

 

	
  CISCO SYSTEMS CAPITAL CORPORATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
				

 

 

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

 

 

	
  By:

  	
  /s/David Schaeffer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  David Schaeffer

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE SCHAEFFER DESCENDENTS TRUST

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Ruth Schaeffer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Ruth Schaeffer

  	
   

  	
   

  
					

 

 

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

 

	
  UFO COMMUNICATIONS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Charles Schoenhoeft

  	
   

  	
   

  
	
  Name:

  	
  Charles Schoenhoeft

  	
   

  	
   

  
	
  Title: Chief Executive Officer

  	
   

  
					

 

 

[Signature
Page to Fifth 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

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  2001 Pennsylvania Avenue

  	
   

  
	
   

  	
  Suite 400

  	
   

  
	
   

  	
  Washington, D.C. 
  20006

  	
   

  
	
  Telephone:  (202) 293-5590

  	
   

  
	
  Facsimile:  (202) 293-5548

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  WORLDWIDE INVESTMENTS, LLC

  	
   

  
	
   

  	
   

  
	
  By: 
  Worldwide Assets, Inc., its Sole Member

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Frank J. Hannah

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
  Address:  Worldwide Investments, LLC

  	
   

  
	
   

  	
  c/o Worldwide Assets, Inc.

  	
   

  
	
   

  	
  P.O. Box 27740

  	
   

  
	
   

  	
  Las Vegas, NV 89126

  	
   

  
	
  Telephone:

  	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  2001 PENN. AVE. INVESTMENTS, LLC

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Michael R. Steed

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
  Address:  2001 Pennsylvania Avenue

  	
   

  
	
   

  	
  Suite 400

  	
   

  
	
   

  	
  Washington, DC 
  20006

  	
   

  
	
  Telephone:

  	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  	
   

  
															

 

 

[Signature
Page to Fifth 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:

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Member

  	
   

  	
   

  
	
  Address:

  	
  11726 San Vicente Blvd, Suite 300

  Los Angeles, CA. 90049

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  KLINE HAWKES PACIFIC FRIENDS FUND, LLC

  	
   

  
	
  By: Kline Hawkes Pacific Advisors, LLC, its Managing
  Member

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Jay Ferguson

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Member

  	
   

  	
   

  
	
  Address:

  	
  11726 San Vicente Blvd, Suite 300

  Los Angeles, CA. 90049

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BROADMARK CAPITAL, L.L.C.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Joseph L. Schocken

  	
   

  	
   

  
	
  Name:

  	
  Joseph L. Schocken

  	
   

  	
   

  
	
  Title:

  	
  PresidentExhibit 10.3

 

1015
31st Street, NW  Suite 330

Washington,
DC  20007

Tel:   202-295-4201

Confidential
Fax:   202-342-8269

 

July 1, 2004

 

R.R. Harrison III

2 South Beers Street

Holmdel, New Jersey 07733

 

Re:       Executive
Employment Agreement

 

Dear Reed:

 

Cogent Communications is offering you the position of President and
Chief Operating Officer. Your monthly starting salary will be $22,916.67, the
equivalent of $275,000 if calculated annually. This position is an “exempt”
position and will not be eligible for overtime compensation.  Your salary will be paid semi-monthly.

 

You will serve as President and Chief Operating Officer of the Company,
reporting directly to the Chairman and Chief Executive Officer, with duties and
authority as are customary for such a role. 
These duties include but are not limited to all engineering, operations,
customer care, provisioning, real estate, and chief network, technology, and
information officer functions appropriate to your executive status.

 

You will devote substantially your full business time and attention
toward the fulfillment and execution of all assigned duties.  You may devote such time and attention as
needed to other business activities such as personal investments, independent
consulting, board memberships, and advisory roles.  Such other business activities will not unreasonably interfere
with your assigned duties.

 

In addition to the cash compensation you receive, Cogent will issue to
you options to purchase 8427 shares of Series H Preferred Stock at a strike
price of $230.77 per Series H share (8427 shares of Series H stock will
currently convert to 6,482,307 shares of common stock and the equivalent strike
price would be $.30.)  These options
will vest monthly beginning on your date of employment such that you will be
fully vested after four (4) years in 48 equal portions on the first of each
month of employment.  If, following a
Change of Control (as defined below), you are terminated other than for Cause
(as defined below) or you resign for Good Reason (as defined below), you will
be fully vested in your options, as more fully described in the accompanying
Severance Agreement, incorporated by reference.  Your accompanying Option Agreement, also incorporated by
reference, will also provide for accelerated vesting over a period of twelve
(12) months immediately following a Change of Control.  In order to receive these options, you must
sign Cogent’s 

 

 

accompanying Option Agreement at the time of your employment.
Shareholder approval and board approval of the plan under which these options
will be issued has not yet been received. 
You agree that should the plan not be approved or not become effective
for any reason this option grant will be void and that you will not be entitled
to any payment or benefit as compensation. 
In such event, the parties agree to negotiate commercially reasonable
substitute provisions of equal value. 
These will be “non-qualified” options for purposes of the Internal
Revenue Code.  Consequently you will be
treated as receiving compensation income at the time specified by the Internal
Revenue Code.  You recognize that Cogent
will withhold from your salary any amounts required by law to be withheld as a
result of the receipt of such compensation income.  You may elect, by written notice to Cogent, to substitute up to
$100,000 per year of Incentive Stock Options, (“ISOs”), whose strike price will
be the fair market value on date of issuance, and will be subject to all laws
and regulation governing such ISOs.  You
may make such election prior to July 6, 2004 and as to each ensuing year,
prior to the anniversary thereof.

 

Cogent will pay to you within 5 business days of the date of your
employment $50,000 (reduced by applicable taxes) as a signing bonus to cover
your moving expenses.  If you terminate
your employment with Cogent without Good Reason or are terminated for Cause
prior to the first anniversary of your employment, you will repay to Cogent
$37,500; if you terminate your employment with Cogent without Good Reason or
are terminated for Cause before the second anniversary of your employment, you
will repay to Cogent $25,000; if you, terminate your employment with Cogent
without Good Reason or are terminated for Cause before the third anniversary of
your employment you will repay to Cogent $12,500.  You agree that Cogent may withhold from your severance, if any,
or other payment due you the amount payable hereunder.  If (i) your employment is terminated without
Cause, (ii) your employment is terminated due to Death or Disability; (iii) you
terminate your employment for Good Reason, or (iv) your employment is severed
for any reason after the last-referenced anniversary date, then in each such
case, you will be under no obligation to reimburse the Company any portion of
the signing bonus.

 

In the absence of a Change of Control, in the event of termination of
your employment by Cogent other than for Cause, you will receive six month’s
salary against $275,000 and in addition, you will immediately become vested in
the next three months of options, as set forth more fully in the attached
Severance Agreement, and Option Agreement. 
In addition, you will receive the benefits described in the attached
Severance Agreement.  In the event of
termination of your employment other than for Cause, or in the event you
terminate your employment for Good Reason, in either case in conjunction with
or following a Change in Control, you will receive six months salary against
$275,000 and immediate vesting of all options, together with those benefits set
forth in the accompanying Severance Agreement and Option Agreement.

 

Cogent will periodically evaluate your performance at minimum intervals
of 12 months and commencing January 31, 2005.  these reviews will be utilized to evaluate your compensation
package relative to the market for similar level professionals at organizations
of comparable stage of development and market opportunity as Cogent.  The findings of these reviews will be
submitted to the Company’s compensation committee for final decision and
appropriate compensation adjustments. 
You will also be eligible to receive one-time bonuses of 3% of base
salary, upon 2 consecutive quarters of positive 

 

 

EBITDA, and of 7% of base salary upon 2 consecutive quarters of
positive cash flow, together with any other bonus consideration applicable to
the Company’s senior management.  These
bonuses will be paid (on a pro rata basis if applicable) in the event of
termination of employment by the Company without Cause, or by you for Good
Reason.

 

As a member of Cogent’s team, you will be entitled to health care and
dental coverage, which is partially (50%) funded by the company.  The company will also offer a funded life
insurance plan.  The company has also
implemented a 401(k) retirement plan that is corporately administered, however,
it requires individual contributions on a non-matching basis by individual
participants.  You will be eligible for
3 weeks paid vacation annually. Additionally, the company has 6 fixed major
holidays and 3 discretionary floating holidays to be chosen by you.  These benefits may be modified by Cogent at
any time.

 

Your employment by Cogent and the benefits, including the options,
described herein is subject to approval by Cogent’s board of directors.  We will notify you when the board has
approved your employment and the terms of your employment.  Until such approval is received this letter
will not constitute an offer or agreement.

 

Your employment will commence on July 1, 2004 or at a mutually
agreed-upon to date between yourself and the company.  Also, as a condition of employment, you will be required to sign
Cogent’s accompanying standard agreement (incorporated herein by reference)
providing for invention disclosure and assignment, limitation of your right to
compete with Cogent if you leave, and non-disclosure of confidential
information.  Your employment is also
contingent upon completing the Form I-9 (Employment Eligibility Verification)
and providing the required documentation establishing your legal right to work
in the U. S. on your first day of employment. Please note that by law, the I-9
requirement must be met before you can begin work.

 

You will be an employee at will and may be discharged at any time
without cause.

 

Any disputes between the parties concerning the interpretation and application
of this Employment Agreement and attachments, shall be resolved exclusively by
arbitration under the then-applicable procedures of the American Arbitration
Association, (Labor Section, Washington, D.C.).  The arbitrator’s fees and costs of such proceeding shall be
shared equally.

 

 

We look forward to having you join our team and build the most advanced
next generation network for high-speed Internet services.  If you have any further questions, please
give me a call at 202-295-4201.

 

 

	
  Sincerely,

  
	
   

  
	
  /s/David Schaeffer

  	
   

  
	
   

  
	
  Dave Schaeffer

  
	
  CEO

  

 

 

	
  Accepted

  	
   

  
	
   

  	
   

  
	
  /s/R. Reed Harrison III

  	
   

  	
  7/1/2004

  	
   

  
	
  R.
  R. Harrison III

  	
   

  	
  Date

  	
   

  

 

 

	
  Notice of Grant of Stock Options and Option
  Agreement

  	
  Cogent Communications Group, Inc.

  
	
   

  	
   

  
	
  Option holder:  R.R. Harrison III

  	
  Plan:        2004
  Incentive Award Plan

  

 

Effective as of the date indicated below (the “Grant Date”) you have
been granted a Nonstatutory Option to buy 8427 shares of Series H Participating
Convertible Preferred Stock $.001 par value of Cogent Communications Group,
Inc. (the Company) at $230.77 per share (“the Option”).  This option will become vested and may be
exercise in accordance with the following schedule:

 

The right to purchase all of the shares
subject to the Option will vest in 48 equal monthly portions, commencing on
July 1, 2004, and continuing on the first day of each month of the 47
ensuing months, whereupon you will be fully vested.

 

Notwithstanding the foregoing, this option shall be fully vested and
exercisable upon the termination of your employment by reason of death or
disability.  Upon a Change of Control
vesting shall accelerate such that the Option shall be fully vested within 12
months from the date of the Change of Control. 
The acceleration shall be effected by increasing the vesting increment
set forth above to the percentage, if larger, resulting from dividing the
difference between 100 and the Participant’s current vested percentage by
12.  Upon termination of employment any
unvested portion of the Option shall expire; non-ISO vested options may be
exercised during a period of ten years from the Grant Date.  In addition, full vesting shall occur in
accordance with paragraph 5 of your Severance Agreement, dated July 1,
2004 and such paragraph is hereby incorporated by reference.

 

The option must be exercised, if at all, to the extent vested prior to
the tenth anniversary of the Grant Date, and if not exercised prior thereto
shall terminate and no longer be exercisable. 
In addition, if the option is an Incentive Stock Option it must be
exercised within 90 days of the date you cease to be an employee.  The option will be deemed exercised upon
delivery of a properly completed Exercise Notice and payment of the Option
exercise price per share and any applicable tax withholding to the Company.  Payment maybe made in cash, by check, or
such other method as the Company may permit from time to time as set forth in
the Plan.  The Company will cooperate in
the cashless exercise of the Options by delivery of shares to a recognized
broker of Harrison’s selection, provided, however that the Company shall
receive the strike price upon conclusion of the transaction.  The shares that may be acquired upon
exercise of the option may be subject to certain rights of first refusal and
repurchase rights of the Company, to the extent required under the Exercise
Notice and other procedures established by the Committee. The option may not be
exercised for a fraction of a share.

 

If Executive is terminated other than for Cause, or terminates his
employment for Good Reason, in either case in conjunction with or following a
Change of Control, Executive shall on the date of notification of such
termination become fully vested in any restricted stock, options, or other
similar incentive plan involving vesting. 
In the absence of a Change of Control, if Executive is terminated other
than for Cause or terminates his employment for Good Reason, Executive shall,
on the date of notification of such termination, become vested in any
restricted stock, options, or other similar incentive plan involving vesting,
in all such restricted stock or options in which he would have become vested in
the month of the effective date of such termination of employment, together
with those in which he would have become vested in the three (3) ensuing
months.

 

This option is granted under and governed by the terms and conditions
of the Company’s 2004 Incentive Award Plan as may be amended from time to
time.  Defined terms used herein shall
have the meaning set forth in the 2004 Incentive Award Plan, unless otherwise
defined herein.  The Company shall not
exercise any discretionary authority under the 2004 Incentive Award Plan to
restrict, circumvent or defeat the recipient’s grant, exercise or acceleration
of Options hereunder.

 

 

	
  /s/David Schaeffer

  	
   

  	
  July 14, 2004

  
	
  Cogent Communications Group, Inc.

  	
  Date

  

 

 

Severance Agreement

 

1.       This
agreement is entered into by Cogent Communications, Inc. (“Cogent”) and the
executive employee signing this Agreement, below (“Executive”).

 

2.       As
an inducement for Executive to focus his full efforts on Cogent’s business
without undue concern for future employment the Compensation Committee of the
Cogent Board of Directors has approved the following minimum severance
provisions for Executive.  This
severance is not intended to reduce any severance arrangement provided for in
Executive’s offer letter or other agreement. 
In any case in which such offer letter or other agreement provides a
greater severance compensation with respect to cash payment or continuation of
benefits Executive shall receive the greater cash payment or benefit.

 

3.       If
Executive is terminated other than for Cause (as defined below) or Executive
terminates his employment for Good Reason (as defined below), Executive shall
continue to receive his salary (reduced by all mandatory withholdings for taxes
or other governmentally required payments such as garnishments) for six (6)
months following the date of termination, i.e. Executive shall be paid through
the 183rd day following the date of termination.  However, if either such termination follows a Change of Control
(as defined below) such payment shall be made as a lump sum within 5 days of
termination. Salary means Executive’s salary before voluntary withholdings and
reductions (such as those for parking, 401(k) plan, medical, dental, and life
insurance) and before mandatory withholdings for taxes and other governmentally
required payments such as garnishments. 
At the election of Executive, the employee share of the cost of benefits
(provided in paragraph 4) may be paid through a salary reduction agreement (in
order to make such payments with pre-tax income).  If the amount payable under this paragraph is less than the
amount payable under Executive’s offer letter or other agreement no payment shall
be made under this paragraph and Executive shall instead receive the payment
provided for in the offer letter or other agreement.  In addition to the severance payments provided under this
paragraph, Executive shall receive the benefit of certain accelerated vesting
of applicable options, as set forth under the applicable provisions of the
accompanying Option Agreement.

 

4.       If
Executive is terminated other than for Cause or Executive terminates his
employment for Good Reason, Executive shall continue to receive through the
last day of the sixth month following the month in which termination occurs all
health insurance, dental insurance, life insurance (to the extent paid by the
company), and long term disability insurance. 
Cogent shall pay the company share of such benefits and Executive shall
pay the employee share, e.g. the employee portion of the premium for health and
dental insurance.  The employee share
and company share shall be the same as currently applicable to the benefits at
the time of termination.  If the value
of the benefit under this paragraph is less than the benefit under Executive’s
offer letter or other agreement no benefit shall be provided under this
paragraph and Executive shall instead receive the benefit provided for in the
offer letter or other agreement.

 

5.       If
Executive is terminated other than for Cause, or terminates his employment for
Good Reason, in either case in conjunction with or following a Change of
Control, Executive shall on the date of notification of such termination become
fully vested in any restricted stock, options, or other similar incentive plan
involving vesting, notwithstanding 

 

 

any provision to the contrary contained in the second sentence of
Section 10.2 of the 2004 Incentive Award Plan.

 

6.       In the event of termination for any
reason, Executive shall, in addition to any entitlements set forth above,
receive all accrued, unused vacation pay in a lump sum payment at his
then-applicable rate of pay, in accordance with applicable Company vacation
policies.

 

7.       Executive shall be under no obligation
to seek or obtain subsequent employment or to mitigate his economic damages, in
order to receive the severance pay, options, and other benefits provided
herein.

 

8.       For purposes of this agreement, Cogent
shall have “Cause” to terminate the Executive’s employment hereunder (i) upon
the Executive’s conviction for the commission of an act or acts constituting a
felony under the laws of the United States or any state thereof, or (ii) upon
the Executive’s willful and continued failure to substantially perform his or
her duties hereunder (other than any such failure resulting from the
Executive’s incapacity due to physical or mental illness), after written notice
has been delivered to the Executive by Cogent, which notice specifically
identifies the manner in which the Executive has not substantially performed
his duties, and the Executive’s failure to substantially perform his duties is
not cured within ten (10) business days after notice of such failure has been
given to the Executive. No act or failure to act on the Executive’s part shall
be deemed “willful” unless done or omitted to be done, by the Executive not in
good faith and (i) without reasonable belief that the Executive’s act, or
failure to act, was in the best interest of Cogent, or (ii) without the
reasonable belief that such act or omission was required by law.

 

9.       “Good Reason” shall mean the occurrence
(without the Executive’s express written consent) of any one of the following:

 

a.               the assignment to Executive
of duties inconsistent with the Executive’s status as a senior executive
officer of the Company or a substantial adverse alteration in the nature or
status of the Executive’s responsibilities; or

 

b.              if Executive is an
attorney, resignation required by any applicable law, regulation, rule, or code
of professional responsibility; or

 

c.               a reduction in Executive’s
salary;

 

d.              relocation of Executive’s
principal place of employment outside of the Washington, DC area; or

 

e.               A material breach by Cogent
of the Employment Agreement, Severance Agreement, or Option Agreement.

 

10.     “Change
of Control” shall mean any of the following: (i) a consolidation, merger or
reorganization of Cogent Communications Group, Inc. with or into any other
corporation or corporations in which the stockholders of Cogent Communications
Group, Inc. immediately before such event shall own fifty percent (50%) or less
(calculated on an as converted basis, fully diluted) of the voting securities
of the surviving corporation;

 

(ii)
a transaction or series of related transactions, other than an underwritten
public offering, in which at least fifty percent (50%) of Cogent Communications
Group, Inc.’s 

 

 

voting
power is transferred; (iii) the sale, transfer or lease of all or substantially
all of the assets of Cogent Communications Group, Inc.; (iv) the acquisition of
shares of capital stock of Cogent Communications Group, Inc. (whether through a
direct issuance by Cogent Communications Group, Inc., negotiated stock
purchase, a tender for such shares, merger, consolidation or otherwise) by any
party or group that did not beneficially own a majority of the voting power of
the outstanding shares of capital stock of Cogent Communications Group, Inc.
immediately prior to such purchase, the effect of which is that such party or
group beneficially owns at least a majority of such voting power immediately
after such event; or (v) the consummation by Cogent Communications Group, Inc.
of a plan of complete liquidation of Cogent Communications Group, Inc..

 

11.     Executive’s continued employment shall
not constitute consent to, or a waiver of rights with respect to any act or
failure to act constituting Good Reason hereunder. Notwithstanding the
foregoing, a termination shall not be treated as a Termination for Good Reason
if the Executive shall have consented in writing to the occurrence of the event
giving rise to the claim of Termination for Good Reason.

 

12.     Executive shall be entitled to the
indemnification set forth in the certificate of organization of any entity for
which he or she performs services to the maximum extent permitted by law.  Executive shall also be entitled to the
protection of any insurance policies Cogent may elect to maintain generally for
the benefit of its directors and officers.

 

13.     Executive agrees that he or she remains
an employee at will whose employment may be terminated at any time with or
without cause.

 

14.     Cogent agrees that Executive is giving
consideration for this agreement by relying upon its provisions in determining
whether or not to seek other employment.

 

	
  Accepted
  and agreed to:

  
	
   

  	
   

  	
  Cogent Communications, Inc.

  	
   

  	
  Executive

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
    /s/David
  Schaeffer

  	
   

  	
   

  	
   

  	
    /s/R. Reed
  Harrison III

  
	
  Name:

  	
   

  	
  Dave Schaeffer

  	
  Name:

  	
   

  	
  R. Reed Harrison III

  
	
  Title:

  	
   

  	
  CEO

  	
  Date:

  	
   

  	
  7/1/2004

  
	
  Date:

  	
   

  	
  7/1/04

  	
   

  	
   

  	
   

  
							

 

 

CONFIDENTIALITY AND NON-COMPETE AGREEMENT

 

In
consideration of my employment with COGENT
COMMUNICATIONS, INC., a Delaware corporation (the “Company”),
I hereby represent to and agree with the Company as follows:

 

1.             Company Business.  I understand that the Company is engaged in a
continuous program of research, development, production and marketing in
connection with its business and that, as an essential part of my employment
with the Company, I may be expected to make new contributions to, and create
Inventions (as defined below) of value for, the Company.

 

2.             Disclosure of Inventions. 
From and after the
date I first became employed with the Company, I will promptly disclose in
confidence to the Company all inventions, improvements, designs, original works
of authorship, formulas, processes, compositions of matter, computer software
programs, databases, mask works, and trade secrets (collectively, “Inventions”),
whether or not patentable, copyrightable or protectible as trade secrets, that
are made or conceived or first reduced to practice or created by me, either
alone or jointly with others, during the period of my employment.

 

3.             Work for Hire; Assignment of Inventions.  I acknowledge that copyrightable works prepared by me within the scope
of my employment are “works for hire” under the United States Copyright Act and
that the Company will be considered the author thereof.  I agree that all Inventions that (a) are
developed using equipment, supplies, facilities or trade secrets of the
Company, (b) result from work performed by me for the Company, or (c) relate to
the Company’s business, or current or anticipated research and development,
will be the sole and exclusive property of the Company and are hereby assigned
by me to the Company.

 

4.             Assignment of Other Rights. 
I hereby irrevocably
transfer and assign to the Company:  (a)
all worldwide patents, patent applications, copyrights, mask works, trade
secrets and other intellectual property rights in any Invention; and (b) any and
all “Moral Rights” (as defined below) that I may have in or with respect
to any Invention.  I also hereby forever
waive and agree never to assert any and all Moral Rights I may have in or with
respect to any Invention, even after termination of my work on behalf of the
Company.  The term “Moral Rights” shall
mean any rights to claim authorship of an Invention to object to or prevent the
modification of any Invention, or to withdraw from circulation or control the
publication or distribution of any Invention, and any similar right, existing
under judicial or statutory law of any country in the world, or under any
treaty, regardless of whether or not such right is denominated or generally
referred to as a “moral right.”

 

5.             Assistance.  I agree to assist the Company in every proper way to obtain for the
Company and enforce patents, copyrights, mask work rights, trade secret rights
and other legal protections for the Company’s Inventions in any and all
countries.  I will execute any documents
that the Company may reasonably request for use in obtaining or enforcing such
patents copyrights, mask work rights, trade secrets and other legal
protections.  My obligations under this
paragraph will continue beyond the termination of my employment with the
Company, provided that the Company will compensate me at a reasonable rate
after such termination for time or expenses actually spent by me at the 

 

 

Company’s
request on such assistance.  I hereby
appoint the Secretary of the Company as my attorney-in-fact to execute documents
on my behalf for this purpose.

 

6.             Proprietary
Information.  I understand that my employment by the
Company creates a relationship of confidence and trust with respect to any
information of a confidential or secret nature that may be disclosed to me by
the Company that relates to the business of the Company or to the business of
any parent, subsidiary, affiliate, customer or supplier of the Company or any
other party with whom the Company agrees to hold information of such party in
confidence (“Proprietary Information”). 
Such Proprietary Information includes but is not limited to Inventions,
marketing plans, product plans, business strategies, financial information,
forecasts, personnel information and customer lists.

 

7.             Non-Competition.

 

(a)           I agree that, during my
employment by the Company and for six (6) months after the effective date of
termination of my employment by the Company (the “Non-Compete Period”),
I will not:

 

(i)            Compete (as defined
below) with the Company, or any entity which is a subsidiary or affiliate of
the Company as of the date of termination;

 

(ii)           interfere with or
disrupt, or attempt to interfere with or disrupt, the relationship, contractual
or otherwise, between the Company, or any subsidiary or affiliate of the
Company, and any customer, supplier or employee of the Company, or any such
subsidiary or affiliate;

 

(iii)          assist a Competitor (as
defined below) of the Company by providing consulting or other advisory
services to that Competitor; or

 

(iv)          offer employment to any
current employee of the Company or solicit (directly or indirectly,
individually or in connection with any new employer or other business partner)
any current employee of the Company to accept employment elsewhere.

 

(b)           The following terms, as
used in this Section 7 shall have the meanings set forth below:

 

(i)            The “Company’s
Business” means providing very high band width internet access to business
users in the markets served or planned to be served by the Company and any of
the other substantial business activities of the Company, as described in the
business plan of the Company attached hereto.

 

(ii)           The term “Competitor”
means any firm, corporation or entity substantially engaged in the Company’s
Business.

 

(iii)          The term “Compete”
with the Company means to engage in a business venture or share substantial
responsibility for the development or operation of a division or group within a
larger corporate body, the primary product or service of which competes
directly is a direct competitor with the Company’s Business in the Markets
served or planned to be served by the Company, as an employee, officer,
director, proprietor, partner or stockholder or other security holder (other
than ownership of a corporation listed on a national securities exchange or the
securities of which are regularly traded in the over-the-counter market,
provided that I at no time own in excess of 10% of the outstanding securities
of such corporation entitled to vote for the election of directors).

 

(iv)          The term “affiliate”
means any person, firm or corporation, directly or indirectly through one or
more intermediaries, controlling, controlled by or under common control with
the Company.

 

(c)           I further acknowledge
that this Section 7 is an independent covenant within this Agreement, and
that this covenant shall survive any termination of Agreement and shall be
treated as an independent covenant for the purposes of enforcement.  With respect to this covenant, I hereby
acknowledge receipt of Ten Dollars ($10.00) and other good and valuable
consideration stated herein including the consideration of my continued
employment by the Company.

 

(d)           I shall, during the
term of this Agreement and thereafter, notify any prospective employer of the
terms and conditions of this Agreement regarding confidentiality, nondisclosure
and noncompetition.

 

(e)           During the Non-Compete
Period, I shall not publicly disparage the Company, its Business or its
employees.

 

(f)            I hereby acknowledge
that the Company’s Business is unique in character and international in
scope.  As such, I agree that the
Company’s Business could be located anywhere in the world and that the
provisions of this Section 7 are reasonable and necessary for
maintenance of the Business.

 

8.             Confidentiality.  At all times, both during my employment with the Company and after any
termination of such employment, I will keep and hold all Proprietary
Information in strict confidence and trust, and I will not use or disclose any
such Proprietary Information without the prior written consent of the Company,
except as may be necessary to perform my duties as an employee of the Company
for the benefit of the Company.  Upon
termination of my employment with the Company, I will promptly deliver to the
Company all documents and materials of any nature pertaining to my work with
the Company and I will not take with me or otherwise retain any documents or
materials or copies thereof containing any Proprietary Information.

 

9.             No Breach of Prior
Agreement.  I represent that my performance of all the
terms of this Employee Confidentiality and Invention Assignment Agreement and
my duties as an employee of the Company will not breach any invention
assignment, 

 

 

proprietary information or similar agreement with any former employer
or other party.  I represent that I will
not bring with me to the Company or use in the performance of my duties for the
Company any documents or materials of a former employer that are not generally
available to the public or have not been legally transferred to the Company.

 

10.       Notification.  I hereby authorize the Company to notify my actual or future employers
of the terms of this Agreement and my responsibilities hereunder.

 

11.       Name and Likeness Rights,
Etc.  I hereby authorize the Company to use, reuse, and to grant others the right
to use and reuse, my name, photograph, likeness (including caricature), voice,
and biographical information, and any reproduction or simulation thereof, in
any media now known or hereafter developed (including but not limited to film,
video and digital or other electronic media), both during and after my
employment, for whatever purposes the Company deems reasonably necessary.

 

12.       Injunctive Relief.  I understand that in the event of a breach or threatened breach of this
Agreement by me the Company may suffer irreparable harm and will therefore be
entitled to injunctive relief to enforce this Agreement.

 

13.       Governing Law.  This Agreement will be governed and interpreted in accordance with the
internal laws of the State of Delaware without regard to or application of
choice of law rules or principles.

 

14.       Severability.  In the event that any provision of this Agreement is found by a court,
arbitrator or other tribunal to be illegal, invalid or unenforceable, then such
provision shall not be voided, but shall be enforced to the maximum extent
permissible under applicable law, and the remainder of this Agreement shall
remain in full force and effect.

 

15.       Advisory Boards/Consulting. 
Nothing herein shall restrict me from participating on the Advisory Board
of Accenture LLP, or from holding similar consulting and advisory positions.

 

16.       No Duty to Employ: Effective
Date.  I understand that this Agreement does not
constitute a contract of employment or obligate the Company to employ me for
any stated period of time.

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN
WITNESS WHEREOF, the parties hereto have executed Employee Confidentiality and
Non-Compete Agreement effective as July 1, 2004.

 

	
   

  	
  COGENT COMMUNICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/David
  Schaeffer

  
	
   

  	
  Name:

  	
  Dave
  Schaeffer

  
	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/R.
  Reed Harrison III       7/1/2004

  
	
   

  	
  Name:

  	
  R.
  Reed Harrison III

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