EXHIBIT 10.03
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VOTING AGREEMENT
THIS VOTING AGREEMENT, dated as of July 18, 2003 (this "Agreement"),
is made and entered into by and among XXX.xxx, Inc., a Delaware corporation
("DSLN"), certain stockholders of DSLN who have executed a signature page hereto
(each a "Stockholder," and collectively, the "Stockholders") and the Investors
listed on the signature pages hereto (collectively, the "Investors").
PREAMBLE
The Stockholders are stockholders of DSLN and desire that DSLN and
the Investors enter into the Note and Warrant Purchase Agreement dated as of the
date hereof (the "Purchase Agreement") among DSLN and the Investors with respect
to the sale of certain Notes and Warrants to the Investors set forth therein.
The Stockholders are executing this Agreement as an inducement to DSLN and the
Investors to enter into and execute the Purchase Agreement.
All capitalized terms used herein which are not defined herein shall
have the same meanings as ascribed to them in the Purchase Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by
DSLN and the Investors of the Purchase Agreement and the mutual covenants,
conditions and agreements contained herein and therein, the parties agree as
follows:
1. REPRESENTATIONS AND WARRANTIES. (a) The Stockholders severally
and not jointly represent and warrant to DSLN and the Investors as follows:
(i) As of the date hereof, the Stockholders
are the record owners of the DSLN Common Stock, the Series X
Preferred Stock, the Series Y Preferred Stock or warrants (listed on
an as-if-converted to DSLN Common Stock basis) set forth on Schedule
1 to this Agreement. Except for the DSLN Capital Stock set forth on
Schedule 1 to this Agreement, the Stockholders are not the record
owner of any other shares of DSLN Capital Stock. "DSLN Capital
Stock" shall mean the DSLN Common Stock, the Series X Preferred
Stock and the Series Y Preferred Stock. The DSLN Capital Stock set
forth on Schedule 1 to this Agreement and any other DSLN Capital
Stock (including Common Stock issuable pursuant to the warrants set
forth on Schedule 1) or other voting stock of DSLN that the
Stockholders may acquire in the future are referred to herein as the
"Shares." This Agreement has been duly authorized, executed and
delivered by, and constitutes a valid and binding agreement of, the
Stockholders, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors
rights generally or the availability of equitable remedies, and the
execution and delivery of this Agreement will not violate or result
in a default under any agreement to which the Stockholders are a
party. Neither the execution and delivery of this Agreement nor the
consummation by the Stockholders of the transactions contemplated
hereby will (A) conflict with or violate, or require any consent,
approval or notice under any provision of any judgment, order,
decree, statute, law, rule or regulation applicable to a Stockholder
or a Stockholder's Shares or (B) constitute a violation of, conflict
with or constitute a default under, any contract, commitment,
agreement, understanding, arrangement or other restriction of any
kind to which a Stockholder is a party or by which a Stockholder is
bound.
(ii) Except as permitted by Section 3, each
Stockholder's Shares and the certificates representing such Shares
are now and at all times during the term hereof will be held by each
Stockholder, free and clear of all liens, claims, security
interests, proxies, voting trusts or agreements, understandings or
arrangements or any other encumbrances whatsoever that would
interfere with the voting of the Shares or the granting of any proxy
with respect to the subject matter of the proxy granted in Section 2
below, except for any such encumbrances or proxies arising
hereunder.
(iii) The DSLN Capital Stock set forth on
Schedule 1 and held by the Stockholders as of the date hereof is
subject to this Agreement and is sufficient, if voted in accordance
with the terms hereof, under the Delaware General Corporation Law
and the Company's certificate of incorporation and by-laws to obtain
the Required Stockholder Approvals, regardless of whether all
options, warrants, rights or agreements for the purchase or
acquisition of any DSLN Capital Stock or other voting stock of DSLN
that may be exercised by any Person prior to any DSLN Stockholders
Meeting are exercised.
(iv) The Stockholders understand and
acknowledge that any DSLN Capital Stock or other voting stock of the
Company that the Stockholders purchase or with respect to which the
Stockholders otherwise acquire beneficial ownership after the date
of this Agreement and prior to the Termination Date shall be subject
to the terms and conditions of this Agreement to the same extent as
if they constituted Shares as of the date hereof.
(v) The Stockholders understand and
acknowledge that DSLN and the Investors are entering the Purchase
Agreement in reliance upon the Stockholders' execution and delivery
of this Agreement. The Stockholders acknowledge that the irrevocable
proxy set forth in Section 4 is granted in consideration for the
execution and delivery of the Purchase Agreement by DSLN and the
Investors.
(b) DSLN and each of the Investors severally and not jointly
represent and warrant to the Stockholders as follows:
(i) This Agreement has been duly authorized,
executed and delivered by and constitutes a valid and binding
agreement of it, enforceable in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency
or similar laws affecting creditors' rights generally or the
availability of equitable remedies,
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and the execution and delivery of this Agreement will not violate or
result in a default under any agreement to which it is a party.
Neither the execution and delivery of this Agreement nor the
consummation by it of the transactions contemplated hereby will (A)
violate, or require any consent, approval or notice under any
provision of any judgment, order, decree, statute, law, rule or
regulation applicable to it or (B) constitute a violation of,
conflict with or constitute a default under, any contract,
commitment, agreement, understanding, arrangement or other
restriction of any kind to which it is a party or by which it is
bound.
2. VOTING AGREEMENT. The Stockholders severally agree with, and
covenant to, DSLN and the Investors that, during the term of this Agreement, at
any meeting of DSLN stockholders called for the purpose of approving the
transactions contemplated by the Purchase Agreement, including the Required
Stockholder Approvals and all other meetings of Stockholders related thereto
(each, a "DSLN Stockholders Meeting"), or at any adjournment thereof or in any
other circumstances upon which a vote, consent, agreement or other approval is
sought for the purpose of approving the transactions contemplated by the
Purchase Agreement, including the Required Stockholder Approvals, the
Stockholders shall vote (or cause to be voted) the Stockholder's Shares (and all
shares of DSLN Capital Stock for which such Stockholder has been granted a proxy
to the extent permitted thereby), and shall otherwise consent or agree to vote,
in favor of the issuances of the Notes and Warrants as proposed under the
Purchase Agreement and each of the amendments to DSLN's certificate of
incorporation set forth in Exhibit A hereto. The Stockholders, as holders of
DSLN Capital Stock, shall be present in person or by proxy at all meetings of
stockholders of DSLN so that all Shares are counted for purposes of determining
the presence of a quorum at such meetings.
3. COVENANTS. The Stockholders severally agree with, and covenant
to, DSLN and the Investors that prior to the termination of this Agreement, the
Stockholders shall not (i) without the prior written consent of DSLN and the DB
Investors (which consent shall not be unreasonably withheld if the transferee
executes this Agreement at the time of the transfer) transfer (which term shall
include, without limitation, for the purposes of this Agreement, any sale, gift,
pledge, or consent to any transfer of) any or all of a Stockholder's Shares or
any interest therein; (ii) enter into any contract, option or other agreement or
understanding with respect to any transfer of any or all of such Shares or any
interest therein; (iii) grant any proxy, power of attorney or other
authorization in or with respect to such Shares other than pursuant hereto; or
(iv) deposit such Shares into a voting trust or enter into a voting agreement or
arrangement with respect to such Shares other than pursuant hereto.
4. GRANT OF IRREVOCABLE PROXY; APPOINTMENT OF PROXY.
(a) Each Stockholder hereby revokes any previous proxies
relating to its Shares and irrevocably (to the fullest extent
permitted by Section 212 of the Delaware General Corporation Law)
grants to, and appoints, Xxxxx X. Xxxxxxx, Xxxxxx XxXxxxxx, and
Xxxxxxx Xxxxxxxx, each of DSLN, and each of them individually, and
any individual who shall hereafter succeed such person in such
office at DSLN, such Stockholder's proxy and attorney-in-fact (with
full power of substitution), for and in the name, place
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and stead of such Stockholder, to vote such Stockholder's Shares at
any meeting of stockholders of DSLN (including without limitation
the DSLN Stockholders Meeting), or at any adjournment thereof or in
any other circumstances upon which a vote, agreement, consent or
other approval is sought, on the matters set forth in Section 2
hereof; provided, however, that such vote shall be restricted to the
matters set forth in Section 2 and such vote shall be an affirmative
vote in favor of the transactions contemplated by the Purchase
Agreement, including the Required Stockholder Approvals. Such
attorney-in-fact may evidence the taking of any action, giving of
any consent or the voting of the Shares by the execution of any
document or instrument for such purpose in the name of such
Stockholder.
(b) Each Stockholder hereby affirms that the irrevocable
proxy set forth in this Section 4 is given in connection with the
execution of the Purchase Agreement, and that such irrevocable proxy
is given to secure the performance of the duties of such Stockholder
under this Agreement. Each Stockholder hereby further affirms that
the irrevocable proxy is coupled with an interest and may under no
circumstances be revoked. Each Stockholder hereby ratifies and
confirms all that such irrevocable proxy may lawfully do or cause to
be done by virtue hereof. SUCH IRREVOCABLE PROXY IS EXECUTED AND
INTENDED TO BE IRREVOCABLE IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 212 OF THE DELAWARE GENERAL CORPORATION LAW.
5. CERTAIN EVENTS. The Stockholders agree that, except as provided
in Section 3, this Agreement and the obligations hereunder shall attach to the
Stockholders' Shares and shall be binding upon any person or entity to which
legal or beneficial ownership of such Shares shall pass, whether by operation of
law or otherwise, including without limitation the Stockholders' successors or
assigns. In the event of any stock split, stock dividend, merger,
reorganization, recapitalization or other change in the capital structure of
DSLN, or the acquisition of additional shares of DSLN Capital Stock or other
voting securities of DSLN by any Stockholder, the number of Shares subject to
the terms of this Agreement shall be adjusted appropriately and this Agreement
and the obligations hereunder shall attach to any additional shares of DSLN
Capital Stock or other voting securities of DSLN issued to or acquired by the
Stockholders.
6. FURTHER ASSURANCES. The Stockholders shall, upon request of DSLN
or any of the Investors execute and deliver any additional documents and take
such further actions as may be necessary to carry out the provisions hereof and
to vest the power to vote each Stockholder's Shares as contemplated by Section 4
(except as provided in Section 3) in DSLN and the other irrevocable proxies
described therein at the expense of DSLN.
7. TERMINATION. This Agreement, and all rights and obligations of
the parties hereunder, including, without limitation, the proxy set forth in
Section 4, shall terminate upon the first to occur of (i) the termination of the
Purchase Agreement in accordance with Section 1.5 thereof, or (ii) upon the
Second Closing (the "Termination Date").
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8. MISCELLANEOUS.
(a) This Agreement may be executed in two or more
counterparts (including by facsimile transmission), all of which
shall be considered one and the same agreement.
(b) This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement,
and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter
hereof.
(c) This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of
conflicts of laws thereof.
(d) Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise, by any of the
parties without the prior written consent of the other parties. Any
assignment in violation of the foregoing shall be void.
(e) The Stockholders agree that irreparable damage would
occur and that DSLN and the Investors would not have any adequate
remedy at law in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that DSLN and
the Investors shall be entitled to an injunction or injunctions to
prevent breaches by the Stockholders of this Agreement and to
enforce specifically the terms and provisions of this Agreement,
this being in addition to any other remedy to which they are
entitled at law or in equity.
(f) If any term, provision, covenant or restriction
herein, or the application thereof to any circumstance, shall, to
any extent, be held by a court of competent jurisdiction to be
invalid, void or unenforceable, such term, provision, covenant or
restriction shall be modified or voided, as may be necessary to
achieve the intent of the parties to the extent possible, and the
remainder of the terms, provisions, covenants and restrictions
herein and the application thereof to any other circumstances, shall
remain in full force and effect, shall not in any way be affected,
impaired or invalidated, and shall be enforced to the fullest extent
permitted by law.
(g) No amendment, modification or waiver in respect of
this Agreement shall be effective against any party unless it shall
be in writing and signed by such party.
[SIGNATURES APPEAR ON THE NEXT PAGE]
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IN WITNESS WHEREOF, the undersigned parties have
executed and delivered this Voting Agreement as of the date first above written.
DSL. net, Inc.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Title: Chief Executive Officer
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DEUTSCHE BANK AG LONDON,
BY DB ADVISORS LLC AS INVESTMENT ADVISOR
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxx
-----------------------------------
Title: President
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VantagePoint Venture Partners III (Q), L.P.
By: VantagePoint Venture Associates III,
L.L.C., its general partner
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
---------------------------------
Managing Member
VantagePoint Venture Partners III, L.P.
By: VantagePoint Venture Associates III,
L.L.C., its general partner
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
---------------------------------
Managing Member
VantagePoint Communications Partners, L.P.
By: VantagePoint Communications Associates,
L.L.C., its general partner
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
---------------------------------
Managing Member
VantagePoint Venture Partners 1996, L.P.
By: VantagePoint Associates, L.L.C., its
general partner
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
---------------------------------
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COLUMBIA CAPITAL EQUITY PARTNERS II (QP), L.P.
By: Columbia Capital Equity Partners, L.L.C.
By: /s/ Xxxxx X. Xxxxxx, III
---------------------------------
Name: Xxxxx X. Xxxxxx, III
-------------------------------
Title: Partner
------------------------------
COLUMBIA CAPITAL EQUITY PARTNERS III (QP),
L.P.
By: Columbia Capital Equity Partners III, L.P.
Its: General Partner
By: /s/ Xxxxx X. Xxxxxx, III
---------------------------------
Name: Xxxxx X. Xxxxxx, III
-------------------------------
Title: Pertner
------------------------------
COLUMBIA CAPITAL EQUITY PARTNERS II (CAYMAN),
LP
By: Columbia Capital Equity Partners, L.L.C.
Its: General Partner
By: /s/ Xxxxx X. Xxxxxx, III
---------------------------------
Name: Xxxxx X. Xxxxxx, III
-------------------------------
Title: Partner
------------------------------
COLUMBIA CAPITAL EQUITY PARTNERS II, LP
By: Columbia Capital Equity Partners, L.L.C.
Its: General Partner
By: /s/ Xxxxx X. Xxxxxx, III
---------------------------------
Name: Xxxxx X. Xxxxxx, III
-------------------------------
Title: Partner
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COLUMBIA CAPITAL EQUITY PARTNERS III (CAYMAN),
LP
By: Columbia Capital Equity Partners III
(Cayman), Ltd.
Its: General Partner
By: /s/ Xxxxx X. Xxxxxx, III
---------------------------------
Name: Xxxxx X. Xxxxxx, III
-------------------------------
Title: Partner
------------------------------
COLUMBIA CAPITAL EQUITY PARTNERS III (AI), LP
By: Columbia Capital Equity Partners III, L.P.
Its: General Partner
By: /s/ Xxxxx X. Xxxxxx, III
---------------------------------
Name: Xxxxx X. Xxxxxx, III
-------------------------------
Title: Partner
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COLUMBIA CAPITAL INVESTORS III, LLC
By: Columbia Capital III, LLC
Its: Manager
By: /s/ Xxxxx X. Xxxxxx, III
---------------------------------
Name: Xxxxx X. Xxxxxx, III
-------------------------------
Title: Partner
------------------------------
COLUMBIA CARDINAL PARTNERS, L.L.C.
By: Columbia Partners, L.L.C.
By: /s/ Xxxxx X. Xxxxxx, III
---------------------------------
Name: Xxxxx X. Xxxxxx, III
-------------------------------
Title: Partner
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COLUMBIA BROADSLATE PARTNERS, LLC
By: Columbia Capital III, L.L.C.
Its:
By: /s/ Xxxxx X. Xxxxxx, III
-----------------------------
Name: Xxxxx X. Xxxxxx, III
---------------------------
Title: Partner
--------------------------
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XXXXXXX RIVER PARTNERSHIP X, A LIMITED
PARTNERSHIP
By: Xxxxxxx River X GP, LLC, General Partner
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
-------------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
-----------------------------------
Title: Managing Member
----------------------------------
XXXXXXX RIVER PARTNERSHIP X-A, A LIMITED
PARTNERSHIP
By: Xxxxxxx River X GP, LLC, General Partner
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
-------------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
-----------------------------------
Title: Managing Member
----------------------------------
XXXXXXX RIVER FRIENDS X-B, LLC
By: Xxxxxxx River Friends, Inc., Manager
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
-------------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
-----------------------------------
Title: Managing Member
----------------------------------
XXXXXXX RIVER FRIENDS X-C, LLC
By: Xxxxxxx River Friends, Inc., Manager
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
-------------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
-----------------------------------
Title: Managing Member
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THE LAFAYETTE INVESTMENT FUND, L.P.
By: Lafayette Investment Partners, L.P.,
its sole general partner
By: Lafayette Private Equities, Inc.,
its sole general partner
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Xxxxxx Xxxxxxx
Vice President
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SCHEDULE 1
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Stockholder's Name Series X Preferred Series Y Preferred Common Warrants
------------------------------------------------------- -------------------- -------------------- ------------ ------------
VantagePoint Venture Partners III (Q), L.P. 10,694 0 1,361,037 5,960,152
------------------------------------------------------- -------------------- -------------------- ------------ ------------
VantagePoint Venture Partners III, L.P. 1,306 0 168,218 727,881
------------------------------------------------------- -------------------- -------------------- ------------ ------------
VantagePoint Communications Partners, L.P. 4,000 0 13,562,330 2,284,888
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Vantagepoint Venture Partners 1996, L.P. 4,000 0 6,781,164 2,257,114
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Columbia Capital Equity Partners III (QP), L.P. 0 3,877 0 850,053
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Columbia Capital Equity Partners II (QP), L.P. 0 507 0 112,718
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Columbia Cardinal Partners, LLC 0 544 0 20,225
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Columbia Broadslate Partners, LLC 0 3,108 0 0
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Columbia Capital Equity Partners III (AI), L.P. 0 214 0 46,959
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Columbia Capital Equity Partners II (Cayman), L.P. 0 0 0 92,020
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Columbia Capital Equity Partners II, L.P. 0 0 0 4,754
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Columbia Capital Equity Partners III, (Cayman) L.P. 0 0 0 466,809
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Columbia Capital Investors III, L.L.C. 0 0 0 209,741
------------------------------------------------------- -------------------- -------------------- ------------ ------------
The Lafayette Investment Fund, L.P. 0 3,750 0 0
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Xxxxxxx River Partnership X, A Limited Partnership 0 905 0 0
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Xxxxxxx River Partnership X-A, A Limited Partnership 0 25 0 0
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Xxxxxxx River Friends X-B, LLC 0 60 0 0
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Xxxxxxx River Friends X-C, LLC 0 10 0 0
------------------------------------------------------- -------------------- -------------------- ------------ ------------
------------------------------------------------------- -------------------- -------------------- ------------ ------------
TOTALS 20,000 13,000 21,872,749 13,033,314
------------------------------------------------------- -------------------- -------------------- ------------ ------------
Exhibit A
---------
PROPOSED AMENDMENTS TO THE CERTIFICATE OF INCORPORATION OF XXX.XXX, INC.
All corporate action necessary to effectuate the following proposed
amendments to the certificate of incorporation of the Company will need to be
taken in connection with the transactions contemplated by the Note and Warrant
Purchase Agreement (the "Purchase Agreement") dated as of July 18, 2003 by and
among the Corporation and the investors named therein (capitalized terms used
but not defined herein shall have the meaning given such terms in the Purchase
Agreement):
Proposed Amendment to Increase the Number of Shares of Authorized Common Stock
------------------------------------------------------------------------------
Paragraph A of Article IV of the Corporation's certificate of
incorporation shall be amended to increase the number of authorized shares of
Common Stock to _____________ shares from 250,000,000 shares by amending and
restating such paragraph A in its entirety, so that as so amended and restated
such paragraph A shall read in its entirety as follows:
A. CLASSES OF STOCK. This corporation is authorized to
issue two classes of stock to be designated, respectively, "Common
Stock" and "Preferred Stock." The total number of shares that this
corporation is authorized to issue is ___________ shares, of which
____________ shares shall be Common Stock with a par value of $.0005
per share and 20,000,000 shares shall be Preferred Stock with a par
value of $.001 per share.
Proposed Amendments to Series X Preferred Stock
-----------------------------------------------
The terms of the Series X Preferred Stock shall be amended to
replace the full ratchet antidilution adjustment mechanism with a
weighted-average antidilution adjustment mechanism by amending and restating the
first paragraph of Section 3(d) of the Certificate of Designation of Series X
Preferred Stock ("Series X Certificate of Designation") in its entirety, so that
as so amended and restated such first paragraph of Section 3(d) shall read in
its entirety as follows:
(d) Adjustment of Price Upon Issuance of Common Stock.
Except as provided in subsections 3(e) and 3(f), if and whenever the
Corporation shall issue or sell, or is, in accordance with
subsections 3(d)(i) through 3(d)(vii), deemed to have issued or
sold, any shares of Common Stock for a consideration per share less
than the Conversion Price in effect immediately prior to the time of
such issue or sale (such number being appropriately adjusted to
reflect the occurrence of any event described in subsection 3(f))
(the "Dilutive Financing Price"), then, forthwith upon such issue or
sale, the applicable Conversion Price shall be reduced to the price
determined by dividing (i) an amount equal to the sum of (a) the
number of shares of Common Stock outstanding immediately prior to
such issue or sale multiplied by the then existing Conversion Price
and (b) the consideration, if any, received by the Corporation upon
such issue or sale, by (ii) an
amount equal to the sum of (a) the total number of shares of Common
Stock outstanding immediately prior to such issue or sale and (b)
the total number of shares of Common Stock issuable in such issue or
sale. For purposes hereof all shares of Common Stock issuable upon
conversion of outstanding Options and Convertible Securities (both
as defined below) (including all outstanding shares of Series X
Preferred Stock and Series Y Preferred Stock and all outstanding
warrants to purchase shares of capital stock of the Corporation)
immediately prior to such issue or sale shall be deemed to be
outstanding for the purposes of clauses (i)(a) and (ii)(a). The
provisions of this subsection 3(d) may be waived in any instance,
without a meeting, prospectively or retroactively, by the holders of
the Series X Preferred Stock by obtaining the written consent of the
holders of a majority of the then outstanding shares of Series X
Preferred Stock.
The terms of the Series X Preferred Stock shall be amended to
exclude from the requirement to make adjustments of the Conversion Price
applicable to the Series X Preferred Stock (1) the issuance, sale and exercise
of the Warrants, (2) the issuance of shares of Common Stock as payment of
interest in accordance with the terms of the Notes and (3) the issuance and
exercise of certain warrants to be issued to VantagePoint Venture Partners III
(Q), L.P. by amending and restating Section 3(e) of the Series X Certificate of
Designation in its entirety, so that as so amended and restated such Section
3(e) shall read in its entirety as follows:
(e) Certain Issues of Common Stock Excepted. Anything herein to the
contrary notwithstanding, the Corporation shall not be required to make
any adjustment of the Conversion Price in the case of (A) the issuance,
or deemed issuance, of shares of Common Stock to directors, officers,
employees or consultants of the Corporation or a subsidiary of the
Corporation in connection with their service as directors of the
Corporation or a subsidiary of the Corporation, their employment by the
Corporation or a subsidiary of the Corporation or their retention as
consultants by the Corporation or a subsidiary of the Corporation under
the Corporation's Amended and Restated 1999 Stock Plan, the Vector
Internet Services Inc. 1997 Stock Option Plan, the Vector Internet
Services Inc. 1999 Stock Option Plan, the Corporation's 1999 Employee
Stock Purchase Plan or the Corporation's Amended and Restated 2001 Stock
Option and Incentive Plan (the "Plans"), plus such additional number of
shares issued or issuable to directors, officers, employees or
consultants of the Corporation or a subsidiary of the Corporation under
any amendment of the Plans, or under other plans, adopted or assumed by
the Corporation with the approval of the Board of Directors of the
Corporation (including a majority of the Series X Directors (as defined
in Section 4(b)), plus such number of shares of Common Stock which are
repurchased by the Corporation from such persons pursuant to contractual
rights held by the Corporation and at repurchase prices not exceeding
the respective original purchase prices paid by such persons to the
Corporation therefor, (B) the issuance of shares of Common Stock upon
exercise of the warrant to purchase 27,770 shares of Common Stock
(appropriately adjusted to reflect the occurrence of any event described
in subsection 3(f)) issued to VantagePoint Venture Partners 1996, L.P.,
(C) the issuance of shares of Common Stock upon exercise of the warrant
to purchase 55,544 shares of Common Stock (appropriately adjusted to
reflect the occurrence of any event described in subsection 3(f)) issued
to VantagePoint Communications Partners, L.P., (D) the issuance of
shares of Common Stock upon exercise of the warrant to purchase
12,950,000 shares of Common Stock (appropriately adjusted to reflect the
occurrence of any event described in subsection 3(f)) issued to
affiliates of VantagePoint Venture Partners and Columbia Capital
Partners in connection with the guaranty of the Corporation's
obligations under that certain Revolving Credit and Term Loan Agreement
dated as of December 13, 2002 by and between the Corporation and Fleet
National Bank; (E) the issuance of shares of Common Stock upon exercise
of the warrant to purchase an aggregate of 2,260,909 shares of Common
Stock (appropriately adjusted to reflect the occurrence of any event
described in subsection 3(f)) issued to VantagePoint Venture Partners
III (Q), L.P., (F) the issuance, or deemed issuance, of shares of Common
Stock pursuant to a merger, consolidation or stock or asset acquisition
approved by the Corporation's Board of Directors, including a majority
of the Series X Directors; (G) the issuance of shares of Common Stock
upon the conversion of the Series X Preferred Stock or Series Y
Preferred Stock; (H) the issuance, or deemed issuance, of securities of
the Corporation for any purpose and in any amount as approved by the
Corporation's Board of Directors, including a majority of the Series X
Directors and the approval of the Series Y Director (as defined in the
Amended and Restated Stockholders Agreement dated as of July 18, 2003
among the Corporation, holders of the Series X Preferred Stock, holders
of the Series Y Preferred Stock and certain other signatories thereto);
and (I) the issuance and sale of warrants to purchase shares of Common
Stock pursuant to the Note and Warrant Purchase Agreement dated as of
July 18, 2003 by and among the Corporation and the investors named
therein and the issuance of shares of Common Stock upon the exercise of
such warrants.
The terms of the Series X Preferred Stock shall be amended to extend
the redemption date for the Series X Preferred Stock from January 1, 2005 to
[three years after the Initial Closing Date] by amending and restating the first
sentence of Section 6(a) of the Series X Certificate of Designation in its
entirety, so that as so amended and restated such first sentence of Section 6(a)
shall read in its entirety as follows:
(a) Optional Redemption. At any time on or after [three years after
the Initial Closing Date], the holders of at least a majority of the
then outstanding shares of the Series X Preferred Stock may request that
the Corporation redeem all (and not less than all) of the outstanding
shares of Series X Preferred Stock pursuant to the terms of this Section
6 (the "Redemption Request").
Proposed Amendments to Series Y Preferred Stock
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The terms of the Series Y Preferred Stock shall be amended to reduce
the Conversion Price applicable to the Series Y Preferred Stock to $.4423 from
$0.50 by amending and restating the last sentence of Section 3(a)(i) of the
Certificate of Designation of Series Y Preferred Stock ("Series Y Certificate of
Designation") in its entirety, so that as so amended and restated such last
sentence of Section 3(a)(i) shall read in its entirety as follows:
The initial Conversion Price per share for shares of Series Y
Preferred Stock shall be $0.50; provided, however, that from and
after July __, 2003 [insert Initial Closing Date] the Conversion
Price per share for shares of Series Y Preferred Stock shall be
$.4423; and provided further, however, that the Conversion Price
shall be subject to further adjustment as set forth in subsection
3(d).
The terms of the Series Y Preferred Stock shall be amended to
replace the full ratchet antidilution adjustment mechanism with a
weighted-average antidilution adjustment mechanism by amending and restating the
first paragraph of Section 3(d) of the Series Y Certificate of Designation in
its entirety, so that as so amended and restated such first paragraph of Section
3(d) shall read in its entirety as follows:
(d) Adjustment of Price Upon Issuance of Common Stock.
Except as provided in subsections 3(e) and 3(f), if and whenever the
Corporation shall issue or sell, or is, in accordance with
subsections 3(d)(i) through 3(d)(vii), deemed to have issued or
sold, any shares of Common Stock for a consideration per share less
than the Conversion Price in effect immediately prior to the time of
such issue or sale (such number being appropriately adjusted to
reflect the occurrence of any event described in subsection 3(f))
(the "Dilutive Financing Price"), then, forthwith upon such issue or
sale, the applicable Conversion Price shall be reduced to the price
determined by dividing (i) an amount equal to the sum of (a) the
number of shares of Common Stock outstanding immediately prior to
such issue or sale multiplied by the then existing Conversion Price
and (b) the consideration, if any, received by the Corporation upon
such issue or sale, by (ii) an amount equal to the sum of (a) the
total number of shares of Common Stock outstanding immediately prior
to such issue or sale and (b) the total number of shares of Common
Stock issuable in such issue or sale. For purposes hereof all shares
of Common Stock issuable upon conversion of outstanding Options and
Convertible Securities (both as defined below) (including all
outstanding shares of Series X Preferred Stock and Series Y
Preferred Stock and all outstanding warrants to purchase shares of
capital stock of the Corporation) immediately prior to such issue or
sale shall be deemed to be outstanding for the purposes of clauses
(i)(a) and (ii)(a). The provisions of this subsection 3(d) may be
waived in any instance, without a meeting, prospectively or
retroactively, by the holders of the Series Y Preferred Stock by
obtaining the written consent of the holders of a majority of the
then outstanding shares of Series Y Preferred Stock.
The terms of the Series Y Preferred Stock shall be amended to
exclude from the requirement to make adjustments of the Conversion Price
applicable to the Series Y Preferred Stock (1) the issuance and exercise of the
Warrants, (2) the issuance of shares of Common Stock as payment of interest in
accordance with the terms of the Notes and (3) the issuance and exercise of
certain warrants to be issued to VantagePoint Venture Partners III (Q), L.P. by
amending and restating Section 3(e) of the Series Y Certificate of Designation
in its entirety, so that as so amended and restated such Section 3(e) shall read
in its entirety as follows:
(e) Certain Issues of Common Stock Excepted. Anything herein to the
contrary notwithstanding, the Corporation shall not be required to make
any adjustment of the Conversion Price in the case of (A) the issuance,
or deemed issuance, of shares of Common Stock to directors, officers,
employees or consultants of the Corporation or a subsidiary of the
Corporation in connection with their service as directors of the
Corporation or a subsidiary of the Corporation, their employment by the
Corporation or a subsidiary of the Corporation or their retention as
consultants by the Corporation or a subsidiary of the Corporation under
the Corporation's Amended and Restated 1999 Stock Plan, the Vector
Internet Services Inc. 1997 Stock Option Plan, the Vector Internet
Services Inc. 1999 Stock Option Plan, the Corporation's 1999 Employee
Stock Purchase Plan or the Corporation's Amended and Restated 2001 Stock
Option and Incentive Plan (the "Plans"), plus such additional number of
shares issued or issuable to directors, officers, employees or
consultants of the Corporation or a subsidiary of the Corporation under
any amendment of the Plans, or under other plans, adopted or assumed by
the Corporation with the approval of the Board of Directors of the
Corporation (including a majority of the Series X Directors (as defined
in Section 4(b)), plus such number of shares of Common Stock which are
repurchased by the Corporation from such persons pursuant to contractual
rights held by the Corporation and at repurchase prices not exceeding
the respective original purchase prices paid by such persons to the
Corporation therefor, (B) the issuance of shares of Common Stock upon
exercise of the warrant to purchase 27,770 shares of Common Stock
(appropriately adjusted to reflect the occurrence of any event described
in subsection 3(f)) issued to VantagePoint Venture Partners 1996, L.P.,
(C) the issuance of shares of Common Stock upon exercise of the warrant
to purchase 55,544 shares of Common Stock (appropriately adjusted to
reflect the occurrence of any event described in subsection 3(f)) issued
to VantagePoint Communications Partners, L.P., (D) the issuance of
shares of Common Stock upon exercise of the warrant to purchase
12,950,000 shares of Common Stock (appropriately adjusted to reflect the
occurrence of any event described in subsection 3(f)) issued to
affiliates of VantagePoint Venture Partners and Columbia Capital
Partners in connection with the guaranty of the Corporation's
obligations under that certain Revolving Credit and Term Loan Agreement
dated as of December 13, 2002 by and between the Corporation and Fleet
National Bank; (E) the issuance of shares of Common Stock upon exercise
of the warrant to purchase an aggregate of 2,206,909 shares of Common
Stock (appropriately adjusted to reflect the occurrence of any event
described in subsection 3(f)) issued to VantagePoint Venture Partners
III (Q), L.P., (F) the issuance, or deemed issuance, of shares of Common
Stock pursuant to a merger, consolidation or stock or asset acquisition
approved by the Corporation's Board of Directors, including a majority
of the Series X Directors; (G) the issuance of shares of Common Stock
upon the conversion of the Series X Preferred Stock or Series Y
Preferred Stock; (H) the issuance, or deemed issuance, of securities of
the Corporation for any purpose and in any amount as approved by the
Corporation's Board of Directors, including a majority of the Series X
Directors and the approval of the Series Y Director (as defined in the
Amended and Restated Stockholders Agreement dated as of July 18, 2003
among the Corporation, holders of the Series X Preferred Stock, holders
of the Series Y Preferred Stock and certain other signatories thereto);
and (I) the issuance and sale of warrants to purchase shares of Common
Stock pursuant to the Note and Warrant Purchase Agreement dated as of
July 18, 2003 by and among the Corporation and the investors named
therein and the issuance of shares of Common Stock upon the exercise of
such warrants.
The terms of the Series Y Preferred Stock shall be amended to extend
the redemption date for the Series Y Preferred Stock from January 1, 2005 to
[three years after the Initial Closing Date] by amending and restating the first
sentence of Section 6(a) of the Series Y Certificate of Designation in its
entirety, so that as so amended and restated such first sentence of Section 6(a)
shall read in its entirety as follows:
(a) Optional Redemption. At any time on or after [three years after
the Initial Closing Date], the holders of at least a majority of the
then outstanding shares of the Series Y Preferred Stock may request that
the Corporation redeem all (and not less than all) of the outstanding
shares of Series Y Preferred Stock pursuant to the terms of this Section
6 (the "Redemption Request").
