-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NRK+TfXt9e6QTXLQmF11vL/ZbNtd8yfxko4Sir+Pc2x7yyiu7VSe4tntkvHW3tXK I++nluVA+IWRTv3qK71vzg== 0000944209-00-000309.txt : 20000307 0000944209-00-000309.hdr.sgml : 20000307 ACCESSION NUMBER: 0000944209-00-000309 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20000302 GROUP MEMBERS: PAUL G. ALLEN GROUP MEMBERS: VULCAN VENTURES INC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RCN CORP /DE/ CENTRAL INDEX KEY: 0001041858 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 223498533 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-51715 FILM NUMBER: 559984 BUSINESS ADDRESS: STREET 1: 105 CARNEGIE CENTER CITY: PRINCETON STATE: NJ ZIP: 08540 BUSINESS PHONE: 6097343700 MAIL ADDRESS: STREET 1: 105 CARNEGIE CENTER CITY: PRINCETON STATE: NJ ZIP: 08540 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: VULCAN VENTURES INC CENTRAL INDEX KEY: 0001014931 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 911374788 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 110 110TH AVE N E STREET 2: STE 550 CITY: BELLEVUE STATE: WA ZIP: 98004 MAIL ADDRESS: STREET 1: 110 110TH AVE NE STREET 2: STE 550 CITY: BELLEVUE STATE: WA ZIP: 98004 SC 13D/A 1 AMEND. NO. 1 TO SCHEDULE 13D ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________ SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No. 1)* RCN CORPORATION (Name of Issuer) COMMON STOCK (Title of Class of Securities) 7493 6101 (CUSIP Number) William D. Savoy Alvin G. Segel, Esq. Vulcan Ventures Incorporated Irell & Manella LLP 110-110th Avenue N.E., Suite 550 1800 Avenue of the Stars Bellevue, WA 98004 Suite 900 (206) 453-1940 Los Angeles, CA 90067 (310) 277-1010 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) February 28, 2000 (Date of Event which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [_]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D - --------------------- -------------------- CUSIP NO. 7493 6101 Page 1 of 2 Pages - --------------------- -------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1. S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Vulcan Ventures Incorporated - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) 2. (a) (b) - ------------------------------------------------------------------------------ SEC USE ONLY 3. - ------------------------------------------------------------------------------ SOURCE OF FUNDS* 4. WC - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) 5. - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6. State of Washington - ------------------------------------------------------------------------------ SOLE VOTING POWER 7. NUMBER OF -0- SHARES SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8. OWNED BY 30,020,003 SHARES (1) ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9. REPORTING -0- SHARES PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10. 30,020,003 SHARES (1) - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11. 30,020,003 SHARES (1) - ------------------------------------------------------------------------------ CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12. - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 13. 29.2% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON 14. CO - ------------------------------------------------------------------------------ (1) These shares are directly owned by Vulcan Ventures Incorporated. Paul G. Allen is the sole shareholder of Vulcan Ventures Incorporated and may be deemed to have shared voting and dispositive power with respect to such shares. The reported shares include 1,650,000 shares of Series B 7% Senior Convertible Preferred Stock (and the shares of Common Stock that may be obtained upon conversion thereof) that Vulcan Ventures Incorporated acquired on February 28, 2000 pursuant to the Stock Purchase Agreement (as defined below) and 3,407,100 shares of Common Stock that it owned prior to the execution of the Stock Purchase Agreement. * SEE INSTRUCTIONS BEFORE FILLING OUT! SCHEDULE 13D - ---------------------- --------------------- CUSIP NO. 7493 6101 Page 2 of 2 Pages - ---------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1. S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Paul G. Allen - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) 2. (a) (b) - ------------------------------------------------------------------------------ SEC USE ONLY 3. - ------------------------------------------------------------------------------ SOURCE OF FUNDS* 4. PF - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) 5. - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6. United States of America - ------------------------------------------------------------------------------ SOLE VOTING POWER 7. NUMBER OF -0- SHARES SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8. OWNED BY 30,020,003 SHARES (1) ----------------------------------------------------------- EACH SOLE DISPOSITIVE SHARES 9. REPORTING -0- SHARES PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10. 30,020,003 SHARES (1) - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11. 30,020,003 SHARES (1) - ------------------------------------------------------------------------------ CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12. - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 13. 29.2% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON 14. IN - ------------------------------------------------------------------------------ (1) These shares are directly owned by Vulcan Ventures Incorporated. Paul G. Allen is the sole shareholder of Vulcan Ventures Incorporated and may be deemed to have shared voting and dispositive power with respect to such shares. The reported shares include 1,650,000 shares of Series B 7% Senior Convertible Preferred Stock (and the shares of Common Stock that may be obtained upon conversion thereof) that Vulcan Ventures Incorporated acquired on February 28, 2000 pursuant to the Stock Purchase Agreement (as defined below) and 3,407,100 shares of Common Stock that it owned prior to the execution of the Stock Purchase Agreement. SCHEDULE 13D This Statement, which is being filed by Vulcan Ventures Incorporated, a Washington corporation ("Vulcan Ventures"), and Paul G. Allen, the Chairman, President and sole shareholder of Vulcan ("Mr. Allen"), constitutes Amendment No. 1 to the Schedule 13D originally filed with the Securities and Exchange Commission on October 18, 1999 (the "Schedule 13D"). The Schedule 13D relates to the Common Stock, par value $1.00 per share ("Common Stock"), of RCN Corporation, a Delaware corporation (the "Issuer"). The item numbers and responses thereto below are in accordance with the requirements of Schedule 13D. Capitalized terms used herein and not defined shall have the meaning set forth in the Schedule 13D. ITEM 3: SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Item 3 of the Schedule 13D is hereby amended and restated in its entirety to read as follows: On February 28, 2000, Vulcan Ventures purchased from the Issuer 1,650,000 shares of Series B 7% Senior Convertible Preferred Stock (the "Preferred Stock") for an aggregate purchase price of $1,650,000,000 pursuant to a Stock Purchase Agreement entered into by Vulcan Ventures and the Issuer on October 1, 1999 (as amended, the "Stock Purchase Agreement"). Vulcan Ventures funded its purchase of the Preferred Stock from its working capital following a capital contribution from Mr. Allen, which was funded by Mr. Allen's personal funds. Vulcan Ventures funded its purchase of the 3,407,100 shares of Common Stock that it owned prior to the execution of the Stock Purchase Agreement from its own working capital. None of the funds used to purchase such shares of Common Stock or Preferred Stock consisted of funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding, trading or voting the shares of Common Stock. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5 of the Schedule 13D is hereby amended and restated in its entirety to read as follows: (a) On February 28, 2000, the sale of 1,650,000 shares of the Preferred Stock by the Issuer to Vulcan Ventures pursuant to the Stock Purchase Agreement was consummated. As of the date of this Amendment, Vulcan Ventures and Mr. Allen each beneficially owns 30,020,003 shares of the Issuer's Common Stock. These shares include the shares of Common Stock and Class B Common Stock that may be obtained upon conversion of the Preferred Stock that Vulcan Ventures acquired pursuant to the Stock Purchase Agreement and 3,407,100 shares of Common Stock that Vulcan Ventures owned prior to the execution of the Stock Purchase Agreement. The Class B Common Stock is identical to the Common Stock except that it is not entitled to vote. -7- Vulcan Ventures' and Mr. Allen's stockholdings, assuming immediate conversion of all of the shares of Preferred Stock into shares of Common Stock, represent approximately 29.2% of the shares of the Issuer's Common Stock outstanding (27.4% if the Issuer's Series A 7% Convertible Preferred Stock outstanding as of September 30, 1999 were converted into shares of Common Stock). But see Item 6 of the Schedule 13D. All of the percentages set forth in this Item 5(a) are based upon 76,324,222 shares of the Issuer's Common Stock outstanding as of September 30, 1999, as reported by the Issuer in its Quarterly Report on Form 10-Q for the quarter ended September 30, 1999. To the best knowledge of Vulcan Ventures and Mr. Allen, none of the other parties named in Item 2 of the Schedule 13D owns any of the Issuer's Common Stock. (b) Vulcan Ventures and Mr. Allen have shared voting and dispositive power with respect to the 30,020,003 shares of Common Stock beneficially owned by Vulcan Ventures. (c) Vulcan Ventures and Mr. Allen have not, nor to the knowledge of Vulcan Ventures, has any of its executive officers, directors or controlling persons named in Item 2 of the Schedule 13D, effected any transactions in the Issuer's Common Stock during the past sixty days. (d) Neither Vulcan Ventures nor Mr. Allen knows any other person who has the right to receive or the power to direct the receipt of dividends from or the proceeds from the sale of any Common Stock beneficially owned by Vulcan Ventures or Mr. Allen. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 6 of the Schedule 13D is hereby amended by adding the following: Amendment Number One to Stock Purchase Agreement ------------------------------------------------ On February 28, 2000, the Issuer and Vulcan Ventures entered into Amendment Number One to Stock Purchase Agreement ("Amendment One") which provides that if Vulcan Ventures' covenant to vote all Voting Securities owned by it for nominees to the Board of Directors who have been recommended by the Issuer's Board of Directors is unenforceable, then Vulcan Ventures shall vote all Voting Securities owned by it for nominees of the Board of Directors of the Issuer, at Vulcan Ventures' election, either for the nominees to the Board of Directors of the Issuer who have been recommended by the Issuer's Board of Directors or in proportion to the votes cast by the other holders of Voting Securities. The foregoing description of Amendment One is not, and does not purport to be, complete and is qualified in its entirety by reference to Amendment One, a copy of which is filed as Exhibit 10.3. -8- Voting Agreement between Vulcan Ventures and the Issuer ------------------------------------------------------- On February 28, 2000, the Issuer and Vulcan Ventures entered into a Voting Agreement (the "Vulcan Voting Agreement") in furtherance of Vulcan Ventures' covenant in the Stock Purchase Agreement to, subject to certain exceptions, vote all shares of Preferred Stock owned by it pro rata with the voting of the Issuer's other stockholders on matters submitted to a vote of such stockholders. The foregoing description of the Vulcan Voting Agreement is not, and does not purport to be, complete and is qualified in its entirety by reference to the Voting Agreement, a copy of which is filed as Exhibit 10.4. ITEM 7. MATERIALS TO BE FILED AS EXHIBITS. Exhibit 10.3 Amendment Number One to Stock Purchase Agreement dated February 28, 2000 between RCN Corporation and Vulcan Ventures Incorporated. Exhibit 10.4 Voting Agreement dated as of February 28, 2000 between RCN Corporation and Vulcan Ventures Incorporated. -9- SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: March 2, 2000 VULCAN VENTURES INCORPORATED By: /s/ William D. Savoy --------------------------- Name: William D. Savoy Title: Vice President Dated: March 2, 2000 By: /s/ Paul G. Allen --------------------------- Paul G. Allen -10- EXHIBIT INDEX EXHIBIT NO. DESCRIPTION ----------- ----------- 10.3 Amendment Number One to Stock Purchase Agreement dated February 28, 2000 between RCN Corporation and Vulcan Ventures Incorporated. 10.4 Voting Agreement dated as of February 28, 2000 between RCN Corporation and Vulcan Ventures Incorporated. EX-10.3 2 AMEND. NO. 1 TO STOCK PURCHASE AGMT EXHIBIT 10.3 Amendment Number One To Stock Purchase Agreement This Amendment Number One (this "Amendment") is made as of February 28, 2000, between RCN Corporation, a Delaware corporation (the "Corporation"), and Vulcan Ventures Incorporated, a Washington corporation ("Buyer"), to the Stock Purchase Agreement between the Corporation and Buyer dated as of October 1, 1999 (the "Stock Purchase Agreement"). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms as set forth in the Stock Purchase Agreement. WHEREAS, the Corporation and Buyer desire to amend certain provisions of the Stock Purchase Agreement, as set forth below. NOW, THEREFORE, the parties hereto agree as follows: 1. Amendment. Section 6.05 of the Stock Purchase Agreement is hereby amended and restated in its entirety as follows: "Section 6.05. Voting Arrangements. During the Standstill Period, Buyer shall vote and cause to be voted all Voting Securities owned by the Buyer (i) for nominees to the Board of Directors of the Corporation who have been recommended by the Corporation's Board of Directors and (ii) on all other matters submitted to the holders of Voting Securities, either in accordance with the recommendations of the Corporation's Board of Directors or in proportion to the votes cast by the other holders of Voting Securities; provided that (A) with respect to any Takeover Proposal submitted to the vote of the Corporation's stockholders, Buyer shall be free to vote without restriction all Voting Securities beneficially owned by it and (B) with respect to any proposal to approve the issuance of equity securities by the Corporation (not including a proposal to approve a stock option or other director or officer compensation plan and not in connection with a Takeover Proposal) (a "Stock Issuance Proposal") submitted to the vote of the Corporation's stockholders, Buyer shall be free to vote without restriction Voting Securities beneficially owned by it representing up to the Agreed Percentage (disregarding clause (i) of the proviso in the definition of such term) of the Total Voting Power. Buyer shall cause all Voting Securities owned by Buyer to be represented, in person or by proxy, at all meetings of holders of Voting Securities of which Buyer has actual notice, so that such Voting Securities may be counted for the purpose of determining the presence of a quorum at such meetings. The Corporation agrees to give Buyer reasonable advance notice of the record date of any meeting of stockholders (or consent solicitation) to which a Takeover Proposal or a Stock Issuance Proposal will be submitted for approval (or in respect of which consents will be sought) so that Buyer may, subject to the other provisions of this Agreement, convert shares of Preferred Stock into Common Stock prior to the applicable record date and vote such shares of Common Stock at such meeting (or execute such consent) as permitted hereby. Notwithstanding the foregoing, if Buyer's covenant to vote and cause to be voted all Voting Securities owned by the Buyer for nominees to the Board of Directors who have been recommended by the Corporation's Board of Directors is unenforceable, then Buyer shall vote and cause to be voted all Voting Securities owned by Buyer for nominees to the Board of Directors of the Corporation, at Buyer's election, either for the nominees to the Board of Directors of the Corporation who have been recommended by the Corporation's Board of Directors or in proportion to the votes cast by the other holders of Voting Securities. 2. Effect on Stock Purchase Agreement. Except to the extent of the amendment set forth specifically herein, all provisions of the Stock Purchase Agreement are and shall remain in full force and effect, and the execution, delivery and performance of this Amendment shall not operate as a waiver or amendment of any provision of the Stock Purchase Agreement not specifically amended herein. 3. Execution in Counterparts; Effectiveness. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. 2 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written. RCN CORPORATION By: /s/ Timothy J. Stoklosa ------------------------------------- Name: Timothy J. Stoklosa Title: Chief Financial Officer and Executive Vice President VULCAN VENTURES INCORPORATED By: /s/ William D. Savoy ------------------------------------- Name: William D. Savoy Title: Vice President 3 EX-10.4 3 VOTING AGREEMENT EXHIBIT 10.4 VOTING AGREEMENT VOTING AGREEMENT (this "Agreement") dated as of February 28, 2000 between RCN Corporation, a Delaware corporation (the "Corporation"), and Vulcan Ventures Incorporated ("Vulcan"), a Washington corporation. WHEREAS, the Corporation and Vulcan entered into a Stock Purchase Agreement dated as of October 1, 1999 (as amended from time to time, the "Stock Purchase Agreement"), which provides for the purchase by Vulcan of 1,650,000 shares of Series B 7% Senior Convertible Preferred Stock (the "Preferred Stock") of the Corporation (capitalized terms used and not defined herein shall have the meanings given to such terms in the Stock Purchase Agreement); WHEREAS, it is a condition to the obligation of the Corporation to consummate the Closing under the Stock Purchase Agreement that Vulcan enter into an arrangement, agreement or proxy with respect to the voting of the Vulcan Preferred Stock (other than a voting trust) as requested by the Corporation, in its reasonable discretion, for purposes of ensuring that all shares of Preferred Stock (together with any shares of Preferred Stock issued as dividends) beneficially owned (as defined in the Stock Purchase Agreement) by Vulcan (collectively, the "Vulcan Preferred Stock") will be (i) represented, in person or by proxy at all meetings of holders of Voting Securities of which Vulcan has actual notice in proportion to the representation of votes entitled to be cast by holders of Voting Securities, so that such portion of such shares of Preferred Stock may be counted for the purpose of determining the presence of a quorum at such meetings and (ii) voted (and abstained) in proportion to the votes cast (and abstained) by the holders of Voting Securities; and NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows: ARTICLE 1 VOTING OF THE SHARES SECTION 1.1. Voting Agreement. (a) Vulcan hereby agrees that (i) all shares of Vulcan Preferred Stock will be represented, in person or by proxy, at all meetings of holders of Voting Securities of which Vulcan has actual notice in proportion to the representation of votes entitled to be cast by holders of Voting Securities, so that such portion of such shares of Preferred Stock may be counted for the purpose of determining the presence of a quorum at such meetings and (ii) that all shares so represented will be voted (and abstained) in proportion to the votes cast (and abstained) by the holders of Voting Securities represented at such meeting. (b) Notwithstanding the foregoing, if, immediately prior to the record date for a meeting of the Corporation's stockholders at which a Takeover Proposal or Stock Issuance Proposal is to be considered, the conversion by Vulcan of Vulcan Preferred Stock into Common Stock would violate any material legal impediment imposed by any Regulatory Authority, Vulcan shall be permitted to vote in its sole discretion Vulcan Preferred Stock in respect of such Takeover Proposal or Stock Issuance Proposal to the extent necessary to increase Vulcan's vote to the Agreed Percentage and the remaining shares of Vulcan Preferred Stock will be represented and voted in accordance with Section 1.1(a). With respect to such vote and the implementation of this Section 1.1(b) only, the applicable amount of Vulcan Preferred Stock that Vulcan is permitted to vote in its sole discretion will be deemed to have been converted to Common Stock for purposes of the definition of the terms "Agreed Percentage" and "Voting Securities" in Section 1.01 of the Stock Purchase Agreement. The parties will cooperate with each other so as to effect the intent of this Section 1.1(b). SECTION 1.2. Irrevocable Proxy. Vulcan hereby revokes any and all previous proxies granted with respect to the shares of Vulcan Preferred Stock that are inconsistent with the voting agreement set forth in Section 1.1. By entering into this Agreement, Vulcan hereby grants a proxy appointing David C. McCourt (or if he ceases to be Chief Executive Officer of the Corporation, the person holding the office of Chief Executive Officer of the Corporation from time to time) as Vulcan's attorney-in-fact and proxy, with full power of substitution, for and in Vulcan's name, to be represented at meetings of holders of Voting Securities and to vote or consent or otherwise to utilize such voting power solely in the manner contemplated by Section 1.1. The proxy granted by Vulcan pursuant to this Section 1.2 is irrevocable and is coupled with an interest and is granted in consideration of the Corporation entering into this Agreement and consummating the Closing under the Stock Purchase Agreement and as security for the obligations of Vulcan under Section 1.1. Without limiting the foregoing, Vulcan will, upon Corporation's request, take all action as shall be reasonably required from time to time in order to appoint the person described in the second 2 sentence of this Section 1.2 as its duly authorized proxy holder for the shares of Vulcan Preferred Stock solely for the purpose set forth in Section 1.1. SECTION 1.3. Record Holder. If Vulcan is not the record owner of any shares of Preferred Stock as to which it is the beneficial owner, Vulcan agrees to cause or direct the record holder to act in respect of such shares of Preferred Stock in accordance with the terms of this Agreement or, to the extent permitted by law, to provide a proxy to the Corporation with respect thereto. ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF VULCAN Vulcan hereby represents and warrants to the Corporation as follows: SECTION 2.1. Authority Relative to this Agreement. Vulcan is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Washington. Vulcan has all necessary power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Vulcan and the consummation by Vulcan of the transactions contemplated hereby have been duly and validly authorized by Vulcan, and no other proceedings on the part of Vulcan are necessary to authorize the execution and delivery of this Agreement or to consummate such transactions. This Agreement has been duly and validly executed and delivered by Vulcan and constitutes a legal, valid and binding obligation of Vulcan, enforceable against Vulcan in accordance with its terms. SECTION 2.2. No Conflict. (a) The execution and delivery of this Agreement by Vulcan do not, and the performance of this Agreement by Vulcan will not, (i) conflict with or violate the certificate of incorporation or bylaws of Vulcan, (ii) conflict with or violate any law, rule, regulation, order, judgment or decree applicable to Vulcan or by which the shares of Vulcan Preferred Stock are bound or affected or (iii) require any consent or other action by any person or private or governmental entity, result in any breach of or constitute a default (or an event that, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of any lien or encumbrance on any of the shares of Vulcan Preferred Stock pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which Vulcan is a party or by which Vulcan or the shares of Vulcan Preferred Stock are bound or affected, except, in the case of 3 clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not prevent, delay or impair the performance by Vulcan of its obligations under this Agreement. (b) The execution and delivery of this Agreement by Vulcan do not, and the performance of this Agreement by Vulcan will not, require any consent, approval, authorization or permit of, or filing with or notification to, any federal, state, local or foreign regulatory body, except (i) filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not prevent, delay or impair the performance by Vulcan of its obligations under this Agreement. SECTION 2.3. Title to the Shares. Subject to the terms and conditions of the Stock Purchase Agreement, Vulcan is the owner of the shares of Vulcan Preferred Stock, free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges and other encumbrances of any nature whatsoever. Vulcan has not appointed or granted any proxy, which appointment or grant is still effective, with respect to the shares of Vulcan Preferred Stock. Subject to the terms and conditions of the Stock Purchase Agreement, Vulcan has sole voting power with respect to the shares of Vulcan Preferred Stock and Vulcan has the sole power to direct the voting of the shares of Vulcan Preferred Stock. ARTICLE 3 COVENANTS OF VULCAN SECTION 3.1. No Inconsistent Agreement. Vulcan hereby covenants and agrees that it shall not enter into any voting agreement or grant a proxy or power of attorney or take any other action with respect to the shares of Vulcan Preferred Stock which is inconsistent with this Agreement. SECTION 3.2. Transfer of Title. Vulcan hereby covenants and agrees that Vulcan will not sell, pledge, encumber or otherwise transfer any of its shares of Preferred Stock unless (i) the transfer is permitted under the Stock Purchase Agreement and (ii) the transfer is to a transferee that agrees in writing to be bound by the terms and conditions of this Agreement on terms satisfactory to the Corporation in its reasonable discretion. 4 SECTION 3.3. Further Assurances. Vulcan will execute and deliver, or cause to be executed and delivered, all further documents and instruments and use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to take the actions required to be taken by Vulcan hereunder. Vulcan agrees, at the request of the Corporation, to enter into such other arrangement, agreement or proxy with respect to the voting of the Vulcan Preferred Stock (other than a voting trust) to effect the intent of Section 6.06 of the Stock Purchase Agreement with respect to voting of the Vulcan Preferred Stock as the Corporation may request in its reasonable discretion. ARTICLE 4 MISCELLANEOUS SECTION 4.1. Termination. This Agreement (including, without limitation, the proxy granted hereunder) shall terminate on the earlier of (i) the conversion of all shares of Vulcan Preferred Stock into Common Stock or Class B Stock and (ii) the redemption of all shares of Vulcan Preferred Stock. SECTION 4.2. Specific Performance. The parties hereto agree that the remedy at law for any breach of this Agreement will be inadequate and that any party by whom this Agreement is enforceable shall be entitled to specific performance in addition to any other appropriate relief or remedy. Such party may, in its sole discretion, apply to any court of competent jurisdiction for specific performance or injunctive or such other relief as such court may deem just and proper in order to enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief. SECTION 4.3. Entire Agreement. This Agreement, the Stock Purchase Agreement (including the Exhibits thereto) and the Certificate of Designations constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof and thereof (except for the provisions of the letter agreement dated July 29, 1999 that relate to the solicitation and employment of employees of the Corporation, which remain in effect). SECTION 4.4. Amendments and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this 5 Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative. SECTION 4.5. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. SECTION 4.6. Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of Delaware, without regard to the conflicts of law rules of such state. SECTION 4.7. Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. SECTION 4.8. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. SECTION 4.9. Assignments. This Agreement shall not be assigned by any party hereto. SECTION 4.10. Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any person other than the parties hereto any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 6 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above. RCN CORPORATION By: /s/ Timothy J. Stoklosa ------------------------------------ Name: Timothy J. Stoklosa Title: Chief Financial Officer and Executive Vice President VULCAN VENTURES INCORPORATED By: /s/ William D. Savoy ------------------------------------ Name: William D. Savoy Title: Vice President 7 -----END PRIVACY-ENHANCED MESSAGE-----