EXHIBIT 4.3
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WARRANT ESCROW AGREEMENT
among
FIBERNET TELECOM GROUP, INC.,
as the Borrower,
DEUTSCHE BANK SECURITIES INC.,
and
TORONTO DOMINION (TEXAS), INC.,
as the Beneficiaries
and
BANKERS TRUST COMPANY
as Escrow Agent
DATED AS OF APRIL 11, 2000
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TABLE OF CONTENTS
ARTICLE I. Definitions..................................................................... 1
ARTICLE II. Escrowed Securities............................................................. 2
Section 2.1 Initial Deposit of Escrowed Warrants............................... 2
Section 2.2 Additional Deposit of Escrowed Warrants............................ 2
Section 2.3 Release to the Beneficiaries....................................... 2
Section 2.4 Distribution of Warrants........................................... 3
Section 2.5 Release for Resale................................................. 3
Section 2.6 Release to the Borrower............................................ 3
Section 2.7 Certain Additional Agreements...................................... 3
ARTICLE III. Escrow Agent.................................................................... 4
Section 3.1 Duties............................................................. 4
Section 3.2 Duties Uncertain................................................... 4
Section 3.3 Liability.......................................................... 4
Section 3.4 Legal Counsel...................................................... 4
Section 3.5 Dispute............................................................ 4
Section 3.6 Indemnification.................................................... 5
Section 3.7 Survival........................................................... 5
Section 3.8 Resignation........................................................ 5
Section 3.9 Expenses........................................................... 5
ARTICLE IV. Miscellaneous.................................................................... 6
Section 4.1 Notices............................................................ 6
Section 4.2 Termination........................................................ 7
Section 4.3 Governing Law...................................................... 7
Section 4.4 Consent to Jurisdiction............................................ 7
Section 4.5 Waiver of Jury Trial............................................... 8
Section 4.6 Reliance........................................................... 8
Section 4.7 Entire Agreement; Waivers.......................................... 8
Section 4.8 Amendment or Modification, etc..................................... 9
Section 4.9 Headings, etc...................................................... 9
Section 4.10 Severability....................................................... 9
Section 4.11 Counterparts....................................................... 9
Section 4.12 Successors and Assigns............................................. 9
This WARRANT ESCROW AGREEMENT (as amended, supplemented, amended and
restated or otherwise modified from time to time, this "Agreement") is entered
into as of April 11, 2000, among FIBERNET TELECOM GROUP, INC., a Delaware
corporation (the "Borrower"), DEUTSCHE BANK SECURITIES INC. ("DBS"), and TORONTO
DOMINION (TEXAS), INC. ("TD" and together with DBS, the "Beneficiaries") and,
BANKERS TRUST COMPANY as escrow agent for the Beneficiaries (in such capacity,
the "Escrow Agent").
RECITALS
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A. The Borrower, the Lenders, the Administrative Agent, the Co-
Syndications Agent have entered into a Credit Agreement, dated as of April 11,
2000 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Credit Agreement"), providing for, among other things,
certain Loans to be made by the Beneficiaries thereunder to the Borrower;
B. The Borrower has agreed to place warrants (the "Warrants") in escrow
in the form of Exhibit A to the Warrant Agreement, dated as of April 11, 2000
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "Warrant Agreement"), duly executed by the Borrower and the
Beneficiaries, to be held pursuant to this Agreement; and
C. It is a condition to the making of Loans under the Credit Agreement
that the Warrants be delivered into escrow pursuant to this Agreement.
AGREEMENT
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NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained and for other good valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I.
DEFINITIONS
Capitalized terms used herein and not otherwise defined have the
meanings assigned to them in the Credit Agreement. As used in this Agreement,
the following capitalized terms shall have the following meanings:
"Additional Warrants" shall have the meaning assigned such term in Section
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2.2.
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"Escrowed Warrants" shall have the meaning assigned such term in Section
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2.2.
---
"High Yield Securities" shall have the meaning assigned such term in Fee
Letter.
"Initial Warrants" shall have the meaning assigned such term in Section
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2.1.
"Maturity Date" shall have the meaning assigned such term in the Credit
Agreement.
ARTICLE II.
ESCROWED SECURITIES
Section 2.1 Initial Deposit of Escrowed Warrants.
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On the Closing Date, concurrently with the execution and delivery of this
Agreement, the Borrower shall deliver to the Escrow Agent undated Warrants, duly
executed by the Borrower, registered in blank (the "Initial Warrants"),
representing the right to acquire an aggregate of 2,018,458 shares of the common
stock, par value $0.01 per share, of the Borrower.
Section 2.2 Additional Deposit of Escrowed Warrants.
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From time to time (if necessary), the Borrower shall deliver to the Escrow
Agent undated Warrants, duly executed by the Borrower, unregistered as to holder
or registered in blank (the "Additional Warrants," and, together with the
Initial Warrants, the "Escrowed Warrants"), which together with the Initial
Warrants represent the right to acquire:
(a) prior to October 11, 2000, 2,018,458 shares of the common stock, par
value $.01 per share, of the Borrower;
(b) after October 11, 2000 and prior to April 11, 2001, 1,513,843 shares
of the common stock, par value $0.01 per share, of the Borrower;
(c) after April 11, 2001 and prior to July 11, 2001, 1,029,229 shares of
the common stock, par value $0.01 per share, of the Borrower; and
(d) after July 11, 2001 and prior to the Maturity Date, 504,614 shares of
the common stock, par value $0.01 per share, of the Borrower.
Section 2.3 Release to the Beneficiaries.
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The Escrow Agent shall hold the Escrowed Warrants in escrow pursuant to
this Agreement until authorized hereunder to deliver them as follows as
described in this Section 2.3 or Section 2.5:
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(a) If the Loans have not been paid in full on or before October 11, 2000,
the Escrow Agent shall, upon receipt of written notice from the Beneficiaries,
register Warrants representing 504,614 shares of the common stock, par value
$0.01 per share, of the Borrower, in the names designated by the Beneficiaries
and release such Warrants to the Beneficiaries or their designees in the
proportions described in Section 2.4 hereof.
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(b) If the Loans have not been paid in full on or before April 11, 2001,
the Escrow Agent shall, upon receipt of written notice from the Beneficiaries,
register Warrants representing 504,614 shares of the common stock, par value
$0.01 per share, of the Borrower, in the names designated by the Beneficiaries
and release such Warrants to the Beneficiaries or their designees in the
proportions described in Section 2.4 hereof.
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(c) If the Loans have not been paid in full on or before July 11, 2001,
and to the extent the Warrants have not previously been released pursuant to
Section 2.5 hereof, the Escrow Agent shall, upon receipt of written notice from
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the Beneficiaries, register Warrants representing 504,614 shares of the common
stock, par value $0.01 per share, of the Borrower, in the names designated by
the Beneficiaries and release such Warrants to the Beneficiaries or their
designees in the proportions described in Section 2.4 hereof.
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(d) If the Loans have not been paid in full on or before October 11, 2001
and to the extent the Warrants have not previously been released pursuant to
Section 2.5 hereof, the Escrow Agent shall, upon receipt of written notice from
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the Beneficiaries, register Warrants representing 504,614 shares of the common
stock, par value $0.01 per share, of the Borrower, in the names designated by
the Beneficiaries and release such Warrants to the Beneficiaries or their
designees in the proportions described in Section 2.4 hereof.
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Section 2.4 Distribution of Warrants.
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Escrowed Warrants released pursuant to Section 2.3 shall be allocated as
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follows:
DBS.................... 50%
TD..................... 50%
Section 2.5 Release for Resale.
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If on or after April 11, 2001, the Escrow Agent receives written notice
from DBS, based on consultation with the other Beneficiaries, stating in effect
that all or a portion of the Warrants referred to in clauses (c) and (d) of
Section 2.3 are necessary (in the sole judgment of DBS) to issue or place the
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High Yield Securities, the Escrow Agent shall release the requested portion of
such Warrants to DBS (registered by the Escrow Agent in the names specified by
DBS), for delivery to the purchasers of such High Yield Securities or their
designees.
Section 2.6 Release to the Borrower.
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On or within one Business Day after receipt of a certificate from the
Beneficiaries certifying that the Obligations have been paid in full on or prior
to the Maturity Date, the Escrow Agent shall deliver to the Borrower all
remaining Escrowed Warrants for cancellation.
Section 2.7 Certain Additional Agreements.
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The Borrower and/or the Beneficiaries shall, upon request by the Escrow
Agent, execute and deliver to the Escrow Agent such additional written
instructions and certificates hereunder as may be reasonably required by the
Escrow Agent to give effect to the provisions of Section 2.
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ARTICLE III.
ESCROW AGENT
Section 3.1 Duties.
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The Escrow Agent shall have no duties or responsibilities, including,
without limitation, a duty to review or interpret the Credit Agreement, except
those expressly set forth herein. Except for this Agreement, the Escrow Agent,
in its capacity as such, is not a party to, or bound by, any agreement that may
be required under, evidenced by, or arise out of the Credit Agreement.
Section 3.2 Duties Uncertain.
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If the Escrow Agent shall be uncertain as to its duties or rights hereunder
or shall receive instructions from any of the undersigned with respect to the
Escrowed Warrants, which, in its opinion, are in conflict with any of the
provisions of this Agreement, it shall be entitled to refrain from taking any
action until it shall be directed otherwise in writing by the Borrower or the
Beneficiaries or by order of a court of competent jurisdiction. The Escrow
Agent shall be protected in acting upon any notice, request, waiver, consent,
receipt or other document reasonably believed by the Escrow Agent to be signed
by the proper party or parties.
Section 3.3 Liability.
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The Escrow Agent shall not be liable for any error or judgment or for any
act done or step taken or omitted by it in good faith or for any mistake of fact
or law, or for anything that it may do or refrain from doing in connection
herewith, except for its own gross negligence or willful misconduct, and the
Escrow Agent shall have no duties to anyone except the Borrower and the
Beneficiaries and their respective successors and permitted assigns.
Section 3.4 Legal Counsel.
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The Escrow Agent may consult legal counsel in the event of any dispute or
question as to the construction of this Agreement, or the Escrow Agent's duties
hereunder, and the Escrow Agent shall incur no liability and shall be fully
protected with respect to any action taken or omitted in good faith in
accordance with the opinion and instructions of counsel.
Section 3.5 Dispute.
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In the event of any disagreement between the undersigned or any of them,
and/or any other person, resulting in adverse claims and demands being made in
connection with or for the Escrowed Warrants, the Escrow Agent shall be entitled
at its option to refuse to comply with any such claim or demand, so long as such
disagreement shall continue, and in so doing the
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Escrow Agent shall not be or become liable for damages or interest to the
undersigned or any of them or to any person named herein for its failure or
refusal to comply with such conflicting or adverse demands. The Escrow Agent
shall be entitled to continue so to refrain and refuse so to act until all
differences shall have been resolved by agreement and the Escrow Agent shall
have been notified thereof in writing signed by the Borrower and the
Beneficiaries. In the event of such disagreement which continues for 90 days or
more, the Escrow Agent in its discretion may, but shall be under no obligation
to, file a suit in interpleader for the purpose of having the respective rights
of the claimants adjudicated and may deposit with the court all documents and
property held hereunder. The Borrower agrees to pay all reasonable out-of-pocket
costs and expenses incurred by the Escrow Agent in such action, including
reasonable attorney's fees and disbursements.
Section 3.6 Indemnification.
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The Escrow Agent is hereby indemnified by the Borrower from all losses,
costs and expenses of any nature incurred by the Escrow Agent arising out of or
in connection with this Agreement or with the administration of its duties
hereunder, unless such losses, costs or expenses shall have been caused by the
Escrow Agent's willful misconduct or gross negligence. Such indemnification
shall survive termination of this Agreement until extinguished by any applicable
statute of limitations.
Section 3.7 Survival.
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The Escrow Agent, in its capacity as Escrow Agent, does not have any
interest in the Escrowed Warrants deposited hereunder but is serving as escrow
holder only and having only possession thereof. This paragraph shall survive
notwithstanding any termination of this Agreement or the resignation of the
Escrow Agent.
Section 3.8 Resignation.
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The Escrow Agent (and any successor Escrow Agent) may at any time resign as
such by giving written notice of its resignation to the parties hereto at least
30 days prior to the date specified for such resignation to take effect. Upon
the effective date of such resignation, the Escrowed Warrants shall be delivered
by it to such successor Escrow Agent or as otherwise shall be instructed in
writing by the Borrower and the Beneficiaries, whereupon the Escrow Agent shall
be discharged of and from any and all further obligations arising in connection
with this Agreement. If at that time the Escrow Agent has not received such
instruction, the Escrow Agent's sole responsibility after that time shall be to
safekeep the Escrowed Warrants until receipt of a designation of successor
Escrow Agent or joint written instruction as to disposition of the Escrowed
Warrants by the Borrower and the Beneficiaries or a final order of a court of
competent jurisdiction mandating disposition of the Escrowed Warrants.
Section 3.9 Expenses.
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The Escrow Agent hereby accepts its appointment and agrees to act as escrow
agent under the terms and conditions of this Agreement and acknowledges receipt
of the Escrowed Warrants. The Borrower further agrees to reimburse the Escrow
Agent for all reasonable out-of-pocket expenses, disbursements and advances
incurred or made by the Escrow Agent in the performance of its duties hereunder
(including reasonable fees, and out-of-pocket expenses and disbursements, of its
counsel).
ARTICLE IV.
MISCELLANEOUS
Section 4.1 Notices.
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Any notices or other communications required or permitted hereunder shall
be effective if in writing and delivered personally or sent by overnight
courier, addressed as follows:
If to the Beneficiaries, to them at:
Deutsche Bank AG New York Branch
00 X. 00/xx/ Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxx
Telecopy: (000) 000-0000
Toronto Dominion (Texas), Inc.,
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxx
Telecopy: (000) 000-0000
If to the Borrower, to it at:
FiberNet Telecom Group, Inc.
000 Xxxxxxxxx Xxxxxx
0/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention.: President
Telecopy: (000) 000-0000
If to the Escrow Agent, to it at:
Bankers Trust Company
0 Xxxxxx Xxxxxx, 0/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
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Telecopy: (000) 000-0000
Unless otherwise specified herein, such notices or other communications
shall be deemed effective (a) on the date delivered, if delivered personally,
(b) one Business Day after being delivered, if delivered by telecopier with
confirmation of good transmission, (c) one Business Day after being sent by
overnight courier, if sent by overnight courier, (d) two Business Days after
being sent by Federal Express or United Parcel Service, if sent by Federal
Express or United Parcel Service, or (e) three Business Days after being sent,
if sent by registered or certified mail. Each of the parties hereto shall be
entitled to specify a different address by giving notice as aforesaid to each of
the other parties hereto.
Section 4.2 Termination.
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This Agreement shall automatically terminate upon the final distribution of
the Escrowed Warrants in accordance with the terms hereof, provided that the
provisions of Sections 3.6, 3.7 and 3.9 shall survive the termination of this
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Agreement.
Section 4.3 Governing Law.
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THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). EACH PARTY HERETO HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW
YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 4.4 Consent to Jurisdiction.
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Each of the parties agrees that all actions, suits or proceedings arising
out of or based upon this Agreement or the subject matter hereof may be brought
and maintained in the federal district court in the Southern District of New
York. Each of the parties hereby by execution hereof (i) hereby irrevocably
submits to the non-exclusive jurisdiction of such court in New York,
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New York, for the purpose of any action, suit or proceeding arising out of or
based upon this Agreement or the subject matter hereof and (ii) hereby waives to
the extent not prohibited by applicable law, and agrees not to assert, by way of
motion, as a defense or otherwise, in any such action, suit or proceeding, any
claim that it is not subject personally to the jurisdiction of the above-named
court, that it is immune from extraterritorial injunctive relief or other
injunctive relief, that its property is exempt or immune from attachment or
execution, that any such action, suit or proceeding may not be brought or
maintained in the above-named court should be dismissed on the grounds of forum
non conveniens, should be transferred to any court other than the above-named
court, should be stayed by virtue of the pendency of any other action, suit or
proceeding in any court other than the above-named court, or that this Agreement
or the subject matter hereof may not be enforced in or by the above-named court.
Each of the parties hereto hereby consents to service of process in any such
suit, action or proceeding in any manner permitted by the laws of the State of
New York, agrees that service of process by registered or certified mail, return
receipt requested, at the address specified in or pursuant to Section 4.1 hereof
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is reasonably calculated to give actual notice and waives and agrees not to
assert by way of motion, as a defense or otherwise, in any such action, suit or
proceeding any claim that service of process made in accordance with Section 4.1
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hereof does not constitute good and sufficient service of process. The
provisions of this Section 4.4 shall not restrict the ability of any party to
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enforce in any court any judgment obtained in the federal district court in the
Southern District of New York.
Section 4.5 Waiver of Jury Trial.
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To the extent not prohibited by applicable law which cannot be waived, each
of the parties hereto hereby waives, and covenants that it will not assert
(whether as plaintiff, defendant, or otherwise), any right to trial by jury in
any forum in any respect of any issue, claim, demand, cause of action, action,
suit or proceeding arising out of or based upon this Agreement or the subject
matter hereof, in each case whether now existing or hereafter arising and
whether in contract or tort or otherwise. Any of the parties hereto may file an
original counterpart or a copy of this Section 4.5 with any court as written
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evidence of the consent of each of the parties hereto to the waiver of his or
its right to trial by jury.
Section 4.6 Reliance.
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Each of the parties hereto acknowledges that it has been informed by each
other party that the provisions of this Section constitute a material inducement
upon which such party is relying and will rely in entering into this Agreement
and the transactions contemplated hereby.
Section 4.7 Entire Agreement; Waivers.
--------------------------
This Agreement constitutes the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties with respect to such subject matter
except for those provisions in the Fee Letter that are in addition to the
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provisions contained herein. No waiver of any provision of this Agreement (a)
shall be deemed to or shall constitute a waiver of any other provision hereof
(whether or not similar), (b) shall constitute a continuing waiver unless
otherwise expressly provided therein or (c) shall be effective unless in writing
and executed by each party hereto.
Section 4.8 Amendment or Modification, etc..
--------------------------------
The parties hereto may not amend or modify this Agreement except in such
manner as may be agreed upon by a written instrument executed by all of the
parties hereto. Any written amendment, modification or waiver executed by all
of the parties hereto shall be binding upon all such parties and their
respective successors and assigns.
Section 4.9 Headings, etc.
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Section and subsection headings are not to be considered part of this
Agreement, are included solely for convenience, are not intended to be full or
accurate descriptions of the content thereof and shall not affect the
construction hereof. This Agreement shall be deemed to express the mutual
intent of the parties, and no rule of strict construction shall be applied
against any party.
Section 4.10 Severability.
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In the event that any provision hereof would, under applicable law, be
invalid or unenforceable in any respect, such provision shall (to the extent
permitted by applicable law) be construed by modifying or limiting it so as to
be valid and enforceable to the maximum extent compatible with, and possible
under, applicable law. The provisions hereof are severable, and in the event
any provision hereof should be held invalid or unenforceable in any respect, it
shall not invalidate, render unenforceable or otherwise affect any other
provision hereof.
Section 4.11 Counterparts.
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This Agreement and any amendments, waivers, consents, or supplements
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but
one and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto. Delivery of an
executed counterpart of a signature page to this Agreement or to any amendments,
waivers, consents or supplements hereof by telecopier shall be as effective as
delivery of a manually executed counterpart thereof.
Section 4.12 Successors and Assigns.
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All of the terms and provisions of this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective permitted
transferees, successors and assigns (each of which shall be deemed to be a party
hereto for all purposes hereof). The Borrower may
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not assign its obligations hereunder without the prior written consent of the
Beneficiaries. Except as expressly provided herein, this Agreement shall not
confer any right or remedy upon any person other than the parties and their
respective transferees, successors and assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized representatives as of the day
and year first above written.
FIBERNET TELECOM GROUP, INC.,
as Borrower
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
Title: President
DEUTSCHE BANK SECURITIES INC.,
as Beneficiary
By: /s/ Xxx X. Xxxxxx
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Name: Xxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxxxxxxx Xxxxxxx
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Name: Xxxxxxxxx Xxxxxxx
Title: Assistant Vice President
TORONTO DOMINION (TEXAS), INC.,
as Beneficiary
By: /s/ Xxxx X. Xxxxx
---------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
BANKERS TRUST COMPANY,
as Escrow Agent
By: /s/ Hugo Gindrau
---------------------------------
Name: Hugo Gindrau
Title: Assistant Vice President
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