Exhibit J
Execution Copy
Amendment and Waiver
This Amendment and Waiver is made as of January 10, 2003, by and among
FiberNet Telecom Group, Inc., a corporation organized under the laws of Delaware
("FiberNet"), and each party listed on the signature page hereto under the
heading "Bank Lenders."
Recitals
Whereas, pursuant to a Purchase Agreement dated October 30, 2002
("October Purchase Agreement"), among FiberNet, Deutsche Bank AG New York Branch
("Deutsche Bank"), IBM Credit LLC, formerly IBM Credit Corporation ("IBM"),
Wachovia Investors, Inc. ("Wachovia"), Bank One, N.A. ("Bank One"), Nortel
Networks Inc. ("Nortel"), and Toronto Dominion (Texas), Inc. ("TD" and together
with Deutsche Bank, IBM, Wachovia, Bank One and Nortel, the "Bank Lenders"), the
Bank Lenders purchased from FiberNet, and FiberNet sold to the Bank Lenders,
upon the terms and subject to the conditions set forth therein, an aggregate of
440,000,000 shares of FiberNet's Common Stock (the "Common Stock") and
immediately exercisable warrants to purchase an aggregate of 110,000,000 shares
of Common Stock;
Whereas, pursuant to a Purchase Agreement dated November 11, 2002
("November Purchase Agreement" and together with the October Purchase Agreement,
the "Purchase Agreements"), among FiberNet and each Bank Lender, the Bank
Lenders purchased from FiberNet, and FiberNet sold to the Bank Lenders, upon the
terms and subject to the conditions set forth therein, an aggregate of
20,000,000 shares of Common Stock and immediately exercisable warrants to
purchase an aggregate of 20,000,000 shares of Common Stock;
Whereas, on November 11, 2002, FiberNet and each Bank Lender entered
into the First Amended and Restated Investor's Rights Agreement (the "Rights
Agreement") pursuant to which each Bank Lender agreed to certain transfer
restrictions on the shares of Common Stock received by it pursuant to the
Purchase Agreements and upon exercise of warrants received by it pursuant to the
Purchase Agreements;
Whereas, on November 11, 2002, FiberNet and each Bank Lender (other
than Nortel) entered into the First Amended and Restated Shareholders Agreement
(the "Shareholders Agreement") pursuant to which (a) FiberNet agreed to certain
covenants restricting its ability to enter into agreements with any existing or
future investor and (b) each Bank Lender a party thereto agreed to share voting
power with respect to the shares of Common Stock received by it pursuant to the
Purchase Agreements and upon exercise of warrants received by it pursuant to the
Purchase Agreements;
Whereas, FiberNet has presented to each Bank Lender a copy of each
agreement listed on Exhibit A (collectively, the "January Financing Agreements")
pursuant to which,
(a) Bank One, TD and Nortel will convert into 138,514,536 shares of
Common Stock (the "Converted Shares"), at a conversion price of $0.09662 per
share an aggregate of $13,382,789.92 of principal indebtedness and accrued
interest owed to such Bank Lenders under FiberNet's Amended and Restated Credit
Agreement, dated as of February 9, 2001, among FiberNet Operations, Inc.,
Devnet, L.L.C., the financial institutions from time to time parties thereto as
lenders, Deutsche Bank AG New York Branch, as administrative agent, Toronto
Dominion (USA) Securities Inc., as syndication agent, and Wachovia Investors,
Inc., as documentation agent; and
(b) the exercise price of (1) warrants held by Bank One to purchase an
aggregate of 12,380,952 shares of Common Stock, (2) warrants held by TD to
purchase an aggregate of 18,571,429
shares of Common Stock, and (3) warrants held by Nortel to purchase an aggregate
of 18,571,429 shares of Common Stock will each be reduced to $0.001 per share,
and Bank One, TD and Nortel will each exercise in full each such warrant (the
"Warrant Shares"); and
(c) Nortel will sell 101,942,950 shares of Common Stock held by it to
a group of investors (the "New Equity Investors") for an aggregate purchase
price of $3.0 million; and
(d) Bank One will sell 90,715,938 shares of Common Stock held by it to
the New Equity Investors for an aggregate purchase price of $3.0 million; and
(e) TD will sell 101,942,950 shares of Common Stock held by it to the
New Equity Investors for an aggregate purchase price of $3.0 million; and
(f) the exercise price of one third of the warrants held by each Bank
Lender, other than Bank One, TD and Nortel, will be reduced to $0.001 per share,
and each such Bank Lender will exercise in full each repriced warrant; and
(g) FiberNet will establish material rights and provide material
benefits to the New Equity Investors that have not been received by the Bank
Lenders under Stockholders Agreement, the Rights Agreement, or either Purchase
Agreement;
Whereas, unless waived, the terms of the Stockholders Agreement and
Rights Agreement would prevent FiberNet, Bank One, TD and Nortel from
consummating the transactions contemplated by January Financing Agreements to
occur on the date hereof (the "January Financing");
Whereas, pursuant to the terms of Section III.I of the Stockholders
Agreement, any term of the Stockholders Agreement may be amended or waived only
with the written consent of FiberNet and Bank Lenders (other than Nortel)
holding at least 75% of the shares of Common Stock (on a fully-diluted basis)
issued pursuant to the Purchase Agreements and then held by such Bank Lenders,
provided that, if in any particular instance a party's obligations or rights
under the Stockholders Agreement are adversely affected in a disproportionately
adverse manner from that in which other parties are affected by application of
Section III.I of such agreement, the consent of such party shall also be
required in such instance;
Whereas, pursuant to the terms of Section 4.5 of the Rights Agreement,
(a) any term of Section 2 of the Rights Agreement may be amended or waived only
with the written consent of FiberNet and the holders of at least 75% of the
Registrable Securities (as defined in the Rights Agreement) then outstanding and
(b) any other term of the Rights Agreement may be amended or waived only with
the written consent of Bank Lenders holding at least 75% of the Common Stock (on
a fully-diluted basis) issued pursuant to the Purchase Agreements and then held
by all Bank Lenders, provided that, if in any particular instance a party's
obligations or rights under the Rights Agreement are adversely affected in a
disproportionately adverse manner from that in which other parties are affected
by application of Section 4.5 of such agreement, the consent of such party shall
also be required in such instance;
Whereas, the undersigned Bank Lenders hold a sufficient number of
shares of Common Stock and Registrable Securities to amend or waive any term of
the Rights Agreement or the Stockholders Agreement and wish to waive the
application of the terms of each such agreement to the extent necessary to
consummate the January Financing;
Agreement
Now, Therefore, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
I. Amendment and Waiver.
Each party hereto (a) consents to the consummation of the January
Financing and waives any and all rights such party may have under the
Stockholders Agreement or the Rights Agreement with respect to the consummation
of the January Financing and (b) agrees that each of the Stockholders Agreement
and the Rights Agreement is hereby amended to remove each and every reference to
Bank One, TD and Nortel, if any, as an "Investor" thereunder.
II. Miscellaneous.
A. Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
B. Entire Agreement; Titles and Subtitles. This Amendment and Waiver,
together with the Rights Agreement and Stockholders Agreement, constitutes the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof. The titles of the paragraphs and subparagraphs
of this Amendment and Waiver are for convenience of reference only and are not
to be considered in construing or interpreting this Amendment and Waiver. Except
as specifically set forth in Section I, the terms of the Stockholders Agreement
and Rights Agreement shall not be changed by this Amendment and Waiver and shall
remain in full force and effect.
C. Governing Law. The validity, construction and effect of this Amendment
and Waiver shall be governed by the with the laws of the State of New York,
without giving effect to principles of conflicts of laws.
D. Counterparts; Effectiveness. This Amendment and Waiver may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. Each party to
this Amendment and Waiver may rely on a facsimile signature on this Amendment
and Waiver, and each party shall, if the other party so requests, provide an
originally signed copy of this Amendment and Waiver to the other party.
In Witness Whereof, the undersigned has executed this Amendment and Waiver
as of the date set forth in the first paragraph hereof.
Company
FIBERNET TELECOM GROUP, INC.
By: _________________________
Bank Lenders
DEUTSCHE BANK AG IBM CREDIT LLC
NEW YORK BRANCH
By: _________________________ By: _________________________
Name: Name:
Title: Title:
By: _________________________
Name:
Title:
WACHOVIA INVESTORS, INC. NORTEL NETWORKS INC.
By: _________________________ By: _________________________
Name: Name:
Title: Title:
BANK ONE, NA TORONTO DOMINION (TEXAS), INC.
By: _________________________ By: _________________________
Name: Name:
Title: Title:
Exhibit A
January Financing Agreements
1. Debt Exchange Agreement, dated January 10, 2003, between FiberNet Telecom
Group, Inc. and Bank One, NA
2. Debt Exchange Agreement, dated January 10, 2003, between FiberNet Telecom
Group, Inc. and Nortel Networks Inc.
3. Debt Exchange Agreement, dated January 10, 2003, between FiberNet Telecom
Group, Inc. and TD Securities (USA) Inc.
4. Stock Purchase Agreement, dated January 10, 2003, between Bank One, NA and
the purchasers listed on Exhibit A thereto
5. Stock Purchase Agreement, dated January 10, 2003, between Nortel Networks
Inc. and the purchasers listed on Exhibit A thereto
6. Stock Purchase Agreement, dated January 10, 0000, xxxxxxx Xxxxxxx Xxxxxxxx
(Xxxxx), Inc. and the purchasers listed on Exhibit A thereto
7. Common Stock Purchase Agreement, dated January 10, 2003 between FiberNet
Telecom Group, Inc. and the parties listed on Exhibit A thereto as
"Purchasers"
8. Registration Rights Agreement, dated January 10, 2003 between FiberNet
Telecom Group, Inc. and the parties listed on Schedule I thereto as
"Purchasers"
9. Warrant to Purchase Shares of Common Stock of FiberNet Telecom Group, Inc.
between FiberNet Telecom Group, Inc. and each party listed on Exhibit A to
the Purchase Agreement referred to in paragraph 7 above as "Purchasers"
10. Warrant Agreement Amendment No. 2, dated January 10, 2003, among FiberNet
Telecom Group, Inc., Toronto Dominion (Texas), Inc., Nortel Networks Inc.,
and Bank One, N.A.
11. Warrant Agreement Amendment No. 1, dated January 10, 2003, among FiberNet
Telecom Group, Inc., Deutsche Bank AG New York Branch, IBM Credit LLC,
Wachovia Investors, Inc., and TD Securities (USA) Inc.
