Exhibit 2
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WARRANT AMENDMENT
This Warrant Amendment (this "Agreement") is entered into among FirstWorld
Communications, Inc. (the "Company"), and TPG Partners III, L.P., a Delaware
limited partnership ("TPG III"), T3 Partners, L.P., a Delaware limited
partnership ("T3") and Colony Investors IV, L.P., a Delaware limited partnership
("Colony") as of the 10th day of February 2000. TPG, T3 and Colony are referred
to collectively in this Agreement as the "Purchasers." The Purchasers and the
Company are herein referred to as the "Parties."
WHEREAS, the Purchasers have entered into a Stock Purchase Agreement dated
February 10, 2000 with Enron North America Corp. and ECT Merchant Purchases
Corp. (the "Purchase Agreement") pursuant to which the Purchasers have agreed to
purchase (the "Purchase") certain shares of Series A Common Stock of the
Company, which will convert automatically upon the Purchase into shares of
Series B Common Stock of the Company, shares of outstanding shares of Series B
Common Stock (collectively, the "Shares"), and certain warrants to purchase
shares of Series B Common Stock of the Company (the "Warrants"). The Shares and
Warrants are referred to herein as the "Securities".
WHEREAS, pursuant to the Indenture dated April 13, 1998 (the "Indenture"),
the Company is subject to certain obligations triggered by a Change of Control,
as such term is defined in the Indenture.
WHEREAS, the Parties have agreed that, as a condition to the transfer of
the Securities as outlined in the Purchase Agreement, the Warrants shall be
amended to provide that the Purchasers shall not be entitled to exercise a
portion of the Warrants to the extent that the exercise thereof would give rise
to a Change of Control under the Indenture.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration, the sufficiency
and receipt of which are hereby acknowledged, the Parties hereby covenant and
agree as follows:
1.1 Issuance of Separate Warrants. Upon the closing of the Purchase of the
Securities, the December Warrants (as defined in the Purchase Agreement) shall
be issued in two separate instruments, exercisable for 4,625,000 shares and
375,000 shares of Series B Common Stock, respectively. Such Warrants shall be
identical in all respects except as set forth in Section 1.2 below.
1.2 Amendment to Warrant to Purchase Series B Common Stock. Effective upon
the closing of the Purchase of the Securities, Section 1.1 of the December
Warrant exercisable for 375,000 shares of Series B common stock shall be amended
to insert following the last sentence of such Section 1.1:
"Notwithstanding anything to the contrary herein, this Warrant
shall not be exercisable to the extent (but only to the
extent) that such exercisability would cause the holder of
such Warrant, individually or taken together with all other
persons or entities acting as a group with such holder within
the meaning of Section 13(d)(3) and Section 14(d)(2) of the
Securities Exchange Act of 1934, as amended, to be or become
the Beneficial Owner (as such term is defined in the
Indenture) of more than 35% of the total Voting Stock (as such
term is defined in the Indenture) of the Company; provided
that, notwithstanding the foregoing, this Warrant shall become
fully exercisable upon the earlier to occur of (i) the 61st
day following the Company's initial public offering of shares
of the Company's Common Stock, (ii) February 15, 2001, (iii)
any Change of Control (as such term is defined in the
Indenture) and (iv) any amendment to or restatement of the
Company's Bylaws or Certificate of Incorporation without the
consent of Purchasers or their transferees holding a majority
of the Warrants (other than an amendment to increase the
number of shares of the Company's authorized Series B Common
Stock to a number not to exceed 150,000,000 shares in the
aggregate or any amendment required by applicable law)."
1.3 Assignment. Any person to whom a Purchaser assigns any of its rights
under the Purchase Agreement shall be deemed to consent and agree to this
amendment of the Warrants.
1.4 Other Terms; Entire Agreement. All other terms of the Warrants shall
remain in full force and effect. This Agreement sets forth all of the promises,
agreements, conditions, understandings, warranties and representations by or
among the Parties with respect to the actions contemplated hereby, and
supersedes all prior agreements, arrangements and understandings by or among the
Parties relating to such actions, whether written, oral or otherwise. There are
no promises, agreements, conditions, understandings, warranties or
representations, oral or written, express or implied, by or among the Parties
except as set forth herein, except as to the terms of the Warrant which continue
pursuant to the terms hereof.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
as of the date first above written.
TPG Partners III, L.P.
By: TPG GenPar III, L.P., its General Partner
By: TPG Advisors III, Inc., its General Partner
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
T3 Partners, L.P.
By: T3 GenPar, L.P., its General Partner
By: T3 Advisors, Inc., its General Partner
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
Colony Investors IV, L.P.
By: Colony Capital IV, L.P., its General Partner
By: Colony XX XX, Inc., its General Partner
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
FirstWorld Communications, Inc.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President, General Counsel
