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EXHIBIT 10.13
WAIVER AND CONSENT
WAIVER AND CONSENT (this "Waiver and Consent"), dated October 25, 1999,
by and among Allied Riser Communications Corporation f/k/a Allied Riser
Communications Holdings, Inc., a Delaware corporation (the "Company") and each
of the parties identified on Schedule 1 hereto as a Financial Sponsor (the
"Financial Sponsors").
WHEREAS, the Company desires to register all of the shares (the
"Registered Shares") of its Common Stock, par value $0.0001 per share (the
"Common Stock"), as described in and pursuant to the Form S-1 filed with the
Securities and Exchange Commission during September, 1999 (the "Form S-1") in
anticipation of selling such Registered Shares in an initial "Qualifying Public
Offering" (as defined in the Company's Amended and Restated Certificate of
Incorporation (the "Charter"));
WHEREAS, each Financial Sponsor is party to an Investment Agreement
with the Company (each, an "Investment Agreement" and collectively, the
"Investment Agreements"), pursuant to which each Financial Sponsor acquired (i)
Series A-1 Preferred Stock, par value $0.0001 per share (the "Series A-1
Preferred"), or Series A-2 Preferred Stock, par value $0.0001 per share (the
"Series A-2 Preferred" and, collectively with the Series A-1 Preferred, the
"Series A Preferred") or Series B Preferred Stock, par value $0.0001 per share
(the "Series B Preferred") and (ii) Common Stock;
WHEREAS, the powers, designations, preferences and other rights of the
Series A Preferred and Series B Preferred are set forth in the Charter and the
Amended and Restated Certificate of Designation of Series B Preferred Stock
(the "Series B Certificate of Designation"), respectively;
WHEREAS, the Financial Sponsors are parties to a Registration Rights
Agreement dated as of November 23, 1998, as amended (the "Registration Rights
Agreement");
WHEREAS, upon the occurrence of a Qualifying Public Offering, (i) each
share of Series A Preferred may be converted, at the option of a the holders of
a majority of the Series A Preferred, into Common Stock and (ii) each share of
Series B Preferred will automatically be converted in Common Stock;
WHEREAS, Section 3.J of certain of the Investment Agreements provides
that after such time as investments in the Company equal or exceed a certain
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threshold, and so long as the Financial Sponsors under each such Investment
Agreement own Common Stock, each such Financial Sponsor shall, in connection
with the issuance of additional Company equity securities to non-employees
exclusively for cash, have the right to purchase in the same relative
proportions from the Company additional equity securities on the same terms as
such equity securities are being offered to non-employees (the "Preemptive
Rights");
WHEREAS, pursuant to Section 2 of the Registration Rights Agreement,
the Financial Sponsors are granted certain piggyback registration rights
("Piggyback Rights") in the event that the Company registers any of its
securities under the Securities Act of 1933, as amended, on a registration form
that may be used to register Common Stock;
WHEREAS, the Financial Sponsors have been granted the right to receive
notice (the "Notice Right") of a Qualifying Public Offering pursuant to either
the Charter or the Series B Certificate of Designation;
WHEREAS, pursuant to the Charter and the Series B Certificate of
Designation, the Company may not engage in a Qualifying Public Offering without
the consent of the holders of a majority of the issued and outstanding shares
of Series A Preferred and Series B Preferred, voting as a single class (the
"Consent Threshold");
WHEREAS, pursuant to Section 3 of each of the Investment Agreements,
the Company may not increase the number of shares of Common Stock issuable
pursuant to stock option plans or stock ownership plans above 3,333,333 (after
taking account of the 15-1 reverse stock split) (or such lesser number as may
be stated in certain of the Investment Agreements) without the prior written
consent of at least 60% of the issued and outstanding shares of Series A
Preferred and Series B Preferred, voting as a single class (the "Option Consent
Threshold");
WHEREAS, the Company desires to increase the number of shares of
Common Stock issuable pursuant to stock option plans or stock ownership plans
to 5,000,000 (after taking account of the 15-1 reverse stock split);
WHEREAS, the Board of Directors has determined that the Company's
Charter should be amended and restated as set forth in Exhibit A attached
hereto so as to effectuate a reverse stock split of the Common Stock and
eliminate the current series of preferred stock which have been designated; and
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WHEREAS, the Financial Sponsors desire to (i) waive any Preemptive
Rights they may have solely in connection with the registration of the
Registered Shares on Form S-1 and subsequent sale of such Registered Securities
in an initial Qualifying Public Offering, (ii) waive any Piggyback Rights they
may have solely in connection with the registration of the Registered Shares on
Form S-1 and subsequent sale of such Registered Securities in an initial
Qualifying Public Offering, (iii) waive any Notice Rights they may have solely
in connection with the registration of the Registered Securities on Form S-1 and
subsequent sale of such Registered Securities in an initial Qualifying Public
Offering, (iv) consent to the Qualifying Public Offering, (v) consent to the
increase in the number of shares issuable pursuant to stock option plans or
stock ownership plans and (vi) consent to the amendment and restatement of the
Charter.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
herein made and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Financial Sponsors mutually
agree as follows:
1. Consent to Issuance of Registered Securities. The Financial Sponsors
hereby consent to the issuance of the Registered Securities in connection with
the initial Qualifying Public Offering as detailed in the Form S-1. Such consent
will be effective until 6:00 E.S.T. on December 1, 1999 unless the initial
Qualifying Public Offering has occurred before such date in which case, such
consent will be irrevocable.
2. Consent to Qualifying Public Offering. The Financial Sponsors, who
together hold as of the date hereof in excess of the Consent Threshold, hereby
consent to the proposed Qualifying Public Offering. Such consent will be
effective until 6:00 E.S.T. on December 1, 1999 unless the proposed Qualifying
Public Offering has occurred before such date in which case, such consent will
be irrevocable.
3. Consent to Increase in Number of Shares of Common Stock Issuable
Pursuant to Stock Option Plans or Stock Ownership Plans. The Financial Sponsors,
who together hold as of the date hereof in excess of the Option Consent
Threshold, hereby consent to the proposed increase in shares of Common Stock
issuable pursuant to stock option plans or stock ownership plans to 5,000,000
(after taking account of the 15-1 reverse stock split).
4. Consent to Amendment and Restatement of the Charter. The Financial
Sponsors hereby consent to the amendment and restatement of the Charter as set
forth in Exhibit A attached hereto. Such consent will be effective until 6:00
E.S.T.
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on December 1, 1999 unless the initial Qualifying Public Offering has occurred
before such date in which case, such consent will be irrevocable.
5. Waiver of Preemptive Rights. The Financial Sponsors hereby waive
any Preemptive Rights they may have been provided pursuant to Section 3.J of
certain of the Investment Agreements between the Company and certain of the
Financial Sponsors, respectively, solely in connection with the sale of the
Registered Securities in an initial Qualifying Public Offering as detailed in
the Form S-1, it being acknowledged that nothing herein shall serve to waive
any preemptive right afforded to the Financial Sponsors in connection with any
other issuance of Company equity securities.
6. Waiver of Piggyback Rights. The Financial Sponsors hereby waive any
Piggyback Rights provided pursuant to Section 2 of the Registration Rights
Agreement between the Company and the Financial Sponsors, respectively, solely
in connection with the registration of the Registered Securities on Form S-1,
it being acknowledged that nothing herein shall serve to waive any registration
right afforded to the Financial Sponsors in connection with any other
registration of Company equity securities.
7. Waiver of Notice Rights. The Financial Sponsors hereby waive the
Notice Rights, it being acknowledged that nothing herein shall serve to waive
any notice right afforded to the Financial Sponsors in connection with any
other issuance of Company equity securities.
8. Miscellaneous.
(a) Counterparts. This Waiver and Consent may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(b) Governing Law. This Waiver and Consent shall be governed by the
laws of the state of Delaware (other than its rules of conflicts of law to the
extent that the application of the laws of another jurisdiction would be
required thereby).
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties have executed this Waiver and Consent
as of the date first written above.
ALLIED RISER COMMUNICATIONS
CORPORATION
By:
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Name: Xxxxx X. Xxxxxxxx
Title: Chief Executive Officer
EGI-ARC INVESTORS, L.L.C.
By: GAMI Investments, Inc.
Its: Managing Member
By:
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Name: Xxx Xxxxxxxxxxx
Title: Vice President
TELECOM PARTNERS II, L.P.
By: Telecom Management II, L.L.C.
Its: General Partner
By:
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Name: Xxxxxxx X. Xxxxxxx
Title: Managing Member
CRESCENDO WORLD FUND, LLC
By: Crescendo Ventures World Fund, LLC
Its: General Partner
By:
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Name: R. Xxxxx Xxxxxx
Title: Managing Member
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EAGLE VENTURES WF, LLC
By:
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Name: R. Xxxxx Xxxxxx
Title: Managing Member
CRESCENDO III, L.P.
By: Crescendo Ventures III, LLC
Its: General Partner
By:
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Name: R. Xxxxx Xxxxxx
Title: Managing Member
XXXXXXXX EQUITY GROUP, L.L.C.
By:
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Managing Member
NORWEST VENTURE PARTNERS VII, L.P.
By: Itasca VC Partners VII, LLP
Its: General Partner
By:
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Name: Xxxxx Xxxxxxxx
Title: Partner
ANDA PARTNERSHIP,
an Illinois general partnership
By: Xxx Only Trust, an Illinois trust
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By:
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Name: Xxxx Xxxxxx
Title: Co-Trustee
By: Xxx and Descendants Trust, an Illinois trust
By:
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Name: Xxxx Xxxxxx
Title: Xx-Xxxxxxx
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XX XXXXXXX XXXXXXXX XXX, L.P.
By: GS Advisors III, L.P.
Its: General Partner
By: GS Advisors III, L.L.C.
Its: General Partner
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By: Xxxxxx XxXxxxxx
Its: Attorney in Fact
WHITEHALL STREET REAL ESTATE LIMITED
PARTNERSHIP XI
By: WH Advisory, LLC XI
Its: General Partner
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By: Xxxxx X. Xxxxxx
Its: Vice President
EOP OPERATING LIMITED PARTNERSHIP
By: Equity Office Properties Trust
Its: Managing General Partner
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By: Xxxx Xxxxxxxxxxx
Its: Vice President
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CORNERSTONE PROPERTIES LIMITED
PARTNERSHIP
By: Cornerstone Properties, Inc.
Its: General Partner
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By: H. Xxx Xxx Xxxxx
Its: Chief Operating Officer
XXXXX ARC INVESTORS LIMITED PARTNERSHIP
By: Xxxxx Interests Limited Partnership
Its: General Partner
By: Xxxxx Holdings, Inc.
Its: General Partner
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By: Xxxxxxx X. Xxxxx
Its: President
DWS CAPITAL LLC
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By: Xxxxxxx X. Xxxxxxxxxxx
Its: Managing Member
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BOSTON PROPERTIES LIMITED PARTNERSHIP
By: Boston Properties, Inc.
Its: General Partner
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By: Xxxxxx X. Xxxxx
Its: Executive Vice President
BCI GROWTH V, L.P.
By: Glenpointe Associates V, LLC
Its: General Partner
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By: Xxxxxxx X. Xxxx
Its: Managing Member
BCI INVESTORS, LLC
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By: Xxxxxxx X. Xxxx
Its: Managing Member
FIRST UNION INVESTORS, INC.
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By: X. Xxxxx Xxxxxxx, III
Its: Senior Vice President
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TRIZECHAHN CORPORATION
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By:
Its:
VORNADO REALTY L.P.
By: Vornado Realty Trust
Its: General Partner
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By: Xxxxxx Xxxxxx
Its: Executive Vice President
TRANSWESTERN COMMERCIAL SERVICES, LLC
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By: Xxxxxxx X. Xxxx
Its: Chairman
CHASE EQUITY ASSOCIATES, L.P.
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By: Xxxxxxx X. Xxxxxx
Its: General Partner
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Schedule 1
1. EGI-ARC Investors, L.L.C.
2. Telecom Partners II, L.P.
3. Crescendo World Fund, LLC
4. Eagle Ventures WF, LLC
5. Crescendo III, L.P.
6. Xxxxxxxx Equity Group, L.L.C.
7. Norwest Venture Partners VII, L.P.
8. ANDA Partnership
9. GS Capital Partners III, L.P.
10. Whitehall Street Real Estate Limited Partnership XI
11. EOP Operating Limited Partnership
12. Cornerstone Properties Limited Partnership
13. Hines ARC Investors Limited Partnership
14. DWS Capital LLC
15. Boston Properties Limited Partnership
16. BCI Growth V, L.P. and BCI Investors, LLC
17. First Union Investors, Inc.
18. TrizecHahn Corporation
19. Vornado Realty L.P.
20. Transwestern Commercial Services, LLC
21. Chase Equity Associates, L.P.
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