EXHIBIT 13
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: /s/ Xxx X. Xxxxxx
Name: Xxx X. Xxxxxx
Title: SVP - Finance, CFO
Bank Lenders
DEUTSCHE BANK AG IBM CREDIT LLC
NEW YORK BRANCH
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxxx X Xxxxxxxx
-------------------------------- ------------------------------
Name: Xxxx Xxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Director Title: Manager Special Handling
By: /s/ Xxxxxxxxx Xxxxxxx
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Name: Xxxxxxxxx Xxxxxxx
Title: Vice President
WACHOVIA INVESTORS, INC. NORTEL NETWORKS INC.
By: /s/ Xxxxxx Xxxx By: /s/ Xxxxx Xxxxxx
------------------------------- -----------------------------
Name: Xxxxxxx Xxxx Name: Xxxxx Xxxxxx
Title: Authorized Officer Title: Director, Customer Finance
BANK ONE, NA TORONTO DOMINION (TEXAS), INC.
By: /s/ Xxxxxxxxxx X. Xxxxxxx By: /s/ Xxxx Xxxxx
--------------------------------- -----------------------------
Name: Xxxxxxxxxx X. Xxxxxxx Name: Xxxx Xxxxx
Title: Senior Vice President Title: Vice President
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.
