sc13da

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R5Nt6kdZluOQivuCvn2hP3yzuS8Xi5ZNxJFpgSuZvrypqthqEEYLb5Sv5teT5YfX twuuSUDPPgjjivu99Q5q+w== 0000950144-01-509944.txt : 20020412 0000950144-01-509944.hdr.sgml : 20020412 ACCESSION NUMBER: 0000950144-01-509944 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20011211 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FIBERNET TELECOM GROUP INC\ CENTRAL INDEX KEY: 0001001868 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 133859938 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-56267 FILM NUMBER: 1811626 BUSINESS ADDRESS: STREET 1: 570 LEXINGTON AVENUE STREET 2: 3RD FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2124056200 MAIL ADDRESS: STREET 1: 570 LEXINGTON AVENUE STREET 2: 3RD FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: DESERT NATIVE DESIGNS INC DATE OF NAME CHANGE: 19960517 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NORTEL NETWORKS CORP CENTRAL INDEX KEY: 0000072911 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 621262580 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 8200 DIXIE ROAD SUITE 100 STREET 2: BRAMPTON CITY: ONTARIO CANADA STATE: A6 ZIP: L6T 5P6 BUSINESS PHONE: 9058631103 MAIL ADDRESS: STREET 1: 8200 DIXIE ROAD STREET 2: SUITE 100 BRAMPTON CITY: ONTARIO CANADA STATE: A6 ZIP: L6T 5P6 FORMER COMPANY: FORMER CONFORMED NAME: NORTHERN ELECTRIC CO LTD DATE OF NAME CHANGE: 19760324 FORMER COMPANY: FORMER CONFORMED NAME: NORTHERN TELECOM LTD DATE OF NAME CHANGE: 19940831 SC 13D/A 1 t29459sc13da.htm NORTEL NETWORKS/FIBERNET TELECOM GROUP sc13da

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D
(Amendment No. 1)

Under the Securities Exchange Act of 1934

FIBERNET TELECOM GROUP, INC.

(Name of Issuer)

Common Stock, Par Value $0.001

(Title of Class of Securities)

315653105

(CUSIP Number)

Deborah J. Noble, Corporate Secretary
8200 Dixie Road
Suite 100
Brampton, Ontario L6T 5P6
Canada
(905) 863-1103

(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)

December 7, 2001

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Section 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ]

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

Page 2 of 12 Pages


CUSIP No. 315653105

1 NAMES OF REPORTING PERSONS / IRS IDENTIFICATION NO. OF REPORTING PERSON:

Nortel Networks Corporation

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions):

(a) (b)

3 SEC USE ONLY

4 SOURCE OF FUNDS (See Instructions): OO

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e):

6 CITIZENSHIP OR PLACE OF ORGANIZATION: Canada

NUMBER OF 7 SOLE VOTING POWER 18,082,201

SHARES

BENEFICIALLY

OWNED BY 8 SHARED VOTING POWER -0-

EACH

REPORTING

PERSON 9 SOLE DISPOSITIVE POWER 18,082,201

WITH

10 SHARED DISPOSITIVE POWER -0-

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 18,082,201(1)

12 CHECK IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES (See Instructions):

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11: 26.3%(2)

14 TYPE OF REPORTING PERSON (See Instructions): CO

(1)		Includes (a) 8,547,360 shares of common stock of the Issuer issued upon the conversion of 373,947 shares of nonvoting Series H Preferred Stock of the Issuer, (b) 1,901,253 shares of common stock of the Issuer issued upon conversion of all of its shares of nonvoting Series I Preferred Stock of the Issuer, and (c) 7,633,588 shares of common stock of the Issuer issuable upon the conversion of 100,000 shares of nonvoting Series H Preferred Stock of the Issuer. The common stock and Series H Preferred Stock are held by Nortel Networks Inc., a wholly-owned subsidiary of Nortel Networks Limited, which in turn is a wholly-owned subsidiary of Nortel Networks Corporation.

(2)		Based on 61,112,535 shares of common stock of the Issuer issued and outstanding as of December 6, 2001, as set forth in the Issuer’s Prospectus Supplement filed with the Securities and Exchange Commission on December 7, 2001 pursuant to Rule 424(b)(3) under the Securities Act of 1933, as amended.

Page 3 of 12 Pages

AMENDMENT NO. 1
TO
SCHEDULE 13D

This Amendment No. 1 amends the Statement on Schedule 13D (the “Statement”) filed on February 12, 2001 by and on behalf of Nortel Networks Corporation with respect to its beneficial ownership of common stock, par value $0.001 per share (the “Common Stock”), of FiberNet Telecom Group, Inc. (“FiberNet”). Capitalized terms used and not defined herein have the meanings set forth in the Statement. The Statement, as amended by this Amendment No. 1, is referred to herein as “Schedule 13D”.

With respect to Items 2, 4, 5 and 6 of the Statement, the Schedule I attached to the Statement is hereby replaced with the Schedule I attached hereto.

Item 1. Security and Issuer

The second and third sentences of Item 1 of the Statement are hereby deleted.

Item 3. Source and Amount of Funds or Other Consideration

Item 3 of the Statement is hereby amended to read as follows:

Nortel Networks Inc. acquired its shares of Series H Preferred Stock and Series I Preferred Stock for an aggregate original purchase price of $50,000,000, plus $133,000 attributable to accrued dividends of FiberNet Series G Preferred Stock. In connection with the agreement of Nortel Networks Inc. to certain concessions relating to the issuance by FiberNet of its Series J Convertible Preferred Stock to unrelated purchasers (the “Transaction”), Nortel Networks Inc. converted 373,947 shares of Series H Preferred Stock and all of its shares of Series I Preferred Stock into an aggregate of 10,448,613 shares of Common Stock.

Item 4. Purpose of the Transaction

Item 4 of the Statement is amended to include the following paragraphs after the first paragraph:

As of the date of the Transaction, December 7, 2001, and as the result of accrued dividends payable with respect to the Series H Preferred Stock and Series I Preferred Stock, the Series H Preferred Stock was convertible into an aggregate of 10,472,366 shares of Common Stock and the Series I Preferred Stock was convertible into an aggregate of 1,901,253 shares of Common Stock.

In connection with the Transaction Nortel Networks Inc. (a) converted 373,947 shares of Series H Preferred Stock into 8,547,360 shares of Common Stock, and (b) converted all of its shares of Series I Preferred Stock into 1,901,253 shares of Common Stock. In addition, in connection with the Transaction the number of shares of Common Stock into which Nortel

Page 4 of 12 Pages

Networks Inc.’s remaining 100,000 shares of Series H Preferred Stock are convertible increased to 7,633,588.

Item 5. Interest in Securities of the Issuer

(a) Number and Percentage of Securities Owned:

The first paragraph of Item 5(a) is hereby amended to read as follows:

Nortel Networks Corporation is the beneficial owner of 18,082,201 shares of Common Stock, representing approximately 26.3% of the Common Stock issued and outstanding. The 18,082,201 shares include (a) 8,547,360 shares of Common Stock issued upon the conversion of 373,947 shares of Series H Preferred Stock, (b) 1,901,253 shares of Common Stock issued upon conversion of all of its shares of Series I Preferred Stock, and (c) 7,633,588 shares of Common Stock issuable upon the conversion of 100,000 shares of Series H Preferred Stock.

(b) Type of Ownership:

Item 5(b) is hereby amended to read as follows:

Nortel Networks Corporation has the sole power to vote or to direct the vote or to dispose or direct the disposition of the 18,082,201 shares of Common Stock.

(d) Right to Receive Dividends:

Item 5(d) is hereby amended to read as follows:

Nortel Networks Inc. holds all rights associated with its shares of Common Stock and Series H Preferred Stock, including the right to receive dividends on such shares of Common Stock and Preferred Stock.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

Item 6 is hereby amended to include the following paragraphs:

Nortel Networks Inc. is party to that certain letter agreement, dated as of December 7, 2001, by FiberNet Telecom Group, Inc. and acknowledged by Nortel Networks Inc. (the “Letter Agreement”), which is attached as Exhibit 2 to this Schedule 13D and incorporated herein by reference.

Under the Letter Agreement, the Issuer has agreed that so long as at least twenty-five percent (25%) of the 100,000 shares of the Series H Preferred Stock not converted by Nortel Networks Inc., together with any dividends earned thereon, remain issued and outstanding, the

Page 5 of 12 Pages

Issuer shall not take certain actions without the prior approval of the holders of at least a majority of such shares of Series H Preferred Stock. The Issuer and Nortel Networks Inc. also agreed that Nortel Networks Inc. shall have substantially similar redemption rights relating to the Series H Preferred Stock as provided to the holders of Series J Preferred Stock on a pro rata basis with the holders of Series J Preferred Stock. The Issuer and Nortel Networks Inc. also agreed that under the Certificate of Designation (the “Certificate of Designation”) of the Series H Preferred Stock, the election to treat a Sale (as defined in the Certificate of Designation) as a Liquidation (as defined in the Certificate of Designation) need only be made by a majority of the then issued and outstanding Series H Preferred Stock. The Issuer also agreed to use its best efforts to seek stockholder approval at the next meeting of stockholders of the Issuer for a revised Series H Preferred Certificate of Designation containing the rights, preferences and privileges described in the Letter Agreement.

Nortel Networks Inc. is also party to that certain letter agreement, dated as of December 7, 2001, by Nortel Networks Inc. and acknowledged by Signal Equity Partners, L.P., which is attached as Exhibit 3 to this Schedule 13D and incorporated herein by reference. Pursuant to this letter agreement, Signal Equity Partners, L.P. has agreed to vote its voting securities of the Issuer in favor of an amendment to the Issuer’s certificate of incorporation amending the terms of the Issuer’s Series H Preferred Stock with respect to the matters contained in the Letter Agreement described above, and Nortel Networks Inc. has agreed to vote its voting securities of the Issuer in favor of certain matters that affect the warrants of the Issuer held by Signal Equity Partners, L.P. The letter agreement terminates on earlier to occur of the completion of the meeting of stockholders of the Issuer to be held for the purpose of voting on the matters contemplated by the letter agreement or the four month anniversary of the date of the letter agreement.

Nortel Networks Inc. is also party to that certain letter agreement, dated as of December 7, 2001, by SDS Merchant Fund, L.P., Penny Lane Partners, L.P. and Alexander Enterprise Holdings, Inc. (collectively, the “Series J Holders”) and acknowledged by Nortel Networks Inc., which is attached as Exhibit 4 to this Schedule 13D and incorporated herein by reference. Pursuant to this letter agreement, the Series J Holders have agreed to vote their voting securities of the Issuer in favor of an amendment to the Issuer’s certificate of incorporation amending the terms of the Issuer’s Series H Preferred Stock with respect to the matters contained in the Letter Agreement described above. The letter agreement will terminate on the earlier to occur of the completion of the meeting of stockholders of the Issuer to be held for the purpose of voting on the matters contemplated by the letter agreement or June 30, 2002.

Item 7. Material to Be Filed as Exhibits

Item 7 is hereby amended to include the following paragraph:

Exhibit 2 Letter Agreement, dated as of December 7, 2001 by FiberNet Telecom Group, Inc. and acknowledged by Nortel Networks Inc.

Exhibit 3 Letter Agreement, dated as of December 7, 2001 by Nortel Networks Inc. and acknowledged by Signal Equity Partners, L.P.

Page 6 of 12 Pages

Exhibit 4 Letter Agreement, dated as of December 7, 2001 by SDS Merchant Fund, L.P., Penny Lane Partners, L.P. and Alexander Enterprise Holdings, Inc. and acknowledged by Nortel Networks Inc.

Page 7 of 12 Pages

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: December 11, 2001.


		NORTEL NETWORKS CORPORATION

		By:	/s/ Deborah J. Noble

			Name: Deborah J. Noble Title: Corporate Secretary

		By:	/s/ Linda F. Mezon

			Name: Linda F. Mezon Title: Assistant Controller

Page 8 of 12 Pages

SCHEDULE I

DIRECTORS AND OFFICERS OF
NORTEL NETWORKS CORPORATION
AND
NORTEL NETWORKS LIMITED

The name, citizenship, present principal occupation or employment, and the name of any corporation or other organization in which such employment is conducted, of each of the directors and executive officers of Nortel Networks Corporation and Nortel Networks Limited is set forth below. Unless otherwise indicated below, the business address of each director and executive officer is Nortel Networks Corporation and Nortel Networks Limited, 8200 Dixie Road, Suite 100, Brampton, Ontario L6T 5P6, Canada.


NAME AND CITIZENSHIP		PRESENT PRINCIPAL OCCUPATION
		OR EMPLOYMENT

Directors
	Blanchard, James J. American	Verner, Liipfert, Bernhard, McPherson and Hand 901-15th Street, N.W., Suite 700 Washington, DC 20005-2301 USA

	Brown, Robert E. Canadian/British	President and Chief Executive Officer Bombardier Inc. 800 René-Lévesque Boulevard West Montréal, Québec H3B 1Y8 Canada

	Cleghorn, John E. Canadian	Corporate Director Suite 3115, South Tower Royal Bank Plaza 200 Bay Street Toronto, Ontario M5J 2J5 Canada

	Dunn, Frank A. Canadian	President and Chief Executive Officer

	Fortier, L. Yves Canadian	Chairman & Senior Partner Ogilvy Renault 1981 McGill College Avenue, 12th Floor Montréal, Québec H3A 3C1 Canada

	Ingram, Robert A. American	Chief Operating Officer and President GlaxoSmithKline 5 Moore Drive Research Triangle Park, North Carolina 27709 USA

	Roth, John A. Canadian	Vice-Chairman of the Board (non-executive)

Page 9 of 12 Pages


	Saucier, Guylaine Canadian	Corporate Director 1321 Sherbrooke Street West, Suite C-61 Montréal, Québec H3G 1J4 Canada

	Smith, Jr., Sherwood H. American	Chairman Emeritus of the Board Carolina Power & Light Company One Hanover Square Building 411 Fayetteville Street Mall Raleigh, North Carolina 27601-1748 USA

	Wilson, Lynton R. Canadian	Chairman of the Board Nortel Networks Corporation Nortel Networks Limited and Chairman of the Board CAE Inc. 483 Bay Street Floor 7, North Tower Toronto, Ontario M5G 2E1 Canada

Officers
	Beatty, Douglas C. Canadian	Controller

	Bolouri, Chahram Canadian	President, Global Customer Care & Supply Chain Operations 9300 Trans Canada Highway St. Laurent, Québec H4S 1K5 Canada

	Bush, Kriss W. American	Vice-President, Tax

	Carney, Lloyd A. American	President, Core IP Networks 1 Place des Frères Montgolfier Guyancourt 78928 France

	Debon, Pascal French	President, Wireless Networks Maidenhead Office Park Westacott Way Maidenhead, Berkshire SL6 3QH United Kingdom

	DeRoma, Nicholas J. American	Chief Legal Officer

	Donahee, Gary R. Canadian/American	President, Americas 2221 Lakeside Blvd. Richardson, Texas 75082-4399 USA

Page 10 of 12 Pages


		Donovan, William J. American		Senior Vice President, Human Resources

		Doolittle, John M. Canadian		Assistant Treasurer

		Dunn, Frank A. Canadian		President and Chief Executive Officer

		Hungle, Terry G. Canadian		Chief Financial Officer

		Kaye, Robert B. Canadian		General Auditor

		Kember, Alan T. Canadian		Chief Marketing Officer 4401 Great America Parkway Santa Clara, California 95054 USA

		Mao, Robert Y.L. American		Chief Executive Officer, Nortel China 11/f Tower 3 Sun Dong An Plaza 138 Wang Fu Ji Beijing 100006 China

		McFadden, Brian W. Canadian		President, Metro Optical 2351 Boulevard Alfred-Nobel St. Laurent, Québec H4S 2A9 Canada

		Mezon, Linda F. American/Canadian		Assistant Controller

		Morrison, Blair F. Canadian		Assistant Secretary

		Mumford, D. Gregory Canadian		President, Optical Long-Haul Networks 1285 Baseline Road Ottawa, Ontario K2C 3S3 Canada

		Noble, Deborah J. Canadian		Corporate Secretary

		Plastina, Frank Canadian		President, Metro Networks 4006 E. Chapel Hill-Nelson Highway Research Triangle Park, North Carolina 27709 USA

Page 11 of 12 Pages


		Pusey, Stephen C. British		President, Europe, Middle East and Africa Maidenhead Office Park Westacott Way Maidenhead, Berkshire SL6 3QH England

		Ricks, Richard C. American		Chief Information Officer 4006 East Chapel Hill-Nelson Highway Research Triangle Park, North Carolina 27709 USA

		Ross, Eric J. American		President, Enterprise Solutions 4006 E. Chapel Hill-Nelson Highway Research Triangle Park, North Carolina 27709 USA

		Schilling, Steven L. American		President, Optical Ethernet and Corporate Accounts 4006 E. Chapel Hill-Nelson Highway Research Triangle Park, North Carolina 27709 USA

		Stevenson, Katharine B. Canadian/American		Treasurer

		Tariq, Masood A. Canadian/American		President, Asia c/o Nortel Networks (Asia) Limited 21-22/f Cityplaza One 1111 King’s Road Quarry Bay, Hong Kong

		Wilson, Lynton R. Canadian		Chairman of the Board Nortel Networks Corporation Nortel Networks Limited CAE Inc. 483 Bay Street, Floor 7 North Tower Toronto, Ontario M5G 2E1 Canada

		Yohe, Vickie L. American		President, Circuit Switching 2221 Lakeside Blvd. Richardson, Texas 75082-4399 USA

Page 12 of 12 Pages

DIRECTOR AND OFFICERS OF
NORTEL NETWORKS INC.

The name, citizenship, present principal occupation or employment, and the name of any corporation or other organization in which such employment is conducted, of each of the director and executive officers of Nortel Networks Inc. is set forth below. Unless otherwise indicated below, the business address of each director and executive officer is Nortel Networks Inc., 200 Athens Way, Nashville, Tennessee 37228-1397 USA.


Director
	Cross, Mary M. American	President and Vice-President, Finance

Officers

	Ashby, Robert L. American	Vice-President and Treasurer

	Cross, Mary M. American	President and Vice-President, Finance

	Donahee, Gary R. Canadian/American	President, Americas Nortel Networks Corporation Nortel Networks Limited Nortel Networks Inc. 2221 Lakeside Blvd. Richardson, Texas 75082-4399 USA

	Egan, Lynn C. American	Assistant Secretary and Senior Counsel

	Froncek, Frank X. American	Assistant Secretary 4001 E. Chapel Hill-Nelson Highway Research Triangle Park, North Carolina 27709 USA

	Knudsen, Paul T. Canadian	Lawyer and Assistant Secretary 5405 Windward Parkway Alpharetta, Georgia 30004 USA

	Lester, Monica L. American	Assistant Treasurer

	Noble, Deborah J. Canadian	Corporate Secretary, Nortel Networks Corporation and Nortel Networks Limited Assistant Secretary, Nortel Networks Inc. 8200 Dixie Road, Suite 100 Brampton, Ontario L6T 5P6 Canada

	Schecter, Roger A. American	Secretary and Managing Attorney

EX-2 3 t29459ex2.htm EXHIBIT 2 ex2

Exhibit 2

FIBERNET TELECOM GROUP, INC.
570 Lexington Avenue
New York, NY 10022

December 7, 2001

Nortel Networks Inc.
GMS 991 15 A40
2221 Lakeside Blvd.
Richardson, Texas 75082-4399
Attention: Paul D.Day

Ladies and Gentlemen:

This letter agreement (the “Agreement”) is being entered into in connection with the conversion by Nortel Networks Inc. (“Nortel Networks”) of certain of its shares of Series H Preferred Stock, $.001 par value per share (the “Series H Preferred”) of FiberNet Telecom Group, Inc. (the “Company”).

Immediately prior to the issuance of the Company’s Series J Preferred Stock, $.001 par value per share (the “Series J Preferred”) pursuant to the Purchase Agreement by and among the Company and the purchasers named therein, Nortel Networks will convert 373,947 shares of its Series H Preferred into shares of the Company’s common stock, $.001 par value per share (the “Common Stock”). One hundred thousand (100,000) shares of Nortel Networks’ Series H Preferred will remain issued and outstanding (and, together with any dividends earned thereon, the “Retained Shares”).

For so long as at least twenty-five percent (25%) of the Retained Shares remain issued and outstanding, the Company shall not, without first obtaining the approval (by vote or written consent) of the holders of at least a majority of the Retained Shares, voting as a separate class, take any action to:

(i) be merged with or into any other corporation or entity;

(ii) sell all or substantially all of its assets to any third party;

(iii) authorize, designate or issue any shares of a new class or series of equity securities senior to the Series H Preferred as to liquidation preference, redemption or dividends;

(iv) repurchase, redeem or retire any shares of Series H Preferred or other stock ranking as to redemption, conversion, payment of dividends or distribution of assets on a parity with the Series H Preferred, except pursuant to any provision of the Company’s Certificate of Incorporation

relating to the Company’s Series H Preferred (the “Series H Certificate of Designation”);

(v) repurchase, redeem or retire any shares of Common Stock or any other shares of stock of any class of the Company, whether or not presently authorized, ranking as to redemption, conversion, payment of dividends or distribution of assets junior to the Series H Preferred;

(vi) amend the Certificate of Incorporation in any manner adverse to the holders of the Series H Preferred (it being understood and agreed that the amendment of the Certificate of Incorporation for the purpose of authorizing and issuing the Series J Preferred and authorizing or issuing other securities with rights and preferences junior or pari passu with the rights and preferences of the Series H Preferred shall not be deemed to be adverse to the holders of the Series H Preferred);

(vii) increase or decrease the authorized number of shares of Series H Preferred or any other series of preferred stock; or

(viii) authorize or pay any dividend or other distribution (other than dividends payable to the holders of Series H Preferred or Series J Preferred as contemplated by the Certificate of Incorporation) with respect to the Common Stock.

In addition, the parties hereto agree that Nortel Networks shall have such right to require the Company to redeem all or a portion of the Retained Shares, as well as such other rights, limitations and obligations, as are provided to the holders of the Series J Preferred in Sections 5, 8 and 9 of the Series J Certificate of Designation as if Nortel Networks was a holder of Series J Preferred, on a pro-rata basis (based on the aggregate redemption proceeds that would have been received by a holder for shares being redeemed had the full amount of redemption proceeds been available) with the holders of the Series J Preferred; provided that the upon any such redemption, the liquidation preference amount applicable to the redemption of the Series H Preferred shall be the Mandatory Redemption Obligation (as defined in the Series H Certificate of Designation).

Furthermore, solely for purposes of clarification, the parties hereto agree that under Section 3(b) of the Series H Certificate of Designation, the election to treat a Sale (as defined in the Series H Certificate of Designation) as a Liquidation (as defined in the Series H Certificate of Designation) need only be made by a majority of the then issued and outstanding Series H Preferred.

The Company covenants to use its best efforts to seek stockholder approval at the next meeting of stockholders of the Company for a revised Series H Preferred Certificate of Designation containing the rights, preferences and privileges granted to Nortel Networks herein. This Agreement will terminate upon Nortel Networks’ approval of such revised Series H Certificate of Designation that contains the matters set forth herein and Nortel Networks’ receipt of a file-stamped copy of such revised Certificate of Designation by the Secretary of State of the

State of Delaware (the “Secretary of State”). Notwithstanding the foregoing, Nortel Networks may not unreasonably withhold its consent if the Series H Certificate of Designation to be filed with the Secretary of State contains identical rights to those outlined above, provided, however, that the Series H Certificate of Designation to be filed shall provide that the holders of a majority of the Series H Preferred may request redemption upon a sale of a majority of the assets of the Company as provided in Section 6(a) and 7(v)(ii) of the Series H Certificate of Designation as in effect on the date hereof.

This Agreement will be governed and construed in accordance with the laws of the State of New York. This Agreement may be changed, modified or amended only by a writing signed by all parties hereto. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

If the foregoing comports with your understanding of our agreement, please so indicate by signing this Agreement in the space provided below, whereupon this Agreement shall evidence the binding obligations between us.


		Very truly yours,

		FIBERNET TELECOM GROUP, INC a Delaware corporation

		By:	/s/ Michael S. Liss
			Michael S. Liss President and Chief Executive Officer

ACKNOWLEDGED:

NORTEL NETWORKS INC.


By:		/s/ Elias Makris
Name:		Elias Makris
Title:		Director, Customer Finance

EX-3 4 t29459ex3.htm EXHIBIT 3 ex3

Exhibit 3

December 7, 2001

Signal Equity Partners, L.P.
10 E. 53rd Street, 32nd Floor
New York, New York 10022
Attention: Timothy Bradley

This letter agreement (the “Agreement”) is being entered into in connection with the sale and issuance of Series J Preferred Stock, $.001 par value per share, of FiberNet Telecom Group, Inc. (the “Company”) to SDS Merchant Fund, L.P., Penny Lane Partners, L.P. and Alexander Enterprise Holdings, Inc. (collectively, the “Series J Holders”). Pursuant to the sale and issuance of the Company’s Series J Preferred Stock, Nortel Networks Inc. (“Nortel Networks”) has agreed to, among other things, certain concessions to the Company and certain modifications to the terms of its shares of the Company’s Series H Preferred Stock, which modifications require the approval of the stockholders of the Company and an amendment to the Company’s Certificate of Incorporation (the “Amendment”). Additionally, Signal Equity Partners, L.P. (“Signal”), currently holds certain warrants of the Company.

Signal will, with respect to all securities for which it or any party controlled by it may vote at the meeting of the Company’s stockholders to be held for the purpose of voting on the Amendment or for granting any written consent in connection with the solicitation of written consents in lieu of such a meeting, vote or cause to be voted such securities (or execute written consents with respect to such securities) in favor of the Amendment.

In the event that the Company holds a meeting of the Company’s stockholders (or solicits written consents in lieu of such a meeting) at which one of the proposals (or with respect to such consent) is a proposal to reduce the exercise price of the warrants held by Signal as of the date of this Agreement, Nortel Networks will, with respect to all securities for which it or any party controlled by it may vote at such meeting (or with respect to such consent), vote or cause to be voted such securities (or execute written consents with respect to such securities) in favor of such proposal.

Until the termination of this Agreement, Nortel Networks will not sell or transfer (but may convert into common stock) any shares of Series H Preferred Stock of the Company unless any transferee agrees to and accepts the terms and conditions of this Agreement before such transferee obtains such securities.

The parties acknowledge that money damages are not an adequate remedy for violations of any provision of this Agreement and that any party may, in its sole discretion, apply to a court of competent jurisdiction for specific performance for injunctive or such other relief as such court may deem just and proper in order to enforce any such provision or prevent any violation hereof and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief.

This Agreement shall be governed and construed in accordance with the laws of the State of New York without giving effect to conflict of laws principles. This Agreement may be changed, modified or amended only by a writing signed by all parties. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

The Agreement shall terminate on the earlier to occur of the completion of the meeting of stockholders of the Company to be held for the purpose of voting on the matters contained herein (or upon the granting of any written consent in connection with the solicitation of written consents in lieu of such a meeting) or the four month anniversary of the date of this Agreement.


		Sincerely,

		NORTEL NETWORKS INC


		By:		/s/ Elias Makris
		Name:		Elias Makris
		Title:		Director, Consumer Finance

Acknowledged:
SIGNAL EQUITY PARTNERS, L.P.

By: Signal Equity Advisors, L.P.
its General Partner


By:	Signal Equity Advisors, Inc., its General Partner



	By:	/s/ Timothy P. Bradley
	Name:	Timothy P. Bradley
	Title:	Managing Director

EX-4 5 t29459ex4.htm EXHIBIT 4 ex4

Exhibit 4

December 7, 2001

Nortel Networks Inc.
GMS 991 15 A40
2221 Lakeside Blvd.
Richardson, Texas 75082-4399
Attention: E. Leigh Gillett, Esq.

Ladies and Gentlemen:

This letter agreement (the “Agreement”) is being entered into in connection with the sale and issuance of Series J Preferred Stock, $.001 par value per share, of FiberNet Telecom Group, Inc. (the “Company”) to SDS Merchant Fund, L.P., Penny Lane Partners, L.P. and Alexander Enterprise Holdings, Inc. (collectively, the “Series J Holders”). Pursuant to the sale and issuance of the Company’s Series J Preferred Stock, Nortel Networks Inc. has agreed to, among other things, certain concessions to the Company and certain modifications to the terms of its shares of the Company’s Series H Preferred Stock, which modifications require the approval of the stockholders of the Company and an amendment to the Company’s Certificate of Incorporation (the “Amendment”).

Each of the Series J Holders will, with respect to all securities for which it or any party controlled by it may vote at the meeting of the Company’s stockholders to be held for the purpose of voting on the Amendment or for granting any written consent in connection with the solicitation of written consents in lieu of such a meeting, vote or cause to be voted such securities (or execute written consents with respect to such securities) (i) in favor of the Amendment and (ii) in favor of any other matter necessary for the consummation of the Amendment.

Until the termination of this Agreement, no Series J Holder will sell, transfer or otherwise dispose of (other than through the conversion to common stock of the Company) any of its Series J Preferred Stock of the Company or enter into a voting agreement or arrangement or grant any proxy with respect thereto unless any transferee agrees to and accepts the terms and conditions of this Agreement before such transferee obtains such securities.

executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

The Agreement shall terminate on the earlier to occur of the completion of the meeting of stockholders of the Company to be held for the purpose of voting on the Amendment (or upon the granting of any written consent in connection with the solicitation of written consents in lieu of such a meeting) or June 30, 2002.


Sincerely,

SDS MERCHANT FUND, L.P.


By:		/s/ Steve Derby
Name:		Steve Derby
Title:		Managing Member



PENNY LANE PARTNERS, L.P.

By: Penny Lane Associates, L.P. its General Partner

By: Penny Lane, Inc., its General Partner

	By:	/s/ William R. Denslow, Jr.
	Name:	William R. Denslow, Jr.
	Title:	Chairman

ALEXANDER ENTERPRISE HOLDINGS, INC.


By:		/s/ Jared Bluestein
Name:		Jared Bluestein
Title:		Director

Acknowledged:
NORTEL NETWORKS INC.


By:		/s/ Elias Makris
Name:		Elias Makris
Title:		Director, Consumer Finance

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NUMBER OF	7	SOLE VOTING POWER	18,082,201
SHARES
BENEFICIALLY
OWNED BY	8	SHARED VOTING POWER	-0-
EACH
REPORTING
PERSON	9	SOLE DISPOSITIVE POWER	18,082,201
WITH

	10	SHARED DISPOSITIVE POWER	-0-


Exhibit 2	Letter Agreement, dated as of December 7, 2001 by FiberNet Telecom Group, Inc. and acknowledged by Nortel Networks Inc.

Exhibit 3	Letter Agreement, dated as of December 7, 2001 by Nortel Networks Inc. and acknowledged by Signal Equity Partners, L.P.


Exhibit 4	Letter Agreement, dated as of December 7, 2001 by SDS Merchant Fund, L.P., Penny Lane Partners, L.P. and Alexander Enterprise Holdings, Inc. and acknowledged by Nortel Networks Inc.


	(ii)	sell all or substantially all of its assets to any third party;


	(iii)	authorize, designate or issue any shares of a new class or series of equity securities senior to the Series H Preferred as to liquidation preference, redemption or dividends;


	(iv)	repurchase, redeem or retire any shares of Series H Preferred or other stock ranking as to redemption, conversion, payment of dividends or distribution of assets on a parity with the Series H Preferred, except pursuant to any provision of the Company’s Certificate of Incorporation


	(vi)	amend the Certificate of Incorporation in any manner adverse to the holders of the Series H Preferred (it being understood and agreed that the amendment of the Certificate of Incorporation for the purpose of authorizing and issuing the Series J Preferred and authorizing or issuing other securities with rights and preferences junior or pari passu with the rights and preferences of the Series H Preferred shall not be deemed to be adverse to the holders of the Series H Preferred);


	(vii)	increase or decrease the authorized number of shares of Series H Preferred or any other series of preferred stock; or


	(viii)	authorize or pay any dividend or other distribution (other than dividends payable to the holders of Series H Preferred or Series J Preferred as contemplated by the Certificate of Incorporation) with respect to the Common Stock.