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EXHIBIT 10.12
WAIVER AND CONSENT
WAIVER AND CONSENT (this "Waiver and Consent"), dated August 18, 1999,
by and among Allied Riser Communications Corporation f/k/a Allied Riser
Communications Holdings, Inc., a Delaware corporation (the "Company"), EGI-ARC
Investors, L.L.C., a Delaware limited liability company ("EGI-ARC"), Telecom
Partners II, L.P., a Delaware limited partnership ("TP"), Crescendo World Fund,
LLC, a Delaware limited liability company ("CWF"), Eagle Ventures WF, LLC, a
Minnesota limited liability company ("EVW"), Crescendo III, L.P., a Delaware
limited partnership ("CIII"), Xxxxxxxx Equity Group, L.L.C., a California
limited liability company ("LEG"), Norwest Venture Partners VII, L.P., a
Minnesota limited partnership ("NVP") and ANDA Partnership, an Illinois general
partnership ("ANDA") and, collectively with EGI-ARC, TP, CWF, EVW, CIII, LEG and
NVP, the "Previous Financial Sponsors"). All terms not otherwise defined herein
shall have the meanings given such terms in that certain Investment Agreement by
and between EGI-ARC and the Company dated as of November 23, 1998.
WHEREAS, the Company desires to issue to those persons listed on
Schedule 1 attached hereto (the "New Financial Sponsors"), shares of Series B
Preferred Stock, par value $0.0001 per share (the "Series B Preferred") and
shares of Company Common Stock, par value $0.0001 per share (the "Common Stock")
pursuant to Investment Agreements dated as of August 18, 1999 (the "New
Financial Sponsors' Investment Agreements");
WHEREAS, the Company desires to issue to those New Financial Sponsors
listed on Schedule 2 attached hereto (the "Real Estate Financial Sponsors"),
warrants (the "Warrants") to acquire Common Stock pursuant to Warrant Agreements
dated on or before August 31, 1999 (the "Warrant Agreements") and pursuant to
Warrant Acquisition Agreements dated on or before August 31, 1999 (the "Warrant
Acquisition Agreements")
WHEREAS, each Previous Financial Sponsor is party to an Investment
Agreement with the Company (each, an "Investment Agreement" and collectively,
the "Investment Agreements"), pursuant to which each Previous Financial Sponsor
acquired (i) Series A-1 Preferred Stock or Series A-2 Preferred Stock, each with
par value $0.0001 per share (collectively, the "Series A Preferred Stock" and,
collectively with
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the Series B Preferred, the "Company Preferred") or Series B Preferred and (ii)
Common Stock;
WHEREAS, pursuant to Section 3.E or 3.D of each of the Investment
Agreements the issuance by the Company of equity securities which are on parity
with the Company Preferred with respect to the payment of dividends, redemptions
or distributions upon liquidation or otherwise, is prohibited without the prior
written consent of holders of at least the percentage of outstanding Company
Preferred that is not Series B Preferred plus five percent (5%);
WHEREAS, Section 3.J of each of the Investment Agreements provides that
after such time as investments in the Company equal or exceed a certain
threshold, and so long as the Purchasers under each such Investment Agreement
own Common Stock, each such Purchaser 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 Right"); and
WHEREAS, the Previous Financial Sponsors desire to consent to (i) the
issuance of shares of Series B Preferred and Common Stock, including Common
Stock issuable upon conversion of Series B Preferred, to each of the New
Financial Sponsors and (ii) the issuance of Warrants, and the Common Stock
issuable upon exercise of Warrants, to each of the Real Estate Financial
Sponsors;
WHEREAS, the Previous Financial Sponsors desire to waive any Preemptive
Rights they may have solely in connection with (i) the issuance of shares of
Series B Preferred and Common Stock, including Common Stock issuable upon
conversion of Series B Preferred, to each of the New Financial Sponsors pursuant
to the New Financial Sponsors' Investment Agreements and (ii) the issuance of
Warrants, and the Common Stock issuable upon exercise of Warrants, to each of
the Real Estate Financial Sponsors pursuant to the Warrant Agreements and
Warrant Acquisition Agreements.
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 Previous Financial Sponsors
mutually agree as follows:
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1. Consent. The Previous Financial Sponsors, who together hold as of
the date hereof in excess of the percentage of outstanding Company Preferred
that is not Series B Preferred plus five percent (5%), hereby consent to (i) the
issuance of shares of Series B Preferred and shares of Common Stock to the New
Financial Sponsors in the amounts set forth opposite their names on Schedule 1
attached hereto (ii) the issuance of Common Stock to the New Financial Sponsors
issuable upon the conversion of Series B Preferred, in accordance with the
Certificate of Designation of the Series B Preferred, (iii) the issuance of
Warrants to the Real Estate Financial Sponsors in accordance with the Warrant
Agreements and Warrant Acquisition Agreements and (iv) the issuance of Common
Stock to the Real Estate Financial Sponsors issuable upon the exercise of the
Warrants, in accordance with the Warrant Agreements and Warrant Acquisition
Agreements.
2. Waiver. The Previous Financial Sponsors hereby waive any Preemptive
Rights they may have provided pursuant to Section 3.J of the Investment
Agreements between the Company and each of the Previous Financial Sponsors,
respectively, solely in connection with (i) the issuance of Series B Preferred
and Common Stock referenced above and issued as of the date of the closings of
the New Financial Sponsors' Investment Agreements or upon conversion, as the
case may be, (ii) the issuance of the Warrants referenced above and issued as of
the date of the closings of the Warrant Agreements and Warrant Acquisition
Agreements and (iii) the issuance of Common Stock upon exercise of Warrants in
accordance with the Warrant Agreements and Warrant Acquisition Agreements, it
being acknowledged that nothing herein shall serve to waive any preemptive right
afforded to the Previous Financial Sponsors in connection with any other
issuance of Company equity securities.
3. 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:
Title:
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CRESCENDO WORLD FUND, LLC
By: Crescendo Ventures World Fund, LLC
Its: General Partner
By:
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Name:
Title:
EAGLE VENTURES WF, LLC
By:
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Name:
Title:
CRESCENDO III, L.P.
By: Crescendo Ventures III, LLC
Its: General Partner
By:
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Name:
Title:
XXXXXXXX EQUITY GROUP, L.L.C.
By:
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Name:
Title:
NORWEST VENTURE PARTNERS VII, L.P.
By: Itasca VC Partners VII, LLP
Its: General Partner
By:
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Name: Xxxx X. Xxxxxx
Title: Partner
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ANDA PARTNERSHIP,
an Illinois general partnership
By: Xxx Only Trust, an Illinois trust
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: Co-Trustee
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SCHEDULE 1
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NEW FINANCIAL SPONSORS SHARES OF SERIES B SHARES OF COMPANY
PREFERRED STOCK COMMON STOCK
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TrizecHahn Corporation 3 5,346,438
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Cornerstone Properties Limited Partnership 1.5 2,673,219
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EOP Operating Limited Partnership 2 3,564,292
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Boston Properties Limited Partnership 1.5 2,673,219
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Vornado Realty L.P. 6 10,692,877
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DWS Capital LLC 3 5,346,438
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Transwestern Commercial Services, L.L.C. 1 1,782,146
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Xxxxx ARC Investors Limited Partnership 6 10,692,877
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BCI Growth V, L.P. and BCI Investors, Inc. 2.5 4,455,365
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Chase Equity Associates, L.P. 2 3,564,292
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First Union Investors, Inc. 2.5 4,455,385
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SCHEDULE 2
REAL ESTATE FINANCIAL SPONSORS
TrizecHahn Corporation
Cornerstone Properties Limited Partnership
EOP Operating Limited Partnership
Boston Properties Limited Partnership
Vornado Realty L.P.
Transwestern Investment Company, L.L.C.
Xxxxx ARC Warrants Holding Limited Partnership
Xxxxxxxx Partners Office Management
Shorenstein Company, L.P.
Para Met Plaza Associates
Metropolitan Life Insurance Company
Xxxxxx Brothers Financial and Development Company