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EXHIBIT 10.9
WAIVER AND CONSENT
WAIVER AND CONSENT (the "WAIVER AND CONSENT"), dated December 30, 1998 and
effective as of November 23, 1998, by and among 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"), ▇▇▇▇▇▇▇▇ Equity Group, L.L.C., a California limited
liability company ("LEG", and collectively with EGI-ARC, TP, CWF, and EVW, the
"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 TP, CWF, EVW, CIII, Norwest
Venture Partners VII, L.P., a Minnesota limited partnership ("Norwest") and ANDA
Partnership, an Illinois general partnership "(ANDA"), shares of Company Series
A-1 Preferred Stock; and
WHEREAS, each Financial Sponsor is party to an Investment Agreement with
the Company, dated as of November 23, 1998, (each an "Investment Agreement" and
collectively, the "Investment Agreements") and Section 3(E) of the Investment
Agreements prohibits the issuance by the Company of Additional Shares of Company
Preferred Stock without the prior written consent of holders of at least 60% of
the then outstanding shares of Company Preferred; and
WHEREAS, Section 3(J) of the Investment Agreements provides that after such
time as investments in the company equal or exceed $60,000,000, and so long as
Purchaser owns Common Stock, such Purchaser shall, in connection with the
issuance of additional Company equity securities to non-employees exclusively
for cash, have the right to purchase form the Company additional shares of
Common Stock on the terms set forth in the Investment Agreements (the
"Preemptive Right"); and
WHEREAS, the Financial Sponsors desire to consent to the issuance of
Company Series A-1 Preferred Stock to TP, CWF, EVW, CIII, Norwest and ANDA and
desire to waive any Preemptive Rights they may have solely in connection with
the issuance of said shares of stock to TP, CWF, EVW, CIII, Norwest and ANDA as
of the date hereof.
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. The Financial Sponsors, who together hold as of the date hereof
in excess of 60% of the outstanding shares of Company Preferred, hereby consent
to the issuance of additional shares of Series A-1 Preferred Stock to each of
TP, CWF, EVW, CIII, Norwest and ANDA in the amounts set forth on Exhibit A
hereto.
2. Waiver. The Financial Sponsors hereby waive the Preemptive Rights
provided pursuant to Section 3(J) of the Investment Agreements between the
Company and each of the Financial Sponsors, respectively, solely in connection
with the issuance of Series A-1 Preferred Stock referenced above and issued as
of the date hereof, it being acknowledged that nothing
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herein shall serve to waive any preemptive right afforded to the 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).
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IN WITNESS WHEREOF, the Parties have executed this Waiver and Consent as of the
date first above written.
ALLIED RISER COMMUNICATIONS HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name:
Title:
EGI-ARC INVESTORS
By: GAMI Investments, Inc., its Managing
Member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
TELECOM PARTNERS II, L.P.
By: Telecom Management II, L.L.C., its
General Partner
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Member
CRESCENDO WORLD FUND, LLC
By: Crescendo Ventures World Fund, LLC, its
General Partner
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: R. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Member
EAGLE VENTURES WF, LLC
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: R. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Member
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CRESCENDO III, L.P.
By: Crescendo Ventures III, LLC, its General
Partner
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: R. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Member
▇▇▇▇▇▇▇▇ EQUITY GROUP, L.L.C.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Managing Member
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EXHIBIT A
Shares of
Shares of Series Series A-2 Shares of
A-1 Preferred Preferred Common Stock Total
Purchased at Purchased at Purchased at Purchase
Purchaser Closing Closing Closing Price
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TELECOM
PARTNERS II, L.P. 2 0 $ 2,000,000
8,749,290 $ 874.93
CRESCENDO
WORLD FUND, LLC .9543 0 $ 954,300
4,174,724 $ 417.48
EAGLE VENTURES
WF, LLC .0457 0 $ 45,700
199,921 $ 20.00
CRESCENDO III, L.P. 4 0 $ 4,000,000
17,498,580 $ 1,749.86
ANDA PARTNERSHIP 3 0 $ 3,000,000
13,123,935 $ 1,312.40
NORWEST VENTURE
PARTNERS VII, L.P. 15 0 $15,000,000
65,619,675 $ 6,561.97