EXHIBIT 10.74

 

This AMENDMENT, dated as of March 22, 2005 (this “Fourteenth Amendment”), is
among FIBERNET TELECOM GROUP, INC., a Delaware corporation (the “Parent”),
FIBERNET OPERATIONS, INC., a Delaware corporation (“FiberNet”), DEVNET L.L.C., a
Delaware limited liability company (together with FiberNet, the “Borrowers”),
the financial institutions party to the Credit Agreement (as defined below) as
lenders (collectively, the “Lenders”), and DEUTSCHE BANK AG NEW YORK BRANCH, as
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”), and relates to (1) the Amended and Restated Credit Agreement, dated as
of February 9, 2001 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among the Borrowers, the
Lenders, the Administrative Agent, TD Securities (USA) Inc., as syndication
agent for the Lenders, and Wachovia Investors, Inc., as documentation agent for
the Lenders, and (2) the Amended and Restated Parent Guaranty Agreement, dated
as of February 9, 2001 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Parent Guaranty Agreement”), by the
Parent in favor of the Administrative Agent for the benefit of each of the
Secured Parties. Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Credit Agreement.

 

RECITALS

 

WHEREAS, the Borrowers wish to modify certain provisions of their financial
covenants contained in the Credit Agreement as more particularly described
herein.

 

WHEREAS, the Borrowers wish to defer all payments of principal of the Loans due
on each of March 31, 2005, June 30, 2005, September 30, 2005 and December 31,
2005 until March 31, 2006.

 

WHEREAS, the modification described in the first recital is subject to the prior
approval of the Majority Lenders and the deferment described in the second
recital is subject to the prior approval of each of the Lenders, and the Lenders
are willing to approve such modification and deferment on the terms and subject
to the conditions contained herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:

 

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ARTICLE I.

AMENDMENTS

 

Section 1.01 Amendments to the Credit Agreement. The Credit Agreement is hereby
amended as follows:

 

(a) Section 1.1 shall be amended by adding the following new defined terms in
the appropriate alphabetical order:

 

“Fourteenth Amendment” means the Amendment, dated as of March 22, 2005, among
the Parent, the Borrowers, the Lenders and the Administrative Agent, which
amends the Credit Agreement and the Parent Guaranty Agreement.

 

“Equity Issuance” has the meaning assigned to that term in Section 4.4 of the
Parent Guaranty Agreement.

 

(b) Section 2.5.B.(iii)(a) is amended by deleting the table set forth in such
Section in its entirety and replacing it with the following table:

 

Date of Reduction

--------------------------------------------------------------------------------

   Aggregate Reduction
(Expressed as a
Percentage)

--------------------------------------------------------------------------------

03/31/2004

   2.00%

06/30/2004

   2.00%

9/30/2004

   2.00%

12/31/2004

   2.00%

03/31/2005

   0.00%

06/30/2005

   0.00%

9/30/2005

   0.00%

12/31/2005

   0.00%

03/31/2006

   52.00%

06/30/2006

   12.00%

9/30/2006

   12.00%

12/31/2006

   12.00%

Maturity Date

     4.00% or any greater
amount remaining

 

(c) Section 2.5.D.(iii) is amended by adding the following phrase after the term
“Gateway Transaction Equity”: “or the Net Proceeds of the Equity Issuance”.

 

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(d) Section 6.6.A. is amended by deleting the table set forth in such Section in
its entirety and replacing it with the following table:

 

Date

--------------------------------------------------------------------------------

   Minimum Consolidated
Revenue
(in Dollars)

--------------------------------------------------------------------------------

March 31, 2005

   31,470,000

June 30, 2005

   31,070,000

September 30, 2005

   31,393,000

December 31, 2005

   32,093,000

March 31, 2006

   32,086,000

June 30, 2006

   33,604,000

September 30, 2006

   34,897,000

December 31, 2006

   35,653,000

March 31, 2007

   36,409,000

 

(e) Section 6.6.B. is amended by deleting the table set forth in such Section in
its entirety and replacing it with the following table:

 

Date

--------------------------------------------------------------------------------

   Minimum Consolidated
EBITDA
(in Dollars)

--------------------------------------------------------------------------------

March 31, 2005

   1,368,000

June 30, 2005

   929,000

September 30, 2005

   636,000

December 31, 2005

   1,028,000

March 31, 2006

   1,710,000

June 30, 2006

   2,441,000

September 30, 2006

   3,132,000

December 31, 2006

   3,545,000

March 31, 2007

   3,957,000

 

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(f) Section 6.6.C. is amended by (i) replacing the words “September 30, 2002” in
the third line of such Section with the words “January 1, 2005” and (ii)
deleting the table set forth in such Section in its entirety and replacing it
with the following table:

 

Date

--------------------------------------------------------------------------------

   Maximum Cumulative
Consolidated Capital
Expenditures
From January 1, 2005
(In Dollars)

--------------------------------------------------------------------------------

March 31, 2005

   1,200,000

June 30, 2005

   2,200,000

September 30, 2005

   3,080,000

December 31, 2005

   3,960,000

March 31, 2006

   5,520,000

June 30, 2006

   6,440,000

September 30, 2006

   7,360,000

December 31, 2006

   8,280,000

March 31, 2007

   8,200,000

 

(g) Section 6.6.D. is amended by deleting the table set forth in such Section in
its entirety and replacing it with the following table:

 

Date

--------------------------------------------------------------------------------

   Consolidated Leverage Ratio

--------------------------------------------------------------------------------

March 31, 2005

   11.50 to 1.00

June 30, 2005

   17.19 to 1.00

September 30, 2005

   18.03 to 1.00

December 31, 2005

   15.55 to 1.00

March 31, 2006

     3.97 to 1.00

June 30, 2006

     1.94 to 1.00

September 30, 2006

     0.99 to 1.00

December 31, 2006

     0.19 to 1.00

March 31, 2007

     0.00 to 1.00

 

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(h) Section 6.6E is amended by deleting the table set forth in such Section in
its entirety and replacing it with the following table:

 

Date

--------------------------------------------------------------------------------

   Consolidated Interest
Coverage Ratio

--------------------------------------------------------------------------------

March 31, 2005

     1.65 to 1.00

June 30, 2005

     1.11 to 1.00

September 30, 2005

     0.73 to 1.00

December 31, 2005

     1.16 to 1.00

March 31, 2006

     2.25 to 1.00

June 30, 2006

     4.04 to 1.00

September 30, 2006

     7.45 to 1.00

December 31, 2006

   17.01 to 1.00

March 31, 2007

   34.82 to 1.00

 

(i) Section 6.6.F. and all references thereto are deleted in their entirety.

 

(j) Section 7.9(i) is amended by (i) inserting the word “(a)” immediately before
the words “any of its negative covenants” in the second line thereof and (ii) by
inserting the words “or (b) Section 4.4 of the Parent Guaranty Agreement”
immediately after the words “to which it is a party” in the third line thereof.

 

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Section 1.02 Amendments to the Parent Guaranty Agreement. The Parent Guaranty
Agreement is hereby amended by adding the following Section at the end of
Article IV thereof:

 

“Section 4.4 Equity Issuance.

 

On or prior to June 23, 2005, the Guarantor shall issue equity in an amount
sufficient to result in Net Proceeds of at least $6,500,000 pursuant to a
securities purchase agreement among the Guarantor and the purchasers party
thereto in form and substance satisfactory to the Administrative Agent and the
Lenders (provided that the Administrative Agent’s and the Lenders’ review of
such securities purchase agreement may include, among any other considerations
deemed appropriate by the Administrative Agent and the Lenders, a review of the
covenants and other terms of the Credit Agreement and the need for possible
changes thereto, in light of the Guarantor’s acquisition of CEC and the related
transactions) (such issuance, the “Equity Issuance”).”

 

ARTICLE III.

MISCELLANEOUS

 

Section 4.01 Execution of this Fourteenth Amendment.

 

This Fourteenth Amendment is executed and shall be construed as an amendment to
the Credit Agreement and the Parent Guaranty Agreement, and, as provided in the
Credit Agreement and the Parent Guaranty Agreement, this Fourteenth Amendment
forms a part thereof. This Fourteenth Amendment shall become effective only upon
(i) the repricing of the warrants referred to in Section 4.08 hereof, and (ii)
the payment of any fees or expenses then due and payable to the Administrative
Agent.

 

Section 4.02 Representations and Warranties.

 

(a) The Borrowers hereby represent and warrant to the Administrative Agent and
the Lenders that (a) all consents, approvals and authorizations necessary for
the Borrowers’ execution, delivery and performance of this Fourteenth Amendment
have been obtained or made, (b) this Fourteenth Amendment has been duly executed
and delivered by the Borrowers and constitutes a legal, valid and binding
obligation of each Borrower, enforceable against such Borrower in accordance
with its terms, (c) the representations and warranties of the Borrowers set
forth in Article IV of the Credit Agreement are true and correct in all material
respects as of the date hereof and (d) no Event of Default or Potential Event of
Default has occurred and is continuing as of the date hereof.

 

(b) The Parent hereby represents and warrants to the Administrative Agent and
the Lenders that (a) all consents, approvals and authorizations necessary for
the Parent’s execution, delivery and performance of this Fourteenth Amendment
have been obtained or made, (b) this Fourteenth Amendment has been duly executed
and delivered by the Parent and constitutes a legal, valid and binding
obligation of the Parent, enforceable against such Parent in accordance

 

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with its terms and (c) the representations and warranties of the Parent set
forth in Article III of the Parent Guaranty Agreement are true and correct in
all material respects as of the date hereof.

 

Section 4.03 Waiver.

 

This Fourteenth Amendment is made in amendment and modification of, but not
extinguishment of, the obligations set forth in the Credit Agreement, the Parent
Guaranty Agreement and the other Loan Documents and, except as specifically
modified pursuant to the terms of this Fourteenth Amendment, the terms and
conditions of the Credit Agreement, the Parent Guaranty Agreement and the other
Loan Documents remain in full force and effect. Nothing herein shall limit in
any way the rights and remedies of Administrative Agent and the Lenders under
the Credit Agreement, the Parent Guaranty Agreement and the other Loan
Documents. The execution and delivery by the Lenders of this Fourteenth
Amendment shall not constitute a waiver, forbearance or other indulgence with
respect to any Potential Event of Default or Event of Default now existing or
hereafter arising.

 

Section 4.04 Counterparts; Integration; Effectiveness.

 

This Fourteenth Amendment may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Fourteenth Amendment and any agreements referred to herein
constitute the entire contract among the parties hereto relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. In addition to the
requirements set forth above in Section 4.01, this Fourteenth Amendment shall
become effective when it shall have been executed by each of the Parent, each of
the Borrowers and each of the Lenders, and thereafter shall be binding upon and
inure to the benefit of the parties hereto and, subject to and in accordance
with Section 9.16 of the Credit Agreement, their respective successors and
assigns. Delivery of an executed counterpart of a signature page of this
Fourteenth Amendment by telecopy shall be as effective as delivery of a manually
executed counterpart of this Fourteenth Amendment.

 

Section 4.05 Severability.

 

Any provision of this Fourteenth Amendment held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality or enforceability of the remaining provisions
hereof, and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

 

Section 4.06 Governing Law.

 

This Fourteenth Amendment shall be construed in accordance with and governed by
the laws of the State of New York without regard to the conflicts of law
provisions thereof, other than Sections 5-1401 and 5-1402 of the General
Obligations Law of the State of New York.

 

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Section 4.07 Headings.

 

Article and Section headings used herein are for convenience of reference only,
are not part of this Fourteenth Amendment and shall not affect the construction
of, or be taken into consideration in interpreting, this Fourteenth Amendment.

 

Section 4.08 Fourteenth Amendment Fee.

 

The Parent agrees to reprice a total of 496,231 of the warrants dated October
30, 2002 and November 11, 2002 and held by the Lenders to $0.01 within fifteen
days of the execution of this Fourteenth Amendment.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Fourteenth Amendment to
be duly executed by their respective authorized officers as of the day and year
first above written.

 

FIBERNET TELECOM GROUP, INC. By:    

Name:

   

Title:

    FIBERNET OPERATIONS, INC. By:    

Name:

   

Title:

    DEVNET L.L.C. By:    

Name:

   

Title:

   

DEUTSCHE BANK AG NEW YORK

BRANCH, as Administrative Agent and as a Lender

By:    

Name:

   

Title:

    By:    

Name:

   

Title:

   

WACHOVIA INVESTMENT HOLDINGS, LLC.,

as a Lender

By:    

Name:

   

Title:

   

 

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IBM CREDIT LLC, as a Lender By:    

Name:

   

Title: