<PAGE>

                                                                     EXHIBIT 4.3

                      FIRST LIMITED WAIVER AND AGREEMENT
                      ----------------------------------

     This FIRST LIMITED WAIVER AND AGREEMENT (as amended or modified from time
to time, this "Agreement"), dated as of February 9, 2001, is among FiberNet
Telecom Group, Inc., a Delaware corporation (formerly known as FiberNet Holdco,
Inc.) (the "Parent"), and First Union Investors, Inc. (the "Beneficiary").

                                   RECITALS
                                   --------

     A.   In connection with the assignment of certain Loans to the Beneficiary
under that certain Credit Agreement, dated as of April 11, 2000 (the "Credit
Agreement") among FiberNet Operations, Inc., formerly known as FiberNet Telecom
Group, Inc. ("FiberNet"), the institutions party thereto from time to time as
lenders, Deutsche Bank AG New York Branch, as administrative agent, DBAB, as co-
syndications agent, and TD, as co-syndications agent, (i) FiberNet and the
Beneficiary entered into that certain Warrant Agreement, dated as of July 31,
2000 ("Warrant Agreement"), pursuant to which FiberNet issued certain warrants
(the "Warrants") directly to the Beneficiary.

     B.   FiberNet has assigned its obligations under the Warrant Agreement to
the Parent, and the Parent has assumed such obligations.

     C.   In connection with the amendment and restatement of the Credit
Agreement, the Parent and the Beneficiary have agreed to, subject to the terms
and conditions set forth herein, (i) modify the exercise price of the Warrants,
and (ii) return the warrant certificates in respect of the Warrants and issue
certain new warrant certificates in exchange therefor.

     F.   Capitalized terms used and not otherwise defined herein have the
meanings assigned to such terms in the Warrant Agreement.

                                   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:

  1. Waiver and Agreement. Notwithstanding anything to the contrary in the
     --------------------
Warrant Agreement:

     a. the Exercise Price of the Outstanding Warrants shall be $8.00 per share;

     b. upon the return and cancellation of all Warrant Certificates in respect
of the Warrants, new Warrant Certificates, each with an exercise price of $8.00
per share, shall be issued as follows:
<PAGE>

<TABLE>
<CAPTION>

Certificate      Issued to         Number of Shares             Representing an Exchange of
  Number
----------------------------------------------------------------------------------------------------
<S>           <C>                     <C>                   <C>
     1          First Union           566,666               Returned First Union Investors Warrant
              Investors, Inc.                                 Certificate No.1 for 566,666 shares
----------------------------------------------------------------------------------------------------
</TABLE>


          c.   the parties hereto acknowledge that the warrants set forth in
paragraph (b) above are the only warrants Beneficiary is entitled to or will be
entitled to pursuant to the Warrant Agreement and any references to additional
warrants, including those references in Recital C of the Warrant Agreement are
hereby terminated and rendered null and void;

          d.   Section 6.5(d)(ii) of the Warrant Agreement is hereby amended by
               ------------------
deleting the words "pursuant to a firm commitment underwriting" and replacing
such words with the words "to persons that are not Affiliates of the Borrower,
provided that the Beneficiary receive evidence that the Board of Directors of
the Borrower has resolved that such rights, options or warrants were issued for
fair value";

          e.   Section 6.7(c)(vi) of the Warrant Agreement is hereby amended by
               ------------------
deleting the words "in a bona fide public offering pursuant to a firm commitment
underwriting" and replacing such words with the words "to persons that are not
Affiliates of the Borrower, provided that the Beneficiary receive evidence that
the Board of Directors of the Borrower has resolved that such Common Stock was
issued for fair value"; and

          e.   Section 6.8(d)(ii) of the Warrant Agreement is hereby amended by
               ------------------
deleting the words "pursuant to a firm commitment underwriting" and replacing
such words with the words "to persons that are not Affiliates of the Borrower,
provided that the Beneficiary receive evidence that the Board of Directors of
the Borrower has resolved that such convertible securities were issued for fair
value".

     2.   Representations and Warranties.  The Parent represents and warrants to
          ------------------------------
the Beneficiary as of the date hereof as follows:

          a.     Authority.  The Parent has the requisite corporate power and
                 ---------
authority to execute and deliver this Agreement and to perform its obligations
hereunder and under the Warrant Agreement (as modified hereby).  The execution,
delivery and performance by the Parent of this Agreement, and the transactions
contemplated hereby have been duly approved by all necessary corporate action of
the Parent and no other corporate proceedings on the part of the Parent are
necessary to consummate such transactions (except as expressly contemplated
hereby).

          b.     Enforceability. This Agreement has been duly executed and
                 --------------
delivered by the Parent. This Agreement and, after giving effect to this
Agreement, the Warrant Agreement are (i) the legal, valid and binding obligation
of the Parent, enforceable against the Parent in accordance with its terms, and
(ii) in full force and effect.

                                       2
<PAGE>

          c.     No Conflicts.  Neither the execution and delivery of this
                 ------------
Agreement, nor the consummation of the transactions contemplated hereby, nor
performance of and compliance with the terms and provisions hereof by the Parent
will, at the time of such performance, (i) violate or conflict with any
provision of its articles of incorporation or bylaws or other organizational or
governing documents of the Parent, (ii) violate, contravene or conflict with any
law, regulation, order, writ, judgment, injunction, decree or permit applicable
to it, (iii) violate, contravene or conflict with contractual provisions of, or
cause an event of default under, any indenture, loan agreement, mortgage, deed
of trust, contract or other agreement or instrument to which it is a party or by
which it may be bound or (iv) require the Parent to obtain any consents,
approvals, or authorizations or, to make any filings.

     4.   Reference to and Effect on Warrant Agreement.
          --------------------------------------------

          a.   Upon and after the effectiveness of this Agreement, each
reference in any of the Warrant Agreement to "this Warrant Agreement";
"hereunder", "hereof" or words of like import referring to the Warrant
Agreement, shall mean and be a reference to the Warrant Agreement as modified
hereby.

          b.   Except as specifically modified above, the Warrant Agreement is
and shall continue to be in full force and effect and is hereby in all respects
ratified and confirmed.  This Agreement is made in modification of, but not
extinguishment of, the obligations set forth in the Warrant Agreement and,
except as specifically modified pursuant to the terms of this Agreement, the
terms and conditions of each of the Warrant Agreement remain in full force and
effect.  Nothing herein shall limit in any way the rights and remedies of the
Escrow Agent under any of the Warrant Agreement.

     5.   Counterparts.  This Agreement may be executed in any number of
          ------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute one and the same agreement.  Delivery
of an executed counterpart of a signature page to this Agreement by facsimile
shall be effective as delivery of a manually executed counterpart of this
Agreement.

     6.   Severability.  Any provision of this Agreement that is prohibited or
          ------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

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

     8.   Further Assurances.  Without limiting any party's obligations
          ------------------
hereunder, the Parent hereby agrees to do all things and take all actions which
may reasonably be requested by Beneficiary to effectuate the provisions of this
Agreement.

                                       3
<PAGE>

     9.   Governing Law.  This Agreement shall be governed by, and construed in
          -------------
accordance with, the laws of the State of New York.

                            [Signature Page Follows]


                                       4
<PAGE>


          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first written above.

                                            FIBERNET TELECOM GROUP, INC.


                                            By:   /s/ Michael S. Liss
                                               -------------------------------
                                               Name:  Michael S. Liss
                                               Title: President



                                            FIRST UNION INVESTORS, INC.


                                            By:   /s/ Mark L. Cook
                                               -------------------------------
                                               Name:  Mark L. Cook
                                               Title: Senior Vice President