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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported July 31, 2000) August 4, 2000
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FIBERNET TELECOM GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 333-7841 13-3859938
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
570 Lexington Avenue
New York, New York 10022
(Address of principal executive
offices including zip code)
(212) 405-6200
(Registrant's telephone number,
including area code)
N.A.
----
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
On July 31, 2000, the Registrant acquired the remaining membership interests of
Devnet L.L.C. ("Devnet") not beneficially owned by the Registrant pursuant to
the Agreement and Plan of Reorganization (the "Reorganization Agreement"), dated
as of June 2, 2000, by and among FiberNet Telecom Group, Inc., FiberNet Holdco,
Inc., FiberNet Merger Sub, Inc., Devnet Merger Sub, LLC, Devnet, and FP
Enterprises L.L.C. Pursuant to the Reorganization Agreement, FiberNet Telecom
Group, Inc. merged into FiberNet Merger Sub, Inc., a wholly-owned subsidiary of
FiberNet Holdco, Inc., with FiberNet Telecom Group, Inc. surviving as a wholly-
owned subsidiary of FiberNet Holdco, Inc. and Devnet Merger Sub, LLC, another
wholly-owned subsidiary of FiberNet Holdco, Inc. merged with and into Devnet,
with Devnet surviving as a wholly-owned subsidiary of FiberNet Holdco, Inc. (the
"Merger"). In connection with the Merger, FiberNet Telecom Group, Inc. changed
its name to FiberNet Operations, Inc. ("Operations") and ceased being the
Registrant and FiberNet Holdco, Inc. was renamed FiberNet Telecom Group, Inc.
and succeeded as Registrant.
In connection with the Merger, the Registrant issued 3,461,162 shares of its
Common Stock, par value $.001 per share ("Common Stock"), granted options to
purchase 344,839 shares of its Common Stock and paid approximately $15 million
in exchange for approximately 97% of the membership interests in Devnet.
Operations (formerly known as FiberNet Telecom Group, Inc.) had previously
acquired approximately 3% of the Devnet membership interests for a purchase
price of $3 million in May 2000. The acquisition of the remaining Devnet
membership interests gave the Registrant control of 100% of Devnet.
The source of the funds used to finance the Merger was (i) cash on hand and (ii)
equity investments by Nortel Networks Inc. ("Nortel"), as more fully described
under Item 5 of this Current Report. The Merger was an arm's-length transaction
and there was no prior relationship (other than as described above) between the
Registrant and Devnet or any of its officers and directors.
In connection with the Merger, the Registrant entered into an employment
agreement with Philip L. DiGennaro (the "DiGennaro Agreement"), pursuant to
which Mr. DiGennaro shall serve as President of Devnet. A copy of the DiGennaro
Agreement is filed as Exhibit 10.1 hereto and incorporated herein by reference.
A copy of the joint press release of the Registrant and Devnet with respect to
the Merger is included herein as Exhibit 99.1. The information contained in the
Reorganization Agreement (as previously filed as Exhibit 2.1 to the Current
Report on Form 8-K, filed by FiberNet on June 8, 2000) and the joint press
release is incorporated herein by reference and the foregoing description of
such documents and the transactions contemplated therein are qualified in their
entirety by reference to such exhibits.
Item 5. Other Events.
On July 31, 2000, Operations (formerly known as FiberNet Telecom Group, Inc.)
issued and sold 426,333 shares of its Series H Preferred Stock, $.001 par value
per share (the "Preferred Stock") to Nortel in a private placement for an
aggregate purchase price consisting of $22.5 million in cash plus the transfer
by Nortel of 2,000,000 shares of the Registrant's Series G Preferred Stock, par
value $.001 per share, including all accrued and unpaid dividends, to the
Registrant for cancellation, which Preferred Stock became identical preferred
stock in Registrant pursuant to the terms of the Merger. Each share of
Preferred Stock is convertible into ten shares of Common Stock, subject to anti-
dilution adjustments.
A copy of the Securities Purchase Agreement executed by the Registrant and
Nortel (the "Securities Purchase Agreement"), excluding the schedules and
exhibits thereto, is filed herewith as Exhibit 10.2, together with the following
agreements and documents, each dated as of July 28, 2000, which were executed in
connection with the closing of this transaction (the "Transaction Documents"):
(i) Certificate of Designation of Series H Preferred Stock, filed as Exhibit 3.1
hereto; and (ii) Second Amendment between FiberNet Telecom Group, Inc., Signal
Equity Partners, L.P. (formerly known as Signal Capital Partners, L.P.), as the
Majority in Interest of the Purchasers, and Nortel, to the Stockholders
Agreement dated as of May 7, 1999 by and among FiberNet Telecom Group, Inc. and
the Stockholders listed therein, filed as Exhibit 4.1 hereto. The information
contained in the Press Release dated August 2, 2000, which is attached hereto as
Exhibit 99.2, the Securities Purchase Agreement and the other Transaction
Documents is incorporated herein by reference and the foregoing description of
such documents and the transactions contemplated thereby are qualified in their
entirety by reference to such exhibits.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
At the time of the filing of this Current Report on Form 8-K, it was
impracticable for the Registrant to provide the required financial statements
for the acquired business. The Registrant will file such required financial
statements under cover of Form 8-K/A as soon as practicable, but not later than
60 days following the date of this Report.
(b) Pro Forma Financial Information.
At the time of the filing of this Current Report on Form 8-K, it was
impracticable for the Registrant to provide the required pro forma financial
statements relative to the acquired business. The Registrant will file such
required financial statements under cover of Form 8-K/A as soon as practicable,
but not later than 60 days following the date of this Report.
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(c) Exhibits.
Exhibit No. Description
3.1 Certificate of Designation of Series H Preferred Stock of
FiberNet Telecom Group, Inc. dated July 28, 2000.
4.1 Second Amendment dated as of July 28, 2000, between FiberNet
Telecom Group, Inc., Signal Equity Partners, L.P. (formerly known
as Signal Capital Partners, L.P.), as the Majority in Interest of
the Purchasers, and Nortel Networks Inc., to the Stockholders
Agreement dated as of May 7, 1999 by and among FiberNet Telecom
Group, Inc. and the Stockholders listed therein.
10.1 Employment Agreement dated as of July 31, 2000, between
Registrant and Philip L. DiGennaro.
10.2 Securities Purchase Agreement dated as of July 28, 2000, between
FiberNet Telecom Group, Inc. and Nortel Networks Inc.
99.1 Joint Press Release dated August 3, 2000.
99.2 Press Release dated August 2, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIBERNET TELECOM GROUP, INC.
(Registrant)
Dated August 4, 2000 By: /s/ Michael S. Liss
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Michael S. Liss
President and Chief
Executive Officer
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EXHIBIT INDEX
Exhibit No. Description
3.1 Certificate of Designation of Series H Preferred Stock of
FiberNet Telecom Group, Inc. dated July 28, 2000.
4.1 Second Amendment dated as of July 28, 2000, between FiberNet
Telecom Group, Inc., Signal Equity Partners, L.P. (formerly
known as Signal Capital Partners, L.P.), as the Majority in
Interest of the Purchasers, and Nortel Networks Inc., to the
Stockholders Agreement dated as of May 7, 1999 by and among
FiberNet Telecom Group, Inc. and the Stockholders listed
therein.
10.1 Employment Agreement dated as of July 31, 2000, between
Registrant and Philip L. DiGennaro.
10.2 Securities Purchase Agreement dated as of July 28, 2000,
between FiberNet Telecom Group, Inc. and Nortel Networks Inc.
99.1 Joint Press Release dated August 3, 2000.
99.2 Press Release dated August 2, 2000.
