<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 29, 1999.
REGISTRATION NO. 333-75795
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ABOVENET COMMUNICATIONS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN OUR CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 4813 77-0424796
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
50 W. SAN FERNANDO STREET, SUITE #1010
SAN JOSE, CALIFORNIA 95113
(408) 367-6666
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
SHERMAN TUAN
CHIEF EXECUTIVE OFFICER
50 W. SAN FERNANDO STREET, SUITE #1010
SAN JOSE, CALIFORNIA 95113
(408) 367-6666
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<S> <C>
CARLA S. NEWELL, ESQ. JORGE DEL CALVO, ESQ.
BENNETT L. YEE, ESQ. STANTON D. WONG, ESQ.
ALLISON M. WING, ESQ. GABRIELLA A. LOMBARDI, ESQ.
TODD W. SMITH, ESQ. CHRISTINE F. NAKAGAWA, ESQ.
GUNDERSON DETTMER STOUGH PILLSBURY MADISON & SUTRO LLP
VILLENEUVE FRANKLIN & HACHIGIAN, LLP 2550 HANOVER STREET
155 CONSTITUTION DRIVE PALO ALTO, CA 94304
MENLO PARK, CA 94025 (650) 233-4500
(650) 321-2400
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box. [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]__________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]__________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of common stock being registered. All amounts are estimates except the SEC
registration fee, the NASD filing fee and the Nasdaq National Market listing
fee.
<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
----------
<S> <C>
SEC registration fee........................................ $158,000
NASD filing fee............................................. 30,500
Nasdaq National Market listing fee.......................... 50,000
Printing and shipping fees.................................. 150,000
Legal fees and expenses..................................... 275,000
Accounting fees and expenses................................ 200,000
Blue Sky qualification fees and expenses.................... 5,000
Transfer agent and registrar fees........................... 10,000
Miscellaneous fees.......................................... 21,500
--------
Total............................................. $900,000
========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to award
or a corporation's Board of Directors to grant indemnification to directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "Securities
Act"). Article VII, Section 6, of the Registrant's Bylaws provides for mandatory
indemnification of our directors and officers and permissible indemnification of
employees and other agents to the maximum extent permitted by the Delaware
General Corporation Law. The Registrant's Certificate of Incorporation provides
that, pursuant to Delaware law, our directors shall not be liable for monetary
damages for breach of the directors' fiduciary duty as directors to us and our
stockholders. This provision in the Certificate of Incorporation does not
eliminate the directors' fiduciary duty, and in appropriate circumstances
equitable remedies such as injunctive or other forms of non-monetary relief will
remain available under Delaware law. In addition, each director will continue to
be subject to liability for breach of the director's duty of loyalty to us for
acts of omissions not in good faith or involving intentional misconduct, for
knowing violations of law, for actions leading to improper personal benefit to
the director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws. The Registrant has
entered into Indemnification Agreements with our officers and directors, a form
of which is attached as Exhibit 10.1 hereto and incorporated herein by
reference. The Indemnification Agreements provide the Registrant's officers and
directors with further indemnification to the maximum extent permitted by the
Delaware General Corporation Law. Reference is made to Section 7 of the
Underwriting Agreement filed as Exhibit 1.1 hereto, indemnifying officers and
directors of the Registrant against certain liabilities.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since March 8, 1996, the Registrant's predecessor company has issued and sold
the following securities (which numbers do not reflect either the 1 for 2.5
exchange effected in connection with our reincorporation
II-1
<PAGE> 3
into Delaware, the 1 for 1.6 reverse stock split effected in December 1998 or
the 2 for 1 stock split to be effected May 7, 1999).
(1) On August 28, 1996, Registrant sold and issued an aggregate of 4,100,000
shares of Series A preferred stock, at a purchase price of $0.10 per share,
for cash in the aggregate amount of $410,000 to a group of investors
pursuant to a Series A preferred stock Purchase Agreement.
(2) On March 14, 1997, Registrant sold and issued an aggregate of 2,000,000
shares of Series B preferred stock, at a purchase price of $0.30 per share,
for cash in the aggregate of $600,000 to a group of investors pursuant to a
Series B preferred stock Purchase Agreement.
(3) On April 30, 1997, Registrant terminated a joint venture agreement with
DSK, Inc. by issuing 2,000,000 shares of Series B preferred stock.
(4) On August 7, 1997, Registrant issued promissory notes in the principal
amount of $989,000 and warrants to acquire 1,979,804 shares of Series B
preferred stock at $0.50 per share. On December 31, 1997, Registrant
entered into exchange agreements with the noteholders. Pursuant to the
exchange agreements, the above notes, accrued interest of $21,200 and the
related warrants were exchanged for (i) 2,527,640 shares of Series B
preferred stock and (ii) warrants to acquire 494,951 shares of Series B
preferred stock at $0.50 per share.
(5) On May 11, 1998, Registrant sold and issued an aggregate of 8,012,000
shares of Series C preferred stock, at a weighted-average purchase price of
$0.48 per share, for cash in the aggregate amount of $3,882,400 to a group
of investors pursuant to a Series C preferred stock Purchase Agreement.
(6) On June 30, 1998, Registrant issued promissory notes, in the principal
amount of $7,000,000, convertible into Series D preferred stock (the
"Series D Notes") to a group of investors pursuant to a Note Purchase
Agreement. On July 15, 1998, Registrant sold and issued an aggregate of
8,461,538 shares of Series D preferred stock, at a purchase price of $1.30
per share, for cash and cancellation of indebtedness in the aggregate
amount of $10,999,999.40 to a group of investors pursuant to a Series D
preferred stock Purchase Agreement. All of the Series D Notes were
converted into shares of Series D preferred stock on July 15, 1998.
(7) On September 4, 1998, Registrant sold and issued an aggregate of 1,628,000
shares of Series E preferred stock, at a purchase price of $2.50 per share,
for cash in the aggregate amount of $4,070,000 to a group of investors
pursuant to a Series E preferred stock Purchase Agreement. In addition, the
Registrant issued 7,100 shares of Series E Preferred in consideration for
placement agent services.
(8) As of October 31, 1998, Registrant has sold and issued 2,086,482 shares of
our common stock for an aggregate purchase price of $68,288 to employees,
directors and consultants pursuant to direct issuances and to exercises of
options under our 1996 and 1997 Stock Option Plans and non-plan options.
(9) During May 1998, Registrant issued warrants for 15,000 shares of common
stock, with an exercise price of $.50 per share, to Jerry Weissman at Power
Presentations for services to the Company. During the same time period,
Registrant issued warrants for 24,375 shares of common stock, with an
exercise price of $1.00 per share, to DEF Public Relations, Heidrich &
Struggles and Greg Moyer at Flying Beyond for services to us.
(10) During May 1998, Registrant issued warrants, in connection with various
financing arrangements, to purchase 90,000 shares of common stock, with a
weighted-average exercise price of $1.15 per share to Transamerica and
5,000 warrants of Series D preferred stock, with an exercise price of $1.00
per share to Silicon Valley Bank.
(11) In July 1998, Registrant sold and issued warrants for 35,000 shares of our
common stock, at an exercise price of $1.30 per share, to Primus Technology
for services in connection with developing Registrant's Asian business
opportunities. During the same time period, Registrant issued warrants for
10,000 shares of common stock, at a purchase price of $1.30 per share, for
cash in the aggregate amount of $500 to Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP.
II-2
<PAGE> 4
(12) In September 1998, Registrant issued warrants to purchase 100,000 shares of
common stock in connection with a financing arrangement, to TransAmerica
Business Credit Corporation. The exercise price for 50,000 shares is equal
to $2.50 per share and the exercise price for the remaining 50,000 shares
is equal to 80% of the price of this offering or, if this offering is not
completed, 80% of the price of the next equity financing.
(13) In October 1998, we issued warrants with an exercise price equal to $4.00
per share to purchase 26,250 shares to various consultants in connection
with the construction of our new Internet service exchange.
(14) In December 1998, we issued a warrant to purchase 100,000 shares of common
stock in connection with a real estate lease to Forest City Enterprises,
L.L.C. at an exercise price of $10.00 per share (the share numbers and
exercise price reflect the exchange and reverse stock split).
(15) In November 1998, David K. Small exercised options to purchase 15,625
shares of our common stock for an aggregate purchase price of $1,875 (the
share numbers and exercise price reflect the exchange and reverse stock
split).
The sale of the above securities was deemed to be exempt from registration under
the Securities Act in reliance upon Section 4(2) of the Securities Act or
Regulation D promulgated thereunder, or Rule 701 promulgated under Section 3(b)
of the Securities Act as transactions by an issuer not involving any public
offering or transactions pursuant to compensation benefit plans and contracts
relating to compensation as provided under such Rule 701. The recipients of
securities in each such transaction represented their intentions to acquire the
securities for investment only and now with a view to or for sale in connection
with any distribution thereof, and appropriate legends were affixed to the share
certificates issued in such transactions. All recipients had adequate access,
through their relationships with the Registrant, to information about the
Registrant.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
1.1(5) Form of Underwriting Agreement.
3.1(1) Third Amended and Restated Certificate of Incorporation.
3.5(1) Bylaws of Registrant.
4.2(1) Form of Registrant's Common Stock Certificate.
4.3(1) Amended and Restated Investors' Rights Agreement dated
September 4, 1998.
4.4(a)(1) Stock Subscription Warrant No. 1 to purchase shares of
Common Stock of Registrant issued to Transamerica Business
Credit Corporation.
4.4(b)(1) Stock Subscription Warrant No. 2 to purchase shares of
Common Stock of Registrant issued to Transamerica Business
Credit Corporation.
4.4(c)(1) Stock Subscription Warrant No. 3 to purchase shares of
Common Stock of Registrant issued to Transamerica Business
Credit Corporation (see Exhibit No. 10.28).
4.4(d)(1) Stock Subscription Warrant No. 4 to purchase shares of
Common Stock of Registrant issued to Transamerica Business
Credit Corporation (see Exhibit No. 10.28).
4.5(1) Warrants to purchase shares of Series D Preferred Stock of
Registrant issued to Silicon Valley Bank.
4.6(1) Form of Warrant to purchase shares of Common Stock of
Registrant.
5.1(5) Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP ("Gunderson Dettmer").
10.1(1) Form of Indemnification Agreement entered into by Registrant
with each of our directors and executive officers.
10.2(1) 1996 Stock Option Plan.
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
10.3(1) 1997 Stock Option Plan.
10.4(1) 1998 Stock Incentive Plan.
10.5(1) 1998 Employee Stock Purchase Plan.
10.6(1) Employment Agreement between Registrant and Warren J.
Kaplan.
10.7(1) Employment Agreement between Registrant and Sherman Tuan.
10.8(1) Employment Agreement between Registrant and David Rand.
10.9(1) Stock Option Agreement between Registrant and Warren J.
Kaplan.
10.10(1) Technology Agreement between Registrant and David Rand.
10.11(1) Lease Equipment Agreement between Registrant and Cisco
Systems Capital Corporation.
10.12(1) Loan and Security Agreement between Registrant and Silicon
Valley Bank.
10.13(1) Master Loan and Security Agreements between Registrant and
Transamerica Business Credit Corporation.
10.14(1) Promissory Note by Registrant to Transamerica Business
Credit Corporation.
10.15(1) Office Lease between 50 West San Fernando Associates and
Registrant dated May 15, 1996 (San Jose Office, 10th Floor).
10.16(1) First Amendment to Lease Agreement between 50 West San
Fernando Associates and Registrant, dated December 12, 1996
(San Jose Office, 10th Floor).
10.17(1) Second Amendment to Lease between 50 West San Fernando
Associates and Registrant, dated February 23, 1998 (San Jose
Office, 10th Floor).
10.18(1) Office Lease between 50 West San Fernando Associates and
Registrant, dated May 15, 1996 (San Jose Office, 18th
Floor).
10.19(1) First Amendment to Lease Agreement between 50 West San
Fernando Associates and Registrant, dated December 12, 1996
(San Jose Office, 18th Floor).
10.20(1) Second Amendment to Lease between 50 West San Fernando
Associates and Registrant, dated February 24, 1998 (San Jose
Office, 18th Floor).
10.21(1) Consent of Landlord between Registrant and Halcyon Software
California Inc., dated March 31, 1998 (San Jose Office,
Suite 1012).
10.22(1) Consent of Landlord between 50 West San Fernando Associates
and KPMG Peat Marwick LLP, dated April 6, 1998 and April 12,
1998 (Registrant sublease from KPMG Peat Marwick LLP, San
Jose Office, 10th Floor).
10.23(1) Sublease between KPMG Peat Marwick (USA) LLP and Registrant,
dated March 13, 1998 (Registrant sublease from KPMG Peat
Marwick LLP (USA), San Jose Office, 10th Floor).
10.24(1) Deed of Lease between Gosnell Properties, Inc. and
Registrant dated September 3, 1997 (Suite B-290, Vienna,
VA/"D.C.").
10.25(1) Deed of Lease between Gosnell Properties, Inc. and
Registrant dated January 30, 1998 (Suite 110, Vienna,
VA/"D.C.").
10.26(1) Network Access Agreement between Goodnet and Registrant
dated June 11, 1996.
10.27(1)(3) Fiber Optic Private Network Agreement Product Order between
Metromedia Fiber Network Services, Inc. and Registrant,
dated September 1, 1998.
10.28(1) Amended and Restated Master Loan and Security Agreement
between Registrant and Transamerica Business Credit
Corporation.
10.29(1) Loan Modification Agreement between Registrant and Silicon
Valley Bank dated as of October 26, 1998.
10.30(1) Lease by and between F.C. Pavilion, L.L.C. and Registrant
dated as of December 4, 1998.
10.31(2)(3) Atlantic Crossing/AC-1 Submarine Cable System Capacity
Purchase Agreement, dated December 23, 1998, by and between
Atlantic Crossing LTD, a Bermuda corporation, and AboveNet.
</TABLE>
II-4
<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
10.32(2)(3) Atlantic Crossing/AC-1 Submarine Cable System Capacity
Indefeasible Right of Use Agreement in Inland Capacity
(United Kingdom), dated December 23, 1998, by and between GT
U.K. LTD and AboveNet.
10.33(2)(3) Atlantic Crossing/AC-1 Submarine Cable System Indefeasible
Right of Use 1.1 Agreement in Inland Capacity (United
States), dated December 23, 1998, by and between GT U.K. LTD
and AboveNet.
10.34(4) Letter Agreement by and between Global Crossing Ltd. and
Registrant, dated March 23, 1999.
10.35(5) Agreement of Lease between 111 Eighth Avenue LLC and
Registrant, dated January, 1999 (Registrant lease from 111
Eighth Avenue LLC portion of 2nd Floor, 111 Eighth Ave., New
York, NY).
10.36(4)(5) Shareholders Agreement by and between Raiffeisen
Rechenzentrum Ges. m.b.H and Registrant, dated March 8,
1999.
10.37(4)(5) Cooperation Agreement, by and between Registrant and
AboveNet Deutschland GmbH, dated March 25, 1999.
10.38(4)(5) Shareholder Agreement relating to AboveNet UK Limited, by
and between Registrant, Mr. W. Dobbie and Mr. A. MacSween
and AboveNet UK Limited, dated March, 1999.
16.1(1) Letter Regarding Change in Certifying Accountants.
23.1(5) Consent of Gunderson Dettmer (included in Exhibit 5.1).
23.2(5) Consent of Deloitte & Touche LLP, Independent Accountants.
23.3(5) Independent Auditors' Report on Schedule.
27.1(5) Financial Data Schedule.
99.1(1) Consent of Forrester Research, Inc.
99.2(1) Consent of International Data Corporation.
</TABLE>
- -------------------------
(1) Incorporated by reference to the Company's Registration Statement on Form
S-1 (No. 333-63141) originally filed with the Securities and Exchange
Commission on September 10, 1998.
(2) Incorporated by reference to the Company's filing on Form 10-Q filed with
the Securities and Exchange Commission on February 11, 1999
(3) Confidential treatment granted as to certain portions of exhibit.
(4) Confidential treatment requested as to certain portions of exhibit.
(5) Previously filed.
(b) Financial Statement Schedule
(i) Schedule II. Valuation and Qualifying Accounts.
Schedules not listed above have been omitted because the information required to
be set forth therein is not applicable.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters at
the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the Delaware General Corporation Law, the Registrant's Restated
Certificate of Incorporation, the Registrant's Bylaws, and Registrant's
indemnification agreements or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person
II-5
<PAGE> 7
in connection with the securities being registered hereunder, the Registrant
will, unless in the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of Prospectus shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-6
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this Amendment No. 3 to Registration Statement on Form S-1 to be
signed on our behalf by the undersigned, thereunto duly authorized, in the City
of San Jose, State of California, on this 29th day of April 1999.
ABOVENET COMMUNICATIONS INC.
By: /s/ DAVID F. LARSON
------------------------------------
David F. Larson
Senior Vice President and
Chief Financial Officer
Pursuant to the requirement of the Securities Act of 1933, this Amendment No. 3
to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
NAME AND SIGNATURE TITLE DATE
------------------ ----- ----
<C> <C> <S>
/s/ SHERMAN TUAN* Chairman of the Board and Chief April 29, 1999
- ------------------------------------------------ Executive Officer (Principal
Sherman Tuan Executive Officer) and Director
/s/ DAVID F. LARSON Senior Vice President and Chief April 29, 1999
- ------------------------------------------------ Financial Officer (Principal
David F. Larson Financial Officer)
/s/ KEVIN HOURIGAN* Vice President Finance (Principal April 29, 1999
- ------------------------------------------------ Accounting Officer)
Kevin Hourigan
/s/ PETER C. CHEN, PH.D.* Vice Chairman of the Board April 29, 1999
- ------------------------------------------------
Peter C. Chen, Ph.D.
/s/ WARREN J. KAPLAN* President, Chief Operating Officer April 29, 1999
- ------------------------------------------------ and Director
Warren J. Kaplan
/s/ ROBERT A. BURGELMAN* Director April 29, 1999
- ------------------------------------------------
Robert A. Burgelman
/s/ FRANK R. KLINE* Director April 29, 1999
- ------------------------------------------------
Frank R. Kline
/s/ JAMES SHA* Director April 29, 1999
- ------------------------------------------------
James Sha
/s/ TOM SHAO, PH.D.* Director April 29, 1999
- ------------------------------------------------
Tom Shao, Ph.D.
/s/ KIMBALL W. SMALL* Director April 29, 1999
- ------------------------------------------------
Kimball W. Small
/s/ FRED A. VIERRA* Director April 29, 1999
- ------------------------------------------------
Fred A. Vierra
*By: /s/ DAVID F. LARSON
------------------------------------------
David F. Larson
Attorney-In-Fact
</TABLE>
II-7
<PAGE> 9
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO BALANCE AT
BEGINNING OF COST AND DEDUCTIONS/ END OF
PERIOD EXPENSES WRITE-OFF PERIOD
------------ ---------- ----------- ----------
<S> <C> <C> <C> <C>
PERIOD FROM MARCH 8, 1996 (INCEPTION)
TO JUNE 30, 1996
Accounts receivable allowance............... $ -- $ -- $ -- $ --
YEAR ENDED JUNE 30, 1997
Accounts receivable allowance............... $ -- $15,000 $ -- $15,000
YEAR ENDED JUNE 30, 1998
Accounts receivable allowance............... $15,000 $58,787 $13,787 $60,000
</TABLE>
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION OF DOCUMENT NUMBERED PAGE
- ----------- ----------------------- -------------
<S> <C> <C>
1.1(5) Form of Underwriting Agreement.
3.1(1) Third Amended and Restated Certificate of Incorporation.
3.5(1) Bylaws of Registrant.
4.2(1) Form of Registrant's Common Stock Certificate.
4.3(1) Amended and Restated Investors' Rights Agreement dated
September 4, 1998.
4.4(a)(1) Stock Subscription Warrant No. 1 to purchase shares of
Common Stock of Registrant issued to Transamerica Business
Credit Corporation.
4.4(b)(1) Stock Subscription Warrant No. 2 to purchase shares of
Common Stock of Registrant issued to Transamerica Business
Credit Corporation.
4.4(c)(1) Stock Subscription Warrant No. 3 to purchase shares of
Common Stock of Registrant issued to Transamerica Business
Credit Corporation (see Exhibit No. 10.28).
4.4(d)(1) Stock Subscription Warrant No. 4 to purchase shares of
Common Stock of Registrant issued to Transamerica Business
Credit Corporation (see Exhibit No. 10.28).
4.5(1) Warrants to purchase shares of Series D Preferred Stock of
the Registrant issued to Silicon Valley Bank.
4.6(1) Form of Warrant to purchase shares of Common Stock of the
Registrant.
5.1(5) Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP ("Gunderson Dettmer").
10.1(1) Form of Indemnification Agreement entered into by Registrant
with each of our directors and executive officers.
10.2(1) 1996 Stock Option Plan.
10.3(1) 1997 Stock Option Plan.
10.4(1) 1998 Stock Incentive Plan.
10.5(1) 1998 Employee Stock Purchase Plan.
10.6(1) Employment Agreement between the Registrant and Warren J.
Kaplan.
10.7(1) Employment Agreement between the Registrant and Sherman
Tuan.
10.8(1) Employment Agreement between the Registrant and David Rand.
10.9(1) Stock Option Agreement between the Registrant and Warren J.
Kaplan.
10.10(1) Technology Agreement between the Registrant and David Rand.
10.11(1) Lease Equipment Agreement between Registrant and Cisco
Systems Capital Corporation.
10.12(1) Loan and Security Agreement between the Registrant and
Silicon Valley Bank.
10.13(1) Loan and Security Agreements between the Registrant and
Transamerica Business Credit Corporation.
10.14(1) Promissory Note by Registrant to Transamerica Business
Credit Corporation.
10.15(1) Office Lease between 50 West San Fernando Associates and
Registrant dated May 15, 1996 (San Jose Office, 10th Floor).
10.16(1) First Amendment to Lease Agreement between 50 West San
Fernando Associates and Registrant, dated December 12, 1996
(San Jose Office, 10th Floor).
10.17(1) Second Amendment to Lease between 50 West San Fernando
Associates and Registrant, dated February 23, 1998 (San Jose
Office, 10th Floor).
10.18(1) Office Lease between 50 West San Fernando Associates and
Registrant, dated May 15, 1996 (San Jose Office, 18th
Floor).
</TABLE>
<PAGE> 11
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION OF DOCUMENT NUMBERED PAGE
- ----------- ----------------------- -------------
<S> <C> <C>
10.19(1) First Amendment to Lease Agreement between 50 West San
Fernando Associates and Registrant, dated December 12, 1996
(San Jose Office, 18th Floor).
10.20(1) Second Amendment to Lease between 50 West San Fernando
Associates and Registrant, dated February 24, 1998 (San Jose
Office, 18th Floor).
10.21(1) Consent of Landlord between Registrant and Halcyon Software
California Inc., dated March 31, 1998 (San Jose Office,
Suite 1012).
10.22(1) Consent of Landlord between 50 West San Fernando Associates
and KPMG Peat Marwick LLP, dated April 6, 1998 and April 12,
1998 (Registrant sublease from KPMG Peat Marwick LLP, San
Jose Office, 10th Floor).
10.23(1) Sublease between KPMG Peat Marwick (USA) LLP and Registrant,
dated March 13, 1998 (Registrant sublease from KPMG Peat
Marwick LLP (USA), San Jose Office, 10th Floor).
10.24(1) Deed of Lease between Gosnell Properties, Inc. and
Registrant dated September 3, 1997 (Suite B-290, Vienna,
VA/"D.C.").
10.25(1) Deed of Lease between Gosnell Properties, Inc. and
Registrant dated January 30, 1998 (Suite 110, Vienna,
VA/"D.C.").
10.26(1) Network Access Agreement between Goodnet and Registrant
dated June 11, 1996.
10.27(1)(3) Fiber Optic Private Network Agreement Product Order between
Metromedia Fiber Network Services, Inc. and Registrant,
dated September 1, 1998.
10.28(1) Amended and Restated Master Loan and Security Agreement
between Registrant and Transamerica Business Credit
Corporation.
10.29(1) Loan Modification Agreement between Registrant and Silicon
Valley Bank dated as of October 26, 1998.
10.30(1) Lease by and between F.C. Pavilion, L.L.C. and Registrant
dated December 4, 1998.
10.31(2)(3) Atlantic Crossing/AC-1 Submarine Cable System Capacity
Purchase Agreement, dated December 23, 1998, by and between
Atlantic Crossing LTD, a Bermuda corporation, and AboveNet.
10.32(2)(3) Atlantic Crossing/AC-1 Submarine Cable System Capacity
Indefeasible Right of Use Agreement in Inland Capacity
(United Kingdom), dated December 23, 1998, by and between GT
U.K. LTD and AboveNet.
10.33(2)(3) Atlantic Crossing/AC-1 Submarine Cable System Indefeasible
Right of Use 1.1 Agreement in Inland Capacity (United
States), dated December 23, 1998, by and between GT U.K. LTD
and AboveNet.
10.34(4) Letter Agreement by and between Global Crossing Ltd. and
Registrant, dated March 23, 1999.
10.35(5) Agreement of Lease between 111 Eighth Avenue LLC and
Registrant, dated January, 1999 (Registrant lease from 111
Eighth Avenue LLC portion of 2nd Floor, 111 Eighth Ave., New
York, NY).
10.36(4)(5) Shareholders Agreement by and between Raiffeisen
Rechenzentrum Ges. m.b.H and Registrant, dated March 8,
1999.
10.37(4)(5) Cooperation Agreement, by and between Registrant and
AboveNet Deutschland GmbH, dated March 25, 1999.
10.38(4)(5) Shareholder Agreement relating to AboveNet UK Limited, by
and between Registrant, Mr. W. Dobbie and Mr. A. MacSween
and AboveNet UK Limited, dated March, 1999.
16.1(1) Letter Regarding Change in Certifying Accountants.
23.1(5) Consent of Gunderson Dettmer (included in Exhibit 5.1).
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION OF DOCUMENT NUMBERED PAGE
- ----------- ----------------------- -------------
<S> <C> <C>
23.2(5) Consent of Deloitte & Touche LLP, Independent Accountants.
23.3(5) Independent Auditors' Report on Schedule.
27.1(5) Financial Data Schedule.
99.1(1) Consent of Forrester Research, Inc.
99.2(1) Consent of International Data Corporation.
</TABLE>
- ---------------
(1) Incorporated by reference to the Company's Registration Statement on Form
S-1 (No. 333-63141) originally filed with the Securities and Exchange
Commission on September 10, 1998.
(2) Incorporated by reference to the Company's filing on Form 10-Q filed with
the Securities and Exchange Commission on February 11, 1999.
(3) Confidential treatment granted as to certain portions of exhibit.
(4) Confidential treatment requested as to certain portions of exhibit.
(5) Previously filed.
<PAGE> 1
EXHIBIT 10.34
[LOGO GLOBAL CROSSING]
March 23, 1999
Mr. Dave Rand
CTO
AboveNet Communications
50 W. San Fernando St. #1010
San Jose, CA 95113
USA
Dear Mr. Rand:
This letter confirms our understanding with respect to the sale by Global
Crossing International Ltd. and/or its affiliates ("GCI") to AboveNet
Communications, Inc. ("AboveNet") of capacity on GCI's Pan European network
("PEC").
Purchased Capacity.
GCI hereby agrees to sell (or cause its affiliates to sell) and ABOVENET hereby
agrees to purchase on the RFS Date (to be defined) for PEC [*] (the "Purchased
Capacity") consisting of indefeasible rights of use ("IRUs") for point-to-point
capacity on the following PEC city-to- city segments (GCI PoP to GCI PoP) as
follows:
(1) [*]
(2) [*]
(3) [*]
The aggregate purchase price (the "Purchase Price") for the Purchase Capacity
shall be [*] provided however, if ABOVENET does not enter into a
global network offer within [*] days of the date hereof with Global Crossing
Holdings Ltd. for an [*] the aggregate
purchase price for the Purchased Capacity shall be increased to $7.5 million.
The Purchase Price shall be paid as follows (i) [*] of the Purchase Price shall
be payable on the date this letter agreement is executed by ABOVENET and (ii)
[*] million shall be payable just prior to activation of the circuit but no
later than April 30, 1999 (iii) the balance of the Purchase Price shall be
financed over a [*] period at the rate of 10.5% with net payable on
or before December 30, 1999. Interest payments shall be made on the 5th of
every month. If tail circuits are required to connect the Purchased Capacity to
ABOVENET's local PoP, GCI agrees to assist ABOVENET in obtaining such
connectivity, all at ABOVENET's expense.
Maintenance payments shall be payable in accordance with the [*] Capacity
Purchase Agreement.
Documentation.
ABOVENET and GCI and/or its affiliates shall enter into capacity purchase
agreements with respect to the Purchased Capacity promptly after the execution
of this letter agreement, but not later than April 30, 1999.
- --------------
*Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 2
Miscellaneous.
This letter agreement shall be governed by and construed in accordance with the
laws of the State of New York.
This letter agreement may be executed in any number of counterparts, each of
which shall be an original, and all of which, when taken together, shall
constitute one agreement.
This letter agreement may not be amended or waived except in an instrument in
writing and signed by each of the parties hereto.
This letter agreement shall be binding upon each of the parties hereto and
their respective successors and permitted assigns. Neither party hereto shall
be permitted to assign any of their rights or obligations hereunder without the
other party's prior written consent, provided, however, (i) GCI may assign and
delegate any and all of its rights and obligations hereunder to its affiliates
and (ii) ABOVENET may, without relieving it of its obligations hereunder,
assign its rights hereunder to its wholly-owned subsidiaries.
ABOVENET shall keep the provisions of this letter agreement and any non-public
information, written or oral, with respect to this Agreement ("Confidential
Information") confidential and shall not disclose Confidential Information, in
whole or in part, to any person other than affiliates, officers, directors,
employees, agents or representatives of ABOVENET (collectively,
"Representatives") who need to know such Confidential Information for the
purpose of negotiating, executing and implementing this letter agreement.
ABOVENET agrees to inform each of its Representatives of the non-public nature
of the Confidential Information and to direct such persons to treat such
Confidential Information in accordance with this paragraph. Nothing herein
shall prevent ABOVENET from disclosing Confidential Information (i) upon the
order of any court or administrative agency, (ii) upon the request or demand
of, or pursuant to any regulation of, any regulatory agency or authority or
(iii) to a party's legal counsel or independent auditors. ABOVENET shall not
make any public announcement regarding this letter agreement or the terms
hereof, without the prior written consent of GCI.
If the foregoing correctly sets forth our understanding, please indicate your
agreement to be bound by the terms hereof by signing in the space indicated
below.
GLOBAL CROSSING HOLDINGS LTD.
By: /s/ K. Eugene Shutler
-------------------------------------
Name: K. Eugene Shutler
Title: President
AGREED AND ACCEPTED:
ABOVENET COMMUNICATIONS, INC.
By: /s/ Dave Rand
--------------------------------------
Name: Dave Rand
Title: CTO
Agreement subject to satisfactory
completion of the European ring
agreement before April 2, 1999.
Timeframe may be extended by mutual
consent. Terms are to be no less
favorable on future orders.
[initials]
