EXECUTION COPY
Exhibit 8
NOTE PURCHASE AGREEMENT
NOTE PURCHASE AGREEMENT, dated as of October 30, 2002 (this
"Agreement"), by and among Nortel Networks Inc., a Delaware corporation (the
"Seller"), and SDS Merchant Fund, L.P., a Delaware limited partnership (the
"Purchaser").
WHEREAS, on December 7, 2001, FiberNet Telecom Group, Inc., a Delaware
corporation (the "Company") issued a certain promissory note in an initial
principal amount of $2,321,117 (the "Note");
WHEREAS, the current outstanding principal balance under the Note is
$450,102, together with accrued interest thereon; and
WHEREAS, the Seller desires to sell and transfer to the Purchaser, and
the Purchaser desires to purchase from the Seller, the Note, upon the terms and
conditions set forth herein.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I.
PURCHASE AND SALE OF NOTE
Section 1.1. Purchase and Sale of Note. Upon the following terms and
conditions, and in consideration of and in express reliance upon such terms and
conditions and the representations, warranties and covenants of this Agreement,
the Seller shall sell to the Purchaser, and the Purchaser shall purchase from
the Seller, the Note for a cash purchase price (the "Purchase Price") of
$150,000.
Section 1.2. Closing. The closing (the "Closing") of the purchase and
sale of the Note to be acquired by the Purchaser from the Seller under this
Agreement shall take place at the offices of Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx
LLP, The Chrysler Building, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at
10:00 a.m., New York time (i) on or before October __, 2002, provided, that all
of the conditions set forth in Article IV hereof shall have been fulfilled or
waived in accordance herewith, or (ii) at such other time and place or on such
date as the Purchaser and the Seller may agree upon (such date on which the
Closing occurs, the "Closing Date"). At the Closing, the Seller shall deliver or
cause to be delivered to the Purchaser the Note that the Purchaser is purchasing
pursuant to the terms hereof, together with all appropriate endorsements and
other appropriate instruments of transfer. At the Closing, the Purchaser shall
deliver the Purchase Price by wire transfer to an account designated by the
Seller.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Seller. The Seller
hereby represents and warrants to the Purchaser, as of the date hereof and the
Closing Date, as follows:
(a) Organization, Good Standing and Power. The Seller is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware and has the requisite power to own, lease and operate its
properties and assets and to conduct its business as it is now being conducted.
The Seller is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary except for
any jurisdictions (alone or in the aggregate) in which the failure to be so
qualified will not have a Material Adverse Effect. For the purposes of this
Agreement, "Material Adverse Effect" means any condition, circumstance, or
situation that would prohibit or hinder the Seller from executing this Agreement
and/or performing any of its obligations hereunder or thereunder in any material
respect.
(b) Authorization; Enforcement. The Seller has the requisite power and
authority to enter into and perform this Agreement and to sell the Note in
accordance with the terms hereof. The execution, delivery and performance of
this Agreement by the Seller and the consummation by it of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action, and no further consent or authorization is required for the
Seller to effect the transactions contemplated by this Agreement. When executed
and delivered by the Seller, this Agreement shall constitute a valid and binding
obligation of the Seller, enforceable against the Seller in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditor's
rights and remedies or by other equitable principles of general application.
(c) No Conflicts. The execution, delivery and performance of this
Agreement by the Seller and the consummation by the Seller of the transactions
contemplated hereby do not and will not (i) violate any provision of the
Seller's Certificate of Incorporation or Bylaws, each as amended to date, (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
mortgage, deed of trust, indenture, note, bond, license, lease agreement,
instrument or obligation to which the Seller is a party or by which any of the
Seller's properties or assets are bound, or (iii) result in a violation of any
federal, state, local or foreign statute, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations) applicable
to the Seller or by which any property or asset of the Seller is bound or
affected, in all cases, other than violations pursuant to clauses (i) or (iii)
(with respect to federal and state securities laws) above, except, for such
conflicts, defaults, terminations, amendments, acceleration, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect. The Seller is not required under federal, state, foreign or
local law, rule or regulation to obtain any consent, authorization or order of,
or make any filing or registration with, any court or governmental agency in
order for it to execute, deliver or perform any of its obligations under this
Agreement or issue and sell the Note in accordance with the terms hereof.
(d) Title to Note. The Seller has the right to transfer good, valid
and marketable title in and to the Note, free and clear of any mortgages,
pledges, charges, liens, security interests or other encumbrances.
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(e) Certain Fees. The Seller has not employed any broker or finder or
incurred any liability for any brokerage, investment banking, commission,
finders', structuring or financial advisory fees or other similar fees in
connection with this Agreement or the transactions contemplated hereby.
Section 2.2. Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants to the Seller, as of the date hereof
and as of the Closing Date, as follows:
(a) Organization and Standing of the Purchaser. The Purchaser is a
limited partnership duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization.
(b) Authorization and Power. The Purchaser has the requisite power and
authority to enter into and perform this Agreement and to purchase the Note
being sold to it hereunder. The execution, delivery and performance of this
Agreement by the Purchaser and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary organizational
action, and no further consent or authorization is required for such Purchaser
to effect the transactions contemplated by this Agreement. When executed and
delivered by the Purchaser, this Agreement shall constitute valid and binding
obligations of the Purchaser enforceable against such Purchaser in accordance
with their terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation,
conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditor's rights and remedies or by other
equitable principles of general application.
(c) No Conflict. The execution, delivery and performance of this
Agreement by the Purchaser and the consummation by the Purchaser of the
transactions contemplated hereby do not and will not (i) violate any provision
of the Purchaser's organizational documents, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, mortgage, deed of trust,
indenture, note, bond, license, lease agreement, instrument or obligation to
which the Purchaser is a party or by which the Purchaser's properties or assets
are bound, or (iii) result in a violation of any federal, state, local or
foreign statute, rule, regulation, order, judgment or decree (including federal
and state securities laws and regulations) applicable to the Purchaser or by
which any property or asset of the Purchaser is bound or affected, in all cases,
other than violations pursuant to clauses (i) or (iii) (with respect to federal
and state securities laws) above, except, for such conflicts, defaults,
terminations, amendments, acceleration, cancellations and violations as would
not, individually or in the aggregate, materially and adversely affect
Purchaser's ability to perform its obligations under this Agreement.
(d) Acquisition for Investment. The Purchaser is purchasing the Note
solely for its own account for the purpose of investment and not with a view to
or for sale in connection with any distribution. The Purchaser does not have a
present intention to sell the Note, nor a present arrangement (whether or not
legally binding) or intention to effect any distribution of the Note, to or
through any person or entity.
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(e) Assessment of Risks. The Purchaser acknowledges that it (i) has
such knowledge and experience in financial and business matters that such
Purchaser is capable of evaluating the merits and risks of such Purchaser's
investment in the Company (by virtue of its purchase of Note hereunder), (ii) is
able to bear the financial risks associated with an investment in the Note and
(iii) has been given full access to such records of the Company and to the
officers of the Company as it has deemed necessary or appropriate to conduct its
due diligence investigation with respect to the Note.
(f) No General Solicitation. The Purchaser acknowledges that the Note
was not offered to such Purchaser by means of any form of general or public
solicitation or general advertising, or publicly disseminated advertisements or
sales literature, including (i) any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media or
broadcast over television or radio or (ii) any seminar or meeting to which such
Purchaser was invited by any of the foregoing means of communications.
(g) Accredited Investor. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the Securities Act of 1933, as
amended).
(h) Certain Fees. The Purchaser has not employed any broker or finder
or incurred any liability for any brokerage, investment banking, commission,
finders', structuring or financial advisory fees or other similar fees in
connection with this Agreement or the transactions contemplated hereby.
(i) Reliance on Representations. The Company is hereby expressly
permitted to rely on the Purchaser's representations and warranties set forth in
Sections 2.2(d) through (g), inclusive.
ARTICLE III.
COVENANTS OF THE PARTIES
Section 3.1. Covenants. The parties hereto hereby covenant with each
other as follows, which covenants are for the benefit of such parties and their
respective permitted assigns:
(a) Further Assurances. From and after the Closing Date, upon the
request the Purchaser or the Seller, the Seller and the Purchaser shall execute
and deliver such instruments, documents and other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement.
(b) Commercially Reasonable Efforts. Each party hereto will use
commercially reasonable efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things necessary, proper or advisable,
consistent with applicable law, to consummate and make effective in the most
expeditious manner practicable the transactions contemplated hereby, including
without limitation, making all regulatory and other filings required by
applicable law as promptly as practicable after the date hereof.
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ARTICLE IV.
CONDITIONS
Section 4.1. Conditions Precedent to the Obligation of the Seller to
Close and to Sell the Note. The obligation hereunder of the Seller to close and
sell the Note to the Purchaser at the Closing is subject to the satisfaction or
waiver, at or before the Closing of the conditions set forth below:
(a) Accuracy of the Purchaser's Representations and Warranties. The
representations and warranties of the Purchaser shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time, except for representations and warranties that are expressly
made as of a particular date, which shall be true and correct in all material
respects as of such date.
(b) Performance by the Purchaser. The Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Purchaser at or prior to the Closing.
(c) No Injunction, Statute or Rule. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.
(d) Delivery of Purchase Price. The Purchase Price for the Note shall
have been delivered to the Seller.
The conditions set forth in this Section 4.1 are for the Seller's sole benefit
and may be waived only by the Seller at any time in its sole discretion.
Section 4.2. Conditions Precedent to the Obligation of the Purchaser
to Close and to Purchase the Note. The obligation hereunder of the Purchaser to
purchase the Note and to consummate the transactions contemplated by this
Agreement is subject to the satisfaction or waiver, at or before the Closing, of
each of the conditions set forth below:
(a) Accuracy of the Seller's Representations and Warranties. Each of
the representations and warranties of the Seller in this Agreement shall be true
and correct in all material respects as of the Closing Date, except for
representations and warranties that speak as of a particular date, which shall
be true and correct in all material respects as of such date.
(b) Performance by the Seller. The Seller shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Seller at or prior to the Closing.
(c) No Injunction, Statute or Rule. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or
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governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.
(d) Note. The Seller shall have delivered to the Purchaser the Note
acquired by the Purchaser at the Closing, together with all appropriate
indorsements and other instruments of transfer.
(e) Note Exchange Agreement. The Company shall have executed and
delivered to the Purchaser a Note Exchange Agreement, substantially in the form
attached as Exhibit B hereto (the "Note Exchange Agreement").
The conditions set forth in this Section 4.2 are for the Purchaser's sole
benefit and may be waived only by the Purchaser at any time in its sole
discretion.
ARTICLE V.
MISCELLANEOUS
Section 5.1. Fees and Expenses. Each party hereto shall pay the fees
and expenses of its advisors, counsel, accountants and other experts, if any,
and all other expenses, incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement and the
transactions contemplated hereby.
Section 5.2. Entire Agreement; Amendment. This Agreement and the Note
Exchange Agreement contain the entire understanding and agreement (written or
oral) of the parties hereto with respect to the subject matter hereof and,
except as specifically set forth herein or in the Note Exchange Agreement,
neither the Seller nor the Purchaser make any representation, warranty, covenant
or undertaking with respect to such matters, and they supersede all prior
understandings and agreements with respect to said subject matter, all of which
are merged herein. No provision of this Agreement may be waived or amended other
than by a written instrument signed by each party hereto. Any amendment or
waiver effected in accordance with this Section 5.2 shall be binding upon each
such party and its permitted assigns.
Section 5.3. Notices. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery by telecopy or facsimile at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be:
If to the Seller: Nortel Networks Inc.
MS 991-15-A40
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
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Attn: Customer Finance
Fax No.: (000) 000-0000
If to the Purchaser: SDS Merchant Fund, L.P.
c/o SDS Capital Partners, LLC
00 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
Fax No.: (000) 000-0000
Either party hereto may from time to time change its address for notices by
giving written notice of such changed address to the other party hereto.
Section 5.4. Waivers. No waiver by either party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
Section 5.5. Headings. The article, section and subsection headings in
this Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.
Section 5.6. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns.
Neither party hereto may assign its rights or obligations under this Agreement
(by operation of law or otherwise) without the prior written consent of each
other party hereto, and any attempted assignment without such consent shall be
void ab initio.
Section 5.7. No Third Party Beneficiaries. Except as provided in
Section 2.2(j) hereof, this Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns and is not for the
benefit of, nor may any provision hereof be enforced by, any other person or
entity.
Section 5.8. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to the choice of law provisions thereof. This Agreement shall not
be interpreted or construed with any presumption against the party causing this
Agreement to be drafted.
Section 5.9. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and shall become effective when counterparts have been signed by
each party and delivered to the other parties hereto, it being understood that
all parties need not sign the same counterpart.
Section 5.10. Severability. The provisions of this Agreement are
severable and, in the event that any court of competent jurisdiction shall
determine that any one or more of the provisions or part of the provisions
contained in this Agreement shall, for any reason, be held to
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be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision or part of a provision
of this Agreement and this Agreement shall be reformed and construed as if such
invalid or illegal or unenforceable provision, or part of such provision, had
never been contained herein, so that such provisions would be valid, legal and
enforceable to the maximum extent possible.
Section 5.11. Waiver of Jury Trial. EACH PARTY HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON, ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR
LITIGATION OF ANY TYPE BROUGHT BY ANY SUCH PARTY AGAINST THE OTHER PARTY HERETO,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. EACH PARTY
HERETO HEREBY AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. THE AGREEMENT OF EACH PARTY HERETO TO THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE OTHER PARTY HERETO TO ENTER INTO THIS
AGREEMENT.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the date first
above written.
NORTEL NETWORKS INC.
By: /s/ Xxxxx Xxxxxx
_____________________________________
Name: Xxxxx Xxxxxx
Title: Director, Customer Finance
SDS MERCHANT FUND, L.P.
By: SDS Capital Partners, LLC,
its general partner
By: /s/ Xxxxx Xxxxx
_____________________________________
Name: Xxxxx Xxxxx
Title: General Counsel
EXHIBIT B
FORM OF NOTE EXCHANGE AGREEMENT
EXECUTION COPY
NOTE EXCHANGE AGREEMENT
NOTE EXCHANGE AGREEMENT, dated as of October __, 2002 (this
"Agreement"), by and among FiberNet Telecom Group, Inc., a Delaware corporation
(the "Company"), and SDS Merchant Fund, LP (the "Purchaser").
R E C I T A L S
WHEREAS, the Purchaser has purchased from Nortel Networks Inc.
("Nortel") that certain promissory note, issued on December 7, 2001 by the
Company, in the initial principal amount of $2,321,117.00 (the "Note"), pursuant
to a Note Purchase Agreement, of even date herewith, by and among Nortel and the
Purchaser (the "Purchase Agreement");
WHEREAS, the Company has agreed that, immediately upon completion of
the purchase of the Note pursuant to the Purchase Agreement, it will issue to
the Purchaser, in exchange for the Note, an aggregate of 9,002,040 shares of
common stock, par value $.001 per share, of the Company (the "Shares"); and
WHEREAS, the Company and the Purchaser desire to enter into this
Agreement to set forth certain matters relating to such exchange.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I.
EXCHANGE
Section 1.1. Exchange of Note for Shares. Upon the following terms and
conditions, and in consideration of and in express reliance upon such terms and
conditions and the representations, warranties and covenants of this Agreement,
the Purchaser shall, immediately upon completion of the purchase of the Note
pursuant to the Purchase Agreement, surrender to the Company for exchange, the
Note, together with all appropriate endorsements and instruments of transfer,
and, in exchange therefor, the Company shall issue to the Purchaser the Shares.
The exchange described in this Section 1.1 is referred to herein as the
"Exchange".
Section 1.2. Closing. The closing (the "Closing") of the Exchange
shall take place at the same place as, and immediately following, the "Closing",
as defined in the Purchase Agreement. The date of the Closing is referred to
herein as the "Closing Date".
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company. The
Company hereby represents and warrants to the Purchaser, as of the date hereof
and the Closing Date, as follows:
(a) Organization, Good Standing and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has the requisite power to own, lease and
operate its properties and assets and to conduct its business as it is now being
conducted. The Company is duly qualified as a foreign corporation to do business
and is in good standing in every jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary
except for any jurisdictions (alone or in the aggregate) in which the failure to
be so qualified will not have a Material Adverse Effect. For the purposes of
this Agreement, "Material Adverse Effect" means any condition, circumstance, or
situation that would prohibit or hinder the Company from executing this
Agreement and/or performing any of its obligations hereunder or thereunder in
any material respect.
(b) Authorization; Enforcement. The Company has the requisite power
and authority to enter into and perform this Agreement and to consummate the
Exchange. The execution, delivery and performance of this Agreement by the
Company have been duly and validly authorized by all necessary corporate action,
and no further consent or authorization is required for the Company to effect
the transactions contemplated hereby. When executed and delivered by the
Company, the Agreement shall constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, reorganization,
moratorium, liquidation, conservatorship, receivership or similar laws relating
to, or affecting generally the enforcement of, creditor's rights and remedies or
by other equitable principles of general application.
(c) Issuance of Shares. The Shares have been duly authorized by all
necessary corporate action and, when issued in accordance with the terms hereof
upon surrender of the Note in the Exchange, the Shares shall be validly issued
and outstanding, fully paid and non-assessable.
(d) No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby does not and will not (i) violate any provision of the
Company's Certificate of Incorporation or Bylaws, each as amended to date, (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
mortgage, deed of trust, indenture, note, bond, license, lease agreement,
instrument or obligation to which the Company is a party or by which any of the
Company's properties or assets are bound, or (iii) result in a violation of any
federal, state, local or foreign statute, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations) applicable
to the Company or by which any property or asset of the Company is bound or
affected, except, in all cases, other than violations pursuant to clauses (i) or
(iii) (with respect to federal and state securities laws) above, except, for
such conflicts, defaults, terminations, amendments, acceleration, cancellations
and violations as would not, individually or in the aggregate, have a Material
Adverse Effect. The Company is not required under federal, state, foreign or
local law, rule or regulation to obtain any consent, authorization or order of,
or make any filing or registration with, any court or governmental agency in
order for it to execute, deliver or perform any of its obligations under this
Agreement or consummate the Exchange in accordance with the terms hereof (other
than any filings, consents and approvals which may be required to be made by the
Company under
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applicable state and federal securities laws, rules or regulations, or the rules
of the Nasdaq SmallCap Market, prior to or subsequent to the Closing).
Section 2.2. Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants to the Company, as of the date hereof
and as of the Closing Date, as follows:
(a) Organization and Standing of the Purchaser. The Purchaser is a
limited partnership duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization.
(b) Authorization and Power. The Purchaser has the requisite power and
authority to enter into and perform this Agreement and to consummate the
Exchange. The execution, delivery and performance of this Agreement the
Purchaser and the consummation by it of the transactions contemplated hereby
have been duly authorized by all necessary organizational action, and no further
consent or authorization is required for the Purchaser to effect the
transactions contemplated hereby. When executed and delivered by the Purchaser,
this Agreement shall constitute valid and binding obligations of the Purchaser
enforceable against the Purchaser in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditor's
rights and remedies or by other equitable principles of general application.
(c) No Conflict. The execution, delivery and performance of this
Agreement by the Purchaser and the consummation by the Purchaser of the
transactions contemplated hereby does not and will not (i) violate any provision
of the Purchaser's organizational documents, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, mortgage, deed of trust,
indenture, note, bond, license, lease agreement, instrument or obligation to
which the Purchaser is a party or by which the Purchaser's properties or assets
are bound, or (iii) result in a violation of any federal, state, local or
foreign statute, rule, regulation, order, judgment or decree (including federal
and state securities laws and regulations) applicable to the Purchaser or by
which any property or asset of the Purchaser is bound or affected, except, in
all cases, other than violations pursuant to clauses (i) or (iii) (with respect
to federal and state securities laws) above, except, for such conflicts,
defaults, terminations, amendments, acceleration, cancellations and violations
as would not, individually or in the aggregate, materially and adversely affect
Purchaser's ability to perform its obligations hereunder.
(d) Acquisition for Investment. The Purchaser is acquiring the Shares
solely for its own account for the purpose of investment and not with a view to
or for sale in connection with any distribution. The Purchaser does not have a
present intention to sell any of the Shares, nor a present arrangement (whether
or not legally binding) or intention to effect any distribution of any of the
Shares, to or through any person or entity.
(e) Assessment of Risks. The Purchaser acknowledges that it (i) has
such knowledge and experience in financial and business matters that such
Purchaser is capable of evaluating the
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merits and risks of such Purchaser's investment in the Company (by virtue of its
purchase of Shares hereunder), (ii) is able to bear the financial risks
associated with an investment in the Shares and (iii) has been given full access
to such records of the Company and to the officers of the Company as it has
deemed necessary or appropriate to conduct its due diligence investigation with
respect to the Shares.
(f) No General Solicitation. The Purchaser acknowledges that the
Shares were not offered to the Purchaser by means of any form of general or
public solicitation or general advertising, or publicly disseminated
advertisements or sales literature, including (i) any advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
media or broadcast over television or radio or (ii) any seminar or meeting to
which the Purchaser was invited by any of the foregoing means of communications.
(g) Accredited Investor. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the Securities Act of 1933, as
amended).
(h) Legend. The Purchaser hereby acknowledges and agrees that the
certificates or other documents representing the Shares may contain the
following, or a substantially similar, legend, which legend shall be removed
only upon receipt by the Company of an opinion of its counsel, which opinion
shall be satisfactory to the Company, that such legend may be so removed:
THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR FIBERNET TELECOM GROUP,
INC. SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT
REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS
NOT REQUIRED.
(i) Certain Fees. The Purchaser has not employed any broker or finder
or incurred any liability for any brokerage, investment banking, commission,
finders', structuring or financial advisory fees or other similar fees in
connection with this Agreement or the transactions contemplated hereby.
ARTICLE III.
COVENANTS OF THE PARTIES
Section 3.1. Covenants. The parties hereto hereby covenant with each
other as follows, which covenants, as applicable, are for the benefit of such
parties and their respective permitted assigns:
4
(a) Further Assurances. From and after the Closing Date, upon the
request of the Purchaser or the Company, the Company and the Purchaser shall
execute and deliver such instruments, documents and other writings as may be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
(b) Commercially Reasonable Efforts. Each party hereto will use
commercially reasonable efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things necessary, proper or advisable,
consistent with applicable law, to consummate and make effective in the most
expeditious manner practicable the transactions contemplated hereby, including
without limitation, making all required regulatory and other filings required by
applicable law as promptly as practicable after the date hereof.
ARTICLE IV.
CONDITIONS
Section 4.1. Conditions Precedent to the Obligation of the Company to
Close. The obligation hereunder of the Company to close and effect the Exchange
at the Closing is subject to the satisfaction or waiver, at or before the
Closing of the conditions set forth below:
(a) Accuracy of the Purchaser's Representations and Warranties. The
representations and warranties of the Purchaser shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time, except for representations and warranties that are expressly
made as of a particular date, which shall be true and correct in all material
respects as of such date.
(b) Performance by the Purchaser. The Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Purchaser at or prior to the Closing.
(c) No Injunction, Statute or Rule. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.
(d) Surrender of Note. The Purchaser shall have surrendered to the
Company the Note together with all appropriate indorsements other appropriate
instruments of transfer.
The conditions set forth in this Section 4.1 are for the Company's sole benefit
and may be waived only by the Company at any time in its sole discretion.
Section 4.2. Conditions Precedent to the Obligation of the Purchaser
to Close. The obligation hereunder of the Purchaser to close and effect the
Exchange is subject to the satisfaction or waiver, at or before the Closing, of
each of the conditions set forth below:
5
(a) Accuracy of the Company's Representations and Warranties. Each of
the representations and warranties of the Company in this Agreement shall be
true and correct in all material respects as of the Closing Date, except for
representations and warranties that speak as of a particular date, which shall
be true and correct in all material respects as of such date.
(b) Performance by the Company. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing.
(c) No Injunction, Statute or Rule. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.
(d) Certificates. The Company shall have delivered to the Purchaser
certificates representing the Shares (in such denominations as the Purchaser may
request) being acquired by the Purchaser at the Closing.
(e) Warrants. The Company shall have delivered to the Purchaser the
Warrants (in such denominations as the Purchaser may request) being acquired by
the Purchaser at the Closing.
The conditions set forth in this Section 4.2 are for the Purchaser's sole
benefit and may be waived only by the Purchaser at any time in its sole
discretion.
ARTICLE V.
MISCELLANEOUS
Section 5.1. Fees and Expenses. Each party hereto shall pay the fees
and expenses of its advisors, counsel, accountants and other experts, if any,
and all other expenses, incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.
Section 5.2. Entire Agreement; Amendment. This Agreement and the
Purchase Agreement contain the entire understanding and agreement (written or
oral) of the parties hereto with respect to the subject matter hereof and,
except as specifically set forth herein or in the Purchase Agreement, neither
the Company nor the Purchaser make any representation, warranty, covenant or
undertaking with respect to such matters, and they supersede all prior
understandings and agreements with respect to said subject matter, all of which
are merged herein. No provision of this Agreement may be waived or amended other
than by a written instrument signed by each party hereto. Any amendment or
waiver effected in accordance with this Section 5.2 shall be binding upon each
such party and its permitted assigns.
Section 5.3. Notices. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery by telecopy or facsimile at the
address or number designated below (if delivered
6
on a business day during normal business hours where such notice is to be
received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be
received) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:
If to the Company: FiberNet Telecom Group, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Fax No.: (000) 000-0000
with copies (which copies
shall not constitute notice
to the Company) to: Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Fax No.: (000) 000-0000
If to the Purchaser: SDS Merchant Fund, L.P.
c/o SDS Capital Partners
00 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
Fax No.: (000) 000-0000
with copies (which copies
shall not constitute notice
to the Purchaser) to: Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx
Fax No.: (000) 000-0000
Any party hereto may from time to time change its address for notices by giving
written notice of such changed address to the other party hereto.
Section 5.4. Waivers. No waiver by either party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
7
Section 5.5. Headings. The article, section and subsection headings in
this Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.
Section 5.6. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns.
Neither party hereto may assign its rights or obligations under this Agreement
(by operation of law or otherwise) without the prior written consent of each
other party hereto, and any attempted assignment without such consent shall be
void ab initio.
Section 5.7. No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person or entity.
Section 5.8. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to the choice of law provisions thereof. This Agreement shall not
be interpreted or construed with any presumption against the party causing this
Agreement to be drafted.
Section 5.9. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and shall become effective when counterparts have been signed by
each party and delivered to the other parties hereto, it being understood that
all parties need not sign the same counterpart.
Section 5.10. Severability. The provisions of this Agreement are
severable and, in the event that any court of competent jurisdiction shall
determine that any one or more of the provisions or part of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement and this Agreement shall be reformed and construed as if such
invalid or illegal or unenforceable provision, or part of such provision, had
never been contained herein, so that such provisions would be valid, legal and
enforceable to the maximum extent possible.
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IN WITNESS WHEREOF, the parties hereto have caused this Note Exchange
Agreement to be duly executed by their respective authorized officers as of the
date first above written.
FIBERNET TELECOM GROUP, INC.
By:
------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President and CEO
SDS MERCHANT FUND, L.P.
By: SDS Capital Partners, LLC,
its general partner
By:
------------------------------------------
Name: Xxxxx Xxxxx
Title: Managing Member
