Exhibit G
DEBT EXCHANGE AGREEMENT
DEBT EXCHANGE AGREEMENT, dated as of January 10, 2003 (this "Agreement"),
by and between FiberNet Telecom Group, Inc., a Delaware corporation (the
"Company"), and Bank One, N.A., a national banking association (the
"Purchaser").
R E C I T A L S
WHEREAS, pursuant to the Amended and Restated Credit Agreement dated as of
February 9, 2001 by and among FiberNet Operations, Inc., Devnet L.L.C., the
Purchaser and certain other lenders, FiberNet Operations, Inc. and Devnet L.L.C.
owe $3,345,697.48 to the Purchaser (the "Bank One Debt");
WHEREAS, the Company has agreed that, pursuant to this Agreement, it will
issue to the Purchaser, in exchange for the Bank One Debt, an aggregate of
34,628,636 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 Bank One Debt 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 release the Company of all obligations owing in
respect of the Bank One Debt and shall surrender to the Company for exchange all
documents evidencing the Bank One Debt, together with all appropriate
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 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 January 10, 2003, provided,
that all of the conditions set forth in this Agreement 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 Company may agree upon (such date on which
the Closing occurs, the "Closing Date"). At the Closing, the Purchaser shall
deliver or cause to be delivered to the Company the Bank One Debt that the
Purchaser is exchanging pursuant to the terms hereof, together with all
appropriate instruments of transfer. At the Closing, the Company shall deliver
the Shares to the Purchaser.
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 Bank One Debt in the Exchange, the Shares shall be validly
issued and outstanding, fully paid and non-assessable, free of restrictions on
transfer other than as described herein and under applicable state and federal
securities laws, and assuming the accuracy of the Purchaser's representations
and warranties set forth in Section 2.2 hereof, such Shares will have been
issued in compliance with all applicable state and federal securities laws.
(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)
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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 applicable
state and federal securities laws, rules or regulations, or the rules of the
Nasdaq SmallCap Market, prior to or subsequent to the Closing).
(e) Offering. No form of general solicitation or general advertising (as
defined in Regulation D of the Securities Act of 1933, as amended) was used by
the Company or any of its respective representatives in connection with the
offer and sale of the Shares hereby, including, but not limited to, articles,
notices or other communications published in any newspaper, magazine or similar
medium or broadcast over television or radio, or any seminar or other meeting
whose attendees have been invited by any general solicitation or general
advertising. Except as set forth in any schedule attached to or made part of
either the Common Stock and Warrant Purchase Agreement dated October 30, 2002 or
November 11, 2002 between the Company and the investors listed in each
respective contract, no securities of the same class as the Shares have been
issued and sold by the Company within the six-month period immediately prior to
the date hereof.
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
national banking association duly organized, validly existing and in good
standing under the laws of the United States of America.
(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.
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(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 and not with a view to or for sale in connection with
any distribution.
(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 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
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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:
(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, including, without limitation,
authorizing the Company's transfer agent to issue shares of the Company's common
stock to the purchasers of the Shares sold by the Purchaser.
(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:
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(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 Bank One Debt. The Purchaser shall have released and
surrendered to the Company all documents evidencing the Bank One Debt together
with all appropriate instruments of transfer.
(e) Agreement, Limited Waiver and Ninth Amendment. FiberNet Operations,
Inc. and Devnet L.L.C. shall have executed and delivered to the Purchaser the
Agreement, Limited Waiver and Ninth Amendment among FiberNet Operations, Inc.,
Devnet L.L.C., and the lenders under the Company's senior credit facility.
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:
(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.
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(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.
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 contains 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, 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 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: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C.
Chrysler Center
000 Xxxxx Xxxxxx
0
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
Fax No.: (000) 000-0000
If to the Purchaser: Bank One, N.A.
Bank Xxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
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.
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
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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.
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IN WITNESS WHEREOF, the parties hereto have caused this Debt 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
FIBERNET OPERATIONS, INC.
By:_____________________________________________
Name:
Title:
DEVNET L.L.C.
By:_____________________________________________
Name:
Title:
BANK ONE, N.A.
By:_____________________________________________
Name:
Title:
