EXHIBIT 10.2
------------
SECURITIES EXCHANGE AGREEMENT(1)
THIS SECURITIES EXCHANGE AGREEMENT, dated as of September 15, 2004
(this "Agreement"), is entered into by and between Globix Corporation, a
Delaware corporation (the "Company"), and the Investor named on the signature
page hereto (the "Investor").
W I T N E S S E T H:
WHEREAS, the Company has entered into an Agreement and Plan of Merger,
dated as of July 19, 2004, with NEON Communications, Inc. (the "Merger
Agreement");
WHEREAS, a condition to the closing under the Merger Agreement is that
the Company shall have exchanged an aggregate of $12.5 million in principal and
interest on its 11% Senior Notes due 2008 of the Company (the "Senior Notes")
for an aggregate 4,545,455 shares of common stock, par value $.01 per share, of
the Company ("Common Stock") at a price of $2.75 per share (the "Debt
Exchange");
WHEREAS, the Investor wishes to participate in the Debt Exchange by
exchanging Senior Notes in an aggregate amount of $________ (including accrued
interest to the date of the exchange) (the "Exchange Notes") for _________
shares of Common Stock (the "Exchange Shares");
- --------
(1) This Security Exchange Agreement was entered into with the five
debt holders listed below, each of which is itself, or is affiliated with, a
holder of 5% or more of Globix common stock. The material terms and conditions
of each Security Exchange Agreement differ only with respect to the value of
debt to be exchanged and the number of shares to be issued, as outlined below.
DEBT HOLDER DEBT TO BE EXCHANGED SHARES TO BE ISSUED
----------- -------------------- -------------------
MacKay Shields LLC $3,800,000 1,381,819
York Capital Management $2,200,000 800,000
Singer Children's
Management Trust $1,100,000 400,000
Goldman Sachs & Co. $2,350,000 854,546
LC Capital Master Fund Ltd. $1,250,000 454,545
Security Exchange Agreements were also entered into with two additional
debt holders that are not holders of 5% or more of Globix common stock (or
affiliated with holders of 5% or more of Globix common stock). These two debt
holders will exchange an aggregate of $1,800,000 in 11% Senior Notes for an
aggregate of 654,545 shares of Globix common stock.
-5-
WHEREAS, each of the investors participating in the Debt Exchange
(collectively, the "Participating Investors") is entering into a Securities
Exchange Agreement on the terms set forth herein;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE I
---------
EXCHANGE OF SECURITIES
----------------------
1.1 AUTHORIZATION. The Company has, prior to the date hereof, duly
authorized (a) the issuance by the Company of the Exchange Shares and (b) the
Debt Exchange.
1.2 EXCHANGE OF SECURITIES. Subject to the terms and conditions of this
Agreement, at the closing under the Merger Agreement, upon satisfaction or
waiver of the conditions set forth in Article IV below, or on any earlier date
mutually agreed to by the Investor and the Company, the Investor shall surrender
to the Company the Exchange Notes for cancellation, and the Company shall issue
the Exchange Shares to the Investor. The closing of the exchange of securities
referred to herein (the "Closing") shall take place at the offices of Day, Berry
& Howard LLP, One Canterbury Green, Stamford, Connecticut 06901 immediately
prior to the closing under the Merger Agreement. The Company shall notify the
Investor at least two business days prior to the Closing. If the transactions
contemplated by the Merger Agreement are at any time terminated or abandoned, or
are not completed prior to February 28, 2005, the Company shall notify the
Investor and this Agreement shall terminate.
1.3 DELIVERIES AT CLOSING. At the Closing, the Company shall deliver to
the Investor (a) certificates representing the Exchange Shares registered in the
name of the Investor or in the name of such nominee as the Investor shall
specify in written notice to the Company prior to the Closing, free and clear of
any liens, security interests or encumbrances (other than those created by the
Investor) and (b) the documents specified in Section 4.1 below. At the Closing,
the Investor shall deliver Senior Notes in the aggregate amount (including
principal and interest) of $_______ and the documents specified in Section 4.2
below. The delivery of the Exchange Shares by the Company to the Investor and
the delivery of the Senior Notes by the Investor to the Company shall be deemed
a simultaneous transaction and delivery by one party shall not be deemed
effective without delivery by the other party hereto. At the Closing the
Investor will become a stockholder of the Company in respect of the Exchange
Shares with all of the rights attendant thereto.
ARTICLE II
----------
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company hereby represents and warrants to the Investor as follows:
2.1 ORGANIZATION AND GOOD STANDING OF THE COMPANY. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has full corporate power to enter into this
Agreement and perform its obligations hereunder.
-6-
2.2 CAPITALIZATION. As of the date of this Agreement, the authorized
capital stock of the Company consists of 500,000,000 shares of Common Stock, of
which 16,460,000 shares are issued and outstanding, and 5,000,000 shares of
preferred stock, of which no shares are issued and outstanding. All of the
issued and outstanding shares of capital stock of the Company have been duly
authorized and are validly issued, fully paid and nonassessable. The Exchange
Shares have been duly authorized, and when issued in accordance with this
Agreement, will be validly issued, fully paid and nonassessable, free and clear
of any liens, security interests or encumbrances (other than those created by
the Investor).
2.3 OTHER SHARES AUTHORIZED FOR ISSUANCE. As of the date of this
Agreement, there are no other shares of capital stock reserved for issuance or
subject to preemptive rights or any outstanding subscriptions, warrants,
options, rights, convertible securities or other agreements or instruments
outstanding or in effect giving any person the right to acquire shares of
capital stock or other securities of the Company other than (a) the shares of
Common Stock and preferred stock issuable under the Merger Agreement, (b) the
shares of Common Stock issuable upon the exercise of stock options under the
Company's 2003 Stock Option Plan and stock option plans of NEON Communications,
Inc. to be assumed in accordance with the Merger Agreement and (c) warrants to
purchase up to 500,000 shares of Common Stock at a purchase price of $3.00 per
share granted to certain affiliates of Communications Technology Advisors LLC.
2.4 CORPORATE AUTHORITY. The Company has the requisite power and
authority to execute, deliver and perform its obligations hereunder and to issue
the Exchange Shares. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject
to bankruptcy, insolvency, moratorium, fraudulent transfer and other laws
affecting the rights of creditors generally and to general principles of equity.
2.5 NO VIOLATIONS. The execution and delivery of this Agreement by the
Company does not, and the performance and consummation by the Company of the
transactions contemplated by this Agreement will not, contravene, conflict with,
or constitute or result in a breach or violation of, or a default under any
provision of, (a) the Company's organizational documents, (b) any agreement to
which the Company or any of its subsidiaries is bound, or to which its or any of
their assets or properties are subject, or (c) any law, rule or regulation to
which the Company, any subsidiary of the Company or any of their assets are
subject.
2.6 CONSENTS AND APPROVALS. All authorizations, consents, approvals,
licenses, qualifications or exemptions from, or any filings, declarations or
registrations with, any court, administrative agency, commission or other
governmental authority or instrumentality, whether domestic or foreign, required
in connection with the execution, delivery or performance by the Company of this
Agreement have been made or obtained and are in full force and effect as of the
date hereof.
2.7 DISCLOSURE DOCUMENTS. The Company's filings with the Securities and
Exchange Commission pursuant to Section 13(a) of the Securities Exchange Act of
1934, as amended, do not contain, and as of the Closing will not contain, any
untrue statement of a material fact or any omission to state a material fact
required to be stated therein or necessary to make the statements continued
therein, in light of the circumstances under which they were made, not
misleading.
-7-
2.8 EXEMPTION FROM REGISTRATION. Assuming the accuracy of the
representations of the Investor and the same representations of each other
Participating Investor, the issuance of the Exchange Shares, in the manner
contemplated by this Agreement, does not require registration under the
Securities Act of 1933, as amended (the "Securities Act").
2.9 OTHER SECURITIES EXCHANGE AGREEMENTS. The terms and conditions of
the exchange contemplated by this Agreement are no less favorable to the
Investor than the terms and conditions of the exchanges contemplated by
Securities Exchange Agreements with the other Participating Investors.
ARTICLE III
-----------
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
----------------------------------------------
The Investor hereby represents and warrants to the Company as follows:
3.1 PRIVATE OFFERING WITH REGISTRATION RIGHTS. The Investor understands
that the Exchange Shares are being issued in a private transaction under Section
4(2) of the Securities Act, subject to the registration rights described in
Section 5.1 below. This means that (in the absence of an effective Registration
Statement as described in Section 5.1 below), the Exchange Shares may not be
sold in market transactions except as otherwise permitted under Rule 144 under
Securities Act or pursuant to another exemption under the Securities Act.
Certificates representing the Exchange Shares may bear a legend in customary
form reflecting such restrictions. The Company agrees to cause any such legend
to be removed promptly in connection with any transfer under Rule 144 under the
Securities Act or otherwise upon the lapse of any such restrictions.
3.2 PURCHASE FOR OWN ACCOUNT. The Investor represents that the Exchange
Shares to be received by the Investor hereunder will be acquired for the
Investor's own account, and not with a view to the resale or distribution
thereof in violation of the Securities Act.
ARTICLE IV
----------
CONDITIONS TO CLOSING
---------------------
4.1 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations of
the Company under this Agreement are subject to the condition that the
representations of the Investor are true as of the Closing Date, and the receipt
of a certificate of an officer of the Investor as to the satisfaction of this
condition.
4.2 CONDITIONS TO THE OBLIGATIONS OF THE INVESTOR. The obligations of
the Investor under this Agreement are subject to the following conditions:
(a) The representations and warranties of the Company are true
and correct as of the Closing and a certificate of an officer of the Company to
that effect has been received by the Investor;
(b) The Investor shall have received a certificate of the
Secretary of the Company, attesting to the authority of the Company to
consummate the transactions contemplated hereby;
-8-
(c) The Investor shall have received an opinion of Day, Berry
& Howard LLP, as special counsel to the Company, in the form attached hereto.
ARTICLE V
---------
REGISTRATION RIGHTS
-------------------
5.1 REGISTRATION RIGHTS. As promptly as possible, but no later than
thirty (30) days after the closing under the Merger Agreement, the Company
shall, at its sole expense, prepare and file with the Securities and Exchange
Commission (the "SEC") a Registration Statement on Form S-1 or Form S-3 or any
other appropriate form under the Securities Act covering the resale of the
Exchange Shares (the "Registration Statement"), and shall use commercially
reasonable efforts to cause the Registration Statement to become effective
within ninety (90) days of filing and to remain continuously effective (subject
to Section 5.5 below) for a period of three years, or until such earlier time as
all of the Exchange Shares (a) have been sold or (b) may be sold without
restriction under Rule 144(k) under the Securities Act.
5.2 EFFECT OF FAILURE TO FILE AND OBTAIN AND MAINTAIN EFFECTIVENESS OF
REGISTRATION STATEMENT. If the Registration Statement has not become effective
on or before the one hundred twentieth day following the closing under the
Merger Agreement (such one hundred twentieth day being the "EFFECTIVENESS
Deadline"), the Investor shall have the right to purchase from the Company up to
the Penalty Number (as defined below) of additional shares of Common Stock at a
purchase price of $2.75 per share. If the Registration Statement is not
effective for more than ninety days in the aggregate during the first twelve
months following the Effectiveness Deadline, the Investor shall have the right
to purchase from the Company up to the Penalty Number of additional shares of
Common Stock at a purchase price of $2.75 per share. The Penalty Number shall be
5% of the amount acquired by the Investor in the Debt Exchange. The right to
purchase shares of Common Stock pursuant to the first sentence of this Section
5.2 shall be exercisable for a period of one year following the Effectiveness
Deadline. The right to purchase shares of Common Stock pursuant to the second
sentence of this Section 5.2 shall be exercisable for a period of one year
following the first anniversary of the Effectiveness Deadline. All shares of
Common Stock purchased pursuant to this Section 5.2 shall be subject to the
registration rights set forth in this Article V as if such shares were
originally acquired in the Debt Exchange.
5.3 INVESTOR INFORMATION. In connection with the preparation of the
Registration Statement, the Investor agrees to provide the Company with all
information concerning the Investor and the Investor's plan of distribution that
is required under Regulation S-K promulgated by the SEC. The Company agrees to
include in the Registration Statement such information concerning the Investor's
intended plan of distribution as may be desired by the Investor or required in
accordance with Regulation S-K in order to accomplish such distribution and
shall amend or supplement any prospectus or prospectus supplement as reasonably
requested by the Investor or required under Regulation S-K in order to
accommodate any changes in or updates to such information. The Company shall
provide the Investor with an opportunity to review and comment on the
Registration Statement and each amendment or supplement thereto covering the
Exchange Shares prior to the filing thereof and shall provide final copies
thereof to the Investor.
5.4 COMPANY NOTICES. The Company shall notify the Investor when the
Registration Statement and each amendment or supplement thereto covering the
Exchange Shares is filed and
-9-
if such Registration Statement, amendment or supplement has become effective.
The Company shall promptly notify the Investor of any stop order with respect to
the Registration Statement or any amendment or supplement thereto covering the
Exchange Shares or the discovery of any fact or the occurrence of any event that
would cause the Registration Statement or any such amendment or supplement
thereto to contain an untrue statement of a material fact or to omit to state a
material fact required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading.
5.5 AMENDMENTS AND SUPPLEMENTS. The Company shall prepare and file with
the SEC such amendments, including post-effective amendments, as may be
necessary to keep the Registration Statement continuously effective for the
applicable time period required under this Agreement, and shall cause the
related prospectus to be supplemented by any required prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 (or any similar provisions
then in force) promulgated under the Securities Act; provided, however, that the
Company may refrain from making any such amendment for a period of up to sixty
days in any one year period if the filing of such amendment or supplement would
require the disclosure of any material information for which the Company has a
bona fide business purpose for preserving as confidential.
5.6 RULE 144. With a view to making available to the Investor the
benefits of Rule 144 under the Securities Act and other rules and regulations of
the SEC that may at any time permit the Investor to sell the Exchange Shares to
the public without registration, the Company covenants that it shall use
reasonable efforts to file in a timely manner all reports and other documents
required to be filed by it under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
5.7 INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees,
notwithstanding termination of this Agreement, to indemnify and hold harmless to
the fullest extent permitted by law, the Investor, each of its directors,
officers, partners, employees, advisors, and agents, their respective Affiliates
(as hereinafter defined) and each person who controls (within the meaning of the
Securities Act or the Exchange Act) any of such persons, and each underwriter
and each person who controls (within the meaning of the Securities Act or the
Exchange Act) any underwriter from and against any and all losses, claims,
damages, expenses (including, without limitation, reasonable costs of
investigation and fees, disbursements, and other charges of counsel) or other
liabilities (collectively, "Losses") resulting from or arising out of or based
upon any untrue, or alleged untrue, statement of a material fact contained in
the Registration Statement, prospectus, or preliminary prospectus (as amended or
supplemented) or any document incorporated by reference in any of the foregoing
or resulting from or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a prospectus, in light
of the circumstances under which they were made), not misleading, and the
Company will reimburse the Investor, each of its officers, directors, partners,
employees, advisors, and agents, their respective Affiliates, and each person
controlling any such persons, for any legal and any other Losses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability, action, investigation, or proceeding
(collectively, a "Claim") by any court or governmental agency or body commenced
or threatened, or any Claim whatsoever
-10-
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided, however, that the Company will not be liable in
any such case to the extent that any Losses arise out of or are based on any
untrue statement or omission or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to the
Company by the Investor or underwriter expressly for use therein.
(b) INDEMNIFICATION BY THE INVESTOR. The Investor agrees to
indemnify and hold harmless the Company, any underwriter retained by the
Company, and their respective directors, officers, partners, employees,
advisors, and agents, their respective Affiliates, and each person who controls
(within the meaning of the Securities Act and the Exchange Act) any of such
persons to the same extent as the foregoing indemnity from the Company to the
Investor as set forth in Section 5.7(a) above (subject to the exceptions set
forth in the foregoing indemnity and the proviso to this sentence), but only
with respect to any such information furnished in writing by the Investor
expressly for use therein; provided, however, that the liability of the Investor
under this Section 5.7(b) shall be limited to the amount of the net proceeds
received by the Investor in the offering giving rise to such liability.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any person
entitled to indemnification hereunder (the "Indemnified Party") agrees to give
prompt written notice to the indemnifying party (the "Indemnifying Party") after
the receipt by the Indemnified Party of any written notice of the commencement
of any action, suit, proceeding, or investigation or threat thereof made in
writing for which the Indemnified Party intends to claim indemnification or
contribution pursuant to this Agreement; provided, however, that the failure so
to notify the Indemnifying Party shall not relieve the Indemnifying Party of any
liability that it may have to the Indemnified Party hereunder unless such
Indemnifying Party is materially prejudiced by such failure. If notice of
commencement of any such action is given to the Indemnifying Party as above
provided, the Indemnifying Party shall be entitled to participate in and, to the
extent it may wish, jointly with any other Indemnifying Party similarly
notified, to assume the defense of such action at its own expense, with counsel
chosen by it and reasonably satisfactory to such Indemnified Party. The
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be paid by the Indemnified Party unless (i) the Indemnifying Party
agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense
of such action with counsel satisfactory to the Indemnified Party in its
reasonable judgment, or (iii) the named parties to any such action (including,
but not limited to, any impleaded parties) reasonably believe that the
representation of such Indemnified Party and the Indemnifying Party by the same
counsel would be inappropriate under applicable standards of professional
conduct; provided, however, that the Indemnifying Party shall only have to pay
the fees and expenses of one firm of counsel for all Indemnified Parties
(including any persons who are Indemnified Parties under the Securities Exchange
Agreements with the other Participating Investors) in each jurisdiction. In the
case of clauses (ii) and (iii) above, the Indemnifying Party shall not have the
right to assume the defense of such action on behalf of such Indemnified Party.
No Indemnifying Party shall be liable for any settlement entered into without
its written consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the written consent of the Indemnified Party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnified Party is an actual or potential party to such action or claim)
unless such settlement, compromise, or judgment (A) includes an
-11-
unconditional release of the Indemnified Party from all liability arising out of
such action or claim and (B) does not include a statement as to, or an admission
of, fault, culpability, or a failure to act by or on behalf of any Indemnified
Party. The rights afforded to any Indemnified Party hereunder shall be in
addition to any rights that such Indemnified Party may have at common law, by
separate agreement, or otherwise.
(d) CONTRIBUTION. If the indemnification provided for in this
Agreement from the Indemnifying Party is unavailable, then the Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such Losses in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and the Indemnified Party, as well as any other relevant
equitable considerations. The relative faults of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, was
made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the Indemnifying Party's and Indemnified Party's relative
intent, knowledge, access to information, and opportunity to correct or prevent
such action; provided, however, that the liability of the Investor under this
Section 5.7(d) shall be limited to the amount of the net proceeds received by
the Investor in the offering giving rise to such liability. The amount paid or
payable by a party as a result of the losses, claims, damages, expenses, or
other liabilities referred to above shall be deemed to include, subject to the
limitations set forth in Section 5.7 (a), (b), and (c) above, any legal or other
fees, charges or expenses reasonably incurred by such party in connection with
any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5.7(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution
pursuant to this Section 5.7(d).
(e) AFFILIATE. For purposes of this Section 5.7, the term
"Affiliate" shall mean any person that directly or indirectly through one or
more intermediaries controls or is controlled by, or is under common control
with, such other person. For purposes of this definition, the term "control"
(including the terms "controlling," "controlled by," and "under common control
with") means the possession, direct or indirect, of the power to cause the
direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise.
ARTICLE VI
----------
MISCELLANEOUS
-------------
6.1 SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by a
party hereto without the prior written consent of the Company or the Investor,
as applicable. The provisions of this Agreement shall inure to the benefit of
and be binding upon the respective permitted successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns
-12-
any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
6.2 COUNTERPARTS; FAXES. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may also
be executed via facsimile, which shall be deemed an original.
6.3 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
e-mail or telecopier, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (iii) if given by mail, then such notice
shall be deemed given upon the earlier of (A) receipt of such notice by the
recipient or (B) three days after such notice is deposited in first class mail,
postage prepaid, and (iv) if given by an internationally recognized overnight
air courier, then such notice shall be deemed given one day after delivery to
such carrier. All notices shall be addressed to the party to be notified at the
address as follows, or at such other address as such party may designate by ten
days' advance written notice to the other party:
If to the Company:
Globix Corporation
139 Centre Street
New York, New York 10013
Attention: James C. Schroeder, Esq.,
General Counsel
With a copy to:
Day, Berry & Howard LLP
One Canterbury Green
Stamford, CT 06901-2047
Attention: Bonnie J. Roe, Esq.
Fax: (203) 977-7301
If to the Investor:
to the address set forth on the signature
page hereto
6.4 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be
governed by, and construed in accordance with the internal laws of the State of
New York without regard to the choice of law principles hereof. Each of the
parties hereto irrevocably submits to the exclusive jurisdiction of the courts
of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto irrevocably waives
any objection to the laying of venue of any such suit, action or proceeding
brought in such courts and irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.
-13-
IN WITNESS WHEREOF, the parties have executed this Agreement or caused
their duly authorized officers to execute this Agreement as of the date first
above written.
GLOBIX CORPORATION
By:________________________________
Name:
Title:
[INVESTOR]
By:________________________________
Name:
Title:
Address of Investor:
Investor's DTC Participant Number:
-14-
Exhibit A
[closing date]
To the Investors listed on Schedule A hereto
Ladies and Gentlemen:
We have acted as special counsel for Globix Corporation, a corporation
organized under the laws of Delaware (the "Company"), in connection with the
offering and sale by the Company of an aggregate of 4,545,455 shares (the
"Shares") of the common stock, $0.01 par value per share (the "Common Stock") of
the Company, pursuant to separate Securities Exchange Agreements, dated as of
September 15, 2004 (the "Securities Exchange Agreements") between the investors
listed on Schedule A hereto (the "Investors") and the Company. Capitalized terms
used herein and not otherwise defined shall have the meanings ascribed to them
in the Securities Exchange Agreements.
This opinion is furnished to you at the request of the Company pursuant
to Section 4.2(c) of the Securities Exchange Agreements, and is being delivered
concurrently with the delivery of the Shares and receipt of payment therefor.
We have examined the Securities Exchange Agreements and resolutions
adopted by the Board of Directors of the Company, each as certified by the
Secretary of the Company, certificates of officers of the Company covering
various other matters, and a certificate of the Secretary of State of the State
of Delaware as to the legal existence of the Company in Delaware.
We have also examined such other papers, documents and certificates and
have made such investigations as to matters of fact and law as we have
considered necessary in order to give the opinions set forth below. In making
such examination, we have assumed the authenticity of documents submitted to us
as originals or certified copies, the accuracy of copies and the genuineness of
signatures appearing thereon. As to various questions of fact material to such
opinions, we have, when relevant facts were not independently established,
relied upon certificates of officers of the Company and other appropriate
persons.
We do not express any opinion as to matters governed by any law other
than the laws of the State of New York, the General Corporation Law of the State
of Delaware and the federal laws of the United States of America.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
-15-
2. The Shares to be issued by the Company pursuant to the terms of the
Securities Exchange Agreements have been duly authorized and, upon issuance and
delivery against payment therefor in accordance with the terms thereof, will be
duly and validly issued, fully paid and nonassessable.
3. The Company has the corporate power and authority to enter into the
Securities Exchange Agreements, to issue, sell and deliver to the Investors the
Shares to be issued and sold by it and to perform the other obligations of the
Company thereunder.
4. The Securities Exchange Agreements have been duly authorized by all
necessary corporate action on the part of the Company and have been duly
executed and delivered by the Company. Assuming due authorization, execution and
delivery of each Securities Exchange Agreement by the Investor party thereto,
such Investor's Securities Exchange Agreement is a valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except that enforcement of each Securities Exchange Agreement may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium and other laws affecting
creditors' rights generally and (b) general principles of equity, including
limitations on the availability of the remedy of specific enforcement and other
equitable remedies; provided, however, that we express no opinion as to Section
5.7 of the Securities Exchange Agreements.
5. The performance of the Securities Exchange Agreements and the
consummation of the transactions therein contemplated will not (a) result in any
violation of the Company's Certificate of Incorporation or Bylaws or (b) result
in a breach or violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to us to which the Company is a party or by which
its properties are bound.
6. Assuming the accuracy of the representations and warranties
contained in the Securities Exchange Agreements and compliance by the Investors
with the covenants contained in the Securities Exchange Agreements, no
registration under the Securities Act is required for the offer and sale of the
Shares to the Investors.
As used herein, the phrase "to our knowledge," or words of similar
import, mean the actual knowledge of lawyers at our firm who have been
principally involved in negotiating and reviewing the Securities Exchange
Agreements.
This letter is furnished by us as counsel for the Company to you as the
Investors and is solely for your benefit as such Investors.
Very truly yours,
Day, Berry & Howard LLP
-16-