Amendment to General Statement of Beneficial Ownership — Schedule 13D
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 13D/A Amendment to General Statement of Beneficial 14 54K
Ownership
2: EX-10 Material Contract 10 38K
3: EX-11 Statement re: Computation of Earnings Per Share 25 87K
4: EX-12 Statement re: Computation of Ratios 6 24K
5: EX-13 Annual or Quarterly Report to Security Holders 5 24K
EX-11 — Statement re: Computation of Earnings Per Share
Exhibit Table of Contents
EXHIBIT 11
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of January 10, 2003 (this
"Agreement"), by and among Nortel Networks Inc., a Delaware corporation (the
"Seller"), and the purchasers listed on Exhibit A attached hereto (each, a
"Purchaser" and collectively, the "Purchasers").
The parties hereto agree as follows:
ARTICLE I.
Purchase and Sale of Stock
Section 1.1. Purchase and Sale of Stock. 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 Purchasers, and the Purchasers shall purchase from
the Seller, an aggregate of 101,942,950 shares of common stock, par value $.001
per share (the "Shares") at a price per share of $.02943, of FiberNet Telecom
Group, Inc., a Delaware corporation (the "Company"), in the amounts and at the
aggregate cash purchase prices (each a "Purchase Price") set forth opposite
their respective names on Schedule 1.1 hereto. The aggregate Purchase Price is
$3,000,000.
Section 1.2. Closing. The closing (the "Closing") of the purchase and
sale of the Shares to be acquired by the Purchasers from the Seller under this
Agreement shall take place at the offices of Jenkens & Gilchrist Parker Chapin
LLP, The Chrysler Building, 405 Lexington Avenue, New York, New York 10174 at
10:00 a.m., New York time (i) on or before January 10, 2003, 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 Purchasers 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 each Purchaser all certificates representing the number
of Shares that such Purchaser is purchasing pursuant to the terms hereof,
together with such stock powers duly endorsed in blank as the Purchasers may
request, and all other appropriate instruments of transfer, or shall provide, in
conjunction with the Company, for the delivery of the Shares by the Company's
transfer agent to the Purchasers. At the Closing, each Purchaser shall deliver
its 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 Purchasers, 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 Shares 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)
assuming the execution and delivery of those documents set forth in Section
4.1(e) hereof, 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 Shares in accordance with the terms
hereof.
(d) Title to Shares. The Seller has the right to transfer good, valid
and marketable title in and to all of the Shares, free and clear of any
mortgages, pledges, charges, liens, security interests or other encumbrances.
(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.
(f) 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 Seller 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.
Section 2.2. Representations and Warranties of the Purchasers. Each
Purchaser hereby represents and warrants to the Seller with respect solely to
itself and not with respect to any other Purchaser, as of the date hereof and as
of the Closing Date, as follows:
(a) Organization and Standing of the Purchasers. If the Purchaser is an
entity, such Purchaser is a corporation, limited liability company or
partnership duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization.
(b) Authorization and Power. The Purchaser has the requisite power and
authority to enter into and perform this Agreement and to purchase the Shares
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 corporate (or
other 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 each 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 charter or 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 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 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 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) Legend. The Purchaser hereby acknowledges and agrees that the
certificates 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 BY THIS CERTIFICATE (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.
(j) Reliance on Representations. The Seller is hereby expressly
permitted to rely on the Purchaser's representations and warranties set forth in
Sections 2.2(d) through (h), 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 of any Purchaser or the Seller, the Seller and each 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.
ARTICLE IV.
Conditions
Section 4.1. Conditions Precedent to the Obligation of the Seller to
Close and to Sell the Shares. The obligation hereunder of the Seller to close
and sell the Shares to the Purchasers 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 Purchasers' Representations and Warranties. The
representations and warranties of each 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 Purchasers. Each 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 Purchasers 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 Shares shall
have been delivered to the Seller.
(e) Transaction Documents. The Seller shall have received executed
copies of (i) 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 named therein, (ii) Debt Exchange Agreement dated as of January
10, 2003 by and among the Seller and the Company, (iii) Amendment and Waiver to
the Investor's Rights Agreement and Stockholders Agreement dated as of January
10, 2003 by and among the Company and the lenders under the Company's senior
credit facility, and (iv) Warrant Agreement Amendment No. 2 dated as of January
10, 2003 by and among FiberNet Operations, Inc., Devnet L.L.C. and the lenders
under the Company's senior credit facility named therein.
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 Purchasers
to Close and to Purchase the Shares. The obligation hereunder of the Purchasers
to purchase the Shares 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 governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.
(d) Certificates. The Seller shall have delivered to the Purchasers
certificates representing the Shares being acquired by the Purchasers at the
Closing together with such stock powers duly endorsed in blank as the Purchasers
may request or made such other arrangements with the Company's transfer agent
for delivery of certificates representing the Shares reasonably satisfactory to
the Purchasers.
(e) Opinion of Counsel. At the Closing, the Purchaser shall have
received an opinion of counsel to the Seller, dated the date of the Closing, in
the form of Exhibit B hereto.
(f) Common Stock Purchase Agreement. The transactions contemplated by
the Common Stock Purchase Agreement by and among the Company and the Purchasers
shall have been consummated.
The conditions set forth in this Section 4.2 are for each Purchaser's sole
benefit and may be waived only by a Purchasers (only with respect to such
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 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 Seller nor any 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
2221 Lakeside Boulevard
Richardson, TX 75082
Attn: Customer Finance
Fax No.: (972) 684-3679
If to any Purchaser: At the address of such Purchaser set forth on
Exhibit A attached hereto.
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. 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 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 ANY 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 EACH OTHER PARTY HERETO TO ENTER INTO THIS AGREEMENT.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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/ Elias Makris
-----------------------------------
Name: Elias Makris
Title: Director, Customer Finance
PURCHASERS:
SDS MERCHANT FUND, L.P.
By: /s/ Scott E. Derby
-----------------------------------
Name: Scott E. Derby
Title: General Counsel
SARGON CAPITAL INTERNATIONAL FUND LTD.
By: /s/ Margaret Chu
-----------------------------------
Name: Margaret Chu
Title: Manager
DMG LEGACY FUND LLC
By: /s/ Thomas McAuley
------------------------------------
Name: Thomas McAuley
Title: Chief Investment Officer
DMG LEGACY INSTITUTIONAL FUND LLC
By: /s/ Thomas McAuley
------------------------------------
Name: Thomas McAuley
Title: Chief Investment Officer
DMG LEGACY INTERNATIONAL LTD.
By: /s/ Thomas McAuley
------------------------------------
Name: Thomas McAuley
Title: Chief Investment Officer
STEVE DERBY
By: /s/ Steve Derby
------------------------------------
BURNHAM HILL HOLDINGS LLC
By: /s/ Cass Gunther
------------------------------------
Name: Cass Gunther
Title: Managing Member
WILLIAM KING
By: /s/ William King
-----------------------------------
GERALD WOLFE
By: /s/ Gerald Wolfe
-----------------------------------
ILLEGIBLE
By: /s/ illegible
-----------------------------------
JERDAN ENTERPRISES
By: /s/ Myles Jerdan
-----------------------------------
Name: Myles Jerdan
Title: President
BEDDING DISCOUNTERS, INC.
By: /s/ Elliot Sobol
-----------------------------------
Name: Elliot Sobol
Title: President
ASHRAF ABDELAAL & KATHRYN CAPO
By: /s/ Ashraf Abdelaal
-----------------------------------
By: /s/ Kathryn M. Cafo
-----------------------------------
MICHAEL POKEL
By: /s/ Michael Pokel
-----------------------------------
STONESTREET LIMITED PARTNERSHIP
By: /s/ Michael Finkelstein
-----------------------------------
Name: Michael Finkelstein
Title: President
GREENWICH GROWTH FUND, LTD.
By: /s/ Arthur Jones
-----------------------------------
Name: Arthur Jones
Title: Director
01144 LTD.
By: /s/ Ian McKinnon
-----------------------------------
ALLEN WEISS
By: /s/ Allen Weiss
-----------------------------------
JAMES K. LEHMAN
By: /s/ James K. Lehman
-----------------------------------
STUART JACOBSON
By: /s/ Stuart Jacobson
-----------------------------------
GERARD J. D'ANDUANO
By: /s/ Gerard J. D'Anduano
-----------------------------------
ROBERT B. KINNEY
By: /s/ Robert B. Kinney
-----------------------------------
THOMAS J. CONTINO
By: /s/ Thomas J. Contino
-----------------------------------
R.A. SCHAEFER, M.D.
By: /s/ R.A. Schaefer, M.D.
-----------------------------------
JULIUS ROMA
By: /s/ Julius Roma
-----------------------------------
OSCAR GARZA
By: /s/ Oscar Garza
-----------------------------------
ROBERT W. DUGGAN
By: /s/ Robert W. Duggan
-----------------------------------
JACK GILBERT
By: /s/ Jack Gilbert
-----------------------------------
ALPHA CAPITAL AG
By: /s/ Illegible
-----------------------------------
Name: Illegible
Title: Director
ELLIS ENTERPRISES INC.
By: /s/ Julian Unger
-----------------------------------
Name: Julian Unger
Title: Director
PENNY LANE PARTNERS, L.P.
By: Penny Lane Associates, L.P., G.P.
By: Penny Lane, Inc., G./P.
By: /s/ William R. Denslow, Jr.
-------------------------------
Name: William R. Denslow, Jr.
Title: Chairman
SILVER OAK INVESTMENTS, INC.
By: /s/ Murray Todd
------------------------------------
Name: Murray Todd
Title: Director
MARK COLLINS
By: /s/ Mark Collins
------------------------------------
BLUEFIN PARTNERS
By: /s/ Stephen Schwartz
------------------------------------
Name: Stephen Schwartz
Title: President
ROBERT A. MELNICK
By: /s/ Robert A. Melnick
------------------------------------
JEFF HERMANSON
By: /s/ Jeff Hermanson
------------------------------------
DAVID WIENER
By: /s/ David Wiener
------------------------------------
MICHAEL LOEW
By: /s/ Michael Loew
------------------------------------
RHP MASTER FUND, LTD.
By: Rock Hill Investment Management,
L.P.
By: RHP General Partner, LLC
By: /s/ Illegible
-----------------------------
Name: Illegible
Title: Managing Partner
TRAUTMAN WASSERMAN 8701
By: /s/ Robert Spiegel
------------------------------------
Name: Robert Spiegel
Title: General Partner
EXHIBIT A
LIST OF PURCHASERS
SDS Merchant Fund, L.P.
c/o SDS Capital Partners
53 Forest Avenue, 2nd Floor
Old Greenwich, CT 06870
Attention: Steve Derby
Fax No.: (203) 967-5851
Sargon Capital International Fund Ltd.
c/o Sargon Capital LLC
6 Louis Drive
Montville, NJ 07045
Attention: Margaret Chu
Fax No.: (203) 967-5851
DMG Legacy Fund LLC
c/o DMG Advisors
53 Forest Avenue, Suite 202
Old Greenwich, CT 06870
Attention: Andrew Wilder
Fax No.: (203) 967-5751
DMG Legacy Institutional Fund LLC
c/o DMG Advisors
53 Forest Avenue, Suite 202
Old Greenwich, CT 06870
Attention: Andrew Wilder
Fax No.: (203) 967-5751
DMG Legacy International Ltd.
c/o DMG Advisors
53 Forest Avenue, 2nd Floor
Old Greenwich, CT 06870
Attention: Andrew Wilder
Fax No.: (203) 967-5751
Steven Derby
c/o SDS Capital Partners
53 Forest Avenue, 2nd Floor
Old Greenwich, CT 06870
Fax No.: (203) 967-5851
Burnham Hill
900 Park Avenue
New York, NY 10021
Attention: Cass Gunther
Fax No. : N/A
William King
c/o Kimball & Cross Investment Management
c/o Mark J. Gillis
153 Dutch Street
Montrose, NY 10548
Attention: William King
Fax No.: N/A
Gerald Wolfe
c/o Kimball & Cross Investment Management
c/o Mark J. Gillis
153 Dutch Street
Montrose, NY 10548
Attention: Gerald Wolfe
Fax No.: N/A
Dan Foley
c/o Kimball & Cross Investment Management
c/o Mark J. Gillis
153 Dutch Street
Montrose, NY 10548
Attention: Mark Gillis
Fax No.: (914) 206-3828
Jerdan Enterprises, Inc.
c/o Kimball & Cross Investment Management
c/o Mark J. Gillis
153 Dutch Street
Montrose, NY 10548
Attention: Myles Jerdan
Fax No.: (770) 426-9534
Bedding Discounters, Inc.
c/o Kimball & Cross Investment Management
c/o Mark J. Gillis
153 Dutch Street
Montrose, NY 10548
Attention: Elliot Sobol
Fax No.: (718) 238-8224
Ashraf Abdelaal & Kathryn Capo
c/o Kimball & Cross Investment Management
c/o Mark J. Gillis
153 Dutch Street
Montrose, NY 10548
Attention: Ashraf Abdelaal
Fax No.: (516) 374-1317
Michel F. Pokel
Kimball & Cross Investment Management
c/o Mark J. Gillis
153 Dutch Street
Montrose, NY 10548
Attention: Mike Pokel
Fax No.: (262) 724-4200
Stonestreet Limited Partnership
320 Bay Street, Ste.
1300
Toronto, Ontario M5H4A6
Fax No.: (416) 956-8989
Attention: Michael Finkelstein
Greenwich Growth Fund Limited
c/o Canaccord Capital Corporation
320 Bay Street, Suite 1300
Toronto, Ontario M5H4A6
Fax No.: (416) 956-8989
Attention: Tricia Webb
01144 Ltd.
c/o Canaccord Capital Corporation
320 Bay Street, Suite 1300
Toronto, Ontario M5H4A6
Fax No.: (416) 869-3632
Attention: Michelle McKinnon
Allen Weiss
Kimball & Cross Investment Management
c/o Mark J. Gillis
153 Dutch Street
Montrose, NY 10548
Attention: Mark Gillis
Fax No.: (914) 206-3828
James K. Lehman
Kimball & Cross Investment Management
c/o Mark J. Gillis
153 Dutch Street
Montrose, NY 10548
Attention: James K. Lehman
Fax No.: (803) 933-4253
Stuart Jacobson
Kimball & Cross Investment Management
c/o Mark J. Gillis
153 Dutch Street
Montrose, NY 10548
Attention: Stuart Jacobson
Fax No.: (770) 682-2230
Gerard J. D'anduono
216 Quail Lane South
Lanoka Harbor, NJ 08734
Fax No.: N/A
Robert B. Kinney
Kimball & Cross Investment Management
c/o Mark J. Gillis
153 Dutch Street
Montrose, NY 10548
Attention: Mark Gillis
Fax No.: (914) 206-3828
Thomas J. Contino
115 South Appletree Street
Howell, NJ 07731
Fax No.: N/A
R.A. Schafer, M.D.
Kimball & Cross Investment Management
c/o Mark J. Gillis
153 Dutch Street
Montrose, NY 10548
Attention: Rick Schafer
Fax No.: (603) 362-6439
Julius Roma
Kimball & Cross Investment Management
c/o Mark J. Gillis
153 Dutch Street
Montrose, NY 10548
Attention: Julius Roma
Fax No.: N/A
Oscar Garza
Kimball & Cross Investment Management
c/o Mark J. Gillis
153 Dutch Street
Montrose, NY 10548
Attention: Oscar Garza
Fax No.: N/A
Robert W. Duggan
c/o Duggan & Associates
1933 Cliff Drive, Suite 30
Santa Barbara, CA 93109
Attention: Mike Shields
Fax No.: (805) 965-5053
Jack Gilbert
15456 Coutolenc Rd.
Magalia, CA 95954
Fax No.: (530) 873-5087
Alpha Capital AG
c/o L.H. Financial
160 Central Park South, Suite 2701
New York, NY 10019
Attention: Ari Kluger
Fax No.: (212) 586-8244
Ellis Enterprises Inc.
c/o Matt Drillman
212 Juniper Circle North
Lawrence, NY 11559
Attention: Julian Unger
Fax No.: 011 445 465 001
Penny Lane Partners, L.P.
One Palmer Square, Suite 309 Princeton, NJ
08542
Attention: William R. Denslow, Jr.
Fax No.: 609-497-0611
With copies to:
William R. Denslow, Jr.
Penny Lane Advisors, Inc.
108 Forest Avenue
P.O. Box 447 Locust Valley, NY 11560 Fax No.: 516-759-4653
and
Adam Weinstein
O'Melveny & Meyers LLP
30 Rockefeller Plaza
New York, NY 10112
Fax No.: 212-408-2420
Silver Oak Investments, Inc.
350 California Street, Suite 1750
San Francisco, CA 94104
Attention: Murray Todd
Fax No.: (415) 217-7072
Mark Collins
6 Ruth's Road
Crested Butte, CO 81224
Fax No.: (970) 349-0932
Bluefin Partners
6630 NW 101 Terrace
Parkland, FL 33079
Attention: Stephen Schwartz
Fax No.: (954) 752-2143
Robert A. Melnick
1074 Bonnie Brae Blvd.
Denver, CO 80209
Fax No.: N/A
Jeff Hermanson
1430 Larimer Square, #200
Denver, CO 80202
Fax No.: (303) 623-1041
David Wiener
10 Iron Canyon Ct.
Park City, UT 84060
Fax No.: (435) 649-3458
Michael Loew
507 East 80th Street, #4F
New York, NY 10021
Fax No.: (212) 585-1154
RHP Master Fund, Ltd.
c/o Rock Hill Investment Management, L.P.
Three Bala Plaza-East, Suite 585
Cynwyd, PA 19004
Attention: Wayne D. Bloch
Fax No.: (610) 949-9600
Trautman Wasserman 8701 Opportunities Fund,
LP
500 Fifth Avenue Ste. 1440
New York, NY 10110
Attention: Robert Spiegel
Fax No.: (212) 575-6589
EXHIBIT B
FORM OF OPINION
1. The Seller is the legal, beneficial and registered owner of the Shares,
free and clear of any liens, charges or encumbrances.
2. The offer and sale of the Shares is exempt from registration under the
Securities Act of 1933, as amended.
3. The Seller is not an "affiliate" (as such term is defined under Rule
144(a)(1) promulgated under the Securities Act of 1933, as amended) of
the Company.
SCHEDULE 1.1
SHARES TO BE PURCHASED
Shares of
Purchaser Common Stock Purchase Price
--------------------- ------------------------- ---------------------------
Dates Referenced Herein and Documents Incorporated by Reference
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