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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 25, 2000
REGISTRATION NO. 333-90203
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 3
TO
REGISTRATION STATEMENT
ON FORM S-3
UNDER THE SECURITIES ACT OF 1933
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GLOBIX CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 7373 13-3781263
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
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139 CENTRE STREET
NEW YORK, NEW YORK 10013
(212) 334-8500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MARC H. BELL
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
GLOBIX CORPORATION
139 CENTRE STREET
NEW YORK, NEW YORK 10013
(212) 334-8500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE OF AGENT FOR SERVICE)
PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
ARNOLD N. BRESSLER, ESQ.
MILBERG WEISS BERSHAD HYNES & LERACH LLP
ONE PENNSYLVANIA PLAZA
NEW YORK, NEW YORK 10119-0165
(212) 594-5300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time upon the exercise of warrants after this registration statement becomes
effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration number of the earlier effective registration statement for the
same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
Pursuant to Rule 416, this Registration Statement also covers such
indeterminable number of additional shares of common stock, if any, which may
become issuable by virtue of the anti-dilution provisions of the warrants.
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE(1) REGISTRATION FEE(2)
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Common Stock, $.01 par value per share............. 2,518,824 $143,572,968 $37,974
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(1) Estimated solely for purposes of calculating registration fee in accordance
with Rule 457(c) of the Securities Act of 1933, as amended, based upon the
closing price of $57.00 per share of common stock on February 18, 2000.
(2) $35,776 previously paid.
Pursuant to Rule 429 of the Securities Act, as amended, this Registration
Statement also relates to File No. 33-98978 insofar as it pertains to 405,492
common shares (adjusted for the 2-for-1 stock split in December 1999 and the
2-for-1 stock split in January 2000) issuable upon exercise of warrants issued
in connection with the Registrant's initial public offering.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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PROSPECTUS
GLOBIX CORPORATION
2,518,824 SHARES OF COMMON STOCK
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These shares may be offered and sold from time to time by Globix to holders
of warrants to purchase 405,492 shares of Globix common stock upon the exercise
of the warrants. These warrants were issued on January 24, 1996 in connection
with Globix's initial public offering of common stock. The balance of the shares
may be offered and sold from time to time by Globix to holders of warrants to
purchase 2,113,332 shares of Globix common stock upon the exercise of warrants
which were issued on April 30, 1998 in connection with Globix's sale of 160,000
units consisting of 13% senior notes and warrants.
The Section entitled "Selling Stockholders" sets forth information
concerning holders of warrants. The selling stockholders will receive all of the
net proceeds from their sale of the shares. These stockholders will pay all
underwriting discounts and selling commissions, if any, applicable to the sale
of the shares. Globix will not receive any proceeds from the sale of the shares
by the selling stockholders.
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 3 OF THIS
PROSPECTUS BEFORE PURCHASING ANY OF THE COMMON STOCK OFFERED HEREBY.
Globix's common stock is quoted on the Nasdaq National Market under the
symbol "GBIX." On February 18, 2000, the last reported sale price of the common
stock was $57.00 per share.
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Neither the SEC nor any state securities commission has determined whether this
prospectus is truthful or complete. Nor have they made, nor will they make, any
determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
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The date of this Prospectus is February 25, 2000
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TABLE OF CONTENTS
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SECTION PAGE
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Globix Corporation.......................................... 1
Risk Factors................................................ 3
Use of Proceeds............................................. 8
Selling Stockholders........................................ 8
Plan of Distribution........................................ 15
Legal Matters............................................... 16
Experts..................................................... 16
Available Information....................................... 16
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SUMMARY
GLOBIX CORPORATION
BUSINESS
We are a leading full-service provider of sophisticated end-to-end Internet
solutions to businesses. Our solutions include:
- secure and fault tolerant Internet data centers;
- high performance network connectivity to the Internet; and
- hosting and support for complex Internet-based web site applications.
These three major elements of our total Internet solution combine to
provide our customers with the ability to create, operate and scale their
increasingly complex Internet operations in a cost efficient manner.
Our customers primarily use our products and services to maintain complex
computer equipment in a secure, fault-tolerant environment with connectivity to
a high-speed, high-capacity, direct link to the Internet and to support complex
Internet applications. We currently offer our products and services from our new
SuperPOP facilities in New York City, London and Santa Clara, California. Our
teams of account managers, computer system and network engineers and customer
support specialists are located at each SuperPOP. Our strong local market
presence enables us to evaluate the needs of our customers and quickly respond
with tailored solutions. We also provide our customers the ability to outsource
the maintenance of their Internet presence. Our products are flexible and
scaleable, allowing us to modify the size and breadth of the services we
provide. We believe that our ability to offer a broad range of Internet products
and services, combined with our local sales and support professionals and high
performance Internet data center facilities and network, differentiates us from
our competitors.
FACILITIES AND NETWORK EXPANSION
Each of our newly opened SuperPOP facilities features:
- a high performance Internet data center with multiple, redundant,
high-capacity fiber connections, uninterruptable power supplies with
back-up power generation, a dry fire suppression system, raised flooring
and environmental controls;
- a network operations center, which provides 24 hour a day, 7 day a week
monitoring of our network and our customers' web sites; and
- on-site customer support, sales and marketing, and administration of
Internet software and hardware, including servers and routers.
Our addition of new SuperPOP facilities has increased our total Internet
data center capacity from 2,000 square feet to 63,000 square feet, significantly
increasing the space we have available to house servers and routers for hosting
web sites and co-location.
We have established a network to significantly increase data transmission
speed and capacity, improve reliability and reduce data transmission costs. This
network connects our points of presence or network access points in Chicago,
Washington D.C., Amsterdam, Frankfurt, Geneva, Milan, Paris and Stockholm to our
SuperPOPs. We are also seeking to establish SuperPOPs and other facilities in
other major business centers in the United States and abroad. We will expand our
network to connect these SuperPOPs and other facilities when they are
established.
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MARKET OPPORTUNITY
According to estimates by independent research firms, a significant market
opportunity exists to provide Internet products and services to businesses. We
believe that the needs of businesses for comprehensive Internet products and
services are not being met by the larger national and global or smaller local
and regional ISPs that constitute most of our competitors. We believe we are
well positioned to take advantage of this opportunity.
CUSTOMERS
We have established a diversified base of customers in a variety of
Internet-intensive industries, such as media and publishing, financial services,
retail, healthcare and technology. Since initiating Internet services in
December 1995, our customer base has grown to approximately over 1,600 business
customer accounts.
GROWTH STRATEGY
Our objective is to become the leading provider of sophisticated Internet
solutions to businesses in key global markets. To achieve this objective, we
intend to:
- continue to invest extensively in our infrastructure by establishing new
SuperPOPs and points of presence, or, strategically located near our
customers, and by expanding our network;
- expand our product and service offerings;
- sell additional products and services to existing customers;
- enhance the Globix brand name in our target markets; and
- make investments in, or acquire, complementary businesses.
RECENT DEVELOPMENTS
On December 3, 1999 Globix issued $80.0 million in new Series A Convertible
Preferred Stock to affiliates of Hicks, Muse, Tate & Furst Incorporated to
expand our build-out of SuperPOPs in Europe and the United States. The preferred
stock is convertible into common stock at $10.00 per share at any time and
cannot be called for redemption for five years. Under the agreement, the
preferred stock is subject to mandatory redemption in 2014 and pays an annual
dividend at the rate of 7.5% payable quarterly in cash or additional preferred
stock at the option of Globix. As a result of this investment, Hicks Muse
beneficially owns approximately 19% of Globix's outstanding common stock on an
as-converted basis.
On December 10, 1999, Globix announced a two-for-one stock split of its
outstanding shares of common stock, which was paid on December 30, 1999. On
January 10, 2000, Globix announced an additional two-for-one stock split of its
outstanding shares of common stock, which was paid on January 31, 2000. All
common stock share references contained in this prospectus reflect both of these
stock splits.
On February 8, 2000, Globix commenced a tender offer to purchase for cash
any and all of its outstanding 13% senior notes due 2005, $160 million in
principal amount. The purchase price in the tender offer is 106.5% of the
principal amount, plus accrued and unpaid interest. Shortly before the
commencement of the tender offer, Globix received the consent of the holders of
a majority of the outstanding 13% senior notes to amend the indenture to
eliminate most of the restrictive covenants governing the 13% senior notes.
On February 8, 2000, Globix raised $600 million gross proceeds through a
private offering of 12 1/2% senior notes. The notes were offered within the
United States only to qualified institutional buyers and, outside the United
States, only to non-U.S. investors.
HISTORY
We were originally incorporated in New York in 1989 as NAFT International
Ltd. In July 1994, PFM Technologies Corporation, a newly formed affiliate of
NAFT, acquired NAFT and its affiliated corporations in a tax-free exchange of
common stock. We reincorporated in Delaware in 1995 under the name Bell
Technology Group Ltd. We changed our name to Globix Corporation on June 1, 1998.
Our principal executive offices are located at 139 Centre Street, New York, New
York 10013. Our telephone number is (212) 334-8500.
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RISK FACTORS
AS A RESULT OF OUR LARGE OUTSTANDING DEBT OBLIGATIONS, WE HAVE SIGNIFICANT
ONGOING DEBT SERVICE REQUIREMENTS WHICH MAY ADVERSELY AFFECT OUR FINANCIAL AND
OPERATING FLEXIBILITY.
As of December 31, 1999, as adjusted to give effect to the sale of the $600
million of 12 1/2% senior notes, and assuming the tender of all of our
outstanding 13% senior notes, our total indebtedness would have been
approximately $604.3 million. This substantial leverage may have important
consequences for us, including the following:
- a significant portion of our cash flow from operations will be dedicated
to servicing our debt obligations and will not be available for other
business purposes;
- the terms and conditions of our indebtedness limit our flexibility in
planning for and reacting to changes in our business;
- our ability to obtain additional financing in the future for working
capital, capital expenditures, and other purposes may be substantially
impaired; and
- our substantial leverage may make us more vulnerable to economic
downturns and competitive pressures.
Our ability to meet our debt service obligations, including with respect to
the notes, and to reduce our total indebtedness depends on our future operating
performance. Our future operating performance will depend on our ability to
expand our business operations by building new facilities, extending our
enhanced network and expanding our product and service offerings, which it is
anticipated will require additional financing. In addition, our future operating
performance will depend on economic, competitive, regulatory, legislative and
other factors affecting our business that are beyond our control. If we are
unable to expand our business as planned, we may not be able to service our
outstanding indebtedness, including the notes.
AFTER MARCH 2001, WE MAY NOT HAVE SUFFICIENT CASH FLOW TO SERVICE OUR DEBT AND
OPERATE OUR BUSINESS.
Based on our current level of operations, we believe that we will have
sufficient cash flow to meet our needs at least through the year ending March
31, 2001. After that time, we may not be able to generate sufficient cash flow
from operations or be able to raise capital in sufficient amounts, or at all, to
enable us to service our debt, including the notes, and operate our business.
Our ability to raise additional capital may be limited by a number of factors,
including market conditions and the terms of our outstanding indenture,
governing our 12 1/2% senior notes.
WE HAVE A HISTORY OF OPERATING LOSSES WHICH WE EXPECT TO CONTINUE FOR THE NEAR
FUTURE. WE CANNOT ASSURE YOU THAT WE WILL EVER BECOME PROFITABLE.
We have experienced significant losses since we began operations. We expect
to continue to incur significant losses for the foreseeable future. We have
incurred net losses of approximately $43.4 million, $11.2 million and $3.1
million for the years ended September 30, 1999, 1998 and 1997, respectively. As
of December 31, 1999, our accumulated deficit was approximately $80.4 million.
We expect our expenses to increase as we expand our business. We cannot assure
you that our revenues will increase as a result of our increased spending. If
revenues grow more slowly than we anticipate, or if operating expenses exceed
our expectations, we may not become profitable. Even if we become profitable, we
may be unable to sustain our profitability. In either of such cases, our
business, financial conditions and results of operations will be materially and
adversely affected.
COMPETITION FOR QUALIFIED PERSONNEL IS INTENSE AND WE MAY NOT BE ABLE TO ATTRACT
OR RETAIN THE PERSONNEL WE NEED IN EACH OF THE CRITICAL AREAS OF OUR BUSINESS.
Our future success depends on our ability to attract and retain key
personnel for management, technical, sales and marketing, and customer support
positions. The failure to attract or retain qualified personnel in each of these
critical areas could adversely affect the ability of our business to perform its
functions.
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OUR GROWTH IS PLACING A SIGNIFICANT STRAIN ON OUR MANAGEMENT SYSTEMS AND
RESOURCES.
As of December 31, 1999, we had approximately 510 full-time employees in
comparison to approximately 170 full-time employees as of September 30, 1998. If
we do not successfully institute adequate financial and managerial controls and
reporting systems and procedures to operate from multiple facilities in
geographically dispersed locations, we may not be able to grow as rapidly and
extensively as we expect. If we fail to grow as we expect, we may not be able to
meet the needs of our current and future customers and, consequently, our entire
business may suffer.
OUR SUCCESS WILL DEPEND ON OUR ABILITY TO INTEGRATE, OPERATE AND FURTHER EXPAND
AND UPGRADE OUR NEW NETWORK AND FACILITIES.
A key element of our business strategy is the expansion of our facilities
and our network, which has required, and will continue to require, a great deal
of management time and the expenditure of large amounts of money. This expansion
will require, among other things:
- identification of sites for new facilities;
- negotiation and consummation of agreements to lease the properties;
- construction of facilities;
- purchase and installation of equipment;
- recruiting required staff; and
- interconnection with our network.
Any delay in the completion of our new network or facilities may make us
less attractive to future customers and may hamper our ability to retain our
current customers, which in turn could adversely affect our entire business.
WE CANNOT ASSURE YOU THAT OUR TELECOMMUNICATION PROVIDERS WILL CONTINUE TO
SERVICE US OR THAT WE COULD REPLACE THEM ON COMPARABLE TERMS, OR AT ALL.
Our existing network relies entirely on a limited number of third party
data communications and telecommunications providers. These carriers are subject
to price constraints, including tariff controls, that in the future may be
relaxed or lifted. Price increases or the lack of service availability could
have a material and adverse effect on the costs of maintaining our network and
our ability to maintain or grow our business.
IF WE FAIL TO MAINTAIN ADEQUATE PEERING RELATIONSHIPS OUR OPERATING COSTS WILL
INCREASE.
The Internet includes a number of Internet service providers that operate
their own networks and connect with each other at various points under
arrangements known as "peering" arrangements. It is more costly and less
efficient to operate a network without peering arrangements. Consequently, we
must maintain peering relationships to maintain high network performance levels
without having to pay excessive amounts for the transmission of data. These
arrangements are not subject to regulation and the terms, conditions and costs
can be changed by the provider over time. While we currently have agreements to
peer with more than 200 organizations that represent over 550 peering
connections, we may not be able to maintain a favorable cost structure for data
transmission with our peering partners.
WE ARE JUST BEGINNING TO EXPAND INTO INTERNATIONAL MARKETS AND MAY NOT BE
SUCCESSFUL IN THESE EFFORTS.
Prior to 1999, we operated only in the New York City area. We began
operations in Santa Clara, California in June, 1999 and in London in July, 1999.
In addition, we recently established points of presence or network access points
in Chicago, Washington D.C., Amsterdam, Frankfurt, Geneva, Milan, Paris and
Stockholm. Because we have limited experience operating in markets outside the
United States, we may have difficulty adapting our products and services to
different market needs. We may also be unsuccessful in our efforts to market and
sell these products and services to customers abroad. In addition, we may find
it more
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difficult and expensive to hire and train employees and to manage international
operations together with our United States operations. If we fail to
successfully address these risks, our international expansion may be materially
and adversely affected.
WE MAY NOT BE ABLE TO OBTAIN COMPUTER HARDWARE AND SOFTWARE ON THE SCALE AND AT
THE TIMES WE NEED AT AN AFFORDABLE COST.
We rely on outside vendors to supply us with computer hardware, software
and networking equipment. We primarily buy these products from Cisco, Compaq and
Sun Microsystems. Consequently, our expertise is concentrated in products from
these manufacturers. We also rely on Cisco for network design and computer
installation services. If we were unable over an extended period of time to
obtain the products and services that we need on a timely basis and at
affordable prices, it would have a material adverse effect on our business,
financial condition and results of operations.
WE MAY MAKE INVESTMENTS OR ACQUISITIONS THAT ARE NOT SUCCESSFUL.
We may make investments in or acquire complementary businesses, products,
services or technologies, but we have very limited experience in these
activities. Consequently, we are subject to the following risks:
- we may not be able to identify suitable investment or acquisition
candidates;
- if we do identify suitable candidates, we may not be able to make
investments or acquisitions on terms which prove successful;
- acquisitions may cause a disruption in our ongoing business, distract our
management and other resources and make it difficult to maintain the
operations, organization and procedures of Globix or the acquired
business; and
- we may not be able to retain key employees of the acquired companies or
maintain good relations with its customers or suppliers.
BECAUSE WE ARE DEPENDENT ON COMPUTER SYSTEMS, A SYSTEMS FAILURE WOULD CAUSE A
SIGNIFICANT DISRUPTION TO OUR BUSINESS.
Our business depends on the efficient and uninterrupted operation of our
computer and communications hardware systems and infrastructure. We currently
maintain most of our computer systems in our new facilities in New York City,
London and Santa Clara, California. While we have taken precautions against
systems failure, interruptions could result from natural disasters as well as
power loss, telecommunications failure and similar events. We also lease
telecommunications lines from local, regional and national carriers, whose
service may be interrupted. Our business, financial condition and results of
operations could be materially and adversely affected by any damage or failure
that interrupts or delays our operations.
IF OUR SECURITY MEASURES ARE INADEQUATE, OUR ABILITY TO ATTRACT AND RETAIN
CUSTOMERS MAY BE ADVERSELY AFFECTED.
We have taken measures to protect the integrity of our infrastructure and
the privacy of confidential information. Nonetheless, our infrastructure is
potentially vulnerable to physical or electronic break-ins, viruses or similar
problems. If a person circumvents our security measures, he or she could
jeopardize the security of confidential information stored on our systems,
misappropriate proprietary information or cause interruptions in our operations.
We may be required to make significant additional investments and efforts to
protect against or remedy security breaches. Security breaches that result in
access to confidential information could damage our reputation and expose us to
a risk of loss or liability.
The security services that we offer in connection with our customers'
networks cannot assure complete protection from computer viruses, break-ins and
other disruptive problems. Although we attempt to limit contractually our
liability in such instances, the occurrence of these problems may result in
claims against us or liability on our part. These claims, regardless of their
ultimate outcome, could result in costly litigation and
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could have a material adverse effect on our business and reputation and on our
ability to attract and retain customers for our products and services.
OUR BUSINESS DEPENDS ON THE CONTINUED GROWTH, USE AND IMPROVEMENT OF THE
INTERNET.
Our products and services are targeted toward businesses which use the
Internet. The Internet is subject to a high level of uncertainty and is
characterized by rapidly changing technology, evolving industry standards, and
frequent new product and service introductions. Accordingly, you should consider
the risks and difficulties frequently encountered in new and rapidly evolving
markets.
Critical issues concerning the commercial use of the Internet remain
unresolved and may affect the growth of Internet use, especially in the market
that we target. Despite growing interest in the many commercial uses of the
Internet, many businesses have been deterred from purchasing Internet products
and services for a number of reasons, including:
- inadequate protection of the confidentiality of stored data and
information moving across the Internet;
- inconsistent quality of service;
- inability to integrate business applications on the Internet;
- the need to deal with multiple vendors, whose products are frequently
incompatible; and
- lack of availability of cost-effective, high-speed products and services.
If Internet usage does not grow at the rates which we presently anticipate,
our business, financial condition and results of operations will be materially
and adversely affected.
SIGNIFICANT TECHNOLOGICAL CHANGES COULD RENDER OUR EXISTING PRODUCTS AND
SERVICES OBSOLETE.
We must adapt to our rapidly changing market by continually improving the
responsiveness, functionality and features of our products and services to meet
our customers' needs. If we are unable to respond to technological advances and
conform to emerging industry standards in a cost-effective and timely basis, our
business, financial condition and results of operations will be materially and
adversely affected.
BECAUSE WE OFFER A BROAD RANGE OF GOODS AND SERVICES, WE ENCOUNTER COMPETITION
FROM NUMEROUS OTHER BUSINESSES WHICH PROVIDE ONE OR MORE SIMILAR GOODS OR
SERVICES. THIS COULD ADVERSELY AFFECT OUR REVENUES AND MARKET SHARE.
Competition for the Internet products and services that we provide is
intense and we expect that competition will continue to intensify.
Our competitors include other Internet service providers, with a
significant national or global presence that focus on business customers, such
as DIGEX, Digital Island, Exodus, Global Crossing's Global Center, NaviSite,
PSINet and UUNet.
Our competitors also include telecommunications companies, such as AT&T,
British Telecom, Cable & Wireless, Level 3, MCI WorldCom, Qwest and Sprint.
Many of our existing competitors, as well as a number of potential new
competitors, have:
- longer operating histories;
- greater name recognition;
- larger customer bases;
- larger networks;
- more and larger facilities; and
- significantly greater financial, technical and marketing resources.
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New competitors, including large computer hardware, software, media and
other technology and telecommunications companies, may enter our market and
rapidly acquire significant market share. As a result of increased competition
and vertical and horizontal integration in the industry, we could encounter
significant pricing pressures. These pricing pressures could result in
significantly lower average selling prices for our products and services. For
example, telecommunications companies may be able to provide customers with
reduced communications costs in connection with their Internet access services,
significantly increasing pricing pressures on us. We may not be able to offset
the effects of any price reductions with an increase in the number of our
customers, higher revenue from value-added services, cost reductions or
otherwise. In addition, Internet access service businesses are likely to
encounter consolidation in the near future, which could result in increased
price and other competition.
YEAR 2000 PROBLEMS MAY DISRUPT OUR BUSINESS.
The Year 2000 issue did not cause any apparent disruption to our business
or, to the best of our knowledge, to any of our providers or others with which
we do business. However, it is possible that unforeseen problems may still
appear. We cannot predict what effect, if any, these problems may present to us.
CHANGES IN GOVERNMENT REGULATIONS RELATED TO THE INTERNET COULD RESTRICT OUR
ACTIVITIES, EXPOSE US TO LIABILITY OR OTHERWISE ADVERSELY AFFECT OUR BUSINESS.
There are an increasing number of laws and regulations pertaining to the
Internet. These laws or regulations relate to liability for information received
from or transmitted over the Internet, online content regulation, user privacy,
taxation and quality of products and services. The government may also seek to
regulate some segments of our activities as basic telecommunications services.
Moreover, the applicability to the Internet of existing laws governing
intellectual property ownership and infringement, copyright, trademark, trade
secret, obscenity, libel, employment, personal privacy and other issues is
uncertain and developing. We cannot predict the impact, if any, that future
regulation or regulatory changes may have on our business.
WE MAY BE LIABLE FOR VIOLATING THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES
OR HAVE DIFFICULTIES ENFORCING OUR OWN INTELLECTUAL PROPERTY RIGHTS.
Intellectual property rights, such as patents, technology, software,
copyrights, trademarks and domain names, are very important to companies engaged
in Internet-related businesses. We do not believe that the intellectual property
important to the operation of our business -- whether owned by us or licensed to
us by a third party -- infringes or violates the intellectual property rights of
any other party. Nonetheless, a third party may bring a claim of infringement
against us or any of our material suppliers, which could cause us to incur
substantial expenses.
WE MAY BE LIABLE FOR THE MATERIAL OUR CUSTOMERS DISTRIBUTE OVER THE INTERNET.
The law relating to the liability of online service providers, private
network operators and Internet service providers for content and information
carried on or disseminated through their networks is currently unsettled. While
we have taken steps contractually to limit our liability, we may become subject
to legal claims relating to the content of the web sites we host. For example,
lawsuits may be brought against us claiming that material inappropriate for
viewing by young children can be accessed from the web sites we host. Claims
could also involve matters such as defamation, invasion of privacy, copyright
and trademark infringement. We may take additional measures to reduce our
exposure to these risks, which could be costly or result in reduced revenues. In
addition defending ourselves against claims, or pay damage awards to third
parties could strain our management and financial resources.
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USE OF PROCEEDS
If all of the holders of warrants were to exercise all of their warrants in
full for cash the net proceeds to Globix would be approximately $7.7 million.
Globix intends to use any net proceeds it may receive for general corporate
purposes. Pending the use of the proceeds, if any, the net proceeds will be
invested in short-term, investment grade instruments, certificates of deposit or
direct or guaranteed obligations of the United States. All of the net proceeds
from the sale of Globix shares of common stock by the selling stockholders will
go to those stockholders who sell their shares. Accordingly, Globix will not
receive any proceeds from the sales of the Globix shares by the selling
stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information, as of February 14,
2000, with respect to the number of shares of common stock owned, or to be owned
upon the exercise of warrants, by the selling stockholders named below and as
adjusted to give effect to the sale of shares offered. This information was
provided by the respective selling stockholders named below. The shares are
being registered to permit public secondary trading of the shares, and the
selling stockholders may offer the shares for sale from time to time.
The shares being offered by the selling stockholders will be issued to the
selling stockholders upon the exercise of warrants to purchase shares of common
stock. The warrants held by Rickel & Associates, Inc., Michael Eaton, Eve
Karlin, Elliot J. Smith and Gregg A. Smith were acquired from Globix in
connection with its initial public offering in January 1996 as compensation
securities. There are currently outstanding 76,200 warrants issued in connection
with the initial public offering each of which entitles the holder to acquire
4.2232 shares of common stock per warrant for $2.735 per share. In addition, the
holders of these warrants have the right, for a purchase price of $.165, to
purchase a total of 19,766 warrants, each of which has the right to acquire
4.234 shares of common stock for $2.91 per share. If all these warrants were
exercised, Globix would issue 405,492 shares of common stock receive proceeds of
$1,126,927.
Rickel & Associates is currently subject to bankruptcy court protection and
is no longer conducting business as a broker-dealer. Consequently, all
investment decisions and exercise of voting rights with respect to its Globix
shares are subject to approval by the Official Committee of Unsecured Creditors
for Rickel & Associates appointed by the United States Trustee in the Chapter XI
case pending in the United States Bankruptcy Court of the Southern District of
New York. The Committee exercises its powers through its attorney, Jonathan S.
Pasternak, c/o Rattet & Pasternak LLP, 550 Mamaroneck Avenue, Harrison, NY
10528.
The other warrants were acquired from Globix in connection with its sale of
13% senior notes in April 1998 as investment securities. The selling
shareholders holding these warrants have the right to acquire 1,901,907 shares.
Each warrant issued in connection with the sale of the 13% senior notes entitles
the holder to acquire 14.08 shares of common stock for $3.51 per share. The
holders of these warrants have the right to pay the exercise price without
making any cash payment by using the underlying common shares having a fair
market value equal to the exercise price or by tendering 13% senior notes equal
to the exercise price. If all of these warrants were exercised for cash, Globix
would receive $6,675,694.
Globix believes the holders of the 1998 warrants purchased those warrants
and, if they exercise their warrants, will purchase the common stock in the
ordinary course of business.
At no time did Globix have, nor does Globix currently have, any agreement
or understanding, directly or indirectly, with any selling stockholder to
distribute the shares underlying the warrants. To the best of Globix's
knowledge, none of the selling stockholders had or currently has any agreement
or understanding, directly or indirectly, with any person to distribute the
shares underlying the warrants.
None of the selling stockholders is an affiliate of Globix.
Globix has filed with the SEC, under the Securities Act, a registration
statement on Form S-3 of which this prospectus forms a part, with respect to the
resale of the shares from time to time on the Nasdaq National Market or in
privately-negotiated transactions.
8
<PAGE> 12
The shares offered by this prospectus may be offered from time to time by
the selling stockholders named below. An asterisk * following the name of a
selling stockholder indicates that the selling stockholder is either a
registered broker-dealer or an affiliate of a registered broker-dealer.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES NUMBER OF SHARES
BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO BEING OWNED AFTER
NAME OF SELLING STOCKHOLDER ADDRESS OF SELLING STOCKHOLDER THE OFFERING OFFERED THE OFFERING
--------------------------- ------------------------------ -------------- --------- ------------
<S> <C> <C> <C> <C>
American Express
Retirement Plan............... IDS Tower 10 7,040 7,040 0
Minneapolis, MN 55440
American Odyssey Funds, Inc..... c/o Credit Suisse Asset 3,520 3,520
Control Person: Management 0
Richard Lindquist 153 E. 53 Street
New York, NY 10022
Atlas Strategic Income Fund..... Oppenheimer Funds, Inc. 704 704 0
Two World Trade Center
34th Floor
New York, NY 10048
AXP Variable Portfolio 0
-- Bond Fund.................. IDS Tower 10 76,173 76,173
Minneapolis, MN 55440
AXP Variable Portfolio
-- Extra Income Fund.......... IDS Tower 10 33,088 33,088 0
Minneapolis, MN 55440
AXP Variable Portfolio
-- Managed Fund............... IDS Tower 10 70,400 70,400 0
Minneapolis, MN 55440
Credit Suisse Asset Management 0
Income Fund*.................. c/o Credit Suisse Asset 14,080 14,080
Management
153 E. 53 Street
New York, NY 10022
CPR (USA) Inc.* ................ 101 Hudson Street 94,913 94,913 0
Control Person: Suite 3700
Rick Meckler Jersey City, NJ 07302
CSAM-Australia U.S. High Yield
Fund*......................... c/o Credit Suisse Asset 2,816 2,816 0
Control Person: Management
Richard Lindquist 153 E. 53 Street
New York, NY 10022
CSAM-GPF-CSAM
High Yield Fund*.............. c/o Credit Suisse Asset 6,336 6,336 0
Control Person: Management
Richard Lindquist 153 E. 53 Street
New York, NY 10022
CSAM Investment Trust
U.S. High Yield SRS*.......... c/o Credit Suisse Asset 7,040 7,040 0
Control Person: Management
Richard Lindquist 153 E. 53 Street
New York, NY 10022
</TABLE>
9
<PAGE> 13
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES NUMBER OF SHARES
BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO BEING OWNED AFTER
NAME OF SELLING STOCKHOLDER ADDRESS OF SELLING STOCKHOLDER THE OFFERING OFFERED THE OFFERING
--------------------------- ------------------------------ -------------- --------- ------------
<S> <C> <C> <C> <C>
CSAM Strategic Global
Income Fund, Inc.*............ c/o Credit Suisse Asset 3,520 3,520 0
Management
153 E. 53 Street
New York, NY 10022
DFG Corporation*................ c/o Green Cohn Group 13,024 13,024 0
Control Person: 360 East 88th Street #2D
Van Greenfield New York, NY 10128
Donaldson Lufkin & Jenrette
Securities Corp.*............. 277 Park Avenue 52,800 52,800 0
New York, NY 10172
Dreyfus High Yield Securities... 200 Park Avenue 42,240 42,240 0
Control Person: 7th Floor
Roger King New York, NY 10166
Eaton, Michael*................. 1 State Street Plaza 9,780 9,780 0
New York, NY 10004
FamCo Value Income
Partners LP*.................. 121 Outrigger Mall 46,464 46,464 0
Control Person: Marina del Rey, CA 90292
Kenneth B. Funsten
Fam Co. Offshore Ltd.*.......... 121 Outrigger Mall 8,800 8,800 0
Control Person: Marina del Rey, CA 90292
Kenneth B. Funsten
General Ret. System of the City
of Detroit.................... c/o Credit Suisse Asset 5,632 5,632 0
Control Person: Management
Richard Lindquist 153 E. 53 Street
New York, NY 10022
High Yield Portfolio............ IDS Tower 10 274,912 274,912 0
Minneapolis, MN 55440
IDS Life Series Fund,
Inc. -- Income Portfolio...... IDS Tower 10 3,520 3,520 0
Minneapolis, MN 55440
IDS Life Series Fund,
Inc. -- Managed Portfolio..... IDS Tower 10 10,560 10,560 0
Minneapolis, MN 55440
ING Barings LLC*................ 55 E. 52nd Street 217,761 217,761 0
New York, New York 10055
Karlin, Eve*.................... 15 W. 81st Street 18,228 18,228 0
New York, NY 10024
LibertyView LLC*................ 101 Hudson Street 19,712 19,712 0
Control Person: Suite 3700
Rick Meckler Jersey City, NJ 07302
LibertyView Global 101 Hudson Street
Volatility Fund*.............. Suite 3700 8,448 8,448 0
Control Person: Jersey City, NJ 07302
Rick Meckler
</TABLE>
10
<PAGE> 14
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES NUMBER OF SHARES
BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO BEING OWNED AFTER
NAME OF SELLING STOCKHOLDER ADDRESS OF SELLING STOCKHOLDER THE OFFERING OFFERED THE OFFERING
--------------------------- ------------------------------ -------------- --------- ------------
<S> <C> <C> <C> <C>
LibertyView Funds, L.P.*........ 101 Hudson Street 178,816 178,816 0
Control Person: Suite 3700
Rick Meckler Jersey City, NJ 07302
LibertyView U.S.
Enhanced High Yield Fund*..... 101 Hudson Street 14,080 14,080 0
Control Person: Suite 3700
Rick Meckler Jersey City, NJ 07302
Lincoln Capital Management...... 200 South 34,496 34,496 0
Company Wacker Drive
Suite 2100
Chicago, Illinois 60606
Control Person:
Ann Benjamin c/o Credit Suisse Asset 3,520 3,520 0
Mediolanum Top Managers Management
Global HY Fund................ 153 E. 53 Street
Control Person: New York, NY 10022
Richard Lindquist
Morgan Grenfell High
Yield Bond Fund*.............. 150 S Independence Square West 21,120 21,120 0
Suite 726
Philadelphia, PA 19106
Nabisco Foods................... c/o Credit Suisse Asset 1,972 1,972 0
Management
153 E. 53 Street
New York, NY 10022
Northrup Grumman Corp. -- HY 0
Portfolio..................... c/o Credit Suisse Asset 9,856 9,856
Management
153 E. 53 Street
New York, NY 10022
Northwestern University......... c/o Credit Suisse Asset 2,816 2,816 0
Control Person: Management
Richard Lindquist 153 E. 53 Street
New York, NY 10022
Oppenheimer Strategic
Bond Fund..................... Oppenheimer Funds, Inc. 4,576 4,576 0
Two World Trade Center
34th Floor
New York, NY 10048
Oppenheimer Champion
Income Fund Inc............... Oppenheimer Funds, Inc. 58,784 58,784 0
Two World Trade Center
34th Floor
New York, NY 10048
Oppenheimer Strategic
Income Fund................... Oppenheimer Funds Inc. 173,747 173,747 0
Two World Trade Center
34th Floor
New York, NY 10048
</TABLE>
11
<PAGE> 15
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES NUMBER OF SHARES
BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO BEING OWNED AFTER
NAME OF SELLING STOCKHOLDER ADDRESS OF SELLING STOCKHOLDER THE OFFERING OFFERED THE OFFERING
--------------------------- ------------------------------ -------------- --------- ------------
<S> <C> <C> <C> <C>
Oppenheimer Bond Fund........... Oppenheimer Funds, Inc. 2,816 2,816 0
Two World Trade Center
34th Floor
New York, NY 10048
Oppenheimer High Yield
Bond Fund..................... Oppenheimer Funds, Inc. 105,741 105,741 0
Two World Trade Center
34th Floor
New York, NY 10048
Oppenheimer High
Income Fund................... Oppenheimer Funds, Inc. 25,344 25,344 0
Two World Trade Center
34th Floor
New York, NY 10048
Oppenheimer Multi-
Sector Income Trust........... Oppenheimer Funds, Inc. 8,448 8,448 0
Two World Trade Center
34th Floor
New York, NY 10048
Perkin Elmer Corp Emp
Pen and Savings Plan.......... c/o Credit Suisse Asset 2,112 2,112 0
Management
153 E. 53 Street
New York, NY 10022
Pilgrim High Total
Return 2*..................... 40 N. Central Avenue 28,160 28,160 0
Suite 1200
Phoenix, AZ 85004
Pilgrim High Total
Return*....................... 40 N. Central Avenue 70,400 70,400 0
Suite 1200
Phoenix, AZ 85004
Pilgrim High
Yield II Fund*................ 40 N. Central Avenue 19,008 19,008 0
Suite 1200
Phoenix, AZ 85004
Pilgrim High Yield Fund*........ 40 N. Central Avenue 77,440 77,440 0
Suite 1200
Phoenix, AZ 85004
Policemen and Firemen
Retirement Sys -- Detroit..... c/o Credit Suisse Asset 4,224 4,224 0
Control Person: Management
Richard Lindquist 153 E. 53 Street
New York, NY 10022
Prudential High Yield Fund,
Inc.* ........................ c/o The Prudential Investment 119,680 119,680 0
Corporation
Two Gateway Center, 3rd Floor
Newark, NJ 07102
</TABLE>
12
<PAGE> 16
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES NUMBER OF SHARES
BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO BEING OWNED AFTER
NAME OF SELLING STOCKHOLDER ADDRESS OF SELLING STOCKHOLDER THE OFFERING OFFERED THE OFFERING
--------------------------- ------------------------------ -------------- --------- ------------
<S> <C> <C> <C> <C>
Prumerica Worldwide
Investors Portfolio:
U.S. High Yield Fund*......... c/o The Prudential Investment 3,520 3,520 0
Corporation
Two Gateway Center, 3rd Floor
Newark, NJ 07102
PS Retirement System City of
St. Louis..................... c/o Credit Suisse Asset 2,816 2,816 0
Control Person: Management
Richard Lindquist 153 E. 53 Street
New York, NY 10022
Rickel & Associates, Inc.*...... c/o Wolman, Babbitt & King, 88,272 88,272 0
LLP
521 Fifth Avenue
New York, New York 10175
RJR Tobacco Co -- Domestic
High Yield.................... c/o Credit Suisse Asset 2,956 2,956 0
Management
153 E. 53 Street
New York, NY 10022
SEI Global -- High Yield
Fixed Income*................. c/o Credit Suisse Asset 2,816 2,816 0
Control Person: Management
Richard Lindquist 153 E. 53 Street
New York, NY 10022
SEI Institutional Managed 19,712 19,712 0
Trust*........................ c/o Credit Suisse Asset
Control Person: Management
Richard Lindquist 153 E. 53 Street
New York, NY 10022
Smith, Elliot J.*............... 400 East 56th Street 158,296 158,296 0
New York, NY 10022
Smith, Gregg A.*................ 599 Lexington Avenue 130,916 130,916 0
New York, NY 10022
Texaco, Inc..................... c/o Credit Suisse Asset 4,224 4,224 0
Management
153 E. 53 Street
New York, NY 10022
The Prudential Series Fund,
Inc., c/o The Prudential Investment 17,600 17,600 0
High Yield Bond Portfolio*.... Corporation
Two Gateway Center, 3rd Floor
Newark, NJ 07102
The Common Fund................. c/o Credit Suisse Asset 4,928 4,928 0
Control Person: Management
Richard Lindquist 153 E. 53 Street
New York, NY 10022
Total Return Portfolio.......... IDS Tower 10 48,013 48,013 0
Minneapolis, MN 55440
</TABLE>
13
<PAGE> 17
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES NUMBER OF SHARES
BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO BEING OWNED AFTER
NAME OF SELLING STOCKHOLDER ADDRESS OF SELLING STOCKHOLDER THE OFFERING OFFERED THE OFFERING
--------------------------- ------------------------------ -------------- --------- ------------
<S> <C> <C> <C> <C>
Vail............................ c/o Credit Suisse Asset 4,928 4,928 0
Management
153 E. 53 Street
New York, NY 10022
Virginia Retirement System --
CSAM Cash MGN................. c/o Credit Suisse Asset 600 600 0
Control Person: Management
Richard Lindquist 153 East 53rd Street
New York, NY 10022
Warburg Pincus High Yield 8,448 8,448 0
Fund*......................... c/o Credit Suisse Asset
Control Person: Management
Richard Lindquist 153 E. 53 Street
New York, NY 10022
ZPG Securities LLC*............. c/o Green Cohn Group 2,112 2,112 0
Control Person: 360 East 88th Street, #2D
Van Greenfield................ New York, NY 10128
--------- --------- --
Totals: 2,518,824 2,518,824 0
========= ========= ==
</TABLE>
14
<PAGE> 18
PLAN OF DISTRIBUTION
The selling stockholders, including any distributees, donees or pledgees
who receive shares from a selling stockholder, may offer their Globix shares of
common stock at various times in one or more of the following transactions
(which may involve block transactions, ordinary brokerage transactions and
transactions in which brokers solicit purchases):
- on the Nasdaq National Market where our common stock is listed;
- in the over-the-counter market;
- in negotiated transactions or otherwise, including an underwritten
offering;
- in connection with short sales of the shares of common stock;
- by pledge to secure debts and other obligations;
- in connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other transactions in
standardized or over-the-counter options, if permitted under the
securities laws; or
- in a combination of any of the above transactions.
The selling stockholders may sell their shares at market prices prevailing
at the time of sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices.
The selling stockholders may sell their shares directly to purchasers or
may use broker-dealers to sell their shares. Broker-dealers who sell the shares
may receive compensation in the form of discounts, concessions, or commissions
from the selling stockholders or they may receive compensation from purchasers
of the shares for whom they acted as agents or to whom they sold the shares as
principal, or both. The compensation as to a particular broker-dealer might be
in excess of customary commissions.
Some of the selling stockholders who acquired warrants in connection with
the 13% senior notes are registered broker-dealers or affiliates of registered
broker-dealers. Any commissions received by these broker-dealers and any profit
on the resale of the shares sold by them while acting as principals might be
deemed to be underwriting discounts or commissions under the Securities Act of
1933. Because the following broker-dealers acquired warrants for investment in
connection with the 13% senior notes in the ordinary course of their business,
they are considered "underwriters":
<TABLE>
<CAPTION>
NAME OF NUMBER OF SHARES
SELLING STOCKHOLDER BEING OFFERED
- ------------------- ----------------
<S> <C>
CPR (USA Inc.) ............................................ 94,913
Credit Suisse Asset Management Income Fund................. 14,080
CSAM-Australia U.S. High Yield Fund........................ 2,816
CSAM-GPF-CSAM High Yield Fund.............................. 6,336
CSAM Investment Trust U.S. High Yield SRS.................. 7,040
CSAM Strategic Global Income Fund.......................... 3,520
DFG Corporation............................................ 13,024
Donaldson Lufkin & Jenrette Securities Corp. .............. 52,800
FamCo Offshore Ltd......................................... 8,800
FamCo Value Income Partners LP............................. 46,464
ING Barings LLC............................................ 217,761
LibertyView Funds, L.P. ................................... 178,816
LibertyView Global Volatility Fund......................... 8,448
LibertyView LLC............................................ 19,712
LibertyView U.S. Enhanced High Yield Fund.................. 14,080
Morgan Grenfell High Yield Bond Fund....................... 21,120
</TABLE>
15
<PAGE> 19
<TABLE>
<CAPTION>
NAME OF NUMBER OF SHARES
SELLING STOCKHOLDER BEING OFFERED
- ------------------- ----------------
<S> <C>
Pilgrim High Total Return.................................. 70,400
Pilgrim High Total Return 2................................ 28,160
Pilgrim High Yield Fund.................................... 77,440
Pilgrim High Yield II Fund................................. 19,008
Prudential High Yield Fund, Inc............................ 119,680
Prumerica Worldwide Investors Portfolio: U.S. High Yield
Fund..................................................... 3,520
SEI Global-High Yield Fixed Income......................... 2,816
SEI Institutional Managed Trust............................ 19,712
The Prudential Series Fund, Inc., High Yield Bond
Portfolio................................................ 17,600
Warburg Pincus High Yield Fund............................. 8,448
ZPG Securities............................................. 2,112
</TABLE>
Globix will pay all fees and expenses incurred in connection with preparing
and filing this prospectus and the registration statement. The selling
stockholders will pay any brokerage commissions and similar selling expenses, if
any, attributable in connection with the sale of the shares of common stock
including stock transfer taxes due or payable in connection with the sale of the
shares.
Globix will indemnify the selling stockholders and any person deemed to be
an underwriter acting on behalf of a selling stockholder against certain
liabilities, including liabilities under the Securities Act of 1933. The selling
stockholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities under the Securities Act of 1933.
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby has been
passed upon for Globix by Milberg Weiss Bershad Hynes & Lerach LLP, One
Pennsylvania Plaza, New York, New York 10119.
EXPERTS
The financial statements included in Globix's Form 10-K for the year ended
September 30, 1999, incorporated by reference in this prospectus and elsewhere
in the registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report.
AVAILABLE INFORMATION
Globix files reports, proxy statements and other information with the
Commission. Those reports, proxy statements and other information may be
obtained:
- At the Public Reference Room of the Commission, Room 1024-Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549;
- At the public reference facilities at the Commission's regional offices
located at Seven World Trade Center, 13th Floor, New York, New York 10048
or Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661;
- By writing to the Commission, Public Reference Section, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549;
- At the offices of The Nasdaq Stock Market, Reports Section, 1735 K
Street, N.W., Washington, D.C. 20006; or
16
<PAGE> 20
- From the Internet site maintained by the Commission at
http://www.sec.gov, which contains reports, proxy and information
statements and other information regarding issuers that file
electronically with the Commission.
Some locations may charge prescribed or modest fees for copies.
Globix has filed with the Commission a registration statement under the
Securities Act of 1933, as amended, with respect to the common stock offered
hereby. This prospectus, which is a part of the registration statement, does not
contain all the information set forth in, or annexed as exhibits to, such
registration statement, certain portions of which have been omitted pursuant to
rules and regulations of the Commission. For further information with respect to
Globix and the common stock, reference is made to such registration statement,
including the exhibits thereto, copies of which may be inspected and copied at
the aforementioned facilities of the Commission. Copies of such registration
statement, including the exhibits, may be obtained from the Public Reference
Section of the Commission at the aforementioned address upon payment of the fee
prescribed by the Commission.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents which have been filed by Globix with the Commission
pursuant to the Exchange Act or the Securities Act are incorporated by reference
in this prospectus:
- annual report on Form 10-K for the year ended September 30, 1999;
- current report on Form 8-K filed January 13, 2000;
- current report on Form 8-K filed February 14, 2000;
- quarterly report on Form 10-Q for the quarter ended December 31, 1999;
and
- the description of Globix's common stock and warrants contained in its
Registration Statement on Form S-1, declared effective by the Commission
on March 22, 1999, File No. 333-70375.
In addition, all documents filed by Globix pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this prospectus
and prior to the termination of the offering of the common stock offered hereby
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of filing of such documents.
Globix hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this prospectus is delivered,
upon the written or oral request of any such person, a copy of any and all of
the above documents (not including exhibits to any of such documents unless such
exhibits are specifically incorporated by reference into such documents). Such
requests should be addressed to the Secretary, Globix Corporation, 139 Centre
Street, New York, New York 10013.
17
<PAGE> 21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with this offering are as follows:
<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
SEC Registration Fee........................................ $ 37,904
--------
Legal Fees and Expenses..................................... 30,000
--------
Accounting Fees and Expenses................................ 13,000
--------
Printing.................................................... 15,000
--------
Miscellaneous............................................... 4,096
--------
Total....................................................... $100,000
--------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation limits the liability of
Directors to the maximum extent permitted by Delaware General Corporation Law.
Delaware law provides that the directors of a corporation will not be personally
liable to such corporation or its stockholders for monetary damages for breach
of their fiduciary duties as directors, except for liability (i) for any breach
of their duty of loyalty to the corporation or its stockholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) for unlawful payments of dividends or unlawful
stock repurchases or redemptions as provided in Section 174 of the Delaware
General Corporation Law; or (iv) for any transaction from which the director
derives an improper personal benefit. The Company's By-laws provide that the
Company shall indemnify its directors and officers under certain circumstances,
including those circumstances in which indemnification would otherwise be
discretionary, and the Company is required to advance expenses to its officers
and directors as incurred in connection with proceedings against them for which
they may be indemnified.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
3.1 Certificate of Incorporation of Globix, as amended.(10)
3.2 By-laws of Globix, as amended.(8)
4.1 Specimen Stock Certificate.(2)
4.2 Form of Underwriter's Warrant issued to Rickel & Associates,
Inc.(2)
4.3 Indenture between Globix and Marine Midland Bank, as
Trustee, dated April 30, 1998.(5)
4.4 Form of $160,000,000 13% Senior Note, Series A, due 2005.(5)
4.5 Form of $160,000,000 13% Senior Notes, Series B, due
2005.(7)
4.6 Form of Warrant to purchase Common Stock expiring May 1,
2005.(5)
4.7 Specimen Series A 7.5% Convertible Preferred Stock
Certificate.(15)
4.8 Certificate of Designations, Preferences and Rights of
Series A 7.5% Convertible Preferred Stock Certificate.(15)
4.9 Indenture between Globix and HSBC Bank USA, as Trustee,
dated as of February 8, 2000.(16)
4.10 Form of 12.5% Senior Note due February 1, 2020.(16)
</TABLE>
II-1
<PAGE> 22
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
4.11 Supplemental Indenture to Indenture dated April 30, 1998,
between Globix and HSBC Bank USA, dated as of February 4,
2000.(16)
5 Opinion of Milberg Weiss Bershad Hynes & Lerach LLP.(13)
10.1 Purchase Agreement between Globix and ING Baring (U.S.)
Securities, Inc., dated April 24, 1998.(5)
10.2 Warrant Agreement between Globix and Marine Midland Bank, as
Warrant Agent, dated as of April 30, 1998.(5)
10.3 Registration Rights Agreement between Globix and ING Baring,
(U.S.) Securities, dated as of April 30, 1998.(5)
10.4 Warrant Registration Rights Agreement between Globix and ING
Baring, (U.S.) Securities, dated as of April 30, 1998.(5)
10.5 Escrow and Security Agreement between Marine Midland Bank,
as Escrow Agent, Marine Midland Bank, as Trustee, and
Globix, dated as of April 30, 1998.(5)
10.6 1995 Stock Option Plan, adopted September 29, 1995.(1)
10.7 1998 Stock Option Plan, adopted April 16, 1998.(6)
10.8 Employment Agreement between Marc H. Bell and Globix, dated
as of April 10, 1998.(9)
10.9 Agreement of Lease between Globix and Puck Associates, dated
as of July 23, 1996.(3)
10.10 Agreement between Globix, and Cisco Systems Capital
Corporation granting credit approval for $1,000,000 for
leasing transactions, dated as of December 15, 1997.(4)
10.11 Lease between Mission Plaza LLC and Globix dated as of July
24, 1998.(9)
10.12 First Amendment to Lease by and between Mission Plaza LLC
and Globix dated October 8, 1998 and effective as of July
24, 1998.(9)
10.13 Lease by and between Corston Holdings Limited, Globix
Limited and Globix dated October 15, 1998.(9)
10.14 Deed of Guaranty between Bank Leumi (UK) Plc, Corston
Holdings Limited, and Globix Limited dated October 15,
1998.(9)
10.15 IRU Agreement between Qwest Communications Corporation and
Globix dated as of October 5, 1998.(9)
10.16 Amendment to Marc H. Bell Employment Agreement, dated as of
March 2, 1999.(10)
10.17 Stock Option Agreement between Globix and Marc H. Bell,
dated as of March 26, 1999.(10)
10.18 1999 Stock Option Plan, adopted April 23, 1999.(11)
10.19 Employment Agreement between Robert B. Bell and Globix,
dated as of July 21, 1999.(12)
10.20 Purchase Agreement between Globix Corporation and HMTF-IV
Acquisition Corp. dated as of November 5, 1999.(14)
10.21 Registration Rights Agreement for 12.5% Senior Notes, dated
as of February 8, 2000.(16)
10.22 Offer to Purchase 13% Senior Notes due 2005, dated February
8, 2000.(16)
10.23 Purchase Agreement for 12.5% Senior Notes, dated January 28,
2000.(16)
23.1 Consent of Milberg Weiss Bershad Hynes & Lerach LLP
(included in Exhibit 5).
23.2 Consent of Arthur Andersen LLP.*
24. Power of Attorney.(17)
</TABLE>
- ---------------
* Filed herewith.
(1) Incorporated by reference to Registration Statement on Form SB-2 (File No.
33-98978) filed November 3, 1995.
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<PAGE> 23
(2) Incorporated by reference to Amendment No. 2 to the Registration Statement
filed January 23, 1996, declared effective January 24, 1996.
(3) Incorporated by reference to Globix's Annual Report on Form 10-KSB/A for
the year ended September 30, 1996.
(4) Incorporated by reference to Globix's Annual Report on Form 10-KSB for the
year ended September 30, 1997.
(5) Incorporated by reference to Globix's Report on Form 8-K filed May 11,
1998.
(6) Incorporated by reference to Globix's Proxy Statement on Schedule 14A filed
on March 16, 1998.
(7) Incorporated by reference to Globix's Registration Statement on Form S-4
(File No. 333-57993) filed June 29, 1998.
(8) Incorporated by reference to Amendment No. 1 filed August 7, 1998 to
Registration Statement (File No. 333-57993) filed June 29, 1998.
(9) Incorporated by reference to Globix's Annual Report on Form 10-KSB filed
December 29, 1998.
(10) Incorporated by reference to Globix's Quarterly Report on Form 10-QSB filed
May 17, 1999.
(11) Incorporated by reference to Globix's Proxy Statement on Schedule 14A filed
on March 24, 1999.
(12) Incorporated by reference to Globix's Quarterly Report on Form 10-QSB filed
August 16, 1999.
(13) Incorporated by reference to Registration Statement on Form S-3 (File No.
333-90203) filed November 2, 1999.
(14) Incorporated by reference to Globix's Report on Form 8-K filed November 29,
1999.
(15) Incorporated by reference to Globix's Annual Report on Form 10-K filed
December 29, 1999.
(16) Incorporated by reference to Globix's Report on Form 8-K filed February 14,
1999.
(17) Incorporated by reference to Amendment No. 1 filed January 18, 2000 to
registration statement (File No. 333-90203) filed November 2, 1999.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to include any
additional or changed material information on the plan of distribution.
(2) For determining liability under the Securities Act of 1933, treat
each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to be
the initial bona fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(4) For purposes of determining any liability under the Securities Act
of 1933, treat each filing of its annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this registration statement to be a new
registration statement relating to the securities offering herein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) Deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual to
security holders that is incorporated by reference in the prospectus and
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<PAGE> 24
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule
14-c under the Securities Exchange Act of 1934.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable ground to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Amendment No. 3
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized.
GLOBIX CORPORATION
By /s/ MARC H. BELL
------------------------------------
Marc H. Bell
Chairman, President and Chief
Executive Officer
Dated: February 25, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Amendment No. 2 to the Registration Statement has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
<TABLE>
<S> <C>
Date: February 25, 2000 /s/ MARC H. BELL
---------------------------------------------
Marc H. Bell
Chairman of the Board, President
and Chief Executive Officer
Date: February 25, 2000 /s/ BRIAN L. REACH
---------------------------------------------
Brian L. Reach
Senior Vice President
and Chief Financial Officer
Date: February 25, 2000 /s/ SHAWN P. BROSNAN
---------------------------------------------
Shawn P. Brosnan
Vice President, Corporate Controller
and Chief Accounting Officer
Date: February 25, 2000 *
---------------------------------------------
Robert B. Bell
Executive Vice President, Business
Development and Director
Date: February 25, 2000 *
---------------------------------------------
Martin Fox
Director
</TABLE>
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<PAGE> 26
<TABLE>
<S> <C>
Date: , 2000
---------------------------------------------
Jack Furst
Director
Date: February 25, 2000 *
---------------------------------------------
Michael Levitt
Director
Date: February 25, 2000 *
---------------------------------------------
Sid Paterson
Director
Date: February 25, 2000 /s/ ANTHONY ST. JOHN
---------------------------------------------
Anthony St. John
Vice President, Business Development
and Director
Date: , 2000
---------------------------------------------
Tsuyoshi Shiraishi
Director
Date: February 25, 2000 *
---------------------------------------------
Richard Videbeck
Director
* By: /s/ MARC H. BELL
------------------------------------------
Marc H. Bell
Attorney-in-Fact
</TABLE>
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<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement, File No. 333-90203, of our report
dated November 18, 1999 included in Globix Corporation's Form 10-K for the year
ended September 30, 1999 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
February 25, 2000
New York, New York
