Exhibit 99.2
FIRST AMENDMENT DATED
AS OF AUGUST 30, 1999
TO LOAN DOCUMENTS AND GUARANTY
THIS AMENDMENT, dated as of August 30, 1999, is entered into among ONEPOINT
COMMUNICATIONS CORP., a Delaware corporation (the "Borrower"), SBC
COMMUNICATIONS INC., a Delaware corporation (the "Guarantor"), and THE NORTHERN
TRUST COMPANY, an Illinois banking corporation having an office at 000 Xxxx
Xxxxxxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxx 00000 (the "Lender").
RECITALS:
A. The Borrower has previously delivered to the Lender (i) an Amended and
Restated Call On Term - Term Note dated as of April 29, 1998 in the original
principal amount of $9,000,000 (as amended, modified, restated or replaced, the
"Note") and (ii) an Amended and Restated Security Agreement dated as of April
29, 1998 (as amended, modified, restated or replaced, the "Security Agreement";
together with the Note, collectively the "Loan Documents" and individually, a
"Loan Document").
B. Guarantor has previously delivered to the Lender an Amended and
Restated Guaranty dated as of April 29, 1998 (as amended, modified or replaced,
the "Guaranty"). Terms defined in the Loan Documents or the Guaranty and not
otherwise defined herein shall be used herein as defined in the Loan Documents
and the Guaranty, as applicable.
C. The Borrower, the Guarantor and the Lender wish to amend the Loan
Documents and the Guaranty.
D. Therefore, the parties hereto agree as follows:
1. AMENDMENTS TO THE NOTE.
1.1. Section 2.2 of the Note. Section 2.2 of the Note is hereby
amended as of the date hereof by deleting the first sentence thereof
and substituting the following therefor:
"2.2 MANDATORY PREPAYMENT. In the event that twenty percent (20%)
or more of the issued and outstanding shares of the Borrower are held
by persons not owning shares of the Borrower, directly or indirectly,
on April 29, 1998 or substantially all the assets of the Borrower are
sold, then on the date such event shall occur, the Borrower immediately
agrees to prepay the entire outstanding principal amount of the Loans
and all unpaid and accrued interest on the Loans and acknowledges and
agrees that any commitment to lend hereunder is terminated without
further notice or action on the part of the Lender."
1.2. Section 5 of the Note. The definition of "Subsidiary" in Section 5 of
the Note is hereby amended as of the date hereof by deleting the percentage
"eighty percent (80%)" appearing therein and substituting the percentage "fifty
percent (50%)" therefor.
1.3. Sections 6(c), (d), (f), (g), (h), (i), (l) and (m) of the Note.
Sections 6(c), (d), (f), (g), (h), (i), (l) and (m) only of the Note are hereby
amended and restated in their entirety as of the date hereof as follows:
"(c) failure of Borrower or any of its Subsidiaries or the Guarantor
to pay when due any principal of or interest on or any other amount payable
in respect of one or more items of indebtedness or reimbursement obligation
in an aggregate amount in excess of $5,000,000 ($100,000,000 in the case of
the Guarantor only), in each case beyond the end of any grace period
provided therefor, or any breach or default by Borrower or any of its
Subsidiaries or the Guarantor with respect to any term of one or more terms
of indebtedness or reimbursement obligation in the aggregate principal
amount in excess of $5,000,000 ($100,000,000 in the case of the Guarantor
only) shall occur if the effect of such breach or default is to cause, or
permit the holders of that indebtedness to cause, that indebtedness to
become due and payable prior to its stated maturity;
(d) any representation, warranty, schedule, certificate, financial
statement, report, notice, or other writing furnished by or on behalf of
Borrower, any Subsidiary or Guarantor to Lender is false or misleading in
any material respect on the date as of which the facts therein set forth
are stated or certified; . . .
(f) Borrower, any Subsidiary or Guarantor shall fail to maintain their
existence in good standing in their state of formation or shall fail to be
duly qualified, in good standing and authorized to do business in each
jurisdiction where failure to do so is reasonably likely to have a material
adverse impact on the consolidated assets, condition or prospects of
Borrower and such failure is not cured within ten (10) days of the
Borrower, such Subsidiary or the Guarantor having actual notice that they
are not in good standing or duly qualified;
(g) Borrower, any Subsidiary or Guarantor shall dissolve, liquidate,
merge, consolidate, or cease to be in existence for any reason; provided
that, the Borrower or any Subsidiary may merge or consolidate with
Guarantor or any one or more Subsidiaries of Borrower or with any other
entity if, before and after giving effect thereto, no Event of Default
shall have occurred and be continuing and the surviving entity assumes all
the obligations and duties of the Borrower under this Note and the
obligations of the Borrower continue to be guaranteed by a creditworthy
entity and in form and substance satisfactory to the Lender; provided
further that this clause (g) shall not apply to any Subsidiary to be
liquidated or dissolved if the Board of Directors of such Subsidiary shall
determine that the preservation of the existence of such Subsidiary is no
longer
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desirable in the conduct of business of the Borrower and its Subsidiaries,
and that the loss thereof is not disadvantageous in any material respect to
Lender, as reasonably determined by the Lender;
(h) Xxxxx X. Xxxxxxxxx and the Guarantor in the aggregate shall cease
to own, directly or indirectly, at least 51% of the issued and outstanding
common stock of Borrower entitled to vote for the election of directors of
Borrower;
(i) any proceeding (judicial or administrative) shall be commenced
against Borrower, any Subsidiary or the Guarantor, or with respect to any
assets of Borrower, any Subsidiary or the Guarantor which could reasonably
be expected to have a material and adverse effect on the assets, condition
or prospects of Borrower, any Subsidiary or the Guarantor; or final
judgment(s) and/or settlement(s) in an aggregate amount in excess of (i) in
the case of the Guarantor, XXXXXX-XXXX XXXXXXX XXX XX/000 XXXXXX XXXXXX
DOLLARS ($25,000,000.00), or (ii) in the case of the Borrower or any
Subsidiary, XXX XXXXXXX XXX XX/000 XXXXXX XXXXXX DOLLARS ($1,000,000), in
each case in excess of insurance for which the insurer has confirmed
coverage in writing, a copy of which writing has been furnished to Lender,
shall be entered or agreed to in any suit or action; . . .
(l) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, liquidation, dissolution, or similar proceeding, domestic or
foreign, is instituted by or against Borrower, any Subsidiary or the
Guarantor and in the case of an involuntary proceeding is not dismissed
within 60 days; or Borrower, any Subsidiary or the Guarantor shall take any
steps toward, or to authorize, such a proceeding; or
(m) Borrower, any Subsidiary or any Guarantor shall become insolvent,
generally shall fail or be unable to pay its debts as they mature, shall
admit in writing its inability to pay its debts as they mature, shall make
a general assignment for the benefit of its creditors, shall enter into any
composition or similar agreement, or shall suspend the transaction of all
or a substantial portion of its usual business."
1.4. Section 6(e) of the Note. Section 6(e) of the Note is hereby amended
as of the date hereof by adding the following immediately after the semicolon
but before the word "or" appearing therein:
"or the senior unsecured debt rating of Guarantor shall be less than BBB by
Standard & Poor's, a division of McGraw Hill Company, Inc. or Baa by
Xxxxx'x Investors Services, Inc.;"
1.5. Section 6(j) of the Note. Section 6(j) of the Note is hereby amended
as of the date hereof by deleting everything after the word "documents;"
appearing therein and substituting the following therefor:
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"or any notice of a federal tax lien against Borrower in excess of
$1,000,000 shall be filed with any public recorder and such lien is not
vacated, discharged, stayed or bonded over for a period of 60 days; or"
2. AMENDMENTS TO THE SECURITY AGREEMENT.
2.1. Section 1(d) of the Security Agreement. Section 1(d) of the Security
Agreement is hereby amended as of the date hereof by deleting the percentage
"80%" appearing therein and substituting the percentage "50%" therefor.
2.2. Sections 9(c), (d), (f), (g), (h), (i), (j) (l) and (m) of the
Security Agreement. Sections 9(c), (d), (f), (g), (h), (i), (j), (l) and (m)
only of the Security Agreement are hereby amended and restated in their entirety
as of the date hereof as follows:
"(c) failure of Debtor or any of its Subsidiaries or the Guarantor to
pay when due any principal of or interest on or any other amount payable in
respect of one or more items of indebtedness or reimbursement obligation in
an aggregate amount in excess of $5,000,000 ($100,000,000 in the case of
the Guarantor only), in each case beyond the end of any grace period
provided therefor, or any breach or default by Debtor or any of its
Subsidiaries or the Guarantor with respect to any term of one or more terms
of indebtedness or reimbursement obligation in the aggregate principal
amount in excess of $5,000,000 ($100,000,000 in the case of the Guarantor
only) shall occur if the effect of such breach or default is to cause, or
permit the holders of that indebtedness to cause, that indebtedness to
become due and payable prior to its stated maturity;
(d) any representation, warranty, schedule, certificate, financial
statement, report, notice, or other writing furnished by or on behalf of
Debtor, any Subsidiary or Guarantor to Secured Party is false or misleading
in any material respect on the date as of which the facts therein set forth
are stated or certified; . . .
(f) Debtor, any Subsidiary or Guarantor shall fail to maintain their
existence in good standing in their state of formation or shall fail to be
duly qualified, in good standing and authorized to do business in each
jurisdiction where failure to do so is reasonably likely to have a material
adverse impact on the consolidated assets, condition or prospects of Debtor
and such failure is not cured within ten (10) days of the Debtor, such
Subsidiary or the Guarantor having actual notice that they are not in good
standing or duly qualified;
(g) Debtor, any Subsidiary or Guarantor shall dissolve, liquidate,
merge, consolidate, or cease to be in existence for any reason; provided
that, the Debtor or any Subsidiary may merge or consolidate with Guarantor
or any one or more Subsidiaries of Debtor or with any other entity if,
before and after giving effect thereto, no Event of Default shall have
occurred and be continuing and the surviving entity assumes all the
obligations and duties of the Debtor under this Note and the obligations of
the Debtor continue to be guaranteed by a
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creditworthy entity and in form and substance satisfactory to the Secured
Party; provided further that this clause (g) shall not apply to any
Subsidiary to be liquidated or dissolved if the Board of Directors of such
Subsidiary shall determine that the preservation of the existence of such
Subsidiary is no longer desirable in the conduct of business of the Debtor
and its Subsidiaries, and that the loss thereof is not disadvantageous in
any material respect to Secured Party, as reasonably determined by the
Secured Party;
(h) Xxxxx X. Xxxxxxxxx and the Guarantor in the aggregate shall cease
to own, directly or indirectly, at least 51% of the issued and outstanding
common stock of Debtor entitled to vote for the election of directors of
Debtor;
(i) any proceeding (judicial or administrative) shall be commenced
against Debtor, any Subsidiary or the Guarantor, or with respect to any
assets of Debtor, any Subsidiary or the Guarantor which could reasonably be
expected to have a material and adverse effect on the assets, condition or
prospects of Debtor, any Subsidiary or the Guarantor; or final judgment(s)
and/or settlement(s) in an aggregate amount in excess of (i) in the case of
the Guarantor, XXXXXX-XXXX XXXXXXX XXX XX/000 XXXXXX XXXXXX DOLLARS
($25,000,000.00), or (ii) in the case of the Debtor or any Subsidiary, XXX
XXXXXXX XXX XX/000 XXXXXX XXXXXX DOLLARS ($1,000,000), in each case in
excess of insurance for which the insurer has confirmed coverage in
writing, a copy of which writing has been furnished to Secured Party, shall
be entered or agreed to in any suit or action; . . .
(l) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, liquidation, dissolution, or similar proceeding, domestic or
foreign, is instituted by or against Debtor, any Subsidiary or the
Guarantor and in the case of an involuntary proceeding is not dismissed
within 60 days; or Debtor, any Subsidiary or the Guarantor shall take any
steps toward, or to authorize, such a proceeding; or
(m) Debtor, any Subsidiary or any Guarantor shall become insolvent,
generally shall fail or be unable to pay its debts as they mature, shall
admit in writing its inability to pay its debts as they mature, shall make
a general assignment for the benefit of its creditors, shall enter into any
composition or similar agreement, or shall suspend the transaction of all
or a substantial portion of its usual business."
2.3. Section 9(e) of the Security Agreement. Section 9(e) of the Security
Agreement is hereby amended as of the date hereof by adding the following
immediately after the semicolon but before the "or" appearing therein:
"or the senior unsecured debt rating of Guarantor shall be less than BBB by
Standard & Poor's, a division of McGraw Hill Company, Inc. or Baa by
Xxxxx'x Investors Services, Inc.;"
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2.4. Section 9(j) of the Security Agreement. Section 9(j) of the Security
Agreement is hereby amended as of the date hereof by deleting everything after
the phrase "with the terms hereof" appearing therein and substituting the
following therefor:
"or any notice of a federal tax lien against Debtor in excess of $1,000,000
shall be filed with any public recorder and such lien is not vacated,
discharged, stayed or bonded over for a period of 60 days; or"
3. AMENDMENTS TO THE GUARANTY
3.1. Section 2 of the Guaranty. Section 2 of the Guaranty is hereby
amended as of the date hereof by (i) adding a new clause (e) thereto as follows
and (ii) relettering existing clauses (e) and (f) as clauses (f) and (g)
respectively:
"(e) Credit Rating. The Guarantor's senior unsecured debt rating
shall be less than BBB by Standard & Poor's, a division of McGraw Hill
Company, Inc. or Baa by Xxxxx'x Investors Services, Inc.; or"
3.2. Section 3 of the Guaranty. Section 3 of the Guaranty is hereby
amended as of the date hereof by deleting the reference to "Section 2(e) - (f)"
appearing therein and substituting "Section 2(f) - (g)" therefor.
4. WARRANTIES. To induce the Lender to enter into this Amendment, the
Borrower and the Guarantor warrant that:
4.1. Authorization. Such party is duly authorized to execute and
deliver this Amendment and is and will continue to be duly authorized, in the
case of the Borrower, to borrow monies under the Loan Documents, as amended
hereby, and to perform its obligations under the Loan Documents, as amended
hereby, and in the case of the Guarantor, to perform its obligations under the
Guaranty, as amended hereby.
4.2. No Conflicts. The execution and delivery of this Amendment, and the
performance by such party of its obligations, in the case of the Borrower under
the Loan Documents, and in the case of the Gurantor, the Guaranty, each as
amended hereby, do not and will not conflict with any provision of law or of the
charter or by-laws of such party or of any agreement binding upon such party.
4.3. Validity and Binding Effect. The Loan Documents and, in the case
of the Guarantor, the Guaranty, each as amended hereby, are legal, valid and
binding obligations of such party, as applicable, enforceable against such
party, as applicable, in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency or other similar laws of general
application affecting the enforcement of creditors' rights or by general
principles of equity limiting the availability of equitable remedies.
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5. CONDITIONS PRECEDENT TO AMENDMENTS. The amendments contemplated by
Sections 1, 2 and 3 hereof are subject to the satisfaction of each of the
following conditions precedent:
5.1. Documentation. The Borrower shall have delivered to the Lender all
of the following, each duly executed and dated the closing date hereof, in form
and substance satisfactory to the Lender:
(a) Certificate. A certificate of the president or chief financial officer
of the Borrower as to the matters set out in Sections 5.2 and 5.3
hereof.
(b) Amendment. The Borrower and the Guarantor shall each have executed a
counterpart of this Amendment and delivered it to the Lender.
(c) Other. Such other documents as the Lender may reasonably request.
5.2. No Default. As of the closing date hereof, no Event of Default or
Unmatured Event of Default under the Loan Documents or Event Requiring Payment
under the Guaranty shall have occurred and be continuing.
5.3. Warranties. As of the closing date hereof, the warranties in the
Loan Documents, the Guaranty and in Section 4 of this Amendment shall be true
and correct as though made on such date, except for such changes as are
specifically permitted under the Loan Documents or the Guaranty.
6. GENERAL.
6.1. Expenses. The Borrower agrees to pay the Lender upon demand for all
reasonable expenses, including reasonable attorneys' and legal assistants' fees
(which attorneys and legal assistants may be employees of the Lender), incurred
by the Lender in connection with the preparation, negotiation and execution of
this Amendment and any document required to be furnished herewith.
6.2. Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
6.3. Successors. This Amendment shall be binding upon the Borrower, the
Guarantor and the Lender and their respective successors and assigns, and shall
inure to the benefit of the Borrower, the Guarantor and the Lender and the
successors and assigns of the Lender.
6.4. Confirmation of the Agreement. The Loan Documents and the Guaranty,
each as amended hereby, shall remain in full force and effect and are hereby
ratified and confirmed in all respects.
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6.5. References to the Agreement. Each reference in the Loan Documents
or the Guaranty to "this Agreement," "hereunder," "hereof," or words of similar
import in instruments or documents provided for in the Loan Documents or the
Guaranty or delivered or to be delivered thereunder or in connection therewith,
shall, except where the context otherwise requires, be deemed a reference to the
Loan Documents or the Guaranty, each as amended hereby.
6.6. Counterparts. This Amendment may be executed in any number of
counterparts and any party hereto may execute any one or more counterparts, all
of which shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed at Chicago, Illinois by their respective officers thereunto duly
authorized as of the date first written above.
ONE POINT COMMUNICATIONS CORP.
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Title Chief Financial Officer
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SBC COMMUNICATIONS, INC.
By: /s/ (Signature Illegible)
--------------------------------
Director-Corporate Finance,
for Xxxxx X. Xxxxxxx,
Assistant Treasurer,
Title: pursuant to Delegation
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THE NORTHERN TRUST COMPANY
By: /s/ Xxxxxx Xxxxx
--------------------------------
Title Vice President
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