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EXHIBIT 10.8A
As of January 1, 1999
Network Plus, Inc.
Network Plus Corp.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Chief Financial Officer
RE: $60,000,000.00 LOAN AND SECURITY AGREEMENT
Gentlemen:
Reference is hereby made to that certain Loan and Security Agreement dated
as of October 7, 1998 (as amended, the "Loan Agreement") by and between Network
Plus Corp., a Delaware corporation ("Holdings") and Network Plus, Inc., a
Massachusetts corporation ("NPI"), as borrowers (individually and collectively,
jointly and severally, the "Borrower"), Fleet National Bank, a national banking
association, as Agent ("Agent"), and Xxxxxxx Sachs Credit Partners L.P., a
Bermuda limited partnership, as syndication and arrangement agent for the
Lenders (the "S&A Agent"), Fleet National Bank and the other lenders party
thereto from time to time (collectively, the "Lenders"). Capitalized terms used
herein and not otherwise defined shall have the meaning given to such term in
the Loan Agreement.
The Borrower has requested that the Agent and the Lenders amend certain
provisions of the Loan Agreement, as follows:
1. The Borrower, the Agent and the Lenders agree to amend Section 7.20(a)
of the Loan Agreement by deleting Section 7.20(a) of the Loan Agreement
in its entirety and by inserting the following in its place and stead:
(a) Profitability. Achieve operating EBITDA of not less than the amount
shown below for the one (1) month period (except for March 31, 1999,
which shall be for the 6 month period) corresponding thereto:
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Period Minimum operating EBITDA
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for the 6 month period ending ($7,000,000)
March 31, 1999
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for the one month period ending ($1,800,000)
April 30, 1999
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for the one month period ending ($2,800,000)
May 31, 1999
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for the one month period ending ($2,700,000)
June 30, 1999
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for the one month period ending ($2,500,000)
July 31, 1999
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for the one month period ending ($2,200,000)
August 31, 1999
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for the one month period ending ($1,800,000)
September 30, 1999
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for the one month period ending ($1,600,000)
October 31, 1999
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for the one month period ending ($1,700,000)
November 30, 1999
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for the one month period ending ($1,600,000)
December 31, 1999
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for the one month period ending ($1,600,000)
January 30, 2000
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for the one month period ending ($1,600,000)
February 28, 2000
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for the one month period ending ($1,600,000)
March 31, 2000
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2. The Borrower, the Agent and the Lenders agree to amend Section 7.20(b)
of the Loan Agreement by deleting Section 7.20(b) of the Loan Agreement
in its entirety and by inserting the following in its place and stead:
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(b) Total Revenues. Achieve total revenues, determined in accordance with
GAAP, of not less than the amount shown below for the period
corresponding thereto:
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Period Minimum Total Revenue
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for the 6 month period ending $56,100,000
March 31, 1999
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for the 6 month period ending $61,500,000
June 30, 1999
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for the 6 month period ending $70,000,000
September 30, 1999
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for the 6 month period ending $79,500,000
December 31, 1999
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for the 6 month period ending $92,500,000
March 31, 2000
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3. The Borrower, the Agent and the Lenders agree to amend Section 7.20(c)
of the Loan Agreement by deleting Section 7.20(c) of the Loan Agreement
in its entirety and by inserting the following in its place and stead:
"(c) Maximum Revolving Line of Credit Debt to Annualized Quarterly
Revenue Ratio. Achieve a Revolving Line of Credit Debt to
Annualized Quarterly Revenue Ratio of 35% or less, measured on a
monthly basis."
4. The Borrower, the Agent and the Lenders agree to delete Section 7.20(d)
of the Loan Agreement in its entirety.
5. The Borrower, the Agent and the Lenders agree to amend Section 2.2(a)
of the Loan Agreement by deleting Section 2.2(a) of the Loan Agreement
in its entirety and by inserting the following in its place and stead:
"(a) Subject to the terms and conditions of this Agreement and during
the term of this Agreement, each Tranche B Lender severally agrees
to make advances ("Tranche B Advances") to Borrower in an amount
at any one time outstanding not to exceed such Tranche B Lender's
Pro Rata Share of the lesser of (i) the aggregate of the amount
collected, in cash, by the Borrower over the prior three (3) month
period from Accounts, as evidenced by a report to be furnished to
the Agent, MINUS, Tranche A Advances and (ii) the Maximum Tranche
B Amount (the "Tranche B Borrowing Base"). The Borrower agrees to
furnish the Agent with such information regarding the Borrower's
cash collections from Accounts at such
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time and in such form as the Agent may reasonably request.
Notwithstanding the foregoing, upon the receipt by Holdings of at
least Seventy Five Million Dollars ($75,000,000.00) in net cash
proceeds from the issuance and sale of common Stock of Holdings
and the contribution of such cash proceeds by Holdings to NPI,
and, subject to the terms and conditions of this Agreement and
during the term of this Agreement, each Tranche B Lender severally
agrees to make Tranche B Advances to Borrower in an amount at any
one time outstanding not to exceed such Lender's Pro Rata Share of
an amount equal to the Maximum Tranche B Amount."
6. The Borrower, the Agent and the Lenders agree to amend Section 7.3 of
the Loan Agreement by adding the following sentence at the end thereof:
"Notwithstanding the foregoing, the Borrower may acquire an entity
whose total revenues as determined in accordance with GAAP for the
twelve (12) calendar month period ending immediately prior to the
date of such acquisition shall not exceed twenty five percent
(25%) of the then current annualized monthly revenue of the
Borrower as determined by the financial statements required to be
furnished to the Agent pursuant to Section 6.3(a) hereof;
provided, however, that the purchase price of any such acquisition
shall be paid only in common Stock of Holdings."
7. The Borrower, the Agent and the Lenders agree to amend Section 7.11 of
the Loan Agreement by adding the following sentence at the end thereof:
"Notwithstanding the foregoing, Holdings may make distributions to
holders of the Series A Cumulative Preferred Stock in accordance
with the provisions of the Governing Documents so long as the
gross proceeds raised in connection with any public offering of
Holding's common Stock shall exceed One Hundred Fifteen Million
Dollars ($115,000,000.00)."
8. The Borrower, the Agent and the Lenders agree to delete Section 7.21 of
the Loan Agreement in its entirety.
In consideration of the forgoing amendments, upon execution of this letter
agreement, and as a condition precedent to the effectiveness hereof, the
Borrower shall pay to the Agent the sum of $125,000, to be distributed by the
Agent pro rata to all Participants. In addition, the Borrower
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shall pay the Agent a monthly administration fee of $10,000 on the 28th day of
each month, commencing May 28, 1999 until the Maturity Date. Further, upon
execution of this letter agreement, Holdings shall issue a Warrant in favor of
each Lender, in form and substance acceptable to the Agent, for the purchase of
such Lender's Pro Rata Share of 5,000 shares of the common stock of Holdings at
a price of .01 cent per share. Upon execution of this letter agreement, and as a
condition precedent to the effectiveness hereof, the Borrower shall also pay any
and all amounts owed to the S&A Agent under or in respect of that certain letter
agreement executed by the Borrower dated ____, which amount is $480,0000.00
through June 1, 1999.
The Agent and the Lenders hereby consent to the purchase by Holdings of
138,888 shares (the "NorthPoint Stock") of common stock of NorthPoint
Communications, Inc. ("NorthPoint") on March 23, 1999. In consideration of the
foregoing consent, upon the execution of this letter agreement, Holdings shall
execute and deliver to the Agent a Pledge Agreement, in form and substance
acceptable to the Agent, pursuant to which Holdings will pledge the NorthPoint
Stock to the Agent for the benefit of the Lenders, as additional collateral for
the Loan.
Notwithstanding anything to the contrary contained herein or in the Loan
Agreement, the Borrower acknowledges and agrees that the Lenders shall have no
continuing and further obligation to make Advances after September 30, 1999
unless Holdings shall have received net cash proceeds of at least Seventy Five
Million Dollars ($75,000,000.00) from the issuance and sale of Holding's common
Stock and such net cash proceeds shall have been contributed by Holdings to NPI
as a capital contribution (the "Equity Injection"). After September 30, 1999,
provided there shall not have occurred and be continuing an Event of Default and
provided that the Borrower shall be in compliance with all terms and conditions
of the Loan Agreement, the Borrower may once again request Advances in
accordance with the terms and conditions of the Loan Agreement after such time
as the Equity Injection is made.
Notwithstanding the foregoing amendments, the Agent's and the Lenders'
failure to insist upon the strict performance of Section 7.20(a) of the Loan
Agreement, or of any other term, condition or provision of the Loan Agreement,
now or in the future, shall not affect or alter the Loan Agreement, except as
provided herein, and each and every term, condition and other provision of the
Loan Agreement shall continue in full force and effect, except as provided
herein. The foregoing amendments shall not constitute a future amendment or
waiver of Section 7.20(a) of the Loan Agreement, or any other term, condition,
or provision of the Loan Agreement, except as provided herein. The Borrower
ratifies and confirms all of the representations, warranties and covenants
contained in the Loan Agreement as modified hereby and agree that the Agent and
the Lenders may continue to rely upon all of the representations, warranties and
covenants contained therein.
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Very truly yours,
Fleet National Bank, as Agent and a Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
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Xxxxxxx Xxxxx Credit Partners, L.P., as
S&A Agent and a Lender
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
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Title: Authorized Signatory
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Transamerica Business Credit Corporation,
as a Lender
By:
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Name:
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Title:
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[no signature required]
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Fremont Financial Corporation,
as a Lender
By:
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Name:
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Title:
----------------------------
[no signature required]
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Accepted and Agreed as of the 1st day of January, 1999
Network Plus, Inc., as Borrower
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
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Title: Executive Vice President
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Network Plus Corp., as Borrower
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
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Title: Executive Vice President
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cc: PricewaterhouseCoopers
