EXHIBIT 4.11
SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT
SECOND AMENDMENT dated of October 3, 1995 (this "Amendment") to the NOTE
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PURCHASE AGREEMENT dated November 30, 1994, as amended, between HEARTLAND
WIRELESS COMMUNICATIONS, INC., a Delaware corporation (the "Company"), and
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JUPITER PARTNERS L.P. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Purchasers") (the "Note Purchase
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Agreement"). Capitalized terms used herein and not otherwise defined herein
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shall have the meanings ascribed to such terms in the Note Purchase Agreement.
WHEREAS, the Company and the Purchasers desire to amend certain
provisions of the Note Purchase Agreement;
NOW, THEREFORE, in consideration of the terms and conditions contained
in this Amendment and the Note Purchase Agreement and of the purchase of the
Notes by the Purchasers pursuant thereto, the parties hereto hereby agree as
follows:
1. Amendment to Representative Covenant: Appointment of Jupiter
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Director. Section 6.3 (Representative of Purchasers) of the Note Purchase
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Agreement is hereby amended to provide in full that the Company covenants and
agrees that it will:
"5.12 Representative of Purchasers; Jupiter Director.
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In addition to the director which Jupiter has the right to designate
pursuant to the Stockholders Agreement (the "Jupiter Director"), permit one
non-voting representative of the Purchasers (who shall be selected in accordance
with Section 10.1) to attend all meetings of the Board of Directors, and
committees thereof, of the Company; cause the Board of Directors to hold at
least four (4) meetings per year; cause the Jupiter Director to be appointed to
the compensation committee of the Board of Directors; provide to the Jupiter
Director and such representative all notices, documents and information
furnished to the directors of the Company, at the same time as furnished to such
directors; use its best efforts to notify the Jupiter Director and such
representative of, and permit the Jupiter Director and such representative to
participate by telephone in, meetings of the Board of Directors or committees
thereof, and to provide the Jupiter Director
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and such representative copies of the minutes of all such meetings
promptly after they are held; and pay the Company's customary outside
director fees to the Jupiter Director as well as the reasonable expenses
of the Jupiter Director, and of the representative designated by the
Purchasers, in connection with attendance at meetings of the Board of
Directors and committees thereof."
2. Amendment to Divestiture Covenant: Restriction of
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Consideration in Permitted Dispositions; Elimination of Permitted RuralVision
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Dispositions. Section 6.1 (Liquidation Reorganization, Reclassification,
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Consolidation, Merger or Sale) of the Note Purchase Agreement is hereby amended
to provided in full that the Company covenants and agrees that it will not:
"6.1. Liquidation, Reorganization, Reclassification,
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Consolidation, Merger or Sale. (i) Wind up, liquidate its affairs or dissolve,
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or permit any Subsidiary to do so (except any Subsidiary which has no assets);
or (ii) effect any capital reorganization or reclassification of its capital
stock; or (iii) effect any consolidation or merger with or into another
corporation, or any sale of all or substantially all of its assets to another
corporation, or permit any subsidiary to do so, expect that any Subsidiary may
merge with and into, or sell all or substantially all of its assets to, the
Company or another Subsidiary; or (iv) convey, sell, lease or otherwise dispose
of all or substantially all of its assets or properties (except inventory sold
in the ordinary course of business), or permit any Subsidiary to do so; or (v)
convey, sell, lease or otherwise dispose of any Interest in Channel Rights, or
permit any Subsidiary to do so (whether through a sale of assets or a sale of
stock of a Subsidiary which owns such assets), provided, however, that nothing
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contained in this Section 6.1 shall prohibit (x) any Permitted Channel
Disposition, or (y) the purchase or redemption by the Company or any Subsidiary
of capital stock of any Subsidiary held by any minority stockholder thereof.
For the purposes of Section 6.1, 6.3 and 6.5 hereof, the following terms
shall have the respective meanings given thereto:
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"Channel Rights" shall mean any wireless cable channel license (ITFS,
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MMDS, or MDS) issued by the FCC, or lease or sublease of any channel rights
associated with such license, or an option or agreement to lease or sublease
such channel rights whether or not such license has yet been granted to the
applicant or licensee by the FCC.
"Disposition" shall mean any conveyance, sale, lease, transfer or other
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disposition whether pursuant to a sale of assets or sale of stock or other
equity interest.
"Full Market" shall mean a market in which the Company and/or any of its
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Subsidiaries has an Interest in Channel Rights for at least eight channels in
the aggregate.
"Interest in Channel Rights" shall mean any legal or beneficial
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interest in or right to acquire any Channel Rights.
"Permitted Channel Disposition" shall mean any of:
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(i) the Disposition of Interests in Channel Rights of the Company or any
Subsidiary, on fair market terms, for consideration in full in cash, for
markets which are not Full Markets; or
(ii) during any twelve-month period, the Disposition of any Interest in
Channel Rights in a Full Market, on fair market terms, for consideration
in full in cash, to the extent that the number of line of sight
households in such Full Market, when added to the number of line of
sight households in Full Markets subject to other Dispositions during
such twelve-month period, does not exceed 10% of the aggregate number of
line of sight households in all of the Full Markets of the Company and
its Subsidiaries at the end of such period; or
(iii) during any twelve-month period, the Disposition of any Interest in
Channel Rights of the Company or any of its Subsidiaries, on fair market
terms, for consideration in full in cash, to the extent that the number
of subscribers in the market or markets subject to such Disposition,
when added to the aggregate number of subscribers
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in all of the markets of the Company and its Subsidiaries subject to
Dispositions during such twelve-month period, does not exceed 10% of the
aggregate number of subscribers in all of the markets of the Company and
its Subsidiaries at the end of such period. For the purposes of this
calculation, the number of subscribers in a market subject to a
Disposition shall be the number of subscribers at the time of such
Disposition."
3. Amendment to Acquisitions Covenant: Restriction on Loans and
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Investments; Creation of New Channel Acquisition Basket. Section 6.3
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(Acquisitions; Indebtedness) of the Note Purchase Agreement is hereby amended to
provide in full that the Company covenants and agrees that it will not:
"6.3. Acquisition; Indebtedness.
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(a) Prior to January 1, 1998, with respect to itself or any Subsidiary:
without Jupiter's prior written consent (so long as Jupiter shall be a
Significant Purchaser), (i) purchase, lease or make any investment in, or agree
to purchase, lease or make any investment in, any assets or properties or (ii)
purchase or invest in (including any extension of credit or making any loans,
advances or capital contributions to) any person, firm, joint venture,
corporation, partnership, limited liability company or other entity; provided
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however, that the Company need not seek Jupiter's prior written consent for
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purchases or leases made in the ordinary course of the Company's business of
inventory, equipment or office supplies used in the ordinary course of the
Company's business as existed prior to such purchase or lease; provided further,
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that the Company or a Subsidiary need not seek Jupiter's prior written consent
to (x) acquire Channel Rights in any market where the Company has 12 or more
Channel Rights for a cumulative total consideration not in excess of $900,000 in
cash plus 100,000 shares of Common Stock (reduced proportionately to reflect
any reverse stock split, share repurchase or similar reduction in the
outstanding shares of Common Stock), provided that the holders of shares of
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Common Stock used for any such acquisition shall not be granted demand or
other similar registration rights with respect to such shares, except for piggy
back registration rights as provided in Section 3 of the Registration Rights
Agreement as of November 30,
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1994, as amended, among the Company and the Purchasers, or (y) enter into any
lease on fair market terms for Channel Rights in any market where the Company
already has 12 or more Channel Rights.
(b) On or after January 1, 1998, with respect to itself or any Subsidiary:
without Jupiter's prior written consent (so long as Jupiter shall be a
Significant Purchaser), (i) purchase, lease or make any investment in, or agree
to purchase, lease or make any investment in, any assets or properties or (ii)
purchase or invest in (including any extension of credit or making any loans,
advances or capital contributions to) any person, firm, joint venture,
corporation, partnership, limited liability company or other entity, for an
aggregate Net Acquisition Expense in excess of $15,000,000 (x) in any
consecutive 12-month period or (y) in any transaction or series of related
transactions (it being understood that transactions shall be deemed related if
they involve the purchase or lease (A) from the same seller or lessor or from
affiliates of the same seller or lessor or (B) from any group of sellers or
lessors and/or their affiliates acting in concert); provided, however, that this
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Section 6.3(b) shall not apply to purchases or leases made in the ordinary
course of the Company's business of inventory, equipment or office supplies used
in the ordinary course of the Company's business as existing prior to such
purchase or lease. "Net Acquisition Expense" for any period shall mean the
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excess of (i) the aggregate total consideration paid or payable for all
purchases, leases, loans, and investments covered by this Section 6.3(a) made
during such period over (ii) the aggregate consideration received from all
Permitted Channel Dispositions made during such period.
(c) With respect to itself or any Subsidiary: directly or indirectly
create, incur or assume, or otherwise be or become liable on, or permit to
exist, any indebtedness (other than trade accounts payable) for borrowed money
or any other liability evidenced by bonds, debentures, notes or similar
instruments, except for any such indebtedness or other liability (i) existing
pursuant to written agreements in effect on March 14, 1995 and known to the
Purchasers or (ii) in an amount incurred in any transaction or series or related
transactions not exceeding $10,000,000 or
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(iii) created, incurred or assumed after September 13, 1996."
4. Amended to Events of Default: Extension of Default for Change of
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Control. Section 7.7 of the Note Purchase Agreement governing defaults in the
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event of a Change of Control of the Company is hereby amended to provide in full
that an Event of Default shall arise in the event that:
"7.7. There shall occur (a) a Change in Control on or prior to
December 31, 1997 or (b) a Change of Control which occurs as a result of a
transaction or series of related transactions (it being understood that
transactions shall be deemed related if they involve (x) the same person,
firm, joint venture, corporation, partnership, limited liability company or
entity, or any affiliates of the same person, firm, joint venture,
corporation, partnership, limited liability company or entity or (y) any
group of persons, firms, joint ventures, corporations, partnerships,
limited liability companies or entities and/or their affiliates acting in
concert) which commenced or was agreed to on or prior to December 31, 1997
(including the sale, transfer, pledge, assignment or other disposition of,
or the entrance into any contract, option or other arrangement with respect
to the sale, transfer, pledge, assignment or other disposition of, any
securities of the Company or any Subsidiary or any assets or properties of
the Company or any Subsidiary)."
5. Amendment to the Definition of Material Default: Extension of
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Default for Change of Control. The definition of Material Default in the Note
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Purchase Agreement is hereby amended to provide in full:
"Material Default" shall mean an Event of Default arising as a result
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of a breach of any of the Company's covenants contained in Section 6.1,
6.2, 6.3, 6.4 or 6.5 hereof or arising as a result of a Change of Control
pursuant to Section 7.7 hereof. An Event of Default arising from a Change
of Control pursuant to Section 7.7 will constitute a Material Default
despite any consent or waiver."
6. Amendment to Expenses Covenant: Expenses Incurred After the Closing
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Date. Section 13.6 of the Note
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Purchase Agreement is hereby amended to provide in full that:
"13.6 Expenses. The Company agrees to pay and save Jupiter
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harmless against liability for the payment of all out-of-pocket expenses
arising in connection with its investment in the Notes, including the
negotiation, preparation, execution, delivery and enforcement of, and
any amendment, supplement or modification to, or waiver of any provision
of, any Transaction Document, or any document or including without
limitation all documentary, stamp and similar taxes and assessments, all
recording and filing fees charged by any Governmental Authority, all
fees and expenses incurred by Jupiter in connection with FCC and other
"due diligence" investigations, and the reasonable fees and
disbursements of counsel. In addition, if it shall be necessary pursuant
to the provisions of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976 to file a Notification and Report Form with the Federal Trade
Commission in connection with any conversion or proposed conversion of
the Notes, the Company shall be liable for payment of all filing fees
and other expenses incurred by Jupiter in connection therewith,
including without limitation the reasonable fees of one counsel for all
the Purchasers in connection therewith. The obligations provided for in
this Section 13.6 shall survive any termination of this Agreement and
shall be payable regardless of whether the transactions contemplated
hereby are consummated."
7. Full Force and Effect of the Transaction Documents. Except
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as specifically amended hereby, all of the terms and conditions of the Note
Purchase Agreement and the other Transaction Documents shall be and remain
in full force and effect as executed.
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IN WITNESS WHEREOF, this Second Amendment to Note Purchase Agreement has
been duly executed as of the day and year first above written.
Company:
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HEARTLAND WIRELESS
COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President and
Chief Financial Officer
Purchasers:
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JUPITER PARTNERS L.P.
By: Ganymede L.P.
General Partner
By: Europa L.P.
General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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a General Partner
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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