EXHIBIT 10.18
NORTHPOINT COMMUNICATIONS, INC.
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this "Agreement") is made between NorthPoint
---------
Communications, Inc., a Delaware corporation (the "Company"), and CNA Trust FBO
-------
Xxxxxxx X. Xxxx ("Purchaser").
---------
1. Subject to the terms and conditions of this Agreement, the Company
agrees to sell to Purchaser, and Purchaser agrees to purchase from the Company,
17,800 shares of Series B Preferred Stock (the "Shares"), at a price of
------
$0.67417772 per Share, for an aggregate purchase price of $12,000.36. The
Series B Preferred Stock shall have the rights provided in the Company's
Certificate of Incorporation, as amended, a copy of which has been made
available to Purchaser. As soon as practicable after all necessary regulatory
approvals for the issuance of the Shares have been obtained, the Company shall
notify Purchaser and Purchaser shall promptly deliver to the Company an executed
copy of this Agreement and payment in the form of cash, check or wire transfer
for the Shares being purchased.
2. Representations of Purchaser. Purchaser hereby represents and warrants
----------------------------
to the Company with respect to the purchase of the Shares as follows:
(a) Experience. Purchaser has experience in evaluating and investing
----------
in private placement transactions so that Purchaser is capable of evaluating the
merits and risks of Purchaser's investment in the Company. Purchaser, by reason
of its business or financial experience or the business or financial experience
of its professional advisors who are unaffiliated with and who are not
compensated by the Company or any affiliate or selling agent of the Company,
directly or indirectly, has the capacity to protect its own interests in
connection with the purchase of the Shares hereunder.
(b) Investment. Purchaser is acquiring the Shares for investment for
----------
Purchaser's own account, not as a nominee or agent, and not with the view to, or
for resale in connection with, any distribution thereof. Purchaser understands
that the Shares to be purchased (and the underlying Common Stock) have not been,
and will not be, registered under the Securities Act of 1933, as amended (the
"Securities Act"), by reason of a specific exemption from the registration
---------------
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of Purchaser's
representations as expressed herein. Purchaser has not been formed for the
specific purpose of acquiring the Shares (or the underlying Common Stock).
(c) Rule 144. Purchaser acknowledges that the Shares and the
--------
underlying Common Stock must be held indefinitely unless subsequently registered
under the Securities Act or an exemption from such registration is available.
Purchaser is aware of the provisions of Rule 144 promulgated under the
Securities Act which permit limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including a
requirement that
the securities be held prior to resale for the applicable holding periods
specified in Rule 144, the existence of a public market for the shares, and, in
some cases, the availability of certain current public information about the
Company, compliance with the manner of sale requirements of Rule 144, and the
number of shares being sold during any three-month period not exceeding
specified limitations.
(d) No Public Market. Purchaser understands that no public market now
----------------
exists for any of the securities issued by the Company, that the Company has
made no assurances that a public market will ever exist for the Shares (or the
underlying Common Stock) and that, even if such a public market exists at some
future time, the Company may not then be satisfying the current public
information requirements of Rule 144.
(e) Access to Data. Purchaser and its representatives have met with
--------------
representatives of the Company and thereby have had the opportunity to ask
questions of, and receive answers from, said representatives concerning the
Company and the terms and conditions of this transaction as well as to obtain
any information requested by Purchaser. Any questions raised by Purchaser or
its representatives concerning the transaction have been answered to the
satisfaction of Purchaser and its representatives. Purchaser's decision to
purchase the Shares is based in part on the answers to such questions as
Purchaser and its representatives have raised concerning the transaction and on
its own evaluation of the risks and merits of the purchase and the Company's
proposed business activities.
(f) Authorization. This Agreement, when executed and delivered by
-------------
Purchaser, will constitute a valid and legally binding obligation of Purchaser,
enforceable in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies.
(g) Tax Consequences. Purchaser has reviewed with its own tax
----------------
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. Purchaser is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents and understands that Purchaser (and not the
Company) shall be responsible for Purchaser's own tax liability that may arise
as a result of this investment or the transactions contemplated by this
Agreement.
3. Representation of Company. The Company hereby represents and warrants
-------------------------
to Purchaser as follows:
(a) Authorization. The Company is a corporation duly organized,
-------------
validly existing in good standing under the laws of the State of Delaware. All
corporate action on the part of the Company, its officers, directors and
stockholders necessary for the authorization, execution and delivery of this
Agreement, the performance of all obligations of the Company hereunder and the
authorization, issuance and delivery of the Shares (and the Common Stock
issuable upon conversion of the Shares) has been taken and this Agreement
constitutes a valid
and legally binding obligation of the Company, enforceable against the Company
in accordance with its terms.
(b) Valid Issuance of Securities. The Shares being issued to
----------------------------
Purchaser hereunder, when issued, sold and delivered in accordance with the
terms hereof for the consideration expressed herein, will be duly and validly
issued, fully paid and nonassessable and free of any liens or encumbrances;
provided, however, that the Shares may be subject to restrictions on transfer
under state and/or federal securities laws as set forth herein. Based in part
upon the representations of Purchaser in this Agreement, the Shares will be
issued in compliance with all applicable federal and state securities laws. The
Common Stock issuable upon conversion of the Series B Preferred Stock has been
duly and validly reserved for issuance, and upon issuance in accordance with
the terms of the Company's Certificate of Incorporation, as amended, shall be
duly and validly issued, fully paid and non-assessable and free of any liens or
encumbrances (provided, however, that such Common Stock may be subject to
restrictions on transfer under state and/or federal securities laws as set forth
herein) and will be issued in compliance with all applicable federal and state
securities laws.
(c) The execution, delivery and performance of this Agreement does not
and will not conflict with or result in any breach of any of, constitute a
default under, or result in a violation of: any obligation or commitment to any
third party; any law or judgement applicable to the Company; any law, statute,
rule, regulation, judgement or decree to which the Company is subject; or the
charter documents or bylaws of the Company or any securities by the Company.
4. Qualification of Securities. The sale of the securities which are the
---------------------------
subject of this Agreement has not been qualified with the Commissioner of
Corporations of the State of California, and the issuance of such securities or
the payment or receipt of any part of the consideration therefor prior to such
qualification is unlawful unless the sale of securities is exempt from the
qualification by Section 25100, 25102 or 25105 of the California Corporations
Code. The rights of all parties to this Agreement are expressly conditioned
upon such qualification being obtained, unless the sale is so exempt.
5. Legends. Purchaser acknowledges and understands that the certificate
-------
evidencing the Series B Preferred Stock (and Common Stock issuable upon
conversion thereof) shall bear the following legends (and any other legends
required under state securities laws in the opinion of legal counsel for the
Company):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
(WHICH MAY BE COUNSEL FOR THE COMPANY) REASONABLY ACCEPTABLE TO IT STATING
THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY."
6. General. This Agreement shall be governed by the laws of the State of
-------
California, is not assignable by either party and represents the entire
agreement between the parties. This Agreement may only be modified or amended
in writing with the consent of the Company and Purchaser.
In witness whereof, the parties have executed this Agreement on December
31, 1997.
"Company" NORTHPOINT COMMUNICATIONS, INC.
a Delaware corporation
By: /s/ NORTHPOINT COMMUNICATIONS, INC.
-------------------------------------
Title:
-----------------------------
"Purchaser" CNA TRUST FBO XXXXXXX X. XXXX
By: /s/ CNA TRUST FBO XXXXXXX X. XXXX
-----------------------------------
Title:
-----------------------------
