Exhibit 10.24
FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT
This FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT (this "Amendment"), dated
as of March 22, 1999, is made by and between NORTHPOINT COMMUNICATIONS, INC., a
Delaware corporation (the "Company") and Xxxxxx Xxxxxxx Senior Funding, Inc.
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("MS"). This Amendment amends the Note Purchase Agreement, dated as of July 10,
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1998, between the Company and MS (said Agreement, as it may hereafter be
amended, supplemented or otherwise modified from time to time, being the "Note
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Purchase Agreement"; the terms defined therein and not otherwise defined herein
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being used herein as therein defined).
PRELIMINARY STATEMENT
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The Company has consummated a reorganization (the "Reorganization")
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pursuant to which the Company became a wholly owned subsidiary of the NorthPoint
Communications Holdings, Inc. ("Holdings"). The Reorganization was effected by
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a merger between the Company and another Delaware corporation formed solely for
this purpose, which was a wholly owned subsidiary of Holdings, with the Company
as the surviving corporation of such merger. As a result of the Reorganization,
each of the holders of capital stock of the Company immediately prior to the
consummation of the Reorganization became the only holders of capital stock of
Holdings immediately after the consummation of the Reorganization, each holding
the same number of shares of capital stock of the same class of Holdings with
the same rights, privileges, terms and conditions as shares of capital stock of
the Company held by such holders immediately prior to the consummation of the
Reorganization. Holdings owns all of the capital stock of the Company and has
no other significant assets.
In order to permit the Reorganization, the Company desires, and MS has
agreed, to amend the Note Purchase Agreement as provided in this Amendment,
subject to the terms and conditions set forth in this Amendment.
NOW THEREFORE, in consideration of the mutual terms, conditions and other
agreements set forth herein, the Company and MS hereby agree as follows:
1. Amendments to Note Purchase Agreement. The Note Purchase Agreement is
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hereby amended as follows:
(a) The following defined terms shall be added to the Defined Terms
contained in Schedule II to the Note Purchase Agreement:
"Holdings" means NorthPoint Communications Holdings, Inc., a Delaware
corporation.
"Reorganization" means the reorganization of the Company pursuant to
which the Company became a wholly owned subsidiary of Holdings. The
Reorganization was effected by a merger between the Company and another
Delaware corporation formed solely for this purpose, which was a wholly
owned subsidiary of Holdings, with the Company as the surviving
corporation of such merger. As a result of the Reorganization, each of
the holders of capital stock of the Company immediately prior to the
consummation of the Reorganization became the only holders of capital
stock of the same class of Holdings immediately after the consummation of
the Reorganization, each holding the same number of shares of capital
stock of Holdings with the same rights, privileges, terms and conditions
as shares of capital stock of the Company held by such holders
immediately prior to the consummation of the Reorganization. Holdings
owns all of the capital stock of the Company and has no other significant
assets.
(b) Each of the Defined Terms contained in Schedule II to the Note
Purchase Agreement and listed below is amended and restated below as follows:
"Change of Control" means such time as (i) a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act)
becomes the ultimate "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act) of Voting Interests representing a greater percentage
of the total voting power of the Voting Interests of Holdings, on a fully
diluted basis, than is beneficially owned by the Existing Stockholders on
the date of the Reorganization; (ii) individuals who on the Closing Date
constitute the Board of Directors of the Company (together with any new
directors whose election by the Board of Directors of the Company or
whose nomination by the Board of Directors of the Company for election by
the Company's stockholders was approved by a vote of at least two-thirds
of the members of the Board of Directors of the Company then in office
who either were members of the Board of Directors of the Company on May
20, 1998 or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the members of
the Board of Directors then in office; (iii) individuals who on the date
of the Reorganization constitute the Board of Directors of Holdings
(together with any new directors whose election by the Board of Directors
of Holdings or whose nomination by the Board of Directors of Holdings for
election by Holdings' stockholders was approved by a vote of at least two-
thirds of the members of the Board of Directors of Holdings then in
office who either were members of the Board of Directors of Holdings on
the date of the Reorganization or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the members of the Board of Directors then in office; (iv)
the Company or Holdings, either individually or together with one or more
of its Subsidiaries, shall convey, sell, lease, assign, transfer or
otherwise dispose of, or agree in writing to convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of the
property and assets of the Company or Holdings and its Subsidiaries,
taken as a whole (either in one transaction or a series of related
transactions), or (v) Holdings shall for any reason hold less than all of
the capital stock of the Company.
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"Co-Sale Agreement" means the Fourth Amended and Restated Right of First
Refusal and Co-Sale Agreement, dated as of the date of the Reorganization,
among the Founders, Holding, the Company, MS and certain other
securityholders of Holdings.
"Holdings Letter Agreement" means the letter agreement, dated the date of
the Reorganization, between Holdings and Xxxxxx Xxxxxxx & Co.
Incorporated.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, results of
operations, performance, properties, assets, liabilities (contingent or
otherwise), value or prospects of Holdings and its Subsidiaries, taken as
a whole, (b) the ability of any of the Obligors to perform its obligations
under this Agreement or any of the other Note Documents to which it is or
is to be a party, (c) the rights and remedies afforded to you, any of the
Other Purchasers or any of the other holders of the Notes under this
Agreement or any of the other Note Documents or (d) the ability of Holdings
or the Company to consummate the Refinancing.
"Note Documents" means, collectively, this Agreement, the Other
Agreements, the Warrant Agreement, the Rights Agreement, the Co-Sale
Agreement, the Warrant Agreement dated May 20, 1998 among the Company,
Xxxxxx Xxxxxxx Bridge Fund L.L.C. and Northpoint Communications of
Virginia, Inc., the Notes, the Rollover Notes (if issued), the Warrants,
the Commitment Letter, the Letter Agreement, the Holdings Letter
Agreement, the guaranty by NorthPoint Communications of Virginia, Inc.
and the guaranties of the Subsidiaries of the Company entered into
pursuant to Section 9.10, the guaranty by Holdings dated as of the date
of the Reorganization, and all other agreements, instruments and other
documents evidencing any Obligation of the Company or any of the other
Obligors, in each case as such agreement, instrument or other document
may be amended, supplemented or otherwise modified hereafter from time to
time in accordance with the terms thereof and Section 17.
"Obligors" means, collectively, Holdings, the Company, NorthPoint
Communications of Virginia, Inc. and each other Subsidiary of the Company
that becomes party to any guarantee after the date of this Agreement
pursuant to Section 9.10.
"Refinancing" means the private placement or public offering and sale by
Holdings or the Company of Refinancing Securities in an amount of at least
$100,000,000 in gross proceeds.
"Refinancing Securities" means high yield debt securities, including
redeemable preferred stock, of Holdings or the Company.
"Rights Agreement" means the Fifth Amended and Restated Rights Agreement
dated as of the date of the Reorganization, among Holdings, the Company, MS
and certain other securityholders of Holdings.
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(c) Section 7.3 of the Note Purchase Agreement is amended and restated as
follows:
7.3. Mandatory Redemptions of the Notes (or Rollover Notes).
Upon receipt by Holdings or any of its Subsidiaries of the Net Cash
Proceeds from (a) the issuance or incurrence by Holdings or any of its
Subsidiaries of any Indebtedness (including, without limitation, the
Refinancing Securities, but other than Indebtedness of the Company and its
Subsidiaries issued or incurred pursuant to any of Sections 10.3(a) or
10.3(c) through 10.3(h) of the Note Purchase Agreement), (b) the sale or
issuance by Holdings or any of its Subsidiaries of any shares of its
capital stock (or other ownership or profit interests therein), any
securities convertible into or exchangeable for shares of its capital stock
(or other ownership or profit interests therein) or any warrants, options
or other rights for the purchase or acquisition of any shares of its
capital stock (or other ownership or profit interests therein) and (c) any
Asset Sale (other than (i) Asset Sales effected in the ordinary course of
the Company's or the applicable Subsidiary's business and (ii) Asset Sales
effected since the date of this Agreement the aggregate fair value of which
does not exceed $250,000), the Company shall redeem outstanding Notes (or
Rollover Notes) in an amount equal to the lesser of (A) 100% of the
aggregate principal amount of all Notes (or Rollover Notes) outstanding on
the date of such redemption and (B) the amount of such Net Cash Proceeds,
in either case at a purchase price in cash equal to 100% of the aggregate
principal amount thereof plus accrued and unpaid interest to the date of
such redemption and all fees, expenses and other payments due and payable
to the holders of the Notes (or Rollover Notes) under the Note Documents on
such date; provided that, if Xxxxxx Xxxxxxx & Co. Incorporated is not
offered the opportunity, on market terms, to act as exclusive agent or sole
underwriter for any transaction the proceeds of which are used to repay the
Notes (including any issuance and sale of debt or equity securities, any
asset sale, any credit facility financing or any other transaction but
excluding (i) an equity investment by a stockholder existing on May 28,
1998, (ii) an equity investment by a strategic investor primarily engaged
in the telecommunications business and (iii) an equity investment by Xxxxxx
Xxxxxxx & Co. Incorporated or any of its affiliates), then the Company
shall redeem the outstanding Notes at a purchase price in cash equal to
103.5% of the aggregate principal amount thereof plus accrued and unpaid
interest to the date of such redemption and all fees, expenses and other
payments due and payable to the holders of the Notes under the Note
Documents on such date.
(d) Section 10.6 of the Note Purchase Agreement is amended by inserting ";
and" at the end of clause (h) thereof and adding a new clause (i) as follows:
(i) the Company and its Subsidiaries may consummate the Reorganization.
2. Conditions to Amendment of Note Purchase Agreement. The effectiveness
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of this Amendment is subject to satisfaction by the Company, on or prior to the
date hereof, of the following conditions:
2.1. Documents Required.
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MS shall have received the following documents, each dated as of the date
of this Amendment (except as otherwise specified below) and in the form of the
respective Exhibit attached hereto, if any, or otherwise in form and substance
satisfactory MS:
(a) Agreement and Plan of Merger. The Agreement and Plan of Merger of
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NorthPoint Merger Sub, Inc., a Delaware corporation, and the Company, duly
executed by the Company.
(b) Assignment and Assumption of Asset Purchase Agreement. The Assignment
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and Assumption of Asset Purchase Agreement, dated as of the date of the
Reorganization, between the Company, as Assignor, and Holdings, as Assignee.
(c) Co-Sale Agreement. The Fourth Amended and Restated Right of First
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Refusal and Co-Sale Agreement, dated as of the date of the Reorganization,
among the Founders, Holdings, the Company, MS and certain securityholders
of Holdings.
(d) Fifth Amended and Restated Rights Agreement. The Fifth Amended and
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Restated Rights Agreement dated as of the date of the Reorganization, among
Holdings, the Company, MS and certain other securityholders of Holdings.
(e) Holdings Letter Agreement. The letter agreement, dated the date of the
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Reorganization, between Holdings and Xxxxxx Xxxxxxx & Co. Incorporated.
(f) Guaranty. The Guaranty of Holdings, dated as of the date of the
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Reorganization, in favor of the Purchasers in the form of Exhibit A to this
Amendment.
(g) Corporate Approvals of the Company. Certified copies of the
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resolutions of the board of directors (or persons performing similar
functions) of the Company approving the Reorganization and all documents
evidencing necessary corporate action with respect to the Reorganization.
(h) Corporate Approvals of Holdings. Certified copies of the resolutions
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of the board of directors (or persons performing similar functions) of
Holdings approving the Reorganization and all documents evidencing
necessary corporate action with respect to the Reorganization.
(i) Certificate of Incorporation of the Company. A copy of the certificate
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of incorporation of the Company and each amendment thereto, certified (as
of a date reasonably near the date of this Amendment) by the Secretary of
State of the State of Delaware as being a true and complete copy thereof.
(j) Certificate of Incorporation of Holdings. A copy of the certificate of
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incorporation of Holdings and each amendment thereto, certified (as of a
date reasonably near the date of this Amendment) by the Secretary of State
of the State of Delaware as being a true and complete copy thereof.
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(k) Secretary's Certificate of the Company. A certificate from the
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secretary or an assistant secretary (or a person performing similar
functions) of the Company certifying:
(i) the absence of any amendments to the certificate of
incorporation of the Company since the date of the Secretary of State's
certificate referred to in subsection (i) of this Section 2.1;
(ii) the completeness and accuracy of the resolutions of the board of
directors of the Company and all documents evidencing other necessary
corporate action thereof referred to under subsection (g) of this Section
2.1;
(iii) the completeness and accuracy of the bylaws of the Company as in
effect on the date the resolutions specified in subsection (g) of this
Section 2.1 were adopted and on the date of this Amendment (a copy of
which shall be attached to such certificate);
(iv) the names and true signatures of the officers of the Company
authorized to sign each of this Amendment and the other documents to be
executed by the Company in connection with the Reorganization; and
(v) such other matters MS shall specify relating to the existence
and good standing of the Company and the corporate and other necessary
authority for, and the validity of, this Amendment and the other
documents to be executed by the Company in connection with the
Reorganization and any other matters relevant to any of the foregoing.
(l) Secretary's Certificate of Holdings. A certificate from the secretary
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or an assistant secretary (or a person performing similar functions) of
Holdings certifying:
(i) the absence of any amendments to the certificate of
incorporation of Holdings since the date of the Secretary of State's
certificate referred to in subsection (j) of this Section 2.1;
(ii) the completeness and accuracy of the resolutions of the board
of directors of Holdings and all documents evidencing other necessary
corporate action thereof referred to under subsection (h) of this Section
2.1;
(iii) the completeness and accuracy of the bylaws of Holdings as in
effect on the date the resolutions specified in subsection (h) of this
Section 2.1 were adopted and on the date of this Amendment (a copy of
which shall be attached to such certificate);
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(iv) the names and true signatures of the officers of Holdings
authorized to sign each of this Amendment and the other documents to be
executed by Holdings in connection with the Reorganization; and
(v) such other matters MS shall specify relating to the existence
and good standing of Holdings and the corporate and other necessary
authority for, and the validity of, this Amendment and the other
documents to be executed by Holdings in connection with the
Reorganization and any other matters relevant to any of the foregoing.
2.2. Opinion of Counsel.
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MS shall have received the favorable opinion of counsel of the Company and
Holdings, dated the date of this Amendment, in substantially the form of Exhibit
B attached hereto, and addressing such other matters as MS (or counsel to MS)
may reasonably request.
3. Expenses. The Company will pay, within 15 days of each demand
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therefor (such demand to be accompanied by supporting documentation in
reasonable detail), all costs and expenses incurred by MS (including, without
limitation, reasonable attorneys' fees of a special counsel) in connection
with the preparation, review, execution and delivery of this Amendment, the
Guaranty by Holdings and the other agreements or documents delivered in
connection with the Reorganization
4. Ratification and Confirmation of Note Purchase Agreement. Except as
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specifically amended hereby, the Note Purchase Agreement is hereby ratified and
confirmed and shall remain in full force and effect in accordance with its
terms.
5. Execution in Counterpart. The Amendment may be executed by the
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parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a
number of copies hereof each signed by less than all, but together signed by
all of the parties hereto.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have hereunto executed this Amendment as of
the day first above set forth.
NORTHPOINT COMMUNICATIONS, INC.
By:__________________________________
Name:
Title:
XXXXXX XXXXXXX SENIOR FUNDING, INC.
By:___________________________________
Name:
Title:
EXHIBIT A
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[FORM OF GUARANTY OF HOLDINGS]
EXHIBIT B
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Opinion of Counsel for Holdings and the Company
(A) Each of Holdings and the Company (i) is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware; (ii) is duly qualified as a foreign corporation and in good
standing in each other jurisdiction in which the ownership, lease or operation
of its property and assets or the conduct of its business requires
qualification, other than in any such jurisdiction where failure to be so
qualified or in good standing, either individually or in the aggregate, could
not reasonably expected to have a material adverse effect, and (iii) has all
corporate power and authority to own or hold under lease all of the property and
assets it purports to own or hold under lease and to conduct the business it
presently conducts.
(B) Each of the First Amendment to Note Purchase Agreement, the Co-
Sale Agreement, the Rights Agreement, the Holdings Letter Agreement, the
Guaranty by Holdings, the Agreement and Plan of Merger of NorthPoint Merger Sub,
Inc. and NorthPoint Communications, Inc. dated as of the date of the
Reorganization, and the Assignment and Assumption of Asset Purchase Agreement
dated as of the date of the Reorganization between the Company and Holdings
(collectively the "Transaction Documents") to which Holdings or the Company is a
party has been duly authorized, executed and delivered by Holdings or the
Company, as the case may be, and constitutes the legal, valid and binding
obligation of Holdings or the Company, enforceable against Holdings or the
Company in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar laws of
general applicability relating to or affecting creditors' rights and to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(C) The execution, delivery and performance by Holdings and the
Company of the Transaction Documents to which it is a party do not (i)
contravene Holdings' or the Company's certificate of incorporation or bylaws,
(ii) violate any applicable provision of any presently existing law or
regulation of the United States of America or any Governmental Authority thereof
or of the State of New York or (iii) conflict with or result in the breach of,
or constitute a default under, or result in or require the creation or
imposition of any Lien upon or with respect to any of the property or assets of
Holdings or the Company under any material agreement or instrument of Holdings
or the Company. No consent, approval or authorization of, or notice to, or
other action by, any United States federal or New York State Governmental
Authority is required for the due execution, delivery or performance by Holdings
or the Company of the Transaction Documents to which it is a party or the
consummation of the transactions contemplated thereby.
