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EXHIBIT 99.1
AMENDMENT NO. 4
TO
CREDIT AND GUARANTY AGREEMENT
This AMENDMENT NO. 4, dated as of December 8, 2000 (this
"Amendment"), to the Credit and Guaranty Agreement, dated as of December 9,
1999, as amended by Amendment No. 1, dated as of February 2, 2000, Amendment No.
2, dated as of June 28, 2000 and Amendment No. 3, dated as of August 29, 2000
(as amended, the "Existing Credit Agreement"), by and among NORTHPOINT
COMMUNICATIONS, INC., a Delaware corporation ("Company"), NORTHPOINT
COMMUNICATIONS GROUP, INC., a Delaware corporation ("Parent Guarantor"), CERTAIN
SUBSIDIARIES OF COMPANY, as Guarantors, the lenders party thereto from time to
time, GOLDMAN SACHS CREDIT PARTNERS L.P., as Lead Arranger, and as Syndication
Agent, CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC"), as Administrative Agent, and
CIT LENDING SERVICES CORPORATION (formerly known as NEWCOURT COMMERCIAL FINANCE
CORPORATION, an affiliate of The CIT Group, Inc.), as Documentation Agent.
RECITALS:
WHEREAS, the terms used herein, including in the preamble and recitals
hereto, not otherwise defined herein or otherwise amended hereby shall have the
meanings ascribed thereto in the Existing Credit Agreement;
WHEREAS, Parent Guarantor and Bell Atlantic Corporation (d/b/a Verizon
Communications), a Delaware corporation ("Verizon"), entered into an Agreement
and Plan of Merger dated as of August 7, 2000 providing for, among other things,
(i) the contribution by Verizon and/or one or more of its wholly-owned
Subsidiaries to Verizon Ventures I Inc., a Delaware corporation and a wholly-
owned Subsidiary of Verizon ("Verizon Ventures I"), of cash and certain assets
used by Verizon in connection with its wholesale digital subscriber line
operations in exchange for shares of Verizon Ventures I's common stock, (ii) the
merger of a wholly owned subsidiary of Verizon Ventures I with and into Parent
Guarantor, with Parent Guarantor surviving as a wholly owned subsidiary of
Verizon Ventures I and (iii) the commitment by Verizon or its Subsidiary to
provide $200 million in financing to Company (the "Verizon Commitment");
WHEREAS, on November 29, 2000, Verizon notified the Company that it
was terminating the Agreement and Plan of Merger and the Verizon Commitment;
WHEREAS, as a consequence of the foregoing, Company has requested, and
Requisite Lenders have agreed, in each case on the terms and conditions set
forth herein, that the Existing Credit Agreement be amended as hereinafter set
forth.
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NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, each Guarantor, Requisite
Lenders and Agents hereby agree as follows:
SECTION 1. AMENDMENT
As of the Amendment Effective Date (as defined in Section 2 hereof),
the Existing Credit Agreement shall be amended as set forth in this Section 1.
1.1 The Existing Credit Agreement is amended by inserting the
following definitions in the appropriate alphabetical order:
""Amendment Effective Date" means the date "Amendment No. 4 to Credit
and Guaranty Agreement" shall have become effective in accordance with its
terms.
"Consultant" means the firm of E&Y Capital Advisors LLC ("EYCA")."
1.2 The definition of "Consolidated Adjusted EBITDA" is hereby
amended by deleting the "." at the end thereof and inserting in lieu
thereof the following:
"; provided that Consolidated Adjusted EBITDA for the period ended
December 31, 2000 shall exclude from such calculation the payment of
$575,000 in retainers to professionals pursuant to Section 2.3 of Amendment
No. 4 to Credit and Guaranty Agreement, dated as of December 8, 2000."
1.3 The definition of "Delayed Draw Term Loan Commitment Termination
Date" set forth in Section 1.1 of the Existing Credit Agreement is hereby
amended by deleting the date "December 9, 2000" in subsection (ii) thereof
and inserting in lieu thereof the date "January 11, 2001".
1.4 Section 2.1(c) of the Existing Credit Agreement is hereby
amended to read in its entirety as follows:
"(c) Notwithstanding anything in this Agreement to the
contrary, for the period commencing on the Amendment Effective Date
and ending on January 7, 2001, Company shall not deliver to the
Administrative Agent a Funding Notice for any Revolving Loan or
Delayed Draw Term Loan, any attempt to deliver to Administrative Agent
a Funding Notice for any Revolving Loan or Delayed Draw Term Loan
prior to January 8, 2001 shall be ineffective, and during such period,
the Lenders shall have no obligation to make any Revolving Loan or
Delayed Draw Term Loan prior to January 8, 2001."
1.5 Section 2.3(b)(ii) of the Existing Credit Agreement is hereby
amended by deleting the "." at the end thereof and inserting in lieu
thereof the following:
"; provided, however, that notwithstanding anything in this
Agreement to the contrary, for the period commencing on the Amendment
Effective Date and
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ending on January 7, 2001, Company shall not deliver to the
Administrative Agent a Funding Notice for any Swing Line Loan, any
attempt to deliver to Administrative Agent a Funding Notice for any
Swing Line Loan prior to January 8, 2001 shall be ineffective, and
during such period, Swing Line Lender shall have no obligation to make
any Swing Line Loan prior to January 8, 2001."
1.6 Section 2.4(b) of the Existing Credit Agreement is hereby
amended by deleting the "." at the end thereof and inserting in lieu
thereof the following:
"; provided, however, that notwithstanding anything in this
Agreement to the contrary, for the period commencing on the Amendment
Effective Date and ending on January 7, 2001, Company shall not
deliver to the Administrative Agent an Issuance Notice for any Letter
of Credit, any attempt to deliver to Administrative Agent an Issuance
Notice for any Letter of Credit prior to January 8, 2001 shall be
ineffective, and during such period, Issuing Bank shall have no
obligation to issue any Letter of Credit prior to January 8, 2001."
1.7 Section 5.6 of the Existing Credit Agreement is amended by
deleting the word "and" at the end of subsection (j) therein, deleting the
"." at the end of subsection (k) therein and inserting a ";" in lieu
thereof, and inserting immediately thereafter the following:
"(l) by no later than December 21, 2000, (i) a thirteen week
weekly cash flow forecast (commencing January 1, 2001), (ii) a two-
year business plan (which includes a detailed financial forecast on a
monthly basis for the fiscal year 2001 and on a quarterly basis for
the fiscal year 2002) for Company and its Subsidiaries, including
without limitation, financial projections and any proposed
modifications to Company's operations and businesses, (iii) detailed
financial information (including, without limitation, historical
monthly financial statements) for the fiscal quarters ended September
30, 2000 and June 30, 2000 (as restated) and for the months of October
2000 and November 2000 and (iv) commencing on December 21, 2000, and
on the first Business Day of each week thereafter, actual weekly cash
flow results for the preceding week."
1.8 Section 5.10 of the Existing Credit Agreement is amended by
inserting the following at the end thereof:
"Such Credit Party agrees, upon reasonable prior written notice, (i)
to permit Consultant, any agents and any representatives thereof, to
(A) examine and make copies of and abstracts from the records and
books of account of such Credit Party, (B) visit the properties of
such Credit Party and examine the Collateral and (C) communicate
directly with the independent certified public accountants of such
Credit Party, and (ii) to permit Consultant, any agents and any
representatives thereof, to discuss the affairs, finances and accounts
of such Credit Party with any of their respective officers or
directors, financial advisors and investment bankers. Such Credit
Party hereby authorizes its independent certified public accountants
to disclose to Consultant, any agents and any representatives
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thereof, which authorization shall be confirmed at the request of the
Consultant, any and all financial statements and other information of
any kind, including, without limitation, to furnish copies of any
management letter, or the substance of any oral information that such
accountants may have with respect to the business, financial
condition, results of operations or other affairs of such Credit
Party, except that such accounting firm shall not be obligated to
disclose to the Consultant or any agents and any representatives
thereof its work papers or other confidential information, in each
case relating to either (1) any preliminary reports or studies
conducted by such accountants unrelated to any information previously
disclosed to Consultants, any agents or any representatives thereof or
(2) information provided by the attorneys of such Credit Party with
respect to litigation matters if such information is confidential by
reason of the applicable attorney work product doctrine."
1.9 Section 8.1(b) of the Existing Credit Agreement is hereby
amended by deleting the phrase "Section 5.4 or Section 6" and replacing it
in its entirety with the phrase "Section 5.4, Section 5.6(l) or Section 6",
and by inserting immediately after the phrase "relates to Section 5.6" the
phrase "(other than Section 5.6(l))".
1.10 Section 10.2 of the Existing Credit Agreement is hereby amended
by inserting immediately after the phrase "Skadden, Arps, Slate, Meagher &
Flom LLP" the phrase "and Shearman & Sterling".
SECTION 2. CONDITIONS PRECEDENT
This Amendment shall be effective as of the date (the "Amendment
Effective Date") on which each of the following conditions shall have been
satisfied (or waived in accordance with Section 10.5 of the Existing Credit
Agreement), except that Section 3.1 hereof shall become effective solely upon
execution of this Agreement by the Credit Parties and delivery to the
Administrative Agent of such signature page; provided, each Lender agrees that
the execution and delivery to the Company of its signature page hereto shall be
deemed to be the acknowledgement of such Lender that each of the following
conditions precedent in this Section 2 have been duly satisfied or such Lender
has waived the satisfaction thereof:
2.1 Administrative Agent shall have received sufficient copies of
this Amendment, originally executed and delivered by each applicable Credit
Party and the Requisite Lenders.
2.2 Company shall have paid to Administrative Agent a sum equal to
all of the reasonable accrued and unpaid out-of-pocket fees of Agents
(including without limitation, expenses for telephonic conferences, travel
and lodging), fees and expenses of counsel and financial advisors for
Lenders and Administrative Agent, including without limitation the fees and
expenses of EYCA, Shearman & Sterling and Skadden, Arps, Slate, Meagher &
Flom LLP.
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2.3 Company shall have paid to the Administrative Agent a retainer in
the amount of $575,000, of which $250,000 shall be paid to Shearman &
Sterling, counsel to Lenders, $75,000 shall be paid to Sidley & Austin,
counsel to CIBC, as Administrative Agent and $250,000 shall be paid to EYCA
as financial advisors for Administrative Agent and Lenders, for application
against future fees and expenses.
2.4 Company shall have provided Administrative Agent with (i) a
thirteen week weekly cash flow forecast (commencing the week of December 1,
2000), (ii) reasonably detailed information relating to the aging of
Company's and its Subsidiaries' accounts receivable and any analysis
prepared by the Company relating to accounts receivable reserves and (iii)
revenue recognition schedules.
Upon the occurrence of the Amendment Effective Date, the Existing Credit
Agreement as amended by this Amendment and all references in any other Credit
Document (including this Amendment) to the Existing Credit Agreement shall be a
reference to such Agreement as amended hereby.
SECTION 3. ADDITIONAL AGREEMENTS
3.1 Company agrees that notwithstanding Section 2.1(b)(v) of the
Existing Credit Agreement or anything in the Credit Documents to the
contrary, and without prejudice to the rights of Administrative Agent and
Lenders to make or not make any Loan to Company as provided in the Credit
Documents, if Company shall have delivered to Administrative Agent a
Funding Notice with respect to any Revolving Loan or the Delayed Draw Term
Loan (including any Funding Notice deemed to have been delivered pursuant
to Section 2.1(c) of the Existing Credit Agreement), Administrative Agent
shall have no obligation to make funds in respect of such Funding Notice
available to Company prior to 5 p.m. New York City time on December 11,
2000. In the event this Amendment shall become effective prior to 5 p.m.
New York City time on December 11, 2000, then any Funding Notice delivered
to the Administrative Agent (including any Funding Notice deemed delivered
under the Existing Credit Agreement) shall be deemed to have been
irrevocably withdrawn by Company without further action by Company and such
deemed notice shall have no force and effect.
3.2 The obligation of any Lender to make any Loan, or Issuing Bank to
issue any Letter of Credit, on any Credit Date during the period of January
8, 2001 through and including January 11, 2001, are subject to the
satisfaction of all conditions precedent set forth in Section 4.2 of the
Existing Credit Agreement, including, without limitation, the delivery of a
certificate of Company's chief financial officer as of such Credit Date
stating that (i) as of December 11, 2000 and as of the relevant Credit
Date, the representations and warranties contained in the Existing Credit
Agreement and in the other Credit Documents were and shall be true and
correct in all material respects on and as of December 11, 2000 and as of
that Credit Date to the same extent as though made on and as of such date,
(ii) the Maximum Consolidated Adjusted EBITDA Losses (as defined in the
Existing Credit Agreement) for the fiscal quarter ended December 31, 2000
shall not exceed ($85,000,000) and (iii) the Consolidated Senior Debt to
Consolidated
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Capitalization ratio for the fiscal quarter ended December 2000 shall not
exceed 0.25:1.00.
3.3 The Lenders hereby agree to temporarily waive any Default or
Event of Default that would arise under Section 6.7(a)(iv) of the Existing
Credit Agreement from (and including) January 1, 2001 to the earlier of (i)
the date immediately preceding any Credit Date on which the Company has
requested under a Funding Notice a Loan or issuance of a Letter of Credit
and (ii) January 10, 2001 (the "Waiver Expiry Date") and upon the Waiver
Expiry Date, such temporary waiver shall expire and have no further force
and effect.
SECTION 4. WAIVER AND RELEASE
Company, Parent Guarantor, Northpoint Communications of Virginia, Inc.
and Northpoint Europe, Inc. hereby waive and agree not to assert any claims or
causes of action arising before the Amendment Effective Date against the
Lenders, the Lead Arranger, the Syndication Agent, the Administrative Agent or
the Documentation Agent or any of their respective officers, directors,
employees, attorneys and agents, on any theory of liability, whether known or
unknown, matured or contingent, including, without limitation, for special,
indirect, consequential or punitive damages, arising out of or otherwise
relating to, or in connection with, this Amendment, the Loans, the actual or
proposed use of the proceeds of the Loans or the Letters of Credit, the Credit
Documents or any of the transactions entered into in connection therewith;
provided, that nothing in this Section 4 shall relieve any Lender or any Agent
from any of their obligations and agreements under this Amendment or any other
Credit Documents.
SECTION 5. REFERENCE TO AND EFFECT ON THE CREDIT DOCUMENTS
5.1 On and after the Amendment Effective Date, each reference in the
Existing Credit Agreement to "this Agreement," "hereunder," "hereof" or
words of like import referring to the Existing Credit Agreement, and each
reference in the Notes and other Credit Documents to "the Credit
Agreement," "thereunder," "thereof" or words of like import referring to
the Credit Agreement, shall mean and be a reference to the Existing Credit
Agreement, as amended and otherwise modified hereby.
5.2 The Existing Credit Agreement, the Notes and each of the other
Credit Documents, except to the extent of the amendments and other
modifications specifically provided above, are and shall continue to be in
full force and effect and are hereby in all respects ratified and confirmed
by the Credit Parties. Without limiting the generality of the foregoing,
the Collateral Documents and all of the Collateral described therein do and
shall continue to secure the payment of all Obligations of the Credit
Parties under and in respect of the Credit Documents, as amended and
otherwise modified by this Amendment.
5.3 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT, EXCEPT AS SET FORTH IN SECTION 3.3 HEREOF, THE EXECUTION,
DELIVERY AND EFFECTIVENESS OF THIS AMENDMENT SHALL NOT OPERATE AS A WAIVER
OF ANY RIGHT,
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ASSERTION, ACT, POSITION, POWER OR REMEDY OF ANY LENDER OR ANY AGENT UNDER
ANY OF THE CREDIT DOCUMENTS, NOR CONSTITUTE A WAIVER OF ANY PROVISION OF
ANY OF THE CREDIT DOCUMENTS INCLUDING, WITHOUT LIMITATION, THE EXISTENCE AS
OF THE DATE HEREOF OR ANY DATE HEREAFTER, OF ANY EVENT, OCCURRENCE, ACT,
CHANGE OR OMISSION WHICH (A) CONSTITUTES, OR WITH THE PASSAGE OF TIME WOULD
CONSTITUTE, A DEFAULT OR AN EVENT OF DEFAULT UNDER ANY CREDIT DOCUMENT, (B)
HAS, OR WITH THE PASSAGE OF TIME WOULD HAVE CAUSED, CAUSES, EVIDENCED OR
EVIDENCES, A MATERIAL ADVERSE EFFECT (AS DEFINED IN THE EXISTING CREDIT
AGREEMENT) OR (C) CONSTITUTES, OR WITH THE PASSAGE OF TIME WOULD
CONSTITUTE, A BREACH OF ANY REPRESENTATION OR WARRANTY or covenant UNDER
THE EXISTING CREDIT AGREEMENT.
SECTION 6. COSTS AND EXPENSES
In addition to all of its obligations under Section 10.2 of the
Existing Credit Agreement, the Company hereby agrees to pay, upon demand, (i)
all costs and expenses of the Lenders and the Agents incurred or to be incurred
(including, without limitation, the reasonable fees and expenses of counsel and
financial advisors for the Lenders and the Agents) in connection with the
preparation, execution, delivery of this Amendment and (ii) all costs and
expenses of the Lenders and the Agents (including, without limitation, the
reasonable fees and expenses of Shearman & Sterling, as counsel to the Lenders,
Sidley & Austin as counsel to the Administrative Agent, EYCA, as financial
advisor to the Lenders and the Administrative Agent and any other local counsel
retained by the Lenders or the Administrative Agent) in connection with the
review of legal, financial and related documents and information, the review of
Collateral and Collateral Documents and any other matters related to the
Existing Credit Agreement or Credit Documents.
SECTION 7. MISCELLANEOUS
7.1 This Amendment shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of Lenders. No Credit Party's
rights or obligations hereunder or any interest therein may be assigned or
delegated by any Credit Party without the prior written consent of all
Lenders.
7.2 In case any provision in or obligation hereunder or any Credit
Document shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
7.3 Section headings herein are included herein for convenience of
reference only and shall not constitute a part hereof for any other purpose
or be given any substantive effect.
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7.4 THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
7.5 EACH OF THE COMPANY, THE GUARANTORS, THE AGENTS AND THE LENDERS
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THIS AMENDMENT OR THE ACTIONS OF THE AGENTS OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
7.6 This Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original,
but all such counterparts together shall constitute but one and the same
instrument. As set forth herein, this Amendment shall become effective upon
the execution of a counterpart thereof by each of the parties hereto and
receipt by Company and Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof.
Delivery of an executed counterpart of a signature page to this Amendment
by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
NORTHPOINT COMMUNICATIONS, INC., as Company
By:
--------------------------------------
Name:
Title:
NORTHPOINT COMMUNICATIONS GROUP, INC., as Parent
Guarantor
By:
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Name:
Title:
NORTHPOINT COMMUNICATIONS OF VIRGINIA, INC., as a
Subsidiary Guarantor
By:
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Name:
Title:
NORTHPOINT EUROPE, INC., as a Subsidiary Guarantor
By:
--------------------------------------
Name:
Title:
Northpoint Amendment No. 4
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GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Lead Arranger, Syndication Agent and a Lender
By:
--------------------------------------
Authorized Signatory
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent, Swing Line Lender and Issuing Bank
By:
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Name:
Title:
CIBC INC., as a Lender
By:
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Name:
Title:
CIT LENDING SERVICES CORPORATION (formerly
known as NEWCOURT COMMERCIAL FINANCE
CORPORATION, an affiliate of The CIT Group, Inc.),
as Documentation Agent and as a Lender
By:
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Name:
Title:
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FLEET NATIONAL BANK, as a FIRST UNION NATIONAL BANK, as a
Lender Lender
By: By:
-------------------------- -------------------------------
Name: Name:
Title: Title:
BANK OF MONTREAL, as a Lender PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By: By:
-------------------------- -------------------------------
Name: Name:
Title: Title:
BARCLAYS BANK PLC, as a Lender FINOVA CAPITAL CORPORATION, as
a Lender
By: By:
-------------------------- -------------------------------
Name: Name:
Title: Title:
COAST BUSINESS CREDIT A UNION BANK OF CALIFORNIA, as a
DIVISION OF SOUTHERN PACIFIC Lender
BANK, as a Lender
By: By:
-------------------------- -------------------------------
Name: Name:
Title: Title:
CREDIT SUISSE FIRST BOSTON, FRANKLIN FLOATING RATE TRUST,
as a Lender as a Lender
By: By:
-------------------------- -------------------------------
Name: Name:
Title: Title:
By:
--------------------------
Name:
Title:
Northpoint Amendment No. 4
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CREDIT LYONNAIS NEW YORK
BRANCH, as a Lender
By:
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Name:
Title:
ELC (CAYMAN) LTD., as a Lender
By:
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Name:
Title:
ELC (CAYMAN) LTD. CDO SERIES
1999-I, as a Lender
By:
---------------------------
Name:
Title:
HELLER FINANCIAL, INC., as a
Lender
By:
---------------------------
Name:
Title:
Northpoint Amendment No. 4
