exv10w57



 





EXHIBIT 10.57




AMENDMENT NO. 1 TO




CONVERTIBLE NOTE PURCHASE AGREEMENT




     AMENDMENT NO. 1, dated March 9, 2004 (this “Amendment”), among Critical
Path, Inc., a California corporation (the “Company”), Permal U.S. Opportunities
Limited, Zaxis Equity Neutral, L.P., Zaxis Institutional Partners, L.P., Zaxis
Offshore Limited, Zaxis Partners, L.P., and Passport Master Fund, L.P.
(collectively with the Company, the “Parties”),



WITNESSETH:




     WHEREAS, the Parties are each a party to that certain Convertible Note
Purchase Agreement, dated January 16, 2004 (the “January 2004 Note Purchase
Agreement”); and



     WHEREAS, the Company desires to enter into a Convertible Note Purchase
Agreement, pursuant to which the Company proposes to issue and sell to Permal
U.S. Opportunities Limited, Zaxis Equity Neutral, L.P., Zaxis Institutional
Partners, L.P., Zaxis Offshore Limited, Zaxis Partners, L.P., Guggenheim
Portfolio Company XIII, Crosslink Crossover Fund IV, L.P., Criterion Capital
Partners, Ltd., Criterion Capital Partners, Institutional, Criterion Capital
Partners, L.P. and Capital Ventures International convertible notes having an
aggregate principal amount of $18.5 million which notes will be convertible,
subject to Stockholder Approval, into shares of Series E Redeemable Convertible
Preferred Stock of the Company, par value $0.001 per share (the “March 2004
Note Purchase Agreement”); and



     WHEREAS, in connection with the execution of the March 2004 Note Purchase
Agreement, the Parties desire to amend the January 2004 Note Purchase Agreement
as set forth herein; and



     WHEREAS, capitalized terms used in this Amendment and not defined herein
shall have the meanings ascribed to such terms in the January 2004 Note
Purchase Agreement:



     NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, for the covenants and agreements set forth in the January
2004 Note Purchase Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and intending to
be legally bound hereby, the Parties hereby agree as follows:



     1.1 Amendments to the January 2004 Note Purchase Agreement. The January
2004 Note Purchase Agreement shall be amended as set forth below:



          (a) Section 1.1 of the January 2004 Note Purchase Agreement shall be
amended to add the following:




     ““March 2004 Note Purchase Agreement” means that certain
Convertible Note Purchase Agreement, dated March 9, 2004, among
Permal U.S. Opportunities Limited, Zaxis Equity Neutral, L.P.,
Zaxis Institutional Partners,



 









 






	 	 	L.P., Zaxis Offshore Limited, Zaxis Partners, L.P.,
Guggenheim Portfolio Company XIII, Crosslink Crossover Fund IV,
L.P., Criterion Capital Partners, Ltd., Criterion Capital
Partners, Institutional, Criterion Capital Partners, L.P., Capital
Ventures International and Critical Path, Inc., a California
corporation (the “Company”), pursuant to which the Company shall
issue and sell convertible notes in an aggregate principal amount
of up to $18.5 million, which notes shall be convertible into
Series E Preferred Stock, subject to Stockholder Approval and
concurrently with the Conversion, or Common Stock, in each case in
accordance with such agreement.”






     ““Subsequent Lenders” means the Lenders as defined in the
March 2004 Note Purchase Agreement.”



     (b) The third sentence of Section 2.1(a) of the January 2004 Note Purchase
Agreement shall be deleted and replaced with the following:




     “If the Conversion has not occurred on or before August 15,
2004, the Notes shall thereafter be convertible at the option of
each Lender only into shares of Common Stock in accordance with
the terms thereof (all the shares of Common Stock issuable
directly upon conversion of the Notes referred to herein as the
“Common Shares”).”



     (c) Section 2.4(e) of the January 2004 Note Purchase Agreement is hereby
deleted and amended and restated in its entirety to read as follows:




     “(e) Subsequent Closing. The consummation of the Conversion
(the “Subsequent Closing”) shall take place concurrently with the
Subsequent Closing under the Convertible Note Agreement and the
Subsequent Closing under the March 2004 Note Purchase Agreement,
as soon as practicable following the satisfaction of the closing
conditions set forth in Article VI of this Agreement, Article VI
of the Convertible Note Agreement and Article VI of the March 2004
Note Purchase Agreement (the “Subsequent Closing Date”), at the
offices of Pillsbury Winthrop LLP, 50 Fremont Street, San
Francisco, California, or at such other time and place as the
Company, the Lenders, the General Atlantic Entities, the CK
Purchasers and the Subsequent Lenders may mutually agree. At the
Subsequent Closing, signature pages transmitted by facsimile will
be acceptable, with originals to follow as soon as practicable
thereafter.”


       
   (d) In the first sentence of Section 2.5 of the January 2004 Note Purchase
Agreement, the words “April 30” shall be deleted and replaced with the words
“August 15”.



       
   (e) Section 8.6 of the January 2004 Note Purchase Agreement shall be
deleted and replaced with the following:




       
   “8.6 Purchases and Sales. In the event any Lender has become
aware of or becomes aware of any material non-public information
about the Company (which the parties hereby agree will include
(but not be limited to) any



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	 	 	information labeled by the Company to be material non-public
information) (“Material Non-Public Information”), such Lender
shall not purchase or sell any shares of the Company’s capital
stock (or securities exercisable or convertible for shares of the
Company’s capital stock) until the earlier of (a) such time as the
information is no longer material as a matter of law (which the
parties agree shall be a period of at least three months after
becoming aware of such material non-public information), and (b)
the time at which such information has been disseminated publicly
by the Company, and in any event not in violation of the federal
securities laws. Except as set forth in this Agreement, the
Company covenants and agrees that neither it nor any other Person
acting on its behalf will provide any Lender or its agents or
counsel with any information that the Company believes constitutes
Material Non-Public Information, unless prior thereto such Lender
shall have executed a written agreement regarding the
confidentiality and use of such information. The Company
understands and confirms that each Lender shall be relying on the
foregoing representations in effecting transactions in securities
of the Company.”





     (f) Article VIII of the January 2004 Note Purchase Agreement shall be
amended to add a new Section 8.7 which shall read as follows:




     “8.7 Proxy Matters. Notwithstanding anything herein to the
contrary, but subject to the provisions of Section 9.1 of this
Agreement, if the Registration Statement (as defined in the
Convertible Note Agreement) has not been declared effective by the
Commission on or prior to May 15, 2004, subject to approval by the
Board of Directors, the Company will promptly take all such
actions as may be necessary to withdraw the Registration
Statement, and the Company shall continue to have an obligation
under Section 8.4 of this Agreement to seek Stockholder Approval.
If the Company withdraws the Registration Statement pursuant to
this Section 8.7 and receives Stockholder Approval, the Company
may, subject to approval by the Board of Directors, file a
subsequent registration statement with the Commission and provide
the Company’s shareholders the opportunity to participate in a
subsequent rights offering.”



     (g) In the first sentence of Section 9.1 of the January 2004 Note Purchase
Agreement, the words “April 30” shall be deleted and replaced with the words
“August 15”.



     1.2 Amendments to Schedules to the January 2004 Note Purchase Agreement.
Schedule 8.5 of the January 2004 Note Purchase Agreement is hereby deleted and
amended and restated to read in its entirety in the form set forth as Annex 1
attached hereto.



     1.3 Counterparts. This Amendment may be executed in any number of
counterparts and by the Parties in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. Signature pages transmitted by
facsimile will be acceptable, with originals to immediately follow.



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     1.4 Continuing Agreement. Except as specifically amended hereby, all of
the terms of the January 2004 Note Purchase Agreement shall remain and continue
in full force and effect and are hereby confirmed in all respects.



     1.5 Headings. The headings in this Amendment are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.



     1.6 Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of California, without regard to the
principles of conflicts of law thereof.



     1.7 Severability. If any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair
the benefits of the remaining provisions hereof.



     1.8 Entire Agreement. This Amendment, together with the January 2004 Note
Purchase Agreement and the exhibits and schedules thereto, and the other
Transaction Documents, are intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein. There are no restrictions, promises,
representations, warranties or undertakings, other than those set forth or
referred to herein or therein. This Amendment and the January 2004 Note
Purchase Agreement, together with the exhibits and schedules thereto, and the
other Transaction Documents, supersede all prior agreements and understandings
between the parties with respect to such subject matter.



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          IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this Amendment on the date first written above.


	 	 	 	 	 
	 	CRITICAL PATH, INC.,

a California corporation

 	 
	 	By:  	/s/   William E. McGlashan, Jr.
 	 
	 	 	Name:  	William E. McGlashan, Jr. 	 
	 	 	Title:  	Chairman, Chief Executive Officer 	 
	 




SIGNATURE PAGE TO AMENDMENT
NO. 1 TO CONVERTIBLE NOTE PURCHASE AGREEMENT




 









 








	 	 	 	 	 
	 	PERMAL U.S. OPPORTUNITIES LIMITED



By: Apex Capital, LLC, its Authorized Investment

Advisor

 	 
	 	By:  	/s/
Sanford J. Colen
 	 
	 	 	Name:  	Sanford J. Colen 	 
	 	 	Title:  	Manager and Principal 	 
	 



	 	 	 	 	 
	 	ZAXIS PARTNERS, L.P.



By:  Apex Capital, LLC, its General Partner

 	 
	 	By:  	/s/
Sanford J. Colen
 	 
	 	 	Name:  	Sanford J. Colen 	 
	 	 	Title:  	Manager and Principal 	 
	 



	 	 	 	 	 
	 	ZAXIS EQUITY NEUTRAL, L.P.



By:  Apex Capital, LLC, its General Partner

 	 
	 	By:  	/s/
Sanford J. Colen
 	 
	 	 	Name:  	Sanford J. Colen 	 
	 	 	Title:  	Manager and Principal 	 
	 



	 	 	 	 	 
	 	ZAXIS OFFSHORE LIMITED



By:  Apex Capital, LLC, its Authorized Investment Advisor

 	 
	 	By:  	/s/
Sanford J. Colen
 	 
	 	 	Name:  	Sanford J. Colen 	 
	 	 	Title:  	Manager and Principal 	 
	 



	 	 	 	 	 
	 	ZAXIS INSTITUTIONAL PARTNERS, L.P.



By:  Apex Capital, LLC, its General Partner

 	 
	 	By:  	/s/
Sanford J. Colen
 	 
	 	 	Name:  	Sanford J. Colen 	 
	 	 	Title:  	Manager and Principal 	 
	 



 




SIGNATURE PAGE TO AMENDMENT
NO. 1 TO CONVERTIBLE NOTE PURCHASE AGREEMENT






 







	 	 	 	 	 
	 	PASSPORT MASTER FUND

 	 
	 	By:  	/s/   John Burbank
 	 
	 	 	Name:  	John Burbank 	 
	 	 	Title:  	Managing Partner 	 
	 



 




SIGNATURE PAGE TO AMENDMENT NO. 1 TO CONVERTIBLE NOTE PURCHASE AGREEMENT