Exhibit 10.2
AMENDMENT NO. 1
TO
NOTE PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT, dated as of
March 15, 1999 (this "Agreement"), among USN COMMUNICATIONS, INC., a
Delaware corporation (the "Company"), XXXXXXX XXXXX GLOBAL ALLOCATION FUND,
INC. ("MLGAF") and CORECOMM LIMITED ("CoreComm"; Xxxxxxx Xxxxx and CoreComm
are individually referred to as a "Purchaser" and collectively as the
"Purchasers").
W I T N E S S E T H:
WHEREAS, the Company and the Purchasers are parties to the Note
Purchase Agreement, dated as of February 23, 1999 (the "Existing Note
Agreement"); and
WHEREAS, the Company has requested that, as of the Effective
Date, the Existing Note Agreement be amended as herein provided; and
WHEREAS, the Purchasers are willing, subject to the terms and
conditions hereinafter set forth, to make such amendment as of the
Effective Date;
NOW, THEREFORE, in consideration of the agreements herein
contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Definitions. The following terms (whether
or not underscored) when used in this Agreement shall have the following
meanings:
"Agreement" is defined in the preamble.
"Amended Note Agreement" means the Existing Note Agreement as
amended by this Agreement as of the Effective Date.
"Company" is defined in the preamble.
"CoreComm" is defined in the preamble.
"Effective Date" is defined in Section 4.1.
"Existing Note Agreement" is defined in the first recital.
"MLGAF" is defined in the preamble.
"Purchasers" is defined in the preamble.
Section 1.2 Other Definitions. Unless otherwise defined or the
context otherwise requires, terms used herein (including in the preamble
and recitals hereto) have the meanings provided for in the Existing Note
Agreement.
ARTICLE II
AMENDMENTS
Effective on (and subject to the occurrence of) the Effective Date,
the Existing Note Agreement is amended as follows:
Section 2.1 Amendments to Sections 3.2 and 11.1(l). The (a)
fourth line of Section 3.2 is amended by deleting reference to "March 15,
1999" and inserting in lieu thereof "March 22, 1999" and (b) the second
line of Section 11.1(l) of the Existing Note Agreement is amended by
deleting reference to "March 15, 1999" and inserting in lieu thereof "March
19, 1999".
Section 2.2 Amendments to Sections 2.2 and 11.1(l). Section
9.22 of the Existing Note Agreement is amended and restated in the entirety
as follows:
"9.22 Chapter 11 Claims
The Company will not permit any of its Subsidiaries to incur,
create, assume, apply for, suffer or exist or permit any other
superpriority claim or other claim which is pari passu with or senior to
the claims of the holders of the Notes, against the Company, any of its
Subsidiaries or any of their properties or assets. The Liens and
Superpriority Claims granted to the DIP Agent and the Lenders pursuant
to the Credit Agreement and the Order shall be subject and subordinate
to a carve-out (the "Carve-Out") for (a) following the occurrence and
during the pendency of a Default or an Event of Default, the payment of
(I) allowed professional fees and disbursements incurred by the
professionals retained, pursuant to Bankruptcy sections 327(a) or (e)
under a general retainer (excepting ordinary course professionals) or
1103(a), by the Debtors and any statutory committees appointed in the
Chapter 11 cases and (ii) the expenses of any member of any such
committee allowed under Bankruptcy Code section 503(b)(3)(F), in an
aggregate amount not to exceed the Carve-Out Amount (as defined below)
and (b) quarterly fees required to be paid pursuant to 28 U.S.C. section
1930(a)(6) and any fees payable to the Clerk of the Bankruptcy Court;
provided, however, that the Carve-Out shall not include professional
fees and disbursements incurred in connection with the prosecution of a
complaint, motion or other pleading which asserts (x) claims or causes
of action against the Lenders and/or (y) challenges or raises any
defenses to the Obligations or Prepetition Obligations or any
prepetition or postpetition lien of the Lenders. As long as no Default
or Event of Default shall have occurred and be continuing, the Debtors
shall pay compensation and reimbursement of expenses as authorized by
any applicable order of the Bankruptcy Court, as the same may be
payable, and the amount so paid shall not reduce the Carve-Out. The
Carve-Out Amount shall equal the sum of $500,000 plus an amount equal to
the lesser of (a) the cumulative unpaid budgeted amount, or pro rata per
diem portion of the cumulative unpaid budgeted amount to the extent the
Carve-Out is triggered during a calendar month, as the case may be, for
the period ending as of the date of such Default (the "Computation
Period") for incurred professional fees shown on Schedule II and (b) the
amount of professional fees previously or subsequently allowed by the
Bankruptcy Court for the Computation Period (including such amounts
permitted to be paid pursuant to any interim compensation order entered
by the Bankruptcy Court)."
Section 2.3 Amendments to Section 4.5. Section 4.5 of the
Existing Note Agreement is amended by inserting after the word "Xxxxx" on
the third line thereof" and Young Xxxxxxx, Stargatt & Xxxxxx".
Section 2.4 New Section 4.B.4.6. A new Section 4.B.4.6 is added
to the Existing Note Agreement as follows:
"4.6 Payment of Special Counsel Fees.
Without limiting the provisions of Section 14.1, there shall be
paid from the proceeds of the Second Closing Notes the reasonable fees,
charges, and disbursements of XxXxxxxxx, Will & Xxxxx and Young,
Conaway, Stargatt & Xxxxxx that are incurred in connection with the
Transaction".
Section 2.5 Amendments to Section 14.1. Section 14.1 of the
Existing Note Agreement is amended by adding (a) after the word "counsel"
on the fourth line thereof the phrase "(including, without limitation, the
fees and expenses of Young, Conaway, Stargatt & Xxxxxx)", and (b) after the
word "with" on the fifteenth line thereof the phrase "the participation of
the Purchasers in the Chapter 11 case, and".
Section 2.6 New Schedule II. A new Schedule II is added to the
Existing Note Agreement in the form of Schedule I hereto, and "Schedule II
- Incurred Professional Fees" is added after reference to Schedule I in the
table of contents.
Section 2.7 Schedule I - New Defined Term. The following
defined term is added to Schedule I of the Existing Note Agreement:
"Computation Period has the meaning provided in Section 9.22."
Section 2.8 Schedule I - Revised Defined Term. The definition
of "Transaction" is amended by adding after the word "including" on the
second line the phrase "the participation of the Purchasers in the Chapter
11 case,".
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Purchasers to make the amendments provided
for in Article II, the Company hereby represents and warrants as of the
Effective Date that each of the representations and warranties of the
Company contained in the Existing Note Agreement and in the other Note
Documents is true and correct in all material respects as of the Effective
Date (except, if any such representation and warranty relates to an earlier
date, such representation and warranty shall be true and correct in all
material respects as of such earlier date).
ARTICLE IV
CONDITIONS TO EFFECTIVENESS, ETC.
Section 4.1 Effective Date. The amendments set forth in Article
II shall become effective on such date (herein called the "Effective Date")
when the relevant conditions set forth in this Section 4.1 have been
satisfied.
Section 4.2 Execution of Agreement. Counterparts of this
Agreement shall have been duly executed and delivered on behalf of the
Company and each Purchaser.
Section 4.3 Representations and Warrants. The representations
and warranties made by the Company pursuant to Article III as of the
Effective Date shall be true and correct.
Section 4.4 Letter of Clarification. The Company and the
Purchasers shall have entered into a mutually acceptable letter of
clarification with respect to Section 3.21 of the CoreComm Asset Purchase
Agreement.
Section 4.5 Opinion of Counsel. On or prior to the Second
Closing the Purchasers shall have received the legal opinion(s) in
substantially the form attached hereto at Annex I.
ARTICLE V
MISCELLANEOUS
Section 5.1 Cross-References. References in this Agreement to
any Article or Section are, unless otherwise specified, to such Article or
Section of this Agreement.
Section 5.2 Note Document Pursuant to Credit Agreement. This
Agreement is a Note Document executed pursuant to the Amended Note
Agreement. Except as expressly amended hereby, all of the representations,
warranties, terms, covenants and conditions contained in the Note Agreement
and each other Note Document shall remain unamended or otherwise unmodified
and in full force and effect.
Section 5.3 Limitation of Amendments. The amendments set forth
in Article II shall be limited precisely as provided for herein and shall
not be deemed to be a waiver of, amendment of, consent to or modification
of any other term or provision of the Existing Note Agreement or of any
term or provision of any other Note Document or of any transaction or
further or future action on the part of the Company or any of the Company's
Subsidiaries which would require the consent of any of the Lenders under
the Existing Note Agreement or any other Note Document.
Section 5.4 Counterparts. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.
Section 5.5 Successors and Assigns. This Agreement shall be
binding upon an inure to the benefit of the parties hereto and their
respective successors and assigns.
Section 5.6 Costs and Expenses. The Company agrees to pay all
reasonable costs and expenses incurred by legal counsel for MLGAF incurred
in connection with the execution and delivery of this Agreement and the
other agreements and documents entered into in connection herewith.
Section 5.7 GOVERNING LAW; WAIVER OF JURY TRIAL; ENTIRE
AGREEMENT. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH PERSON A PARTY HERETO
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION ARISING UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY AGREEMENT OR DOCUMENT ENTERED INTO IN CONNECTION HEREWITH.
THIS AGREEMENT CONSTITUTES THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY PRIOR
AGREEMENT, WRITTEN OR ORAL, WITH RESPECT HERETO.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers hereunto duly authorized as of
the day and year first above written.
COMPANY
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USN COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxx
_________________________
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
and General Counsel
PURCHASERS
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XXXXXXX XXXXX GLOBAL ALLOCATION
FUND, INC.
By: /s/ Xxxx Xxx X'Xxxxxxx
___________________________
Name: Xxxx Xxx X'Xxxxxxx
Title: Vice President, Xxxxxxx
Xxxxx Asset Management
CORECOMM LIMITED
By: /s/ Xxxxxx X. Xxxxxxxxxx
__________________________
Name: Xxxxxx X. Xxxxxxxxxx
Title: Chairman
