Exhibit 10.13
SECOND AMENDMENT
TO
PURCHASE AGREEMENT
This document entered into to be effective as of April 20, 1994 constitutes
the Second Amendment (the "Amendment") to the Purchase Agreement dated as of
April 20, 1994 (the "Agreement") by and among UNITED USN, INC., a Delaware
corporation (the "Company"), CIBC WOOD GUNDY VENTURES, INC., a Delaware
corporation ("CIBC"), and CHEMICAL VENTURE CAPITAL ASSOCIATES, a California
limited partnership ("Chemical"). A First Amendment to the Agreement was made as
of June 10, 1994 in which XXXXXXX VENTURE PARTNERS IV--DIRECT FUND L.P.
("Xxxxxxx") became a party to the Agreement. In this Amendment, the term
"Purchasers" shall mean and include CIBC, Chemical and Xxxxxxx. Except as
otherwise indicated in this Amendment, capitalized terms used herein shall have
the same meanings assigned to such terms in the Agreement.
Recitals
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A. The applicability of certain provisions of the Agreement have proven to
be cumbersome or unnecessary during the start-up phase of the Company and its
Subsidiaries.
B. Company and Purchasers desire to conform the terms of the Agreement to
the actual operation of the Company and its Subsidiaries.
C. As permitted by paragraph 9E of the Agreement, Company and Purchaser
hereby give their written consent to the following amendments to the Agreement.
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Paragraph 4A and subparagraphs (i) and (ii) thereof are hereby amended
and restated to read as follows:
4A. Financial Statements and Other Information. Commencing on the
dates specified herein, the Company shall deliver to the Purchasers, or
if the Purchasers have transferred any part of its interest in the Company,
to any other Qualified Holder:
(i) Commencing with the month ending September 30, 1994, on dates
acceptable to and designated by Purchasers, monthly financial
summaries in form and content acceptable to Purchasers and, commencing
with the quarter ending December 31, 1994, as soon as available but in
any event within 30 days after the end of each quarterly accounting
period in each fiscal year, unaudited consolidating and consolidated
statements of income and cash flows of the Company and its
Subsidiaries for such quarterly period and for the period from the
beginning of the fiscal year to the end of such quarter, and
consolidating and consolidated balance sheets of the Company and its
Subsidiaries as of the end of such quarterly period, setting forth in
each case comparisons to the annual budget and to the corresponding
period in the preceding fiscal year, and all such statements shall be
prepared in accordance with generally accepted accounting principles,
consistently applied;
(ii) accompanying the financial statements referred to in
subparagraph (i), an Officer's Certificate, in the form of attached
Exhibit K stating that there is no Event of Noncompliance in existence
and that neither the Company nor any of its Subsidiaries is in default
under any of its other material agreements or, if any Event of
Noncompliance or any such default exists, specifying the nature and
period of existence thereof and what actions the Company and its
Subsidiaries have taken and propose to take with respect thereto;
2. Subparagraph (viii) of Paragraph 4A is amended and restated to read as
follows:
(viii) within ten days after receipt thereof, copies of all financial
statements provided by UTS to the Company unless such
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financial statements have been forwarded to each Purchaser; and
The remaining subparagraphs of paragraph 4A shall remain as stated in the
Agreement.
3. Subparagraph (v) of Paragraph 4D is amended and restated to read as
follows:
(v) make, or permit any Subsidiary to make, any loans or advances to,
guarantees for the benefit of or Investments in any Person (other than a
wholly-owned Subsidiary established under the laws of a jurisdiction of the
United States or any of its territorial possessions), except for (a)
reasonable advances to employees in the ordinary course of business, (b)
acquisitions permitted pursuant to subparagraph (x) below, (c) Investments
in UTS pursuant to the UTS Agreement or as approved by a majority of the
members of the Company's board of directors, and (d) Investments having a
stated maturity no greater than one year from the date the Company makes
such Investment in (1) obligations of the United States government or any
agency thereof or obligations guaranteed by the United States government,
(2) certificates of deposit of commercial banks having combined capital and
surplus of at least $50 million, (3) commercial paper with a rating of at
least "Prime-l" by Xxxxx'x Investors Service, Inc., or (4) certificates of
deposit or interest-bearing demand deposits of Madison Bank and Trust
Company.
4. Subparagraph (xiv) of Paragraph 4D is amended and restated to read as
follows:
(xiv) enter into, or permit any Subsidiary to enter into, any
transaction with the Company's or any Subsidiary's officers, directors,
employees or Affiliates or any individual related by blood or marriage to
any such Person or any entity in which any such Person or individual owns a
beneficial interest, except (a) pursuant to the UTS Agreement, (b) the
Xxxxxxxx Agreement, (c) normal employment arrangements and benefit programs
on reasonable terms, (d)
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agreements for consulting services, other services, office space or the
purchase of goods on terms and conditions no less favorable than available
from unrelated third parties if said agreements are approved by the Chief
Financial Officer, and (e) as otherwise expressly contemplated by this
Agreement;
5. Subparagraph (xvi) of Paragraph 4D is amended and restated to read as
follows:
(xvi) except pursuant to CAP Agreements approved by a majority of the
members of the Company's board of directors, make, or permit any Subsidiary
to enter into, any capital expenditures (including, without limitation,
payments with respect to capitalized leases, as determined in accordance
with generally accepted accounting principles consistently applied)
exceeding $3 million in the aggregate on a consolidated basis during any
12-month period.
6. Subparagraph (xvii) of Paragraph 4D is amended and restated to read as
follows:
(xvii) except pursuant to CAP Agreements approved by a majority of the
members of the Company's board of directors, enter into, or permit any
Subsidiary to enter into, any leases or other rental agreements (excluding
capitalized leases, as determined in accordance with generally accepted
accounting principles consistently applied) under which the amount of the
aggregate lease payments for all such agreements for both the Company and
its Subsidiaries exceeds $3 million on a consolidated basis for any 12-
month period;
7. Paragraph 4N is amended and restated as follows:
4N. Key-Man Life Insurance. Prior to December 31, 1994, Network
shall have obtained key-man life insurance policies on the lives of Xxxxxx
X. Xxxxxxxxxxx and Xxxxxxx X. Xxxxxxx in the face amount of $2,500,000
each. Such insurance policies shall name the Purchasers as beneficiary
and shall provide that such insur-
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ance policies may not be cancelled unless the insurance carrier gives at
least 30 days' prior written notice of such cancellation to each Purchaser.
8. The first sentence of subparagraph (i) of Paragraph 6B is amended and
restated as follows:
(i) As of the Tranche I Closing and immediately thereafter, the
authorized capital stock of the Company shall consist of (a) 50,000 shares
of preferred stock, of which 20,000 shares shall be designated as Series A
10% Senior Cumulative Preferred Stock, 6,300 shares shall be issued and
outstanding and 4,950 shares reserved for issuance pursuant to any Tranche
II Closing, and (b) 200,000 shares of Common Stock, of which 85,000 shares
shall be issued and outstanding, 46,420 shares shall be reserved for
issuance pursuant to any Tranche II Closing, 24,076 shares shall be
reserved for issuance in connection with the Management Option Pool
subsequent to the Tranche I Closing and 15,165 shares shall be reserved for
issuance in connection with the Management Option Pool subsequent to any
Tranche II Closing.
The remainder of subparagraph (i) of Paragraph 6B shall remain as stated in
the Agreement.
9. In all other respects, the Agreement shall remain unchanged and in
full force and effect.
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EXECUTED AND DELIVERED by the parties on the date first written above.
UNITED USN, INC.
By:
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Xxxxxx X. Xxxxxxxxxxx
Chief Executive Officer
CIBC WOOD GUNDY VENTURES, INC.
By:
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Xxxxxxx X. Xxxxxx
President
CHEMICAL VENTURE CAPITAL
ASSOCIATES
By:
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Xxxxxx X. Xxxxxxx, Xx.
Its:
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XXXXXXX VENTURE PARTNERS IV -
DIRECT FUND L.P.
By: Back Bay Partners XII L.P.
By: Xxxxxxx Venture Partners,
Inc.
By:
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Xxxxxxx X Xxxxxxxx
Senior Vice President
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