1
Exhibit 10.1(e)
July 11, 1997
Global TeleSystems Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx 00xx Xxxxx
XxXxxx, Xxxxxxxx 00000
Global TeleSystems Group, Inc.
Ladies and Gentlemen:
We refer to (i) the Senior Note Purchase Agreement, dated as of January
19, 1996, as heretofore amended (and as so amended, the "Initial Chatterjee
Agreement"), among Global TeleSystems Group, Inc. (the "Company") and The Open
Society Institute ("OSI") and Chatterjee Fund Management, L.P., as purchasers
(the "Initial Chatterjee Purchasers"), and (ii) the Senior Note Purchase
Agreement, dated as of June 6, 1996, as heretofore amended (as so amended, the
"Additional Chatterjee Agreement"; the Initial Chatterjee Agreement and the
Additional Chatterjee Agreement being collectively, the "Chatterjee
Agreements"), among the Company, and OSI, Winston Partners II LDC and Winston
Partners II LLC, as purchasers (the "Additional Chatterjee Purchasers"; the
Initial Chatterjee Purchasers and the Additional Chatterjee Purchasers being,
collectively, the "Chatterjee Purchasers"). Terms defined or referenced in the
Additional Chatterjee Agreement and not otherwise defined or referenced herein
are used herein as therein defined or referenced.
The Company and the Chatterjee Purchasers hereby agree as follows:
1. Subsection (g) of Section 9.3 of each Chatterjee Agreement is amended
by substituting the words "$135 million of bonds convertible into Common Stock,
plus the issuance of up to an additional $20.250 million of bonds convertible
into Common Stock, pursuant to the exercise of the over-allotment option to the
extent such over-allotment option
2
2
exercised by UBS Securities LLC, on behalf of itself and the other placement
agents," for the words "$115 million of bonds convertible into Common Stock."
2. Section 9.3 of each Chatterjee Agreement is amended by deleting
the word "and" immediately preceding subsection 9.3(g) and by adding the
following text immediately following subsection 9.3(g):
and (h) Indebtedness incurred in connection with the issuance
of up to $175 million of notes of Hermes Europe Railtel B.V. on
substantially the terms set forth in Schedule A; provided, however, that
such indebtedness is incurred on or before September 30, 1997.
3. Schedule A of each Chatterjee Agreement, under the caption
"Pending Financings," is amended by adding the text set forth in Appendix A
hereto.
4. THIS LETTER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
5. This letter agreement becomes effective as of the date first
above written, on the date on which the Company and each Chatterjee Purchaser
shall have executed and delivered a counterpart hereof. Upon the effectiveness
of this letter agreement, each reference in any Initial Transaction Document or
Transaction Document to either Chatterjee Agreement or any term or provision
thereof shall mean such Chatterjee Agreement, such term or such provision,
respectively, as amended hereby. Except as otherwise provided herein, the
Transaction Documents shall remain in full force and effect and are hereby in
all respects ratified and confirmed.
6. This letter agreement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together shall constitute but one and the same letter
agreement. Delivery of an executed counterpart of a signature page of this
letter agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this letter agreement.
3
3
Please indicate your agreement to the foregoing by executing a
counterpart of this letter agreement in the appropriate space provided below.
Very truly yours,
THE OPEN SOCIETY INSTITUTE WINSTON PARTNERS II LDC
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
------------------------------ --------------------------------------
Name: Name: [Illegible]
Title: Title: Attorney-in-fact
CHATTERJEE FUND MANAGEMENT, X.X. XXXXXXX PARTNERS II LLC by its
Manager Chatterjee Advisors LLC
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
------------------------------ --------------------------------------
Name: [Illegible] Name: [Illegible]
Title: Attorney-in-fact Title: Manager
Accepted and Agreed:
GLOBAL TELESYSTEMS GROUP, INC.
By: /s/ [ILLEGIBLE]
----------------------------
Name: [Illegible]
Title: Treasurer
4
APPENDIX A
HERMES EUROPE RAILTEL
$175 MILLION SENIOR NOTE FINANCING
Issuer: Hermes Europe Railtel, B.V.
Issue: Senior Notes
Gross Proceeds: $175 million
Maturity: 10 years
Interest Rates: 12.0% - 13.0%
Pre-funded Interest: 2 years
Optional Redemption: 5 * year non-call
Ranking: Senior (Subordinated to all accrued/unsecured
liabilities of subsidiaries)
Use of Proceeds: To fund the build-out of the Hermes network through
Phase I
Marketing: 144A
Gross Spread: 3.5%
Underwriters: DLJ (lead), UBS, Xxxxxx
Equity Clawback: Prior to the first 3 years, 33 1/3% of each of the
Senior Notes may be redeemed with (i) the proceeds of a
public equity offering of $75 million or more or (ii) the
proceeds from the sale of the Company's common stock to
one or more Strategic Equity Investors for the aggregate
purchase price of $75 million or more.
Change of Control: Company must offer to redeem the Senior Notes at 101% of
principal amount thereof, plus accrued and unpaid
interest.
Covenants: Standard covenants for a High Yield offering, including
* Limitation on Incurrence of indebtedness;
* Limitation on Restricted Payments;
* Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries;
* Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries;
* Limitation on Issuance of Guarantees by Restricted
Subsidiaries;
* Limitation on Asset Sales;
* Limitation on Liens;
* Limitation on Consolidation or Merger;
* Limitation on Transaction with Affiliates;
