FIRST AMENDMENT TO
NOTE PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT (this
"Amendment") dated as of January 15, 1999 is entered into by and between
USN COMMUNICATIONS, INC., a Delaware corporation (the "Company") and
XXXXXXX XXXXX GLOBAL ALLOCATION FUND, INC., (the "Holder").
W I T N E S S E T H:
WHEREAS, the Company and the Holder are parties to a Note
Purchase Agreement dated as of November 18, 1998 (as amended, herein called
the "Purchase Agreement"; terms used but not otherwise defined herein are
used herein as defined in the Purchase Agreement);
WHEREAS, the Company desires to sell and the Holder
desires to purchase additional Notes in the aggregate principal amount of
$2,500,000 on the terms and conditions set forth herein; and
WHEREAS, the Company and the Holder also desire to make
certain amendments to the Purchase Agreement and the existing note on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises, and
intending to be legally bound hereby, the Company and the Holder hereby
agree as follows:
SECTION 1 ADDITIONAL NOTE.
1.1 On the Effective Date (as defined below), the Company will
issue and sell to the Holder and, subject to the terms and conditions of
this Amendment, the Holder will purchase from the Company, Notes in the
aggregate principal amount of $2,500,000 (the "Additional Notes"). The
Additional Notes shall be Notes under the Purchase Agreement.
1.2 The sale and purchase of the Additional Notes to be purchased
by the Holder shall occur at the offices of XxXxxxxxx, Will & Xxxxx, 000
Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, at 11:30 A.M. (Chicago time),
at a closing (the "Closing") on the Effective Date. At the Closing, the
Company will deliver to the Holder the Additional Notes to be purchased by
the Holder in the form of a single Additional Note (or such greater number
of Additional Notes in denominations of at least $500,000 or integral
multiples of $100,000 in excess thereof as the Holder may request) dated
the Effective Date and registered in the Holder's name (or in the name of
its nominee), against delivery by the Holder to the Company or its order of
immediately available funds in the amount of the aggregate purchase price
therefor by wire transfer of immediately available funds for the account of
the Company to Xxxxxx Trust and Savings Bank, Account No. 000-000-0. If, at
the Closing, the Company shall fail to tender such Additional Notes to the
Holder as provided above or any of the conditions specified in Section 6.2
shall not have been fulfilled to the Holder's satisfaction, the Holder
shall, at its election, be relieved of all further obligations under this
Amendment, without hereby waiving any rights it may have by reason of such
failure or such nonfulfillment.
SECTION 2 AMENDMENTS.
Subject to and upon the terms and conditions hereof and
in reliance on the Company's warranties set forth in Section 4 below, as of
the date hereof the Purchase Agreement is amended as follows:
2.1 Schedule I to the Purchase Agreement is hereby amended to (a)
delete the reference to "January 15, 1999" in the definition of Maturity
Date set forth therein and to insert a reference to "February 15, 1999" in
lieu thereof and (b) delete the reference to "$500,000" in the definition
of Facility Fee and insert a reference to "$625,000" in lieu thereof.
2.2 The Purchase Agreement and each Note Document are hereby
amended to delete each reference to "17.00% Senior Secured Notes due
January 15, 1999" and each reference to "January 15, 1999" contained
therein and replace each such reference with a reference to "17.00% Senior
Secured Notes due February 15, 1999" or a reference to "February 15, 1999",
as applicable.
2.3 The Purchase Agreement and each Note Document are hereby
amended to delete each reference to "$10,000,000" contained therein and
replace each such reference with a reference to "$12,500,000".
SECTION 3 NOTES.
3.1 Concurrently herewith, the Company is executing and delivering
(a) a replacement Note (the "Replacement Note") in the form attached hereto
as Exhibit A and (b) the Additional Note.
3.2 The Replacement Note will constitute a renewal and restatement
of, and a replacement and substitution for, the existing Note. The
indebtedness evidenced by the existing Note is continuing indebtedness, and
nothing herein shall be deemed to constitute a payment, settlement or
novation of the existing Note, or to release or otherwise adversely affect
any lien, mortgage or security interest securing such indebtedness or any
rights of the holder against any guarantor, surety or other party primarily
or secondarily liable for such indebtedness.
3.3 Concurrently with the delivery of the Replacement Note, the
Holder will deliver to the Company the existing Note for cancellation.
SECTION 4 WARRANTIES.
The Company hereby represents and warrants to the Holder that:
4.1 Amendment. The Company is duly authorized to execute and
deliver this Amendment, the Replacement Note and the Additional Note. The
execution and delivery by the Company of this Amendment, the Replacement
Note and the Additional Note does not and will not require any consents or
approvals, and does not conflict with, or result in a default under, any
provision of law or of the Company's charter or bylaws or of any agreement
binding on the Company. Each of this Amendment, the Replacement Note and
the Additional Note are the legal, valid and binding obligation of the
Company.
4.2 Default. Both before and after giving effect to this
Amendment, no Default or Event of Default shall exist which has not been
waived.
SECTION 5 WAIVER OF CONSENT AGREEMENT. The Company, the Holder and
Xxxxxxx Xxxxx Equity/Convertible Series (Global Allocation Portfolio) ("Global
Allocation") are parties to a Consent Agreement, dated as of August 12,
1997 (the "Consent Agreement"). Effective September 30, 1998, the Holder
and Global Allocation waive compliance with Section 5.1 of the Consent
Agreement, and the corresponding provisions of the Old Senior Note
Supplemental Indenture (as defined in the Consent Agreement), until
February 15, 1999, at which date the Company shall be required to name an
Additional Outside Director (as defined in Section 4.22 of the Old Senior
Note Indenture (as defined in the Consent Agreement)).
SECTION 6 GENERAL.
6.1 Counterparts. This Amendment may be executed in any number of
counterparts and any party hereto may execute any counterpart, each of
which when executed and delivered will be deemed to be an original and all
of which counterparts of this Amendment when taken together will be deemed
to be but one and the same Amendment.
6.2 Effectiveness. Upon satisfaction of each of the following
conditions (the "Effective Date"), this Amendment shall become effective as
of the date hereof and the Company will issue the Additional Note:
(a) receipt by the Holder of (i) counterparts of this Amendment,
(ii) the Replacement Note executed by the Company and (iii) an
Additional Note or Notes, in substantially the form of Exhibit B
attached hereto, duly executed by the Company;
(b) receipt by the Holder of (i) a copy of the charter of the
Company and each amendment thereto, certified by the Secretary of the
Company as being a true and correct copy thereof.; and (ii)
confirmation from each jurisdiction in which the Company is qualified
as a foreign corporation that the Company is duly qualified and in
good standing as a foreign corporation in such State and has filed all
annual reports required to be filed to the date of such certificate.
(c) receipt by the Holder of a certificate from the secretary or
an assistant secretary (or a person performing similar functions) of
the Company certifying:
(i) copies of the resolutions of the board of directors
(or persons performing similar functions) of the Company
approving the transactions contemplated hereby; and
(ii) the names and true signatures of the officers of the
Company authorized to sign this Amendment, the Additional
Notes, the Replacement Note and each of the other agreements,
instruments and other documents to be delivered hereunder and
thereunder;
(d) the Holder shall be satisfied that the purchase of and any
payment for the Additional Notes and the Replacement Notes (i) shall
be permitted by the applicable laws, statutes, rules, tariffs and
regulations, (ii) shall not violate any applicable law, statute, rule
or regulation (including, without limitation, Regulation T, Regulation
U, or Regulation X) and (iii) shall not subject the Holder to any tax,
penalty or liability under or pursuant to any applicable law, statute,
rules or regulation;
(e) the Holder shall be satisfied that all orders, consents and
approvals licenses, validations of any Governmental Authority or
public body or authority or any subdivision thereof and any other
third party including any radio, television or other license, Permit,
certificate or approval granted or issued by the FCC or any other
Governmental Authority (including any licenses or permits issued by
the FCC) necessary in connection with any aspect of the transaction
contemplated hereby or this Amendment shall have been obtained
(without the imposition of any conditions that are not acceptable to
the Holder) and shall remain in full force and effect; and all
applicable waiting periods shall have expired without any action being
taken by any competent authority;
(f) the Company shall have paid on or before the Closing the
reasonable fees, charges and disbursements of XxXxxxxxx, Will & Xxxxx
plus a retainer in the amount of $70,000; and
(g) receipt by the Holder of such other documents as may be
reasonably requested by the Holder.
6.3 Limited Amendments. The amendments contained herein are
limited precisely to their terms and shall not constitute an amendment
generally or for any other purpose.
6.4 Reaffirmation. As herein modified, the Purchase Agreement and
each Note Document shall remain in full force and effect and is hereby
ratified, approved and confirmed in all respects.
6.5 Reservation of Rights. The Company acknowledges and agrees
that the execution and delivery by the Holder of this Amendment shall not
be deemed (a) to create a course of dealing or otherwise obligate the
Holder to forbear or execute similar amendments under the same or similar
circumstances in the future, or (b) to waive, relinquish or impair any
right of the Holder to receive any indemnity or similar payment from any
Person or entity as a result of any matter arising from or relating to this
Amendment.
6.6 References. On and after the Effective Date, each reference in
the Purchase Agreement, the Note Documents and the related documents to
"Purchase Agreement," "this Agreement" or words of like import, shall
unless the context otherwise requires, be deemed to refer to the Purchase
Agreement as modified hereby and the New Note.
6.7 Costs and Expenses. The Company agrees to pay all reasonable
fees and out-of-pocket costs and expenses of the Holder (including
reasonable attorneys fees and expenses of counsel to the Holder) in
connection with the preparation, execution and delivery of this Amendment.
6.8 Binding Agreement. This Amendment shall be binding upon the
Company and the Holder and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly
authorized as of the day and year first above written.
USN COMMUNICATIONS, INC.
By:___________________________
Name:
Title:
XXXXXXX XXXXX GLOBAL
ALLOCATION FUND, INC.
By:___________________________
Name:
Title:
For purposes of Section 5 only:
XXXXXXX XXXXX EQUITY/
CONVERTIBLE SERIES (GLOBAL
ALLOCATION PORTFOLIO)
By:____________________________
Name:
Title:
