SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
MAY 26, 1999
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Date of Report (date of earliest event reported)
USN COMMUNICATIONS, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 333-16265 36-3947804
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(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
10 SOUTH RIVERSIDE PLAZA, SUITE 1810, CHICAGO, ILLINOIS 60606
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(Address of principal executive offices, including zip code)
(312) 474-5766
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(Registrant's telephone number, including area code)
10 SOUTH RIVERSIDE PLAZA, SUITE 2000, CHICAGO, ILLINOIS 60606
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(Former name or former address, if changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 26, 1999 (the "Closing Date"), USN Communications, Inc. and
twelve of its subsidiaries (collectively, the "Company") sold substantially
all of the assets of the Company, other than the Company's Connecticut
wireless subsidiaries (collectively, the "Assets"), to CoreComm Limited
("CoreComm") pursuant to the terms of a previously announced Asset Purchase
Agreement, dated as of February 19, 1999, among the Company and CoreComm
(the "CoreComm Agreement") and an order of the United States District Court
for the District of Delaware.
CoreComm purchased the Assets for an initial cash purchase price of
approximately $26,000,000. The Company also received warrants to purchase
250,000 shares of CoreComm common stock at a price of $30.00 per share and
100,000 shares of CoreComm common stock at a price of $50.00 per share.
Under the terms of the CoreComm Agreement, the Company may receive an
additional payment of up to approximately $60,000,000, depending on
revenues of the Company's operations, other than in Ohio, during the six
month period ending on March 31, 2000.
A portion of the cash proceeds of the sale were used to
extinguish the indebtedness of the Company in the approximate amount of
$19,100,000 to CoreComm and Merrill Lynch Global Allocation Fund, Inc.
("MLGAF"), under the terms of a previously announced Note Purchase
Agreement, dated as of February 23, 1999, among CoreComm, MLGAF and the
Company, and to pay certain fees and expenses associated with the
transaction.
The descriptions set forth above of the CoreComm Agreement and
the Note Purchase Agreement and any amendments thereto do not purport to
summarize all of the material provisions of such documents. Copies of such
documents have been previously filed as exhibits as noted below. The terms
of such documents are hereby incorporated herein by reference. Investors
are urged to obtain and review copies of such documents.
This Report contains statements which constitute "forward-looking
statements" within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934, as amended by the Private Securities
Reform Act of 1995. "Forward-looking statements" in this Report include the
intent, belief or current expectations of the Company and members of its
management team with respect to any additional cash payment to be received
by the Company from CoreComm and any assumptions on which such statements
are based. While the Company believes that its expectations are based upon
reasonable assumptions within the bounds of its knowledge of its business
and operations, investors are cautioned that any such forward-looking
statements are not guarantees of future performance, involve risks and
uncertainties, and that actual results may differ materially from those
contemplated by the forward-looking statements. Important facts currently
known to management that could cause actual results to differ materially
from those contemplated by the forward-looking statements in this Report
include, but are not limited to, the potential for adverse developments in
CoreComm's operation of the Assets going forward and the ability of
CoreComm to realize the anticipated benefits of the acquisition. Additional
factors that would cause actual results to differ materially from those
contemplated within this Report can also be found in the Company's Reports
on Form 8-K during 1998 and 1999, Form 10-Q for the quarter ended September
30, 1998 and Form 10-K for the year ended December 31, 1997.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The following exhibits are included with this Report:
Exhibit 10.1 Asset Purchase Agreement, dated as of February 19,
1999, by and among the Company, certain of its
subsidiaries and CoreComm Limited (incorporated
herein by reference to Exhibit 10.1 of the
Company's previously filed Form 8-K dated February
18, 1999).
Exhibit 10.2 Note Purchase Agreement, dated as of February 23,
1999, by and between USN Communications, Inc. and
the Purchasers listed on Annex I thereto
(incorporated herein by reference to Exhibit 10.2
of the Company's previously filed Form 8-K dated
February 18, 1999).
Exhibit 10.3 First Amendment to Note Purchase Agreement, dated
as of March 15, 1999, by and among the Company,
MLGAF and CoreComm (incorporated herein by
reference to Exhibit 10.2 of the Company's
previously filed Form 8-K dated April 1, 1999)
Exhibit 10.4 Second Amendment to Note Purchase Agreement, dated
as of March 24, 1999, by and among the Company,
MLGAF and CoreComm (incorporated herein by
reference to Exhibit 10.3 of the Company's
previously filed Form 8-K dated April 1, 1999).
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
USN COMMUNICATIONS
By: /s/ J. Thomas Elliott
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J. Thomas Elliott
President and Chief Executive Officer
