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EXHIBIT 10.2
AMERICAN COMMUNICATIONS SERVICES, INC.
$220,000,000
13-3/4% SENIOR NOTES DUE 2007
REGISTRATION RIGHTS AGREEMENT
New York, New York
July 23, 1997
BT Securities Corporation
As Representative of the Initial Purchasers
One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
American Communications Services, Inc., a Delaware corporation
(the "Company"), proposes to issue and sell (the "Initial Placement") to the
Initial Purchasers, upon the terms set forth in the Purchase Agreement dated
July 18, 1997 (the "Purchase Agreement") among the Initial Purchasers and the
Company, its 13-3/4% Senior Notes due 2007 (the "Notes"). As an inducement to
the Initial Purchasers to enter into the Purchase Agreement and purchase the
Notes and in satisfaction of a condition to your obligations under the Purchase
Agreement, the Company agrees with you for the benefit of the holders from time
to time of the Notes (including the Initial Purchasers) (each of the foregoing a
"Holder" and together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"Additional Interest" has the meaning set forth in Section 7
hereof.
"Affiliate" of any specified person means any other person
that, directly or indirectly, is in control of, is con-
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trolled by, or is under common control with, such specified person. For purposes
of this definition, control of a person means the power, direct or indirect, to
direct or cause the direction of the management and policies of such person
whether by contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning set forth in the preamble hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Exchange Notes" has the meaning set forth in Section 2
hereof.
"Exchange Offer" means the proposed offer to the Holders to
issue and deliver to such Holders, in exchange for the Notes, a like principal
amount of Exchange Notes.
"Exchange Offer Registration Period" means the 180 day period
following the consummation of the Exchange Offer, exclusive of any period during
which any stop order shall be in effect suspending the effectiveness of the
Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a registration
statement of the Company on an appropriate form under the Securities Act with
respect to the Exchange Offer, all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Expiration Date" means the date the Exchange Offer is
consummated.
"Final Memorandum" has the meaning set forth in the Purchase
Agreement.
"Holder" has the meaning set forth in the preamble hereto.
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"Indenture" means the indenture relating to the Notes and the
New Notes, to be dated as of the Closing Date, between the Company and The Chase
Manhattan Bank, as trustee, as the same may be amended or supplemented from time
to time in accordance with the terms thereof.
"Initial Placement" has the meaning set forth in the preamble
hereto.
"Initial Purchasers" has the meaning set forth in the Purchase
Agreement.
"Issue Date" means July 23, 1997.
"Losses" has the meaning set forth in Section 6(d) hereto.
"Majority Holders" means the Holders of a majority of the
aggregate principal amount of notes registered under a Registration Statement.
"Managing Underwriters" means the investment banker or
investment bankers and manager or managers that shall administer an underwritten
offering under a Shelf Registration Statement.
"New Notes" means debt securities of the Company identical in
all material respects to the Notes (except that the interest rate step-up
provisions and the transfer restrictions pertaining to such Notes will be
modified or eliminated, as appropriate), to be issued under the Indenture,
including Exchange Notes and Private Exchange Notes.
"Notes" has the meaning set forth in the preamble hereto.
"Participating Broker-Dealer" means any Holder (which may
include the Initial Purchasers) which is a broker-dealer electing to exchange
Notes acquired for its own account as a result of market-making activities or
other trading activities for New Notes.
"Private Exchange Notes" has the meaning given in Section 2(f)
hereof.
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a
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prospectus filed as part of an effective registration statement in reliance upon
Rule 430A under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Notes or the New Notes covered by such Registration Statement, and all
amendments and supplements to the Prospectus, including post-effective
amendments.
"Purchase Agreement" has the meaning set forth in the preamble
hereto.
"Registration Statement" means any Exchange Offer Registration
Statement or Shelf Registration Statement that covers any of the Notes or the
New Notes pursuant to the provisions of this Agreement, amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto,
and all material incorporated by reference therein.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Shelf Registration" means a registration effected pursuant to
Section 3 hereof.
"Shelf Registration Period" has the meaning set forth in
Section 3(b) hereof.
"Shelf Registration Statement" means a "shelf" registration
statement of the Company pursuant to the provisions of Section 3 hereof, which
covers some or all of the Notes or New Notes, as applicable, on an appropriate
form under Rule 415 under the Securities Act, or any similar rule that may be
adopted by the Commission, amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto, and all material
incorporated by reference therein.
"Trustee" means the trustee with respect to the Notes or New
Notes, as applicable, under the Indenture.
"underwriter" means any underwriter of Notes in connection
with an offering thereof under a Shelf Registration Statement.
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2. Exchange Offer; Resales of New Notes by Participating
Broker-Dealers; Private Exchange. (a) The Company shall (i) within 60 days after
the Issue Date, file a registration statement on an appropriate registration
form (the "Exchange Offer Registration Statement") with respect to the offer to
exchange the Notes for New Notes pursuant to such Exchange Offer Registration
Statement (the "Exchange Offer"), which Notes (the "Exchange Notes") will have
terms substantially identical in all material respects to the Notes (except that
the Exchange Notes will not contain terms with respect to transfer restrictions)
and (ii) use commercially reasonable efforts to cause the Exchange Offer
Registration Statement to become effective under the Securities Act within 120
days after the Issue Date.
(b) Upon the Exchange Offer Registration Statement being
declared effective, the Company shall offer the Exchange Notes for surrender of
the Notes. For each of the Notes surrendered to the Company pursuant to the
Exchange Offer, the Holder who surrendered such Notes will receive an Exchange
Note or Notes having a principal amount equal to that of the surrendered Notes.
Interest on each Exchange Note will accrue (A) from the later of (i) the last
interest payment date on which interest was paid on the Note surrendered in
exchange therefor, or (ii) if the Note is surrendered for exchange on a date in
a period which includes the record date for an interest payment date to occur on
or after the date of such exchange and as to which interest will be paid, the
date of such interest payment date or (B) if no interest has been paid on the
Notes, from the Issue Date.
(c) In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(ii) keep the Exchange Offer open for not less than 20 business
days (or longer if required by applicable law) after the date notice
thereof is mailed to the Holders;
(iii) utilize the services of a depositary for the Exchange
Offer with an address in the Borough of Manhattan, The City of New
York; and
(iv) comply in all material respects with all applicable laws.
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(d) As soon as practicable after the close of the Exchange
Offer, the Company shall:
(i) accept for exchange all Notes tendered and not validly
withdrawn pursuant to the Exchange Offer;
(ii) deliver to the Trustee for cancellation all Notes so
accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver to
each Holder Exchange Notes equal in principal amount to the Notes of
such Holder so accepted for exchange.
(e) The Initial Purchasers and the Company acknowledge that,
pursuant to interpretations by the staff of the Commission of Section 5 of the
Securities Act, and in the absence of an applicable exemption therefrom, each
Participating Broker-Dealer is required to deliver a Prospectus in connection
with a sale of any Exchange Notes received by such Participating Broker-Dealer
pursuant to the Exchange Offer in exchange for Notes acquired for its own
account as a result of market-making activities or other trading activities.
Accordingly, the Company shall:
(i) include the information set forth in Annex A hereto on the
cover of the Exchange Offer Registration Statement, in Annex B hereto
in the forepart of the Exchange Offer Registration Statement in a
section setting forth details of the Exchange Offer, in Annex C hereto
in the underwriting or plan of distribution section of the Prospectus
forming a part of the Exchange Offer Registration Statement, and in
Annex D hereto in the letter of transmittal delivered pursuant to the
Exchange Offer; and
(ii) use its commercially reasonable efforts to keep the
Exchange Offer Registration Statement continuously effective under the
Securities Act during the Exchange Offer Registration Period for
delivery by Participating Broker-Dealers in connection with sales of
Exchange Notes received pursuant to the Exchange Offer, as contemplated
by Section 4(h) below.
(f) If, prior to consummation of the Exchange Offer, any
Holder holds any Notes acquired by it that have, or that are reasonably likely
to be determined to have, the status of an unsold allotment in an initial
distribution, or any Holder is not entitled to participate in the Exchange
Offer, the Com-
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pany upon the request of any such Holder shall simultaneously with the delivery
of the Exchange Notes in the Exchange Offer, issue and deliver to any such
Holder, in exchange (the "Private Exchange") for such Notes held by any such
Holder, a like principal amount of unregistered New Notes (the "Private Exchange
Notes") of the Company that are identical in all material respects to the
Exchange Notes, but will continue to bear all applicable legends with respect to
transfer. The Private Exchange Notes shall be issued pursuant to the same
indenture as the Exchange Notes and bear the same CUSIP number as the Exchange
Notes.
(g) Upon consummation of the Exchange Offer in accordance with
this Section 2, the provisions of this Agreement shall continue to apply,
mutatis mutandis, solely with respect to New Notes that are Private Exchange
Notes, Exchange Notes as to which Section 2(h)(iv) is applicable and Exchange
Notes held by Initial Purchasers (as defined), and the Company shall have no
further obligation to register Notes (other than Private Exchange Notes and
other than in respect of any Exchange Notes as to which clause 2(h)(iv) hereof
applies) pursuant to Section 3 hereof. No securities other than the Exchange
Notes shall be included in the Exchange Offer Registration Statement.
(h) If,(i) because of any change in law or in currently
prevailing interpretations of the staff of the Commission, the Company
determines upon advice of its outside counsel that it is not permitted to effect
the Exchange Offer, (ii) for any reason other than that specified in clause (i)
above, the Exchange Offer Registration Statement is not declared effective
within 120 days of the Issue Date, (iii) a Holder of Private Exchange Notes so
requests, or (iv) in the case of any Holder that participates in the Exchange
Offer, such Holder does not receive Exchange Notes on the date of the exchange
that may be sold without restriction under state and federal securities laws
(other than due solely to the status of such Holder as an affiliate of the
Company within the meaning of the Securities Act), then in the case of each of
clauses (i) to and including (iv) of this sentence, the Company shall promptly
deliver to the Holders and the Trustee written notice thereof (the "Shelf
Notice") and shall file a Shelf Registration pursuant to Section 3 hereof.
3. Shelf Registration. If at any time a Shelf Notice is
delivered as contemplated by Section 2(h) hereof, then:
(a) The Company shall (x) as promptly as practicable deliver
to the Holders and the Trustee written notice thereof
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and (y) at its sole expense, as promptly as practicable (but in no event more
than 60 days after the Issue Date), file with the Commission a Shelf
Registration Statement relating to the offer and sale of the Notes or the New
Notes, as applicable, by the Holders from time to time in accordance with the
methods of distribution elected by such Holders and set forth in such Shelf
Registration Statement and Rule 415 under the Securities Act; provided that with
respect to Private Exchange Notes received by an Initial Purchaser in exchange
for Notes constituting any portion of an unsold allotment, the Company may, if
permitted by current interpretations by the Commission's staff, file a
post-effective amendment to the Exchange Offer Registration Statement containing
the information required by Regulation S-K Items 507 and/or 508, as applicable,
in satisfaction of its obligations under this paragraph (a) with respect
thereto, and any such Exchange Offer Registration Statement, as so amended,
shall be referred to herein as, and governed by the provisions herein applicable
to, a Shelf Registration Statement.
(b) The Company shall use commercially reasonable efforts to
cause the Shelf Registration Statement to be declared effective under the
Securities Act, and keep the Shelf Registration Statement continuously effective
in order to permit the Prospectus contained therein to be usable by Holders for
a period of three years from the Closing Date or such shorter period that will
terminate when all the Notes or New Notes, as applicable, covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement (in any such case, such period being called the "Shelf Registration
Period"). Notwithstanding, anything to the contrary herein, the Company may
include any of its securities in the Shelf Registration Statement.
(c) Suspension of Shelf Registration. The Company's obligation
to keep the Shelf Registration Statement effective and usable for offers and
sales of the Notes may be suspended by the Company in good faith for valid
business reasons, including, without limitation, a pending acquisition or
divestiture of assets. Any such period during which the Company fails to keep
the Shelf Registration Statement effective and usable for offers and sales of
Notes is referred to as a "Suspension Period." A Suspension Period shall
commence on and include the date that the Company gives notice that the Shelf
Registration Statement is no longer effective or the prospectus included therein
is no longer usable for offers and sales of Notes and shall end on the date when
each Holder of Notes covered by such registration statement either receives the
copies of the sup-
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plemented or amended prospectus contemplated by Section 4(p) hereof or is
advised in writing by the Company that use of the prospectus may be resumed.
During the pendency of any Suspension Period, the Company may not issue any
securities, whether or not in a public offering, except for issuances of Common
Stock pursuant to an acquisition or other business combination transaction or
upon exercise of options or warrants outstanding prior to such Suspension
Period.
4. Registration Procedures. In connection with any Shelf
Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to you, prior to the filing
thereof with the Commission, a copy of any Registration Statement, and each
amendment thereof and each amendment or supplement, if any, to the Prospectus
included therein and shall use its best efforts to reflect in each such
document, when so filed with the Commission, such comments as you reasonably may
propose in a timely manner.
(b) The Company shall ensure that:
(i) any Registration Statement and any amendment thereto and
any Prospectus contained therein and any amendment or supplement
thereto complies in all material respects with the Securities Act and
the rules and regulations thereunder,
(ii) any Registration Statement and any amendment thereto does
not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
(iii) any Prospectus forming part of any Registration Statement
and any amendment or supplement to such Prospectus does not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) (1) The Company shall advise you and, in the case of a
Shelf Registration Statement, the Holders of notes covered thereby, and, if
requested by you or any such Holder, confirm such advice in writing:
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(i) when a Registration Statement and any amendment thereto
has been filed with the Commission and when the Registration Statement
or any post-effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus included
therein or for additional information.
(2) The Company shall advise you and, in the case of a Shelf
Registration Statement, the Holders of notes covered thereby, and, in the case
of an Exchange Offer Registration Statement, any Participating Broker-Dealer
that has provided in writing to the Company a telephone or facsimile number and
address for notices, and, if requested by you or any such Holder or
Participating Broker-Dealer, confirm such advice in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(ii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the notes included
therein for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose; and
(iii) of the happening of any event that requires the making of
any changes in the Registration Statement or the Prospectus so that, as
of such date, the statements therein are not misleading and do not omit
to state a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of
the circumstances under which they were made) not misleading (which
advice shall be accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made).
(d) The Company shall use its commercially reasonable efforts
to obtain the withdrawal of any order suspending the effectiveness of any
Registration Statement at the earliest possible time.
(e) The Company shall furnish to each Holder of notes covered
by any Shelf Registration Statement, without charge, at least one copy of such
Shelf Registration Statement and any post-effective amendment thereto, including
financial
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statements and schedules, and, if the Holder so requests in writing, all
exhibits thereto (including those incorporated by reference).
(f) The Company shall, during the Shelf Registration Period,
deliver to each Holder of notes covered by any Shelf Registration Statement,
without charge, as many copies of the Prospectus (including each preliminary
Prospectus) included in such Shelf Registration Statement and any amendment or
supplement thereto as such Holder may reasonably request; and the Company
consents to the use of the Prospectus or any amendment or supplement thereto by
each of the selling Holders of notes in connection with the offering and sale of
the notes covered by the Prospectus or any amendment or supplement thereto.
(g) The Company shall furnish to each Participating
Broker-Dealer that so requests, without charge, at least one copy of the
Exchange Offer Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, any documents incorporated by
reference therein, and, if the Participating Broker-Dealer so requests in
writing, all exhibits thereto (including those incorporated by reference).
(h) The Company shall, during the Exchange Offer Registration
Period, promptly deliver to each Participating Broker-Dealer, without charge, as
many copies of the Prospectus included in such Exchange Offer Registration
Statement and any amendment or supplement thereto as such Participating
Broker-Dealer may reasonably request for delivery by such Participating
Broker-Dealer in connection with a sale of New Notes received by it pursuant to
the Exchange Offer; and the Company consents to the use of the Prospectus or any
amendment or supplement thereto by any such Participating Broker-Dealer, as
provided in Section (2)(e) above.
(i) Prior to the Exchange Offer or any other offering of notes
pursuant to any Registration Statement, the Company shall register or qualify or
cooperate with the Holders of notes included therein and their respective
counsel in connection with the registration or qualification of such notes for
offer and sale under the securities or blue sky laws of such jurisdictions as
any such Holders reasonably request in writing and do any and all other acts or
things necessary or advisable to enable the offer and sale in such jurisdictions
of the notes covered by such Registration Statement; provided, however, that the
Company will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified
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or to take any action that would subject it to general service of process or to
taxation in any such jurisdiction where it is not then so subject.
(j) The Company shall cooperate with the Holders of Notes to
facilitate the timely preparation and delivery of certificates representing
notes to be sold pursuant to any Registration Statement free of any restrictive
legends and in denominations of $1,000 or an integral multiple thereof and
registered in such names as Holders may request prior to sales of notes pursuant
to such Registration Statement.
(k) Upon the occurrence of any event contemplated by paragraph
(c)(2)(iii) of this Section 3, the Company shall promptly prepare a
post-effective amendment to any Registration Statement or an amendment or
supplement to the related Prospectus or file any other required document so
that, as thereafter delivered to purchasers of the notes included therein, the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(l) Not later than the effective date of any such Registration
Statement hereunder, the Company shall provide a CUSIP number for the Notes or
New Notes, as the case may be, registered under such Registration Statement, and
provide the Trustee with printed certificates for such Notes or New Notes, in a
form eligible for deposit with The Depository Trust Company.
(m) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to its security holders as soon as practicable after the effective
date of the applicable Registration Statement an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act.
(n) The Company shall cause the Indenture to be qualified
under the Trust Indenture Act of 1939, as amended, in a timely manner.
(o) The Company may require each Holder of notes to be sold
pursuant to any Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of such notes as the
Company may from time to time reasonably require for inclusion in such
Registration Statement.
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(p) The Company shall, if requested, promptly incorporate in a
Prospectus supplement or post-effective amendment to a Shelf Registration
Statement such information as the Managing Underwriters and Majority Holders
reasonably agree should be included therein and shall make all required filings
of such Prospectus supplement or post-effective amendment as soon as notified of
the matters to be incorporated in such Prospectus supplement or post-effective
amendment.
(q) In the case of any Shelf Registration Statement, the
Company shall enter into such agreements (including underwriting agreements) and
take all other appropriate actions in order to expedite or facilitate the
registration or the disposition of any notes included therein, and in connection
therewith, if an underwriting agreement is entered into, cause the same to
contain indemnification provisions and procedures no less favorable than those
set forth in Section 6 (or such other provisions and procedures acceptable to
the Majority Holders and the Managing Underwriters, if any) with respect to all
parties to be indemnified pursuant to Section 6.
(r) In the case of an underwritten offering, if any, of Notes
pursuant to a Shelf Registration Statement, the Company shall:
(i) make reasonably available for inspection by the Holders of
notes to be registered thereunder, any underwriter participating in any
disposition pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by the Holders or any such
underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries;
(ii) cause the Company's officers, directors and employees to
supply all relevant information reasonably requested by the Holders or
any such underwriter, attorney, accountant or agent in connection with
any such Registration Statement as is customary for similar due
diligence examinations; provided, however, that any information that is
designated in writing by the Company, in good faith, as confidential at
the time of delivery of such information shall be kept confidential by
the Holders or any such underwriter, attorney, accountant or agent,
unless such disclosure is made in connection with a court proceeding or
required by law, or such information becomes available to the public
generally or through a third party without an accompanying obligation
of confidentiality; and make such
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representatives of the Company as shall be reasonably requested by the
Initial Purchasers available for discussion of any such Registration
Statement;
(iii) make such representations and warranties to the Holders of
notes registered thereunder and the underwriters, if any, in form,
substance and scope as are customarily and appropriately made by
issuers to underwriters in primary underwritten offerings and covering
matters set forth in the Purchase Agreement;
(iv) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the Managing Underwriters, if any)
addressed to each selling Holder and the underwriters, if any, covering
such matters as are customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such Holders and underwriters;
(v) obtain "comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company
for which financial statements and financial data are, or are required
to be, included in the Registration Statement), addressed to each
selling Holder of notes registered thereunder and the underwriters, if
any, in customary form and covering matters of the type customarily
covered in "comfort" letters in connection with primary underwritten
offerings; and
(vi) deliver such documents and certificates as may be
reasonably requested by the Majority Holders and the Managing
Underwriters, if any, including those to evidence compliance with
Section 4(k) and with any conditions contained in the underwriting
agreement or other agreement entered into by the Company.
The foregoing actions set forth in clauses (iii), (iv), (v)
and (vi) of this Section 4(r) shall be performed at (A) the effectiveness of
such Registration Statement and each post-effective amendment thereto and (B)
each closing under any underwriting or similar agreement as and to the extent
required thereunder.
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5. Registration Expenses. The Company shall bear all expenses
incurred in connection with the performance of its obligations under Sections 2,
3 and 4 hereof and, in the event of any Shelf Registration Statement, will
reimburse the Holders for the reasonable fees and disbursements of one firm or
counsel designated by the Majority Holders to act as counsel for the Holders in
connection therewith, and, in the case of any Exchange Offer Registration
Statement, will reimburse the Initial Purchasers for the reasonable fees and
disbursements of counsel acting in connection therewith, all such reasonable
fees and expenses hereunder not to exceed $30,000 in the aggregate.
6. Indemnification and Contribution. (a) In connection with
any Registration Statement, the Company agrees to indemnify and hold you
harmless and, with respect to any Prospectus delivery as contemplated by
Sections 2(e) and 4(h) hereof, each Participating Broker-Dealer, your and any
Participating Broker-Dealer's directors, officers, employees and agents and each
person who controls you or any Participating Broker-Dealer within the meaning of
either the Securities Act or the Exchange Act, against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement as originally filed
or in any amendment thereof, or in any preliminary Prospectus or Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein (in the case of
the Prospectus, in the light of the circumstances under which they were made)
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any case to the extent that any such loss, claim, damage or liability arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any such
Holder specifically for inclusion therein. This indemnity agreement
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will be in addition to any liability that the Company may otherwise have.
The Company also agrees to indemnify any selling Holders and
any underwriters of Notes registered under a Shelf Registration Statement, their
employees, officers, directors and agents and each person who controls such
selling Holders or underwriters on the same basis as that of the indemnification
of the Initial Purchasers provided in this Section 6(a) and shall, if requested
by any Holder, enter into an underwriting agreement reflecting such agreement,
as provided in Section 4(q) hereof.
(b) Each Holder of notes covered by a Registration Statement
(including each Initial Purchaser and, with respect to any Prospectus delivery
as contemplated by Sections 2(e) and 4(h) hereof, each Participating
Broker-Dealer) severally agrees to indemnify and hold harmless (i) the Company,
(ii) each of its directors, (iii) each of its officers who signs such
Registration Statement and (iv) each person who controls the Company within the
meaning of either the Securities Act or the Exchange Act to the same extent as
the foregoing indemnity from the Company to each such Holder, but only with
respect to written information relating to such Holder furnished to the Company
by or on behalf of such Holder specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will be in
addition to any liability that any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 6 or notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 6, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve the indemnifying party from liability under paragraph (a) or
(b) above unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial
rights and defenses, and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel (including local
counsel) of the indemnifying party's choice at the indemnifying party's expense
to represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be responsible
for the fees and expenses
17
-17-
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be satisfactory to
the indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel (and local counsel) if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential defendants in,
or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 6 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the Initial Placement and the
Registration Statement that resulted in such Losses; provided, however, that in
no case shall any Initial Purchaser or any subsequent Holder of any
18
-18-
Note or New Note be responsible, in the aggregate, for any amount in excess of
the purchase discount or commission applicable to such Note, or in the case of a
New Note, applicable to the Note that was exchangeable into such New Note, as
set forth on the cover page of the Final Memorandum, nor shall any underwriter
be responsible for any amount in excess of the underwriting discount or
commission applicable to the notes purchased by such underwriter under the
Registration Statement that resulted in such Losses. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the
indemnifying party and the indemnified party shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of such indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the sum of (x)
the total net proceeds from the Initial Placement (before deducting expenses) as
set forth on the cover page of the Final Memorandum and (y) the total amount of
additional interest that the Company was not required to pay as a result of
registering the notes covered by the Registration Statement that resulted in
such Losses. Benefits received by the Initial Purchasers shall be deemed to be
equal to the total purchase discounts and commissions as set forth on the cover
page of the Final Memorandum, and benefits received by any other Holders shall
be deemed to be equal to the value of receiving Notes or New Notes, as
applicable, registered under the Securities Act. Benefits received by any
underwriter shall be deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus forming a part of
the Registration Statement that resulted in such Losses. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the indemnifying party, on the one hand, or
by the indemnified party, on the other hand. The parties agree that it would not
be just and equitable if contribution were determined by pro rata allocation or
any other method of allocation that did not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person who controls a
Holder within the meaning of either the Securities Act or the Exchange Act and
each director, officer, employee and agent of such Holder shall have the same
rights to
19
-19-
contribution as such Holder, and each person who controls the Company within the
meaning of either the Securities Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
(e) The provisions of this Section 6 will remain in full force
and effect, regardless of any investigation made by or on behalf of any Holder
or the Company or any of the officers, directors or controlling persons referred
to in Section 6 hereof, and will survive the sale by a Holder of notes covered
by a Registration Statement.
7. Additional Interest. If the Company fails to file a
Registration Statement within the time periods specified in this Agreement or if
the Exchange Offer Registration Statement or the Shelf Registration Statement
fails to become effective, then, as liquidated damages, additional interest (the
"Additional Interest") shall become payable in respect of the Notes as follows:
(a) if (A) neither the Exchange Offer Registration Statement
nor the Shelf Registration Statement if filed with the Commission within 60 days
following the Closing Date or (B) notwithstanding that the Company has
consummated or will consummate a Exchange Offer, the Company is required to file
a Shelf Registration Statement and such Shelf Registration Statement is not
filed on or prior to the date required by this Agreement, then commencing on the
day after either such required filing date, Additional Interest shall be paid on
the principal amount of the Notes at a rate per annum equal to 0.5% of the
principal amount of the Notes; or
(b) if (A) neither the Exchange Offer Registration Statement
nor a Shelf Registration Statement is declared effective by the Commission
within 120 days following the Closing Date or (B) notwithstanding that the
Company has consummated or will consummate a Exchange Offer, the Company is
required to file a Shelf Registration Statement and such Shelf Registration
Statement is not declared effective by the Commission on or prior to the 120th
day following the Closing Date, then, commencing on the day after either such
required effective date, Additional Interest shall be paid on the principal
amount of the Notes at a rate per annum equal to 0.5% of the principal amount of
the Notes; or
20
-20-
(c) if applicable, the Shelf Registration Statement has been
declared effective and such Shelf Registration Statement ceases to be effective
at any time prior to the third anniversary of the Issue Date (other than after
such time as all Notes have been disposed of thereunder and other than during
any Suspension Period), then Additional Interest shall be paid on the principal
amount of the Notes at a rate per annum equal to 0.5% of the principal amount of
the Notes commencing on the day such Shelf Registration Statement ceases to be
effective;
provided, however that the Additional Interest rate on the
Notes may not exceed in the aggregate 1.5% per annum of the principal amount;
provided, further, however, that (1) upon the filing of the Exchange Offer
Registration Statement or a Shelf Registration Statement (in the case of clause
(a) above), (2) upon the effectiveness of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (b) above),
or (3) upon the effectiveness of the Shelf Registration Statement which had
ceased to remain effective (in the case of clause (c) above), Additional
Interest on the Notes as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue and the terms of the Notes
shall revert to their original terms.
Any amounts of Additional Interest due pursuant to clause (a),
(b) or (c) above will be payable in cash on January 15 and July 15 of each year.
8. Miscellaneous.
(a) No Inconsistent Agreements. The Company shall not, after
the date hereof, enter into any agreement that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Holders of at least a majority of the then-outstanding aggregate
principal amount of Notes (or, after the consummation of any Exchange Offer in
accordance with Section 2 hereof, of New Notes); provided, however, that any
amendment, qualification, modification, supplement, waiver or consent relating
to the Shelf Registration Statement shall require the written consent of the
Holders of at least two-thirds of the then outstanding aggregate principal
amount of Notes (including the
21
-21-
consent of the Holders which were not able to participate in the Exchange
Offer). Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders whose notes are being sold pursuant to an Exchange Offer
Registration Statement and that does not directly or indirectly affect the
rights of other Holders may be given by the Majority Holders, determined on the
basis of notes being sold rather than registered under such Exchange Offer
Registration Statement.
(c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the most current address given by such
holder to the Company in accordance with the provisions of this Section
8(c), which address initially is, with respect to each Holder, the
address of such Holder maintained by the Registrar under the Indenture.
(ii) if to you, initially at the respective addresses set forth
in the Purchase Agreement; and
(iii) if to the Company, initially at its address set forth in
the Purchase Agreement.
All such notices and communications shall be deemed to have
been duly given when received. You or the Company by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent by
the Company thereto, subsequent Holders of Notes and/or New Notes. The Company
hereby agrees to extend the benefits of this Agreement to any Holder of Notes
and/or New Notes and any such Holder may specifically enforce the provisions of
this Agreement as if an original party hereto.
(e) Counterparts. This agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
22
-22-
(f) Headings. The headings in this agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
(i) Notes Held by the Company, etc. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Notes or
New Notes is required hereunder, Notes or New Notes, as applicable, held by the
Company or its Affiliates (other than subsequent Holders of Notes or New Notes
if such subsequent Holders are deemed to be Affiliates solely by reason of their
holdings of such Notes or New Notes) shall not be counted in determining whether
such consent or approval was given by the Holders of such required percentage.
23
S-1
Please confirm that the foregoing correctly sets forth the
agreement between the Company and you.
Very truly yours,
AMERICAN COMMUNICATIONS SERVICES, INC.
By: __________________________________
Name:
Title:
The forgoing Agreement is hereby
accepted as of the date first above written.
BT SECURITIES CORPORATION,
as Representative of the Initial Purchasers
By: _________________________________
Name:
Title:
24
-A-1-
ANNEX A
Based on interpretations by the staff of the Securities and Exchange Commission
(the "Commission"), as set forth in no-action letters issued to third parties,
the Company believes that the New Notes issued pursuant to the Exchange Offer
may be offered for resale, resold or otherwise transferred by holders thereof
(other than any holder that is an "affiliate" of the Company as defined under
Rule 405 of the Securities Act), provided that such New Notes are acquired in
the ordinary course of such holders' business and such holders are not engaged
in, and do not intend to engage in, a distribution of such New Notes and have no
arrangement or understanding with any person to participate in the distribution
of such New Notes. However, the staff of the Commission has not considered the
Exchange Offer in the context of a no-action letter, and there can be no
assurance that the staff of the Commission would make a similar determination
with respect to the Exchange Offer as in such other circumstances. By tendering
the Notes in exchange for New Notes, each holder, other than a broker-dealer,
will represent to the Company that: (i) it is not an affiliate of the Company
(as defined under Rule 405 of the Securities Act); (ii) any New Notes to be
received by it were acquired in the ordinary course of its business; and (iii)
it is not engaged in, and does not intend to engage in, a distribution of such
New Notes and has no arrangement or understanding to participate in a
distribution of the New Notes.
Each broker-dealer that receives New Notes for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such New Notes. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of New Notes received in
exchange for Notes where such Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities. The Company has
agreed that, starting on the Expiration Date (as defined in the Registration
Rights Agreement) and ending on the close of business one year after the
Expiration Date, it will make this Prospectus available to any broker-dealer for
use in connection with any such resale. See "Plan of Distribution."
25
-B-1-
ANNEX B
Based on interpretations by the staff of the Commission, as set forth in
no-action letters issued to third parties, the Company believes that holders of
Notes (other than any holder that is an "affiliate" of the Company as defined
under Rule 405 of the Securities Act) who exchange their Notes for New Notes
pursuant to the Exchange Offer may offer such New Notes for resale, resell such
New Notes and otherwise transfer such New Notes without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such New Notes are acquired in the ordinary course of such holders'
business and such New Notes and have no arrangement or understanding with any
person to participate in the distribution of such New Notes. However, the staff
of the Commission has not considered the Exchange Offer in the context of a
no-action letter, and there can be no assurance that the staff of the Commission
would make a similar determination with respect to the Exchange Offer.
Each broker-dealer that receives New Notes for its own account in exchange for
Notes, where such Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such New Notes. See
"Plan of Distribution."
26
-C-1-
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of New Notes received in exchange for
Notes where such Notes were acquired as a result of market-making activities or
other trading activities. The Company has agreed that, starting on the
Expiration Date and ending on the close of business 180 days after the
Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale. In
addition, until ________, 199__, all dealers effecting transactions in the New
Notes may be required to deliver a prospectus.
The Company will not receive any proceeds from any sale of New
Notes by broker-dealers. New Notes received by broker-dealers for their own
account pursuant to the Exchange Offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Notes or a combination of such methods
of resale, at market prices prevailing at the time of resale, at prices related
to such prevailing market prices or negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Notes. Any broker-dealer
that resells New Notes that were received by it for its own account pursuant to
the Exchange Offer and any broker or dealer that participates in a distribution
of such New Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit of any such resale of New Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
27
-C-2-
For a period of 180 days after the Expiration Date, the
Company will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. The Company has agreed to pay all
expenses incident to the Exchange Offer (including the expenses of one counsel
for the Holders of the Notes) other than commissions or concessions of any
brokers or dealers and will indemnify the Holders of the Notes (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
[If applicable, add information required by Regulation S-K
Items 507 and/or 508.]
28
-D-1-
ANNEX D
Rider A
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
______________________________________________
Address:
______________________________________________
______________________________________________
Rider B
The undersigned acknowledges that this Exchange Offer is being made by the
Company based upon the Company's understanding of an interpretation by the staff
of the Securities and Exchange Commission (the "Commission") as set forth in
no-action letters issued to third parties, that the New Notes issued in exchange
by holders thereof (other than any such holder that is an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act), without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that: (1) such holders are not affiliates of the
Company within the meaning of Rule 405 under the Securities Act; (2) such New
Notes are acquired in the ordinary course of such holders' business; and (3)
such holders are not engaged in, and do not intend to engage in, a distribution
of such New Notes and have no arrangement or understanding with any person to
participate in the distribution of such New Notes. However, the staff of the
Commission has not considered the Exchange Offer in the context of a no-action
letter and there can be no assurance that the staff of the Commission would make
a similar determination with respect to the Exchange Offer as in other
circumstances. If a holder of Notes is an affiliate of the Company, and is
engaged in or intends to engage in a distribution of the New Notes or has any
arrangement or understanding with respect to the distribution of the New Notes
to be acquired pursuant to the Exchange Offer, such holder could not rely on the
applicable interpretations of the staff of the Commission and must comply with
the registration and prospectus
29
-D-2-
delivery requirements of the Securities Act in connection with any secondary
resale transaction. If the undersigned is a broker-dealer that will receive New
Notes for its own account in exchange for Notes, it represents that the Notes to
be exchanged for New Notes were acquired by it as a result of market-making
activities or other trading activities and acknowledges that it will deliver a
prospectus in connection with any resale of such New Notes; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
