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EXHIBIT 4.2
AMERICAN COMMUNICATIONS SERVICES, INC.
$120,000,000
12-3/4% SENIOR DISCOUNT NOTES DUE 2006
SUPPLEMENTAL INDENTURE
Dated as of July 7, 1997
to
INDENTURE
Dated as of March 26, 1996, as amended
THE CHASE MANHATTAN BANK,
Trustee
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THIS SUPPLEMENTAL INDENTURE (the
"Supplemental Indenture"), dated as of July 7, 1997,
by and between AMERICAN COMMUNICATIONS SERVICES,
INC., a Delaware corporation (the "Company"), having
its principal office at 000 Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxxxx Xxxxxxxx, Xxxxxxxx
00000, and THE CHASE MANHATTAN BANK (formerly known
as Chemical Bank), a New York banking corporation, as
trustee (the "Trustee") under the Indenture (as
defined below), having its Corporate Trust Office at
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000.
Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the
Indenture.
WHEREAS, the Company and the Trustee previously duly executed,
and the Company duly delivered to the Trustee, an Indenture dated as of March
26, 1996, as amended by the Supplemental Indenture dated January 13, 1997 (as
supplemented, the "Indenture"), relating to $120,000,000 aggregate principal
amount at maturity of the Company's 12-3/4% Senior Discount Notes due 2006 (the
"Notes");
WHEREAS, pursuant to Section 9.02 of the Indenture, the
Company and the Trustee have obtained the consent of the Holders of not less
than a majority in principal amount of the outstanding Notes to the amendments
made hereby;
WHEREAS, the Board of Directors of the Company has
authorized the execution of this Supplemental Indenture and its delivery to
the Trustee;
WHEREAS, the Company has delivered an Officers' Certificate
and Opinion of Counsel to the Trustee pursuant to Section 9.07 of the Indenture;
and
WHEREAS, all other actions necessary to make this Supplemental
Indenture a legal, valid and binding obligation of the parties hereto in
accordance with its terms and the terms of the Indenture have been performed;
NOW, THEREFORE, in consideration of the promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Trustee hereby
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mutually covenant and agree for the equal and proportionate benefit of all
Holders of the Notes as follows:
ARTICLE I
Amendments
Upon execution of this Supplemental Indenture, the terms of
the Notes and the Indenture shall be amended as follows:
SECTION 1.1. Section 1.01 of the Indenture shall be amended by
adding the following definition in appropriate alphabetical order:
"Additional Notes" means unsecured notes of the Company (i)
ranking in right of payment pari passu with, or junior to, the Notes and the
2005 Notes, (ii) having a Stated Maturity of approximately ten or more years
from the date of issuance of such notes and (iii) having covenants and terms
(other than interest payment terms, escrow account provisions, interest rate,
interest payment dates, maturity dates, optional redemption dates and redemption
prices) substantially similar to those of the Notes and the 2005 Notes."
"EBIT" means the amount calculated in the same manner as
EBITDA, but not including clauses (iii) and (iv) of the definition thereof
contained herein."
"Fiber Network" means a digital fiber optic telecommunications
network wholly owned by the Company that serves a Metropolitan Area."
"Metropolitan Area" means the 31 metropolitan areas in which
the Company, as of June 30, 1997, has a Fiber Network and other metropolitan
areas deemed in the reasonable business judgment of the management of the
Company to provide an opportunity for the building and operation of such a Fiber
Network with the reasonable potential to produce financial results for the
Company at least substantially comparable to the metropolitan areas in which the
Company has such operational Fiber Networks."
SECTION 1.2. The definition of "Indebtedness" in Section 1.01
of the Indenture shall be amended by (A) adding the words ", Additional Notes"
after each occurrence of the word "Notes" in the thirty-first line thereof, (B)
deleting the words "(as defined herein with respect to the Notes and as defined
in the 2005 Indenture with respect to the 2005 Notes) and (C) adding the words
"(as defined in the relevant indenture)" after the word "thereof" in the
thirty-third
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line thereof and after the word "Value" in the thirty-seventh line thereof.
SECTION 1.3. The definition of "Permitted Liens" in Section
1.01 of the Indenture shall be amended by striking the word "and" at the end of
clause (xv) of such definition, by renumbering the final clause (xvi) of such
definition as clause (xvii) and by inserting a new clause (xvi) on the
immediately preceding line as follows:
"(xvi) any Lien with respect to cash proceeds from the sale of the
Additional Notes (or certificated or uncertificated securities or other
investments) placed or held in escrow for the benefit of the holders of
the Additional Notes; and".
SECTION 1.4. Section 4.09(b) of the Indenture shall be amended
by:
(A) inserting the words ", the 2005 Notes or the Additional
Notes" after the word "Notes" in the second line in subsection (vi) thereof;
(B) inserting the words "an amount that is one and a half
times" after the word "outstanding," in the second line in subsection (ix)
thereof;
(C) replacing the references to subsections "(ii) or (vi)" in
the fourth line of subsection (x) thereof with references to subsections "(ii),
(vi) or (xiii)";
(D) deleting the word "and" at the end of subsection (xii)
thereof;
(E) renumbering subsection (xiii) thereof as subsection (xiv);
and
(F) adding a new subsection (xiii) as follows:
"(xiii) the incurrence by the Company of Indebtedness
consisting of Additional Notes yielding up to $150,000,000 gross
proceeds to the Company (exclusive of any cash proceeds from the sale
of the Additional Notes placed in escrow by the Company for the benefit
of the holders of the Additional Notes) upon issuance thereof; and".
SECTION 1.5. Section 4.13(a)(iii) of the Indenture shall be
amended by deleting the words "and Section 4.13(b)(viii)" in the last line
thereof.
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SECTION 1.6. Section 4.18 of the Indenture shall be amended by
adding after the final sentence, the following:
"In addition to the foregoing, commencing with the unaudited information for the
fiscal quarter ended September 30, 1997, the Company will file with the
Commission and will thereafter transmit by mail to the Holders and file with the
Trustee within the same time periods as set forth in the second next preceding
sentence, unaudited information, on an aggregate Fiber Network basis (before
headquarter allocations) segmented by the calendar year in which each such Fiber
Network became operational, setting forth the investment in plant, property and
equipment to date, revenue, EBITDA, EBIT, access lines, fiber miles, route
miles, buildings connected and voice grade equivalents; provided, however, that
the Company will provide such unaudited information with respect to (i) all
Fiber Networks that were initially operational at any time prior to December 31,
1995 (all such Fiber Networks shall be deemed to have become operational in
calendar year 1995) and (ii) all Fiber Networks that were initially operational
in each succeeding calendar year (including all or any portion of the then
current year); and provided, further, that the Company need no longer comply
with the information requirements of this sentence after four consecutive fiscal
quarters for which the ratio of EBITDA of the Company to Consolidated Interest
Expense (other than dividends or distributions with respect to preferred stock
or Disqualified Stock of the Company) of the Company is greater than 1.0 or
after the occurrence of a Change of Control."
SECTION 1.7. A new Section 4.20 of the Indenture will be
added, as follows:
"Section 4.20. Limitation on Construction of Fiber Networks.
The Company may construct Fiber Networks in no more than 45 Metropolitan Areas
until the earlier of such time as (i) the ratio of EBITDA of the Company to
Consolidated Interest Expense (other than dividends or distributions with
respect to preferred stock or Disqualified Stock of the Company) of the Company
is greater than 1.0 for four consecutive fiscal quarters and (ii) the occurrence
of a Change of Control."
SECTION 1.8. The paragraph on the reverse side of each Note
entitled "Optional Redemption." will be deleted in its entirety and replaced
with the following:
"Optional Redemption.
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The Notes may not be redeemed prior to October 1, 2001.
Thereafter, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 calendar days; nor more than
60 calendar days' notice, at the prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest thereon (if any) at
the applicable Redemption Date, if redeemed during the twelve-month period
beginning October 1 of the years indicated below:
Year Percentage
2001 106.375%
2002 104.250%
2003 102.125%
2004 and thereafter 100.000%"
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ARTICLE II
Miscellaneous
SECTION 2.1. For all purposes of this Supplemental Indenture,
except as otherwise herein expressly provided or unless the context otherwise
requires: (A) the terms and expressions used herein shall have the same meanings
as corresponding terms and expressions used in the Indenture and (B) the words
"herein", "hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
any particular Article, Section or other subdivision.
SECTION 2.2. Upon execution of this Supplemental Indenture,
the Indenture shall be modified in accordance therewith, but except as expressly
amended hereby, the Indenture is in all respects ratified and confirmed and all
the terms, conditions and provisions thereof shall remain in full force and
effect.
SECTION 2.3. Upon execution, this Supplemental Indenture shall
form a part of the Indenture and the Supplemental Indenture shall be read, taken
and construed as one and the same instrument for all purposes, and every holder
of Notes heretofore or hereafter authenticated and delivered under the Indenture
shall be bound hereby.
SECTION 2.4. This Supplemental Indenture shall become
effective as of the date first above written; provided, however, that the
amendment to Section 4.09(b)(ix) of the Indenture made by Section 1.4 hereto and
the amendments made by Sections 1.6, 1.7 and 1.8 hereto shall become effective
immediately prior to the consummation of the issuance and sale by the Company of
the Additional Notes.
SECTION 2.5. The Trustee accepts the amendments to the
Indenture effected by this Supplemental Indenture and agrees to execute the
trust created by the Indenture, as hereby amended, but only upon the terms and
provisions defining and limiting the liabilities and responsibilities of the
Trustee, which terms and provisions shall in like manner define and limit the
Trustee's liabilities in the performance of the trust created by the Indenture,
as hereby amended. Without limiting the generality of the foregoing, the Trustee
has no responsibility for the correctness of the recitals of fact herein
contained which shall be taken as the statements of the Company and makes no
representations as to the validity or sufficiency of this Supplemental
Indenture, except as to the due and valid execution hereof
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by the Trustee, and shall incur no liability or responsibility in respect of the
validity thereof. The Trustee's execution of this Supplemental Indenture should
not be construed to be an approval or disapproval of the advisability of the
amendments to the Indenture provided herein.
SECTION 2.6. THIS SUPPLEMENTAL INDENTURE 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.
SECTION 2.7. This Supplemental Indenture may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original, and all of such counterparts shall together constitute one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed, and their respective corporate seals to be hereunto affixed
and duly attested, all as of the day and year first above written.
AMERICAN COMMUNICATIONS
SERVICES, INC.
by /s/ Xxxxx X. Xxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice
President/
Secretary
[Corporate Seal]
Attest:
THE CHASE MANHATTAN BANK,
as Trustee
by /s/ Xxxxxx X. Xxxx
----------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
[Corporate Seal]
Attest:
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STATE OF COLORADO)
) SS.:
COUNTY OF XXXXXXX)
On the 7th day of July, 1997, before me personally came Xxxxx
X. Xxxxxx, to me known, who, being by me duly sworn, did depose and say that she
is Executive Vice President/Secretary of American Communications Services, Inc.,
one of the corporations described in and which executed the foregoing
instrument; that she knows the seal of said corporation; that the seal affixes
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation; and that she signed her name
thereto by like authority.
/s/ Xxxxxxx Xxxxxxx Xxxxxx
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Notary Public
State of Colorado
My commission expires 9/20/99
[Seal]
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STATE OF )
) SS.:
COUNTY OF )
On the 8th day of July, 1997, before me personally came Xxxxxx
X. Xxxx, to me known, who, being by me duly sworn, did depose and say that he is
Vice President of The Chase Manhattan Bank, one of the corporations described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixes to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.
/s/ Xxxxx Xxxxx
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Notary Public
State of New York
My commission expires 12/31/97
[Seal]
