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EXHIBIT 4.1
AMERICAN COMMUNICATIONS SERVICES, INC.
$190,000,000
13% SENIOR DISCOUNT NOTES DUE 2005
SUPPLEMENTAL INDENTURE
Dated as of July 7, 1997
to
INDENTURE
Dated as of November 14, 1995, 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 know 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 November
14, 1995, as amended by the Supplemental Indenture dated as of March 11, 1996
and the Supplemental Indenture dated as of January 13, 1997 (as supplemented,
the "Indenture"), relating to $190,000,000 aggregate principal amount at
maturity of the Company's 13% Senior Discount Notes due 2005 (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:
"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."
"2006 Notes means the Company's 12-3/4% Senior Discount Notes
Due 2006."
SECTION 1.2. The definition of "Additional Notes" in Section
1.01 of the Indenture shall be amended by (A) striking the word "discount" in
the first line of such definition, (B) inserting the words "or more" after the
word "ten" in the fourth line thereof, (C) striking clause (iii) of such
definition in its entirety and (D) renumbering the final clause (iv) of such
definition as clause (iii) and inserting, after the words "other than" in the
parenthetical therein, the following: "interest payment terms, escrow account
provisions,".
SECTION 1.3. The definition of "Indebtedness" in
Section 1.01 of the Indenture shall be amended by replacing
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the words "Additional Notes" each time they appear therein with the words "2006
Notes."
SECTION 1.4. 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 1.5. Section 4.09(b) of the Indenture shall be amended
by striking such Section in its entirety and inserting a new Section 4.09(b) as
follows:
"(b) The provisions of Section 4.09(a) hereof shall not apply to:
(i) the incurrence by the Company or any of its Restricted Subsidiaries
of Indebtedness under the Secured Credit Facility; provided that the aggregate
principal amount of Indebtedness incurred under the Secured Credit Facility by
the Company and its Restricted Subsidiaries does not exceed $35,000,000 at any
one time outstanding;
(ii) the incurrence of the Existing Indebtedness;
(iii) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and any
of its Restricted Subsidiaries;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Interest Hedging Obligations with respect to any floating rate
Indebtedness that is permitted to be outstanding under this Section 4.09;
(v) the incurrence by the Company of any Exchange Rate Obligations;
provided that such Exchange Rate Obligations were entered into in connection
with transactions in the ordinary course of business or the incurrence of
Indebtedness that is permitted under this Section 4.09;
(vi) the incurrence by the Company of Indebtedness represented by the
Notes, the 2006 Notes or the Additional Notes;
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(vii) the incurrence by the Company of Indebtedness in connection with
one or more standby letters of credit issued in the ordinary course of business;
(viii) the incurrence by the Company of Indebtedness in respect of
performance, surety or appeal bonds provided by the Company in the ordinary
course of business;
(ix) the incurrence by the Company of Indebtedness not to exceed, at
any one time outstanding, an amount that is one and a half times the amount of
the Net Cash Proceeds in excess of $40,000,000 received by the Company from the
issuance and sale of its Qualified Stock (other than Preferred Stock) subsequent
to the Issue Date; provided that such Indebtedness shall have a Stated Maturity
no earlier than the Stated Maturity of the Notes and is subordinated to the
Notes as provided in Exhibit F hereto;
(x) the incurrence by the Company or any of its Restricted Subsidiaries
of Refinancing Indebtedness issued in exchange for, or the proceeds of which are
used to refinance, repurchase, replace, refund or defease ("Refinance")
Indebtedness permitted pursuant to clauses (ii), (vi) or (xii) of this Section
4.09(b); provided that (1) the amount of such Refinancing Indebtedness shall not
exceed the principal amount of, premium, if any, and accrued interest on the
Indebtedness so Refinanced (or if such Indebtedness was issued with original
issue discount, the original issue price plus amortization of the original issue
discount at the time of the repayment of such Indebtedness) plus the fees,
expenses and costs of such Refinancing and reasonable prepayment premiums, if
any, in connection therewith; (2) such Refinancing Indebtedness shall have a
Stated Maturity no earlier than the Stated Maturity of the Indebtedness being
Refinanced; (3) such Refinancing Indebtedness shall have an Average Life equal
to or greater than the Average Life of the Indebtedness being Refinanced; (4) if
the Indebtedness being Refinanced is subordinated in right of payment to the
Notes, such Refinancing Indebtedness shall be subordinate in right of payment to
the Notes on terms at least as favorable to the holders of Notes as those
contained in the documentation governing the Indebtedness being so Refinanced;
and (5) no Restricted Subsidiary shall incur Refinancing Indebtedness to
Refinance Indebtedness of the Company or another Subsidiary;
(xi) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness of any Person which incurrence resulted directly
from an Investment described in clause (ix) of the definition of "Permitted
Investments" in Section 1.01 hereof; provided that, (x) immediately after giving
effect to such Investment on a pro forma basis (and
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treating any Indebtedness which becomes, or is anticipated to become, an
obligation of the Company or any Restricted Subsidiary as a result of such
Investment as having been incurred by the Company or such Restricted Subsidiary
at the time of such Investment), the Company would (A) be permitted to incur
$1.00 of additional Indebtedness under Section 4.09(a) hereof or (B) have a Debt
to EBITDA Ratio which is equal to or not worse than the Debt to EBITDA Ratio of
the Company immediately prior to such Investment or (y) such incurrence is
otherwise permitted; provided further that Indebtedness incurred by the Company
and its Restricted Subsidiaries under this clause (xi) as a result of any such
Investment does not exceed 50 percent of the Fair Market Value of the Qualified
Stock used as consideration in such Investment; provided further that the
aggregate principal amount of Indebtedness incurred under this clause (xi) does
not exceed $50,000,000;
(xii) 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;
(xiii) the incurrence by the Company of Permitted Subordinated
Financing; and
(xiv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness not otherwise permitted to be incurred pursuant to
this Section 4.09 in an aggregate amount not to exceed $428,634."
SECTION 1.6. 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.
SECTION 1.7. Section 4.18 will 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 transit 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;
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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 1.8. 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 (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 1.9. 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.
The Notes may not be redeemed prior to May 1, 2001. Theeafter, 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' not 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) to the applicable
Redemption Date, if redeemed during the twelve-month period beginning May 1 of
the years indicated below:
Year Percentage
---- ----------
2001 110.000%
2002 106.667%
2003 103.333%
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 1.5 hereto
and the amendments made by Sections 1.7, 1.8 and 1.9 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, Deck
--------------------------
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
---------------------------------
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
----------------------------------
Notary Public
State of New York
My commission expires 12/31/97
[Seal]
