1
EXHIBIT 10.55
REGISTRATION RIGHTS AGREEMENT
Dated as of October 16, 1997
between
AMERICAN COMMUNICATIONS SERVICES, INC.
and
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
2
TABLE OF CONTENTS
1. Definitions........................................................ 1
2. Securities Subject to this Agreement............................... 5
3. Registered Exchange Offer.......................................... 5
4. Shelf Registration................................................. 7
5. Liquidated Damages................................................. 9
6. Registration Procedures............................................ 11
7. Registration Expenses.............................................. 21
8. Indemnification.................................................... 22
9. Rules 144 and 144A................................................. 26
10. Miscellaneous...................................................... 26
(a) No Inconsistent Agreements................................ 26
(b) Adjustments Affecting Preferred Stock..................... 26
(c) Amendments and Waivers.................................... 26
(d) Notices................................................... 27
(e) Successors and Assigns.................................... 28
(f) Counterparts.............................................. 28
(g) Headings.................................................. 28
(h) Governing Law............................................. 28
(i) Severability.............................................. 28
(j) Securities Held by the Company............................ 29
(k) Third Party Beneficiaries................................. 29
3
(l) Entire Agreement.......................................... 29
4
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made
and entered into as of October 16, 1997, by and between American Communications
Services, Inc., a Delaware corporation (the "Company"), and Bear, ▇▇▇▇▇▇▇ & Co.
Inc. (the "Initial Purchaser"), in connection with the consummation of the
transactions contemplated by the Purchase Agreement, dated October 6, 1997,
between the Company and the Initial Purchaser (the "Purchase Agreement"), which
provides for the issuance and sale by the Company to the Initial Purchaser of
150,000 shares of the Company's 12-3/4% Junior Redeemable Preferred Stock due
2009 (the "Preferred Stock"). In order to induce the Initial Purchaser to
consummate the purchase of the Preferred Stock, the Company has agreed to
provide the registration rights set forth in this Agreement for the benefit of
the Initial Purchaser and its direct and indirect transferees and assigns. The
execution and delivery of this Agreement is a condition to the Initial
Purchaser's obligation to purchase the Preferred Stock pursuant to the Purchase
Agreement.
The parties hereby agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
Act: The Securities Act of 1933, as amended.
Additional Dividends: See Section 4 hereof.
Agreement: See the introductory paragraph hereof.
Broker-Dealer: Any broker or dealer registered as
such under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: Shares of New
Preferred Stock that are acquired by a Broker-Dealer in the Exchange Offer in
exchange for shares of
5
2
Preferred Stock that such Broker-Dealer acquired for its own account as a result
of market making activities or other trading activities (other than shares of
Preferred Stock acquired directly from the Company or any of its affiliates).
Business Day: Any day except a Saturday, Sunday or other day
in the City of New York on which banks are authorized to close.
Certificate of Designation: The Certificate of Designation
governing the Preferred Stock, as filed with the Secretary of State of the State
of Delaware, as amended from time to time.
Closing Date: The Closing Date as defined in the Purchase
Agreement.
Commission: The Securities and Exchange Commission.
Company: See the introductory paragraph hereof.
Consummated and Consummation: A Registered Exchange Offer
shall be deemed "Consummated" for purposes of this Agreement upon the occurrence
of (i) the effectiveness under the Act of the Exchange Offer Registration
Statement relating to the New Preferred Stock to be issued in the Exchange
Offer, (ii) the maintenance of such Registration Statement continuously
effective and the keeping of the Exchange Offer open for a period not less than
the minimum period required pursuant to Section 3(b), and (iii) the delivery by
the Company to the Transfer Agent of shares of New Preferred Stock having the
same aggregate Liquidation Preference as the aggregate Liquidation Preference of
the shares of Preferred Stock that were tendered by Holders thereof pursuant to
the Exchange Offer.
Exchange Act: The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
6
3
Exchange Offer: The registration by the Company under the Act
of shares of New Preferred Stock pursuant to a Registration Statement under
cover of which the Company offers the Holders of all outstanding Transfer
Restricted Securities the opportunity to exchange all such outstanding Transfer
Restricted Securities held by such Holders for shares of New Preferred Stock
having an aggregate Liquidation Preference equal to the aggregate Liquidation
Preference of the Transfer Restricted Securities tendered in such exchange offer
by such Holder.
Exchange Offer Registration Statement: The Registration
Statement relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial
Purchaser proposes to sell the Preferred Stock (i) to "qualified institutional
buyers" as such term is defined in Rule 144A under the Act, and (ii) to persons
that are not "U.S. persons" in offshore transactions meeting the requirements of
Regulation S under the Act.
Holder: Any holder of Preferred Stock, Transfer Restricted
Securities or New Preferred Stock, as the case may be.
Indemnified Person: See Section 8(c) hereof.
Indemnifying Person: See Section 8(c) hereof.
Initial Purchaser: See the introductory paragraph hereof.
Issue Date: The date on which the Preferred Stock was issued
and sold to the Initial Purchaser pursuant to the Purchase Agreement.
NASD: The National Association of Securities Dealers, Inc.
New Preferred Stock: The Company's 12-3/4% Junior Redeemable
Preferred Stock due 2009 to be issued pursuant to
7
4
the Certificate of Designation (i) in the Exchange Offer or (ii) upon the
request of any Holder of Preferred Stock covered by a Shelf Registration
Statement in exchange for such Preferred Stock.
Participant: See Section 8(a) hereof.
Person: An individual, partnership, corporation, limited
liability company, unincorporated association, trust or joint venture, or a
governmental agency or political subdivision thereof.
Preferred Stock: See the introductory paragraph hereof.
Prospectus: The prospectus included in any Registration
Statement at the time such Registration Statement becomes effective, as the same
may be amended or supplemented by any prospectus supplement or by any other
amendment thereto, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such
Prospectus.
Purchase Agreement: See the introductory paragraph hereof.
Registrable Preferred Stock: Shares of Preferred Stock
constituting Transfer Restricted Securities.
Registration Default: See Section 5 hereof.
Registration Statement: Any registration statement of the
Company filed with the SEC pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Restricted Broker-Dealer: Any Broker-Dealer holding
Broker-Dealer Transfer Restricted Securities.
8
5
Rule 144: Rule 144 promulgated under the Act, as such Rule may
be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the Commission providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the Commission.
Rule 415: Rule 415 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
Shelf Registration: See Section 4 hereof.
Subsequent Shelf Registration: See Section 4(a) hereof.
Transfer Agent: The Transfer Agent for the Preferred Stock or
the New Exchange Preferred Stock, as the context may require.
Transfer Restricted Securities: Each share of Preferred Stock
until the earliest to occur of (i) the date on which such share of Preferred
Stock has been exchanged by a person other than a Broker-Dealer for New
Preferred Stock in Exchange Offer, (ii) following the exchange by a
Broker-Dealer in the Exchange Offer of Preferred Stock for New Preferred Stock,
the date on which such New Preferred Stock is sold to a purchaser who receives
from such Broker-Dealer on or prior to the date of such sale a copy of the
Prospectus contained in the Exchange Offer Registration Statement, (iii) the
date on which such share of Preferred Stock has been effectively registered
under the Act and disposed of in accordance with the Shelf Registration
Statement or (iv) the date on which such share of Preferred
9
6
Stock is distributed to the public pursuant to Rule 144 or may be distributed to
the public pursuant to paragraph (k) of Rule 144.
Underwritten registration or underwritten offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
2. Securities Subject to this Agreement. The securities entitled
to the benefits of this Agreement are the Transfer Restricted Securities. A
Person is deemed to be a Holder of Transfer Restricted Securities whenever such
Person owns Transfer Restricted Securities.
3. Registered Exchange Offer. (a) Unless the Exchange Offer shall
not be permissible under applicable law or Commission policy, the Company shall
(i) cause to be filed with the Commission as soon as practicable after the
Closing Date, but in no event later than 45 days after the Closing Date, the
Exchange Offer Registration Statement, (ii) use its best efforts to cause such
Exchange Offer Registration Statement to become effective at the earliest
possible time, but in no event later than 120 days after the Closing Date, (iii)
in connection with the foregoing, file (A) all pre-effective amendments to such
Exchange Offer Registration Statement as may be necessary in order to cause such
Exchange Offer Registration Statement to become effective, (B) if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) cause all necessary filings in connection
with the registration and qualification of the New Preferred Stock to be made
under the Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer, and (iv) upon the effectiveness of such
Exchange Offer Registration Statement, commence the Exchange Offer. The Exchange
Offer Registration Statement shall be on the appropriate form permitting
registration of the New Preferred Stock to be offered in exchange for the
Transfer Restricted Securities and to permit resales of Broker-Dealer Transfer
Restricted Securities held by Restricted Broker-Dealers as contemplated by
Section 3(c) below.
10
7
(b) The Company shall cause the Exchange Offer Registration Statement
to be effective continuously and shall keep the Exchange Offer open for a period
of not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 Business Days. The Company shall cause
the Exchange Offer to comply with all applicable federal and state securities
laws. No securities other than the New Preferred Stock shall be included in the
Exchange Offer Registration Statement. The Company shall use its best efforts to
cause the Exchange Offer to be Consummated on the earliest practicable date
after the Exchange Offer Registration Statement has become effective but in no
event later than 30 Business Days thereafter.
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and shall
indicate therein that any Broker-Dealer that holds shares of Preferred Stock
that are Transfer Restricted Securities and that were acquired by such
Broker-Dealer for its own account as a result of market-making activities or
other trading activities (other than shares of Preferred Stock acquired directly
from the Company) may exchange such shares of Preferred Stock pursuant to the
Exchange Offer; however, such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Act and must, therefore, deliver a prospectus meeting
the requirements of the Act in connection with any resales of shares of New
Preferred Stock received by such Broker-Dealer in the Exchange Offer, which
prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement. Such "Plan of Distribution" section also shall contain all other
material information with respect to such resales by Broker-Dealers that the
Commission may require in order to permit such resales pursuant thereto, but
such "Plan of Distribution" shall not name any such Broker-Dealer or disclose
the amount of Preferred Stock or New Preferred Stock held by any such
Broker-Dealer except to the extent required by the
11
8
Commission as a result of a change in policy after the date of this Agreement.
(d) The Company shall use its commercially reasonable efforts to keep
the Exchange Offer Registration Statement continuously effective, supplemented
and amended as required by the provisions of Section 6(c) below to the extent
necessary to ensure that it is available for resales of Broker-Dealer Transfer
Restricted Securities by Restricted Broker-Dealers, and to ensure that it
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of expiring upon the earlier of (i) 180 days following the date that the
Exchange Offer is Consummated (exclusive of any days during which the Company
has advised the Restricted Broker-Dealers that the Prospectus contained in the
Exchange Offer Registration Statement may not be used in connection with offers
and sales of the securities covered thereby or (ii) the date that all Restricted
Broker-Dealers that acquired Broker-Dealer Transfer Restricted Securities in the
Exchange Offer have sold or otherwise disposed of the same.
(e) The Company shall provide sufficient copies of the latest version
of such Prospectus to Restricted Broker-Dealers holding Broker-Dealer Transfer
Restricted Securities promptly upon request at any time during such one-year
period in order to facilitate such resales.
4. Shelf Registration. (a) If (i) the Company is not required to file
an Exchange Offer Registration Statement or to Consummate the Exchange Offer
because the Exchange Offer is not permitted by applicable law or Commission
policy, or (ii) any Holder of Transfer Restricted Securities shall notify the
Company prior to the 20th day following the Consummation of the Exchange Offer
(A) that such Holder is prohibited by applicable law or Commission policy from
participating in the Exchange Offer, or (B) that such Holder may not resell the
New Preferred Stock acquired by it in the Exchange Offer to the public without
delivering a prospectus and that the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for
12
9
such resales by such Holder (each of the events described in Section 4(a)(i) and
(ii) being a "Shelf Registration Event"), then the Company shall use its
commercially reasonable efforts to:
(x) cause to be filed on or prior to (1) in the case of a
Registration Statement filed pursuant to clause (i) above, 30 days
after the date on which the Company determines that it is not required
to file the Exchange Offer Registration Statement and (2) in the case
of a Registration Statement filed pursuant to clause (ii) above, 30
days after the date on which the Company receives the notice specified
in clause (ii) above (and in any event, within 90 days after the
Closing Date), a Registration Statement on an appropriate form under
the Act (which may be an amendment to the Exchange Offer Registration
Statement), which Registration Statement shall indicate that it is
being filed pursuant to Rule 415 under the Act and shall cover all
Transfer Restricted Securities the Holders of which shall have provided
the information required pursuant to Section 4(b) hereof (such
Registration Statement being hereafter referred to as a "Shelf
Registration Statement"); and
(y) use its commercially reasonable efforts to cause such
Shelf Registration Statement to become effective on or prior to (1) in
the case of a Shelf Registration Statement filed pursuant to clause (i)
above, 120 days after the date on which the Company becomes obligated
to file such Shelf Registration Statement and (2) in the case of a
Shelf Registration Statement filed pursuant to clause (ii) above, 150
days after the date on which the Company receives the notice specified
in clause (ii) above.
Subject to the provisions of Section 4(c) below, the Company shall use its
commercially reasonable efforts to keep such Shelf Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 6 hereof to the extent necessary to ensure that it is available for
resales of Notes by the Holders of Transfer
13
10
Restricted Securities entitled to the benefit of this Section 4(a), and to
ensure that it conforms with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period expiring on the earlier of (i) two years following the
Closing Date or (ii) the date that all Holders of Transfer Restricted Securities
have sold such securities pursuant thereto.
(b) No Holder of Transfer Restricted Securities may include any of its
Transfer Restricted Securities in any Shelf Registration Statement pursuant to
this Agreement unless and until such Holder furnishes to the Company in writing,
within 20 Business Days after receipt of a request therefor, such information as
the Company may reasonably request for use in connection with any Shelf
Registration Statement or Prospectus or preliminary prospectus included therein.
No Holder of Transfer Restricted Securities shall be entitled to Additional
Dividends pursuant to Section 5 unless and until such Holder shall have used its
best efforts to provide all such reasonably requested information. Each Holder
as to which any Shelf Registration Statement is being effected agrees to furnish
promptly to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such Holder not
materially misleading.
(c) The Company's obligation to keep the Shelf Registration Statement
effective and usable for offers and sales of the Preferred Stock 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 Transfer Restricted Securities 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 that Prospectus included therein is no
longer usable for offers and sales of Transfer Restricted Securities and shall
end on the date when each Holder of Transfer Restricted Securities covered by
such Shelf
14
11
Registration Statement either receives the copies of a supplemented or amended
Prospectus 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.
5. Liquidated Damages. The Company and the Initial Purchaser agree that
the Holders of the Preferred Stock will suffer damages if the Company fails for
any reason to fulfill its obligations under Sections 3 and 4 hereof and that it
would not be feasible to ascertain the amount of such damages with provision.
Accordingly, if (i) any of the Registration Statements required by this
Agreement is not filed with the Commission on or prior to the date specified for
such filing in this Agreement, (ii) any of such Registration Statements have not
been declared effective by the Commission on or prior to the date specified for
such effectiveness in this Agreement (the "Effectiveness Target Date"), (iii)
the Exchange Offer has not been Consummated within 30 business days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded immediately by a
post-effective amendment to such Registration Statement that causes such failure
and that is itself immediately declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), the Company hereby
agrees to pay, as liquidated damages, additional dividends on the Preferred
Stock ("Additional Dividends") to each Holder of Transfer Restricted Securities
affected by such Registration Default on each Dividend Payment Date occurring
from and after the date of each Registration Default until the Dividend Payment
Date next succeeding the date on which such Registration Default shall have been
cured. Such Additional Dividends shall accrue from and including the date on
which such Registration Default shall occur to but
15
12
excluding the date on which such Registration Default (and all other then
existing Registration Defaults, if any) shall have been cured, at a rate per
annum of 0.25% for each 90-day period that such Registration Default continues;
provided, that such rate shall in no event exceed 1.0% per annum. Additional
Dividends shall be paid, either in cash or, at the Company's option, by the
issuance of additional shares of Preferred Stock. Following the cure of all
Registration Defaults relating to any particular Transfer Restricted Securities,
the accrual of Additional Dividends with respect to such Transfer Restricted
Securities will cease.
All obligations of the Company set forth in the preceding paragraph
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such Transfer Restricted
Security shall have been satisfied in full.
6. Registration Procedures.
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company shall comply with all of the provisions of Section
6(b) below to the extent appropriately applicable to the Exchange Offer
Registration Statement, shall use its best efforts to effect the Exchange Offer
and to permit the sale of Broker-Dealer Transfer Restricted Securities being
sold in accordance with the intended method or methods of distribution thereof,
and shall comply with the following provisions:
(i) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation thereof, a written representation to the
Company (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the
effect that (A) it is not an affiliate of the Company, (B) it is not
engaged
16
13
in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the
New Preferred Stock to be issued in the Exchange Offer and (C) it is
acquiring the New Preferred Stock in its ordinary course of business.
Each Holder will be required to acknowledge and agree (as shall be set
forth in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) that, if it is a Broker-Dealer or if such
Holder intends to use the Exchange Offer to participate in a
distribution of the securities to be acquired in the Exchange Offer,
it: (1) could not under Commission policy as in effect on the date of
this Agreement rely on the position of the Commission enunciated in
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Co., Inc. (available June 5, 1991) and Exxon Capital
Holdings Corporation (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993, and
similar no-action letters (including any no-action letter obtained
pursuant to clause (i) above), and (2) must comply with the
registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a
secondary resale transaction should be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K, if the resales are of shares of New Preferred Stock obtained by
such Holder in exchange for shares of Preferred Stock acquired by such
Holder directly from the Company.
(ii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company shall provide a supplemental letter
to the Commission (A) stating that the Company and the Guarantors are
registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available
May 13, 1988), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Co., Inc. (available June 5, 1991)
and, if applicable, any no-action letter obtained pursuant to clause
(i) above and (B) including a representation
17
14
that the Company and the Guarantors have not entered into any
arrangement or understanding with any Person to distribute the New
Preferred Stock to be received in the Exchange Offer and that, to the
best of the Company's information and belief, each Holder participating
in the Exchange Offer is acquiring the New Preferred Stock in its
ordinary course of business and has no arrangement or understanding
with any Person to participate in the distribution of the New Preferred
Stock received in the Exchange Offer.
(b) General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus required to permit resales of
Broker Dealer Transfer Restricted Securities by Broker-Dealers) the Company
agrees as follows:
(i) To use its commercially reasonable efforts to keep
such Registration Statement continuously effective (subject to the
provisions of Section 4(c) hereof) and provide all requisite financial
statements for the period specified in Section 3 or 4, as applicable;
upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and usable for
resale of Transfer Restricted Securities during the period required by
this Agreement, to file promptly an appropriate amendment to such
Registration Statement, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or (B),
use its commercially reasonable efforts to cause such amendment to be
declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter.
(ii) To prepare and file with the Commission such
amendments and post-effective amendments to the Registration Statement
as may be necessary to keep the
18
15
Registration Statement effective for the applicable period set forth in
Section 3 or 4, as applicable, or such shorter period as will terminate
when all Transfer Restricted Securities covered by such Registration
Statement have been sold; cause the Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Act, and to comply fully with the
applicable provisions of Rules 424 and 430A under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement
during the applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus.
(iii) To advise the underwriter(s), if any, of the
securities covered by such Registration Statement and the selling
Holders promptly and, if requested by any of such Persons, to confirm
such advice in writing, (A) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with
respect to any Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments
or supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the
Act or of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or
sale in any jurisdiction, or the initiation of any proceeding for any
of the preceding purposes, (D) of the existence of any fact or the
happening of any event that makes any statement of a material fact made
in the Registration Statement, the Prospectus, any amendment or
supplement thereto, or any document incorporated by reference therein
untrue, or that requires the making of any additions to or changes in
the Registration Statement
19
16
or the Prospectus in order to make the statements therein not
misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any
state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption from qualification
of the Transfer Restricted Securities under state securities or Blue
Sky laws, to use its commercially reasonable efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(iv) To furnish to each of the selling Holders and each of
the underwriter(s), if any, of securities to be sold by such Holders,
before filing with the Commission, copies of the Shelf Registration
Statement or any Prospectus included therein or any amendments or
supplements to such Shelf Registration Statement or Prospectus
(including, if requested in writing, all documents, if any,
incorporated by reference after the initial filing of such Shelf
Registration Statement), which documents will be subject to the review
of such Holders and underwriter(s), if any, for a period of at least
five business days, and not to file any such Shelf Registration
Statement or Prospectus or any amendment or supplement to such Shelf
Registration Statement or Prospectus (including all such documents
incorporated by reference) to which a selling Holder of Transfer
Restricted Securities covered by such Shelf Registration Statement or
the underwriter(s), if any, shall reasonably object within three
business days after the receipt thereof. A selling Holder or
underwriter, if any, shall be deemed to have reasonably objected to
such filing if such Shelf Registration Statement, amendment, Prospectus
or supplement, as applicable, as proposed to be filed, contains a
material misstatement or omission or fails in any material respect to
comply with the applicable requirements of the Act.
(v) To make available at reasonable times for inspection
by the selling Holders, any underwriter
20
17
participating in any disposition pursuant to such Registration
Statement, and any attorney or accountant retained by such selling
Holders or any of the underwriter(s) (collectively, the "Inspectors"),
all financial and other records, pertinent corporate documents and
properties of the Company (collectively, the "Records") and cause the
officers, directors and employees of the Company to supply all
information reasonably requested by any such Holder, underwriter,
attorney or accountant in connection with such Shelf Registration
Statement subsequent to the filing thereof and prior to its
effectiveness. Records that the Company determines, in good faith, to
be confidential shall not be disclosed by the Inspectors unless upon
five business days' prior written notice and (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in
such Registration Statement, (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, (iii) disclosure of such information is, in the
reasonable opinion of counsel for any Inspector, necessary or advisable
in connection with any action, claim, suit or proceeding, directly or
indirectly, involving or potentially involving such Inspector and
arising out of, based upon, relating to, or involving this Agreement or
any transactions contemplated hereby or arising hereunder or (iv) the
information in such Records has been made generally available to the
public (other than as a result of an impermissible disclosure or
failure to safeguard by the Inspectors). Each selling Holder of such
Transfer Restricted Securities will be required to agree that
information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Company unless and until
such information is generally available to the public (other than as a
result of an impermissible disclosure or failure to safeguard by such
person). Each selling Holder of such Transfer Restricted Securities
will be required to further agree that it will, upon learning that
disclosure of such Records is sought in a court of
21
18
competent jurisdiction, give notice to the Company and allow the
Company to undertake appropriate action to prevent disclosure of the
Records deemed confidential at the Company's sole expense.
(vi) If requested by any selling Holders or the
underwriter(s), if any, of the securities to be sold by such Holders,
to promptly incorporate in any Shelf Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such selling Holders and underwriter(s),
if any, may reasonable request to have included therein, including,
without limitation, information relating to the "Plan of Distribution"
of the Transfer Restricted Securities, information with respect to the
amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid therefor and any other
terms of the offering of the Transfer Restricted Securities to be sold
in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company is notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment.
(vii) To furnish to each selling Holder and each of the
underwriter(s), if any, of securities to be sold by such Holders,
without charge, at least one copy of the Shelf Registration Statement,
as first filed with the Commission, and of each amendment thereto,
including all documents incorporated by reference therein and, if
requested in writing, all exhibits (including exhibits incorporated
therein by reference).
(viii) To deliver to each selling Holder and each of the
underwriter(s), if any, of securities to be sold by such Holders,
without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons reasonably may request. The Company hereby consents to the use
of the Prospectus and any amendment or supplement thereto by each of
the selling Holders and
22
19
each of the underwriter(s), if any, in connection with the offering and
the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto.
(ix) In connection with any Underwritten Registration, to
enter into such agreements (including an underwriting agreement (in
such form as is customary in underwritten offerings for the account of
selling securityholders of securities similar to the Preferred Stock)
with the underwriters of securities to be sold by the Holders), and
make such representations and warranties as are customarily made by
issuers to underwriters of securities similar to the Preferred Stock,
and take all such other actions in connection therewith in order to
expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any Registration Statement contemplated by this
Agreement, all to such extent as reasonably may be requested by the
Initial Purchaser or by any Holder of Transfer Restricted Securities or
any such underwriter in connection with any sale or resale pursuant to
any Registration Statement contemplated by this Agreement; and --
(A) to furnish to the Initial Purchaser, each
selling Holder and each such underwriter, in such substance
and scope as they reasonably may request and as are
customarily furnished by issuers to underwriters in primary
underwritten offerings, upon the closing of the Underwritten
Registration:
(1) a certificate, dated the date of
closing of the Underwritten Registration, signed by
(x) the Executive Chairman of the Board of Directors
or the President of the Company and (y) Chief
Financial Officer of the Company, confirming, as of
the date thereof, the matters set forth in paragraph
(g) of Section 7 of the Purchase Agreement
23
20
and such other matters as such parties may reasonably
request;
(2) opinions, dated the date of closing of
the Underwritten Registration, of counsel for the
Company covering the matters set forth in Exhibits
▇-▇(▇), ▇-▇ and A-3(a) of the Purchase Agreement and
such other matters as such parties may reasonably
request, together with letters from such counsel
substantially to the effect of Exhibits A-1(b) and
A-3(b); and
(3) a comfort letter, dated the date of
closing of the Underwritten Registration, from the
Company's independent accountants, in the customary
form and covering matters of the type customarily
covered in comfort letters furnished to underwriters
in connection with primary underwritten offerings,
and affirming the matters set forth in the comfort
letters delivered pursuant to Section 7(c) of the
Purchase Agreement, without exception;
(B) to set forth in full or incorporate by
reference in the underwriting agreement, if any, between the
Company and underwriters of any Transfer Restricted Securities
within the coverage of the Registration Statement the
indemnification and contribution provisions and procedures set
forth in Section 8 hereof; and
(C) to deliver such other documents and
certificates as may be reasonably requested by such parties to
evidence compliance with clause (A) above and with any
customary conditions contained in the underwriting agreement
or other agreement entered into by the Company pursuant to
this clause (xi), if any.
24
21
If at any time when a prospectus is required by the Act to be
delivered in connection with resales of Transfer Restricted Securities
the representations and warranties of the Company contemplated in
clause (A)(1) above cease to be true and correct, the Company shall so
advise the Initial Purchaser and the underwriter(s), if any, and each
selling Holder promptly and, if requested by any such Person, shall
confirm such advice in writing.
(x) Prior to any public offering of Transfer Restricted
Securities, to cooperate with the selling Holders, the underwriter(s),
if any, and their respective counsel in connection with the
registration and qualification of the Transfer Restricted Securities
under the securities or Blue Sky laws of such jurisdictions as the
selling Holders or underwriter(s) reasonably may request and do any and
all other reasonable acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the Shelf Registration Statement; provided,
however, that the Company shall not be required to register or qualify
as a foreign corporation where they are not now so qualified or to take
any action that would subject it to service of process in suits or to
taxation in any jurisdiction where it is not now so subject.
(xi) To cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and to enable such
Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders or underwriter(s), if any,
reasonably may request at least two business days prior to any sale of
Transfer Restricted Securities made by such underwriter(s).
(xii) To use its commercially reasonable efforts to cause
the Transfer Restricted Securities covered by the
25
22
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof or the underwriter(s), if any, to consummate
the disposition of such Transfer Restricted Securities, subject to the
proviso contained in clause (x) above, except insofar as the same may
be required solely as a consequence of the nature of the seller's
business.
(xiii) If any fact or event contemplated by clause
(b)(iii)(D) above shall exist or have occurred, to prepare a supplement
or post-effective amendment to the Registration Statement or related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading.
(xiv) To provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement and provide Transfer Agent with printed certificates for the
Transfer Restricted Securities that are in a form eligible for deposit
with The Depository Trust Company.
(xv) To cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter") that is required in accordance with the rules and
regulations of the NASD, and to use their reasonable best efforts to
cause such Registration Statement to become effective and approved by
such governmental agencies or authorities as may be necessary to enable
the Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities.
26
23
(xvi) To otherwise use its reasonable commercial efforts to
comply with all applicable rules and regulations of the Commission, and
make generally available to its security holders, as soon as
practicable, a consolidated earnings statement meeting the requirements
of Rule 158 under the Act (which need not be audited) for the
twelve-month period (A) commencing at the end of any fiscal quarter in
which Transfer Restricted Securities are sold to underwriters in a firm
or best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of
the Registration Statement.
(xvii) To cause all Preferred Stock covered by the
Registration Statement to be listed on each securities exchange (which
term shall be deemed to include the NASDAQ National Market) on which
any other series of preferred stock issued by the Company is then
listed if so requested by the Holders of a majority in aggregate
Liquidation Preference of the Preferred Stock or the managing
underwriter(s), if any.
(xviii) To provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13 and Section 15 of the Exchange Act.
(c) Restrictions on Holders. Each Holder, by acquisition of a
Transfer Restricted Security agrees that, upon receipt of any notice from the
Company of the existence of any fact of the kind described in Section
6(b)(iii)(D) hereof, such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 6(b)(xvi) hereof, or until it is advised in
writing (the "Advice") by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings that
are incorporated by reference in the Prospectus. If so desired
27
24
by the Company, each Holder will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of such notice. In the event the Company
shall give any such notice, the time period regarding the effectiveness of such
Registration Statement set forth in Section 3 or 4, as applicable, shall be
extended by the number of days during the period from the date when each selling
Holder covered by such Registration Statement shall have received the copies of
the supplemented or amended Prospectus contemplated by Section (6)(b)(xvi)
hereof or shall have received the Advice.
7. Registration Expenses. (a) All expenses incident to the performance
by the Company of or compliance by the Company with this Agreement will be borne
by the Company, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and filing fees
and expenses (including filing made by the Initial Purchaser or any Holder with
the NASD (and, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel that may be required by the rules and
regulations of the NASD)); (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities law; (iii) all expenses of printing
(including printing certificates for the New Preferred Stock to be issued in the
Exchange Offer and printing of Prospectuses), messenger and delivery services
and telephone; (iv) all fees and disbursements of counsel for the Company and,
subject to Section 7(b) below, the Holders of Transfer Restricted Securities,
(v) all application and filing fees in connection with listing the New Preferred
Stock on any national securities exchange or automated quotation system if
required hereunder; and (vi) all fees and disbursements of the Company's
independent public accountants (including the expenses of any special audit and
comfort letters required by or incident to such performance). The Company will,
in any event, bear its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expenses of any
28
25
annual audit and the fees and expenses of any Person, including special experts,
retained by the Company.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements (not to exceed $30,000 in the aggregate) of
not more than one counsel, which shall be Weil, Gotshal & ▇▇▇▇▇▇ LLP or such
other counsel as may be chosen by the Holders of a majority in principal amount
of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared.
8. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Holder of Transfer Restricted Securities, the officers and
directors of each such Person, and each Person, if any, who controls any such
Person within the meaning of either Section 15 of the Act or Section 20 of the
Exchange Act (each, a "Participant"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, the reasonable
legal fees and other expenses actually incurred in connection with any suit,
action or proceeding or any claim asserted) caused by, arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement (or any amendment thereto) or
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or omission or alleged untrue statement or
29
26
omission made in reliance upon and in conformity with information relating to
any Participant furnished to the Company in writing by such Participant
expressly for use therein; provided, however, that the Company will not be
required to indemnify a Participant if such untrue statement or omission or
alleged untrue statement or omission was contained or made in any preliminary
prospectus and corrected in the Prospectus or any amendment or supplement
thereto and it is established in the related proceeding that such Participant
failed to deliver or provide a copy of the Prospectus (as amended or
supplemented) to such Person with or prior to the confirmation of the sale to
such Person of shares of Preferred Stock included within the coverage of the
Registration Statement if required by applicable law, unless such failure to
deliver or provide a copy of the Prospectus (as amended or supplemented) shall
have been determined by a court of competent jurisdiction by final and
non-appealable judgment (or stipulated in a settlement agreement reached by all
parties involved in any action or proceeding related to such claim) to have been
the result of noncompliance by the Company with one or more of the provisions of
Section 6 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors and officers who sign the
Registration Statement and each Person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to each Participant, but only
(i) with reference to information relating to such Participant furnished to the
Company in writing by such Participant expressly for use in any Registration
Statement or Prospectus, any amendment or supplement thereto, or any preliminary
prospectus or (ii) with respect to any untrue statement or representation made
by such Participant in writing to the Company. The liability of any Participant
under this paragraph shall in no event exceed the proceeds received by such
Participant from sales of Transfer Restricted Securities giving rise to such
obligations.
30
27
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any Person in respect of which indemnity may be sought pursuant
to either of the two preceding paragraphs, such Person (the "Indemnified
Person") shall promptly notify the Person against whom such indemnity may be
sought (the "Indemnifying Person") in writing, and the Indemnifying Person, upon
request of the Indemnified Person, shall retain counsel reasonably satisfactory
to the Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding; provided, however, that the failure to so notify the
Indemnifying Person shall not relieve it of any obligation or liability which it
may have hereunder or otherwise (unless and to the extent such Indemnifying
Person has been materially prejudiced by such failure, including, without
limitation, that such failure results in the forfeiture by the Indemnifying
Person of substantial rights and defenses). In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed in writing to the contrary, (ii) the Indemnifying Person has
failed to retain counsel reasonably satisfactory to the Indemnified Person or
(iii) the named parties in any such proceeding (including any impleaded parties)
include both the Indemnifying Person and the Indemnified Person and the
Indemnified Person shall have been advised by counsel that representation of
both parties by the same counsel would be inappropriate under applicable
standards of professional conduct due to differing interests between them. It is
understood that, unless there exists a conflict among Indemnified Persons, the
Indemnifying Person shall not, in connection with any one such proceeding or
separate but substantially similar related proceeding in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm (in addition to any
31
28
local counsel) for all Indemnified Persons, and that all such fees and expenses
shall be reimbursed promptly as they are incurred. Any such separate firm for
the Participants and such control Persons of Participants shall be designated in
writing by Participants who sold a majority of shares of Registrable Preferred
Stock sold by all such Participants and any such separate firm for the Company,
its directors, its officers and such control Persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its prior written
consent (which consent shall not be unreasonably withheld or delayed), but if
settled with such consent or if there be a final non-appealable judgment for the
plaintiff for which the Indemnified Person is entitled to indemnification
pursuant to this Agreement, the Indemnifying Person agrees to indemnify and hold
harmless each Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement or
compromise of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party, or indemnity could have been
sought hereunder by such Indemnified Person, unless such settlement (A) includes
an unconditional written release of such Indemnified Person, in form and
substance reasonably satisfactory to such Indemnified Person, from all liability
on claims that are the subject matter of such proceeding and (B) does not
include any statement as to an admission of fault, culpability or failure to act
by or on behalf of any Indemnified Person.
(d) If the indemnification provided for in the paragraphs (a)
and (b) of this Section 8 is for any reason unavailable to, or insufficient to
hold harmless, an Indemnified Person in respect of any losses, claims, damages
or liabilities referred to therein, then each Indemnifying Person under such
paragraphs, in lieu of indemnifying such Indemnified Person thereunder and in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in
32
29
such proportion as is appropriate to reflect (i) the relative benefits received
by the Indemnifying Person or Persons on the one hand and the Indemnified Person
or Persons on the other from the offering of the Preferred Stock or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the
Indemnifying Person or Persons on the one hand and the Indemnified Person or
Persons on the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
such Participant or such other Indemnified Person, as the case may be, on the
other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable
if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Transfer Restricted
Securities Pursuant to the Registration Statement
33
30
exceeds the amount of any damages that such Participant has otherwise been
required to pay or has paid by reason of such untrue or alleged untrue statement
or omission or alleged omission. 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.
(f) The indemnity and contribution agreements contained
in this Section 8 will be in addition to any liability that the Indemnifying
Persons may otherwise have to the Indemnified Persons referred to above.
9. Rules 144 and 144A. So long as any Transfer Restricted
Securities are outstanding, the Company will provide to the Holders and file
with the Commission copies of the annual and quarterly reports and any of the
information, documents and other reports that the Company would have been
required to file with the Commission pursuant to Sections 13 or 15(d) of the
Exchange Act regardless of whether the Company is obligated to file such
reports. The Company further covenants that, for so long as any Transfer
Restricted Securities remain outstanding, to make available to any Holder or
beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities
from such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Securities Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A.
10. Miscellaneous.
(a) No Inconsistent Agreements. The Company shall not,
after the date of this Agreement, enter into any agreement with respect to any
of its securities that conflicts with the provisions hereof.
(b) Adjustments Affecting Preferred Stock. The Company shall
not, directly or indirectly, take any action with respect to the Preferred Stock
as a class that would adversely affect the ability of the Holders of Transfer
34
31
Restricted Securities to include such Transfer Restricted Securities in a Shelf
Registration undertaken pursuant to this Agreement.
(c) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, otherwise than with
the prior written consent of the Holders of not less than a majority of the then
outstanding shares of Registrable Preferred Stock; provided, however, that
Section 8 and this Section 10(c) may not be amended, modified or supplemented
without the prior written consent of each Holder (including any person who was a
Holder of Transfer Restricted Securities sold pursuant to any Registration
Statement). Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Transfer Restricted Securities sold whose Transfer
Restricted Securities sold are being sold pursuant to a Registration Statement
and that does not directly or indirectly affect, impair, limit or compromise the
rights of other Holders of Transfer Restricted Securities sold may be given by
Holders of at least a majority in aggregate Liquidation Preference of the
Transfer Restricted Securities sold being sold by such Holders pursuant to such
Registration Statement; provided, however, that the provisions of this sentence
may not be amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(d) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, next-day air courier or facsimile:
1. if to a Holder of Transfer Restricted Securities,
at the most current address of such Holder on the stock books of the
Company with a copy in like manner to the Initial Purchaser at its
address set forth in the Purchase Agreement for the giving of notices
thereunder.
35
32
2. if to the Initial Purchaser, at the
address specified in Section 10(d)(1) above;
3. if to the Company to:
American Communications Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esq.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; one business
day after being timely delivered to a next-day air courier; and when receipt
acknowledged by the addressee, if sent by facsimile.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto, including the Holders; provided, however, that this Agreement shall not
inure to the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign holds Registrable Preferred
Stock.
(f) 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.
36
33
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
(j) Securities Held by the Company. Whenever the consent or
approval of Holders of a specified percentage in aggregate Liquidation
Preference of Transfer Restricted Securities is required hereunder, Transfer
Restricted Securities held by the Company or its subsidiaries shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
(k) Third Party Beneficiaries. Holders of Transfer Restricted
Securities and Participants are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Persons.
37
34
(l) Entire Agreement. This Agreement, together with the
Purchase Agreement, is intended by the parties as a final and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein and any and all prior oral or
written agreements, representations, or warranties, contracts, understandings,
correspondence, conversations and memoranda between the Purchasers on the one
hand and the Company on the other, or between or among any agents,
representatives, parents, subsidiaries, affiliates, predecessors in interest or
successors in interest with respect to the subject matter hereof and thereof are
merged herein and replaced hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
AMERICAN COMMUNICATIONS SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President -
Legal & Regulatory Affairs
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Managing Director
