<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
Commission File Number 000-24737
CROWN CASTLE INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0470458
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
510 BERING DRIVE 77057-1457
SUITE 500 (Zip Code)
HOUSTON, TEXAS
(Address of principal executive offices)
(713) 570-3000
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [_]
Number of shares of common stock outstanding at May 1, 2000:
Common Stock - 154,326,984
Class A Common Stock - 11,340,000
<PAGE>
CROWN CASTLE INTERNATIONAL CORP.
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet at December 31, 1999 and March 31, 2000............................ 3
Consolidated Statement of Operations and Comprehensive Loss for the three months ended
March 31, 1999 and 2000...................................................................... 4
Consolidated Statement of Cash Flows for the three months ended March 31, 1999 and 2000....... 5
Condensed Notes to Consolidated Financial Statements.......................................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations................................................................................. 15
Item 3. Quantitative and Qualitative Disclosures About Market Risk............................. 23
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds.............................................. 24
Item 6. Exhibits and Reports on Form 8-K....................................................... 24
Signatures...................................................................................... 25
</TABLE>
2
<PAGE>
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
---------- ----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................................................... $ 549,328 $ 509,505
Receivables:
Trade, net of allowance for doubtful accounts of $3,218 and $4,756 at
December 31, 1999 and March 31, 2000, respectively............................. 74,290 87,991
Other........................................................................... 4,327 50
Inventories....................................................................... 19,178 24,948
Prepaid expenses and other current assets......................................... 14,922 12,897
---------- ----------
Total current assets........................................................... 662,045 635,391
Property and equipment, net of accumulated depreciation of $119,473 and
$155,556 at December 31, 1999 and March 31, 2000, respectively.................... 2,468,101 2,851,855
Escrow deposit for acquisition..................................................... 50,000 50,000
Goodwill and other intangible assets, net of accumulated amortization of
$53,437 and $61,887 at December 31, 1999 and March 31, 2000, respectively......... 596,147 595,166
Deferred financing costs and other assets, net of accumulated amortization of
$4,245 and $4,458 at December 31, 1999 and March 31, 2000, respectively........... 60,357 80,100
---------- ----------
$3,836,650 $4,212,512
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................................................. $ 45,998 $ 43,640
Accrued interest.................................................................. 20,912 9,273
Accrued compensation and related benefits......................................... 4,005 4,918
Deferred rental revenues and other accrued liabilities............................ 60,366 85,633
---------- ----------
Total current liabilities...................................................... 131,281 143,464
Long-term debt..................................................................... 1,542,343 1,892,566
Other liabilities.................................................................. 67,064 75,250
---------- ----------
Total liabilities.............................................................. 1,740,688 2,111,280
---------- ----------
Commitments and contingencies
Minority interests................................................................. 55,292 74,529
Redeemable preferred stock......................................................... 422,923 430,291
Stockholders' equity:
Common stock, $.01 par value; 690,000,000 shares authorized:
Common Stock; shares issued: December 31, 1999 - 146,074,905 and
March 31, 2000 - 148,813,270................................................... 1,461 1,488
Class A Common Stock; shares issued: 11,340,000................................. 113 113
Additional paid-in capital........................................................ 1,805,053 1,831,119
Cumulative foreign currency translation adjustment................................ (3,013) (5,393)
Accumulated deficit............................................................... (185,867) (230,915)
---------- ----------
Total stockholders' equity..................................................... 1,617,747 1,596,412
---------- ----------
$3,836,650 $4,212,512
========== ==========
</TABLE>
See condensed notes to consolidated financial statements.
3
<PAGE>
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1999 2000
-------- --------
<S> <C> <C>
Net revenues:
Site rental and broadcast transmission.............................................. $ 45,326 $ 93,741
Network services and other.......................................................... 9,783 30,503
-------- --------
55,109 124,244
-------- --------
Operating expenses:
Costs of operations (exclusive of depreciation and amortization):
Site rental and broadcast transmission............................................ 18,527 40,287
Network services and other........................................................ 6,982 15,901
General and administrative.......................................................... 8,304 14,853
Corporate development............................................................... 874 2,071
Restructuring charges............................................................... 1,814 --
Non-cash compensation charges....................................................... 667 461
Depreciation and amortization....................................................... 19,656 45,122
-------- --------
56,824 118,695
-------- --------
Operating income (loss).............................................................. (1,715) 5,549
Other income (expense):
Interest and other income (expense)................................................. 340 5,704
Interest expense and amortization of deferred financing costs....................... (11,286) (41,761)
-------- --------
Loss before income taxes, minority interests, extraordinary item and cumulative
effect of change in accounting principle............................................ (12,661) (30,508)
Provision for income taxes........................................................... (127) (11)
Minority interests................................................................... (685) (1,541)
-------- --------
Loss before extraordinary item and cumulative effect of change in accounting
principle........................................................................... (13,473) (32,060)
Extraordinary item--loss on early extinguishment of debt............................. -- (1,495)
Cumulative effect of change in accounting principle for costs of start-up
activities.......................................................................... (2,414) --
-------- --------
Net loss............................................................................. (15,887) (33,555)
Dividends on preferred stock......................................................... (6,408) (11,493)
-------- --------
Net loss after deduction of dividends on preferred stock............................. $(22,295) $(45,048)
======== ========
Net loss............................................................................. $(15,887) $(33,555)
Other comprehensive income:
Foreign currency translation adjustments............................................ (4,743) (2,380)
-------- --------
Comprehensive loss................................................................... $(20,630) $(35,935)
======== ========
Per common share - basic and diluted:
Loss before extraordinary item and cumulative effect of change in accounting
principle.......................................................................... $ (0.21) $ (0.27)
Extraordinary item.................................................................. -- (0.01)
Cumulative effect of change in accounting principle................................. (0.03) --
-------- --------
Net loss............................................................................ $ (0.24) $ (0.28)
======== ========
Common shares outstanding - basic and diluted (in thousands)......................... 94,732 158,566
======== ========
</TABLE>
See condensed notes to consolidated financial statements.
4
<PAGE>
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1999 2000
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................................................................ $ (15,887) $ (33,555)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization......................................................... 19,656 45,122
Amortization of deferred financing costs and discounts on long-term debt.............. 4,920 19,139
Minority interests.................................................................... 685 1,541
Extraordinary loss on early extinguishment of debt.................................... -- 1,495
Non-cash compensation charges......................................................... 667 461
Cumulative effect of change in accounting principle................................... 2,414 --
Changes in assets and liabilities, excluding the effects of acquisitions:
Increase in deferred rental revenues and other liabilities........................... 46,046 38,026
Increase in inventories, prepaid expenses and other assets........................... (4,456) (11,767)
Decrease in accrued interest......................................................... (14,457) (11,541)
Increase in receivables.............................................................. (1,363) (9,842)
Decrease in accounts payable......................................................... (17,738) (2,145)
--------- ---------
Net cash provided by operating activities.......................................... 20,487 36,934
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of businesses, net of cash acquired........................................ (204,845) (287,363)
Capital expenditures.................................................................... (76,363) (110,427)
Investments in affiliates............................................................... -- (1,498)
--------- ---------
Net cash used for investing activities............................................. (281,208) (399,288)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt................................................ -- 400,000
Net borrowings under revolving credit agreements........................................ 64,679 19,000
Proceeds from issuance of capital stock................................................. 1,835 6,845
Principal payments on long-term debt.................................................... -- (82,000)
Incurrence of financing costs........................................................... (117) (18,930)
--------- ---------
Net cash provided by financing activities.......................................... 66,397 324,915
--------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH.................................................. (279) (2,384)
--------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS................................................ (194,603) (39,823)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD......................................... 296,450 549,328
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD............................................... $ 101,847 $ 509,505
========= =========
SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Amounts recorded in connection with acquisitions:
Fair value of net assets acquired, including goodwill and other intangible assets..... $ 653,029 $ 320,392
Escrow deposits for acquisitions...................................................... 100,000 --
Issuance of long-term debt............................................................ 280,000 --
Minority interests.................................................................... 14,330 18,289
Issuance of common stock.............................................................. 253,854 14,740
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid........................................................................... $ 21,452 $ 33,096
Income taxes paid....................................................................... 104 23
</TABLE>
See condensed notes to consolidated financial statements.
5
<PAGE>
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
The information contained in the following notes to the consolidated
financial statements is condensed from that which would appear in the annual
consolidated financial statements; accordingly, the consolidated financial
statements included herein should be reviewed in conjunction with the
consolidated financial statements for the fiscal year ended December 31, 1999,
and related notes thereto, included in the Annual Report on Form 10-K (the "Form
10-K") filed by Crown Castle International Corp. with the Securities and
Exchange Commission. All references to the "Company" include Crown Castle
International Corp. and its subsidiary companies unless otherwise indicated or
the context indicates otherwise.
The consolidated financial statements included herein are unaudited; however,
they include all adjustments (consisting only of normal recurring adjustments)
which, in the opinion of management, are necessary to present fairly the
consolidated financial position of the Company at March 31, 2000 and the
consolidated results of operations and consolidated cash flows for the three
months ended March 31, 1999 and 2000. Accounting measurements at interim dates
inherently involve greater reliance on estimates than at year end. The results
of operations for the interim periods presented are not necessarily indicative
of the results to be expected for the entire year.
RECENT ACCOUNTING PRONOUNCEMENTS
In April 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position 98-5,
Reporting on the Costs of Start-Up Activities ("SOP 98-5"). SOP 98-5 requires
that costs of start-up activities be charged to expense as incurred and broadly
defines such costs. The Company has deferred certain costs incurred in
connection with potential business initiatives and new geographic markets, and
SOP 98-5 requires that such deferred costs be charged to results of operations
upon its adoption. SOP 98-5 is effective for fiscal years beginning after
December 15, 1998. The Company has adopted the requirements of SOP 98-5 as of
January 1, 1999. The cumulative effect of the change in accounting principle
for the adoption of SOP 98-5 resulted in a charge to results of operations for
$2,414,000 in the Company's financial statements for the three months ended
March 31, 1999.
In June 1998, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133"). SFAS 133 requires that
derivative instruments be recognized as either assets or liabilities in the
consolidated balance sheet based on their fair values. Changes in the fair
values of such derivative instruments will be recorded either in results of
operations or in other comprehensive income, depending on the intended use of
the derivative instrument. The initial application of SFAS 133 will be reported
as the effect of a change in accounting principle. SFAS 133, as amended, is
effective for all fiscal quarters of fiscal years beginning after June 15, 2000.
The Company will adopt the requirements of SFAS 133 in its financial statements
for the three months ending March 31, 2001. The Company has not yet determined
the effect that the adoption of SFAS 133 will have on its consolidated financial
statements.
2. ACQUISITIONS
Agreement With GTE Corporation ("GTE")
On November 7, 1999, the Company entered into an agreement with GTE to form a
joint venture ("Crown Castle GT") to own and operate a significant majority of
GTE's towers. The agreement contemplates that the transaction will be completed
in multiple closings during 2000. On January 31, 2000, the formation of Crown
Castle GT took place in connection with the first such closing of towers.
During the course of the multiple closings, (1) the Company will contribute an
aggregate of approximately $825,000,000 (of which up to
6
<PAGE>
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
$100,000,000 can be in shares of its common stock, with the balance in cash) in
exchange for a majority ownership interest in Crown Castle GT, and (2) GTE will
contribute approximately 2,300 towers in exchange for cash distributions
aggregating approximately $800,000,000 (less any amount contributed in the form
of the Company's common stock) from Crown Castle GT and a minority ownership
interest in Crown Castle GT. Upon dissolution of Crown Castle GT, GTE will
receive (1) any shares of the Company's common stock contributed to Crown Castle
GT and (2) a payment equal to approximately 11.4% of the fair market value of
Crown Castle GT's other net assets; the Company will then receive the remaining
assets and liabilities of Crown Castle GT. The Company is accounting for its
investment in Crown Castle GT as a purchase of tower assets, and is including
Crown Castle GT's results of operations and cash flows in the Company's
consolidated financial statements for periods subsequent to formation. Upon
entering into this agreement, the Company placed $50,000,000 into an escrow
account. At the January 31, 2000 closing, the Company contributed $223,870,000
in cash to Crown Castle GT, and GTE contributed 637 towers in exchange for a
cash distribution of $198,870,000 from Crown Castle GT. See Note 9.
BellSouth Mobility Inc. and BellSouth Telecommunications Inc. ("BellSouth")
and BellSouth DCS
On February 2, 2000, the Company closed on an additional 90 of the BellSouth
towers. In connection with this closing, the Company paid $20,437,000 in cash
and issued 441,925 shares of its common stock. On the same date, the Company
closed on an additional 26 of the BellSouth DCS towers. In connection with this
closing, the Company paid $10,662,000 in cash. See Note 9.
3. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
------------ ---------
(In thousands of dollars)
<S> <C> <C>
2000 Credit Facility........................................ $ -- $ 400,000
Senior Credit Facility...................................... 63,000 --
CCUK Credit Facility........................................ 133,456 131,778
Crown Atlantic Credit Facility.............................. 180,000 180,000
9% Guaranteed Bonds due 2007................................ 195,699 193,096
10 5/8% Senior Discount Notes due 2007, net of discount..... 186,434 191,321
10 3/8% Senior Discount Notes due 2011, net of discount..... 321,284 329,511
9% Senior Notes due 2011.................................... 180,000 180,000
11 1/4% Senior Discount Notes due 2011, net of discount..... 157,470 161,860
9 1/2% Senior Notes due 2011................................ 125,000 125,000
---------- ----------
$1,542,343 $1,892,566
========== ==========
</TABLE>
2000 Credit Facility
In March 2000, a subsidiary of the Company entered into a credit agreement
with a syndicate of banks (the "2000 Credit Facility") which consists of two
term loan facilities and a revolving line of credit aggregating $1,200,000,000.
Available borrowings under the 2000 Credit Facility are generally to be used for
the construction and purchase of towers and for general corporate purposes of
CCUSA, Crown Castle GT and Crown Castle Australia Limited. The amount of
available borrowings will be determined based on the current financial
performance (as defined) of those subsidiaries' assets. In addition, up to
$25,000,000 of borrowing availability under the 2000 Credit Facility can be used
for letters of credit.
On March 15, 2000, the Company used $83,375,000 in borrowings under one of
the term loan facilities of the 2000 Credit Facility to repay outstanding
borrowings and accrued interest under the Senior Credit Facility. The net
proceeds from $316,625,000 in additional borrowing under this term loan facility
are being used to fund
7
<PAGE>
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
a portion of the purchase price for Crown Castle GT and for general corporate
purposes (see Note 9). As of March 31, 2000, approximately $180,000,000 of
borrowings was available under the 2000 Credit Facility, of which $25,000,000
was available for letters of credit. There were no letters of credit outstanding
as of March 31, 2000. In the first quarter of 2000, CCI recorded an
extraordinary loss of $1,495,000 consisting of the write-off of unamortized
deferred financing costs related to the Senior Credit Facility.
The amount of available borrowings under the 2000 Credit Facility's term
loans and revolving line of credit will decrease by stated amounts at the end of
each calendar quarter beginning on June 30, 2003. Any remaining borrowings
under the term loan currently outstanding must be repaid on March 15, 2008. Any
remaining borrowings under the other term loan and the revolving line of credit
must be repaid on September 15, 2007. Under certain circumstances, the Company's
subsidiaries may be required to make principal prepayments under the 2000 Credit
Facility in an amount equal to 50% of excess cash flow (as defined), the net
cash proceeds from certain asset sales or the net cash proceeds from certain
borrowings.
The 2000 Credit Facility is secured by substantially all of the assets of
CCUSA and CCAL, and the Company's pledge of the capital stock of those
subsidiaries and Crown Castle GT. In addition, the 2000 Credit Facility is
guaranteed by CCIC. Borrowings under the 2000 Credit Facility bear interest at
rates per annum, at the Company's election, equal to the bank's prime rate plus
margins ranging from 1.75% to 2.00% or a Eurodollar interbank offered rate
(LIBOR) plus margins ranging from 2.75% to 3.00%. The interest rate margins may
be reduced by up to 1.00% (non-cumulatively) based on a financial test,
determined quarterly. Interest on prime rate loans is due quarterly, while
interest on LIBOR loans is due at the end of the period (from one to six months)
for which such LIBOR rate is in effect. The 2000 Credit Facility requires the
borrowers to maintain certain financial covenants and places restrictions on
their ability to, among other things, incur debt and liens, pay dividends, make
capital expenditures, dispose of assets, undertake transactions with affiliates
and make investments.
Reporting Requirements Under the Indentures Governing the Company's Debt
Securities (the "Indentures") and the Certificate of Designations Governing the
Company's 12 3/4% Senior Exchangeable Preferred Stock (the "Certificate")
The following information (as such capitalized terms are defined in the
Indentures and the Certificate) is presented solely as a requirement of the
Indentures and the Certificate; such information is not intended as an
alternative measure of financial position, operating results or cash flow from
operations (as determined in accordance with generally accepted accounting
principles). Furthermore, the Company's measure of the following information
may not be comparable to similarly titled measures of other companies.
Summarized financial information for (1) the Company and its Restricted
Subsidiaries and (2) the Company's Unrestricted Subsidiaries is as follows:
8
<PAGE>
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
March 31, 2000
-----------------------------------------------------------
Company and
Restricted Unrestricted Consolidation Consolidated
Subsidiaries Subsidiaries Eliminations Total
------------ ------------ -------------- ------------
(In thousands of dollars)
<S> <C> <C> <C> <C>
Cash and cash equivalents....................... $ 475,007 $ 34,498 $ -- $ 509,505
Other current assets............................ 61,248 64,638 -- 125,886
Property and equipment, net..................... 1,706,949 1,144,906 -- 2,851,855
Escrow deposit for acquisition.................. 50,000 -- -- 50,000
Investments in Unrestricted Subsidiaries........ 999,931 -- (999,931) --
Goodwill and other intangible assets, net....... 134,568 460,598 -- 595,166
Other assets, net............................... 68,526 11,574 -- 80,100
---------- ---------- --------- ----------
$3,496,229 $1,716,214 $(999,931) $4,212,512
========== ========== ========= ==========
Current liabilities............................. $ 57,685 $ 85,779 $ -- $ 143,464
Long-term debt.................................. 1,387,692 504,874 -- 1,892,566
Other liabilities............................... 5,760 69,490 -- 75,250
Minority interests.............................. 18,389 56,140 -- 74,529
Redeemable preferred stock...................... 430,291 -- -- 430,291
Stockholders' equity............................ 1,596,412 999,931 (999,931) 1,596,412
---------- ---------- --------- ----------
$3,496,229 $1,716,214 $(999,931) $4,212,512
========== ========== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended March 31, 2000
---------------------------------------------
Company and
Restricted Unrestricted Consolidated
Subsidiaries Subsidiaries Total
------------- ------------- -------------
(In thousands of dollars)
<S> <C> <C> <C>
Net revenues....................................................$ 49,459 $ 74,785 $124,244
Costs of operations (exclusive of depreciation and
amortization).................................................. 19,432 36,756 56,188
General and administrative...................................... 12,030 2,823 14,853
Corporate development........................................... 1,786 285 2,071
Non-cash compensation charges................................... 407 54 461
Depreciation and amortization................................... 21,450 23,672 45,122
-------- -------- --------
Operating income (loss)......................................... (5,646) 11,195 5,549
Interest and other income (expense)............................. 5,048 656 5,704
Interest expense and amortization of deferred financing costs... (29,100) (12,661) (41,761)
Provision for income taxes...................................... (11) -- (11)
Minority interests.............................................. (100) (1,441) (1,541)
Extraordinary item.............................................. (1,495) -- (1,495)
-------- -------- --------
Net loss........................................................$(31,304) $ (2,251) $(33,555)
======== ======== ========
</TABLE>
Tower Cash Flow and Adjusted Consolidated Cash Flow for the Company and its
Restricted Subsidiaries is as follows under (1) the indenture governing the
10 5/8% Senior Discount Notes and the Certificate (the "1997 and 1998
Securities") and (2) the indentures governing the 10 3/8% Discount Notes, the 9%
Senior Notes, the 11 1/4% Discount Notes and the 9 1/2% Senior Notes (the "1999
Securities"):
9
<PAGE>
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
1997 and 1998 1999
Securities Securities
-------------- -----------
(In thousands of dollars)
<S> <C> <C>
Tower Cash Flow, for the three months ended March 31, 2000............................... $ 16,251 $ 16,251
======== ========
Consolidated Cash Flow, for the twelve months ended March 31, 2000....................... $ 39,951 $ 45,480
Less: Tower Cash Flow, for the twelve months ended March 31, 2000........................ (45,175) (45,175)
Plus: four times Tower Cash Flow, for the three months ended March 31, 2000.............. 65,004 65,004
-------- --------
Adjusted Consolidated Cash Flow, for the twelve months ended March 31, 2000.............. $ 59,780 $ 65,309
======== ========
</TABLE>
4. REDEEMABLE PREFERRED STOCK
Redeemable preferred stock ($.01 par value, 10,000,000 shares authorized)
consists of the following:
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
-------- --------
(In thousands of
dollars)
<S> <C> <C>
12 3/4% Senior Exchangeable Preferred Stock; shares issued:
December 31, 1999 - 226,745 and March 31, 2000 - 233,973 (stated at
mandatory redemption and aggregate liquidation value).................................. $227,950 $235,216
8 1/4% Cumulative Convertible Redeemable Preferred Stock; shares issued:
200,000 (stated net of unamortized value of warrants; mandatory
redemption and aggregate liquidation value of $200,000)................................ 194,973 195,075
-------- --------
$422,923 $430,291
======== ========
</TABLE>
5. RESTRUCTURING CHARGES
In connection with the formation of Crown Atlantic, the Company completed a
restructuring of its United States operations during the first quarter of 1999.
The objective of this restructuring was to transition from a centralized
organization to a regionally-based organization in the United States.
Coincident with the restructuring, the Company incurred one-time charges of
$1,814,000 related to severance payments for staff reductions, as well as costs
related to non-cancelable leases of excess office space.
6. PER SHARE INFORMATION
Per share information is based on the weighted-average number of common
shares outstanding during each period for the basic computation and, if
dilutive, the weighted-average number of potential common shares resulting from
the assumed conversion of outstanding stock options, warrants and convertible
preferred stock for the diluted computation.
A reconciliation of the numerators and denominators of the basic and diluted
per share computations is as follows:
10
<PAGE>
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1999 2000
-------- --------
(In thousands of dollars,
except per share amounts)
<S> <C> <C>
Loss before extraordinary item and cumulative effect of change in
accounting principle........................................................ $(13,473) $(32,060)
Dividends on preferred stock................................................. (6,408) (11,493)
-------- --------
Loss before extraordinary item and cumulative effect of change in
accounting principle applicable to common stock for basic and diluted
computations................................................................ (19,881) (43,553)
Extraordinary item........................................................... -- (1,495)
Cumulative effect of change in accounting principle.......................... (2,414) --
-------- --------
Net loss applicable to common stock for basic and diluted computations....... $(22,295) $(45,048)
======== ========
Weighted-average number of common shares outstanding during the period
for basic and diluted computations (in thousands)........................... 94,732 158,566
========= ========
Per common share - basic and diluted:
Loss before extraordinary item and cumulative effect of change in
accounting principle..................................................... $ (0.21) $ (0.27)
Extraordinary item........................................................ -- (0.01)
Cumulative effect of change in accounting principle....................... (0.03) --
-------- --------
Net loss.................................................................. $ (0.24) $ (0.28)
======== ========
</TABLE>
The calculations of common shares outstanding for the diluted computations
exclude the following potential common shares as of March 31, 2000: (1) options
to purchase 19,452,770 shares of common stock at exercise prices ranging from
$-0- to $33.25 per share, (2) warrants to purchase 835,990 shares of common
stock at an exercise price of $7.50 per share, (3) warrants to purchase
1,000,000 shares of common stock at an exercise price of $26.875 per share, (4)
shares of Crown Castle UK Holdings Limited ("CCUK") stock which are convertible
into 17,443,500 shares of common stock and (5) shares of the Company's 8 1/4%
Cumulative Convertible Redeemable Preferred Stock which are convertible into
7,441,860 shares of common stock. The inclusion of such potential common shares
in the diluted per share computations would be antidilutive since the Company
incurred net losses for all periods presented.
7. CONTINGENCIES
The Company is involved in various claims, lawsuits and proceedings arising
in the ordinary course of business. While there are uncertainties inherent in
the ultimate outcome of such matters and it is impossible to presently determine
the ultimate costs that may be incurred, management believes the resolution of
such uncertainties and the incurrence of such costs should not have a material
adverse effect on the Company's consolidated financial position or results of
operations.
8. OPERATING SEGMENTS
The measurement of profit or loss currently used to evaluate the results of
operations for the Company and its operating segments is earnings before
interest, taxes, depreciation and amortization ("EBITDA"). The Company defines
EBITDA as operating income (loss) plus depreciation and amortization, non-cash
compensation charges and restructuring charges. EBITDA is not intended as an
alternative measure of operating results or cash flow from operations (as
determined in accordance with generally accepted accounting
11
<PAGE>
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
principles), and the Company's measure of EBITDA may not be comparable to
similarly titled measures of other companies. There are no significant revenues
resulting from transactions between the Company's operating segments.
The financial results for the Company's operating segments are as follows:
<TABLE>
<CAPTION>
Three Months Ended March 31, 2000
-------------------------------------------------------------------
Corporate
Crown Office Consolidated
CCUSA CCUK Atlantic and Other Total
------------ ---------- ---------- ---------- -------------
(In thousands of dollars)
<S> <C> <C> <C> <C> <C>
Net revenues:
Site rental and broadcast
transmission.......................... $ 31,370 $ 48,579 $ 13,792 $ -- $ 93,741
Network services and other............. 18,055 6,546 5,868 34 30,503
---------- -------- -------- -------- ----------
49,425 55,125 19,660 34 124,244
---------- -------- -------- -------- ----------
Costs of operations (exclusive of
depreciation and amortization)......... 19,383 27,934 8,822 49 56,188
General and administrative.............. 9,980 1,026 1,797 2,050 14,853
Corporate development................... -- 285 -- 1,786 2,071
---------- -------- -------- -------- ----------
EBITDA.................................. 20,062 25,880 9,041 (3,851) 51,132
Non-cash compensation charges........... 67 54 -- 340 461
Depreciation and amortization........... 21,154 15,553 8,119 296 45,122
---------- -------- -------- -------- ----------
Operating income (loss)................. (1,159) 10,273 922 (4,487) 5,549
Interest and other income (expense)..... 776 185 471 4,272 5,704
Interest expense and amortization of
deferred financing costs............... (3,734) (8,285) (4,376) (25,366) (41,761)
Provision for income taxes.............. (11) -- -- -- (11)
Minority interests...................... (100) (1,303) (138) -- (1,541)
Extraordinary item...................... (1,495) -- -- -- (1,495)
---------- -------- -------- -------- ----------
Net income (loss)....................... $ (5,723) $ 870 $ (3,121) $(25,581) $ (33,555)
========== ======== ======== ======== ==========
Capital expenditures.................... $ 66,941 $ 20,904 $ 22,235 $ 347 $ 110,427
========== ======== ======== ======== ==========
Total assets (at period end)............ $2,135,195 $998,804 $717,410 $361,103 $4,212,512
========== ======== ======== ======== ==========
</TABLE>
12
<PAGE>
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
Three Months Ended March 31, 1999
--------------------------------------------------
Corporate
Office Consolidated
CCUSA CCUK and Other Total
--------- --------- ---------- -------------
(In thousands of dollars)
<S> <C> <C> <C> <C>
Net revenues:
Site rental and broadcast transmission.................. $ 6,316 $39,010 $ -- $ 45,326
Network services and other.............................. 5,167 3,845 771 9,783
------- ------- ------- --------
11,483 42,855 771 55,109
------- ------- ------- --------
Costs of operations (exclusive of depreciation and
amortization)........................................... 4,208 20,784 517 25,509
General and administrative............................... 5,294 1,680 1,330 8,304
Corporate development.................................... -- 33 841 874
------- ------- ------- --------
EBITDA................................................... 1,981 20,358 (1,917) 20,422
Restructuring charges.................................... 1,814 -- -- 1,814
Non-cash compensation charges............................ 67 284 316 667
Depreciation and amortization............................ 4,238 15,139 279 19,656
------- ------- ------- --------
Operating income (loss).................................. (4,138) 4,935 (2,512) (1,715)
Interest and other income (expense)...................... (533) (175) 1,048 340
Interest expense and amortization of deferred
financing costs......................................... (685) (5,539) (5,062) (11,286)
Provision for income taxes............................... (31) -- (96) (127)
Minority interests....................................... -- (685) -- (685)
Cumulative effect of change in accounting principle
for costs of start-up activities........................ (2,014) -- (400) (2,414)
------- ------- ------- --------
Net loss................................................. $(7,401) $(1,464) $(7,022) $(15,887)
======= ======= ======= ========
Capital expenditures..................................... $17,171 $58,805 $ 387 $ 76,363
======= ======= ======= ========
</TABLE>
9. SUBSEQUENT EVENTS
Crown Castle GT
On April 3, 2000, the second closing of towers took place for Crown Castle
GT. The Company contributed $479,671,000 in cash and 5,067,488 shares of its
common stock to Crown Castle GT, and GTE contributed 1,607 towers in exchange
for a cash distribution of $479,671,000 from Crown Castle GT. The funds in the
escrow account (see Note 2) were used to pay $50,000,000 of the Company's cash
contribution. A portion of the remaining cash contribution was financed with
the net proceeds from borrowings under the Term Loans due 2011 (as discussed
below).
In addition to the approximately 2,300 towers to be contributed pursuant to
the formation agreement, GTE has the right to contribute certain additional
towers to Crown Castle GT, including towers acquired by GTE from Ameritech Corp.
("Ameritech"), on terms substantially similar to those in the formation
agreement. In April 2000, the Company agreed with GTE that approximately 470 of
the Ameritech towers would be contributed to Crown Castle GT. The consideration
to GTE for these additional towers will be a cash distribution of approximately
$162,500,000 and additional ownership interests in Crown Castle GT.
Crown Castle Australia Limited ("CCAL")
In March 2000, CCAL (a 66.7% owned subsidiary of the Company) entered into an
agreement to purchase approximately 700 towers in Australia from Cable &
Wireless Optus ("Optus"). The total purchase price for the towers will be
approximately $135,000,000 in cash (Australian $220,000,000). The Company is
accounting for
13
<PAGE>
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
its investment in CCAL as a purchase of tower assets, and will include CCAL's
results of operations and cash flows in the Company's consolidated financial
statements for periods subsequent to the purchase date. On April 3, 2000, the
first closing took place for CCAL. The Company contributed $90,786,000 in cash
(Australian $147,500,000) to CCAL. The largest portion of this amount, along
with a capital contribution from CCAL's minority shareholder, was used to pay
$95,710,000 (Australian $155,500,000) to Optus. The remaining portion of the
purchase price is expected to be paid to Optus in the second quarter of 2000.
Term Loans due 2011
On April 3, 2000, the Company borrowed $400,000,000 under a term loan
agreement with a group of lenders (the "Term Loans"). The net proceeds from
this borrowing, which amounted to $395,875,000, were used to fund a portion of
the cash contribution for the second closing of towers at Crown Castle GT (as
discussed above). The Term Loans mature on March 31, 2011 and bear interest at
an initial rate of LIBOR plus 3.75% per annum, with such interest rate
increasing on a periodic basis. Interest is due at the end of the period for
which such LIBOR rate is in effect. The Term Loans must be prepaid from the net
proceeds of any future equity or debt securities sold by the Company.
BellSouth and BellSouth DCS
On April 20, 2000, the Company closed on an additional 90 of the BellSouth
towers. In connection with this closing, the Company paid $20,518,000 in cash
and issued 441,926 shares of its common stock. On the same date, the Company
closed on an additional 32 of the BellSouth DCS towers. In connection with this
closing, the Company paid $13,175,000 in cash.
14
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion is intended to assist in understanding our
consolidated financial condition as of March 31, 2000 and our consolidated
results of operations for the three-month periods ended March 31, 1999 and 2000.
The statements in this discussion regarding the industry outlook, our
expectations regarding the future performance of our businesses and the other
nonhistorical statements in this discussion are forward-looking statements.
These forward-looking statements are subject to numerous risks and
uncertainties, including but not limited to the uncertainties relating to
decisions on capital expenditures to be made in the future by wireless carriers
and broadcasters. This discussion should be read in conjunction with the
response to Part I, Item 1 of this report and the consolidated financial
statements of the Company, including the related notes, and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included in the Form 10-K. Any capitalized terms used but not defined in this
Item have the same meaning given to them in the Form 10-K.
RESULTS OF OPERATIONS
In March 1999, we completed the formation of Crown Atlantic. In June and
December of 1999, we completed the acquisition of towers from Powertel. During
1999, we completed the substantial portions of the transactions with BellSouth
and BellSouth DCS. Finally, in January 2000, the formation of Crown Castle GT
took place with the first closing of towers. Results of operations of these
acquired businesses and towers are included in our consolidated financial
statements for the periods subsequent to the respective dates of acquisition.
As such, our results of operations for the three months ended March 31, 1999 are
not comparable to the results of operations for the three months ended March 31,
2000.
The following information is derived from our historical Consolidated
Statements of Operations for the periods indicated.
15
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1999 March 31, 2000
------------------------ -----------------------
Percent of Percent of
Net Net
Amount Revenues Amount Revenues
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
(Dollars in thousands)
Net revenues:
Site rental and broadcast transmission................... $ 45,326 82.2% $ 93,741 75.4%
Network services and other............................... 9,783 17.8 30,503 24.6
-------- ------ -------- ------
Total net revenues.................................... 55,109 100.0 124,244 100.0
-------- ------ -------- ------
Operating expenses:
Costs of operations:
Site rental and broadcast transmission................. 18,527 40.9 40,287 43.0
Network services and other............................. 6,982 71.4 15,901 52.1
-------- --------
Total costs of operations............................. 25,509 46.3 56,188 45.2
General and administrative............................... 8,304 15.1 14,853 12.0
Corporate development.................................... 874 1.6 2,071 1.7
Restructuring charges.................................... 1,814 3.3 -- --
Non-cash compensation charges............................ 667 1.2 461 0.4
Depreciation and amortization............................ 19,656 35.6 45,122 36.3
-------- ------ -------- ------
Operating income (loss)................................... (1,715) (3.1) 5,549 4.4
Other income (expense):
Interest and other income (expense)...................... 340 0.6 5,704 4.6
Interest expense and amortization of deferred
financing costs.......................................... (11,286) (20.5) (41,761) (33.6)
-------- ------ -------- ------
Loss before income taxes, minority interests,
extraordinary item and cumulative effect of change
in accounting principle.................................. (12,661) (23.0) (30,508) (24.6)
Provision for income taxes................................ (127) (0.2) (11) --
Minority interests........................................ (685) (1.2) (1,541) (1.2)
-------- ------ -------- ------
Loss before extraordinary item and cumulative effect
of change in accounting principle........................ (13,473) (24.4) (32,060) (25.8)
Extraordinary loss on early extinguishment of debt........ -- -- (1,495) (1.2)
Cumulative effect of change in accounting principle
for costs of start-up activities......................... (2,414) (4.4) -- --
-------- ------ -------- ------
Net loss.................................................. $(15,887) (28.8)% $(33,555) (27.0)%
======== ====== ======== ======
</TABLE>
Comparison of Three Months Ended March 31, 2000 and 1999
Consolidated revenues for the three months ended March 31, 2000 were $124.2
million, an increase of $69.1 million from the three months ended March 31,
1999. This increase was primarily attributable to:
(1) a $48.4 million, or 106.8%, increase in site rental and broadcast
transmission revenues, of which $9.6 million was attributable to CCUK,
$13.8 million was attributable to Crown Atlantic and $25.0 million was
attributable to CCUSA,
(2) a $12.9 million increase in network services and other revenues from
CCUSA,
(3) a $2.7 million increase in network services and other revenues from CCUK,
and
(4) $5.9 million in network services and other revenues from Crown Atlantic.
Costs of operations for the three months ended March 31, 2000 were $56.2
million, an increase of $30.7 million from the three months ended March 31,
1999. This increase was primarily attributable to:
(1) a $21.8 million increase in site rental and broadcast transmission costs,
of which $5.9 million was attributable to CCUK, $5.9 million was
attributable to Crown Atlantic and $10.0 million was attributable to
CCUSA,
16
<PAGE>
(2) a $5.2 million increase in network services costs related to CCUSA,
(3) a $1.3 million increase in network services costs from CCUK, and
(4) $3.0 million in network services costs from Crown Atlantic.
Costs of operations for site rental and broadcast transmission as a percentage
of site rental and broadcast transmission revenues increased to 43.0% for the
three months ended March 31, 2000 from 40.9% for the three months ended March
31, 1999 because of higher costs attributable to the CCUK, Crown Atlantic and
CCUSA operations. Costs of operations for network services and other as a
percentage of network services and other revenues decreased to 52.1% for the
three months ended March 31, 2000 from 71.4% for the three months ended March
31, 1999, primarily due to higher margins from the CCUK, Crown Atlantic and
CCUSA operations.
General and administrative expenses for the three months ended March 31, 2000
were $14.9 million, an increase of $6.5 million from the three months ended
March 31, 1999. This increase was primarily attributable to:
(1) a $4.7 million increase in expenses related to the CCUSA operations,
(2) a $0.7 million increase in expenses at our corporate office, and
(3) $1.8 million in expenses at Crown Atlantic, partially offset by
(4) a $0.7 million decrease in expenses at CCUK.
General and administrative expenses as a percentage of revenues decreased for
the three months ended March 31, 2000 to 12.0% from 15.1% for the three months
ended March 31, 1999 because of lower overhead costs as a percentage of revenues
for CCUK, Crown Atlantic and CCUSA.
Corporate development expenses for the three months ended March 31, 2000 were
$2.1 million, compared to $0.9 million for the three months ended March 31,
1999. This increase was attributable to (1) a $0.9 million increase in expenses
at our corporate office and (2) $0.3 million in expenses at CCUK.
In connection with the formation of Crown Atlantic, we completed a
restructuring of our United States operations during the first quarter of 1999.
The objective of this restructuring was to transition from a centralized
organization to a regionally-based organization in the United States. In the
first quarter of 1999, we recorded one-time charges of $1.8 million related to
severance payments for staff reductions, as well as costs related to non-
cancelable leases of excess office space.
For the three months ended March 31, 2000, we recorded non-cash compensation
charges of $0.5 million related to the issuance of stock options to certain
employees and executives, compared to $0.7 million for the three months ended
March 31, 1999.
Depreciation and amortization for the three months ended March 31, 2000 was
$45.1 million, an increase of $25.5 million from the three months ended March
31, 1999. This increase was primarily attributable to:
(1) a $0.4 million increase in depreciation and amortization related to the
property and equipment and goodwill from CCUK,
(2) $8.1 million of depreciation and amortization related to the property and
equipment and goodwill from Crown Atlantic, and
(3) a $16.9 million increase in depreciation and amortization related to the
property and equipment, goodwill and other intangible assets related to
the CCUSA operations.
Interest and other income (expense) for the three months ended March 31, 2000
resulted primarily from:
17
<PAGE>
(1) the investment of the net proceeds from the sale of our 11 1/4% discount
notes and 9 1/2% senior notes in July 1999,
(2) the investment of the net proceeds from the sale of our 8 1/4%
convertible preferred stock in November 1999, and
(3) the investment of the net proceeds from borrowings under the 2000 credit
facility. See "--Liquidity and Capital Resources".
Interest and other income (expense) for the three months ended March 31, 1999
resulted primarily from:
(1) the investment of the net proceeds from our initial public offering of
common stock in August 1998,
(2) the investment of the excess proceeds from the sale of our 12 3/4% senior
exchangeable preferred stock in December 1998, and
(3) the investment of the excess proceeds from the sale of our 10 5/8%
discount notes in November 1997, largely offset by costs incurred in
connection with unsuccessful acquisition attempts.
Interest expense and amortization of deferred financing costs for the three
months ended March 31, 2000 was $41.8 million, an increase of $30.5 million, or
270.0%, from the three months ended March 31, 1999. This increase was primarily
attributable to interest on indebtedness at CCUK and Crown Atlantic,
amortization of the original issue discount on the 10 3/8% discount notes and
the 11 1/4% discount notes, and interest on the 9% senior notes and the 9 1/2%
senior notes.
Minority interests represent the minority shareholder's 20% interest in
CCUK's operations, the minority partner's 38.5% interest in Crown Atlantic's
operations and the minority partner's 18.7% interest in Crown Castle GT's
operations.
The extraordinary loss on early extinguishment of debt represents the write-
off of unamortized deferred financing costs related to the senior credit
facility. See "--Liquidity and Capital Resources".
The cumulative effect of the change in accounting principle for costs of
start-up activities represents the charge we recorded upon the adoption of SOP
98-5 on January 1, 1999.
LIQUIDITY AND CAPITAL RESOURCES
Our business strategy contemplates substantial capital expenditures:
(1) in connection with the expansion of our tower portfolios by partnering
with wireless carriers to assume ownership or control of their existing
towers, by pursuing build-to-suit opportunities, and by pursuing other
tower acquisition opportunities, and
(2) to acquire existing transmission networks globally as opportunities
arise.
Since its inception, CCIC has generally funded its activities, other than
acquisitions and investments, through excess proceeds from contributions of
equity capital and cash provided by operations. CCIC has financed acquisitions
and investments with the proceeds from equity contributions, borrowings under
our senior credit facilities, issuances of debt securities and the issuance of
promissory notes to sellers. Since its inception, CCUK has generally funded its
activities, other than the acquisition of the BBC home service transmission
business, through cash provided by operations and borrowings under CCUK's credit
facility. CCUK financed the acquisition of the BBC home service transmission
business with the proceeds from equity contributions and the issuance of the
CCUK bonds.
18
<PAGE>
For the three months ended March 31, 1999 and 2000, our net cash provided by
operating activities was $20.5 million and $36.9 million, respectively. For the
three months ended March 31, 1999 and 2000, our net cash provided by financing
activities was $66.4 million and $324.9 million, respectively. Our primary
financing-related activities in the first quarter and April of 2000 included the
following:
2000 Credit Facility
In March 2000, a subsidiary of CCIC entered into a credit agreement with a
syndicate of banks which consists of two term loan facilities and a revolving
line of credit aggregating $1,200.0 million. Available borrowings under the
2000 credit facility are generally to be used for the construction and purchase
of towers and for general corporate purposes of CCUSA, Crown Castle GT and CCAL.
The amount of available borrowings will be determined based on the current
financial performance (as defined) of those subsidiaries' assets. In addition,
up to $25.0 million of borrowing availability under the 2000 credit facility can
be used for letters of credit. On March 15, 2000, we used $83.4 million in
borrowings under the 2000 credit facility to repay outstanding borrowings and
accrued interest under the Crown Communication senior credit facility. The net
proceeds from $316.6 million in additional borrowings are being used to fund a
portion of the purchase price for the GTE joint venture and for general
corporate purposes.
Term Loans due 2011
On April 3, 2000, we borrowed $400.0 million under a term loan agreement with
a group of lenders. The net proceeds from this borrowing, which amounted to
$395.9 million, were used to fund a portion of the cash contribution for the
second closing of towers at the GTE joint venture (as discussed below). The
term loans mature on March 31, 2011 and must be prepaid from the net proceeds of
any future equity or debt securities sold by us.
Capital expenditures were $110.4 million for the three months ended March 31,
2000, of which $0.4 million were for CCIC, $66.9 million were for CCUSA, $22.2
million were for Crown Atlantic and $20.9 million were for CCUK. We anticipate
that we will build, through the end of 2000, approximately 900 towers in the
United States at a cost of approximately $225.0 million and approximately 270
towers in the United Kingdom at a cost of approximately $45.0 million. We also
expect that the capital expenditure requirements related to the roll-out of
digital broadcast transmission in the United Kingdom will be approximately
(Pounds)17.5 million ($27.9 million).
In addition to capital expenditures in connection with build-to-suits, we
expect to apply a significant amount of capital to finance the remaining cash
portion of the consideration being paid in connection with the recent and agreed
to transactions discussed below.
In connection with the BellSouth transaction, through April 20, 2000, we have
issued approximately 8.6 million shares of our common stock and paid BellSouth
$411.1 million in cash. We expect to (1) issue an additional 0.5 million shares
of our common stock and (2) use a portion of the net proceeds from our recent
offerings to finance the remaining $18.9 million cash purchase price for this
transaction.
In connection with the BellSouth DCS transaction, through April 20, 2000, we
have paid BellSouth DCS $290.7 million in cash. We expect to use a portion of
the net proceeds from our recent offerings to finance the remaining $26.2
million cash purchase price for this transaction.
On November 7, 1999, we entered into an agreement with GTE to form a joint
venture to own and operate a significant majority of GTE's towers. The
agreement contemplates that the transaction will be completed in multiple
closings during 2000. On January 31, 2000, the formation of the joint venture
took place in connection with the first such closing of towers. During the
course of the multiple closings, (1) we will contribute an aggregate of
approximately $825.0 million (of which up to $100.0 million can be in shares of
our common stock, with the balance in cash) in exchange for a majority ownership
interest in the joint venture, and (2) GTE will contribute approximately 2,300
towers in exchange for cash distributions aggregating approximately $800.0
million (less any amount contributed in the form of our common stock) from the
joint venture and a minority ownership interest in the joint venture. Upon
dissolution of the joint venture, GTE will receive (1) any shares
19
<PAGE>
of our common stock contributed to the joint venture and (2) a payment equal to
approximately 11.4% of the fair market value of the joint venture's other net
assets; we will then receive the remaining assets and liabilities of the joint
venture. We are accounting for our investment in the GTE joint venture as a
purchase of tower assets, and are including the joint venture's results of
operations and cash flows in our consolidated financial statements for periods
subsequent to formation. Upon entering into this agreement, we placed $50.0
million into an escrow account. At the January 31, 2000 closing, we contributed
$223.9 million in cash to the joint venture, and GTE contributed 637 towers in
exchange for a cash distribution of $198.9 million from the joint venture. On
April 3, 2000, the second closing of towers took place. We contributed $479.7
million in cash and 5.1 million shares of our common stock to the joint venture,
and GTE contributed 1,607 towers in exchange for a cash distribution of $479.7
million from the joint venture. The funds in the escrow account were used to pay
$50.0 million of our cash contribution. A portion of our remaining cash
contribution was financed with the net proceeds from borrowings under term loans
(as discussed above). We expect to use borrowings under our 2000 credit facility
to finance most of the remaining $21.4 million purchase price for this
transaction.
In addition to the approximately 2,300 towers to be contributed pursuant to
the formation agreement, GTE has the right to contribute certain additional
towers to the joint venture, including towers acquired by GTE from Ameritech, on
terms substantially similar to those in the formation agreement. In April 2000,
we agreed with GTE that approximately 470 of the Ameritech towers would be
contributed to the joint venture. The consideration to GTE for these additional
towers will be a cash distribution of approximately $162.5 million and
additional ownership interests in the joint venture. We expect to use
borrowings under our 2000 credit facility to finance the cash purchase price for
this transaction.
In March 2000, CCAL (our 66.7% owned subsidiary) entered into an agreement to
purchase approximately 700 towers in Australia from Cable & Wireless Optus. The
total purchase price for the towers will be approximately $135.0 million in cash
(Australian $220.0 million). We are accounting for our investment in CCAL as a
purchase of tower assets, and will include CCAL's results of operations and cash
flows in our consolidated financial statements for periods subsequent to the
purchase date. On April 3, 2000, the first closing took place for CCAL. We
contributed $90.8 million in cash (Australian $147.5 million) to CCAL. The
largest portion of this amount, along with a capital contribution from CCAL's
minority shareholder, was used to pay $95.7 million (Australian $155.5 million)
to Optus. We expect to use borrowings under our 2000 credit facility to finance
our remaining $33.5 million portion (Australian $54.5 million) of the cash
purchase price for this transaction.
We expect that the completion of the recent and agreed to transactions and
the execution of our new tower build, or build-to-suit program, will have a
material impact on our liquidity. We expect that once integrated, these
transactions will have a positive impact on liquidity, but will require some
period of time to offset the initial adverse impact on liquidity. In addition,
we believe that as new towers become operational and we begin to add tenants,
they should result in a long-term increase in liquidity.
To fund the execution of our business strategy, including the recent and
agreed to transactions described above and the construction of new towers that
we have agreed to build, we expect to use the net proceeds of our recent
offerings and borrowings available under our U.S. and U.K. credit facilities.
We will have additional cash needs to fund our operations in the future. We may
also have additional cash needs in the near term if additional tower
acquisitions or build-to-suit opportunities arise. Some of the opportunities
that we are currently pursuing could require significant additional capital. If
we do not otherwise have cash available, or borrowings under our credit
facilities have otherwise been utilized, when our cash need arises, we would be
forced to seek additional debt or equity financing or to forego the opportunity.
In the event we determine to seek additional debt or equity financing, there can
be no assurance that any such financing will be available, on commercially
acceptable terms or at all, or permitted by the terms of our existing
indebtedness. We expect to raise additional funds in the near term with bank
loans, debt or equity financing.
As of March 31, 2000, we had consolidated cash and cash equivalents of $509.5
million (including $214.6 million at CCUSA, $16.4 million at CCUK and $18.1
million at Crown Atlantic), consolidated long-term debt
20
<PAGE>
of $1,892.6 million, consolidated redeemable preferred stock of $430.3 million
and consolidated stockholders' equity of $1,596.4 million.
As of May 1, 2000, Crown Atlantic had unused borrowing availability under its
credit facility of approximately $70.0 million, and CCUK had unused borrowing
availability under its credit facility of approximately (Pounds)65.0 million
($101.1 million). As of May 1, 2000, our subsidiaries had approximately $180.0
million of unused borrowing availability under the 2000 credit facility. Our
various credit facilities require our subsidiaries to maintain certain financial
covenants and place restrictions on the ability of our subsidiaries to, among
other things, incur debt and liens, pay dividends, make capital expenditures,
undertake transactions with affiliates and make investments. These facilities
also limit the ability of the borrowing subsidiaries to pay dividends to CCIC.
If we are unable to refinance our subsidiary debt or renegotiate the terms of
such debt, we may not be able to meet our debt service requirements, including
interest payments on the notes, in the future. Our 9% senior notes and our 9
1/2% senior notes will require annual cash interest payments of approximately
$16.2 million and $11.9 million, respectively. Prior to November 15, 2002, May
15, 2004 and August 1, 2004, the interest expense on our 10 5/8% discount notes,
our 10 3/8% discount notes and our 11 1/4% discount notes, respectively, will be
comprised solely of the amortization of original issue discount. Thereafter,
the 10 5/8% discount notes, the 10 3/8% discount notes and the 11 1/4% discount
notes will require annual cash interest payments of approximately $26.7 million,
$51.9 million and $29.3 million, respectively. Prior to December 15, 2003, we do
not expect to pay cash dividends on our exchangeable preferred stock or, if
issued, cash interest on the exchange debentures. Thereafter, assuming all
dividends or interest have been paid-in-kind, our exchangeable preferred stock
or, if issued, the exchange debentures will require annual cash dividend or
interest payments of approximately $47.8 million. Annual cash interest payments
on the CCUK bonds are (Pounds)11.25 million ($17.9 million). In addition, our
various credit facilities will require periodic interest payments on amounts
borrowed thereunder.
As a holding company, CCIC will require distributions or dividends from its
subsidiaries, or will be forced to use capital raised in debt and equity
offerings, to fund its debt obligations, including interest payments on the
cash-pay notes and eventually the 10 5/8% discount notes, the 10 3/8% discount
notes and the 11 1/4% discount notes. The terms of the indebtedness of our
subsidiaries significantly limit their ability to distribute cash to CCIC. As a
result, we will be required to apply a portion of the net proceeds from the
recent debt offerings to fund interest payments on the cash-pay notes. If we do
not retain sufficient funds from the offerings or any future financing, we may
not be able to make our interest payments on the cash-pay notes.
Our ability to make scheduled payments of principal of, or to pay interest
on, our debt obligations, and our ability to refinance any such debt
obligations, will depend on our future performance, which, to a certain extent,
is subject to general economic, financial, competitive, legislative, regulatory
and other factors that are beyond our control. We anticipate that we may need
to refinance all or a portion of our indebtedness on or prior to its scheduled
maturity. There can be no assurance that we will be able to effect any required
refinancings of our indebtedness on commercially reasonable terms or at all.
REPORTING REQUIREMENTS UNDER THE INDENTURES GOVERNING THE COMPANY'S DEBT
SECURITIES (THE "INDENTURES") AND THE CERTIFICATE OF DESIGNATIONS GOVERNING THE
COMPANY'S 12 3/4% SENIOR EXCHANGEABLE PREFERRED STOCK (THE "CERTIFICATE")
The following information (as such capitalized terms are defined in the
Indentures and the Certificate) is presented solely as a requirement of the
Indentures and the Certificate; such information is not intended as an
alternative measure of financial position, operating results or cash flow from
operations (as determined in accordance with generally accepted accounting
principles). Furthermore, the Company's measure of the following information
may not be comparable to similarly titled measures of other companies.
Summarized financial information for (1) the Company and its Restricted
Subsidiaries and (2) the Company's Unrestricted Subsidiaries is as follows:
21
<PAGE>
<TABLE>
<CAPTION>
March 31, 2000
-----------------------------------------------------------
Company and
Restricted Unrestricted Consolidation Consolidated
Subsidiaries Subsidiaries Eliminations Total
------------ ------------ -------------- ------------
(In thousands of dollars)
<S> <C> <C> <C> <C>
Cash and cash equivalents....................... $ 475,007 $ 34,498 $ -- $ 509,505
Other current assets............................ 61,248 64,638 -- 125,886
Property and equipment, net..................... 1,706,949 1,144,906 -- 2,851,855
Escrow deposit for acquisition.................. 50,000 -- -- 50,000
Investments in Unrestricted Subsidiaries........ 999,931 -- (999,931) --
Goodwill and other intangible assets, net....... 134,568 460,598 -- 595,166
Other assets, net............................... 68,526 11,574 -- 80,100
---------- ---------- --------- ----------
$3,496,229 $1,716,214 $(999,931) $4,212,512
========== ========== ========= ==========
Current liabilities............................. $ 57,685 $ 85,779 $ -- $ 143,464
Long-term debt.................................. 1,387,692 504,874 -- 1,892,566
Other liabilities............................... 5,760 69,490 -- 75,250
Minority interests.............................. 18,389 56,140 -- 74,529
Redeemable preferred stock...................... 430,291 -- -- 430,291
Stockholders' equity............................ 1,596,412 999,931 (999,931) 1,596,412
---------- ---------- --------- ----------
$3,496,229 $1,716,214 $(999,931) $4,212,512
========== ========== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended March 31, 2000
---------------------------------------------
Company and
Restricted Unrestricted Consolidated
Subsidiaries Subsidiaries Total
------------- ------------- -------------
(In thousands of dollars)
<S> <C> <C> <C>
Net revenues.......................................................... $ 49,459 $ 74,785 $124,244
Costs of operations (exclusive of depreciation and.................... 19,432 36,756 56,188
amortization)
General and administrative............................................ 12,030 2,823 14,853
Corporate development................................................. 1,786 285 2,071
Non-cash compensation charges......................................... 407 54 461
Depreciation and amortization......................................... 21,450 23,672 45,122
-------- -------- --------
Operating income (loss)............................................... (5,646) 11,195 5,549
Interest and other income (expense)................................... 5,048 656 5,704
Interest expense and amortization of deferred financing costs......... (29,100) (12,661) (41,761)
Provision for income taxes............................................ (11) -- (11)
Minority interests.................................................... (100) (1,441) (1,541)
Extraordinary item.................................................... (1,495) -- (1,495)
-------- -------- --------
Net loss.............................................................. $(31,304) $ (2,251) $(33,555)
======== ======== ========
</TABLE>
Tower Cash Flow and Adjusted Consolidated Cash Flow for the Company and its
Restricted Subsidiaries is as follows under (1) the indenture governing the
10 5/8% Senior Discount Notes and the Certificate (the "1997 and 1998
Securities") and (2) the indentures governing the 10 3/8% Discount Notes, the 9%
Senior Notes, the 11 1/4% Discount Notes and the 9 1/2% Senior Notes (the "1999
Securities"):
22
<PAGE>
<TABLE>
<CAPTION>
1997 and 1998 1999
Securities Securities
-------------- -----------
(In thousands of dollars)
<S> <C> <C>
Tower Cash Flow, for the three months ended March 31, 2000.......................... $ 16,251 $ 16,251
======== ========
Consolidated Cash Flow, for the twelve months ended March 31, 2000.................. $ 39,951 $ 45,480
Less: Tower Cash Flow, for the twelve months ended March 31, 2000................... (45,175) (45,175)
Plus: four times Tower Cash Flow, for the three months ended March 31, 2000......... 65,004 65,004
-------- --------
Adjusted Consolidated Cash Flow, for the twelve months ended March 31, 2000......... $ 59,780 $ 65,309
======== ========
</TABLE>
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In April 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position 98-5,
Reporting on the Costs of Start-Up Activities ("SOP 98-5"). SOP 98-5 requires
that costs of start-up activities be charged to expense as incurred and broadly
defines such costs. The Company has deferred certain costs incurred in
connection with potential business initiatives and new geographic markets, and
SOP 98-5 requires that such deferred costs be charged to results of operations
upon its adoption. SOP 98-5 is effective for fiscal years beginning after
December 15, 1998. The Company has adopted the requirements of SOP 98-5 as of
January 1, 1999. The cumulative effect of the change in accounting principle
for the adoption of SOP 98-5 resulted in a charge to results of operations for
$2.4 million in the Company's financial statements for the three months ended
March 31, 1999.
In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133").
SFAS 133 requires that derivative instruments be recognized as either assets or
liabilities in the consolidated balance sheet based on their fair values.
Changes in the fair values of such derivative instruments will be recorded
either in results of operations or in other comprehensive income, depending on
the intended use of the derivative instrument. The initial application of SFAS
133 will be reported as the effect of a change in accounting principle. SFAS
133, as amended, is effective for all fiscal quarters of fiscal years beginning
after June 15, 2000. The Company will adopt the requirements of SFAS 133 in its
financial statements for the three months ending March 31, 2001. The Company
has not yet determined the effect that the adoption of SFAS 133 will have on its
consolidated financial statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a result of our international operating, investing and financing
activities, we are exposed to market risks, which include changes in foreign
currency exchange rates and interest rates which may adversely affect our
results of operations and financial position. In attempting to minimize the
risks and/or costs associated with such activities, we seek to manage exposure
to changes in interest rates and foreign currency exchange rates where
economically prudent to do so.
Certain of the financial instruments we have used to obtain capital are
subject to market risks from fluctuations in market interest rates. The
majority of our financial instruments, however, are long-term fixed interest
rate notes and debentures. Therefore, fluctuations in market interest rates of
1% in 2000 would not have a material effect on our consolidated financial
results.
The majority of our foreign currency transactions are denominated in the
British pound sterling, which is the functional currency of CCUK. As a result
of CCUK's transactions being denominated and settled in such functional
currency, the risks associated with currency fluctuations are generally limited
to foreign currency translation adjustments. We do not currently hedge against
foreign currency translation risks and believe that foreign currency exchange
risk is not significant to our operations.
23
<PAGE>
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On February 2, 2000 and April 20, 2000, the Company issued 441,925 and
441,926 unregistered shares of common stock, respectively, to an affiliate of
BellSouth Corporation in connection with closings relating to the BellSouth
transaction. The agreement of sublease relating to the BellSouth transaction
will close in a series of closings, with approximately 30% of the consideration
being paid with our common stock. As of May 1, 2000, we have issued a total of
8,612,638 shares of common stock to BellSouth in connection with closings
relating to the BellSouth transaction. We contemplate that a total of up to 9.1
million shares of our common stock will be issued to BellSouth in connection
with the BellSouth transaction. The shares were issued in exempt transactions
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the "Act").
On March 26, 2000, the Company issued 156,501 shares of unregistered common
stock to the prior majority shareholder of Millennium Communications Limited in
connection with the acquisition of Millenium by Crown Castle UK Limited, which
originally closed on October 8, 1998. The shares were issued in an exempt
transaction pursuant to Section 4(2) of the Act.
On April 1, 2000, in connection with a subsequent closing relating to our
previously announced transaction with GTE, the Company contributed via its
wholly-owned subsidiary, Crown Castle GT Corp. ("CCGT"), 5,067,488 shares of
unregistered common stock of the Company along with $479.7 million in cash (of
which $50.0 million came out of an escrow account previously established by the
Company) to Crown Castle GT Holding Company LLC, a joint venture between CCGT
and GTE. GTE has contributed a total of 2,244 towers to the joint venture,
including 1,607 towers contributed in connection with the April 1, 2000 closing,
together with related assets and liabilities. The cash contributed to the joint
venture has been distributed to GTE by the joint venture. The shares were
issued and contributed to the joint venture in an exempt transaction pursuant to
Section 4(2) of the Act.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS:
*2.1 Operating Agreement, dated January 31, 2000, by and between Crown
Castle GT Corp. and affiliates of GTE Wireless Incorporated
*10.1 Credit Agreement dated as of March 15, 2000 among Crown Castle
Operating Company, Crown Castle International Corp., The Chase
Manhattan Bank, Credit Suisse First Boston Corporation, Key
Corporate Capital Inc. and The Bank of Nova Scotia, as Agents, and
the several Lenders which are parties thereto
10.2 Term Loan Agreement, dated as of March 30, 2000 among Crown Castle
International Corp., Chase Securities Inc., Goldman Sachs Credit
Partners L.P., Syndicated Loan Funding Trust and the several
Lenders which are parties thereto
11.1 Computation of Net Loss Per Common Share
12.1 Computation of Ratios of Earnings to Fixed Charges and Earnings
to Combined Fixed Charges and Preferred Stock Dividends
27.1 Financial Data Schedule
- -------------
* Incorporated by reference to the exhibit previously filed by the
Registrant on Form 10-K (Registration No. 0-24737) for the year ended
December 31, 1999.
(B) REPORTS ON FORM 8-K:
None.
24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CROWN CASTLE INTERNATIONAL CORP.
Date: May 11, 2000 By: /s/ W. BENJAMIN MORELAND
-------------------------------------
W. Benjamin Moreland
Senior Vice President,
Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: May 11, 2000 By: /s/ WESLEY D. CUNNINGHAM
-------------------------------------
Wesley D. Cunningham
Senior Vice President, Chief Accounting Officer
and Corporate Controller
(Principal Accounting Officer)
25
<PAGE>
EXECUTION COPY
================================================================================
TERM LOAN AGREEMENT
dated as of
March 30, 2000
among
CROWN CASTLE INTERNATIONAL CORP.
as Borrower,
____________________
CHASE SECURITIES INC.
and
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Arrangers and Joint Book Running Managers
____________________
SYNDICATED LOAN FUNDING TRUST
and
THE OTHER LENDERS named herein,
===============================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS ......................................................... 1
Section 1.1 Defined Terms ................................................ 1
Section 1.2 Interpretation ............................................... 25
ARTICLE II.
THE CREDIT FACILITY ................................................. 25
Section 2.1 Commitments to Make Term Loans ............................... 25
Section 2.2 Option to Exchange Term Loans for Exchange Notes ............. 25
Section 2.3 Interest; Default Interest ................................... 26
Section 2.4 Mandatory Prepayment ......................................... 27
Section 2.5 Optional Prepayment .......................................... 28
Section 2.6 Breakage Costs; Indemnity .................................... 29
Section 2.7 Effect of Notice of Prepayment ............................... 29
Section 2.8 Payments ..................................................... 29
Section 2.9 Taxes ........................................................ 31
Section 2.10 Right of Set Off; Sharing of Payments, Etc .................. 35
Section 2.11 Certain Fees ................................................ 36
ARTICLE III.
REPRESENTATIONS AND WARRANTIES ...................................... 36
Section 3.1 Acquisition Agreements ....................................... 36
Section 3.2 Organization; Powers ......................................... 36
Section 3.3 Due Authorization and Enforceability ......................... 37
Section 3.4 No Conflicts; No Consents .................................... 37
Section 3.5 No Violations; Material Contracts ............................ 38
Section 3.6 Capital Stock; Subsidiaries .................................. 38
Section 3.7 Liens ........................................................ 38
Section 3.8 Governmental Regulations ..................................... 38
Section 3.9 [Reserved.] .................................................. 38
Section 3.10 Financial Statements; No Undisclosed Liabilities ............ 39
Section 3.11 Full Disclosure ............................................. 39
Section 3.12 Private Offering; Rule 144A Matters ......................... 40
Section 3.13 Absence of Proceedings ...................................... 40
Section 3.14 Taxes ....................................................... 41
Section 3.15 Financial Condition; Solvency ............................... 41
Section 3.16 Absence of Certain Changes .................................. 41
Section 3.17 [Reserved]................................................... 41
Section 3.18 Properties .................................................. 41
Section 3.19 Permits; Registration ....................................... 41
Section 3.20 ERISA ....................................................... 42
Section 3.21 Environmental Matters ....................................... 42
ARTICLE IV.
COVENANTS ........................................................... 42
-i-
<PAGE>
Page
----
Section 4.1 Use of Proceeds .............................................. 42
Section 4.2 Notice of Default and Related Matters ........................ 43
Section 4.3 Reports ...................................................... 43
Section 4.4 Compliance Certificate ....................................... 43
Section 4.5 Taxes ........................................................ 44
Section 4.6 Stay, Extension and Usury Laws ............................... 44
Section 4.7 Restricted Payments .......................................... 45
Section 4.8 Dividend and Other Payment Restrictions Affecting
Subsidiaries ................................................. 48
Section 4.9 Incurrence of Indebtedness and Issuance of
Preferred Stock .............................................. 49
Section 4.10 Asset Sales ................................................. 52
Section 4.11 Transactions with Affiliates ................................ 52
Section 4.12 Liens ....................................................... 53
Section 4.13 Business Activities ......................................... 53
Section 4.14 Corporate Existence ......................................... 53
Section 4.15 Offer to Prepay Upon a Change of Control..................... 53
Section 4.16 Limitation on Sale and Leaseback Transactions ............... 54
Section 4.17 Limitation on Issuances and Sales of Capital Stock
of Restricted Subsidiaries .................................. 54
Section 4.18 Limitation on Issuances of Guarantees of Indebtedness ....... 55
Section 4.19 Merger; Sale of All or Substantially All Assets ............. 55
Section 4.20 Inspection Rights ........................................... 56
Section 4.21 Special Rights .............................................. 56
ARTICLE V.
CONDITIONS .......................................................... 57
Section 5.1 Corporate and Other Proceedings .............................. 58
Section 5.2 No Competing Offering ........................................ 59
Section 5.3 Absence of Certain Changes ................................... 59
Section 5.4 Market Disruption ............................................ 59
Section 5.5 Financial Statements ......................................... 59
Section 5.6 Litigation, etc .............................................. 59
Section 5.7 Payment of Fees and Expenses ................................. 59
Section 5.8 Escrow Agreement ............................................. 60
Section 5.9 Exchange Notes ............................................... 60
Section 5.10 Registration Rights Agreement ............................... 60
Section 5.11 Delivery of Opinions ........................................ 60
Section 5.12 Solvency .................................................... 60
Section 5.13 No Breach; No Default ....................................... 60
Section 5.14 Special Conditions .......................................... 60
ARTICLE VI.
TRANSFER OF THE LOANS, THE INSTRUMENTS EVIDENCING SUCH LOANS AND THE
SECURITIES; REPRESENTATIONS OF LENDERS; PARTICIPATIONS .............. 61
Section 6.1 Transfer of the Loans, the instruments evidencing the Loans
and the Securities............................................ 61
Section 6.2 Permitted Assignments ........................................ 61
Section 6.3 Permitted Participants; Effect ............................... 61
Section 6.4 Dissemination of Information ................................. 62
Section 6.5 Tax Treatment ................................................ 63
Section 6.6 Replacement Securities Upon Transfer or Exchange ............. 63
-ii-
<PAGE>
Page
----
Section 6.7 Register ..................................................... 63
ARTICLE VII.
EVENTS OF DEFAULT... ................................................ 63
Section 7.1 Events of Default ............................................ 63
Section 7.2 Acceleration ................................................. 65
Section 7.3 Rights and Remedies Cumulative ............................... 65
Section 7.4 Delay or Omission Not Waiver ................................. 65
Section 7.5 Waiver of Past Defaults ...................................... 65
Section 7.6 Rights of Lenders To Receive Payment ......................... 66
ARTICLE VIII.
PERMANENT SECURITIES ................................................ 66
Section 8.1 Permanent Securities ......................................... 66
ARTICLE IX.
TERMINATION ......................................................... 66
Section 9.1 Termination .................................................. 66
Section 9.2 Survival of Certain Provisions ............................... 66
ARTICLE X.
INDEMNITY ........................................................... 66
Section 10.1 Indemnification ............................................. 66
Section 10.2 Counsel ..................................................... 67
Section 10.3 Settlement of Claims ........................................ 68
Section 10.4 Appearance Expenses ......................................... 68
Section 10.5 Indemnity for Taxes, Reserves and Expenses .................. 68
Section 10.6 Survival of Indemnification ................................. 69
Section 10.7 Liability Not Exclusive; Payments ........................... 69
ARTICLE XI.
THE ADMINISTRATIVE AGENT; THE ARRANGERS ............................. 69
Section 11.1 Appointment ................................................. 69
Section 11.2 Delegation of Duties ........................................ 70
Section 11.3 Exculpatory Provisions ...................................... 70
Section 11.4 Reliance by the Administrative Agent ........................ 70
Section 11.5 Notice of Default ........................................... 71
Section 11.6 Non-Reliance on the Administrative Agent and Other Lenders... 71
Section 11.7 Indemnification ............................................. 71
Section 11.8 Administrative Agent, in its Individual Capacity ............ 72
Section 11.9 Successor Administrative Agents ............................. 72
Section 11.10 Arrangers .................................................. 72
ARTICLE XII.
MISCELLANEOUS ....................................................... 72
Section 12.1 Expenses; Documentary Taxes ................................. 72
Section 12.2 Notices ..................................................... 73
Section 12.3 Consent to Amendments and Waivers ........................... 74
Section 12.4 Parties ..................................................... 75
Section 12.5 New York Law; Submission to Jurisdiction; Waiver of
Jury Trial .................................................. 75
Section 12.6 Replacement Notes ........................................... 75
Section 12.7 Appointment of Agent For Service ............................ 76
Section 12.8 Marshalling; Recapture ...................................... 76
-iii-
<PAGE>
Page
----
Section 12.9 Limitation of Liability ..................................... 76
Section 12.10 Independence of Covenants .................................. 76
Section 12.11 Currency Indemnity ......................................... 76
Section 12.12 Waiver of Immunity ......................................... 76
Section 12.13 Freedom of Choice .......................................... 77
Section 12.14 Successors and Assigns ..................................... 77
Section 12.15 Merger ..................................................... 77
Section 12.16 Severability Clause ........................................ 77
Section 12.17 Representations, Warranties and Agreements To
Survive Delivery ........................................... 77
EXHIBITS:
EXHIBIT A FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT B FORM OF TERM NOTE
EXHIBIT C FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT D FORM OF ESCROW AGREEMENT
EXHIBIT E FORM OF EXCHANGE NOTE INDENTURE
EXHIBIT F-1 OPINION OF CRAVATH, SWAINE & MOORE
EXHIBIT F-2 OPINION OF GENERAL COUNSEL
Schedules:
Schedule 3.10(a) Consolidated Balance Sheet and Consolidated Statements of
Income and Cash Flows of the Borrower
Schedule 3.10(b) Financial Projections Concerning Assets Acquired in
the Acquisition
-iv-
<PAGE>
THIS TERM LOAN AGREEMENT, dated as of March 30, 2000 (as amended,
restated and/or otherwise modified from time to time, this "Agreement"), is by
and among:
(a) Crown Castle International Corp., a Delaware corporation (the
"Borrower"),
(b) Chase Securities Inc. and Goldman Sachs Credit Partners L.P., as
arrangers (the "Arrangers"),
(c) The Chase Manhattan Bank, as Administrative Agent (the
"Administrative Agent") and
(d) Syndicated Loan Funding Trust, and the other Lenders named herein.
The parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 Defined Terms.
As used in this Agreement, the following terms shall have the meanings
specified below:
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Acquisition Agreements" means GTE Formation Agreement, Services
Agreement, Build-to-Suit Agreement, Global Lease, Management Agreement,
Operating Agreement, GTE Registration Rights Agreement, GTE Escrow Agreement and
Future Towers Agreement, along with any related documents, instruments and
agreements, and in each case, as amended or modified from time to time.
"Acquisition" means the acquisition of not less than 1600 wireless
communication towers, pursuant to the GTE Formation Agreement.
"Adjusted Consolidated Cash Flow" means, as of any date of
determination, the sum of:
<PAGE>
2
(1) the Consolidated Cash Flow of the Borrower for the four most recent
full fiscal quarters ending immediately prior to such date for which internal
financial statements are available, less the Company's Tower Cash Flow for such
four-quarter period; plus
(2) the product of four times the Company's Tower Cash flow for the most
recent fiscal quarter for which internal financial statements are available.
For purposes of making the computation referred to above:
(1) acquisitions that have been made by the Borrower or any of its
Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the reference period or
subsequent to such reference period and on or prior to the calculation date
shall be deemed to have occurred on the first day of the reference period and
Consolidated Cash Flow for such reference period shall be calculated without
giving effect to clause (ii) of the proviso set forth in the definition of
Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the calculation date, shall be excluded; and
(3) the corporate development expense of the Borrower and its Restricted
Subsidiaries calculated in a manner consistent with the audited financial
statements of the Borrower included in its most recent Annual Report on
Form 10-K, as filed with the SEC, shall be added to Consolidated Cash Flow to
the extent it was included in computing Consolidated Net Income.
"Administrative Agent" means The Chase Manhattan Bank, as
administrative agent pursuant to Article XI, or any successor or replacement
Administrative Agent in accordance therewith, acting in such capacity.
"Affected Party" means any Lender, any Lender's LIBOR Lending Office,
any beneficial owner of any Lender, and their respective successors and assigns.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that for
purposes of Section 4.11, beneficial ownership of 10% or more of the Voting
Stock of a Person shall be deemed to be control. Neither the Lenders nor any of
their Affiliates will be treated as an Affiliate of the Borrower or any of its
Subsidiaries for purposes of this Agreement.
<PAGE>
3
"Agreement" has the meaning specified in the preamble to this
Agreement, as the same may be amended or supplemented from time to time.
"Anniversary Date" means the first anniversary of the Closing Date, or
the next Business Day if such date is not a Business Day.
"Arrangers" means Chase Securities Inc. and Goldman Sachs Credit
Partners L.P., acting as arrangers in connection with the Term Loans, as well as
in their capacity as Joint Book Running Managers.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback) provided that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Borrower and its
Subsidiaries taken as a whole will be governed by the provisions of Section 4.15
and/or the provisions described in Section 4.19 and not by the provisions of
Section 4.10, and (ii) the issue or sale by the Borrower or any of its
Restricted Subsidiaries of Equity Interests of any of the Borrower's
Subsidiaries (other than directors' qualifying shares or shares required by
applicable law to be held by a Person other than the Borrower or a Restricted
Subsidiary), in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a fair market
value in excess of $1.0 million or (b) for Net Proceeds in excess of $1.0
million. Notwithstanding the foregoing, the following items shall not be deemed
to be Asset Sales: (i) a transfer of assets by the Borrower to a Restricted
Subsidiary or by a Restricted Subsidiary to the Borrower or to another
Restricted Subsidiary, (ii) an issuance of Equity Interests by a Subsidiary to
the Borrower or to another Restricted Subsidiary, (iii) a transfer or issuance
of Equity Interests of an Unrestricted Subsidiary to an Unrestricted Subsidiary;
provided, however, that such transfer or issuance does not result in a decrease
in the percentage of ownership of the voting securities of such transferee
Unrestricted Subsidiary that are collectively held by the Borrower and its
Subsidiaries, (iv) a Restricted Payment that is permitted by Section 4.7, (iv)
grants of leases or licenses in the ordinary course of business and (v)
disposals of Cash Equivalents.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit A or such other form as shall be approved by the
Administrative Agent.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"August 1999 Senior Discount Note Indenture" means that certain
indenture, dated as of August 3, 1999, between the Borrower and United States
Trust Company of New York, as trustee, governing the Borrower's 11-1/4 % Senior
Discount Notes due 2011.
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4
"BAM" means Cellco Partnership, a Delaware general partnership doing
business as Bell Atlantic Mobile.
"BAM Formation Agreement" means the Formation Agreement, dated as of
December 8, 1998, by and among BAM, the Transferring Partnerships (as defined
therein), the Borrower and CCAIC, pursuant to which the Borrower and BAM are to
enter into the Crown Atlantic Holding Company LLC Operating Agreement,
substantially in the form of Exhibit 3.5 thereto.
"BAM Funds" means Cash Equivalents in an aggregate amount that is
sufficient to fund the Borrower's cash obligations under the BAM Formation
Agreement to consummate the BAM Joint Venture.
"BAM Joint Venture" means the Crown Atlantic Holding Company LLC joint
venture between the Borrower and BAM, pursuant to the BAM Formation Agreement.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar
federal or state law for the relief of debtors.
"Base Rate" means, for any day, the sum of higher of (i) the Federal
Funds Rate for such day plus 50 basis points and (ii) the Prime Rate for such
day. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such change in
the Prime Rate or Federal Funds Rate.
"Base Rate Loan" means a Term Loan at any time that the interest rate
thereon is computed with reference to the Base Rate.
"beneficial owner" and "beneficial ownership" each has the meaning as
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act.
"Berkshire Group" means Berkshire Fund III, Limited Partnership,
Berkshire Fund IV, Limited Partnership, Berkshire Investors LLC and Berkshire
Partners LLC.
"Board" means the Board of Governors of the Federal Reserve System of
the United States or any successor.
"Board of Directors" means the Board of Directors of the Borrower, or
any authorized committee of the Board of Directors.
"Borrower" has the meaning specified in the preamble to this
Agreement.
"Build-to-Suit Agreement" means the build-to-suit agreement among GTE
Wireless, certain of its affiliates and OpCo.
"Business Day" means each day other than a Legal Holiday.
<PAGE>
5
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Markets Transaction" has the meaning specified in
Section 2.4(a).
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof (provided that the full
faith and credit of the United States is pledged in support thereof) having
maturities of not more than six months from the date of acquisition, (iii)
certificates of deposit and eurodollar time deposits with maturities of six
months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each case
with any lender party to the Senior Credit Facility or with any domestic
commercial bank having capital and surplus in excess of $500.0 million and a
Thompson Bank Watch Rating of "B" or better, (iv) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clauses (ii) and (iii) above entered into with any financial
institution meeting the qualifications specified in clause (iii) above, (v)
commercial paper having the highest rating obtainable from either Moody's
Investors Service, Inc. or Standard & Poor's Ratings Group and in each case
maturing within six months after the date of acquisition and (vi) money market
funds at least 95% of the assets of which constitute Cash Equivalents of the
kinds described in clauses (i)-(v) of this definition.
"CCAIC" means CCA Investment Corp., a Delaware corporation and an
indirect Wholly Owned Subsidiary of the Borrower that was formed to hold the
Borrower's Equity Interests in Crown Atlantic Holding Company LLC.
"CC Investment Corp." means Crown Castle Investment Corp., a Delaware
corporation and a Wholly Owned Subsidiary of the Borrower.
"CC Investment Corp. II" means Crown Castle Investment Corp. II, a
Delaware corporation and a Wholly Owned Subsidiary of the Borrower.
"Centennial Group" means Centennial Fund IV, L.P., Centennial Fund V,
L.P. and Centennial Entrepreneurs Fund V, L.P.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Borrower and its Restricted
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6
Subsidiaries, taken as a whole, to any "person" (as such term is used in Section
13(d)(3) of the Exchange Act) other than a Principal or a Related Party of a
Principal; (ii) the adoption of a plan relating to the liquidation or
dissolution of the Borrower; (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which
is that any "person" (as defined above), other than the Principals and their
Related Parties, becomes the "beneficial owner" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has the
right to acquire, whether such right is currently exercisable or is exercisable
only upon the occurrence of a subsequent condition), directly or indirectly, of
more than 50% of the Voting Stock of the Borrower (measured by voting power
rather than number of shares); provided that transfers of Equity Interests in
the Borrower between or among the beneficial owners of the Borrower's Equity
Interests and/or Equity Interests in CTSH, in each case as of the date of the
May 1999 Senior Discount Note Indenture, shall not be deemed to cause a Change
of Control under this clause (iii) so long as no single Person together with its
Affiliates acquires a beneficial interest in more of the Voting Stock of the
Borrower than is at the time collectively beneficially owned by the Principals
and their Related Parties; (iv) the first day on which a majority of the members
of the Board of Directors of the Borrower are not Continuing Directors; or (v)
the Borrower consolidates with, or merges with or into, any Person, or any
Person consolidates with, or merges with or into, the Borrower, in any such
event pursuant to a transaction in which any of the outstanding Voting Stock of
the Borrower is converted into or exchanged for cash, securities or other
property, other than any such transaction where (x) the Voting Stock of the
Borrower outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock (other than Disqualified Stock) of the surviving or
transferee Person constituting a majority of the outstanding shares of such
Voting Stock of such surviving or transferee Person (immediately after giving
effect to such issuance) or (y) the Principals and their Related Parties own a
majority of such outstanding shares after such transaction.
"Change of Control Offer" has the meaning specified in
Section 4.15(a).
"Change of Control Payment" has the meaning specified in
Section 4.15(a).
"Chase" means The Chase Manhattan Bank, a New York banking
corporation.
"Change of Control Payment Date" has the meaning specified in
Section 4.15(a).
"Closing Date" means March 30, 2000.
"Code" means the Internal Revenue Code of 1986, as amended, and any
regulation promulgated thereunder.
"Commitment" means, with respect to any Lender, its obligation to make
a Loan to the Borrower on the Funding Date in an amount equal to the amount set
forth opposite such Lender's name in Schedule 1.1 under the heading
"Commitment"; collectively, as to all such Lenders, the "Commitments."
<PAGE>
7
"Completed Tower" means any wireless transmission tower owned or
managed by the Borrower or any of its Restricted Subsidiaries that, as of any
date of determination, (i) has at least one wireless communications or broadcast
tenant that has executed a definitive lease with the Borrower or any of its
Restricted Subsidiaries, which lease is producing revenue with respect to the
tower as of the date of determination, and (ii) has capacity for at least two
tenants in addition to the tenant referred to in clause (i) of this definition.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i)
provision for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was
included in computing such Consolidated Net Income, plus (ii) consolidated
interest expense of such Person and its Restricted Subsidiaries for such period,
whether paid or accrued and whether or not capitalized (including, without
limitation, amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income, plus (iii) depreciation, amortization
(including amortization of goodwill and other intangibles and other non-cash
expenses (excluding any such non-cash expense to the extent that it represents
an accrual of or reserve for cash expenses in any future period) of such Person
and its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income, minus (iv) non-cash items increasing
such Consolidated Net Income for such period (excluding any items that were
accrued in the ordinary course of business), in each case on a consolidated
basis and determined in accordance with GAAP.
"Consolidated Indebtedness" means, with respect to any Person as of
any date of determination, the sum, without duplication, of (i) the total amount
of Indebtedness of such Person and its Restricted Subsidiaries, plus (ii) the
total amount of Indebtedness of any other Person, to the extent that such
Indebtedness has been Guaranteed by the referent Person or one or more of its
Restricted Subsidiaries, plus (iii) the aggregate liquidation value of all
Disqualified Stock of such Person and all preferred stock of Restricted
Subsidiaries of such Person, in each case, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for
any period,(i) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period determined in accordance with GAAP,
whether paid or accrued and whether or not capitalized (including, without
limitation, amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments, if any, pursuant
to Hedging Obligations); plus (ii) all preferred stock dividends paid or accrued
in respect of the Borrower's and its Restricted Subsidiaries'
<PAGE>
8
preferred stock to Persons other than the Borrower or a Wholly Owned Restricted
Subsidiary of the Borrower, other than preferred stock dividends paid by the
Borrower in shares of preferred stock that is not Disqualified Stock.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person other
than the Borrower that is not a Restricted Subsidiary or that is accounted for
by the equity method of accounting shall be included only to the extent of the
amount of dividends or distributions paid in cash to the referent Person or a
Restricted Subsidiary thereof, (ii) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded, (iii) the cumulative effect of a change in
accounting principles shall be excluded and (iv) the Net Income (but not loss)
of any Unrestricted Subsidiary shall be excluded whether or not distributed to
the Borrower or one of its Restricted Subsidiaries.
"Consolidated Tangible Assets" means, with respect to the Borrower,
the total consolidated assets of the Borrower and its Restricted Subsidiaries,
less the total intangible assets of the Borrower and its Restricted
Subsidiaries, as shown on the most recent internal consolidated balance sheet of
the Borrower and such Restricted Subsidiaries calculated on a consolidated basis
in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Borrower who (i) was a member of such
Board of Directors on the date of the August 1999 Senior Discount Note
Indenture, (ii) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Directors who were members of
such Board at the time of such nomination or election or (iii) is a designee of
a Principal or was nominated by a Principal.
"Continuing Rate" will be determined on the Anniversary Date and will
be the greatest of the following (expressed as a percentage per annum):
(i) the interest rate borne by the Term Loans on the Business Day
immediately preceding the Anniversary Date;
(ii) the sum of the yield (expressed as a percentage per annum) then
in effect for United States Treasury Notes with a remaining maturity closest to
10 years (provided, however, that if the remaining term of the Term Loans is not
equal to the constant maturity of a United States Treasury Note for which a
weekly average yield is given, such yield on United States Treasury Notes shall
be obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury Notes for which
such yields are given) plus 650 basis points; and
(iii) the sum of the CSI High Yield Index Rate then in effect plus 100
basis points;
<PAGE>
9
provided that the rates referenced in clauses (ii) and (iii) shall be determined
two Business Days prior to the Anniversary Date.
"Continuing Interest Rate Loan" means a Term Loan at any time the
interest thereon is computed with reference to the Continuing Rate.
"Continuing Spread" means 50 basis points at all times during the
period commencing on and including the Anniversary Date and ending on the 90th
day thereafter, and increasing by 50 basis points on the 90th day after the
Anniversary Date and by an additional 50 basis points on the last day of each
90-day period thereafter for so long as any Term Loans are outstanding.
"Credit Facilities" means one or more debt facilities (including,
without limitation, the Senior Credit Facility) or commercial paper facilities
with banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time.
"Crown Transaction Agreements" means collectively (i) the Crown
Memorandum of Understanding among the Borrower, Robert A. Crown and Barbara A.
Crown, dated as of July 2, 1998, (ii) the Crown Services Agreement between the
Borrower and Robert A. Crown, dated as of July 2, 1998 and (iii) the
Registration Rights Crown Side Letter Agreement, among the Borrower, Robert A.
Crown and Barbara A. Crown, dated as of August 18, 1998.
"CSI High Yield Index Rate" means the average yield to worst of the
CSI High Yield Index as published in the Chase High Yield Research Weekly Update
Report by Chase.
"CTI" means Crown Castle UK Limited.
"CTI Operating Agreement" means the memorandum of understanding among
the Borrower, CTSH, CTI and TdF, dated as of August 21, 1998, relating to the
development of certain business opportunities outside of the United States and
the provision of certain business support and technical services in connection
therewith.
"CTI Services Agreement" means the amended and restated services
agreement between CTI and TdF, dated as of August 21, 1998, relating to the
provisions of certain services to CTI.
"CTSH" means Crown Castle UK Holdings Ltd. and its successors.
"CTSH Shareholders' Agreement" means the agreement entered into by the
Borrower, CTSH and TdF, dated as of August 21, 1998, to govern the relationship
between the Borrower and TdF as shareholders of CTSH.
<PAGE>
10
"Custodian" means any receiver, interim receiver, receiver and
manager, trustee, assignee, liquidator, sequestrator, custodian or similar
official under any Bankruptcy Law.
"Debt to Adjusted Consolidated Cash Flow Ratio" means, as of any date
of determination, the ratio of (a) the Consolidated Indebtedness of the Borrower
as of such date to (b) the Adjusted Consolidated Cash Flow of the Borrower as of
such date.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable, in each case, at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the Holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Term Notes mature; provided, however, that any Capital Stock
that would constitute Disqualified Stock solely because the holders thereof have
the right to require the Borrower to repurchase such Capital Stock upon the
occurrence of a Change of Control or an Asset Sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Borrower
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 4.7.
"dollars" or "$" shall mean lawful money of the United States of
America.
"Eligible Indebtedness" means any Indebtedness other than (i)
Indebtedness in the form of, or represented by, bonds or other securities or any
guarantee thereof and (ii) Indebtedness that is, or may be, quoted, listed or
purchased and sold on any stock exchange, automated trading system or over-the-
counter or other securities market (including, without prejudice to the
generality of the foregoing, the market for securities eligible for resale
pursuant to Rule 144A under the Securities Act).
"Engagement Letter" means that certain letter agreement, dated as of
March 30, 2000, among the Borrower, Chase Securities Inc. and Goldman, Sachs &
Co.
"Equity Interests" means the Capital Stock and all warrants, options
or other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"Escrow Agent" means United States Trust Company of New York, in its
capacity as escrow agent pursuant to the Escrow Agreement.
"Escrow Agreement" means the escrow agreement among the Borrower, the
Arrangers on behalf of the Lenders, and the Escrow Agent, in the form attached
as Exhibit D.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board, as in effect from time to time.
<PAGE>
11
"Event of Default" means any event specified in Section 7.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Note Indenture" means, the indenture relating to the
Exchange Notes, among the Borrower, as issuer, and the Exchange Note Trustee, in
the form attached as Exhibit E, as the same may be amended or supplemented from
time to time.
"Exchange Note Trustee" means, on any date of determination, the
trustee under the Exchange Note Indenture.
"Exchange Notes" means the senior unsecured Exchange Notes of the
Borrower, placed into escrow on the Closing Date, to be issued in exchange for
certain Term Loans pursuant to Section 2.2, in the form attached as an exhibit
to the Exchange Note Indenture.
"Exchange Notice" has the meaning specified in Section 2.2(a).
"Exchange Period" means the period (i) commencing on and including the
last day of the first Interest Period to expire on a date on or after the
Anniversary Date and (ii) ending on the Maturity Date.
"Existing Indebtedness" means Indebtedness of the Borrower and its
Subsidiaries (other than Indebtedness under the Senior Credit Facility) in
existence on August 3, 1999, until such amounts are repaid.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Lenders (in
their individual capacity) on such day on such transactions as determined by the
Administrative Agent.
"Fee Letter" means that certain Fee Letter, dated as of March 30,
2000, among the Borrower and Chase Securities Inc., The Chase Manhattan Bank and
Goldman Sachs Credit Partners L.P.
"Foreign Lender" means a Lender that is a foreign person for purposes
of the U.S. federal income tax.
"Foreign Participant" means a Participant that is a foreign person for
purposes of the U.S. federal income tax.
<PAGE>
12
"Funding Date" means April 3, 2000.
"Funding Notice" has the meaning specified in Section 2.1.
"Future Towers Letter Agreement" means the letter agreement between
the Borrower and GTE Wireless dated as of November 7, 1999.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Agreement.
"Global Lease" means the means the global lease agreement among OpCo,
GTE Wireless, and certain of its affiliates.
"Governance Agreement" means the agreement among the Borrower, TdF and
its affiliates, dated as of August 21, 1998, to provide for certain rights and
obligations of the Borrower, TdF and its affiliates with respect to the
management of the Borrower.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Governmental Entity" means any government or political subdivision or
any agency, authority, bureau, central bank, commission, department or
instrumentality thereof, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"GTE Escrow Agreement" means the escrow agreement among the Borrower,
GTE Wireless and Citibank, N.A., as escrow agent.
"GTE Escrow Payment" means a $50.0 million escrow payment by the
Borrower to Citibank, N.A. for the benefit of GTE Wireless upon execution of the
GTE Formation Agreement.
"GTE Formation Agreement" means the Formation Agreement, dated as of
November 7, 1999, among the Borrower, GTE Wireless and the other parties named
therein
"GTE Registration Rights Agreement" means the registration rights
agreement between GTE Wireless and the Borrower
"GTE Wireless" means GTE Wireless Incorporated.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without
<PAGE>
13
limitation, by way of a pledge of assets or through letters of credit or
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness. The term "Guarantor" shall mean any person Guaranteeing any
obligation.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency exchange rates.
"HoldCo" means Crown Castle GT Holding Company LLC.
"HoldCo Operating Agreement" means the operating agreement among
certain affiliates of GTE Wireless and Crown Castle GT Corp.
"HoldCo Sub" means Crown Castle GT Holding Sub Company LLC.
"HoldCo Sub Operating Agreement" means the operating agreement among
certain affiliates of GTE Wireless and HoldCo.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all Indebtedness of
others secured by a Lien on any asset of such Person whether or not such
Indebtedness is assumed by such Person (the amount of such Indebtedness as of
any date being deemed to be the lesser of the value of such property or assets
as of such date or the principal amount of such Indebtedness of such other
Person so secured) and, to the extent not otherwise included, the Guarantee by
such Person of any Indebtedness of any other Person. The amount of any
Indebtedness outstanding as of any date shall be (i) the accreted value thereof,
in the case of any Indebtedness issued with original issue discount, and (ii)
the principal amount thereof, together with any interest thereon that is more
than 30 days past due, in the case of any other Indebtedness.
"Indemnified Party" has the meaning specified in Section 10.1.
"Initial Period" means the period beginning on the Closing Date and
ending on the last day of the first Interest Period to expire on a date on or
after the Anniversary Date.
"Initial Spread" means, for so long as any Term Loans are outstanding
during the Initial Period, 375 basis points at all times during the period
commencing on and including the Closing Date and ending on the 45th day
thereafter, and increasing to 450 basis points on the 45th day after the
<PAGE>
14
Closing Date until the 90th day after the Closing Date and increasing to 550
basis points on the 90th day after the Closing Date until the 180th day after
the Closing Date and increasing to 600 basis points on the 180th day after the
Closing Date until the Anniversary Date.
"Interbank Offered Rate" means, for any LIBOR Rate Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100th of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "Interbank Offered Rate" shall
mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
dollars at approximately 11:00 a.m. (London Time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates.
"Interest Payment Date" means (i) the last day of each March, June,
September and December after the Closing Date in the case of the Base Rate
Loans, (ii) the last day of each Interest Period in the case of LIBOR Rate
Loans, (iii) the 90th day after the last day of the first Interest Period to
expire on a date on or after the Anniversary Date, and the last day of each 90-
day period thereafter, in the case of Term Loans outstanding at any time during
the Exchange Period, (iv) the Maturity Date and (v) the date of any prepayment
of all or any portion of the principal of the Loans.
"Interest Period" means, in respect of any LIBOR Rate Loan, (i) in the
case of the first Interest Period applicable to the Term Loans, the period
commencing on and including the Funding Date and ending on the numerically
corresponding date (or, if there is no numerically corresponding date, on the
last date) in the calendar month that is 1 month thereafter, and (ii) in the
case of each subsequent Interest Period, the period beginning on the last day of
the prior Interest Period and ending on the numerically corresponding date (or,
if there is no numerically corresponding date, on the last date) in the calendar
month that is either 1 month or 3 months thereafter, at the election of the
Borrower; provided, however, that the Borrower shall give the Lenders written
notice upon such election; provided further that if any Interest Period would
end on a day other than a Business Day, such Interest Period shall be extended
until the next succeeding Business Day unless the next Business Day would fall
in the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day. Interest shall accrue from the first day of an
Interest Period to but excluding the last day of such Interest Period.
Notwithstanding the foregoing, no Interest Period in respect of the Term Loans
may extend beyond the Maturity Date and each Interest Period that would
otherwise commence before and end after the Maturity Date shall end on the
Maturity Date.
"Investment Banks" means, collectively, Chase Securities Inc.,
Goldman, Sachs & Co. and Lehman Brothers Inc.
<PAGE>
15
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Borrower or any Restricted Subsidiary of the Borrower sells or otherwise
disposes of any Equity Interests of any direct or indirect Subsidiary of the
Borrower or a Restricted Subsidiary of the Borrower issues any of its Equity
Interests such that, in each case, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of the Borrower,
the Borrower shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Equity Interests of
such Subsidiary not sold or disposed of in an amount determined as provided in
the final paragraph of Section 4.7.
"Joint Venture Companies" means HoldCo, HoldCo Sub, and OpCo.
"Legal Holiday" means a Saturday, a Sunday or any other day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed and, if such
day relates to a payment or prepayment of principal of, or interest on, or an
Interest Period for, LIBOR Rate Loans, any day on which dealings in dollar
deposits are not carried out in the London interbank markets.
"Lenders" shall mean (a) each financial institution that has executed
a counterpart to this Agreement (other than any such financial institution that
has ceased to be a party hereto pursuant to an Assignment and Acceptance) and
(b) any financial institution that has become a party hereto pursuant to an
Assignment and Acceptance.
"LIBOR Lending Office" means, with respect to any Lender, the office,
if any, of such Lender specified from time to time as its "LIBOR Lending Office"
in a written notice to the Borrower.
"LIBOR Rate" means the interest rate per annum calculated according to
the following formula:
Interbank Offered Rate
LIBOR Rate = --------------------------------
1 -- LIBOR Reserve Percentage
"LIBOR Rate Loan" means a Term Loan at any time the interest rate
thereon is computed with reference to the LIBOR Rate.
"LIBOR Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation D
or any successor regulation, as the maximum reserve requirement (including any
basic, supplemental, emergency, special, or marginal reserves) applicable with
respect to Eurocurrency Liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by reference to
which the interest rate of
<PAGE>
16
LIBOR Rate Loans is determined), whether or not any Administrative Agent or any
Lender has any Eurocurrency liabilities subject to such requirements, without
benefits of credits or proration, exceptions or offsets that may be available
from time to time to any Administrative Agent or any Lender. The LIBOR Rate
shall be adjusted automatically on and as of the effective date of any change in
the LIBOR Reserve Percentage.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owning pursuant
to Section 3(c) of the Registration Rights Agreement.
"Loan" means a Term Loan.
"Loan Documents" means this Agreement, the Term Notes and the Related
Documents.
"Loan Register" means the register maintained by the Administrative
Agent on behalf of the Borrower pursuant to Section 6.7.
"Majority Lenders" means, at any time, Lenders holding at least a
majority of the then aggregate unpaid principal balance of the Loans, or, if no
such principal amount is then outstanding, Lenders having at least a majority of
the total Commitments; provided that, for purposes hereof, neither the Borrower
nor any of its Affiliates shall be included in (i) the Lenders holding such
amount of the Loans or having such amount of the Commitments or (ii) determining
the aggregate unpaid principal amount of the Loans or the total Commitments.
"Management Agreement" means the management services agreement between
OpCo and HoldCo Sub.
"Material Adverse Effect" means, except as otherwise specifically
stated, a material adverse effect on the condition (financial or other),
business, prospects, properties or results of operations of the Borrower and its
"significant subsidiaries" as defined in Rule 405 of the rules and regulations
of the Commission promulgated under the Securities Act, taken as a whole.
"Maturity Date" means March 31, 2011.
"May 1999 Senior Discount Note Indenture" means that certain
indenture, dated as of May 17, 1999, between the Borrower and United States
Trust Company of New York, as trustee, governing the Borrower's 10-3/8% Senior
Discount Notes due 2011.
<PAGE>
17
"Nassau Group" means Nassau Capital Partners II, L.P. and NAS
Partners I, L.L.C.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain or loss,
together with any related provision for taxes on such gain or loss, realized in
connection with (a) any Asset Sale (including, without limitation, dispositions
pursuant to sale and leaseback transactions) or (b) the disposition of any
securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries and (ii) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss.
"Net Proceeds" means the aggregate cash proceeds received by the
Borrower or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
(i) the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, (ii) taxes paid or payable as
a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), (iii) amounts required to be
applied to the repayment of Indebtedness (other than Indebtedness under a Credit
Facility) secured by a Lien on the asset or assets that were the subject of such
Asset Sale, (iv) all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries as a result of such Asset
Sale, (v) the deduction of appropriate amounts provided by the seller as a
reserve in accordance with GAAP against any liabilities associated with the
assets disposed of in such Asset Sale and retained by the Borrower or any
Restricted Subsidiary after such Asset Sale and (vi) without duplication, any
reserves that the Borrower's Board of Directors determines in good faith should
be made in respect of the sale price of such asset or assets for post closing
adjustments; provided that in the case of any reversal of any reserve referred
to in clause (v) or (vi) above, the amount so reserved shall be deemed to be Net
Proceeds from an Asset Sale as of the date of such reversal.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Borrower nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise), or (c) constitutes the lender; (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Borrower or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and (iii) as to which the lenders have been
notified in writing that they will not have any recourse to the stock or assets
of the Borrower or any of its Restricted Subsidiaries (except that this clause
(iii) shall not apply to any Indebtedness incurred by CTSH and its Subsidiaries
prior to August 21, 1998).
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
<PAGE>
18
"Offering Documents" means an offering memorandum or prospectus
together with such other documents, instruments and agreements as the Investment
Banks may request in their sole discretion in connection with the issuance of
the Permanent Securities.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operation Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Borrower by two Officers of the Borrower, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Borrower.
"OpCo Operating Agreement" means the operating agreement among certain
affiliates of GTE Wireless and Crown Castle GT Corp.
"Operating Agreements" means the HoldCo Operating Agreement, the
HoldCo Sub Operating Agreement, and the OpCo Operating Agreement, collectively.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Administrative Agent. The counsel may be an
employee of or counsel to the Borrower, any Subsidiary of the Borrower or the
Administrative Agent.
"Other Taxes" has the meaning specified in Section 2.9(b).
"Participations" has the meaning specified in Section 6.3.
"Permanent Securities" means securities to be issued by the Borrower
in connection with the Proposed Offering to refinance the Loans.
"Permitted Business" means any business conducted by the Borrower, its
Restricted Subsidiaries or CTSH and its Subsidiaries on the date of this
Agreement and any other business related, ancillary or complementary to any such
business.
"Permitted Investment" means (a) any Investment in the Borrower or in
a Restricted Subsidiary of the Borrower; (b) any Investment in Cash Equivalents;
(c) any Investment by the Borrower or any Restricted Subsidiary of the Borrower
in a Person, if as a result of such Investment (i) such Person becomes a
Restricted Subsidiary of the Borrower or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Borrower or a Restricted
Subsidiary of the Borrower; (d) any Restricted Investment made as a result of
the receipt of non-cash consideration from an Asset Sale that was made pursuant
to and in compliance with Section 4.10; (e) any acquisition of assets solely in
exchange for the issuance of Equity Interests (other than Disqualified Stock) of
the Borrower; (f) receivables created in the ordinary course of business; (g)
loans or advances to employees made in the ordinary course of business since the
date of the August 1999 Senior Discount Note Indenture not to exceed $2.0
million at any one time
<PAGE>
19
outstanding; (h) securities and other assets received in settlement of trade
debts or other claims arising in the ordinary course of business; (i) purchases
of additional Equity Interests in CTSH for cash pursuant to the Governance
Agreement as the same is in effect on the date of this Agreement for aggregate
cash consideration not to exceed $20 million since the beginning of the quarter
during which the May 1999 Senior Discount Note Indenture was executed; (j)
Investments since the date of the August 1999 Senior Discount Note Indenture of
up to an aggregate of $100.0 million (each such Investment being measured as of
the date made and without giving effect to subsequent changes in value); and (k)
other Investments in Permitted Businesses since the date of the August 1999
Senior Discount Note Indenture not to exceed an amount equal to $10.0 million
plus 10% of the Borrower's Consolidated Tangible Assets at any one time
outstanding (each such Investment being measured as of the date made and without
giving effect to subsequent changes in value).
"Permitted Liens" means (i) Liens securing Eligible Indebtedness of
the Borrower under one or more Credit Facilities that was permitted by the terms
of this Agreement to be incurred; (ii) Liens securing any Indebtedness of any of
the Borrower's Restricted Subsidiaries that was permitted by the terms of this
Agreement to be incurred; (iii) Liens in favor of the Borrower; (iv) Liens
existing on the date of the August 1999 Senior Discount Note Indenture; (v)
Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (vi) Liens securing Indebtedness permitted to be incurred
under clause (v) of the second paragraph of Section 4.9; and (vii) Liens
incurred in the ordinary course of business of the Borrower or any Restricted
Subsidiary of the Borrower since the date of the August 1999 Senior Discount
Note Indenture with respect to obligations that do not exceed $5.0 million at
any one time outstanding and that (a) are not incurred in connection with the
borrowing of money or the obtaining of advances or credit (other than trade
credit in the ordinary course of business) and (b) do not in the aggregate
materially detract from the value of the property or materially impair the use
thereof in the operation of business by the Borrower or such Restricted
Subsidiary.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Borrower or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Borrower or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that: (i) the principal amount
(or initial accreted value, if applicable) of such Permitted Refinancing
Indebtedness does not exceed the principal amount (or accreted value, if
applicable) of, plus accrued interest on, the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of expenses
and prepayment premiums incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date later than the final maturity
date of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness is subordinated 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 extended, refinanced, renewed, replaced,
defeased or refunded; and
<PAGE>
20
(iv) such Indebtedness is incurred either by the Borrower or by the Restricted
Subsidiary who is the obligor on the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"Prepayment Date" has the meaning specified in Section 2.7.
"Prime Rate" means the rate of interest per annum established and
publicly announced from time to time by Chase as its prime rate. The Prime Rate
is not necessarily the best or the lowest rate of interest offered by the
Administrative Agent.
"Principals" means Berkshire Group, Centennial Group, Nassau Group,
TdF and any Related Party of the foregoing.
"Proposed Offering" means the Borrower's proposal to issue an amount
necessary to repay the Term Loans and the Exchange Notes and all accrued
interest and Liquidated Damages on the foregoing as contemplated by the
Engagement Letter.
"Public Equity Offering" means an underwritten primary public offering
of common stock of the Borrower pursuant to an effective registration statement
under the Securities Act.
"Recovered Escrow Funds" means any and all amounts received by the
Borrower or any of its Subsidiaries as a distribution or payment on, or refund,
reimbursement, repayment or other recovery of, any amounts paid by the Borrower
and its Subsidiaries with respect to the GTE Escrow Payment; provided that any
such amounts that are given by the Borrower or any of its Subsidiaries to GTE
Wireless as consideration in connection with the Acquisition shall not
constitute Recovered Escrow Funds.
"Registration Rights Agreement" means the registration rights
agreement among the Borrower and the Arrangers pursuant to which the Exchange
Notes are required to be registered for public sale, in the form attached as
Exhibit C.
"Regulation D" means Regulation D of the Board as the same may be
amended or supplemented from time to time.
"Related Documents" means the Exchange Notes, the Exchange Note
Indenture, the Registration Rights Agreement, the Escrow Agreement, the
Engagement Letter and the Fee Letter.
"Related Party" with respect to any Principal means (A) any
controlling stockholder, 80% (or more) owned Subsidiary of such Principal or (B)
any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, members, partners, owners or Persons beneficially holding an
<PAGE>
21
80% or more controlling interest of which consist of such Principal and/or such
other Persons referred to in the immediately preceding clause (A).
"Request" has the meaning specified in Section 8.1(b).
"Responsible Officer" of any corporation shall mean any executive
officer or financial officer of such corporation and any other officer or
similar official thereof responsible for the administration of the obligations
of such corporation in respect of this Agreement.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payments" has the meaning specified in Section 4.7.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rights Agreement" means the agreement between the Borrower and
ChaseMellon Shareholders Services, L.L.C., as rights agent, dated as of August
21, 1998, relating to the dividend declared by the Borrower consisting of the
right to purchase 1/100th of a share of the Borrower's Series A Participating
Cumulative Preferred Stock, parachute value $.01 per share.
"SEC" means the Securities and Exchange Commission.
"Securities" means, collectively, the Exchange Notes.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Facility" means that certain $1.2 billion Credit
Agreement, dated as of March 15, 2000, by and among The Chase Manhattan Bank, as
Administrative Agent, Credit Suisse First Boston Corporation and Key Corporate
Capital Inc., as Syndication Agents, and The Bank of Nova Scotia, as
Documentation Agent for the financial institutions listed therein, and Crown
Castle Operating Company and Crown Castle International Corp., including any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, modified,
renewed, refunded, replaced or refinanced from time to time.
"Services Agreement" means the services agreement among the Borrower
and the Joint Venture Companies.
"Significant Subsidiary" means, with respect to any Person, any
Restricted Subsidiary of such Person that would be a "significant subsidiary" of
such Person as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Agreement, except that all references to "10 percent" in Rule 1-02(w)(1),
(2) and (3) shall mean "5 percent" and that all Unrestricted Subsidiaries of the
Company shall be excluded from all calculations under Rule 1-02(w).
<PAGE>
22
"Solvent" means, with respect to any Person on a pro forma basis
immediately after the consummation of a transaction, that (i) the fair value of
such Person's assets exceeds its stated liabilities, including all contingent
liabilities, (b) the present fair saleable value of such Person's assets exceeds
that amount that will be required to pay its probable liability on its debts as
they become absolute and mature, (c) such Person will not have incurred debts
beyond its ability to pay such debts as they mature, and (d) the then remaining
assets of such Person will not constitute an unreasonably small capital for such
Person's businesses.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Stockholders' Agreement" means the agreement among the Borrower and
certain stockholders of the Borrower, dated as of August 21, 1998, as amended or
supplemented, to provide for certain rights and obligations of the Borrower and
such stockholders with respect to the governance of the Borrower and such
stockholders' shares of Common Stock and/or Class A Common Stock of the
Borrower.
"Strategic Equity Investment" means a cash contribution to the common
equity capital of the Borrower or a purchase from the Borrower of common Equity
Interests (other than Disqualified Stock), in either case by or from a Strategic
Equity Investor and for aggregate cash consideration of at least $50.0 million.
"Strategic Equity Investor" means a Person engaged in a Permitted
Business whose Total Equity Market Capitalization exceeds $1.0 billion.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership
(a) the sole general partner or the managing general partner of which
is such Person or a Subsidiary of such Person or (b) the only general partners
of which are such Person or of one or more Subsidiaries of such Person (or any
combination thereof).
"Taxes" has the meaning specified in Section 2.9(a).
"TdF" means TeleDiffusion de France International S.A, or any
controlled affiliate of TdF.
"Term Loan" means, collectively, the term loans made hereunder in an
aggregate principal amount not to exceed $400.0 million.
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23
"Term Note" means a promissory note of the Borrower in the form
attached as Exhibit B hereto evidencing the Term Loan of any Lender.
"Total Equity Market Capitalization" of any Person means, as of any
day of determination, the sum of (i) the product of (A) the aggregate number of
outstanding primary shares of common stock of such Person on such day (which
shall not include any options or warrants on, or securities convertible or
exchangeable into, shares of common stock of such person) multiplied by (B) the
average closing price of such common stock listed on a national securities
exchange or the Nasdaq National Market System over the 20 consecutive business
days immediately preceding such day, plus (ii) the liquidation value of any
outstanding shares of preferred stock of such Person on such day.
"Tower Asset Exchange" means any transaction in which the Borrower or
one of its Restricted Subsidiaries exchanges assets for Tower Assets and/or cash
or Cash Equivalents where the fair market value (evidenced by a resolution of
the Board of Directors set forth in an Officers' Certificate delivered to the
Trustee) of the Tower Assets and cash or Cash Equivalents received by the
Borrower and its Restricted Subsidiaries in such exchange is at least equal to
the fair market value of the assets disposed of in such exchange.
"Tower Assets" means wireless transmission towers and related assets
that are located on the site of a transmission tower.
"Tower Cash Flow" means, for any period, the Consolidated Cash Flow of
the Borrower and its Restricted Subsidiaries for such period that is directly
attributable to site rental revenue or license fees paid to lease or sublease
space on communication sites owned or leased by the Borrower, all determined on
a consolidated basis and in accordance with GAAP. Tower Cash Flow will not
include revenue or expenses attributable to non-site rental services provided by
the Borrower or any of its Restricted Subsidiaries to lessees of communication
sites or revenues derived from the sale of assets.
"Transactions" means, collectively, the Acquisitions, the related
financing transactions and each of the other transactions contemplated by the
Transaction Documents.
"Transaction Documents" means the Loan Documents and the Acquisition
Agreements.
"Transferee" has the meaning specified in Section 6.4.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Borrower
that is designated by the Board of Directors as an Unrestricted Subsidiary
pursuant to a Board Resolution; but only to the extent that such Subsidiary: (a)
has no Indebtedness other than Non-Recourse Debt; (b) is not party to any
agreement, contract, arrangement or understanding with the Borrower or any
Restricted Subsidiary of the Borrower unless the terms of any such agreement,
contract, arrangement
<PAGE>
24
or understanding are no less favorable to the Borrower or such Restricted
Subsidiary than those that might be obtained at the time from Persons who are
not Affiliates of the Borrower; (c) is a Person with respect to which neither
the Borrower nor any of its Restricted Subsidiaries has any direct or indirect
obligation (x) to subscribe for additional Equity Interests or (y) to maintain
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; (d) has not guaranteed or otherwise
directly or indirectly provided credit support for any Indebtedness of the
Borrower or any of its Restricted Subsidiaries; and (e) has at least one
director on its board of directors that is not a director or executive officer
of the Borrower or any of its Restricted Subsidiaries and has at least one
executive officer that is not a director or executive officer of the Borrower or
any of its Restricted Subsidiaries. Any such designation by the Board of
Directors shall be evidenced to the Administrative Agent by filing with the
Administrative Agent a certified copy of the Board Resolution giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions and was permitted by Section 4.7 hereof.
If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Agreement and any Indebtedness of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Borrower as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.9 hereof, the Borrower shall be in
default of such covenant). The Board of Directors of the Borrower may at any
time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Borrower of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted under Section 4.9 hereof,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period, and (ii) no Default would occur
or be in existence following such designation. For avoidance of doubt, for
purposes of this Agreement the following Subsidiaries of the Borrower shall be
deemed as of the date hereof to be Unrestricted Subsidiaries: (i) CTSH and each
of its Subsidiaries as of the date of this Agreement; and (ii) CC Investment
Corp. and CC Investment Corp. II and each of their Subsidiaries (including CCAIC
and the BAM Joint Venture) as of the date of this Agreement.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the board of
directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness.
"West Street" means West Street Fund I, L.L.C., an Affiliate of
Goldman Sachs Credit Partners L.P.
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"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person, 100% of the Capital Stock and other Equity Interests of which is owned
directly or indirectly by such Person.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned (i) by such Person, (ii) by one or more Wholly Owned
Restricted Subsidiaries of such Person or (iii) by such Person and one or more
Wholly Owned Restricted Subsidiaries of such Person.
Section 1.2 Interpretation. In this Agreement, the singular includes
the plural and the plural includes the singular; words implying any gender
include the other genders; references to any section, exhibit or schedule are to
sections, exhibits or schedules hereto unless otherwise indicated; references to
statutes are to be construed as including all statutory provisions
consolidating, amending or replacing the statute referred to; references to
"writing" include printing, typing, lithography and other means of reproducing
words in a visible form; "including" following a word or phrase shall not be
construed to limit the generality of such word or phrase; "or" is not exclusive;
provisions apply to successive events and transactions; and an accounting term
not otherwise defined has the meaning assigned to it in accordance with GAAP.
ARTICLE II.
THE CREDIT FACILITY
Section 2.1 Commitments to Make Term Loans. In reliance upon the
representations and warranties of the Borrower set forth herein and subject to
the terms and conditions herein set forth, each of the Lenders severally agrees
to make a Term Loan to the Borrower on the Funding Date in the amount of such
Lender's Commitment. On the Business Day prior to the Funding Date, the Borrower
shall irrevocably notify the Administrative Agent in a written notice (a
"Funding Notice") as to the principal amount of Term Loans to be drawn on such
Funding Date. The proceeds of each Term Loan shall be disbursed by wire transfer
on the relevant Funding Date as provided in written instructions delivered by
the Borrower to the Administrative Agent on the Business Day prior to such
Funding Date. Each Term Loan will mature on the Maturity Date.
Section 2.2 Option to Exchange Term Loans for Exchange Notes.
(a) On any Business Day on or after the Anniversary Date (if any), any
Lender may elect to exchange all or any portion of its Term Loan for one or more
Exchange Notes by giving not less than five Business Days' prior irrevocable
written notice of such election to the Borrower, the Escrow Agent, the
Administrative Agent and the Exchange Note Trustee specifying the principal
amount of its Term Loan to be exchanged (which shall be at least $1,000,000 and
integral multiples of $1,000 in excess thereof) and subject to Section 6.1, the
name of the proposed registered holder and, subject to the terms of the Exchange
Note Indenture, the amount of each Exchange Note requested (each such notice, an
"Exchange Notice"); provided, that in no event shall the aggregate principal
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26
amount of the Term Loans initially exchanged pursuant to this Section 2.2(a) be
less than $15,000,000. Any such exchanging Lender shall deliver its Term Notes
to the Administrative Agent within five Business Days following delivery of an
Exchange Notice. Term Notes exchanged for Exchange Notes pursuant to this
Section 2.2 shall be deemed repaid and canceled and the Exchange Notes so issued
shall be governed by and construed in accordance with the provisions of the
Exchange Note Indenture.
(b) Not later than the fifth Business Day after delivery of an
Exchange Notice:
(i) the Administrative Agent shall deliver to the Escrow Agent the
original Term Notes delivered to it by the exchanging Lender pursuant to Section
2.2(a);
(ii) the Escrow Agent shall cancel each Term Note so delivered to it
and, if applicable, the Borrower shall issue a replacement Term Note to such
Lender in an amount equal to the principal amount of such Lender's Term Loan
that is not being exchanged, or the Escrow Agent shall make a notation on the
surrendered Term Note to the effect that a portion of the Term Loan represented
thereby has been repaid; and
(iii) upon completion of the actions set forth in clauses (b)(i) and
(ii) the Escrow Agent shall deliver the applicable Exchange Note(s) to the
Exchange Note Trustee for authentication and delivery to the holder or holders
thereof specified in the Exchange Notice.
(iv) Each Exchange Note issued pursuant to this Section 2.2 shall bear
interest at a fixed rate equal to the rate per annum on the Term Loan on the
date of the Exchange Notice. Accrued interest on Term Loans so exchanged shall
be canceled and the Exchange Notes received in such exchange shall bear interest
from and including the most recent date to which interest has been paid on the
Term Loans so exchanged.
Section 2.3 Interest; Default Interest. (a) Interest Rate Applicable
to Term Loans During the Initial Period. Subject to Sections 2.3(d) and (e)
below, the unpaid principal balance of all Term Loans outstanding at any time
during the Initial Period shall accrue interest at a rate per annum equal to the
sum of the LIBOR Rate plus the Initial Spread, changing on the first day of each
Interest Period when and as the LIBOR Rate and/or the Initial Spread changes.
(b) Interest Rate Applicable to Term Loans As Of and Following the
Anniversary Date. Subject to Sections 2.3(d) and (e) below, interest on the
unpaid principal balance of all Term Loans outstanding at any time following the
Anniversary Date shall accrue interest at a rate per annum equal to the
Continuing Rate plus the Continuing Spread, changing when and as the Continuing
Spread changes.
(c) Basis of Computation of Interest; Payment of Interest. All
interest shall be payable in arrears not later than 12:00 noon (New York City
time) on each Interest Payment Date by wire transfer of immediately available
funds in accordance with Section 2.8. All interest (i) in respect of LIBOR Rate
Loans shall be calculated for actual days elapsed on the basis of a 360-day
year, (ii) in respect of Base Rate Loans shall be calculated for actual number
of days elapsed over a year of 365 or
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27
366 days, as the case may be, when the Base Rate is determined by reference to
the Prime Rate, and over a year of 360 days at all other times, and (iii) in
respect of Continuing Interest Rate Loans shall be calculated on the basis of a
year comprised of twelve months of 30 days each.
(d) Default Interest. Subject to Section 2.3(e) below, if an Event of
Default described in clause (a) or (b) of Section 7.1 occurs, the Borrower shall
on demand from time to time pay interest on such defaulted amount, to the extent
permitted by law, from the date such Default in the payment of interest or Event
of Default first occurred to but excluding the date of actual payment or cure or
waiver (after as well as before judgment) to the extent lawful, at a rate per
annum equal to 200 basis points in excess of the otherwise applicable interest
rate on the Loans. The Borrower shall pay such default interest and all interest
accruing on any overdue Obligation in cash on demand from time to time,
provided, however, that the sum of such default interest rate and rate of
interest accruing on any overdue Obligations shall not at any time exceed 16%
per annum.
(e) Maximum Interest Rate. Notwithstanding anything contained in
Section 2.3(a), 2.3(b) or 2.3(d) above, in no event shall the interest rate on
the Loans for any Interest Period exceed an annual rate equal to the lesser of
(i) 16% per annum and (ii) the maximum interest rate permitted by law.
(f) Payment of Interest and Liquidated Damages. Except as otherwise
set forth herein, interest and Liquidated Damages on each Loan shall be payable
in arrears on and to (i) each Interest Payment Date applicable to that Loan;
(ii) any prepayment of that Loan, to the extent accrued on the amount being
prepaid; (iii) at maturity, including final maturity; and (iv) if such Loan is a
Term Loan that is exchanged for an Exchange Note, the date of exchange as
specified in the relevant Exchange Notice. All interest and Liquidated Damages
payments shall be made not later than 12:00 noon (New York City time) on the
date specified for payment by wire transfer of immediately available funds in
accordance with Section 2.8.
Section 2.4 Mandatory Prepayment. (a) The Borrower shall prepay the
Loans ratably in accordance with the aggregate outstanding principal balances
thereof with:
(1) the net cash proceeds of:
(i) any direct or indirect public offering or private placement of the
Permanent Securities, or any other debt or equity securities of the Borrower or
any of its controlled Affiliates issued after the Closing Date (including
without limitation any equity contributions from TeleDiffusion de France
International S.A.) other than (A) any issuance of directors' qualifying shares
and (B) any issuance or sale of common stock (or common stock equivalents) of
the Borrower to officers and employees under employee benefit clients or
compensation plans";
(ii) the incurrence of any other Indebtedness by the Borrower or any
of its controlled Affiliates after the Closing Date (other than Indebtedness
permitted to be
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28
incurred under the Senior Credit Facility pursuant to clauses (i), (v) and (vii)
of the second paragraph of Section 4.9, subject to the terms of the Engagement
Letter); and
(iii) any Asset Sale by the Borrower or any of its controlled
Affiliates after the Closing Date; provided that the following shall not be
deemed an "Asset Sale" for purposes of this covenant: (A) the sale of any asset
encumbered by Liens of third-party creditors permitted under Section 4.12 solely
to the extent that the Net Proceeds of such Asset Sale are applied to pay the
claims of such third party creditors and (B) sales of Tower Assets in an
aggregate amount not to exceed $5.0 million during any calendar year if (y) the
Borrower advises the Administrative Agent in writing that it will utilize the
net cash proceeds of each such sale within six months of the date of closing
such sale to purchase additional Tower Assets and (z) the Borrower in fact uses
the net cash proceeds to purchase additional Tower Assets within such six-month
period,
(each of the transactions in the foregoing clauses (i), (ii) and (iii), a
"Capital Markets Transaction"), or
(2) all of the Recovered Escrow Funds if at any time the Borrower or
any of its Subsidiaries receives any Recovered Escrow Funds (any such event, an
"Escrow Recovery").
Subject to Section 2.6 and Section 2.7, the Borrower shall, not later than the
fifth Business Day following any Capital Markets Transaction or Escrow Recovery,
apply such net cash proceeds or Recovered Escrow Funds to prepay the Loans
pursuant to this Section 2.4, without premium or penalty, by paying to each
Lender an amount equal to 100% of such Lender's pro rata share of the aggregate
principal amount of the Loans to be prepaid, plus accrued and unpaid interest
thereon to the Prepayment Date.
(b) Notwithstanding the provisions of Section 2.4(a) above, in the
case of any Capital Markets Transaction, the Borrower shall be required to apply
the net cash proceeds from such Capital Markets Transaction to prepay the Loans
pursuant to this Section 2.4 only after making any repayment of amounts
outstanding under the Senior Credit Facility that are required to be made prior
to the application of such net cash proceeds to the prepayment of the Loans.
(c) Subject to and in accordance with Section 4.15, in the event of
any Change of Control, the Borrower shall offer to prepay the Loans pursuant to
Section 4.15.
Section 2.5 Optional Prepayment. Subject to Section 2.6 and Section
2.7, the Borrower may prepay the Loans at any time without premium or penalty,
in whole or in part, on a pro rata basis, by paying to each applicable Lender an
amount equal to 100% of such Lender's pro rata share of the aggregate principal
amount of Loans to be prepaid, plus accrued and unpaid interest thereon to the
Prepayment Date.
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Section 2.6 Breakage Costs; Indemnity. The Borrower agrees to
indemnify and hold each Affected Party harmless from and against any loss or
expense which such Affected Party sustains or incurs as a consequence of:
(a) the failure by the Borrower to borrow LIBOR Rate Loans on the
Funding Date after the Borrower has given a notice with respect thereof in
accordance with Section 2.1,
(b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of Section
2.4 or 2.5, as applicable, or
(c) the mandatory or optional prepayment of LIBOR Rate Loans on a day
that is not the last day of an Interest Period, except in connection with
issuance of the Permanent Securities.
Such indemnification may include an amount equal to the greater of (i) such
Affected Party's actual loss and expenses incurred (excluding consequential
damages) in connection with, or by reason of, any of the foregoing events and
(ii) the excess, if any of (A) the amount of interest that would have accrued
(1) in the case of a failure to make Term Loans, on the principal amount of Term
Loans not so made from the date of such proposed issuance to the last day of the
Interest Period that would have commenced on the proposed date of funding, or
(2) in the case of any prepayment of Loans, on the principal amount of Loans so
prepaid from the date of such prepayment to the last day of the Interest Period
in which such prepayment occurred, in each case at the applicable rate of
interest for such Loans provided for herein (excluding, however, the Initial
Spread or the Continuing Spread, as the case may be, included therein, if any)
over (B) the amount of interest (as reasonably determined by such Affected
Party) which would have accrued to such Affected Party on such amount by placing
such amount on deposit for a period comparable to such Interest Period with
leading banks in the interbank LIBOR market. A certificate as to any amounts
payable pursuant to this Section 2.6 submitted to the Borrower by any Affected
Party shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Obligations.
Section 2.7 Effect of Notice of Prepayment. The Borrower shall notify
the Lenders of any prepayment in writing at their addresses shown in the Loan
Register, which notice shall be given at least five Business Days prior to any
date set for prepayment of Loans (each such day, a "Prepayment Date"). Once such
notice is sent or mailed, the Loans to be prepaid shall become due and payable
on the Prepayment Date set forth in such notice. Such notice may not be
conditional.
Section 2.8 Payments. (a) Wire Transfer. The principal of, fees,
premium, if any, and interest on each Loan and all other Obligations arising
under the Loan Documents shall be payable by wire transfer in immediately
available funds (in United States dollars) to the Administrative Agent for the
respective accounts of the Lenders set forth below their signatures on the
signature pages of this Agreement or otherwise designated in the Loan Register
from time to time to the Borrower by any Lender at least three Business Days
prior to the due date therefor.
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(b) Change in Costs. If prior to the first day of any Interest Period
with respect to a LIBOR Rate Loan, any Lender shall have determined (which
determination shall be conclusive and binding upon the Borrower absent manifest
error) that: (i) by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the LIBOR Rate for
such Interest Period, or (ii) the LIBOR Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lender or its LIBOR Lending Office of maintaining its LIBOR Rate Loan during
such Interest Period, then such Lender shall give facsimile or telephone notice
thereof to the Borrower as soon as practicable thereafter. If such notice is
given, the interest rate on each Term Loan for such Interest Period and for each
subsequent Interest Period until such Lender gives notice to the Borrower
otherwise shall equal the sum of the Base Rate plus the Initial Spread or the
Continuing Spread, as the case may be.
(c) Change in Law. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Borrower that subsequent to the date
hereof the introduction of, or any change in the interpretation of, any law or
regulation makes it unlawful, or any Governmental Entity asserts that it is
unlawful, for such Lender or its LIBOR Lending Office to make or maintain LIBOR
Rate Loans hereunder, (i) the obligation of such Lender to make or maintain
LIBOR Rate Loans shall be suspended until such Lender shall notify the Borrower
that the circumstances causing such suspension no longer exist and (ii) any
LIBOR Rate Loan then outstanding from such Lender shall immediately be converted
into a Base Rate Loan.
(d) Payments on Business Days. If any payment to be made hereunder or
under any Term Note shall be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day (and such extension of
time shall be included in computing interest in connection with such payment);
provided, however, that, in the case of a LIBOR Rate Loan, if such succeeding
Business Day falls in the next calendar month, such payment shall be made on the
next preceding Business Day.
(e) Partial Prepayments and Redemptions. All partial prepayments and
redemptions of the outstanding principal balance of the Loans shall be made
ratably amongst the applicable Lenders in accordance with their respective
shares of the aggregate outstanding principal balance of the Loans eligible for
prepayment or redemption.
(f) No Defense. To the fullest extent permitted by law, the Borrower
shall make all payments hereunder and under the Term Notes regardless of any
defense or counterclaim.
(g) Allocation. Any money paid to, received by, or collected by any
Administrative Agent or any Lender pursuant to this Agreement or any other Loan
Document shall be applied in the following order, at the date or dates fixed by
the Administrative Agent:
First: to any unpaid fees and reimbursement or unpaid expenses of the
Arrangers (in their capacity as Administrative Agent and/or as Lender) hereunder
and under the Fee Letter;
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Second: to the payment of all costs, expenses, other fees, commissions
and taxes owing to any Lender hereunder;
Third: to the indefeasible payment of all accrued interest to the date
of such payment or collection;
Fourth: to the indefeasible payment of the amounts then due and unpaid
under this Agreement, the Term Notes or any other Loan Document for principal,
in respect of which or for the benefit of which such money has been paid or
collected, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Term Notes for principal; and
Fifth: the balance, if any, to the Person lawfully entitled thereto.
Section 2.9 Taxes. (a) Any and all payments by the Borrower hereunder
or under the Term Notes, the Exchange Notes or any other Loan Document shall be
made, in accordance with Section 2.8 or the other applicable provision of the
applicable Loan Document, free and clear of and without deduction or withholding
for or on account of any and all present or future taxes, levies, imports,
deductions, charges or withholdings additions to tax, interest, penalties and
all other liabilities with respect thereto, excluding (i) income, franchise or
similar taxes imposed or levied on the Administrative Agent or the Lenders as a
result of a present or former connection between the Administrative Agent or the
Lenders and the jurisdiction of the governmental authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from such Administrative Agent or such Lenders
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement) and (ii) in the case of any Foreign Lender,
any taxes that are in effect and that would apply to a payment hereunder or
under the Term Notes, the Exchange Notes or any other Loan Document made to such
Foreign Lender as of the date such Foreign Lender becomes a party to this
Agreement, or in the case of any other Lender which changes its lending office
with respect to the Loan or the Exchange Notes to an office outside the U.S.,
any taxes that are in effect and would apply to a payment to such Lender as of
the date of the change of the lending office (all such non-excluded taxes,
levies, imports, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct or withhold any Taxes from, or in respect of, any sum payable hereunder
or under the Term Notes, the Exchange Notes or any other Loan Document to the
Administrative Agent or the Lenders or any of their respective Affiliates who
may become a Lender: (i) the sum payable thereunder shall be increased as may be
necessary so that after making all required deductions or withholdings
(including deductions or withholdings applicable to additional sums payable
under this Section 2.9) the Administrative Agent or the Lenders or any of their
respective Affiliates receives an amount equal to the sum it would have received
had no such deductions or withholdings been made; (ii) the Borrower shall make
such deductions or withholdings; and (iii) the Borrower shall pay the full
amount deducted to the relevant tax authority or other authority in accordance
with applicable laws.
(b) Other Taxes. In addition, the Borrower agrees to pay any present
or future stamp, mortgage recording or documentary taxes or any other excise or
property taxes, charges or
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32
similar levies which arise from any payment made hereunder or under a Term Note,
Exchange Note or other Loan Document or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or the other Loan
Documents (hereinafter referred to as "Other Taxes") and hold each
Administrative Agent and each Lender harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Lender) to pay such Other Taxes. Each Lender
represents that, to the best of its knowledge, except for any such Other Taxes
that may be imposed under the federal, state or local laws of the United States
(or any political subdivision thereof), it is not aware of any such stamp,
mortgage recording or documentary taxes or any other excise or property taxes,
charges or similar levies.
(c) Indemnity. The Borrower will indemnify any Administrative Agent
and any Lender for the full amount of Taxes or Other Taxes arising in connection
with payments made under this Agreement or any other Loan Document (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.9) paid by any Administrative Agent or any
Lender or any of their respective Affiliates and any liability (including
penalties, additions to tax interest and expenses) arising therefrom or with
respect thereto. Payment under this indemnification shall be made within fifteen
days from the date any Administrative Agent or any Lender or any of their
respective Affiliates makes written demand therefor; provided, however, that the
Borrower shall not be obligated to make payment to the Lender or the
Administrative Agent (as the case may be) pursuant to this Section 2.9(c) in
respect of penalties, interest and other liabilities attributable to any Taxes
or Other Taxes, if (i) written demand therefor has not been made by such Lender
or such Administrative Agent within 60 days from the date on which such Lender
or such Administrative Agent received written notice of the imposition of Taxes
or Other Taxes by the relevant taxing or governmental authority, but only to the
extent such penalties, interest and other similar liabilities are attributable
to such failure or delay by the Administrative Agent or the Lender in making
such written demand, (ii) such penalties, interest and other liabilities have
accrued after the Borrower had indemnified or paid an additional amount due as
of the date of such payment pursuant to this Section 2.9(c) or (iii) such
penalties, interest and other liabilities are attributable to the gross
negligence or willful misconduct of the Lender or the Administrative Agent or
such Affiliates. After the Lender or the Administrative Agent (as the case may
be) receives written notice of the imposition of the Taxes or Other Taxes which
are subject to this Section 2.9(c), such Lender and the Administrative Agent
will act in good faith to promptly notify the Borrower of its obligations
hereunder; provided, however, that the failure to so act shall not, standing
alone, affect the rights of the Administrative Agent or the Lenders under this
Section 2.9(c).
(d) Furnish Evidence to Administrative Agent. The Borrower will make
reasonable efforts to obtain certified copies of tax receipts evidencing the
payment of any Taxes deducted or withheld from each taxing authority imposing
such Taxes. The Borrower will furnish to the Lenders, within 60 days after the
date the payment of any Taxes so deducted or withheld is due pursuant to
applicable law, original or certified copies of tax receipts evidencing such
payment by the Borrower or, if such receipts are not obtainable, other evidence
of such payments by the Borrower reasonably satisfactory to the Lenders.
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33
(e) Survival. Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.9 shall survive the payment in full of all amounts
due hereunder and under the Term Notes.
(f) Mitigation. If the Borrower is required to pay additional amounts
to or for the account of any Lender pursuant to this Section 2.9 as a result of
a change in law or treaty occurring after such Lender first became a party to
this Agreement, then such Lender will, at the request of the Borrower, change
the jurisdiction of its Applicable Lending Office if such change (i) will
eliminate or reduce any such additional payment which may thereafter accrue and
(ii) is, in such Lender's sole, reasonable discretion, determined not to be
materially disadvantageous or cause unreasonable hardship to such Lender,
provided that fees, charges, costs or expenses that are related to such change
shall be borne by the Borrower on behalf of a Lender, and the mere existence of
such expenses, fees or costs shall not be deemed to be materially
disadvantageous or cause undue hardship to the Lender.
Each Lender and each Administrative Agent agrees that it will (i) take
all reasonable actions reasonably requested by the Borrower in writing that are
without material risk and cost to such Lender or such Administrative Agent and
consistent with the internal policies of such Lender and applicable legal and
regulatory restrictions (as the case may be) to maintain all exemptions, if any,
available to it from withholding taxes (whether available by treaty or existing
administrative waiver) and (ii) to the extent reasonable and without material
risk and cost to it, otherwise cooperate with the Borrower to minimize any
amounts payable by the Borrower under this Section 2.9; provided, however, that
in each case, any cost relating to such action or cooperation requested by the
Borrower shall be borne by the Borrower.
(g) Certification. Each Foreign Lender and Foreign Participant shall
deliver to the Borrower and the Administrative Agent, and if applicable, the
assigning Lender (and, in the case of a Foreign Participant, to the Lender from
which the related participation shall have been purchased) on or before the date
on which it becomes a party to this Agreement (or, in the case of a Foreign
Participant, on or before the date on which such Participant purchases the
related Participation) either:
(i) two duly completed and signed copies of either Internal Revenue
Service Form 1001 or its successor form or Form 4224 or its successor form and
related applicable forms, as the case may be; or
(ii) in the case of a Foreign Lender that is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and that does not comply with the
requirements of clause (A) hereof, (x) a statement to the effect that such
Lender is eligible for a complete exemption from withholding of U.S. Taxes under
Code Section 871(h) or 881(c), and (y) two duly completed and signed copies of
Internal Revenue Service Form W-8 or successor and related applicable form.
Further, each Foreign Lender or Foreign Participant agrees (x) to
deliver to the Borrower and the Administrative Agent, and if applicable, the
assigning Lender (and, in the case of a Foreign Participant, to the Lender from
which the related Participation shall have been purchased) two
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34
further duly completed and signed copies of such Forms 1001 or 4224, as the case
may be, or successor and related applicable forms, on or before the date that
any such form expires or becomes obsolete and promptly after the occurrence of
any event requiring a change from the most recent form(s) previously delivered
by it in accordance with applicable U.S. laws and regulations and (y) in the
case of a Foreign Lender that delivers a statement pursuant to Section
2.9(g)(ii) above, to deliver to the Borrower and the Administrative Agent, and
if applicable, the assigning Lender, such statement on an annual basis on the
anniversary of the date on which such Foreign Lender became a party to this
Agreement and to deliver promptly to the Borrower and the Administrative Agent,
and if applicable, the assigning Lender, such additional statements and forms as
shall be reasonably requested by the Borrower from time to time unless, in any
such case, any change in law or regulation has occurred subsequent to the date
such Foreign Lender became a party to this Agreement (or in the case of a
Foreign Participant, the date on which such Foreign Participant purchased the
related Participation) which renders all such forms inapplicable or which would
prevent such Lender (or Participant) from properly completing and executing any
such form with respect to it and such Lender promptly notifies the Borrower and
the Administrative Agent (and, in the case of a Foreign Participant, the Lender
from which the related participation shall have been purchased) if it is no
longer able to deliver, or if it is required to withdraw or cancel, any form or
statement previously delivered by it pursuant to this Section 2.9(g).
(h) Failure to Provide Certification. Notwithstanding any provision of
this Agreement, the Borrower shall not be required to pay any Taxes or Other
Taxes pursuant to this Section 2.9 in respect of U.S. federal income taxes if
the obligation to withhold with respect to such Taxes or Other Taxes results
from, or would not have occurred but for, the failure of any Foreign Lender or
Foreign Participant to deliver the forms described in the preceding Section 2.9
in the manner and at the times specified in such paragraphs. A Foreign Lender or
Foreign Participant shall not be required to deliver any form or statement
pursuant to Section 2.9(g) that such Foreign Lender or Foreign Participant is
not legally able to deliver.
(i) Tax Benefit. If and to the extent that any Lender is able, in its
sole opinion, to apply or otherwise take advantage of any offsetting tax credit
or other similar tax benefit arising out of or in conjunction with any deduction
or withholding which gives rise to an obligation on the Borrower to pay any
Taxes or Other Taxes pursuant to this Section 2.9 then such Lender shall, to the
extent that in its sole opinion it can do so without prejudice to the retention
of the amount of such credit or benefit and without any other adverse tax
consequences for such Lender, reimburse to the Borrower at such time as such tax
credit or benefit shall have actually been received by such Lender such amount
as such Lender shall, in its sole opinion, have determined to be attributable to
the relevant deduction or withholding and as will leave such Lender in no better
or worse position than it would have been in if the payment of such Taxes or
Other Taxes had not been required.
Nothing in this Section 2.9 shall oblige any Lender to disclose to the
Borrower or any other person any information regarding its tax affairs or tax
computations or interfere with the right of any Lender to arrange its tax
affairs in whatever manner it thinks fit and, in particular, no Lender shall be
under any obligation to claim relief from its corporate profits or similar tax
liability in credits or
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35
deductions available to it and, if it does claim, the extent, order and manner
in which it does so shall be at its absolute discretion.
Section 2.10 Right of Set Off; Sharing of Payments, Etc. (a) Right of
Set-Off. In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default or if the Borrower
becomes insolvent, however evidenced, the Borrower authorizes each Lender at any
time or from time to time, without presentment, demand, protest or other notice
of any kind to the Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special, time or demand, provisional or final, whether or not
collected or available) in any currency and any other indebtedness at any time
held by or owing to such Lender or any of its Affiliates (including, without
limitation, by branches and agencies of such Lender wherever located) to or for
the credit or the account of the Borrower against and on account of the
Obligations of the Borrower to such Lender under this Agreement or under any of
the other Loan Documents, including, without limitation, all interests in or
participation in the Obligations purchased by such Lender, and all other claims
of any nature or description arising out of or in connection with this Agreement
or any other Loan Document, irrespective of whether or not such Lender shall
have made any demand hereunder and although the Obligations, liabilities or
claims, or any of them, shall be contingent or unmatured. A Lender may exercise
such rights notwithstanding that the amounts concerned may be expressed in
different currencies and each Lender is authorized to effect any necessary
conversions at a market rate of exchange selected by it. A Lender exercising its
rights under this Section 2.10(a) shall provide prompt notice to the Borrower
following such exercise.
(b) Sharing. If any Lender shall obtain from the Borrower payment of
any principal of or interest on any Loan owing to it or payment of any other
amount under this Agreement, a Loan Document or any Term Note held by it though
the exercise of any right of set-off, banker's lien or counterclaim or similar
right or otherwise (other than from the Administrative Agent as provided herein)
and, as a result of such payment, such Lender shall have received a greater
percentage of the principal of or interest on the Loans or such other amounts
then due to such Lender by the Borrower than the percentage received by any
other Lenders, it shall promptly purchase from such other Lenders participation
in (or, if and to the extent specified by such Lender, direct interests in) the
Loans or such other amounts, respectively, owing to such other Lenders (or any
interest due thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all the
Lenders shall share the benefit of such excess payment (net of any expenses
which may be incurred by such Lender in obtaining or preserving such excess
payment) pro rata in accordance with the unpaid principal of and/or interest on
the Loans or such other amounts, respectively, owing to each of the Lenders. To
such end all the Lenders shall make appropriate adjustments among themselves (by
the resale of participations sold or otherwise) if such payment is rescinded or
must otherwise be restored.
(c) No Requirement. Nothing in this Agreement shall require any Lender
to exercise any such right or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower. If, under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim
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36
in lieu of a set-off to which this Section 2.10 applies, such Lender shall, to
the extent practicable, exercise its rights in respect of such secured claim in
a manner consistent with the rights of the Lenders entitled under this Section
2.10 to share in the benefits of any recovery on such secured claim.
Section 2.11 Certain Fees. The Borrower agrees to pay to each Arranger
(in its capacity as Administrative Agent and/or as Lender), for its own account,
the fees specified in the Fee Letter with respect to the Term Loans and Exchange
Notes, amounts for its expenses incurred hereunder and all other amounts owing
under this Agreement and the other Loan Documents.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
As of the date hereof and as of the Closing Date, the Borrower hereby
agrees with, and represents and warrants to, the Lenders that each of the
following representations and warranties is true and will be true after giving
pro forma effect to the making of the Loans hereunder (but not, unless otherwise
explicitly stated, the consummation of the Acquisition):
Section 3.1 Acquisition Agreements. (a) As of the Funding Date, the
representations and warranties of GTE Wireless contained in the Acquisition
Agreement are hereby made by the Borrower and incorporated herein by reference
for the benefit of the Lenders (without giving effect to any waivers thereof or
amendment thereto subsequent to the date hereof) and are true and correct in all
respects except to the extent which, individually or in the aggregate, would not
result in a material adverse effect on the condition (financial or other),
business, prospects, properties or results of operations of the operations
acquired pursuant to the Acquisition.
(b) As of the date of this Agreement and as of the Funding Date, (i)
the Acquisition Agreements are in full force and effect, and (ii) the Borrower
has not received any notice of default under any of the Acquisition Agreements,
and is not aware of the occurrence, or any impending or threatened occurrence,
of any event which would cause or constitute a breach or default of any of the
representations, warranties or covenants of any party contained in or referred
to in any Acquisition Agreement.
(c) As of the date of this Agreement and as of the Funding Date, the
BAM Formation Agreement is in full force and effect and, to the knowledge of the
Borrower, all of the conditions to the consummation of the BAM Joint Venture
contained in the BAM Formation Agreement have been satisfied without waiver.
(d) As of the date of this Agreement, all of the Borrower's cash
obligations under the BAM Formation Agreement have been satisfied or waived, and
the BAM Funds have been fully expended, refunded, reimbursed, repaid or
otherwise recovered by the Borrower.
Section 3.2 Organization; Powers. The Borrower has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of Delaware with power and corporate authority to own its
properties and conduct its business as now conducted and as
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37
proposed to be conducted, and has been duly qualified and is in good standing
under the laws of each other jurisdiction, or place where the nature of its
properties or the conduct of its business requires such qualification, except
where the failure to so register or qualify or to be in good standing would not
have a Material Adverse Effect; and each Subsidiary of the Borrower has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation.
Section 3.3 Due Authorization and Enforceability. (a) Each of the
Transaction Documents: (i) has been duly authorized, executed and delivered by
the Borrower and each of its Subsidiaries (to the extent each is a party
thereto) and (ii) assuming due authorization, execution and delivery by the
Lenders, constitutes a valid and binding obligation of Borrower and each of its
Subsidiaries (to the extent each is a party thereto) enforceable against each
such Person in accordance with its terms (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and other similar
laws affecting creditors' rights from time to time in effect and to general
equity principles including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether in a
proceeding at law or equity).
(b) The Loans, the Term Notes and the Exchange Notes have been duly
authorized by the Borrower. When the Term Notes and the Exchange Notes have been
executed and delivered pursuant to the terms of this Agreement or the Exchange
Note Indenture, as applicable, each of the Term Notes and, assuming due
authentication of the Exchange Notes by the Exchange Note Trustee, the Exchange
Notes will be valid and binding obligations of the Borrower, enforceable against
it in accordance with their terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws affecting
creditors' rights from time to time in effect and to general equity principles
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing, regardless of whether in a proceeding at law or equity).
Section 3.4 No Conflicts; No Consents. (i)The execution and delivery
of the Acquisition Agreements and the consummation of the transactions completed
thereunder as of the date hereof have not, and the consummation of the further
transactions contemplated thereby and the compliance with the terms and
provisions thereof will not, and (ii) the execution and delivery of the Loan
Documents, the consummation of the transactions contemplated hereby and
compliance with the terms and provisions hereof will not, (a) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement or other similar financing agreement or
instrument or other agreement or instrument to which the Borrower or any of its
Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is
bound or to which any of the property or assets of the Borrower or any of its
Subsidiaries is subject, except such breaches, violations or defaults that in
the aggregate would not have a Material Adverse Effect, (b) result in any
violation of the provisions of the Certificate of Incorporation or By-laws of
the Borrower, (c) result any violation of the provisions of any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Borrower or any of its Subsidiaries or any of their
properties, or (d) result in any violation of any Certificate of Designations
governing any series of the Borrower's preferred stock, except such violations
that in the aggregate would not have a Material Adverse Effect. No consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or
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38
body is required for the consummation by the Borrower of the transactions
contemplated by this Agreement, the Exchange Note Indenture, the Escrow
Agreement the Registration Rights Agreement or the Acquisition Agreements, or
the issuance and delivery of the Exchange Notes by the Borrower, except for such
consents, approvals, authorizations, registrations or qualifications (A) as may
be required by securities or "blue sky" laws of any State of the United States
in connection with the Exchange Notes, (B) as contemplated by the Registration
Rights Agreement, (C) as may already have been obtained or made and (D) which
the failure to obtain or make would not, individually or in the aggregate,
result in a Material Adverse Effect.
Section 3.5 No Violations; Material Contracts. Neither the Borrower
nor any of its Subsidiaries is in violation of its Certificate of Incorporation
or By-laws or in default in any material respect in the performance or
observance of any obligation, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties may be
bound, including without limitation the Acquisition Agreements, except for such
defaults that, in the aggregate, would not have a Material Adverse Effect.
Section 3.6 Capital Stock; Subsidiaries. The Borrower has an
authorized capitalization as set forth on its Annual Report on Form 10-K for the
year ended December 31, 1999 as filed with the SEC under the Exchange Act, and
all of the issued shares of capital stock of the Borrower have been duly and
validly authorized and issued and are fully paid and non-assessable; and all of
the issued shares of capital stock of each subsidiary of the Borrower have been
duly and validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares and except for (i) the minority
interest of CTSH owned by TdF and its affiliates, (ii) the minority interest of
Crown Castle Atlantic Holdings LLC owned by BAM, (iii) the minority interest of
HoldCo owned by GTE Wireless and (iv) the minority interest of Crown Castle
Australia Limited owned by a group of investors led by Fay Richwhite Limited,
are owned directly or indirectly by the Borrower, free and clear of all Liens
other than the Liens under (x) the Senior Credit Facility, (y) CTI's
(Pounds)150,000,000 credit facility dated June 18, 1999 with Credit Suisse First
Boston and the other parties named therein, and (z) the Loan Agreement dated as
of March 31, 1999 by and among Crown Atlantic Holdco Sub LLC, as borrower, Key
Corporate Capital Inc., as agent and the financial institutions listed therein,
together with the guarantees thereof.
Section 3.7 Liens. There are no Liens on any assets of the Borrower or
any of its Subsidiaries except Permitted Liens.
Section 3.8 Governmental Regulations. None of the Borrower or any of
its Subsidiaries is or will be subject to regulation under the Investment
Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935,
as amended, the Federal Power Act, the Interstate Commerce Act or to any other
statute, rule or regulation limiting its ability to incur Indebtedness for
borrowed money.
Section 3.9 [Reserved.].
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39
Section 3.10 Financial Statements; No Undisclosed Liabilities. (a) The
consolidated balance sheet of the Borrower and its Subsidiaries as of December
31, 1999 that is attached hereto as Schedule 3.10(a) fairly presents the
consolidated financial position of the Borrower and its Subsidiaries as of such
date, in accordance with GAAP consistently applied (except as otherwise
specifically indicated therein). The consolidated statements of income and cash
flows of the Borrower and its Subsidiaries that are attached hereto as Schedule
3.10(a) have been prepared in conformity with GAAP applied on a consistent basis
through all the periods involved (except as otherwise specifically indicated
therein) and fairly present the consolidated results of operations of each of
the Borrower and its Subsidiaries for the periods indicated.
(b) As of the date of this Agreement and the Funding Date, any
projections provided to the Arrangers, including the financial and other
information provided by the Borrower for use in the syndication of the Senior
Credit Facility in effect on the Issue Date (including the information contained
in Schedule 3.10(b)), were prepared in good faith with a reasonable basis for
the assumptions and conclusions reached therein and on a basis reasonably
consistent with the Borrower's historical financial data, and no information has
come to the attention of the Borrower that would lead the Borrower to believe
that such projections are no longer based on reasonable assumptions or that the
conclusions reached therein are no longer valid.
(c) The historical and pro forma financial statements attached hereto
as Schedule 3.10(a) comply as to form with the requirements applicable to such
financial statements in, and constitute all of the financial statements required
by, Regulation S-X of the Securities Act for a Form S-1 registration statement.
(d) Neither the Borrower nor any of its Subsidiaries (prior to giving
effect to the consummation of the Transactions) has any liability (direct or
contingent) except (i) those shown on the most recent audited balance sheets
described in Section 3.10(a), (ii) those incurred under the Transaction
Documents, (iii) those incurred in connection with borrowings under the Senior
Credit Facility, (iv) those incurred under the Loan Agreement dated as of March
31, 1999 by and among Crown Atlantic Holdco Sub LLC, as the borrower, Key
Corporate Capital Inc., as agent, and the financial institutions listed therein
and (v) those incurred in the ordinary course of business since the date of such
audited balance sheets.
(e) For purposes of this Section 3.10, all financial statements
required pursuant to Section 5.5 of this Agreement, once approved by the
Lenders, shall be added to Schedule 3.10(a) as appropriate, and shall become
subject to the Borrower's representations contained in Sections 3.10(a) through
3.10(d) above.
Section 3.11 Full Disclosure. No information, report, financial
statement or certificate delivered or to be delivered to the Lenders in
connection with the Transactions contains or will contain any untrue statement
of material fact or omitted or omits or will omit to state a material fact
necessary to make such statements not misleading in light of the circumstances
in which such statements were made; provided that to the extent any such
information, report, financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection or pro forma financial information, the
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40
Borrower represents only that it acted in good faith and utilized reasonable
assumptions and due care in the preparation of such information, report,
financial statement, exhibit or schedule. The Borrower has disclosed to the
Lenders in all material respects the status of negotiations concerning each
acquisition (other than the Acquisition) currently being actively considered by
the Borrower or any of its controlled Affiliates.
Section 3.12 Private Offering; Rule 144A Matters. (a) Based in part on
the accuracy of the representations and warranties of, and compliance with the
covenants and agreements by, the Lenders in Section 6.1, the issuance of the
instruments evidencing the Securities are and will be exempt from the
registration and prospectus delivery requirements of the Securities Act. The
Borrower has not issued or sold Securities to anyone other than the Lenders. No
securities of the same class as the Securities have been issued or sold by the
Borrower within the six-month period immediately prior to the date hereof. The
Borrower agrees that neither it, nor anyone acting on its behalf, will (i) offer
the Securities so as to subject the making, issuance and/or sale of the
Securities to the registration or prospectus delivery requirements of the
Securities Act or (ii) offer any securities that are similar to the Securities
for issuance or sale to, or solicit any offer to acquire any of the same from,
or otherwise approach or negotiate with respect to the same with, anyone if the
issuance or sale of the Securities and any such securities would be integrated
as a single offering for the purposes of the Securities Act, including without
limitation, Regulation D thereunder, in such a manner as would require
registration under the Securities Act thereof. Subject to the terms of the
Exchange Note Indenture and the Escrow Agreement, each of the Exchange Notes
will bear a legend setting forth the restrictions on the transferability thereof
imposed by the Securities Act for so long as such restrictions apply.
(b) In the case of each offer, sale or issuance of the Securities no
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) was or will be used by the Borrower or
their representatives, including, but not limited to, advertisements, articles,
notices or other communications published in any newspaper, magazine or similar
medium or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
(c) The Securities will be eligible for resale pursuant to Rule 144A
under the Securities Act. When the Securities are issued and delivered pursuant
to the Transaction Documents, they will not be of the same class (within the
meaning of Rule 144A(d) (3) under the Securities Act) as any other security of
the Borrower that is listed on a national securities exchange registered under
Section 6 of the Exchange Act or that is quoted in a United States automated
interdealer quotation system. Neither the issuance of the Exchange Notes nor the
execution, delivery and performance of the Transaction Documents (other than the
Registration Rights Agreement) will require the qualification of an indenture
under the Trust Indenture Act.
Section 3.13 Absence of Proceedings. There are no legal or
governmental proceedings pending to which the Borrower or any of its
Subsidiaries is a party or of which any property of the Borrower or any of its
Subsidiaries is the subject which, if determined adversely to the Borrower or
any of its Subsidiaries, would individually or in the aggregate have a Material
Adverse
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41
Effect; and, to the best of the Borrower's knowledge, no such proceedings are
threatened by governmental authorities or by others.
Section 3.14 Taxes. The Borrower and its Subsidiaries have duly and
timely filed all required material tax returns required to be filed through the
date hereof and paid prior to delinquency all material taxes, assessments, and
governmental levies due thereon except those not in the process of enforcement
and being contested in good faith and by appropriate proceedings.
Section 3.15 Financial Condition; Solvency. (a) The Borrower is, and
immediately after giving effect to the making of the Loans will be, Solvent.
(b) The Borrower does not intend to incur debts beyond its ability to
pay such debts as they mature, taking into account the timing and amounts of
cash to be received by it and the timing and amounts of cash to be payable on or
in respect of its Indebtedness.
Section 3.16 Absence of Certain Changes. Since December 31, 1999,
there has not been any event or series of events, adverse condition or change in
or affecting the Borrower that, individually or in the aggregate, has had or
would have a Material Adverse Effect.
Section 3.17 [Reserved.]
Section 3.18 Properties. The Borrower and its Subsidiaries have good
and indefeasible title to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as would not be reasonably expected, in the
aggregate, to result in a Material Adverse Effect; and any real property and
buildings held under lease by the Borrower and its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as would not
be reasonably expected, in the aggregate, to result in a Material Adverse
Effect.
Section 3.19 Permits; Registration. (a) The Borrower and each of the
Significant Subsidiaries has such permits, licenses, franchises, certificates of
need and other approvals or authorizations of any governmental or regulatory
authority ("Permits"), including, without limitation, any permits required by
the Federal Communications Commission ("FCC"), the Federal Aviation
Administration or the Office of Telecommunications, as are necessary under
applicable law to own their respective properties and to conduct their
respective businesses, except to the extent that the failure to have such
Permits would not have a Material Adverse Effect. The Borrower and the
Significant Subsidiaries have fulfilled and performed in all material respects,
all their respective obligations with respect to the Permits, and no event has
occurred which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of the rights
of the holder of any such Permit, except to the extent that any such revocation
or termination would not have a Material Adverse Effect. None of the Permits
contains any restriction that has not previously been satisfied and that is
materially burdensome to the Borrower or any of the Significant Subsidiaries
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42
(b) For each existing tower of the Borrower not yet registered with
the FCC where registration will be required, the FCC's grant of an application
for registration of such tower will not have a significant environmental effect
as defined under Section 1.1307(a) of the FCC's rules.
Section 3.20 ERISA. The Borrower and each of the Significant
Subsidiaries are in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder
("ERISA"); no "reportable event" (as defined in ERISA) has occurred with respect
to any "pension plan" (as defined in ERISA) for which the Borrower would have
any liability; the Borrower has not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Code;
and each "pension plan" for which the Borrower would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification.
Section 3.21 Environmental Matters. There has been no storage,
disposal, generation, manufacture, refinement, transportation, handling or
treatment of toxic wastes, medical wastes, hazardous wastes or hazardous
substances by the Borrower or any of its Subsidiaries (or, to the knowledge of
the Borrower, any of their predecessors in interest) at, upon or from any of the
property now or previously owned or leased by the Borrower or any of its
Subsidiaries in violation of any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit or which would require remedial action under
any applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not have, or
could not be reasonably likely to have, singularly or in the aggregate, a
Material Adverse Effect; there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such property
or into the environment surrounding such property in a manner reasonably likely
to affect such property of any toxic wastes, medical wastes, solid wastes,
hazardous wastes or hazardous substances due to or caused by the Borrower or any
of its Subsidiaries or with respect to which the Borrower or any of its
subsidiaries has knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate, a Material
Adverse Effect; and the terms "hazardous wastes," "toxic wastes," "hazardous
substances" and "medical wastes" shall have the meanings specified in any
applicable local, state, federal and foreign laws or regulations with respect to
environmental protection.
ARTICLE IV.
COVENANTS
So long as any Commitment shall remain outstanding or any Obligation
shall remain unpaid, the Borrower covenants and agrees with the Lenders as
follows:
Section 4.1 Use of Proceeds. The Borrower shall use the proceeds of
the Loans solely to finance the Acquisition and pay certain transaction costs,
fees and expenses related thereto.
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43
The Borrower will use the net proceeds received by it from the sale of the
Permanent Securities to repay the Loans and Exchange Notes.
Section 4.2 Notice of Default and Related Matters. The Borrower shall
furnish to the Administrative Agent (with copies for each Lender) written
notice, promptly upon becoming aware of the existence of:
(a) any condition or event that constitutes a Default or an Event of
Default, specifying the nature and period of existence thereof and the action
taken or proposed to be taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any Person to file or commence, any action, suit or proceeding,
whether at law or in equity or by or before any Governmental Entity, against or
affecting the Borrower or any of its Subsidiaries or any of their respective
Affiliates that could reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Effect; and
(c) any development that, individually or in the aggregate, has
resulted in, or could reasonably be expected to have, a Material Adverse Effect.
Section 4.3 Reports. Whether or not required by the rules and
regulations of the SEC, so long as any Term Notes are outstanding, the Borrower
shall furnish to the Lenders (i) all quarterly and annual financial information
that would be required to be contained in a filing with the SEC on Forms 10-Q
and 10-K if the Borrower were required to file such forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries (showing in reasonable detail, in
the footnotes to the financial statements and in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" (in each case to the
extent not prohibited by the SEC's rules and regulations), (A) the financial
condition and results of operations of the Borrower and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Borrower and (B) the Tower Cash Flow for
the most recently completed fiscal quarter and the Adjusted Consolidated Cash
Flow for the most recently completed four-quarter period) and, with respect to
the annual information only, a report thereon by the Borrower's certified
independent accountants and (ii) all current reports that would be required to
be filed with the SEC on Form 8-K if the Borrower were required to file such
reports, in each case within the time periods specified in the SEC's rules and
regulations. In addition, whether or not required by the rules and regulations
of the SEC, the Borrower shall file a copy of all such information and reports
with the SEC for public availability within the time periods specified in the
SEC's rules and regulations (unless the SEC will not accept such a filing) and
make such information available to securities analysts and prospective investors
upon request.
Section 4.4 Compliance Certificate. (a) The Borrower shall deliver to
the Administrative Agent, within 90 days after the end of each fiscal year, an
Officers' Certificate stating that a review of the activities of the Borrower
and its Subsidiaries during the preceding fiscal year has
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44
been made under the supervision of the signing Officers with a view to
determining whether the Borrower has kept, observed, performed and fulfilled its
obligations under this Agreement, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Borrower
has kept, observed, performed and fulfilled each and every covenant contained in
this Agreement and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Agreement (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Borrower is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest or Liquidated Damages, if
any, on the Term Loans is prohibited or if such event has occurred, a
description of the event and what action the Borrower is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.3 above shall be accompanied by a
written statement of the Borrower's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Borrower has violated
any provisions of Article IV hereof or, if any such violation has occurred,
specifying the nature and period of existence thereof, it being understood that
such accountants shall not be liable directly or indirectly to any Person for
any failure to obtain knowledge of any such violation.
(c) The Borrower shall, so long as any of the Term Notes are
outstanding, deliver to the Administrative Agent, forthwith upon any Officer
becoming aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Borrower is
taking or proposes to take with respect thereto.
(d) Immediately upon the occurrence of any event giving rise to the
accrual of Liquidated Damages or the cessation of such accrual, the Borrower
shall give the Administrative Agent notice thereof and of the event giving rise
to such accrual or cessation (such notice to be contained in an Officer's
Certificate) and prior to receipt of such Officer's Certificate the
Administrative Agent shall be entitled to assume that no such accrual has
commenced or ceased, as the case may be.
Section 4.5 Taxes. The Borrower shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Lenders.
Section 4.6 Stay, Extension and Usury Laws. The Borrower covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Agreement; and the Borrower (to the extent that it may lawfully do so) hereby
expressly waives all
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45
benefit or advantage of any such law, and covenants that it shall not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Lenders, but shall suffer and permit the execution of every such
power as though no such law has been enacted.
Section 4.7 Restricted Payments. The Borrower shall not, and shall not
permit any of its Restricted Subsidiaries to, directly or indirectly: (i)
declare or pay any dividend or make any other payment or distribution on account
of the Borrower's or any of its Restricted Subsidiaries' Equity Interests
(including, without limitation, any payment in connection with any merger or
consolidation involving the Borrower or any of its Restricted Subsidiaries) or
to the direct or indirect holders of the Borrower's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
the Borrower or to the Borrower or a Restricted Subsidiary of the Borrower);
(ii) purchase, redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation involving the
Borrower) any Equity Interests of the Borrower or any direct or indirect parent
of the Borrower (other than any such Equity Interests owned by the Borrower or
any Restricted Subsidiary of the Borrower); (iii) make any payment on or with
respect to, or purchase, redeem, defease or otherwise acquire or retire for
value any Indebtedness that is subordinated to the Term Notes, except a payment
of interest or the payment of principal at Stated Maturity; or (iv) make any
Restricted Investment (all such payments and other actions set forth in clauses
(i) through (iv) above, including those occurring since the date of the May 1999
Senior Discount Note Indenture, being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Default shall have occurred and be continuing or would occur as
a consequence thereof; and
(b) the Borrower would have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Debt to Adjusted Cash Flow Ratio test
set forth in Section 4.9; provided that the Borrower and its Restricted
Subsidiaries shall not be required to comply with this clause (b) to make
Restricted Investments; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Borrower and its Restricted Subsidiaries
after the date of the May 1999 Senior Discount Note Indenture, (excluding
Restricted Payments permitted by clauses (ii), (iii) and (iv) of the next
succeeding paragraph), is less than the sum, without duplication, of (i) 100% of
the Consolidated Cash Flow of the Borrower for the period (taken as one
accounting period) from the beginning of the first fiscal quarter during which
the May 1999 Senior Discount Note Indenture was executed to the end of the
Borrower's most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, if such
Consolidated Cash Flow for such period is a deficit, less 100% of such deficit),
less 1.75 times the Consolidated Interest Expense of the Borrower since the
beginning of the fiscal quarter during which May 1999 Senior Discount Note
Indenture was executed, plus (ii) 100% of the aggregate net cash proceeds
received by the Borrower since the beginning of the fiscal quarter during which
the May 1999 Senior Discount Note Indenture
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46
was executed as a contribution to its common equity capital or from the issue or
sale of Equity Interests of the Borrower (other than Disqualified Stock and
except to the extent such net cash proceeds are used to incur new Indebtedness
outstanding pursuant to clause (xi) in Section 4.9) or from the issue or sale of
Disqualified Stock or debt securities of the Borrower that have been converted
into such Equity Interests (other than Equity Interests (or Disqualified Stock
or convertible debt securities) sold to a Subsidiary of the Borrower and other
than Disqualified Stock or convertible debt securities that have been converted
into Disqualified Stock), plus (iii) to the extent that any Restricted
Investment that was made after the date of the May 1999 Senior Discount Note
Indenture is sold for cash or otherwise liquidated or repaid for cash, the
lesser of (A) the cash return of capital with respect to such Restricted
Investment (less the cost of disposition, if any) and (B) the initial amount of
such Restricted Investment, plus (iv) to the extent that any Unrestricted
Subsidiary of the Borrower and all of the Subsidiaries of such Unrestricted
Subsidiary are designated as Restricted Subsidiaries after the date of the
August 1999 Senior Discount Note Indenture, the lesser of (A) the fair market
value of the Borrower's Investment in such Subsidiaries as of the date of such
designation, or (B) the sum of (x) the fair market value of the Borrower's
Investment in such Subsidiaries as of the date on which such Subsidiaries were
originally designated as Unrestricted Subsidiaries and (y) the amount of any
Investments made in such Subsidiaries subsequent to such designation (and
treated as a Restricted Payment) by the Borrower or any Restricted Subsidiary;
provided that (i) in the event the Unrestricted Subsidiaries designated as a
Restricted Subsidiary are CTSH and its Subsidiaries, the references in clauses
(A) and (B) of this clause (iv) to fair market value of the Borrower's
Investments in such Subsidiaries shall mean the amount by which the fair market
value of all such Investments exceeds 34.3% of the fair market value of CTSH and
its Subsidiaries as a whole and (ii) in the event the Unrestricted Subsidiaries
designated as Restricted Subsidiaries are CCAIC and its Subsidiaries, the
references in clauses (A) and (B) of this clause (d) to fair market value of the
Borrower's Investments in such Subsidiaries shall mean the amount by which the
fair market value of all such Investments exceeds $250.0 million, plus (v) 50%
of any dividends received by the Borrower or a Restricted Subsidiary after the
date of the May 1999 Senior Discount Note Indenture from an Unrestricted
Subsidiary of the Borrower, to the extent that such dividends were not otherwise
included in Consolidated Net Income of the Borrower for such period.
The foregoing provisions shall not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Agreement;
(ii) the making of any Investment or the redemption, repurchase,
retirement, defeasance or other acquisition of any subordinated Indebtedness or
Equity Interests of the Borrower in exchange for, or out of the net cash
proceeds from the sale since the beginning of the fiscal quarter during which
the May 1999 Senior Discount Note Indenture was executed (other than to a
Subsidiary of the Borrower) of Equity Interests of the Borrower (other than any
Disqualified Stock); provided that such net cash proceeds are not used to incur
new
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47
Indebtedness pursuant to clause (xi) in Section 4.9); and provided further that,
in each such case, the amount of any such net cash proceeds that are so utilized
shall be excluded from clause (c) (ii) of the preceding paragraph;
(iii) the payment of any dividend by a Restricted Subsidiary of the
Borrower to the holders of its common Equity Interests on a pro rata basis;
(iv) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness:
(v) the repurchase, redemption or other acquisition or retirement for
value of any equity Interests of the Borrower or any Restricted Subsidiary of
the Borrower held by any member of the Borrower's (or any of its Restricted
Subsidiaries') management pursuant to any management equity subscription
agreement or stock option agreement in effect as of the date of the May 1999
Senior Discount Note Indenture; provided that the aggregate price paid for all
of the repurchased, redeemed, acquired or retired Equity Interests may not
exceed (a) $500,000 in any twelve-month period and (b) $5.0 million in the
aggregate since the date of the August 1999 Senior Discount Note Indenture; or
(vi) the payment of scheduled dividends on the Borrower's 12-3/4%
Senior Exchangeable Preferred Stock due 2010, whether paid in cash or in kind
through the issuance of additional shares of such preferred stock, all in
accordance with the certificate of designations governing such preferred stock
as in effect on the date of the May 1999 Senior Discount Note Indenture.
The Board of Directors may designate any Restricted Subsidiary to be
an Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Borrower and its Restricted Subsidiaries (except to the extent repaid in cash)
in the Subsidiary so designated shall be deemed to be Restricted Payments at the
time of such designation and shall reduce the amount available for Restricted
Payments under the first paragraph of this covenant. All such outstanding
Investments will be deemed to constitute Investments in an amount equal to the
fair market value of such Investments at the time of such designation. Such
designation will only be permitted if such Restricted Payment would be permitted
at such time and if such Restricted Subsidiary otherwise meets the definition of
an Unrestricted Subsidiary. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary if such designation would
not cause a Default.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Borrower or the
applicable Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. The fair market value of any property, assets or Investments required
by this covenant to be valued will be determined by the Board of Directors whose
resolution with respect thereto shall be delivered to the Administrative Agent.
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48
Section 4.8 Dividend and Other Payment Restrictions Affecting
Subsidiaries. The Borrower shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to
the Borrower or any of its Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any indebtedness owed to the Borrower or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Borrower or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets to
the Borrower or any of its Restricted Subsidiaries. However, the foregoing
restrictions shall not apply to encumbrances or restrictions existing under or
by reason of (a) Existing Indebtedness as in effect on the date hereof and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof; provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are no more restrictive, taken as a whole, with
respect to such dividend and other payment restrictions than those contained in
the applicable series of Existing Indebtedness as in effect on the date hereof,
(b) Indebtedness of any Restricted Subsidiary under any Credit Facility that is
permitted to be incurred pursuant to Section 4.9 hereof; provided that such
Credit Facility and Indebtedness contain only such encumbrances and restrictions
on such Restricted Subsidiary's ability to engage in the activities set forth in
clauses (i) through (iii) above as are, at the time such Credit Facility is
entered into or amended, modified, restated, renewed, increased, supplemented,
refunded, replaced or refinanced, ordinary and customary for a Credit Facility
of that type as determined in the good faith judgment of the Board of Directors
(and evidenced in a board resolution), which determination shall be conclusively
binding, (c) encumbrances and restrictions applicable to any Unrestricted
Subsidiary, as the same are in effect as of the date on which such Subsidiary
becomes a Restricted Subsidiary, and as the same may be amended, modified,
restated, renewed, increased, supplemented, refunded, replaced or refinanced;
provided that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings are no more restrictive,
taken as a whole, with respect to such dividend and other payment restrictions
than those contained in the applicable series of Indebtedness of such Subsidiary
as in effect on the date on which such Subsidiary becomes a Restricted
Subsidiary, (d) any Indebtedness incurred in compliance with Section 4.9 hereof
or any agreement pursuant to which such Indebtedness is issued if the
encumbrance or restriction applies only in the event of a payment default or
default with respect to a financial covenant contained in the Indebtedness or
agreement and the encumbrance or restriction is not materially more
disadvantageous to the Lenders than is customary in comparable financings (as
determined by the Borrower) and the Borrower determines that any such
encumbrance or restriction will not materially affect the Borrowers's ability to
pay interest on or the principal of the Term Notes, (e) this Agreement, the Term
Notes and the Exchange Note Indenture, (f) applicable law, (g) any instrument
governing Indebtedness or Capital Stock of a Person acquired by the Borrower or
any of its Restricted Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired, provided that,
in the case of Indebtedness, such Indebtedness was permitted by the terms of
this Agreement to be incurred, (h) customary non-assignment provisions in leases
or licenses entered into in the ordinary course of business, (i) purchase money
obligations for property acquired in the ordinary course of
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49
business that impose restrictions of the nature described in clause (v) of the
second paragraph of Section 4.9 on the property so acquired, (j) the provisions
of agreements governing Indebtedness incurred pursuant to clause (iv) of the
second paragraph of Section 4.9, (k) any agreement for the sale of a Restricted
Subsidiary that restricts that Restricted Subsidiary pending its sale, (l)
Permitted Refinancing Indebtedness, provided that the restrictions contained in
the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive, taken as a whole, than those contained in the agreements governing
the Indebtedness being refinanced, (m) Liens permitted to be incurred pursuant
to the provisions of Section 4.12 that limit the right of the debtor to transfer
the assets subject to such Liens, (n) provisions with respect to the disposition
or distribution of assets or property in joint venture agreements and other
similar agreements and (o) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary course of
business.
Section 4.9 Incurrence of Indebtedness and Issuance of Preferred
Stock. The Borrower shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt) and the Borrower shall not issue any Disqualified Stock and shall not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Borrower may incur Indebtedness (including
Acquired Debt) or issue shares of Disqualified Stock and the Borrower's
Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or
issue preferred stock if, in each case, the Borrower's Debt to Adjusted
Consolidated Cash Flow Ratio at the time of incurrence of such Indebtedness or
the issuance of such preferred stock, after giving pro forma effect to such
incurrence or issuance as of such date and to the use of proceeds therefrom as
if the same had occurred at the beginning of the most recently ended four full
fiscal quarter period of the Borrower for which internal financial statements
are available, would have been no greater than 7.5 to 1.
The provisions of the first paragraph of this covenant shall not apply
to the incurrence of any of the following items of Indebtedness or the issuance
of any of the following items of Disqualified Stock or preferred stock
(collectively, "Permitted Debt"):
(i) the incurrence by the Borrower or any of its Restricted
Subsidiaries of Indebtedness under Credit Facilities since the date of the
August 1999 Senior Discount Note Indenture in an aggregate principal amount
(with letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Borrower and its Restricted Subsidiaries
thereunder) at any one time outstanding not to exceed the product of $150,000
times the number of Completed Towers on the date of such incurrence;
(ii) the incurrence by the Borrower and its Restricted Subsidiaries of
the Existing Indebtedness;
(iii) the incurrence by the Borrower of Indebtedness represented by
the 9% Senior Notes due 2011 and the 10-3/8% Senior Discount Notes due 2011,
each issued on the date of the May 1999 Senior Discount Note Indenture;
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(iv) the issuance by the Borrower of additional shares of its 12-3/4%
Senior Exchangeable Preferred Stock due 2010 solely for the purpose of paying
dividends thereon and the incurrence by the Borrower of Indebtedness represented
by the Borrower's 12-3/4% Senior Subordinated Exchange Debentures due 2010;
(v) the incurrence by the Borrower or any of its Restricted Subsidiaries
since the date of the August 1999 Senior Discount Note Indenture of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case incurred for the purpose of financing all or any part
of the purchase price or cost of construction or improvement of property, plant
or equipment used in the business of the Borrower or such Restricted Subsidiary,
in an aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any other indebtedness
incurred pursuant to this clause (v), not to exceed $10.0 million at any time
outstanding;
(vi) the incurrence by the Borrower or any of its Restricted Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to extend, refinance, renew, replace, defease or refund
Indebtedness of the Borrower or any of its Restricted Subsidiaries or
Disqualified Stock of the Borrower (other than intercompany Indebtedness) that
was permitted by this Agreement to be incurred under the first paragraph of this
Section 4.9 or clauses (ii), (iii), (iv), (v) or this clause (vi) of this
paragraph;
(vii) the incurrence by the Borrower or any of its Restricted Subsidiaries
of intercompany Indebtedness between or among the Borrower and any of its
Restricted Subsidiaries; provided, however, that (i) if the Borrower is the
obligor on such Indebtedness, such Indebtedness is expressly subordinated to the
prior payment in full in cash of all Obligations with respect to the Term Notes
and (ii) (a) any subsequent issuance or transfer of Equity Interests that
results in any such Indebtedness being held by a Person other than the Borrower
or a Restricted Subsidiary and (b) any sale or other transfer of any such
Indebtedness to a Person that is not either the Borrower or a Restricted
Subsidiary shall be deemed, in each case, to constitute an incurrence of such
indebtedness by the Borrower or such Restricted Subsidiary, as the case may be;
(viii) the incurrence by the Borrower or any of its Restricted Subsidiaries
of Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating rate Indebtedness that is
permitted by the terms of this Section 4.9 to be outstanding or currency
exchange risk;
(ix) the guarantee by the Borrower or any of its Restricted Subsidiaries of
Indebtedness of the Borrower or a Restricted Subsidiary of the Borrower that was
permitted to be incurred by another provision of this Section 4.9;
(x) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Acquired Debt in connection with the acquisition of assets or a new Subsidiary
and the incurrence by the Borrower's Restricted Subsidiaries of Indebtedness as
a result of the
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51
designation of an Unrestricted Subsidiary as a Restricted Subsidiary;
provided that, in the case of any such incurrence of Acquired Debt, such
Acquired Debt was incurred by the prior owner of such assets or such Restricted
Subsidiary prior to such acquisition by the Borrower or one of its Restricted
Subsidiaries and was not incurred in connection with, or in contemplation of,
such acquisition by the Borrower or one of its Restricted Subsidiaries; and
provided further that, in the case of any incurrence pursuant to this clause
(x), as a result of such acquisition by the Borrower or one of its Restricted
Subsidiaries, the Borrower's Debt to Adjusted Consolidated Cash Flow Ratio at
the time of the incurrence of such Acquired Debt, after giving pro forma effect
to such incurrence as if the same had occurred at the beginning of the most
recently ended four full fiscal quarter period of the Borrower for which
internal financial statements are available, would have been less than the
Borrower's Debt to Adjusted Consolidated Cash Flow Ratio for the same period
without giving pro forma effect to such incurrence;
(xi) the incurrence by the Borrower or any of is Restricted
Subsidiaries of Indebtedness or Disqualified Stock not to exceed, at any one
time outstanding, the sum of:
(i) 2.0 times the aggregate net cash proceeds, plus
(ii) 1.0 times the fair market value of non-cash proceeds (evidenced
by a resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Administrative Agent),
in each case, from the issuance and sale, other than to a Subsidiary, of Equity
Interests (other than Disqualified Stock) of the Borrower since the beginning of
the fiscal quarter during which the May 1999 Senior Discount Note Indenture was
executed (less the amount of such proceeds used to make Restricted Payments as
provided in clause (c)(ii) of the first paragraph or clause (ii) of the second
paragraph of Section 4.7 hereof); and
(xii) the incurrence by the Borrower or any of its Restricted
Subsidiaries since the date of the August 1999 Senior Discount Note Indenture of
additional Indebtedness and/or the issuance by the Borrower of Disqualified
Stock in an aggregate principal amount, accreted value or liquidation
preference, as applicable, at any time outstanding, not to exceed $25.0 million.
The Borrower shall not (i) incur any Indebtedness that is
contractually subordinated in right of payment to any other Indebtedness of the
Borrower unless such Indebtedness is also contractually subordinated in right of
payment to the Term Notes and the Securities on substantially identical terms;
provided, however, that no Indebtedness of the Borrower shall be deemed to be
contractually subordinated in right of payment to any other Indebtedness of the
Borrower solely by virtue of being unsecured and (ii) the Borrower shall not
permit any of its Unrestricted Subsidiaries to incur any Indebtedness other than
Non-Recourse Debt.
For purposes of determining compliance with this Section 4.9, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in
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52
clauses (i) through (xii) above or is entitled to be incurred pursuant to the
first paragraph of this Section 4.9, the Borrower shall, in its sole discretion,
classify (or later reclassify in whole or in part) such item of Indebtedness in
any manner that complies with this Section 4.9. Accrual of interest, accretion
or amortization of original issue discount and the payment of interest in the
form of additional Indebtedness shall not be deemed to be an incurrence of
Indebtedness for purposes of this Section 4.9. Indebtedness under Credit
Facilities outstanding on the date hereof shall be deemed to have been incurred
on such date in reliance on the exception provided by clause (i) of the
definition of Permitted Debt. The 9-1/2% Senior Notes due 2011 issued on the
date of the August 1999 Senior Discount Note Indenture shall be deemed to have
been incurred on such date in reliance on the exception provided by clause (xi)
of the definition of Permitted Debt. The Term Notes and the Securities shall be
deemed to have been incurred on this date in reliance on the exception provided
by clause (xi) of the definition of Permitted Debt.
Section 4.10 Asset Sales. The Borrower shall not, and shall not permit
any of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the
Borrower (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued or sold or otherwise disposed of;
(ii) fair market value is determined by the Board of Directors and evidenced by
a resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Administrative Agent and (iii) except in the case of a Tower
Asset Exchange, at least 75% of the consideration therefor received by the
Borrower or such Restricted Subsidiary is in the form of cash or Cash
Equivalents; provided that the amount of (x) any liabilities (as shown on the
Borrower's or such Restricted Subsidiary's most recent balance sheet), of the
Borrower or any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Term Notes or any
guarantee thereof) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Borrower or such
Restricted Subsidiary from further liability and (y) any securities, notes or
other obligations received by the Borrower or any such Restricted Subsidiary
from such transferee that are converted by the Borrower or such Restricted
Subsidiary into cash within 20 days of the applicable Asset Sale (to the extent
of the cash received), shall be deemed to be cash for purposes of this
provision.
Section 4.11 Transactions with Affiliates. The Borrower shall not, and
shall not permit any of its Restricted Subsidiaries to, make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (i) such Affiliate Transaction is on terms that are no
less favorable to the Borrower or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Borrower or
such Restricted Subsidiary with an unrelated Person and (ii) the Borrower
delivers to the Administrative Agent (a) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $1.0 million, a resolution of the Board of Directors
set forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (i) above and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the Board of Directors
and (b) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $10.0 million, an
opinion as to the fairness to the Lenders
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53
of such Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national standing.
Notwithstanding the foregoing, the following items shall not be deemed to be
Affiliate Transactions: (i) any employment arrangements with any executive
officer of the Borrower or a Restricted Subsidiary that is entered into by the
Borrower or any of its Restricted Subsidiaries in the ordinary course of
business and consistent with compensation arrangements of similarly situated
executive officers at comparable companies engaged in Permitted Businesses, (ii)
transactions between or among the Borrower and/or its Restricted Subsidiaries,
(iii) payment of directors fees in an aggregate annual amount not to exceed
$25,000 per Person, (iv) Restricted Payments that are permitted by the
provisions of Section 4.7, (v) the issuance or sale of Equity Interests (other
than Disqualified Stock) of the Borrower, and (vi) transactions pursuant to the
provisions of the Governance Agreement, the Rights Agreement, the Stockholders'
Agreement, the CTSH Shareholders' Agreement, the CTI Services Agreement, the CTI
Operating Agreement and the Crown Transaction Agreements as the same are in
effect on the date hereof.
Section 4.12 Liens. The Borrower shall not, and shall not permit any
of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume
or suffer to exist any Lien securing Indebtedness or trade payables on any asset
now owned or hereafter acquired, or any income or profits therefrom or assign or
convey any right to receive income therefrom, except Permitted Liens.
Section 4.13 Business Activities. The Borrower shall not, and shall
not permit any Subsidiary to, engage in any business other than Permitted
Business, except to such extent as would not be material to the Borrower and its
Subsidiaries taken as a whole.
Section 4.14 Corporate Existence. Subject to Section 4.19 hereof, the
Borrower shall do or cause to be done all things necessary to preserve and keep
in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in accordance with
the respective organizational documents (as the same may be amended from time to
time) of the Borrower or any such Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Borrower and its Subsidiaries;
provided, however, that the Borrower shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Borrower and its Subsidiaries, taken as a whole, and that the loss thereof
is not adverse in any material respect to the Lenders.
Section 4.15 Offer to Prepay Upon a Change of Control. (a) Upon the
occurrence of a Change of Control, each Lender will have the right to require
the Borrower to prepay all or any part of the principal amount of such Lender's
Loans pursuant to the offer described below (the "Change of Control Offer") at a
prepayment price in cash equal to 100% of the aggregate principal amount thereof
plus accrued and unpaid interest thereon, if any, to the date of prepayment (the
"Change of Control Payment"). Within 30 days following any Change of Control,
the Borrower will mail a notice to each Lender describing the transaction or
transactions that constituted the Change of Control and offer to repay the Loans
on the date specified in such notice, which date shall be no earlier than 30
days and no later than 60 days from the date such notice is mailed (the "Change
of Control Payment Date"), pursuant to the procedures set forth below.
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(b) Notice of a Change of Control Offer shall be mailed by the
Borrower to the Lenders at their addresses set forth in the Loan Register. The
Change of Control Offer shall remain open from the time of mailing until the
Change of Control Payment Date. The notice shall be accompanied by a copy of the
most recent reports furnished pursuant to Section 4.4(b)(i) and (ii). The notice
shall contain all instructions and materials necessary to enable such Lenders to
elect to be prepaid pursuant to the Change of Control Offer. Lenders electing to
have a Loan repaid will be required to surrender the applicable Term Note, with
an appropriate form duly completed, to the Borrower at the address specified in
the notice at least three Business Days prior to the repayment date.
(c) The Borrower shall not be required to prepay Loans pursuant to
this Section if a third party makes an offer to prepay applicable Loans in the
manner, at the times and otherwise in compliance with the requirements set forth
in this covenant applicable to an offer to prepay Loans made by the Borrower and
purchases all Term Notes validly tendered and not withdrawn under such offer.
(d) On the Change of Control Payment Date, the Borrower shall (i)
repay all Loans or portions thereof of each Lender that properly elected
repayment thereof pursuant to the Change of Control Offer and were received by
the Borrower for cancellation, (ii) pay the Change of Control Payment for each
such Loan (or portion thereof) elected to be repaid and (iii) deliver to each
such Lender a new Term Note equal in principal amount (excluding premiums, if
any) to the unpurchased portion of the corresponding Term Note surrendered, if
any. The Borrower will notify the remaining Lenders of the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
Section 4.16 Limitation on Sale and Leaseback Transactions. The
Borrower shall not, and shall not permit any of its Restricted Subsidiaries to,
enter into any sale and leaseback transaction; provided that the Borrower or any
of its Restricted Subsidiaries may enter into a sale and leaseback transaction
if (i) the Borrower or such Restricted Subsidiary, as applicable, could have (a)
incurred Indebtedness in an amount equal to the Attributable Debt relating to
such sale and leaseback transaction pursuant to the Debt to Adjusted
Consolidated Cash Flow Ratio test set forth in the first paragraph of Section
4.9 and (b) incurred a Lien to secure such Indebtedness pursuant to Section
4.12, (ii) the gross cash proceeds of such sale and leaseback transaction are at
least equal to the fair market value (as determined in good faith by the Board
of Directors) of the property that is the subject of such sale and leaseback
transaction and (iii) the transfer of assets in such sale and leaseback
transaction is permitted by Section 4.10, and the Borrower applies the proceeds
of such transaction in compliance with, Section 2.4.
Section 4.17 Limitation on Issuances and Sales of Capital Stock of
Restricted Subsidiaries. The Borrower (i) shall not, and shall not permit any
Restricted Subsidiary of the Borrower to, transfer, convey, sell, lease or
otherwise dispose of any Equity Interests in any Restricted Subsidiary of the
Borrower to any Person (other than the Borrower or a Wholly Owned Restricted
Subsidiary of the Borrower) and (ii) shall not permit any Restricted Subsidiary
of the Borrower to issue any of its Equity Interests (other than, if necessary,
shares of its Capital Stock constituting directors' qualifying shares) to any
Person other than to the Borrower or a Wholly Owned Restricted Subsidiary
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55
of the Borrower, unless, in each such case: (a) as a result of such transfer,
conveyance, sale, lease or other disposition or issuance such Restricted
Subsidiary no longer constitutes a Subsidiary and (b) the cash Net Proceeds from
such transfer, conveyance, sale, lease or other disposition or issuance are
applied in accordance with Section 2.4.
Notwithstanding the foregoing, the issuance or sale of shares of
Capital Stock of any Restricted Subsidiary of the Borrower will not violate the
provisions of the immediately preceding sentence if such shares are issued or
sold in connection with (x) the formation or capitalization of a Restricted
Subsidiary or (y) a single transaction or a series of substantially
contemporaneous transactions whereby such Restricted Subsidiary becomes a
Restricted Subsidiary of the Borrower by reason of the acquisition of securities
or assets from another Person.
Section 4.18 Limitation on Issuances of Guarantees of Indebtedness.
The Borrower shall not permit any Restricted Subsidiary, directly or indirectly,
to Guarantee or pledge any assets to secure the payment of any other
Indebtedness of the Borrower unless such Subsidiary simultaneously executes and
delivers a supplement to this Agreement providing for the Guarantee of the
payment of the Term Notes by such Subsidiary, which Guarantee shall be senior to
or pari passu with such Subsidiary's Guarantee of or pledge to secure such other
Indebtedness. Notwithstanding the foregoing, any such Guarantee by a Subsidiary
of the Term Notes shall provide by its terms that it shall be automatically and
unconditionally released and discharged upon any sale, exchange or transfer, to
any Person other than a Subsidiary of the Borrower, of all of the Borrower's
stock in, or all or substantially all the assets of, such Subsidiary, which
sale, exchange or transfer is made in compliance with the applicable provisions
of this Agreement.
Section 4.19 Merger; Sale of All or Substantially All Assets. (a) The
Borrower shall not consolidate or merge with or into (whether or not the
Borrower is the surviving corporation), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions, to another corporation, Person or entity
unless (i) the Borrower is the surviving corporation or the entity or the Person
formed by or surviving any such consolidation or merger (if other than the
Borrower) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia, (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Borrower) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Borrower under the Term
Notes and this Agreement pursuant to a supplemental agreement in a form
reasonably satisfactory to the Administrative Agent, (iii) immediately after
such transaction, no Default exists and (iv) except in the case of a merger of
the Borrower with or into a Wholly Owned Restricted Subsidiary of the Borrower
and a merger entered into solely for the purpose of reincorporating the Borrower
in another jurisdiction, (x) in the case of a merger or consolidation in which
the Borrower is the surviving corporation, the Borrower's Debt to Adjusted
Consolidated Cash Flow Ratio at the time of the transaction, after giving pro
forma effect to the transaction as of such date for balance sheet purposes and
as if the transaction had occurred at the beginning of the most recently ended
four full fiscal quarter period of the Borrower for which internal financial
statements are available for income statement purposes, would have been less
than the Borrower's Debt to Adjusted
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Consolidated Cash Flow Ratio for the same period without giving pro forma effect
to such transaction, or (y) in the case of any other such transaction, the Debt
to Adjusted Consolidated Cash Flow of the entity or Person formed by or
surviving any such consolidation or merger (if other than the Borrower), or to
which the sale, assignment, transfer, lease, conveyance or other disposition
shall have been made, at the time of the transaction, after giving pro forma
effect to the transaction as of such date for balance sheet purposes and as if
such transaction had occurred at the beginning of the most recently ended four
full fiscal quarter period of such entity or Person for which internal financial
statements are available for income statement purposes, would have been less
than the Borrower's Debt to Adjusted Consolidated Cash Flow Ratio for the same
period without giving pro forma effect to such transaction; provided that for
purposes of determining the Debt to Adjusted Consolidated Cash Flow Ratio of any
entity or Person for purposes of this clause (y) the entity or Person will be
substituted for the Borrower in the definition of Debt to Adjusted Consolidated
Cash Flow Ratio and the defined terms included therein under Section 1.1 hereof.
(b) Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Borrower in accordance with Section 4.19(a) hereof, the
successor corporation formed by such consolidation or into or with which the
Borrower is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted for
(so that from and after the date of such consolidation, merger, sale, lease,
conveyance or other disposition, the provisions of this Agreement referring to
the "Borrower" shall refer instead to the successor corporation and not to the
Borrower), and may exercise every right and power of the Borrower under this
Agreement with the same effect as if such successor Person had been named as the
Borrower herein, provided, however, that and the predecessor Borrower shall not
be relieved from the obligation to pay the principal of and interest on the Term
Notes except in the case of a sale of all of the Borrower's assets that meets
the requirements of Section 4.19(a) hereof.
Section 4.20 Inspection Rights. The Borrower shall, and shall cause
each of its Subsidiaries to, permit the Lenders or any of their respective
representatives to visit and inspect any of its properties, to examine and make
abstracts from any of its books and records and to discuss its businesses,
finances and accounts with its executive officers and, subject to the right of
the Borrower's representatives to participate in any such discussion, with their
independent public accountants, all upon reasonable notice and at such
reasonable times and as often as may reasonably be desired.
Section 4.21 Special Rights. (a) For so long as any Loans or Exchange
Notes are held by Chase or West Street, the Borrower shall, and shall cause each
of its Subsidiaries to, promptly provide Chase and West Street, as the case may
be, with such information concerning the businesses, properties or financial
condition of the Borrower and such Subsidiaries as Chase or West Street may from
time to time request. In that connection, the Borrower shall, and shall cause
each of its Subsidiaries to:
(i) keep proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities; and
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(ii) permit Chase or West Street or any of their respective
representatives to consult with the Borrower and its Subsidiaries with respect
to their businesses and make proposals with respect to such businesses and meet
with the respective executive officers and directors of the Borrower and its
Subsidiaries with respect to such proposals.
(b) For so long as any Loans or Exchange Notes are held by Chase or
West Street, the Borrower shall, and shall cause each of its Subsidiaries to,
upon prior reasonable request, invite Chase and West Street or any of their
respective representatives to attend each regular, special or other meeting of
their respective Board of Directors in a nonvoting observer capacity and in this
respect shall, upon prior reasonable request, give Chase and West Street or such
representative copies of all notices, minutes, consents and other materials that
it provides to its directors. Chase and West Street or such representative may
participate in any and all discussions of matters brought to the Board of
Directors. The Borrower shall and shall cause each of its Subsidiaries to allow
Chase and West Street or any such representative of West Street to attend such
meetings by means of conference call or other communications equipment utilized
by any other person participating in such meetings. Notwithstanding the
foregoing, the Borrower reserves the right to exclude Chase and West Street and
their respective representatives from access to any material or meeting or
portion thereof if the Borrower believes upon advice of counsel that such
exclusion is reasonably necessary to preserve the attorney-client privilege, to
protect highly confidential proprietary information or for other similar valid
business reasons.
(c) In addition to the provisions of Section 12.3, (i) any amendment
to the provisions of this Section 4.21 shall require the consent of Chase and
West Street at any time that Chase or West Street, as the case may be, holds
Loans and/or Notes and (ii) for so long as Chase and West Street hold Loans
and/or Notes having an aggregate principal amount equal to at least 25% of the
aggregate principal amount of Term Loans originally funded by Chase or West
Street, as the case may be, under this Agreement, any amendment to the
provisions of Section 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17,
4.18, 4.19 and 4.20 shall require the consent of Chase and West Street at any
time that Chase or West Street holds any Loans or Exchange Notes.
ARTICLE V.
CONDITIONS
The obligation of each of the Lenders to make Term Loans is subject to
(i) the representations and warranties of the Borrower in Article III being
true, correct and complete in all respects on and as of the Closing Date to the
same extent as though made on and as of the Closing Date, (ii) on or prior to
the Closing Date, the Borrower having performed and complied with all covenants
and conditions to be performed and observed by it on or prior to the Closing
Date and (iii) the prior or concurrent satisfaction of each of the conditions
set forth below; provided, however, that notwithstanding such conditions, no
Lender may default in its obligations to make Term Loans hereunder solely
because of (a) the failure by another Lender to deem a condition satisfied, or
(b) the failure by another Lender to make Term Loans hereunder:
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Section 5.1 Corporate and Other Proceedings. On or before the Closing
Date, all corporate and other proceedings taken or to be taken in connection
with the Transactions and all documents incidental thereto not previously found
acceptable by the Administrative Agent shall be reasonably satisfactory in form
and substance to the Administrative Agent, and the Administrative Agent shall
have received on behalf of the Lenders the following items, each of which shall
be in form and substance satisfactory to the Administrative Agent and, unless
otherwise noted, dated the Closing Date:
(a) a certified copy of the Borrower's charters, together with a
certificate of status, compliance, good standing or like certificate with
respect to the Borrower issued by the appropriate government officials of the
jurisdiction of its formation and of each jurisdiction in which the Borrower
owns any material assets or carries on any material business, each to be dated a
recent date prior to the Closing Date;
(b) a copy of the Borrower's bylaws, in each case certified as of the
Closing Date by its Secretary or one of its Assistant Secretaries;
(c) resolutions of the Borrower's Boards of Directors approving and
authorizing the execution, delivery and performance of this Agreement, each of
the other Transaction Documents and any other documents, instruments and
certificates required to be executed by the Borrower in connection herewith or
therewith and approving and authorizing the execution, delivery and payment of
the Term Notes and the Exchange Notes and the consummation of the Transactions,
each certified as of the Closing Date by its Secretary or one of its Assistant
Secretaries as being in full force and effect without modification or amendment;
(d) signature and incumbency certificates of the Borrower's Officers
executing this Agreement and the Term Notes and any other documents executed in
connection therewith;
(e) executed copies of this Agreement and the Term Notes, drawn to the
order of the Lenders;
(f) an Officers' Certificate from the Borrower in form and substance
satisfactory to the Administrative Agent to the effect that (i) the
representations and warranties of the Borrower in Article III are true, correct
and complete in all respects on and as of the Closing Date to the same extent as
though made on and as of that date, (ii) on or prior to the Closing Date, the
Borrower has performed and complied with all covenants and conditions hereunder
to be performed and observed by it on or prior to the Closing Date and (iii) all
conditions to the consummation of the relevant Transactions have been satisfied
on the terms set forth in the documentation relating thereto and have not been
waived or amended without the prior written consent of the Administrative Agent;
(g) true and correct copies of the final form of each of the
Acquisition Agreements; and
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(h) true and correct copies of each of the other Transaction
Documents, each of which shall be reasonably satisfactory in form and substance
to each of the Lenders.
Section 5.2 No Competing Offering. The Arrangers shall be satisfied
that there is no competing offering, placement or arrangement of any debt
securities (other than the Permanent Securities) or bank financing by or on
behalf of the Borrower or any of its Affiliates.
Section 5.3 Absence of Certain Changes. There shall not have occurred
or become known to the Lenders any event or events, adverse condition or change
in or affecting the Borrower subsequent to December 31, 1999 that, individually
or in the aggregate, (i) could have a Material Adverse Effect, (ii) has, or may
be reasonably expected to have, any materially adverse effect upon the validity
or enforceability of this Agreement or any of the Transaction Documents or (iii)
materially impairs the ability of the Borrower to consummate the Loan or to
perform its Obligations under the Transaction Documents. For purposes of this
Section 5.3, "Material Adverse Effect" shall mean the result of one or more
events, changes or effects which, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on the business,
results of operations, property, condition (financial or otherwise), management
or prospects of the Borrower and its subsidiaries, taken as a whole.
Section 5.4 Market Disruption. There shall not have occurred any
disruption or adverse change, as determined by the Arrangers in their sole
discretion, in the financial or capital markets generally, or in the markets for
term loan syndication, high yield debt or equity securities in particular or
affecting the syndication or funding of term loans (or the refinancing thereof)
that the Arrangers shall reasonably determine makes it impracticable to
consummate the syndication of the Term Loans or the Proposed Offerings.
Section 5.5 Financial Statements. Each of the Lenders shall have
received audited financial statements for the one-, two-, or three-year period,
as applicable, immediately preceding the Closing Date and any appropriate
unaudited financial statements for any interim period or periods of the Borrower
and all other recent or probable acquisitions (including pro forma financial
statements), to the extent such financial statements are required by, and all
meeting the requirements of, Regulation S-X for Form S-1 registration statements
and all such financial statements shall be reasonably satisfactory in form and
substance to each of the Lenders. Once approved by the Lenders, all such
financial statements shall be added to Schedule 3.10(a) and shall become subject
to the Borrower's representations in Section 3.10.
Section 5.6 Litigation, etc. There shall not exist any action, suit,
investigation, litigation or proceeding pending or threatened in any court or
before any arbitrator or governmental authority that, in the opinion of the
Lenders, affects the Acquisition, the financing thereof or any of the other
transactions contemplated hereby, or that could have a Material Adverse Effect
on the Borrower, the Acquisition the financing thereof or any of the
transactions contemplated hereby.
Section 5.7 Payment of Fees and Expenses. All fees and expenses due to
the Lenders, Chase Securities Inc., The Chase Manhattan Bank, Goldman Sachs
Credit Partners L.P.,
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Goldman, Sachs & Co., Syndicated Loan Funding Trust or the Administrative Agent
on or before the Closing Date in connection with the Term Loans, pursuant to the
Commitment Letter, the Fee Letter, the Engagement Letter or otherwise, shall
have been paid in full.
Section 5.8 Escrow Agreement. The Borrower and the Escrow Agent shall
have entered into the Escrow Agreement and a fully executed copy of the Escrow
Agreement shall have been delivered to each of the Lenders.
Section 5.9 Exchange Notes. The Borrower and the Exchange Note Trustee
shall have entered into the Exchange Note Indenture and a fully executed copy of
the Exchange Note Indenture shall have been delivered to each of the Lenders. At
least $200.0 million in aggregate principal amount of Exchange Notes shall have
been issued by the Borrower into escrow and delivered to the Escrow Agent as
contemplated by the Escrow Agreement.
Section 5.10 Registration Rights Agreement. The Borrower and the
Arrangers shall have entered into the Registration Rights Agreement and a fully
executed copy of the Registration Rights Agreement shall have been delivered to
each of the Lenders.
Section 5.11 Delivery of Opinions. The Arrangers shall have received
originally executed copies of one or more favorable written opinions of (i)
Cravath, Swaine & Moore, counsel for the Borrower, in the form of Exhibit F-1
hereto and addressed to the Lenders, (ii) General Counsel of the Borrower, in
the form of Exhibit F-2 hereto and addressed to the Lenders and (iii) such other
opinions of counsel and such certificates or opinions of accountants, appraisers
or other professionals as the Arrangers shall have reasonably requested.
Section 5.12 Solvency. The Arrangers shall have received originally
executed copies of a certificate of the Chief Financial Officer of the Borrower,
in form and substance satisfactory to the Administrative Agent, with appropriate
opining that, after giving effect to the making of the Loans, the Borrower and
its Subsidiaries will be Solvent, and the Arrangers shall have received such
other reasonable and appropriate factual information and expert advice
supporting the conclusions reached in such opinion as the Arrangers may
reasonably request, all in form and substance satisfactory to the Arrangers.
Section 5.13 No Breach; No Default. The Borrower shall not be in
breach or violation of any of its obligations under the Engagement Letter or the
Fee Letter and each of the Engagement Letter and the Fee Letter shall be in full
force and effect. In addition, no event shall have occurred and be continuing or
would result from the consummation of the Transactions that would constitute an
Event of Default.
Section 5.14 Special Conditions. The Term Loan will be subject to the
condition that (i) the Acquisition Agreements shall be in full force and effect,
(ii) the representations and warranties contained therein shall continue to be
true and correct in all material respects, and (iii) the Borrower shall not have
received any notice of default under any of the Acquisition Agreements, and
shall not be aware of the occurrence, or any impending or threatened occurrence,
of any event which
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would cause or constitute a breach or default of any of the representations,
warranties or covenants of any party contained in or referred to in any
Acquisition Agreement.
ARTICLE VI.
TRANSFER OF THE LOANS, THE INSTRUMENTS
EVIDENCING SUCH LOANS AND THE SECURITIES;
REPRESENTATIONS OF LENDERS; PARTICIPATIONS
Section 6.1 Transfer of the Loans, the instruments evidencing the
Loans and the Securities. Each Lender acknowledges that none of the Loans, the
instruments evidencing such Loans and the Securities have been registered under
the Securities Act and represents and agrees that it is acquiring the Loans, the
instruments evidencing such Loans and the Securities for its own account and
that it will not, directly or indirectly, transfer, sell, assign, pledge or
otherwise dispose of its Loans, the instruments evidencing such Loans or the
Securities (or any interest therein) unless such transfer, sale, assignment,
pledge or other disposition is made (i) pursuant to an effective registration
statement under the Securities Act or (ii) pursuant to an available exemption
from registration under, or in a transaction that is not subject to, the
Securities Act. Each Lender represents, warrants, covenants and agrees to and
with the Borrower that it is either (i) a qualified institutional buyer within
the meaning of Rule 144A under the Securities Act acting for its own account or
the account of one or more other qualified institutional buyers, and is aware
that the Borrower may rely upon the exemption from the provisions of Section 5
of the Securities Act provided by Rule 144A thereunder or (ii) an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act. Each of the Lenders acknowledges that the instruments
evidencing the Securities will bear a legend restricting the transfer thereof in
accordance with the Securities Act.
Subject to the provisions of the previous paragraph, the Borrower
agrees that, with the consent of the Administrative Agent, each Lender will be
free to sell or transfer all or any part of the Loans, the instruments
evidencing the Loans or the Securities (including, without limitation,
participation interest in the Loans) to any third party and to pledge any or all
of the Securities to any commercial bank or other institutional lender.
Section 6.2 Permitted Assignments. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time assign
to one or more banks or other entities ("Purchasers") all or any part of its
rights and obligations hereunder and under the Loan Documents. Such assignment
shall be made pursuant to an Assignment and Acceptance substantially in the form
of Exhibit A or in such other form as may be agreed to by the parties thereto.
The consent of the Borrower and the Administrative Agent shall be required prior
to an assignment becoming effective with respect to a Purchaser which is not a
Lender, an Affiliate of a Lender (including West Street, in the case of Goldman
Sachs Credit Partners L.P.) or a Federal Reserve Bank; provided, however, that
if an Event of Default has occurred and is continuing, the consent of the
Borrower shall not be required. Such consent shall not be unreasonably withheld
or delayed.
Section 6.3 Permitted Participants; Effect. (a) Upon notice thereof to
the Borrower, any Lender may, in the ordinary course of its business and in
accordance with applicable
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law, at any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Term Note held by
such Lender, any Commitment of such Lender or any other interest of such Lender
under the Loan Documents; provided that such Lender retains all voting rights
with respect to such participating interests on all matters other than such
matters that require the consent of each Lender under this Agreement. In the
event of any such sale by a Lender of participating interests to a Participant,
such Lender's obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the owner of its Loans
and the holder of any Term Note issued to it in evidence thereof for all
purposes under the Loan Documents, all amounts payable by the Borrower under
this Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents.
(b) Each Lender shall retain the sole right to approve, without the
consent of any Participant, any amendment, modification or waiver of any
provision of the Loan Documents other than any amendment, modification or waiver
with respect to any Loan or Commitment in which such Participant has an interest
which forgives principal, interest or fees or reduces the interest rate or fees
payable with respect to any such Loan or Commitment, extends the Maturity Date,
postpones any date fixed for any regularly scheduled payment of principal of, or
interest or fees on, any such Loan or Commitment or releases any guarantor of
any such Loan or releases all or substantially all of the collateral, if any,
securing any such Loan.
(c) The Borrower agrees that each Participant shall be deemed to have
the right of setoff provided in Section 2.10 in respect of its participating
interest in amounts owing under the Loan Documents to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
the Loan Documents, provided that each Lender shall retain the right of setoff
provided in Section 2.10 with respect to the amount of participating interests
sold to each Participant. The Lenders agree to share with each Participant, and
each Participant, by exercising the right of setoff provided in Section 2.10,
agrees to share with each Lender, any amount received pursuant to the exercise
of its right of setoff, such amounts to be shared in accordance with Section
2.10 as if each Participant were a Lender.
Section 6.4 Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries; provided,
however, that any records, documents, properties or information that are
designated by the Borrower as confidential at the time of delivery of such
records, documents, properties or information shall be kept confidential by each
Lender and each Transferee, unless (i) such records, documents, properties or
information are in the public domain or otherwise publicly available (other than
as a result of a breach of this Section 6.4), (ii) disclosure of such records,
documents, properties or information is required by court or administrative
order or (iii) disclosure of such records, documents, properties or information,
in the written opinion of counsel to such Lender or Transferee, is
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otherwise required by law (including, without limitation, pursuant to the
requirements of the Securities Act).
Section 6.5 Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 2.9.
Section 6.6 Replacement Securities Upon Transfer or Exchange. Upon
surrender of any Securities by any Lender in connection with any permitted
transfer or exchange, the Borrower will execute and deliver in exchange therefor
a new Security or Securities of the same aggregate tenor and principal amount,
payable to the order of such Persons and in such denominations as such Lender
may request. The Borrower may require (i) satisfactory indemnification or (ii)
payment by such Lender of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer.
Section 6.7 Register. The Administrative Agent on behalf of the
Borrower shall maintain a register of the principal amount of the Loans held by
each Lender and any interest due and payable with respect thereto. The entries
in the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders shall treat each Person whose
name is recorded in the register as the owner of a Loan, a Term Note or Exchange
Note hereunder as the owner thereof for all purposes of this Agreement. The
Administrative Agent will allow any Lender to inspect and copy such register at
each Administrative Agent's principal place of business during normal business
hours.
ARTICLE VII.
EVENTS OF DEFAULT
Section 7.1 Events of Default. The occurrence of any one or more of
the following events shall constitute an "Event of Default":
(a) the Borrower defaults in the payment when due of interest on the
Term Loans and such default continues for a period of 10 (or, from and after the
Anniversary Date, 30) days;
(b) the Borrower defaults in the payment when due of principal of or
premium, if any, on the Term Loans when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase) or
otherwise;
(c) any representation or warranty made or deemed made by the Borrower
or any of its Subsidiaries herein or that is contained in any certificate,
document or financial or other statement furnished by any of them to the Lenders
at any time under or in connection with any Transaction Document shall prove to
have been incorrect in any material respect on or as of the date made or deemed
made;
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(d) the Borrower fails to comply with any of the provisions of Section 2.4,
4.15 or 4.19 hereof;
(e) the Borrower fails to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture or the Term Loans
for 30 days after notice to the Borrower by the Trustee or the Holders of at
least 25% in aggregate principal amount of the Term Loans then outstanding
voting as a single class;
(f) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Borrower or any of its Significant
Subsidiaries (or the payment of which is guaranteed by the Borrower or any of
its Significant Subsidiaries), whether such Indebtedness or guarantee now
exists, or is created after the date of this Agreement, which default (a) is
caused by a failure to pay principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (b) results in
the acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of such Indebtedness, under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$20.0 million or more;
(g) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Borrower or
any of its Significant Subsidiaries or any group of Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary and such judgment or
judgments remain undischarged for a period (during which execution shall not be
effectively stayed) of 60 days, provided that the aggregate of all such
undischarged judgments exceeds $20.0 million;
(h) the Borrower or any of its Restricted Subsidiaries pursuant to or
within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is not paying its debts as they become due; or
(i) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
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(A) is for relief against the Borrower or any Restricted Subsidiary in
an involuntary case;
(B) appoints a Custodian of the Borrower or any Restricted Subsidiary or
for all or substantially all of the property of the Borrower or any Restricted
Subsidiary; or
(C) orders the liquidation of the Borrower or any Restricted Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days.
Section 7.2 Acceleration. If any Event of Default (other than an Event
of Default specified in Section 7.1(h) or 7.1(i) with respect to the Borrower,
any Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary) occurs and is continuing, the Lenders
holding at least 25% in aggregate principal amount of the then outstanding Loans
may, by written notice to the Borrower, declare the unpaid principal of and any
accrued and unpaid interest and fees on all of the Loans to be immediately due
and payable. Upon such declaration, all Obligations in respect of the Loans
shall become immediately due and payable. Notwithstanding the foregoing, if an
Event of Default specified in Section 7.1(h) or 7.1(i) with respect to the
Borrower, any Significant Subsidiary or any group of Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary occurs, all Obligations in
respect of the Loans shall ipso facto become and be immediately due and payable
without any declaration, notice or other act on the part of any Lender. The
Majority Lenders by written notice to the Borrower may on behalf of all Lenders
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium that has become due solely
because of the acceleration) have been cured or waived.
Section 7.3 Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Lenders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent or subsequent assertion or employment of any other
appropriate right or remedy.
Section 7.4 Delay or Omission Not Waiver. No delay or omission by any
Lender to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
VII or by law to the Lenders may be exercised from time to time, and as often as
may be deemed expedient, by the Lenders.
Section 7.5 Waiver of Past Defaults. Subject to Section 12.3, the
Majority Lenders by written notice to the Borrower may (i) rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except
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nonpayment of principal or interest that has become due solely because of the
acceleration) have been cured or waived and (ii) waive an existing Default or
Event of Default and its consequences hereunder, except a continuing Default or
Event of Default in the payment of the principal of, premium, if any, or
interest on, the Term Loans (including in connection with an offer to purchase).
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Agreement; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 7.6 Rights of Lenders To Receive Payment. Notwithstanding
anything to the contrary contained in this Agreement, the right of any Lender to
receive payment of principal of, premium, if any, and interest on the Loans and
Term Notes held by such Lender, on or after the respective due dates expressed
in this Agreement or the Term Notes, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Lender.
ARTICLE VIII.
PERMANENT SECURITIES
Section 8.1 Permanent Securities. The Borrower shall comply with its
agreements in this Agreement, the Fee Letter and the Engagement Letter with
respect to the proposed issuance and sale of the Permanent Securities in the
Proposed Offerings and the repayment of the Loans with all or a portion of the
net proceeds therefrom.
ARTICLE IX.
TERMINATION
Section 9.1 Termination. (a) The Commitments hereunder shall terminate
on the earlier of (A) the date on which the Borrower informs the Lenders that it
has decided not to proceed with the Acquisition, (B) the date on which the
Acquisition Agreements are terminated in accordance with their terms or (C)
April 15, 2000;
Section 9.2 Survival of Certain Provisions. If this Agreement is
terminated pursuant to this Article IX, such termination shall be without
liability of any party to any other party, except that, whether or not the
transactions contemplated by this Agreement are consummated, (i) the Obligations
of the Borrower to reimburse the Lenders for all of their out-of-pocket expenses
pursuant to Section 12.1 and the Engagement Letter and (ii) the indemnity
provisions contained in Article X shall, in each case, remain operative and in
full force and effect.
ARTICLE X.
INDEMNITY
Section 10.1 Indemnification. In the event that any of the Lenders or
the Administrative Agent (each, an "Indemnified Party") becomes involved in any
capacity in any action, proceeding or investigation brought by or against any
Person, including stockholders of the Borrower,
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in connection with or as a result of either this arrangement or any matter
referred to in this Agreement, the Borrower periodically will reimburse such
Indemnified Party for its legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith. The Borrower
also will indemnify and hold each Indemnified Party harmless against any and all
losses, claims, damages or liabilities to any such Person in connection with or
as a result of either this arrangement or any matter referred to in this
Agreement, except to the extent that any such loss, claim, damage or liability
results from the gross negligence or bad faith of such Indemnified Party in
performing the services that are the subject of this Agreement. If for any
reason the foregoing indemnification is unavailable to any Indemnified Party or
insufficient to hold it harmless, then the Borrower shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative economic interests of the Borrower and its stockholders on the one hand
and such Indemnified Party on the other hand in the matters contemplated by this
Agreement as well as the relative fault of the Borrower, on the one hand, and
such Indemnified Party, on the other hand, with respect to such loss, claim,
damage or liability and any other relevant equitable considerations. The
reimbursement, indemnity and contribution obligations of the Borrower under this
Section 10.1 shall be in addition to any liability which the Borrower may
otherwise have, shall extend upon the same terms and conditions to any affiliate
of any Indemnified Party and the partners, directors, agents, employees and
controlling persons (if any), as the case may be, of such Indemnified Party and
any such affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Borrower, such
Indemnified Party, any such affiliate and any such Person. Any right to trial by
jury with respect to any action or proceeding arising in connection with or as a
result of either this arrangement or any matter referred to in the Letters is
hereby waived by the parties hereto. The provisions of this Section 10.1 shall
survive any termination or completion of the arrangement provided by this
Agreement.
Section 10.2 Counsel. Promptly after receipt by an Indemnified Party
of notice of the commencement of any proceedings, such Indemnified Party will,
if a claim in respect thereof is to be made against the Borrower, notify the
Borrower in writing of the commencement thereof; provided that (i) the omission
so to notify the Borrower will not relieve it from any liability that it may
have hereunder except to the extent it has been materially prejudiced by such
failure and (ii) the omission so as to notify the Borrower will not relieve it
from any liability that it may have to an Indemnified Party otherwise than on
account of the indemnity provided for hereunder. In case any such proceedings
are brought against any Indemnified Party and it notifies the Borrower of the
commencement thereof, the Borrower will be entitled to participate therein, and,
to the extent that it may elect by written notice delivered to such Indemnified
Party, to assume the defense thereof, with counsel reasonably satisfactory to
such Indemnified Party; provided that, if the defendants in any such proceedings
include both such Indemnified Party and the Borrower and such Indemnified Party
shall have concluded that there may be legal defenses available to it which are
different from or additional to those available to the Borrower, such
Indemnified Party shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such proceedings
on behalf of such Indemnified Party. Upon receipt of notice from the Borrower to
such Indemnified Party of its election so to assume the defense of such
proceedings and approval by such Indemnified Party of counsel, the Borrower
shall not be liable to such Indemnified Party for expenses incurred by such
Indemnified Party in connection with the defense thereof (other than reasonable
costs of investigation) unless (i) such Indemnified Party shall
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have employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding sentence (it being
understood, however, that the Borrower shall not be liable for the reasonable
expenses of more than one separate counsel (plus not more than one separate
local counsel in any jurisdiction), approved by the Administrative Agent,
representing the Indemnified Parties who are parties to such proceedings), (ii)
the Borrower shall not have employed counsel reasonably satisfactory to such
Indemnified Party to represent such Indemnified Party within a reasonable time
after notice of commencement of the proceedings, (iii) the Borrower shall have
authorized in writing the employment of counsel for such Indemnified Party or
(iv) the use of counsel chosen by the Borrower to represent such Indemnified
Party would present such counsel with a conflict of interest, and except that,
if clause (i) or (iii) is applicable, such liability shall be only in respect of
the counsel referred to in such clause (i) or (iii).
Section 10.3 Settlement of Claims. The Borrower agrees that, neither
it nor any of its Subsidiaries will settle, compromise or consent to the entry
of any judgment in any pending or threatened claim, action or proceeding in
respect of which indemnification or contribution could be sought under Section
10.1 (whether or not any Indemnified Party is an actual or potential party to
such claim, action or proceeding) without the prior written consent of the
Indemnified Parties, unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising out
of such claim, action or proceeding, which consent shall not be unreasonably
withheld.
Section 10.4 Appearance Expenses. If an Indemnified Party is requested
or required to appear as a witness in any action brought by or on behalf of or
against the Borrower or any Affiliate thereof in which such Indemnified Party is
not named as a defendant, the Borrower agrees to reimburse such Indemnified
Party for all reasonable expenses incurred by it in connection with such
Indemnified Party's appearing and preparing to appear as such a witness,
including, without limitation, the reasonable fees and disbursements of its
legal counsel.
Section 10.5 Indemnity for Taxes, Reserves and Expenses. If, after the
date hereof, the adoption of any law or guideline or any amendment or change in
the administration, interpretation or application of any existing or future law
or guideline by any Governmental Entity charged with the administration,
interpretation or application thereof, or the compliance with any request or
directive of any Governmental Entity (whether or not having the force of law):
(a) subjects any Affected Party to any tax of any kind with respect to
this Agreement or the Term Notes or changes the basis of taxation of payments of
amounts due hereunder or thereunder or with respect to this Agreement or any of
the other Loan Documents, (including, without limitation, any sales, gross
receipts, general corporate, personal property, privilege or license taxes, and
including claims, losses and liabilities arising from any failure to pay or
delay in paying any such tax (unless such failure or delay results solely from
such Affected Party's negligence or willful misconduct), but excluding (i) Taxes
and Other Taxes covered by Section 2.9 and (ii) any taxes, levies, imposts,
deductions, charges or withholding specifically excluded under Section 2.9(a)
(it being understood that,
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notwithstanding the foregoing, if any payment obligation results from the
application of this Section 10.5(a), then the provisions of Section 2.9(f) or
2.9(i) would apply to such extent);
(b) imposes, modifies or deems applicable any reserve (including,
without limitation, any reserve imposed by the Board), special deposit or
similar requirement against assets of the Borrower held by, credit to the
Borrower extended by, deposits of the Borrower with or for the account of, or
other acquisition of funds of the Borrower by, any Affected Party;
(c) shall change the amount of capital maintained or requested or
directed to be maintained by an Affected Party; or
(d) imposes upon an Affected Party any other condition or expense
(including, without limitation, (i) loss of margin and (ii) attorneys' fees and
expenses incurred by officers or employees of an Affected Party (or any
successor thereto) and expenses of litigation or preparation therefor in
contesting any of the foregoing) with respect to this Agreement or any of the
other Loan Documents or the purchase, maintenance or funding of the Loans by an
Affected Party,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, reduce the rate of return on capital of, or impose any
expense (including loss of margin) upon, an Affected Party with respect to this
Agreement, any of the other Loan Documents, the obligations hereunder or
thereunder or the funding of the Loans hereunder, the Affected Party may notify
the Borrower of the amount of such increase, reduction, or imposition, and the
Borrower hereby agrees to pay to the Affected Party the amount the Affected
Party deems necessary to compensate the Affected Party for such increase,
reduction or imposition which determination shall be conclusive. Such amounts
shall be due and payable by the Borrower 15 days after such notice is given.
Section 10.6 Survival of Indemnification. The provisions contained in
this Article X shall remain in full force and effect whether or not any of the
transactions contemplated hereby are consummated and notwithstanding the
termination of this Agreement or the payment in full of all Obligations
hereunder.
Section 10.7 Liability Not Exclusive; Payments. The agreements of each
Person in this Article X shall be in addition to any liability that each may
otherwise have. All amounts due under this Article X shall be payable as
incurred upon written demand therefor.
ARTICLE XI.
THE ADMINISTRATIVE AGENT; THE ARRANGERS
Section 11.1 Appointment. Each Lender hereby irrevocably designates
and appoints each Administrative Agent to act as an agent of such Lender under
this Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes each Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative
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Agent by the terms of this Agreement and the other Loan Documents, together with
such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Administrative Agent
shall have no duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Lender or other Administrative
Agents, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Administrative Agent.
Section 11.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to the advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
Section 11.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower or any of its
Subsidiaries or any officer thereof contained in this Agreement or any other
Loan Document or in any certificate, report, statement, opinion or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or any other Loan Document or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or any other Loan Document or for any failure of the Borrower
or any of its Subsidiaries to perform its obligations hereunder or thereunder.
The Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower or any
of its Subsidiaries.
Section 11.4 Reliance by the Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Term Note, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower or any of its Subsidiaries), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of the Term Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Majority Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the
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Majority Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
Section 11.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender, the Borrower or any of its Subsidiaries referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give prompt notice thereof to the
Lenders. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Majority
Lenders; provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
Section 11.6 Non-Reliance on the Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that none of the Administrative
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by the Administrative Agent hereafter taken, including any
review of the affairs of the Borrower or any of its Subsidiaries, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to any Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other
Lenders, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition, prospects and credit
worthiness of the Borrower and its Subsidiaries and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender confirms
that it is a qualified institutional buyer within the meaning of Rule 144A under
the Securities Act. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition, prospects and credit
worthiness of the Borrower and its Subsidiaries. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall have no any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial or other condition,
prospects or credit worthiness of the Borrower or any of its Subsidiaries which
may come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
Section 11.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower or any of its Subsidiaries and without limiting the obligation of
the Borrower and any of its Subsidiaries to do so), ratably according to their
respective Commitments in effect on the date on which indemnification is sought,
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from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (include, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of, the
Commitments, this Agreement, any other Loan Document or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing, provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the gross negligence or
willful misconduct of an Administrative Agent. The agreements in this subsection
shall survive the payment of the Loans and all other Obligations payable
hereunder.
Section 11.8 Administrative Agent, in its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though such
Administrative Agent were not acting in such capacities hereunder and under the
other Loan Documents. With respect to the Loans made or renewed by it and the
Term Note issued to it such Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not an Administrative Agent, and the terms
"Lender" and "Lenders" shall include each Administrative Agent in its individual
capacity.
Section 11.9 Successor Administrative Agents. The Administrative Agent
may resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents then the Majority Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent (provided
that it shall have been approved by the Borrower), shall succeed to the rights,
powers and duties of the Administrative Agent, hereunder. Effective upon such
appointment and approval, the term "Administrative Agent" shall mean and include
such successor agent, and the former Administrative Agent's rights, powers and
duties as Administrative Agent shall be terminated, without any other or further
act or deed on the part of such former Administrative Agent, any of the parties
to this Agreement or any holders of the Loans. After any retiring Administrative
Agent's resignation as Administrative Agent the provisions of this Article XI
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents.
Section 11.10 Arrangers. Except as expressly set forth herein, the
Arrangers, in their capacity as such, shall have no duties or responsibilities,
and shall incur no liabilities, under this Agreement or the other Loan
Documents.
ARTICLE XII.
MISCELLANEOUS
Section 12.1 Expenses; Documentary Taxes. The Borrower agrees to pay
(a) all reasonable out-of-pocket expenses incurred by the Lenders (including,
without limitation, expenses
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incurred in connection with due diligence by the Lenders) associated with the
preparation, execution and delivery, administration, waiver, enforcement or
modification and enforcement of the documentation contemplated hereby and (b)
the reasonable fees and disbursements of Simpson Thacher & Bartlett, legal
counsel to the Lenders, in connection with the transactions contemplated herein,
including in each case those incurred prior to the date hereof. The Borrower
hereby agrees to indemnify the Lenders against any transfer taxes, documentary
taxes, assessments or charges made by any Governmental Entity by reason of the
execution and delivery, or the terms, of this Agreement or any of the other Loan
Documents.
Section 12.2 Notices. All notices and other communications pertaining
to this Agreement or any Term Note shall be in writing and shall be delivered
(a) in Person (with receipt acknowledged), (b) by facsimile (confirmed
immediately in writing by a copy mailed by registered or certified mail, return
receipt requested, postage prepaid, addressed as hereafter set forth), (c) by
registered or certified mail, return receipt requested, postage prepaid, or (d)
by overnight courier, addressed as follows:
(i) If to the Arrangers and/or Administrative Agent, to them at:
The Chase Manhattan Loan and
Agency Services Group
1 Chase Manhattan Plaza
New York, New York 10081
Attention: Stephen McArdle
Facsimile No.: (212) 552-5700
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Constance Coleman
Facsimile No.: (212) 270-4584
Goldman Sachs Credit Partners L.P.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: John Makrinos
Facsimile No.: (212) 357-4597
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Arthur D. Robinson
Facsimile No.: (212) 455-2502
<PAGE>
74
(ii) If to Syndicated Loan Funding Trust, to it at:
Syndicated Loan Funding Trust
c/o Lehman Commercial Paper Inc.
3 World Financial Center
New York, New York 10285
Attention: Andrew Keith
Facsimile No.: (212) 526-7691
(iii) If to the Borrower, to it at:
Crown Castle International Corp.
510 Bering Drive
Suite 500
Houston, Texas 77057
Attention: Charles C. Green, III
Facsimile No.: (713) 570-3150
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 8th Avenue
New York, New York 10019
Attention: Stephen L. Burns
Facsimile No.: (212) 474-3700
or to such other Person or address as shall be furnished in writing delivered to
the other parties in compliance with this Section 12.2.
Section 12.3 Consent to Amendments and Waivers. (a) Except as provided
in Section 4.21 and 12.3(b), this Agreement and the Term Notes may be amended or
supplemented with the consent of the Borrower and the Majority Lenders and any
existing default or compliance with any provision of this Agreement or the Term
Notes may be waived with the consent of the Majority Lenders. Term Notes held by
the Borrower or any of its Affiliates will not be deemed to be outstanding for
purposes of this Section 12.3.
(b) Notwithstanding the provisions of Section 12.3(a) and in addition
to the provisions of Section 4.21, without the consent of each Lender affected
thereby, an amendment or waiver may not: (i) reduce the principal amount of any
Loan, (ii) change the fixed maturity of any Loan, (iii) reduce the rate of or
change the time for payment of interest on any Loan, (iv) waive a Default or
Event of Default in the payment of principal of, or premium, fees or interest,
if any, on the Loans or any other amounts payable under any of the Loan
Documents, (v) make any Loan payable in money other than that stated in the
applicable Loan, (vi) make any change in the provisions of this Agreement
relating to the rights of Lenders to receive (A) prepayments on, or (B) payments
of principal of, premium, if any, or fees or interest on, the Loans, (vii) make
any change to the provisions of Article VII that would
<PAGE>
75
adversely affect the rights of any Lender or (viii) make any change in the
foregoing amendment and waiver provisions.
(c) The Borrower shall not and shall not permit any of its
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Lender for
or as an inducement to any consent, waiver or amendment permitted by Section
12.3(a) unless such consideration is offered to be paid and is paid to all
Lenders that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or amendment.
Section 12.4 Parties. This Agreement shall inure to the benefit of and
be binding upon the Borrower, the Affected Parties and each of their respective
successors and assigns. Except as expressly in this Agreement, nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
other Person any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained. Except as expressly
provided in this Agreement, this Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Affected
Parties and their respective successors and assigns, and for the benefit of no
other Person.
Section 12.5 New York Law; Submission to Jurisdiction; Waiver of Jury
Trial. THIS AGREEMENT AND THE TERM NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THE BORROWER AND EACH OF THE
LENDERS HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE
COURT SITTING IN NEW YORK CITY (EACH, A "NEW YORK COURT") FOR PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THE TERM NOTES, THIS AGREEMENT,
ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE
BORROWER AND EACH OF THE LENDERS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. THE BORROWER AND EACH OF THE LENDERS IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE TERM
NOTES, THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 12.6 Replacement Notes. If any Term Note becomes mutilated and
is surrendered by the applicable Lender to the Borrower, or if any Lender claims
that any of its Term Notes has been lost, destroyed or wrongfully taken, the
Borrower shall execute and deliver to such Lender a replacement Term Note, upon
the delivery by such Lender of an indemnity to the Borrower reasonably
satisfactory to its counsel to save it and any agent of it harmless in respect
of such loss, destruction or wrongful taking with respect to such Term Note.
<PAGE>
76
Section 12.7 Appointment of Agent For Service. The Borrower designates
and appoints CT Corporation System and such other Persons as may irrevocably
agree in writing to serve as their respective agent to receive on their behalf
service of all process in any proceedings in any New York Court, such service
being hereby acknowledged by the Borrower to be effective and binding in every
respect. If any agent appointed by a the Borrower refuses to receive and forward
such service, that the Borrower hereby agrees that service upon it by mail shall
constitute sufficient service.
Section 12.8 Marshalling; Recapture. None of the Administrative Agent
nor any Lender shall be under any obligation to marshall any assets in favor of
the Borrower or any other party or against or in payment of any or all of the
Obligations. To the extent any Lender receives any payment by or on behalf of
the Borrower, which payment or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
the Borrower or its estate, trustee, receiver, custodian or any other party
under any Bankruptcy Law, state or federal law, common law or equitable cause,
then, to the extent of such payment or repayment, the obligation or part thereof
which has been paid, reduced or satisfied by the amount so repaid shall be
reinstated by the amount so repaid and shall be included within the liabilities
of Borrower to such Lender as of the date such initial payment, reduction or
satisfaction occurred.
Section 12.9 Limitation of Liability. No claim may be made by the
Borrower or any other Person against any Administrative Agent or any Lender or
the Affiliates, directors, officers, employees, attorneys or agents of any of
them for any special, indirect, consequential or punitive damages in respect of
any claim for breach of contract or any theory of liability arising out of or
related to the transactions contemplated by this Agreement or the other Loan
Documents, or any act, omission or event occurring in connection therewith; and
the Borrower hereby waives, releases and agrees not to sue and shall cause each
of its respective Subsidiaries to waive, release or agree not to sue (if
required), upon any claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
Section 12.10 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default or Event of Default if such action is
taken or condition exists.
Section 12.11 Currency Indemnity. The Borrower acknowledges and agrees
that this is a credit transaction where specification of dollars is of the
essence and dollars shall be the currency of account and payment in all events.
If, pursuant to a judgment or for any other reason, payment shall be made in
another currency and such payment, after prompt conversion to dollars and
transfer to New York City in accordance with normal banking procedures, falls
short of the sum due the Lenders in dollars, the Borrower shall pay the Lender
such shortfall and the Lenders shall have a separate cause of action for such
amount.
Section 12.12 Waiver of Immunity. To the extent that the Borrower has
or hereafter may acquire any immunity from:
<PAGE>
77
(a) the jurisdiction of any court of (i) any jurisdiction in which the
Borrower owns or leases property or assets or (ii) the United States, the State
of New York or any political subdivision thereof; or
(b) any legal process (whether through service of notice, attachment
prior to judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property and assets, this Agreement, any Loan Document
or actions to enforce judgments in respect of any thereof,
it hereby irrevocably waives such immunity in respect of its obligations under
the above-referenced document.
Section 12.13 Freedom of Choice. The submission to the jurisdiction of
the courts referred to in this Article XII shall not (and shall not be construed
so as to) limit the right of any Lender to take proceedings against the Borrower
in the courts of any country in which the Borrower has assets or in any other
court of competent jurisdiction nor shall the taking of proceedings in any one
or more jurisdictions preclude the taking of proceedings in any other
jurisdiction (whether concurrently or not) if and to the extent permitted by
applicable law.
Section 12.14 Successors and Assigns. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party; and all covenants and agreements of
the Borrower in this Agreement shall bind their respective successors and
assigns. The Borrower may not assign or transfer any of its rights or
obligations hereunder (by operation of law or otherwise) without the prior
written consent of the Majority Lenders. Any assignment by any Lender must be
made in compliance with Article VI hereof.
Section 12.15 Merger. This Agreement constitutes the entire contract
among the parties relating to the subject matter hereof and supersedes any and
all previous agreements among the parties relating to the subject matter hereof,
except for those provisions in the Fee Letter and the Engagement Letter that are
in addition to the provisions contained herein.
Section 12.16 Severability Clause.
In case any provision in this Agreement or any Term Note shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby and such provision shall be ineffective in such jurisdiction
only to the extent of such invalidity, illegality or unenforceability.
Section 12.17 Representations, Warranties and Agreements To Survive
Delivery. All representations, warranties and agreements contained in or
incorporated into this Agreement, or contained in Officers' Certificates
submitted pursuant hereto, shall remain operative and in full force and effect
until all Obligations under all of the Loan Documents have been repaid in full,
regardless of any investigation made by or on behalf of the Lenders or any
controlling Person of the Lenders, or by or on behalf of the Borrower or any
controlling Person of the Borrower, and shall survive delivery of the Term
Notes.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
CROWN CASTLE INTERNATIONAL CORP.
By:____________________________________
Name: W. Benjamin Moreland
Title: Senior Vice President and Treasurer
<PAGE>
THE CHASE MANHATTAN BANK
By: _________________________
Name:
Title:
CHASE SECURITIES INC., as Arranger
By: _________________________
Name:
Title:
Wire Transfer Instructions:
Name of Bank:
Address:
ABA#:
For the account of:
Account No.:
Reference:
Attention:
Telephone:
<PAGE>
GOLDMAN SACHS CREDIT PARTNERS L.P.
By: _________________________
Name:
Title:
Wire Transfer Instructions:
Name of Bank:
Address:
ABA#:
For the account of:
Account No.:
Reference:
Attention:
Telephone:
<PAGE>
SYNDICATED LOAN FUNDING TRUST
By: LEHMAN COMMERCIAL PAPER INC.,
not in its individual capacity,
but solely as Asset Manager
By: _________________________
Name:
Title:
Wire Transfer Instructions:
Name of Bank:
Address:
ABA#:
For the account of:
Account No.:
Reference:
Attention:
Telephone:
<PAGE>
EXHIBIT 11.1
CROWN CASTLE INTERNATIONAL CORP.
COMPUTATION OF NET LOSS
PER COMMON SHARE
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS
ENDED MARCH 31,
--------------------
1999 2000
-------- --------
Loss before extraordinary item and cumulative
effect of change in accounting principle..... $(13,473) $(32,060)
Dividends on preferred stock.................. (6,408) (11,493)
-------- --------
Loss before extraordinary item and cumulative
effect of change in accounting principle
applicable to common stock for basic and
diluted computations......................... (19,881) (43,553)
Extraordinary item............................ -- (1,495)
Cumulative effect of change in accounting
principle.................................... (2,414) --
-------- --------
Net loss applicable to common stock for basic
and diluted computations..................... $(22,295) $(45,048)
======== ========
Weighted-average number of common shares
outstanding during the period for basic and
diluted computations (in thousands).......... 94,732 158,566
======== ========
Per common share--basic and diluted:
Loss before extraordinary item and cumulative
effect of change in accounting principle... $ (0.21) $ (0.27)
Extraordinary item............................ -- (0.01)
Cumulative effect of change in accounting
principle.................................... (0.03) --
-------- --------
Net loss................................... $ (0.24) $ (0.28)
======== ========
<PAGE>
EXHIBIT 12.1
CROWN CASTLE INTERNATIONAL CORP.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(DOLLARS IN THOUSANDS)
THREE MONTHS
ENDED MARCH 31,
--------------------
1999 2000
---- ----
Computation of Earnings:
Income (loss) before income taxes, minority
interests, extraordinary item and cumulative
effect of change in accounting principle $(12,661) $(30,508)
Add:
Fixed charges (as computed below) 13,795 46,557
-------- --------
$ 1,134 $ 16,049
======== ========
Computation of Fixed Charges and Combined Fixed
Charges and Preferred Stock Dividends:
Interest expense $ 6,366 $ 22,622
Amortization of deferred financing
costs and discounts on long-term debt 4,920 19,139
Interest component of operating lease
expense 2,509 4,796
-------- --------
Fixed charges 13,795 46,557
Preferred stock dividends 6,408 11,493
-------- --------
Combined fixed charges and preferred
stock dividends $ 20,203 $ 58,050
======== ========
Ratio of Earnings to Fixed Charges -- --
======== ========
Deficiency of Earnings to Cover Fixed Charges $ 12,661 $ 30,508
======== ========
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends -- --
======== ========
Deficiency of Earnings to Cover Combined
Fixed Charges and Preferred Stock Dividends $ 19,069 $ 42,001
======== ========
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's consolidated balance sheet and consolidated statement of operations
and is qualified in its entirety by reference to such consolidated financial
statements together with the related footnotes thereto.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 509,505
<SECURITIES> 0
<RECEIVABLES> 92,747
<ALLOWANCES> 4,756
<INVENTORY> 24,948
<CURRENT-ASSETS> 635,391
<PP&E> 3,007,411
<DEPRECIATION> 155,556
<TOTAL-ASSETS> 4,212,512
<CURRENT-LIABILITIES> 143,464
<BONDS> 1,892,566
430,291
0
<COMMON> 1,601
<OTHER-SE> 1,594,811
<TOTAL-LIABILITY-AND-EQUITY> 4,212,512
<SALES> 0
<TOTAL-REVENUES> 124,244
<CGS> 0
<TOTAL-COSTS> 56,188
<OTHER-EXPENSES> 62,507
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 41,761
<INCOME-PRETAX> (30,508)
<INCOME-TAX> 11
<INCOME-CONTINUING> (32,060)
<DISCONTINUED> 0
<EXTRAORDINARY> (1,495)
<CHANGES> 0
<NET-INCOME> (33,555)
<EPS-BASIC> (0.28)
<EPS-DILUTED> (0.28)
</TABLE>
