<PAGE>
FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ______________
Commission File Number 0-24773
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PINNACLE HOLDINGS INC.
Incorporated in Delaware I.R.S. Employer Identification No. 65-0652634
1549 Ringling Blvd., 3rd Floor, Sarasota, Florida 34236
Telephone: (941) 364-8886
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 _____
---
At November 12, 1999, Registrant had outstanding 41,094,520 shares of $.001 par
value Common Stock.
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
----
Item 1. Financial Statements
<S> <C> <C>
Condensed Consolidated Balance Sheets as of December 31, 1998 and September 30, 1999 1
Condensed Consolidated Statements of Operations for the nine months ended
September 30, 1998 and 1999 2
Condensed Consolidated Statements of Operations for the three months ended
September 30, 1998 and 1999 3
Condensed Consolidated Statement of Changes in Stockholders' Equity for the nine months
ended September 30, 1999 4
Condensed Consolidated Statements of Cash Flows for the nine months ended
September 30, 1998 and 1999 5
Notes to Condensed Consolidated Financial Statements 6-9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 9-16
Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 17
Item 2 Not Applicable 17
Items 3. Not Applicable
Item 4. Not Applicable 17
Item 5. Other Information 17
Item 6. Exhibits and Reports on Form 8-K 18
SIGNATURES 19
EXHIBIT INDEX 20
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
--------------------
PINNACLE HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, September 30
1998 1999
---------------- ------------------
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 13,801,190 $ 151,868,363
Accounts receivable, net 1,679,390 7,555,110
Prepaid expenses and other current assets 1,432,428 6,192,589
------------- --------------
Total current assets 16,913,008 165,616,062
Tower assets, net 473,942,309 861,753,326
Leasehold interests, net -- 81,071,025
Fixed assets, net 2,476,666 3,606,803
Land 14,613,365 31,611,851
Deferred debt issue costs, net 6,686,683 14,026,548
Other assets 1,516,070 2,612,601
------------- --------------
$ 516,148,101 $1,160,298,216
============= ==============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 3,280,809 $ 4,903,801
Accrued expenses 5,761,016 48,652,128
Deferred revenue 1,448,432 4,344,308
Current portion of long-term debt 15,692,912 6,666,384
------------- --------------
Total current liabilities 26,183,169 64,566,621
Long-term debt 417,524,802 698,320,176
Other liabilities 125,152 359,145
------------- --------------
443,833,123 763,245,942
------------- --------------
Redeemable stock:
Series A senior preferred stock, Class B common stock, and Class D common stock 31,643,338 --
Warrants 1,000,000 --
------------- --------------
32,643,338 --
------------- --------------
Stockholders' equity:
Series B junior preferred stock 59,928,980 --
Common stock:
Class A common stock, 202,500 and 0 shares issued and outstanding at December 31, 1998 and
September 30, 1999, respectively 203 --
Class E common stock, 174,766 and 0 shares issued and outstanding at December 31, 1998 and
September 30, 1999, respectively 175 --
Common Stock, $.001 par value, 100,000,000 shares authorized; 0 and 41,094,520 shares issued
and outstanding at December 31, 1998 and September 30, 1999, respectively -- 41,095
Additional paid-in capital 33,136,302 489,426,399
Accumulated deficit (53,394,020) (92,415,220)
------------- --------------
39,671,640 397,052,274
------------- --------------
$ 516,148,101 $1,160,298,216
============= ==============
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these condensed financial statements.
1
<PAGE>
PINNACLE HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------------
1998 1999
---------------- ----------------
(unaudited) (unaudited)
<S> <C> <C>
Revenues $ 21,127,633 $ 48,816,143
Direct operating expenses, excluding depreciation and amortization 3,965,511 11,691,067
-------------- --------------
Gross margin, excluding depreciation and amortization 17,162,122 37,125,076
Other expenses:
General and administrative 2,720,097 2,822,760
Corporate development 4,955,121 5,731,059
State franchise, excise and minimum taxes 398,730 699,836
Depreciation and amortization 13,357,626 35,118,413
-------------- --------------
21,431,574 44,372,068
-------------- --------------
Loss from operations (4,269,452) (7,246,992)
Interest expense 7,276,265 14,439,470
Amortization of original issue discount and debt issuance costs 11,635,619 17,334,738
-------------- --------------
Net loss $ (23,181,336) $ (39,021,200)
============== ==============
Payable-in-kind preferred dividends and accretion 683,304 2,930,338
============== ==============
Net loss attributable to common shareholders $ (23,864,640) $ (41,951,538)
Basic loss per common share(a) $ (2.46) $ (1.41)
-------------- --------------
Weighted average number of common shares outstanding 9,708,457 29,721,466
============== ==============
</TABLE>
(a) Basic loss per common share in 1999 and 1998 have been computed based on
the weighted average number of common shares outstanding during the
periods, after giving retroactive effect for the conversion of the
Company's common stock outstanding prior to the Company's initial public
offering in accordance with the recapitalization effected contemporaneously
with the completion of the initial public offering (Note 3). Diluted loss
per common share would be anti-dilutive and therefore is not applicable.
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these condensed financial statements.
2
<PAGE>
PINNACLE HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
September 30,
---------------------------------
1998 1999
--------------- ----------------
(unaudited) (unaudited)
<S> <C> <C>
Revenue $ 8,583,537 $ 23,059,176
Direct operating expenses, excluding depreciation and amortization 1,908,426 6,863,660
------------- --------------
Gross margin, excluding depreciation and amortization 6,675,111 16,195,516
Other expenses:
General and administrative 852,967 1,210,505
Corporate development 1,660,506 2,459,995
State franchise, excise and minimum taxes 116,083 295,502
Depreciation and amortization 5,865,773 15,469,742
------------- --------------
8,495,339 19,435,744
------------- --------------
Loss from operations (1,820,228) (3,240,228)
Interest expense 2,725,923 6,199,411
Amortization of original issue discount and debt issuance costs 5,496,024 6,107,045
------------- --------------
Net loss $ (10,042,175) $ (15,546,684)
------------- --------------
Payable-in-kind preferred dividends and accretion 683,304 -
============= ==============
Net loss attributable to common shareholders $ (10,725,479) $ (15,546,684)
Basic loss per common share(a) $ (1.07) $ (0.40)
------------- --------------
Weighted average number of common shares outstanding 10,000,000 38,842,567
============= ==============
</TABLE>
(a) Basic loss per common share in 1999 and 1998 have been computed based on
the weighted average number of common shares outstanding during the
periods, after giving retroactive effect for the conversion of the
Company's common stock outstanding prior to the Company's initial public
offering in accordance with the recapitalization effected contemporaneously
with the completion of the initial public offering (Note 3). Diluted loss
per common share would be anti-dilutive and therefore is not applicable.
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these condensed financial statements.
3
<PAGE>
PINNACLE HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Series B
Junior Class A
preferred Stock Common Stock common stock
--------------------------- ------------------- ---------------------
Shares Amount Shares Amount Shares Amount
---------- ---------------- ---------- --------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1998 60.40 $ 59,928,980 - - 202,500 $ 203
Unaudited:
Dividends and accretion on
Preferred Stock 1.27 1,767,106 - -
Issuance of common stock,
net of issuance costs, and
conversion (Note 3) 41,094,520 $ 41,095 (202,500) (203)
Liquidation of Series B
Junior Preferred Stock (61.67) (61,696,086)
Distribution of
contributed capital
and yield on various
classes of common stock
Net Loss
------ ------------ ---------- ----------- -------- ------
Balance at September 30,
1999 - $ - 41,094,520 $ 41,095 - $ -
====== ============ ========== =========== ======== ======
Class E
common stock Additional
--------------------- paid-in Accumulated Stockholders'
Shares Amount capital deficit equity
--------- ---------- ------------ ------------ -------------
Balance at December 31, 1998 174,766 175 $ 33,136,302 $(53,394,020) $ 39,671,640
Unaudited:
Dividends and accretion on
Preferred Stock (2,930,338) (1,163,232)
Issuance of common stock,
net of issuance costs, and
conversion (Note 3) (174,766) (175) 502,968,169 503,008,886
Liquidation of Series B
Junior Preferred (61,696,086)
Distribution of
contributed capital
and yield on various
classes of common stock (43,747,734) (43,747,734)
Net Loss (39,021,200) (39,021,200)
----------- ---------- ------------ ------------ -------------
Balance at September 30, 1999 - $ - $489,426,399 ($92,415,220) $ 397,052,274
=========== ========== ============ ============ =============
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these condensed financial statements.
4
<PAGE>
PINNACLE HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------------------
1998 1999
----------------- ------------------
(unaudited) (unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (23,181,336) $ (39,021,200)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation 13,357,626 35,118,413
Amortization of original issue discount and debt issuance costs 11,635,619 17,334,738
Provision for doubtful accounts 286,905 568,000
(Increase) decrease in:
Accounts receivable, gross (855,026) (3,077,230)
Prepaid expenses and other current assets 4,828 (758,769)
Other assets (609,486) (1,096,531)
Increase (decrease) in:
Accounts payable 647,258 (430,522)
Accrued expenses 4,279,009 4,041,112
Deferred revenue 399,402 296,130
Other liabilities 7,077 233,993
-------------- --------------
Total adjustments 29,153,212 52,229,334
-------------- --------------
Net cash provided by operating activities 5,971,876 13,208,134
-------------- --------------
Cash flows from investing activities:
Payments made in connection with acquisitions:
Tower assets (310,721,207) (383,216,262)
Leasehold interests - (83,387,340)
Land (7,010,921) (16,998,487)
Net current liabilities acquired - 36,135,378
Capital expenditures:
Tower assets (31,312,021) (27,706,463)
Fixed assets (1,244,500) (1,833,704)
-------------- --------------
Net cash used in investing activities (350,288,649) (477,006,878)
-------------- --------------
Cash flows from financing activities:
Borrowings under long-term debt, net 474,736,382 556,080,721
Repayment of long-term debt (204,138,000) (317,963,299)
Proceeds from issuance of common stock, net 10,767,709 501,237,846
Proceeds from issuance of PIK preferred stock and warrants, net 61,669,647 -
Liquidation of PIK preferred stock and warrants - (93,741,617)
Distribution of contributed capital and payment of
accretion on various classes of common stock (412,888) (43,747,734)
-------------- --------------
Net cash provided by financing activities 342,622,850 601,865,917
------------- --------------
Net increase (decrease) in cash and cash equivalents (1,693,923) 138,067,173
Cash and cash equivalents, beginning of period 1,693,923 13,801,190
------------- --------------
Cash and cash equivalents, end of period $ - $ 151,868,363
============= ==============
Supplemental disclosure of cash flows:
Cash paid for interest $ 7,840,878 $ 16,498,833
============= ==============
Non-Cash Transactions:
Seller debt issued in acquisitions $ 2,347,107 $ 8,998,250
Payable-in-kind preferred dividends and accretion $ 683,304 $ 2,930,338
Stock issued for acquisitions $ - $ 8,804,163
</TABLE>
The accompanying notes to Condensed Consolidated Financial Statements are an
integral part of these condensed financial statements.
5
<PAGE>
Pinnacle Holdings Inc.
Notes to Condensed Consolidated Financial Statements
1. Financial Statements
The accompanying condensed consolidated financial statements reflect the
financial position and results of operations and cash flows of Pinnacle Holdings
Inc. and its wholly owned subsidiaries: Pinnacle Towers Inc., Pinnacle Towers
Canada Inc., Coverage Plus Antenna Systems, Inc. and Tower Systems, Inc. At the
time of the August 31, 1999 Motorola site acquisition (as defined herein), the
Company invested $49 million in convertible preferred stock of PT III, a newly
formed entity, most of the common stock of which is owned by two members of
management of the Company. These proceeds were utilized by PT III to acquire the
ownership of certain rooftop communication site leases previously owned by
Motorola. The Company and Part III modified certain aspects of those
relationships subsequent to September 30, 1999. See Part II, Item 5, Other
Information. In addition, PT III entered into a service agreement with the
Company to manage these assets. As a result of these transactions and
significant operating relationships with PT III, the assets and liabilities of
PT III, together with the results of operations from the date of the Motorola
acquisition, have been included in the Company's consolidated financial
statements as of September 30, 1999. These entities are collectively referred to
as the "Company". See Part II, Item 5, Other Information. All significant
intercompany balances and transactions have been eliminated. Preparation of the
consolidated financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the consolidated financial statements. Actual
results may vary from estimates used.
Results of operations for any interim period are not necessarily indicative of
results of any other periods or for the year. The consolidated statements as of
September 30, 1999 and for the nine month and three month periods ended
September 30, 1999 and 1998 are unaudited, but in the opinion of management
include all adjustments (consisting of normal recurring adjustments) necessary
for a fair presentation of results for such periods . These consolidated
financial statements should be read in conjunction with the Company's financial
statements and notes thereto for the year ended December 31, 1998.
The Company's Condensed Consolidated Statements of Operations for the nine month
and three month periods ended September 30, 1999, reflect all components of
Comprehensive Income as defined by SFAS No. 130, "Reporting Comprehensive
Income." Accordingly, no separate Consolidated Statement of Comprehensive
Income is presented as would otherwise be required.
2. Acquisitions
The Company actively acquires communications sites and related real estate
assets.
On March 4, 1998, the Company completed the acquisition of 201 communications
sites from Southern Communications Services, Inc. ("Southern Communications"), a
subsidiary of Southern Company. The Company paid $83,500,000 for these
communications sites, located in Georgia, Alabama, Mississippi, and Florida.
On September 3, 1998, the Company acquired from MobileMedia Corporation
("MobileMedia") and several of its affiliates 166 communications sites for an
aggregate purchase price of approximately $170 million (the "MobileMedia
Acquisition"). MobileMedia assigned its existing tenant leases on the sites to
the Company. The Company entered into a lease (the "Lease") with MobileMedia
Communications, Inc., an affiliate of MobileMedia, providing such affiliate of
MobileMedia the non-exclusive right to install a certain amount of its equipment
on the acquired communications sites for aggregate rent of $10.7 million per
year. The Lease has an initial term of 15 years and one five-year renewal term
exercisable at the option of the lessee. Prior to this acquisition, space on
the sites was primarily for the exclusive use of MobileMedia and its affiliates.
The Company has integrated these communications sites into its rental tower
business and is leasing space on these sites to other third party wireless
6
<PAGE>
communications providers. The communications sites are located in the
Southeastern United States, Southern California and New England.
In addition to the Southern Communications and MobileMedia transactions
described above, the Company completed 80 acquisitions of 526 communications
sites and related assets, all of which were individually insignificant to the
Company, from various sellers during the year ended December 31, 1998 for an
aggregate purchase price of $331,204,262, consisting of $328,789,297 in cash and
$2,414,965 of notes payable to the former tower owners.
On August 31, 1999, the Company acquired 1858 communications sites and related
assets from Motorola, Inc. ("Motorola") for $254 million, comprised of $245
million in cash and $9 million in the Company's common stock, plus fees and
expenses of approximately $17 million (the "Motorola Antenna Site Acquisition").
The purchase price allocations related to this transaction are preliminary.
However, we do not expect that the final allocation of the purchase price will
be materially different from its preliminary allocation. This acquisition
results in the Company having sites in all fifty States and nine Canadian
Provinces. The Company transferred certain of the rooftop communication sites
it acquired from Motorola to PT III. See Part II, Item 5, Other Information.
In addition to the Motorola Antenna Site Acquisition, during the nine months
ended September 30, 1999 the Company completed 108 acquisitions of 295
communications sites and related assets, all of which were individually
insignificant to the Company, from various sellers for an aggregate purchase
price of $211 million consisting of $202 million in cash and $9 million of notes
payable to the former tower owners.
The Company accounts for its acquisitions using the purchase method of
accounting. The results of operations of the acquired assets are included with
those of the Company from the dates of the respective acquisitions. The pro
forma results of operations listed below reflect purchase accounting and pro
forma adjustments as if all of the transactions completed during 1998 and the
nine months ended September 30, 1999 occurred as of January 1, 1998. The
unaudited pro forma condensed consolidated financial information are not
necessarily indicative of the results that would have occurred if the assumed
transactions had occurred on the dates indicated and are not necessarily
indicative of the expected results of operations in the future.
<TABLE>
<CAPTION>
Pro Forma
-----------------------------------------
September 30, September 30,
1998 1999
------------------- --------------------
(unaudited) (unaudited)
<S> <C> <C>
Revenue $ 100,368,428 $ 110,241,230
Gross margin, excluding depreciation 57,896,990 67,573,289
Net loss (88,939,174) (72,603,977)
Net loss attributable to common shareholders (89,622,478) (75,534,315)
Basic net loss per common share (9.23) (2.54)
</TABLE>
3. Public Offerings and Stockholders' Equity
On February 19, 1999, the Company completed its initial public offering of
common stock ("the IPO") whereby the Company sold 20,000,000 shares of a new
class of common stock (the "Common Stock"). In addition, on March 19, 1999, the
Underwriters over-allotment option was exercised to the extent that an
additional 2,026,000 shares were sold. The initial price per share was $14,
resulting in net proceeds from the IPO of approximately $288 million.
In connection with the IPO, pursuant to a recapitalization agreement between the
Company, its largest stockholder, ABRY Broadcast Partners II, L.P. ("ABRY II"),
and certain members of the Company's
7
<PAGE>
management that are stockholders of the Company, the Company converted all
outstanding shares of each class of the Company's five classes of common stock
into shares identical to the Common Stock sold in the IPO and paid to the
holders of certain of such classes of common stock preferential amounts and
yields. The certificate of incorporation of the Company was amended immediately
prior to the consummation of the IPO to eliminate the multiple classes of the
Company's common stock and create the now single class of Common Stock, and all
of the outstanding shares of all the classes of common stock of the Company
other than Class D Common Stock were converted into approximately 8,571,309
shares of Common Stock and all shares of Class D common Stock were converted
into approximately 1,428,691 shares of Common Stock.
The holders of the Company's outstanding (prior to the above described
conversion) shares of Class A Common Stock, Class B Common Stock and Class E
Common Stock were collectively paid approximately $38.9 million by the Company
from proceeds of the IPO, which amount equaled the amount of preferences such
shares were entitled to over the other classes of the Company's common stock
pursuant to the Company's certificate of incorporation before giving effect to
the amendment relative to the conversion of those shares as described above. In
addition, the holders of the Company's outstanding (prior to the above described
conversion) shares of Class A Common Stock were collectively paid approximately
$4.8 million by the Company from proceeds of the IPO, which amount equaled the
amount of yield such shares had accrued from the date of their issuances through
June 30, 1997 pursuant to the Company's certificate of incorporation before
giving effect to the amendment relative to the conversion of those shares as
described above.
Other uses of proceeds from the IPO were: (1) approximately $32.0 million
redeemed the outstanding shares of the Company's Series A Senior Preferred Stock
(the "Senior Preferred Stock"); (2) approximately $61.7 million redeemed the
outstanding shares of the Company's Series B Junior Preferred Stock (the "Junior
Preferred Stock"); (3) approximately $15.7 million repaid in full and retired a
loan from ABRY II; (4) approximately $123.8 million repaid outstanding
borrowings under the Company's Senior Credit Facility (as defined herein); and,
(5) $11.4 million was used to fund the closing of pending acquisitions proximate
to the date the funds were available from the IPO.
On July 22, 1999, the Company completed a secondary offering of common stock
(the "Secondary Offering") whereby the Company sold 8,650,000 shares of its
Common Stock. The price per share was $25, resulting in net proceeds from the
Secondary Offering of approximately $206 million. Certain stockholders of the
Company also sold 2,350,000 shares of common stock, the net proceeds of which
are not available to the Company. The proceeds from the Secondary Offering were
invested initially in short-term liquid securities and will be used in
conjunction with the Company's availability of senior debt under its amended
Senior Credit Facility to fund acquisitions and development of communications
sites. Approximately $55 million of this cash had been used as of September
30, 1999, $20 million of which was used to consummate the Motorola Antenna Site
Acquisition.
Also in conjunction with the Motorola Antenna Site Acquisition the Company
issued 418,520 shares of its common stock to Motorola as part of the
consideration given for the acquisition. These shares were recorded at the
fair value of the securities when the terms of the acquisition were agreed to
and announced.
4. Long-term Debt
As of June 25, 1999, the Company amended its Senior Credit Facility to provide
$520 million of financing, of which $470 million was committed. Advances under
the Senior Credit Facility accrue interest at the Company's option of either
LIBOR plus a margin of up to 3.00%, as defined in the related agreement, or at
the greater of the Federal Funds Effective Rate plus 0.50% or the prime rate,
plus a margin of up to 1.75%. Additionally, certain financial covenants were
modified.
As of September 17, 1999, the Company again amended its Senior Credit Facility
to provide $670 million of financing, of which $470 million was committed and
utilized at September 30, 1999.
8
<PAGE>
The Senior Credit Facility is secured by a lien on substantially all of the
Company's assets and a pledge of substantially all of the capital stock of the
Company's subsidiaries. The Senior Credit Facility contains customary covenants
such as limitations on the Company's ability to incur indebtedness, to incur
liens or encumbrances on assets, to make certain investments, to make
distributions to shareholders, or prepay subordinated debt. Under the Senior
Credit Facility, the Company may not permit the ratio of senior debt to
annualized EBITDA as defined in the agreement to exceed certain amounts.
5. Commitments
As of and subsequent to September 30, 1999, the Company entered into several
letters of intent with various third parties to purchase 512 additional
communications sites and related assets, reflecting an aggregate commitment to
pay approximately $105 million, all of which are subject to consummation of
transactions pending completion of due diligence efforts and any further
negotiation that may result therefrom.
6. Subsequent Events
During October 1999, the Company increased the committed amount of its Senior
Credit Facility from $470 million to $520 million, $50 million of which remains
available for use in making acquisitions as of November 11, 1999.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations:
The following discussion of the consolidated financial condition and results of
operations of the Company should be read in conjunction with the condensed
consolidated financial statements and related notes thereto. This discussion
contains forward-looking statements within the meaning of the federal securities
laws. The words "believe," "estimate," "expect," "intend," "anticipate," "plan,"
and similar expressions and variations of such expressions identify certain of
such forward-looking statements that speak only as of the dates on which they
were made. Prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties. Actual events or results may differ materially from those
discussed in the forward-looking statements as a result of various factors,
including, without limitation, the risk factors set forth in the Company's
Amendment No. 2 to Registration Statement on Form S-3 (No. 333-82273) filed on
July 21, 1999 (the "Registration Statement").
The Company
The Company acquires and constructs communications sites, including exclusive
management rights or leasehold interests and leases space on such sites to a
broad base of wireless communications providers, operators of private networks,
government agencies and other customers. The Company's objective is to own or
manage and operate clusters of rental communications sites in areas where there
is significant existing and expected continued growth in the demand for rental
communications sites by wireless communications providers. The Company seeks to
obtain a substantial number of communications sites in its targeted markets in
order to offer "one-stop shopping" to wireless communications providers who are
deploying or expanding wireless communications networks.
The Company's growth has come primarily from aggressively pursuing communication
site acquisitions in areas that complement the Company's existing base of rental
communications sites and the expansion into additional high growth wireless
communications markets. The Company also selectively constructs new
communications sites to further augment its communication site portfolio.
Additionally, the Company realizes organic revenue growth from new tenants,
escalations and repricing of existing tenant leases. The Company is the leading
provider of wireless communications rental tower space in the Southeastern
United States. With the closing of the Motorola Antenna Site Acquisition, the
Company's footprint has expanded to cover all fifty states and parts of Canada.
9
<PAGE>
During the quarter, we achieved a 185% increase in our number of sites by
closing 1,987 sites - nearly tripling our site inventory. These new sites
included the purchase of all of Motorola's 1,858 North American antenna sites,
which accounted for 499 owned sites, 526 "managed" sites and 833 "leased" sites.
Managed sites are tower or rooftop communications sites owned by others where we
would have the exclusive right to market antenna space on these sites. Leased
sites are tower or rooftop communications sites owned by others that we would
have a non-exclusive right to market antenna space. We subsequently sold certain
rooftop sites to PT III. As of September 30, 1999, the Company has completed
over 320 acquisitions and upon completion of all pending acquisitions will own
or manage over 3,600 sites.
We currently have over 3000 customers renting space on one or more of our
communications sites. Our tenants consist of all forms of wireless
communications providers, operators of private wireless networks and government
agencies, including Southern Communications, Nextel, Sprint PCS, PageNet,
Motorola, BellSouth Mobility, MobileMedia Communications, Teletouch, Skytel,
Pagemart, Federal Bureau of Investigation and Bureau of Alcohol, Tobacco &
Firearms. The Company's leases generally range in duration from three to five
years and many provide for scheduled minimum rent increases of the greater of a
specified percentage (which typically ranges from 3-5%) or the change for the
relevant period in the Consumer Price Index. Additionally, our customers are
generally responsible for the installation of their own equipment and the
incremental utility costs associated with such equipment. Hence, adding
customers on a communications site does not increase monitoring, maintenance or
utility costs. When new customers are added to a communications site, we are
able to increase revenue at low incremental cost, thereby increasing cash flow
margins.
The Company has designed and implemented a three-tiered growth strategy that
focuses on: (i) increasing revenue yield per tower through aggressive marketing
and development; (ii) continuing to acquire communications sites in key markets;
and (iii) selective new tower construction. In order to effect its strategy,
the Company has created a highly focused, structured organization in which
significant resources are devoted to acquiring or constructing communications
sites on strategically located sites supported by customer demand. In addition
to supporting the purchase decision regarding potential acquisitions, the
Company uses its proprietary information systems and other systems to rapidly
integrate new communications sites and initiate sales and marketing efforts
immediately following their acquisition or construction.
Results of Operations
Nine months ended September 30, 1999 compared to nine months ended September 30,
- --------------------------------------------------------------------------------
1998
- ----
Site Revenues increased by $27.7 million, or 131%, to $48.8 million for the
nine-month period ended September 30, 1999 from $21.1 million for the nine-month
period ended September 30, 1998. This additional revenue is mainly attributable
to the acquisition and construction of 2,748 sites since January 1, 1998. They
are as follows: 1,987 sites during third quarter, 1999; 197 sites during first
two quarters of 1999; and 564 sites during 1998. A portion of the revenue
increase is related to same-sites organic growth. Same-site organic growth is a
result of expanded marketing efforts to increase the number of customers per
site, renegotiating leases that are subject to renewal, and, contractual price
escalations for existing customers.
Direct operating expenses, excluding depreciation and amortization, increased by
$7.7 million or 195% to $11.7 for the nine-month period ended September 30, 1999
from $4.0 million for the nine-month period ended September 30, 1998. This
increase is consistent with the acquisition and construction of the 2,748 sites
discussed above. Direct operating expenses as a percentage of revenue increased
to 23.9% for the nine-month period ended September 30, 1999 from 18.8% for the
nine-month period ended September 30, 1998. The percentage increase is
primarily a result of the change in mix of sites. Both managed and leased sites
produce lower margins than
10
<PAGE>
owned sites because of their variable rent expense. Notwithstanding, these sites
are financially and strategically consistent with the Company's objective of
providing wireless service providers a large selection of antenna site
locations.
General and administrative expenses increased slightly for the nine-month period
ended September 30, 1999 from $2.7 million to $2.8 million for the nine-month
period ended September 30, 1998. The increases in expenses are from additional
staffing required for the increased work volume, the Company becoming a public
registrant, increased levels of advertising and marketing expenditures, and
other related costs associated with the Company's growth. However, as a
percentage of revenue, it decreased to 5.8% of revenue for the nine-month period
ended September 30, 1999 from 12.9% for the nine-month period ended September
30, 1998 reflecting the disproportionate higher growth in revenues relative to
expenses. The decrease in percentage is from economies of scale realized from
increases in tower revenues as a result of the Company's acquisitions and
construction of communications sites.
Corporate development expenses increased $776 thousand, but decreased as a
percentage of revenue from 23.5% for the nine-month period ended September 30,
1998 compared to 11.7% for the nine-month period ended September 30, 1999. The
increase in expense is related to the overall growth in the business and related
activity during this same period. The decrease in percentage is from economies
of scale realized from increases in tower revenues relative to direct operating
expenses as a result of the Company's acquisitions and construction of
communications sites.
State franchise, excise and minimum taxes, which represent taxes assessed in
connection with the Company's operations in various state jurisdictions
increased to $0.70 million for the nine-month period ended September 30, 1999
from $0.40 million for the nine-month period ended September 30, 1998. Such
taxes are calculated using various methods such as a portion of the Company's
property within a given state, the Company's capital structure or based upon a
minimum tax in lieu of income taxes. The increase in 1999 is primarily
attributable to the Company's significant growth in assets and capital, offset
slightly by benefits resulting from the ability to apportion such amounts to
certain newly entered states that have no such taxes or only minimum taxes, plus
taxes to be incurred related to operations located in Canada from the Motorola
Acquisition.
Depreciation and amortization expense increased 163%, or $21.8 million, to $35.1
million for the nine-month period ended September 30, 1999 from $13.4 million
for the nine-month period ended September 30, 1998 as a result of the increase
in tower assets through the acquisition activities of the Company as described
above. Of the $21.8 million increase, $3.6 million was attributable to the
Motorola Acquisition.
Interest expense increased $7.2 million, or 98%, for the nine-month period ended
September 30, 1999 from $7.3 million for the nine-month period ended September
30, 1998. The increase in interest expenses was attributable to higher interest
rates and increased average borrowings associated with the Company's
acquisitions during the nine-month period ended September 30, 1999 as compared
to the nine-month period ended September 30, 1998.
Amortization of original issue discount and debt issuance cost increased $5.7
million to $17.3 million for the nine-month period ended September 30, 1999 from
$11.6 million for the nine-month period ended September 30, 1998. The prior
year period included amortization of original issue discount for only six full
and one partial month, as the sale of the Company's 10% Senior Discount Notes
due March 15, 2008 ("Senior Discount Notes") was consummated on March 20, 1998,
compared to a full nine-months of amortization on the accreted balance for the
1999 period.
Three months ended September 30, 199 compared to three months ended September
- -----------------------------------------------------------------------------
30, 1998
- --------
Site Revenues increased by $14.5 million, or 169%, to $23.1 million for the
three-month period ended September 30, 1999 from $8.6 million for the three-
month period ended September 30, 1998. The additional revenue is mainly
attributable to the acquisition and construction of 2,184 sites over the past
twelve months since September 30, 1998, of which 1,987 closed during the three
months ended September 30, 1999.
11
<PAGE>
A portion of the revenue increase is related to same-sites sales growth.
Same-site organic growth is a result of expanded marketing efforts to increase
the number of customers per site, renegotiating leases that are subject to
renewal, and contractual price escalations for existing customers.
Direct operating expenses, excluding depreciation and amortization, increased by
$5.0 million, or 260%, to $6.9 million for the three-month period ended
September 30, 1999 from $1.9 million for the three-month period ended September
30, 1998. This increase is consistent with the acquisition and construction of
the 2,184 sites discussed above. Direct operating expenses as a percentage of
revenue increased to 29.8% for the three-month period ended September 30, 1999
from 22.2% for the three-month period ended September 30, 1998. The percentage
increase is primarily a result of the change in mix of sites. Both managed and
leased sites produce lower margins than owned sites because of their variable
rent expense. Notwithstanding, these sites are financially and strategically
consistent with the Company's objective of providing wireless service providers
a large selection of antenna site locations.
General and administrative expenses increased for the three-month period ended
September 30, 1999 from $0.9 million to $1.2 million for the three-month period
ended September 30, 1998. However, as a percentage of revenue, it decreased to
5.2% of revenue for the three-month period ended September 30, 1999 from 9.9%
for the three-month period ended September 30, 1998 reflecting the
disproportionate higher growth in revenues relative to expenses. The decrease in
percentage is from economies of scale realized from increases in tower revenues
as a result of the Company's acquisitions and construction of communications
sites. The increases in expenses are from additional staffing required for the
increased work volume, the Company becoming a public registrant, increased
levels of advertising and marketing expenditures, and other related costs
associated with the Company's growth.
Corporate development expenses increased $0.8 million, from $1.7 million to
$2.5 million, but decreased as a percentage of revenue from 19.3% for the
three-month period ended September 30, 1998 compared to 10.7% for the three-
month period ended September 30, 1999. The increases are related to the overall
growth in the business and related activity during this same period. The
decrease in percentage is from economics of scale realized from increases in
tower revenues relative to direct operating expenses as a result of the
Company's acquisitions and construction of communications sites.
State franchise, excise and minimum taxes, which represent taxes assessed in
connection with the Company's operations in various state jurisdictions
increased to $0.3 million for the three-month period ended September 30, 1999
from $0.1 million for the three-month period ended September 30, 1998. Such
taxes are calculated using various methods such as a portion of the Company's
property within a given state, the Company's capital structure or based upon a
minimum tax in lieu of income taxes. The increase in 1999 is primarily
attributable to the Company's significant expansion of its geographic region,
primarily through acquisitions.
Depreciation and amortization expense increased 164%, or $9.6, million to $15.5
million for the three-month period ended September 30, 1999 from $5.9 million
for the three-month period ended September 30, 1998 as a result of the increase
in tower assets through the acquisition activities of the Company as described
above. Of the $9.6 million increase, $3.6 million was attributable to the
Motorola Acquisition.
Interest expense increased $3.5 million, or 127%, for the three-month period
ended September 30, 1999 from $2.7 million for the three-month period ended
September 30, 1998. The increase in interest expenses was attributable to higher
interest rates and increased average borrowings associated with the Company's
acquisitions during the three-month period ended September 30, 1999 as compared
to the three-month period ended September 30, 1998.
Amortization of original issue discount and debt issuance cost increased $0.6
million to $6.1 million for the three-month period ended September 30, 1999 from
$5.5 million for the three-month period ended September 30, 1998. The increase
reflects the twelve months of compounding of the amortized original issue
discount of the zero-coupon Senior Discount Notes issued March 20, 1998 and due
March 15, 2003.
12
<PAGE>
Liquidity and Capital Resources
- -------------------------------
The Company's liquidity needs arise from its acquisition-related activities,
debt service, working capital and capital expenditures. The Company has
historically funded its liquidity needs with proceeds from equity contributions,
bank borrowings, cash flow from operations and the offering of its Senior
Discount Notes. The Company had working capital of $101.0 million and a working
capital deficit $9.3 million (inclusive of a $15.0 million bridge loan owed to
ABRY II repaid on February 24, 1999) as of September 30, 1999 and December 31,
1998, respectively. The Company's ratio of total debt to stockholders' equity
was 1.8 to 1.0 at September 30, 1999 and 10.9 to 1.0 at December 31, 1998.
The Senior Credit Facility with Bank of America, N.A. and certain other lenders
provides a combination of term loans and revolving lines of credit for
borrowings of up to $670 million, 520 of which is currently committed. The
Company may make borrowings and repayments until June 30, 2006. Beginning June
30, 2001, the availability under the term loans and revolving lines of credit
start reducing by specified amounts on a quarterly basis until June 30, 2007
when the availability will be reduced to zero. Loans under the Senior Credit
Facility bear interest at a rate per annum, at the borrower's request, equal to
the agent bank's prime rate plus a margin of up to 1.75% or the 90-day London
Interbank Offered Rate plus a margin of up to 3.00%. Outstanding borrowings
under the Senior Credit Facility have been used primarily to fund acquisitions
and construction of communications sites. As of September 30, 1999, there was
approximately $200 million available under the Senior Credit Facility (of the
additional $50 million of uncommitted amount that subsequently was committed and
the $150 million that remains uncommitted currently) after giving effect to
approximately $25.7 million of outstanding letters of credit, which reduce
availability under the Senior Credit Facility.
The Company also uses seller financing to fund certain of its tower
acquisitions. The Company had outstanding notes that it issued to sellers
bearing interest at rates ranging from 8.5% to 13.0% per annum in the aggregate
amount of $28.2 million at September 30, 1999.
In March 1998, the Company completed its offering of its Senior Discount Notes.
The Company received net proceeds of approximately $192.8 million from that
offering. The proceeds were used to repay outstanding borrowings under the
Senior Credit Facility, to repay in full and retire a $12.5 million bridge loan
from ABRY II and accrued interest thereon, to repay in full and retire a $20
million subordinated term loan and accrued interest thereon and to pay a
distribution preference to holders of Class B Common Stock. The Senior Discount
Notes were issued under an indenture dated as of March 20, 1998 and will mature
on March 15, 2008. Until March 15, 2003, the Company's interest expense on the
Senior Discount Notes will consist solely of the accretion of original issue
discount. Thereafter, the Senior Discount Notes will require semi-annual cash
interest payments of $16.25 million.
In September 1998, in order to finance the MobileMedia Acquisition, the Company
sold two newly issued series of Preferred Stock, the Senior Preferred Stock with
a liquidation preference of $30.0 million and the Junior Preferred Stock with a
liquidation preference of $32.5 million. Included in the sale of the Senior
Preferred Stock were warrants to purchase approximately .75% of the Company's
outstanding common stock. The warrants were cancelled upon the redemption of
the Senior Preferred Stock. ABRY/Pinnacle, Inc., an affiliate of ABRY II,
purchased the Junior Preferred Stock. In addition to the proceeds from the above
sales, the MobileMedia Acquisition was funded with the ABRY Bridge Loan and
borrowings under the Senior Credit Facility. In December 1998, the Company
issued $26.2 million of additional Junior Preferred Stock to ABRY/Pinnacle, Inc.
The proceeds from the sale of the Junior Preferred Stock were used to fund tower
acquisitions and pay operating costs. The Senior Preferred Stock and the Junior
Preferred Stock were entitled to receive dividends, payable quarterly, at a
current rate of 14% per annum. The Senior Preferred Stock and the Junior
Preferred Stock were redeemable, at the option of the Company, in whole (but not
in part), at any time at a redemption price equal to the aggregate liquidation
preference thereof, plus all accumulated but unpaid dividends to the date of
redemption.
13
<PAGE>
The principal stockholders of the Company (ABRY II, and Messrs. Wolsey, Dell'Apa
and Day) were parties to a Subscription and Stockholders Agreement, dated as of
May 16, 1996, as amended (the "Stockholders Agreement"). Pursuant to the
Stockholders Agreement, ABRY II agreed to make capital contributions to the
Company, up to an aggregate capital contribution of $50.0 million. As of
December 31, 1998, ABRY II had contributed $37.2 million and had guaranteed an
additional $3.9 million of other debt under the aggregate $50.0 million capital
contribution commitment. Such capital contribution commitment terminated upon
the closing of the IPO. Additionally, as of December 31, 1998, ABRY II or an
affiliate had contributed separately $73.7 million to the Company, including
$15.0 million outstanding under the ABRY Bridge Loan and $58.7 million of Junior
Preferred Stock. The Stockholders Agreement was terminated upon completion of
the IPO.
On February 19, 1999, the Company completed the IPO whereby the Company sold
20,000,000 shares of Common Stock. In addition, on March 19, 1999, the
Underwriters over-allotment option was exercised to the extent that an
additional 2,026,000 shares were sold. The initial price per share was $14,
resulting in net proceeds from the IPO of approximately $290 million before
deducting costs of the IPO.
In connection with the IPO, pursuant to a recapitalization agreement between the
Company, its largest stockholder, ABRY II, and certain members of the Company's
management that are stockholders of the Company, the Company converted all
outstanding shares of each class of the Company's five classes of common stock
into shares of the Common Stock sold in the IPO and paid to the holders of
certain of such classes of common stock preferential amounts and yields. The
certificate of incorporation of the Company was amended immediately prior to the
consummation of the IPO to eliminate the multiple classes of the Company's
common stock and create the now single class of Common Stock, and all of the
outstanding shares of all the classes of common stock of the Company other than
Class D Common Stock were converted into approximately 8,571,309 shares of
Common Stock and all shares of Class D common Stock were converted into
approximately 1,428,691 shares of Common Stock.
The holders of the Company's outstanding (prior to the above described
conversion) shares of Class A Common Stock, Class B Common Stock and Class E
Common Stock were collectively paid approximately $38.9 million by the Company
from proceeds of the IPO, which amount equaled the amount of preferences such
shares were entitled to over the other classes of the Company's common stock
pursuant to the Company's certificate of incorporation before giving effect to
the amendment relative to the conversion of those shares as described above. In
addition, the holders of the Company's outstanding (prior to the above described
conversion) shares of Class A Common Stock were collectively paid approximately
$4.8 million by the Company from proceeds of the IPO, which amount equaled the
amount of yield such shares had accrued from the date of their issuances through
June 30, 1997 pursuant to the Company's certificate of incorporation before
giving effect to the amendment relative to the conversion of those shares as
described above.
Other uses of proceeds from the IPO were: (1) approximately $32.0 redeemed the
outstanding shares of the Company's Senior Preferred Stock; (2) approximately
$61.7 million redeemed the outstanding shares of the Company's Junior Preferred
Stock; (3) approximately $15.7 million repaid in full and retired a loan from
ABRY II; (4) approximately $123.8 million repaid outstanding borrowings under
the Company's Senior Credit Facility; and, (5) $11.4 was used to fund the
closing of pending acquisitions proximate to the date the funds were available
from the IPO.
On July 22, 1999, the Company completed the Secondary Offering whereby the
Company sold 8,650,000 shares of common stock. The price per share was $25,
resulting in net proceeds from the Secondary Offering of approximately $206
million. Certain stockholders of the Company also sold 2,350,000 shares of
common stock, the net proceeds of which are not available to the Company. The
proceeds from the Secondary Offering were invested initially in short-term
liquid securities and will be used in conjunction with the Company's
availability of senior debt under the Senior Credit Facility to fund the
expected consummation of the Motorola Antenna Site Acquisition and other
acquisitions and development of communications sites.
14
<PAGE>
Capital expenditures, including acquisitions, for the nine months ended
September 30, 1999 were $477.0 million, compared to $350.3 million in the
comparable 1998 period. The Company anticipates that it will spend approximately
$98.7 million on capital expenditures during the period from October 1, 1999
through December 31, 1999, including the Motorola Antenna Site Acquisition,
various individually immaterial acquisitions in the Company's current targeted
acquisitions pipeline, construction and upgrading of communications sites.
Depending on availability of additional capital, the Company expects that it may
make substantial capital expenditures for acquisitions, construction and
upgrading of additional communications sites in 1999 and 2000.
The Company believes that cash flow from operations and existing cash balances
will be sufficient to meet working capital requirements for existing properties.
The Company currently anticipates that it will seek additional financing in
order to pursue additional acquisitions, construction activity and other capital
expenditures that will require funding in excess of available proceeds and funds
available under its Senior Credit Facility. Such additional financing may be
obtained by the Company through public or private debt and equity offerings or
increasing availability under its Senior Credit Facility. There can be no
assurance that such financing will be commercially available through an
increased commitment under the Senior Credit Facility or otherwise or be
permitted by the terms of the Company's existing indebtedness. To the extent
that the Company is unable to finance future capital expenditures, it may not be
able to achieve its current acquisition strategy.
Inflation
Because of the relatively low levels of inflation experienced in 1998 and as of
September 30, 1999, inflation did not have a significant effect on the Company's
results in such years.
Year 2000
Many computer systems in use today were designed and developed using two digits,
rather than four, to specify years. As a result, such systems will recognize
the year 2000 as "00" or 1900. This could cause many computer applications to
fail completely or to create erroneous results unless corrective measures are
taken.
We utilize management information systems and software technology that may be
affected by Year 2000 issues throughout our businesses. During 1996, we began
to implement plans to assess our systems to determine their ability to meet our
internal and external requirements. During 1998, we completed our initial
comprehensive testing of and modifications to our information systems in
response to that testing. We have developed questionnaires and contacted key
suppliers regarding their Year 2000 compliance to determine any impact on our
operations. In general, our suppliers and customers appear to have developed or
are in the process of developing plans to address Year 2000 issues. We will
continue to monitor and evaluate the progress of our suppliers and customers on
this matter.
Year 2000 issues are not expected to have a material impact on our current
information systems as a result of the steps already completed to try and make
our systems Year 2000 compliant. Based on the nature of our business, we
anticipate that we are not likely to experience material business interruption
due to the impact of Year 2000 compliance on our customers and vendors, although
if our customers and vendors experience Year 2000 problems, our results of
operations could be materially adversely affected. We estimate that we will
spend approximately $100,000 in 1999 to continue to monitor and test our systems
for Year 2000 compliance including our software applications that we
continuously develop and enhance. As a result, we do not anticipate that
incremental expenditures to address Year 2000 compliance will be material to our
liquidity, financial position or results of operations prior to the Year 2000.
15
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
----------------------------------------------------------
The Company is exposed to certain market risks inherent in the Company's
financial instruments. These instruments arise from transactions entered into
in the normal course of business and, in some cases, relate to the Company's
acquisitions of related businesses. The Company is subject to interest rate
risk on its existing Senior Credit Facility and any future financing
requirements. The Company's fixed rate debt consists primarily of outstanding
balances on its Senior Discount Notes and notes payable to former tower owners
and its variable rate debt relates to borrowings under its Senior Credit
Facility. See "-Liquidity and Capital Resources".
The following table represents the future principal payment obligations and
weighted-average interest rates associated with the Company's existing long-term
debt instruments assuming the Company's actual level of long-term indebtedness
of $676.8 million under the Senior Discount Notes and the Senior Credit Facility
as of September 30, 1999:
<TABLE>
<CAPTION>
Expected Maturity Date
<S> <C> <C> <C> <C> <C> <C>
1999 2000 2001 2002 2003 Thereafter
Liabilities
Long-term Debt
Fixed Rate
(10.00%) $ -- $ -- $ -- $ -- $ -- $325,000,000
Variable Rate
(Weighted Average
Interest Rate of 8.32%) -- -- 34,530,000 51,245,000 61,274,000 297,251,000
</TABLE>
The Company's primary market risk exposure relates to (i) the interest rate risk
on long-term and short-term borrowings, (ii) its ability to refinance its Senior
Discount Notes at maturity at market rates, (iii) the impact of interest rate
movements on its ability to meet interest expense requirements and exceed
financial covenants and (iv) the impact of interest rate movements on the
Company's ability to obtain adequate financing to fund future acquisitions. The
Company manages interest rate risk on its outstanding long-term and short-term
debt through its use of fixed and variable rate debt. While the Company can not
predict or manage its ability to refinance existing debt or the impact interest
rate movements will have on its existing debt, management continues to evaluate
its financial position on an ongoing basis.
16
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------
The Company is from time to time involved in ordinary litigation incidental to
the conduct of its business. The Company believes that none of its pending
litigation will have a material adverse effect on the Company's business,
financial condition or results of operations.
Item 2. Changes in Securities and Use of Proceeds.
-----------------------------------------
Not applicable.
Item 3. Defaults Upon Senior Securities.
-------------------------------
Not applicable.
Item 4 Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
Not applicable.
Item 5. Other Information.
-----------------
The Company is taxed as a Real Estate Investment Trust ("REIT") for federal
income tax purposes. The federal tax laws and regulations relating to REITs
limit the Company's ability to own and derive income from certain types of
assets. In order to minimize the risk that the ownership of or income from
certain of the roof top communications sites acquired from Motorola (the
"Transferred Assets") might negatively affect the Company's qualification as a
REIT, effective September 29, 1999 the Transferred Assets were transferred to PT
III for $49,000,000. A subsidiary of the Company owns approximately 9% of PT
III's common stock. Certain officers of the Company own the remaining
outstanding common stock of PT III. In September 1999, a subsidiary of the
Company purchased $49,000,000 of convertible preferred stock issued by PT III.
PT III used the proceeds from the sale of such preferred stock to acquire the
Transferred Assets. In connection with such transfer, a subsidiary of the
Company and PT III entered into a services agreement whereby such subsidiary
agreed to service the assets of PT III and take certain related actions.
Subsequent to September 30, 1999, PT III exchanged a portion of the convertible
preferred stock it issued for a $39,200,000 convertible promissory note issued
by it to a subsidiary of the Company and amended certain terms of the remaining
convertible preferred stock. In addition, the aforementioned services agreement
was replaced with a cost and expense sharing and reimbursement agreement. PT III
has guaranteed the Senior Credit Facility and has pledged all of its assets to
secure such guarantee. The Board of Directors of the Company, excluding the
officers of the Company owning PT III common stock, who abstained, approved the
transactions with PT III and determined that such transactions were on terms no
less favorable to the Company than those that would be obtained in comparable
arms-length transactions with parties that were not affiliated with the Company,
and that such transactions were in the best interests of the Company. The
Company currently does not anticipate that the officers of the Company who own
PT III common stock will significantly benefit from such stock ownership.
As a result of the acts referenced in the preceding paragraph, a subsidiary of
the Company currently owns a $39,200,000 convertible promissory note issued by
PT III that accrues interest at the rate of 13%, with interest payable quarterly
and all principal and accrued interest due and payable within 30 days upon
demand. The $9,800,000 of outstanding PT III convertible preferred stock
accrues dividends at 18% per annum, payable quarterly. The terms of PT III's
convertible promissory note, convertible preferred stock and certificate of
incorporation limit PT III's ability to borrow money, pledge its assets, issue
additional securities, make distributions to its shareholders, purchase and sell
assets, enter into transactions with affiliates and take certain actions without
seeking approval from either its common shareholders, the holders of the
convertible preferred
17
<PAGE>
stock and/or the holders of the convertible note, depending on the action
seeking to be taken. Should all of the PT III convertible preferred stock and
the convertible promissory note be fully converted to common stock of PT III, a
subsidiary of the Company would own in excess of 99.9% of the outstanding
common stock of PT III. PT III may issue limited amounts of nonvoting common
stock in the future in order for it to independently qualify as a REIT.
The foregoing is merely a summary description of PT III and the transactions
between it and the Company and its subsidiaries. The description does not
purport to be a complete description of such matters and is subject to the
provisions of, and is qualified in its entirety be reference to, the material
agreements relating to those matters, copies of which are filed as exhibits to
this Quarterly Report on Form 10-Q.
The Company continues to assess the risk to its status as a REIT that might
result from it reacquiring the Transferred Assets. Depending upon the
conclusions reached from such assessment, the Company may seek to reacquire the
Transferred Assets by purchase, merger or other means. It is possible that the
Company may enter into additional transactions with PT III or other similar
entities in certain circumstances to minimize the risk of no longer qualifying
as a REIT. In addition, as additional acquisition opportunities become
available to the Company in its existing line of business or in complimentary
non-real estate based communication services activities, the Company may
determine that it is in its best interests to acquire, operate or derive income
from assets, business or entities that would cause it to no longer qualify as a
REIT.
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) The Exhibits listed in the "Exhibit Index" are filed as part of this
report.
(b) Reports on Form 8-K. The Company filed a Form 8-K on September 14, 1999
with respect to the acquisition of communication sites from Motorola, Inc.
as discussed in footnote 2 to the Consolidated Financial Statements in Part
I, Item 1 above. The Company indicated in such Form 8-K that it intended
to file the required financial statements and pro forma financial
information as soon as practicable, but no later than 60 days from the date
of that filing. The Form 8-K/A was filed on November 15, 1999.
No other reports on Form 8-K were filed during the nine month period ended
September 30, 1999.
18
<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.
Pinnacle Holdings Inc.
Date December 1, 1999 By: /s/ Steven R. Day
-----------------------
Steven R. Day
Chief Financial Officer
Vice President, and Secretary
Duly Authorized Officer and Principal
Financial Officer.
19
<PAGE>
EXHIBIT INDEX
Designation Description
- ----------- -----------
2.1 Agreement for Purchase and Sale of Assets between Pinnacle Towers Inc. and
Motorola, Inc., dated June 25, 1999.***
2.2 Amendment to Agreement for Purchase and Sale of Assets dated as of August
31, 1999 between Pinnacle Towers Inc. and Motorola, Inc.+
3.1.1 Amended and Restated Certificate of Incorporation.*
3.1.2 Bylaws of the Company.**
4.1 Registration Rights Agreement dated as of August 31, 1999 between the
Registrant and Motorola, Inc.+
10.1 Fourth Amended and Restated Credit Agreement, dated June 25, 1999.****
10.2 Fifth Amended and Restated Credit Agreement, dated September 17, 1999.
10.3 Subscription Agreement between Pinnacle Towers Inc. and Pinnacle Towers
III, Inc., dated as of August 31, 1999.
10.4 Amended and Restated Articles of Incorporation of Pinnacle Towers III,
Inc., dated September 28, 1999.
10.5 Agreement For Purchase and Sale Agreement of Assets by and between
Pinnacle Towers Inc. and Pinnacle Towers III, Inc., dated as of August 31,
1999.
10.6 Services Agreement by and between Pinnacle Towers Inc. and Pinnacle Towers
III, Inc., dated as of August 31, 1999.
10.7 Agreement by and between Pinnacle Towers III, Inc. and Pinnacle Towers
Inc., dated as of September 28, 1999.
10.8 Amended and Restated Articles of Incorporation of Pinnacle Towers III,
Inc., dated October 28, 1999.
10.9 Convertible Promissory Note of Pinnacle Towers III, Inc.
10.10 Cost and Expense Sharing and Reimbursement Agreement by and between
Pinnacle Towers Inc. and Pinnacle Towers III, Inc., effective as of
August 31, 1999.
27.1 Financial Data Schedule
__________________
* Previously filed on February 17, 1999 with Amendment No. 6 to the Company's
Registration Statement on Form S-11 (S.E.C. File No. 333-59297).
** Previously filed on April 1, 1998 with the Company's Registration Statement
on Form S-4 (S.E.C. File No. 333-49147).
*** Previously filed on July 2, 1999 with the Company's Registration Statement
on Form S-3 (S.E.C. File No. 333-82273).
**** Previously filed on July 21, 1999 with Amendment No. 2 to the Company's
Registration Statement on Form S-3 (S.E.C. File No. 333-82273).
+ Previously filed on September 14, 1999 with the Company's Report on Form
8-K (S.E.C. file No. 000-24773)
20
<PAGE>
$470,000,000
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Among
PINNACLE TOWERS INC.
And
BANK OF AMERICA, N.A.
as Administrative Agent
BANKERS TRUST COMPANY
as Syndication Agent
BANKBOSTON, N.A.
as Documentation Agent
KEY CORPORATE CAPITAL INC.
UNION BANK OF CALIFORNIA, N.A.
SOCIETE GENERALE
as Managing Agents
DRESDNER BANK AG NEW YORK & GRAND CAYMAN BRANCHES
THE BANK OF NOVA SCOTIA
CREDIT LYONNAIS NEW YORK BRANCH
COBANK, ACB
as Co-Agents
and
LENDERS
as defined herein
Dated as of September 17, 1999
With
BANC OF AMERICA SECURITIES LLC
as Sole Lead Arranger and Sole Book Manager
<PAGE>
PINNACLE TOWERS INC.
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I. DEFINITIONS
1.01. Definitions.................................................................. 2
1.02. Accounting and Other Terms................................................... 27
ARTICLE II. THE LOAN FACILITIES
2.01. The Loans.................................................................... 27
2.02. Making Advances.............................................................. 28
2.03. Evidence of Debt for Borrowed Money.......................................... 29
2.04. Optional Prepayments......................................................... 30
2.05. Mandatory Prepayments........................................................ 30
2.06. Repayment.................................................................... 31
2.07. Interest..................................................................... 33
2.08. Default Interest............................................................. 33
2.09. Continuation and Conversion Elections........................................ 34
2.10. Fees and the Fee Letter...................................................... 35
2.11. Reduction of Commitment...................................................... 36
2.12. Funding Losses............................................................... 38
2.13. Computations and Manner of Payments.......................................... 38
2.14. Yield Protection; Changed Circumstances...................................... 40
2.15. Use of Proceeds.............................................................. 42
2.16. Collateral and Collateral Call............................................... 42
2.17. Replacement of a Lender...................................................... 43
2.18. Conditions Precedent to the Increase of the Commitment....................... 44
ARTICLE III. LETTERS OF CREDIT
3.01. Issuance of Letters of Credit................................................ 46
3.02. Letters of Credit Fee........................................................ 47
3.03. Reimbursement Obligations.................................................... 47
3.04. Lenders' Obligations......................................................... 50
3.05. Administrative Agent's Obligations........................................... 50
ARTICLE IV. CONDITIONS PRECEDENT
4.01. Conditions Precedent to Closing, Effectiveness of this Agreement and the
Refunding Advance........................................................... 51
4.02. Conditions Precedent to All Advances and Letters of Credit................... 52
</TABLE>
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<TABLE>
<S> <C>
4.03. Conditions Precedent to Advances for Permitted Acquisitions.................. 53
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.01. Representations and Warranties............................................... 54
5.02. Survival of Representations and Warranties................................... 62
ARTICLE VI. GENERAL COVENANTS
6.01. Preservation of Existence and Similar Matters................................ 62
6.02. Business; Compliance with Law and Material Agreements........................ 62
6.03. Maintenance of Properties.................................................... 62
6.04. Accounting Methods and Financial Records..................................... 62
6.05. Insurance.................................................................... 63
6.06. Payment of Taxes and Claims.................................................. 63
6.07. Visits and Inspections....................................................... 63
6.08. Payment of Debt for Borrowed Money........................................... 63
6.09. Use of Proceeds.............................................................. 63
6.10. Indemnity.................................................................... 63
6.11. Environmental Law Compliance................................................. 64
6.12. Interest Rate Protection Agreements.......................................... 65
6.13. Issuance and Pledge of Capital Stock of the Borrower......................... 65
6.14. Continued Status as a Real Estate Investment Trust; Prohibited Transactions.. 65
6.15. Tenant Leases, Ground Leases and Fee Owned Property.......................... 66
6.16. Acquisitions, Generally...................................................... 67
6.17. Year 2000.................................................................... 68
ARTICLE VII. INFORMATION COVENANTS
7.01. Quarterly Financial Statements and Information............................... 68
7.02. Annual Financial Statements and Information; Certificate of No Default....... 69
7.03. Compliance Certificates...................................................... 69
7.04. Copies of Other Reports and Notices.......................................... 69
7.05. Notice of Litigation, Default and Other Matters.............................. 70
7.06. ERISA Reporting Requirements................................................. 71
7.07. Fee Owned Property, Ground Leases and Tenant Leases.......................... 72
ARTICLE VIII. NEGATIVE COVENANTS
8.01. Financial Covenants.......................................................... 73
8.02. Debt for Borrowed Money...................................................... 75
8.03. Liens........................................................................ 77
8.04. Investments.................................................................. 77
8.05. Amendment and Waiver......................................................... 78
8.06. Liquidation, Disposition or Acquisition of Assets, Merger, New Subsidiaries.. 79
8.07. Guaranties; Contingent Liabilities........................................... 79
8.08. Restricted Payments.......................................................... 80
8.09. Affiliate Transactions....................................................... 81
</TABLE>
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<TABLE>
<S> <C>
8.10. Compliance with ERISA........................................................ 81
8.11. Capital Stock................................................................ 82
8.12. Sale and Leaseback........................................................... 82
8.13. Sale or Discount of Receivables.............................................. 82
8.14. Limitation on Restrictive Agreements......................................... 82
8.15. Synthetic Leases............................................................. 82
ARTICLE IX. EVENTS OF DEFAULT
9.01. Events of Default............................................................ 83
9.02. Remedies upon Default........................................................ 86
9.03. Cumulative Rights............................................................ 87
9.04. Waivers...................................................................... 87
9.05. Performance by Administrative Agent or any Lender............................ 87
9.06. Expenditures................................................................. 87
9.07. Control...................................................................... 87
ARTICLE X. THE ADMINISTRATIVE AGENT
10.01. Authorization and Action..................................................... 88
10.02. Administrative Agent's Reliance, Etc......................................... 88
10.03. Bank of America, N.A. and Affiliates......................................... 88
10.04. Lender Credit Decision....................................................... 89
10.05. Indemnification by Lenders................................................... 89
10.06. Successor Administrative Agent............................................... 89
ARTICLE XI. MISCELLANEOUS
11.01. Amendments and Waivers....................................................... 90
11.02. Notices...................................................................... 90
11.03. Parties in Interest and Register............................................. 92
11.04. Assignments and Participations............................................... 92
11.05. Sharing of Payments.......................................................... 93
11.06. Right of Set-off............................................................. 94
11.07. Costs, Expenses, and Taxes................................................... 94
11.08. Rate Provision............................................................... 97
11.09. Severability................................................................. 97
11.10. Exceptions to Covenants...................................................... 98
11.11. Counterparts................................................................. 98
11.12. GOVERNING LAW; WAIVER OF JURY TRIAL.......................................... 98
11.13. ENTIRE AGREEMENT............................................................. 98
11.14. Amendment, Restatement, Extension, Renewal and Increase...................... 99
</TABLE>
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<PAGE>
Table of Schedules and Exhibits
-------------------------------
Schedules
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<TABLE>
<S> <C>
Schedule 2.16 - Items required with respect to Each Fee Owned Real
Property of the Borrower and its Subsidiaries
Schedule 3.01 - Existing Letters of Credit
Schedule 5.01(a) - Jurisdictions of Qualification, Ownership and Capital
Structure - Borrower
Schedule 5.01(f) - FAA Non-Compliance as of the Closing Date
Schedule 5.01(h) - Existing Litigation
Schedule 5.01(w) - Tenant Leases in existence on the Closing Date
Schedule 5.01(x) - Ground Leases in existence on the Closing Date
Schedule 5.01(y) - Owned Real Property in existence on the Closing Date
Schedule 8.02 - Existing Debt and Liabilities
Schedule 8.03 - Existing Liens
Schedule 8.04 - Existing Investments
Schedule 8.09 - Existing Affiliate Transactions
Schedule 11.02 - Lender Addresses
</TABLE>
Exhibits
--------
<TABLE>
<S> <C>
Exhibit A-1 - Form of Revolver Note
Exhibit A-2 - Form of Term Loan A Note
Exhibit A-3 - Form of Term Loan B Note
Exhibit B - Form of Security Agreement (Borrower)
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Borrowing Notice
Exhibit E - Form of Conversion/Continuation Notice
Exhibit F - Form of Assignment and Acceptance
Exhibit G - Form of Guaranty of Subsidiaries
Exhibit H - Form of Security Agreement (Subsidiary)
Exhibit I - Form of Subordination Agreement
Exhibit J - Form of Borrower Pledge Agreement
Exhibit K - Form of Certain Ground Lease Provisions
Exhibit L - Form of Guaranty of Parent
Exhibit M - Form of Parent Pledge Agreement
Exhibit N - Form of Estoppel and Attornment Language
</TABLE>
<PAGE>
$470,000,000
PINNACLE TOWERS INC.
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIFTH AMENDED AND RESTATED CREDIT AGREEMENT is dated as of September
17, 1999, among Pinnacle Towers Inc., a Delaware corporation (the "Borrower"),
the Lenders (as defined below), Bank of America, N.A., as a Lender and
Administrative Agent (the "Administrative Agent"), Bankers Trust Company, as
Syndication Agent, BankBoston, N.A., as Documentation Agent, Key Corporate
Capital Inc., Union Bank of California, N.A. and Societe Generale, as Managing
Agents and Dresdner Bank AG New York & Grand Cayman Branches, The Bank of Nova
Scotia, Credit Lyonnais New York Branch and COBANK, ACB as Co-Agents. Banc of
America Securities LLC acted as Sole Lead Arranger and Sole Book Manager.
BACKGROUND.
WHEREAS, Borrower entered into that certain Fourth Amended and Restated
Credit Agreement with Bank of America, N.A. (formerly known as NationsBank,
N.A.) and Lenders, dated as of June 25, 1999 (the "Original Credit Agreement")
which provided for loan facilities in the initial amount of $470,000,000;
WHEREAS, Borrower and Administrative Agent have agreed to restructure,
extend, renew, refinance, and restate such indebtedness under the Original
Credit Agreement as set forth herein to provide for three separate facilities 1)
a seven year reducing revolver facility in the initial amount of $235,000,000
(with a subfacility provided by Bank of America Canada to a Canadian subsidiary
of the Borrower in a maximum amount not to exceed $16,464,800 Canadian Dollars
(such amount approximately equal to $11,000,000 on the closing date), 2) a seven
year delayed draw acquisition term loan in the amount of $125,000,000, and 3) an
eight year term loan in the amount of $110,000,000 (which must be fully drawn on
the date of closing), and to make certain other agreed to changes to the
existing credit facility among the parties thereto. Of the proceeds of the
facility referenced in 1) above, $219,957,000 be applied on the date hereof to
refinance indebtedness under the Original Credit Agreement Term Loan A (as
defined in the Original Credit Agreement) and such portions of Revolver A and
Revolver B (as each is defined in the Original Credit Agreement) that constitute
Acquisition Debt (as defined below).
AGREEMENT.
NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties
hereto agree as follows:
1
<PAGE>
ARTICLE I. DEFINITIONS
1.01. Definitions. As used in this Agreement, the following terms have
the respective meanings indicated below (such meanings to be applicable equally
to both the singular and plural forms of such terms):
"Acquisition Debt" shall have the meaning ascribed thereto in the
Indenture.
"Acquisition Agreement" means that certain Agreement For Purchase and Sale
of Assets by and between Motorola and the Borrower, in the form of the draft of
such agreement delivered to the Administrative Agent on June 24, 1999, and in
any executed copy of such Agreement For Purchase and Sale of Assets, so long as
any such executed copy is in such form delivered, with only minor and immaterial
changes, or such form with material changes that are consented to by the
Majority Lenders.
"Advance" means an advance made by a Lender to the Borrower pursuant to
Section 2.01 hereof which may be a Revolver Advance, a Term Loan A Advance or a
Term Loan B Advance (and may either be Base Advance or a LIBOR Advance), and
which such Advance may also be a Refinancing Advance.
"Affiliate" means a Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled By or is Under Common Control with
another Person.
"Administrative Agent" means Bank of America, N.A. in its capacity as
Administrative Agent hereunder, or any successor Administrative Agent appointed
pursuant to Section 10.06 hereof.
"Agreement" means this Fifth Amended and Restated Credit Agreement, as
hereafter amended, modified, increased, extended, restated or supplemented from
time to time.
"Annualized EBITDA" means, (a) with respect to Compliance Certificates
delivered in connection with Section 7.03 hereof, the product of (i) EBITDA for
the Parent, the Borrower and its Subsidiaries on a consolidated basis, for the
most recently completed fiscal quarter immediately preceding the date of
determination times (ii) four and (b) with respect to pro-forma Compliance
Certificates delivered in connection with Permitted Acquisitions delivered
pursuant to Section 6.16 hereof, the product of (i) EBITDA for the Parent, the
Borrower and its Subsidiaries on a consolidated basis, for the most recently
completed fiscal quarter immediately preceding the date of determination with
respect to which the Borrower has financial statements prepared, times (ii)
four.
"Applicable Law" means (a) in respect of any Person, all provisions of Laws
applicable to such Person, and all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a party
and (b) in respect of contracts made or performed in the State of Texas,
"Applicable Law" shall also mean the laws of the United States of America,
including, without limiting the foregoing, 12 USC Sections 85 and 86, as amended
to the date hereof and as the same may be amended at any time and from time to
time hereafter, and any
2
<PAGE>
other statute of the United States of America now or at any time hereafter
prescribing the maximum rates of interest on loans and extensions of credit, and
the laws of the State of Texas, including, without limitations, Articles 5069-
1H, Title 79, Revised Civil Statutes of Texas, 1925, as amended ("Art. 1H"), if
applicable, and if Art. 1H is not applicable, Article 5069-1D, Title 79, Revised
Civil Statutes of Texas, 1925 ("Art. 1D"), as amended, and any other statute of
the State of Texas now or at any time hereafter prescribing maximum rates of
interest on loans and extensions of credit, provided however, that pursuant to
Article 5069-15.10(b), Title 79, Revised Civil Statutes of Texas, 1925, as
amended, the Borrower agrees that the provisions of Chapter 15, Title 79,
Revised Civil Statutes of Texas, 1925, as amended, shall not apply to the
Advances hereunder.
"Applicable Margin" means, (a) with respect to Advances outstanding under
the Term Loan A and the Revolver Loan, 2.75% per annum for LIBOR Advances and
1.50% per annum for Base Advances and (b) with respect to Advances under the
Term Loan B, 3.000% per annum for LIBOR Advances and 1.750% for Base Advances,
provided that, after the date which the Administrative Agent and the Lenders
receive a Compliance Certificate required to be delivered in accordance with the
terms of Section 7.01 hereof for the fiscal quarter ended June 30, 2000, then,
if there exists no Default or Event of Default, the Applicable Margin will be
the following per annum percentages applicable in the following situations:
Term Loan A and
Revolver Loan Term Loan B
Applicability Percentage Percentage
------------- --------------- -----------
(i) If the Leverage 2.750% 3.000%
Ratio is equal to or
greater than 6.00 to 1.00
(ii) If the Leverage 2.500% 3.000%
Ratio is equal to or
greater than 5.50 to 1.00
but is less than
6.00 to 1.00
(iii)If the Leverage 2.250% 3.000%
Ratio is equal to or
greater than 5.00 to 1.00
but is less than
5.50 to 1.00
(iv) If the Leverage 2.000% 3.000%
Ratio is equal to or
greater than 4.50 to 1.00
but is less than
5.00 to 1.00
3
<PAGE>
(v) If the Leverage 1.750% 2.750%
Ratio is equal to or
greater than 4.00 to 1.00
but is less than
4.50 to 1.00
(vi) If the Leverage 1.500% 2.750%
Ratio is equal to or
greater than 3.50 to 1.00
but is less than
4.00 to 1.00
(vii)If the Leverage 1.250% 2.750%
Ratio is less than
3.50 to 1.00
In each case in the above grid, the Applicable Margin for Base Advances shall be
a per annum rate equal to 1.25% less than the Applicable Margin for the
applicable LIBOR Advance. The Applicable Margin payable by the Borrower shall
be (a) after the Administrative Agent has received all financial information
required by Section 7.01 hereof for the fiscal quarter ended June 30, 2000,
reduced or increased as applicable and as set forth in the table above, on a
quarterly basis according to the performance of the Parent, Borrower and
Subsidiaries of Borrower as tested by the Leverage Ratio and (b) further
increased as set forth in Section 6.15(c) hereof. Except as set forth in the
last sentence hereof, any such increase or reduction in the Applicable Margin
provided for herein shall be effective three Business Days after receipt by
Administrative Agent of the applicable financial statements and corresponding
Compliance Certificate. If financial statements and a Compliance Certificate of
the Borrower setting forth the Leverage Ratio are not received by the
Administrative Agent by the date required pursuant to Article VII hereof, the
Applicable Margin shall be determined as if the Leverage Ratio exceeds 6.00 to
1.00, until such time as such financial statements and Compliance Certificate
are received. For the final quarter of any fiscal year of the Borrower, the
Borrower may provide the unaudited financial statements of the Borrower, subject
only to year-end adjustments, for the purpose of adjusting the Applicable
Margin.
"Applicable Specified Percentage" means with respect to any Lender, in the
case of the Revolver Loan, such Lender's Revolver Specified Percentage, in the
case of the Term Loan A, such Lender's Term Loan A Specified Percentage, in the
case of the Term Loan B, such Lender's Term Loan B Specified Percentage, and in
the case of the Canada Indebtedness, with respect to the Canada Lender, such
Lender's Canada Specified Percentage.
"Application" means any stand-by letter of credit application delivered to
Administrative Agent for or in connection with any stand-by Letter of Credit
pursuant to Article III hereof, in Administrative Agent's standard form for
stand-by letters of credit.
"Art. 1D" has the meaning specified in the definition herein of "Applicable
Law".
4
<PAGE>
"Art. 1H" has the meaning specified in the definition herein of "Applicable
Law".
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by Administrative Agent, in
the form of Exhibit F hereto.
---------
"Auditor" means PricewaterhouseCoopers LLP, or other independent certified
public accountants selected by the Borrower and acceptable to Administrative
Agent.
"Authorized Officer" means, with respect to the Borrower and its
Subsidiaries, the President, Chief Executive Officer, Chief Financial Officer or
the Controller of the Borrower.
"Bank Affiliate" means the holding company of any Lender, or any
wholly-owned direct or indirect subsidiary of such holding company or of such
Lender.
"BAS" means Banc of America Securities LLC.
"Base Advance" means an Advance bearing interest at the Base Rate.
"Base Rate" means a per annum interest rate equal to the lesser of (a) the
Highest Lawful Rate, and (b) the sum of the Applicable Margin plus the higher of
(i) a fluctuating rate per annum as shall be in effect from time to time
announced or published by Bank of America, N.A. as its prime rate, and which may
not necessarily be the lowest interest rate charged by Bank of America, N.A. and
(ii) the Federal Funds Rate in effect at such time plus .50%.
"Borrower Pledge Agreement" means the Pledge Agreement, executed by the
Borrower, granting a Lien on 100% of the Capital Stock of each of the Borrower's
Subsidiaries constituting Pledged Stock as security for the Obligations,
substantially in the form of Exhibit J hereto, as such agreement may be amended,
---------
modified, renewed or extended from time to time.
"Borrowing" means a borrowing of the same Type made on the same day.
"Borrowing Notice" has the meaning set forth in Section 2.02(a) hereof.
"Bridge Debt" has the meaning ascribed thereto in Section 8.02(c)(ii)
hereof.
"Business Day" means a day of the year on which banks are not required or
authorized to close in Dallas, Texas or Sarasota, Florida, or, if with respect
to any notice, payment or calculation related to a LIBOR Advance, in New York,
New York, Dallas, Texas, Sarasota, Florida or London, England.
"Canadian Dollars" means the lawful currency of Canada.
"Canada Guarantors" means the Borrower and the Parent.
"Canada Guaranty" means that certain Guaranty executed by the Canada
Guarantors, guaranteeing payment and performance of the Canada Indebtedness.
5
<PAGE>
"Canada Indebtedness" means the Dollar Equivalent of all Debt for Borrowed
Money under that certain term loan incurred by Canada Sub from the Canada
Lender, in a maximum amount outstanding at any one time not to exceed
$16,464,800 Canadian Dollars (the Dollar Equivalent of such amount being
approximately equal to $11,000,000 on the Closing Date).
"Canada Indebtedness Agreements" means the Canada Guaranty, that certain
Term Loan Agreement, executed by the Canada Lender and the Canada Sub, dated as
of August 31, 1999, and each promissory note, security agreement, mortgage, deed
of trust, pledge agreement, assignment and all other documents, instruments and
agreements at any time evidencing any portion of the Canada Obligations, or
granting any Lien or security interest in any assets or properties securing all
or any portion of the Canada Obligations, or otherwise related to or executed in
connection with, the Canada Indebtedness.
"Canada Indebtedness Amount" means, on any date of determination, the
Dollar Equivalent of $16,464,800 Canadian Dollars (such Dollar Equivalent being
approximately $11,000,000 on the Closing Date), or the Dollar Equivalent of such
lesser amount as such amount is reduced by all repayments and prepayments of the
Canada Indebtedness from time to time.
"Canada Lender" means Bank of America Canada and any other lenders, or any
of their assignees, in each case which are at any time owed any portion of the
Canada Obligations.
"Canada Obligations" means the Dollar Equivalent of all obligations of the
Canada Sub and the Canada Guarantors under all agreements and documents executed
by each of the foregoing in connection with the Canada Indebtedness and the
Canada Guaranty, including, without limitation, all principal, interest, fees,
expenses and other payment obligations under such documentation, and all
"obligations" as defined in any such documentation.
"Canada Specified Percentage" means, as to any Lender, the percentage
indicated beside its name on the signature pages hereof designated as its Canada
Specified Percentage, or as adjusted or specified (a) in any Assignment and
Acceptance or (b) in any amendment to this Agreement.
"Canada Sub" means Pinnacle Towers Canada, Inc., a corporation incorporated
under the laws of New Brunswick, Canada, and wholly owned indirect Subsidiary of
the Borrower.
"Canada Term Loan Advances" means the Dollar Equivalent of all advances
under the term loan constituting Canada Indebtedness.
"Capital Expenditures" means capital expenditures, as defined in accordance
with GAAP.
"Capital Leases" means capital leases and subleases, as defined in
accordance with GAAP.
6
<PAGE>
"Capital Stock" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital stock
of any Person that is a corporation and each class of partnership interests
(including without limitation, general, limited and preference units) in any
Person that is a partnership, and including options, warrants and similar
interests with respect to any such capital stock.
"Change of Control" means the occurrence of one of more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the assets of
the Parent and its Subsidiaries, taken as a whole, to any Person or group of
related Persons, as defined in Section 13(d) of the Securities Exchange Act of
1934 (a "Group"), other than Permitted Holders, (ii) any Person or Group (other
than Permitted Holders) shall become the owner, directly or indirectly,
beneficially or of record, of shares representing 30% or more of the aggregate
voting power represented by the issued and outstanding voting stock of the
Parent or any successor to all or substantially all of its assets; or (iii) the
first day on which a majority of the members of the board of directors of the
Parent are not Continuing Directors.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
reference to any provision of the Code shall include all successor provisions
thereto.
"Collateral" has the meaning ascribed thereto in Section 2.16 hereof.
"Commitment" means $235,000,000 minus the sum of (a) the undrawn face
amount of all Letters of Credit plus (b) the sum of all reimbursement
obligations under Article III hereof, in each case as such amount may be
increased prior to June 30, 2001 in accordance with the terms of Section 2.18
hereof, plus (c) the Canada Indebtedness Amount, as such Commitment may be
further reduced from time to time or terminated pursuant to Sections 2.06, 2.11
or 9.02 hereof.
"Commitment Fee" means the fee described in Section 2.10(b) hereof.
"Communications Act" means, collectively, the Communications Act of 1934
and the rules and regulations promulgated thereunder, as from time to time in
effect.
"Compliance Certificate" means a certificate of an Authorized Officer in
the form of Exhibit C hereto, (a) certifying that such individual has no
---------
knowledge that a Default or Event of Default has occurred and is continuing, or
if a Default or Event of Default has occurred and is continuing, a statement as
to the nature thereof and the action being taken or proposed to be taken with
respect thereto, (b) setting forth detailed calculations with respect to the
covenants described in Section 8.01 hereof, (c) certifying to the appropriate
Applicable Margins and (d) setting forth a description of all acquisitions
consummated in the previous fiscal quarter with respect to which the Borrower
was not required to inform the Administrative Agent, describing the name of the
acquisition, the purchase price, whether such acquisition was an asset or
Capital Stock acquisition and the cash flow related to the towers acquired.
7
<PAGE>
"Consequential Loss" with respect to (a) the Borrower's payment of all or
any portion of the then-outstanding principal amount of a LIBOR Advance on a day
other than the last day of the related Interest Period, including, without
limitation, payments made as a result of the acceleration of the maturity of a
Note, (b) subject to Administrative Agents' prior consent, a LIBOR Advance made
on a date other than the date on which the Advance is to be made according to
Section 2.02(a) or Section 2.09 hereof to the extent such Advance is made on
such other date at the request of the Borrower, or (c) any of the circumstances
specified in Section 2.04 hereof on which a Consequential Loss may be incurred,
means any loss, cost or expense incurred by any Lender as a result of the timing
of the payment or Advance or in liquidating, redepositing, redeploying or
reinvesting the principal amount so paid or affected by the timing of the
Advance or the circumstances described in Section 2.04 hereof, which amount
shall be the sum of (i) the interest that, but for the payment or timing of
Advance, such Lender would have earned in respect of that principal amount,
reduced, if such Lender is able to redeposit, redeploy, or reinvest the
principal amount, by the interest earned by such Lender as a result of
redepositing, redeploying or reinvesting the principal amount plus (ii) any
expense or penalty incurred by such Lender by reason of liquidating,
redepositing, redeploying or reinvesting the principal amount. Each
determination by each Lender of any Consequential Loss is, in the absence of
manifest error, presumptive evidence of the validity of such claim.
"Consolidated Leverage Ratio" means the ratio, at the end of the accounting
period with respect to which such determination is made, of (a) Total Debt minus
the sum of Subordinated Debt outstanding which is (i) (used instead of
Distributions to shareholders in connection with its REIT Status) permitted to
be incurred under Section 8.02(g) hereof and (ii) (without duplication)
described in Schedule 8.02(g) as the "Tidewater" debt guaranteed by ABRY in the
----------------
aggregate principal amount not to exceed $3,904,600 (provided that, only such
amount that is outstanding on any date of determination may be excluded), to (b)
Annualized EBITDA, provided that, the calculation of Consolidated Leverage Ratio
shall exclude revenues or charges attributable to Properties of the Borrower and
its Subsidiaries sold during the calculation period as if such sale occurred on
the first day of such period and shall include revenues and charges attributable
to Properties of the Borrower and its Subsidiaries purchased during such period
as if such purchase occurred on the first day of such period.
"Contingent Liability" means, as to any Person, any obligation, contingent
or otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Debt or obligation of any other Person in any manner, whether
directly or indirectly, including without limitation any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt, (b)
to purchase Property or services for the purpose of assuring the owner of such
Debt of its payment, or (c) to maintain the solvency, working capital, equity,
cash flow, fixed charge or other coverage ratio, or any other financial
condition of the primary obligor so as to enable the primary obligor to pay any
Debt or to comply with any agreement relating to any Debt or obligation, but
excluding endorsement of checks, drafts and other instruments in the ordinary
course of business.
"Continue," "Continuation" and "Continued" each refer to the continuation
pursuant to Section 2.09 hereof of a LIBOR Advance from one Interest Period to
the next Interest Period.
8
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"Continuing Directors" means, as of any date of determination, any member
of the board of directors of the Parent who (i) was a member of such board of
directors on the date hereof or (ii) was nominated for election or elected to
such board of directors by any of the Permitted Holders or with the approval of
a majority of the Continuing Directors who were members of such board at the
time of such nomination or election.
"Control" or "Controlled By" or "Under Common Control" mean possession,
direct or indirect, of power to direct or cause the direction of management or
policies (whether through ownership of voting securities, by contract or
otherwise); provided that, in any event (a) any Person which beneficially owns
--------
(i) 10% or more (in number of votes) of the securities having ordinary voting
power for the election of directors of a corporation shall be conclusively
presumed to control such corporation and (ii) 10% or more of the interest in
capital or profits of a partnership shall be conclusively presumed to control
such partnership, and (b) no Person shall be deemed to be an Affiliate of a
corporation solely by reason of his being an officer or director of such
corporation.
"Controlled Group" means, as to any Person, all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
which are under common control with such Person and which, together with such
Person, are treated as a single employer under Section 414(b), (c), (m) or (o)
of the Code.
"Conversion or Continuance Notice" has the meaning set forth in Section
2.09(b) hereof.
"Debt" means all obligations, contingent or otherwise, which in accordance
with GAAP are required to be classified on the balance sheet as liabilities, and
in any event including (without duplication) (a) Capital Leases, (b) Contingent
Liabilities that are required to be disclosed and quantified in notes to
consolidated financial statements in accordance with GAAP, and (c) liabilities
secured by any Lien on any Property, regardless of whether such secured
liability is with or without recourse.
"Debt for Borrowed Money" means, as to any Person, at any date, without
duplication, (a) all obligations of such Person for borrowed money, letters of
credit (or applications for letters of credit), bankers' acceptances or other
similar instruments, (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments and (c) all obligations of such
Person to pay the deferred purchase price of property or services, except trade
accounts payable arising in the ordinary course of business, and, with respect
to the Parent, the Borrower and its Subsidiaries, including any accrued but
unpaid Earn-Out Liability, but excluding any unaccrued Earn-Out Liability,
provided that, notwithstanding the foregoing, with respect to the Parent, the
Borrower and the Subsidiaries of the Borrower, Debt for Borrowed Money shall
specifically include (without duplication) all Canada Obligations and all
obligations under the Canada Guaranty.
"Debtor Relief Laws" means applicable bankruptcy, reorganization,
moratorium, or similar Laws, or principles of equity affecting the enforcement
of creditors' rights generally.
9
<PAGE>
"Default" means any event specified in Section 9.01 hereof, whether or not
any requirement in connection with such event for the giving of notice, lapse of
time, or happening of any further condition has been satisfied.
"Distribution" means, as to any Person, (a) any declaration or payment of
any distribution or dividend (other than a stock dividend) on, or the making of
any pro rata distribution, loan, advance, or investment to or in any holder of,
any partnership interest or shares of capital stock or other equity interest of
such Person (or the establishment of a sinking fund or otherwise setting aside
of funds for any such purpose), or (b) any purchase, redemption, or other
acquisition or retirement for value of any shares of partnership interest or
capital stock or other equity interest of such Person (or the establishment of a
sinking fund or otherwise setting aside of funds for any such purpose).
"Dollar Equivalent" means (a) in relation to any amount denominated in
Dollars, the amount thereof and (b) in relation to an amount denominated in
Canadian Dollars, the amount of such Dollars required to purchase the relevant
stated amount of Canadian Dollars at the Exchange Rate on the date of
determination.
"Earn-Out Liability" means, with respect to the Borrower and its
Subsidiaries, any unsecured contingent liability of the Borrower or any
Subsidiary of the Borrower incurred in connection with any Permitted
Acquisition, which such contingent liability (a) constitutes a portion of the
purchase price for the property acquired but is not an amount certain, (b) is
only payable based on the performance of the acquired property and in an amount
based only on the performance of the acquired property and (c) is not subject
to any acceleration right.
"EBITDA" means, for the Parent, the Borrower and its Subsidiaries, for any
period of determination, the sum of (a) net income for such period, excluding
non-cash income, plus (b) amortization and depreciation for such period, plus
(c) non-cash charges (minus non-cash income) and other extraordinary items for
such period to the extent not included in net income, plus (d) Interest Expense
for such period, plus (e) Income Tax Expense for the Parent, the Borrower and
its Subsidiaries for such period, plus (f) an adjustment to net income (without
duplication) for such period to account for the effect of treating all
acquisitions completed in such period as if such acquisitions had been completed
on the first day of such period, plus (g) an adjustment to net income for such
period to record (i) an increase in revenue related to all new leases executed
or acquired in the period as if such leases were effective as of the beginning
of such period and (ii) a decrease in revenue related to all terminated or
canceled leases during the period as if such leases were terminated or canceled
as of the beginning of such period, provided that, determinations of adjustments
to EBITDA with respect to the assets acquired by the Borrower in connection with
the Motorola Acquisition shall be calculated in a manner reasonably acceptable
to the Administrative Agent and Majority Lenders.
"Eligible Assignee" means any Lender, Related Fund of a Lender or Bank
Affiliate, and any (a) commercial bank organized under the laws of the United
States, or any state thereof, and having total assets in excess of
$1,000,000,000; (b) savings and loan association or savings bank organized under
the laws of the United States, or any state thereof, having total assets in
excess of $1,000,000,000, and not in receivership or conservatorship; (c)
commercial bank organized
10
<PAGE>
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development, or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is described in this clause; (d) central bank
of any country which is a member of the Organization for Economic Cooperation
and Development; and (e) any other Person approved by the Administrative Agent,
which approval will not be unreasonably withheld.
"Environmental Claim" means any written notice by any Tribunal alleging
liability for damage to the environment, or by any Person alleging liability for
personal injury (including sickness, disease or death), resulting from or based
upon (a) the presence or release, or threatened release (including sudden or
non-sudden, accidental or non-accidental, leaks or spills) of any Hazardous
Material at, in or from property, whether or not owned by the Parent, the
Borrower or any of its Subsidiaries, or (b) circumstances forming the basis of
any violation, or alleged violation, of any Environmental Law.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. (S)9601 et seq.) ("CERCLA"), the
Hazardous Material Transportation Act (49 U.S.C. (S)1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C (S)6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. (S)1251 et seq.), the Clean Air Act (42 U.S.C.
(S)7401 et seq.), the Toxic Substances Control Act (15 U.S.C. (S)2601 et seq.),
and the Occupational Safety and Health Act (29 U.S.C. (S)651 et seq.) ("OSHA"),
as such laws have been or hereafter may be amended or supplemented, and any and
all analogous future federal, or present or future state or local, Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rulings and regulations issued thereunder, as from time to time
in effect.
"ERISA Affiliate" means any Person that for purposes of Title IV of ERISA
is a member of the controlled group of the Borrower or any Obligor, or is under
common control with 67 Borrower or any Obligor, within the meaning of Section
414(c) of the Code, and the regulations and rulings issued thereunder.
"ERISA Event" means (a) a reportable event, within the meaning of Section
4043 of ERISA, unless the 30-day notice requirement with respect thereto has
been waived by the PBGC, (b) the issuance by the administrator of any Plan of a
notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA), (c) the withdrawal by the Parent, the Borrower, any
Subsidiary of the Borrower, or an ERISA Affiliate from a Multiple Employer Plan
during a Plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA, (d) the failure by the Borrower, any Subsidiary of
the Borrower, or any ERISA Affiliate to make a payment to a Plan required under
Section 302 of ERISA, (e) the adoption of an amendment to a Plan requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA, or (f) the
institution by the PBGC of proceedings to terminate a Plan, pursuant to Section
4042 of ERISA, or the occurrence of any event or condition that constitutes
grounds under
11
<PAGE>
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, a Plan.
"Estoppel and Attornment Language" means estoppel and attornment language
substantially in the form of Exhibit N hereto, or such other language as may be
---------
approved in writing by Administrative Agent.
"Event of Default" means any of the events specified in Section 9.01 of
this Agreement, provided there has been satisfied any requirement in connection
therewith for the giving of notice, lapse of time, or happening of any further
condition.
"Excess Cash Flow" means, for any fiscal year of the Borrower, EBITDA for
such year minus the sum of (a) Fixed Charges for such year (excluding interest
paid or payable, at the option of the Borrower, in-kind), plus (b) (without
duplication) all voluntary principal prepayments on the Obligations pursuant to
Section 2.04 hereof during such period.
"Exchange Rate" means with respect to Canadian Dollars on a particular
date, the rate at which Canadian Dollars may be exchanged into Dollars, as set
forth on such date on the Reuters currency page for exchanges of Dollars into
Canadian Dollars. In the event that such rate does not appear on any Reuters
currency page, the Exchange Rate with respect to Canadian Dollars shall be
determined by reference to such other publicly available service for displaying
exchange rates as may be agreed upon by the Administrative Agent and the
Borrower.
"FAA" means the Federal Aviation Administration, or any governmental agency
succeeding to the functions thereof.
"FCC" means the Federal Communications Commission, or any governmental
agency succeeding to the functions thereof.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of Dallas, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such date on such
transactions received by Administrative Agent from three federal funds brokers
of recognized standing selected by it.
"Fee Letter" means that certain Fee Letter and Agreement, dated June 23,
1999, between the Borrower and the Administrative Agent, as such letter may be
amended, modified, substituted, replaced, or increased from time to time, and
such other fee letters as may be executed among the parties from time to time,
as such letters may be amended, modified, substituted, replaced, or increased
from time to time.
"Final Maturity Date" means June 30, 2007, or such earlier date on which
all outstanding Advances under the Term Loan B and all other outstanding
Obligations are due and payable
12
<PAGE>
(including, without limitation, whether by acceleration, installment payment,
mandatory or voluntary commitment reduction or mandatory or voluntary
prepayment).
"First Maturity Date" means June 30, 2006, or such earlier date on which
all outstanding Advances under the Revolver Loan and the Term Loan A,
respectively, are due and payable (including, without limitation, whether by
acceleration, installment payment, scheduled reduction of the Commitment to zero
or mandatory or voluntary commitment reduction of the Commitment to zero or
mandatory or voluntary prepayment).
"Fixed Charges" means, for any specified period for the Parent, the
Borrower and its Subsidiaries on a consolidated basis, the sum of (a) required
or scheduled principal and interest payments with respect to Debt for Borrowed
Money for such period, plus (b) required or scheduled principal payments with
respect to seller notes executed by the Borrower in connection with Permitted
Acquisitions to the extent permitted by Section 8.02 hereof, plus (c) accrued or
paid Earn-Out Liabilities, plus (d) required or scheduled payments with respect
to Capital Leases for such period, plus (e) cash distributions made by the
Borrower and the Parent in accordance with the terms of Section 8.08(b)(iii)
hereof during such period (without duplication), plus (f) Capital Expenditures
for such period, plus, (g) (without duplication), cash Income Tax Expense of the
Parent, the Borrower and its Subsidiaries with respect to such period.
"GAAP" means generally accepted accounting principles applied on a
consistent basis. Application on a consistent basis shall mean that the
accounting principles observed in a current period are comparable in all
material respects to those applied in a preceding period, except for new
developments or statements promulgated by the Financial Accounting Standards
Board and other changes in accounting methods permitted by generally accepted
accounting principles.
"Ground Lease" means those certain leases for real property or rooftops
entered into or acquired by the Borrower or any Subsidiary of the Borrower, for
the lease of real property (including rooftops) which constitute a Tower or upon
which is located a Tower (or which will constitute a Tower or upon which will be
located a Tower) for the purpose of maintaining Tenant Leases, including,
without limitation, those Ground Leases described on Schedule 5.01(x) hereto.
----------------
"Guarantors" means the Parent and each Subsidiary of the Borrower existing
on the Closing Date or formed or acquired from time to time thereafter.
"Guaranty" means a guaranty executed by any Person of the obligations of
another Person, or any agreement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the payment of,
or otherwise becomes liable upon, the obligation of any other Person, or agrees
to maintain the net worth or working capital or other financial condition of any
other Person, or otherwise assures any creditor or such other Person against
loss, including, without limitation, any comfort letter, or take-or-pay contract
and shall include without limitation, the contingent liability of such Person in
connection with any application for a letter of credit.
"Hazardous Materials" means all materials subject to any Environmental Law,
including without limitation materials listed in 49 C.F.R. (S) 172.101,
Hazardous Substances, explosive or
13
<PAGE>
radioactive materials, hazardous or toxic wastes or substances, petroleum or
petroleum distillates, asbestos, or material containing asbestos.
"Hazardous Substances" means hazardous waste as defined in the Clean Water
Act, 33 U.S.C. (S) 1251 et seq., the Comprehensive Environmental Response
Compensation and Liability Act as amended by the Superfund Amendments and
Reauthorization Act, 42 U.S.C. (S) 9601 et seq., the Resource Conservation
Recovery Act, 42 U.S.C. (S) 6901 et seq., and the Toxic Substances Control Act,
15 U.S.C. (S) 2601 et seq.
"Highest Lawful Rate" means at the particular time in question the maximum
rate of interest which, under Applicable Law, Administrative Agent is then
permitted to charge on the Obligations. If the maximum rate of interest which,
under Applicable Law, such Lender is permitted to charge on the Obligations
shall change after the date hereof, the Highest Lawful Rate shall be
automatically increased or decreased, as the case may be, from time to time as
of the effective time of each change in the Highest Lawful Rate without notice
to the Borrower. For purposes of determining the Highest Lawful Rate under
Applicable Law, the applicable rate ceiling shall be (a) the indicated rate
ceiling described in and computed in accordance with the provisions of Art. lH;
or (b) either the annualized ceiling or quarterly ceiling computed pursuant to
.008 of Art. 1D; provided, however, that at any time the indicated rate ceiling,
-------- -------
the annualized ceiling or the quarterly ceiling, as applicable, shall be less
than 18% per annum or more than 24% per annum, the provisions of Sections
.009(a) and .009(b) of said Art. lD shall control for purposes of such
determination, as applicable.
"Income Tax Expense" means the aggregate Taxes accrued by the Parent, the
Borrower and its Subsidiaries for the relevant period of determination, plus any
cash Distributions made by the Borrower for the purposes of satisfying any Tax
liabilities in accordance with Section 8.08 hereof.
"Indenture" means that certain Indenture, dated March 20, 1998, between the
Parent and The Bank of New York, as trustee, in connection with the Parent
Senior Notes.
"Insufficiency" means, with respect to any Plan, the amount, if any, of its
unfunded benefit liabilities within the meaning of Section 4001(a)(18) of ERISA.
"Interest Expense" means, for the Parent, the Borrower and its Subsidiaries
on a consolidated basis, all interest expense and commitment fees incurred with
respect to Total Debt whether accrued or paid, all fees or expenses with respect
to letters of credit, bankers' acceptances or similar facilities, excluding
interest actually paid-in-kind.
"Interest Period" means, with respect to any LIBOR Advance, the period
beginning on the date the Advance is made or continued as a LIBOR Advance and
ending one, two, three or six months thereafter (as the Borrower shall select),
provided, however, that:
- -------- -------
(a) the Borrower may not select any Interest Period that ends after
any principal repayment date unless, after giving effect to such selection,
the aggregate principal amount of LIBOR Advances having Interest Periods
that end on or prior to such
14
<PAGE>
principal repayment date, shall be at least equal to the principal amount
of Advances due and payable on and prior to such date;
(b) whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding Business Day, provided,
--------
however, that if such extension would cause the last day of such Interest
-------
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(c) whenever the first day of any Interest Period occurs on a day of
an initial calendar month for which there is no numerically corresponding
day in the calendar month that succeeds such initial calendar month by the
number of months equal to the number of months in such Interest Period,
such Interest Period shall end on the last Business Day of such succeeding
calendar month.
"Interest Rate Protection Agreement" means an interest rate swap, cap,
collar or similar interest rate protection agreement between the Borrower and
any Lender or any Bank Affiliate.
"Investment" means any acquisition of all or substantially all of the
assets of any Person, or any direct or indirect purchase or other acquisition
of, or a beneficial interest in, capital stock or other securities of any other
Person, or any direct or indirect loan, advance (other than (i) advances to
employees for moving and travel expenses, (ii) drawing accounts, (iii) deposits
and advances made to contractors, vendors and others in the ordinary course of
business, (iv) earnest money deposits, good faith deposits and similar deposits
made in connection with Permitted Acquisitions, and (v) similar expenditures in
the ordinary course of business), or capital contribution to or investment in
any other Person, including without limitation the incurrence or sufferance of
Debt or accounts receivable of any other Person that are not current assets or
do not arise from sales to that other Person in the ordinary course of business.
"Law" means any constitution, statute, law, ordinance, regulation, rule,
order, writ, injunction, or decree of any Tribunal.
"Lenders" means (a) the lenders listed on the signature pages of this
Agreement, and each Eligible Assignee which hereafter becomes a party to this
Agreement pursuant to Section 11.04 hereof or pursuant to an amendment to this
Agreement or Section 2.18 hereof, for so long as each is owed any portion of the
Obligation or is obligated under any portion of the Commitment, and (b) the
Canada Lender, for so long as each is owed any portion of the Canada Obligation,
and in each case, any Bank Affiliate who is owed any portion of the Obligations.
"Lending Office" means, with respect to each Lender, its branch or
affiliate, (a) initially, the office of each Lender, branch or affiliate
identified as such on Schedule 11.02 hereto, and (b) subsequently, such other
--------------
office of each Lender, branch or affiliate as each Lender may designate to the
Borrower and Administrative Agent as the office from which the Advances of each
Lender will be made and maintained and for the account of which all payments of
principal and interest
15
<PAGE>
on the Advances and the Commitment Fee will thereafter be made. Lenders may have
more than one Lending Office for the purpose of making Base Advances and LIBOR
Advances.
"Letter of Credit Commitment" means an amount equal to the lesser of (a)
$40,000,000 and (b) the remainder of the Commitment minus the sum of all
outstanding Revolver Advances.
"Letters of Credit" means the irrevocable standby letters of credit issued
by Administrative Agent under and pursuant to Article III hereof, and under or
pursuant to Article III of the Original Credit Agreement, as each may be
amended, modified, substituted, increased, replaced, renewed or extended from
time to time.
"Leverage Ratio" means the ratio, at the end of the accounting period with
respect to which such determination is made, of (a) Senior Debt of the Borrower
and its Subsidiaries (exclusive of Debt owed to each other), minus the sum of
Subordinated Debt outstanding which is (i) (used instead of Distributions to
shareholders in connection with its REIT Status) permitted to be incurred under
Section 8.02(g) hereof and (ii) (without duplication) described in Schedule
--------
8.02(g) as the "Tidewater" debt guaranteed by ABRY in the aggregate principal
- -------
amount not to exceed $3,904,600 (provided that, only such amount that is
outstanding on any date of determination may be excluded), to (b) Annualized
EBITDA (excluding EBITDA attributable to the Parent), provided that, the
calculation of the Leverage Ratio shall exclude revenues or charges attributable
to Properties of the Borrower and its Subsidiaries sold during the calculation
period as if such sale occurred on the first day of such period and shall
include revenues and charges attributable to Properties of the Borrower and its
Subsidiaries purchased during such period as if such purchase occurred on the
first day of such period.
"LIBOR Advance" means an Advance bearing interest at the LIBOR Rate.
"LIBOR Lending Office" means, with respect to each Lender, the office
designated as its "LIBOR Lending Office" below its name on Schedule 11.02
--------------
hereto, or such other office of Lender or any of its affiliates hereafter
designated by notice to the Borrower and Administrative Agent.
"LIBOR Rate" means a simple per annum interest rate equal to the lesser of
(a) the Highest Lawful Rate, and (b) sum of the Applicable Margin plus the LIBOR
Rate Basis. The LIBOR Rate shall, with respect to LIBOR Advances subject to
reserve or deposit requirements under any Law, be subject to premiums assessed
therefor by each Lender, which are payable directly to each Lender in an amount
sufficient to compensate such Lender for any increased cost or reduced rate of
return attributable to such reserve deposit requirements. Any calculation by a
Lender of such increased cost or reduced rate of return which is in reasonable
detail and submitted to Borrower shall, in the absence of manifest error, be
presumptive evidence of the validity of such claim. Once determined for any
LIBOR Advance, the LIBOR Rate shall remain unchanged during the applicable
Interest Period.
"LIBOR Rate Basis" means, for any LIBOR Advance for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at
16
<PAGE>
approximately 11:00a.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 "LIBOR Rate Basis" shall mean,
for any LIBOR Advance for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 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.
"License" means, as to the Parent, the Borrower, or any Subsidiary of the
Borrower, any license, permit, consent, certificate of need, authorization,
certification, accreditation, franchise, approval, or grant of rights by, or any
filing or registration with, any Tribunal or third Person (including without
limitation the FCC and the FAA) necessary for such Person to own, build,
maintain, or operate its business or Property.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien, or
charge of any kind, including without limitation any agreement to give or not to
give any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement or other similar form of public notice under the
Laws of any jurisdiction (except for the filing of a financing statement or
notice in connection with an (a) operating lease or (b) the true consignment of
goods to the Borrower or any Subsidiary of the Borrower as consignee).
"Litigation" means any proceeding, claim, lawsuit, arbitration, and/or
investigation conducted by or before any Tribunal or arbitrator, including
without limitation proceedings, claims, lawsuits, and/or investigations under or
pursuant to any environmental, occupational, safety and health, antitrust,
unfair competition, securities, Tax, or other Law, or under or pursuant to any
contract, agreement, or other instrument.
"Loan" means, as applicable in the context used, the Revolver Loan, the
Term Loan A or the Term Loan B, and "Loans" means all or any combination of the
Revolver Loan, the Term Loan A and the Term Loan B, as applicable in the context
used.
"Loan Papers" means this Agreement, the Notes, the Security Agreements,
Borrower Pledge Agreement, the Subsidiary Guaranties, the Parent Guaranty, the
Parent Pledge Agreement, the Fee Letters, the Canada Indebtedness Agreements,
financing statements, mortgages, deeds of trust, any Interest Rate Protection
Agreement and related documents entered into by the Borrower with any Lender or
Bank Affiliate, all Letters of Credit, all Applications and all other agreements
between the Borrower, the Parent or any Subsidiary of the Borrower and the
Administrative Agent related to any Letter of Credit, letter agreements,
assignment of leases, other fee letters, Assignment and Acceptances,
post-closing letters, and all other documents, instruments, agreements, or
certificates executed or delivered from time to time by any Person in connection
with this Agreement or as security for the Obligations hereunder, granting
Collateral or otherwise, as each such agreement may be amended, modified,
substituted, replaced or extended from time to time.
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"Majority Lenders" means any combination of Lenders having at least 51.00%
of the aggregate amount of the sum of (a) the outstanding Commitment plus (b)
the outstanding Term Loan A Advances, plus (c) the outstanding Term Loan B
Advances, plus (d) the outstanding Canada Term Loan Advances, provided, however,
that if the Commitment has been terminated, then (a) above will be the amount of
the outstanding Advances under the Revolver Loan.
"Material Adverse Change" means any circumstance or event that is or would
reasonably be expected to (a) be material and adverse to the financial
condition, business operations, prospects, or Properties of the Parent, the
Borrower and its Subsidiaries on a consolidated basis, (b) materially and
adversely affect (i) the validity or enforceability of or (ii) any material
Rights of the Administrative Agent or any Lender under (A) any Note, (B) this
Agreement or (C) any Loan Paper or Loan Papers which in the aggregate are
material, or (c) cause a Default or Event of Default.
"Maximum Amount" means the maximum amount of interest which, under
Applicable Law, a Lender is permitted to charge on the Obligations.
"Motorola" means Motorola, Inc., a Delaware corporation.
"Motorola Acquisition" means that certain acquisition by the Borrower of
certain tower assets of Motorola in accordance with the Acquisition Agreement.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower, any Subsidiary of the Borrower, or
any ERISA Affiliate is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an obligation
to make contributions, such plan being maintained pursuant to one or more
collective bargaining agreements.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower, any Subsidiary of the Borrower, or any ERISA Affiliate and at least
one Person other than the Borrower, any Subsidiary of the Borrower, and any
ERISA Affiliate, or (b) was so maintained and in respect of which the Borrower,
any Subsidiary of the Borrower, or any ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or were to
be terminated.
"Net Proceeds" means the gross cash proceeds received by the Parent, the
Borrower or any Subsidiary of the Borrower in connection with or as a result of
(a) any asset sale not in the ordinary course of business, minus (so long as
each of the following are estimated in good faith by the management of the
Borrower and certified to the Lenders in reasonable detail by an Authorized
Officer) (i) distributions to be made, if any, by the Borrower to the Parent and
by the Parent to the Shareholders, each as permitted by Section 8.08 hereof,
plus to the extent the Borrower or such Subsidiary has any actual Tax liability,
actual Taxes payable with respect to such asset sale in an amount equal to the
Tax liability of the Parent, the Borrower or any Subsidiary of the Borrower in
respect of such sale (taking into account the distribution to the Parent and by
the Parent to the Shareholders, and all Tax benefits of each of the parties),
(ii)
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reasonable and customary transaction costs payable by the Parent, the Borrower
or any Subsidiary of the Borrower related to such sale and (iii) Debt secured by
the assets sold that is immediately repaid as a consequence of such sale, and
(b) any additional equity or permitted Debt for Borrowed Money, except such Debt
for Borrowed Money that is specifically permitted to be incurred under the terms
of Section 8.02 hereof, minus (so long as it is estimated in good faith by the
management of the Borrower or such Subsidiary and certified to the Lenders in
reasonable detail by an Authorized Officer), reasonable and customary
transaction costs (including reasonable and customary broker's fees), payable by
the Parent, the Borrower or any Subsidiary of the Borrower related to such
transaction.
"Note" means each Note of the Borrower evidencing Advances hereunder,
substantially in the forms of Exhibits A-1, A-2 and A-3 hereto, together with
-------------------------
any extension, renewal or amendment thereof, or substitution therefor.
"Obligations" means all present and future obligations, indebtedness and
liabilities, and all renewals and extensions of all or any part thereof, of the
Borrower and each Obligor to Lenders and Administrative Agent arising from, by
virtue of, or pursuant to this Agreement, any of the other Loan Papers and any
and all renewals and extensions thereof or any part thereof, or future
amendments thereto, all interest accruing on all or any part thereof and
reasonable attorneys' fees incurred by the Administrative Agent for the
preparation of this Agreement and consummation of this credit facility,
execution of waivers, amendments and consents, and in connection with the
enforcement or the collection of all or any part thereof, and reasonable
attorneys' fees incurred by the Lenders in connection with the enforcement or
the collection of all or any part of the Obligations during the continuance of
an Event of Default, in each case whether such obligations, indebtedness and
liabilities are direct, indirect, fixed, contingent, joint, several or joint and
several. Without limiting the generality of the foregoing, "Obligations"
includes all amounts which would be owed by the Borrower, each other Obligor and
any other Person (other than Administrative Agent or Lenders) to Administrative
Agent or Lenders under any Loan Paper, but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower, any other Obligor
or any other Person (including all such amounts which would become due or would
be secured but for the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding of the Borrower, any other
Obligor or any other Person under any Debtor Relief Law).
"Obligor" means (a) the Borrower, (b) the Parent, (c) each Subsidiary of
the Borrower, (d) each other Person liable for performance of any of the
Obligations and (e) each other Person the Property of which secures the
performance of any of the Obligations.
"Oral Tenant Leases" means those Tenant Leases which are oral and not
subject to any written agreement.
"Original Credit Agreement" has the meaning ascribed thereto in the
preamble hereof.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
agency or entity performing substantially the same functions.
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"Parent" means Pinnacle Holdings Inc., a Delaware corporation.
"Parent Guaranty" means any Guaranty executed by the Parent guarantying
payment and performance of the Obligations, substantially in the form of Exhibit
-------
L attached hereto, as such agreement may be amended, modified, renewed or
- -
extended from time to time.
"Parent Pledge Agreement" means the Pledge Agreement executed by the
Parent, granting a Lien on 100% of the Capital Stock of the Borrower owned by
the Parent which such Capital Stock will constitute Pledged Stock securing the
Obligations, substantially in the form of Exhibit M hereto, as such agreement
---------
may be amended, modified, renewed or extended from time to time.
"Parent Senior Notes" means those certain 10% Senior Discount Notes due
2008 aggregating $325,000,000.00 amount in face value, unsecured, non cash
interest bearing (payment in kind only) for the first five years and issued by
the Parent pursuant to the Parent Senior Notes Documentation.
"Parent Senior Notes Documentation" means that certain Indenture and all
other written agreements and documentation relating to the Parent Senior Notes
in existence on the Closing Date or as permitted to be amended by Section 8.05
hereof.
"Permitted Acquisition" means any acquisition of assets related to the
communications tower or rooftop business, including, without limitation, (i) the
development, construction or acquisition of towers or rooftop space and related
real estate, ground leases, and easements for towers, rooftops, access and/or
guy wires, or (ii) acquisitions of 100% of the Capital Stock of any Person
owning or leasing towers or rooftop space, or (iii) acquisitions of leasehold
rights on Towers for the purpose of subleasing, in each case by the Borrower or
any Subsidiary of the Borrower, which, after giving effect to the proposed
acquisition and any equity investments and borrowings related thereto, would not
cause a Default or Event of Default under Section 8.01(a) or 8.01(b) hereof or
any other term or provision of this Agreement and the Loan Papers.
"Permitted Holders" means as of the date of determination (i) Robert
Wolsey and his spouse, and any of his respective estates, lineal descendants
(including adoptive children), heirs, executors, personal representatives,
administrators and trusts for any of their benefit and (ii) any other Person,
the majority of which voting stock is directly or indirectly owned by any Person
described in clause (i) above.
"Permitted Liens" means, as applied to any Person:
(a) any Lien in favor of the Lenders to secure the Obligations hereunder;
(b) (i) Liens on real estate for real estate Taxes not yet delinquent, (ii)
Liens created by lease agreements, statute or common law to secure the payments
of rental amounts and other sums not yet due thereunder, (iii) Liens on
leasehold interests created by the lessor in favor of any mortgagee of the
leased premises, and (iv) Liens for Taxes, assessments, governmental
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charges, levies or claims that are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves shall have been set
aside on such Person's books, but only so long as no foreclosure, restraint,
sale or similar proceedings have been commenced with respect thereto;
(c) Liens of carriers, warehousemen, mechanics, laborers and materialmen
and other similar Liens incurred in the ordinary course of business for sums not
yet due or being contested in good faith, if such reserve or appropriate
provision, if any, as shall be required by GAAP shall have been made therefor;
(d) Liens incurred in the ordinary course of business in connection with
worker's compensation, unemployment insurance or similar legislation;
(e) Easements, right-of-way, restrictions and other similar encumbrances on
the use of real property which do not interfere with the ordinary conduct of the
business of such Person or materially and adversely affect the value of such
real property;
(f) Liens in respect of judgments or awards for which appeals or
proceedings for review are being prosecuted and in respect of which a stay of
execution upon any such appeal or proceeding for review shall have been secured,
provided that (i) such Person shall have established adequate reserves for such
judgments or awards, (ii) such judgments or awards shall be fully insured and
the insurer shall not have denied coverage, or (iii) such judgments or awards
shall have been bonded to the satisfaction of the Majority Lenders;
(g) Any Liens existing on the Closing Date which are described on Schedule
--------
8.03 hereto, and Liens resulting from the refinancing of the related Debt for
- ----
Borrowed Money, provided that the Debt for Borrowed Money secured thereby shall
not be increased and the Liens shall not cover additional assets of the
Borrower, the Parent or any such Subsidiary; and
(h) Any Liens which secure the Debt for Borrowed Money permitted under
Section 8.02(e) hereof.
"Person" means an individual, partnership, joint venture, corporation,
trust, Tribunal, unincorporated organization, and government, or any department,
agency, or political subdivision thereof.
"Pinnacle III" means Pinnacle Towers III Inc., a Florida corporation.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledged Stock" means all of the Capital Stock of the Subsidiaries of the
Borrower and all of the Capital Stock of the Borrower.
"Pro Forma Debt Service" means, on any date of determination, for the
Parent, the Borrower and its Subsidiaries, the sum of (a) cash Interest Expense
plus (b) required or scheduled principal payments with respect to Debt for
Borrowed Money, each for the four fiscal quarters immediately succeeding any
date of determination, provided that, with respect to any
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Debt for Borrowed Money subject to a floating interest rate, the rate of
interest on such Debt for Borrowed Money for the four fiscal quarters
immediately succeeding any such date of determination shall be deemed to be the
weighted average interest rate applicable to the Obligations on the date of
calculation of Pro Forma Debt Service.
"Prohibited Transaction" has the meaning specified in Section 4975 of the
Code or Section 406 of Title I of ERISA.
"Property" means all types of real, personal, tangible, intangible, or
mixed property, whether owned or hereafter acquired in fee simple or leased by
the Parent, the Borrower and its Subsidiaries, including for the Borrower and
its Subsidiaries without limitation, the Tenant Leases.
"Pro Rata" means, as to any Lender, in accordance with its percentage of
the aggregate amount of outstanding Advances under the applicable Loan or all
the Loans; provided, however, that if no such Advances are outstanding, such
-------- -------
term means in accordance with such Lender's Applicable Specified Percentage or
Total Specified Percentage, as applicable.
"PT Transactions" means the following series of transactions: (a) the
issuance and sale by Pinnacle III, and the purchase by the Borrower, of certain
Capital Stock in Pinnacle III, (b) the issuance and sale by Pinnacle III, and
the purchase by Borrower and certain management and employee shareholders of
Parent or Borrower, of certain common Capital Stock in Pinnacle III and (c) the
sale by Borrower and the purchase by Pinnacle III of certain rooftop assets
acquired by the Borrower in the Motorola Acquisition.
"Qualified REIT Subsidiaries" means the Borrower and any Subsidiary of the
Borrower, so long as such entity meets the qualifications set forth in Section
856(i)(2) of the Code.
"Qualified Facility Revolver Advance" means all or any portion of any
Revolver Advance borrowed hereunder if, after giving effect to all or such
portion of such Advance the aggregate amount of outstanding Qualified Facility
Revolver Advances under the Revolver Loan does not exceed $15,000,000.
"Quarterly Date" means the last day of each March, June, September and
December during the term of this Agreement.
"Ratable" means, as to any Lender, a determination made in accordance with
its Applicable Specified Percentage or Total Specified Percentage, in each case
applicable in the context used.
"Refinancing Advance" means any Advance which is (a) used to pay the
principal amount (or any portion thereof) of an Advance at the end of its
Interest Period, or (b) a conversion of all or any portion of an outstanding
Base Advance to a LIBOR Advance, which, in each case after giving effect to such
application, does not result in an increase in the aggregate amount of
outstanding Advances.
"Register" has the meaning ascribed thereto in Section 11.03 hereof.
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"REIT Conversion" means the occurrence of any one of the following events:
(a) the election by the Parent to no longer maintain its REIT Status, (b) the
election by the Borrower or any Subsidiary of the Borrower to no longer maintain
its Qualified REIT Subsidiary status, (c) the occurrence of any event which
results in the Parent no longer having REIT Status, or (d) the occurrence of any
event which results in the Borrower or any Subsidiary of the Borrower no longer
qualifying as a Qualified REIT Subsidiary.
"REIT Status" means, with respect to any Person, such Person's status as a
real estate investment trust, as defined in Section 856(a) of the Code, that
satisfies the conditions and limitations set forth in Sections 856(b) and 856(c)
of the Code.
"Related Fund" means with respect to any Lender that is a fund that invests
in bank loans, any other fund that invests in bank loans and is advised or
managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
"Release Date" means the first date on which all of the following have
occurred: (a) the Notes have been paid, (b) all other Obligations due and owing
have been paid and performed in full, (c) all Letters of Credit have been
terminated, fully drawn or extinguished, (d) all Canada Obligations have been
paid in full, and (d) the Commitment has been terminated.
"Restricted Payments" means (a) any direct or indirect Distribution,
dividend or other payment on account of any equity interest in, or shares of
capital stock or other securities of, the Borrower or the Parent (or the
establishment of any sinking fund or otherwise the setting aside of any funds
with respect thereto); (b) any management, consulting or other similar fees, or
any interest thereon, payable by the Parent, the Borrower or any of its
Subsidiaries to any Affiliate of the Parent, the Borrower, or to any other
Person other than an unrelated third party (or the establishment of any sinking
fund or otherwise the setting aside of any funds with respect thereto); and (c)
any cash payment of interest, principal, fees or penalties, on any Debt for
Borrowed Money or Subordinated Debt, or the establishment of any sinking fund or
otherwise the setting aside of any funds with respect thereto.
"Revolver Advances" means Advances made under the Revolver Loan.
"Revolver Loan" means the loan made by a Lender pursuant to Section 2.01(a)
of this Agreement.
"Revolver Note" means each Note of the Borrower evidencing Advances under
the Revolver Loan hereunder, substantially in the form of Exhibit A-1 hereto,
-----------
together in each case, with any extension, renewal or amendment thereof, or
substitution therefor.
"Revolver Specified Percentage" means, as to any Lender, the percentage
indicated beside its name on the signature pages hereof designated as its
Revolver Specified Percentage, or as adjusted or specified (a) in any Assignment
and Acceptance, (b) in any amendment to this Agreement or (c) in each case, upon
each date of any reduction in the Canada Indebtedness Amount, the Revolver
Specified Percentage of each Lender will be adjusted to increase the
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Canada Lender's Revolver Specified Percentage and decrease each other Lender's
Revolver Specified Percentage, such that, (i) after such adjustments to the
Revolver Specified Percentages of the Lenders, the Canada Lender's Revolver
Specified Percentage of the Commitment shall be equal to a greater amount than
prior to such adjustment (and such amount of increase shall be equal to the
amount of decrease in the Canada Indebtedness Amount), and (ii) both before and
after such adjustments to the Revolver Specified Percentages of the Lenders,
with respect to all Lenders other than the Canada Lender, each such Lenders'
Revolver Specified Percentage of the Commitment shall be equal to the same
Dollar amount.
"Rights" means rights, remedies, powers, and privileges.
"Second Parent Issuance" has the meaning ascribed thereto in Section
8.02(c)(i) hereof.
"Second Parent Issuance Documentation" means any indenture and all other
written agreements and documentation relating to the Second Parent Issuance to
be entered into in accordance with the terms of Section 8.02(c) hereof, as such
documentation is permitted to be amended by Section 8.05 hereof.
"Security Agreements" means (a) the Security Agreement, duly executed by
the Borrower and Parent in substantially the form of Exhibit B hereto,
---------
appropriately completed, and (b) each Security Agreement, duly executed by each
of the Borrower's Subsidiaries, in substantially the form of Exhibit H hereto,
---------
appropriately completed, in each case as amended, modified, substituted,
replaced or extended from time to time.
"Senior Debt" means, on any date of determination, the difference between
Total Debt and Debt of the Parent included in the definition of Total Debt.
"Shareholder" or "Shareholders" means, on any date of determination, the
shareholders of the Parent.
"Single Employer Plan" means a single employer plan, as defined in Section
4001(a)(15) of ERISA, other than a Multiple Employer Plan of the Borrower.
"Solvent" means, with respect to any Person, that on such date (a) the fair
value of the Property of such Person is greater than the total amount of
liabilities, including without limitation Contingent Liabilities of such Person,
(b) the present fair salable value of the assets of such Person on a going
concern basis is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature, and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's Property would constitute an unreasonably small capital.
"Special Counsel" means the law firm of Donohoe, Jameson & Carroll, P.C.,
Dallas, Texas, or such other individual or firm acting as special counsel to
Administrative Agent, as designated by Administrative Agent from time to time.
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"Subordinated Debt" means Debt for Borrowed Money of the Borrower, any
Subsidiary of the Borrower or the Parent, that is subordinated to the
Obligations hereunder in accordance with the terms and provisions of the
Subordination Agreement substantially in the form of Exhibit I attached hereto.
---------
"Subsidiary" of any Person means any corporation, partnership, joint
venture, trust or estate of which (or in which) 50% or more of:
(a) the outstanding capital stock having voting power to elect a
majority of the Board of Directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency),
(b) the interest in the capital or profits of such partnership or
joint venture, or
(c) the beneficial interest of such trust or estate,
is at the time directly or indirectly owned by such Person, by such Person
and one or more of its Subsidiaries or by one or more of such Person's
Subsidiaries.
"Subsidiary Guaranty" means the Guaranty, executed by each Subsidiary of
the Borrower, guarantying payment and performance of the Obligations,
substantially in the form of Exhibit G attached hereto, as such agreement may be
---------
amended, modified, renewed or extended from time to time.
"Synthetic Lease" means any lease entered into in connection with the lease
or acquisition of fixed assets which is treated under GAAP as an operating lease
but for Tax purposes as a capital lease.
"Taxes" means all taxes, assessments, imposts, fees, or other charges at
any time imposed by any Laws or Tribunal.
"Tenant Lease Revenue" means, with respect to each Tenant Lease for the
most recently completed calendar month, all revenues generated by such Tenant
Lease for such month.
"Tenant Leases" means each of the leases of space on any Tower of the
Borrower or any Subsidiary of the Borrower now existing or hereafter created or
acquired, including, without limitation, those leases listed on
Schedule 5.01(w) hereto.
- ----------------
"Term Loan A Advance" means the initial advance and any of the Refinancing
Advances made under the Term Loan A.
"Term Loan B Advance" means the initial advance and any of the Refinancing
Advances made under the Term Loan B.
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"Term Loan A" means the term loan made by the Lenders pursuant to Section
2.01(b) of this Agreement.
"Term Loan B" means the term loan made by the Lenders pursuant to Section
2.01(c) of this Agreement.
"Term Loan A Initial Advance" has the meaning set forth in Section 2.01(b)
hereof.
"Term Loan B Initial Advance" has the meaning set forth in Section 2.01(c)
hereof.
"Term Loan A Note" means each Note of the Borrower evidencing Term Loan A
Advances hereunder, substantially in the form of Exhibit A-2 hereto with respect
-----------
to Term Loan A Advances made under the Term Loan A, together with any extension,
renewal or amendment thereof, or substitution therefor.
"Term Loan B Note" means each Note of the Borrower evidencing Term Loan B
Advances hereunder, substantially in the form of Exhibit A-3 hereto with respect
-----------
to Term Loan B Advances made under the Term Loan B, together with any extension,
renewal or amendment thereof, or substitution therefor.
"Term Loan A Specified Percentage" means, as to any Lender, the percentage
of the outstanding portion of the Term Loan A held by such Lender on any date of
determination, or as adjusted or specified (i) in any Assignment and Acceptance
or (ii) in any amendment to this Agreement.
"Term Loan B Specified Percentage" means, as to any Lender, (a) prior to
the initial Term Loan B Advance, the percentage indicated beside its name on the
signature pages hereof designated as its Term Loan B Specified Percentage, or as
adjusted or specified (i) in any Assignment and Acceptance or (ii) in any
amendment to this Agreement, and (b) after the initial Term Loan B Advance, the
percentage of the outstanding portion of the Term Loan B held by such Lender on
any date of determination (after giving effect to assignments in accordance with
the terms of Section 11.04 hereof).
"Total Debt" means all Debt for Borrowed Money of the Borrower, the Parent
and any Subsidiary of the Borrower which would be shown on a balance sheet in
accordance with GAAP, including, without limitation, (a) Capital Lease
obligations, (b) obligations to pay the deferred purchase price of property and
services (but excluding trade payables that are less than 90 days old and any
thereof that are being contested in good faith), (c) Debt of any other Person
secured by a Lien on the property of the Borrower and the Parent or any
Subsidiary of the Borrower and the Parent, (d) Contingent Liabilities, and (e)
Withdrawal Liability.
"Total Specified Percentage" means, as to any Lender on any date of
determination, the percentage that the sum of such Lender's outstanding (a)
Revolver Advances bears to the aggregate outstanding amount of all Revolver
Advances plus (b) Term Loan A Advances, Term Loan B Advances and Canada Term
Loan Advances bears to the aggregate outstanding amount of Term Loan A Advances,
Term Loan B Advances and Canada Term Loan Advances made by all Lenders
hereunder, provided that, if there are no outstanding Revolver Advances
hereunder
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on any such date, subsection (a) above for any such Lender shall be instead an
amount equal to the percentage that the sum of its Revolver Specified Percentage
of the Commitment bears to the aggregate Commitments of all Lenders on such
date.
"Tower" means each tower owned or managed by the Borrower or any Subsidiary
of the Borrower, and each rooftop or other site owned or managed by the Borrower
or any Subsidiary of the Borrower in the ordinary course of business.
"Tower Cash Flow" means, with respect to each Tower for the most recently
completed calendar month, the remainder of (a) the aggregate amount of all
Tenant Lease Revenues generated by all Tenant Leases relating to such Tower for
such month, plus (b) the aggregate amount of all Tenant Lease Revenues generated
by all newly executed or acquired leases relating to such Tower as if such
leases were effective as of the beginning of such calendar month minus (c) Tower
level cash operating expenses for such Tower for such month.
"Tribunal" means any state, commonwealth, federal, foreign, territorial, or
other court or government body, subdivision, agency, department, commission,
board, bureau, or instrumentality of a governmental body.
"Type" refers to the distinction between Advances bearing interest at the
Base Rate and LIBOR Rate.
"UCC" means the Uniform Commercial Code as adopted in the State of Texas on
the Closing Date.
"Unavailable Commitment" means (a) prior to June 30, 2001, $200,000,000 (as
such amount may be reduced from time to time as a result of the reallocation of
any portion of the Unavailable Commitment to the Commitment in accordance with
the terms of Section 2.18 hereof), and (b) on and after June 30, 2001, $0.00.
"Withdrawal Liability" has the meaning given such term under Part I of
Subtitle E of Title IV of ERISA.
1.02. Accounting and Other Terms. All accounting terms used in this
Agreement which are not otherwise defined herein shall be construed in
accordance with GAAP on a consolidated basis for the Parent, the Borrower and
its Subsidiaries, unless otherwise expressly stated herein. References herein to
one gender shall be deemed to include all other genders. Except where the
context otherwise requires, (a) definitions imparting the singular shall include
the plural and vice versa and (b) all references to time are deemed to refer to
Dallas time.
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ARTICLE II. THE LOAN FACILITIES
2.01. The Loans.01.
(a) The Revolver Loan. Each Lender severally agrees, on the terms and
subject to the conditions hereinafter set forth, to make Advances to the
Borrower on a Business Day during the period from the Closing Date to the
First Maturity Date, in an aggregate principal amount not to exceed at any
time outstanding such Lender's Revolver Specified Percentage of the
Commitment. Subject to the terms and conditions of this Agreement, the
Borrower may borrow, repay and reborrow the Revolver Advances; provided,
--------
however, that at no time shall the sum of all outstanding Revolver Advances
-------
exceed the Commitment.
(b) Term Loan A. Each Lender severally agrees, on the terms and
subject to the conditions hereinafter set forth, to make a Term Loan A
available to the Borrower on the Closing Date in an aggregate principal
amount equal to such Lender's Term Loan A Specified Percentage of
$125,000,000. The Term Loan A must be borrowed in one initial Advance only
(the "Term Loan A Initial Advance"), which such Term Loan A Initial Advance
must be made on the Closing Date. Once borrowed and repaid, no Term Loan A
Advance may be reborrowed.
(c) Term Loan B. Each Lender severally agrees, on the terms and
subject to the conditions hereinafter set forth, to make a Term Loan B
available to the Borrower on the Closing Date in an aggregate principal
amount equal to such Lender's Term Loan B Specified Percentage of
$110,000,000. The Term Loan B must be borrowed in one initial Advance only
(the "Term Loan B Initial Advance"), which such Term Loan B Initial Advance
must be made on the Closing Date. If the Borrower does not borrow the Term
Loan B Initial Advance on the Closing Date, the obligations of the Lenders
to make the Term Loan B available under this Section 2.01(c) shall
terminate. Once borrowed and repaid, no Term Loan B Advance may be
reborrowed.
2.02. Making Advances.
(a) Each Borrowing of Advances shall be made upon the written notice
of the Borrower, received by Administrative Agent not later than (i) 10:00
a.m. three Business Days prior to the date of the proposed Borrowing, in
the case of LIBOR Advances and (ii) 10:00 a.m. on the date of such
Borrowing, in the case of Base Advances. Each such notice of a Borrowing
(a "Borrowing Notice") shall be by telecopy or telephone, promptly
confirmed by letter, in substantially the form of Exhibit D hereto
---------
specifying therein:
(i) the date of such proposed Borrowing, which shall be a
Business Day;
(ii) the Type of Advances of which the Borrowing is to be
comprised, and whether such Borrowing is a Revolver Advance, a Term Loan A
Advance or a Term Loan B Advance (provided that, other than with respect to
the Term Loan A Initial
28
<PAGE>
Advance and the Term Loan B Initial Advance, all such borrowings under the
Term Loan A and the Term Loan B shall be Refinancing Advances);
(iii) the amount of such proposed Borrowing which, (A) in the
case of Advances under the Revolver Loan, shall not exceed the unused
portion of the Commitment, in the case of the Term Loan A Initial Advance,
shall not exceed the Term Loan A amount of $125,000,000, and in the case of
the Term Loan B Initial Advance, shall not exceed the Term Loan B amount of
$110,000,000, (B) shall, in the case of a Borrowing of Base Advances, be in
an amount of not less than $500,000 or an integral multiple of $50,000 in
excess thereof (or any lesser amount if such amount is the remaining
undrawn portion under the Commitment) and (C) shall, in the case of a
Borrowing of LIBOR Advances, be in an amount of not less than $5,000,000 or
an integral multiple of $100,000 in excess thereof; and
(iv) if the Borrowing is to be comprised of LIBOR Advances, the
duration of the initial Interest Period applicable to such Advances.
If the Borrowing Notice fails to specify the duration of the initial
Interest Period for any Borrowing comprised of LIBOR Advances, such Interest
Period shall be three months. Administrative Agent shall promptly notify Lenders
of each such notice. Each Lender shall, before 1:00 p.m. on the date of each
Advance hereunder (other than a Refinancing Advance), make available to
Administrative Agent, at its office at Bank of America Plaza, 901 Main Street,
Dallas, Texas 75202, such Lender's Applicable Specified Percentage of the
aggregate Advances to be made on that day in immediately available funds.
(b) Unless any applicable condition specified in Article IV has not been
satisfied, Administrative Agent will make the funds promptly available to the
Borrower (other than with respect to a Refinancing Advance) by wiring such
amounts pursuant to any wiring instructions specified by the Borrower to the
Administrative Agent in writing.
(c) After giving effect to any Borrowing, (i) there shall not be more than
ten different Interest Periods in effect and (ii) the aggregate principal amount
of outstanding Revolver Advances shall not exceed the Commitment.
(d) No Interest Period applicable to any Revolver Advance and Term Loan A
Advance shall extend beyond the First Maturity Date, and no Interest Period
applicable to any Term Loan B Advance shall extend beyond the Final Maturity
Date.
(e) Unless a Lender shall have notified Administrative Agent prior to the
date of any Advance that it will not make available its Applicable Specified
Percentage of any such Advance (that is not a Refinancing Advance), the
Administrative Agent may assume that such Lender has made the appropriate amount
available in accordance with Section 2.02(a) hereof, and Administrative Agent
may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If and to the extent any Lender shall not have made such
amount available to Administrative Agent, such Lender and the Borrower severally
agree to repay to Administrative Agent immediately on demand such corresponding
amount together with interest
29
<PAGE>
thereon, from the date such amount is made available to the Borrower until the
date such amount is repaid to Administrative Agent, at (i) in the case of the
Borrower, the Base Rate, and (ii) in the case of such Lender, the Federal Funds
Rate.
(f) The failure by any Lender to make available its Applicable Specified
Percentage of any Advance hereunder shall not relieve any other Lender of its
obligation, if any, to make available its Applicable Specified Percentage of any
Advance. In no event, however, shall any Lender be responsible for the failure
of any other Lender to make available any portion of any Advance.
(g) The Borrower shall indemnify each Lender against any Consequential Loss
incurred by each Lender as a result of (i) any failure to fulfill, on or before
the date specified for the Advance, the conditions to the Advance set forth
herein or (ii) the Borrower's requesting that an Advance not be made on the date
specified in the Borrowing Notice.
2.03. Evidence of Debt for Borrowed Money.
(a) (i) The Revolver Advances made by each Lender shall be evidenced by a
Note in the amount of such Lender's Revolver Specified Percentage of
$235,000,000 (as the same may be modified pursuant to Section 11.04 hereof)
in the form of Exhibit A-1 hereto.
-----------
(ii) The Term Loan A Advances made by each Lender shall be evidenced
by a Note in the amount of such Lender's Term Loan A Specified Percentage
of $125,000,000 (as the same may be modified pursuant to Section 11.04
hereof) in the form of Exhibit A-2 hereto.
-----------
(iii) The Term Loan B Advances made by each Lender shall be evidenced
by a Note in the amount of such Lender's Term Loan B Specified Percentage
of $110,000,000 (as the same may be modified pursuant to Section 11.04
hereof) in the form of Exhibit A-3 hereto.
-----------
(b) Administrative Agent's and each Lender's records shall be presumptive
evidence as to amounts owed Administrative Agent and such Lender under the Notes
and this Agreement. The Borrower shall maintain a Register of each Note and
each Person who is owed any principal or interest, and each assignee thereof, in
accordance with the terms of Sections 11.03 and 11.04 hereof, but the Borrower
shall have no liability or obligation resulting from errors or mistakes in such
Register to the extent that the Borrower has not received notice of assignment
or transfer in accordance with the terms of Section 11.04 hereof.
2.04. Optional Prepayments.
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<PAGE>
(a) The Borrower may, upon at least two Business Days prior written notice
to Administrative Agent stating the proposed date and aggregate principal amount
of the prepayment, prepay the outstanding principal amount of any Advances in
whole or in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid without premium or penalty other than any
Consequential Loss; provided, however, that in the case of a prepayment of a
-------- -------
Base Advance, the notice of prepayment may be given by telephone by 10:00 a.m.
on the date of prepayment. Each partial prepayment shall, in the case of Base
Advances, be in an aggregate principal amount of not less than $500,000 or a
larger integral multiple of $50,000 in excess thereof and, in the case of LIBOR
Advances, be in an aggregate principal amount of not less than $5,000,000 or a
larger integral multiple of $100,000 in excess thereof. If any notice of
prepayment is given, the principal amount stated therein, together with accrued
interest on the amount prepaid and the amount, if any, due under Section 2.12
and Section 2.14 hereof, shall be due and payable on the date specified in such
notice unless the Borrower revokes its notice, provided that, if the Borrower
revokes its notice of prepayment prior to such date specified, the Borrower
shall reimburse the Administrative Agent for the account of all Lenders for all
Consequential Losses suffered by each Lender as a result of the Borrower's
failure to prepay. A certificate of each Lender claiming compensation under
this Section 2.04(a), setting forth in reasonable detail the calculation of the
additional amount or amounts to be paid to it hereunder shall be presumptive
evidence of the validity of such claim.
(b) No prepayments of Revolver Advances made solely pursuant to this
Section 2.04 shall cause the Commitment to be reduced. Prepayments of Term Loan
A Advances and Term Loan B Advances may not be reborrowed. All prepayments made
hereunder shall be allocated in accordance with the terms and conditions of
Section 2.13(f) hereof.
2.05. Mandatory Prepayments.
(a) Excess Cash Flow. Commencing April 30, 2000 and continuing on each
April 30 thereafter, the Borrower shall pay to Administrative Agent for the
Ratable account of Lenders to repay the Obligations, an amount equal to (i) 50%
of Excess Cash Flow for the preceding fiscal year if the Leverage Ratio
calculated at the end of the same period is less than 4.00 to 1.00, or (b) 75%
of Excess Cash Flow for the preceding fiscal year if the Leverage Ratio
calculated at the end of the same period is greater than or equal to 4.00 to
1.00.
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<PAGE>
(b) Additional Equity and Allowed Debt. To the extent that the Parent,
the Borrower or any of its Subsidiaries issues any public or private
indebtedness, or equity securities (except equity permitted to be issued by the
Parent in Section 8.11 hereof and Debt permitted to be incurred by the Parent
under Section 8.02(c) hereof, but only to the extent in each case that such Debt
and equity when added together do not exceed $250,000,000 in the aggregate over
the term of this Agreement) (this provision shall not in and of itself permit
the Borrower to consummate any of the above described transactions), then,
unless the Net Proceeds therefrom are used, within 180 days thereafter, for
Permitted Acquisitions or for Capital Expenditures relating to Towers, the
Borrower and its Subsidiaries shall immediately after the expiration of such
180-day period use the Net Proceeds of any such transaction to repay Advances
hereunder. All prepayments made pursuant to this Section 2.05(b) shall be
applied to reduce outstanding Advances, and shall reduce the Commitment in
accordance with the terms of Section 2.11(c)(ii) hereof (if applied to the
Commitment by the terms of Section 2.13(f) hereof). Upon the occurrence of a
"Change of Control" as that term is defined in the Indenture, the Borrower will
repay all Advances and Obligations hereunder (and the Commitment shall
correspondingly reduce to zero in accordance with the terms of Section
2.11(c)(iv) hereof).
(c) Asset Sales. To the extent that the Parent, the Borrower or any of
its Subsidiaries consummates any sale of any asset or any of its Properties
other than in the ordinary course of business, then unless the Net Proceeds
therefrom are used, within 180 days thereafter, for Permitted Acquisitions or
for Capital Expenditures relating to Towers, the Borrower and its Subsidiaries
shall immediately after the expiration of the 180-day period use the Net
Proceeds of any such transaction to repay Advances hereunder. All prepayments
made pursuant to this Section 2.05(c) shall be applied to reduce outstanding
Advances and, such prepayment shall also reduce the Commitment in accordance
with the terms of Section 2.11(c)(iii) hereof (if applied to the Commitment by
the terms of Section 2.13(f) hereof).
(d) Outstandings in Excess of the Commitment. To the extent that the
outstanding aggregate amount of Revolver Advances at any time exceed the
Commitment, the Borrower shall pay to Administrative Agent for the account of
Lenders in their Revolver Specified Percentages, such excess amount necessary to
reduce the outstanding aggregate Revolver Advances to an amount less than, or
equal to, the Commitment.
(e) Mandatory Prepayments, Generally. Unless otherwise directed by the
Borrower, any prepayments made pursuant to this Section 2.05 shall be first
applied to Base Advances and then to LIBOR Advances, without premium or penalty,
except the Borrower must pay together with any such prepayments, any
Consequential Losses. Application of all payments and prepayments shall be
applied in accordance with the terms of Section 2.13(f) hereof.
2.06. Repayment.
(a) LIBOR Advances. The principal amount of each LIBOR Advance is due and
payable on the last day of the applicable Interest Period, which principal
payment may be made by means of a Refinancing Advance (subject to the other
provisions of this Agreement).
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<PAGE>
(b) Reduction of Commitment On the date of each reduction of the
Commitment pursuant to Section 2.11 hereof, the Borrower shall immediately repay
the Obligations in an amount equal to the difference by which the sum of the
amount of all Revolver Advances outstanding on the date of reduction exceeds the
Commitment, as reduced, which principal payment may not be made by means of a
Refinancing Advance.
(c) Maturity Dates. All outstanding Advances under the Revolver Loan and
the Term Loan A, and all other Obligations in connection with the Revolver Loan
and the Term Loan A, shall be due and payable in full on the First Maturity
Date. All outstanding Advances under the Term Loan B, and all other outstanding
Obligations, shall be due and payable in full on the Final Maturity Date.
(d) Installment Repayments of Term Loan A and Term Loan B. After June 30,
2001, each of the Term Loan A and Term Loan B shall be repaid by the Borrower on
each Quarterly Date, in an amount on each such date equal to the percentage set
forth below of the outstanding Term Loan A Advances and the outstanding Term
Loan B Advances, respectively, in effect on June 30, 2001, in each case opposite
each such Quarterly Date, until each of the Term Loan A and the Term Loan B has
been repaid in full. The first such installment repayment shall occur on
September 30, 2001, and continue thereafter as follows:
Repayment Percentage is equal to the
Outstanding Amount of the Term Loan
Date of Installment Repayment A Advances and the outstanding
of the Term Loan A and the Term Loan B Advances, respectively,
Term Loan B in effect on June 30, 2001
----------------------------- -------------------------------------
Term Loan A Term Loan B
----------- -----------
September 30, 2001 5.00% 0.50%
December 31, 2001 5.00% 0.50%
March 31, 2002 3.75% 0.25%
June 30, 2002 3.75% 0.25%
September 30, 2002 3.75% 0.25%
December 31, 2002 3.75% 0.25%
March 31, 2003 4.50% 0.25%
June 30, 2003 4.50% 0.25%
September 30, 2003 4.50% 0.25%
December 31, 2003 4.50% 0.25%
March 31, 2004 5.50% 0.25%
June 30, 2004 5.50% 0.25%
September 30, 2004 5.50% 0.25%
December 31, 2004 5.50% 0.25%
March 31, 2005 6.25% 0.25%
June 30, 2005 6.25% 0.25%
September 30, 2005 6.25% 0.25%
December 31, 2005 6.25% 0.25%
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<PAGE>
March 31, 2006 5.00% 0.25%
June 30, 2006 5.00% 0.25%
September 30, 2006 0.00% 0.25%
December 31, 2006 0.00% 0.25%
March 31, 2007 0.00% 47.00%
June 30, 2007 0.00% 47.00%
(e) Repayments, Generally. Any repayments made pursuantto this Section
2.06 shall be first applied to Base Advances and then to LIBOR Advances in the
order of maturity, without premium or penalty, except the Borrower must pay
together with any such prepayments, any Consequential Losses. All repayments
shall be allocated among the Loans in accordance with the terms of Section
2.13(f) hereof.
2.07. Interest. Subject to Section 2.08 and Section 11.08 hereof, the
Borrower shall pay interest on the unpaid principal amount of each Advance from
the date of such Advance until such principal shall be paid in full, at the
following rates per annum:
(a) Base Advances. Base Advances shall bear interest at a rate per
annum equal to the Base Rate as in effect from time to time. If the amount
of interest payable in respect of any interest computation period is
reduced to the Highest Lawful Rate and the amount of interest payable in
respect of any subsequent interest computation period would be less than
Maximum Amount, then the amount of interest payable in respect of such
subsequent interest computation period shall be automatically increased to
the Maximum Amount; provided that at no time shall the aggregate amount by
--------
which interest paid has been increased pursuant to this sentence exceed the
aggregate amount by which interest has been reduced pursuant to this
sentence.
(b) LIBOR Advances. LIBOR Advances shall bear interest at the rate
per annum equal to the LIBOR Rate applicable to such Advance.
(c) Payment Dates. Accrued and unpaid interest on Base Advances shall
be paid quarterly in arrears on each Quarterly Date and on the First
Maturity Date with respect to Advances under the Revolver Loan and the Term
Loan A and the Final Maturity Date with respect to Advances made under the
Term Loan B. Accrued and unpaid interest in respect of each LIBOR Advance
shall be paid on the last day of the appropriate Interest Period and on the
date of any prepayment or repayment of such Advance; provided, however,
-------- -------
that if any Interest Period for a LIBOR Advance exceeds three months,
interest shall also be paid on the date which falls three months after the
beginning of such Interest Period.
2.08. Default Interest. During the continuation of any Event of
Default, the Borrower shall pay, on demand, interest (after as well as before
judgment to the extent permitted by Law) on the principal amount of all Advances
outstanding and on all other Obligations due and unpaid hereunder at a per annum
rate equal to the lesser of the (a) the Highest Lawful Rate and (b) (i) to the
extent any such Advance outstanding at such time is bearing interest at the
LIBOR Rate, then the applicable LIBOR Rate plus 3.00% to the end of its
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<PAGE>
Interest Period, and (ii) for all other outstanding Advances, the Base Rate plus
2.00%. LIBOR Advances shall not be available for selection by the Borrower
during the continuance of an Event of Default.
2.09. Continuation and Conversion Elections.
(a) The Borrower may upon irrevocable written notice to Administrative
Agent and subject to the terms of this Agreement:
(i) elect to convert, on any Business Day, all or any portion of
outstanding Base Advances (in an aggregate amount not less than $500,000 or
an integral multiple of $50,000 in excess thereof) into LIBOR Advances; or
(ii) elect to convert at the end of any Interest Period therefor,
all or any portion of outstanding LIBOR Advances comprised in the same
Borrowing (in an aggregate amount not less than $5,000,000 or an integral
multiple of $100,000 in excess thereof) into Base Advances; or
(iii) elect to continue, at the end of any Interest Period
therefor, any LIBOR Advances;
provided, however, that if the aggregate amount of outstanding LIBOR
-------- -------
Advances comprised in the same Borrowing shall have been reduced as a result of
any payment, prepayment or conversion of part thereof to an amount less than
$5,000,000, the LIBOR Advances comprised in such Borrowing shall automatically
convert into Base Advances at the end of each respective Interest Period.
(b) The Borrower shall deliver a notice of conversion or continuation (a
"Conversion or Continuation Notice"), in substantially the form of Exhibit E
---------
hereto, to Administrative Agent not later than 10:00 a.m. (i) three Business
Days prior to the proposed date of conversion or continuation, if the Advances
or any portion thereof are to be converted into or continued as LIBOR Advances;
and (ii) on the Business Day of the proposed conversion, if the Advances or any
portion thereof are to be converted into Base Advances.
Each such Conversion or Continuation Notice shall be by telecopy or
telephone, promptly confirmed by letter, specifying therein:
(i) the proposed date of conversion or continuation and whether
such continuation or conversion is a Revolver Advance, a Term Loan A
Advance or a Term Loan B Advance (or any combination thereof);
(ii) the aggregate amount of Advances to be converted or
continued;
(iii) the nature of the proposed conversion or continuation; and
35
<PAGE>
(iv) the duration of the applicable Interest Period.
(c) If, upon the expiration of any Interest Period applicable to LIBOR
Advances, the Borrower shall have failed to select a new Interest Period to be
applicable to such LIBOR Advances or if an Event of Default shall then have
occurred and be continuing, the Borrower shall be deemed to have elected to
convert such LIBOR Advances into Base Advances effective as of the expiration
date of such current Interest Period.
(d) Notwithstanding any other provision contained in this Agreement, after
giving effect to any conversion or continuation of any Advances, there shall not
be outstanding Advances with more than ten different Interest Periods. The
Borrower shall indemnify each Lender against any Consequential Loss incurred by
each Lender as a result of (i) any failure to fulfill, on or before the date
specified for a conversion or continuation of an Advance, the conditions to the
Advance set forth herein or (ii) the Borrower's requesting that a conversion or
continuation of an Advance not be made on the date specified in the Conversion
or Continuation Notice.
2.10. Fees and the Fee Letter.
(a) Facility Fee. Subject to Section 11.08 hereof, the Borrower shall pay
to Administrative Agent for the account of each of the Lenders such origination
and facility fees as are agreed to in writing by the Borrower, the
Administrative Agent and the Lenders, including those set forth in the Fee
Letter.
(b) Commitment Fee. Subject to Section 11.08 hereof, the Borrower shall
pay to Administrative Agent for the Ratable account of Lenders having Revolver
Specified Percentages in excess of zero, a commitment fee on the average daily
amount of the sum of (i) the difference between the Commitment and the sum of
all Revolver Advances outstanding, plus (ii) until December 31, 1999, the
difference between $125,000,000 and the sum of all Term Loan A Advances
outstanding, in each case at a per annum rate based on usage equal to the
percentage set forth below, applicable in the following circumstances, payable
in each case in arrears on each Quarterly Date and on the First Maturity Date,
commencing with the first Quarterly Date after the Closing Date, and continuing
until the First Maturity Date:
Percentage of Usage
of the Revolver Loan
and the Term Loan A Commitment Fee Percentage
------------------- -------------------------
If outstanding Revolver
Advances and Term Loan A
Advances are less than 25%
of the Commitment
plus $125,000,000 1.25%
36
<PAGE>
If outstanding Revolver
Advances and Term Loan A
Advances are greater than 25%
of the Commitment
plus $125,000,000 but equal to
or less than 50% 0.75%
If outstanding Revolver
Advances and Term Loan A
Advances are greater than 50%
of the Commitment
plus $125,000,000 0.50%
(c) Other Fees and the Fee Letter. The Borrower shall pay such other fees
as are set forth in Article III hereof, in the Fee Letter and in any other Loan
Paper, in each case in accordance with the terms of such agreements. The
Borrower agrees to perform, over the term of this Agreement, all terms,
conditions and agreements of the Fee Letter in accordance with the terms
thereof.
2.11. Reduction of Commitment.
(a) Mandatory Termination of the Commitment. The Commitment shall reduce
to zero and terminate on the First Maturity Date.
(b) Mandatory Scheduled Reduction of the Commitment. After June 30, 2001,
the Commitment shall automatically reduce on each Quarterly Date, in a reduction
amount on each such date equal to the percentage set forth below of the
Commitment in effect on June 30, 2001, in each case opposite each such Quarterly
Date, until the Commitment has been reduced to zero. The first such automatic
reduction in the Commitment shall occur on September 30, 2001, and continue
thereafter as follows:
Reduction Percentage is equal to the Date of Automatic Reduction Percentage of
the Commitment in effect of the Commitment on June 30, 2001, and the Commitment
shall each be reduced to zero
Reduction Percentage is equal to the
Date of Automatic Reduction Percentage of the Commitment in effect
of the Commitment on June 30, 2001
--------------------------- -------------------------------------------
September 30, 2001 5.00%
December 31, 2001 5.00%
March 31, 2002 3.75%
June 30, 2002 3.75%
September 30, 2002 3.75%
December 31, 2002 3.75%
March 31, 2003 4.50%
June 30, 2003 4.50%
September 30, 2003 4.50%
December 31, 2003 4.50%
March 31, 2004 5.50%
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<PAGE>
June 30, 2004 5.50%
September 30, 2004 5.50%
December 31, 2004 5.50%
March 31, 2005 6.25%
June 30, 2005 6.25%
September 30, 2005 6.25%
December 31, 2005 6.25%
March 31, 2006 5.00%
June 30, 2006 5.00%
(c) Reduction of the Commitment. The Commitment shall be permanently
reduced from time to time:
(i) on the date of, and by the amount of, each Excess Cash Flow mandatory
prepayment required by Section 2.05(a) hereof,
(ii) on the date of, and by the amount of, each mandatory prepayment made
from the issuance of equity or debt, in each case only as required to be
prepaid by Section 2.05(b) hereof,
(iii) on the date of, and by the amount of, each mandatory prepayment made
from the sale of assets, in each case only as required to be prepaid by
Section 2.05(c) hereof, and
(iv) on the date of any occurrence of a "Change of Control" as that term is
defined in the Indenture, the Commitment will automatically be reduced to
zero and terminate.
No reduction in the Commitment set forth in 2.11(c) above shall reduce or
relieve the automatic scheduled reduction of the Commitment required by Section
2.11(b) above.
(d) Voluntary Reduction of the Commitment. The Borrower may from time to
time, upon notice to Administrative Agent not later than 1:00 p.m., five
Business Days in advance, terminate in whole or reduce in part the Commitment,
as designated by the Borrower; provided, however, that the Borrower shall pay
-------- -------
the accrued interest and the applicable Commitment Fee on the amount of such
reduction and all amounts due, and any partial reduction shall be in an
aggregate amount which is an integral multiple of $5,000,000. No voluntary
reduction in the Commitment permitted by this Section 2.11(d) shall reduce or
relieve the automatic scheduled reduction of the Commitment required by Section
2.11(b) above.
(e) Commitment Reductions, Generally. No prepayment under Section 2.04
hereof, required prepayment under Section 2.05 hereof or commitment reductions
under Sections 2.11(c) and (d) above shall reduce or relieve the scheduled
reduction required by Section 2.11(b) above. To the extent the outstanding
Revolver Advances exceed the Commitment after any reduction thereof, the
Borrower shall repay, on the date of such reduction, any such excess amount and
all accrued interest thereon, the applicable Commitment Fee on the amount of
such reduction and all amounts due. Once reduced or terminated, the Commitment
may not be increased or reinstated,
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<PAGE>
except in accordance with Section 2.18 hereof. Application of all reductions in
the Commitment shall be in accordance with the terms of Section 2.13(f) hereof.
2.12. Funding Losses. The Borrower may prepay the outstanding principal
balance of any Advance, in full at any time or in part from time to time in
accordance with the terms of Section 2.04 hereof, provided, that as a condition
--------
precedent to the Borrower's right to make, and any Lender's obligation to
accept, any such prepayment, each such prepayment shall be in the amount of 100%
of the principal amount to be prepaid, plus accrued unpaid interest thereon to
the date of prepayment, plus any other sums which have become due to
Administrative Agent and Lenders under the Loan Papers on or before the
prepayment date but have not been paid, plus (subject to Section 11.08 hereof)
any Consequential Loss.
The Borrower agrees that each Lender is not obligated to actually reinvest
the amount prepaid in any specific obligation as a condition to receiving any
Consequential Loss, or otherwise.
2.13. Computations and Manner of Payments.
(a) The Borrower shall make each payment hereunder and under the other
Loan Papers not later than 1:00 p.m. on the day when due in same day funds to
Administrative Agent, for the Ratable account of Lenders unless otherwise
specifically provided herein, at Administrative Agent's office at Bank of
America Plaza, 901 Main Street, Dallas, Texas 75202, for further credit to the
account of Pinnacle Towers Inc. No later than the end of each day when each
payment hereunder is made, the Borrower shall notify Judy Schneidmiller, at
(214) 209-2135, or such other Person as Administrative Agent may from time to
time specify.
(b) Unless Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due hereunder that the
Borrower will not make payment in full, Administrative Agent may assume that
such payment is so made on such date and may, in reliance upon such assumption,
make distributions to Lenders. If and to the extent the Borrower shall not have
made such payment in full, each Lender shall repay to Administrative Agent
forthwith on demand the applicable amount distributed, together with interest
thereon at the Federal Funds Rate, from the date of distribution until the date
of repayment. The Borrower hereby authorizes each Lender, if and to the extent
payment is not made when due hereunder, to charge the amount so due against any
account of the Borrower with such Lender.
(c) Subject to Section 11.08 hereof, interest on LIBOR Advances under
the Loan Papers shall be calculated on the basis of actual days elapsed but
computed as if each year consisted of 360 days. Subject to Section 11.08 hereof,
interest on Base Advances, the Commitment Fee, and other amounts due under the
Loan Papers shall be calculated on the basis of actual days elapsed but computed
as if each year consisted of 365 or 366 days, as applicable. Such computations
shall be made including the first day but excluding the last day occurring in
the period for which such interest, payment or Commitment Fee is payable. Each
determination by Administrative Agent or a Lender of an interest rate, fee or
commission hereunder shall be
39
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presumptive evidence of the validity of such claim. All payments under the Loan
Papers shall be made in United States dollars, and without setoff, counterclaim,
or other defense.
(d) Whenever any payment to be made hereunder or under any other Loan
Papers shall be stated to 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 the computation of interest or fees, if applicable;
provided, however, if such extension would cause payment of interest on or
- -------- -------
principal of LIBOR Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
(e) Reference to any particular index or reference rate for determining
any applicable interest rate under this Agreement is for purposes of calculating
the interest due and is not intended as and shall not be construed as requiring
any Lender to actually obtain funds for any Advance at any particular index or
reference rate.
(f) Notwithstanding anything to the contrary herein or in any Loan
Paper, to the extent the Borrower makes any voluntary prepayment, or voluntary
reduction of the Commitment under Sections 2.04 or 2.11 hereof, or any mandatory
prepayment, or mandatory reduction of the Commitment under Sections 2.05 and
2.11 hereof, then such reduction of the Commitment or such prepayment shall be
applied as follows:
(i) so long as there exists no Default or Event of Default, all
voluntary Commitment reductions and all voluntary repayments and
prepayments shall be applied as directed by the Borrower, and in the
absence of direction by the Borrower, shall be deemed to prepay and reduce,
respectively (1) the Commitment and the Revolver Loan, until the Commitment
has been reduced to zero and the outstandings under the Revolver Loan have
been repaid in full, then (2) the Term Loan A and the Term Loan B, pro
rata, until all outstanding Term Loan A Advances and Term Loan B Advances
have been repaid in full and (3) to all remaining outstanding and unpaid
Obligations; provided that, so long as there exists no Default or Event of
Default, each Lender having a Term Loan B Specified Percentage in excess of
zero may elect to decline all voluntary prepayments made or allocated to
Term Loan B in accordance with the terms of this Agreement, in which case
such declined prepayments shall be allocated to the Revolver Loan and the
Term Loan A pro rata;
(ii) so long as there exists no Default or Event of Default, all
mandatory Commitment reductions and all mandatory repayments and
prepayments shall be applied pro rata among the Revolver Loan, the Term
Loan A and the Term Loan B, and then to all remaining outstanding
Obligations; provided that, so long as there exists no Default or Event of
Default, each Lender having a Term Loan B Specified Percentage in excess of
zero may elect to decline all mandatory prepayments made or allocated to
Term Loan B in accordance with the terms of this Agreement, in which case
such declined prepayments shall be allocated to the Revolver Loan and the
Term Loan A pro rata;
(iii) if there exists a Default or Event of Default, all mandatory
and voluntary Commitment reductions and mandatory and voluntary repayments
and prepayments shall
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be applied pro rata among the Revolver Loan, the Term Loan A and the Term
Loan B, and then to all remaining outstanding Obligations; and
(iv) all Term Loan A and Term Loan B repayments and prepayments shall
be applied to installments due thereunder in the inverse order of maturity,
and all repayments and prepayments, and reductions to the Commitment shall
not affect the mandatory commitment reduction schedule set forth in Section
2.11(b) hereof.
2.14. Yield Protection; Changed Circumstances.
(a) If any Lender determines that either (i) the adoption, after the date
hereof, of any Applicable Law, rule, regulation or guideline regarding capital
adequacy and applicable to commercial banks or financial institutions generally
or any change therein, or any change, after the date hereof, in the
interpretation or administration thereof by any Tribunal, central bank or
comparable agency charged with the interpretation or administration thereof, or
(ii) compliance by any Lender (or Lending Office of any Lender) with any request
or directive made after the date hereof applicable to commercial banks or
financial institutions generally regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency has the effect of reducing the rate of return on such Lender's capital as
a consequence of its obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, change or compliance (taking
into consideration such Lender's policies with respect to capital adequacy) by
an amount reasonably deemed by such Lender to be material, then from time to
time, within fifteen days after demand by such Lender, the Borrower shall pay to
such Lender such additional amount or amounts as will adequately compensate such
Lender for such reduction. Each Lender will notify the Borrower of any event
occurring after the date of this Agreement which will entitle such Lender to
compensation pursuant to this Section 2.14(a) as promptly as practicable after
such Lender obtains actual knowledge of such event; provided, no Lender shall be
--------
liable for its failure or the failure of any other Lender to provide such
notification. A certificate of such Lender claiming compensation under this
Section 2.14(a), setting forth in reasonable detail the calculation of the
additional amount or amounts to be paid to it hereunder and certifying that such
claim is consistent with such Lender's treatment of similar customers having
similar provisions generally in their agreements with such Lender shall be
presumptive evidence of the validity of such claim. Each Lender shall use
reasonable efforts to mitigate the effect upon the Borrower of any such
increased costs payable to such Lender under this Section 2.14(a).
(b) If, after the date hereof, any Tribunal, central bank or other
comparable authority, at any time imposes, modifies or deems applicable any
reserve (including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System), special deposit or similar requirement against
assets of, deposits with or for the amount of, or credit extended by, any
Lender, or imposes on any Lender any other condition affecting a LIBOR Advance,
the Notes, or its obligation to make a LIBOR Advance, or imposes on any Lender
any other condition affecting a Letter of Credit; and the result of any of the
foregoing is to increase the cost to such Lender of making or maintaining its
Letter of Credit, LIBOR Advances, or to reduce the amount of any sum received or
receivable by such Lender under this Agreement or under the
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Notes, the Letters of Credit or reimbursement obligations by an amount deemed by
such Lender, to be material, then, within five days after demand by such Lender,
----
the Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction. Each Lender will
(i) notify the Borrower of any event occurring after the date of this Agreement
that entitles such Lender to compensation pursuant to this Section 2.14(b), as
promptly as practicable after such Lender obtains actual knowledge of the event;
provided, no Lender shall be liable for its failure or the failure of any other
- --------
Lender to provide such notification and (ii) use good faith and reasonable
efforts to designate a different Lending Office for LIBOR Advances, of such
Lender if the designation will avoid the need for, or reduce the amount of, the
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender. A certificate of such Lender claiming
compensation under this Section 2.14(b), setting forth in reasonable detail the
computation of the additional amount or amounts to be paid to it hereunder and
certifying that such claim is consistent with such Lender's treatment of similar
customers having similar provisions generally in their agreements with such
Lender shall be presumptive evidence of the validity of such claim. If such
Lender demands compensation under this Section 2.14(b), the Borrower may at any
time, on at least five Business Days' prior notice to such Lender (i) repay in
full the then outstanding principal amount of LIBOR Advances, of such Lender,
together with accrued interest thereon, or (ii) convert the LIBOR Advances to
Base Advances in accordance with the provisions of this Agreement; provided,
--------
however, that the Borrower shall be liable for the Consequential Loss arising
- -------
pursuant to those actions.
(c) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation or administration of
any Law shall make it unlawful, or any central bank or other Tribunal shall
assert that it is unlawful, for a Lender to perform its obligations hereunder to
issue or maintain Letters of Credit, make LIBOR Advances or to continue to fund
or maintain LIBOR Advances hereunder, then, on notice thereof and demand
therefor by such Lender to the Borrower, (i) each LIBOR Advance will
automatically, upon such demand, convert into a Base Advance, (ii) the
obligation of such Lender to make, or to convert Advances into, LIBOR Advances
shall be suspended until such Lender notifies Administrative Agent and the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist, and (iii) the obligation of such Lender to make or
maintain Letters of Credit shall be suspended until such Lender notifies
Administrative Agent and the Borrower that such Lender has determined that the
circumstances causing such suspension no longer exist.
(d) Upon the occurrence and during the continuance of any Default or Event
of Default, (i) each LIBOR Advance will automatically, on the last day of the
then existing Interest Period therefor, convert into a Base Advance and (ii) the
obligation of each Lender to make, or to convert Advances into, LIBOR Advances
shall be suspended.
(e) If any Lender notifies Administrative Agent that the LIBOR Rate for
any Interest Period for any LIBOR Advances will not adequately reflect the cost
to such Lender of making, funding or maintaining LIBOR Advances for such
Interest Period, Administrative Agent shall promptly so notify the Borrower,
whereupon (i) each such LIBOR Advance will automatically, on the last day of the
then existing Interest Period therefor, convert into a Base Advance and (ii) the
obligation of such Lender to make, or to convert Advances into, LIBOR Advances
shall be
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suspended until such Lender notifies Administrative Agent that such Lender has
determined that the circumstances causing such suspension no longer exist and
Administrative Agent notifies the Borrower of such fact.
(f) Failure on the part of any Lender to demand compensation for any
increased costs, increased capital or reduction in amounts received or
receivable or reduction in return on capital pursuant to this Section 2.14 with
respect to any period shall not constitute a waiver of any Lender's right to
demand compensation with respect to such period or any other period, subject,
however, to the limitations set forth in this Section 2.14.
(g) The obligations of the Borrower under this Section 2.14 shall survive
any termination of this Agreement, provided that, in no event shall the Borrower
be required to make a payment under this Section 2.14 with respect to any event
of which the Lender making such claim had knowledge more than twelve months
prior to demand for such payment.
(h) Determinations by Lenders for purposes of this Section 2.14 shall be
presumptively correct. Any certificate delivered to the Borrower by a Lender
pursuant to this Section 2.14 shall include in reasonable detail the basis for
such Lender's demand for additional compensation and a certification that the
claim for compensation is consistent with such Lender's treatment of similar
customers having similar provisions generally in their agreements with such
Lender.
(i) Notwithstanding any other provision of this Agreement, no Lender not
organized under the Laws of the United States or any State (or which has a Bank
Affiliate not organized under the Laws of the United States or any State) shall
be entitled to compensation pursuant to this Section 2.14 with respect to any
amount which would otherwise be due under this Section 2.14 but which is the
result of an act of a Tribunal of the country in which such Lender or Bank
Affiliate is organized.
2.15. Use of Proceeds. The proceeds of all Revolver Advances borrowed
hereunder shall be solely used in connection with the acquisition of assets in
accordance with the terms of Section 1008(v) of the Indenture, such that all
Revolver Advances constitute in each case, Acquisition Debt or"Purchase Money
Secured Debt" (as defined in the Indenture) in accordance with the terms of the
Indenture, the other Parent Senior Notes Documentation and permitted fully
secured indebtedness under all Second Parent Issuance Documentation. The
proceeds of the initial Term Loan B Advance and all Term Loan A Advances shall
be available (and the Borrower shall use such proceeds) solely (i) with respect
to the initial Term Loan B Advance and any Term Loan A Advance made on the
Closing Date only, to refinance existing indebtedness of the Borrower, (ii) for
Permitted Acquisitions, (iii) for Capital Expenditures permitted under the terms
of this Agreement, (iv) for working capital and (v) for other lawful corporate
purposes. Notwithstanding the preceding sentences of this Section 2.15, any
Revolver Advance that constitutes a Qualified Facility Revolver Advance shall be
available (and the Borrower shall use such proceeds) solely (i) for Permitted
Acquisitions, (ii) for Capital Expenditures permitted under the terms of this
Agreement, (iii) for working capital and (iv) for other lawful corporate
purposes.
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2.16. Collateral and Collateral Call.
(a) Collateral. Payment of the Obligations (including the Canada
----------
Indebtedness and the Canada Guaranty) will be secured by (i) a first perfected
security interest in 100% of the Capital Stock of the Subsidiaries of the
Borrower and 100% of the Capital Stock of the Borrower, (ii) subject to
Permitted Liens and Section 6.15 hereof, a first perfected security interest in
all of the existing and future accounts (including without limitation, the
Tenant Leases), equipment, inventory and general intangibles (including all
existing and future Tenant Leases, and excluding any Interest Rate Protection
Agreement to which any Lender is a party, motor vehicles, bank accounts,
intellectual property and chattel paper) of the Borrower and its Subsidiaries,
(iii) Guaranties of the Obligations by each Guarantor, (iv) in accordance with
Section 6.15 hereof, deeds of trust and/or mortgages on all real property owned
by the Borrower and each Subsidiary of the Borrower, (v) certain pre-existing
leasehold deeds of trust and/or mortgages on Borrower's leasehold interest under
certain Ground Leases entered into or acquired by the Borrower before June 25,
1999, and (vi) cash on hand of the Parent, the Borrower and each Subsidiary of
the Borrower in excess of $10,000,000 (collectively, together with all other
Properties or assets of the Borrower, Subsidiaries and other Persons securing
the Obligations from time to time, the "Collateral"). The Borrower agrees that
it will, and will cause its Subsidiaries and the Parent to, execute and deliver,
or cause to be executed and delivered, such documents as the Administrative
Agent may from time to time reasonably request to create and perfect a first
Lien for the benefit of the Administrative Agent and the Lenders in the
Collateral, provided that, notwithstanding the foregoing, the Borrower is not
obligated to grant or perfect any new leasehold deed of trust or leasehold
mortgage.
(b) Collateral Call. The Borrower agrees: (i) upon the creation,
---------------
formation or acquisition of any direct or indirect Subsidiary of the Borrower,
to immediately pledge 100% of the Capital Stock of any such Subsidiary to secure
the Obligations, pursuant to a pledge agreement substantially in the form of
Exhibit J hereto, and to promptly deliver to the Administrative Agent all
- ---------
certificates or other documentation evidencing 100% of such Capital Stock and,
if such Capital Stock is stock of a corporation, together with stock powers
executed in blank, and to cause such new Subsidiary to execute a Guaranty of the
Obligations in the form of Exhibit G hereto and (ii) to, and agrees to cause the
---------
Subsidiaries of the Borrower to, grant the Administrative Agent and the Lenders
from time to time, a Lien on any of the Property of the Borrower or any
Subsidiary of the Borrower that is not already subject to a perfected Lien,
excluding all leasehold real estate. The Borrower shall comply with Section
6.15(a), (b) and (d) hereof with respect to all owned or acquired real estate by
the Borrower or any Subsidiary from time to time. The Borrower shall, and shall
cause the Subsidiaries of the Borrower to, provide for the benefit of
Administrative Agent and Lenders securing the Obligations in any other Property
of the Borrower and its Subsidiaries, all items to fully effect the foregoing,
including, without limitation, providing the Administrative Agent with UCC-1's
together with, new security agreements, appraisals, hazard insurance, UCC-11
searches, Tax and Lien searches, intellectual property documentation and
registration and other similar types of documents, consents, authorizations,
Licenses, instruments and agreements relating to all Property of the Borrower
and its Subsidiaries as reasonably requested by the Administrative Agent from
time to time, and at the request of the Administrative Agent, opinions of local
legal counsel with respect to the execution and filing thereof, and perfection
of Liens created thereby. Notwithstanding the
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foregoing, in no event shall the Borrower be obligated to grant, or perfect, any
new leasehold mortgage or leasehold deed of trust.
2.17. Replacement of a Lender. If any Lender has requested compensation or
reimbursement in accordance with the terms of Section 2.14 hereof or in
accordance with the terms of Section 11.07 hereof and (a) such request is not
the result of any uniform changes in the statutes or regulations for capital
adequacy, (b) there exists no Default or Event of Default hereunder, and (c) the
Borrower and such Lender are unable to reach a written agreement regarding such
request within 30 days following written notice by such Lender to the Borrower
and the Administrative Agent of such request, then after the expiration of 30
days following the delivery of the notice under Section 2.14 or Section 11.07
hereof, the Borrower may replace such Lender in whole with another Eligible
Assignee reasonably acceptable to Administrative Agent pursuant to an Assignment
and Acceptance and in accordance with Section 11.04 hereof. Until such time as
any Lender is replaced by the Borrower, the Borrower shall reimburse or
compensate such Lender in accordance with the terms of Section 2.14 hereof and
Section 11.07 hereof.
2.18. Conditions Precedent to the Increase of the Commitment.
Prior to June 30, 2001, upon written request by the Borrower to the
Administrative Agent and any other existing Lender of its choice (and not all
Lenders) not less than ten Business Days prior to the proposed effective date of
the proposed increase (or, in the case of each proposed lender, such lesser
notice as any proposed lender is willing to accept), the Commitment shall,
subject to the further terms and conditions set forth below, increase to a
maximum of $435,000,000 in the manner set forth below:
(a) On any date of proposed increase, the representations and
warranties contained in Article V hereof are true and correct on such date,
as though made on and as of such date, except to the extent expressly made
only as of a prior date; and
(b) On any date of proposed increase, no Default or Event of Default
shall exist on any such date, and no Default or Event of Default would
result from the such increase in the Commitment and the subsequent Revolver
Advance to the Borrower up to the amount of the Commitment; and
(c) On any date of proposed increase, there shall have occurred no
Material Adverse Change since December 31, 1998; and
(d) On any date of proposed increase, the sum of all Revolver Advances
outstanding (after giving effect to any proposed Revolver Advance to be
made on such date) shall not exceed the Commitment; and
(e) The proposed increase shall occur prior to June 30, 2001 and the
Commitment as increased shall not be in excess of the sum of the Commitment
prior to such increase plus the Unavailable Commitment prior to such
increase; and
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(f) Upon satisfaction of each of the conditions precedent in this
Section 2.18, the Borrower shall be entitled to increase the Commitment not
more than five times, in an aggregate amount for such increases not to
exceed the Unavailable Commitment . Each Lender specified by the Borrower
shall have received not less than 5 Business Days' prior written notice
from the Borrower requesting such Commitment increase. Each such Lender
electing to participate in such Commitment increase shall commit to an
amount not less than $5,000,000, but shall accept any allocation amount
designated by the Borrower and the Administrative Agent that is equal to or
less than its proposed portion of the Commitment increase; and
(g) Notwithstanding anything herein or in any other Loan Paper to the
contrary, (i) the Borrower is not obligated to notify each Lender of, or to
allocate to any existing Lender any portion of, the proposed increase, and
the Borrower and the Administrative Agent may agree to add other creditors
in connection with any such proposed increase. Each existing Lender agrees
and acknowledges that new creditors may be allocated all or any portion of
the proposed increase upon the determination of the Borrower and the
Administrative Agent; and
(h) Each of the proposed increases shall be in an aggregate minimum
amount of $10,000,000 and $5,000,000 multiples thereof; and
(i) The Administrative Agent shall have received a certificate from
the Borrower to the effect that (i) such increase has received all required
regulatory approvals, if necessary, and is in compliance with all
applicable Laws, and (ii) no other approvals or consents from any Person
are required by any such Person except to the extent they have been
received; and
(j) Each new Lender (including any new Lenders party hereto) shall
have received a promissory Note evidencing its new Revolver Specified
Percentage of the Commitment, and the Borrower and each new Lender agrees
to execute any and all such documents deemed necessary by the
Administrative Agent in order to effectuate this Section 2.18 (whether UCC-
1s, new documentation relating to any Collateral, Guaranty or otherwise);
and
(k) On the date of increase, the Administrative Agent shall deliver to
each Lender evidence of new Revolver Specified Percentages adjusted to give
effect to the increase in the Commitment; and
(l) On or prior to the date of increase, each new lender being added
to the credit facility shall deliver to the Borrower and the Administrative
Agent documentation acceptable to the Administrative Agent evidencing such
new Lender's acceptance of this Agreement and all the other Loan Papers in
form and substance reasonably acceptable to the Administrative Agent (and
making such lender a party to this Agreement and the other Loan Papers);
and
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(m) The Administrative Agent shall have received a pro-forma
Compliance Certificate in form and substance acceptable to the Lenders and
demonstrating compliance with the terms of this Agreement and the Loan
Papers for one full year after the date of such proposed increase; and
(n) The Administrative Agent shall have received financial projections
in form and substance acceptable to the Lenders and demonstrating
compliance with the financial covenants set forth in Section 8.01 hereof
throughout the term of this Agreement; and
(o) The Commitment shall (i) never exceed the sum of the Commitment
plus the Unavailable Commitment, as each is reduced in accordance with
Section 2.11 hereof, this Section 2.18 and the other terms of this
Agreement, and (ii) never increase except to the extent, and not to exceed
such amount, that the Unavailable Commitment is in excess of zero; and
(p) The Unavailable Commitment shall be reduced in accordance with
this Section 2.18 dollar for dollar for each increase in the Commitment;
and
(q) The Administrative Agent on behalf of each Lender shall have
received all amendments to security agreements, deeds of trust and
mortgages as the Administrative Agent shall deem necessary to maintain its
valid and perfected Lien.
No Lender shall be obligated to increase the dollar amount of its share of
the Commitment without its written consent in its sole discretion. In connection
with any increase to the Commitment in accordance with the terms of this Section
2.18, each existing Lender (regardless of whether such Lender is participating
in such increase) agrees to execute any and all agreements requested by the
Administrative Agent to effectuate the intent of this Section 2.18.
Notwithstanding anything contained herein to the contrary, the limitations
placed upon assignments set forth in Section 11.04 hereof shall not apply to
proposed increases pursuant to this Section.
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ARTICLE III. LETTERS OF CREDIT
3.01. Issuance of Letters of Credit. Letters of Credit issued under the
Original Credit Agreement and described on Schedule 3.01 hereto shall be
-------------
deemed, for the purposes of this Agreement, to be issued hereunder, and each
such Letter of Credit shall be treated accordingly. The Borrower shall give the
Administrative Agent not less than five Business Days prior written notice of a
request for the issuance of a Letter of Credit, and the Administrative Agent
shall promptly notify each Lender of such request. Upon receipt of the
Borrower's properly completed and duly executed Applications, and subject to the
terms of such Applications and to the terms of this Agreement ( this Agreement
governing all conflicting provisions), the Administrative Agent agrees to issue
Letters of Credit on behalf of the Borrower in an aggregate face amount not in
excess of the Letter of Credit Commitment, each denominated in Dollars and each
for sight drawings only. No Letter of Credit shall have a maturity extending
beyond the earliest of (i) the fifth Business Day prior to the First Maturity
Date, or (ii) one year from the date of its issuance, or (iii) such earlier date
as may be required to enable the Borrower to satisfy its repayment obligations
under Section 2.06 hereof (including, without limitation, such repayment
obligations resulting from a decrease in the Commitment required by Section 2.11
hereof). Subject to such maturity limitations and so long as no Default or Event
of Default has occurred and is continuing or would result from the renewal of a
Letter of Credit, the Letters of Credit may be renewed by the Administrative
Agent in its discretion. The Lenders shall participate ratably in all rights and
obligations of the Administrative Agent under the Letters of Credit and in any
unreimbursed draws under any Letter of Credit in their Revolver Specified
Percentages. The amount of the Letters of Credit issued and outstanding and the
unpaid reimbursement obligations of the Borrower for such Letters of Credit
shall reduce the amount of Commitment available, so that at no time shall the
sum of (i) all outstanding Revolver Advances in the aggregate, plus (ii) the
aggregate face amount of all outstanding Letters of Credit, plus (iii) (without
duplication) all outstanding reimbursement obligations related to Letters of
Credit, exceed $235,000,000 (as may be increased by Section 2.18 hereof, and as
may be reduced by Section 2.11 hereof), and at no time shall the sum of all
Revolver Advances made by any Lender (except the Canada Lender) plus any such
Lender's ratable share of amounts available to be drawn under the Letters of
Credit and the unpaid reimbursement obligations of the Borrower in respect of
such Letters of Credit exceed such Lender's Revolver Specified Percentage of the
Commitment, provided that, with respect to the Canada Lender, at no time shall
the sum of all Revolver Advances made by the Canada Lender plus its ratable
share of amounts available to be drawn under the Letters of Credit and the
unpaid reimbursement obligations of the Borrower in respect of such Letters of
Credit exceed an amount equal to the difference between its Revolver Specified
Percentage of the Commitment, minus the Canada Indebtedness Amount.
3.02. Letters of Credit Fee. In consideration for the issuance of each
Letter of Credit, the Borrower shall pay to (a) the Administrative Agent for its
own account, an application and processing fee in the amount of (i) $350.00 on
each Letter of Credit, due and payable on the date of issuance of each Letter of
Credit and (ii) the product of 1/8 of 1 percent multiplied by the face amount of
each such Letter of Credit, plus and (b) the Administrative Agent for the
account of the Administrative Agent and the Lenders in accordance with their
Revolver Specified Percentages, a per annum fee for each Letter of Credit equal
to the product of the Applicable Margin for LIBOR Advances on the date of
issuance multiplied by the
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face amount of each such Letter of Credit. Each fee for each Letter of Credit
under subsections (a)(i) and (b) above shall be due and payable to the
Administrative Agent quarterly as it accrues on each Quarterly Date during the
term of the Letter of Credit and on the expiration or renewal and/or extension
of each such Letter of Credit, beginning with the first such Quarterly Date
after the issuance of each Letter of Credit and continuing through the expiry
date of each such Letter of Credit, or the renewal and/or extension of each such
Letter of Credit.
3.03. Reimbursement Obligations.
(a) The Borrower hereby absolutely, unconditionally and irrevocably agrees
to reimburse Administrative Agent immediately upon demand by Administrative
Agent, and in immediately available funds, for any payment or disbursement made
by Administrative Agent under any Letter of Credit. The obligations of the
Borrower under this Agreement, any Letter of Credit and any Application to
reimburse the Administrative Agent for a drawing under a Letter of Credit shall
be unconditional and irrevocable, and shall be paid strictly in accordance with
the term of this Agreement and each Application under all circumstances,
including the following:
(i) any lack of validity of enforceability of this Agreement or any
Application;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of the Borrower in respect of
any Letter of Credit or any other amendment or waiver of or any consent to
departure from all or any of the provisions of this Agreement or any
Application;
(iii) the existence of any claim, set-off, defense or other right that the
Borrower or any Subsidiary of the Borrower may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any Person for
whom any such beneficiary or any such transferee may be acting), the
Administrative Agent or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby, any Application, any
underlying transaction or any unrelated transaction;
(iv) any draft, demand, certificate or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; or any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit;
(v) any payment by the Administrative Agent under any Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of any Letter of Credit; or any payment made by the
Administrative Agent under any Letter of Credit to any Person purporting to
be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit
of creditors, liquidator, receiver or other representative of or successor
to any beneficiary or any transferee of any Letter of Credit, including any
proceeding arising in connection with any Debtor Relief Laws;
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(vi) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the obligations of the Borrower in respect of
any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower or a guarantor.
Payment shall be made by the Borrower with interest on the amount so paid or
disbursed by Administrative Agent from and including the date payment is made
under any Letter of Credit to and including the date of payment, at the lesser
of (i) the Highest Lawful Rate, and (ii) the sum of the Base Rate in effect from
time to time plus two percent (2%) per annum; provided, however, that if the
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Borrower would be permitted under the terms of Section 2.01, Section 2.02 and
Section 4.02 hereof to borrow Advances in amounts at least equal to their
reimbursement obligation for a drawing under any Letter of Credit, a Base
Advance by each Lender, in an amount equal to such Lender's Revolver Specified
Percentage, shall automatically be deemed made on the date of any such payment
or disbursement made by Administrative Agent in the amount of such obligation
and subject to the terms of this Agreement. The Administrative Agent shall
notify each Lender that has a Revolver Specified Percentage in excess of zero of
any such Base Advance deemed made.
(b) The Borrower hereby also agrees to pay to Administrative Agent
immediately upon demand by Administrative Agent and in immediately available
funds, as security for their reimbursement obligations in respect of the Letters
of Credit under Section 3.03(a) hereof and any other amounts payable hereunder
and under the Notes, an amount equal to the aggregate amount available to be
drawn under Letters of Credit then outstanding, irrespective of whether the
Letters of Credit have been drawn upon, upon an Event of Default. Any such
payments shall be deposited in a separate account designated "Pinnacle Special
Account" or such other designation as Administrative Agent shall elect. All such
amounts deposited with Administrative Agent shall be and shall remain funds of
the Borrower on deposit with Administrative Agent and may be invested by
Administrative Agent as Administrative Agent shall determine. Such amounts may
not be used by Administrative Agent to pay the drawings under the Letters of
Credit; however, such amounts may be used by Administrative Agent as
reimbursement for Letter of Credit drawings which Administrative Agent has paid.
If any amounts in the Pinnacle Special Account shall have been deposited upon
the occurrence of an Event of Default only and such Event of Default shall have
been subsequently cured or waived and no other Event of Default exists, the
Borrower shall be relieved of its obligations under this Section 3.03(b) until
an Event of Default once again occurs. During the existence of an Event of
Default but after the expiration of any Letter of Credit that was not drawn
upon, the Borrower may direct the Administrative Agent to use any cash
collateral for any such expired Letter of Credit, if any, to reduce the amount
of the Obligations. Any amounts remaining in the Pinnacle Special Account, after
the date of the expiration of all Letters of Credit and after all Obligations
have been paid in full, shall be repaid to the Borrower promptly after such
expiration and such payment in full.
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(c) The obligations of the Borrower under this Section 3.03 will continue
until all Letters of Credit have expired and all reimbursement obligations with
respect thereto have been paid in full by the Borrower and until all other
Obligations shall have been paid in full.
(d) The Borrower shall be obligated to reimburse Administrative Agent upon
demand for all amounts paid under the Letters of Credit as set forth in Section
3.03(a) hereof; provided, however, if the Borrower for any reason fails to
reimburse Administrative Agent in full upon demand, whether by borrowing
Advances to pay such reimbursement obligations or otherwise, the Lenders shall
reimburse Administrative Agent in accordance with each Lender's Revolver
Specified Percentage for amounts due under this Article III and unpaid from the
Borrower as set forth in Section 3.04 hereof; provided, however, that no such
reimbursement made by the Lenders shall discharge the Borrower's obligations to
reimburse Administrative Agent.
(e) The Borrower shall indemnify and hold Administrative Agent and each
Lender, its officers, directors, representatives and employees harmless from
loss for any claim, demand or liability which may be asserted against
Administrative Agent or such indemnified party in connection with actions taken
under the Letters of Credit or in connection therewith (including losses
resulting from the negligence of Administrative Agent or such indemnified
party), and shall pay Administrative Agent for reasonable fees of attorneys (who
may be employees of Administrative Agent) and legal costs paid or incurred by
Administrative Agent in connection with any matter related to the Letters of
Credit, except for losses and liabilities incurred as a direct result of the
gross negligence or wilful misconduct of Administrative Agent or such
indemnified party, as finally determined by a court of competent jurisdiction.
If the Borrower for any reason fails to indemnify or pay Administrative Agent or
such indemnified party as set forth herein in full, the Lenders shall indemnify
and pay Administrative Agent upon demand, in accordance with each Lender's
Revolver Specified Percentage of such amounts due and unpaid from the Borrower.
The provisions of this Section 3.03(e) shall survive the termination of this
Agreement.
3.04. Lenders' Obligations. Each Lender agrees, unconditionally and
irrevocably to reimburse Administrative Agent (to the extent Administrative
Agent is not otherwise reimbursed by the Borrower in accordance with Section
3.03(a) hereof) on demand for such Lender's Revolver Specified Percentage of
each draw paid by Administrative Agent under any Letter of Credit. All amounts
payable by any Lender under this subsection shall include interest thereon at
the Federal Funds Rate, from the date of the applicable draw to the date of
reimbursement by such Lender. No Lender shall be liable for the performance or
nonperformance of the obligations of any other Lender under this Section. The
obligations of the Lenders under this Section with respect to Letters of Credit
issued in accordance with the terms of this Agreement shall continue after the
First Maturity Date and shall survive the termination of any Loan Papers, but
only to the extent that any such Lender has not reimbursed the Administrative
Agent prior to such date in accordance with the terms hereof.
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3.05. Administrative Agent's Obligations.
(a) Administrative Agent makes no representation or warranty, and assumes
no responsibility with respect to the validity, legality, sufficiency or
enforceability of any Application or any document relative thereto or to the
collectibility thereunder. Administrative Agent assumes no responsibility for
the financial condition of the Borrower and its Subsidiaries or for the
performance of any obligation of the Borrower. Administrative Agent may use its
discretion with respect to exercising or refraining from exercising any rights,
or taking or refraining from taking any action which may be vested in it or
which it may be entitled to take or assert with respect to any Letter of Credit
or any Application.
(b) Except as set forth in subsection (c) below, Administrative Agent
shall be under no liability to any Lender, with respect to anything the
Administrative Agent may do or refrain from doing in the exercise of its
judgment, the sole liability and responsibility of Administrative Agent being to
handle each Lender's share on as favorable a basis as Administrative Agent
handles its own share and to promptly remit to each Lender its share of any sums
received by Administrative Agent under any Application. Administrative Agent
shall have no duties or responsibilities except those expressly set forth herein
and those duties and liabilities shall be subject to the limitations and
qualifications set forth herein.
(c) Neither Administrative Agent nor any of its directors, officers, or
employees shall be liable for any action taken or omitted (whether or not such
action taken or omitted is expressly set forth herein) under or in connection
herewith or any other instrument or document in connection herewith, except for
gross negligence or willful misconduct, and no Lender waives its right to
institute legal action against Administrative Agent for wrongful payment of any
Letter of Credit due to Administrative Agent's gross negligence or willful
misconduct. Administrative Agent shall incur no liability to any Lender, the
Borrower or any Affiliate of the Borrower or Lender in acting upon any notice,
document, order, consent, certificate, warrant or other instrument reasonably
believed by Administrative Agent to be genuine or authentic and to be signed by
the proper party.
ARTICLE IV. CONDITIONS PRECEDENT
4.01. Conditions Precedent to Closing, Effectiveness of this Agreement and
the Refunding Advance. The effectiveness of this Agreement and the obligation of
the Lenders to make the initial refunding Advance to refinance the existing
indebtedness, or issue the first Letter of Credit, is subject to receipt by the
Administrative Agent of each of the following, in form and substance
satisfactory to the Administrative Agent (and, in the case of subparagraphs (b),
(c) and (i) below, each Lender), with a copy (except for the Notes) for each
Lender:
(a) A loan certificate of the Borrower, the Parent and each Subsidiary of
the Borrower certifying as to the accuracy of their representations and
warranties in the Loan Papers, certifying that no Default has occurred, and
including a certificate of incumbency with respect to each Authorized Officer,
and including (i) a copy of the Articles of Incorporation of the Borrower, the
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Parent and each Subsidiary of the Borrower, certified to be true, complete and
correct by the secretary of state of its state of incorporation, (ii) a copy of
the By-Laws of the Borrower, the Parent and each Subsidiary of the Borrower, as
in effect on the Closing Date, (iii) a copy of the resolutions of the Borrower,
the Parent and each Subsidiary of the Borrower authorizing them to execute,
deliver and perform this Agreement, the Notes and the other Loan Papers to which
each of them is a party, and (iv) a copy of a certificate of good standing and a
certificate of existence for the Borrower's, the Parent's, and each of the
Borrower's Subsidiaries' state of incorporation and each state in which they are
conducting material business;
(b) duly executed Notes, payable to the order of each Lender in an amount
for each Lender (i) equal to its Revolver Specified Percentage of $235,000,000,
(ii) equal to its Term Loan A Specified Percentage of $125,000,000 and (iii)
equal to its Term Loan B Specified Percentage of $110,000,000;
(c) duly executed and completed confirmation agreement confirming
obligations under (i) pledge agreements by the Parent and the Borrower; (ii) the
Guaranty of the Obligations executed by the Parent and the Subsidiaries of the
Borrower; (iii) Security Agreement by the Borrower, the Parent and the
Subsidiaries of the Borrower granting the Lenders a lien and security interest
in all assets owned by the Borrower, the Parent and the Subsidiaries of the
Borrower; and (iv) all other Loan Papers, including without limitation, all
mortgages, deeds of trust, and deeds to secure debt duly filed in all required
locations and each item required to be delivered on Schedule 2.16 hereto, except
-------------
those Loan Papers specifically agreed to in Section 6.15 hereof;
(d) copies of all financing statements filed against the Borrower, the
Parent and each Subsidiary of the Borrower, as debtor;
(e) opinions of counsel to the Borrower, the Parent and each Subsidiary of
the Borrower addressed to the Lenders and in form and substance satisfactory to
the Lenders, dated the Closing Date, including, without limitation, an opinion
of counsel to the Borrower that this Agreement does not violate or conflict with
any term or condition of the Indenture of any of the other Parent Senior Notes
Documentation;
(f) copies of insurance binders or certificates covering the assets of the
Borrower, the Parent and the Subsidiaries of the Borrower, and meeting the
requirements of Section 6.05 hereof;
(g) payment of all fees due to the Administrative Agent in accordance with
the terms of the Fee Letter to be paid on the Closing Date and reimbursement for
Administrative Agent of its reasonable fees and expenses and for Special
Counsel's reasonable fees and expenses rendered through the date hereof and
receipt by each Lender of its upfront fees;
(h) evidence that all corporate proceedings of the Borrower, the Parent
and the Subsidiaries of the Borrower taken in connection with the transactions
contemplated by this Agreement and the other Loan Papers shall be reasonably
satisfactory in form and substance to the Lenders and Special Counsel; and the
Lenders shall have received copies of all documents or
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other evidence which the Administrative Agent, Special Counsel or any Lender may
reasonably request in connection with such transactions;
(i) copies of the following audited financial statements for the Borrower
(and as applicable, the Parent), as of and for the period ended December 31,
1998; (i) balance sheets of the Borrower, the Parent and the Subsidiaries of the
Borrower as of the end of such period, and (ii) statements of income and changes
in cash for such period; all in reasonable detail and certified by an Authorized
Officer to the best of his knowledge to present fairly in all material respects
the consolidated financial position of the Borrower and the results of
operations for the period then ended and, except as noted therein, to be in
accordance with GAAP (other than footnotes thereto);
(j) a duly completed Compliance Certificate evidencing no Default or Event
of Default as of the Closing Date;
(k) the Parent, the Borrower and each Subsidiary of the Borrower shall
have provided the Administrative Agent with all information, documentation,
agreements, etc. in order for the Administrative Agent to have a Lien in all
cash of the Parent, the Borrower and each Subsidiary of the Borrower from time
to time on hand in excess of $10,000,000; and
(l) in form and substance satisfactory to the Lenders and Special Counsel,
such other documents, instruments and certificates as the Administrative Agent
or any Lender may reasonably require in connection with the transactions
contemplated hereby, including without limitation the status, organization or
authority of the Borrower, the Parent and the Subsidiaries of the Borrower, and
the enforceability of and security for the Obligations.
4.02. Conditions Precedent to All Advances and Letters of Credit. The
obligation of each Lender to make each Advance hereunder and the obligation of
the Administrative Agent to issue any Letter of Credit shall be subject to the
further conditions precedent that on the date of such Advance or such issuance
of such Letter of Credit:
(a) All of the representations and warranties of the Borrower under this
Agreement shall be true and correct at such time in all material respects, both
before and after giving effect to the application of the proceeds of the Advance
or the issuance of the Letter of Credit, except those representations and
warranties that specifically speak as of a particular date;
(b) The incumbency of the Authorized Officers shall be as stated in the
certificate of incumbency delivered in the Borrower's loan certificate pursuant
to Section 4.01(a) or as subsequently modified and reflected in a certificate of
incumbency delivered to the Administrative Agent. The Lenders may, without
waiving this condition, consider it fulfilled and a representation by the
Borrower made to such effect if no written notice to the contrary, dated on or
before the date of such Advance or the issuance of such Letter of Credit, is
received by the Administrative Agent from the Borrower prior to the making of
such Advance or such Letter of Credit;
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(c) There shall not exist a Default hereunder or an Event of Default
hereunder and none shall exist as a result of making any such Advance or such
Letter of Credit, and the Administrative Agent shall have received written or
telephonic certification thereof by an Authorized Officer (which certification,
if telephonic, shall be followed promptly by written certification);
(d) There shall have occurred no Material Adverse Change since December 31,
1998;
(e) In the case of each Letter of Credit, Borrower shall have delivered to
the Administrative Agent a duly executed and complete Application acceptable to
Administrative Agent;
(f) In the case of any Advance under the Revolver Loan, the aggregate
outstanding Revolver Advances, after giving effect to any such proposed Revolver
Advance, shall not exceed the Commitment; and
(g) In the case of each and every Advance under the Loan, the Borrower, by
making its borrowing request hereunder, or requesting the issuance of any Letter
of Credit, will provide a certificate to the Administrative Agent containing (i)
a representation and warranty to the Administrative Agent and each Lender that
the proceeds of such Advance shall be used in accordance with the terms of
Section 2.15 hereof, and (ii) a representation and calculation that with respect
to each Revolver Advance that is not a Qualified Facility Revolver Advance, such
Advance will constitute Acquisition Debt in accordance with the terms of the
Indenture and that such acquisition is a nonleveraging event, in accordance
with the terms of the Indenture, the Parent Senior Notes Documentation (with
supporting calculations in reasonable detail acceptable to the Administrative
Agent with respect thereto).
4.03. Conditions Precedent to Advances for Permitted Acquisitions. The
obligation of each Lender to make each Advance (including the initial Advance)
where any proceeds of such Advance will be used for a Permitted Acquisition,
shall be subject to the further conditions precedent that the Borrower has
complied with all terms and provisions of Sections 6.15 and 6.16 hereof.1
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ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.01. Representations and Warranties. The Borrower hereby represents and
warrants to each Lender as follows:
(a) The respective jurisdictions of incorporation and percentage ownership
of the Subsidiaries of the Parent by the Parent and the Borrower on the Closing
Date and listed on Schedule 5.01(a) hereto are true and correct. Each of the
----------------
Parent, the Borrower and its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its state of
organization. Each of the Parent, the Borrower and its Subsidiaries has the
corporate power and authority to own its properties and to carry on its business
as now being and hereafter proposed to be conducted. Each of the Parent, the
Borrower and its Subsidiaries is duly qualified, in good standing and authorized
to do business in each jurisdiction in which the character of its Properties or
the nature of its business requires such qualification or authorization, except
where the failure to so qualify would not cause a Material Adverse Change.
(b) The Borrower has corporate power and has taken all necessary corporate
action to authorize it to borrow hereunder. Each of the Parent, the Borrower
and its Subsidiaries has corporate power and has taken all necessary corporate
action to execute, deliver and perform the Loan Papers to which it is party in
accordance with the terms thereof, and to consummate the transactions
contemplated thereby. Each Loan Paper has been duly executed and delivered by
the Parent, the Borrower or such Subsidiary executing it. Each of the Loan
Papers to which the Parent, the Borrower, and its Subsidiaries are party is a
legal, valid and binding respective obligation of the Parent, the Borrower or
such Subsidiary, as applicable, enforceable in accordance with its terms,
subject, to enforcement of remedies, to the following qualifications: (i)
equitable principles generally, and (ii) bankruptcy, insolvency, liquidation,
reorganization, reconstruction and other similar laws affecting enforcement of
creditors' rights generally (insofar as any such law relates to the bankruptcy,
insolvency or similar event of the Parent, the Borrower or any Subsidiary of the
Borrower).
(c) The execution, delivery and performance by the Parent, the Borrower and
its Subsidiaries of the other Loan Papers to which they are respectively a
party, and the consummation of the transactions contemplated thereby, do not and
will not (i) require any consent or approval not already obtained, (ii) violate
any Applicable Law, (iii) conflict with, result in a breach of, or constitute a
default under the articles of incorporation or by-laws of the Parent, the
Borrower or any Subsidiary of the Borrower, or under any material License,
indenture, agreement or other instrument, to which the Parent, the Borrower or
any Subsidiary of the Borrower is a party or beneficiary of, or by which they or
their respective Properties may be bound, or (iv) result in or require the
creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by the Parent, the Borrower or any Subsidiary of the
Borrower, except Permitted Liens.
(d) The Parent, the Borrower and its Subsidiaries are primarily engaged in
the operation of leasing and subleasing towers and tower sites, and pursuing
activities related thereto.
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(e) All material Licenses have been duly authorized and obtained, and are
in full force and effect. The Parent, the Borrower and its Subsidiaries are and
will continue to be in compliance in all material respects with all provisions
thereof. On the Closing Date, no material License is the subject of any pending
or, to the best of the Borrower's knowledge, threatened challenge or revocation.
After the Closing Date, no material License is the subject of any pending or, to
the best of the Borrower's knowledge, threatened challenge or revocation, which
such event could cause a Material Adverse Change. The Parent, the Borrower and
its Subsidiaries are not required to obtain any material License that has not
already been obtained from, or effect any material filing or registration that
has not already been effected with, the FCC, the FAA or any other federal, state
or local regulatory authority in connection with the execution and delivery of
this Agreement or any other Loan Paper, or the performance thereof (other than
any enforcement of remedies by the Administrative Agent on behalf of the
Lenders), in accordance with their respective terms, including any borrowings
hereunder.
(f) The Parent, the Borrower and its Subsidiaries are in compliance in all
material respects with all Applicable Laws. The Parent, the Borrower and its
Subsidiaries have duly and timely filed all reports, statements and filings that
are required to be filed by any of them under the Communications Act, and are in
all material respects in compliance therewith, including without limitation the
rules and regulations of the FCC and FAA. Except as set forth on Schedule
--------
5.01(f) hereto, as of the Closing Date, the Borrower is not aware of any event
- -------
or circumstance constituting noncompliance (or any Person alleging
noncompliance) with any rule or regulation of the FAA. After the Closing Date,
the Borrower is not aware of any event or circumstance constituting
noncompliance (or any Person alleging noncompliance) with any rule or regulation
of the FAA, which such event or circumstance could cause a Material Adverse
Change.
(g) The Parent, the Borrower and its Subsidiaries have good and
indefeasible title to, or a valid leasehold interest in, all of their material
assets. None of their assets are subject to any Liens, except Permitted Liens.
As of the Closing Date, no financing statement or other Lien filing authorized
by the Parent, the Borrower or any Subsidiary of the Borrower (except relating
to Permitted Liens) is on file in any state or jurisdiction that names the
Parent, the Borrower or any of its Subsidiaries as debtor or covers (or purports
to cover) any assets of the Parent, the Borrower or any of its Subsidiaries.
After the Closing Date, no financing statement or other Lien filing authorized
by the Parent, the Borrower or any Subsidiary of the Borrower (except relating
to Permitted Liens) is on file in any state or jurisdiction that names the
Parent, the Borrower or any of its Subsidiaries as debtor or covers (or purports
to cover) any assets of the Parent, the Borrower or any of its Subsidiaries,
which such financing statement or other Lien filing could cause a Material
Adverse Change. The Parent, the Borrower and its Subsidiaries have not signed
any such financing statement or filing, nor any security agreement authorizing
any Person to file any such financing statement or filing.
(h) On the Closing Date, except as reflected on Schedule 5.01(h) hereto,
----------------
there is no action, suit, proceeding or any other Litigation pending against,
or, to the best of the Borrower's knowledge, threatened against the Parent, the
Borrower or any of its Subsidiaries, or in any other manner relating directly
and materially adversely to the Parent, the Borrower, any of its Subsidiaries,
or any of their material Properties, in any court or before any arbitrator of
any kind
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or before or by any governmental body. On each date after the Closing Date on
which this representation is deemed to be made, there is no action, suit,
proceeding or any other Litigation pending against, or, to the best of the
Borrower's knowledge, threatened against the Parent, the Borrower or any of its
Subsidiaries, or in any other manner relating to the Parent, the Borrower, any
of its Subsidiaries, or any of their Properties, in any court or before any
arbitrator of any kind or before or by any governmental body, which could
reasonably be expected to cause a Material Adverse Change.
(i) All federal, state and other Tax returns of the Parent, the Borrower
and its Subsidiaries required by law to be filed have been duly filed and all
federal, state and other Taxes, assessments and other governmental charges or
levies upon the Parent, the Borrower, its Subsidiaries or any of their
Properties, income, profits and assets, which are due and payable, have been
paid, except those that are diligently contested in good faith by the Borrower
and for which a reserve has been established in accordance with GAAP, and no
Lien (other than a Permitted Lien) has attached and no foreclosure, distraint,
sale or similar proceedings have been commenced.
(j) The Borrower has furnished or caused to be furnished to the Lenders
copies of its audited financial statements at December 31, 1998, which are
prepared in good faith and complete in all material respects and present fairly
in all material respects and in accordance with GAAP (except, with respect to
the financial statements delivered prior to the Closing Date, as noted therein),
the financial position of the Parent, the Borrower and its Subsidiaries as at
such dates and the results of operations for the periods then ended. The
Parent, the Borrower and its Subsidiaries have no material liabilities,
contingent or otherwise, nor material losses, except as disclosed in writing to
the Lenders prior to the Closing Date or as disclosed on any subsequent
financial statements. On the Closing Date after giving effect to the Advances
made on such date, each of the Parent, the Borrower and its Subsidiaries is
Solvent.
(k) Since the date of the most recent financial statements delivered to
the Lenders, no event or circumstances have occurred or arisen that could
constitute a Material Adverse Change.
(l) None of the Borrower or its Controlled Group maintains or contributes
to any Plan other than those disclosed to the Administrative Agent in writing.
Each such Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code, and any other applicable Federal or state law,
rule or regulation. With respect to each Plan of the Borrower and each member
of its Controlled Group (other than a Multiemployer Plan), all reports required
under ERISA or any other Applicable Law to be filed with any governmental
authority, the failure of which to file could reasonably result in liability of
the Borrower or any member of its Controlled Group in excess of $100,000, have
been duly filed. All such reports are true and correct in all material respects
as of the date given. No such Plan of the Borrower or any member of its
Controlled Group has any accumulated funding deficiency (as defined in Section
412(a) of the Code) (without regard to any waiver granted under Section 412 of
the Code), nor has any funding waiver from the Internal Revenue Service been
received or requested. None of the Borrower or any member of its Controlled
Group has failed to make any contribution or pay any amount due or owing as
required by Section 412 of the Code or Section 302 of ERISA or the terms of any
such Plan prior to the due date under Section 412 of the Code
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and Section 302 of ERISA. There has been no ERISA Event or any event requiring
disclosure under Section 4041(c)(3)(C), 4068(f), 4063(a) or 4043(b) of ERISA
with respect to any Plan or trust of the Borrower or any member of its
Controlled Group since the effective date of ERISA. The value of the assets of
each Plan (other than a Multiemployer Plan) of the Borrower and each member of
its Controlled Group equaled or exceeded the present value of the benefit
liabilities, as defined in Title IV of ERISA, of each such Plan as of the most
recent valuation date using Plan actuarial assumptions at such date. There are
no pending or, to the best of the Borrower's knowledge, threatened claims,
lawsuits or actions (other than routine claims for benefits in the ordinary
course) asserted or instituted against, and neither the Borrower nor any member
of its Controlled Group has knowledge of any threatened Litigation or claims
against, (i) the assets of any Plan or trust or against any fiduciary of a Plan
with respect to the operation of such Plan, or (ii) the assets of any employee
welfare benefit plan within the meaning of Section 3(1) or ERISA, or against any
fiduciary thereof with respect to the operation of any such plan. None of the
Borrower or any member of its Controlled Group has engaged in any prohibited
transactions, within the meaning of Section 406 of ERISA or Section 4975 of the
Code, in connection with any Plan. None of the Borrower or any member of its
Controlled Group, nor has incurred or reasonably expects to incur (A) any
liability under Title IV of ERISA (other than premiums due under Section 4007 of
ERISA to the PBGC), (B) any withdrawal liability (and no event has occurred
which with the giving of notice under Section 4219 of ERISA would result in such
liability) under Section 4201 of ERISA as a result of a complete or partial
withdrawal (within the meaning of Section 4203 or 4205 of ERISA) from a
Multiemployer Plan, or (C) any liability under Section 4062 of ERISA to the PBGC
or to a trustee appointed under Section 4042 of ERISA. None of the Borrower, any
member of its Controlled Group, or any organization to which the Borrower or any
member of its Controlled Group is a successor or parent corporation within the
meaning of ERISA Section 4069(b), has engaged in a transaction within the
meaning of ERISA Section 4069. None of the Borrower or any member of its
Controlled Group maintains or has established any welfare benefit plan within
the meaning of Section 3(1) of ERISA which provides for continuing benefits or
coverage for any participant or any beneficiary of any participant after such
participant's termination of employment except as may be required by the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA") and
the regulations thereunder, and at the expense of the participant or the
beneficiary of the participant, or retiree medical liabilities. Each of the
Borrower and its Controlled Group which maintains a welfare benefit plan within
the meaning of Section 3(1) of ERISA has complied in all material respects with
any applicable notice and continuation requirements of COBRA and the regulations
thereunder.
(m) The Borrower is not engaged principally or as one of its important
activities in the business of extending credit for the purpose of purchasing or
carrying any margin stock within the meaning of Regulations T, U and X of the
Board of Governors of the Federal Reserve System, and no part of the proceeds of
the Advances will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin stock. No
assets of the Parent, the Borrower and its Subsidiaries are margin stock, and
none of the Pledged Stock is margin stock. None of the Parent, the Borrower and
its Subsidiaries, nor any agent acting on their behalf, have taken or will
knowingly take any action which might cause this Agreement or any Loan Papers to
violate any regulation of the Board of Governors of the
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Federal Reserve System or to violate the Securities Exchange Act of 1934, in
each case as in effect now or as the same may hereafter be in effect.
(n) As of the Closing Date, the Parent, the Borrower and its Subsidiaries
are in compliance in all material respects with all of the provisions of their
articles of incorporation and by-laws, and no event has occurred or failed to
occur, which has not been remedied or waived, the occurrence or non-occurrence
of which constitutes, or which with the passage of time or giving of notice or
both would constitute, (i) an Event of Default or (ii) a default by the Parent,
the Borrower or any of its Subsidiaries under any material indenture, agreement
or other instrument, or any judgment, decree or order to which the Parent, the
Borrower or any of its Subsidiaries is a party or by which they or any of their
material Properties is bound. After the Closing Date, the Parent, the Borrower
and its Subsidiaries are in compliance in all material respects with all of the
provisions of their articles of incorporation and by-laws, and no event has
occurred or failed to occur, which has not been remedied or waived, the
occurrence or non-occurrence of which constitutes, or which with the passage of
time or giving of notice or both would constitute, (i) an Event of Default or
(ii) a default by the Parent, the Borrower or any of its Subsidiaries under any
material indenture, agreement or other instrument, or any judgment, decree or
order to which the Parent, the Borrower or any of its Subsidiaries is a party or
by which they or any of their material Properties is bound, that could
reasonably be expected to cause a Material Adverse Change.
(o) The Borrower is not required to register under the provisions of the
Investment Company Act of 1940, as amended. Neither the entering into or
performance by the Borrower of this Agreement nor the issuance of the Notes
violates any provision of such act or requires any consent, approval, or
authorization of, or registration with, the Securities and Exchange Commission
or any other governmental or public body of authority pursuant to any provisions
of such act.
(p) On the Closing Date, none of the Borrower nor any Subsidiary of the
Borrower has any actual knowledge or reason to believe that any substance deemed
hazardous by any applicable Environmental Law, has been installed on any real
property now owned by the Parent, the Borrower or any of its Subsidiaries,
except (i) for hazardous substances the presence of which is not in violation of
law and (ii) as disclosed to the Lenders. After the Closing Date, none of the
Parent, the Borrower nor any Subsidiary of the Borrower has any actual knowledge
or reason to believe that any substance deemed hazardous by any applicable
Environmental Law, has been installed in violation of law on any real property
now owned by the Parent, the Borrower or any of its Subsidiaries except as
disclosed to the Lenders and which would not, in the reasonable judgment of the
Borrower, cause a Material Adverse Change. As of the Closing Date, the Borrower
and its Subsidiaries are not in violation of or subject to any existing, pending
or, to the best of the Borrower's knowledge, threatened investigation or inquiry
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by any governmental authority or to any material remedial obligations under any
applicable Environmental Laws, and this representation and warranty would
continue to be true and correct following disclosure to the applicable
governmental authorities of all relevant facts, conditions and circumstances, if
any, pertaining to any real property of the Parent, the Borrower and its
Subsidiaries. After the Closing Date, the Parent, the Borrower and its
Subsidiaries are not in violation of or subject to any existing, pending or, to
the best of the Borrower's knowledge, threatened investigation or inquiry by any
governmental authority or to any material remedial obligations under any
applicable Environmental Laws which could cause a Material Adverse Change, and
this representation and warranty would continue to be true and correct following
disclosure to the applicable governmental authorities of all relevant facts,
conditions and circumstances, if any, pertaining to any real property of the
Parent, the Borrower and its Subsidiaries. The Parent, the Borrower and its
Subsidiaries are not required to obtain any permits, Licenses or similar
authorizations to construct, occupy, operate or use any buildings, improvements,
fixtures, and equipment forming a part of any real property of the Parent, the
Borrower or any Subsidiary of the Borrower by reason of any applicable
Environmental Laws, except those that have been obtained. As of the Closing
Date, the Borrower and its Subsidiaries have no actual knowledge or reason to
believe, after reasonable investigation, that any hazardous substances or solid
wastes have been disposed of or otherwise released on or to the real property of
the Parent, the Borrower or any of its Subsidiaries in violation of any
applicable Environmental Law. After the Closing Date, the Parent, the Borrower
and its Subsidiaries have no actual knowledge or reason to believe, that any
hazardous substances or solid wastes have been disposed of or otherwise released
on or to the real property of the Parent, the Borrower or any of its
Subsidiaries, within the meaning of the applicable Environmental Laws, except as
disclosed to the Lenders and which such disposal or release would not cause a
Material Adverse Change.
(q) The agreements evidencing obligations with respect to Capital Leases
have been duly authorized, executed and delivered by the Parent, Borrower or its
Subsidiaries, as applicable, and (to the best of the Borrower's knowledge) the
other parties thereto. Except as disclosed to each Lender, there is no
Litigation, or, to the best of the Borrower's knowledge, threatened Litigation
or pending or threatened claim of breach or default, with respect to any such
Capital Lease obligations that could be expected to adversely affect any such
lease or contract. There is no Litigation, or, to the best of the Borrower's
knowledge, threatened Litigation or pending or threatened claim of breach or
default, with respect to any loan agreement or document evidencing any Debt for
Borrowed Money of the Parent, the Borrower, or their Subsidiaries that has not
been disclosed to Lenders. The Borrower has no knowledge of any default by any
tenant or tenants under any Tenant Leases which aggregate five percent or more
of the revenues of the Borrower and its Subsidiaries, except as disclosed to the
Lenders. The Borrower has no notice of or belief that any party to any material
Capital Lease is contemplating a breach, default or termination for any reason
of such contract or lease, except as disclosed to the Lenders. As of the
Closing Date, the Borrower has provided, or caused to be provided, to the
Administrative Agent complete and correct copies of or access to the Capital
Leases, all as amended, together with all exhibits and schedules thereto.
(r) All Pledged Stock has been duly authorized and validly issued, and is
fully paid and nonassessable. The Capital Stock described on Exhibit A to
Borrower Pledge Agreement constitutes all the issued and outstanding Capital
Stock of the Subsidiaries of the Borrower or the Subsidiaries of another
Subsidiary, except such shares that have been issued after the Closing Date,
pledged to the Administrative Agent to secure the Obligations and delivered to
the Administrative Agent together with stock powers executed in blank. All
Capital Stock of the Borrower is pledged to the Administrative Agent on behalf
of Lenders to secure the Obligations. No Person has conversion rights with
respect to, or any subscription rights, calls, commitments or claims of any
character for, or any repurchase or redemption options relating to, the Pledged
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Stock, other than those that have waived. The Pledged Stock, when issued or
sold, was either (i) registered or qualified under applicable federal or state
securities laws, or (ii) exempt therefrom.
(s) No broker's, finder's or other fee or commission will be payable by
the Borrower (other than to the Lenders hereunder) with respect to the making of
the Commitment or the Advances hereunder. The Borrower agrees to indemnify and
hold harmless the Administrative Agent and each Lender from and against any
claims, demand, liability, proceedings, costs or expenses asserted with respect
to or arising in connection with any such fees or commissions.
(t) No event has occurred which permits (or with the passage of time would
permit) the revocation or termination of any material License, or which could
result in the imposition of any restriction thereon of such a nature that could
reasonably be expected to constitute a Material Adverse Change.
(u) The Parent, the Borrower and its Subsidiaries have obtained all
material patents, trademarks, service-marks, trade names, copyrights, Licenses
and other rights, free from burdensome restrictions, that are necessary for the
operation of their business as presently conducted and as proposed to be
conducted. Nothing has come to the attention of the Borrower or any of its
Subsidiaries to the effect that (i) any process, method, part or other material
presently contemplated to be employed by the Parent, Borrower or any Subsidiary
of the Borrower may infringe any patent, trademark, service-mark, trade name,
copyright, License or other right owned by any other Person, or (ii) there is
pending or overtly threatened any claim or Litigation against or affecting the
Borrower or any Subsidiary of the Borrower contesting its right to sell or use
any such process, method, part or other material, which could reasonably be
expected to cause a Material Adverse Change.
(v) Neither this Agreement nor any other document, certificate or
statement which has been furnished to any Lender by or on behalf of the Parent,
the Borrower or any Subsidiary of the Borrower in connection herewith contained
any untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statement contained herein and therein not
misleading at the time it was furnished. On the Closing Date, there is no fact
known to the Borrower and not known to the public generally that could
reasonably be expected to cause a Material Adverse Change, which has not been
set forth in this Agreement or in the documents, certificates and statements
furnished to the Lenders by or on behalf of the Borrower prior to the date
hereof in connection with the transaction contemplated hereby. On each date
after the Closing Date on which this representation is deemed to be made, there
is no fact known to the Borrower and not known to the public generally that
could reasonably be expected to cause a Material Adverse Change, which has not
been disclosed to the Lenders in writing.
(w) There exists no breach or default by any party under any Tenant Lease,
except (i) those disclosed to the Administrative Agent in writing, and (ii)
breaches of any Tenant Lease, or all breaches of Tenant Leases in the aggregate,
that could not cause a Material Adverse Change. All Tenant Leases in existence
on the Closing Date are listed on Schedule 5.01(w) hereto, together with the
----------------
lease rate for each such Tenant Lease, the date of termination of each such
Tenant Lease, and whether such Tenant Lease is a Oral Tenant Lease. No Tenant
Lease is a Oral Tenant Lease, except, if the Borrower is in compliance with
Section 6.15(c) below, the Borrower
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may have Oral Tenant Leases that are disclosed to the Lenders in connection with
Section 7.07 below and accurately included in all calculations pursuant to
Sections 6.15(a) and (c) below.
(x) All Ground Leases are in full force and effect, and, as of the Closing
Date, there exists no breach or default by any party under any Ground Lease,
except those disclosed to the Administrative Agent in writing. All Ground
Leases in existence on the Closing Date are listed on Schedule 5.01(x) hereto,
----------------
together with the lease rate for each such Ground Lease, the date of termination
of each such Ground Lease and the Tower Cash Flow generated from the Tower on
each such Ground Lease, in each case, as of the Closing Date.
(y) Each piece of owned real property in existence on the Closing Date is
listed on Schedule 5.01(y) hereto, together with the Tower Cash Flow related to
----------------
such piece of real property. After the expiration of 90 days after the Closing
Date, all real property owned by the Borrower or any Subsidiary for more than 90
days is subject to a mortgage and/or deed of trust and otherwise complies with
all requirements set forth with respect to owned real property in Section 6.15
hereof.
(z) Either (i) Parent (A) qualifies as a real estate investment trust, as
defined in Section 856(a) of the Code, and satisfies the conditions and
limitations set forth in Sections 856(b) and 856(c) of the Code, (B) has not
engaged in any "prohibited transactions" as defined in Section 857(b)(6)(B)(iii)
and (C) of the Code and (C) for its current "tax year" (as defined in the Code)
is and for all prior tax years subsequent to its election to be a real estate
investment trust has been entitled to a dividends paid deduction under the
requirements of Section 857 of the Code. Borrower and each of the Subsidiaries
of Borrower is a Qualified REIT Subsidiary, or (ii) the Borrower has delivered
written notice to the Administrative Agent in accordance with the terms of
Section 7.04(e) hereof, that a REIT Conversion has occurred.
(aa) On each date after the Closing Date on which this representation is
deemed to be made, no event has occurred and no circumstance exists, which by
itself or aggregated together with all other such events or circumstances is
likely to (i) reduce Tower Cash Flow in the aggregate for all Towers by five
percent or more for a period in excess of three months, or (ii) otherwise cause
a Material Adverse Change.
(bb) None of the Parent, the Borrower or their respective Subsidiaries have
any Synthetic Leases.
(cc) Each piece of Collateral (except cash and cash equivalents) is subject
to a perfected first priority Lien securing the Obligations, subject to Liens
permitted to exist in accordance with the terms of Section 8.03 hereof. All
cash and cash equivalents of the Borrower, the Parent and the Subsidiaries of
the Parent and the Borrower in excess of $10,000,000 is subject to a Lien
securing the Obligations.
(dd) The Borrower has (a) undertaken a detailed review and assessment of
all areas within its business and operations that could be adversely affected by
the "Year 2000 Problem" (that is, the risk that computer applications used by
the Borrower may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to, on, and any date after
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December 31, 1999), (b) developed a detailed plan and timeline for addressing
the Year 2000 Problem on a timely basis, and (c) to date, implemented that plan
in accordance with that timetable. The Borrower reasonably anticipates that all
computer applications that are material to its business and operations will on a
timely basis be able to perform properly date-sensitive functions for all dates
before, on and after January 1, 2000 (that is, be "Year 2000 Compliant").
5.02. Survival of Representations and Warranties. All representations
and warranties made under this Agreement and the other Loan Papers shall be
deemed to be made at and as of the Closing Date and at and as of the date of
each Advance and/or the issuance of each Letter of Credit, and each shall be
true and correct in all material respects when made. All such representations
and warranties shall survive, and not be waived by, the execution hereof by any
Lender, any investigation or inquiry by any Lender, or by the making of any
Advance under this Agreement.
ARTICLE VI. GENERAL COVENANTS
So long as any of the Obligations or Canada Obligations are outstanding and
unpaid or any portion of either of the Commitment or any Letter of Credit is
outstanding (whether or not the conditions to borrowing have been or can be
fulfilled):
6.01. Preservation of Existence and Similar Matters. The Borrower
shall, and shall cause each Subsidiary of the Borrower and the Parent to:
(a) preserve and maintain, or timely obtain and thereafter preserve and
maintain, its existence and material rights, franchises, authorizations,
consents, privileges and all other material Licenses from federal, state and
local governmental bodies and any Tribunal (regulatory or otherwise); and
(b) qualify and remain qualified and authorized to do business in each
jurisdiction in which the character of its Properties or the nature of its
business requires such qualification or authorization, except where the failure
to do so would not cause a Material Adverse Change.
6.02.Business; Compliance with Law and Material Agreements. The
Parent, the Borrower and its Subsidiaries shall (a) engage primarily in the
acquisition and operation of Towers, and leasing and subleasing Towers and Tower
sites, and activities related thereto, and (b) comply in all material respects
with the requirements of all Applicable Law and all material agreements to which
each is a party.
6.03.Maintenance of Properties. The Borrower shall, and shall cause
the Parent and each Subsidiary of the Borrower to, maintain or cause to be
maintained all its material Properties necessary to the conduct of its business
(whether owned or held under lease) in reasonably good repair, working order and
condition, taken as a whole, and from time to time make or cause to be made all
appropriate repairs, renewals, replacements, additions, betterments and
improvements thereto.
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6.04. Accounting Methods and Financial Records. The Borrower shall,
and shall cause the Parent and each Subsidiary of the Borrower to, maintain a
system of accounting established and administered in accordance with GAAP, keep
adequate records and books of account in which complete entries will be made and
all transactions reflected in accordance with GAAP, and keep accurate and
complete records of its respective assets. The Borrower and each of its
Subsidiaries shall maintain a fiscal year ending on December 31.
6.05. Insurance. The Borrower shall, and shall cause the Parent and
each Subsidiary of the Borrower to, maintain insurance from responsible
companies in such amounts and against such risks as shall be customary and usual
in the industry for companies of similar size and capability, but in no event
less than the amount and types insured as of the Closing Date, provided that,
the Borrower is permitted to self insure the replacement value of Towers having
in the aggregate at any one time insurable values not more than 5% of the
aggregate insurable values for all Towers. Each insurance policy shall provide
for at least 30 days' prior notice to the Administrative Agent of any proposed
termination or cancellation of such policy, whether on account of default or
otherwise and all property insurance shall name the Administrative Agent as loss
payee or additional insured, as appropriate.
6.06. Payment of Taxes and Claims. The Borrower shall, and shall cause
the Parent and each Subsidiary of the Borrower to, pay and discharge all Taxes,
assessments and governmental charges or levies imposed upon it or its income or
Properties prior to the date on which penalties attach thereto, and all lawful
material claims for labor, materials and supplies which, if unpaid, might become
a Lien upon any of their Properties, except those Taxes, assessments and charges
contested by the Borrower diligently in good faith, and for which adequate
reserves have been established in accordance with GAAP. The Borrower shall, and
shall cause the Parent and each Subsidiary of the Borrower to, timely file all
information returns required by federal, state or local Tax authorities.
6.07. Visits and Inspections. The Borrower shall, and shall cause each
Subsidiary of the Borrower and the Parent to, promptly permit representatives of
the Administrative Agent or any Lender from time to time to (a) visit and
inspect the Properties of the Parent, the Borrower and each Subsidiary of the
Borrower as often as the Administrative Agent or any Lender shall deem
advisable, (b) inspect and make extracts from and copies of the Borrower's, the
Parent's and each Subsidiary of the Borrower's books and records, and (c)
discuss with the Parent's, the Borrower's and each Subsidiary's directors,
officers, employees and, after notice to the Borrower, the auditors of Borrower
and the Parent, its business, assets, liabilities, financial positions, results
of operations and business prospects.
6.08. Payment of Debt for Borrowed Money. The Borrower shall, and
shall cause the Parent and each Subsidiary of the Borrower to, pay its Debt for
Borrowed Money when and as the same becomes due.
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6.09. Use of Proceeds. The Borrower shall use the proceeds of Advances
solely as set forth in Section 2.15 hereof.
6.10. Indemnity.
(a) The Borrower agrees to defend, protect, indemnify and hold harmless
the Administrative Agent, each Lender, each of their respective Affiliates, and
each of their respective (including such Affiliates') officers, directors,
employees, agents, attorneys, shareholders and consultants (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth herein) of each of the foregoing
(collectively, "Indemnitees") from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitees shall be designated a party
thereto), imposed on, incurred by, or asserted against such Indemnitees (whether
direct, indirect or consequential and whether based on any federal, state, or
local laws and regulations, under common law or at equitable cause, or on
contract, tort or otherwise, arising from or connected with the past, present or
future operations of the Borrower or its predecessors in interest, in any manner
relating to or arising out of this Agreement, the Loan Papers, or any act, event
or transaction or alleged act, event or transaction relating or attendant
thereto, the making of any participations in the Advances and the management of
the Advances, including in connection with, or as a result, in whole or in part,
of any negligence of Administrative Agent or any Lender (other than those
matters raised exclusively by a participant against the Administrative Agent or
any Lender and not the Borrower), or the use or intended use of the proceeds of
the Advances hereunder, or in connection with any investigation of any potential
matter covered hereby, but excluding, in the case of each Indemnitee, any claim
or liability that arises as the result of the gross negligence or willful
misconduct of such Indemnitee, as finally judicially determined by a court of
competent jurisdiction (collectively, the "Indemnified Matters").
(b) In addition, the Borrower shall periodically, upon request,
reimburse each Indemnitee for its reasonable legal and other actual expenses
(including the cost of any investigation and preparation) incurred in connection
with any Indemnified Matter. The reimbursement and indemnity obligations under
this Section shall be in addition to any liability which the Borrower may
otherwise have, shall extend upon the same terms and conditions to each
Indemnitee, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Borrower, the
Administrative Agent, the Lenders and all other Indemnitees. This Section shall
survive any termination of this Agreement and payment of the Obligations.
6.11. Environmental Law Compliance. The use which the Parent, the
Borrower or any Subsidiary of the Borrower intends to make of any real Property
owned by it will not result in the disposal or other release of any hazardous
substance or solid waste on or to such real Property in violation of any
Environmental Law. As used herein, the terms "hazardous substance" and
"release" as used in this Section shall have the meanings
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specified in CERCLA (as defined in the definition of applicable Environmental
Laws), and the terms "solid waste" and "disposal" shall have the meanings
specified in RCRA (as defined in the definition of applicable Environmental
Laws); provided, however, that if CERCLA or RCRA is amended so as to broaden the
meaning of any term defined thereby, such broader meaning shall apply subsequent
to the effective date of such amendment; and provided further, to the extent
that any other law applicable to the Parent, the Borrower, any Subsidiary of the
Borrower or any of their Properties establishes a meaning for "hazardous
substance," "release," "solid waste," or "disposal" which is broader than that
specified in either CERCLA or RCRA, such broader meaning shall apply. The
Borrower agrees to indemnify and hold the Administrative Agent and each Lender
harmless from and against, and to reimburse them with respect to, any and all
claims, demands, causes of action, loss, damage, liabilities, costs and expenses
(including attorneys' fees and courts costs) of any kind or character, known or
unknown, fixed or contingent, asserted against or incurred by any of them at any
time and from time to time by reason of or arising out of (a) the failure of the
Parent, the Borrower or any Subsidiary of the Borrower to perform any obligation
hereunder regarding asbestos or applicable Environmental Laws, (b) any violation
on or before the Release Date of any applicable Environmental Law in effect on
or before the Release Date, and (c) any act, omission, event or circumstance
existing or occurring on or prior to the Release Date (including without
limitation the presence on such real Property or release from such real Property
of hazardous substances or solid wastes disposed of or otherwise released on or
prior to the Release Date), resulting from or in connection with the ownership
of the real Property, regardless of whether the act, omission, event or
circumstance constituted a violation of any applicable Environmental Law at the
time of its existence or occurrence, or whether the act, omission, event or
circumstance is caused by or relates to the negligence of any indemnified
Person; provided that, the Borrower shall not be under any obligation to
indemnify the Administrative Agent or any Lender to the extent that any such
liability arises as the result of the gross negligence or willful misconduct of
such Person, as finally judicially determined by a court of competent
jurisdiction, or for any event which is both not caused by the Parent, the
Borrower or any Subsidiary of the Borrower and occurs after any foreclosure by
the Lenders on any specific Property. The provisions of this paragraph shall
survive the Release Date and shall continue thereafter in full force and effect.
6.12. Interest Rate Protection Agreements. By no later than September
30, 1999, the Borrower will enter into an Interest Rate Protection Agreement on
terms acceptable to the Administrative Agent providing for interest rate
protection for one year for 50% of the principal of the Obligations outstanding
on September 30, 1999, and the Borrower shall thereafter, until the third
anniversary of the Closing Date, maintain an Interest Rate Protection Agreement
in effect at all times on terms acceptable to the Administrative Agent and
providing for an interest rate protection for not less than 50% of the entire
principal of the Obligations.
6.13. Issuance and Pledge of Capital Stock of the Borrower. Prior to
or simultaneous with the issuance by the Borrower of any Capital Stock to any
Person and/or the acquisition by the Parent, the Borrower or any Subsidiary of
the Parent or the Borrower of any Capital Stock, the Borrower shall, and shall
cause the Parent to, cause such Capital Stock to be pledged to the
Administrative Agent on
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behalf of Lenders to secure the Obligations in accordance with documentation
substantially in the form of Exhibit J hereto, as applicable.
---------
6.14. Continued Status as a Real Estate Investment Trust; Prohibited
Transactions. Parent will either (a) (i) continue to be qualified as a real
estate investment trust as defined in Section 856 of the Code, (ii) not engage
in any "prohibited transactions" as defined in Section 857(b)(6)(B)(iii) or (C)
of the Code, (iii) continue to satisfy the conditions and limitations set forth
in Sections 856(b) and 856(c) of the Code and (iv) will do all acts necessary to
continue to be entitled to a dividend paid deduction under Section 857 of the
Code, or (b) elect to not maintain its REIT Status and notify the Administrative
Agent and each Lender of its decision in writing in accordance with the
provisions of Section 7.04(e) hereof. The Borrower and each of its Subsidiaries
will either (a) continue to be a Qualified REIT Subsidiary so long as the Parent
remains a REIT, or (b) elect not to qualify as a Qualified REIT Subsidiary and
notify the Administrative Agent and each Lender of its decision in writing in
accordance with the provisions of Section 7.04(e) hereof.
6.15. Tenant Leases, Ground Leases and Fee Owned Property.
(a) Tenant Leases and Fee Owned Properties. The Borrower and each
--------------------------------------
Subsidiary of the Borrower shall, after the Closing Date, only enter into new
Tenant Leases, acquire new Tenant Leases or become party to any Tenant Leases
which are not Oral Tenant Leases provided that, the Borrower is permitted to
have Oral Tenant Leases so long as the sum of the aggregate Tenant Lease
Revenues from all Oral Tenant Leases, at no time after the 90th day after the
Closing Date exceeds 10% of the total revenues of the Borrower and its
Subsidiaries for the most recently completed calendar month during the term of
this Agreement. The Borrower covenants that it will use commercially reasonable
efforts to insure that each Tenant Lease (a) is not oral and is subject to
written agreement, (b) does not prohibit or render unenforceable or void any
Lien of the Administrative Agent or any foreclosure and/or operation of the
Tower on which such Tenant Lease is located by the Lenders, whether by
contractual provision, operation of law or otherwise, and (c) does not have any
provision preventing, hindering or prohibiting the Administrative Agent from
directly receiving the rents, receivables or other Tenant Lease Revenues from
the lessee (or the effect of which prevents, hinders or prohibits such action by
the operation of Law). The Borrower shall use commercially reasonable efforts
to immediately provide the Lenders with each item required on Schedule 2.16
-------------
hereto with respect to each piece of fee owned real Property in accordance with
the terms of Schedule 2.16 hereto, prior to and immediately after the Closing
-------------
Date, and prior to and immediately after each Permitted Acquisition or other
creation or acquisition of any real Property by the Borrower or any Subsidiary
of the Borrower.
(b) Ground Leases. The Borrower and each Subsidiary of the Borrower
-------------
shall, after the Closing Date, use its best efforts to only enter into new
Ground Leases which are substantially in the form set forth on Exhibit K hereto,
---------
or with such other provisions as are approved by the Administrative Agent in
writing. The Borrower shall use commercially reasonable efforts to immediately
provide the Lenders with respect to each Ground Lease, Estoppel and Attornment
Language immediately after each Permitted Acquisition or other creation or
acquisition of any real Property by the Borrower or any Subsidiary of the
Borrower.
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(c) Breach of Section 6.15(a) above. In the event any provision of Section
-------------------------------
6.15(a) above is breached, subject to the last sentence of this Section 6.15(c),
the Applicable Margin shall increase by .25% per annum, effective the date of
such breach under Section 6.15(a) above, and shall increase every 30 days
thereafter (effective each 31st date following the preceding increase) by .25%
per annum (but in no event shall the interest rate increase under this Section
6.15(c) by more than .25% per annum per 30 day period) until the earlier of (i)
compliance with this Section 6.15, or (ii) such time as the per annum interest
rate is equal to the Highest Lawful Rate (where the interest rate will remain
until the Borrower is in compliance). If, on the date six months after the date
of any breach, such breach is still in effect, then all Tenant Lease Revenues
from any Oral Tenant Lease in excess of the ten percent limitation, will be
excluded from revenues for the purpose of determining EBITDA in connection with
any determination of (I) the Leverage Ratio (with respect to the determination
of Section 8.01(a) hereof and the Applicable Margin), the Consolidated Leverage
Ratio in Section 8.01(b) hereof, the consolidated interest coverage ratio set
forth in Section 8.01(c) hereof, the pro forma debt service coverage ratio set
forth in Section 8.01(d) hereof and the fixed charge coverage ratio set forth in
Section 8.01(e) hereof, and such exclusion from EBITDA for such purposes will
continue until five Business Days after the date the Borrower delivers to the
Administrative Agent a certificate of an Authorized Officer certifying that
there exists no breach under Section 6.15(a) above, in detail satisfactory to
the Administrative Agent. If there exists no Default or Event of Default upon
giving effect to any exclusion from EBITDA in accordance with the provisions set
forth above, the interest rate shall be calculated without giving effect to any
increase in the Applicable Margin set forth in this Section 6.15(c).
(d) Real Estate Collateral.
----------------------
(i) Fee Owned Property. The Borrower shall, within 60 days after the
------------------
acquisition by the Borrower or any of its Subsidiaries of any owned real
property, provide or cause to be provided to the Administrative Agent on
behalf of itself and the Lenders with a first and prior mortgage or deed of
trust for each such property securing the Obligations in form and substance
substantially similar to the previously filed mortgages/deeds of trust.
The Borrower also agrees to provide (or to cause to be provided) all such
documents and instruments required by the Administrative Agent to fully
effect the foregoing, including, without limitation, providing the
Administrative Agent with UCC-1's, new security agreements, mortgages,
deeds of trust, appraisals, surveys, hazard insurance, UCC-11 searches, Tax
and Lien searches, intellectual property documentation and registration and
other similar types of documents, consents, authorizations, Licenses,
instruments and agreements relating to all Property of the Borrower and its
Subsidiaries as reasonably requested by the Administrative Agent from time
to time.
(ii) Leasehold Property. The Borrower shall use commercially reasonable
------------------
efforts to deliver to the Administrative Agent, within 60 days after each
Permitted Acquisition, a list of each leasehold site acquired by the
Borrower, the purpose each such leased site serves and Estoppel and
Attornment Language for each such site.
(iii)Fee Owned Property Existing on the Closing Date. With respect to
-----------------------------------------------
fee owned property of the Borrower and its Subsidiaries in existence on the
Closing Date and not
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subject to a mortgage or deed of trust on the Closing Date, all such
property shall be treated as if such property were acquired on the Closing
Date in order to determine compliance with Section 6.15(d)(i) above.
6.16. Acquisitions, Generally. In connection with any acquisition made
by the Borrower during the term of this Agreement, the Borrower shall, in
addition to the requirements set forth in Sections 4.04, 6.15 and 6.18 (to the
extent applicable) hereof, with respect to individual Permitted Acquisitions in
excess of $20,000,000 and any series of related Permitted Acquisitions which in
the aggregate exceed $20,000,000, (a) deliver notice to Administrative Agent at
such time prior to the proposed acquisition date as is reasonable under the
circumstances, together with (or, the following may be delivered later than the
notice (but still prior to the proposed acquisition), so long as such delivery
is reasonable under the circumstances, and copies of agreements are delivered
promptly upon execution of each such agreement: (i) a detailed description of
the proposed Permitted Acquisition in form reasonably acceptable to the
Administrative Agent, a description and location of all fee owned real property,
all Towers and all other assets (together with all legal descriptions of all
real property (fee owned) available at such time), (ii) the address of any
office acquired, (iii) the most recent financial statements with respect to the
acquired assets and/or Person, and to the extent available, the most recent
audited financial statements, and (iv) a copy of the purchase agreement,
schedules thereto and all related documentation (unless such schedules or
documentation are to be delivered by the seller, in which case the Borrower
shall deliver drafts and originals of such schedules and documentation promptly
upon receipt by the Borrower if later than ten days prior to closing), and (b)
prior to the consummation of the acquisition a statement certified by an
Authorized Officer that (i) the proposed transaction complies with the
definition of Permitted Acquisition set forth in Article I hereof, and (ii) no
Default or Event of Default exists prior to or after giving effect to any
requested Advance or the consummation of such acquisition, or will exist upon
consummation of the proposed acquisition and related borrowings and
transactions, together with a pro forma Compliance Certificate computed after
giving effect to such acquisition and borrowings (A) for acquisitions having
purchases prices in excess of $20,000,000 but less than $50,000,000, evidencing
compliance with the terms of this Agreement for the lesser of two years after
the consummation of the proposed acquisition or the remainder of the term of
this Agreement, together with all projections of the Parent, the Borrower and
any acquired assets and/or Person used to compute the Compliance Certificate
(and, in each case, to the extent that the Parent, the Borrower or any
Subsidiary of the Borrower has prepared or has in its possession projections
later than two years after any such proposed acquisitions, the Borrower shall
deliver such projections to the Administrative Agent) and (B) for acquisitions
having purchases prices in excess of $50,000,000, evidencing compliance with the
terms of this Agreement for the remainder of the term of this Agreement,
together with all projections of the Parent, the Borrower and any acquired
assets and/or Person used to compute the Compliance Certificate.
6.17. Year 2000. The Borrower will promptly notify the Administrative
Agent in the event the Borrower discovers or determines that any computer
application material to the business and operations of the Borrower, the Parent
or any of their respective Subsidiaries will not be Year 2000 Compliant as of
January 1, 2000.
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ARTICLE VII. INFORMATION COVENANTS
So long as any of the Obligations or Canada Obligations are outstanding and
unpaid or any portion of either of the Commitment or any Letter of Credit is
outstanding (whether or not the conditions to borrowing have been or can be
fulfilled), the Borrower shall furnish or cause to be furnished to each Lender:
7.01. Quarterly Financial Statements and Information. Within 45 days
after the end of each fiscal quarter, consolidated and consolidating balance
sheets of Parent, the Borrower and its Subsidiaries as at the end of such
quarter and the related consolidated and consolidating statements of income and
consolidated statements of changes in cash for such quarter and for the elapsed
portion of the year ended with the last day of such quarter, all of which shall
be certified by an Authorized Officer, to, in his or her opinion, present fairly
in all material respects, in accordance with GAAP, the financial position and
results of operations of the Parent, the Borrower and its Subsidiaries as at the
end of and for such period, and for the elapsed portion of the year ended with
the last day of such period.
7.02. Annual Financial Statements and Information; Certificate of No
Default.
(a) Within 120 days after the end of each fiscal year, a copy of (i) the
consolidated balance sheet of the Parent, the Borrower and its Subsidiaries, as
of the end of the current and prior fiscal years and (ii) consolidated
statements of earnings, statements of changes in shareholders' equity, and
statements of changes in cash as of and through the end of such fiscal year, all
of which are prepared in accordance with GAAP, and certified by independent
certified public accountants acceptable to the Lenders, whose opinion shall be
in scope and substance in accordance with generally accepted auditing standards
and shall be unqualified.
(b) As soon as available, but in any event within 60 days following the
end of each fiscal year, a copy of the annual consolidated operating budget of
the Borrower, the Parent, and its Subsidiaries for the succeeding fiscal year.
7.03. Compliance Certificates. At the time financial statements are
furnished pursuant to Section 7.01 hereof and Section 7.02 hereof, a Compliance
Certificate.
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7.04. Copies of Other Reports and Notices.
(a) Promptly upon their becoming available, a copy of (i) all material
reports or letters submitted to the Parent, the Borrower or any Subsidiary of
the Borrower by accountants in connection with any annual, interim or special
audit, including without limitation any report prepared in connection with the
annual audit referred to in Section 7.03 hereof, and any other comment letter
submitted to management in connection with any such audit, (ii) each financial
statement, report, notice or proxy statement sent by the Parent, the Borrower or
any Subsidiary of the Borrower to stockholders generally, (iii) each regular or
periodic report and any registration statement or prospectus (or material
written communication in respect of any thereof) filed by the Parent, the
Borrower or any Subsidiary of the Borrower with any securities exchange, with
the Securities and Exchange Commission or any successor agency, and (iv) all
press releases concerning material financial aspects of the Parent, the Borrower
or any Subsidiary of the Borrower;
(b) Promptly upon becoming aware that (i) the holder(s) of any note(s) or
other evidence of indebtedness or other security of the Parent, the Borrower or
any Subsidiary of the Borrower in excess of $250,000 in the aggregate has given
notice or taken any action with respect to a breach, failure to perform, claimed
default or event of default thereunder, (ii) any party to any material Capital
Lease of the Borrower or any Subsidiary of the Borrower has given notice or
taken any action with respect to a breach, failure to perform, claimed default
or event of default thereunder, (iii) any occurrence or non-occurrence of any
event which constitutes or which with the passage of time or giving of notice or
both could constitute a material breach by the Parent, the Borrower or any
Subsidiary of the Borrower under any material agreement or instrument other than
this Agreement to which the Parent, the Borrower or any Subsidiary of the
Borrower is a party or by which any of their Properties may be bound, or (iv)
any event, circumstance or condition which could reasonably be expected to
constitute a Material Adverse Change, a written notice specifying the details
thereof (or the nature of any claimed default or event of default) and what
action is being taken or is proposed to be taken with respect thereto;
(c) Promptly upon receipt thereof, information with respect to and copies
of any notices received from the FCC, the FAA or any other federal, state or
local regulatory agencies or any tribunal relating to any order, ruling, law,
information or policy that relates to a breach of or noncompliance with the
Communications Act, or might result in the payment of money by the Parent, the
Borrower or any Subsidiary of the Borrower in an amount of $250,000 or more in
the aggregate, or otherwise constitute a Material Adverse Change, or result in
the loss or suspension of any material License;
(d) Promptly upon receipt from any governmental agency, or any
government, political subdivision or other entity, any material notice,
correspondence, hearing, proceeding or order regarding or affecting the Parent,
the Borrower, any Subsidiary of the Borrower, or any of their Properties or
businesses not in the ordinary course of business, a copy of such notice,
correspondence, hearing, proceeding or order;
(e) Promptly upon and in any event within forty-eight hours after the
Borrower first has knowledge of (i) the Parent failing to or electing to, as
appropriate, (A) continue to qualify as
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a real estate investment trust as defined in Section 856 of the Code or (B)
maintain its REIT Status, (ii) any act by the Parent causing the election by the
Parent or the Borrower, as applicable, to be taxed as a real estate investment
trust to be terminated, (iii) any act causing the Parent to be subject to the
taxes imposed by Section 857(b)(6) of the Code, (iv) the Parent failing to be
entitled to a dividends paid deduction under Section 857 of the Code, (v) the
Parent failing to satisfy any condition or limitation set forth in Section
856(b) or 856(c) of the Code, (vi) any challenge by the Internal Revenue Service
to the Parent's REIT Status, (vii) the Borrower or any Subsidiary of Borrower
failing to be a Qualified REIT Subsidiary, (viii) any challenge by the Internal
Revenue Service to the status of Borrower or any Subsidiary of Borrower as a
Qualified REIT Subsidiary, or (ix) any other REIT Conversion, immediate
telephonic and subsequent written notice within forty-eight hours of any such
occurrence or circumstance; and
(f) From time to time and promptly upon each request, such data,
certificates, reports, statements, documents or further information regarding
the assets, business, liabilities, financial position, projections, results of
operations or business prospects of the Parent, the Borrower and its
Subsidiaries that is within the Borrower's control, as the Administrative Agent
or any Lender may reasonably request.
7.05. Notice of Litigation, Default and Other Matters. Prompt notice
of the following events after the Borrower has knowledge or notice thereof:
(a) The commencement of all proceedings and investigations by or before
the FCC, the FAA or any other governmental body, and all other actions and
proceedings in any court or before any arbitrator involving claims for damages
(including punitive damages) in excess of $250,000 in the aggregate (after
deducting the amount with respect to the Parent, the Borrower or any Subsidiary
of the Borrower is insured), against or in any other way relating directly to
the Parent, the Borrower, any Subsidiary of the Borrower, or any of their
Properties or businesses;
(b) Promptly upon the happening of any condition or event which
constitutes a Default, a written notice specifying the nature and period of
existence thereof and what action is being taken or is proposed to be taken with
respect thereto; and
(c) Any Material Adverse Change with respect to the business, assets,
liabilities, financial position, results of operations or prospective business
of the Parent, the Borrower or any Subsidiary of the Borrower.
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7.06. ERISA Reporting Requirements.
(a) Promptly and in any event (i) within 30 days after the Borrower or
any member of its Controlled Group knows or has reason to know that any ERISA
Event described in clause (a) of the definition of ERISA Event or any event
described in Section 4063(a) of ERISA with respect to any Plan of the Borrower
or any member of its Controlled Group has occurred, and (ii) within 10 days
after the Borrower or any member of its Controlled Group knows or has reason to
know that any other ERISA Event with respect to any Plan of the Borrower or any
member of its Controlled Group has occurred or a request for a minimum funding
waiver under Section 412 of the Code with respect to any Plan of the Borrower or
any member of its Controlled Group, a written notice describing such event and
describing what action is being taken or is proposed to be taken with respect
thereto, together with a copy of any notice of event that is given to the PBGC;
(b) Promptly and in any event within two Business Days after receipt
thereof by the Borrower or any member of its Controlled Group from the PBGC,
copies of each notice received by the Borrower or any member of its Controlled
Group of the PBGC's intention to terminate any Plan or to have a trustee
appointed to administer any Plan;
(c) Promptly and in any event within 30 days after the filing thereof by
the Borrower or any member of its Controlled Group with the United States
Department of Labor, the Internal Revenue Service or the PBGC, copies of each
annual and other report (including Schedule B thereto) with respect to each
Plan;
(d) Promptly and in any event within 30 days after receipt thereof, a
copy of any notice, determination letter, ruling or opinion the Borrower or any
member of its Controlled Group receives from the PBGC, the United States
Department of Labor or the Internal Revenue Service with respect to any Plan;
(e) Promptly, and in any event within 10 Business Days after receipt
thereof, a copy of any correspondence the Borrower or any member of its
Controlled Group receives from the Plan Sponsor (as defined by Section
4001(a)(10) of ERISA) of any Plan concerning potential withdrawal liability
pursuant to Section 4219 or 4202 of ERISA, and a statement from the chief
financial officer of the Borrower or such member of its Controlled Group setting
forth details as to the events giving rise to such potential withdrawal
liability and the action which the Borrower or such member of its Controlled
Group is taking or proposes to take with respect thereto;
(f) Notification within 30 days of any material increases in the benefits
of any existing Plan which is not a Multiemployer Plan, or the establishment of
any new Plans, or the commencement of contributions to any Plan to which the
Borrower or any member of its Controlled Group was not previously contributing;
(g) Notification within three Business Days after the Borrower or any
member of its Controlled Group knows or has reason to know that the Borrower or
any such member of its Controlled Group has or intends to file a notice of
intent to terminate any Plan under a distress termination within the meaning of
Section 4041(c) of ERISA and a copy of such notice; and
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(h) Promptly after receipt of written notice of commencement thereof,
notice of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Borrower or any member of its Controlled Group with
respect to any Plan.
7.07. Fee Owned Property, Ground Leases and Tenant Leases.
(a) Quarterly Information Regarding Fee Owned Real Property, Ground Leases
----------------------------------------------------------------------
and Tenant Leases. The Borrower shall provide the Administrative Agent and each
- -----------------
Lender, with quarterly updates delivered with the Compliance Certificate as
required in Section 7.03 hereof, certifying as to (i) all existing Ground Leases
and fee owned real property of the Borrower and the Subsidiaries of the
Borrower, (ii) the annual charges paid in connection with fee owned real
Property (if any) and Ground Leases of the Borrower and the Subsidiaries of the
Borrower, and the annual revenues generated by each Tower on each Ground Lease
and each fee owned real property, (iii) the termination date for each such
Ground Lease, (iv) whether there exists a material breach or default by any
party to any such Ground Lease (or alleged breach or default), and (v) a list of
all Oral Tenant Leases (detailing the reason for non-compliance) and all Tenant
Lease Revenues generated by such Oral Tenant Leases, all in form and substance
acceptable to the Administrative Agent. Each such quarterly update certificate
shall be certified by an Authorized Officer that there exists no breach of
Section 6.15 hereof and that there exists no Default or Event of Default under
Section 9.01(s) hereof.
(b) Annual Information Regarding Tenant Leases. The Borrower shall provide
------------------------------------------
the Administrative Agent and each Lender, with annual updates as to all existing
Tenant Leases delivered with the annual information required by Section 7.02
hereof, such information to show the Tenant Lease Revenues with respect to each
Tenant Lease, the termination date for each such Tenant Lease, whether such
Tenant Lease is a Oral Tenant Lease (and the reason therefor), and whether there
exists a material breach or default by any party to a (i) material Tenant Lease
or (ii) group of Tenant Leases which is material, all in form and substance
acceptable to the Administrative Agent.
ARTICLE VIII. NEGATIVE COVENANTS
So long as any of the Obligations or Canada Obligations are outstanding and
unpaid or any portion of either of the Commitment or any Letter of Credit is
outstanding (whether or not the conditions to borrowing have been or can be
fulfilled):
8.01. Financial Covenants.
(a) Leverage Ratio. The Borrower shall not permit the Leverage Ratio to be
more than the following ratios at the end of any fiscal quarter during the time
during the following time periods:
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Period Ratio
------ -----
From the Closing Date
through September 30, 1999 6.75 to 1.00
From October 1, 1999
through June 29, 2000 6.50 to 1.00
From June 30, 2000
through September 29, 2000 6.00 to 1.00
From September 30, 2000
through December 30, 2000 5.25 to 1.00
From December 31, 2000
through March 30, 2001 4.75 to 1.00
From March 31, 2001
through June 29, 2001 4.50 to 1.00
From June 30, 2001
through December 30, 2001 4.25 to 1.00
From December 31, 2001
through December 30, 2002 3.50 to 1.00
From December 31, 2002
and thereafter 3.00 to 1.00
(b) Consolidated Leverage Ratio. Commencing December 31, 2001, the
Borrower shall not permit the Consolidated Leverage Ratio to be more than the
following ratios at the end of any fiscal quarter during the time during the
following time periods:
Period Ratio
------ -----
From December 31, 2001
through December 30, 2002 7.50 to 1.00
From December 31, 2002
through December 30, 2003 6.50 to 1.00
From December 31, 2003
and thereafter 5.50 to 1.00
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(c) Consolidated Interest Coverage Ratio. The Borrower shall not permit,
at the end of any fiscal quarter, the ratio of (i) EBITDA for the preceding
twelve month period to (ii) cash Interest Expense for the preceding twelve month
period, to be less than the following ratios during the following time periods:
Period Ratio
------ -----
From the Closing Date
through June 29, 2000 1.75 to 1.00
From June 30, 2000
through December 30, 2000 2.00 to 1.00
From December 31, 2000
through March 30, 2001 2.25 to 1.00
From March 31, 2001
and thereafter 2.50 to 1.00
(d) Consolidated Pro Forma Debt Service Coverage Ratio. The Borrower shall
not permit at the end of any fiscal quarter the ratio of (a) Annualized EBITDA
to (b) Pro Forma Debt Service to be less than 1.50 to 1.00.
(e) Consolidated Fixed Charge Coverage Ratio. On March 31, 2001 and for
each fiscal quarter thereafter, the Borrower shall not permit at the end of any
fiscal quarter the ratio of (a) EBITDA for the most recently completed twelve
month period to (b) Fixed Charges paid in cash during the most recently
completed twelve month period, to be less than the following ratios during the
following time periods:
Period Ratio
------ -----
From March 31, 2001
through December 31, 2001 1.10 to 1.00
From January 1, 2002 and
thereafter 1.25 to 1.00
(f) Capital Expenditures. The Borrower shall not permit Capital
Expenditures (excluding acquisitions permitted to be consummated in accordance
with the terms of Section 8.06(b) hereof) made by the Parent, the Borrower and
its Subsidiaries in the aggregate, during the fiscal year 2000, to exceed
$40,000,000.
8.02. Debt for Borrowed Money. The Borrower shall not, and shall not permit
the Parent or any Subsidiary of the Borrower to, create, assume,
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incur or otherwise become or remain obligated in respect of, or permit to be
outstanding, or suffer to exist any Debt for Borrowed Money or any preferred
Capital Stock, except:
(a) with respect to the Borrower and its Subsidiaries, Debt for Borrowed
Money under the Loan Papers;
(b) with respect to the Borrower, Debt for Borrowed Money described on
Schedule 8.02 hereto attached hereto in the principal amounts and as such Debt
- -------------
for Borrowed Money exists as of the Closing Date;
(c) provided that no Default or Event of Default exists or would result
from the incurrence thereof and that the net proceeds of any such Debt or
preferred Capital Stock issuance be downstreamed by the Parent to the Borrower
as equity, the Parent may, so long as the aggregate amount of Second Parent
Issuance and the Bridge Debt incurred pursuant to subsections (i) and (ii) below
in the aggregate over the term of this Agreement do not exceed $250,000,000 AND
at no time shall the aggregate amount of outstanding Debt and preferred Capital
Stock under subsections (i) and (ii) below exceed $200,000,000 (except in
connection with any accretion), elect to:
(i) issue unsecured public Debt for Borrowed Money up to the maximum
aggregate amount at any one time outstanding of $200,000,000, except with
respect to any accretion (the "Second Parent Issuance"), and which such
Debt, notwithstanding the foregoing, (i) must be on terms and conditions
substantially similar to the Parent Senior Notes and the Parent Senior
Notes Documentation, (ii) may not be subject to an interest rate in excess
of 13.5% per annum, (iii) must have a scheduled maturity date later than
the Final Maturity Date, and must not be subject to any mandatory
repurchase, redemption, defeasance or any similar provision prior to the
Final Maturity Date, except to the extent there exists a Change of Control,
and in such event such Debt must provide for the repayment in full of the
Obligations prior to such redemption, repurchase, repayment or other
provision, (iv) may not contain covenants or other provisions more
restrictive than this Agreement and the other Loan Papers (including the
definitions), and may not prohibit any action or omission with respect to
this Agreement and the Loan Papers, and (v) shall provide for no principal
payments until the Obligations have been paid in full, and in-kind interest
payments only for a period of not less than the first five years after its
issuance; and
(ii) incur unsecured Debt for Borrowed Money and/or preferred Capital
Stock up to the maximum aggregate amount for both Debt for Borrowed Money
and preferred Capital Stock at any one time outstanding of $50,000,000,
except with respect to any accretion (such Debt for Borrowed Money or
preferred Capital Stock herein referred to as the "Bridge Debt"), and which
such Bridge Debt, notwithstanding the foregoing (i) must be payment in kind
only, and not subject to any cash interest payments, principal payments,
fees or otherwise, (ii) must have a scheduled maturity date not earlier
than the Final Maturity Date, (iii) must not be subject to any mandatory
repurchase, redemption, defeasance or any similar provision prior to the
Final Maturity Date and (iv) may not contain covenants or other provisions
more restrictive than this Agreement and the other
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Loan Papers (including the definitions), and may not prohibit any action or
omission with respect to this Agreement and the Loan Papers;
(d) provided that no Default or Event of Default exists or would result
from the incurrence thereof, with respect to the Borrower and the Parent,
unsecured Debt for Borrowed Money not to exceed $5,000,000 in the aggregate for
the Borrower and the Parent throughout the term of this Agreement;
(e) provided that no Default or Event of Default exists or would result
from the incurrence thereof, with respect to the Borrower and the Parent,
secured Debt for Borrowed Money not to exceed $5,000,000 in the aggregate for
the Borrower and the Parent throughout the term of this Agreement;
(f) provided that no Default or Event of Default exists or would result
from the incurrence thereof, with respect to the Borrower, accrued but unpaid
Earn-Out Liabilities;
(g) provided that no Default or Event of Default exists or would result
from the incurrence thereof, in addition to the Subordinated Debt the Parent is
entitled to incur in accordance with the terms of Section 8.02(c) above, if
there has not occurred a REIT Conversion, the Parent may incur Subordinated Debt
to the Shareholders, such Subordinated Debt not to exceed in principal face
amount in the aggregate for any taxable year, the amount necessary to enable the
Borrower to obtain the maximum possible deduction for dividends paid, as defined
in Section 561 of the Code and further described in Section 857 of the Code for
such year, taking into account the sum of all distributions previously made to
Shareholders permitted by Section 8.08(b)(iii) hereof for such fiscal year,
provided that, any determination under Section 857 of the Code shall take into
consideration for such purpose the necessity of increasing the aggregate amounts
distributed to reflect the fact that distributions in redemption of any
preferred return on any class of stock will be treated as being made partly from
earnings and profits and partly from capital;
(h) provided that no Default or Event of Default exists or would result
from the incurrence thereof, Debt for Borrowed Money incurred by the Borrower to
sellers in connection with Permitted Acquisitions, provided that (i) the amount
of such Debt shall not exceed, together with the amount of seller Debt described
on Schedule 8.02 hereto, $40,000,000, and (ii) in connection with the incurrence
-------------
of such Debt, a Letter of Credit shall be issued in the amount of such seller
Debt; and
(i) with respect to the Canada Sub, Debt for Borrowed Money in the form of
the Canada Indebtedness, and with respect to the Parent and the Borrower, Debt
for Borrowed Money under the Canada Guaranty.
8.03. Liens. The Borrower shall not, and shall not permit the Parent or
any Subsidiary of the Borrower to, create, assume, incur, permit or suffer to
exist, directly or indirectly, any Lien on any of its assets or Properties,
whether now owned or hereafter acquired, except Permitted Liens and Liens
securing the Canada Indebtedness and the Canada Guaranty. The Borrower shall
not, and shall not permit Parent or any Subsidiary of the Borrower to, agree
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with any other Person that it shall not create, assume, incur, permit or suffer
to exist or to be created, assumed, incurred or permitted to exist, directly or
indirectly, any Lien on any of its assets or Properties.
8.04. Investments. The Borrower shall not, and shall not permit the Parent
or any Subsidiary of the Borrower to, make any Investment, except that the
Borrower may purchase or otherwise acquire and own:
(a) Marketable, direct obligations of, or guaranteed by, the United States
of America and maturing within 365 days of the date of purchase;
(b) Commercial paper issued by U.S. corporations that have a rating of A-
1/P-1 or better by Moody's Investors Service, Inc. or Standard & Poor's Ratings
Group, a Division of McGraw-Hill, Inc.;
(c) Certificates of deposit of domestic banks maturing within 365 days of
the date of purchase, which banks' debt obligations have one of the two highest
ratings obtainable from Moody's Investors Service, Inc. or Standard & Poor's
Ratings Group, a Division of McGraw-Hill, Inc.;
(d) Securities issued by U.S. corporations that have one of the two
highest ratings obtainable from Moody's Investors Service, Inc. or Standard &
Poor's Ratings Group, a Division of McGraw-Hill, Inc.;
(e) Investments in newly-formed or existing, wholly-owned Subsidiaries of
the Borrower, in each case (i) that are subject to the provisions hereof, (ii)
that are or immediately become party to the Subsidiary Guaranty and any security
documents required by the Administrative Agent, (iii) whose stock is pledged to
the Lenders to secure the Obligations pursuant to a pledge agreement
substantially identical in form and substance to the Borrower Pledge Agreement
and (iv) if the Parent has not notified the Administrative Agent and each Lender
of a REIT Conversion, such Subsidiaries must be Qualified REIT Subsidiaries;
(f) Accounts receivable that arise in the ordinary course of business and
are payable on standard terms;
(g) Investments in existence on the Closing Date which are described on
Schedule 8.04 hereto;
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(h) Investments constituting Permitted Acquisitions permitted by Section
8.06(b) hereof;
(i) Investments in Pinnacle III so long as (i) such Investments are in
accordance with the terms of the PT Transactions, (ii) Pinnacle III becomes a
party to the Subsidiary Guaranty and executes any security documents required by
the Administrative Agent to grant a security interest in its assets in
accordance with the terms of Section 2.16(b) hereof and (iii) the Capital
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Stock of Pinnacle III is pledged to the Lenders to secure the Obligations
pursuant to a pledge agreement substantially identical in form and substance to
the Borrower Pledge Agreement; and
(j) Certificates of deposit and Eurodollar time deposits with maturities
of one year or less from the date of acquisition, overnight bank deposits and
repurchase obligations having a term of not more than 30 days with respect to
securities issued or fully guaranteed or insured by the United States government
or any agency thereof, in each case, of either an Eligible Assignee or Brown
Brothers Harriman & Co., provided that such Investments do not exceed
$20,000,000 in the aggregate at any time outstanding.
8.05. Amendment and Waiver. The Borrower shall not, and shall not permit
the Parent or any Subsidiary of the Borrower to, enter into any amendment of any
term or provision, or accept any consent or waiver with respect to any such
provision, of (a) its articles of incorporation or by-laws in any manner
material and adverse to the Lenders, (b) any material provision of any material
Capital Lease in any manner material and adverse to the Lenders or (c) any
provision in any Ground Lease provision that is set forth on Exhibit K hereto.
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The Borrower shall not, nor shall it permit the Parent or any Subsidiary of the
Borrower to, amend or change (or take any action or fail to take any action the
result of which is an effective amendment or change) or accept any waiver or
consent with respect to, the Subordinated Debt or the Parent Senior Notes, the
Indenture or any other Parent Senior Notes Documentation, or any Second Parent
Issuance Documentation or any Bridge Debt, that would result in (a) an increase
in any principal, interest, fees, or other amounts payable under the
Subordinated Debt, the Parent Senior Notes Documentation, the Second Parent
Issuance Documentation or the Bridge Debt (including without limitation a waiver
or action that results in the waiver of any payment default under the
Subordinated Debt, the Bridge Debt, the Parent Senior Notes Documentation or the
Second Parent Issuance Documentation), (b) a change in any date fixed for any
payment of principal, interest, fees, or other amounts payable under the
Subordinated Debt, the Bridge Debt, the Parent Senior Notes Documentation or the
Second Parent Issuance Documentation (including, without limitation, as a result
of any redemption) to a date earlier than January 31, 2005, (c) a change in any
financial covenant in the Subordinated Debt, the Parent Senior Notes
Documentation, the Bridge Debt or the Second Parent Issuance Documentation to a
more restrictive provision for the Borrower, the Parent or any Subsidiary of the
Borrower, (d) an increase in any remedy or right (or any change that broadens
the rights or remedies) of the holders of the Subordinated Debt, the Bridge
Debt, the Parent Senior Notes Documentation or the Second Parent Issuance
Documentation, (e) a change in any covenant, term or provision in the
Subordinated Debt, the Bridge Debt, the Parent Senior Notes Documentation or the
Second Parent Issuance Documentation which would result in such term or
provision being more restrictive than the terms of this Agreement and the Loan
Papers, (f) a change in any term or provision of the Parent Senior Notes
Documentation that would alter the definition of Acquisition Debt or Section
1008 of the Indenture in a manner that would make it more restrictive or effect
the usage of the Revolver Loan or the Term Loan A, or (g) a change in any term
or provision of the Subordinated Debt, the Parent Senior Notes Documentation or
the Second Parent Issuance Documentation, or other document or instrument in
connection therewith that could have, in any material respect, an adverse effect
on the interests of the Lenders.
8.06. Liquidation, Disposition or Acquisition of Assets, Merger, New
Subsidiaries. The Borrower shall not, and shall not permit the Parent or any
Subsidiary of the Borrower to, at any time:
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(a) liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up; or sell, lease, abandon, transfer or
otherwise dispose of all or any part of its assets, Properties or business,
other than in the ordinary course of business and other than assets that are
damaged or obsolete), provided that, (i) any Subsidiary of the Borrower can be
dissolved so long as the Borrower or a wholly-owned Subsidiary of the Borrower
acquires all such Subsidiary's assets; and (ii) so long as there exists no
Default or Event of Default both before and after giving effect to such sale (A)
and the Borrower complies fully with Section 2.05(c) hereof, Borrower may
consummate the sale of Towers (but not all or any substantial portion of Towers)
and (B) the Borrower may transfer certain rooftop assets acquired by the
Borrower in connection with the Motorola Acquisition to Pinnacle III in
accordance with the PT Transactions;
(b) acquire any assets, Property or business of any other Person except
(i) the Borrower and the Subsidiaries of the Borrower may acquire assets and
Property acquired in the ordinary course of business and (ii) provided no
Default or Event of Default exists or would result therefrom, the Borrower may
consummate transactions constituting Permitted Acquisitions;
(c) enter into any merger or consolidation, except that, so long as there
exists no Default or Event of Default and none is caused thereby, (i) any
Subsidiary of the Borrower can merge or consolidate into any other Subsidiary of
the Borrower, or so long as such transaction is in connection with a Permitted
Acquisition, into another Person, so long as a Subsidiary of the Borrower is a
survivor, or into the Borrower so long as the Borrower is the surviving
corporation, and (ii) another Person may be merged into the Borrower or any
Subsidiary of the Borrower in connection with a Permitted Acquisition, so long
as the Borrower or such Subsidiary is the surviving corporation; or
(d) create or acquire any Subsidiary, except as permitted by Section
8.04(e) hereof.
In connection with any asset sale permitted by this Section 8.06, Section 11.01
hereof or otherwise consented to by the Lenders in accordance with the terms of
this Agreement, the Administrative Agent is hereby authorized by each Lender to
(i) execute any and all releases deemed appropriate by it to release such assets
of the Borrower and the Subsidiaries of the Borrower constituting Collateral
from all Liens and security interests securing all or any portion of the
Obligations, (ii) return to the Borrower any such Collateral in the possession
of the Administrative Agent, and (iii) take such other action as the
Administrative Agent deems necessary or appropriate in connection with such
transaction and in furtherance of the effectuation thereof.
8.07. Guaranties; Contingent Liabilities. The Borrower shall not, and
shall not permit the Parent or any Subsidiary of the Borrower to, at any time
make or issue any Guaranty, or assume, be obligated with respect to, or permit
to be outstanding any Contingent Liabilities, except pursuant to the Loan
Papers, the Canada Indebtedness and the Canada Guaranty.
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8.08. Restricted Payments. The Borrower shall not, and shall not permit the
Parent or any Subsidiary of the Borrower to, directly or indirectly declare,
make or pay any Restricted Payment; provided, however
(a) any Subsidiary of the Borrower may declare and pay a Distribution to
the Borrower, and
(b) so long as there exists no Default or Event of Default immediately
before and after giving effect to any such transaction or payment,
(i) commencing April 30, 2000, the Borrower may make an annual
Restricted Payment in an aggregate amount not to exceed in any fiscal year,
the difference between Excess Cash Flow for the preceding calendar year and
the amount required by Section 2.05(a) hereof to repay the Obligations,
provided that, no such Restricted Payment may be made in any fiscal year of
the Borrower until the Borrower has fully complied with Section 2.05(a)
hereof with respect to such year,
(ii) the Borrower and the Parent may each make payments in kind on
its Subordinated Debt (but only in kind payments and no cash payments),
(iii) so long as there has not been a REIT Conversion, the Borrower
may annually make not more than two cash distributions to the Parent, who
must use such cash distributions to make distributions to the Shareholders,
each such distribution in an aggregate amount per taxable year equal to (A)
the amount of gross income actually includible by the Shareholders on their
Tax returns with respect to such taxable year solely as a result of the
operations of the Parent, the Borrower and its Subsidiaries, multiplied by
(B) the sum of the highest marginal Federal and highest marginal State
income tax rates applicable to one or more of the Shareholders,
(iv) so long as there has not been a REIT Conversion, the Borrower
may make one or more distributions with respect to any taxable year
constituting Subordinated Debt to the Parent, who, to the extent such
distribution is made by the Borrower may make one or more distributions
with respect to any taxable year constituting Subordinated Debt to the
Shareholders, each such distribution constituting Subordinated Debt not to
exceed in the aggregate an amount necessary to enable the Parent to obtain
the maximum possible deduction for dividends paid, as defined in Section
561 of the Code and further described in Section 857 of the Code for such
year, taking into account the sum of all distributions previously paid to
Shareholders in accordance with the terms of Section 8.08(b)(iii) above,
provided that, in connection with any such distribution, the Parent shall
take into consideration for such purpose the necessity of increasing the
aggregate amounts distributed to reflect the fact that distributions in
redemption of any preferred return on any class of stock will be treated as
being made partly from earnings and profits and partly from capital,
(v) the Borrower may make an annual distribution to Parent in an
amount not to exceed $25,000 to reimburse the Parent for its miscellaneous
expenses,
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(vi) until September 1, 2003, the Parent may make (A) payments in
kind only on the Parent Senior Notes (but only in kind payments and no cash
payments), in accordance with the terms of the Parent Senior Notes
Documentation, and (B) payments in kind only on the Second Parent Issuance
(but only in kind payments and no cash payments), in accordance with the
terms of the Second Parent Issuance Documentation,
(vii) the Parent may repay in its entirety the Bridge Debt, but only
so long as the Parent uses the proceeds of (i) Debt issued in accordance
with the terms of Section 8.02(c)(i) hereof to repay such Bridge Debt or
(ii) equity issued in accordance with the terms of Section 8.11 hereof to
repay such Bridge Debt, and
(viii) the Borrower may repay seller debt permitted to be incurred in
accordance with the terms of Section 8.02(h) hereof, so long as such
repayments are in accordance with the terms thereof; and
(c) the Canada Sub may make payments of principal, interest and fees on
the Canada Indebtedness.
8.09. Affiliate Transactions. The Borrower shall not, and shall not permit
the Parent or any Subsidiary of the Borrower to, at any time engage in any
transaction with an Affiliate, nor make an assignment or other transfer of any
of its assets or Properties to any Affiliate, on terms materially less
advantageous to the Parent, the Borrower or any Subsidiary of the Borrower than
would be the case if such transaction had been effected with a non-Affiliate,
except the PT Transactions, the agreements listed on Schedule 8.09 hereto and
-------------
except for Restricted Payments permitted to be paid under Section 8.08 hereof,
and as expressly permitted in Sections 8.02 and 8.04 hereof.
8.10. Compliance with ERISA. The Borrower shall not, and shall not permit
the Parent or any Subsidiary of the Borrower to, directly or indirectly, or
permit any member of its Controlled Group to directly or indirectly, (a)
terminate any Plan so as to result in any material (in the opinion of the
Majority Lenders) liability to the Borrower or any member of its Controlled
Group, (b) permit to exist any ERISA Event, or any other event or condition
which presents the risk of liability of the Borrower or any member of its
Controlled Group, (c) make a complete or partial withdrawal (within the meaning
of Section 4201 of ERISA) from any Multiemployer Plan so as to result in any
liability to the Borrower or any member of its Controlled Group, (d) enter into
any new Plan or modify any existing Plan so as to increase its obligations
thereunder except in the ordinary course of business consistent with past
practice which could result in any liability to the Borrower or any member of
its Controlled Group, or (e) permit the present value of all benefit
liabilities, as defined in Title IV of ERISA, under each Plan of the Borrower or
any member of its Controlled Group (using the actuarial assumptions utilized by
the PBGC upon termination of a plan) to exceed the fair market value of Plan
assets allocable to such benefits all determined as of the most recent valuation
date for each such Plan.
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8.11. Capital Stock. The Borrower shall not, and shall not permit the
Parent or any Subsidiary of the Borrower to (a) make or permit any transfer,
assignment, distribution, mortgage, pledge or gift of any shares of Pledged
Stock, and (b) issue any Capital Stock, provided that, (i) if there exists no
Default or Event of Default before and immediately after giving effect to such
issuance and the net proceeds of each such issuance of Capital Stock are
contributed to the Borrower as equity (except to the extent all or any portion
of any such issuance is used to repay Debt permitted to be repaid in accordance
with the terms of Section 8.08 hereof), the Parent may issue (A) common Capital
Stock of the Parent to any Person, and (B) preferred Capital Stock of the Parent
in accordance with the terms of Section 8.02(c)(ii) hereof, (ii) the Capital
Stock of the Borrower and its Subsidiaries may be pledged to secure the Canada
Guaranty, (iii) the Capital Stock of the Canada Sub may be pledged to secure the
Canada Indebtedness and the Canada Guaranty, and (iv) provided no Default or
Event of Default shall exist or result therefrom, Pinnacle III may issue Capital
Stock in accordance with the terms of the PT Transactions, in each case only so
long as such Capital Stock is pledged to the Administrative Agent on behalf of
the Lenders to secure the Obligations pursuant to documentation substantially in
the form of Exhibit J hereto.
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8.12. Sale and Leaseback. The Borrower shall not, and shall not permit the
Parent or any Subsidiary of the Borrower to, enter into any arrangement whereby
it sells or transfers any of its assets, and thereafter rents or leases such
assets, except that the Borrower may sell real estate that it owns and
thereafter lease it subject to a Ground Lease, provided that the Borrower
complies with the provisions of Sections 6.15 and 7.07 hereof as if the Borrower
had acquired such leased property.
8.13. Sale or Discount of Receivables. The Borrower shall not, and shall
not permit the Parent or any Subsidiary of the Borrower to, directly or
indirectly sell, with or without recourse, for discount or otherwise, any notes
or accounts receivable.
8.14. Limitation on Restrictive Agreements. The Borrower shall not, and
shall not permit the Parent or any Subsidiary of the Borrower to, enter into any
indenture, agreement, instrument, financing document or other arrangement which,
directly or indirectly, prohibits or restrains, or has the effect of prohibiting
or restraining, or imposes materially adverse conditions upon (a) any amendment
of, or waiver or consent to, any provision of this Agreement or any other Loan
Paper and (b) the granting of any Liens to secure the Obligations, and, except
with respect to the Parent Senior Notes, the Second Parent Issuance, the Bridge
Debt, the Canada Indebtedness and the Canada Guaranty: (i) the incurrence of
indebtedness, (ii) the granting of Liens, (iii) the making or granting of
Guarantees, (iv) the payment of dividends or Distributions, (v) the purchase,
redemption or retirement of any Capital Stock, (vi) the making of loans or
advances, (vii) transfers or sales of property or assets (including Capital
Stock) by the Parent, the Borrower or any of its Subsidiaries, (viii) the making
of Investments and (ix) any change of control or management.
8.15. Synthetic Leases. The Borrower shall not, nor shall it permit any
Subsidiary to, create any, or permit to exist, any Synthetic Lease.
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ARTICLE IX. EVENTS OF DEFAULT
9.01. Events of Default. Any one or more of the following shall be an
"Event of Default" hereunder, if the same shall occur for any reason whatsoever,
whether voluntary or involuntary, by operation of Law, or otherwise:
(a) The Borrower shall fail to pay any (i) principal payable under any Loan
Paper on the date due; or (ii) any interest, fees or other amounts payable
within three days of the date due;
(b) Any representation or warranty made or deemed made by any Obligor (or
any of its officers or representatives) under or in connection with any Loan
Paper shall prove to have been incorrect or misleading in any material respect
when made or deemed made;
(c) The Borrower shall fail to perform or observe any term or covenant
contained in Article VIII hereof or in Section 7.04(e) hereof;
(d) Any Obligor shall fail to perform or observe any other term or covenant
contained in any Loan Paper, other than those described in Sections 9.01(a), (b)
and (c) above or in Section 6.15(a) hereof, and such failure shall not be
remedied within thirty days following the earlier of the Borrower's knowledge of
such failure or notice from any Lender of the occurrence of such failure;
(e) Any of the following shall occur: (i) Any Loan Paper or material
provision thereof shall, for any reason, not be valid and binding on the Obligor
signatory thereto, or not be in full force and effect, or shall be declared to
be null and void; or (ii) the validity or enforceability of any Loan Paper shall
be contested by any Obligor; or (iii) any Obligor shall deny in writing that it
has any or further liability or obligation under its respective Loan Papers; or
(iv) any default or breach under any provision of any Loan Papers shall continue
after the applicable grace period, if any, specified in such Loan Paper;
(f) Any of the following shall occur: (i) any Obligor shall make an
assignment for the benefit of creditors or be unable to pay its debts generally
as they become due; (ii) any Obligor shall petition or apply to any Tribunal for
the appointment of a trustee, receiver, or liquidator of it, or of any
substantial part of its assets, or shall commence any proceedings relating to
any Obligor under any Debtor Relief Laws; (iii) any such petition or application
shall be filed, or any such proceedings shall be commenced, against any Obligor,
or an order, judgment or decree shall be entered appointing any such trustee,
receiver, or liquidator, or approving the petition in any such proceedings, and
such petition or application shall be consented to or uncontested by such
Obligor, or if contested by such Obligor, shall not be dismissed within 60 days
following the filing of such petition or application; (iv) any final order,
judgment, or decree shall be entered in any proceedings against any Obligor
decreeing its dissolution; or (v) any final order, judgment, or decree shall be
entered in any proceedings against any Obligor decreeing its split-up which
requires the divestiture of a substantial part of its assets;
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(g) Any of the following shall occur: (i) The Borrower or any other Obligor
shall fail to pay any Subordinated Debt, Debt evidenced by the Parent Senior
Notes, Debt evidenced by any Second Parent Issuance Documentation, Bridge Debt
or any other Debt, or obligations in respect of Capital Leases (other than Debt
under the Loan Papers) in an aggregate amount of $1,000,000 or more when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating to such Debt; or (ii)
the Borrower or any other Obligor shall fail to perform or observe any term or
covenant contained in any agreement or instrument relating to any such Debt,
when required to be performed or observed, and such failure shall continue after
the applicable grace period, if any, specified in such agreement or instrument,
and can result in acceleration of the maturity of such Debt; or (iii) any such
Debt shall be declared to be due and payable, or required to be prepaid,
mandatorily redeemed or repurchased (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof;
(h) Any Obligor shall have any final judgment(s) outstanding against it for
the payment of $1,000,000 or more, and such judgment(s) shall remain unstayed,
in effect, and unpaid for the period of time after which the judgment holder may
and may cause the creation of Liens against or seizure of any of its Property;
(i) Any of the following shall have occurred: (i) Any ERISA Event shall
have occurred with respect to a Plan of the Borrower, and the sum of the
Insufficiency of such Plan and liabilities relating thereto is equal to or
greater than $1,000,000 or (ii) the Borrower or any ERISA Affiliate of the
Borrower shall have committed a failure described in Section 302(f)(l) of ERISA,
and the amount determined under Section 302(f)(3) of ERISA is equal to or
greater than $1,000,000;
(j) The Borrower or any ERISA Affiliate of the Borrower shall have been
notified by the sponsor of a Multiemployer Plan that (A) it has incurred
Withdrawal Liability to such Plan in an amount that, exceeds $1,000,000 or
requires payments exceeding $1,000,000 per annum, or (B) such Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
if as a result thereof the aggregate annual contributions to all Multiemployer
Plans in reorganization or being terminated is increased over the amounts
contributed to such Plans for the preceding Plan year by an amount exceeding
$1,000,000;
(k) Any Obligor shall be required under any Environmental Law (i) to
implement any remedial, neutralization, or stabilization process or program, the
cost of which would constitute a Material Adverse Change, or (ii) to pay any
penalty, fine, or damages in an aggregate amount which would constitute a
Material Adverse Change;
(l) Any of the following shall have occurred: (i) Any Property (whether
leased or owned), or the operations conducted thereon by any Obligor or any
current or prior owner or operator thereof (in the case of real Property), shall
violate or have violated any applicable Environmental Law, if such violation
would constitute a Material Adverse Change; or (ii) such Obligor shall not
obtain or maintain any License required to be obtained or filed under any
Environmental Law in connection with the use of such Property and assets,
including without
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limitation past or present treatment, storage, disposal, or release of Hazardous
Materials into the environment, if the failure to obtain or maintain the same
would constitute a Material Adverse Change;
(m) Any of the following shall have occurred: (i) Any Loan Paper shall for
any reason (other than pursuant to the terms thereof) cease to create a valid
and perfected first priority Lien in the Collateral purported to be covered
thereby (except as permitted by the terms of this Agreement or consented to by
the Lenders); (ii) any Loan Paper shall for any reason cease to secure the
Obligations purported to be secured thereby (except as permitted by the terms of
this Agreement or consented to by the Lenders); or (iii) less than 100% of the
Capital Stock of the Borrower shall be pledged to secure the Obligations;
(n) Any of the following shall have occurred: (i) A final non-appealable
order is issued by any Tribunal, including, but not limited to, the FCC, the FAA
or the United States Justice Department, requiring Borrower to divest a
substantial portion of its assets pursuant to any antitrust, restraint of trade,
unfair competition, industry regulation, or similar Laws, or (ii) any Tribunal
shall condemn, seize, or otherwise appropriate, or take custody or control of
all or any substantial portion of the assets of Borrower;
(o) Any of the following shall have occurred if the effect thereof is to
cause a Material Adverse Change: (i) Any License whether presently existing or
hereafter granted to or obtained by Borrower or any Subsidiary of the Borrower
shall expire without renewal on or before payment in full of the Notes and all
Obligations hereunder, or be suspended or revoked, or (ii) Borrower or any
Subsidiary of the Borrower shall become subject to any injunction or other order
affecting or which may affect Borrower's or a Subsidiary of the Borrower's
present or proposed operations under any such License;
(p) The occurrence of one of more of the following events: (i) the
occurrence of a Change of Control, or (ii) the Parent shall own less than 100%
of the Capital Stock of the Borrower, or the Borrower shall own less than 100%
of its Subsidiaries; or (iii) any one of the President, Chief Executive Officer,
Chief Financial Officer or Chief Operating Officer of the Borrower shall, for
any reason, fail to perform the primary roles and functions of such position on
behalf of the Borrower (whether pursuant to death, extended disability,
termination, resignation or otherwise) AND the Borrower shall not have replaced
such senior executive with a new employee reasonably acceptable to the Majority
Lenders within 60 days after such failure;
(q) For any taxable year, the Borrower shall have made any Restricted
Payment to the Parent, or the Parent shall have made any Restricted Payment to
any Shareholder in accordance with the terms of Section 8.08(b)(iii) hereof for
the tax liability of any Shareholder for such taxable year, and the Borrower or
the Parent shall also have paid or be subject to any Federal income tax on any
amount in excess of five percent of the Borrower's real estate investment trust
taxable income for such taxable year;
(r) Any civil action, suit or proceeding shall be commenced against
Borrower, the Parent, or any Subsidiary of the Borrower under any federal or
state racketeering statute (including, without limitation, the Racketeer
Influenced and Corrupt Organization Act of 1970)
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("RICO") and such suit shall be adversely determined by a court of applicable
jurisdiction and forfeiture shall commence against assets in the aggregate
having fair market value of $1,000,000 or more, or any criminal action or
proceeding shall be commenced against the Borrower, the Parent, or any
Subsidiary of the Borrower under any federal or state racketeering statute
(including, without limitation, RICO);
(s) With respect to Parent, Borrower or any Subsidiary of the Borrower, if
the Parent and the Borrower have not notified the Administrative Agent in
accordance with the terms of Section 7.04(e) hereof of a REIT Conversion, (i)
any such entity fails to pay dividends in the amount of taxable income necessary
to maintain Parent's REIT Status, or (ii) Parent shall fail to maintain its REIT
Status or (iii) Borrower or any Subsidiary of Borrower shall fail to maintain
its status as a Qualified REIT Subsidiary;
(t) A "Change of Control" as that term is defined in the Parent Senior
Notes Documentation or any Second Parent Issuance Documentation shall occur;
(u) The Borrower shall not have received an equity contribution within five
days after the payment by the Borrower of cash dividends in accordance with the
terms of Sections 8.08(b)(iii) and (iv) hereof ("Tax Dividends"), in an amount
not less than the difference between (i) the aggregate amount of such Tax
Dividends and (ii) the Shareholder's maximum tax liability as a result of the
operations of the Borrower (after giving effect to all tax benefits); or
(v) There shall exist any default or breach with respect to any of the
Canada Indebtedness Agreements.
9.02. Remedies upon Default. If an Event of Default described in Section
9.01(f) shall occur with respect to any Obligor, the aggregate unpaid principal
balance of and accrued interest on all Advances shall, to the extent permitted
by applicable Law, thereupon automatically become due and payable concurrently
therewith, without any action by Administrative Agent or any Lender, and without
diligence, presentment, demand, protest, notice of protest or intent to
accelerate, or notice of any other kind, all of which are hereby expressly
waived. Subject to the foregoing sentence, if any Event of Default shall occur
and be continuing, Administrative Agent may at its election, or shall at the
direction of the Majority Lenders, do any one or more of the following:
(a) Declare the entire unpaid balance of all Advances immediately due and
payable, whereupon it shall be due and payable without diligence, presentment,
demand, protest, notice of protest or intent to accelerate, or notice of any
other kind (except notices specifically provided for under Section 9.01 hereof),
all of which are hereby expressly waived (except to the extent waiver of the
foregoing is not permitted by applicable Law);
(b) Terminate the Commitment;
(c) Reduce any claim of Administrative Agent and Lenders to judgment;
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(d) Demand (and the Borrower shall pay to Administrative Agent immediately
upon demand and in immediately available funds), the amount equal to the
aggregate amount of the Letters of Credit then outstanding, irrespective of
whether such Letters of Credit have been drawn upon, all as set forth and in
accordance with the terms of provisions of Article III hereof. The
Administrative Agent shall promptly advise the Borrower of any such declaration
or demand but failure to do so shall not impair the effect of such declaration
or demand; and
(e) Exercise any Rights afforded under any Loan Papers, by Law, including
but not limited to the UCC, at equity, or otherwise.
9.03. Cumulative Rights. All Rights available to Administrative Agent and
Lenders under the Loan Papers shall be cumulative of and in addition to all
other Rights granted thereto at Law or in equity, whether or not amounts owing
thereunder shall be due and payable, and whether or not Administrative Agent or
any Lender shall have instituted any suit for collection or other action in
connection with the Loan Papers.
9.04. Waivers. The acceptance by Administrative Agent or any Lender at any
time and from time to time of partial payment of any amount owing under any Loan
Papers shall not be deemed to be a waiver of any Default or Event of Default
then existing. No waiver by Administrative Agent or any Lender of any Default or
Event of Default shall be deemed to be a waiver of any Default or Event of
Default other than such Default or Event of Default. No delay or omission by
Administrative Agent or any Lender in exercising any Right under the Loan Papers
shall impair such Right or be construed as a waiver thereof or an acquiescence
therein, nor shall any single or partial exercise of any such Right preclude
other or further exercise thereof, or the exercise of any other Right under the
Loan Papers or otherwise.
9.05. Performance by Administrative Agent or any Lender. Should any
covenant of any Obligor fail to be performed in accordance with the terms of the
Loan Papers, Administrative Agent may, at its option, perform or attempt to
perform such covenant on behalf of such Obligor. Notwithstanding the foregoing,
it is expressly understood that neither Administrative Agent nor any Lender
assumes, and shall not ever have, except by express written consent of
Administrative Agent or such Lender, any liability or responsibility for the
performance of any duties or covenants of any Obligor.
9.06. Expenditures. The Borrower shall reimburse Administrative Agent and
each Lender for any reasonable sums spent by it in connection with the exercise
of any Right under Section 9.05 hereof. Such sums shall bear interest at the
lesser of (a) the Base Rate (whether or not in effect), plus 2.00% per annum and
(b) the Highest Lawful Rate, from five days after the date any Lender makes
demand to the Borrower for reimbursement of such amount until the date of
repayment by the Borrower.
9.07. Control. None of the covenants or other provisions contained in this
Agreement shall, or shall be deemed to, give Administrative Agent or any Lender
any Rights to exercise control over the affairs and/or management of any
Obligor, the power of Administrative Agent and each Lender being limited to the
Rights to exercise the remedies provided in this Article; provided, however,
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that if Administrative Agent or any Lender becomes
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the owner of any partnership, stock or other equity interest in any Person,
whether through foreclosure or otherwise, it shall be entitled to exercise such
legal Rights as it may have by being an owner of such stock or other equity
interest in such Person.
ARTICLE X. THE ADMINISTRATIVE AGENT
10.01. Authorization and Action. Each Lender hereby appoints and authorizes
Administrative Agent to take such action as Administrative Agent on its behalf
and to exercise such powers under this Agreement and the other Loan Papers as
are delegated to the Administrative Agent by the terms of the Loan Papers,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement and the other Loan Papers
(including without limitation enforcement or collection of the Notes),
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
Majority Lenders (or all Lenders, if required under Section 11.01 hereof), and
such instructions shall be binding upon all Lenders; provided, however, that
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Administrative Agent shall not be required to take any action which exposes
Administrative Agent to personal liability or which is contrary to any Loan
Papers or applicable Law. Administrative Agent agrees to give to each Lender
notice of each notice given to it by the Borrower pursuant to the terms of this
Agreement, and to distribute to each applicable Lender in like funds all amounts
delivered to Administrative Agent by the Borrower for the Ratable or individual
account of any Lender. Functions of the Administrative Agent are administerial
in nature and in no event shall the Administrative Agent have a fiduciary or
trustee relationship in respect of any Lender by reason of this Agreement or any
Loan Paper.
10.02. Administrative Agent's Reliance, Etc. Neither Administrative Agent,
nor any of its directors, officers, agents, employees, or representatives shall
be liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or any other Loan Paper, except for its or their
own gross negligence or willful misconduct. Without limitation of the generality
of the foregoing, Administrative Agent (a) may treat the payee of any Note as
the holder thereof until Administrative Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
Administrative Agent; (b) may consult with legal counsel (including counsel for
the Borrower or any of its Subsidiaries), independent public accountants, and
other experts selected by it, and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants, or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements,
warranties, or representations made in or in connection with this Agreement or
any other Loan Papers; (d) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants, or conditions
of this Agreement or any other Loan Papers on the part of any Obligor or its
Subsidiaries or to inspect the Property (including the books and records) of any
Obligor or its Subsidiaries; (e) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency, or
value of this Agreement, any other Loan Papers, or any other instrument or
document furnished pursuant hereto; and (f) shall incur no liability under or in
respect of this Agreement or any other
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Loan Papers by acting upon any notice, consent, certificate, or other instrument
or writing believed by it to be genuine and signed or sent by the proper party
or parties.
10.03. Bank of America, N.A. and Affiliates. With respect to its portion
of the Commitment, its Advances, the Canada Indebtedness, and any Loan Papers,
Bank of America, N.A. has the same Rights under this Agreement as any other
Lender and may exercise the same as though it were not Administrative Agent.
Bank of America, N.A. and its Affiliates may accept deposits from, lend money
to, act as trustee under indentures of, and generally engage in any kind of
business with, any Obligor, any Affiliate thereof, and any Person who may do
business therewith, all as if Bank of America, N.A. were not Administrative
Agent and without any duty to account therefor to any Lender.
10.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Administrative Agent or any other
Lender, and based on the financial statements referred to in Section 5.01(j),
Article VII hereof and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon 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 decisions in taking or not taking action under this
Agreement and the other Loan Papers.
10.05. Indemnification by Lenders. Lenders shall indemnify
Administrative Agent, Pro Rata, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against Administrative Agent in any way relating to
or arising out of any Loan Papers or any action taken or omitted by
Administrative Agent thereunder, including any negligence of Administrative
Agent; provided, however, that no Lender shall be liable for any portion of such
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liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements resulting from Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, Lenders
shall reimburse Administrative Agent, Pro Rata, promptly upon demand for any
out-of-pocket expenses (including reasonable attorneys' fees) incurred by
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment, or enforcement (whether through
negotiation, legal proceedings or otherwise) of, or legal and other advice in
respect of rights or responsibilities under, the Loan Papers. The indemnity
provided in this Section 10.05 shall survive the termination of this Agreement.
10.06. Successor Administrative Agent. Administrative Agent may resign
at any time by giving written notice thereof to Lenders and the Borrower, and
may be removed at any time with or without cause by the action of all Lenders
(other than Administrative Agent, if it is a Lender). Upon any such
resignation, Majority Lenders shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed and shall have accepted such appointment within thirty days after the
retiring Administrative Agent's giving of notice of resignation, then
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the retiring Administrative Agent may, on behalf of Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the Laws
of the United States of America or of any State thereof and having a combined
capital and surplus of at least $50,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the Rights and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Papers, provided that if the retiring or removed
Administrative Agent is unable to appoint a successor Administrative Agent,
Administrative Agent shall, after the expiration of a sixty day period from the
date of notice, be relieved of all obligations as Administrative Agent
hereunder. Notwithstanding any Administrative Agent's resignation or removal
hereunder, the provisions of this Article shall continue to inure to its benefit
as to any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement.
ARTICLE XI. MISCELLANEOUS
11.01. Amendments and Waivers. No amendment or waiver of any provision
of this Agreement or any other Loan Papers, nor consent to any departure by the
Borrower or any Obligor therefrom, shall be effective unless the same shall be
in writing and signed by the Borrower and the Administrative Agent with the
consent of the Majority Lenders, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver, or consent shall (and the
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result of action or failure to take action shall not) unless in writing and
signed by each of the Lenders and Administrative Agent, (a) increase the
Commitment (except as specifically permitted by Section 2.18 hereof), (b) reduce
any principal, interest, fees, scheduled reduction of the Commitment or other
amounts payable hereunder, or waive or result in the waiver of any Event of
Default under Section 9.01(a) hereof, (c) postpone any date fixed for any
payment of principal, interest, fees, or other amounts payable hereunder, (d)
release any Collateral or guaranties securing any Obligor's obligations
hereunder, other than (i) releases contemplated by the provisions of this
Agreement or by the other Loan Papers and (ii) releases of assets that (A) are
being sold by the Borrower in its ordinary course of business and (B) are
obsolete or immaterial to the business of the Borrower, (C) are immaterial and
were acquired by the Borrower in connection with a Permitted Acquisition but
never contemplated to be used in the operations of the Borrower, (which such
releases do not require the consent of any Lender except the Administrative
Agent), (e) change the meaning of "Revolver Specified Percentage" (except in
accordance with the terms of Section 2.18 hereof), "Term Loan A Specified
Percentage", "Term Loan B Specified Percentage" or "Total Specified
Percentage" (except in accordance with the terms of Section 2.18 hereof), or
the number of Lenders required to take any action hereunder, (f) change the
definitions of "Commitment", "Unavailable Commitment", "First Maturity Date",
"Final Maturity Date", "Majority Lenders", "Letter of Credit Commitment" or
"Canada Indebtedness Amount", (g) or amend any provision of Section 2.18 hereof
which would affect any of the items listed in Section 11.01(a) through (f)
above, or (h) amend this Section 11.01. No amendment, waiver, or consent shall
affect the Rights or duties of Administrative Agent under any Loan Papers,
unless it is in writing and signed by Administrative Agent in addition to the
requisite number of Lenders.
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11.02. Notices.
(a) Manner of Delivery. All notices communications and other materials to
be given or delivered under the Loan Papers shall, except in those cases where
giving notice by telephone is expressly permitted, be given or delivered in
writing. All written notices, communications and materials shall be sent by
registered or certified mail, postage prepaid, return receipt requested, by
telecopier, or delivered by hand. In the event of a discrepancy between any
telephonic notice and any written confirmation thereof, such written
confirmation shall be deemed the effective notice except to the extent
Administrative Agent, any Lender or the Borrower has acted in reliance on such
telephonic notice.
(b) Addresses. All notices, communications and materials to be given or
delivered pursuant to this Agreement shall be given or delivered at the
following respective addresses and telecopier and telephone numbers and to the
attention of the following individuals or departments:
(i) If to the Borrower:
Pinnacle Towers Inc.
1549 Ringling Boulevard
3rd Floor
Sarasota, Florida 34236
Telephone No.: (941) 364-8886
Telecopier No.: (941) 364-8761
Attention: Mr. Steve Day
(ii) If to Administrative Agent:
Bank of America, N.A.
Bank of America Plaza
901 Main Street, 64th Floor
Dallas, Texas 75202
Telephone No.: (214) 209-0988
Telecopier No.: (214) 209-9390
Attention: Ms. Roselyn M. Drake
Principal
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With a copy to:
Donohoe, Jameson & Carroll, P.C.
3400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Telephone No.: (214) 698-3814
Telecopier No.: (214) 744-0231
Attention: Melissa Ruman Stewart
(iii) If to any Lender, to its address shown on Schedule 11.02 hereto or
--------------
on any Assignment and Acceptance.
or at such other address or, telecopier or telephone number or to the attention
of such other individual or department as the party to which such information
pertains may hereafter specify for the purpose in a notice to the other
specifically captioned "Notice of Change of Address".
(d) Effectiveness. Each notice, communication and any material to be given
or delivered to any party pursuant to this Agreement shall be effective or
deemed delivered or furnished (i) if sent by mail, on the fifth day after such
notice, communication or material is deposited in the mail, addressed as above
provided, (ii) if sent by telecopier, when such notice, communication or
material is transmitted to the appropriate number determined as above provided
in this Section 11.02 and the appropriate receipt is received or otherwise
acknowledged, (iii) if sent by hand delivery or overnight courier, when left at
the address of the addressee addressed as above provided, and (iv) if given by
telephone, when communicated to the individual or any member of the department
specified as the individual or department to whose attention notices,
communications and materials are to be given or delivered except that notices of
a change of address, telecopier or telephone number or individual or department
to whose attention notices, communications and materials are to be given or
delivered shall not be effective until received; provided, however, that notices
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to Administrative Agent pursuant to Article II shall be effective when received.
The Borrower agrees that Administrative Agent shall have no duty or obligation
to verify or otherwise confirm telephonic notices given pursuant to Article II,
and agrees to indemnify and hold harmless Administrative Agent and Lenders for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, and expenses resulting, directly or indirectly,
from acting upon any such notice.
11.03. Parties in Interest and Register. All covenants and agreements
contained in this Agreement and all other Loan Papers shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto. Each
Lender may from time to time assign or transfer its interests hereunder pursuant
to Section 11.04 hereof. The Borrower may not assign or transfer its Rights or
obligations hereunder without the prior written consent of Administrative Agent.
The Borrower shall maintain a register (the "Register") indicating (a) each
Person entitled to receive principal and interest with respect to the all or any
portion of the Loans and (b) each transfer of all or any portion of the Loans.
The Borrower shall have no liability or obligation resulting from errors or
mistakes in such Register to the extent that
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the Borrower has not received notice of assignment or transfer in accordance
with the terms of Section 11.04 hereof.
11.04. Assignments and Participations.
(a) Each Lender (an "Assignor") may assign its Rights and obligations as a
Lender under the Loan Papers to one or more Eligible Assignees pursuant to an
Assignment and Acceptance, so long as (i) each assignment shall be of a
constant, and not a varying percentage of all Rights and obligations thereunder,
(ii) each Assignor shall obtain in each case the prior written consent of
Administrative Agent and the Borrower, in each case such consent not to be
unreasonably withheld or delayed, provided that, in the event there exists a
Default or Event of Default, any such consent of the Borrower shall not be
required, (iii) each Assignor shall in each case pay a $3,500 processing fee to
Administrative Agent and (iv) no such assignment is for an amount less than
$3,000,000 (and, if such assignment is a partial assignment, no Lender shall
hold less than $3,000,000 immediately after giving effect to any assignment
unless it is assigning such Lender's entire interest), in each case, unless
otherwise consented to by the Administrative Agent. Assignments and other
transfers (except participations) with respect to each Lender's participation in
a given Letter of Credit may only be made with the prior written consent of the
Administrative Agent. Within five Business Days after Administrative Agent and
the Borrower receive notice of any such assignment, the Borrower shall (A)
record such transfers and assignments in the Register and (B) execute and
deliver to Administrative Agent, in exchange for the Notes issued to Assignor,
new Notes to the order of such Assignor and its assignee in amounts equal to
their respective Revolver Specified Percentages of the Commitment, the
respective Term Loan A Specified Percentages of $125,000,000 and their
respective Term Loan B Specified Percentages of $110,000,000. Such new Notes
shall be dated the effective date of the assignment. It is specifically
acknowledged and agreed that on and after the effective date of each assignment,
the assignee shall be a party hereto and shall have the Rights and obligations
of a Lender under the Loan Papers.
(b) Each Lender may sell participations to one or more Persons in all or
any of its Rights and obligations under the Loan Papers; provided, however, that
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(i) such Lender's obligations under the Loan Papers shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
its Notes for all purposes of the Loan Papers, (iv) the participant shall be
granted the Right to vote on or consent to only those matters described in
Sections 11.01(a), (b), (c) and (d) hereof and (v) Obligor, Administrative
Agent, and other Lenders shall continue to deal solely and directly with such
Lender in connection with its Rights and obligations under the Loan Papers.
(c) Any Lender may, in connection with any assignment or participation, or
proposed assignment or participation, disclose to the assignee or participant,
or proposed assignee or participant, any information relating to any Obligor
furnished to such Lender by or on behalf of any Obligor.
(d) Notwithstanding any other provision set forth in this Agreement, (i)
any Lender may at any time create a security interest in all or any portion of
its Rights under this Agreement
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(including, without limitation, the Advances owing to it and the Notes held by
it) in favor of any Federal Reserve Bank in accordance with Regulation A of the
Board of Governors of the Federal Reserve System and any Lender that is a fund
that invests in bank loans may, without the consent of the Administrative Agent
or the Borrower, pledge its Note or any other instrument evidencing its rights
as a Lender under this Agreement to any holder of obligations owed, or
securities issued, by such fund as security for such obligations or securities,
or to any trustee for, or any other representative of, such holders; provided
that any foreclosure or similar action by such trustee shall be subject to the
provisions of this Section concerning assignments, (ii) no participant of any
Lender may further assign or participate any of its interest in the Loan Papers
to any Person (except as may be required by Law or a Tribunal having authority
over such participant), and (iii) no Lender (other than Bank of America, N.A.)
may assign any of its interest in the Loan Papers to any Person (except as may
be required by Law or a Tribunal having authority over Bank of America, N.A.)
except as specifically provided in Section 11.04 hereof.
11.05. Sharing of Payments. If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any Right of set-off, or
otherwise) on account of its Advances in excess of its Pro Rata share of
payments made by the Borrower, such Lender shall forthwith purchase
participations in Advances made by the other Lenders as shall be necessary to
share the excess payment Pro Rata with each of them; provided, however, that if
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any of such excess payment is thereafter recovered from the purchasing Lender,
its purchase from each Lender shall be rescinded and each Lender shall repay the
purchase price to the extent of such recovery together with a Pro Rata share of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 11.05
may, to the fullest extent permitted by Law, exercise all its Rights of payment
(including the Right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
11.06. Right of Set-off. Upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any time and from time
to time, to the fullest extent permitted by Law, to set-off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any and all of the obligations of
the Borrower now or hereafter existing under this Agreement and the other Loan
Papers, whether or not Administrative Agent or any Lender shall have made any
demand under this Agreement or the other Loan Papers, and even if such
obligations are unmatured. Each Lender shall promptly notify the Borrower after
any such set-off and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The Rights of
each Lender under this Section 11.06 are in addition to other Rights (including,
without limitation, other Rights of set-off) which such Lender may have.
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11.07. Costs, Expenses, and Taxes.
(a) The Borrower agrees to pay on demand (i) all costs and expenses of
Administrative Agent and BAS in connection with the preparation and negotiation
of all Loan Papers, including without limitation the reasonable fees and
out-of-pocket expenses of Special Counsel, (ii) all costs and expenses of
Administrative Agent and BAS in connection with any syndication of the Loans,
including without limitation the costs of all amendments to this Agreement and
the Loan Papers and the reasonable fees and out-of-pocket expenses of Special
Counsel, (iii) all costs and expenses (including reasonable attorneys' fees and
expenses) of Administrative Agent in connection with any interpretation, grant
and perfection of any Lien, modification, amendment, waiver, release of any Loan
Papers, restructuring or work-out and (iv) all costs and expenses (including
reasonable attorneys' fees and expenses) of Administrative Agent and each Lender
in connection with any collection of any portion of the Obligations or the
enforcement of any Loan Papers during the continuance of an Event of Default.
(b) In addition, the Borrower shall pay any and all stamp, debt, and other
Taxes ("Other Taxes") payable or determined to be payable in connection with any
payment hereunder (other than Taxes on the overall net income of Administrative
Agent or any Lender or franchise Taxes or Taxes on capital or capital receipts
of Administrative Agent or any Lender), or the execution, delivery, or
recordation of any Loan Papers, and agrees to save Administrative Agent and each
Lender harmless from and against any and all liabilities with respect to, or
resulting from any delay in paying or omission to pay any Taxes in accordance
with this Section 11.07, including any penalty, interest, and expenses relating
thereto. All payments by the Borrower or any Subsidiary of the Borrower under
any Loan Papers shall be made free and clear of and without deduction for any
present or future Taxes (other than Taxes on the overall net income of
Administrative Agent or any Lender of any nature now or hereafter existing,
levied, or withheld, or franchise Taxes or Taxes on capital or capital receipts
of Administrative Agent or any Lender), including all interest, penalties, or
similar liabilities relating thereto. If the Borrower shall be required by Law
to deduct or to withhold any Taxes from or in respect of any amount payable
hereunder (i) the amount so payable shall be increased to the extent necessary
so that, after making all required deductions and withholdings (including Taxes
on amounts payable to Administrative Agent or any Lender pursuant to this
sentence), Administrative Agent or any Lender 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 or withheld to the relevant taxing
authority in accordance with applicable Law.
(c) The Borrower will indemnify each Lender and the Administrative Agent
for the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 11.07 but excluding any Taxes or Other Taxes on the overall net income
of the Administrative Agent or any Lender) paid by such Lender or the
Administrative Agent (as the case may be) and all liabilities (including
penalties, additions to tax, interest and reasonable expenses) arising therefrom
or with respect thereto whether or not such Taxes or Other Taxes were correctly
or legally asserted, other than penalties, additions to tax, interest and
expenses arising as a result of gross negligence on the part of such Lender or
the Administrative Agent, provided, however, that the Borrower shall have no
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obligation to indemnify such Lender or the Administrative Agent (i) unless
notice has been given by such Lender or the Administrative Agent, as applicable,
in a time sufficient to afford the Borrower, in good faith, a reasonable
opportunity to contest such payment by such Lender or the Administrative Agent,
provided such opportunity to contest exists under Applicable Law, and (ii) until
such Lender or the Administrative Agent shall have delivered to the Borrower a
certificate setting forth in reasonable detail the basis of the Borrower's
obligation to indemnify such Lender or the Administrative Agent pursuant to this
Section 11.07. This indemnification shall be made within 30 days from the date
such Lender or the Administrative Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
will furnish to the Administrative Agent the original or a certified copy of a
receipt evidencing payment thereof. If no Taxes are payable in respect of any
payment hereunder, the Borrower will furnish to the Administrative Agent a
certificate from each appropriate taxing authority, or an opinion of counsel
acceptable to the Administrative Agent, in either case stating that such payment
is exempt from or not subject to Taxes, provided, however, that such certificate
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or opinion need only be given if: (i) the Borrower makes any payment from any
account located outside the United States, or (ii) the payment is made by a
payor that is not a United States Person. For purposes of this Section 11.07
the terms "United States" and "United States Person" shall have the meanings set
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forth in Section 7701 of the Code.
(e) Each Lender which is not a United States Person hereby agrees that:
(i) it shall, no later than the Closing Date (or, in the case of a
Lender which becomes a party hereto pursuant to Section 11.04 after the
Closing Date, the date upon which such Lender becomes a party hereto)
deliver to the Borrower through the Administrative Agent, with a copy to the
Administrative Agent:
(A) for any banking institution, if any lending office is located in
the United States of America, two (2) accurate and complete signed
originals of Internal Revenue Service Form 4224 or any successor
thereto ("Form 4224"),
---------
(B) for any banking institution, if any lending office is located
outside the United States of America, two (2) accurate and complete
signed originals of Internal Revenue Service Form 1001 or any
successor thereto ("Form 1001").
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(C) for any non-bank, two (2) accurate and complete signed originals of
Internal Revenue Service Form W-8 or any successor thereto
("Form W-8").
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in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the
account of such lending office or lending offices under this Agreement free
from withholding of United States Federal income tax;
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(ii) if at any time such Lender changes its lending office or lending
offices or selects an additional lending office it shall, at the same time
or reasonably promptly thereafter but only to the extent the forms
previously delivered by it hereunder are no longer effective, deliver to the
Borrower through the Administrative Agent, with a copy to the Administrative
Agent, in replacement for the forms previously delivered by it hereunder:
(A) if such changed or additional lending office is located in the
United States of America, two (2) accurate and complete signed
originals of Form 4224; or
(B) otherwise, two (2) accurate and complete signed originals of Form
1001 or W-8, as applicable,
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the account
of such changed or additional lending office under this Agreement free from
withholding of United States Federal income tax;
(iii) it shall, before or promptly after the occurrence of any event
(including the passing of time but excluding any event mentioned in clause
(ii) above) requiring a change in the most recent Form 4224, Form 1001 or
Form W-8 previously delivered by such Lender and if the delivery of the same
be lawful, deliver to the Borrower through the Administrative Agent with a
copy to the Administrative Agent, two (2) accurate and complete original
signed copies of Form 4224, Form 1001 or Form W-8 in replacement for the
forms previously delivered by such Lender; and
(iv) it shall, promptly upon the request of the Borrower to that
effect, deliver to the Borrower such other forms or similar documentation as
may be required from time to time by any applicable law, treaty, rule or
regulation in order to establish such Lender's tax status for withholding
purposes.
(f) Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 11.07 shall survive the payment in full of principal and interest
hereunder.
(g) Any Lender claiming any additional amounts payable pursuant to this
Section 11.07 shall use its reasonable best efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its lending office, if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which may
thereafter accrue and would not, in the sole judgment of such Lender, be
otherwise disadvantageous to such Lender.
(h) Each Lender (and the Administrative Agent with respect to payments to
the Administrative Agent for its own account) agrees that (i) it will take all
reasonable actions by all usual means to maintain all exemptions, if any,
available to it from United States withholding
100
<PAGE>
taxes (whether available by treaty, existing administrative waiver, by virtue of
the location of any Lender's lending office) and (ii) otherwise cooperate with
the Borrower to minimize amounts payable by the Borrower under this Section
11.07; provided, however, the Lenders and the Administrative Agent shall not be
-------- -------
obligated by reason of this Section 11.07(h) to contest the payment of any Taxes
or Other Taxes or to disclose any information regarding its tax affairs or tax
computations or reorder its tax or other affairs or tax or other planning.
11.08. Rate Provision. It is not the intention of any party to any Loan
Papers to make an agreement violative of the Laws of any applicable jurisdiction
relating to usury. In no event shall any Obligor or any other Person be
obligated to pay any amount in excess of the Maximum Amount. If Administrative
Agent or any Lender ever receives, collects or applies, as interest, any such
excess, such amount which would be excessive interest shall be deemed a partial
repayment of principal and treated hereunder as such; and if principal is paid
in full, any remaining excess shall be paid to the Borrower or the other Person
entitled thereto. In determining whether or not the interest paid or payable,
under any specific contingency, exceeds the Maximum Amount, each Obligor,
Administrative Agent and each Lender shall, to the maximum extent permitted
under Applicable Laws, (a) characterize any nonprincipal payment as an expense,
fee or premium rather than as interest, (b) exclude voluntary prepayments and
the effect thereof, and (c) amortize, prorate, allocate and spread in equal
parts, the total amount of interest throughout the entire contemplated term of
the Obligations so that the interest rate is uniform throughout the entire term
of the Obligations; provided that if the Obligations are paid and performed in
--------
full prior to the end of the full contemplated term thereof, and if the interest
received for the actual period of existence thereof exceeds the Maximum Amount,
Administrative Agent or Lenders, as appropriate, shall refund to the Borrower
the amount of such excess or credit the amount of such excess against the total
principal amount owing, and, in such event, neither Administrative Agent nor any
Lender shall be subject to any penalties provided by any Laws for contracting
for, charging or receiving interest in excess of the Maximum Amount. This
Section 11.08 shall control every other provision of all agreements among the
parties to the Loan Papers pertaining to the transactions contemplated by or
contained in the Loan Papers.
11.09. Severability. If any provision of any Loan Papers is held to be
illegal, invalid, or unenforceable under present or future Laws during the term
thereof, such provision shall be fully severable, the appropriate Loan Paper
shall be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part thereof, and the remaining provisions
thereof shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance therefrom.
Furthermore, in lieu of such illegal, invalid, or unenforceable provision there
shall be added automatically as a part of such Loan Paper a legal, valid, and
enforceable provision as similar in terms to the illegal, invalid, or
unenforceable provision as may be possible.
11.10. Exceptions to Covenants. No Obligor shall be deemed to be permitted
to take any action or to fail to take any action that is permitted as an
exception to any covenant in any Loan Papers, or that is within the permissible
limits of any covenant, if such action or omission would result in a violation
of any other covenant in any Loan Papers.
101
<PAGE>
11.11. Counterparts. This Agreement and the other Loan Papers may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument. In making proof of any such agreement,
it shall not be necessary to produce or account for any counterpart other than
one signed by the party against which enforcement is sought.
11.12. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND ALL OTHER LOAN PAPERS SHALL BE DEEMED TO BE CONTRACTS
MADE IN DALLAS, TEXAS, AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS) AND
THE UNITED STATES OF AMERICA. WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE
BORROWER AGREES THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS,
TEXAS, WILL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION HEREWITH. TO THE
MAXIMUM EXTENT PERMITTED BY LAW, THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH
OTHER PARTY TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT THAT IT MAY HAVE TO A
TRIAL BY JURY OF ANY DISPUTE (WHETHER A CLAIM IN TORT, CONTRACT, EQUITY, OR
OTHERWISE) ARISING UNDER OR RELATING TO THIS AGREEMENT, THE OTHER LOAN PAPERS,
OR ANY RELATED MATTERS, AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A
JUDGE SITTING WITHOUT A JURY.
(b) THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY LEGAL PROCESS UPON
IT. THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT ITS
ADDRESS DESIGNATED FOR NOTICE UNDER THIS AGREEMENT AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED FIVE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL.
NOTHING IN THIS SECTION 11.12 SHALL AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR
ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
11.13. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN PAPERS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
11.14. Amendment, Restatement, Extension, Renewal and Increase. This
Agreement is a renewal and amendment and restatement of the Original Credit
Agreement, and, as such, except for the "Obligation" as
102
<PAGE>
defined in the Original Credit Agreement (which shall survive, be renewed and
restated by the terms of this Agreement), all other terms and provisions
supersede in their entirety the Original Credit Agreement. All subordination
agreements, security agreements, pledge agreements, mortgages, deeds of trust
and other documents and instruments granting any security interest or assigning
any interest in any assets of the Borrower or any Subsidiary to secure the
Obligation executed and delivered in connection with this Agreement that restate
any previously granted interest shall supersede any subordination agreements,
security agreements, pledge agreements, mortgages, deeds of trust and other
documents and instruments granting any security interest or assigning any
interest in any assets of the Borrower or any Subsidiary that were executed and
delivered in connection with the Original Credit Agreement (the "Original
Security Documents"), except for the Liens created under the Original Security
Documents which shall remain valid, binding and enforceable Liens against the
Borrower, the Subsidiaries and each of the other Persons granting any such
Liens. All other Original Security Documents shall continue to secure the
Obligations as herein defined, and shall be in full force and effect.
========================================================
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
========================================================
103
<PAGE>
IN WITNESS WHEREOF, this Fifth Amended and Restated Credit Agreement is
executed as of the date first set forth above.
THE BORROWER:
PINNACLE TOWERS INC.
_____________________________________
By: _________________________________
Its: ________________________________
104
<PAGE>
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Administrative
Agent
________________________________________
By: Roselyn M. Drake
Its: Principal
LENDERS:
Term Loan A
Specified Percentage: 7.7777778% BANK OF AMERICA, N.A., individually as
a Lender
Term Loan B
Specified Percentage: 21.8181818%
________________________________________
By: Roselyn M. Drake
Revolver Its: Principal
Specified Percentage: 3.2490079%
Total
Specified Percentage: 11.0638298%
Address:
Bank of America Plaza
901 Main Street, 64th Floor
Dallas, Texas 75202
Attn.: Roselyn M. Drake
Telephone: (214) 209-0988
Telecopy: (214) 209-9390
105
<PAGE>
Term Loan A
Specified Percentage: 7.7777778% BANKBOSTON, N.A.
Term Loan B
Specified Percentage: 7.2727273%
__________________________________
By: ______________________________
Revolver Its:______________________________
Specified Percentage: 8.1597222%
Total
Specified Percentage: 7.6595745%
Address:
100 Federal Street, MA 01-08-08
Boston, Massachusetts 02110
Attn.: Lenny L. Mason
Telephone: (617) 434-6489
Telecopy: (617) 434-3401
106
<PAGE>
Term Loan A
Specified Percentage: 7.7777778% BANKERS TRUST COMPANY
Term Loan B
Specified Percentage: 7.2727273%
_______________________________________
By: ___________________________________
Revolver Its: __________________________________
Specified Percentage: 8.1597222%
Total
Specified Percentage: 7.6595745%
Address:
130 Liberty Street
New York, New York 10006
Attn.: James Cullen
Telephone: (212) 250-7343
Telecopy: (212) 250-7351
107
<PAGE>
Term Loan A
Specified Percentage: 6.9444444% SOCIETE GENERALE
Term Loan B
Specified Percentage: 7.2727273%
------------------------------
By: --------------------------
Revolver Its:--------------------------
Specified Percentage: 7.2854663%
Total
Specified Percentage: 7.0212766%
Address:
1221 Avenue of the Americas
New York, New York 10020
Attn.: John Sadik-Khan
Telephone: (212) 278-6873
Telecopy: (212) 267-6240
108
<PAGE>
Term Loan A
Specified Percentage: 7.7777778% UNION BANK OF CALIFORNIA, N.A.
Term Loan B
Specified Percentage: 4.5454545%
----------------------------------
By: ------------------------------
Revolver Its:------------------------------
Specified Percentage: 8.1597222%
Total
Specified Percentage: 7.0212766%
Address:
445 S. Figueroa Street, 16th Floor
Los Angeles, California 90071
Attn.: Peter Connoy
Telephone: (213) 236-6803
Telecopy: (213) 236-5747
109
<PAGE>
Term Loan A
Specified Percentage: 7.7777778% KEY CORPORATE CAPITAL INC.
Term Loan B
Specified Percentage: 4.5454545%
--------------------------------
By: ----------------------------
Revolver Its:----------------------------
Specified Percentage: 8.1597222%
Total
Specified Percentage: 7.0212766%
Address:
127 Public Square
Mail Code: OH-01-27-0602
Cleveland, Ohio 44114
Attn.: Jason Weaver
Telephone: (216) 689-4457
Telecopy: (216) 689-4666
110
<PAGE>
Term Loan A
Specified Percentage: 6.9444444% COBANK, ACB
Term Loan B
Specified Percentage: 0.0000000%
----------------------------
By: ------------------------
Revolver Its:------------------------
Specified Percentage: 7.2854663%
Total
Specified Percentage: 5.3191489%
Address:
5500 South Quebec Street
Englewood, Colorado 80111
Attn.: Terry Fountain
Telephone: (303) 694-5864
Telecopy: (303) 224-2553
111
<PAGE>
Term Loan A
Specified Percentage: 6.9444444% CREDIT LYONNAIS NEW YORK BRANCH
Term Loan B
Specified Percentage: 0.0000000%
--------------------------------------
By: ----------------------------------
Revolver Its:----------------------------------
Specified Percentage: 7.2854663%
Total
Specified Percentage: 5.3191489%
Address:
1301 Avenue of the Americas
New York, New York 10019
Attn.: Patrick McCarthy
Telephone: (212) 261-7263
Telecopy: (212) 261-3288
112
<PAGE>
Term Loan A
Specified Percentage: 6.9444444% THE BANK OF NOVA SCOTIA
Term Loan B
Specified Percentage: 0.0000000%
------------------------------
By: --------------------------
Revolver Its:--------------------------
Specified Percentage: 7.2854663%
Total
Specified Percentage: 5.3191489%
Address:
One Liberty Plaza
New York, New York 10006
Attn.: Stuart Malakoff
Telephone: (212) 225-5639
Telecopy: (212) 225-5090
113
<PAGE>
Term Loan A
Specified Percentage: 5.5555556% DRESDNER BANK AG NEW YORK & GRAND
CAYMAN BRANCHES
Term Loan B
Specified Percentage: 0.0000000%
--------------------------------------
By: ----------------------------------
Revolver Its:----------------------------------
Specified Percentage: 5.8283730%
Total
Specified Percentage: 4.2553191%
Address:
75 Wall Street
New York, New York 10005
Attn.: William E. Lambert
Telephone: (212) 429-2459
Telecopy: (212) 429-4181
114
<PAGE>
Term Loan A
Specified Percentage: 4.1666667% MERCANTILE BANK NATIONAL
ASSOCIATION
Term Loan B
Specified Percentage: 0.0000000%
---------------------------------------
By: -----------------------------------
Revolver Its:-----------------------------------
Specified Percentage: 4.3712799%
Total
Specified Percentage: 3.1914894%
Address:
One Merchantile Center
7th & Washington, 12-3
St. Louis, Missouri 63101
Attn.: Michael J. Homeyer
Telephone: (314) 418-8129
Telecopy: (314) 418-8292
115
<PAGE>
Term Loan A
Specified Percentage: 4.1666667% U.S. BANK NATIONAL ASSOCIATION
Term Loan B
Specified Percentage: 0.0000000%
--------------------------------------
By: ----------------------------------
Revolver Its:----------------------------------
Specified Percentage: 4.3712798%
Total
Specified Percentage: 3.1914894%
Address:
1420 Fifth Avenue, 10th Floor
Seattle, Washington 98101
Attn.: Thomas G. Gunder
Telephone: (206) 344-5694
Telecopy: (206) 344-2331
116
<PAGE>
Term Loan A
Specified Percentage: 4.1666667% CREDIT LOCAL DE FRANCE - NEW YORK
AGENCY
Term Loan B
Specified Percentage: 0.0000000%
--------------------------------------
By: ----------------------------------
Revolver Its:----------------------------------
Specified Percentage: 4.3712798%
Total
Specified Percentage: 3.1914894%
Address:
450 Park Avenue, 3rd Floor
New York, New York 10022
Attn.: Michael Wiskind
Telephone: (212) 515-7031
Telecopy: (212) 753-5522
117
<PAGE>
Term Loan A
Specified Percentage: 4.1666667% IBM CREDIT CORPORATION
Term Loan B
Specified Percentage: 0.0000000%
--------------------------------------
By: ----------------------------------
Revolver Its:----------------------------------
Specified Percentage: 4.3712798%
Total
Specified Percentage: 3.1914894%
Address:
North Castle Drove
Armonk, New York 10504
Attn.: Stephen Santini
Telephone: (914) 765-6605
Telecopy: (914) 765-6271
118
<PAGE>
Term Loan A
Specified Percentage: 4.1666667% THE CIT GROUP/EQUIPMENT FINANCING,
INC.
Term Loan B
Specified Percentage: 0.0000000%
--------------------------------------
By: ----------------------------------
Revolver Its:----------------------------------
Specified Percentage: 4.3712798%
Total
Specified Percentage: 3.1914894%
Address:
900 Ashwood Parkway, Suite 600
Atlanta, Georgia 30338
Attn.: Russ Hanley
Telephone: (770) 551-7801
Telecopy: (770) 206-9295
119
<PAGE>
Term Loan A
Specified Percentage: 2.7777778% ALLFIRST BANK
Term Loan B
Specified Percentage: 0.0000000%
--------------------------------------
By: ----------------------------------
Revolver Its:----------------------------------
Specified Percentage: 2.9141865%
Total
Specified Percentage: 2.1276596%
Address:
25 S. Charles Street
18th Floor, M/C 101-511
Baltimore, Maryland 21202
Attn.: Wendy Andrus
Telephone: (410) 545-2044
Telecopy: (410) 244-4920
120
<PAGE>
Term Loan A
Specified Percentage: 2.7777778% CITY NATIONAL BANK
Term Loan B
Specified Percentage: 0.0000000%
--------------------------------------
By: ----------------------------------
Revolver Its:----------------------------------
Specified Percentage: 2.9141865%
Total
Specified Percentage: 2.1276596%
Address:
400 North Roxbury, 3rd Floor
Beverly Hills, California 90210
Attn.: Patrick M. Drum
Telephone: (310) 888-6526
Telecopy: (310) 888-6564
121
<PAGE>
Term Loan A
Specified Percentage: 1.3888889% RAYMOND JAMES BANK, FSB
Term Loan B
Specified Percentage: 0.0000000%
---------------------------------------
By: -----------------------------------
Revolver Its:-----------------------------------
Specified Percentage: 1.4570933%
Total
Specified Percentage: 1.0638298%
Address:
710 Carillon Parkway
St. Petersburg, Florida 33716
Attn.: John D. Hallstrom
Telephone: (727) 573-3800 x4847
Telecopy: (727) 573-8377
122
<PAGE>
Term Loan B
Specified Percentage: 13.6363636% HELLER FINANCIAL, INC.
Total
Specified Percentage: 3.1914894%
--------------------------------------
By: ----------------------------------
Its:----------------------------------
Address:
500 W. Monroe Street
Chicago,Illinois 60661
Attn.: Sheila Weimer
Telephone: (312) 441-7947
Telecopy: (312) 441-7357
123
<PAGE>
Term Loan B
Specified Percentage: 5.4545455% PILGRIM PRIME RATE TRUST
By: Pilgrim Investment, Inc., as its
investment manager
Total
Specified Percentage: 1.2765957%
--------------------------------------
By: ----------------------------------
Its:----------------------------------
Address:
Two Renaissance Tower
40 North Central Avenue, Suite 1200
Pheonix, Arizona 85004-4424
Attn.: Melonie Clark
Telephone: (602) 417-8268
Telecopy: (602) 417-8321
124
<PAGE>
Term Loan B
Specified Percentage: 9.0909091% PPM SPYGLASS FUNDING TRUST
Total
Specified Percentage: 2.1276596%
---------------------------------------
By: -----------------------------------
Its:-----------------------------------
Address:
c/o Banc of America Securities LLC
100 North Tryon Street
NC1-007-06-07
Charlotte, North Carolina 28255
Attn.: Kelly C. Walker
Telephone: (704) 388-8943
Telecopy: (704) 388-0648
125
<PAGE>
Term Loan B
Specified Percentage: 11.8181818% MORGAN STANLEY DEAN WITTER PRIME INCOME
TRUST
Total
Specified Percentage: 2.7659574%
---------------------------------------
By: -----------------------------------
Its:-----------------------------------
Address:
c/o Morgan Stanley Dean Witter Advisors Inc.
Two World Trade Center, 72nd Floor
New York, New York 10048
Attn.: Kevin Egan
Telephone: (212) 392-5845
Telecopy: (212) 392-5345
126
<PAGE>
Term Loan B
Specified Percentage: 2.7272727% KZH ING-1 LLC
Total
Specified Percentage: 0.6382979%
------------------------------------
By: --------------------------------
Its:--------------------------------
Address:
c/o The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attn.: Virginia Conway
Telephone: (212) 946-7575
Telecopy: (212) 946-7776
127
<PAGE>
Term Loan B
Specified Percentage: 4.5454545% KZH ING-2 LLC
Total
Specified Percentage: 1.0638298%
--------------------------------------
By:-----------------------------------
Its:----------------------------------
Address:
c/o The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attn.: Virginia Conway
Telephone: (212) 946-7575
Telecopy: (212) 946-7776
128
<PAGE>
EXHIBIT 10.3
SUBSCRIPTION AGREEMENT
This Subscription Agreement is entered into as of August 31, 1999
between Pinnacle Towers Inc., a Delaware corporation (the "Purchaser"), and
---------
Pinnacle Towers III Inc., a Florida corporation (the "Company").
-------
The Company has created and authorized the issuance of shares of its
Series A Convertible Preferred Stock, par value $0.001 per share (the "Series A
--------
Preferred").
- ---------
The Company has agreed to issue and sell to the Purchaser, and the
Purchaser has agreed to subscribe for and purchase, certain shares of the Series
A Preferred.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Purchaser
agree as follows:
1. Subscription, Purchase and Sale. The Purchaser hereby subscribes
-------------------------------
for and purchases, and the Company hereby issues and sells to the Purchaser, 49
shares of the Series A Preferred, for an aggregate purchase price of
$49,000,000.
2. Payment of Subscription Price. The Purchaser is paying the
-----------------------------
aggregate purchase price for such 49 shares of Series A Preferred on the date of
this Subscription Agreement by wire transfer of immediately available funds as
directed by the Company.
3. Purchaser's Representations. The Purchaser represents and
---------------------------
warrants that it is acquiring the Series A Preferred being purchased by it
hereunder solely for its own account, for investment purposes, and that the
Purchaser is an accredited investor, as that term is defined in the rules and
regulations promulgated under the Securities Act of 1933, as amended.
4. Company's Representations. The Company represents and warrants to
-------------------------
the Purchaser that (a) the Company is a corporation existing and with active
status under the laws of the State of Florida, (b) the Company has the legal
power and capacity to enter into this Agreement and issue the 49shares of the
Series A Preferred to be issued pursuant to this Agreement, and (c) when issued
in accordance with this Agreement, such 49 shares of the Series A Preferred will
be duly authorized, validly issued, fully paid and nonassessable.
5. Miscellaneous. This Subscription Agreement may be executed in two
-------------
or more counterparts, no one of which need contain the signatures of both
parties hereto.
* * * *
<PAGE>
This Subscription Agreement is hereby executed and delivered by the
parties as of the date first written above.
PINNACLE TOWERS INC.
By: _________________________________
Its: _________________________________
PINNACLE TOWERS III INC.
By: ______________________________________
Steven R. Day, Vice President, Chief
Financial Officer and Secretary
<PAGE>
Exhibit 10.4
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
PINNACLE TOWERS III INC.
In accordance with Section 607.1007 of the Florida Business Corporation Act
("FBCA"), the Articles of Incorporation of Pinnacle Towers III Inc., a Florida
corporation (the "Corporation"), are hereby amended and restated to read in
their entirety as follows:
ARTICLE I. NAME
----------------
The name of the Corporation is:
PINNACLE TOWERS III INC.
ARTICLE II. ADDRESS
--------------------
The mailing address of the Corporation is:
1549 Ringling Boulevard
Sarasota, Florida 34236
ARTICLE III. COMMENCEMENT OF EXISTENCE
---------------------------------------
The existence of the Corporation will commence at 12:01 A.M., the date of
filing of these Articles of Incorporation.
ARTICLE IV. PURPOSE
--------------------
The Corporation is organized to engage in any activity or business
permitted under the laws of the United States and Florida.
ARTICLE V. AUTHORIZED CAPITAL
------------------------------
A. AUTHORIZED SHARES. The total number of shares of capital stock that
-----------------
the Corporation has authority to issue is:
1. 5,000,000 shares of Voting Common Stock, par value $0.001 per
share (the "Voting Common");
-------------
2. 5,000,000 shares of Nonvoting Common Stock, par value $0.001 per
share (the "Nonvoting Common"); and
----------------
3. 1,000,000 shares of Preferred Stock, par value $0.001 per share
(the "Preferred Stock").
---------------
<PAGE>
B. COMMON STOCK. The Voting Common and the Nonvoting Common are
------------
collectively referred to as the "Common Stock". The shares may be issued from
------------
time to time as authorized by the Board of Directors of the Corporation without
further approval of the shareholders of the Corporation, except as otherwise
provided herein or to the extent that such approval is required by statute, law,
rule or regulation. Shares of Common Stock will have the rights, preferences
and limitations set forth below.
1. Voting Rights. Except as otherwise provided in this Article V or
-------------
as otherwise required by applicable law, (a) holders of Voting Common shall be
entitled to one vote per share on all matters to be voted on by the shareholders
of the Corporation, and (b) holders of Nonvoting Common shall have no right to
vote on any matter to be voted on by the shareholders of the Corporation, except
as otherwise required by statute, law, rule or regulation.
2. Dividends. As and when dividends are declared or paid thereon,
---------
whether in cash, property or securities of the Corporation, the holders of
Common Stock shall be entitled to participate in such dividends ratably on a per
share basis; provided, that (i) if dividends are declared that are payable in
--------
shares of Voting Common or Nonvoting Common then dividends shall be payable at
the same rate on each such class of Common Stock and the dividends payable in
shares of Voting Common shall be payable to holders of Voting Common, and
dividends payable in shares of Nonvoting Common shall be payable to holders of
Nonvoting Common, and (ii) if the dividends consist of other voting securities
of the Corporation, then the Corporation shall make available to each holder of
Nonvoting Common, at such holder's request, dividends consisting of non-voting
securities of the Corporation which are otherwise identical to such other voting
securities.
3. Liquidation. The holders of Common Stock shall be entitled to
-----------
participate ratably on a per share basis in all distributions to the holders of
Common Stock in any liquidation, dissolution or winding up of the Corporation.
4 Stock Splits And Stock Dividends. If there are any shares of
--------------------------------
Common Stock issued and outstanding, the Corporation will not in any manner
subdivide (by stock split, stock dividend or otherwise) or combine (by reverse
stock split or otherwise) the outstanding shares of Common Stock of one class
unless the outstanding Common Stock of all the other classes will be
proportionately subdivided or combined. All such subdivisions will be payable
only in Voting Common only to the holders of Voting Common and in Nonvoting
Common only to the holders of Nonvoting Common.
2
<PAGE>
5. Percentage Limits. No share of Common Stock will be sold or
-----------------
otherwise transferred (with or without consideration) to any individual if such
transfer would result in the ownership by such individual in combination with
four or fewer individuals (within the meaning of Section 542(a)(2) of the
Internal Revenue Code of 1986 (the "Code")) of more than fifty percent of the
aggregate value of all shares of all classes of capital stock of the Corporation
(the "Percentage Ownership Limit").
--------------------------
6. Distributions. Subject to any right of any holder of Preferred
-------------
Stock to receive any distribution whether in cash, property or securities and
whether by dividend, liquidation, distribution or otherwise ("Distribution"),
the holders of Common Stock will be entitled to receive any Distribution ratably
among such holders on the basis of the number of shares of Common Stock held by
such holders.
C. PREFERRED STOCK.
---------------
1. Generally. Shares of Preferred Stock may be issued from time to
---------
time in one or more series. The Board of Directors of the Corporation without
further approval by the shareholders of the Corporation is hereby expressly
authorized to determine and alter all rights, preferences, privileges,
qualifications, limitations and restrictions of any such series (including,
without limitation, voting rights and the limitation and exclusion of voting
rights) of Preferred Stock and the number of shares constituting any such series
and the designation thereof, and to increase or decrease (but not below the
number of shares of such series then outstanding) the number of shares of any
series after the issuance of shares of that series. If the number of shares of
any series is so decreased, then the shares constituting such reduction will
resume the status that such shares had prior to the adoption of the resolution
originally fixing the number of shares of such series. No share of any series
of Preferred Stock will be sold or otherwise transferred (with or without
consideration) to any individual if such transfer would result in a violation of
the Percentage Ownership Limit.
2. Voting Rights. The holders of shares of Preferred Stock shall
-------------
not be entitled to vote except unless established by the Board of Directors or
otherwise required by statute, law, rule or regulation.
3. Stock to be Reserved. The Corporation will at all times reserve
--------------------
and keep available out of its authorized Preferred Stock, solely for the purpose
of paying dividends, such number of shares of Preferred Stock as shall be
required to satisfy only dividend requirements.
4. Retirement of Shares. Shares of Preferred Stock that are
--------------------
redeemed by the Corporation shall be permanently retired and shall not under any
circumstances be reissued.
3
<PAGE>
5. Series A Convertible Preferred Stock.
------------------------------------
5(a). Designation and Number of Shares. The Corporation is hereby
--------------------------------
authorized to issue from time to time a total of 100 shares of Preferred Stock
to be designated Series A Convertible Preferred Stock, with $0.001 par value per
share, having the preferences, qualification, rights and privileges set forth
herein (the "Series A Preferred"). Other capitalized terms used and not
------------------
otherwise defined in this Section 5 have the meanings set forth in Section 5(j).
5(b). Rank.
----
(i) Priority. The Series A Preferred will rank with respect
--------
to dividend rights and rights on liquidation, winding up and dissolution: (a)
senior to the Common Stock and all other Junior Securities; (b) pari passu with
all Pari Passu Securities; and (c) junior to all Senior Securities.
(ii) Distributions. Any distribution made pursuant to dividend
-------------
rights or rights on liquidation, winding up, or dissolution will be made to the
holders of the Corporation's securities in accordance with the relative
priorities set forth above, and any such distribution will fully satisfy the
Corporation's obligations to the holders of a senior security prior to any
distribution to the holders of any Junior Security.
5(c). Dividends.
---------
(i). General Obligation. When and as declared by the
------------------
Corporation's Board of Directors and to the extent permitted under the FBCA of
the State of Florida, and subject to the terms of any Senior Securities, the
Corporation will pay preferential dividends to the holders of the Series A
Preferred as provided in this Section 5(c)(i). Dividends on each share of the
Series A Preferred (a "Share") will accrue on a daily basis at the rate of 16.0%
-----
per annum of the sum of the Liquidation Value thereof from time to time plus all
accumulated and unpaid dividends thereon from and including the date of issuance
of such Share to and including the first to occur of: (a) the date on which the
Liquidation Value of such Share (plus all accrued and unpaid dividends thereon)
is paid to the holder thereof in connection with the liquidation of the
Corporation; or (b) the date on which such Share is acquired by the Corporation.
Such dividends will accrue whether or not they have been declared and whether or
not there are profits, surplus or other funds of the Corporation legally
available for the payment of dividends. The date on which the Corporation
initially issues any Share will be deemed to be its "date of issuance"
regardless of the number of times transfer of such Share is made on the stock
records maintained by or for the Corporation and regardless of the number of
certificates which may be issued to evidence such Share.
4
<PAGE>
(ii) Dividend Reference Dates. To the extent not paid on
------------------------
March 31, June 30, September 30 or December 31 of any year, beginning with the
first such date after the date of issuance of the Share in question (each a
"Dividend Reference Date"), all dividends which have accrued on each Share
-----------------------
outstanding during the three-month period (or other period, in the case of the
first Dividend Reference Date after the date of issuance of such Share) ending
upon each such Dividend Reference Date will be accumulated and will remain
accumulated and accrue dividends with respect to such Share until paid to the
holder thereof.
(iii) Distribution of Partial Dividend Payments. If at any time
-----------------------------------------
the Corporation pays less than the total amount of dividends then accrued with
respect to the Series A Preferred, such payment will be distributed pro rata
among the holders thereof based upon the rank and number of Shares held by each
such holder.
5(d). Liquidation. Subject to the terms of any Senior Securities,
-----------
upon any liquidation, dissolution or winding up of the Corporation (whether
voluntary or involuntary), each holder of Series A Preferred will be entitled to
be paid, after any required distribution or payment is made upon any Senior
Securities, before any distribution or payment is made upon any Junior
Securities, and on a pari passu basis (pro rata according to the relative
amounts to be paid) with any required distribution or payment to be made upon
any Pari Passu Securities, an amount in cash equal to the aggregate Liquidation
Value of all Shares held by such holder (plus all accrued and unpaid dividends
thereon), and the holders of Series A Preferred will not be entitled to any
further payment. If upon any such liquidation, dissolution or winding up of the
Corporation the Corporation's assets to be distributed among the holders of the
Series A Preferred and any Pari Passu Securities are insufficient to permit
payment to such holders of the aggregate amount which they are entitled to be
paid under this Section 5(d), then the entire assets available to be distributed
to the Corporation's shareholders will be distributed pro rata among the holders
of Series A Preferred and any Pari Passu Securities based upon the aggregate
Liquidation Value (plus all accrued and unpaid dividends) of the Series A
Preferred, and the comparable amount payable to the holders of any Pari Passu
Securities, held by each such holder. Neither the consolidation or merger of
the Corporation into or with any other entity or entities (whether or not the
Corporation is the surviving entity), nor the sale or transfer by the
Corporation of all or any part of its assets, nor the reduction of the capital
stock of the Corporation nor any other form of recapitalization or
reorganization affecting the Corporation will be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this Section
5(d).
5(e). Approval by Series A Preferred. So long as any Series A
------------------------------
Preferred remains outstanding, without the prior written consent of the holders
of a majority of the outstanding shares of Series A Preferred, the Corporation
will not,
5
<PAGE>
nor will it permit any Subsidiary to (i) issue any Senior Securities, Pari Passu
Securities or Junior Securities, other than to issue up to 5,000 additional
shares of nonvoting Common Stock in order for it, in the judgement of any
officer of the Corporation, to obtain or maintain the status of the Corporation
as a Real Estate Investment Trust under Section 856-860 of the Code, (ii)
redeem, purchase or otherwise acquire directly or indirectly any Pari Passu
Securities or Junior Securities, (iii) sell, transfer, assign or dispose of or
lease to one or more related parties in one or more related series of
transactions or take any similar action with respect to any substantial portion
of the Corporation's assets, or make any material acquisition of assets other
than pursuant to that certain Agreement for Purchase and Sale effective as of
August 31, 1999, between the Corporation and Pinnacle Towers Inc., a Delaware
corporation, (iv) Incur in excess of $100,000 in Debt for borrowed money, (v)
enter into a transaction with an Affiliate of the Corporation involving
consideration in excess of $10,000 (vi) directly or indirectly pay or declare
any dividend or make any distribution upon any Pari Passu Securities or any
Junior Securities, or (vii) Incur or suffer to exist any Lien on or with respect
to any property or assets now owned or hereafter acquired to secure any Debt.
5(f). Voting Rights. Except as otherwise may be required herein or
-------------
by the FBCA, the holders of the Series A Preferred will not be entitled to
notice of any meeting of the shareholders of the Corporation and will not be
entitled to vote, together with any other shareholders or as a separate class,
on any matter to be voted on by the Corporation's shareholders.
5(g). Conversion Rights. Each share of Series A Preferred shall be
-----------------
convertible by the holder thereof at any time into a number of shares of voting
or nonvoting Common Stock or in any combination thereof as selected by the
holder equal to the Liquidation Value of such share plus, without duplication,
all accrued and unpaid dividends thereon divided by 25, with such number being
subject to such adjustments to account for any increase or decrease in the
number of outstanding shares of Common Stock that results from a stock split,
stock dividend, combination of shares, merger or other event affecting the
number of outstanding shares of Common Stock (the "Conversion Shares"), which
conversion shall be effective no later than one business day after a notice of
conversion is delivered by the holder thereof to the Corporation.
6
<PAGE>
5(h). Registration of Transfer. The Corporation will keep at its
------------------------
principal office a register for the registration of Series A Preferred. Upon
the surrender of any certificate representing Series A Preferred at such place,
the Corporation will, at the request of the record holder of such certificate,
execute and deliver (at the Corporation's expense) a new certificate or
certificates in exchange therefor representing in the aggregate the number of
Shares represented by the surrendered certificate. Each such new certificate
will be registered in such name and will represent such number of Shares as is
requested by the holder of the surrendered certificate and will be substantially
identical in form to the surrendered certificate, and dividends will accrue on
the Series A Preferred represented by such new certificate from the date to
which dividends have been fully paid on such Series A Preferred represented by
the surrendered certificate.
5(i). Replacement. Upon receipt of evidence reasonably satisfactory
-----------
to the Corporation (provided that an affidavit of the registered holder will be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing Share(s), and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the holder is a financial institution or other
institutional investor its own agreement will be satisfactory), or, in the case
of any such mutilation upon surrender of such certificate, the Corporation will
(at its expense) execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of Shares of such Series
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate, and dividends
will accrue on the Series A Preferred represented by such new certificate from
the date to which dividends have been fully paid on such lost, stolen, destroyed
or mutilated certificate.
5(j). Definitions. As used herein, the following terms have the
-----------
following respective meanings:
"Affiliate" means any Person that directly or indirectly controls, is
---------
controlled by, or is under common control with the Corporation. For
purposes of this definition, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of the Corporation, whether through ownership of voting
securities, by contract or otherwise.
"Capital Lease Obligation" of the Corporation means the obligation to
------------------------
pay rent or other payment amounts under a lease of (or other Debt
arrangements conveying the right to use) real or personal property of the
Corporation which is required to be classified and accounted for as a
capital lease or a liability on the face of a balance sheet of the
Corporation in accordance with generally accepted accounting principles.
The stated
7
<PAGE>
maturity of such obligation shall be the date of the last payment of rent
or any other amount due under such lease prior to the first date upon which
such lease may be terminated by the lessee without payment of a penalty.
The principal amount of such obligation shall be the capitalized amount
thereof that would appear on the face of a balance sheet of the Corporation
in accordance with generally accepted accounting principles.
"Debt" means (without duplication), with respect to the Corporation,
----
whether recourse is to all or a portion of the assets of the Corporation
and whether or not contingent, (i) every obligation of the Corporation for
money borrowed, (ii) every obligation of the Corporation evidenced by
bonds, debentures, notes or other similar instruments, including
obligations Incurred in connection with the acquisition of property, assets
or businesses, (iii) every reimbursement obligation of the Corporation with
respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of the Corporation, (iv) every obligation of the
Corporation issued or assumed as the deferred purchase price of property or
services (including securities repurchase agreements but excluding trade
accounts payable or accrued liabilities arising in the ordinary course of
business which are not overdue or which are being contested in good faith),
(v) every Capital Lease Obligation of the Corporation, (vi) all Receivables
Sales of the Corporation, together with any obligation of the Corporation
to pay any discount, interest, fees, indemnities, penalties, recourse,
expenses or other amounts in connection therewith, (vii) every obligation
under Interest Rate or Currency Protection Agreements of the Corporation
and (viii) every obligation of the type referred to in clauses (i) through
(vii) of another Person and all dividends of another Person the payment of
which, in either case, the Corporation has Guaranteed or is responsible or
liable, directly or indirectly, as obligor, Guarantor or otherwise. The
"amount" or "principal amount" of Debt at any time of determination as used
herein represented by (a) any contingent Debt, shall be the maximum
principal amount hereof, (b) any Debt issued at a price that is less than
the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally
accepted accounting principals, and (c) any Receivables Sale, shall be the
amount, if any, in connection with such Receivables Sale for which there is
recourse to the seller or any of its Subsidiaries.
"Guarantee" of the Corporation means any obligation, contingent or
---------
otherwise, of the Corporation guaranteeing, or having the economic effect
of guaranteeing, any Debt of any other Person (the "Primary Obligor") in
--------------
any manner, whether directly or indirectly, and including, without
limitation, any obligation of such Person, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or to
purchase (or to advance or supply funds for the purchase of) any security
for the payment of such Debt,
8
<PAGE>
(ii) to purchase property, securities or services for the purpose of
assuring the holder of such Debt of the payment of such Debt, or (iii) to
maintain working capital, equity or other financial statement condition or
liquidity of the Primary Obligor so as to enable the Primary Obligor to pay
such Debt (and "Guaranteed", "Guaranteeing" and "Guarantor" shall have the
meanings correlative to the foregoing); provided, however, that the
Guaranty by the Corporation shall not include endorsements by the
Corporation for collection or deposit, in either case, in the ordinary
course of business.
"Incur" means, with respect to any Debt or other obligation of the
-----
Corporation, to create, issue, incur (by conversion, exchange or
otherwise), assume, Guarantee or otherwise become liable in respect of such
Debt or other obligation or the recording, as required pursuant to
generally accepted accounting principles or otherwise, of any such Debt or
other obligation on the balance sheet of the Corporation (and "Incurrence",
"Incurred", "Incurable" and "Incurring" shall have meanings correlative to
the foregoing); provided, however, that a change in generally accepted
accounting principles that results in an obligation of the Corporation that
exists at such time becoming Debt shall not be deemed an Incurrence of such
Debt.
"Interest Rate or Currency Protection Agreement" of the Corporation
----------------------------------------------
means any forward contract, futures contract, swap, option or other
financial agreement or arrangement (including, without limitation, caps,
floors, collars and similar agreements) relating to, or the value of which
is dependent upon, interest rates or currency exchange rates or indices.
"Junior Securities" means any capital stock or other equity securities
-----------------
of the Corporation, except for the Series A Preferred, Senior Securities
and Pari Passu Securities.
"Lien" means, with respect to any property or assets, any mortgage or
----
deed of trust, pledge, hypothecation, assignment, Receivables Sale, deposit
arrangement, security interest, lien, charge, easement (other than any
easement not materially impairing usefulness or marketability),
encumbrance, preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever on or with
respect to such property or assets (including, without limitation, any
conditional sale or other title retention agreement having substantially
the same economic effect as any of the foregoing).
"Liquidation Value" means, in relation to any Share, $1,000,000.
-----------------
"Pari Passu Securities" means shares of any series of preferred stock
---------------------
of the Corporation created and authorized in accordance with the Articles
of
9
<PAGE>
Incorporation of the Corporation, if the terms of such series expressly
provide that shares of such series will be "Pari Passu Securities" with
respect to the Series A Preferred.
"Person" means any individual, corporation, partnership, joint
------
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Receivables" means receivables, chattel paper, instruments, documents
-----------
or intangibles evidencing or relating to the right to payment of money.
"Receivables Sale" of the Corporation means any sale of Receivables of
----------------
the Corporation (pursuant to a purchase facility or otherwise), other than
in connection with a disposition of the business operations of the
Corporation relating thereto or a disposition of defaulted Receivables for
purpose of collection and not as a financing arrangement.
"Senior Securities" means shares of any series of preferred stock of
-----------------
the Corporation created and authorized in accordance with the Articles of
Incorporation of the Corporation, if the terms of such other series
expressly provide that shares of such series will be "Senior Securities"
with respect to the Series A Preferred.
"Subsidiary" means any corporation of which the shares of outstanding
----------
capital stock possessing the voting power (under ordinary circumstances) in
electing the board of directors are, at the time as of which any
determination is being made, owned by the Corporation either directly or
indirectly through Subsidiaries.
5(k). Amendment and Waiver. No amendment, modification or waiver
--------------------
will be binding or effective with respect to any provision of any of Sections
5(a) through 5(k) hereof without the prior written consent of the holders of a
majority of the Series A Preferred outstanding at the time such action is taken;
provided that no change in the terms hereof may be accomplished by merger or
consolidation of the Corporation with another corporation or entity unless the
Corporation has obtained the prior written consent of the holders of a majority
of the Series A Preferred then outstanding.
10
<PAGE>
D. TRANSFER OF STOCK.
-----------------
1. Transfer Restrictions. Inasmuch as it is the intention of the
---------------------
Corporation and its shareholders that the Corporation satisfy the provisions of
the Code relating to qualification of the Corporation as a "real estate
investment trust," particularly Section 856(a)(5) of the Code, no holder of any
share of any capital stock may transfer any such share or any interest therein
to any other individual, firm, corporation, entity or other person if, as a
result of such transfer, either (i) beneficial ownership of all shares of all
classes of capital stock would be held by less than 100 persons (the "Aggregate
---------
Ownership Limit"), if beneficial ownership of all shares of all classes of
- ---------------
capital stock was held by 100 or more persons prior to such transfer, or (ii) a
violation of the Percentage Ownership Limit would occur.
2. Registration of Transfers. The Corporation will keep at its
-------------------------
principal office (or such other place as the Corporation reasonably designates)
a register for the registration of shares of Common Stock and Preferred Stock.
Upon the surrender at such place of any certificate representing shares of any
class of capital stock with respect to all of which a transfer would satisfy all
requirements of paragraph 1 of this Part D, the Corporation will, at the request
of the registered holder of such certificate, execute and deliver a new
certificate or certificates in exchange therefor representing in the aggregate
the number of shares of the class represented by the surrendered certificate,
and the Corporation forthwith will cancel such surrendered certificate. Each
such new certificate will be registered in such name and will represent such
number of shares of such class as is requested by the holder of the surrendered
certificate (so long as the requirements of this paragraph 2 and paragraph 1 of
this Part D are otherwise satisfied with respect to the capital stock
represented by such certificate) and will be substantially identical in form to
the surrendered certificate. The issuance of new certificates will be made
without charge to the holders of the surrendered certificates for any issuance
tax in respect thereof or other cost incurred by the Corporation in connection
with such issuance.
3. Replacement. Upon receipt of evidence reasonably satisfactory to
-----------
the Corporation (an affidavit of the registered holder being satisfactory) of
the ownership and the loss, theft, destruction or mutilation of any certificate
evidencing one or more shares of any class of Common Stock or Preferred Stock,
and in the case of any such loss, theft or destruction, upon receipt of
indemnity reasonably satisfactory to the Corporation (provided that if the
holder is a financial institution or other institutional investor then its own
agreement will be satisfactory) or, in the case of any such mutilation upon
surrender of such certificate, the Corporation will (at its expense), execute
and deliver in lieu of such certificate a new certificate of like kind
representing the number of shares of such class represented by such lost,
stolen, destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate.
11
<PAGE>
4. Amendment And Waiver. No amendment or waiver of any provision of
---------------------
this Part D will be effective without the prior approval of the holders of a
majority of the votes entitled to be cast by the holders of Voting Common.
E. UNAUTHORIZED TRANSFERS.
----------------------
1. Effect Of Unauthorized Transfers. Any transfer of any share of
--------------------------------
any class of capital stock of the Corporation in violation of the Percentage
Ownership Limit, the Aggregate Ownership Limit, and/or any other restriction or
requirement specified in this Article V (a "Purported Transfer") will be void
------------------
and of no legal effect. Any Purported Transfer will cause (without action on
the part of the Corporation, the transferee (the "Prohibited Transferee"), or
---------------------
the transferor) all shares (or interests therein) involved in such Purported
Transfer to be transferred to the Corporation, as trustee (in such capacity, the
"Trustee") in trust for the exclusive benefit of one or more organizations
-------
described in Section 501(c)(3) of the Code (the "Charitable Beneficiaries").
------------------------
The Trustee will be deemed to own such shares for the benefit of the Charitable
Beneficiaries on the day prior to the date of the Purported Transfer. Any
dividends or distributions paid by the Corporation to the Purported Transferee
prior to discovery of a Purported Transfer, will be disgorged and repaid to the
Corporation, as Trustee, by the Prohibited Transferee. Any dividend declared
after a Purported Transfer but unpaid will be rescinded as void ab initio with
respect to the Prohibited Transferee. Any dividends so disgorged or rescinded
will then be paid over to the Trustee and held in trust for the Charitable
Beneficiaries. Any vote taken by a Prohibited Transferee prior to the discovery
by the Corporation of a Purported Transfer will be rescinded as void ab initio.
With respect to the shares involved in the Purported Transfer, the Trustee will
be deemed to have an irrevocable proxy to vote such shares for the benefit of
the Charitable Beneficiaries.
2. Notification Of Proposed Transfers. In order that the Corporation
----------------------------------
may enforce the Aggregate Ownership Limit and the Percentage Ownership Limit, no
share of any class or series of capital stock of the Corporation will be
transferable by the holder thereof unless, not less than 30 days prior to any
such proposed transfer, the holder of any and all shares proposed to be
transferred ("Transferred Shares") delivers to the Corporation written notice of
------------------
its intention to effect such a transfer.
3. Legend. Each certificate for shares of capital stock of the
------
Corporation shall bear substantially the following legend:
"The shares represented by this certificate are subject to
restriction on transfer and ownership for the purpose of the
Corporation's maintenance of its status as a Real Estate Investment
Trust under the Code. Subject to certain further restrictions and
except as expressly provided in the
12
<PAGE>
Corporation's articles of incorporation, as amended, any transfer
of any share of capital stock of the Corporation will be void and
of no legal effect if such transfer would result in (i) the
ownership by five or fewer individuals of more than fifty percent
of the aggregate value of all shares of capital stock of the
Corporation or (ii) beneficial ownership of all shares of common
stock would be held by less than 100 persons. Any shares of
capital stock purported to be transferred in violation of these
restrictions will be automatically transferred to the
Corporation, as trustee, for the benefit of one or more
charitable beneficiaries. A copy of the Corporation's articles of
incorporation, as amended, including the foregoing restrictions
on transfer, will be sent without charge to each shareholder who
so requests."
ARTICLE VI. ACTION BY SHAREHOLDERS
-----------------------------------
1. Shareholder Action by Unanimous Written Consent. Any action required
-----------------------------------------------
or permitted to be taken at an annual or special meeting of the shareholders of
the Corporation may be taken without a meeting, without prior notice, and
without a vote if the action is taken by written consent of the holders of at
least 95% of the outstanding stock of each voting group entitled to vote
thereon.
2. Record Date. For the purpose of determining the shareholders for any
-----------
purpose other than for determining shareholders entitled to notice of and to
vote at an annual or special shareholders meeting, the Board of Directors shall
fix a record date, which shall be not more than seventy days before the date
written notice of the record date is delivered to the shareholders. If no
record date is set by the Board of Directors, the record date shall be
determined as follows: for determining shareholders entitled to demand a special
meeting, the record date is the date the first such demand is delivered to the
Corporation; and for determining shareholders entitled to a share dividend, the
record date is the date the Board of Directors authorizes the dividend. For
determining shareholders entitled to notice of and to vote at an annual or
special shareholders meeting the record date is as of the close of business on
the date that is seven days after notice of the record date is first delivered
or deemed delivered to the shareholders entitled to notice thereof. When a
determination of the shareholders entitled to vote at any meeting has been made,
that determination shall apply to any adjournment of the meeting, unless the
Board of Directors fixes a new record date. The Board of Directors shall fix a
new record date if the meeting is adjourned to a date more than 120 days after
the date fixed for the original meeting. Notwithstanding anything contained
herein to the contrary, irrespective of whether prior action is required by the
Board of Directors, the record date for determining shareholders entitled to
take action without a meeting is the date a signed written consent is delivered
to the Corporation by the holders of at least 95% of the outstanding stock of
each voting group entitled to vote thereon.
13
<PAGE>
ARTICLE VII. INITIAL REGISTERED OFFICE AND AGENT
-------------------------------------------------
The street address of the current registered office of the Corporation is
1200 South Pine Island, Plantation, Florida 33324, and the name of the
Corporation's current registered agent at that address is CT Corporation
Systems.
ARTICLE VIII. INITIAL BOARD OF DIRECTORS
-----------------------------------------
The Corporation shall have two directors initially. The number of
directors may be either increased or diminished from time to time, as provided
in the bylaws, but shall never be less than one. The names and street addresses
of the initial directors are:
Name Address
---- -------
Steven R. Day 1549 Ringling Boulevard, Third Floor
Sarasota, Florida 34236
Robert J. Wolsey 1549 Ringling Boulevard, Third Floor
Sarasota, Florida 34236
ARTICLE IX. BYLAWS
-------------------
The power to adopt, alter, amend or repeal bylaws shall be vested in the
Board of Directors and the shareholders, except that the Board of Directors may
not amend or repeal any bylaws or article or provision thereof without the
affirmative vote of the holders of the outstanding stock of each voting group
entitled to vote thereon if the bylaws provide that they or such article or
provision is not subject to amendment or repeal by the Board of Directors.
ARTICLE X. AMENDMENTS
----------------------
The Corporation reserves the right to amend, alter, change or repeal any
provision in these Articles of Incorporation in the manner prescribed by law,
and all rights conferred on shareholders are subject to this reservation.
14
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed these Amended and Restated
Articles of Incorporation this 28th day of September, 1999.
_____________________________________
Steven R. Day, Secretary
15
<PAGE>
CERTIFICATE TO AMENDED AND RESTATED ARTICLES OF
INCORPORATION OF PINNACLE TOWERS III INC.
The undersigned, Steven R. Day, Secretary of PINNACLE TOWERS III INC., a
Florida corporation (the "Corporation"), does hereby certify as follows:
1. In accordance with Section 607.1007 of the Florida Statutes, the
foregoing Amended and Restated Articles of Incorporation were duly
adopted by the Board of Directors of the Corporation on September 28,
1999, without shareholder action which was not required for
effectiveness pursuant to Section 607.0602 of the FBCA.
2. The undersigned officer of the Corporation has been duly authorized to
submit these Amended and Restated Articles of Incorporation of the
Corporation to the Department of State of Florida for filing in
accordance with Section 607.1007 of the Florida Statutes.
PINNACLE TOWERS III INC.
By:______________________________
Steven R. Day, Secretary
16
<PAGE>
Exhibit 10.5
================================================================================
AGREEMENT
FOR PURCHASE AND SALE OF ASSETS
BY AND BETWEEN
PINNACLE TOWERS INC., SELLER
AND
PINNACLE TOWERS III INC., PURCHASER
================================================================================
<PAGE>
AGREEMENT
FOR
PURCHASE AND SALE OF ASSETS
---------------------------
THIS AGREEMENT is effective as of the 31/st/ day of August, 1999, by and
between PINNACLE TOWERS III INC., a Florida corporation ("Purchaser") and
PINNACLE TOWERS INC., a Delaware corporation ("Seller").
WHEREAS, Seller has acquired from Motorola, Inc., a Delaware corporation
("Motorola"), certain antenna sites listed on Schedule 1.2(b) (the "Sites") and
---------------
the Rooftop Assets (as defined below) (collectively the "Rooftop Business")
pursuant to the Agreement for Purchase and Sale of Assets by and between Seller
and Motorola, Inc., a Delaware corporation ("Motorola"), dated June 29, 1999 (as
amended, the "Motorola Purchase Agreement");
WHEREAS, Purchaser desires to purchase from Seller and Seller desires to
sell to Purchaser, subject to the assumption of the associated liabilities and
obligations, the Rooftop Assets;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties agree as follows:
ARTICLE I
THE TRANSACTION
1.1. Purchase and Sale of Rooftop Assets. At the Closing (as defined
-----------------------------------
below), Seller shall sell, transfer, assign and deliver to Purchaser, and
Purchaser shall purchase, accept and receive, all of Seller's right, title and
interest in and to the Rooftop Assets as they exist at the Closing.
1.2. Rooftop Assets. The "Rooftop Assets" are all of Seller's right, title
--------------
and interest in and to the following:
(a) the accounts and notes receivable of the Rooftop Business;
(b) the Rooftop Assets listed on Schedule 1.2(b);
---------------
(c) the deposits and prepaid assets of the Rooftop Business
related to the Sites;
(d) the performance and other bonds, security and other deposits, and
advances maintained solely for use in the conduct of the Rooftop Business
related to the Sites;
-2-
<PAGE>
(e) the customer files and all lists of customers, suppliers and
vendors of the Rooftop Business related to the Sites;
(f) the rights and claims under lease, management or sale contracts,
customer orders, service agreements and other similar commitments of the
Rooftop Business related to the Sites;
(g) rights in, to and under agreements directly and solely relating
to the Rooftop Business, including the Material Contracts (as defined
below), the Rooftop Agreements (as defined below), and the Tenant Leases
(as defined below);
(h) documents and records directly and solely relating to the Sites,
including accounts receivable and accounts payable ledgers, records and
files;
(i) master customer and vendor lists directly and solely relating to
the operation of the Sites; and
(j) to the extent assignable and transferable to Purchaser, permits
and licenses (and pending applications for any thereof) related to the
operation of the Sites;
provided, however, that the definition of Rooftop Assets shall not include any
items defined as Excluded Assets in Section 1.3 below.
1.3. Excluded Assets. Seller will retain and not transfer, and Purchaser
---------------
will not acquire any assets of Seller, other than the Rooftop Assets,
(collectively, the "Excluded Assets"), including the following assets which
shall not be sold or transferred to Purchaser:
(a) all cash and cash equivalents, including cash on hand or in bank
accounts;
(b) corporate accounting journals and corporate books of account
which comprise Seller's permanent accounting or tax records;
(c) corporate minute books, stock records and corporate seals of
Seller;
(d) refunds pertaining to any Tax obligations of Seller;
(e) software and information systems;
(f) any cash management or other treasury services, legal, patent,
tax, insurance administration, corporate accounting, audit, human resources
or other services provided to the Rooftop Business by Seller;
(g) certain assets listed on Schedule 1.3; and
------------
-3-
<PAGE>
(h) items sold, transferred, disposed of or consumed in the ordinary
course prior to the Closing;
provided, however, that the definition of Excluded Assets shall not include any
items defined as Rooftop Assets in Section 1.2.
1.4. Assumed Liabilities and Obligations. At the Closing, Purchaser shall
-----------------------------------
assume and agrees to discharge promptly as they become due any and all
liabilities and obligations and agreements related to or arising from the
operation of Rooftop Business or the ownership of the Rooftop Assets, including
all contracts and obligations which constitute Rooftop Assets or to which the
Rooftop Assets are subject or by which they are bound (the "Assumed
Liabilities"); provided, however, that notwithstanding the foregoing, none of
the Excluded Liabilities (as defined below) shall be included as Assumed
Liabilities. Purchaser shall forever defend, indemnify and hold harmless Seller
from and against any and all liabilities, obligations, claims, damages, costs
and expenses (including court costs and reasonable attorneys' fees) related to
or arising from Purchaser's failure to fully perform and discharge the
responsibilities of Seller with respect to the Assumed Liabilities. Purchaser
further agrees to pay and discharge all such liabilities and obligations as they
become due.
1.5. Excluded Liabilities and Obligations. Purchaser shall not assume any
------------------------------------
liabilities or obligations of Seller or the Rooftop Business for Federal, state
or local taxes on income for all periods prior to the Closing (the "Excluded
Liabilities"). Seller shall forever defend, indemnify and hold harmless
Purchaser from and against any and all liabilities, obligations, claims,
damages, costs and expenses (including court costs and reasonable attorneys'
fees) related to or arising from Seller's failure to fully perform and discharge
the Excluded Liabilities. Seller further agrees to pay and discharge all such
liabilities and obligations as they become due.
1.6. Assignment of Contracts. Anything contained in this Agreement to the
-----------------------
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign the right, title or interest of Seller in, to or under any contract or
any claim or right of any benefit arising thereunder or resulting therefrom if
any attempted assignment thereof, without the consent of a third party thereto,
would constitute a breach thereof or in any way adversely affect the rights of
Purchaser or Seller thereunder or if by its nature such contract cannot be
assigned. Seller shall use its reasonable commercial efforts to obtain, and
Purchaser agrees to cooperate with Seller in its efforts to obtain, the consent
of each such third party to the assignment or transfer thereof to Purchaser in
all cases in which such consent is required for assignment or transfer. If such
consent is not obtained, Seller and Purchaser shall cooperate in any reasonable
arrangements on mutually acceptable terms designed to provide Purchaser the
obligations and benefits thereunder such as, by example, entering into a
subcontract, operating agreement or other similar relationship, which
arrangements shall include self-operative provisions for transfer of the
affected agreements to Purchaser after Closing upon receipt of the applicable
consents. Notwithstanding the foregoing, the obligations of Seller under this
Section shall not include any obligation to make any payment or incur any
economic burden.
-4-
<PAGE>
1.7. Bulk Transfer. Purchaser hereby waives compliance by Seller with all
-------------
applicable bulk transfer, bulk sales and similar laws and requirements of all
jurisdictions in connection with the transactions contemplated hereby.
ARTICLE II
CONSIDERATION FOR TRANSFER
2.1. Consideration
-------------
(a) The aggregate consideration for the Rooftop Assets shall be:
(i) Forty Nine Million Dollars $49,000,000 (the "Purchase
Price"); and
(ii) assumption by Purchaser of the Assumed Liabilities.
(b) All payments hereunder shall be made in U.S. dollars by wire
transfer or other immediately-available funds, and all currency amounts
referred to throughout this Agreement are to U.S. dollars.
2.2. Payment of Consideration. At Closing, Purchaser shall pay the Purchase
------------------------
Price to an account designated by Seller in immediately available funds.
2.3. Purchase Price Allocation. The consideration for the Rooftop Assets
-------------------------
shall be allocated by Purchaser and Seller as mutually agreed upon by the
parties prior to Closing.
2.4. [Intentionally Omitted].
------------------------
2.5. Costs. The parties shall share equally the costs of the following:
-----
(a) all Taxes arising in connection with any deed or other conveyance document
relating to the Rooftop Assets, and (b) all recording costs arising in
connection with the transactions contemplated hereby.
2.6. [Intentionally Omitted].
-----------------------
ARTICLE III
THE CLOSING AND TRANSFER OF ROOFTOP ASSETS
3.1. Closing. The transfer of assets contemplated by this Agreement (the
-------
"Closing") shall occur at the offices of Holland & Knight LLP, 400 North Ashley
Drive, Tampa, Florida 33602 on the date this Agreement is executed (the "Closing
Date"). Upon consummation, the Closing shall be deemed to take place as of the
close of business on the Closing Date.
-5-
<PAGE>
3.2. Deliveries by Purchaser. At the Closing, Purchaser shall deliver the
-----------------------
following:
(a) an amount equal to the Purchase Price payable in immediately
available funds to the account designated by Seller; and
(b) such other instruments or documents as may be reasonably
necessary or appropriate to carry out the transactions contemplated hereby
or as specifically required to fulfill Purchaser's covenants hereunder.
3.3. Deliveries by Seller. At the Closing, Seller shall deliver such
--------------------
instruments or documents as may be reasonably necessary or appropriate to carry
out the transactions contemplated by this Agreement or as specifically required
to fulfill Seller's covenants hereunder.
3.4. Deliveries by Purchaser and Seller. At the Closing, Purchaser and
----------------------------------
Seller shall deliver the following:
(a) General Assignment, Bill of Sale and Assumption of Liabilities in
substantially the form attached hereto as Attachment I; and
(b) Services Agreement in substantially the form attached hereto as
Attachment II, providing for, if necessary, the provision of certain
services at an appropriate cost.
3.5. Mutual Assurances. At the Closing, the parties shall execute,
-----------------
acknowledge and deliver such other instruments or documents as may be reasonably
necessary or appropriate to carry out the transactions contemplated by this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser, as of the date hereof,
and as of the Closing Date, as set forth below. All of the representations and
warranties herein (except those set forth in Section 4.1, 4.2 and 4.3) are based
solely upon those representations and warranties made by Motorola to Seller
pursuant to the Motorola Purchase Agreement. To the extent that any
representation or warranty made hereunder by Seller is based upon or is subject
to the representations or warranties of Motorola under the Motorola Purchase
Agreement, and to the knowledge of Seller such representation is true and
correct, Seller shall have no liability or obligation to Purchaser regarding
such representation or warranty if the corresponding representation or warranty
from Motorola actually is not true or correct. Also, Seller shall have no
liability or obligation to Purchaser regarding any representation or warranty to
the extent information provided or made available to Seller or Purchaser
resulting from the Due Diligence contradicts such representation or warranty or
otherwise indicates such representation or warranty is not true or correct. For
purposes of this Agreement, a "Material Adverse Effect" shall mean any effect
which is materially adverse to the Rooftop Assets when taken as a whole. For
purposes of this Agreement, the phrase "to the knowledge of Seller," or other
language of
-6-
<PAGE>
similar effect, shall mean to the actual knowledge at the time of execution of
this Agreement of the persons listed on Schedule 4.0. No further due diligence
------------
or investigation shall be attributed to or required of such persons. The
exceptions, modifications, descriptions and disclosures in any Schedule attached
hereto are made for all purposes of this Agreement and are exceptions to all
representations and warranties set forth in this Agreement or in any agreement
or instrument delivered pursuant to or in connection with this Agreement.
Disclosure of an item in response to one Section of this Agreement shall
constitute disclosure in response to every Section of this Agreement
notwithstanding the fact that no express cross-reference is made. Disclosure of
any items not otherwise required to be disclosed shall not create any inference
of materiality.
4.1. Authority. Seller has the full right, power and authority, without
---------
the consent of any other person, to execute and deliver this Agreement and the
agreements contemplated hereby to which it is a party and to consummate the
transactions contemplated on its part hereby and thereby. All corporate acts
required to be taken by Seller to authorize the execution and delivery of this
Agreement and all agreements and transactions contemplated hereby have been duly
and properly taken.
4.2. Validity. This Agreement has been, and the agreements and other
--------
documents to be delivered by Seller at Closing will be, duly executed and
delivered and constitute the valid and legally binding obligations of Seller
enforceable in accordance with their respective terms. The execution and
delivery by Seller of this Agreement and the agreements contemplated hereby to
which it is a party and the consummation of the transactions contemplated hereby
and thereby will not (immediately, with notice, the passage of time or both)
result in the creation of any lien, charge or encumbrance or the acceleration of
any indebtedness or other obligation of Seller and are not prohibited by, do not
violate or conflict with any provision of, and do not and will not (immediately,
with notice, the passage of time or both) constitute a default under or a breach
of (a) the charter or by-laws of Seller, (b) any note, bond, indenture,
contract, agreement, permit, license or other instrument to which Seller is a
party or by which Seller is bound, (c) any order, writ, injunction, decree or
judgment of any court or governmental agency, or (d) any law, rule or regulation
applicable to Seller, except in each of the foregoing cases for such creations,
accelerations, terminations, violations, conflicts, breaches, defaults, charges
or encumbrances which in the aggregate will not have an adverse effect on
Seller's ability to consummate the transactions contemplated hereby.
4.3. Due Organization. Seller is a corporation in good standing and
----------------
validly existing under the laws of Delaware.
4.4. [Intentionally Omitted].
-----------------------
4.5. [Intentionally Omitted].
-----------------------
4.6. Title to Rooftop Assets. To the knowledge of Seller, Seller has
-----------------------
good and marketable title to the personal property included in the Rooftop
Assets it purports to own. To the knowledge of Seller, at the Closing,
Purchaser will receive the Rooftop Assets free and clear of any liens, claims or
encumbrances except for (a) liens, claims or encumbrances which will be
discharged upon payment by Purchaser of the associated Assumed Liabilities, (b)
liens, claims
-7-
<PAGE>
and encumbrances which do not detract from the value or interfere with the
present use of the Rooftop Assets in such manner as could reasonably be expected
to have, in the aggregate, a Material Adverse Effect, (c) materialmen's,
mechanics', carriers', workmen's, repairmen's and other like liens arising in
the ordinary course of business, (d) liens for current Taxes not yet due or
payable or any Taxes being contested in good faith by Seller, or (e) liens in
favor of Seller's senior lenders described on the attached Schedule 4.6. To the
knowledge of Seller, the Rooftop Assets are in good operating condition and
repair (reasonable wear and tear excepted).
4.7. Utilities. To Seller's knowledge, all utilities necessary for the
---------
operation of the Rooftop Assets are installed and operating, except for such
instances as could not reasonably be expected to result, in the aggregate, in a
Material Adverse Effect.
4.8. Rooftop Agreements. To the knowledge of Seller, Schedule 1.2(b) sets
------------------ ---------------
forth a list of all rooftop sites for which there may exist rooftop agreements
(the "Rooftop Agreements") included in the Rooftop Assets, pursuant to which
Seller leases\occupies real property.
4.9. [Intentionally Omitted].
-----------------------
4.10. Material Contracts. To the knowledge of Seller, Schedule 4.10
------------------ -------------
sets forth an accurate list of all sites for which there may exist written
contracts and agreements solely related to the Rooftop Assets meeting any of the
descriptions set forth below (the "Material Contracts"):
(a) all Site agreements and lease agreements (the "Tenant Leases")
with an annual revenue in excess of $100,000;
(b) all management and service contracts and purchase orders and
other contracts for the purchase of materials or services relating to the
Sites requiring annual payments in excess of $100,000;
(c) all machinery leases, equipment leases and other personal
property leases relating to the Sites requiring annual payments in excess
of $100,000; and
(d) all other contracts, commitments, agreements, arrangements and
understandings relating to the Sites which provide for annual payment to or
from Seller having an aggregate value of $100,000 or more.
To the knowledge of Seller, except as set forth on Schedule 4.10, each Material
-------------
Contract is valid and binding and is in full force and effect as to Seller,
assuming the other party thereto is bound which, to Seller's knowledge, is the
case for each Material Contract, except that Seller makes no representation or
warranty with respect to the remaining term of any Material Contract, the
expiration of any Material Contract, or the status of any Material Contract as a
month-to-month agreement. To the knowledge of Seller, no event has occurred
which is or, after the giving of notice or passage of time, or both, would
constitute a material default under or a material breach of any Material
Contract by Seller or, to the knowledge of Seller, by any other party thereto
which could reasonably be expected to result in a Material Adverse Effect. To
Seller's knowledge, no defenses, off-sets, or counterclaims have been asserted
by any party thereto,
-8-
<PAGE>
which could reasonably be expected to result, in the aggregate, in a Material
Adverse Effect. To Seller's knowledge, (i) Seller has not waived any material
rights under any Material Contracts and (ii) there are no disputes with respect
to any Material Contract, which could reasonably be expected to result, in the
aggregate, in a Material Adverse Effect. Except as set forth on Schedule 4.10,
-------------
to Seller's knowledge, Seller has not received notice of any plan or intention
of any other party to any Material Contract to exercise any right to cancel or
terminate any Material Contract, except for such cancellations or terminations
which could not reasonably be expected to result, in the aggregate, in a
Material Adverse Effect. Notwithstanding the foregoing, Seller makes no
representation or warranty regarding the initial, renewal or remaining term of
any Material Contract or the status of any such term being month to month.
4.11. [Intentionally Omitted].
-----------------------
4.12. Legal Proceedings. Except as set forth in Schedule 4.12, (a)
----------------- --------------
Seller is not engaged in or a party to or, to the knowledge of Seller,
threatened with any action, suit or other legal proceeding involving the Rooftop
Assets, (b) Seller has no knowledge of any investigation threatened by any
governmental or regulatory authority with respect to the Rooftop Assets, and (c)
to the knowledge of Seller, the Rooftop Assets are not subject to any judgment,
order, writ, injunction, stipulation or decree of any court or any governmental
agency.
4.13. Compliance with Law. Except as set forth on Schedule 4.13, to the
------------------- -------------
knowledge of Seller, the operation of the Rooftop Business and the Rooftop
Assets complies as of the date hereof in all material respects with all
applicable statutes, codes, laws, ordinances, rules and regulations (including
all Federal Aviation Administration and Federal Communications Commission rules
and regulations), except where non-compliance could not reasonably be expected
to result, in the aggregate, in a Material Adverse Effect.
4.14. Permits. To the knowledge of Seller, Seller currently has all the
-------
permits from all Federal, state, local and foreign authorities as are necessary
for the conduct of the Rooftop Business as currently conducted as of the date
hereof, except where the failure to have any permit could not reasonably be
expected to result in a Material Adverse Effect.
4.15. Taxes. To the knowledge of Seller, Seller has filed, or will file
-----
when due, all reports and returns ("Tax Returns") of all Federal, state, local
and provincial and other foreign net or gross income, gross receipts, sales,
use, ad valorem, value added, franchise, withholding, payroll, employment,
excise, property, transfer or other taxes and assessments, together with any
penalties, additions to or additional amounts with respect thereto and any
interest (collectively referred to as "Taxes" and individually as a "Tax")
required to be filed relating to the Rooftop Assets for the periods up to the
Closing, except where failure to file could not reasonably be expected to
result, in the aggregate, in a Material Adverse Effect. With respect to the
Rooftop Business and the Rooftop Assets, to the knowledge of Seller (a) Seller
has paid all material amounts of Taxes when due, except to the extent Seller is
disputing such Taxes with the applicable Tax authority in the manner permitted
by the local Tax authority (including posting any required deposits), (b) there
is no Tax deficiency or delinquency in any material amount asserted or
threatened against Seller, except to the extent Seller is disputing such Taxes
with the applicable Tax authority and (c) there is no unpaid Tax in any material
amount that could be
-9-
<PAGE>
asserted by a Tax authority for which Purchaser may become liable or the
liability for which might encumber the Rooftop Assets after the Closing as a
result of the transactions contemplated by this Agreement.
4.16. [Intentionally Omitted].
-----------------------
4.17. [Intentionally Omitted].
-----------------------
4.18. [Intentionally Omitted].
-----------------------
4.19. Brokers' Fees. Seller has no liability or obligation to pay any fees
-------------
or commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement for which Purchaser could become liable or
obligated.
4.20. Disclaimer. The representations and warranties set forth in this
----------
Article IV are the only representations and warranties made by Seller with
respect to the Rooftop Business and the Rooftop Assets. Except as specifically
set forth herein, Seller is selling the Rooftop Assets to Purchaser "as is" and
"where is" and with all faults. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, ALL
WARRANTIES, EXPRESS OR IMPLIED, ARE HEREBY DISCLAIMED AND EXCLUDED, INCLUDING
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT
SHALL SELLER BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES. Seller
makes no representation or warranty as to the accuracy or reliability of any
forecasts or projections of revenues, sales, expenses or profits of the Rooftop
Business.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as of the date hereof,
and as of the Closing Date, as set forth below.
5.1. Authority. Purchaser has full right, power and authority, without the
---------
consent of any other person, to execute and deliver this Agreement and the
agreements contemplated hereby and to consummate the transactions contemplated
hereby and thereby. All corporate acts required to be taken by Purchaser to
authorize the execution and delivery of this Agreement and the agreements
contemplated hereby and all transactions contemplated hereby and thereby have
been duly and properly taken.
5.2. Validity. This Agreement has been, and the agreements and other
--------
documents to be delivered by Purchaser at Closing will be, duly executed and
delivered by Purchaser and will constitute lawful, valid and legally binding
obligations of Purchaser, enforceable in accordance with their respective terms.
The execution and delivery by Purchaser of this Agreement and the agreements
contemplated hereby and the consummation of the transactions contemplated hereby
and thereby will not (immediately, with notice, the passage of time or both)
result in the creation of any lien, charge or encumbrance or the acceleration of
any indebtedness or other obligation of
-10-
<PAGE>
Purchaser and are not prohibited by, do not violate or conflict with any
provision of, and do not and will not (immediately, with notice, the passage of
time or both) result in a default under or a breach of (a) the charter or by-
laws of Purchaser, (b) any contract, agreement, permit, license or other
instrument to which Purchaser is a party or by which either is bound, (c) any
order, writ, injunction, decree or judgment of any court or governmental agency,
or (d) any law, rule or regulation applicable to Purchaser, except for such
creations, accelerations, terminations, violations, conflicts, breaches,
defaults, charges or encumbrances which, in the aggregate will not have an
adverse effect on Purchaser's ability to consummate the transactions
contemplated hereby.
5.3. Due Organization. Purchaser is a corporation duly organized, in good
----------------
standing and validly existing under the laws of Florida.
5.4. Brokers' Fees. Purchaser has no liability or obligation to pay any
-------------
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which Seller could become liable
or obligated.
5.5. [Intentionally Omitted].
-----------------------
5.6. Due Diligence. Purchaser has obtained or has otherwise been provided
-------------
access to and reviewed to its satisfaction all Due Diligence materials.
ARTICLE VI
COVENANTS OF SELLER
6.1. [Intentionally Omitted].
-----------------------
6.2. [Intentionally Omitted].
-----------------------
6.3. Records and Documents. Following the Closing Date, Seller shall
---------------------
grant to Purchaser and its representatives, at Purchaser's reasonable request,
reasonable access to and the right to make copies at its expense of those
records and documents in Seller's possession related to the Rooftop Assets as
may be reasonably necessary for litigation, preparation of financial statements,
Tax returns and audits or other valid business purposes, or otherwise related to
Purchaser's operation of the Rooftop Assets after the Closing and which do not
constitute Rooftop Assets.
6.4. Consummation. Subject to the terms and conditions provided herein,
------------
Seller agrees to use all commercially reasonable efforts to take, or cause to be
taken all actions and to do, or cause to be done all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement in accordance with its terms;
except that this covenant shall not require Seller to make any payment or incur
any economic burden not provided for herein.
6.5. [Intentionally Omitted].
-----------------------
-11-
<PAGE>
6.6. [Intentionally Omitted].
------------------------
6.7. Confidentiality. Seller agrees that it will not disclose, nor will
---------------
it permit any of its employees, agents or representatives to disclose, to any
third party any confidential information obtained from Purchaser in connection
with this Agreement, except as needed in connection with obtaining any consents
with respect to any Material Contracts, Rooftop Agreements, and Tenant Leases
and as otherwise contemplated by this Agreement.
6.8. Contracts. Seller will provide to Purchaser correct and complete
---------
copies of substantially all of the Rooftop Agreements, in Seller's possession,
within seven (7) business days of the date hereof. Seller will provide to
Purchaser correct and complete copies of substantially all of the Material
Contracts (other than those set forth in the immediately preceding sentence and
customer licenses) in Seller's possession within 30 days of the date hereof.
6.9. Audits. Seller will cooperate reasonably with Purchaser and,
------
subject to Section 6.7, will make accessible to Purchaser and Purchaser's
accountants Seller's financial books and records regarding the Rooftop Assets in
connection with any audits of Purchaser or its business pertaining to financings
done by Purchaser; provided, however, that Purchaser shall pay all out-of-pocket
expenses incurred by Seller in connection with the foregoing.
6.10. [Intentionally Omitted].
-----------------------
ARTICLE VII
COVENANTS OF PURCHASER
7.1. Consummation. Subject to the terms and conditions provided herein,
------------
Purchaser agrees to use all commercially reasonable efforts to take, or cause to
be taken all actions and to do, or cause to be done all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement in accordance with its
terms, including maintaining any financing commitments related to funding the
consideration for the Rooftop Assets.
7.2. [Intentionally Omitted].
-----------------------
7.3. Confidentiality. Purchaser agrees that it will not disclose, nor
---------------
will it permit any of its employees, agents or representatives to disclose, to
any third party any confidential information obtained from Seller in connection
with this Agreement, except as needed in connection with obtaining any consents
with respect to any Material Contracts, Rooftop Agreements and Tenant Leases and
as otherwise contemplated by this Agreement.
7.4. Records and Documents. Following the Closing Date, Purchaser shall
---------------------
grant to Seller and its representatives, at Seller's reasonable request,
reasonable access to and the right to make copies at its expense of those
records and documents included in the Rooftop Assets covering any period prior
to the Closing related to the Rooftop Business or the Rooftop Assets as
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<PAGE>
may be reasonably necessary for litigation, preparation of financial statements,
tax returns and audits or other valid business purposes. If Purchaser elects to
dispose of such records, Purchaser shall first give Seller sixty (60) days'
written notice, during which period Seller shall have the right to take such
records without further consideration.
7.5. Insurance. Purchaser shall procure and maintain general liability
---------
insurance with carriers and in a form and with such limits as set forth on
Schedule 7.5. All premiums, assessments and other charges incurred in
- ------------
maintaining such insurance in full force and effect, as well as the payment of
any deductibles or self-insured retentions, shall be the sole responsibility of
Purchaser.
7.6. Termination of Contracts. For a period of one (1) year from the
------------------------
Closing Date, Purchaser agrees not to terminate any contract or agreement with
any existing customer of the Rooftop Business without providing such customer
and Seller with at least 90 days prior written notice of such termination;
provided, however, that Purchaser shall have the right to terminate any contract
or agreement with any existing customer of the Rooftop Business, if such
customer is more than 30 days delinquent in paying any amounts owed to Purchaser
from the normal payment date set forth in such contract or agreement. Purchaser
shall give Seller at least ten (10) days prior written notice of any termination
pursuant to the immediately preceding sentence.
7.7. [Intentionally Omitted].
-----------------------
7.8. Non-Solicitation. For the period beginning on the date hereof and
----------------
ending on the earlier to occur of the Closing neither Purchaser nor any of its
representatives will (a) solicit for employment or employ any employees of the
Rooftop Business or cause any employees of the Rooftop Business to leave the
employment of Seller and work for Purchaser or any of its Representatives;
provided, however, that the foregoing shall not apply to employees of the
Rooftop Business hired by Purchaser or any of its Representatives as a result of
the use of general solicitation (such as an advertisement) not specifically
directed to employees of the Rooftop Business or (b) interfere with any
relationships with any customers, lessors, lessees or suppliers of the Rooftop
Business.
7.9. [Intentionally Omitted].
-----------------------
ARTICLE VIII
[INTENTIONALLY OMITTED]
ARTICLE IX
[INTENTIONALLY OMITTED]
-13-
<PAGE>
ARTICLE X
[INTENTIONALLY OMITTED]
ARTICLE XI
SURVIVAL AND INDEMNIFICATION
11.1. Survival. All representations and warranties contained in this
--------
Agreement or in any agreement or other document delivered pursuant hereto shall
terminate at Closing and shall be of no further force and effect.
Notwithstanding the foregoing, the covenants and agreements to the parties
contained in this Agreement that are to be performed following Closing shall
survive Closing until such covenant is performed or unless specifically provided
otherwise in this Agreement or any agreement or document delivered pursuant
hereto.
11.2. Indemnification.
---------------
(a) Purchaser shall indemnify and hold harmless Seller from and against
any and all loss, damage, cost or expense (including reasonable attorneys' fees
and expenses), judgments and fines (collectively, "Damages") (i) caused by any
failure to fulfill any covenant or agreement of Purchaser contained herein or in
any other agreement or document delivered pursuant hereto, (ii) arising from the
Assumed Liabilities, (iii) arising from any action or inaction of Purchaser
after the Closing, other than in accordance with the terms hereof (provided,
however, that the foregoing shall not relieve Seller of any of its obligations
hereunder unless and to the extent, Purchaser's actions or inactions expand or
increase Seller's obligations and liabilities hereunder) or (iv) arising as a
result of, in connection with, or related to the operation of the Rooftop
Business and the Rooftop Assets following Closing.
(b) Seller shall indemnify and hold harmless Purchaser from and against
any Damages (i) caused by any failure to fulfill any covenant or agreement of
Seller contained herein, or in any other agreement or document delivered
pursuant hereto or (ii) arising from the Excluded Liabilities.
11.3. General Provisions Relating to Indemnification.
----------------------------------------------
(a) Seller shall not be required to make any payments pursuant to this
Article XI, unless and until the aggregate amount of all claims pursuant to this
Article XI shall exceed an amount equal to three percent (3%) of the total cash
consideration for the Rooftop Assets (the "Threshold Amount"), as to which
Seller shall be responsible only for the excess over Three Million Dollars
($3,000,000) with respect to any other indemnification claims. The maximum
aggregate amount recoverable from Seller with respect to any claims relating to
this Agreement or the transactions contemplated hereby shall not exceed an
amount equal to twenty-five percent (25%) of the total cash consideration for
the Rooftop Assets (the "Cap").
-14-
<PAGE>
(b) The party seeking indemnification shall give written notice to the
indemnifying party of the facts and circumstances giving rise to any claim for
indemnification as soon as reasonably possible but in any event within thirty
(30) days after it obtains knowledge of the basis for a claim for
indemnification hereunder. The party entitled to indemnification shall take all
reasonable steps to mitigate all indemnifiable liabilities and damages upon and
after becoming aware of any event which could reasonably be expected to give
rise to any liabilities and damages that are indemnifiable hereunder. No party
shall be entitled to indemnification to the extent of any insurance, tax or
other benefits (if applicable, computed on a present value basis using a 6%
discount rate) resulting from or which may be claimed as a result of the facts
and circumstances relating to any indemnifiable claim. If any Damages are
covered by insurance, Purchaser shall use all reasonable efforts to recover the
amount of such Damages from the insurer of such insurance which recovery (net of
any retroactive premium adjustments and the aggregate amount of reasonably
anticipated (based or written advice from insurance brokers or providers)
increased insurance premiums over the following two policy years) shall reduce
the amount of Damages hereunder; provided, however, that Purchaser shall not be
required to obtain such recovery as a condition to making a claim against Seller
pursuant to this Article XI.
(c) With respect to each claim by a third party which could give rise to
an indemnification obligation under this Article XI (a "Third Party Claim"), the
party seeking indemnification (the "Indemnified Party") must give prompt notice
to the indemnifying party (the "Indemnifying Party") of the Third Party Claim.
The Indemnifying Party may, at its sole cost and expense, upon notice to the
Indemnified Party within thirty (30) days after the Indemnifying Party receives
notice of the Third Party Claim, assume the defense of the Third Party Claim,
with counsel of its choice. The Indemnifying Party shall not consent to a
settlement of, or the entry of any judgment arising from, any Third Party Claim,
unless (i) the settlement or judgment is solely for money damages, or (ii) the
Indemnified Party consents thereto, which consent shall not be unreasonably
withheld. The Indemnifying Party shall provide the Indemnified Party with
fifteen (15) days prior notice before it consents to a settlement of, or the
entry of a judgment arising from, any Third Party Claim. The Indemnified Party
shall be entitled to participate in the defense of (but not control) any Third
Party Claim, the defense of which is assumed by the Indemnifying Party, with its
own counsel and at its own expense. The parties shall cooperate in the defense
of any Third Party Claim and the relevant records of each party shall be made
available on a timely basis. If the Indemnifying Party does not assume the
defense of any such claim or proceeding resulting therefrom in accordance with
the terms hereof, the Indemnified Party may defend such claim or proceeding in a
reasonable manner, including settling such claim or proceeding on such terms as
the Indemnified Party may deem appropriate after giving fifteen (15) days'
notice of the same to the Indemnifying Party and obtaining the written consent
of the Indemnifying Party, which consent shall not be unreasonably withheld. To
the extent applicable, the Indemnified Party shall keep the Indemnifying Party
reasonably informed, in writing, as to the defense of any such matter hereunder.
(d) Neither party shall have any obligation to indemnify the other party
or otherwise have liability to the other party for consequential damages,
special damages, incidental damages, indirect damages, lost profits or similar
items.
-15-
<PAGE>
(e) Seller shall have no liability under this Article XI to the extent
arising from (i) actions taken or not taken by Purchaser or its affiliates after
the Closing Date (provided, however, that the foregoing shall not relieve Seller
of any obligations hereunder unless and to the extent, Purchaser's actions or
inactions expand or increase Seller's obligations and liabilities hereunder) or
(ii) matters disclosed or available to Purchaser as a result of the Due
Diligence.
(f) To the extent that Seller discharges any claim for indemnification
hereunder, Seller shall be subrogated to all rights of Purchaser against third
parties.
(g) After the Closing, the indemnification rights provided hereunder
shall be the exclusive remedy of Seller and Purchaser and each of their
respective affiliates and their officers, directors, employees, stockholders,
affiliates, agents or representatives with respect to any dispute arising out of
or related to this Agreement.
ARTICLE XII
[INTENTIONALLY OMITTED]
ARTICLE XIII
[INTENTIONALLY OMITTED]
ARTICLE XIV
DEFINITIONS
(a) "ADR" has the meaning assigned to such term in Section 15.11(b).
(b) "Apportioned Obligations" has the meaning assigned to such term in
Section 15.4(a).
(c) "Assumed Liabilities" has the meaning assigned to such term in
Section 1.4.
(d) "Cap" has the meaning assigned to such term in Section 11.3(a).
(e) "Closing" has the meaning assigned to such term in Section 3.1.
(f) "Closing Date" has the meaning assigned to such term in Section 3.1.
(g) ""Code" shall mean the Internal Revenue Code of 1986, as amended.
(h) "Damages" has the meaning assigned to such term in Section 11.2.(a).
(i) "Due Diligence" means the due diligence regarding the Purchased
Assets (as defined in the Motorola Purchase Agreement) conducted pursuant to the
Motorola Purchase Agreement..
(j) "Excluded Assets" has the meaning assigned to such term in Section
1.3.
-16-
<PAGE>
(k) "Excluded Liabilities" has the meaning assigned to such term in
Section 1.5.
(l) "Indemnified Party" has the meaning assigned to such term in Section
11.3(c).
(m) "Indemnifying Party" has the meaning assigned to such term in Section
11.3(c).
(n) "IRS" shall mean the Internal Revenue Service.
(o) "Material Adverse Effect" has the meaning assigned to such term in
Article IV.
(p) "Material Contracts" has the meaning assigned to such term in Section
4.10.
(q) "Motorola" has the meaning assigned to such term in the preamble.
(r) "Motorola Purchase Agreement" has the meaning assigned to such term
in the preamble.
(s) "Post-Closing Tax Period" has the meaning assigned to such term in
Section 15.4(a).
(t) "Pre-Closing Tax Period" has the meaning assigned to such term in
Section 15.4(a).
(u) "Purchase Price" has the meaning assigned to such term in Section
2.1.
(v) "Purchaser" has the meaning assigned to such term in the preamble
(w) "Rooftop Agreements" has the meaning assigned to such term in Section
4.8.
(x) "Rooftop Assets" has the meaning assigned to such term in Section
1.2.
(y) "Seller" has the meaning assigned to such term in the preamble.
(z) "Sites" shall mean the sites listed on Schedule 1.0.
------------
(aa) "Tax" has the meaning assigned to such term in Section 4.15.
(bb) "Tax Returns" has the meaning assigned to such term in Section 4.15.
(cc) "Taxes" has the meaning assigned to such term in Section 4.15.
(dd) "Tenant Leases" has the meaning assigned to such term in Section
4.10(b).
(ee) "Third Party Claim" has the meaning assigned to such term in Section
11.3(c).
(ff) "Threshold Amount" has the meaning assigned to such term in Section
11.3(a).
-17-
<PAGE>
(gg) "To the knowledge of Seller" has the meaning assigned to such term
in Article IV.
ARTICLE XV
GENERAL PROVISIONS
15.1. Amendments and Waiver. No amendment, waiver or consent with
---------------------
respect to any provision of this Agreement shall in any event be effective,
unless the same shall be in writing and signed by the parties hereto, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
15.2. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be, personally delivered or sent by
facsimile transmission with confirming copy sent by overnight courier (such as
Express Mail, Federal Express, etc.) and a delivery receipt obtained and
addressed to the intended recipient as follows:
(a) If to Seller:
Pinnacle Towers Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Ben Gaboury
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
(b) If to Purchaser:
Pinnacle Towers III Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Steve Day
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
Any party may change its address or add or change parties for receiving notice
by written notice given to the others named above. Notices shall be deemed
given as of the date of receipt.
15.3. Expenses. Except as otherwise expressly provided herein, each
--------
party to this Agreement shall pay its own costs and expenses in connection with
the transactions contemplated hereby; provided that the cost of all permit,
license or other similar fees (including any penalties and interest) incurred in
connection with this Agreement shall be paid by Purchaser when due, and
Purchaser will, at its own expense, file all necessary Tax Returns and other
-18-
<PAGE>
documentation with respect to all such permit, license or other similar fees,
and, if required by applicable law, Seller will, and will cause its affiliates
to, join in the execution of any such Tax Returns and other documentation
15.4. Tax Matters. The following provisions shall govern the allocation
-----------
of responsibility as between Purchaser and Seller for certain tax matters
following the Closing Date:
(a) Prorations. All real property taxes, personal property
----------
taxes, ad valorem obligations and similar Taxes imposed on a
----------
periodic basis, in each case levied with respect to the Rooftop
Assets, other than conveyance taxes provided for in Section 2.5,
for a taxable period which includes (but does not end on) the
Closing Date (collectively, the "Apportioned Obligations") shall
be apportioned between Seller and Purchaser as of the Closing
Date based on the number of days of such taxable period occurring
prior to the Closing Date (the "Pre-Closing Tax Period") and the
number of days of such taxable period occurring on or after the
Closing Date (the "Post-Closing Tax Period"). Seller shall be
liable for the proportionate amount of such Taxes that is
attributable to the Pre-Closing Tax Period. As soon as practical
after the Closing Date, Seller and Purchaser shall present a
statement for reimbursement for such Taxes with respect to which
each is entitled to reimbursement under this Section 15.4(a),
together with such supporting evidence as is reasonably necessary
to calculate the proration amount. The proration amount shall be
paid by the party owing it to the other within ten (10) days
after delivery of such statement. Thereafter, Seller shall notify
Purchaser upon receipt of any bill for such Taxes relating to the
Rooftop Assets, part or all of which are attributable to the Post-
Closing Tax Period, and shall promptly deliver such bill to
Purchaser who shall pay the same to the appropriate Taxing
authority, provided that if such bill covers the Pre-Closing Tax
Period, Seller shall also remit to Purchaser prior to the due
date of assessment payment the proportionate amount of such bill
that is attributable to the Pre-Closing Tax Period. In the event
that either Seller or Purchaser shall thereafter make a payment
for which it is entitled to reimbursement under this Section
15.4(a), the other party shall make such reimbursement promptly
but in no event later than thirty (30) days after the
presentation of a statement setting forth the amount of
reimbursement to which the presenting party is entitled along
with such supporting evidence as is reasonably necessary to
calculate the amount of reimbursement. Any payment required under
this Section and not made within ten (10) days of delivery of the
statement shall bear interest at the rate per annum determined,
from time to time, under the provisions of Section 6621(a)(2) of
the Code for each day until paid.
(b) Cooperation on Tax Matters. Purchaser and Seller
--------------------------
shall cooperate fully, as and to the extent reasonably requested
by the other party, in connection with any audit, litigation or
other proceeding with respect to Taxes. Such cooperation shall
include the retention and (upon the other party's request) the
provision of records and information which are reasonably
relevant to any such
-19-
<PAGE>
audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.
Purchaser and Seller agree (i) to retain all books and records
with respect to Tax matters relating to any taxable period
beginning before the Closing Date until the expiration of the
statute of limitations (and, to the extent notified by Purchaser
or Seller, any extensions thereof) of the respective taxable
periods, and to abide by all record retention agreements entered
into with any Tax authority, and (ii) to give the other party
reasonable written notice prior to transferring, destroying or
discarding any such books and records and, if the other party so
requests, Purchaser or Seller, as the case may be, shall allow
the other party to take possession of such books and records.
15.5. Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
15.6. Successors and Assigns; Beneficiaries This Agreement shall bind
-------------------------------------
and inure to the benefit of the parties named herein and their respective
successors and assigns. Purchaser shall be entitled to assign its right and
duties (in whole or in part) under this Agreement to one or more subsidiaries of
Purchaser or an affiliate of Purchaser which subsidiary or affiliate is
controlled, directly or indirectly, by Purchaser or such other arrangement,
pursuant to a mutually acceptable agreement between Seller and Purchaser;
provided, however, that Purchaser shall in all events remain liable hereunder.
Except as provided in the foregoing sentence, no party may assign any rights,
benefits, duties or obligations under this Agreement without the prior written
consent of the other party. No third party shall be entitled to enforce any
provision hereof; and no third party is intended to benefit from this Agreement.
15.7. Entire Agreement. This Agreement and the documents referred to
----------------
herein contain the entire agreement and understanding among the parties with
respect to the transactions contemplated hereby and supersede all other
agreements, understandings and undertakings among the parties on the subject
matter hereof.
15.8. Announcements. No announcement of the specific terms of this
-------------
Agreement shall be made by any party without the written approval of the other
party (which approval shall not be unreasonably withheld).
15.9. Partial Invalidity. In the event that any provision of this
------------------
Agreement shall be held invalid or unenforceable by any court or competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
15.10. Governing Law; Jurisdiction. This Agreement shall be interpreted
---------------------------
in accordance with the substantive laws of the State of Florida applicable to
contracts made and to be performed wholly within said state. Except as set
forth in Section 15.11, all disputes, legal actions, suits and proceedings
arising out of or relating to this Agreement shall be brought in a federal
district or state court located in Tampa, Florida. Each party hereby consents
to the jurisdiction of the federal district or state court in Tampa, Florida.
Each party hereby irrevocably
-20-
<PAGE>
waives all claims of immunity from jurisdiction and any right to object on the
basis that any dispute, action, suit or proceeding brought in the federal
district or state court of Tampa, Florida has been brought in an improper or
inconvenient venue or forum.
15.11. Disputes.
---------
(a) Seller and Purchaser mutually desire that friendly collaboration will
develop between themselves. Accordingly, they shall try to resolve in a
friendly manner all disagreements and misunderstandings connected with their
respective rights and obligations under this Agreement, including any amendments
hereof.
(b) (i) To the extent that any misunderstanding or dispute cannot be
resolved agreeably in a friendly manner, the dispute will be mediated by a
mutually acceptable mediator to be chosen by Seller and Purchaser within forty-
five (45) days after written notice by one of the parties demanding mediation.
Neither party may unreasonably withhold consent to the selection of a mediator,
however, by mutual agreement Seller and Purchaser may postpone mediation until
each has completed specified but limited discovery with respect to a dispute.
The parties may also agree to attempt some other form of alternative dispute
resolution ("ADR") in lieu of mediation, including by way of example and without
limitation, neutral fact-finding or a mini-trial.
(ii) Any dispute which the parties cannot resolve through
negotiation, mediation or other form of ADR within six (6) months of the date of
the initial demand for it by one of the parties may then be submitted to the
courts for resolution. The use of any ADR procedures will not be construed under
the doctrine of laches, waiver or estoppel to affect adversely the rights of
either party. Nothing in this Section 15.11 will prevent either party from
resorting to judicial proceedings if (A) good faith efforts to resolve the
dispute under these procedures have been unsuccessful or (B) interim relief from
a court is necessary to prevent serious and irreparable injury to one party or
to others.
(c) Each of Purchaser and Seller shall bear their own respective costs of
mediation or ADR but Purchaser and Seller agree to share the costs of the
mediation or ADR equally.
15.12. Further Assurances. In case at any time after the Closing any
------------------
further commercially reasonable action is necessary to carry out the purposes of
this Agreement, each of the parties shall take such further commercially
reasonable action (including the execution and delivery of such further
instruments and documents) as the other party may reasonably request, all at the
sole cost and expense of the requesting party.
15.13. Other Rules of Construction. References in this Agreement to
---------------------------
sections, schedules, attachments and exhibits are to sections of, and
schedules, attachments and exhibits to, this Agreement unless otherwise
indicated. Words in the singular include the plural and in the plural include
the singular. The word "including" shall mean including, without limitation.
The Section and other headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
-21-
<PAGE>
15.14. Authorship. The parties hereto agree that the terms and language
----------
of this Agreement were the result of negotiations between the parties and, as a
result, there shall be no presumption that any ambiguities in this Agreement
shall be resolved against either party. Any controversy over construction of
this Agreement shall be decided without regard to events of authorship or
negotiation.
* * *
-22-
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by a duly authorized officer all as of the date first
written above.
PINNACLE TOWERS INC., PINNACLE TOWERS III INC.,
a Delaware corporation a Florida corporation
______________________________ __________________________________________
Bernard Gaboury, President Steven R. Day, Vice President, Chief
Financial Officer and Secretary
-23-
<PAGE>
SCHEDULE 1.2(b)
(See attached)
-24-
<PAGE>
SCHEDULE 1.3
None.
-25-
<PAGE>
SCHEDULE 4.0
Persons Who Have Actual Knowledge
1. Jim Bokish
2. Steven Day
3. Bob Wolsey
4. Ben Gaboury
-26-
<PAGE>
SCHEDULE 4.6
1. Liens arising in connection with the Fifth Amended and Restated Credit
Agreement executed September 17, 1999, by and between Seller and Bank of
America, N.A.
-27-
<PAGE>
SCHEDULE 4.10
(See attached)
-28-
<PAGE>
SCHEDULE 4.12(a)
None.
-29-
<PAGE>
SCHEDULE 4.13
Compliance With Laws
To the knowledge of the Seller, with respect to the Sites located in the United
States, to the extent that Seller is required to comply with the United States
Federal Communications Commission Rules and Regulations relating to
ElectroMagnetic Emissions ("EME") at antenna sites [47 CFR. 1.1307(b)] ("FCC EME
Rules"), Seller is currently in compliance in all material respects (or shall be
in compliance in all material respects as of the Closing Date) with the FCC EME
Rules.
Additionally, to the knowledge of Seller, with respect to the sites located in
Canada, to the extent that Seller is required to comply with the Health Canada's
Rules and Regulations relating to ElectroMagnetic Emissions ("EME") at antenna
sites [Health Canada Safety Code 6] ("Safety Code 6"), Seller is currently in
compliance in all material respects (or shall be in compliance in all material
respects as of the Closing Date) with Safety Code 6.
Pinnacle Towers Inc. is not a licensed real estate broker.
-30-
<PAGE>
SCHEDULE 7.5
(See attached)
-31-
<PAGE>
Exhibit 10.6
SERVICES AGREEMENT
------------------
THIS SERVICES AGREEMENT (this "Agreement") is effective as of the 31st
day of August, 1999, by and between PINNACLE TOWERS INC., a Delaware corporation
("Seller") and Pinnacle Towers III Inc., a Florida corporation ("Purchaser").
WHEREAS, pursuant to that Agreement for Purchase and Sale of Assets dated
August 31, 1999 by and between Seller and Purchaser (the "Asset Purchase
Agreement"), Purchaser is purchasing certain assets from Seller;
WHEREAS, Seller will provide certain services to Purchaser subject to the
provisions set forth herein;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties agree as follows:
1. Services to be Provided. During the term of this Agreement, upon the
-----------------------
reasonable request of Purchaser, Seller will provide, or will cause to be
provided, to Purchaser the services set forth on Schedule A (the "Services").
2. Fees for Services.
-----------------
(a) As consideration for the Services provided by Seller to
Purchaser pursuant to Schedule A of this Agreement, Purchaser will pay to Seller
a fee on an annual basis during the term of this Agreement in which Purchaser
receives Services (the "Services Fee").
(b) The Services Fee shall be equal to all costs and expenses
incurred by Seller in connection with the provision of the Services and shall
include, without limitation, the following: (i) all direct costs incurred to
provide the Services, including out-of-pocket expenses, (ii) all fees of third
parties, including fees and expenses of consultants, attorneys, accountants and
other experts and (iii) such portion of the overhead expenses relating to the
provision of the Services as the parties shall agree upon in writing prior to
the provision of any Service.
(c) Purchaser shall pay the full amount of the Services Fee within
ten (10) days of the date on which such Services Fee is determined in accordance
with the terms set forth on Schedule A.
3. Performance of Services. All Services to be performed under this
-----------------------
Agreement shall be performed with reasonable care and pursuant to the good faith
business judgement of Seller.
4. Limitation of Liability.
-----------------------
(a) Seller and its Affiliates, and the officers,
directors, employees, shareholders, partners, representatives,
consultants and agents of Seller and its Affiliates
(collectively, "Providing Parties") shall not be liable to the
party receiving the Services, its Affiliates, or to any officer,
director, employee,
<PAGE>
shareholder, partner, representative, consultant or agent of such
party or its Affiliates (collectively, "Receiving Parties"), for
any liability, cost, damage, expense or loss, including, without
limitation, any special, indirect, consequential or punitive
damages (i) arising or allegedly arising out of any actions or
failures to act by any of the Providing Parties with respect to
the Services to be provided hereunder, or (ii) as a result of the
reliance by any of the Receiving Parties on any advice or data
that any of the Providing Parties may provide pursuant to this
Agreement; provided, however, that the foregoing shall not apply
to limit liability of a party to the extent caused by such
party's gross negligence or willful misconduct.
(b) The Receiving Parties shall indemnify and hold
harmless each and every of the Providing Parties from and against
any liability, cost, damage, expense or loss (including court
costs and reasonable attorneys' fees) which such Providing
Parties may sustain or incur by reason of any claim, demand, suit
or recovery by any person or entity, directly resulting from acts
or omissions committed by the Receiving Party in connection with
this Agreement; provided, however, that no person may benefit
from the foregoing indemnity in the event of its gross negligence
or willful misconduct.
5. Term. The term of this Agreement with respect to any Services to be
----
provided by Seller shall commence as of the date hereof and end on the date set
forth on Schedule A, unless earlier terminated by Purchaser. This Agreement
may, at the option of Purchaser, be terminated at any time for any reason upon
thirty days notice to Seller.
6. Relationship of the Parties. In all matters relating to this
---------------------------
Agreement, each party hereto shall be solely responsible for the acts of its
employees, and employees of one party shall not be considered employees of the
other party. No party shall have any right, power or authority to create any
obligation, express or implied, on behalf of any other party. In performing the
Services hereunder, Seller shall be acting as an independent contractor of
Purchaser. Nothing in this Agreement is intended to create or constitute a
joint venture or partnership between the parties hereto or persons referred to
herein.
7. Force Majeure. Seller shall be excused from performance hereunder for
-------------
any period and to the extent that it is prevented from performing any services
hereunder, in whole or in part, as a result of delays caused by Purchaser or any
act of God, war, civil disturbance, court order, strike, labor dispute, law or
regulation of any governmental authority, or other cause beyond the reasonable
control of Seller. Such nonperformance shall not be a default hereunder.
Seller shall take all reasonable actions to resume performance of its
obligations hereunder as soon as feasible.
8. Amendments and Waiver. No amendment, waiver or consent with respect
---------------------
to any provision of this Agreement shall in any event be effective, unless the
same shall be in writing and signed by the parties hereto, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
-2-
<PAGE>
9. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be, personally delivered or sent by
facsimile transmission with confirming copy sent by overnight courier (such as
Express Mail, Federal Express, etc.) and a delivery receipt obtained and
addressed to the intended recipient as follows:
If to Seller:
Pinnacle Towers Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Ben Gaboury
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
If to Purchaser:
Pinnacle Towers III Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Steve Day
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
Any party may change its address or add or change parties for receiving notice
by written notice given to the others named above. Notices shall be deemed
given as of the date of receipt.
10. Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
11. Successors and Assigns; Beneficiaries. This Agreement shall bind
-------------------------------------
and inure to the benefit of the parties named herein and their respective
successors and assigns. No party may assign any rights, benefits, duties or
obligations under this Agreement without the prior written consent of the other
party. Except as specifically provided in Section 4, no third party shall be
entitled to enforce any provision hereof; and no third party is intended to
benefit from this Agreement.
12. Entire Agreement. This Agreement and the documents referred to
----------------
herein contain the entire agreement and understanding among the parties with
respect to the transactions contemplated hereby and supersede all other
agreements, understandings and undertakings among the parties on the subject
matter hereof.
13. Partial Invalidity. In the event that any provision of this
------------------
Agreement shall be held invalid or unenforceable by any court or competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
-3-
<PAGE>
14. Governing Law; Jurisdiction. This Agreement shall be interpreted in
---------------------------
accordance with the substantive laws of the State of Florida applicable to
contracts made and to be performed wholly within said State. All disputes,
legal actions, suits and proceedings arising out of or relating to this
Agreement shall be brought in a federal district or state court located in
Tampa, Florida. Each party hereby consents to the jurisdiction of the federal
district or state court in Tampa, Florida. Each party hereby irrevocably waives
all claims of immunity from jurisdiction and any right to object on the basis
that any dispute, action, suit or proceeding brought in the federal district or
state court of Tampa, Florida has been brought in an improper or inconvenient
venue or forum.
15. Disputes.
--------
(a) Seller and Purchaser mutually desire that friendly
collaboration will develop between themselves. Accordingly, they
shall try to resolve in a friendly manner all disagreements and
misunderstandings connected with their respective rights and
obligations under this Agreement, including any amendments
hereof.
(b) (i) To the extent that any misunderstanding or dispute
cannot be resolved agreeably in a friendly manner, the dispute
will be mediated by a mutually acceptable mediator to be chosen
by Seller and Purchaser within forty-five (45) days after written
notice by one of the parties demanding mediation. Neither party
may unreasonably withhold consent to the selection of a mediator,
however, by mutual agreement Seller and Purchaser may postpone
mediation until each has completed specified but limited
discovery with respect to a dispute. The parties may also agree
to attempt some other form of alternative dispute resolution
("ADR") in lieu of mediation, including by way of example and
without limitation, neutral fact-finding or a mini-trial.
(ii) Any dispute which the parties cannot resolve through
negotiation, mediation or other form of ADR within six months of
the date of the initial demand for it by one of the parties may
then be submitted to the courts for resolution. The use of any
ADR procedures will not be construed under the doctrine of
laches, waiver or estoppel to affect adversely the rights of
either party. Nothing in this Section 14 will prevent either
party from resorting to judicial proceedings if (A) good faith
efforts to resolve the dispute under these procedures have been
unsuccessful or (B) interim relief from a court is necessary to
prevent serious and irreparable injury to one party or to others.
(c) Each of Purchaser and Seller shall bear its costs of
mediation or ADR, but Purchaser and Seller agree to share the
costs of the mediation of ADR equally.
16. Authorship. The parties hereto agree that the terms and language of
----------
this Agreement were the result of negotiations between the parties and, as a
result, there shall be no presumption that any ambiguities in this Agreement
shall be resolved against either party. Any controversy over construction of
this Agreement shall be decided without regard to events of authorship or
negotiation.
-4-
<PAGE>
17. Defined Terms. All capitalized terms not defined herein shall have
-------------
the meanings ascribed to them in the Asset Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
PINNACLE TOWERS INC.
___________________________________
Bernard Gaboury, President
PINNACLE TOWERS III INC.
___________________________________
Steven R. Day, Vice President, Chief
Financial Officer and Secretary
-5-
<PAGE>
SCHEDULE A
Services:
All organizational, sales, marketing, general and administrative services
reasonably required by Purchaser.
Services Fee:
To be determined by the parties no later than ninety (90) days after the end of
each calendar year during the term of this Agreement for the prior year, based
on the actual Services provided by Seller to Purchaser during such calendar
year.
-6-
<PAGE>
Exhibit 10.7
AGREEMENT
---------
This Agreement (the "Agreement") is made and entered into effective as of
September 28, 1999, by and between Pinnacle Towers III Inc., a Florida
corporation (the "Company") and Pinnacle Towers Inc., a Delaware corporation
("PT").
Background
PT owns 49 shares of Series A Convertible Preferred Stock of the Company
("Series A Preferred"). The parties hereto desire to: (a) effect the redemption
of 39.2 shares of Series A Preferred (the "Preferred Shares") from PT in
exchange for $39,200,000, payable in the form of a Convertible Promissory Note
in the form attached hereto as Exhibit A (the "Promissory Note"); (b) modify the
terms of the Series A Preferred; and (c) terminate that certain Servicing
Agreement between the parties and enter into a Cost and Expense Sharing and
Reimbursement Agreement, subject to the terms of this Agreement. Accordingly, in
consideration of the mutual covenants and agreements contained in this
Agreement, and in reliance on the representations and warranties specified
below, the parties agree as follows:
Terms
1. Redemption of Preferred Shares. In exchange for the consideration set
forth in Section 2 below, PT hereby transfers the Preferred Shares to the
Company, and the Company hereby redeems the Preferred Shares from PT. At the
time of execution of this Agreement, PT shall transfer or cause to be
transferred the certificate evidencing the Preferred Shares, duly endorsed for
transfer or accompanied by an appropriate stock power endorsed in blank, to the
Company. The Company shall reissue or cause the reissuance of a certificate
representing the remaining 9.8 shares of Series A Preferred held by PT.
2. Purchase Price and Method of Payment. The purchase price to be paid to
PT in exchange for the Preferred Shares shall be $39,200,000, payable at the
time of execution of this Agreement by the delivery of the Promissory Note.
3. Representations and Warranties of PT. PT represents and warrants to
the Company that the following statements contained in this Section 3 are
correct and complete as of the date of this Agreement:
(a) Organization. PT is duly organized, validly existing, and in good
------------
standing under the laws of Delaware.
(b) Authorization of Transaction. PT has full power and authority to
----------------------------
execute and deliver this Agreement and to perform its obligations
hereunder.
<PAGE>
The Board of Directors of PT and Pinnacle Holdings, Inc., a Delaware
corporation and sole stockholder of PT, have duly authorized the execution,
delivery and performance of this Agreement, with Steven Day and Robert
Wolsey abstaining. This Agreement constitutes the valid and legally binding
obligation of PT, enforceable in accordance with its terms and conditions.
PT need not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental
agency in order to consummate the transactions contemplated by this
Agreement.
(c) Noncontravention. Neither the execution and the delivery of this
----------------
Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which PT is subject or any
provision of its certificate of incorporation or (ii) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which PT is a party or by which it is
bound or to which any of its assets is subject.
(d) Preferred Shares. PT holds of record or owns beneficially the
----------------
Preferred Shares, free and clear of any interests or rights of third
parties and of any restrictions on transfer (other than restrictions under
the Securities Act of 1933, as amended and state securities laws), taxes,
mortgages, pledges, liens (other than a lien in favor of PT's lender, Bank
of America, N.A.), encumbrances, charges or other security interests,
options, warrants, purchase rights, contracts, commitments, equities,
claims, and demands. PT is not a party to any agreement, option, warrant,
purchase right, or other contract or commitment that could require PT to
sell, transfer, or otherwise dispose of the Preferred Shares. PT is not a
party to any voting trust, proxy, or other agreement or understanding with
respect to the voting of the Preferred Shares. Upon the delivery of the
Preferred Shares as contemplated by this Agreement, the Company will
receive valid marketable title to the Preferred Shares free and clear of
any pledge, lien, security interest, encumbrance, claim or equitable
interest.
4. Representations and Warranties of the Company. The Company
represents and warrants to PT that the following statements contained in this
Section 4 are correct and complete as of the date of this Agreement:
(a) Organization. The Company is duly organized, validly existing,
------------
and with active status under the laws of Florida.
2
<PAGE>
(b) Authorization of Transaction. The Company has full power and
----------------------------
authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of the Company, enforceable in accordance with its terms
and conditions. The Company need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government
or governmental agency in order to consummate the transactions contemplated
by this Agreement.
(c) Noncontravention. Neither the execution and the delivery of this
----------------
Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Company is subject
or any provision of its certificate of incorporation or (ii) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract,
lease, license, instrument, or other arrangement to which the Company is a
party or by which it is bound or to which any of its assets is subject.
5. Consent to Amended and Restated Articles. PT hereby consents to
the modification of the terms of the Series A Preferred as set forth in the
Amended and Restated Articles of Incorporation in the form attached hereto as
Exhibit B (the "Amended and Restated Articles"), which consent is required by
Section 5(k) of the Amended and Restated Articles of the Company and deemed
satisfied by PT's execution of this Agreement. The parties agree that the
shares of Series A Preferred held by PT from the date of original issuance shall
have the preferences, qualifications, rights and privileges set forth in the
Amended and Restated Articles.
6. Cost and Expense Sharing and Reimbursement Agreement. The parties
entered into that certain Servicing Agreement, effective as of August 31, 1999,
pertaining to certain services to be performed by PT on behalf of the Company.
The parties hereby agree to terminate the Servicing Agreement, effective as of
August 31, 1999, and enter into a Cost and Expense Sharing and Reimbursement
Agreement in the form attached hereto as Exhibit C (the "Expense Sharing
Agreement"), which Expense Sharing Agreement shall govern the parties' rights
and obligations effective as of August 31, 1999.
3
<PAGE>
7. Miscellaneous.
(a) No Third-Party Beneficiaries. This Agreement shall not confer any
----------------------------
rights or remedies upon any person other than the parties and their
respective successors and permitted assigns.
(b) Entire Agreement. This Agreement (including the documents
----------------
referred to herein) constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements, or representations by or
among the parties, written or oral, to the extent they have related in any
way to the subject matter hereof.
(c) Succession and Assignment. This Agreement shall binding upon and
-------------------------
inure to the benefit of the parties named herein and their respective
successors and permitted assigns. No party may assign either this
Agreement or any of its rights, interests, or obligations hereunder without
the prior written approval of the other parties.
(d) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(e) Headings. The section headings contained in this Agreement are
--------
inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
(f) Notices. All notices, requests, demands, claims, and other
-------
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if
delivered personally, by overnight courier service (with proof of service),
by telecopy (if confirmed), or (and then two business days after) it is
sent by registered or certified mail, return receipt requested, postage
prepaid, and addressed to the intended recipient as set forth below the
recipient's signature to this Agreement or as follows:
If to the Company:
Pinnacle Towers III Inc.
1549 Ringling Boulevard, 3/rd/ Floor
Sarasota, Florida 34236
Attn: Steven R. Day
4
<PAGE>
If to PT:
Pinnacle Towers Inc.
1549 Ringling Boulevard, 3/rd/ Floor
Sarasota, Florida 34236
Attn: Ben Gaboury
(g) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the domestic laws of the State of Florida without giving
effect to any choice or conflict of law provision or rule (whether of the
State of Florida or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
Florida.
(h) Amendments and Waivers. No amendment of any provision of this
----------------------
Agreement shall be valid unless the same shall be in writing and signed by
all of the parties hereto. No waiver by any party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent
such occurrence.
(i) Severability. Any term or provision of this Agreement that is
------------
invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision
in any other situation or in any other jurisdiction.
(j) Construction. Any reference to any federal, state, local, or
------------
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.
The word "including" shall mean including without limitation. The parties
have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.
5
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
PINNACLE TOWERS INC.
By: _________________________________
Its: _________________________________
PINNACLE TOWERS III INC.
By: _________________________________
Steven R. Day, Vice President, Chief
Financial Officer and Secretary
6
<PAGE>
Exhibit A
NEITHER THIS CONVERTIBLE PROMISSORY NOTE NOR THE VOTING COMMON STOCK INTO WHICH
IT IS CONVERTIBLE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT AND APPLICABLE LAWS OR SOME
OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE
LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
PINNACLE TOWERS III INC.
CONVERTIBLE PROMISSORY NOTE
$39,200,000 ____________, __________
October __, 1999
PINNACLE TOWERS III INC., a Florida corporation (the "Company"), the
principal office of which is located at 1549 Ringling Boulevard, Third Floor,
Sarasota, Florida 34236, for value received hereby promises to pay to Pinnacle
Towers Inc., or its registered assigns, the sum of Thirty Nine Million Two
Hundred Thousand Dollars ($39,200,000), or such lesser amount as shall then
equal the outstanding principal amount hereof and any unpaid accrued interest
hereon, as set forth below. The outstanding principal under this Note shall be
due and payable in full within 30 days of the date demand is made therefor by
the Holder. Demand under this Note shall be given by the Holder to the Company
by written notice thereof in accordance with Section 11 below. Payment for all
amounts due hereunder shall be made at the Company's option by either wire
transfer or by mail to the registered address of the Holder.
The following is a statement of the rights of the Holder of this Note and
the conditions to which this Note is subject, and to which the Holder hereof, by
the acceptance of this Note, agrees:
1. Definitions. As used in this Note, the following terms, unless the
context otherwise requires, have the following meanings:
(a) "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Note.
<PAGE>
(b) "Holder," when the context refers to a holder of this Note, shall
mean any Person who shall at the time be the registered holder of this Note.
(c) "Person" means any individual, Company, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
2. Interest. Commencing on ___________________, and on each
________________ and _________________ thereafter until all outstanding
principal and interest on this Note shall have been paid in full, the Company
shall pay interest at the rate of eighteen percent (18%) per annum (the "Initial
Interest Rate") on the principal of this Note outstanding during the period
beginning on the date of issuance of this Note and ending on the date that the
principal amount of this Note becomes due and payable. In the event that the
principal amount of this Note is not paid in full when such amount becomes due
and payable, interest at the same rate as the Initial Interest Rate plus _____
percent (___%) shall continue to accrue on the balance of any unpaid principal
until such balance is paid.
3. Conversion.
3.1 Conversion. Any Holder of this Note has the right, at the
Holder's option (the "Option"), at any time prior to payment in full of the
principal balance of this Note, to convert this Note, in accordance with the
provisions of Section 3.2 hereof, in whole or in part, into fully paid and
nonassessable shares of the Company's Voting Common Stock, par value $0.001 per
share or Nonvoting Common Stock, par value $0.001 per share (the "Common
Stock"), at the option of the Holder from time to time. The number of shares of
Common Stock into which this Note may be converted ("Conversion Shares") shall
be determined by dividing the aggregate principal amount of this Note together
with all accrued interest to the date of conversion elected to be converted by
the Holder by the Conversion Price (as defined below) in effect at the time of
such conversion. The initial Conversion Price shall be equal to $25 (the
"Conversion Price").
3.2 Notice of Conversion Pursuant to Section 3.1. Before the Holder
shall be entitled to convert this Note into shares of Common Stock, it shall
surrender this Note at the office of the Company and shall give written notice
to the Company at its principal corporate office of the election to convert all
or a portion of the same pursuant to this Section 3 ("Notice of Conversion"),
and shall state therein the amount of the Note to be converted and the name or
names in which the certificate or certificates for shares of Common Stock are to
be issued. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the Note, and the
Person or Persons entitled to receive the shares of Common Stock issuable upon
such conversion shall
2
<PAGE>
be treated for all purposes as the record holder or holders of such shares of
Common Stock as of such date.
3.3 Mechanics and Effect of Conversion. No fractional shares of
Common Stock shall be issued upon conversion of this Note. In lieu of the
Company issuing any fractional shares to the Holder upon the conversion of this
Note, the Company shall pay to the Holder the amount of outstanding principal
that is not so converted, such payment to be in the form as provided below. Upon
the conversion of this Note pursuant to Section 3.1 above, the Holder shall
surrender this Note, duly endorsed, at the principal office of the Company. At
its expense, the Company shall, as soon as practicable thereafter, issue and
deliver to such Holder at such principal office a certificate or certificates
for the number of shares of such Common Stock to which the Holder shall be
entitled upon such conversion (bearing such legends as are required by
applicable state and federal securities laws in the opinion of counsel to the
Company), together with any other securities and property to which the Holder is
entitled upon such conversion under the terms of this Note, including a check
payable to the Holder for any cash amounts payable as described above and a
replacement Note representing any amount of the Note not converted. Upon the
complete conversion of all of this Note, the Company shall be forever released
from all its obligations and liabilities under this Note, except that the
Company shall be obligated to pay the Holder, within ten (10) days after the
date of such conversion, any interest accrued and unpaid or unconverted to and
including the date of such conversion, and no more.
4. Prepayment. Prepayment of the principal of this Note is permitted, in
whole or in part, without premium or penalty of any kind; provided the Company
provides the Holder with thirty (30) days' prior written notice (unless notice
is waived in writing by the Holder) of its intention to prepay the principal of
this Note, in whole or in part, during which time the Holder may exercise the
Option by delivering to the Company the Notice of Conversion.
5. Conversion Price Adjustments.
5.1 Adjustments for Stock Splits and Subdivisions. In the event the
Company should at any time or from time to time after the date of issuance
hereof fix a record date for the effectuation of a split or subdivision of the
outstanding shares of Common Stock or the determination of holders of Common
Stock entitled to receive a dividend or other distribution payable in additional
shares of Common Stock or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly, additional
shares of Common Stock (hereinafter referred to as "Common Stock Equivalents")
without payment of any consideration by such holder for the additional shares of
Common Stock or the Common Stock Equivalents (including the additional shares of
Common Stock issuable upon
3
<PAGE>
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the Conversion Price of this Note shall be appropriately decreased so that the
number of shares of Common Stock issuable upon conversion of this Note shall be
increased in proportion to such increase of outstanding shares.
5.2 Adjustments for Reverse Stock Splits. If the number of shares of
Common Stock outstanding at any time after the date hereof is decreased by a
combination of the outstanding shares of Common Stock, then, following the
record date of such combination, the Conversion Price for this Note shall be
appropriately increased so that the number of shares of Common Stock issuable on
conversion hereof shall be decreased in proportion to such decrease in
outstanding shares.
5.3 Notices of Record Date, etc. In the event of:
(a) Any taking by the Company of a record of the holders of any
class of securities of the Company for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash dividend
payable out of earned surplus at the same rate as that of the last such cash
dividend theretofore paid) or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right; or
(b) Any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets of the Company to any other
Person or any consolidation or merger involving the Company; or
(c) Any voluntary or involuntary dissolution, liquidation or
windingup of the Company, the Company will mail to the holder of this Note at
least seven (7) days prior to the earliest date specified therein, a notice
specifying:
(i) The date on which any such record is to be taken for
the purpose of such dividend, distribution or right, and the amount and
character of such dividend, distribution or right; and
(ii) The date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
windingup is expected to become effective and the record date for determining
shareholders entitled to vote thereon.
5.4 Reservation of Stock Issuable Upon Conversion. The Company shall
at all times reserve and keep available out of its authorized but unissued
4
<PAGE>
shares of Common Stock solely for the purpose of effecting the conversion of
this Note such number of its shares of Common Stock as shall from time to time
be sufficient to effect the conversion of the Note; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of the entire outstanding principal amount of this
Note, in addition to such other remedies as shall be available to the holder of
this Note, the Company will use its best efforts to take such corporation action
as may, in the opinion of its counsel, be necessary to increase its authorized
but unissued shares of Common Stock to such number of shares as shall be
sufficient for such purposes.
6. Representations and Warranties of the Holder.
(a) The Holder by its acceptance of this Note acknowledges that it is
aware that this Note and the shares of Common Stock issuable to it by the
Company upon conversion of this Note have not been registered under the
Securities Act of 1933, as amended ("Act"), or the securities laws of any state
or other jurisdiction.
(b) The Holder warrants and represents to the Company that it has
acquired this Note, and, upon conversion of the Note, it will be acquiring the
Common Stock, for investment and not with a view to or for sale in connection
with any distribution of this Note or such Common Stock or with any intention of
distributing or selling this Note or such Common Stock.
(c) The Holder has no right to demand that the Company register this
Note or the shares of Common Stock issued or issuable under this Note.
7. Assignment. Subject to the restrictions on transfer described in
Section 11 below, the rights and obligations of the Company and the Holder of
this Note shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.
8. Waiver and Amendment. Any provision of this Note may be amended,
waived or modified upon the written consent of the Company and the Holder.
9. Transfer of This Note or Securities Issuable on Conversion Hereof.
With respect to any offer, sale or other disposition of this Note or securities
into which such Note may be converted, the Holder will give written notice to
the Company prior thereto, describing briefly the manner thereof, together with
a written opinion of such Holder's counsel, to the effect that such offer, sale
or other distribution may be effected without registration or qualification
(under any federal or state law then in effect). Promptly upon receiving such
written notice and reasonably satisfactory opinion, if so requested, the
Company, as promptly as practicable, shall notify such Holder that such Holder
may sell or otherwise dispose
5
<PAGE>
of this Note or such securities, all in accordance with the terms of the notice
delivered to the Company. If a determination has been made pursuant to this
Section 9 that the opinion of counsel for the Holder is not reasonably
satisfactory to the Company, the Company shall so notify the Holder promptly
after such determination has been made. Each Note thus transferred and each
certificate representing the securities thus transferred shall bear a legend as
to the applicable restrictions on transferability in order to ensure compliance
with the Act, unless in the opinion of counsel for the Company such legend is
not required. The Company may issue stop transfer instructions to its transfer
agent in connection with such restrictions.
10. Treatment of Note. To the extent permitted by generally accepted
accounting principles, the Company will treat, account and report the Note as
debt and not equity for accounting purposes and with respect to any returns
filed with federal, state or local tax authorities.
11. Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if (and then two business days after) mailed by
registered or certified mail, postage prepaid, at the respective addresses of
the parties as set forth herein. Any party hereto may by notice so given change
its address for future notice hereunder.
12. No Shareholder Rights. Nothing contained in this Note shall be
construed as conferring upon the Holder or any other Person the right to vote or
to consent or to receive notice as a shareholder in respect of meetings of
shareholders for the election of directors of the Company or any other matters
or any rights whatsoever as a shareholder of the Company; and no dividends or
interest shall be payable or accrued in respect of this Note or the interest
represented hereby or the Conversion Shares obtained hereunder until, and only
to the extent that, this Note shall have been converted.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, excluding that body of law
relating to conflict of laws.
14. Heading; References. All headings used herein are used for
convenience only and shall not be used to construe or interpret this Note.
Except where otherwise indicated, all references herein to Sections refer to
Sections hereof.
6
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be issued this
_____ day of ___________, 1999.
PINNACLE TOWERS III INC.
By_________________________________
Steven R. Day, Vice President
Name of Holder: ____________
Address: ___________________
___________________
7
<PAGE>
Exhibit B
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
PINNACLE TOWERS III INC.
In accordance with Section 607.1007 of the Florida Business Corporation Act
("FBCA"), the Articles of Incorporation of Pinnacle Towers III Inc., a Florida
corporation (the "Corporation"), are hereby amended and restated to read in
their entirety as follows:
ARTICLE I. NAME
----------------
The name of the Corporation is:
PINNACLE TOWERS III INC.
ARTICLE II. ADDRESS
--------------------
The mailing address of the Corporation is:
1549 Ringling Boulevard
Sarasota, Florida 34236
ARTICLE III. COMMENCEMENT OF EXISTENCE
---------------------------------------
The existence of the Corporation will commence at 12:01 A.M., the date of
filing of these Articles of Incorporation.
ARTICLE IV. PURPOSE
--------------------
The Corporation is organized to engage in any activity or business
permitted under the laws of the United States and Florida.
ARTICLE V. AUTHORIZED CAPITAL
------------------------------
A. AUTHORIZED SHARES. The total number of shares of capital stock that
-----------------
the Corporation has authority to issue is:
1. 1,960,440 shares of Voting Common Stock, par value $0.001 per
share (the "Voting Common");
-------------
2. 1,965,000 shares of Nonvoting Common Stock, par value $0.001 per
share (the "Nonvoting Common"); and
----------------
<PAGE>
3. 1,000,000 shares of Preferred Stock, par value $0.001 per share
(the "Preferred Stock").
---------------
B. COMMON STOCK. The Voting Common and the Nonvoting Common are
------------
collectively referred to as the "Common Stock". The shares may be issued from
------------
time to time as authorized by the Board of Directors of the Corporation without
further approval of the shareholders of the Corporation, except as otherwise
provided herein or to the extent that such approval is required by statute, law,
rule or regulation. Shares of Common Stock will have the rights, preferences
and limitations set forth below. Capitalized terms used and not otherwise
defined in this Section B shall have the meaning set forth in Section 9.
1. Voting Rights. Except as otherwise provided in this Article V or
-------------
as otherwise required by applicable law, (a) holders of Voting Common shall be
entitled to one vote per share on all matters to be voted on by the shareholders
of the Corporation, and (b) holders of Nonvoting Common shall have no right to
vote on any matter to be voted on by the shareholders of the Corporation, except
as otherwise required by statute, law, rule or regulation.
2. Dividends. As and when dividends are declared or paid thereon,
---------
whether in cash, property or securities of the Corporation, the holders of
Common Stock shall be entitled to participate in such dividends ratably on a per
share basis; provided, that (i) if dividends are declared that are payable in
--------
shares of Voting Common or Nonvoting Common then dividends shall be payable at
the same rate on each such class of Common Stock and the dividends payable in
shares of Voting Common shall be payable to holders of Voting Common, and
dividends payable in shares of Nonvoting Common shall be payable to holders of
Nonvoting Common, and (ii) if the dividends consist of other voting securities
of the Corporation, then the Corporation shall make available to each holder of
Nonvoting Common, at such holder's request, dividends consisting of non-voting
securities of the Corporation which are otherwise identical to such other voting
securities.
3. Liquidation. The holders of Common Stock shall be entitled to
-----------
participate ratably on a per share basis in all distributions to the holders of
Common Stock in any liquidation, dissolution or winding up of the Corporation.
2
<PAGE>
4. Stock Splits And Stock Dividends. If there are any shares of
--------------------------------
Common Stock issued and outstanding, the Corporation will not in any manner
subdivide (by stock split, stock dividend or otherwise) or combine (by reverse
stock split or otherwise) the outstanding shares of Common Stock of one class
unless the outstanding Common Stock of all the other classes will be
proportionately subdivided or combined. All such subdivisions will be payable
only in Voting Common only to the holders of Voting Common and in Nonvoting
Common only to the holders of Nonvoting Common.
5. Percentage Limits. No share of Common Stock will be sold or
-----------------
otherwise transferred (with or without consideration) to any individual if such
transfer would result in the ownership by such individual in combination with
four or fewer individuals (within the meaning of Section 542(a)(2) of the
Internal Revenue Code of 1986 (the "Code")) of more than fifty percent of the
aggregate value of all shares of all classes of capital stock of the Corporation
(the "Percentage Ownership Limit").
--------------------------
6. Distributions. Subject to any right of any holder of Preferred
-------------
Stock to receive any distribution whether in cash, property or securities and
whether by dividend, liquidation, distribution or otherwise ("Distribution"),
the holders of Common Stock will be entitled to receive any Distribution ratably
among such holders on the basis of the number of shares of Common Stock held by
such holders.
7. Approval by Voting Common. So long as any Voting Common remains
-------------------------
outstanding, without the prior written consent of the holders of
a majority of the outstanding shares of Voting Common, the
Corporation will not, nor will it permit any Subsidiary to (i)
issue any Senior Securities, Pari Passu Securities or Common
Stock, other than to issue up to 5,000 additional shares of
Nonvoting Common in order for it, in the judgment of any officer
of the Corporation, to obtain or maintain the status of the
Corporation as a Real Estate Investment Trust under Section 856-
860 of the Code; (ii) redeem, purchase or otherwise acquire
directly or indirectly any Pari Passu Securities or Common Stock,
(iii) sell, transfer, assign or dispose of or lease to one or
more Affiliates in one or more related series of transactions or
take any similar action with respect to any substantial portion
of the Corporation's assets, or make any material acquisition of
assets, other than pursuant to that certain Agreement for
Purchase and Sale effective as of August 31, 1999, between the
Corporation and Pinnacle Towers Inc., a Delaware corporation;
(iv) Incur in excess of $100,000 in Debt for borrowed money; (v)
enter into a transaction with an Affiliate
3
<PAGE>
of the Corporation involving consideration in excess of $10,000;
(vi) directly or indirectly pay or declare any dividend or make
any distribution upon any Pari Passu Securities or any Common
Stock; or (v) Incur or suffer to exist any Lien on or with
respect to any property or assets now owned or hereafter acquired
to secure any Debt.
8. Reserved Shares. The Corporation will at all times reserve and
---------------
keep available out of its authorized Voting Common a sufficient number of shares
of Voting Stock to issue upon conversion of any shares of "Series A. Preferred"
(as defined herein) or indebtedness of the Corporation that is outstanding from
time to time that is convertible into Voting Common to satisfy the Corporation's
obligations to issue Voting Common upon any such conversions.
8. Definitions. As used herein or in Section V (C) hereof, the
-----------
following terms have the following respective meanings:
"Capital Lease Obligation" of the Corporation means the obligation to
------------------------
pay rent or other payment amounts under a lease of (or other Debt
arrangements conveying the right to use) real or personal property of the
Corporation which is required to be classified and accounted for as a
capital lease or a liability on the face of a balance sheet of the
Corporation in accordance with generally accepted accounting principles.
The stated maturity of such obligation shall be the date of the last
payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment
of a penalty. The principal amount of such obligation shall be the
capitalized amount thereof that would appear on the face of a balance sheet
of the Corporation in accordance with generally accepted accounting
principles.
"Debt" means (without duplication), with respect to the Corporation,
----
whether recourse is to all or a portion of the assets of the Corporation
and whether or not contingent, (i) every obligation of the Corporation for
money borrowed, (ii) every obligation of the Corporation evidenced by
bonds, debentures, notes or other similar instruments, including
obligations Incurred in connection with the acquisition of property, assets
or businesses, (iii) every reimbursement obligation of the Corporation with
respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of the Corporation, (iv) every obligation of the
Corporation issued or assumed as the deferred purchase price of property or
services (including securities repurchase agreements but excluding trade
accounts payable or accrued liabilities arising in the ordinary course of
business which are not overdue or
4
<PAGE>
which are being contested in good faith), (v) every Capital Lease
Obligation of the Corporation, (vi) all Receivables Sales of the
Corporation, together with any obligation of the Corporation to pay any
discount, interest, fees, indemnities, penalties, recourse, expenses or
other amounts in connection therewith, (vii) every obligation under
Interest Rate or Currency Protection Agreements of the Corporation and
(viii) every obligation of the type referred to in clauses (i) through
(vii) of another Person and all dividends of another Person the payment of
which, in either case, the Corporation has Guaranteed or is responsible or
liable, directly or indirectly, as obligor, Guarantor or otherwise. The
"amount" or "principal amount" of Debt at any time of determination as used
herein represented by (a) any contingent Debt, shall be the maximum
principal amount hereof, (b) any Debt issued at a price that is less than
the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally
accepted accounting principals, and (c) any Receivables Sale, shall be the
amount, if any, in connection with such Receivables Sale for which there is
recourse to the seller or any of its Subsidiaries.
"Guarantee" of the Corporation means any obligation, contingent
---------
or otherwise, of the Corporation guaranteeing, or having the economic
effect of guaranteeing, any Debt of any other Person (the "Primary
-------
Obligor") in any manner, whether directly or indirectly, and including,
-------
without limitation, any obligation of such Person, (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Debt or to
purchase (or to advance or supply funds for the purchase of) any security
for the payment of such Debt, (ii) to purchase property, securities or
services for the purpose of assuring the holder of such Debt of the payment
of such Debt, or (iii) to maintain working capital, equity or other
financial statement condition or liquidity of the Primary Obligor so as to
enable the Primary Obligor to pay such Debt (and "Guaranteed",
"Guaranteeing" and "Guarantor" shall have the meanings correlative to the
foregoing); provided, however, that the Guarantee by the Corporation shall
not include endorsements by the Corporation for collection or deposit, in
either case, in the ordinary course of business.
"Incur" means, with respect to any Debt or other obligation of the
-----
Corporation, to create, issue, incur (by conversion, exchange or
otherwise), assume, Guarantee or otherwise become liable in respect of such
Debt or other obligation or the recording, as required pursuant to
generally accepted accounting principles or otherwise, of any such Debt or
other obligation on the balance sheet of the Corporation (and "Incurrence",
"Incurred", "Incurable" and "Incurring" shall have meanings correlative to
the foregoing); provided, however, that a change in generally accepted
accounting principles
5
<PAGE>
that results in an obligation of the Corporation that exists at such time
becoming Debt shall not be deemed an Incurrence of such Debt.
"Interest Rate or Currency Protection Agreement" of the Corporation
----------------------------------------------
means any forward contract, futures contract, swap, option or other
financial agreement or arrangement (including, without limitation, caps,
floors, collars and similar agreements) relating to, or the value of which
is dependent upon, interest rates or currency exchange rates or indices.
"Junior Securities" means any capital stock or other equity securities
-----------------
of the Corporation, except for the Series A Preferred (as defined below),
Senior Securities and Pari Passu Securities.
"Liquidation Value" means, in relation to any Share, $1,000,000.
-----------------
"Pari Passu Securities" means shares of any series of preferred stock
---------------------
of the Corporation created and authorized in accordance with the Articles
of Incorporation of the Corporation, if the terms of such series expressly
provide that shares of such series will be "Pari Passu Securities" with
respect to the Series A Preferred.
"Person" means any individual, corporation, partnership, joint
------
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Receivables" means receivables, chattel paper, instruments, documents
-----------
or intangibles evidencing or relating to the right to payment of money.
"Receivables Sale" of the Corporation means any sale of Receivables of
----------------
the Corporation (pursuant to a purchase facility or otherwise), other than
in connection with a disposition of the business operations of the
Corporation relating thereto or a disposition of defaulted Receivables for
purpose of collection and not as a financing arrangement.
"Senior Securities" means shares of any series of preferred stock of
-----------------
the Corporation created and authorized in accordance with the Articles of
Incorporation of the Corporation, if the terms of such other series
expressly provide that shares of such series will be "Senior Securities"
with respect to the Series A Preferred.
"Subsidiary" means any corporation of which the shares of outstanding
----------
capital stock possessing the voting power (under ordinary
6
<PAGE>
circumstances) in electing the board of directors are, at the time as of
which any determination is being made, owned by the Corporation either
directly or indirectly through Subsidiaries.
C. PREFERRED STOCK.
---------------
1. Generally. Shares of Preferred Stock may be issued from time to
---------
time in one or more series. The Board of Directors of the Corporation without
further approval by the shareholders of the Corporation is hereby expressly
authorized to determine and alter all rights, preferences, privileges,
qualifications, limitations and restrictions of any such series (including,
without limitation, voting rights and the limitation and exclusion of voting
rights) of Preferred Stock and the number of shares constituting any such series
and the designation thereof, and to increase or decrease (but not below the
number of shares of such series then outstanding) the number of shares of any
series after the issuance of shares of that series. If the number of shares of
any series is so decreased, then the shares constituting such reduction will
resume the status that such shares had prior to the adoption of the resolution
originally fixing the number of shares of such series. No share of any series
of Preferred Stock will be sold or otherwise transferred (with or without
consideration) to any individual if such transfer would result in a violation of
the Percentage Ownership Limit.
2. Voting Rights. The holders of shares of Preferred Stock shall
-------------
not be entitled to vote except unless established by the Board of Directors or
otherwise required by statute, law, rule or regulation.
3. Stock to be Reserved. The Corporation will at all times reserve
--------------------
and keep available out of its authorized Preferred Stock, solely for the purpose
of paying dividends, such number of shares of Preferred Stock as shall be
required to satisfy only dividend requirements.
4. Retirement of Shares. Shares of Preferred Stock that are
--------------------
redeemed by the Corporation shall be permanently retired and shall not under any
circumstances be reissued.
5. Series A Convertible Preferred Stock.
------------------------------------
5(a). Designation and Number of Shares. The Corporation is hereby
--------------------------------
authorized to issue from time to time a total of 100 shares of Preferred Stock
to be designated Series A Convertible Preferred Stock, with $0.001 par value per
share, having the preferences, qualifications, rights and privileges set forth
herein (the "Series A Preferred"). Capitalized terms used and not otherwise
------------------
defined in this Section 5 shall have the meanings set forth in Section B(8)
above.
7
<PAGE>
5(b). Rank.
----
(i) Priority. The Series A Preferred will rank with respect to
--------
dividend rights and rights on liquidation, winding up and dissolution: (a)
senior to the Common Stock and all other Junior Securities; (b) pari passu with
all Pari Passu Securities; and (c) junior to all Senior Securities.
(ii) Distributions. Any distribution made pursuant to dividend
-------------
rights or rights on liquidation, winding up, or dissolution will be made to the
holders of the Corporation's securities in accordance with the relative
priorities set forth above, and any such distribution will fully satisfy the
Corporation's obligations to the holders of a senior security prior to any
distribution to the holders of any Junior Security.
5(c). Dividends.
---------
(i). General Obligation. When and as declared by the
------------------
Corporation's Board of Directors and to the extent permitted under the FBCA of
the State of Florida, and subject to the terms of any Senior Securities, the
Corporation will pay preferential dividends to the holders of the Series A
Preferred as provided in this Section 5(c)(i). Dividends on each share of the
Series A Preferred (a "Share") will accrue on a daily basis at the rate of 18%
-----
per annum of the sum of the Liquidation Value thereof from time to time plus all
accumulated and unpaid dividends thereon from and including the date of issuance
of such Share to and including the first to occur of: (a) the date on which the
Liquidation Value of such Share (plus all accrued and unpaid dividends thereon)
is paid to the holder thereof in connection with the liquidation of the
Corporation; or (b) the date on which such Share is acquired by the Corporation.
Such dividends will accrue whether or not they have been declared and whether or
not there are profits, surplus or other funds of the Corporation legally
available for the payment of dividends. The date on which the Corporation
initially issues any Share will be deemed to be its "date of issuance"
regardless of the number of times transfer of such Share is made on the stock
records maintained by or for the Corporation and regardless of the number of
certificates which may be issued to evidence such Share.
(ii) Dividend Reference Dates. To the extent not paid on March
------------------------
31, June 30, September 30 or December 31 of any year, beginning with the first
such date after the date of issuance of the Share in question (each a "Dividend
--------
Reference Date"), all dividends which have accrued on each Share outstanding
- --------------
during the three-month period (or other period, in the case of the first
Dividend Reference Date after the date of issuance of such Share) ending upon
each such Dividend Reference Date will be accumulated and will remain
accumulated and accrue dividends with respect to such Share until paid to the
holder thereof.
8
<PAGE>
(iii) Distribution of Partial Dividend Payments. If at any time
-----------------------------------------
the Corporation pays less than the total amount of dividends then accrued with
respect to the Series A Preferred, such payment will be distributed pro rata
among the holders thereof based upon the rank and number of Shares held by each
such holder.
5(d). Liquidation. Subject to the terms of any Senior Securities,
-----------
upon any liquidation, dissolution or winding up of the Corporation (whether
voluntary or involuntary), each holder of Series A Preferred will be entitled to
be paid, after any required distribution or payment is made upon any Senior
Securities, before any distribution or payment is made upon any Junior
Securities, and on a pari passu basis (pro rata according to the relative
amounts to be paid) with any required distribution or payment to be made upon
any Pari Passu Securities, an amount in cash equal to the aggregate Liquidation
Value of all Shares held by such holder (plus all accrued and unpaid dividends
thereon), and the holders of Series A Preferred will not be entitled to any
further payment. If upon any such liquidation, dissolution or winding up of the
Corporation the Corporation's assets to be distributed among the holders of the
Series A Preferred and any Pari Passu Securities are insufficient to permit
payment to such holders of the aggregate amount which they are entitled to be
paid under this Section 5(d), then the entire assets available to be distributed
to the Corporation's shareholders will be distributed pro rata among the holders
of Series A Preferred and any Pari Passu Securities based upon the aggregate
Liquidation Value (plus all accrued and unpaid dividends) of the Series A
Preferred, and the comparable amount payable to the holders of any Pari Passu
Securities, held by each such holder. Neither the consolidation or merger of
the Corporation into or with any other entity or entities (whether or not the
Corporation is the surviving entity), nor the sale or transfer by the
Corporation of all or any part of its assets, nor the reduction of the capital
stock of the Corporation nor any other form of recapitalization or
reorganization affecting the Corporation will be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this Section
5(d).
5(e). Voting Rights. Except as otherwise may be required herein or by
-------------
the FBCA, the holders of the Series A Preferred will not be entitled to notice
of any meeting of the shareholders of the Corporation and will not be entitled
to vote, together with any other shareholders or as a separate class, on any
matter to be voted on by the Corporation's shareholders.
5(e) Approval by Series A Preferred. So long as any Series A
------------------------------
Preferred remains outstanding, without the prior written consent of the holders
of a majority of the outstanding shares of Series A Preferred, the Corporation
will not, nor will it permit any Subsidiary to (i) issue any Senior Securities
or Pari Passu
9
<PAGE>
Securities; (ii) redeem, purchase or otherwise acquire directly or indirectly
any Pari Passu Securities or Junior Securities; (iii) sell, transfer, assign or
dispose of or lease to one or more Affiliates in one or more related series of
transactions or take any similar action with respect to a majority of the
Corporation's assets; or (iv) directly or indirectly pay or declare any dividend
or make any distribution upon any Pari Passu Securities or any Junior
Securities.
5(f). Conversion Rights. Each share of Series A Preferred shall be
-----------------
convertible by the holder thereof at any time into a number of shares of voting
or nonvoting Common Stock or in any combination thereof as selected by the
holder equal to the Liquidation Value of such share plus, without duplication,
all accrued and unpaid dividends thereon divided by 25, with such number being
subject to such adjustments to account for any increase or decrease in the
number of outstanding shares of Common Stock that results from a stock split,
stock dividend, combination of shares, merger or other event affecting the
number of outstanding shares of Common Stock (the "Conversion Shares"), which
conversion shall be effective no later than one business day after a notice of
conversion is delivered by the holder thereof to the Corporation.
5(g). Registration of Transfer. The Corporation will keep at its
------------------------
principal office a register for the registration of Series A Preferred. Upon
the surrender of any certificate representing Series A Preferred at such place,
the Corporation will, at the request of the record holder of such certificate,
execute and deliver (at the Corporation's expense) a new certificate or
certificates in exchange therefor representing in the aggregate the number of
Shares represented by the surrendered certificate. Each such new certificate
will be registered in such name and will represent such number of Shares as is
requested by the holder of the surrendered certificate and will be substantially
identical in form to the surrendered certificate, and dividends will accrue on
the Series A Preferred represented by such new certificate from the date to
which dividends have been fully paid on such Series A Preferred represented by
the surrendered certificate.
5(h). Replacement. Upon receipt of evidence reasonably satisfactory
-----------
to the Corporation (provided that an affidavit of the registered holder will be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing Share(s), and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the holder is a financial institution or other
institutional investor its own agreement will be satisfactory), or, in the case
of any such mutilation upon surrender of such certificate, the Corporation will
(at its expense) execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of Shares of such Series
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated
10
<PAGE>
certificate, and dividends will accrue on the Series A Preferred represented by
such new certificate from the date to which dividends have been fully paid on
such lost, stolen, destroyed or mutilated certificate.
5(i). Amendment and Waiver. No amendment, modification or waiver
--------------------
will be binding or effective with respect to any provision of any of Sections
5(a) through 5(i) hereof without the prior written consent of the holders of a
majority of the Series A Preferred outstanding at the time such action is taken;
provided that no change in the terms hereof may be accomplished by merger or
consolidation of the Corporation with another corporation or entity unless the
Corporation has obtained the prior written consent of the holders of a majority
of the Series A Preferred then outstanding.
D. TRANSFER OF STOCK.
-----------------
1. Transfer Restrictions. Inasmuch as it is the intention of the
---------------------
Corporation and its shareholders that the Corporation satisfy the provisions of
the Code relating to qualification of the Corporation as a "real estate
investment trust," particularly Section 856(a)(5) of the Code, no holder of any
share of any capital stock may transfer any such share or any interest therein
to any other individual, firm, corporation, entity or other person if, as a
result of such transfer, either (i) beneficial ownership of all shares of all
classes of capital stock would be held by less than 100 persons (the "Aggregate
---------
Ownership Limit"), if beneficial ownership of all shares of all classes of
- ---------------
capital stock was held by 100 or more persons prior to such transfer, or (ii) a
violation of the Percentage Ownership Limit would occur.
2. Registration of Transfers. The Corporation will keep at its
-------------------------
principal office (or such other place as the Corporation reasonably designates)
a register for the registration of shares of Common Stock and Preferred Stock.
Upon the surrender at such place of any certificate representing shares of any
class of capital stock with respect to all of which a transfer would satisfy all
requirements of paragraph 1 of this Part D, the Corporation will, at the request
of the registered holder of such certificate, execute and deliver a new
certificate or certificates in exchange therefor representing in the aggregate
the number of shares of the class represented by the surrendered certificate,
and the Corporation forthwith will cancel such surrendered certificate. Each
such new certificate will be registered in such name and will represent such
number of shares of such class as is requested by the holder of the surrendered
certificate (so long as the requirements of this paragraph 2 and paragraph 1 of
this Part D are otherwise satisfied with respect to the capital stock
represented by such certificate) and will be substantially identical in form to
the surrendered certificate. The issuance of new certificates will be made
without charge to the holders of the surrendered certificates for any issuance
tax in
11
<PAGE>
respect thereof or other cost incurred by the Corporation in connection with
such issuance.
3. Replacement. Upon receipt of evidence reasonably satisfactory to
-----------
the Corporation (an affidavit of the registered holder being satisfactory) of
the ownership and the loss, theft, destruction or mutilation of any certificate
evidencing one or more shares of any class of Common Stock or Preferred Stock,
and in the case of any such loss, theft or destruction, upon receipt of
indemnity reasonably satisfactory to the Corporation (provided that if the
holder is a financial institution or other institutional investor then its own
agreement will be satisfactory) or, in the case of any such mutilation upon
surrender of such certificate, the Corporation will (at its expense), execute
and deliver in lieu of such certificate a new certificate of like kind
representing the number of shares of such class represented by such lost,
stolen, destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate.
4. Amendment And Waiver. No amendment or waiver of any provision of
---------------------
this Part D will be effective without the prior approval of the holders of a
majority of the votes entitled to be cast by the holders of Voting Common.
E. UNAUTHORIZED TRANSFERS.
----------------------
1. Effect Of Unauthorized Transfers. Any transfer of any share of
--------------------------------
any class of capital stock of the Corporation in violation of the Percentage
Ownership Limit, the Aggregate Ownership Limit, and/or any other restriction or
requirement specified in this Article V (a "Purported Transfer") will be void
------------------
and of no legal effect. Any Purported Transfer will cause (without action on
the part of the Corporation, the transferee (the "Prohibited Transferee"), or
---------------------
the transferor) all shares (or interests therein) involved in such Purported
Transfer to be transferred to the Corporation, as trustee (in such capacity, the
"Trustee") in trust for the exclusive benefit of one or more organizations
-------
described in Section 501(c)(3) of the Code (the "Charitable Beneficiaries").
------------------------
The Trustee will be deemed to own such shares for the benefit of the Charitable
Beneficiaries on the day prior to the date of the Purported Transfer. Any
dividends or distributions paid by the Corporation to the Purported Transferee
prior to discovery of a Purported Transfer, will be disgorged and repaid to the
Corporation, as Trustee, by the Prohibited Transferee. Any dividend declared
after a Purported Transfer but unpaid will be rescinded as void ab initio with
respect to the Prohibited Transferee. Any dividends so disgorged or rescinded
will then be paid over to the Trustee and held in trust for the Charitable
Beneficiaries. Any vote taken by a Prohibited Transferee prior to the discovery
by the Corporation of a Purported Transfer will be rescinded as void ab initio.
With respect to the shares involved in the Purported Transfer, the Trustee will
be deemed to have an irrevocable proxy to vote such shares for the benefit of
the Charitable Beneficiaries.
12
<PAGE>
2. Notification Of Proposed Transfers. In order that the Corporation
----------------------------------
may enforce the Aggregate Ownership Limit and the Percentage Ownership Limit, no
share of any class or series of capital stock of the Corporation will be
transferable by the holder thereof unless, not less than 30 days prior to any
such proposed transfer, the holder of any and all shares proposed to be
transferred ("Transferred Shares") delivers to the Corporation written notice of
------------------
its intention to effect such a transfer.
3. Legend. Each certificate for shares of capital stock of the
------
Corporation shall bear substantially the following legend:
"The shares represented by this certificate are subject to
restriction on transfer and ownership for the purpose of the
Corporation's maintenance of its status as a Real Estate
Investment Trust under the Code. Subject to certain further
restrictions and except as expressly provided in the
Corporation's articles of incorporation, as amended, any transfer
of any share of capital stock of the Corporation will be void and
of no legal effect if such transfer would result in (i) the
ownership by five or fewer individuals of more than fifty percent
of the aggregate value of all shares of capital stock of the
Corporation or (ii) beneficial ownership of all shares of common
stock would be held by less than 100 persons. Any shares of
capital stock purported to be transferred in violation of these
restrictions will be automatically transferred to the
Corporation, as trustee, for the benefit of one or more
charitable beneficiaries. A copy of the Corporation's articles of
incorporation, as amended, including the foregoing restrictions
on transfer, will be sent without charge to each shareholder who
so requests."
ARTICLE VI. ACTION BY SHAREHOLDERS
-----------------------------------
1. Shareholder Action by Unanimous Written Consent. Any action required
-----------------------------------------------
or permitted to be taken at an annual or special meeting of the
shareholders of the Corporation may be taken without a meeting,
without prior notice, and without a vote if the action is taken by
written consent of the holders of at least 95% of the outstanding
stock of each voting group entitled to vote thereon.
2. Record Date. For the purpose of determining the shareholders for any
-----------
purpose other than for determining shareholders entitled to notice of
and to vote at an annual or special shareholders meeting, the Board of
Directors shall fix a record date, which shall be not more than
seventy days before the date written notice of the record date is
13
<PAGE>
delivered to the shareholders. If no record date is set by the Board
of Directors, the record date shall be determined as follows: for
determining shareholders entitled to demand a special meeting, the
record date is the date the first such demand is delivered to the
Corporation; and for determining shareholders entitled to a share
dividend, the record date is the date the Board of Directors
authorizes the dividend. For determining shareholders entitled to
notice of and to vote at an annual or special shareholders meeting the
record date is as of the close of business on the date that is seven
days after notice of the record date is first delivered or deemed
delivered to the shareholders entitled to notice thereof; provided,
however, that no record date shall occur within the last five calendar
days of a calendar quarter. When a determination of the shareholders
entitled to vote at any meeting has been made, that determination
shall apply to any adjournment of the meeting, unless the Board of
Directors fixes a new record date. The Board of Directors shall fix a
new record date if the meeting is adjourned to a date more than 120
days after the date fixed for the original meeting. Notwithstanding
anything contained herein to the contrary, irrespective of whether
prior action is required by the Board of Directors, the record date
for determining shareholders entitled to take action without a meeting
is the date a signed written consent is delivered to the Corporation
by the holders of at least 95% of the outstanding stock of each voting
group entitled to vote thereon.
3. Special Shareholder Meetings. No special meeting of the shareholders
----------------------------
of the Corporation shall occur within the last five calendar days of a
calendar quarter.
ARTICLE VII. INITIAL REGISTERED OFFICE AND AGENT
-------------------------------------------------
The street address of the current registered office of the Corporation is
1200 South Pine Island, Plantation, Florida 33324, and the name of the
Corporation's current registered agent at that address is CT Corporation
Systems.
ARTICLE VIII. INITIAL BOARD OF DIRECTORS
-----------------------------------------
The Corporation shall have two directors initially. The number of
directors may be either increased or diminished from time to time, as provided
in the bylaws, but shall never be less than one. The names and street addresses
of the initial directors are:
Name Address
---- -------
14
<PAGE>
Steven R. Day 1549 Ringling Boulevard, Third Floor
Sarasota, Florida 34236
Robert J. Wolsey 1549 Ringling Boulevard, Third Floor
Sarasota, Florida 34236
ARTICLE IX. BYLAWS
-------------------
The power to adopt, alter, amend or repeal bylaws shall be vested in the
Board of Directors and the shareholders, except that the Board of Directors may
not amend or repeal any bylaws or article or provision thereof without the
affirmative vote of the holders of the outstanding stock of each voting group
entitled to vote thereon if the bylaws provide that they or such article or
provision is not subject to amendment or repeal by the Board of Directors.
15
<PAGE>
ARTICLE X. AMENDMENTS
----------------------
The Corporation reserves the right to amend, alter, change or repeal any
provision in these Articles of Incorporation in the manner prescribed by law,
and all rights conferred on shareholders are subject to this reservation.
16
<PAGE>
IN WITNESS WHEREOF, the
undersigned has executed these
Amended and Restated Articles of
Incorporation this ___ day of
October, 1999.
____________________________
Steven R. Day, Secretary
17
<PAGE>
CERTIFICATE TO AMENDED AND RESTATED ARTICLES OF
INCORPORATION OF PINNACLE TOWERS III INC.
The undersigned, Steven R. Day, Secretary of PINNACLE TOWERS III INC., a
Florida corporation (the "Corporation"), does hereby certify as follows:
1. In accordance with Sections 607.1006 and 607.1007 of the Florida
Statutes, the foregoing Amended and Restated Articles of Incorporation
were duly adopted by the Board of Directors and by the holders of a
majority of the Voting Common and Series A Preferred of the
Corporation on October ____, 1999. The number of votes cast for the
amendment by the Corporation's shareholders, constitutes a sufficient
number of votes to approve the amendment.
2. The undersigned officer of the Corporation has been duly authorized to
submit these Amended and Restated Articles of Incorporation of the
Corporation to the Department of State of Florida for filing in
accordance with Section 607.1007 of the Florida Statutes.
PINNACLE TOWERS III INC.
By:____________________________
Steven R. Day, Secretary
18
<PAGE>
Exhibit C
COST AND EXPENSE SHARING AND REIMBURSEMENT AGREEMENT
----------------------------------------------------
THIS COST AND EXPENSE SHARING AND REIMBURSEMENT AGREEMENT (this
"Agreement") is effective as of the 31st day of August, 1999, by and between
PINNACLE TOWERS INC., a Delaware corporation ("PTI") and Pinnacle Towers III
Inc., a Florida corporation ("PT3").
WHEREAS, PT3 owns certain assets which it acquired from PTI; and
WHEREAS, in connection with the conduct of its business, PT3 considers it
necessary or convenient to avail itself of certain of PTI's personnel,
facilities and general and administrative overhead, and PTI is willing to make
such available to PT3; and
WHEREAS, PT3 has agreed to reimburse PTI for its allocable share of the
cost and expense of such shared personnel, facilities and general and
administrative overhead as determined in the manner hereinafter provided;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties agree as follows:
1. Provision of Shared Costs and Expenses. During the term of this
--------------------------------------
Agreement, upon the reasonable request of PT3, PTI will make available to PT3
any of PTI's office and administrative personnel and facilities, consultants and
contractors, and general and administrative office overhead and costs, including
inter alia office space, record retention, photocopy facilities, facsimile and
telephone equipment, sales and marketing support, office supplies, and computer
services (collectively, the "Shared Costs and Expenses").
2. Reimbursement. PT3 agrees to reimburse PTI for the costs and expenses
-------------
incurred by PTI on behalf of or for the benefit of PT3 in an amount equal to the
sum of the following amounts (the "Reimbursement Amount") determined annually as
of the end of each calendar year:
(a) With respect to any Shared Costs and Expenses directly
attributable solely to PT3, an amount equal to the marginal or incremental
cost or expense thereof incurred by PTI; and
(b) With respect to any Shared Costs and Expenses not described in
(a) above, the pro rata share of such Shared Costs and Expenses based on
the product obtained by multiplying the gross amount of such Shared Costs
and Expenses by the quotient obtained by dividing the gross revenues of PT3
for the year by the sum of the gross revenues for the year of both PTI and
PT3, or an amount determined on such other reasonable basis as the parties
may mutually agree.
<PAGE>
The Reimbursement Amount for each calendar year shall be determined no later
than three months after the end of such calendar year and payment of the
Reimbursement Amount shall be due on or before the April 10/th/ of the year
following the end of such calendar year.
3. Standard of Care. PTI agrees that it and its personnel shall exercise
----------------
the same degree of diligence, care and prudence in connection with matters
conducted on behalf of, or provided for the benefit of, PT3 as it exercises
matters conducted on its own behalf or provided for its own benefit.
4. Limitation of Liability.
-----------------------
(a) PTI and its Affiliates, and the officers, directors,
employees, shareholders, partners, representatives, consultants and
agents of PTI and its Affiliates (collectively, "Providing Parties")
shall not be liable to the party on whose behalf the Shared Costs and
Expenses are incurred, its Affiliates, or to any officer, director,
employee, shareholder, partner, representative, consultant or agent of
such party or its Affiliates (collectively, "Receiving Parties"), for
any liability, cost, damage, expense or loss, including, without
limitation, any special, indirect, consequential or punitive damages
(i) arising or allegedly arising out of any actions or failures to act
by any of the Providing Parties with respect to the Shared Costs and
Expenses to be provided hereunder, or (ii) as a result of the reliance
by any of the Receiving Parties on any advice or data that any of the
Providing Parties may provide pursuant to this Agreement; provided,
however, that the foregoing shall not apply to limit liability of a
party to the extent caused by such party's gross negligence or willful
misconduct.
(b) The Receiving Parties shall indemnify and hold harmless
each and every of the Providing Parties from and against any
liability, cost, damage, expense or loss (including court costs and
reasonable attorneys' fees) which such Providing Parties may sustain
or incur by reason of any claim, demand, suit or recovery by any
person or entity, directly resulting from acts or omissions committed
by the Receiving Party in connection with this Agreement; provided,
however, that no person may benefit from the foregoing indemnity in
the event of its gross negligence or willful misconduct.
5. Term. The term of this Agreement shall commence as of the date hereof
----
and end December 31, 2000, unless earlier terminated effective as of the end of
a calendar month by either party upon no less than two months' prior written
notice to the other party. The term of this Agreement shall automatically renew
for successive periods of one year each unless either party provides to the
other party notice in writing that this Agreement will not so renew and such
notice is given at least two months prior to the then termination date of this
Agreement. In the event this Agreement is terminated prior to the end of a
calendar year, the Reimbursement Amount shall be determined as of the effective
date of termination based on gross revenues of each party through the date of
termination.
2
<PAGE>
6. Relationship of the Parties. In all matters relating to this
---------------------------
Agreement, each party hereto shall be solely responsible for the acts of its
employees, and employees of one party shall not be considered employees of the
other party. No party shall have any right, power or authority to create any
obligation, express or implied, on behalf of any other party. Nothing in this
Agreement is intended to create or constitute a joint venture or partnership
relationship between the parties hereto or persons referred to herein.
7. Force Majeure. PTI shall be excused from performance hereunder for
-------------
any period and to the extent that it is prevented from performance hereunder, in
whole or in part, as a result of delays caused by PT3 or any act of God, war,
civil disturbance, court order, strike, labor dispute, law or regulation of any
governmental authority, or other cause beyond the reasonable control of PTI.
Such nonperformance shall not be a default hereunder. PTI shall take all
reasonable actions to resume performance of its obligations hereunder as soon as
feasible.
8. Amendments and Waiver. No amendment, waiver or consent with respect
---------------------
to any provision of this Agreement shall in any event be effective, unless the
same shall be in writing and signed by the parties hereto, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
9. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be, personally delivered or sent by
facsimile transmission with confirming copy sent by overnight courier (such as
Express Mail, Federal Express, etc.) and a delivery receipt obtained and
addressed to the intended recipient as follows:
If to PTI:
Pinnacle Towers Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Ben Gaboury
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
If to PT3:
3
<PAGE>
Pinnacle Towers III Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Steve Day
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
Any party may change its address or add or change parties for receiving notice
by written notice given to the others named above. Notices shall be deemed
given as of the date of receipt.
10. Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
11. Successors and Assigns; Beneficiaries. This Agreement shall bind and
-------------------------------------
inure to the benefit of the parties named herein and their respective
successors and assigns. No party may assign any rights, benefits, duties or
obligations under this Agreement without the prior written consent of the other
party. Except as specifically provided in Section 4, no third party shall be
entitled to enforce any provision hereof; and no third party is intended to
benefit from this Agreement.
12. Entire Agreement. This Agreement and the documents referred to herein
----------------
contain the entire agreement and understanding among the parties with
respect to the transactions contemplated hereby and supersede all other
agreements, understandings and undertakings among the parties on the
subject matter hereof.
13. Partial Invalidity. In the event that any provision of this
------------------
Agreement shall be held invalid or unenforceable by any court or competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
14. Governing Law; Jurisdiction. This Agreement shall be interpreted in
---------------------------
accordance with the substantive laws of the State of Florida applicable to
contracts made and to be performed wholly within said State. All disputes,
legal actions, suits and proceedings arising out of or relating to this
Agreement shall be brought in a federal district or state court located in
Tampa, Florida. Each party hereby consents to the jurisdiction of the federal
district or state court in Tampa, Florida. Each party hereby irrevocably waives
all claims of immunity from jurisdiction and any right to object on the basis
that any dispute, action, suit or proceeding brought in the federal district or
state court of Tampa, Florida has been brought in an improper or inconvenient
venue or forum.
15. Disputes.
---------
(a) PTI and PT3 mutually desire that friendly
collaboration will develop between themselves. Accordingly, they
shall try to resolve in a friendly manner
4
<PAGE>
all disagreements and misunderstandings connected with their
respective rights and obligations under this Agreement, including
any amendments hereof.
(b) (i) To the extent that any misunderstanding or
dispute cannot be resolved agreeably in a friendly manner, the
dispute will be mediated by a mutually acceptable mediator to be
chosen by PTI and PT3 within forty-five (45) days after written
notice by one of the parties demanding mediation. Neither party
may unreasonably withhold consent to the selection of a mediator,
however, by mutual agreement PTI and PT3 may postpone mediation
until each has completed specified but limited discovery with
respect to a dispute. The parties may also agree to attempt some
other form of alternative dispute resolution ("ADR") in lieu of
mediation, including by way of example and without limitation,
neutral fact-finding or a mini-trial.
(ii) Any dispute which the parties cannot resolve
through negotiation, mediation or other form of ADR within six
months of the date of the initial demand for it by one of the
parties may then be submitted to the courts for resolution. The
use of any ADR procedures will not be construed under the
doctrine of laches, waiver or estoppel to affect adversely the
rights of either party. Nothing in this Section 15 will prevent
either party from resorting to judicial proceedings if (A) good
faith efforts to resolve the dispute under these procedures have
been unsuccessful or (B) interim relief from a court is necessary
to prevent serious and irreparable injury to one party or to
others.
(c) Each of PT3 and PTI shall bear its costs of mediation
or ADR, but PT3 and PTI agree to share the costs of the mediation
of ADR equally.
16. Authorship. The parties hereto agree that the terms and language of
----------
this Agreement were the result of negotiations between the parties and, as a
result, there shall be no presumption that any ambiguities in this Agreement
shall be resolved against either party. Any controversy over construction of
this Agreement shall be decided without regard to events of authorship or
negotiation.
17. Defined Terms. All capitalized terms not defined herein shall have
-------------
the meanings ascribed to them in the Asset Purchase Agreement.
18. Recitals. The recitals hereto are true and correct and are by this
---------
reference incorporated herein.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
PINNACLE TOWERS INC.
_____________________________________
Bernard Gaboury, President
PINNACLE TOWERS III INC.
_____________________________________
Steven R. Day, Vice President, Chief
Financial Officer and Secretary
6
<PAGE>
Exhibit 10.8
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
PINNACLE TOWERS III INC.
In accordance with Section 607.1007 of the Florida Business Corporation Act
("FBCA"), the Articles of Incorporation of Pinnacle Towers III Inc., a Florida
corporation (the "Corporation"), are hereby amended and restated to read in
their entirety as follows:
ARTICLE I. NAME
----------------
The name of the Corporation is:
PINNACLE TOWERS III INC.
ARTICLE II. ADDRESS
--------------------
The mailing address of the Corporation is:
1549 Ringling Boulevard
Sarasota, Florida 34236
ARTICLE III. COMMENCEMENT OF EXISTENCE
---------------------------------------
The existence of the Corporation will commence at 12:01 A.M., the date of
filing of these Articles of Incorporation.
ARTICLE IV. PURPOSE
--------------------
The Corporation is organized to engage in any activity or business
permitted under the laws of the United States and Florida.
ARTICLE V. AUTHORIZED CAPITAL
------------------------------
A. AUTHORIZED SHARES. The total number of shares of capital stock that
-----------------
the Corporation has authority to issue is:
1. 1,960,440 shares of Voting Common Stock, par value $0.001 per
share (the "Voting Common");
-------------
2. 1,965,000 shares of Nonvoting Common Stock, par value $0.001 per
share (the "Nonvoting Common"); and
----------------
3. 1,000,000 shares of Preferred Stock, par value $0.001 per share
(the "Preferred Stock").
---------------
<PAGE>
B. COMMON STOCK. The Voting Common and the Nonvoting Common are
------------
collectively referred to as the "Common Stock". The shares may be issued from
------------
time to time as authorized by the Board of Directors of the Corporation without
further approval of the shareholders of the Corporation, except as otherwise
provided herein or to the extent that such approval is required by statute, law,
rule or regulation. Shares of Common Stock will have the rights, preferences
and limitations set forth below. Capitalized terms used and not otherwise
defined in this Section B shall have the meaning set forth in Section 9.
1. Voting Rights. Except as otherwise provided in this Article V or
-------------
as otherwise required by applicable law, (a) holders of Voting Common shall be
entitled to one vote per share on all matters to be voted on by the shareholders
of the Corporation, and (b) holders of Nonvoting Common shall have no right to
vote on any matter to be voted on by the shareholders of the Corporation, except
as otherwise required by statute, law, rule or regulation.
2. Dividends. As and when dividends are declared or paid thereon,
---------
whether in cash, property or securities of the Corporation, the holders of
Common Stock shall be entitled to participate in such dividends ratably on a per
share basis; provided, that (i) if dividends are declared that are payable in
--------
shares of Voting Common or Nonvoting Common then dividends shall be payable at
the same rate on each such class of Common Stock and the dividends payable in
shares of Voting Common shall be payable to holders of Voting Common, and
dividends payable in shares of Nonvoting Common shall be payable to holders of
Nonvoting Common, and (ii) if the dividends consist of other voting securities
of the Corporation, then the Corporation shall make available to each holder of
Nonvoting Common, at such holder's request, dividends consisting of non-voting
securities of the Corporation which are otherwise identical to such other voting
securities.
3. Liquidation. The holders of Common Stock shall be entitled to
-----------
participate ratably on a per share basis in all distributions to the holders of
Common Stock in any liquidation, dissolution or winding up of the Corporation.
4 Stock Splits And Stock Dividends. If there are any shares of
--------------------------------
Common Stock issued and outstanding, the Corporation will not in any manner
subdivide (by stock split, stock dividend or otherwise) or combine (by reverse
stock split or otherwise) the outstanding shares of Common Stock of one class
unless the outstanding Common Stock of all the other classes will be
proportionately subdivided or combined. All such subdivisions will be payable
only in Voting Common only to the holders of Voting Common and in Nonvoting
Common only to the holders of Nonvoting Common.
2
<PAGE>
5. Percentage Limits. No share of Common Stock will be sold or
-----------------
otherwise transferred (with or without consideration) to any individual if such
transfer would result in the ownership by such individual in combination with
four or fewer individuals (within the meaning of Section 542(a)(2) of the
Internal Revenue Code of 1986 (the "Code")) of more than fifty percent of the
aggregate value of all shares of all classes of capital stock of the Corporation
(the "Percentage Ownership Limit").
--------------------------
6. Distributions. Subject to any right of any holder of Preferred
-------------
Stock to receive any distribution whether in cash, property or securities and
whether by dividend, liquidation, distribution or otherwise ("Distribution"),
the holders of Common Stock will be entitled to receive any Distribution ratably
among such holders on the basis of the number of shares of Common Stock held by
such holders.
7. Approval by Voting Common. So long as any Voting Common remains
-------------------------
outstanding, without the prior written consent of the holders of a majority of
the outstanding shares of Voting Common, the Corporation will not, nor will it
permit any Subsidiary to (i) issue any Senior Securities, Pari Passu Securities
or Common Stock, other than to issue up to 5,000 additional shares of Nonvoting
Common in order for it, in the judgment of any officer of the Corporation, to
obtain or maintain the status of the Corporation as a Real Estate Investment
Trust under Section 856-860 of the Code; (ii) redeem, purchase or otherwise
acquire directly or indirectly any Pari Passu Securities or Common Stock, (iii)
sell, transfer, assign or dispose of or lease to one or more Affiliates in one
or more related series of transactions or take any similar action with respect
to any substantial portion of the Corporation's assets, or make any material
acquisition of assets, other than pursuant to that certain Agreement for
Purchase and Sale effective as of August 31, 1999, between the Corporation and
Pinnacle Towers Inc., a Delaware corporation; (iv) Incur in excess of $100,000
in Debt for borrowed money; (v) enter into a transaction with an Affiliate of
the Corporation involving consideration in excess of $10,000; (vi) directly or
indirectly pay or declare any dividend or make any distribution upon any Pari
Passu Securities or any Common Stock; or (v) Incur or suffer to exist any Lien
on or with respect to any property or assets now owned or hereafter acquired to
secure any Debt.
8. Reserved Shares. The Corporation will at all times reserve and
---------------
keep available out of its authorized Voting Common a sufficient number of shares
of Voting Stock to issue upon conversion of any shares of "Series A. Preferred"
(as defined herein) or indebtedness of the Corporation that is outstanding from
time to time that is convertible into Voting Common to satisfy the Corporation's
obligations to issue Voting Common upon any such conversions.
8. Definitions. As used herein or in Section V (C) hereof, the
-----------
following terms have the following respective meanings:
3
<PAGE>
"Capital Lease Obligation" of the Corporation means the obligation to
------------------------
pay rent or other payment amounts under a lease of (or other Debt
arrangements conveying the right to use) real or personal property of the
Corporation which is required to be classified and accounted for as a
capital lease or a liability on the face of a balance sheet of the
Corporation in accordance with generally accepted accounting principles.
The stated maturity of such obligation shall be the date of the last
payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment
of a penalty. The principal amount of such obligation shall be the
capitalized amount thereof that would appear on the face of a balance sheet
of the Corporation in accordance with generally accepted accounting
principles.
"Debt" means (without duplication), with respect to the Corporation,
----
whether recourse is to all or a portion of the assets of the Corporation
and whether or not contingent, (i) every obligation of the Corporation for
money borrowed, (ii) every obligation of the Corporation evidenced by
bonds, debentures, notes or other similar instruments, including
obligations Incurred in connection with the acquisition of property, assets
or businesses, (iii) every reimbursement obligation of the Corporation with
respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of the Corporation, (iv) every obligation of the
Corporation issued or assumed as the deferred purchase price of property or
services (including securities repurchase agreements but excluding trade
accounts payable or accrued liabilities arising in the ordinary course of
business which are not overdue or which are being contested in good faith),
(v) every Capital Lease Obligation of the Corporation, (vi) all Receivables
Sales of the Corporation, together with any obligation of the Corporation
to pay any discount, interest, fees, indemnities, penalties, recourse,
expenses or other amounts in connection therewith, (vii) every obligation
under Interest Rate or Currency Protection Agreements of the Corporation
and (viii) every obligation of the type referred to in clauses (i) through
(vii) of another Person and all dividends of another Person the payment of
which, in either case, the Corporation has Guaranteed or is responsible or
liable, directly or indirectly, as obligor, Guarantor or otherwise. The
"amount" or "principal amount" of Debt at any time of determination as used
herein represented by (a) any contingent Debt, shall be the maximum
principal amount hereof, (b) any Debt issued at a price that is less than
the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally
accepted accounting principals, and (c) any Receivables Sale, shall be the
amount, if any, in connection with such Receivables Sale for which there is
recourse to the seller or any of its Subsidiaries.
4
<PAGE>
"Guarantee" of the Corporation means any obligation, contingent or
---------
otherwise, of the Corporation guaranteeing, or having the economic effect
of guaranteeing, any Debt of any other Person (the "Primary Obligor") in
--------------
any manner, whether directly or indirectly, and including, without
limitation, any obligation of such Person, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or to
purchase (or to advance or supply funds for the purchase of) any security
for the payment of such Debt, (ii) to purchase property, securities or
services for the purpose of assuring the holder of such Debt of the payment
of such Debt, or (iii) to maintain working capital, equity or other
financial statement condition or liquidity of the Primary Obligor so as to
enable the Primary Obligor to pay such Debt (and "Guaranteed",
"Guaranteeing" and "Guarantor" shall have the meanings correlative to the
foregoing); provided, however, that the Guarantee by the Corporation shall
not include endorsements by the Corporation for collection or deposit, in
either case, in the ordinary course of business.
"Incur" means, with respect to any Debt or other obligation of the
-----
Corporation, to create, issue, incur (by conversion, exchange or
otherwise), assume, Guarantee or otherwise become liable in respect of such
Debt or other obligation or the recording, as required pursuant to
generally accepted accounting principles or otherwise, of any such Debt or
other obligation on the balance sheet of the Corporation (and "Incurrence",
"Incurred", "Incurable" and "Incurring" shall have meanings correlative to
the foregoing); provided, however, that a change in generally accepted
accounting principles that results in an obligation of the Corporation that
exists at such time becoming Debt shall not be deemed an Incurrence of such
Debt.
"Interest Rate or Currency Protection Agreement" of the Corporation
----------------------------------------------
means any forward contract, futures contract, swap, option or other
financial agreement or arrangement (including, without limitation, caps,
floors, collars and similar agreements) relating to, or the value of which
is dependent upon, interest rates or currency exchange rates or indices.
"Junior Securities" means any capital stock or other equity securities
-----------------
of the Corporation, except for the Series A Preferred (as defined below),
Senior Securities and Pari Passu Securities.
"Liquidation Value" means, in relation to any Share, $1,000,000.
-----------------
"Pari Passu Securities" means shares of any series of preferred stock
---------------------
of the Corporation created and authorized in accordance with the Articles
of Incorporation of the Corporation, if the terms of such series expressly
provide
5
<PAGE>
that shares of such series will be "Pari Passu Securities" with respect to
the Series A Preferred.
"Person" means any individual, corporation, partnership, joint
------
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Receivables" means receivables, chattel paper, instruments, documents
-----------
or intangibles evidencing or relating to the right to payment of money.
"Receivables Sale" of the Corporation means any sale of Receivables of
----------------
the Corporation (pursuant to a purchase facility or otherwise), other than
in connection with a disposition of the business operations of the
Corporation relating thereto or a disposition of defaulted Receivables for
purpose of collection and not as a financing arrangement.
"Senior Securities" means shares of any series of preferred stock of
-----------------
the Corporation created and authorized in accordance with the Articles of
Incorporation of the Corporation, if the terms of such other series
expressly provide that shares of such series will be "Senior Securities"
with respect to the Series A Preferred.
"Subsidiary" means any corporation of which the shares of outstanding
----------
capital stock possessing the voting power (under ordinary circumstances) in
electing the board of directors are, at the time as of which any
determination is being made, owned by the Corporation either directly or
indirectly through Subsidiaries.
C. PREFERRED STOCK.
---------------
1. Generally. Shares of Preferred Stock may be issued from time to
---------
time in one or more series. The Board of Directors of the Corporation without
further approval by the shareholders of the Corporation is hereby expressly
authorized to determine and alter all rights, preferences, privileges,
qualifications, limitations and restrictions of any such series (including,
without limitation, voting rights and the limitation and exclusion of voting
rights) of Preferred Stock and the number of shares constituting any such series
and the designation thereof, and to increase or decrease (but not below the
number of shares of such series then outstanding) the number of shares of any
series after the issuance of shares of that series. If the number of shares of
any series is so decreased, then the shares constituting such reduction will
resume the status that such shares had prior to the adoption of the resolution
originally fixing the number of shares of such series. No share of any series
of Preferred Stock will be
6
<PAGE>
sold or otherwise transferred (with or without consideration) to any individual
if such transfer would result in a violation of the Percentage Ownership Limit.
2. Voting Rights. The holders of shares of Preferred Stock shall
-------------
not be entitled to vote except unless established by the Board of Directors or
otherwise required by statute, law, rule or regulation.
3. Stock to be Reserved. The Corporation will at all times reserve
--------------------
and keep available out of its authorized Preferred Stock, solely for the purpose
of paying dividends, such number of shares of Preferred Stock as shall be
required to satisfy only dividend requirements.
4. Retirement of Shares. Shares of Preferred Stock that are
--------------------
redeemed by the Corporation shall be permanently retired and shall not under any
circumstances be reissued.
5. Series A Convertible Preferred Stock.
------------------------------------
5(a). Designation and Number of Shares. The Corporation is hereby
--------------------------------
authorized to issue from time to time a total of 100 shares of Preferred Stock
to be designated Series A Convertible Preferred Stock, with $0.001 par value per
share, having the preferences, qualifications, rights and privileges set forth
herein (the "Series A Preferred"). Capitalized terms used and not otherwise
------------------
defined in this Section 5 shall have the meanings set forth in Section B(8)
above.
5(b). Rank.
----
(i) Priority. The Series A Preferred will rank with respect to
--------
dividend rights and rights on liquidation, winding up and dissolution: (a)
senior to the Common Stock and all other Junior Securities; (b) pari passu with
all Pari Passu Securities; and (c) junior to all Senior Securities.
(ii) Distributions. Any distribution made pursuant to dividend
-------------
rights or rights on liquidation, winding up, or dissolution will be made to the
holders of the Corporation's securities in accordance with the relative
priorities set forth above, and any such distribution will fully satisfy the
Corporation's obligations to the holders of a senior security prior to any
distribution to the holders of any Junior Security.
5(c). Dividends.
---------
(i). General Obligation. When and as declared by the
------------------
Corporation's Florida, and subject to the terms of any Senior Securities, the
Corporation will pay preferential dividends to the holders of the Series A
Preferred as provided
7
<PAGE>
in this Section 5(c)(i). Dividends on each share of the Series A Preferred (a
"Share") will accrue on a daily basis at the rate of 18% per annum of the sum of
-----
the Liquidation Value thereof from time to time plus all accumulated and unpaid
dividends thereon from and including the date of issuance of such Share to and
including the first to occur of: (a) the date on which the Liquidation Value of
such Share (plus all accrued and unpaid dividends thereon) is paid to the holder
thereof in connection with the liquidation of the Corporation; or (b) the date
on which such Share is acquired by the Corporation. Such dividends will accrue
whether or not they have been declared and whether or not there are profits,
surplus or other funds of the Corporation legally available for the payment of
dividends. The date on which the Corporation initially issues any Share will be
deemed to be its "date of issuance" regardless of the number of times transfer
of such Share is made on the stock records maintained by or for the Corporation
and regardless of the number of certificates which may be issued to evidence
such Share.
(ii) Dividend Reference Dates. To the extent not paid on
------------------------
March 31, June 30, September 30 or December 31 of any year, beginning with
the first such date after the date of issuance of the Share in question (each a
"Dividend Reference Date"), all dividends which have accrued on each Share
-----------------------
outstanding during the three-month period (or other period, in the case of the
first Dividend Reference Date after the date of issuance of such Share) ending
upon each such Dividend Reference Date will be accumulated and will remain
accumulated and accrue dividends with respect to such Share until paid to the
holder thereof.
(iii) Distribution of Partial Dividend Payments. If at any
-----------------------------------------
time the Corporation pays less than the total amount of dividends then accrued
with respect to the Series A Preferred, such payment will be distributed pro
rata among the holders thereof based upon the rank and number of Shares held by
each such holder.
5(d). Liquidation. Subject to the terms of any Senior Securities,
-----------
upon any liquidation, dissolution or winding up of the Corporation (whether
voluntary or involuntary), each holder of Series A Preferred will be entitled to
be paid, after any required distribution or payment is made upon any Senior
Securities, before any distribution or payment is made upon any Junior
Securities, and on a pari passu basis (pro rata according to the relative
amounts to be paid) with any required distribution or payment to be made upon
any Pari Passu Securities, an amount in cash equal to the aggregate Liquidation
Value of all Shares held by such holder (plus all accrued and unpaid dividends
thereon), and the holders of Series A Preferred will not be entitled to any
further payment. If upon any such liquidation, dissolution or winding up of the
Corporation the Corporation's assets to be distributed among the holders of the
Series A Preferred and any Pari Passu Securities are insufficient to permit
payment to such holders of the aggregate amount which they are entitled to be
paid under this Section 5(d), then the entire
8
<PAGE>
assets available to be distributed to the Corporation's shareholders will be
distributed pro rata among the holders of Series A Preferred and any Pari Passu
Securities based upon the aggregate Liquidation Value (plus all accrued and
unpaid dividends) of the Series A Preferred, and the comparable amount payable
to the holders of any Pari Passu Securities, held by each such holder. Neither
the consolidation or merger of the Corporation into or with any other entity or
entities (whether or not the Corporation is the surviving entity), nor the sale
or transfer by the Corporation of all or any part of its assets, nor the
reduction of the capital stock of the Corporation nor any other form of
recapitalization or reorganization affecting the Corporation will be deemed to
be a liquidation, dissolution or winding up of the Corporation within the
meaning of this Section 5(d).
5(e). Voting Rights. Except as otherwise may be required herein or by
-------------
the FBCA, the holders of the Series A Preferred will not be entitled to notice
of any meeting of the shareholders of the Corporation and will not be entitled
to vote, together with any other shareholders or as a separate class, on any
matter to be voted on by the Corporation's shareholders.
5(e) Approval by Series A Preferred. So long as any Series A
------------------------------
Preferred remains outstanding, without the prior written consent of the holders
of a majority of the outstanding shares of Series A Preferred, the Corporation
will not, nor will it permit any Subsidiary to (i) issue any Senior Securities
or Pari Passu Securities; (ii) redeem, purchase or otherwise acquire directly or
indirectly any Pari Passu Securities or Junior Securities; (iii) sell, transfer,
assign or dispose of or lease to one or more Affiliates in one or more related
series of transactions or take any similar action with respect to a majority of
the Corporation's assets; or (iv) directly or indirectly pay or declare any
dividend or make any distribution upon any Pari Passu Securities or any Junior
Securities.
5(f). Conversion Rights. Each share of Series A Preferred shall be
-----------------
convertible by the holder thereof at any time into a number of shares of voting
or nonvoting Common Stock or in any combination thereof as selected by the
holder equal to the Liquidation Value of such share plus, without duplication,
all accrued and unpaid dividends thereon divided by 25, with such number being
subject to such adjustments to account for any increase or decrease in the
number of outstanding shares of Common Stock that results from a stock split,
stock dividend, combination of shares, merger or other event affecting the
number of outstanding shares of Common Stock (the "Conversion Shares"), which
conversion shall be effective no later than one business day after a notice of
conversion is delivered by the holder thereof to the Corporation.
5(g). Registration of Transfer. The Corporation will keep at its
------------------------
principal office a register for the registration of Series A Preferred. Upon
the surrender of any certificate representing Series A Preferred at such place,
the
9
<PAGE>
Corporation will, at the request of the record holder of such certificate,
execute and deliver (at the Corporation's expense) a new certificate or
certificates in exchange therefor representing in the aggregate the number of
Shares represented by the surrendered certificate. Each such new certificate
will be registered in such name and will represent such number of Shares as is
requested by the holder of the surrendered certificate and will be substantially
identical in form to the surrendered certificate, and dividends will accrue on
the Series A Preferred represented by such new certificate from the date to
which dividends have been fully paid on such Series A Preferred represented by
the surrendered certificate.
5(h). Replacement. Upon receipt of evidence reasonably satisfactory
-----------
to the Corporation (provided that an affidavit of the registered holder will be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing Share(s), and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the holder is a financial institution or other
institutional investor its own agreement will be satisfactory), or, in the case
of any such mutilation upon surrender of such certificate, the Corporation will
(at its expense) execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of Shares of such Series
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate, and dividends
will accrue on the Series A Preferred represented by such new certificate from
the date to which dividends have been fully paid on such lost, stolen, destroyed
or mutilated certificate.
5(i). Amendment and Waiver. No amendment, modification or waiver
--------------------
will be binding or effective with respect to any provision of any of Sections
5(a) through 5(i) hereof without the prior written consent of the holders of a
majority of the Series A Preferred outstanding at the time such action is taken;
provided that no change in the terms hereof may be accomplished by merger or
consolidation of the Corporation with another corporation or entity unless the
Corporation has obtained the prior written consent of the holders of a majority
of the Series A Preferred then outstanding.
D. TRANSFER OF STOCK.
-----------------
1. Transfer Restrictions. Inasmuch as it is the intention of the
---------------------
Corporation and its shareholders that the Corporation satisfy the provisions of
the Code relating to qualification of the Corporation as a "real estate
investment trust," particularly Section 856(a)(5) of the Code, no holder of any
share of any capital stock may transfer any such share or any interest therein
to any other individual, firm, corporation, entity or other person if, as a
result of such transfer, either (i) beneficial ownership of all shares of all
classes of capital stock would be held by less than 100 persons (the "Aggregate
---------
Ownership Limit"), if beneficial ownership of all shares of all
- ---------------
10
<PAGE>
classes of capital stock was held by 100 or more persons prior to such transfer,
or (ii) a violation of the Percentage Ownership Limit would occur.
2. Registration of Transfers. The Corporation will keep at its
-------------------------
principal office (or such other place as the Corporation reasonably designates)
a register for the registration of shares of Common Stock and Preferred Stock.
Upon the surrender at such place of any certificate representing shares of any
class of capital stock with respect to all of which a transfer would satisfy all
requirements of paragraph 1 of this Part D, the Corporation will, at the request
of the registered holder of such certificate, execute and deliver a new
certificate or certificates in exchange therefor representing in the aggregate
the number of shares of the class represented by the surrendered certificate,
and the Corporation forthwith will cancel such surrendered certificate. Each
such new certificate will be registered in such name and will represent such
number of shares of such class as is requested by the holder of the surrendered
certificate (so long as the requirements of this paragraph 2 and paragraph 1 of
this Part D are otherwise satisfied with respect to the capital stock
represented by such certificate) and will be substantially identical in form to
the surrendered certificate. The issuance of new certificates will be made
without charge to the holders of the surrendered certificates for any issuance
tax in respect thereof or other cost incurred by the Corporation in connection
with such issuance.
3. Replacement. Upon receipt of evidence reasonably satisfactory to
-----------
the Corporation (an affidavit of the registered holder being satisfactory) of
the ownership and the loss, theft, destruction or mutilation of any certificate
evidencing one or more shares of any class of Common Stock or Preferred Stock,
and in the case of any such loss, theft or destruction, upon receipt of
indemnity reasonably satisfactory to the Corporation (provided that if the
holder is a financial institution or other institutional investor then its own
agreement will be satisfactory) or, in the case of any such mutilation upon
surrender of such certificate, the Corporation will (at its expense), execute
and deliver in lieu of such certificate a new certificate of like kind
representing the number of shares of such class represented by such lost,
stolen, destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate.
4. Amendment And Waiver. No amendment or waiver of any provision of
---------------------
this Part D will be effective without the prior approval of the holders of a
majority of the votes entitled to be cast by the holders of Voting Common.
E. UNAUTHORIZED TRANSFERS.
----------------------
1. Effect Of Unauthorized Transfers. Any transfer of any share of
--------------------------------
any class of capital stock of the Corporation in violation of the Percentage
Ownership Limit, the Aggregate Ownership Limit, and/or any other restriction or
requirement
11
<PAGE>
specified in this Article V (a "Purported Transfer") will be void and of no
------------------
legal effect. Any Purported Transfer will cause (without action on the part of
the Corporation, the transferee (the "Prohibited Transferee"), or the
---------------------
transferor) all shares (or interests therein) involved in such Purported
Transfer to be transferred to the Corporation, as trustee (in such capacity, the
"Trustee") in trust for the exclusive benefit of one or more organizations
-------
described in Section 501(c)(3) of the Code (the "Charitable Beneficiaries"). The
------------------------
Trustee will be deemed to own such shares for the benefit of the Charitable
Beneficiaries on the day prior to the date of the Purported Transfer. Any
dividends or distributions paid by the Corporation to the Purported Transferee
prior to discovery of a Purported Transfer, will be disgorged and repaid to the
Corporation, as Trustee, by the Prohibited Transferee. Any dividend declared
after a Purported Transfer but unpaid will be rescinded as void ab initio with
respect to the Prohibited Transferee. Any dividends so disgorged or rescinded
will then be paid over to the Trustee and held in trust for the Charitable
Beneficiaries. Any vote taken by a Prohibited Transferee prior to the discovery
by the Corporation of a Purported Transfer will be rescinded as void ab initio.
With respect to the shares involved in the Purported Transfer, the Trustee will
be deemed to have an irrevocable proxy to vote such shares for the benefit of
the Charitable Beneficiaries.
2. Notification Of Proposed Transfers. In order that the Corporation
----------------------------------
may enforce the Aggregate Ownership Limit and the Percentage Ownership Limit, no
share of any class or series of capital stock of the Corporation will be
transferable by the holder thereof unless, not less than 30 days prior to any
such proposed transfer, the holder of any and all shares proposed to be
transferred ("Transferred Shares") delivers to the Corporation written notice of
------------------
its intention to effect such a transfer.
3. Legend. Each certificate for shares of capital stock of the
------
Corporation shall bear substantially the following legend:
"The shares represented by this certificate are subject to
restriction on transfer and ownership for the purpose of the
Corporation's maintenance of its status as a Real Estate
Investment Trust under the Code. Subject to certain further
restrictions and except as expressly provided in the
Corporation's articles of incorporation, as amended, any transfer
of any share of capital stock of the Corporation will be void and
of no legal effect if such transfer would result in (i) the
ownership by five or fewer individuals of more than fifty percent
of the aggregate value of all shares of capital stock of the
Corporation or (ii) beneficial ownership of all shares of common
stock would be held by less than 100 persons. Any shares of
capital stock purported to be transferred in violation of these
restrictions will be automatically transferred to the
Corporation, as trustee, for the benefit of one or more
charitable beneficiaries. A copy of the Corporation's articles of
incorporation, as amended, including the
12
<PAGE>
foregoing restrictions on transfer, will be sent without charge
to each shareholder who so requests."
ARTICLE VI. ACTION BY SHAREHOLDERS
-----------------------------------
1. Shareholder Action by Unanimous Written Consent. Any action required
------------------------------------------------
or permitted to be taken at an annual or special meeting of the shareholders of
the Corporation may be taken without a meeting, without prior notice, and
without a vote if the action is taken by written consent of the holders of at
least 95% of the outstanding stock of each voting group entitled to vote
thereon.
2. Record Date. For the purpose of determining the shareholders for any
-----------
purpose other than for determining shareholders entitled to notice of and to
vote at an annual or special shareholders meeting, the Board of Directors shall
fix a record date, which shall be not more than seventy days before the date
written notice of the record date is delivered to the shareholders. If no record
date is set by the Board of Directors, the record date shall be determined as
follows: for determining shareholders entitled to demand a special meeting, the
record date is the date the first such demand is delivered to the Corporation;
and for determining shareholders entitled to a share dividend, the record date
is the date the Board of Directors authorizes the dividend. For determining
shareholders entitled to notice of and to vote at an annual or special
shareholders meeting the record date is as of the close of business on the date
that is seven days after notice of the record date is first delivered or deemed
delivered to the shareholders entitled to notice thereof; provided, however,
that no record date shall occur within the last five calendar days of a calendar
quarter. When a determination of the shareholders entitled to vote at any
meeting has been made, that determination shall apply to any adjournment of the
meeting, unless the Board of Directors fixes a new record date. The Board of
Directors shall fix a new record date if the meeting is adjourned to a date more
than 120 days after the date fixed for the original meeting. Notwithstanding
anything contained herein to the contrary, irrespective of whether prior action
is required by the Board of Directors, the record date for determining
shareholders entitled to take action without a meeting is the date a signed
written consent is delivered to the Corporation by the holders of at least 95%
of the outstanding stock of each voting group entitled to vote thereon.
3. Special Shareholder Meetings. No special meeting of the shareholders
-----------------------------
of the Corporation shall occur within the last five calendar days of a calendar
quarter.
ARTICLE VII. INITIAL REGISTERED OFFICE AND AGENT
-------------------------------------------------
The street address of the current registered office of the Corporation is
1200 South Pine Island, Plantation, Florida 33324, and the name of the
Corporation's current registered agent at that address is CT Corporation
Systems.
13
<PAGE>
ARTICLE VIII. INITIAL BOARD OF DIRECTORS
-----------------------------------------
The Corporation shall have two directors initially. The number of
directors may be either increased or diminished from time to time, as provided
in the bylaws, but shall never be less than one. The names and street addresses
of the initial directors are:
Name Address
---- -------
Steven R. Day 1549 Ringling Boulevard, Third Floor
Sarasota, Florida 34236
Robert J. Wolsey 1549 Ringling Boulevard, Third Floor
Sarasota, Florida 34236
ARTICLE IX. BYLAWS
-------------------
The power to adopt, alter, amend or repeal bylaws shall be vested in the
Board of Directors and the shareholders, except that the Board of Directors may
not amend or repeal any bylaws or article or provision thereof without the
affirmative vote of the holders of the outstanding stock of each voting group
entitled to vote thereon if the bylaws provide that they or such article or
provision is not subject to amendment or repeal by the Board of Directors.
ARTICLE X. AMENDMENTS
----------------------
The Corporation reserves the right to amend, alter, change or repeal any
provision in these Articles of Incorporation in the manner prescribed by law,
and all rights conferred on shareholders are subject to this reservation.
14
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed these Amended and Restated
Articles of Incorporation this 29th day of October, 1999.
__________________________________
Steven R. Day, Secretary
15
<PAGE>
CERTIFICATE TO AMENDED AND RESTATED ARTICLES OF
INCORPORATION OF PINNACLE TOWERS III INC.
The undersigned, Steven R. Day, Secretary of PINNACLE TOWERS III INC., a
Florida corporation (the "Corporation"), does hereby certify as follows:
1. In accordance with Sections 607.1006 and 607.1007 of the Florida
Statutes, the foregoing Amended and Restated Articles of Incorporation
were duly adopted by the Board of Directors and by the holders of a
majority of the Voting Common and Series A Preferred of the
Corporation on October 28th, 1999. The number of votes cast for the
amendment by the Corporation's shareholders, constitutes a sufficient
number of votes to approve the amendment.
2. The undersigned officer of the Corporation has been duly authorized to
submit these Amended and Restated Articles of Incorporation of the
Corporation to the Department of State of Florida for filing in
accordance with Section 607.1007 of the Florida Statutes.
PINNACLE TOWERS III INC.
By:_________________________________
Steven R. Day, Secretary
16
<PAGE>
Exhibit 10.9
NEITHER THIS CONVERTIBLE PROMISSORY NOTE NOR THE VOTING COMMON STOCK INTO WHICH
IT IS CONVERTIBLE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT AND APPLICABLE LAWS OR SOME
OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE
LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
PINNACLE TOWERS III INC.
CONVERTIBLE PROMISSORY NOTE
$39,200,000 ____________, __________
October __, 1999
PINNACLE TOWERS III INC., a Florida corporation (the "Company"), the
principal office of which is located at 1549 Ringling Boulevard, Third Floor,
Sarasota, Florida 34236, for value received hereby promises to pay to Pinnacle
Towers Inc., or its registered assigns, the sum of Thirty Nine Million Two
Hundred Thousand Dollars ($39,200,000), or such lesser amount as shall then
equal the outstanding principal amount hereof and any unpaid accrued interest
hereon, as set forth below. The outstanding principal under this Note shall be
due and payable in full within 30 days of the date demand is made therefor by
the Holder. Demand under this Note shall be given by the Holder to the Company
by written notice thereof in accordance with Section 11 below. Payment for all
amounts due hereunder shall be made at the Company's option by either wire
transfer or by mail to the registered address of the Holder.
The following is a statement of the rights of the Holder of this Note and
the conditions to which this Note is subject, and to which the Holder hereof, by
the acceptance of this Note, agrees:
1. Definitions. As used in this Note, the following terms, unless the
context otherwise requires, have the following meanings:
(a) "Company" includes any corporation which shall succeed to or
assume the obligations of the Company under this Note.
(b) "Holder," when the context refers to a holder of this Note, shall
mean any Person who shall at the time be the registered holder of this Note.
<PAGE>
(c) "Person" means any individual, Company, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
2. Interest. Commencing on ___________________, and on each
________________ and _________________ thereafter until all outstanding
principal and interest on this Note shall have been paid in full, the Company
shall pay interest at the rate of eighteen percent (18%) per annum (the "Initial
Interest Rate") on the principal of this Note outstanding during the period
beginning on the date of issuance of this Note and ending on the date that the
principal amount of this Note becomes due and payable. In the event that the
principal amount of this Note is not paid in full when such amount becomes due
and payable, interest at the same rate as the Initial Interest Rate plus _____
percent (___%) shall continue to accrue on the balance of any unpaid principal
until such balance is paid.
3. Conversion.
3.1 Conversion. Any Holder of this Note has the right, at the
Holder's option (the "Option"), at any time prior to payment in full of the
principal balance of this Note, to convert this Note, in accordance with the
provisions of Section 3.2 hereof, in whole or in part, into fully paid and
nonassessable shares of the Company's Voting Common Stock, par value $0.001 per
share or Nonvoting Common Stock, par value $0.001 per share (the "Common
Stock"), at the option of the Holder from time to time. The number of shares of
Common Stock into which this Note may be converted ("Conversion Shares") shall
be determined by dividing the aggregate principal amount of this Note together
with all accrued interest to the date of conversion elected to be converted by
the Holder by the Conversion Price (as defined below) in effect at the time of
such conversion. The initial Conversion Price shall be equal to $25 (the
"Conversion Price").
3.2 Notice of Conversion Pursuant to Section 3.1. Before the Holder
shall be entitled to convert this Note into shares of Common Stock, it shall
surrender this Note at the office of the Company and shall give written notice
to the Company at its principal corporate office of the election to convert all
or a portion of the same pursuant to this Section 3 ("Notice of Conversion"),
and shall state therein the amount of the Note to be converted and the name or
names in which the certificate or certificates for shares of Common Stock are to
be issued. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the Note, and the
Person or Persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock as of such date.
2
<PAGE>
3.3 Mechanics and Effect of Conversion. No fractional shares of
Common Stock shall be issued upon conversion of this Note. In lieu of the
Company issuing any fractional shares to the Holder upon the conversion of this
Note, the Company shall pay to the Holder the amount of outstanding principal
that is not so converted, such payment to be in the form as provided below. Upon
the conversion of this Note pursuant to Section 3.1 above, the Holder shall
surrender this Note, duly endorsed, at the principal office of the Company. At
its expense, the Company shall, as soon as practicable thereafter, issue and
deliver to such Holder at such principal office a certificate or certificates
for the number of shares of such Common Stock to which the Holder shall be
entitled upon such conversion (bearing such legends as are required by
applicable state and federal securities laws in the opinion of counsel to the
Company), together with any other securities and property to which the Holder is
entitled upon such conversion under the terms of this Note, including a check
payable to the Holder for any cash amounts payable as described above and a
replacement Note representing any amount of the Note not converted. Upon the
complete conversion of all of this Note, the Company shall be forever released
from all its obligations and liabilities under this Note, except that the
Company shall be obligated to pay the Holder, within ten (10) days after the
date of such conversion, any interest accrued and unpaid or unconverted to and
including the date of such conversion, and no more.
4. Prepayment. Prepayment of the principal of this Note is permitted, in
whole or in part, without premium or penalty of any kind; provided the Company
provides the Holder with thirty (30) days' prior written notice (unless notice
is waived in writing by the Holder) of its intention to prepay the principal of
this Note, in whole or in part, during which time the Holder may exercise the
Option by delivering to the Company the Notice of Conversion.
5. Conversion Price Adjustments.
5.1 Adjustments for Stock Splits and Subdivisions. In the event the
Company should at any time or from time to time after the date of issuance
hereof fix a record date for the effectuation of a split or subdivision of the
outstanding shares of Common Stock or the determination of holders of Common
Stock entitled to receive a dividend or other distribution payable in additional
shares of Common Stock or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly, additional
shares of Common Stock (hereinafter referred to as "Common Stock Equivalents")
without payment of any consideration by such holder for the additional shares of
Common Stock or the Common Stock Equivalents (including the additional shares of
Common Stock issuable upon conversion or exercise thereof), then, as of such
record date (or the date of such dividend distribution, split or subdivision if
no record date is fixed), the Conversion Price of this Note shall be
appropriately decreased so that the number of shares of
3
<PAGE>
Common Stock issuable upon conversion of this Note shall be increased in
proportion to such increase of outstanding shares.
5.2 Adjustments for Reverse Stock Splits. If the number of shares of
Common Stock outstanding at any time after the date hereof is decreased by a
combination of the outstanding shares of Common Stock, then, following the
record date of such combination, the Conversion Price for this Note shall be
appropriately increased so that the number of shares of Common Stock issuable on
conversion hereof shall be decreased in proportion to such decrease in
outstanding shares.
5.3 Notices of Record Date, etc. In the event of:
(a) Any taking by the Company of a record of the holders of any
class of securities of the Company for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash dividend
payable out of earned surplus at the same rate as that of the last such cash
dividend theretofore paid) or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right; or
(b) Any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets of the Company to any other
Person or any consolidation or merger involving the Company; or
(c) Any voluntary or involuntary dissolution, liquidation or
windingup of the Company, the Company will mail to the holder of this Note at
least seven (7) days prior to the earliest date specified therein, a notice
specifying:
(i) The date on which any such record is to be taken for
the purpose of such dividend, distribution or right, and the amount and
character of such dividend, distribution or right; and
(ii) The date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
windingup is expected to become effective and the record date for determining
shareholders entitled to vote thereon.
5.4 Reservation of Stock Issuable Upon Conversion. The Company shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of
this Note such number of its shares of Common Stock as shall from time to time
be sufficient to effect the conversion of the Note; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the
4
<PAGE>
conversion of the entire outstanding principal amount of this Note, in addition
to such other remedies as shall be available to the holder of this Note, the
Company will use its best efforts to take such corporation action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purposes.
6. Representations and Warranties of the Holder.
(a) The Holder by its acceptance of this Note acknowledges that it is
aware that this Note and the shares of Common Stock issuable to it by the
Company upon conversion of this Note have not been registered under the
Securities Act of 1933, as amended ("Act"), or the securities laws of any state
or other jurisdiction.
(b) The Holder warrants and represents to the Company that it has
acquired this Note, and, upon conversion of the Note, it will be acquiring the
Common Stock, for investment and not with a view to or for sale in connection
with any distribution of this Note or such Common Stock or with any intention of
distributing or selling this Note or such Common Stock.
(c) The Holder has no right to demand that the Company register this
Note or the shares of Common Stock issued or issuable under this Note.
7. Assignment. Subject to the restrictions on transfer described in
Section 11 below, the rights and obligations of the Company and the Holder of
this Note shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.
8. Waiver and Amendment. Any provision of this Note may be amended,
waived or modified upon the written consent of the Company and the Holder.
9. Transfer of This Note or Securities Issuable on Conversion Hereof.
With respect to any offer, sale or other disposition of this Note or securities
into which such Note may be converted, the Holder will give written notice to
the Company prior thereto, describing briefly the manner thereof, together with
a written opinion of such Holder's counsel, to the effect that such offer, sale
or other distribution may be effected without registration or qualification
(under any federal or state law then in effect). Promptly upon receiving such
written notice and reasonably satisfactory opinion, if so requested, the
Company, as promptly as practicable, shall notify such Holder that such Holder
may sell or otherwise dispose of this Note or such securities, all in accordance
with the terms of the notice delivered to the Company. If a determination has
been made pursuant to this Section 9 that the opinion of counsel for the Holder
is not reasonably satisfactory to the Company, the Company shall so notify the
Holder promptly after such determination has been made. Each Note thus
transferred and each certificate
5
<PAGE>
representing the securities thus transferred shall bear a legend as to the
applicable restrictions on transferability in order to ensure compliance with
the Act, unless in the opinion of counsel for the Company such legend is not
required. The Company may issue stop transfer instructions to its transfer agent
in connection with such restrictions.
10. Treatment of Note. To the extent permitted by generally accepted
accounting principles, the Company will treat, account and report the Note as
debt and not equity for accounting purposes and with respect to any returns
filed with federal, state or local tax authorities.
11. Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if (and then two business days after) mailed by
registered or certified mail, postage prepaid, at the respective addresses of
the parties as set forth herein. Any party hereto may by notice so given change
its address for future notice hereunder.
12. No Shareholder Rights. Nothing contained in this Note shall be
construed as conferring upon the Holder or any other Person the right to vote or
to consent or to receive notice as a shareholder in respect of meetings of
shareholders for the election of directors of the Company or any other matters
or any rights whatsoever as a shareholder of the Company; and no dividends or
interest shall be payable or accrued in respect of this Note or the interest
represented hereby or the Conversion Shares obtained hereunder until, and only
to the extent that, this Note shall have been converted.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, excluding that body of law
relating to conflict of laws.
14. Heading; References. All headings used herein are used for
convenience only and shall not be used to construe or interpret this Note.
Except where otherwise indicated, all references herein to Sections refer to
Sections hereof.
6
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be issued this
_____ day of ___________, 1999.
PINNACLE TOWERS III INC.
By_________________________________
Steven R. Day, Vice President
Name of Holder:____________________
Address:___________________________
___________________________
7
<PAGE>
Exhibit 10.10
COST AND EXPENSE SHARING AND REIMBURSEMENT AGREEMENT
----------------------------------------------------
THIS COST AND EXPENSE SHARING AND REIMBURSEMENT AGREEMENT (this
"Agreement") is effective as of the 31st day of August, 1999, by and between
PINNACLE TOWERS INC., a Delaware corporation ("PTI") and Pinnacle Towers III
Inc., a Florida corporation ("PT3").
WHEREAS, PT3 owns certain assets which it acquired from PTI; and
WHEREAS, in connection with the conduct of its business, PT3 considers it
necessary or convenient to avail itself of certain of PTI's personnel,
facilities and general and administrative overhead, and PTI is willing to make
such available to PT3; and
WHEREAS, PT3 has agreed to reimburse PTI for its allocable share of the
cost and expense of such shared personnel, facilities and general and
administrative overhead as determined in the manner hereinafter provided;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties agree as follows:
1. Provision of Shared Costs and Expenses. During the term of this
--------------------------------------
Agreement, upon the reasonable request of PT3, PTI will make available to PT3
any of PTI's office and administrative personnel and facilities, consultants and
contractors, and general and administrative office overhead and costs, including
inter alia office space, record retention, photocopy facilities, facsimile and
telephone equipment, sales and marketing support, office supplies, and computer
services (collectively, the "Shared Costs and Expenses").
2. Reimbursement. PT3 agrees to reimburse PTI for the costs and expenses
-------------
incurred by PTI on behalf of or for the benefit of PT3 in an amount equal to the
sum of the following amounts (the "Reimbursement Amount") determined annually as
of the end of each calendar year:
(a) With respect to any Shared Costs and Expenses directly
attributable solely to PT3, an amount equal to the marginal or incremental
cost or expense thereof incurred by PTI; and
(b) With respect to any Shared Costs and Expenses not described in
(a) above, the pro rata share of such Shared Costs and Expenses based on
the product obtained by multiplying the gross amount of such Shared Costs
and Expenses by the quotient obtained by dividing the gross revenues of PT3
for the year by the sum of the gross revenues for the year of both PTI and
PT3, or an amount determined on such other reasonable basis as the parties
may mutually agree.
The Reimbursement Amount for each calendar year shall be determined no later
than three months after the end of such calendar year and payment of the
Reimbursement Amount shall be due on or before the April 10/th/ of the year
following the end of such calendar year.
<PAGE>
3. Standard of Care. PTI agrees that it and its personnel shall exercise
----------------
the same degree of diligence, care and prudence in connection with matters
conducted on behalf of, or provided for the benefit of, PT3 as it exercises
matters conducted on its own behalf or provided for its own benefit.
4. Limitation of Liability.
-----------------------
(a) PTI and its Affiliates, and the officers, directors,
employees, shareholders, partners, representatives, consultants and
agents of PTI and its Affiliates (collectively, "Providing Parties")
shall not be liable to the party on whose behalf the Shared Costs and
Expenses are incurred, its Affiliates, or to any officer, director,
employee, shareholder, partner, representative, consultant or agent of
such party or its Affiliates (collectively, "Receiving Parties"), for
any liability, cost, damage, expense or loss, including, without
limitation, any special, indirect, consequential or punitive damages
(i) arising or allegedly arising out of any actions or failures to act
by any of the Providing Parties with respect to the Shared Costs and
Expenses to be provided hereunder, or (ii) as a result of the reliance
by any of the Receiving Parties on any advice or data that any of the
Providing Parties may provide pursuant to this Agreement; provided,
however, that the foregoing shall not apply to limit liability of a
party to the extent caused by such party's gross negligence or willful
misconduct.
(b) The Receiving Parties shall indemnify and hold harmless
each and every of the Providing Parties from and against any
liability, cost, damage, expense or loss (including court costs and
reasonable attorneys' fees) which such Providing Parties may sustain
or incur by reason of any claim, demand, suit or recovery by any
person or entity, directly resulting from acts or omissions committed
by the Receiving Party in connection with this Agreement; provided,
however, that no person may benefit from the foregoing indemnity in
the event of its gross negligence or willful misconduct.
5. Term. The term of this Agreement shall commence as of the date hereof
----
and end December 31, 2000, unless earlier terminated effective as of the end of
a calendar month by either party upon no less than two months' prior written
notice to the other party. The term of this Agreement shall automatically renew
for successive periods of one year each unless either party provides to the
other party notice in writing that this Agreement will not so renew and such
notice is given at least two months prior to the then termination date of this
Agreement. In the event this Agreement is terminated prior to the end of a
calendar year, the Reimbursement Amount shall be determined as of the effective
date of termination based on gross revenues of each party through the date of
termination.
6. Relationship of the Parties. In all matters relating to this
---------------------------
Agreement, each party hereto shall be solely responsible for the acts of its
employees, and employees of one party shall not be considered employees of the
other party. No party shall have any right, power or authority to create any
obligation, express or implied, on behalf of any other party. Nothing in this
Agreement is intended to create or constitute a joint venture or partnership
relationship between the parties hereto or persons referred to herein.
7. Force Majeure. PTI shall be excused from performance hereunder for
-------------
any period and to the extent that it is prevented from performance hereunder, in
whole or in part, as a result
-2-
<PAGE>
of delays caused by PT3 or any act of God, war, civil disturbance, court
order, strike, labor dispute, law or regulation of any governmental
authority, or other cause beyond the reasonable control of PTI. Such
nonperformance shall not be a default hereunder. PTI shall take all
reasonable actions to resume performance of its obligations hereunder as
soon as feasible.
8. Amendments and Waiver. No amendment, waiver or consent with respect
---------------------
to any provision of this Agreement shall in any event be effective, unless the
same shall be in writing and signed by the parties hereto, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
9. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be, personally delivered or sent by
facsimile transmission with confirming copy sent by overnight courier (such as
Express Mail, Federal Express, etc.) and a delivery receipt obtained and
addressed to the intended recipient as follows:
If to PTI:
Pinnacle Towers Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Ben Gaboury
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
If to PT3:
Pinnacle Towers III Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Steve Day
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
Any party may change its address or add or change parties for receiving notice
by written notice given to the others named above. Notices shall be deemed
given as of the date of receipt.
10. Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
11. Successors and Assigns; Beneficiaries. This Agreement shall bind and
-------------------------------------
inure to the benefit of the parties named herein and their respective successors
and assigns. No party may assign any rights, benefits, duties or obligations
under this Agreement without the prior written consent of the other party.
Except as specifically provided in Section 4, no third party shall be entitled
to enforce any provision hereof; and no third party is intended to benefit from
this Agreement.
-3-
<PAGE>
12. Entire Agreement. This Agreement and the documents referred to
----------------
herein contain the entire agreement and understanding among the parties with
respect to the transactions contemplated hereby and supersede all other
agreements, understandings and undertakings among the parties on the subject
matter hereof.
13. Partial Invalidity. In the event that any provision of this
------------------
Agreement shall be held invalid or unenforceable by any court or competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
14. Governing Law; Jurisdiction. This Agreement shall be interpreted in
---------------------------
accordance with the substantive laws of the State of Florida applicable to
contracts made and to be performed wholly within said State. All disputes,
legal actions, suits and proceedings arising out of or relating to this
Agreement shall be brought in a federal district or state court located in
Tampa, Florida. Each party hereby consents to the jurisdiction of the federal
district or state court in Tampa, Florida. Each party hereby irrevocably waives
all claims of immunity from jurisdiction and any right to object on the basis
that any dispute, action, suit or proceeding brought in the federal district or
state court of Tampa, Florida has been brought in an improper or inconvenient
venue or forum.
15. Disputes.
---------
(a) PTI and PT3 mutually desire that friendly collaboration
will develop between themselves. Accordingly, they shall try to
resolve in a friendly manner all disagreements and misunderstandings
connected with their respective rights and obligations under this
Agreement, including any amendments hereof.
(b) (i) To the extent that any misunderstanding or dispute
cannot be resolved agreeably in a friendly manner, the dispute will be
mediated by a mutually acceptable mediator to be chosen by PTI and PT3
within forty-five (45) days after written notice by one of the parties
demanding mediation. Neither party may unreasonably withhold consent
to the selection of a mediator, however, by mutual agreement PTI and
PT3 may postpone mediation until each has completed specified but
limited discovery with respect to a dispute. The parties may also
agree to attempt some other form of alternative dispute resolution
("ADR") in lieu of mediation, including by way of example and without
limitation, neutral fact-finding or a mini-trial.
(ii) Any dispute which the parties cannot resolve through
negotiation, mediation or other form of ADR within six months of the
date of the initial demand for it by one of the parties may then be
submitted to the courts for resolution. The use of any ADR procedures
will not be construed under the doctrine of laches, waiver or estoppel
to affect adversely the rights of either party. Nothing in this
Section 15 will prevent either party from resorting to judicial
proceedings if (A) good faith efforts to resolve the dispute under
these procedures have been unsuccessful or (B) interim relief from a
court is necessary to prevent serious and irreparable injury to one
party or to others.
(c) Each of PT3 and PTI shall bear its costs of mediation or
ADR, but PT3 and PTI agree to share the costs of the mediation of ADR
equally.
-4-
<PAGE>
16. Authorship. The parties hereto agree that the terms and language of
----------
this Agreement were the result of negotiations between the parties and, as a
result, there shall be no presumption that any ambiguities in this Agreement
shall be resolved against either party. Any controversy over construction of
this Agreement shall be decided without regard to events of authorship or
negotiation.
17. Defined Terms. All capitalized terms not defined herein shall have
-------------
the meanings ascribed to them in the Asset Purchase Agreement.
18. Recitals. The recitals hereto are true and correct and are by this
--------
reference incorporated herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
PINNACLE TOWERS INC.
__________________________________
Bernard Gaboury, President
PINNACLE TOWERS III INC.
__________________________________
Steven R. Day, Vice President, Chief
Financial Officer and Secretary
-5-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-START> JAN-01-1998 JAN-31-1999
<PERIOD-END> SEP-30-1998 SEP-30-1999
<CASH> 0 151,868,363
<SECURITIES> 0 0
<RECEIVABLES> 2,502,601 11,733,490
<ALLOWANCES> 356,905 4,178,380
<INVENTORY> 0 0
<CURRENT-ASSETS> 3,178,315 165,616,062
<PP&E> 497,463,479 946,431,154
<DEPRECIATION> 21,696,958 64,994,681
<TOTAL-ASSETS> 492,078,268 1,160,298,216
<CURRENT-LIABILITIES> 26,966,366 64,566,621
<BONDS> 399,642,563 698,320,176
30,543,260 0
32,570,731 0
<COMMON> 378 41,695
<OTHER-SE> 2,242,881 397,011,179
<TOTAL-LIABILITY-AND-EQUITY> 492,078,268 1,160,298,216
<SALES> 21,127,633 48,816,143
<TOTAL-REVENUES> 21,127,633 48,816,143
<CGS> 0 0
<TOTAL-COSTS> 3,965,511 11,691,067
<OTHER-EXPENSES> 18,570,441 41,549,308
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 7,276,265 14,439,470
<INCOME-PRETAX> (23,181,336) (41,951,538)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (23,181,336) (41,951,538)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (23,181,336) (41,951,538)
<EPS-BASIC> (59.85) (1.41)
<EPS-DILUTED> 0 0
</TABLE>
