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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 29, 1999
REGISTRATION NO. 333-67043
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 3
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SPECTRASITE HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATES OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
4899
(PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER)
56-2027322
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
8000 REGENCY PARKWAY
SUITE 570
CARY, NORTH CAROLINA 27511
(919) 468-0112
(ADDRESS, INCLUDING ZIP CODE,
AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICES)
DAVID P. TOMICK
SPECTRASITE HOLDINGS, INC.
8000 REGENCY PARKWAY
SUITE 570
CARY, NORTH CAROLINA 27511
(919) 468-0112
(NAME, ADDRESS, INCLUDING ZIP CODE,
AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S AGENT FOR SERVICE)
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Please address a copy of all communications to:
TIMOTHY J. KELLEY
THOMAS D. TWEDT
DOW, LOHNES & ALBERTSON, PLLC
1200 NEW HAMPSHIRE AVENUE, N.W.
WASHINGTON, D.C. 20036
(202) 776-2000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If the securities being registered on this form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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EXPLANATORY NOTE
This registration statement covers the registration of $225,238,000
aggregate principal amount at maturity of Series B 12% senior discount notes due
2008 of SpectraSite Holdings, Inc. that may be exchanged for equal principal
amounts at maturity of SpectraSite's outstanding 12% senior discount notes due
2008. This registration statement also covers the registration of the registered
notes for resale by CIBC Oppenheimer Corp. in market-making transactions. The
complete prospectus relating to the exchange offer follows immediately after
this explanatory note. Following the exchange offer prospectus are certain pages
of the prospectus relating solely to such market-making transactions, including
an alternate front cover page and alternate sections entitled "Use of Proceeds"
and "Plan of Distribution." In addition, each market-making prospectus will not
include the following captions (or the information set forth under such
captions) included in the exchange offer prospectus: "Risk Factors -- Lack of
Public Market for the Notes," "Prospectus Summary -- Summary of the Exchange
Offer," "The Exchange Offer" and "Certain United States Federal Income Tax
Considerations -- Effect of Exchange of Old Notes for Exchange Notes." All other
sections of the exchange offer prospectus will be included in the market-making
prospectus.
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THIS INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION
WHERE THEIR OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED APRIL 29, 1999
[SpectraSite Logo]
PROSPECTUS
$225,238,000
SPECTRASITE HOLDINGS, INC.
OFFER TO EXCHANGE SERIES B 12% SENIOR DISCOUNT NOTES DUE 2008 FOR ANY AND ALL
OUTSTANDING 12% SENIOR DISCOUNT NOTES DUE 2008.
TERMS OF EXCHANGE OFFER
- - Expires 5:00 p.m., New York City time, , 1999, unless extended
- - All outstanding notes that are validly tendered and not withdrawn will be
exchanged
- - Tenders of outstanding notes may be withdrawn any time prior to the expiration
of the exchange offer
- - The exchange of notes will not be a taxable exchange for U.S. Federal tax
purposes
- - We will not receive any proceeds from the exchange offer
- - The terms of the registered notes we will issue in the exchange offer are
substantially identical to the outstanding notes, except that certain transfer
restrictions and registration rights relating to the outstanding notes will
not apply to the registered notes
The notes are eligible for trading in The Portal(SM) Market, a subsidiary
of The Nasdaq Market, Inc. The notes also may be sold in the over-the-counter
market, in negotiated transactions or through a combination of such methods.
WE ARE NOT MAKING AN OFFER TO EXCHANGE NOTES IN ANY JURISDICTION WHERE THE
OFFER IS NOT PERMITTED.
FOR A DISCUSSION OF CERTAIN FACTORS THAT YOU SHOULD CONSIDER BEFORE
PARTICIPATING IN THIS EXCHANGE OFFER, SEE "RISK FACTORS" COMMENCING ON PAGE 8.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THE NOTES TO BE DISTRIBUTED IN THE EXCHANGE OFFER, NOR
HAVE ANY OF THESE ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
, 1999
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PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all of the information that is important to you. This
prospectus includes specific terms of the notes we are offering, as well as
information regarding our business and detailed financial data. We encourage you
to read this prospectus in its entirety. In this prospectus, Holdings refers to
SpectraSite Holdings, Inc., a Delaware corporation, and SpectraSite and we or
our each refers to Holdings, its subsidiaries and all predecessor entities to
Holdings and its subsidiaries collectively, unless the context otherwise
requires.
THE EXCHANGE OFFER
On June 26, 1998, we completed the private offering of $225,238,000
aggregate principal amount at maturity of 12% senior discount notes due 2008.
Holdings entered into a registration rights agreement with the initial
purchasers of the notes in the private offering in which we agreed, among other
things, to deliver to you this prospectus and to complete the exchange offer on
or prior to March 10, 1999. This exchange offer allows you to exchange your
notes for registered notes with substantially identical terms. You should read
the discussions under the heading "-- Summary of Terms of the Registered Notes"
and "Description of the Notes" for further information regarding the registered
notes.
Since we did not complete the exchange offer prior to March 10, 1999, the
interest rate on the notes increased at a rate of 0.50% per annum. This
additional interest will accrue on the notes until we complete the exchange
offer, and we will pay such interest on each semi-annual interest payment date
until we cure the default.
We believe that you may resell the notes issued in the exchange offer
without compliance with the registration and prospectus delivery provisions of
the Securities Act of 1933, subject to certain conditions. You should read the
discussion under the headings "-- Summary of the Exchange Offer" and "The
Exchange Offer" for further information regarding the exchange offer and resale
of the registered notes.
SPECTRASITE
We believe that SpectraSite is one of the leading full service providers of
tower related services in the U.S. wireless communications industry. SpectraSite
develops and manages build-to-suit tower networks and provides site acquisition
and site management services for major wireless communications companies. We are
capitalizing on the growing trend toward antenna co-location and independent
tower ownership, as leading wireless providers increasingly redirect their
capital outlays from tower development to subscriber acquisition activities and
local municipalities encourage multiple tenants on single towers. In addition,
we plan to expand our tower inventory through future acquisitions or partnerings
with major wireless communications service providers and by building or
acquiring selective tower assets in strategic geographic areas that will be
attractive to multiple tenants.
Our primary focus is the ownership of multi-tenant towers and the leasing,
under long-term contracts, of antenna space on such towers to a variety of
wireless service providers, including personal communications service, cellular,
paging, specialized mobile radio and enhanced specialized mobile radio. Our
build-to-suit programs provide a comprehensive solution to those wireless
service providers seeking to minimize their capital expenditures, overhead and
time associated with the build-out and ongoing maintenance of their wireless
network infrastructure. We also offer comprehensive site acquisition services,
including site location analysis; site acquisition; zoning and land use
permitting; FAA compliance analysis and filing; and contract, title and building
permit administration. In addition, we provide comprehensive site management
services for communications sites. We manage not only our own tower sites, but
also over 1,000 sites for carriers. Site acquisition and site management allow
us to offer a complete line of tower services.
Our principal executive offices are located at 8000 Regency Parkway, Suite
570, Cary, North Carolina 27511, and our telephone number is (919) 468-0112.
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BUSINESS STRATEGY
Our strategic objective is to be one of the largest owners and operators of
communications towers and to be the premier build-to-suit provider of tower
networks in the United States. Our strategy involves the following elements:
- Maximize utilization of tower capacity.
- Partner with major wireless service providers and assume ownership of
their existing towers.
- Integrate the Nextel tower assets.
- Build towers in areas of increasing wireless demand.
- Acquire towers with substantial co-location opportunities.
- Capitalize on our strong relationships with major wireless service
providers.
- Leverage our site acquisition experience.
COMPETITIVE STRENGTHS
We believe that the following strengths will enable us to successfully
expand our business:
- National footprint with over 3,000 communications towers.
- Build-to-suit focus.
- Capability to manage multiple projects.
- Standardized procedures and specifications.
- Integrated provider of site development services.
- Experienced management.
RECENT EVENTS
NEXTEL TOWER ACQUISITION. On April 20, 1999, we acquired 2,000
communications towers from Nextel Communications, Inc. in exchange for $560.0
million in cash and 14 million shares of Holdings' Series C preferred stock. As
part of this transaction, Nextel agreed to lease 1,700 additional sites on our
towers as part of its national service deployment.
SALE OF SERIES C PREFERRED STOCK. In connection with the Nextel tower
acquisition, we privately placed 46,286,795 shares of Holdings' Series C
preferred stock for an aggregate purchase price of $231.4 million. We used the
proceeds from this sale to partially fund the Nextel tower acquisition.
ISSUANCE OF 2009 NOTES. On April 20, 1999, we completed the private
offering of $586,800,000 aggregate principal amount at maturity of 11 1/4%
senior discount notes due 2009. We used a portion of the net proceeds from this
offering to partially fund the Nextel tower acquisition and to pay related fees
and expenses. We will use the remaining proceeds for general corporate purposes,
including construction of new towers and possible selective acquisitions.
NEW CREDIT FACILITY. We have entered into a new $500.0 million seven year
credit facility. We borrowed $150.0 million under this facility at the closing
of the Nextel tower acquisition.
AIRADIGM TOWER ACQUISITION. We acquired 40 towers from Airadigm
Communications, Inc. in 1998 and an additional four towers in 1999. We expect to
purchase an additional three towers. The total purchase price for all 47 towers
is $11.75 million.
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SUMMARY OF THE EXCHANGE OFFER
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Registration Rights Agreement............. You have the right to exchange your 2008 notes for
registered notes with substantially identical terms.
This exchange offer is intended to satisfy these rights.
After the exchange offer is complete, you will no longer
be entitled to any exchange or registration rights with
respect to your notes.
The Exchange Offer........................ We are offering to exchange $1,000 principal amount at
maturity of Holdings' Series B 12% senior discount notes
due 2008 which have been registered under the Securities
Act for each $1,000 principal amount at maturity of
Holdings' outstanding 12% senior discount notes due 2008
which were issued in June 1998 in a private offering. In
order to be exchanged, an outstanding note must be
properly tendered and accepted. We will exchange all
2008 notes validly tendered and not validly withdrawn.
As of this date there is $225,238,000 aggregate
principal amount at maturity of 2008 notes outstanding.
We will issue registered notes on or promptly after the
expiration of the exchange offer.
Resales................................... We believe that the registered notes may be offered for
resale, resold and otherwise transferred by you without
compliance with the registration and prospectus delivery
provisions of the Securities Act provided that:
- you acquire the registered notes issued in the
exchange offer in the ordinary course of your business;
- you are not participating, do not intend to
participate, and have no arrangement or understanding
with any person to participate, in the distribution of
the registered notes issued to you in the exchange
offer; and
- you are not an affiliate, as defined under Rule 405 of
the Securities Act, of ours.
If our belief is inaccurate and you transfer any
registered note issued to you in the exchange offer
without delivering a prospectus meeting the requirements
of the Securities Act or without an exemption from
registration of your registered notes from such
requirements, you may incur liability under the
Securities Act. We do not assume or indemnify you
against such liability. Each broker-dealer that is
issued registered notes for its own account in exchange
for outstanding notes which were acquired by such
broker-dealer as a result of market-making or other
trading activities, must acknowledge that it will
deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of the
registered notes. A broker-dealer may use this
prospectus for an offer to resell, resale or other
retransfer of the registered notes issued to it in the
exchange offer.
Record Date............................... We mailed this prospectus and the related exchange offer
documents to registered holders of outstanding 2008
notes on , 1999.
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Expiration Date........................... The exchange offer will expire at 5:00 p.m., New York
City time, , 1999, unless we decide to extend
the expiration date.
Conditions to the Exchange Offer.......... We may terminate or amend the exchange offer if:
- any legal proceeding, government action or other
adverse development materially impairs our ability to
complete the exchange offer;
- any SEC rule, regulation or interpretation materially
impairs the exchange offer; or
- we have not obtained any necessary governmental
approvals with respect to the exchange offer.
We may waive any or all of these conditions. At this
time, there are no adverse proceedings, actions or
developments pending or, to our knowledge, threatened
and no governmental approvals are necessary to complete
the exchange offer.
Procedures for Tendering Outstanding
Notes................................... Each holder of outstanding 2008 notes wishing to accept
the exchange offer must:
- complete, sign and date the accompanying letter of
transmittal, or a facsimile thereof; or
- arrange for DTC to transmit certain required
information to the exchange agent in connection with a
book-entry transfer.
You must mail or otherwise deliver such documentation
and your outstanding 2008 notes to United States Trust
Company of New York, as exchange agent, at the address
set forth under "The Exchange Offer -- Exchange Agent."
By tendering your outstanding 2008 notes in this manner,
you will be representing, among other things, that:
- you are acquiring the registered notes through the
exchange offer in the ordinary course of your
business;
- you are not participating, do not intend to
participate, and have no arrangement or understanding
with any person to participate, in the distribution of
the registered notes issued to you in the exchange
offer; and
- you are not an affiliate of ours.
Untendered Outstanding Notes.............. If you are eligible to participate in the exchange offer
and you do not tender your outstanding notes, you will
not have any further registration or exchange rights and
your outstanding notes will continue to be subject to
certain restrictions on transfer. Accordingly, the
liquidity of the market for such outstanding notes could
be adversely affected.
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Special Procedures for Beneficial
Owners.................................. If you beneficially own outstanding 2008 notes
registered in the name of a broker, dealer, commercial
bank, trust company or other nominee and you wish to
tender your outstanding notes in the exchange offer, you
should contact such registered holder promptly and
instruct it to tender on your behalf. If you wish to
tender on your own behalf, you must, prior to completing
and executing the letter of transmittal for the exchange
offer and delivering your outstanding 2008 notes, either
arrange to have your outstanding notes registered in
your name or obtain a properly completed bond power from
the registered holder. The transfer of registered
ownership may take considerable time.
Guaranteed Delivery Procedures............ If you wish to tender your outstanding 2008 notes and
time will not permit your required documents to reach
the exchange agent by the expiration date of the
exchange offer, or you cannot complete the procedure for
book-entry transfer on time or you cannot deliver
certificates for your outstanding notes on time, you may
tender your outstanding notes according to the
procedures described in this prospectus under the
heading "The Exchange Offer -- Guaranteed Delivery
Procedures."
Withdrawal Rights......................... You may withdraw the tender of your outstanding 2008
notes at any time prior to 5:00 p.m., New York City
time, on , 1999.
Certain U.S. Federal Tax Considerations... The exchange of notes will not be a taxable event for
United States federal income tax purposes.
Use of Proceeds........................... We will not receive any proceeds from the issuance of
registered notes in the exchange offer. We will pay all
our expenses incident to the exchange offer.
Exchange Agent............................ United States Trust Company of New York is serving as
the exchange agent in connection with the exchange
offer.
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SUMMARY OF TERMS OF THE REGISTERED NOTES
The form and terms of the registered notes are the same as the form and
terms of the outstanding 2008 notes except that the registered notes will be
registered under the Securities Act and, therefore, will not bear legends
restricting their transfer and will not be entitled to registration under the
Securities Act. The registered notes will evidence the same debt as the
outstanding 2008 notes, and the same indenture will govern both the registered
notes and the outstanding notes.
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Registered Notes.......................... Series B 12% senior discount notes due 2008 of
SpectraSite Holdings, Inc.
Maturity.................................. July 15, 2008
Accreted Value and Interest............... The registered notes will accrete at a daily rate of 12%
per year, compounded semiannually, to an aggregate
principal amount of $225,238,000 by July 15, 2003. Cash
interest will begin to accrue on July 15, 2003, and we
will pay cash interest on January 15, 2004, and on each
July 15 and January 15 thereafter, at a rate of 12% per
year.
Optional Redemption....................... After July 15, 2003, we may redeem all or a portion of
the 2008 notes at specified redemption prices, plus
accrued and unpaid interest, to the applicable
redemption date.
On any one or more occasions prior to July 15, 2001, we
may redeem up to 25% of the aggregate principal amount
at maturity of the 2008 notes with the net cash proceeds
from one or more equity offerings. The redemption price
would be 112% of the accreted value on the redemption
date.
You should refer to the heading "Description of Notes --
Optional Redemption" for further details.
Ranking................................... The 2008 notes:
- are general unsecured obligations of Holdings;
- rank equal in right of payment with all existing and
future unsecured senior indebtedness of Holdings;
- are senior in right of payment to all future
subordinated indebtedness of Holdings; and
- are effectively subordinated to all indebtedness,
liabilities and other obligations of Holdings'
subsidiaries.
Holdings conducts all operations through its
subsidiaries, and Holdings' subsidiaries are not
guarantors of the notes. As of December 31, 1998, after
giving effect to the offering of our 2009 notes and
initial borrowings under our new credit facility,
Holdings would have had $472.7 million of debt
outstanding, and Holdings' subsidiaries had
approximately $152.7 million of indebtedness and other
liabilities.
Certain Covenants......................... The indenture governing the 2008 notes contains certain
covenants for your benefit which, among other things and
subject to certain qualifications, restrict our ability
to:
- incur indebtedness;
- make certain payments;
- issue preferred stock;
- enter into transactions with affiliates;
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- create liens;
- sell assets; and
- consolidate, merge or sell substantially all of our
assets.
Change of Control......................... Upon the occurrence of a change of control of Holdings,
we will offer to repurchase your 2008 notes, in whole or
in part, at a price equal to 101% of their accreted
value to the date of purchase prior to July 15, 2003 or
101% of their principal amount, plus accrued and unpaid
interest, if any, to the date of purchase on or after
July 15, 2003. There can be no assurance, however, that
we will have sufficient funds available to repurchase
all of the notes which holders may deliver in connection
with a change of control repurchase offer.
Form of Registered Notes.................. The registered notes will be represented by one or more
permanent global securities in bearer form deposited
with United States Trust Company of New York, as book
entry depositary, for the benefit of DTC. You will not
receive registered notes in registered form unless one
of the events set forth under the heading "Description
of the Registered Notes -- Book-Entry; Delivery and
Form" occurs. Instead, beneficial interests in the
registered notes will be shown on, and transfers of
these will be effected only through, records maintained
in book-entry form by DTC with respect to its
participants.
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RISK FACTORS
Ownership of the outstanding notes or the registered notes involves a high
degree of risk. Holders of the outstanding notes should consider carefully the
risk factors below, as well as the other information in this prospectus, before
tendering the outstanding notes in the exchange offer.
Some of the statements contained in this prospectus are forward-looking.
They include statements concerning:
- growth strategy;
- liquidity and capital expenditures;
- construction and acquisition activities;
- debt levels and ability to obtain financing and service debt;
- competitive conditions in the communications site and wireless carrier
industries;
- regulatory matters affecting the communications site and wireless carrier
industries;
- projected growth of the wireless communications and wireless carrier
industries; and
- general economic conditions.
Actual results may differ materially from those suggested by the
forward-looking statements for various reasons, including those discussed in
this section.
SUBSTANTIAL LEVERAGE -- OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT THE
FINANCIAL HEALTH OF SPECTRASITE.
SpectraSite is and will continue to be highly leveraged. As of December 31,
1998, after giving pro forma effect to the offering of our 2009 notes and
initial borrowings under our new credit facility, SpectraSite had total
consolidated indebtedness of approximately $622.7 million. Also, SpectraSite's
pro forma earnings would have been inadequate to service its pro forma fixed
charges by $94.5 million for the year ended December 31, 1998. We expect that
earnings will continue to be inadequate to service fixed charges at least
through fiscal 2000.
Our high level of indebtedness could have important consequences. For
example, it could:
- make it more difficult for us to satisfy our obligations with respect to
the notes;
- increase our vulnerability to general adverse economic and industry
conditions;
- limit our ability to obtain additional financing;
- require the dedication of a substantial portion of our cash flow from
operations to the payment of principal of, and interest on, our
indebtedness, thereby reducing the availability of such cash flow to fund
our growth strategy, working capital, capital expenditures or other
general corporate purposes;
- limit our flexibility in planning for, or reacting to, changes in our
business and the industry; and
- place us at a competitive disadvantage relative to less leveraged
competitors.
ABILITY TO SERVICE DEBT -- WE WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH TO
SERVICE OUR INDEBTEDNESS.
OUR ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL.
Our ability to make scheduled payments of principal of, or to pay interest
on, SpectraSite's debt obligations, and our ability to refinance any such debt
obligations, or to fund planned capital expenditures, will depend on
SpectraSite's future performance, which, to a certain extent, is subject to
general economic, financial, competitive, legislative, regulatory and other
factors that are beyond our control. We anticipate substantial capital
expenditures in connection with our planned tower deployment and acquisitions.
Failure to obtain any such financing could require us to reduce significantly
planned capital expenditures or scale
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back the scope of build-to-suit activity or acquisitions, any of which could
have a material adverse effect on our business, financial condition or results
of operations. In addition, we may need to refinance all or a portion of
SpectraSite's indebtedness on or prior to its scheduled maturity. There can be
no assurance that we will generate sufficient cash flow from operations in the
future, that anticipated revenue growth will be realized or that future
borrowings or equity contributions will be available in amounts sufficient to
service SpectraSite's indebtedness and make anticipated capital expenditures. In
addition, there can be no assurance that SpectraSite will be able to effect any
required refinancing of its indebtedness on commercially reasonable terms or at
all.
HOLDING COMPANY STRUCTURE -- OUR ONLY SOURCE OF CASH TO PAY INTEREST ON AND THE
PRINCIPAL OF THE 2008 NOTES AND THE 2009 NOTES IS DISTRIBUTIONS FROM OUR
SUBSIDIARIES.
Holdings is a holding company with no business operations of its own.
Holdings' only significant asset is and will be the outstanding capital stock of
its subsidiaries. Holdings conducts all of its business operations through its
subsidiaries. Accordingly, Holdings' only source of cash to pay interest on and
the principal of the notes is distributions with respect to its ownership
interest in its subsidiaries from the net earnings and cash flow generated by
such subsidiaries. We currently expect that Holdings' subsidiaries will retain
and use any earnings and cash flow to support their operations, including to
service their respective debt obligations. Even if we decided to pay a dividend
on or to make a distribution in respect of the capital stock of Holdings'
subsidiaries, there can be no assurance that the subsidiaries will generate
sufficient cash flow to pay such a dividend or distribute such funds to Holdings
or that applicable state law and contractual restrictions, including negative
covenants contained in the debt instruments of such subsidiaries, will permit
such dividends or distributions.
SUBORDINATION -- YOUR RIGHT TO RECEIVE PAYMENTS ON THE NOTES IS EFFECTIVELY
JUNIOR TO SPECTRASITE'S EXISTING INDEBTEDNESS AND POSSIBLY ALL FUTURE
BORROWINGS.
The 2008 notes and the 2009 notes rank equally in right of payment.
Holdings' subsidiaries are not guarantors of the notes. As a result, all
indebtedness, including trade payables, of Holdings' subsidiaries, including any
borrowings under a new credit facility will be structurally senior to the notes.
As of December 31, 1998, after giving effect to the Nextel tower acquisition and
the related financing transactions, SpectraSite's subsidiaries had approximately
$152.7 million of debt and other liabilities and the ability to borrow $350.0
million under the new credit facility, all of which is structurally senior in
right of payment to the senior discount notes.
OUR NEW CREDIT FACILITY RESTRICTS THE ABILITY OF HOLDINGS' SUBSIDIARIES TO MAKE
DISTRIBUTIONS TO HOLDINGS, WHICH MAY ADVERSELY AFFECT OUR ABILITY TO PAY
INTEREST ON OR THE PRINCIPAL OF THE 2008 NOTES AND THE 2009 NOTES.
The new credit facility, subject to certain limited exceptions, prohibits
dividends or other distributions by Holdings' subsidiaries to Holdings. In
addition, Holdings' subsidiaries are permitted under the terms of the indenture
governing the 2008 notes and the 2009 notes to incur certain additional
indebtedness that may restrict or prohibit the subsidiaries from making
distributions, paying dividends or making loans to Holdings. If any or all of
Holdings' subsidiaries become subject to bankruptcy proceedings before payment
of the notes, we do not expect the note holders to have claims in such
proceedings. Only after such subsidiaries' creditors are fully paid would any
remaining value of the subsidiaries' assets be available to Holdings or its
creditors, including the note holders. See "-- Subordination."
The new credit facility permits distributions to Holdings in an amount
sufficient to pay scheduled interest payments on the 2008 notes commencing in
2003 and on the 2009 notes commencing in 2004, provided that there is no default
or event of default outstanding under the credit facility, including under the
financial maintenance tests set forth in the new credit facility. If Holdings'
subsidiaries are not able to make distributions to Holdings, we will have to
pursue other alternatives which may include refinancing the new credit facility
or seeking other sources of debt or equity capital. For more information
regarding the new credit facility, see "Description of Certain
Indebtedness -- New Credit Facility."
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REPAYMENT UNCERTAINTY -- REPAYMENT OF THE PRINCIPAL OF THE 2008 NOTES AND THE
2009 NOTES LIKELY WILL REQUIRE ADDITIONAL FINANCING. WE ARE NOT CERTAIN OF THE
SOURCE OR AVAILABILITY OF ANY SUCH FINANCING AT THIS TIME.
We currently anticipate that, in order to pay the principal of the notes or
to redeem or repurchase the notes upon a change of control under the indenture
governing the notes, we will be required to adopt one or more alternatives, such
as refinancing SpectraSite's indebtedness or selling its equity securities or
the equity securities or assets of its subsidiaries. There can be no assurance
that any of the foregoing actions could be effected on satisfactory terms, that
any of the foregoing actions would enable us to pay the principal of the notes
or that any of such actions would be permitted by the terms of the indentures
governing our senior discount notes or any other debt instruments then in
effect.
THERE ARE SIGNIFICANT RISKS ASSOCIATED WITH CONSTRUCTION AND ACQUISITION OF
TOWERS.
Our growth strategy depends on our ability to construct, acquire and
operate towers in conjunction with the expansion by wireless service providers
of their tower network infrastructure. Our ability to construct new towers can
be affected by a number of factors beyond our control, including zoning and
local permitting requirements, FAA considerations, availability of tower
components and construction equipment, availability of skilled construction
personnel and weather conditions. In addition, because the concern over tower
proliferation has grown in recent years, certain communities now restrict new
tower construction or delay granting permits required for construction. There
can be no assurance:
- of the number of mandates that SpectraSite will be awarded or the number
of mandates that will result in towers;
- that we will be able to overcome regulatory or other barriers to new
construction;
- that the number of towers planned for construction will be completed in
accordance with the requirements of our customers; or
- that there will be significant need for the construction of new towers
once the wireless service providers complete their tower network
infrastructure build-out.
Anchor tenant leases may contain penalty or forfeiture provisions in the
event the towers are not completed within specified time periods.
Our expansion plans call for a significant increase in construction
activity. There can be no assurance that we will be able to overcome the
barriers to new construction or that the number of towers planned for
construction will be completed. The failure to complete the necessary
construction could have a material adverse effect on our business, financial
condition and results of operations.
With respect to the acquisition of towers, we compete with certain wireless
service providers, broadcasters, site developers and other independent tower
owners and operators for acquisitions of towers, and we expect such competition
to increase. Increased competition for acquisitions may result in fewer
acquisition opportunities, as well as higher acquisition prices. We regularly
explore acquisition opportunities; however, there can be no assurance that we
will be able to identify towers or tower companies to acquire in the future.
CHALLENGES OF BUSINESS INTEGRATION -- WE MAY ENCOUNTER DIFFICULTIES IN
INTEGRATING NEXTEL'S TOWERS WITH OUR OPERATIONS.
We have never consummated a transaction as large as the Nextel tower
acquisition and will likely face significant challenges in integrating the 2,000
acquired towers into our operations. We are in the process of upgrading our
infrastructure to successfully manage these towers. In addition, integration of
these towers will require substantial attention from our management team, which
has had limited experience in integrating an acquisition of this size. Diversion
of management attention from our existing business could have an adverse impact
on our revenues and operating results. There can be no assurance that we will be
able to integrate the 2,000 towers into our operations successfully.
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<PAGE> 14
WE ANTICIPATE SIGNIFICANT CAPITAL EXPENDITURES.
Our current plans call for at least $140.0 million of capital expenditures
through fiscal 1999 for the construction and acquisition of communication sites,
primarily towers. However, if acquisitions or other opportunities present
themselves more rapidly than we currently anticipate or if estimates prove
inaccurate, we may seek additional sources of debt or equity capital prior to
the end of 1999 or scale back the scope of tower construction activity. The
availability of additional financing cannot be assured and could be restricted
by the terms of a new credit facility and the indentures governing our senior
discount notes.
SUCCESS OF OUR BUSINESS PLAN REQUIRES US TO ACT QUICKLY AND IMPLEMENTATION OF
OUR STRATEGY COULD STRAIN OUR RESOURCES.
We cannot be certain that we will be able to identify, finance and complete
future acquisitions on acceptable terms or that we will be able to manage
profitably and market available space on SpectraSite's towers. Our business plan
depends on the construction or acquisition of additional towers and the
profitable operation of our tower assets. Failure to execute our business plan
will have a material adverse effect on SpectraSite's business, financial
condition or results of operations.
In addition, the time frame for completion of networks currently planned by
wireless communications service providers may be limited to the next few years,
and many personal communications services networks already have been
substantially completed in large markets. Failure to move quickly and
aggressively to obtain growth capital and capitalize on this infrastructure
development opportunity could have a material adverse effect on our business,
financial condition or results of operations with respect to both site
acquisition services and site leasing.
Implementation of our strategy to expand our site leasing business may
impose significant strains on our management, operating systems and financial
resources. In addition, we anticipate that operating expenses will increase
significantly as we build and acquire additional tower assets. Failure to manage
growth or unexpected difficulties encountered during expansion could have a
material adverse effect on our business, financial condition or results of
operations. The pursuit and integration of build-to-suit prospects,
acquisitions, investments, joint ventures and strategic alliances will require
substantial attention from our senior management, which will limit the amount of
time available to devote to the existing operations. Future acquisitions could
result in the incurrence of debt and contingent liabilities and an increase in
amortization expenses related to goodwill and other intangible assets, which
could have a material adverse effect upon our business, financial condition or
results of operations.
OUR BUSINESS DEPENDS ON DEMAND FOR WIRELESS COMMUNICATIONS.
Our business depends on demand for communications sites from wireless
service providers, which, in turn, depends on the demand for wireless services.
Success of SpectraSite's business model requires us to secure co-location
tenants, and securing co-location tenants depends upon the demand for
communications sites from a variety of service providers in a particular market.
Factors outside of SpectraSite's control affect the demand for wireless
communications services and competition for co-location tenants. A reduction in
demand for communications sites or increased competition for co-location tenants
could have a material adverse effect on SpectraSite's business, financial
condition or results of operations.
The wireless communications industry has undergone significant growth in
recent years. A slowdown in the growth of, or reduction in, demand in a
particular wireless segment could adversely affect the demand for communications
sites. Moreover, wireless service providers often operate with substantial
leverage, and financial problems for SpectraSite's customers could result in
accounts receivable going uncollected, as well as the loss of customers and the
associated lease revenue. A slowdown in growth or reduction in demand affecting
the wireless communications industry could have a material adverse effect on our
business, financial condition or results of operations.
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<PAGE> 15
COMPETING TECHNOLOGIES AND OTHER ALTERNATIVES COULD REDUCE THE DEMAND FOR OUR
SERVICES.
Most types of wireless services currently require ground-based network
facilities, including communications sites for transmission and reception. The
extent to which wireless service providers lease such communications sites
depends on a number of factors beyond our control, including the level of demand
for such wireless services, the financial condition and access to capital of
such providers, the strategy of providers with respect to owning or leasing
communications sites, government licensing of broadcast rights, changes in
telecommunications regulations and general economic conditions. In addition,
wireless service providers frequently enter into roaming agreements with
competitors allowing each other to utilize one another's wireless communications
facilities to accommodate customers who are out of range of their home
provider's services. Such roaming agreements may be viewed by wireless service
providers as a superior alternative to leasing antenna space on communications
sites we own. The proliferation of such roaming agreements could have a material
adverse effect on our business, financial condition or results of operations.
The emergence of new technologies could also have a negative impact on our
operations. For example, the FCC has granted license applications for three
low-earth orbiting satellite systems that are intended to provide mobile voice
and data services. Although such systems are highly capital-intensive and
technologically untested, mobile satellite systems could compete with land-based
wireless communications systems, thereby reducing the demand for the
infrastructure services we provide. The occurrence of any of these factors could
have a material adverse effect on our business, financial condition or results
of operations.
WE COMPETE WITH COMPANIES WHO HAVE GREATER FINANCIAL RESOURCES.
SpectraSite competes for site leasing tenants with:
- wireless service providers that own and operate their own towers and
lease, or may in the future decide to lease, antenna space to other
providers;
- site acquisition companies which acquire antenna space on existing towers
for wireless service providers, manage new tower construction and provide
site acquisition services; and
- other independent tower operators.
Wireless service providers that own and operate their own towers generally
are substantially larger and have greater financial resources than SpectraSite.
For example, AT&T Wireless and Sprint PCS are large companies that own and
operate their own tower networks. We believe that tower location and capacity,
price, quality of service and density within a geographic market historically
have been and will continue to be the most significant competitive factors
affecting the site leasing business.
We compete for acquisition and new tower construction opportunities
primarily with site developers and other independent tower companies. Some of
these competitors have or are expected to have greater financial resources than
SpectraSite has.
RELIANCE ON NEXTEL -- MOST OF OUR REVENUES AND TOWER CONSTRUCTION ACTIVITY WILL
DEPEND ON AND BE DIRECTED BY NEXTEL.
On a pro forma basis, Nextel would have accounted for 84.0% of our total
revenues for the year ended December 31, 1998. If Nextel were to suffer
financial difficulties or if Nextel were unwilling or unable to perform its
obligations under its arrangements with us, our business, financial condition
and results of operations could be materially and adversely affected.
Under the terms of our agreements with Nextel, we will be required to
construct or purchase certain numbers of towers at certain specified times. Our
failure to construct or purchase such towers as agreed could result in the
cancellation of our right to construct or purchase additional towers under these
agreements. Such cancellation could have a material adverse effect on our
business, financial condition or results of operations and on our ability to
implement or achieve our business objectives in the future.
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<PAGE> 16
Under our agreements with Nextel, subject to certain limited exceptions, we
will be required to construct new towers in locations to be determined by
Nextel. These towers may have limited appeal to other providers of wireless
communications services, limiting our opportunities to attract additional
tenants, which could have a material adverse effect on our business, financial
condition or results of operations.
PROJECT RISKS -- ANY FAILURE TO MEET CUSTOMER EXPECTATIONS COULD REQUIRE
ADDITIONAL EXPENDITURES TO CORRECT AND ADVERSELY AFFECT FUTURE ORDERS.
Most of our site acquisition services and build-to-suit programs involve
projects which are critical to the operations of our customers' businesses. Any
failure to meet customer expectations in the performance of our services could
damage our reputation and adversely affect our ability to attract new business.
In addition, we could incur substantial costs and expend significant resources
correcting errors in SpectraSite's work and could become liable for damages
caused by such errors. When we bid on fixed-price contracts, SpectraSite could
incur losses with regard to such projects if the expenditures associated with
such projects exceed our estimate in making the bid for the contract. To date,
SpectraSite has not incurred any material liabilities for its failure to perform
or for cost overruns. However, we cannot assure you that errors will not occur
in the future.
REGULATORY COMPLIANCE AND APPROVAL -- OUR OPERATIONS REQUIRE COMPLIANCE WITH AND
APPROVAL FROM FEDERAL AND STATE REGULATORY AUTHORITIES.
SpectraSite is subject to a variety of regulations, including those at the
federal, state and local levels. Both the FCC and the FAA regulate towers and
other sites used for wireless communications transmitters and receivers. Such
regulations control siting and marking of towers and may, depending on the
characteristics of the tower, require registration of tower facilities. Wireless
communications devices operating on towers are separately regulated and
independently licensed based upon the regulation of the particular frequency
used. All proposals to construct new communications sites or to modify existing
communications sites are reviewed by both the FCC and the FAA to ensure that a
site will not present a hazard to aviation. Tower owners may have an obligation
to paint them or install lighting to conform to FCC and FAA standards, and to
maintain such painting or lighting. Tower owners also may bear the
responsibility for notifying the FAA of any tower lighting failure. SpectraSite
generally indemnifies its customers against any failure by SpectraSite to comply
with applicable standards. Failure to comply with applicable requirements may
lead to civil penalties.
Local regulations include city or other local ordinances, zoning
restrictions and restrictive covenants imposed by community developers. These
regulations vary greatly, but typically require tower owners to obtain approval
from local officials or community standards organizations prior to tower
construction. Local regulations can delay or prevent new tower construction or
site upgrade projects, thereby limiting our ability to respond to customers'
demands. In addition, such regulations increase the costs associated with new
tower construction. There can be no assurance that existing regulatory policies
will not adversely affect the timing or cost of new tower construction or that
additional regulations will not be adopted that will increase such delays or
result in additional costs to SpectraSite. Such factors could have a material
adverse effect on SpectraSite's business, financial condition or results of
operations and on SpectraSite's ability to implement or achieve its business
objectives in the future.
Our customers also may become subject to new regulatory policies which
adversely affect the demand for communications sites. In addition, if we pursue
international opportunities, we will be subject to regulation in foreign
jurisdictions. However, we are not actively considering any international
opportunities at this time.
REAL PROPERTY -- WE DO NOT OWN THE LAND UNDER OUR TOWERS.
Our real property interests relating to towers primarily consist of
leasehold interests, private easements and licenses, easements and rights-of-way
granted by governmental entities. Our ability to protect our rights against
persons claiming superior rights in towers depends on our ability to:
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<PAGE> 17
- recover under title policies, the policy limits of which may be less than
the purchase price of a particular tower;
- in the absence of title insurance coverage, realize on title warranties
given by tower sellers, which warranties often terminate after the
expiration of a specific period, typically one to three years; and
- realize on title covenants from landlords contained in lease agreements.
ENVIRONMENTAL MATTERS -- WE ARE SUBJECT TO ENVIRONMENTAL LAWS THAT IMPOSE
LIABILITY WITHOUT REGARD TO FAULT.
Our operations are subject to federal, state and local environmental laws
and regulations regarding the use, storage, disposal, emission, release and
remediation of hazardous and nonhazardous substances, materials or wastes. Under
certain of these laws, SpectraSite could be held strictly, jointly and severally
liable for the remediation of hazardous substance contamination at its
facilities or at third-party waste disposal sites and also could be held liable
for any personal or property damage related to such contamination. Although we
believe that we are in substantial compliance with and have no material
liability under all applicable environmental laws, there can be no assurance
that the costs of compliance with existing or future environmental laws and
liability related thereto will not have a material adverse effect on our
business, financial condition or results of operations.
DAMAGED TOWERS -- OUR TOWERS ARE SUBJECT TO NATURAL DISASTERS.
Our towers are subject to risks associated with natural disasters such as
tornadoes, hurricanes and earthquakes. We self-insure almost all of our towers
against such risks. A tower accident for which we are uninsured or underinsured,
or damage to a tower or group of towers, could have a material adverse effect on
our business, financial condition or results of operations.
RADIO FREQUENCY EMISSIONS -- PERCEIVED HEALTH RISKS.
SpectraSite and the wireless service providers that utilize our towers are
subject to government requirements and other guidelines relating to radio
frequency emissions. The potential connection between radio frequency emissions
and certain negative health effects, including some forms of cancer, has been
the subject of substantial study by the scientific community in recent years. To
date, the results of these studies have been inconclusive. If radio frequency
emissions were conclusively proved harmful, we could be subject to lawsuits
claiming damages from such emissions and demand for wireless services and new
towers would be adversely affected. Although we have not been subject to any
claims relating to radio frequency emissions, there can be no assurance that we
will not be subject to such claims in the future.
KEY PERSONNEL -- OUR SUCCESS DEPENDS ON CERTAIN KEY SENIOR EXECUTIVES.
SpectraSite's success depends to a significant extent upon the continued
services of Stephen H. Clark, its President and Chief Executive Officer, David
P. Tomick, its Chief Financial Officer, and Richard J. Byrne, its Executive Vice
President -- Business Development. Each of Messrs. Clark, Tomick and Byrne has
an employment agreement with SpectraSite. The loss of the services of Mr. Clark,
Mr. Tomick or Mr. Byrne could have a material adverse effect upon our business,
financial condition or results of operations.
SIGNIFICANT STOCKHOLDERS -- A GROUP OF AFFILIATED STOCKHOLDERS CONTROLS THE
VOTING POWER OF HOLDINGS.
Affiliates of Welsh, Carson, Anderson & Stowe own approximately 32 million
shares of Holdings' capital stock. They also have the right to appoint a
majority of the board of directors and proxies from certain of the other
stockholders to vote 51% of the voting power of Holdings' capital stock under a
stockholders' agreement. See "Certain Transactions -- Stockholders' Agreement."
LACK OF PUBLIC MARKET FOR THE NOTES -- YOU MAY NOT BE ABLE TO SELL YOUR NOTES.
The outstanding notes were not registered under the Securities Act or under
the securities laws of any state and may not be resold unless they are
subsequently registered or an exemption from the registration requirements of
the Securities Act and applicable state securities laws is available. The
registered notes
14
<PAGE> 18
will be registered under the Securities Act, but will constitute a new issue of
securities with no established trading market, and there can be no assurance as
to:
- the liquidity of any such market that may develop;
- the ability of registered note holders to sell their notes; or
- the price at which the registered note holders would be able to sell
their notes. If such a market were to exist, the registered notes may
trade at higher or lower prices than their principal amount or purchase
price, depending on many factors, including prevailing interest rates,
the market for similar debentures and the financial performance of
SpectraSite.
The notes are designated for trading among qualified institutional buyers
in The Portal(SM) Market. We understand that Credit Suisse First Boston
Corporation, Lehman Brothers Inc. and CIBC Oppenheimer Corp. presently intend to
make a market in the 2008 notes. However, they are not obligated to do so, and
any market-making activity with respect to the 2008 notes may be discontinued at
any time without notice. In addition, such market-making activity will be
subject to the limits imposed by the Securities Act and the Securities Exchange
Act of 1934, and may be limited during the exchange offer or the pendency of an
applicable shelf registration statement. There can be no assurance that an
active trading market will exist for the 2008 notes or that such trading market
will be liquid.
Notes that are not tendered or are tendered but not accepted will,
following the consummation of the exchange offer, continue to be subject to the
existing restrictions upon transfer thereof, and, upon consummation of the
exchange offer, certain registration rights with respect to the outstanding 2008
notes will terminate. In addition, any outstanding note holder who tenders in
the exchange offer for the purpose of participating in a distribution of the
registered notes may be deemed to have received restricted securities, and if
so, will be required to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction. To
the extent that outstanding 2008 notes are tendered and accepted in the exchange
offer, the trading market for untendered and tendered but unaccepted outstanding
2008 notes could be adversely affected.
WE ARE NOT OBLIGATED TO NOTIFY YOU OF UNTIMELY OR DEFECTIVE TENDERS OF
OUTSTANDING NOTES.
We will issue registered notes in this exchange offer only after a timely
receipt of your outstanding 2008 notes, a properly completed and duly executed
letter of transmittal and all other required documents. Therefore, if you want
to tender your outstanding 2008 notes, please allow sufficient time to ensure
timely delivery. We are under no duty to give notification of defects or
irregularities with respect to the tenders of outstanding 2008 notes for
exchange.
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<PAGE> 19
USE OF PROCEEDS
Holdings will not receive any cash proceeds from the issuance of the
registered notes in exchange for the outstanding notes. In consideration for
issuing the registered notes, Holdings will receive outstanding notes in like
original principal amount at maturity. Outstanding notes received in the
exchange offer will be cancelled.
The net proceeds to SpectraSite from the original issuance of the
outstanding notes, after deducting discount and estimated expenses, was
approximately $120 million. SpectraSite deposited $11.75 million of such
proceeds into escrow for the acquisition of up to 47 towers from Airadigm.
Airadigm received $10 million from escrow as payment for 40 towers and the
balance remains in escrow. In addition, SpectraSite used:
- approximately $500,000 to acquire 14 ground leases and two towers in
inventory from Amica;
- $1.9 million to acquire GlobalComm, Inc.; and
- $2.3 million to repay an outstanding note payable.
SpectraSite holds the remaining net proceeds in interest bearing accounts. We
intend to use the remaining proceeds for general corporate purposes, including
working capital, and may use all or a portion of such proceeds to acquire
additional tower assets or related businesses.
We issued the note payable, which was repaid with outstanding note
proceeds, in connection with the acquisition of Telesite and Metrosite in May
1997. The note had a stated interest rate of 7%. See "Certain
Transactions -- Telesite and Metrosite Acquisition."
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<PAGE> 20
CAPITALIZATION
The following table sets forth the consolidated cash, cash equivalents and
short-term investments, and capitalization of SpectraSite as of December 31,
1998 on a historical basis and as adjusted for the acquisition of 2,000
communications towers from Nextel, the issuance of the 2009 notes, the sale and
issuance of Series C preferred stock, initial borrowings under our new credit
facility and the acquisition of 47 towers from Airadigm. This table should be
read in conjunction with SpectraSite's historical financial statements and the
related notes thereto, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the "Unaudited Pro Forma Financial
Data" included elsewhere in this prospectus.
<TABLE>
<CAPTION>
DECEMBER 31, 1998
---------------------------
ACTUAL AS ADJUSTED
--------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Cash, cash equivalents and short term investments........... $ 114,962 $242,650
========= ========
Long-term debt, including current maturities:
New credit facility(a).................................... -- $150,000
12% senior discount notes due 2008........................ $ 132,689 132,689
11 1/4% senior discount notes 2009........................ -- 340,004
Other debt................................................ 18 18
--------- --------
Total long-term debt, including current maturities..... 132,707 622,711
Series A redeemable preferred stock(b)...................... 11,300 --
Series B redeemable preferred stock(b)...................... 29,356 --
Shareholders' equity:
Series A preferred stock(b)............................... -- 10,000
Series B preferred stock(b)............................... -- 28,000
Series C preferred stock(b)(c)............................ -- 301,434
Common stock.............................................. 1 3
Additional paid-in-capital(d)............................. -- 8,204
Accumulated deficit....................................... (14,068) (23,068)
--------- --------
Total shareholders' equity............................. (14,067) 324,573
--------- --------
Total capitalization.............................. $ 159,296 $947,284
========= ========
</TABLE>
- ---------------
(a) The new credit facility includes (1) a $50.0 million revolver, (2) a $300.0
million multiple-draw term loan and (3) a $150.0 million term loan. We
borrowed all of the $150.0 million term loan at the closing of the Nextel
tower acquisition. The new credit facility requires no amortization prior to
2002. See "Description of Certain Indebtedness -- New Credit Facility."
(b) Each share of Series A preferred stock, Series B preferred stock and Series
C preferred stock is convertible into one share of Holdings' common stock.
Prior to closing the Nextel tower acquisition, shares of Series A preferred
stock and Series B preferred stock accrued dividends at a rate of 8% per
annum, and were redeemable by SpectraSite on December 15, 2008. In
connection with closing the Nextel tower acquisition, Holdings' restated its
certificate of incorporation. As a result of the restatement, the Series A
preferred stock and the Series B preferred stock will no longer accrue
dividends or be redeemable. Therefore, previously accrued dividends have
been eliminated in the "As Adjusted" column.
(c) Nextel received 14 million shares of Series C preferred stock and certain
investors purchased approximately 46 million shares of preferred stock in
connection with SpectraSite's acquisition of tower assets from Nextel.
(d) The increase in consolidated additional paid-in-capital reflects the net
effect of (1) the issuance of two million shares of common stock as
consideration for certain financing commitments made to SpectraSite in
conjunction with the Nextel tower acquisition, (2) the elimination of
previously accrued dividends on the Series A preferred stock and Series B
preferred stock and (3) the estimated issuance costs related to the Series C
preferred stock.
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<PAGE> 21
THE NEXTEL TOWER ACQUISITION
On April 20, 1999, SpectraSite acquired 2,000 communications towers from
Nextel Communications, Inc. in a merger transaction. In addition, in connection
with this transaction, Nextel and its controlled affiliates agreed to offer
SpectraSite certain exclusive opportunities, relating to the construction or
purchase of an additional 1,700 sites. All such sites were then leased back to
Nextel pursuant to a certain master lease agreement. Certain of these sites may
in the future be leased to Nextel Partners Operating Corp. instead of Nextel.
Nextel Partners is an entity in which Nextel has a minority equity interest. We
paid $560.0 million in cash and issued 14 million shares of Series C preferred
stock, valued at $70.0 million, to Nextel.
The following table sets forth the sources and uses of funds for the Nextel
tower acquisition (dollars in thousands):
<TABLE>
<S> <C>
SOURCES OF FUNDS:
Credit facility........................................... $150,000
11 1/4% Senior Discount Notes due 2009.................... 340,004
Series C preferred stock issued to Nextel................. 70,000
Series C preferred stock sold to the Series C investors... 231,434
--------
Total sources.......................................... $791,438
========
USES OF FUNDS:
Cash paid to Nextel....................................... $560,000
Series C preferred stock issued to Nextel................. 70,000
General corporate purposes................................ 127,688
Estimated fees and expenses............................... 33,750
--------
Total uses............................................. $791,438
========
</TABLE>
The merger agreement required that SpectraSite and Nextel and certain other
persons enter into several ancillary agreements. For a summary of the material
terms of the new stockholders' agreement and the new registration rights
agreement, see "Certain Transactions -- Stockholders' Agreement" and
"-- Registration Rights Agreement," respectively. The following is a summary of
the material terms of the other ancillary agreements.
MASTER SITE COMMITMENT AGREEMENT
Concurrently with the closing, SpectraSite and certain of Nextel's
subsidiaries entered into the master site commitment agreement, pursuant to
which Nextel and its controlled affiliates will offer SpectraSite certain
exclusive opportunities, under specified terms and conditions, relating to the
construction or purchase of, or co-location on, additional communications sites
which will then be leased by subsidiaries of Nextel under the terms of the
master site lease agreement. If the number of new sites leased pursuant to the
master site commitment agreement, whether such sites are purchased from Nextel,
constructed at Nextel's request or otherwise made available for co-location by
Nextel, its affiliates and Nextel Partners, is less than certain specified
numbers as of certain specified dates, then commencing with the 37th month after
the closing Nextel shall make certain payments to SpectraSite. The master site
commitment agreement will terminate on the earlier of April 20, 2004 and the
date on which the number of sites purchased or constructed or made available for
co-location under the master site commitment agreement equals or exceeds 1,700.
The master site commitment agreement also gives SpectraSite a right of first
refusal to acquire any towers that Nextel or certain affiliates desire to sell.
The master site commitment agreement specifies that SpectraSite will not be
obligated to develop more than 566 new sites each year. SpectraSite has agreed
to abide by Nextel's deployment plan, which to date has emphasized filling gaps
in current coverage to increase capacity and enhance signal quality, as well as
deploying sites in areas contiguous to Nextel's existing markets and deploying
sites in new markets
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<PAGE> 22
in a way which expands the Nextel network. These sites also include sites
operated or to be developed by Nextel Partners in their service areas. This
strategy contemplates expansion and deployment in most major metropolitan areas
of the contiguous United States, including highway corridors that connect
existing and planned markets, particularly in the eastern half of the United
States and along the west coast. SpectraSite is not obligated to develop sites
outside of Nextel's or Nextel Partner's currently delineated network deployment
footprint to the extent such sites account for more than 10% of the total sites
developed under this agreement.
The agreement may be terminated by either side, by written notice, under
certain conditions. SpectraSite may terminate the agreement if:
- Nextel or one of its subsidiaries that transferred assets to SpectraSite
becomes insolvent, or is unable to pay its debts as they become due; or
- Nextel or a transferring subsidiary is liquidated, voluntarily or
involuntarily, or a receiver or liquidator is appointed for such entity.
Nextel may terminate the agreement if:
- either Holdings or its subsidiary holding the Nextel towers becomes
insolvent, or is unable to pay its debts as they become due;
- either Holdings or such subsidiary is liquidated, voluntarily or
involuntarily, or a receiver or liquidator is appointed for such entity;
or
- at or after the end of any calendar year, Nextel has exercised its rights
to recover a penalty payment, as specified in the agreement, because, for
more than 10% of the total number of towers required to be developed by
SpectraSite during each year, SpectraSite has failed to complete
development of new towers during the time period allotted for such
development.
Either SpectraSite or Nextel may terminate the agreement if the other party is
in breach of an obligation to pay money or in breach of a material nonmonetary
obligation, if such breach is neither waived nor cured according to the methods
specified in the agreement.
MASTER SITE LEASE AGREEMENT
Concurrently with the closing, SpectraSite and Nextel entered into the
Nextel master site lease agreement, pursuant to which SpectraSite will lease to
certain Nextel subsidiaries space on wireless communications towers or other
transmission space at the sites transferred to SpectraSite as part of the Nextel
tower acquisition, or subsequently constructed or acquired by SpectraSite
pursuant to the master site commitment agreement or other sites and related
wireless communications towers or transmission space owned, leased or licensed
by SpectraSite.
In addition, an entity in which Nextel holds a minority equity interest,
Nextel Partners, may in the future enter into a master site lease agreement,
pursuant to which SpectraSite will lease to Nextel Partners space on wireless
communications towers or other transmission space at some of the sites
transferred to SpectraSite as part of the Nextel tower acquisition or
subsequently constructed or acquired by SpectraSite pursuant to the master site
commitment agreement, or other sites and related space on wireless
communications towers or transmission space owned, leased or licensed by
SpectraSite. If Nextel Partners does not enter into a master site lease
agreement with SpectraSite in the future, any site that would otherwise have
been leased to Nextel Partners thereunder will instead be leased to Nextel's
subsidiaries pursuant to the Nextel master site lease agreement.
The Nextel master site lease agreement and, if executed, the Nextel
Partners master site lease agreement, will be supplemented from time to time to
provide for the lease of space on certain additional communications towers or
other transmission space at sites owned, constructed or acquired by SpectraSite.
Nextel and, if Nextel Partners executes a master site lease agreement, Nextel
Partners shall have a right of first refusal with respect to the sale of any
sites acquired by SpectraSite as part of the Nextel tower
19
<PAGE> 23
acquisition, or that are constructed or acquired by SpectraSite pursuant to the
master site commitment agreement.
The master site lease agreements provide that within 15 days of the
commencement of the lease of a given site, and on the first day of each month
thereafter for the term of the lease, rental payments of $1,600 per month, pro
rated if necessary, will be due on each tower which it leases to any of the
tenants who are parties to the agreement. On each annual anniversary of a given
lease's commencement, the rent owed under the lease will increase by 3%.
Other rental provisions include:
- an option for tenants to lease additional space, if such space is
available, on sites where the tenant already leases space; and
- a right allowing tenants to install, at their sole option and expense and
only when additional capacity exists at the rental site, microwave
antennae of various sizes and other equipment at additional rental rates
delineated in the agreement.
These provisions are subject to the same annual 3% rate increase as is the base
rent.
The agreement further provides that each tenant is responsible for any
portion of personal property taxes assessed on any site and directly
attributable to the tenant's property, franchise and similar taxes imposed on
the tenant's business and sales tax imposed upon payment or receipt of rents
payable under the agreement. The landlord is responsible for all other taxes.
Additionally, the agreement provides that the landlord will be responsible for
certain types of insurance, and each tenant is responsible for certain other
types of insurance.
The term of each lease contracted under the agreement is at least five
years, with a right to extend for five successive five-year periods. In certain
cases, the initial lease term will be six, seven or eight years. The lease is
automatically renewed unless the tenant submits notification of its intent to
terminate the lease, when its current term expires, prior to such expiration.
The tenant has the right to trade the term of any given site for the term of any
other site, upon written notice to the landlord. However, such a trade is
limited to one time per site per term.
A tenant may terminate a lease for any site, at its sole discretion,
without further liability to the landlord, with 30 days prior written notice,
if:
- the tenant fails to obtain or maintain any license, permit or other
approval necessary for operation of its communications equipment, if the
tenant has used reasonable effort to obtain or maintain such approval; or
- the tenant is unable to use the tower due to FCC action which is not a
result of any action by the tenant.
Either party may terminate a lease for any site, with 60 days prior written
notice, if the other party breaches a nonmonetary obligation, subject to certain
cure provisions. Either party may terminate a lease for any site, with 10 days
prior written notice, if the other party breaches a monetary obligation and that
breach is not cured within the 10-day period. In addition, if Nextel or Nextel
Partners defaults on rental payments with respect to more than 10% of the sites
covered by their respective master site lease agreement and Nextel or, if Nextel
Partners executes a master site lease agreement, Nextel Partners, as the case
may be, remains in default for 30 days following notice from SpectraSite,
SpectraSite may cancel the master site lease agreement of the defaulting party
as to all sites covered by such agreement.
SECURITY AND SUBORDINATION AGREEMENT
Concurrently with the closing, SpectraSite and Nextel entered into the
security and subordination agreement, pursuant to which SpectraSite granted to
Nextel a continuing security interest in the assets acquired in the Nextel tower
acquisition or acquired or constructed pursuant to the master site commitment
agreement, to secure SpectraSite's obligations under the Nextel master site
lease agreements
20
<PAGE> 24
and, if applicable, the Nextel Partners master site lease agreement. Nextel's
lien and the other rights and remedies of Nextel under the security and
subordination agreement are subordinate and subject to the rights and remedies
of the lenders under the new credit facility pursuant to the terms of an
intercreditor and subordination agreement entered into among the parties at the
closing.
NEXTEL COMMUNICATIONS, INC.
Nextel provides a wide array of digital and analog wireless communications
services throughout the United States. Nextel offers a differentiated,
integrated package of digital wireless communications services under the Nextel
brand name, primarily to business users. Nextel's Digital Mobile Network
constitutes one of the largest integrated wireless communications systems
utilizing a single transmission technology in the United States. Nextel has
significant specialized mobile radio spectrum holdings in and around every major
business population center in the country, including all of the top 50
metropolitan statistical areas in the United States.
Nextel files periodic reports and other information with the SEC. For more
information about Nextel, you should read Nextel's SEC filings. However, we are
not incorporating any of Nextel's SEC filings by reference into this document.
21
<PAGE> 25
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
The following unaudited pro forma consolidated financial data present the
unaudited pro forma consolidated balance sheet of SpectraSite as of December 31,
1998 and the unaudited pro forma consolidated statements of operations of
SpectraSite for the year ended December 31, 1998. The unaudited pro forma
consolidated balance sheet data reflect the following adjustments as if they had
occurred on December 31, 1998:
- the acquisition of 2,000 communications towers from Nextel;
- the issuance and sale of the 2009 notes;
- the issuance and sale of the Series C preferred stock;
- the issuance of two million shares of common stock;
- initial borrowings under SpectraSite's credit facility; and
- the acquisition of seven towers from Airadigm.
The unaudited consolidated statement of operations data give effect to the
transactions listed above, the issuance of the 2008 notes and the acquisition of
an additional 40 towers from Airadigm as if they had occurred on January 1,
1998.
The acquisition of tower assets from Nextel and the leaseback of antennae
space by Nextel are presented as if the purchase of assets had occurred on
January 1, 1998. Adjustments for revenue are based on the terms of the master
site lease agreement entered into at closing. Cost of revenues represents the
cost of the executed ground leases and historical routine maintenance costs.
Depreciation expense is straight-line depreciation of the aggregate cost of the
towers. The Nextel ground leases are non-cancelable operating leases, generally
for terms of five years and include options for renewal. The pro forma minimum
lease payments are based on the executed ground leases. Nextel has leased space
on each of the 2,000 towers we acquired for a five-year term with options for
renewal. The pro forma future minimum lease payments and minimum rental income
for these leases assuming the transaction occurred and the related leases
commenced January 1, 1998 are as follows:
<TABLE>
<CAPTION>
LEASE PAYMENTS RENTAL INCOME
-------------- -------------
<S> <C> <C>
1998.................................................... $ 22,830 $ 40,766
1999.................................................... 22,830 40,766
2000.................................................... 22,830 40,766
2001.................................................... 22,830 40,766
2002.................................................... 22,830 40,766
-------- --------
Total......................................... $114,150 $203,830
======== ========
</TABLE>
The acquisition of tower assets from Airadigm and the leaseback of antennae
space by Airadigm are presented as if the purchase of assets had occurred on
January 1, 1998. Adjustments for revenue are based on the executed tenant lease
terms for the Airadigm towers. Cost of revenues represents the cost of the
executed ground leases and historical routine maintenance costs. Depreciation
expense is straight-line depreciation of the aggregate cost of $11,750 of the 47
towers. The Airadigm ground leases are non-cancelable operating leases,
generally for terms of five years and include options for renewal. The pro forma
minimum lease payments are based on the executed ground leases. Airadigm has
leased space on these towers for a five year term with options for renewal. The
pro forma future minimum lease payments and minimum rental income for these
leases assuming the transaction occurred and the related leases commenced
January 1, 1998 are as follows:
22
<PAGE> 26
<TABLE>
<CAPTION>
LEASE PAYMENTS RENTAL INCOME
-------------- -------------
<S> <C> <C>
1998.................................................... $ 340 $1,048
1999.................................................... 340 1,048
2000.................................................... 340 1,048
2001.................................................... 340 1,048
2002.................................................... 340 1,048
------ ------
Total......................................... $1,700 $5,240
====== ======
</TABLE>
The unaudited pro forma financial data are based on the historical
financial statements of SpectraSite and the adjustments described in the
accompanying notes. The unaudited pro forma financial data do not purport to
represent what SpectraSite's financial position or results of operations would
actually have been if the transactions had in fact occurred on the dates
indicated and are not necessarily representative of SpectraSite's financial
position or results of operations at any future date or for any future period.
The unaudited pro forma consolidated financial data should be read in
conjunction with "Capitalization," "Selected Historical Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements and related notes thereto
included elsewhere in this prospectus.
23
<PAGE> 27
SPECTRASITE HOLDINGS, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL(a) ADJUSTMENTS PRO FORMA
------------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................... $ 99,548 $127,688(a) $227,236
Short-term investments............................. 15,414 -- 15,414
Accounts receivable................................ 3,353 -- 3,353
Prepaid expenses and other......................... 253 -- 253
-------- -------- --------
Total current assets............................ 118,568 127,688 246,256
Property and equipment, net.......................... 28,469 526,750(b) 555,219
Right to construct towers............................ -- 105,000(c) 105,000
Goodwill, net........................................ 8,165 -- 8,165
Note receivable...................................... 273 -- 273
Deposits............................................. 1,750 (1,750)(d) --
Deferred debt issuance costs......................... 4,592 30,300(a) 34,892
Other assets......................................... 129 -- 129
-------- -------- --------
Total assets.................................... $161,946 $787,988 $949,934
======== ======== ========
LIABILITIES, PREFERRED STOCK AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable................................... $ 1,635 $ -- $ 1,635
Accrued and other expenses......................... 791 -- 791
Current portion of long-term debt.................. 18 -- 18
-------- -------- --------
Total current liabilities....................... 2,444 -- 2,444
Other long-term liabilities.......................... 224 -- 224
Credit facility...................................... -- 150,000(a) 150,000
12% senior discount notes due 2008................... 132,689 -- 132,689
11 1/4% senior discount notes due 2009............... -- 340,004(a) 340,004
-------- -------- --------
Total liabilities............................... 135,357 490,004 625,361
Redeemable preferred stock (Series A)................ 11,300 (11,300)(e) --
Redeemable preferred stock (Series B)................ 29,356 (29,356)(e) --
Shareholders' equity
Preferred stock (Series A, B and C)................ -- 339,434(a)(e) 339,434
Common stock....................................... 1 2(f) 3
Additional paid-in-capital......................... -- 8,204(g) 8,204
Accumulated deficit................................ (14,068) (9,000)(f) (23,068)
-------- -------- --------
Total shareholders' equity...................... (14,067) 338,640 324,573
-------- -------- --------
Total liabilities, preferred stock
and shareholders' equity................... $161,946 $787,988 $949,934
======== ======== ========
</TABLE>
See accompanying notes to unaudited pro forma consolidated balance sheet.
24
<PAGE> 28
SPECTRASITE HOLDINGS, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
(a) Reflects the sources and uses of funds for the Nextel tower acquisition:
<TABLE>
<S> <C>
SOURCES OF FUNDS:
Credit facility........................................... $150,000
2009 notes................................................ 340,004
Series C preferred stock.................................. 301,434
--------
Total sources.......................................... $791,438
========
USES OF FUNDS:
Cash paid to Nextel....................................... $560,000
Series C preferred stock issued to Nextel................. 70,000
General corporate purposes................................ 127,688
Estimated fees and expenses*.............................. 33,750
--------
Total uses............................................. $791,438
========
</TABLE>
* Includes $3,450 of estimated costs related to the Series C preferred stock.
(b) Reflects management's preliminary estimate of the increase in property and
equipment basis relating to the purchase of 2,000 towers from Nextel and the
purchase of seven towers from Airadigm for $1,750. These estimates are
subject to adjustment.
(c) Reflects management's preliminary estimate of the value attributable to
SpectraSite's right to develop 1,700 new sites for Nextel. This preliminary
estimate is subject to adjustment.
(d) Reflects the release from escrow of $1,750 paid to Airadigm in connection
with the purchase of seven towers.
(e) Reflects the issuance of the Series C preferred stock and the
reclassification of the Series A preferred stock and the Series B preferred
stock to shareholders' equity, as they are no longer redeemable or accrue
dividends as a result of the restatement of Holdings' certificate of
incorporation in connection with the closing of the Nextel tower
acquisition.
<TABLE>
<S> <C>
Series A preferred stock.................................... $ 11,300
Series B preferred stock.................................... 29,356
Series C preferred stock.................................... 301,434
--------
342,090
Less: accrued dividends as of December 31, 1998............. (2,656)
--------
$339,434
========
</TABLE>
(f) Reflects the issuance of two million shares of Holdings' common stock to
various parties as consideration for providing certain financing commitments
related to the Nextel tower acquisition.
(g) Reflects the net increase to additional paid-in-capital due to the issuance
of two million shares of common stock of $8,998 and the elimination of
previously accrued dividends on the Series A and Series B preferred stock of
$2,656, offset by the estimated costs of issuance related to the Series C
preferred stock of $3,450.
25
<PAGE> 29
SPECTRASITE HOLDINGS, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FINANCING
HISTORICAL NEXTEL(A) AIRADIGM(F) SUBTOTAL ADJUSTMENTS PRO FORMA
---------- --------- ----------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Site acquisition.............. $ 8,142 $ -- $ -- $ 8,142 $ -- $ 8,142
Site leasing.................. 656 49,388(b) 1,048 51,092 -- 51,092
------- ------- ------ -------- -------- --------
Total revenues.................. 8,798 49,388 1,048 59,234 -- 59,234
Cost of operations:
Site acquisition.............. 2,492 -- -- 2,492 -- 2,492
Site leasing.................. 299 22,830(c) 340 23,469 -- 23,469
------- ------- ------ -------- -------- --------
2,791 22,830 340 25,961 -- 25,961
Selling, general and
administrative expenses....... 10,246 --(d) -- 10,246 -- 10,246
Depreciation expense............ 712 35,000(e) 783 36,495 -- 36,495
------- ------- ------ -------- -------- --------
Operating loss.................. (4,951) (8,442) (75) (13,468) -- (13,468)
Other income (expense):
Interest income............... 3,569 -- -- 3,569 -- 3,569
Interest expense.............. (8,170) -- -- (8,170) (67,865)(g) (85,035)
(9,000)(h)
Gain on sale of business...... 473 -- -- 473 -- 473
------- ------- ------ -------- -------- --------
(4,128) -- -- (4,128) (76,865) (80,993)
------- ------- ------ -------- -------- --------
Net loss........................ $(9,079) $(8,442) $ (75) $(17,596) $(76,865) $(94,461)
======= ======= ====== ======== ======== ========
</TABLE>
See accompanying notes to unaudited pro forma consolidated statement of
operations.
26
<PAGE> 30
SPECTRASITE HOLDINGS, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
(a) Certain of the data presented in this column use estimates provided by
Nextel. Neither SpectraSite's auditors nor Nextel's auditors have expressed
an opinion or provided any form of assurance with respect to the Nextel
historical data presented. Actual results may differ materially from these
estimates.
(b) Consists of $8,622 of historical co-location revenues and $40,766 of
additional revenues to be recognized by SpectraSite in connection with the
Nextel tower acquisition pursuant to the master site lease agreements. The
information related to the historical co-location revenues of $8,622 has
been provided by Nextel and is unaudited.
(c) Represents certain direct operating expenses previously paid by Nextel.
Certain of these costs will be borne by Nextel following the Nextel tower
acquisition. These costs have been excluded from SpectraSite's cost of
operations by this adjustment.
(d) SpectraSite expects that it will incur incremental expenses as a result of
the Nextel tower acquisition. Such incremental expenses are currently
estimated to amount to approximately $3,500 per year. These incremental
expenses are based on management's best estimates rather than on any
contractual obligations; as such, these amounts have not been presented as
adjustments in the accompanying pro forma financial statements.
(e) Reflects incremental depreciation of property and equipment calculated on a
straight line basis over 15 years.
(f) Reflects the acquisition of 47 towers from Airadigm and leaseback of antenna
space by Airadigm, as if the purchase of the assets had occurred on January
1, 1998.
(g) Reflects adjustment to interest expense as if the issuance of the 2008
notes, the Nextel tower acquisition and the related financing transactions
had occurred on January 1, 1998. The table below outlines the adjustment:
<TABLE>
<S> <C>
Commitment fees on credit facility.......................... $ 4,000
$150,000 term loan at 8.50%................................. 12,750
$125,000 (gross proceeds) of 2008 notes at 12.00%........... 15,450
$340,004 (gross proceeds) of 2009 notes at 11.25%........... 39,326
Amortization of debt issuance costs......................... 4,272
Less: historical interest expense of 2008 notes............. (7,933)
-------
Total adjustment.......................................... $67,865
=======
</TABLE>
(h) Reflects expense related to the issuance of two million shares of Holdings'
common stock to various parties as consideration for providing certain
financing commitments related to the Nextel tower acquisition.
27
<PAGE> 31
SELECTED HISTORICAL FINANCIAL DATA
(DOLLARS IN THOUSANDS)
The following table sets forth summary historical financial data of
SpectraSite and its predecessor, Telesite, as derived from the audited financial
statements included elsewhere in this prospectus, as of and for:
- the year ended December 31, 1996;
- the period from January 1, 1997 to May 12, 1997;
- the period from SpectraSite's inception on April 25, 1997 to December 31,
1997; and
- the year ended December 31, 1998.
The information set forth below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements and related notes thereto
included elsewhere in this prospectus.
<TABLE>
<CAPTION>
TELESITE (PREDECESSOR) SPECTRASITE YEAR ENDED DECEMBER 31,
------------------------------ -------------- ---------------------------
JANUARY 1, APRIL 25, TELESITE &
YEAR ENDED 1997 - 1997 - SPECTRASITE
DECEMBER 31, MAY 12, DECEMBER 31, COMBINED SPECTRASITE
1996 1997 1997 1997 1998
------------ --------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues:
Site acquisition................................ $8,841 $1,926 $ 5,002 $ 6,928 $ 8,142
Site leasing.................................... -- -- -- -- 656
------ ------ ------- ------- --------
Total revenues.................................... 8,841 1,926 5,002 6,928 8,798
Costs of operations:
Site acquisition................................ 2,255 595 1,120 1,715 2,492
Site leasing, exclusive of depreciation......... -- -- -- -- 299
------ ------ ------- ------- --------
2,255 595 1,120 1,715 2,791
Selling, general and administrative(a)............ 4,256 1,742 5,957 7,699 10,246
Depreciation expense.............................. 91 56 191 247 712
------ ------ ------- ------- --------
Operating income (loss)(a)........................ $2,239 $ (467) $(2,266) $(2,733) $ (4,951)
====== ====== ======= ======= ========
Net income(loss).................................. 2,289 (503) (2,160) (2,663) (9,079)
Net income (loss)
applicable to common
shareholders.................................... 2,289 (503) (2,660) (2,163) (11,235)
</TABLE>
28
<PAGE> 32
<TABLE>
<CAPTION>
TELESITE
--------------------------
(PREDECESSOR) SPECTRASITE COMBINED SPECTRASITE
-------------------------- ------------ ------------ ------------
YEAR ENDED JANUARY 1 - APRIL 25 - YEAR ENDED YEAR ENDED
DECEMBER 31, MAY 12, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1997 1997 1997 1998
------------ ----------- ------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
OTHER DATA:
Net cash provided by (used in) operating activities..... $1,109 $ (71) $ 223 $ 152 $ (2,347)
Net cash used in investing activities................... (853) (322) (7,178) (7,500) (45,002)
Net cash provided by (used in) financing activities..... (266) 390 9,189 9,579 144,663
EBITDA(b)............................................... 2,330 (411) (1,777) (2,188) (3,683)
Adjusted EBITDA(c)...................................... 24,198
Depreciation and amortization........................... 91 56 489 545 1,268
Capital expenditures(d)................................. 498 64 850 914 26,598
Cash interest expense................................... 64 31 64 95 216
Ratio of earnings to fixed charges(e)................... 23.2x -- -- -- --
Deficiency of earnings to fixed
charges............................................... -- 503 2,160 2,663 9,079
SELECTED OPERATING DATA (AT END OF PERIOD):
Number of owned towers............................................................................. 5 106
BALANCE SHEET DATA (AT END OF PERIOD):
Cash, cash equivalents and short term investments................................................................. $114,962
Total assets...................................................................................................... 161,946
Total liabilities................................................................................................. 135,357
Shareholders' deficiency.......................................................................................... (14,067)
</TABLE>
29
<PAGE> 33
- ---------------
Notes to Selected Historical Financial Data
(a) Selling, general and administrative expense and operating income
attributable to site acquisition activities for the period April 25-December
31, 1997 were $2,706 and $1,110, respectively. In addition, selling, general
and administrative expense includes approximately $1,463 of non-recurring
charges primarily related to formation costs and the operations of
Metrosite.
(b) EBITDA consists of operating income (loss) before depreciation and
amortization. EBITDA is provided because it is a measure commonly used in
the industry. EBITDA is not a measurement of financial performance under
generally accepted accounting principles and should not be considered an
alternative to net income as a measure of performance or to cash flow as a
measure of liquidity. EBITDA is not necessarily comparable with similarly
titled measures for other companies.
EBITDA is widely used in the communications site industry as a measure of a
company's operating performance. SpectraSite believes that EBITDA can assist
in comparing company performance on a consistent basis without regard to
depreciation and amortization, which may vary significantly depending on
accounting methods where acquisitions are involved or non-operating factors
such as historical cost bases. EBITDA presented in the table is consistent
with EBITDA calculated under the indenture governing the notes.
(c) Adjusted EBITDA for any stated period means the sum of the EBITDA of
SpectraSite for the fiscal quarters included within the stated period, less
SpectraSite's site leasing EBITDA for such stated period, plus the product
of the most recent quarter's site leasing EBITDA included within the stated
period and the total number of fiscal quarters within the stated period.
Site leasing EBITDA includes, for any stated period, the EBITDA directly
attributable to site rental revenue, license or management fees paid to
manage, lease or sublease space on communications sites owned, leased or
managed by SpectraSite, which we refer to collectively as site leasing
revenues. For the purposes of calculating Adjusted EBITDA, the site leasing
EBITDA for the most recent quarter included in the stated period shall be
determined on a pro forma basis after giving effect to acquisitions or
dispositions, new contracts and rent increases as if these events had
occurred at the beginning of the fiscal quarter, and eliminating losses
related to individual lease or site management contracts. In allocating
corporate, general administrative and other operating expenses that are not
allocated to any particular line of business in the financial statements of
SpectraSite, such expense shall be allocated to SpectraSite's site leasing
business in proportion to its percentage of the total revenues for the
applicable period. Adjusted EBITDA for site leasing includes the acquisition
from Airadigm of certain towers without co-location tenants.
For the year ended December 31, 1998, Adjusted EBITDA was computed as
follows:
<TABLE>
<S> <C>
EBITDA...................................................... $(3,683)
Less site leasing EBITDA.................................... (257)
-------
Adjusted EBITDA -- site acquisition.................... $(3,426)
=======
Pro forma revenue........................................... $12,773
Pro forma cost of site leasing revenue...................... 2,347
Pro forma selling, general and administrative............... 3,520
-------
Pro forma site leasing EBITDA for the three months ended
December 31, 1998......................................... 6,906
X 4
-------
Adjusted EBITDA -- site leasing........................ $27,624
=======
</TABLE>
Adjusted EBITDA is used in the communications tower industry as a measure of
a company's operating performance, and it is presented as additional
information because management believes that it serves as a useful financial
analysis tool for measuring and comparing companies in several areas, such
as liquidity, operating performance and leverage. In addition, Adjusted
EBITDA is a measure used in the indenture governing the notes, and the
measure reported in the table is consistent
30
<PAGE> 34
with the calculation under the indenture. Adjusted EBITDA is not a
measurement of financial performance under generally accepted accounting
principles and should not be considered an alternative to net income as a
measure of performance or to cash flow as a measure of liquidity. Adjusted
EBITDA is not necessarily comparable with similarly titled measures for
other companies.
(d) Capital expenditures for Telesite have been reduced for the periods ended
December 31, 1996 and May 12, 1997 by $340 and $258, respectively. These
expenditures were for land and construction in progress which were sold
prior to the closing of the acquisition of Telesite.
(e) The ratio of earnings to fixed charges is computed by dividing income (loss)
before income taxes and fixed charges by fixed charges. Fixed charges
consist of interest charges, amortization of debt discount and debt issuance
costs, and that portion of rental expense of SpectraSite believes to be
representative of interest. Earnings were not sufficient to cover fixed
charges for all periods presented in the table, except for the year ended
December 31, 1996, and, therefore, the ratio is not meaningful for such
periods.
31
<PAGE> 35
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
Integrated Site Development, Inc., a Delaware corporation which has since
been renamed SpectraSite Holdings, Inc., was incorporated on April 25, 1997.
Integrated Site Development, U.S. Towers, Inc., Metrosite and Telesite were
combined to form SpectraSite through a series of transactions effected as of May
12, 1997. Following this transaction, U.S. Towers was renamed SpectraSite
Communications, Inc., and on October 31, 1997, Telesite was merged into
SpectraSite Communications. On February 27, 1998, we sold Metrosite to an
unaffiliated third party for approximately $299,000 in cash, plus the right to
certain royalty payments which continue for a period of six years. Metrosite
primarily provides site acquisition services to municipal governments. As a
result of the foregoing transactions and as of the date hereof, SpectraSite
Communications is a wholly owned subsidiary of Holdings, and substantially all
of our operations are conducted through SpectraSite Communications.
Holdings has operated the site acquisition services business for a limited
period of time and had no operations prior to May 12, 1997. The acquisitions
were accounted for as a purchase and, accordingly, the results of operations of
the respective former entities are included in the consolidated operations of
SpectraSite from the date of acquisition to, in Metrosite's case, the date of
disposition.
SpectraSite plans to continue to offer site acquisition services in the
future. However, its primary focus will be on the ownership of multi-tenant
towers and leasing of antenna space on such towers. As of December 31, 1998, we
had 106 towers in service. As a result of its limited operating history and
primary focus on tower ownership and leasing, management believes that its
results of operations for the period ended December 31, 1997 and for the year
ended December 31, 1998 are not indicative of our results of operations in the
future.
RECENT EVENTS
During 1998, a group of investors purchased seven million shares of
Holdings' Series B preferred stock in a series of transactions for an aggregate
purchase price of $28.0 million. See "Certain Transactions -- The Series A and
Series B Preferred Stock Offerings."
In May 1998, SpectraSite sold its 33% interest in Communications Management
Specialists to the other owners for approximately $0.4 million. As payment
SpectraSite received a note payable over 60 months and bearing interest at 8.5%
per annum. Communications Management Specialists provides construction
management services to telecommunications companies.
In June 1998, SpectraSite acquired all of the membership interests of H&K
Investments LLC, an independent tower owner, for an aggregate purchase price of
$1.4 million, and in December 1998, H&K was merged with SpectraSite. H&K owned
five towers; each of the towers has multiple tenants, and Sprint PCS is the
anchor tenant on all five towers.
In August 1998, SpectraSite and Airadigm, a regional provider of wireless
communications services, entered into an agreement covering our acquisition of
up to 47 communications towers and certain related assets from Airadigm for
$11.75 million. Airadigm is the anchor tenant on each tower. Pursuant to the
agreement, SpectraSite acquired 40 of the towers in 1998 and four additional
towers in January 1999. SpectraSite identified three towers requiring additional
due diligence before we will accept such towers. We expect to complete our due
diligence and acquire the three towers in the second quarter of 1999.
SpectraSite paid $11.0 million for the 44 towers and $750,000 remains in an
escrow account pending consummation of the acquisition of the other three
towers.
In August 1998, SpectraSite acquired 14 ground leases and two towers in
inventory from Amica, a regional provider of wireless communications services,
for an aggregate cash purchase price of approximately $0.5 million. SpectraSite
has constructed towers on the sites. Amica is the anchor tenant on all 14
towers.
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In September 1998, SpectraSite acquired all of the shares of capital stock
of GlobalComm, Inc. for $2.0 million in cash, and as of December 30, 1998,
GlobalComm was merged into SpectraSite Communications. GlobalComm provides
co-location marketing services to BellSouth Mobility DCS and other wireless
communications providers in North Carolina, South Carolina and Tennessee. The
founder and president of GlobalComm, Michael Garrett, joined SpectraSite as Vice
President -- Co-location Management and, in this capacity, Mr. Garrett is
responsible for marketing available antenna space on all of SpectraSite's owned
towers. See "Management" and "Certain Transactions -- GlobalComm Acquisition."
In April 1999, SpectraSite acquired 2,000 communications towers from Nextel
for a combination of cash and stock. See "The Nextel Tower Acquisition." In
connection with the Nextel tower acquisition, Holdings sold shares of Series C
preferred stock and the 2009 notes, and SpectraSite entered into a new credit
facility. See "Certain Transactions -- The Preferred Stock Offerings" and
"Description of Certain Indebtedness."
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998 COMPARED TO THE COMBINED RESULTS FOR THE TWELVE
MONTHS ENDED DECEMBER 31, 1997.
The following is a discussion of the financial condition and results of
operations of SpectraSite for the year ended December 31, 1998 and for the
period from April 25, 1997 through December 31, 1997, and Telesite's results of
operations for the period from January 1, 1997 through May 12, 1997.
Revenues increased to $8.8 million for the year ended December 31, 1998
from $6.9 million for the year ended December 31, 1997 due to the initiation of
site leasing activity and an increase in the number and size of site development
services projects.
Selling, general and administrative expenses, including depreciation
expense, increased to $11.0 million for the year ended December 31, 1998 from
$7.9 million for the year ended December 31, 1997. The increase is a result of
expenses related to additional corporate overhead to manage and operate the
ongoing activities of SpectraSite. Marketing expenses related to tower
development activities as well as the site acquisition operations also
contributed to the increase in expenses. Telesite did not actively market its
services, relying primarily on its reputation in the industry and customer
referrals to generate revenues. To support our entry into tower development and
leasing, we have established a dedicated marketing effort which promotes tower
development and leasing as well as site acquisition services. Amortization of
goodwill increased to approximately $0.6 million in the year ended December 31,
1998 compared to approximately $0.3 million in the year ended December 31, 1997
as a result of acquisitions.
As a result of the factors discussed above, our operating loss was $5.0
million for the year ended December 31, 1998, compared to $2.7 million for the
year ended December 31, 1997.
Other income, which consists primarily of gain on sales of assets and
equity in earnings of affiliates, increased to approximately $0.5 million for
the year ended December 31, 1998 from approximately $0.1 million for the year
ended December 31, 1997. The increase is a result of a gain on the sale of
assets in connection with the disposal of Metrosite during the first quarter of
1998 of approximately $0.5 million. During the year ended December 31, 1997, we
recognized approximately $0.2 million as equity earnings of Communication
Management Specialists. We disposed of our interest in Communication Management
Specialists during the second quarter of 1998 and did not recognize any equity
in the earnings of such affiliate during 1998.
COMBINED RESULTS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO
TELESITE'S RESULTS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996.
The following is a discussion of the financial condition and results of
operations of SpectraSite for the year ended December 31, 1998 and for the
period from April 25, 1997 through September 30, 1997 and through December 31,
1997, and Telesite's results of operations for the period from January 1, 1997
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<PAGE> 37
through May 12, 1997, April 1, 1997 through May 12, 1997 and for the twelve
month period ended December 31, 1996.
Total revenues decreased to $6.9 million for the twelve months ended
December 31, 1997 from $8.8 million for the twelve months ended December 31,
1996 due primarily to the decreased demand for site development services from
more established personal communications services licensees as a result of their
completing the first phase of construction in their initial markets and not yet
commencing secondary build-outs in such markets or in additional markets, and
the fact that holders of certain more recently issued licenses have not yet
commencing construction of tower networks in their respective markets.
Selling, general and administrative expenses increased to $7.9 million for
the twelve months ended December 31, 1997 from $4.3 million for the twelve
months ended December 31, 1996. The increase is a result of the expenses related
to management of the ongoing activities of SpectraSite, expenses related to the
implementation of tower development and marketing activities, one-time non-cash
charges of approximately $0.9 million as a result of the formation of
SpectraSite, amortization of goodwill of approximately $0.3 million in
connection with our acquisition of Telesite and expenses incurred in connection
with the operations of Metrosite. We sold our interest in Metrosite during early
1998. We anticipate that in the future costs related to tower development
activities will be capitalized as part of the cost of the towers.
Operating loss was $2.7 million for the twelve months ended December 31,
1997 compared to $2.2 million during the twelve months ended December 31, 1996.
The change is a result of the decline in revenues and the increase in selling,
general and administrative expenses attributable to the commencement of
operations of SpectraSite.
Other income, which consists primarily of equity in earnings of affiliates,
was approximately $0.1 million for the twelve months ended December 31, 1997 and
for the twelve months ended December 31, 1996.
LIQUIDITY AND CAPITAL RESOURCES
Holdings is a holding company whose only significant asset is the
outstanding capital stock of its subsidiary, SpectraSite Communications. Our
only source of cash to pay interest on and principal of the 2008 notes and the
2009 notes is distributions from SpectraSite Communications. Prior to July 15,
2003, interest expense on the 2008 notes will consist solely of non-cash
accretion of an original issue discount and the notes will not require annual
cash interest payments. After such time, the 2008 notes will have accreted to
approximately $225 million and will require semi-annual cash interest payments
of $13.5 million. In addition, the notes mature on July 15, 2008. Similarly, the
2009 notes will not require cash interest payments prior to October 15, 2004 and
mature on April 15, 2009. Furthermore, the new credit facility provides for
periodic principal and interest payments.
To complete the Nextel tower acquisition and pay related fees and expenses,
we used $150.0 million of borrowings under our new credit facility, $213.1
million of proceeds from the sale of the 2009 notes and $230.7 million from the
sale of Series C preferred stock. In addition, Nextel received shares of Series
C preferred stock valued at $70.0 million. We currently have $350.0 million
available under our credit facility to fund new tower construction or
acquisition activity. In addition, our cash, cash equivalents and short-term
investments are $241.9 million.
As a result of the issuance and sale of our Series B preferred stock and
the notes, we realized net proceeds of $147.7 million, after deducting fees and
expenses. SpectraSite has $750,000 of the proceeds deposited in escrow for the
acquisition of three towers from Airadigm and has used:
- $11.0 million to acquire 44 of the 47 Airadigm towers;
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<PAGE> 38
- approximately $0.5 million to acquire 14 ground leases and two towers in
inventory from Amica and to construct towers on the sites;
- $2.0 million for the acquisition of GlobalComm; and
- $2.3 million to repay outstanding indebtedness.
The remaining proceeds will be used for the construction and acquisition of
towers and for general working capital purposes.
Net cash used in operating activities during the year ended December 31,
1998 was $2.3 million compared to $0.2 million provided by operating activities
during the comparable period in 1997. The increase in cash used in operating
activities was primarily attributable to an increase in accounts receivable
resulting from the timing of billings related to site development services and
the net loss incurred during the year. Net cash used for investing for the year
ended December 31, 1998 was $45.0 million compared to $7.5 million for the year
ended December 31, 1997. The cash used for investing activities during the year
ended December 31, 1998 was primarily the result of the investment of unused
proceeds from the sale of the 2008 notes in short-term investments, costs
associated with tower construction, acquisition of towers from Airadigm and the
acquisition of GlobalComm. The cash used for investing activities during the
year ended December 31, 1997 primarily related to the acquisition of Telesite.
Net cash provided by financing activities for the year ended December 31, 1998
was $144.7 million compared to $9.6 million for the same period in 1997. The
increase in cash provided by financing activities was attributable to the
proceeds from the sales of Series B preferred stock and the 2008 notes.
Our ability to make scheduled payments of principal of, or to pay interest
on, our debt obligations, and our ability to refinance any such debt
obligations, including the 2008 notes and the 2009 notes, or to fund planned
capital expenditures, will depend on our future performance, which, to a certain
extent is subject to general economic, financial, competitive, legislative,
regulatory and other factors that are beyond our control. Our business strategy
contemplates substantial capital expenditures in connection with our planned
tower buildout. Based on SpectraSite's current operations and anticipated
revenue growth, management believes that cash flow from operations, available
cash of approximately $241.9 million and anticipated available borrowings under
the new credit facility will be sufficient to fund our capital expenditures of
approximately $140.0 million through fiscal 1999. Thereafter, however, or in the
event SpectraSite exceeds its currently anticipated capital expenditures for
fiscal 1999, SpectraSite anticipates that it will seek additional equity or debt
financing to fund its business plan. Failure to obtain any such financing could
require SpectraSite to significantly reduce its planned capital expenditures or
scale back the scope of its tower buildout or acquisition activities, any of
which could have a material adverse effect on our business, prospects, financial
condition or results of operations. There can be no assurance that we will
generate sufficient cash flow from operations in the future, that anticipated
revenue growth will be realized or that future borrowings or equity
contributions will be available in amounts sufficient to service our
indebtedness and make anticipated capital expenditures.
Certain of our expenses, such as those for marketing, wages and benefits
generally increase with inflation. However, we do not believe that our financial
results have been, or will be, adversely affected by inflation in a material
way.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS 133
requires that derivative instruments be recognized as either assets or
liabilities in the consolidated balance sheet based on their fair values.
Changes in the fair values of such derivative instruments will be recorded
either in results of operations or in other comprehensive income, depending on
the intended use of the derivative instrument. The initial application of SFAS
133 will be reported as the effect of a change in accounting principle. SFAS 133
is effective for all fiscal years beginning after June 15, 1999. We will adopt
the requirements of SFAS 133 in our 1999 financial statements. We have not yet
determined the effect that the adoption of SFAS 133 will have on our
consolidated financial statements.
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YEAR 2000 COMPLIANCE
We are in the process of conducting a comprehensive review of our computer
systems to identify which of our systems will have to be modified, upgraded or
converted to recognize and process dates after December 31, 1999, and developing
an implementation plan to resolve this issue. We believe that most, if not all,
of our computer software and systems are year 2000 compliant, because most of
our hardware and software has been purchased within the past 18 months. We
expect to incur internal staff costs, as well as other expenses, related to
testing and updating our systems to prepare for the millennium date change. We
presently believe that, with minor modifications and upgrades to existing
software and successful conversion to new software, the year 2000 issue will not
pose significant operational problems for our systems as so modified, upgraded
or converted. In fact, even if all of our computer systems and other equipment
vulnerable to the millennium date change failed, we could continue operations
uninterrupted after such failures. Like most other companies, SpectraSite is
dependent upon a variety of external suppliers including vendors providing
electrical power, telephony, water and other necessary commodities. SpectraSite
also relies upon the interstate banking system and related electronic
communications for functions such as transmitting financial data from field
offices. We are not aware currently of any material non-compliance by these
vendors that will materially affect our business operations; however, we do not
control these systems and cannot assure that they will be converted in a timely
fashion. Any delays or omissions by us or our customers, suppliers or
contractors to resolve the year 2000 issue could materially adversely affect our
business, financial condition or results of operations. We do not anticipate
material expenditures related to the year 2000 issue and incremental costs to
date have been negligible, but there can be no assurance that amounts to be
spent on addressing the year 2000 issue will not be material.
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INDUSTRY OVERVIEW
GENERAL
SpectraSite was formed in 1997 through the combination of three existing
companies in the tower development, site acquisition and site management
businesses to capitalize on the trend toward co-location and independent tower
ownership in the wireless communications industry and has grown into a leading
build-to-suit provider of tower networks. As wireless services and current
wireless technologies are used in more applications, the cost of wireless
services to consumers declines and new wireless technologies are developed.
Changes in U.S. federal regulatory policy, including the implementation of the
Telecommunications Act of 1996, have led to a significant number of competitors
in the industry through the auction of frequency spectrum for a wide range of
uses, most notably personal communications services. This competition, combined
with a growing reliance on wireless services by consumers, has led to an
increased demand for higher quality, uninterrupted service and improved
coverage, which, in turn, has led to increased demand for communication sites as
new providers build out their networks and existing providers upgrade and expand
their networks to maintain their competitiveness. We believe that, as the
wireless communications industry has become more competitive, wireless service
providers have sought operating and capital efficiencies by outsourcing certain
network services and build-out activities and by co-locating transmission
equipment with other providers on multi-tenant towers. The need for co-location
has also been driven by the growing trend by municipalities to slow the
proliferation of towers by requiring that towers accommodate multiple tenants.
All of these factors provide an opportunity for us to identify and acquire
communication sites, lease antennae space on such sites and provide related
network infrastructure and support services.
NETWORK AND TOWERS
Wireless service providers require wireless transmission networks in order
to provide service to their customers. Each of these networks is configured
specifically to meet the coverage requirements of the particular provider and
includes transmission equipment such as antennae placed at various locations
throughout the service area. These locations, or communication sites, are
critical to the operation of a wireless network. A communication site may have
the capacity for multiple antennae installations, or antennae sites, depending
on the size and type of the communication site. The potential value of a tower
generally depends on its location and the number of antennae that it can
support.
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Set forth below is a diagram illustrating the basic functions of each of
the primary components of a wireless communication network.
[WIRELESS COMMUNITCATIONS NETWORK DIAGRAM]
Communication sites consist of towers, rooftops and other structures upon
which antennae are placed. A typical tower includes a compound enclosing the
tower and an equipment shelter. The equipment shelter houses a variety of
transmitting, receiving and switching equipment. The tower can be either a
self-support or guyed model. There are two types of self-supported models: the
lattice and the monopole. A lattice model is usually tapered from the bottom up
and can have three or four sides of open-framed steel supports. A monopole is a
free standing tubular structure. Guyed towers gain their support capacity from a
series of guy cables attaching separate levels of the tower to anchor
foundations in the ground. Monopoles typically range in height from 50-200 feet,
lattice towers can reach up to 350 feet and guyed towers can reach 2000 feet or
more.
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TYPES OF TOWERS
(DIAGRAM NOT TO SCALE)
[TYPES OF TOWERS]
Rooftop sites are more common in urban areas where tall buildings are
generally available and multiple communication sites are required because of
high wireless traffic density. One advantage of a rooftop site is that zoning
regulations typically permit installation of antennae. In cases of such high
population density, neither height nor extended radius of coverage are as
important and the installation of a tower structure may prove to be impossible
because of zoning restrictions, land cost and land availability. Other
structures on which antennae have been installed include billboards, electric
transmission towers, silos, water tanks and smokestacks.
OPERATION OF TWO-WAY WIRELESS SYSTEMS. Wireless transmission networks use
a variety of radio frequencies to transmit voice and data. Wireless transmission
networks include two-way radio applications, such as cellular, personal
communications services, specialized mobile radio and enhanced specialized
mobile radio networks, and one-way radio applications, such as paging services.
Each application operates within a distinct radio frequency. Although cellular
currently represents the largest segment of the wireless communications
industry, other wireless technologies are expected to grow significantly.
Two-way wireless service areas are divided into multiple regions called
cells, each of which contains a base station consisting of a low-power
transmitter, a receiver and signaling equipment, typically located on a tower.
The cells are usually configured in a grid pattern, although terrain factors,
including natural and man-made obstructions, and signal coverage patterns may
result in irregularly shaped cells and overlaps or gaps in coverage. Cellular
system cells generally have a radius ranging from two miles to 25 miles and
personal communications services and other higher frequency services system
cells generally have a radius ranging from one-quarter mile to 12 miles,
depending on the technology being used, level of customer
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usage, installation, height and the terrain. Growing demand for cell sites is
one of the primary reasons for the expected growing demand for our services. The
base station in each cell is connected by microwave, fiber optic cable or
telephone wires to a switch, which uses computers and specially developed
software to control the operation of the wireless telephone system for an entire
service area. The switch controls the transfer of calls from cells within the
system and connects calls to the local landline telephone system or to a long
distance telephone carrier.
Each wireless transmission network is planned to meet a certain level of
subscriber density and traffic demand in addition to providing a certain
geographic coverage. Each transmission requires a certain amount of radio
frequency, so a system's capacity is limited by the amount of frequency that is
available. The same frequency can be reused by each separate transmitter,
subject to certain interference limitations. The design of each wireless system
involves the placement of transmission equipment in locations that will make
optimal use of available frequency based upon projected usage patterns, subject
to the availability of such locations and the ability to use them for wireless
transmission under applicable zoning requirements.
WIRELESS COMMUNICATIONS. The wireless communications industry now provides
a broad range of services, including cellular, personal communications services,
paging, specialized mobile radio and enhanced specialized mobile radio. The
industry has benefited in recent years from increasing demand for its services
and industry experts expect this demand to continue to increase. The following
table sets forth industry estimates regarding projected subscriber growth for
certain types of wireless communications services:
<TABLE>
<CAPTION>
1998-2002 1998-2008
ESTIMATED PROJECTED PROJECTED COMPOUNDED COMPOUNDED
1998 2002 2008 ANNUAL ANNUAL
SUBSCRIBERS SUBSCRIBERS SUBSCRIBERS GROWTH RATE GROWTH RATE
----------- ----------- ----------- ----------- -----------
(IN MILLIONS, EXCEPT PERCENTAGES)
<S> <C> <C> <C> <C> <C>
Cellular...................... 60.0 80.7 81.1 7.7% 3.1%
Personal Communications
Services.................... 7.2 46.0 86.6 59.1% 28.3%
Enhanced Specialized Mobile
Radio....................... 2.8 10.1 17.0 37.4% 19.6%
</TABLE>
- ---------------
Source: Paul Kagan Associates, Inc. There can be no assurance that these
projections will prove to be accurate.
We believe that more communication sites will be required in the future to
accommodate the expected increase in demand for wireless communications
services. Current emerging wireless communications systems, such as personal
communications services and enhanced specialized mobile radio, represent an
immediate and sizable market for providers of communication site services as
they build out large nationwide and regional networks. The development of higher
frequency technologies such as personal communications services offers us
opportunities as the reduced cell range of those technologies requires a more
concentrated network of towers. While several personal communications services
and enhanced specialized mobile radio providers have already built limited
networks in certain markets, these providers still need to fill in dead zones
and expand geographic coverage. The Personal Communications Industry Association
estimates that there were approximately 80,000 antenna sites in the United
States as of December 31, 1998. In January 1999, the Personal Communications
Industry Association estimated that the number of antenna sites in the United
States for cellular, personal communications services and enhanced mobile radio
providers will increase by an additional 66,000 communications sites through
2005 as cellular systems expand coverage and personal communications services
systems are deployed.
As a result of advances in digital technology, enhanced specialized mobile
radio operators have also begun to design and deploy digital mobile
telecommunications networks in competition with cellular providers. In response
to the increased competition, cellular operators are re-engineering their
networks by increasing the number of sites, locating sites within a smaller
radius, filling in dead zones and converting from analog to digital cellular
service in order to manage subscriber growth, extend geographic coverage
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and provide competitive services. The demand for communication sites is also
being stimulated by the development of new paging applications, such as e-mail
and voicemail notification and two-way paging, as well as other wireless data
applications.
Licenses are also being awarded, and technologies are being developed, for
numerous new wireless applications that will require networks of communication
sites. These potential applications include local multi-point distribution
services, such as wireless local loop, wireless cable television, data and
Internet access. Radio spectrum required for these technologies has, in many
cases, already been awarded and licensees have begun to build out and offer
services through local loop networks operated by Winstar and Teligent, through
new wireless cable networks operated by companies such as CellularVision, and
through data networks being constructed and operated by RAM Mobile Data, MTEL
and Ardis.
CHARACTERISTICS OF THE TOWER INDUSTRY
In addition to the increased demand for wireless services and the need to
develop and expand wireless communications networks, we believe that other
trends influencing the wireless communications industry have important
implications for independent tower operators. In this increasingly competitive
wireless industry environment, we believe that many providers are dedicating
their capital and operations primarily to those activities that directly
contribute to subscriber growth, such as marketing and distribution. Management
believes these providers, therefore, will seek to reduce costs and increase
efficiency through the outsourcing of infrastructure network functions such as
communication site ownership, construction, operation and maintenance. In order
to speed new network deployment and expansion and generate efficiencies,
providers are increasingly co-locating transmission equipment with that of other
wireless service providers. The trend towards co-location has been furthered by
the Not-In-My-Backyard arguments generated by local zoning and planning
authorities in opposition to the proliferation of towers.
Management believes that, in addition to the favorable growth and
outsourcing trends in the wireless communications industry and high barriers to
entry as a result of regulatory and local zoning restrictions associated with
new tower sites, tower operators benefit from several favorable characteristics.
The ability of tower operators to provide antenna sites to customers on multiple
tenant towers diversifies them against the specific technology, product and
market risks typically faced by an individual provider. The emergence of new
technologies, providers, products and markets may allow independent tower
operators to further diversify against such risks. We believe that independent
tower operators also benefit from the contract nature of the site leasing
business and the predictability and stability of these recurring revenues. In
addition, the site leasing business has low variable operating costs and
significant operating leverage. Towers generally are fixed cost assets with
minimal variable operating costs associated with additional tenants. A tower
operator can generally expect to experience increasing margins when new tenants
are added to existing towers.
The site leasing business typically experiences low customer churn rates as
a result of the high costs that would be incurred by a wireless service provider
were it to relocate an antenna to another site and consequently be forced to
re-engineer its network. Moving a single antenna may alter the pre-engineered
maximum signal coverage, requiring a reconfiguration of the network at
significant cost to maintain the same coverage. Municipal approvals are becoming
increasingly difficult to obtain and may also affect the provider's decision to
relocate. We believe that the costs associated with network reconfiguration and
municipal approval and the time required to complete these activities usually
are not justified by the potential savings in reduced site rental expense.
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BUSINESS
OVERVIEW
SpectraSite is one of the leading full service providers of tower related
services in the U.S. wireless communications industry. We develop and manage
build-to-suit tower networks and provide site acquisition services for major
wireless communication companies such as AT&T Wireless, Nextel and Sprint PCS,
as well as numerous other entrepreneurial service providers. Our business enjoys
favorable unit economics which include stable and recurring revenues, low
operating costs, minimal post-construction capital requirements, high customer
retention levels and a diversified asset and customer base. We are capitalizing
on the growing trend toward antenna co-location and independent tower ownership,
as leading wireless providers increasingly redirect their capital outlays from
tower development to subscriber acquisition activities and local municipalities
encourage multiple tenants on single towers.
SpectraSite generally builds towers suited for multi-tenant use under
build-to-suit programs and typically does not start construction of a tower
until an anchor tenant has agreed to lease antenna space on such tower. We have
the capacity to develop a large number of towers as:
- a typical tower takes approximately two months to construct, once zoning
approval is obtained;
- we utilize a standard set of proprietary building specifications; and
- we capitalize on our program management expertise and our established
relationships with highly experienced, pre-qualified third-party
engineers and construction firms that specialize in the wireless
communications industry.
Our primary focus is the ownership of multi-tenant towers and the leasing,
under long-term contracts, of antenna space on such towers to a variety of
wireless service providers, including personal communications services,
cellular, paging, specialized mobile radio, enhanced specialized mobile radio
and other providers. Since a typical tower has and will have multiple antennae
positions that are leased to different wireless providers and the towers are
dispersed geographically, SpectraSite will benefit from a recurring revenue base
that is diversified in terms of customer mix, geographic presence and industry
segment. The relatively low, fixed costs associated with maintaining a tower
network allow for incremental leasing revenues from co-location tenants to
result in disproportionately greater increases in tower cash flow. Management
believes that tower cash flow margins will range from approximately 35% to 80%
depending upon the level of co-location. Additionally, the capital requirements
beyond initial construction are minimal. Assuming a conservative level of
tenants per tower, the payback period on construction investment is
approximately five years, while the usable life of the tower asset is estimated
to be at least 15 years. The tower franchise is further enhanced by the high
cost of antenna relocation, which reduces customer turnover, and the high
barriers to entry resulting from local opposition to tower proliferation.
Under a build-to-suit program for an anchor wireless service provider,
SpectraSite is awarded non-binding mandates and undertakes all site development
activities and costs. In return, the anchor wireless service provider enters
into a long-term lease. SpectraSite retains ownership of the tower and has the
ability to co-locate additional tenants. Management believes that many wireless
service providers are using build-to-suit programs as an alternative to tower
ownership and that this outsourcing trend is likely to continue. SpectraSite's
build-to-suit programs provide a comprehensive solution to those wireless
service providers seeking to minimize their capital expenditures, overhead and
time associated with the build-out and on-going maintenance of their wireless
network infrastructure. We believe that our site leasing business will continue
to grow, particularly through greater acceptance of build-to-suit programs.
SpectraSite also offers comprehensive site acquisition services, including
site location analysis; site acquisition; zoning and land use permitting; FAA
compliance analysis and filing; and contract, title and building permit
administration. One of the three businesses that combined to form SpectraSite in
1997 has been providing site acquisition services since 1992 and has developed
standard procedures for efficiently and effectively identifying locations,
obtaining compliance approvals and acquiring sites. We are typically paid fees
for site acquisition services on a project by project basis.
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Management believes that the number of communication sites in use, which
include towers, rooftops and other structures, will continue to increase with
the growth in demand for wireless services. This increase is the result of
several factors, including:
- the continuing build-out of higher frequency technologies, such as
personal communications services, which have a reduced cell range and
thus require a concentrated network of towers;
- the need to expand the capacity of existing networks;
- the issuance of new wireless network licenses requiring the construction
of new wireless networks; and
- the emergence of new wireless technologies.
BUSINESS STRATEGY
Our strategic objective is to continue to be one of the largest owners and
operators of communications towers and to be the premier build-to-suit provider
of tower networks in the United States. SpectraSite's strategy involves the
following elements:
MAXIMIZE CO-LOCATION ON TOWERS. Our strategy for our owned and managed
towers is to maximize the number of tenants on each tower in order to rapidly
increase tower cash flow. Since most tower costs are fixed, leasing available
space on an existing tower results in minimal additional expenses and,
therefore, generates a disproportionately large increase in tower cash flow
margins. SpectraSite generally constructs towers to accommodate at least three
tenants. We have a dedicated sales force to market available co-location
opportunities to wireless communication providers, and we intend to leverage our
national tower footprint to enable wireless providers to more quickly establish
wireless coverage in individual and multiple markets.
PARTNER WITH WIRELESS COMMUNICATIONS CARRIERS TO ASSUME OWNERSHIP OF THEIR
EXISTING TOWERS. Our acquisition of Nextel's towers provides us with a
nationwide network of more than 2,100 strategically located towers and a
commitment to construct, acquire or make available for co-location on our towers
an additional 1,700 sites to facilitate Nextel's national service deployment
over the next several years. In addition to our transaction with Nextel, we will
continue to seek partnerships and other strategic arrangements with other major
wireless communications carriers in order to assume ownership of their towers.
INTEGRATE THE NEXTEL TOWER ASSETS. In conjunction with the Nextel tower
acquisition, we are establishing four regional offices in the New York, Atlanta,
Chicago and San Francisco areas. Each office offers SpectraSite's full
complement of services, including site acquisition, zoning, project management,
construction, site operations and co-location marketing. A seasoned Regional
Vice President is in charge of each office. We intend to immediately begin site
acquisition and tower development for Nextel and to increase these activities
during 1999 as our regional offices become fully operational.
BUILD TOWERS IN AREAS OF INCREASING WIRELESS DEMAND. SpectraSite is well
positioned to capitalize on the trend of wireless service providers outsourcing
the ownership and management of communications sites. Our turnkey operation can
develop and implement build-to-suit tower networks and then provide efficient
site management services for completed towers. Carriers value our ability to
serve all of their tower network development needs. In addition, we selectively
invest radio frequency engineering and site acquisition costs into sites that
management believes have higher than average co-location opportunities.
ACQUIRE TOWERS WITH SUBSTANTIAL CO-LOCATION OPPORTUNITIES. SpectraSite
intends to continue to make selective acquisitions in the fragmented tower owner
and operator industry. Management's strategy is to acquire towers that can
service multiple tenants and will be attractive to wireless providers based upon
their location, height and available capacity. Additionally, our strategy is to
purchase under-utilized towers with high future co-location potential.
Management believes that there are small and large acquisition candidates and
that the number of available towers will grow as large personal communications
services and other small independent tower companies divest their tower
holdings. SpectraSite has strict valuation
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criteria and believes that certain tower properties can be purchased at
reasonable price levels. SpectraSite regularly evaluates acquisition
opportunities, engages in negotiations and submits bids with respect to
acquisitions of individual towers, groups of towers and entities that own or
manage towers and related businesses, any of which may be material.
CAPITALIZE ON STRONG RELATIONSHIPS WITH MAJOR WIRELESS SERVICE
PROVIDERS. In addition to developing towers for Nextel, we will continue to
pursue build-to-suit contracts with other major wireless communications
providers. We have established a reputation as a highly professional, responsive
build-to-suit and site acquisition provider. This has been achieved through
ongoing investment in the development of multi-level customer relationships. Our
sales force implements a dual marketing strategy that focuses company resources
on the client's decision maker at the local level while solidifying
relationships with the customer's senior management. Our experience is that a
high level of responsiveness and the rapid development of tower sites for an
existing customer ensures that SpectraSite will continue to be an integral part
of that customer's network deployment plans.
LEVERAGE SITE ACQUISITION SERVICES. Over the last six years, SpectraSite
has performed an array of site acquisition services covering approximately 4,000
sites for major wireless service providers, including ALLTEL, BellSouth
Mobility, GTE Mobility, Horizon, Nextel and Powertel. SpectraSite has a broad
field organization that allows it to identify and participate in site
acquisition projects across the country. Knowledge of local markets and strong
customer relationships with wireless service providers are competitive strengths
that position SpectraSite to further capitalize on the site acquisition and
build-to-suit needs of the wireless communications industry.
COMPETITIVE STRENGTHS
The leasing of antenna space on communications towers provides a recurring,
diversified, stable cash flow stream due to the long-term nature of the customer
contracts, the provision of services to multiple customers from different
wireless segments, and the significant costs existing tenants would incur to
relocate. Once a tower is built for an anchor tenant, co-location tenants
provide high incremental cash flow due to low, fixed tower maintenance expense.
To enhance our ability to secure additional tenants on our towers, in September
1998, we acquired GlobalComm, Inc., a leading co-location marketing company;
GlobalComm handled co-location marketing for over 750 towers owned by BellSouth
Mobility DCS. Towers can accommodate a broad array of wireless communications
carriers and, therefore, revenues are not dependent upon any specific wireless
segment or technology. Penetration of personal communications services, cellular
and enhanced specialized mobile radio was approximately 25.3% as of December 31,
1998 and is expected to reach 60.6% by 2008, according to Paul Kagan Associates,
Inc. Since towers are a basic component of a wireless communications network, we
believe we are well positioned to benefit from the proliferation and increased
penetration of wireless communications services.
Management believes that the following strengths will enable SpectraSite to
successfully expand its business:
NATIONAL FOOTPRINT WITH OVER 3,000 COMMUNICATIONS TOWERS. As a result of
the Nextel tower acquisition, we are one of the largest independent owner and
operator of communications towers in the United States with over 3,000 towers
under management, including more than 2,100 owned towers. Furthermore, Nextel
has agreed to lease space on 1,700 additional towers we construct, acquire or
currently own. As a result, we believe we are well positioned to assist wireless
providers in initiating service in new markets both on a local and a national
basis, thereby better positioning us to capture additional co-location
opportunities.
BUILD-TO-SUIT FOCUS. SpectraSite specializes in developing and building
tower networks to suit the needs of wireless communication carriers. Management
believes that its primary focus on and expertise in build-to-suit programs is
unique among its major competitors. SpectraSite has assembled the resources,
tools and proven personnel which combine to form the program management
organization needed for managing high-speed tower development projects. In
addition, SpectraSite offers professional site leasing and asset management
services for the towers it builds, as well as for towers owned by carriers.
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CAPABILITY TO MANAGE MULTIPLE PROJECTS. We have been able to successfully
manage multiple site acquisition and tower development projects in various
locations at the same time. SpectraSite utilizes a pre-qualified pool of local
contractors and advisors to build its towers, which allows management to focus
its resources and capital on managing multiple construction projects
simultaneously. SpectraSite's diversified and outsourced labor pool provides
flexibility to handle varying numbers of build-to-suit programs in a variety of
local markets. Management believes that the ability to undertake concurrent
build-to-suit programs in multiple markets is attractive to wireless service
providers.
STANDARDIZED PROCEDURES AND SPECIFICATIONS. SpectraSite has developed
detailed site acquisition procedures and construction specifications and
procedures that allow it to rapidly construct tower networks. Wireless carriers
require aggressive network build-out schedules, and uniform procedures and
specifications allow for reduced employee training time, improved vendor
performance and quicker identification of potential tower sites. SpectraSite
uses a pre-qualified pool of architectural, engineering and construction
contractors that work within its standard guidelines and have a proven capacity
for multiple projects. In addition, we are organized to efficiently:
- plan the project;
- secure the sites by purchase or lease;
- obtain zoning approvals; and
- manage all site preparation and tower construction.
INTEGRATED PROVIDER OF SITE DEVELOPMENT SERVICES. SpectraSite benefits
from its integrated, comprehensive site development and program management
capabilities, as wireless service providers prefer the flexibility of a vendor
who can program-manage all direct and subcontract functions related to real
estate, design, construction and on-going operations. SpectraSite's efficient
site acquisition business provides a competitive advantage by:
- maintaining a comprehensive project management database;
- allowing management to position SpectraSite with customers as an
end-to-end, full service provider of tower development services; and
- by performing site acquisition services rather than finding third parties
to achieve the same task, which permits tower development mandates to be
fulfilled more rapidly than they would be otherwise.
EXPERIENCED MANAGEMENT. Our senior managers have acquired over 8,000
communication sites and built more than 1,000 towers. In addition, SpectraSite
provides tower management services to 3,000 sites, consisting of both
SpectraSite-owned and carrier-owned tower sites. Management believes that its
industry experience allows it to offer quality service and proven results to
wireless communication providers in their network build-outs.
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TOWER LOCATIONS
The following chart shows the location of our owned towers:
<TABLE>
<CAPTION>
NUMBER % OF
OF TOTAL
STATE TOWERS TOWERS
----- ------ ------
<S> <C> <C>
California.................................................. 411 19.3%
Ohio........................................................ 157 7.4
Michigan.................................................... 150 7.0
Illinois.................................................... 139 6.5
Florida..................................................... 137 6.4
Georgia..................................................... 129 6.1
North Carolina.............................................. 113 5.3
Texas....................................................... 102 4.8
Washington.................................................. 70 3.3
Wisconsin................................................... 65 3.1
Louisiana................................................... 55 2.6
Tennessee................................................... 50 2.3
South Carolina.............................................. 47 2.2
Indiana..................................................... 42 2.0
Missouri.................................................... 41 1.9
Massachusetts............................................... 39 1.8
Oklahoma.................................................... 38 1.8
Alabama..................................................... 36 1.7
Pennsylvania................................................ 34 1.6
Maryland.................................................... 33 1.5
Nevada...................................................... 31 1.5
Oregon...................................................... 31 1.5
Colorado.................................................... 30 1.4
Arizona..................................................... 19 0.9
Utah........................................................ 19 0.9
Virginia.................................................... 15 0.7
Minnesota................................................... 14 0.7
New Jersey.................................................. 14 0.7
Kansas...................................................... 13 0.6
New York.................................................... 13 0.6
Other....................................................... 44 2.1
----- -----
Total............................................. 2,131 100.0%
===== =====
</TABLE>
OUR SERVICES
SpectraSite's business is divided into three areas:
- tower operations, including leasing of tower space;
- tower development; and
- site acquisition.
These services are centrally managed with proprietary documentation and
through a program and site management database which contains information on all
aspects of individual tower sites.
TOWER OPERATIONS. The tower operations business consists of the leasing of
antenna space on tower sites to wireless service providers, and the maintenance
and management of tower sites. These services are provided for our towers and
for carrier-owned towers. When SpectraSite provides site leasing services for
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carrier-owned towers, SpectraSite receives a percentage of the revenues of the
leases it obtains on behalf of the carrier. When SpectraSite performs site
management services for carrier-owned towers, the carrier pays SpectraSite a
fixed monthly fee for each managed site. SpectraSite generally receives monthly
lease payments from customers payable under written antenna site leases. The
majority of SpectraSite's outstanding customer leases, and the new leases
typically entered into by SpectraSite, have original terms of five years, with
four or five renewal periods of five years each, and usually provide for
periodic price increases. Monthly lease pricing varies with the number and type
of antennae installed on a communication site.
Management believes that the site leasing portion of SpectraSite's business
has significant potential for growth, and SpectraSite intends to expand its site
leasing business through increasing activity from its build-to-suit programs and
selective acquisitions, such as the recent acquisition of GlobalComm.
Once acquired or constructed, SpectraSite maintains and manages its
communication sites through a combination of in-house personnel and independent
contractors. In-house personnel are responsible for oversight and supervision of
all aspects of site maintenance and management and are particularly responsible
for monitoring security access and lighting, radio frequency emission and
interference issues, signage, structural engineering and tower capacity, tenant
relations and supervision of independent contractors. SpectraSite hires
independent contractors locally to perform routine maintenance functions, such
as landscaping, pest control, snow removal, site access and equipment
installation oversight. Independent contractors are engaged by SpectraSite on a
fixed fee or time and materials basis.
TOWER DEVELOPMENT. SpectraSite offers comprehensive build-to-suit program
management and also selectively builds towers in strategic geographic locations
for anchor tenant and co-location marketing opportunities. Under its
build-to-suit programs, SpectraSite generally constructs tower networks only
after having signed an antenna site lease agreement with an anchor tenant and
having made the determination that the initial or planned capital investment for
such tower network would not exceed a targeted multiple of tower cash flow after
a certain period of time. In selling its build-to-suit programs, SpectraSite's
representatives utilize their existing relationships in the wireless
communications industry to target wireless service providers interested in
outsourcing their network build-out. Proposals for build-to-suit towers are made
by SpectraSite's sales representatives in response to specific requests for
quotes or proposals from carriers. Although the terms vary from proposal to
proposal, SpectraSite typically offers a five-year lease agreement with four or
five additional five-year renewal periods. The term of the anchor tenant lease
is designed to match the term of the ground lease underlying the tower. While
the proposed monthly rent also varies, anchor tenants will generally pay lower
monthly rents than subsequent tenants.
Build-to-suit proposal requests typically require SpectraSite to offer a
fixed monthly lease rate for all towers included in the proposed network
build-out. To arrive at this average monthly rate, SpectraSite will analyze a
number of factors including projected construction cost, projected average
monthly ground lease rate, zoning and permitting issues and co-location
opportunities.
If a wireless provider accepts the terms of the proposal submitted by
SpectraSite, the provider will award SpectraSite a mandate:
- to pursue specific sites;
- to identify appropriate sites within specific search rings; or
- to build a tower network within a general area.
These mandates are in the form of non-binding agreements and either party may
terminate the mandate at any time.
Based on the status of the sites SpectraSite has been given a mandate to
pursue, SpectraSite will provide the site development activities required to:
- secure and complete a ground lease;
- obtain zoning approval and other required permits;
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<PAGE> 51
- design the network; and
- construct all towers within the network.
Prior to starting construction on each site, SpectraSite will enter into an
antenna site lease agreement with a provider. Certain of the build-to-suit
agreements contain penalty provisions in the event the towers are not completed
within specified time periods.
SpectraSite invests resources in radio frequency engineering and site
acquisition of potential tower sites we believe have higher than average
co-location opportunities. SpectraSite does not commence tower construction
until an anchor tenant signs a lease.
SpectraSite also selectively pursues acquisitions of revenue-producing
communication sites. SpectraSite's goal is to acquire towers that have an
initial or planned capital investment not exceeding a targeted multiple of tower
cash flow after a certain period of time. Tower cash flow is determined by
subtracting from gross tenant revenues the direct expenses associated with
operating the communication site, such as ground lease payments, real estate
taxes, utilities, insurance and maintenance.
SpectraSite has had discussions with a number of wireless communication
providers regarding possible strategic partnerships and other investment
arrangements other than the Nextel tower acquisition. SpectraSite has no present
agreement regarding the terms of any such transaction. If and when attractive
opportunities become available, SpectraSite contemplates pursuing such
opportunities. Nonetheless, there can be no assurance that any such future
strategic business arrangement will be entered into or the timing thereof.
Specifically, any decision by SpectraSite as to whether or not to pursue any
such strategic partnership or similar business arrangement will be based upon,
among other things, the relative attractiveness of available alternative
business and investment opportunities, the regulatory environment for wireless
communication properties, future developments relating to SpectraSite, general
economic conditions and other future developments.
SITE ACQUISITION. SpectraSite offers a full range of site acquisition
services. Site acquisition typically occurs in four phases:
- network pre-design;
- communication site selection;
- communication site acquisition; and
- local zoning and permitting.
SpectraSite offers each phase of its site acquisition services to its customers.
During the initial phase, network pre-design, SpectraSite performs
pre-design analysis by investigating those areas of the Basic Trading Area that
are designated as a priority by the customer. SpectraSite will then identify, to
the extent possible, all sites which meet the customer's radio frequency
requirements. Geographic Information Systems specialists create maps of the
sites, analyzing for a number of factors, including which areas may have the
most favorable zoning regulations and availability of co-location opportunities.
A preliminary zoning analysis is typically conducted, and SpectraSite will
determine those areas of the Basic Trading Area where zoning approval is likely,
along with a possible time frame for approval. These initial services are
intended to eliminate costly redesigns once a project is commenced, which can
result in significant savings of both time and money.
In the second phase, site selection, SpectraSite determines which sites:
- most closely meet the radio frequency engineering requirements of the
customer;
- can be leased or purchased;
- have the potential to be zoned for site construction or co-location based
on the then current zoning requirements; and
- are suitable for the construction of a site.
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Geographic Information Systems specialists select the most suitable sites
based on demographics, traffic patterns and signal characteristics.
Typically, SpectraSite will identify two or three potential sites for each
location in the radio frequency engineering plan, with the intent of co-locating
on an existing site or constructing a new site on the location most advantageous
to the customer. FAA approval, when necessary, is also typically sought at this
time.
In the third phase, site acquisition, SpectraSite secures the right from
the property owner to construct a tower or co-locate on the site. Depending on
the type of interest in the property that SpectraSite
believes will best suit the needs of the customer, SpectraSite will negotiate
and enter into on behalf of the customer:
- a contract of sale under which the customer acquires fee title to the
property;
- a long-term ground or rooftop lease under which the customer acquires a
leasehold interest in the property, typically a five-year lease with four
or five renewal periods of five years each;
- an easement agreement under which the customer acquires an easement over
the property; or
- an option to purchase or lease the property under which the customer has
a future right to acquire fee title to the property or acquire a
leasehold interest.
It is during this phase of the site acquisition services that SpectraSite
generally obtains a title report on the site, conducts a survey of the site,
performs soil analysis of the site and obtains an environmental survey of the
site.
The final phase, local zoning and permitting, includes preparing all
appropriate zoning applications and providing representation at any zoning
hearings that may be conducted. SpectraSite also obtains all necessary
entitlement land use permits necessary to commence construction on the site or
install equipment on the site.
Once SpectraSite is hired on a site acquisition project, a site acquisition
team is dispatched to the project site. A temporary field office is established
for the duration of the project. The site acquisition team is typically composed
of permanent in-house employees and supplemented with local hires employed only
for that particular project. A team leader is assigned to each phase of the site
acquisition project and reports to a project manager who oversees all team
leaders. Upon the completion of a site acquisition project, the field office
typically is closed and all permanent in-house employees are either relocated to
another project or directed to return to headquarters or one of the other
division offices.
SpectraSite generally sets prices for each site acquisition service
separately. Customers are billed for these services on a fixed price or time and
materials basis and SpectraSite may negotiate fees on individual sites or for
groups of sites.
CUSTOMERS
SpectraSite has performed site acquisition, tower construction and site
leasing services for several of the largest wireless service providers. The
majority of SpectraSite's contracts have historically been for personal
communications services customers. SpectraSite also serves enhanced specialized
mobile radio, specialized mobile radio and cellular wireless providers. In both
its site acquisition and site leasing businesses, SpectraSite works with
national, local and regional operators. For the year ended December 31, 1997,
Powertel, Sprint PCS, GTE Mobility, Intercel and Horizon accounted for 38.9%,
18.8%, 14.7%, 13.0% and 11.2%, respectively, of SpectraSite's revenue. For the
year ended December 31, 1998, Powertel and Tritel accounted for 46.6% and 24.3%,
respectively, of SpectraSite's revenues. No other customer accounted for more
than 10% of SpectraSite's revenues during the year ended December 31, 1998.
SALES AND MARKETING
SpectraSite's sales and marketing goals are:
- to further cultivate existing customers in order to obtain mandates for
build-to-suit programs and to maximize sales of site acquisition
services;
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<PAGE> 53
- to position SpectraSite to become a market leader in the site leasing
business;
- to use existing relationships and develop new relationships with wireless
service providers to lease antennae space on SpectraSite-owned or
-managed communication sites; and
- to form affiliations with select communications system vendors who
utilize end-to-end services, including those provided by SpectraSite,
which will enable SpectraSite to market its services and products through
additional channels of distribution.
Historically, SpectraSite has capitalized on the strength of its
experience, performance and relationships with wireless service providers to
obtain build-to-suit mandates, and expects to continue to enhance and leverage
these attributes to sell site acquisition services, build-to-suit programs and
antennae space on SpectraSite-owned or -managed communication sites.
Maintaining and cultivating relationships with wireless service providers
is a main focus of senior management. SpectraSite's strategy is to delegate
sales efforts to those of its employees who have the best relationships with the
wireless service providers. The representatives are assigned specific accounts
based on historical experience with a provider and the quality of the
relationship between the SpectraSite representative and such provider. Most
wireless service providers have national corporate headquarters with regional
offices. SpectraSite believes that most decisions for site acquisition and site
leasing services are made by providers at the regional level with input from
their corporate headquarters. SpectraSite's sales representatives work with
provider representatives at the local level and at the national level when
appropriate. SpectraSite's sales staff compensation is heavily weighted to
incentive-based goals and measurements. In addition to its marketing and sales
staff, SpectraSite relies upon its executive and operations personnel on the
national and field office levels to identify sales opportunities within existing
customer accounts, as well as acquisition opportunities.
COMPETITION
SpectraSite's principal competitors include American Tower Corporation,
Crown Castle International Corp., Pinnacle Tower, SBA Communications
Corporation, Unisite, Inc. and WesTower Corporation. See "Risk Factors -- We
compete with companies who have greater financial resources."
Towers are not the only kind of platform for radio transmitters. The FCC
has authorized numerous entities and is considering applications from many
others to provide fixed and mobile satellite services using various frequency
bands in a manner that may compete with terrestrial service providers. Iridium,
for example, has commenced space-borne provision of cellular telephone service,
and Teledesic plans to provide high-speed data services through low-earth-orbit
satellites. In 1997, the FCC allocated one gigahertz of spectrum in the 47 GHz
band for any use consistent with the spectrum allocation table. The FCC has
decided to auction this spectrum in 200 MHz blocks for the provision of
communications services. It is as yet unclear which of these new technologies
will be commercially feasible, and to what extent they will offer significant
competitive alternatives to terrestrial structures.
EMPLOYEES
As of December 31, 1998, SpectraSite had 104 employees, none of whom are
represented by a collective bargaining agreement. SpectraSite considers its
employee relations to be good. Due to the nature of the site acquisition
business of SpectraSite, it may experience increases and decreases in employees
as site acquisition contracts are completed.
PROPERTIES
SpectraSite is headquartered in Cary, North Carolina, where it currently
leases approximately 5,800 square feet of space. We are also establishing
full-service regional offices in the New York, Atlanta, Chicago and San
Francisco areas. In addition, we currently lease offices in Little Rock,
Birmingham, Cincinnati and Memphis. SpectraSite opens and closes project offices
from time to time in connection with its site acquisition business, which
offices are generally leased for periods not exceeding 18 months.
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LEGAL PROCEEDINGS
From time to time, SpectraSite is involved in various legal proceedings
relating to claims arising in the ordinary course of business. SpectraSite is
not a party to any such legal proceeding, the adverse outcome of which,
individually or in the aggregate, is expected to have a material adverse effect
on its business, financial condition or results of operations.
INTERNATIONAL
SpectraSite's primary focus is on its domestic operations. From time to
time, however, SpectraSite may evaluate international opportunities and take
advantage of those that it feels may be profitable for SpectraSite. Currently,
SpectraSite is not considering any significant international projects.
REGULATORY AND ENVIRONMENTAL MATTERS
FEDERAL REGULATIONS. Both the FCC and the FAA regulate towers used for
wireless communications transmitters and receivers. Such regulations control the
siting, marking and lighting of towers and may, depending on the characteristics
of particular towers, require registration of tower facilities. Wireless
communications antennae operating on towers are separately regulated and
independently licensed by the FCC based upon the particular frequency being used
and the service being provided. In addition to these regulations, SpectraSite
must comply with certain environmental laws and regulations. See "Risk
Factors -- Environmental Matters."
Pursuant to the requirements of the Communications Act of 1934, as amended,
the FCC, in conjunction with the FAA, has developed standards to consider
proposals for new or modified antennae. These standards mandate that the FCC and
the FAA consider the height of the proposed antenna structure, the relationship
of the structure to existing natural or man-made obstructions and the proximity
of the structure to runways and airports. Proposals to construct or modify
existing structures above certain heights or within certain proximity to
airports are reviewed by the FAA to ensure they will not present a hazard to
aviation. The FAA may condition its issuance of no-hazard determinations upon
compliance with specified lighting and marking requirements. The FCC will not
license the operation of wireless telecommunications antennae on towers unless
the tower has been registered with the FCC or a determination has been made that
such registration is not necessary. The FCC will not register a tower unless it
has received all necessary clearances from the FAA. The FCC also enforces
special lighting and painting requirements. Owners of towers on which wireless
communications antennae are located have an obligation to maintain painting and
lighting to conform to FCC standards. Tower owners may also bear the
responsibility of notifying the FAA of any tower lighting failures. SpectraSite
generally indemnifies its customers against any failure to comply with
applicable regulatory standards. Failure to comply with the applicable
requirements may lead to civil penalties and tort liability.
In 1995, the FCC adopted regulations making the owners of towers, rather
than radio licensees, primarily responsible for compliance with antenna
structure painting and lighting requirements. These rule changes are based on
statutory amendments adopted by Congress in 1992 extending regulatory
jurisdiction to tower owners. Radio licensees are now secondarily responsible
for tower maintenance if the tower owners are unwilling or unable to perform
those duties. Currently, these requirements apply to antenna structures that are
more than 200 feet in height, or that may interfere with the approach or
departure space of a nearby airport runway.
The regulatory requirements adopted in 1995 required tower owners to
register existing structures by state, in accordance with filing windows, over a
two-year period between July 1, 1996 and June 30, 1998. Historically, tower
locations were determined using area maps. The FCC has recognized that, with the
proliferation of inexpensive, satellite-based locating devices, such as Global
Positioning System receivers, structures can now be easily located with a higher
degree of accuracy. Accordingly, the FCC has told owners who determined that
tower registration information conflicted with previously issued licenses for
antennae on their towers to register their structures using the new data and to
seek new FAA determinations of no hazard as necessary under the FAA's rules. The
FCC also has instructed licensees or permittees who discovered that the
coordinates on their authorizations differed from those determined by
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more accurate means to submit corrective construction permit applications. In
February 1999, the FCC's Wireless Telecommunications Bureau announced that,
beginning on May 1, 1999, applications for FCC authorizations involving wireless
antennae on existing towers will be dismissed if a tower registration number is
not listed on the FCC application. Beginning on July 1, 1999, wireless
applicants proposing to mount their antennae on new structures will have their
applications dismissed for failure to provide a tower registration number. This
new policy means that for towers to be of use to FCC applicants, it will be
necessary for tower owners to notify the FAA and obtain FCC tower registration
well in advance of the date tenants will be filing FCC applications. As part of
the new policy, the FCC also said that, effective May 1, 1999, it will return
and not process any tower registration applications with data that do not agree
with information listed on previously issued FAA no-hazard determinations.
In December 1998, the FCC announced that a recent audit of existing antenna
structures revealed that over one quarter of the audited structures had not been
registered as required by the FCC's rules. In light of this finding and several
reported near misses of towers by aircraft, the FCC in January 1999 announced a
"no-tolerance policy," requiring all owners of existing unregistered structures
to register them immediately or face monetary forfeitures or civil fines.
The 1996 Telecom Act amended the Communications Act of 1934 by limiting
state and local zoning authorities' jurisdiction over the construction,
modification and placement of towers. The new law preserves local zoning
authority but prohibits any action that would discriminate between different
providers of wireless services or ban altogether the construction, modification
or placement of radio communications towers. The 1996 Telecom Act also requires
the federal government to help licensees for wireless communications services
gain access to preferred sites for their facilities. This may require that
federal agencies and departments work directly with licensees to make federal
property available for tower facilities.
Owners and operators of communications towers may be subject to, and,
therefore, must comply with environmental laws. The FCC's decision to register a
proposed tower may be subject to environmental review pursuant to the National
Environmental Policy Act of 1969, which requires federal agencies to evaluate
the environmental impacts of their decisions under certain circumstances. The
FCC has issued regulations implementing the National Environmental Policy Act.
Such regulations place responsibility on each applicant to investigate any
potential environmental effects of operations and to disclose any significant
effects on the environment in an environmental assessment prior to constructing
a tower. In the event the FCC determines the proposed tower would have a
significant environmental impact based on the standards the FCC has developed,
the FCC would be required to prepare an environmental impact statement. This
process could significantly delay the registration of a particular tower.
STATE AND LOCAL REGULATIONS. Most states regulate certain aspects of real
estate acquisition and leasing activities. Where required, SpectraSite conducts
the site acquisition portions of its site acquisition services business through
licensed real estate brokers or agents, who may be employees of SpectraSite or
hired as independent contractors. Local regulations include city and other local
ordinances, zoning restrictions and restrictive covenants imposed by community
developers. These regulations vary greatly, but typically require tower owners
to obtain approval from local officials or community standards organizations
prior to tower construction. Local zoning authorities generally have been
hostile to construction of new transmission towers in their communities because
of the height and visibility of the towers. Companies owning or seeking to build
towers have encountered an array of obstacles arising from state and local
regulation of tower site and construction, including environmental assessments,
fall radius assessments, marketing/lighting requirements, and concerns with
interference to other electronic devices. The delays resulting from the
administration of such restrictions can last for several months, and when
appeals are involved, can take several years.
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<PAGE> 56
MANAGEMENT
EXECUTIVE OFFICERS, DIRECTORS AND OTHER KEY EMPLOYEES
The executive officers, directors and key employees of SpectraSite are as
follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Stephen H. Clark................. 54 President and Chief Executive Officer and a
Director
Joe L. Finley, III............... 50 Executive Vice President
David P. Tomick.................. 47 Executive Vice President, Chief Financial
Officer and Secretary
Richard J. Byrne................. 41 Executive Vice President -- Business
Development
Terry L. Armant.................. 50 Senior Vice President -- Operations
Frank L. Marco................... 39 Vice President -- Midwestern Region
Thomas K. Hallett................ 34 Vice President -- Northeastern Region
John F. Ricci.................... 31 Vice President -- Western Region
Michael Garrett.................. 35 Vice President -- Co-location Management
Glen Spivak...................... 37 Vice President -- Strategy
Cathy M. Antee................... 40 Controller and Assistant Secretary
Lawrence B. Sorrel............... 40 Chairman of the Board
Timothy M. Donahue............... 50 Director
Andrew R. Heyer.................. 41 Director
James R. Matthews................ 31 Director
Thomas E. McInerney.............. 57 Director
Michael J. Price................. 41 Director
Rudolph E. Rupert................ 33 Director
Steven M. Shindler............... 36 Director
Michael R. Stone................. 36 Director
</TABLE>
STEPHEN H. CLARK is President and Chief Executive Officer of SpectraSite
and a director of Holdings. He has been a director of SpectraSite since its
formation in May 1997. Mr. Clark has 22 years of general management experience
in high growth, start-up companies in the communications, technology and
manufacturing sectors. In 1994, he co-founded PCX Corporation, a manufacturer of
electrical distribution systems. Prior to starting PCX, Mr. Clark co-founded and
served as Chairman and President of Margaux, a supplier of building automation
systems. Prior to starting Margaux, he worked at several technology based,
start-up companies. Mr. Clark has a BA in physics and an MBA from the University
of Colorado.
JOE L. "BUD" FINLEY, III is an Executive Vice President. Mr. Finley has 26
years experience in commercial real estate and mortgage finance. He has been a
director of SpectraSite since its formation in May 1997. He founded the
predecessor to Telesite in 1992 and has successfully managed the rapid growth of
that business during the past 6 years. Prior to founding Telesite, Mr. Finley
was a co-founder of CIERRA, Inc., an environmental consulting firm. Mr. Finley
is a graduate of the University of Arkansas.
DAVID P. TOMICK is Chief Financial Officer and Secretary of SpectraSite.
Mr. Tomick has extensive experience raising capital in both private and public
markets for high growth companies in the telecommunications industry. From 1994
to 1997, Mr. Tomick was Chief Financial Officer of Masada Security, Inc., a
company engaged in the security monitoring business. From 1988 to 1994, he was
Vice President -- Finance of Falcon Cable TV, a multiple system operator of
cable television systems, where he was responsible for debt management, mergers
and acquisitions, equity origination and investor relations. Prior to 1988, he
managed a team of corporate finance professionals focusing on the communications
industry for The First National Bank of Chicago. Mr. Tomick holds a Master of
Management degree from the Kellogg Graduate School of Management at Northwestern
University.
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<PAGE> 57
RICHARD J. BYRNE is Executive Vice President -- Business Development. Prior
to joining SpectraSite in April 1999, Mr. Byrne served as the Director of
Business Development for Nextel. He has had primary responsibility for the tower
sale/lease-back and build-to-suit commitment. In addition, Mr. Byrne has been
responsible for all carrier-to-carrier co-location agreements. Before joining
Nextel in 1997, Mr. Byrne held positions of increasing responsibility in the
System Development Group of AT&T Wireless Services. Prior to entering the
wireless communications industry, Mr. Bryne spent 15 years in the real-estate
industry. His work centered on property management, ownership and brokerage of
investment properties.
TERRY L. ARMANT is Vice President -- Operations of SpectraSite. Prior to
joining SpectraSite in August 1998, Mr. Armant was Director -- System
Implementation at AT&T Wireless Services. In this position, he was responsible
for site acquisition, construction, equipment installation and site management
for the Northeast region. Mr. Armant oversaw eight departments and a staff of
over 115.
FRANK L. MARCO is Vice President -- Towers of SpectraSite. From 1993 to
1997, Mr. Marco was a Project Director and a Regional Director for SBA
Communications Corporation. In 1997, he co-founded Princeton Towers, Inc., a
wireless communication site development company. Before joining SBA, Mr. Marco
was a customer service manager for McCaw Cellular Communications, Inc.
THOMAS K. HALLETT is Vice President -- Northeastern Region. Mr. Hallett
joined SpectraSite in 1998 as Director of Strategic Sites. Prior to joining
SpectraSite, Mr. Hallett owned and operated Thinc., Telecom, a site acquisition
and construction management company, from 1997 to 1998. Prior to that time, Mr.
Hallett was employed by multiple industry consultants and directed the
development of cellular, enhanced specialized mobile radio and personal
communications services markets for carriers such as Nextel, Comcast
Communications, Sprint PCS, AT&T and BellSouth Mobility. Prior to joining the
industry, Mr. Hallett served 12 years in the United States Army. Mr. Hallett is
a graduate of the United States Military Academy.
JOHN F. RICCI is Vice President -- Marketing of SpectraSite. Prior to
joining SpectraSite in June 1998, Mr. Ricci was Director, Program management and
Due Diligence for SBA Communications Corporation, in which capacity he analyzed
build-to-suit, speculative construction and merger opportunities nationwide. Mr.
Ricci was instrumental in developing marketing and budget materials for SBA's
build-to-suit tower program.
MICHAEL GARRETT is Vice President -- Co-location Marketing of SpectraSite.
Prior to joining SpectraSite in September 1998, Mr. Garrett was president of
GlobalComm, which he founded in 1995. Previously, Mr. Garrett worked in site
acquisition management for Whalen & Company. Mr. Garrett is a graduate of the
Columbia University Graduate School of Business.
GLEN SPIVAK is Vice President -- Strategy. Prior to joining SpectraSite in
April 1999, Mr. Spivak served as Director of Business Development Operations at
Nextel, where he focused on the strategic and operational management of the sale
of Nextel's tower assets. Before joining Nextel in 1998, Mr. Spivak worked at
several management consulting firms and technology based companies, including
Pittiglio Rabin Todd & McGrath, Andersen Consulting and IBM. Mr. Spivak is a
graduate of Harvard Business School and the Georgia Institute of Technology.
CATHY M. ANTEE is Controller and Assistant Secretary of SpectraSite. From
1995 to 1997, Ms. Antee was Controller of Masada Security, Inc. Prior to 1995,
Ms. Antee was employed by Parisian, Inc., a Birmingham-based retailer, most
recently as Treasury Director and Director of Investor Relations. She is a
certified public accountant.
LAWRENCE B. SORREL has been Chairman of the Board since April 1999. Mr.
Sorrel joined WCAS in 1998 and is a managing member or general partner of the
respective sole general partners of WCAS VIII and other associated investment
partnerships. Prior to joining WCAS, Mr. Sorrel spent 12 years at Morgan
Stanley, where he was a Managing Director and senior executive in Morgan
Stanley's private equity group, Morgan Stanley Capital Partners. Mr. Sorrel is a
director of Select Medical Corp., Emmis Communications, MedCath Inc., Centennial
Healthcare Corp. and Canterbury Healthcare Ltd.
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<PAGE> 58
TIMOTHY M. DONAHUE has been a director of Holdings since April 1999. Mr.
Donahue has served as President of Nextel since joining it on February 1, 1996
and as a director of Nextel since May 1996. On February 29, 1996, Mr. Donahue
was elected to the additional position of Chief Operating Officer of Nextel.
From 1986 to January 1996, Mr. Donahue held various senior management positions
with AT&T Wireless Services, Inc., including Regional President for the
Northeast. Mr. Donahue serves as a director of Nextel International.
ANDREW R. HEYER has been a director of Holdings since April 1999. Mr. Heyer
is a Managing Director at CIBC Oppenheimer Corp., where he serves as co-head of
The High Yield Group. Prior to joining CIBC Oppenheimer, Mr. Heyer was founder
and Managing Director of the Argosy Group L.P., which was acquired by CIBC
Oppenheimer in 1995. Mr. Heyer is also Chairman of the Board of Directors of the
Hain Food Group, and serves on the Board of Directors of Niagara Corporation,
Hayes Lemmerz International, Inc., Lancer Industries and Fairfield Manufacturing
Company.
JAMES R. MATTHEWS has been a director of Holdings since August 1998. Mr.
Matthews has been employed by J.H. Whitney & Co. since 1994 and has served as a
Principal since 1998. Previously, he was with Gleacher & Co. Inc. and Salomon
Brothers Inc.
THOMAS E. MCINERNEY has been a director of Holdings since April 1999. Mr.
McInerney joined WCAS in 1986 and is a managing member or general partner of the
respective sole general partners of WCAS VIII and other associated investment
partnerships. Formerly, he co-founded and served as President and CEO of Dama
Telecommunications Corp., a telecommunications services company. Earlier, he was
Group Vice President -- Financial Services at ADP and Senior Vice
President -- Operations at the American Stock Exchange. Mr. McInerney is a
director of, among others, Centennial Cellular Corp., Control Data Systems,
Bridge Information Systems, The BISYS Group, The Cerplex Group, Attachmate
Corp., MedE America Corporation and Global Knowledge Network.
MICHAEL J. PRICE has been a director of Holdings since April 1999. Mr.
Price is co-Chief Executive Officer of FirstMark Communications International
LLC, a broadband wireless telecommunications company. Prior to that, he worked
at Lazard Freres & Co. LLC, starting in 1987, serving first as a Vice President
and then as a Managing Director, where he led their global technology and
telecommunications practice.
RUDOLPH E. RUPERT has been a director of Holdings since April 1999. Mr.
Rupert joined WCAS in 1997 and is a managing member or general partner of the
respective sole general partners of WCAS VIII and other associated investment
partnerships. Previously he was at General Atlantic Partners and Lazard Freres.
Mr. Rupert is a director of Centennial Cellular and Control Data Systems, Inc.
and serves on the executive board of Amdocs Limited.
STEVEN M. SHINDLER has been a director of Holdings since April 1999. Mr.
Shindler joined Nextel in May 1996 and serves as Senior Vice President and Chief
Financial Officer. Between 1987 and 1996, Mr. Shindler was an officer with
Toronto Dominion Bank, where most recently he was a Managing Director in its
Communications Finance Group. Mr. Shindler serves as a director of Nextel
International.
MICHAEL R. STONE has been a director of Holdings since its formation in May
1997. Mr. Stone has been employed by J.H. Whitney & Co. since 1989 and has
served as a General Partner since 1992. Previously, he was with Bain & Company.
BOARD OF DIRECTORS
Each member of the Board of Directors holds office until the next annual
meeting of stockholders and until his or her successor has been duly elected and
qualified. For information regarding certain voting arrangements with respect to
the Board of Directors, see "Certain Transactions -- Stockholders'
Agreement -- Board of Directors."
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<PAGE> 59
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation paid by
or incurred on behalf of SpectraSite to its Chief Executive Officer and the
other executive officers whose salary and bonus exceeded $100,000 for the year
ended December 31, 1998. Amounts shown for 1997 include compensation paid by
Holdings to the named executive officers from April 25, 1997, the date of
Holdings' inception, through December 31, 1997. The amounts reported as "All
Other Compensation" for all years represent SpectraSite contributions under its
401(k) plan.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
------------
NUMBER OF
ANNUAL COMPENSATION SECURITIES
--------------------------- UNDERLYING OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) SARS(#) COMPENSATION($)
--------------------------- ---- --------- -------- ------------------- ---------------
<S> <C> <C> <C> <C> <C>
Stephen H. Clark...................... 1998 168,000 68,000 300,000 2,400
Chief Executive Officer 1997 107,046 -- 425,000 --
David P. Tomick....................... 1998 140,000 56,000 50,000 2,178
Chief Financial Officer 1997 64,029 -- 225,000 --
Terry L. Armant(a).................... 1998 55,192 68,150 125,000 --
Senior Vice President
Joe L. Finley, III.................... 1998 350,000 -- -- 2,400
Executive Vice President 1997 248,548 -- -- 2,375
</TABLE>
- ---------------
(a) Mr. Armant joined SpectraSite in August 1998.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
All options become exercisable immediately upon a change in control;
provided, however, that no options become exercisable upon a change in control
as to which a performance milestone has not been achieved as of the date of the
change in control. Messrs. Clark, Tomick and Armant have agreed that the Nextel
tower acquisition and the related financing transactions did not constitute a
change of control under their options. The shares of common stock issuable upon
exercise of the options are subject to certain rights of first refusal.
The present value of the options granted was estimated on the date of grant
using the Black-Scholes option pricing model with the following assumptions:
dividend yield of 0.0%, volatility of 0.7, risk free interest rate of 6.0% and
expected option lives of seven years.
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO
OPTIONS/SARS EMPLOYEES IN EXERCISE PRICE EXPIRATION GRANT DATE
NAME GRANTED 1998 PER SHARE DATE PRESENT VALUE
---- ------------ ------------ -------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Stephen H. Clark................. 300,000 36% $4.00 3/23/05 $178,500
David P. Tomick.................. 50,000 6 4.00 3/23/05 31,500
Terry L. Armant.................. 62,500 7 4.00 8/10/02 37,500
62,500 7 4.00 8/10/05 37,500
</TABLE>
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<PAGE> 60
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/SARS
OPTIONS/SARS AT DECEMBER 31, 1998($)
AT DECEMBER 31, 1998 UNEXERCISABLE
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Stephen H. Clark............................... 106,250 618,750 $117,938 $353,813
David P. Tomick................................ 56,250 218,750 62,438 187,313
Terry L. Armant................................ 0 125,000 0 0
</TABLE>
EMPLOYMENT AGREEMENTS
SpectraSite has entered into employment agreements with each of Messrs.
Clark, Tomick and Byrne effective April 20, 1999. The initial term of the
employment agreements is five years. The annual salaries for Messrs. Clark,
Tomick and Byrne are $225,000, $200,000 and $175,000, respectively, and they are
eligible to receive annual bonuses determined at the discretion of the board of
directors. Mr. Byrne also will receive a $40,000 bonus in connection with his
relocation to Cary, North Carolina. In the event their employment is terminated
as a result of their death, disability, or termination without "cause" Messrs.
Clark, Tomick and Byrne will be entitled to receive continued salary, bonus and
health benefits for a period of 24 months.
Under the employment agreements, Messrs. Clark, Tomick and Byrne will be
granted incentive stock options under the 1997 Stock Option Plan to purchase
775,000, 225,000 and 200,000 shares of common stock, respectively. The exercise
price for the options will be $5.00. Twenty percent of the stock options will
become exercisable each year over the five year employment period. If
SpectraSite terminates the employment of Mr. Byrne without cause, or if he dies
or becomes disabled, then his stock options shall be fully exercisable. If
SpectraSite terminates the employment of Mr. Clark or Mr. Tomick without cause,
or if either of them dies or becomes disabled, then the stock options that they
hold prior to entering into the employment agreement (but not those granted
under the employment agreement) shall be fully exercisable.
Messrs. Clark, Tomick and Byrne have agreed that for a period of 24 months
following the termination of their employment with SpectraSite they will not:
- engage in competition, own any interest in, or perform any services for
any business which engages in competition with SpectraSite;
- solicit management employees of SpectraSite or otherwise interfere with
the employment relationship between SpectraSite and its employees; or
- engage or work with any supplier, contractor or entity with a business
relationship with SpectraSite, if such action would have a material
adverse effect on SpectraSite.
In addition, in connection with his employment with SpectraSite, Mr. Byrne
purchased 50,000 shares of common stock for a nominal amount. Mr. Byrne's right
to retain these shares of common stock vest in equal 25% installments on each of
the first four anniversaries of his employment agreement. Vesting will
accelerate upon Mr. Byrne's termination without cause or if he dies or becomes
disabled. Mr. Byrne will also receive a bonus to pay income taxes incurred in
connection with this purchase of common stock.
On May 12, 1997, SpectraSite entered an employment agreement with Joe L.
Finley, III. The initial term of the employment agreement was May 12, 1997 to
May 31, 1999. SpectraSite and Mr. Finley terminated the employment agreement,
effective December 31, 1998. Although the employment agreement
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has been terminated, Mr. Finley remains employed by SpectraSite. In connection
with the termination of his employment agreement, Mr. Finley agreed that:
- he will not use, divulge or otherwise transfer or convey any confidential
or proprietary information obtained as a result of his employment,
- for three years after his employment terminates, engage in any business
related to certain of SpectraSite's activities in any state where
SpectraSite has done business at any time during the three years prior to
the termination of Mr. Finley's employment,
- for three years after his employment terminates he will not interfere
with the relationships between SpectraSite and any of its affiliates,
including employees and customers existing at any time during the two
years prior to Mr. Finley's departure, or suppliers existing at any time
during the three years prior to Mr. Finley's departure.
Effective January 1, 1999, SpectraSite and Finley & Company, Inc., an
Arkansas corporation, entered into a consulting agreement. This agreement
terminates on May 31, 1999 and includes a provision for automatic renewal on a
monthly basis, subject to termination upon 15 days prior notice. Under the
consulting agreement, Finley & Company agrees to provide not less than 50 hours
a month of general business and strategic consultation, and SpectraSite agrees
to provide office space and part-time secretarial support. Mr. Finley is
employed on an independent contractor basis with no authority to bind
SpectraSite or to incur obligations on its behalf, and receives $9,000 a month
as compensation. Pursuant to the consulting agreement, Finley & Company agrees
that it will not use, divulge or otherwise transfer or convey any confidential
or proprietary information obtained as a result of consultation activities
conducted for SpectraSite, and assigns all rights, title and interest to any
inventions, ideas, developments and designs created while providing services
under the consulting agreement. Further, Finley & Company agrees not to provide
or perform the same or substantially similar services for any competing business
which it provides to SpectraSite or to any SpectraSite customer as it provides
for such customers under the consulting agreement. Finley & Company also agrees
not to interfere with the relationship between SpectraSite and any of its
employees, or any of its customers or suppliers existing during the term of the
consulting agreement or at the time of its termination. Finley & Company may not
assign the consulting agreement or delegate its duties thereunder without prior
written consent from SpectraSite.
1997 STOCK OPTION PLAN
SpectraSite established the SpectraSite Holdings, Inc. Stock Option Plan
effective June 24, 1997. The 1997 option plan has a term of ten years and
provides for the issuance of incentive stock options and non-qualified stock
options to key employees, directors, advisors and consultants of SpectraSite, as
well as any subsidiary of SpectraSite. An aggregate of 4,100,000 shares of
common stock have been reserved for issuance under the 1997 option plan. The
number of shares available for grant as options may be adjusted in the event of
a stock split, stock dividend, combination of shares, spin-off, spin-out or
other similar change, exchange or reclassification of the common stock at the
discretion of the Board, and shares subject to an option which expires, is
terminated or canceled, or is repurchased by SpectraSite, shall be available for
future grants under the 1997 option plan.
The 1997 option plan may be administered by the Board or by a duly
appointed committee having powers specified by the Board. Once SpectraSite
becomes subject to the reporting requirements of the Exchange Act, this
committee shall consist solely of directors who are non-employee directors, for
purposes of Section 16 of the Exchange Act, and outside directors, for purposes
of Section 162(m) of the Internal Revenue Code. The specific terms of any option
awarded under the 1997 option plan will be reflected in a stock option agreement
executed by SpectraSite and the optionee.
The committee administering the 1997 option plan has the discretion to
determine which eligible individuals will receive options, the number of shares
to be covered by the options, the exercise date of the options, whether the
options should be incentive stock options or non-qualified stock options, and
the terms and conditions of the options. The exercise price of any incentive
stock option may not be less than the
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<PAGE> 62
fair market value of the stock on the date the option is granted, provided the
exercise price of any incentive stock option shall be not less than 110% of the
fair market value of a share of stock on the date the option is granted in the
event the optionee owns stock possessing more than 10% of the total combined
voting power of all classes of stock of SpectraSite. Payment of the option price
is to be made in cash, by check, in cash equivalent or by any other form
permitted by the committee, including by promissory note to SpectraSite. Only
employees are eligible to receive incentive stock options, and at the time an
incentive stock option is granted, the fair market value of the common stock for
which the incentive stock option will vest in any year may not exceed $100,000.
Options awarded under the 1997 option plan generally are not assignable or
transferable except by the laws of descent and distribution.
Generally, SpectraSite expects the committee to award options that vest and
become exercisable either according to a four year vesting schedule, whereby 25%
of the total grant of shares becomes vested every year for four consecutive
years, or upon the seventh anniversary of the grant date, subject to
acceleration based on the optionee's successful achievement of performance
milestones. In the event of a merger, consolidation, corporate reorganization,
or any transaction in which all or substantially all of the assets of
SpectraSite are sold, leased, transferred or otherwise disposed of, all
outstanding options shall immediately vest and become exercisable as of a date
prior to the transfer of control, as determined by the Board. Notwithstanding
the foregoing, no options will become exercisable upon a transfer of control as
to which a performance milestone has not been achieved as of the date of the
change in control.
Once vested, an option may remain exercisable until the earliest of:
- ten years from the date of grant, five years from the date of grant in
the event the optionee owns stock possessing more than 10% of the total
combined voting power of all classes of stock of SpectraSite;
- three months from the date on which the optionee terminates employment
with SpectraSite; or
- if the optionee's employment ceases by reason of his or her death or
disability, 12 months from the date on which the optionee's employment
terminated.
In no event shall an incentive stock option be exercisable after one month
following the date an optionee's employment with SpectraSite is terminated for
cause, as determined by the committee.
Generally, SpectraSite expects the committee to award options subject to a
right of first refusal. When an optionee proposes to sell, pledge or otherwise
transfer any shares acquired upon the exercise of an option, SpectraSite would
have the right to repurchase those transfer shares under a right of first
refusal, in accordance with the terms set forth in the individual option
agreements. If SpectraSite fails to exercise the right of first refusal, the
optionee may conclude the proposed transfer, but the subsequent transferee would
be required, as a condition of such transfer, to hold the shares subject to
SpectraSite's right of first refusal with respect to any subsequent transfer.
SpectraSite's right of first refusal would not apply to transfers of shares:
- in connection with a change in control;
- to one or more members of the optionee's immediate family;
- which constitute a pledge to SpectraSite as security for a loan by
SpectraSite to the optionee in connection with exercise of an option; or
- which have been approved by the Board.
In addition, SpectraSite's right of first refusal would terminate upon a change
in control, unless the successor assumes the 1997 option plan, or the common
stock is traded on a public market.
The 1997 option plan may be amended, suspended or terminated by the Board
in whole or in part at any time, provided that no such amendment, suspension or
termination of the 1997 option plan may
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<PAGE> 63
adversely affect the rights of or obligations to the optionees without such
optionees' consent. The Board must obtain stockholder approval for any change in
the 1997 option plan that would:
- extend the period during which options may be granted beyond June 24,
2007;
- materially increase the number of shares which may be issued under the
1997 option plan; or
- materially modify the requirements as to eligibility for participation
under the 1997 option plan.
The grant of an option under the 1997 option plan will not have any
immediate effect on the federal income tax liability of SpectraSite or the
optionee. If the Board grants an optionee a non-qualified stock option, then the
optionee will recognize ordinary income at the time he or she exercises the
non-qualified stock option equal to the difference between the fair market value
of the common stock and the exercise price paid by the optionee, and SpectraSite
will receive a deduction for the same amount.
If the Board grants an optionee an incentive stock option, then the
optionee generally will not recognize any taxable income at the time he or she
exercises the incentive stock option, other than potential liability for
alternative minimum tax, but will recognize income only at the time he or she
sells the common stock acquired by exercise of the incentive stock option. Upon
sale of the common stock acquired upon exercise of the incentive stock option,
the optionee will recognize income equal to the difference between the exercise
price paid by the optionee and the amount received upon sale, and such income
generally will be eligible for capital gain treatment. SpectraSite generally is
not entitled to an income tax deduction for the grant of an incentive stock
option or as a result of either the optionee's exercise of an incentive stock
option or the optionee's sale of the common stock acquired through exercise of
an incentive stock option. However, if the optionee sells the common stock
either within two years of the date of the grant to him or her of the incentive
stock option, or within one year of the date of the transfer to him or her of
the common stock following exercise of the incentive stock option, then the
option is treated for federal income tax purposes as if it were a non-qualified
stock option; the income recognized by the optionee will not be eligible for
capital gain treatment and SpectraSite will be entitled to a federal income tax
deduction equal to the amount of income recognized by the optionee.
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CERTAIN TRANSACTIONS
TELESITE AND METROSITE ACQUISITION
On May 12, 1997, in connection with its formation, SpectraSite purchased
the outstanding membership units of Telesite and Metrosite for an aggregate
purchase price of $7,233,125 which included 81,753 shares of common stock valued
at $71,125 in the aggregate. In addition, as part of the acquisition
consideration, 408,764 shares of common stock were issued into escrow and are to
be released upon the acquired business achieving certain operating goals. The
escrow arrangement provides that SpectraSite may repurchase the shares held in
escrow if the acquired business does not achieve the specified operating goals,
and in May 1998, SpectraSite exercised its option to repurchase 204,382 shares
of the common stock held in escrow for an aggregate repurchase price of $204.38.
Joe L. Finley, III, the Vice Chairman of Holdings' Board of Directors,
members of Mr. Finley's family and entities controlled by Mr. Finley received
all of the aggregate purchase price, which amount included a note payable to Mr.
Finley in the original principal amount of $2,312,000, and all of the common
stock issued in connection with the acquisitions. SpectraSite used $2,331,953 of
the proceeds from the sale of the outstanding notes to pay the outstanding
principal amount of and accrued interest on the note payable to Mr. Finley.
GLOBALCOMM ACQUISITION
As of September 23, 1998, SpectraSite acquired all of the shares of capital
stock of GlobalComm, Inc. for approximately $2 million in cash. In connection
with this acquisition, the founder and president of GlobalComm, Michael Garrett,
joined SpectraSite as Vice President -- Co-location Marketing, and Holdings
granted Mr. Garrett an option to purchase 100,000 shares of its common stock for
a nominal price per share. This option vests in equal installments over a
three-year period, with the first installment vesting on June 30, 1999.
REPURCHASE OF COMMON STOCK FROM FORMER EMPLOYEE
In an agreement dated September 15, 1998, a former employee agreed to
release SpectraSite from any potential claims and to sell 125,000 shares of
Holdings common stock to SpectraSite for an agreed upon price. In addition, the
agreement provided that shareholders of Holdings would have an option to
purchase the former employee's remaining 37,605 shares of Holdings common stock
for the same price per share, provided that SpectraSite advise the former
employee in writing of the exercise of all or any portion of such option by
November 15, 1998. On October 9, 1998, SpectraSite paid the former employee
$500,000 for his shares and the release under the agreement, and on February 5,
1999, David P. Tomick purchased the remaining 37,605 shares for an aggregate
purchase price of $150,240.
THE PREFERRED STOCK OFFERINGS
According to the terms of a stock purchase agreement, dated as of May 12,
1997, the Whitney Equity Partners, L.P. and Kitty Hawk Capital Limited
Partnership, III purchased an aggregate of 3,462,830 shares of Holdings' Series
A preferred stock for an aggregate purchase price of $10 million in a
transaction exempt from registration under the Securities Act.
According to the terms of the Series B stock purchase agreement, the Series
B investors agreed to purchase shares of Holdings' Series B preferred stock for
an aggregate purchase price of $28 million.
In addition, Holdings is obligated under the Series A agreement and the
Series B agreement to pay the Whitney funds a monitoring fee of $10,000 in the
aggregate per month until Holdings completes an initial public offering of its
common stock.
Pursuant to a stock purchase agreement, dated as of February 10, 1999, as
amended on April 20, 1999, Welsh, Carson, Anderson & Stowe VIII, L.P., WCAS
Information Partners, L.P., Kenneth Melkus, Patrick J. Welsh, Russell L. Carson,
Bruce K. Anderson, Andrew M. Paul, Thomas E. McInerney, Laura M. VanBuren,
Robert A. Minicucci, Anthony J. de Nicola, Paul B. Queally, Lawrence B. Sorrel,
D. Scott Mackesy, Priscilla A. Newman, Rudolph E. Rupert, Trust U/A Dated
11/26/84 FBO Eric
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Welsh, Trust U/A Dated 11/26/84 FBO Randall Welsh, Trust U/A Dated 11/26/84 FBO
Jennifer Welsh, J.H. Whitney III, L.P., Whitney Strategic Partners III, L.P.,
CIBC WG Argosy Merchant Fund 2, L.L.C., Co-Investment Merchant Fund 3, LLC, The
North Carolina Enterprise Fund, L.P., Waller-Sutton Media Partners, L.P., Kitty
Hawk Capital Limited Partnership, IV, Finley Family Limited Partnership, Eagle
Creek Capital, L.L.C., David P. Tomick, Jack W. Jackman, Alton D. Eckert,
William R. Gupton, The Price Family Limited Partnership and Benake L.P. agreed
to purchase 46,286,795 shares of Holdings' Series C convertible preferred stock
in connection with and partially to fund the Nextel tower acquisition. The
Series C investors paid an aggregate purchase price of $231,433,975 on April 20,
1999 for the shares of Holdings' Series C preferred stock in a transaction
exempt from registration under the Securities Act.
The Series C investors, including the holders of the Series A preferred
stock and the Series B preferred stock, and certain other stockholders of
Holdings are entitled to certain rights under the stockholders' agreement and
the registration rights agreement, described below.
STOCKHOLDERS' AGREEMENT
In connection with the closing of the Nextel tower acquisition, Holdings
and its stockholders entered into the Third Amended and Restated Stockholders'
Agreement, which superceded and replaced the existing stockholders' agreement
among Holdings and its stockholders. The following is a summary of the material
terms of the new stockholders' agreement.
Under the stockholders' agreement, as long as WCAS holds at least 30% of
Holdings' capital stock, it shall have the right to designate a majority of
Holdings' directors. The chief executive officer shall also be a director and
certain of the other stockholders shall designate the remaining directors. In
addition, subject to certain exceptions, certain stockholders will grant proxies
to WCAS so that WCAS will have the right to vote 51% of Holdings' outstanding
capital stock. The stockholders' agreement also provides:
(a) certain stockholders with preemptive rights;
(b) WCAS with the right to require that other stockholders participate
in a sale of Holdings stock;
(c) all other stockholders with the right to participate in sales of
Holdings stock by WCAS; and
(d) certain restrictions on transfers of Holdings stock.
Each of the rights described in clauses (a) through (d) is subject to
certain important qualifications and exceptions. In addition, SpectraSite shall
not:
- without the consent of Nextel, for a period of one year after the
closing, enter into any agreement for the sale or transfer of all or
substantially all of the assets of SpectraSite or for the merger of
Holdings that would result in the transfer of more than 50% of Holdings'
capital stock; or
- without the consent of Nextel, until the earliest of an initial public
offering, termination of the master site commitment agreement and the
third anniversary of the closing, (1) acquire assets or stock for
consideration in excess of $100.0 million, or enter into any
build-to-suit program for more than 250 towers, unless SpectraSite has
obtained financing commitments sufficient to permit it to accomplish such
acquisition or program without materially impairing SpectraSite's ability
to perform its obligations under the master site commitment agreement, or
(2) enter into certain transactions with any wireless communications
services provider having more than two million subscribers.
REGISTRATION RIGHTS AGREEMENT
In connection with the closing of the Nextel tower acquisition, Holdings,
Nextel, the Series A investors, the Series B investors, the Series C investors
and certain members of SpectraSite's management entered into a Second Amended
and Restated Registration Rights Agreement. The following is a summary of the
registration rights agreement.
The registration rights agreement provides that following Holdings' initial
public offering, or the third anniversary of the closing of the Nextel tower
acquisition if Holdings has not completed an initial public
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offering by that date, the holders of at least 25% of Holdings' common stock
shall have the right, exercisable on no more than three occasions, to cause
Holdings to register their shares of its common stock, so long as the aggregate
offering price for the securities to be registered will equal or exceed $50.0
million. In addition, any institutional stockholder or Nextel shall have the
right, at any time that Holdings is eligible to file a registration statement on
SEC Form S-3, to cause Holdings to effect a registration on Form S-3 of such
stockholder's common stock, so long as the aggregate offering price for
securities to be registered will equal or exceed $10.0 million and provided that
Holdings shall not be required to effect more than one such registration in any
six-month period. Finally, the registration rights agreement provides that if
Holdings proposes to register any of its common stock, then the parties to the
registration rights agreement shall have the right to cause Holdings to register
their shares of common stock as part of such registration, subject to certain
exceptions and limitations.
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OWNERSHIP OF CAPITAL STOCK
The table below sets forth, as of April 30, 1999, certain information with
respect to the beneficial ownership of Holdings' capital stock by:
- each person who is known by SpectraSite to be the beneficial owner of
more than 5% of any class or series of capital stock of Holdings;
- each of the directors and named executive officers individually; and
- all directors and executive officers as a group.
Each share of Series A preferred stock, each share of Series B preferred
stock and each share of Series C preferred stock is immediately convertible into
one share of common stock, subject to certain adjustments, and, therefore, the
holders of Series A preferred stock, Series B preferred stock and Series C
preferred stock are deemed to be the beneficial owners of the shares of common
stock into which their preferred stock can be converted. The amounts and
percentages of common stock beneficially owned are reported on the basis of
regulations of the SEC governing the determination of beneficial ownership of
securities. Under the rules of the SEC, a person is deemed to be a "beneficial
owner" of a security if that person has or shares "voting power," which includes
the power to vote or to direct the voting of such security, or "investment
power," which includes the power to dispose of or to direct the disposition of
such security. A person is also deemed to be a beneficial owner of any
securities of which that person has a right to acquire beneficial ownership
within 60 days. Under these rules, more than one person may be deemed to be a
beneficial owner of securities as to which such person has an economic interest.
<TABLE>
<CAPTION>
PERCENTAGE OF
TOTAL VOTING
NUMBER OF POWER OF
SERIES A SERIES B SERIES C SHARES OF STOCK COMMON STOCK ON
COMMON PREFERRED PREFERRED PREFERRED BENEFICIALLY A FULLY-DILUTED
NAME OF BENEFICIAL OWNER STOCK STOCK STOCK STOCK OWNED BASIS
------------------------ ------ --------- --------- --------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Stephen H. Clark (a)............ 1,356,250 -- -- -- 1,356,250 1.4%
David P. Tomick (b)............. 56,250 -- -- 12,395 68,465 *
Terry L. Armant (c)............. -- -- -- -- -- --
Joe L. Finley, III (d).......... 286,135 -- 50,000 60,000 396,135 *
Michael R. Stone (e)............ -- 3,203,118 5,161,219 4,000,000 12,364,337 16.0%
James R. Matthews (e)........... -- 3,203,118 5,161,219 4,000,000 12,364,337 16.0%
Lawrence B. Sorrel (f).......... -- -- -- 29,500,000 29,500,000 38.3%
Andrew R. Heyer (g)............. -- -- -- 10,000,000 10,000,000 13.1%
Thomas E. McInerney (f)......... -- -- -- 29,722,843 29,722,843 38.6%
Michael J. Price (m)............ -- -- -- 100,000 100,000 *
Rudolph E. Rupert (f)........... -- -- -- 29,475,000 29,475,000 38.3%
Timothy M. Donahue (i).......... -- -- -- 14,000,000 14,000,000 18.2%
Steven M. Shindler (i).......... -- -- -- 14,000,000 14,000,000 18.2%
Tower Parent Corp. (i).......... -- -- -- 14,000,000 14,000,000 18.2%
Welsh, Carson, Anderson & Stowe
VIII, L.P. (f)................ -- -- -- 29,300,000 29,300,000 38.0%
WCAS Information Partners, L.P.
(f)........................... -- -- -- 150,000 150,000 *
WCAS Capital Partners III, L.P.
(f)........................... 1,375,000 -- -- -- 1,375,000 1.8%
Whitney Equity Partners, L.P.
(e)........................... -- 3,203,118 1,720,406 -- 4,923,524 6.4%
J. H. Whitney Mezzanine Fund,
L.P. (e)...................... 312,500 -- -- -- 312,500 *
Canadian Imperial Bank of
Commerce ("CIBC") (g)......... -- -- -- 10,000,000 10,000,000 13.1%
Caravelle Investment Fund,
L.L.C. (h).................... 312,500 -- -- -- 312,500 *
Whitney Strategic Partners III,
L.P. (e)...................... -- -- 80,961 94,118 175,079 *
J. H. Whitney III, L.P. (e)..... -- -- 3,359,852 3,905,882 7,265,734 9.4%
Waller-Sutton Media Partners,
L.P. (j)...................... -- -- 1,228,862 400,000 1,628,862 2.1%
</TABLE>
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<PAGE> 68
<TABLE>
<CAPTION>
PERCENTAGE OF
TOTAL VOTING
NUMBER OF POWER OF
SERIES A SERIES B SERIES C SHARES OF STOCK COMMON STOCK ON
COMMON PREFERRED PREFERRED PREFERRED BENEFICIALLY A FULLY-DILUTED
NAME OF BENEFICIAL OWNER STOCK STOCK STOCK STOCK OWNED BASIS
------------------------ ------ --------- --------- --------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Kitty Hawk Capital Limited
Partnership, III (k).......... 32,761 259,712 61,443 -- 353,916 *
Kitty Hawk Capital Limited
Partnership, IV (k)........... -- -- 307,216 200,000 507,216 *
All directors and executive
officers as a group (17
persons) (l).................. 2,698,635 3,203,118 5,211,219 44,470,238 55,583,210 72.1%
</TABLE>
- ---------------
(a) Includes 106,250 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days. The business address for Mr.
Clark is 8000 Regency Parkway, Suite 570, Cary, North Carolina 27511.
(b) Includes 56,250 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days.
(c) None of Mr. Armant's outstanding stock options are exercisable within 60
days.
(d) Of the shares reported as beneficially owned by Mr. Finley, 81,753 shares
are held by Finley Family Limited Partnership and 204,382 are held in
escrow. Mr. Finley disclaims beneficial ownership of all such shares, and
the shares held in escrow are not considered issued and outstanding for
financial reporting purposes in accordance with generally accepted
accounting principles. The address for Mr. Finley and Finley Family Limited
Partnership is 11 Corporate Hill Drive, Little Rock, Arkansas 72205.
(e) Mr. Stone is a managing member of each of the general partners of each of
the Whitney funds, and Mr. Matthews is a principal of the Whitney funds.
Messrs. Stone and Matthews own no shares directly and disclaim beneficial
ownership of the shares held by such entities. The business address for Mr.
Stone, Mr. Matthews and the Whitney funds is 177 Broad Street, Stamford,
Connecticut 06901.
(f) Messrs. Sorrel, McInerney and Rupert are each general partners of Welsh,
Carson, Anderson & Stowe and will acquire directly 50,000, 272,843 and
25,000 shares of Series C preferred stock, respectively. Messrs. Sorrel,
McInerney and Rupert each disclaim beneficial ownership of the shares held
by the WCAS funds. The business address for Messrs. Sorrel, McInerney and
Rupert and the WCAS funds is 320 Park Avenue, Suite 2500, New York, New York
10022.
(g) Andrew R. Heyer, a director of Holdings and an employee of an affiliate of
CIBC, along with Jay R. Bloom and Dean C. Kehler, who are also employees of
an affiliate of CIBC, have shared power to vote and dispose of the Series C
preferred stock reported in the table. The business address for CIBC is 161
Bay Street, PP Box 500, M51258, Toronto, Canada, and the business address
for Mr. Heyer is 425 Lexington Avenue, 7th Floor, New York, New York 10017.
(h) The general partner and investment manager of Caravelle Investment Fund,
L.L.C. are affiliates of CIBC.
(i) Messrs. Donahue and Shindler are executive officers of Nextel, own no shares
directly and disclaim beneficial ownership of the shares held by Nextel.
Tower Parent Corp. is a wholly owned subsidiary of Nextel. The business
address for Messrs. Donahue and Shindler and Nextel is 1505 Farm Credit
Drive, McLean, Virginia 22102.
(j) The business address for Waller-Sutton Media Partners, L.P. is c/o
Waller-Sutton Management Group, Inc., 1 Rockefeller Plaza, New York, New
York 10020.
(k) The business address for Kitty Hawk III and Kitty Hawk IV is 2700 Coltsgate
Road, Suite 202, Charlotte, North Carolina 28211.
(l) Includes 162,500 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days.
(m) All of the shares reported as beneficially owned by Mr. Price are held by
The Price Family Limited Partnership. Mr. Price disclaims beneficial
ownership of all such shares.
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<PAGE> 69
DESCRIPTION OF CAPITAL STOCK
The following is a summary of the material terms and provisions of
Holdings' capital stock. Holdings' Amended and Restated Certificate of
Incorporation authorizes 95,000,000 shares of common stock, $0.001 par value per
share, and 70,749,625 shares of preferred stock, of which 3,462,830 shares have
been designated as Series A convertible preferred stock, 7,000,000 shares have
been designated as Series B convertible preferred stock and 60,286,795 shares
have been designated as Series C convertible preferred stock. As of April 30,
1999, there were:
- 3,536,135 shares of common stock issued and outstanding;
- 3,462,830 shares of Series A preferred stock issued and outstanding;
- 7,000,000 shares of Series B preferred stock issued and outstanding; and
- 60,286,795 shares of Series C preferred stock issued and outstanding.
The 60,286,795 shares of Series C preferred stock were issued to the Series
C investors and Nextel in connection with the Nextel tower acquisition. In
addition:
- 243,100 shares of common stock are reserved for issuance upon exercise of
stock options available for future grant under the 1997 Option Plan;
- 4,100,000 shares of common stock are reserved for issuance upon exercise
of stock options granted under the 1997 Option Plan;
- 70,749,625 shares of common stock are reserved for issuance upon the
conversion of the preferred stock; and
- 204,382 shares of common stock are held in escrow. See "Certain
Transactions -- Telesite and Metrosite Acquisition."
COMMON STOCK
Holdings has two classes of authorized common stock which are identical in
all respects except that one class is non-voting. Any shares of common stock
held by a regulated entity under the Bank Holding Company Act of 1956, as
amended, in excess of 5% of the total issued and outstanding common stock shall
be non-voting until such shares are transferred to an entity not subject to such
restrictions. The voting common stock is entitled to one vote per share. All
outstanding shares of common stock are validly issued, fully paid and
nonassessable. The common stock holders have no cumulative rights, subscription,
redemption, sinking fund or conversion rights and preferences. There are no
preemptive rights other than those granted under the Stockholders' Agreement.
See "Certain Transactions -- Stockholders' Agreement." Subject to preferences
that may be applicable to the Series A, the Series B and Series C preferred
stock or any preferred stock which Holdings may issue in the future, the common
stock holders will be entitled to receive such dividends as the board of
directors may declare out of funds legally available for that purpose. The
rights and preferences of the common stock holders are subject to the rights of
the preferred stock holders and will be subject to the rights of any series of
preferred stock which Holdings may issue in the future.
PREFERRED STOCK
CONVERSION. Each holder of the Series A, the Series B and the Series C
preferred stock has the right to convert his or her shares at any time.
Currently each share of preferred stock is convertible into one share of common
stock, subject to adjustment in the event of:
- any dividend or distribution made in shares of common stock;
- subdivision, combination or reclassification of Holdings' outstanding
common stock;
- any issue of common stock at less than a specified price per share;
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- any issue of rights, options or warrants to subscribe for or purchase
shares of common stock at less than a specified price per share;
- any issue of rights for the purchase of shares of common stock or other
securities convertible or exchangeable into shares of common stock at
less than a specified price per share; and
- any Holdings distribution, to the common stock holders, of any shares of
its capital stock, other than common stock, or evidence of indebtedness,
cash or other assets.
The preferred stock will automatically convert into common stock upon
Holdings' completion of a firm commitment underwritten initial public offering
raising gross proceeds of at least $150 million at an offering price per share
greater than or equal to $8.00.
DIVIDENDS. The holders of outstanding shares of preferred stock are not
entitled to receive dividends. However, when, as and if Holdings' board of
directors declares and pays a dividend on the common stock out of funds legally
available for that purpose, Holdings will declare and pay to each preferred
stock holder a dividend equal to the dividend that would have been payable to
such holder if his or her shares of preferred stock had been converted into
common stock on the date of determination of common stock holders entitled to
receive such dividend. No dividends will be paid on the common stock until all
accumulated and unpaid dividends have been paid on the preferred stock, or with
the prior written consent of 75% of the holders of outstanding preferred stock
voting as a single class. Accrued and unpaid dividends on the preferred stock
will be payable upon Holdings' liquidation, dissolution or winding-up.
LIQUIDATION. In the event of any liquidation, dissolution or winding-up of
Holdings, either voluntary or involuntary, before any distribution or payment to
holders of common stock or other capital stock, other than the Series A, the
Series B and the Series C preferred stock, the preferred stock holders shall be
entitled to receive an amount equal to the applicable liquidation preference.
The liquidation preference, for this purpose, is equal to the original issue
price plus all unpaid accrued and accumulated dividends on the Series A, the
Series B and the Series C preferred stock. If Holdings' assets are insufficient
to permit payment in full to all the preferred stock holders, the assets shall
be distributed ratably among them. Any remaining assets available for
distribution shall be distributed to the common stock holders.
VOTING. Each of the Series A, the Series B and the Series C preferred
stock holders is entitled to such number of votes equal to the whole number of
shares of common stock into which such holder's preferred stock is convertible
immediately after the close of business on the record date of the meeting.
SPECIAL REQUIRED APPROVAL
Holdings may not take the following actions without approval by vote or
written consent of the holders of 60% of all issued shares of the Series A, the
Series B and the Series C preferred stock, voting as a single class:
- the consummation of any sale or transfer of all or substantially all of
Holdings' assets, or any merger or consolidation;
- any amendment, restatement or modification of Holdings' Certificate of
Incorporation or Bylaws which adversely affects the respective
preferences, qualifications, special or relative rights, or privileges of
preferred stock holders or which adversely affect the common stock or its
holders, provided, however, that any such change which adversely affects
the preferences, qualifications, special or relative rights or privileges
of any series of preferred stock but does not affect the other series of
preferred stock in a substantially similar manner shall require the prior
consent of the holders of a majority of the outstanding shares of the
affected series of preferred stock;
- Holdings' voluntary dissolution, liquidation or winding-up; or
- the authorization, creation or issuance of any shares of capital stock or
other securities which are ranked prior to or ratably with the preferred
stock, increase the authorized amount of the preferred stock, increase
the authorized amount of any additional class of shares of stock which
are ranked prior to or ratably with the preferred stock, or create or
authorize any obligation or security convertible into shares of preferred
stock or any other class of stock which is ranked prior to or ratably
with the preferred stock as to dividends and the distribution of assets
on Holdings' liquidation, dissolution or winding up.
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DESCRIPTION OF CERTAIN INDEBTEDNESS
NEW CREDIT FACILITY
SpectraSite Communications, Inc., a wholly-owned subsidiary of Holdings,
entered into a credit agreement, dated as of April 20, 1999, with CIBC
Oppenheimer Corp. and Credit Suisse First Boston, New York Branch, and certain
other lenders. This credit facility provides a $500.0 million credit facility.
The proceeds of the new credit facility will be used to consummate the Nextel
tower acquisition, to finance the construction and acquisition of additional
towers and for working capital and general corporate purposes.
The following is a summary of the material terms of the credit facility.
This summary is qualified in its entirety by the final terms of the new credit
facility.
The credit facility consists of:
- a $50.0 million revolving credit facility that may, subject to the
satisfaction of certain financial covenants, be drawn at any time after
the closing of the Nextel tower acquisition and from time to time
thereafter up to December 31, 2005, at which time all amounts drawn under
the revolving credit facility must be paid in full;
- a $300.0 million multiple draw term loan that may be drawn at any time
and from time to time from the closing of the Nextel tower acquisition
through March 31, 2002; the amount drawn must be repaid in quarterly
installments commencing on June 30, 2002 and ending on December 31, 2005;
and
- a $150.0 million term loan that was drawn in full at the closing of the
Nextel tower acquisition and that amortizes at a rate of 1.0% annually,
payable in quarterly installments beginning in 2002, $67.5 million on
March 31, 2006 with the balance due on June 30, 2006.
In addition, the credit facility contemplates borrowings to be funded by
affiliates of certain of Holdings' shareholders subject to the approval of a
majority of the lenders under the credit facility and the consent of such
affiliates.
The revolving credit loans and the multiple draw term loans will bear
interest, at SpectraSite Communications' option, at either:
- CIBC's base rate, plus an applicable margin of 1.5% per annum initially,
which margin after a period of time may decrease based on a leverage
ratio, or
- the reserve adjusted London interbank offered rate, plus an applicable
margin of 3.0% per annum initially, which margin after a period of time
may decrease based on a leverage ratio.
The term loan bears interest, at SpectraSite Communications' option, at
either:
- CIBC's base rate, plus 2.0% per annum, which margin after a period of
time may decrease based on a leverage ratio, or
- the reserve adjusted London interbank offered rate, plus 3.5% per annum,
which margin after a period of time may decrease based on a leverage
ratio.
SpectraSite Communications will be required to pay a commitment fee of
between 1.25% and 0.50% per annum in respect of the undrawn portion of the
multiple draw term loan, depending on the amount undrawn. SpectraSite
Communications will be required to pay a commitment fee of 0.50% per annum in
respect of the undrawn portion of the revolving credit facility.
SpectraSite Communications may be required to prepay the new credit
facility in part upon the occurrence of certain events, such as a sale of
assets, the incurrence of certain additional indebtedness, the issuance of
equity and the generation of excess cash flow.
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We expect Holdings and each of SpectraSite Communications' subsidiaries has
guaranteed SpectraSite Communications' obligations under the new credit
facility. The new credit facility is further secured by:
- substantially all the tangible and intangible assets of SpectraSite
Communications and its subsidiaries, and
- a pledge of all of the capital stock of SpectraSite Communications and of
all of its subsidiaries.
The new credit facility contains a number of covenants that, among other
things, restrict the ability of Holdings, SpectraSite Communications and their
subsidiaries to:
- incur additional indebtedness,
- create liens on assets,
- make investments, make acquisitions, or engage in mergers or
consolidations,
- dispose of assets,
- enter into new lines of business,
- engage in certain transactions with affiliates, and
- pay dividends or make capital distributions.
SpectraSite Communications, however, will be permitted to pay dividends after
July 15, 2003, for the purpose of paying interest on the 2008 Notes and the 2009
Notes so long as no default under the new credit facility then exists or would
exist after giving effect to such payment.
In addition, the new credit facility requires compliance with certain
financial covenants, including requiring SpectraSite Communications and its
subsidiaries, on a consolidated basis, to maintain:
- a maximum ratio of total debt to annualized EBITDA,
- a minimum interest coverage ratio,
- a minimum fixed charge coverage ratio, and
- a minimum annualized EBITDA (first year only).
SpectraSite Communications does not expect that such covenants will materially
impact its ability and the ability of its subsidiaries to operate their
respective businesses.
The new credit facility contains customary events of default.
11 1/4% SENIOR DISCOUNT NOTES DUE 2009
On April 20, 1999, Holdings issued $586.8 million in aggregate principal
amount at maturity of its 11 1/4% Senior Discount Notes due 2009 pursuant to an
Indenture between Holdings and the United States Trust Company of New York, as
trustee. The 2009 notes mature on April 15, 2009 and rank equally with the 2008
notes.
The 2009 notes were issued at a substantial discount to their principal
amount, and were sold to investors at a price that yielded gross proceeds to
Holdings of $340.0 million. The 2009 Notes accrete daily at a rate of 11 1/4%
per annum, compounded semiannually, to an aggregate principal amount of $586.8
million as of April 15, 2004. Cash interest will not accrue on the 2009 notes
prior to April 15, 2004. Commencing April 15, 2004, cash interest on the 2009
notes will accrue and be payable semiannually in arrears on each October 15 and
April 15, commencing October 15, 2004, at a rate of 11 1/4% per annum.
Except as described below, the 2009 notes are not redeemable at Holdings'
option prior to April 15, 2004. Thereafter, the 2009 Notes will be subject to
redemption at any time at the option of Holdings, in whole or in part, at the
redemption prices set forth in the indenture plus accrued and unpaid interest
thereon, if any, to the applicable redemption date. In addition, from time to
time prior to April 15, 2002, SpectraSite may on one or more occasions redeem up
to 35% of the aggregate principal amount at maturity of the 2009 notes issued at
a redemption price of 111.25% of their accreted value, to the redemption date,
with the net cash proceeds from one or more equity offerings; provided, however,
that at least 65% of the aggregate principal amount at maturity of 2009 notes
originally issued remains outstanding immediately after the occurrence of such
redemption.
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The 2009 notes are general unsecured obligations of Holdings, rank senior
in right of payment to any future indebtedness of Holdings which is made
expressly junior thereto, and rank equal in right of payment with all current
and future unsecured senior indebtedness of Holdings, including the 2008 notes.
All of the operations of Holdings are conducted through its subsidiaries, and
Holdings' subsidiaries did not guarantee the 2009 notes. Accordingly, the 2009
notes are effectively subordinated to all indebtedness and all other liabilities
or obligations of such subsidiaries, including borrowings under the new credit
facility.
Upon the occurrence of a change of control, the holders of the 2009 notes
have the right to require Holdings to repurchase such holders' 2009 notes, in
whole or in part, at a price equal to 101% of the accreted value thereof to the
date of purchase prior to April 15, 2004 or 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of purchase on or
after April 15, 2004.
The indenture governing the 2009 notes contains certain covenants that,
among other things, limit the ability of Holdings and its subsidiaries to:
- incur additional indebtedness and issue preferred stock;
- pay dividends or make certain other restricted payments;
- enter into transactions with affiliates;
- make certain asset dispositions;
- merge or consolidate with, or transfer substantially all its assets to,
another entity;
- create liens securing indebtedness; and
- permit subsidiaries to incur restrictions on their ability to pay
dividends to Holdings.
However, all of these limitations are subject to a number of important
qualifications.
Holdings has agreed to file a registration statement with the SEC with
respect to a registered offer to exchange the outstanding 2009 notes for
registered 2009 notes, which will have terms substantially identical in all
material respects to the outstanding notes except that such notes will not
contain terms with respect to transfer restrictions. We have agreed to use our
reasonable best efforts to file a registration statement for the exchange notes
with the SEC on or before July 20, 1999 and to cause that registration statement
to be declared effective by October 20, 1999. In addition, in certain
circumstances, we have agreed to file a shelf registration statement that would
allow some or all of these notes to be offered to the public. We will keep the
registered exchange offer open for not less than 30 days (or longer if required
by applicable law) after the date notice of the registered exchange offer is
mailed to the holders of the outstanding notes. This prospectus is not an offer
to purchase or a solicitation of an offer to purchase the 2009 notes or a
solicitation to tender the 2009 notes in the exchange offer. The exchange offer
will only be made by means of a prospectus, which is part of the exchange offer
registration statement, and a copy of the prospectus will be mailed to all
registered holders of the 2009 notes as of the record date for the exchange
offer.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
Holdings originally sold the outstanding notes to Credit Suisse First
Boston Corporation, Lehman Brothers, Inc. and CIBC Oppenheimer Corp. These
initial purchasers subsequently placed the outstanding notes with:
- qualified institutional buyers in reliance on Rule 144A under the
Securities Act; and
- qualified buyers outside the United States in reliance on Regulation S
under the Securities Act.
Holdings entered into a registration rights agreement with the initial
purchasers, as a condition to their purchase of the outstanding notes, under
which Holdings agreed, for the benefit of the outstanding note holders and at
its own expense, to file a registration statement for this exchange offer, of
which this prospectus is a part, with the SEC no later than November 15, 1998.
When the exchange offer registration statement is declared effective, Holdings
will offer the registered notes in exchange for tender of the outstanding notes.
For each outstanding note tendered to Holdings in response to the exchange
offer, the holder of such outstanding note will receive a registered note having
an original principal amount at maturity equal to that of the tendered
outstanding note.
Based upon interpretations by the SEC staff set forth in certain no-action
letters to third parties (including Exxon Capital Holdings Corp., SEC No-Action
Letter (April 13, 1989); Morgan Stanley & Co. Inc., SEC No-Action Letter (June
5, 1991); and Shearman & Sterling, SEC No-Action Letter (July 2, 1993)),
SpectraSite believes that the registered notes issued under this exchange offer
in exchange for the outstanding notes, in general will be freely tradeable after
the exchange offer, without compliance with the registration and prospectus
delivery requirements of the Securities Act. However, any purchaser of
outstanding notes who is a SpectraSite "affiliate," within the meaning of Rule
405 under the Securities Act, who does not acquire the registered notes in the
ordinary course of business, or who tenders in the exchange offer for the
purpose of participating in a distribution of the registered notes, could not
rely on the SEC staff position enunciated in such no-action letters and, in the
absence of an applicable exemption, must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction. A holder's failure to comply with those requirements in such
an instance may result in that holder incurring liability under the Securities
Act which we will not indemnify.
As the above mentioned no-action letters and the registration rights
agreement contemplate, each holder accepting the exchange offer is required to
represent to us, in a letter of transmittal, that:
- the holder or the person receiving the registered notes, whether or not
such person is the holder, will acquire those registered notes in the
ordinary course of business;
- the holder or any other acquiror is not engaging in a distribution of the
registered notes;
- the holder or any other acquiror has no arrangement or understanding with
any person to participate in a distribution of the registered notes;
- neither the holder nor any other acquiror is a Holdings affiliate within
the meaning of Rule 405 under the Securities Act; and
- the holder or any other acquiror acknowledges that if that holder or
other acquiror participates in the exchange offer for the purpose of
distributing the registered notes, it must comply with the registration
and prospectus delivery requirements of the Securities Act in connection
with any such resale and cannot rely on the above mentioned no-action
letters.
As indicated above, each broker-dealer that receives for its own account a
registered note in exchange for outstanding notes must acknowledge that it:
- acquired the outstanding notes for its own account as a result of
market-making activities or other trading activities;
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- has not entered into any arrangement or understanding with Holdings or
any Holdings affiliate to distribute the registered notes; and
- will deliver a prospectus meeting the requirements of the Securities Act
in connection with any resale of the registered notes.
For a description of the procedures for resales by participating broker-dealers,
see "Plan of Distribution."
In the event that changes in the law or the applicable interpretations of
the SEC staff do not permit Holdings to effect this exchange offer, or if for
any other reason the exchange offer is commenced and not consummated within 120
days of November 10, 1998, SpectraSite will:
- file a shelf registration statement covering resales of the outstanding
notes;
- use reasonable best efforts to cause the shelf registration statement to
be declared effective under the Securities Act; and
- use reasonable best efforts to keep effective the shelf registration
statement until the earlier of two years after the outstanding notes'
original issuance date, subject to extension under certain circumstances,
or such time as all of the applicable outstanding notes have been sold.
Holdings will, if and when it files the shelf registration statement,
provide to each applicable holder of the outstanding notes copies of the
prospectus which is a part of the shelf registration statement. A holder that
sells the outstanding notes under the shelf registration statement generally:
- must be named as a selling security holder in the related prospectus;
- must deliver a prospectus to purchasers;
- will be subject to certain of the civil liability provisions under the
Securities Act in connection with such sales; and
- will be bound by the provisions of the registration rights agreement
which are applicable to that holder, including certain indemnification
obligations.
In addition, each of the outstanding note holders must deliver information to
Holdings, to be used in connection with the shelf registration statement, in
order to have his or her outstanding notes included in the shelf registration
statement and to benefit from the provisions set forth in the foregoing
paragraph.
The registration rights agreement covering the outstanding notes provides
that Holdings will file an exchange offer registration statement with the SEC no
later than November 15, 1998. We filed the exchange offer registration statement
on November 10, 1998. In the event that:
- by the 120th day after the exchange offer registration statement filing
date neither the exchange offer is consummated nor the shelf registration
statement is declared effective; or
- after either the exchange offer registration statement or shelf
registration statement is declared effective, such registration statement
thereafter ceases to be effective or usable, subject to certain
exceptions, including an exception for a period not to exceed 60 days in
any 12-month period during which SpectraSite effects a material corporate
transaction, in connection with resales of the outstanding notes or
registered notes in accordance with and during the periods specified in
the registration rights agreement,
the interest rate on the outstanding notes will increase by 0.50% per annum from
and including the date on which any such registration default occurred, but
excluding the date on which all registration defaults are cured. The sole remedy
available to the outstanding note holders will be the immediate assessment of
cash interest on the outstanding notes, whether or not cash interest is then
payable on the outstanding notes under the indenture. All interest payable
because a registration default occurred will be payable to the outstanding notes
holders in cash on each January 15 and July 15, commencing with the first such
date occurring after any such interest begins to accrue, until the registration
default is cured. After the date on
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which the registration default is cured, the interest rate on the outstanding
notes will revert to 12% per annum.
Outstanding note holders must:
- make certain representations to us in order to participate in the
exchange offer;
- deliver information to be used in connection with the shelf registration
statement, if required; and
- provide comments on the shelf registration statement within the time
periods set forth in the registration rights agreement,
in order to have their outstanding notes included in the shelf registration
statement and to benefit from the provisions regarding additional interest
payable because a registration default occurred, as set forth above.
The preceding summary of the material provisions of the registration rights
agreement does not purport to be complete and is subject to, and is qualified in
its entirety by, all the provisions of the registration rights agreement, a copy
of which is filed as an exhibit to the exchange offer registration statement of
which this prospectus is a part.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal for the exchange offer, we will accept any and
all outstanding notes validly tendered and not withdrawn prior to 5:00 p.m., New
York City time, on the expiration date. See "-- Expiration Date; Extensions;
Amendments." Holdings will issue $1,000 original principal amount at maturity of
registered notes in exchange for each $1,000 original principal amount at
maturity of outstanding notes accepted in the exchange offer. Holders may tender
some or all of their outstanding notes in response to the exchange offer.
However, outstanding notes may be tendered only in integral multiples of $1,000.
The form and terms of the registered notes are the same as the form and
terms of the outstanding notes except that:
- the registered notes have been registered under the Securities Act and
hence will not bear legends restricting their transfer; and
- the registered note holders will not be entitled to certain rights under
the registration rights agreement covering the outstanding notes,
including the provisions providing for an increase in the interest rate
on the outstanding notes in certain circumstances relating to the timing
of the exchange offer, all of which rights will terminate when the
exchange offer is terminated.
The registered notes will evidence the same debt as the outstanding notes
and will be entitled to the benefits of the indenture governing the outstanding
notes. As of the date of this prospectus, $225,238,000 aggregate original
principal amount at maturity of outstanding notes were outstanding. We have
fixed the close of business on , 1999 as the record date for the
exchange offer for purposes of determining the persons to whom this prospectus
and the letter of transmittal will be mailed initially.
Outstanding note holders do not have any appraisal or dissenters' rights
under the Delaware General Corporation Law or the indenture in connection with
the exchange offer. We intend to conduct the exchange offer in accordance with
the applicable requirements of the Exchange Act and the rules and regulations of
the SEC related to such offers.
Holdings shall be deemed to have accepted validly tendered outstanding
notes when, as and if we give oral or written notice to that effect to United
States Trust Company of New York, which is the exchange agent. The exchange
agent will act as agent for the tendering holders for the purpose of receiving
the registered notes from Holdings.
If any tendered outstanding notes are not accepted for exchange either
because of an invalid tender, the occurrence of certain other events set forth
herein, or otherwise, the certificates for the unaccepted
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outstanding notes will be returned, without expense, to the tendering holder as
promptly as practicable after the exchange offer's expiration date.
Holders who tender outstanding notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the letter of transmittal, transfer taxes with respect to the exchange of
outstanding notes in response to the exchange offer. We will pay all charges and
expenses, other than transfer taxes in certain circumstances, in connection with
the exchange offer. See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
We shall keep the exchange offer open for at least 30 days, or longer if
required by applicable law, including in connection with any material
modification or waiver of the terms or conditions of the exchange offer that
requires such extension, after the date that notice of the exchange offer is
mailed to outstanding note holders. The expiration date shall be 5:00 p.m., New
York City time, on , 1999, unless we, in our sole discretion, extend
the exchange offer, in which case the expiration date shall be the latest date
and time to which we extend the exchange offer.
If we decide to extend the exchange offer, we will notify United States
Trust Company of New York, which is the exchange agent, of the extension by oral
or written notice, and will mail an announcement of the extension to the
registered holders prior to 10:00 a.m., New York City time, on the next business
day after the previously scheduled expiration date.
SpectraSite reserves the right, in its sole discretion:
- to delay accepting any outstanding notes, to extend the exchange offer or
to terminate the exchange offer if any of the conditions set forth below
under "-- Conditions" shall not have been satisfied, by giving oral or
written notice of such delay, extension or termination to the exchange
agent; or
- to amend the terms of the exchange offer in any manner.
We will give oral or written notice of any delay in acceptance, extension,
termination or amendment to the registered holders as promptly as practicable.
PROCEDURES FOR TENDERING
Only an outstanding note holder may tender such outstanding notes in the
exchange offer. To tender in the exchange offer, a holder must complete, sign
and date the letter of transmittal, or a facsimile thereof, have the signatures
thereon guaranteed if the letter of transmittal so requires, or transmit an
agent's message in connection with a book-entry transfer, and mail or otherwise
deliver the letter of transmittal or facsimile, or agent's message, together
with the outstanding notes and any other required documents, to United States
Trust Company of New York, which is the exchange agent, prior to 5:00 p.m., New
York City time, on the expiration date. In addition, either:
- the exchange agent must receive the letter of transmittal and
certificates for the outstanding notes prior to the expiration date;
- the exchange agent must receive a timely confirmation of a book-entry
transfer of the outstanding notes into the exchange agent's account at
DTC according to the procedure for book-entry transfer described below,
prior to the expiration date; or
- the holder must comply with the guaranteed delivery procedures described
below.
For effective tender, the exchange agent must receive the outstanding notes
or book-entry confirmation, as the case may be, the letter of transmittal, and
other required documents, at the address set forth below under "-- Exchange
Agent" prior to 5:00 p.m., New York City time, on the expiration date. DELIVERY
OF DOCUMENTS TO THE BOOK ENTRY TRANSFER FACILITY IN ACCORDANCE WITH ITS
PROCEDURE DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
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DTC has authorized DTC participants that hold outstanding notes on behalf
of the outstanding notes' beneficial owners to tender their outstanding notes as
if they were holders. To effect a tender of outstanding notes, DTC participants
should either:
- complete and sign the letter of transmittal, or a manually signed
facsimile thereof, have the signature guaranteed if required by the
instructions, and mail or deliver the letter of transmittal, or the
manually signed facsimile, to the exchange agent according to the
procedure set forth in "Procedures for Tendering;" or
- transmit their acceptance to DTC through the DTC automated tender offer
program for which the transaction will be eligible and follow the
procedure for book-entry transfer set forth in "-- Book-Entry Transfer."
By executing the letter of transmittal or an agent's message, each holder
will make to SpectraSite the representations set forth above in the third
paragraph under the heading "-- Purpose and Effect of the Exchange Offer."
Each holder's tender, and Holdings' acceptance, will constitute agreement
between such holder and Holdings in accordance with the terms, and subject to
the conditions, set forth herein and in the letter of transmittal or agent's
message.
THE METHOD OF DELIVERY OF OUTSTANDING NOTES, THE LETTER OF TRANSMITTAL OR
AGENT'S MESSAGE, AND ALL OTHER REQUIRED DOCUMENTS, TO THE EXCHANGE AGENT IS AT
THE HOLDER'S ELECTION AND SOLE RISK. AS AN ALTERNATIVE TO MAIL DELIVERY, HOLDERS
MAY WISH TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, HOLDERS
SHOULD ALLOW SUFFICIENT TIME TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE
EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD BE SENT TO
SPECTRASITE. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL
BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR THEM.
Any beneficial owner whose outstanding notes are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct the
registered holder to tender on the beneficial owner's behalf. See "Instructions
to Registered Holder and/or Book-Entry Transfer Facility Participant from
Beneficial Owner" included with the letter of transmittal.
A member of the Medallion System must guarantee signatures on a letter of
transmittal or a notice of withdrawal, as the case may be, unless the
outstanding notes tendered thereto are tendered, respectively:
- by a registered holder who has not completed the box entitled Special
Registration Instructions or Special Delivery Instructions on the letter
of transmittal; or
- for the account of a Medallion System member.
In the event that signatures on a letter of transmittal or a notice of
withdrawal, as the case may be, must be guaranteed, such guarantee must be by a
Medallion System member.
If a person other than the registered holder of any outstanding notes
listed therein signs the accompanying letter of transmittal, the outstanding
notes must be endorsed or accompanied by a properly completed bond power, signed
by the registered holder as his or her name appears on the outstanding notes,
with the signature guaranteed by a Medallion System member.
If trustees, executors, administrators, guardians, attorneys-in-fact,
offices of corporations, or others acting in a fiduciary or representative
capacity sign the letter of transmittal or any outstanding notes or bond powers,
such persons should so indicate when signing, and they must submit evidence
satisfactory to SpectraSite of their authority to so act, with the letter of
transmittal.
SpectraSite will determine, in its sole discretion, all questions as to the
validity, form, eligibility, including time of receipt, acceptance and
withdrawal of tendered outstanding notes. This determination will be final and
binding. We reserve the absolute right to reject any and all outstanding notes
not properly
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tendered, or any outstanding notes, Holdings' acceptance of which would, in the
opinion of SpectraSite's counsel, be unlawful. We also reserve the right, in our
sole discretion, to waive any defects, irregularities or conditions of tender as
to particular outstanding notes. Our interpretation of the terms and conditions
of the exchange offer, including the instructions in the letter of transmittal,
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of outstanding notes must be cured
within such time as we shall determine. Although we intend to notify holders of
defects or irregularities with respect to tenders of outstanding notes, neither
Holdings, the exchange agent nor any other person shall incur any liability for
failure to give such notification. Tenders of outstanding notes will not be
deemed to have been made until such defects or irregularities have been cured or
waived. If the exchange agent receives any outstanding notes that are not
properly tendered, and as to which the defects or irregularities have not been
cured or waived, the exchange agent will return them to the tendering holders,
unless otherwise provided in the letter of transmittal, as soon as practicable
following the expiration date.
ACCEPTANCE OF OUTSTANDING NOTES FOR EXCHANGE; DELIVERY OF REGISTERED NOTES
For each outstanding note Holdings accepts for exchange, the holder will
receive a registered note having a principal amount at maturity equal to that of
the surrendered outstanding note. For purposes of the exchange offer, Holdings
shall be deemed to have accepted properly tendered outstanding notes for
exchange when, as and if Holdings has given oral or written notice to that
effect to United States Trust Company of New York, as exchange agent.
In all cases, Holdings will issue registered notes for outstanding notes
that are accepted for exchange under the exchange offer only after the exchange
agent's timely receipt of certificates for such outstanding notes, or a timely
book-entry confirmation of the outstanding notes into the exchange agent's
account at the book-entry transfer facility, plus a properly completed and duly
executed letter of transmittal or agent's message and all other required
documents. If Holdings does not accept any tendered outstanding notes for any
reason set forth in the terms and conditions of the exchange offer, we will
return the unaccepted or non-exchanged outstanding notes without expense to the
tendering holder, or, in the case of outstanding notes tendered by book-entry
transfer into the exchange agent's account, the non-exchanged outstanding notes
will be credited to an account maintained with the book-entry transfer facility,
as promptly as practicable after the expiration date.
BOOK-ENTRY TRANSFER
United States Trust Company of New York, as exchange agent, will establish
a new account or utilize an existing account at DTC for the outstanding notes
promptly after the date of this prospectus, and any financial institution that
is a participant in DTC and whose name appears on a security position listing as
the owner of outstanding notes may make a book-entry tender of outstanding notes
by causing DTC to transfer such outstanding notes into the exchange agent's
account in accordance with DTC's procedures for such transfer. However, the
exchange agent must receive, at its address set forth below under the caption
"Exchange Agent," on or prior to the expiration date, or the holders must comply
with the guaranteed delivery procedures described below to submit, the letter of
transmittal, or a manually signed facsimile thereof, properly completed and
validly executed, with any required signature guarantees, or an agent's message,
and any other required documents. Document delivery to DTC in accordance with
DTC's procedures does not constitute delivery to the exchange agent.
The term agent's message means a message transmitted by DTC to, and
received by, the exchange agent, forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgment from the DTC
participant tendering the outstanding notes, stating:
- the aggregate principal amount of outstanding notes which have been
tendered by such participant;
- that such participant has received and agrees to be bound by the terms of
the letter of transmittal; and
- that Holdings may enforce that agreement against the participant.
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GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their outstanding notes and:
- whose outstanding notes are not immediately available;
- who cannot deliver their outstanding notes, the letter of transmittal or
any other required documents, to United States Trust Company of New York,
which is the exchange agent; or
- who cannot complete the procedures for book-entry transfer, prior to the
expiration date,
may effect a tender if:
(a) the tender is made through a firm which is a member of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States;
(b) prior to the expiration date, the exchange agent receives from an
institution listed in clause (a) above a properly completed and duly
executed Notice of Guaranteed Delivery, by facsimile transmission, mail or
hand delivery, setting forth the name and address of the holder, the
certificate number(s) of the outstanding notes and the principal amount of
outstanding notes tendered, stating that the tender is being made thereby
and guaranteeing that, within five New York Stock Exchange trading days
after the expiration date, the letter of transmittal, or facsimile thereof,
or an agent's message, together with the certificate(s) representing the
outstanding notes, or a confirmation of book-entry transfer of the notes
into the exchange agent's account at the book-entry transfer facility, and
any other documents required by the letter of transmittal, will be
deposited by the institution with the exchange agent; and
(c) the exchange agent receives, no later than five New York Stock
Exchange trading days after the expiration date, the certificate(s)
representing all tendered outstanding notes in proper form for transfer, or
a confirmation of book-entry transfer of such outstanding notes into the
exchange agent's account at the book-entry transfer facility, together with
a letter of transmittal, or facsimile thereof, properly completed and duly
executed, with any required signature guarantees, or an agent's message,
and all other documents required by the letter of transmittal.
Holders who wish to tender their outstanding notes according to the
guaranteed delivery procedures set forth above may request that the exchange
agent send them a Notice of Guaranteed Delivery.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of outstanding notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on ,
1999; otherwise such tenders are irrevocable.
To withdraw a tender of outstanding notes in the exchange offer United
States Trust Company of New York, which is the exchange agent, must receive a
telegram, telex, letter or facsimile transmission notice of withdrawal at its
address set forth herein prior to 5:00 p.m., New York City time, on the
expiration date. Any such notice of withdrawal must:
- specify the name of the person having deposited the outstanding notes to
be withdrawn;
- identify the outstanding notes to be withdrawn, including the certificate
number(s) and principal amount of such outstanding notes, or, in the case
of outstanding notes transferred by book-entry transfer, the name and
number of the account at the book-entry transfer facility to be credited;
- be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the outstanding notes were tendered,
including any required signature guarantees, or be accompanied by
documents of transfer sufficient to have the trustee with respect to the
outstanding notes register the transfer of such outstanding notes into
the name of the person withdrawing the tender; and
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- specify the name in which to register the outstanding notes, if different
from that of the depositor.
Holdings will determine all questions as to the validity, form and
eligibility, including time of receipt, of the notices. This determination shall
be final and binding on all parties. Any outstanding notes so withdrawn will be
deemed not to have been validly tendered for purposes of the exchange offer and
no registered notes will be issued with respect thereto unless the outstanding
notes so withdrawn are validly retendered. Holdings will return to the holder
any outstanding notes which have been tendered but which are not accepted for
exchange, without expense to the holder, as soon as practicable after
withdrawal, rejection of tender, or termination of the exchange offer. Holders
may retender properly withdrawn outstanding notes by following one of the
procedures described above under "-- Procedures for Tendering" at any time prior
to the expiration date.
CONDITIONS
Notwithstanding any other term of the exchange offer, we shall not be
required to accept for exchange, or offer registered notes for, any outstanding
notes, and may terminate or amend the exchange offer as provided herein before
the acceptance of the outstanding notes, if:
(a) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the exchange offer
which, in our judgment, might impair materially our ability to proceed with
the exchange offer, or any material adverse development has occurred in any
existing action or proceeding with respect to Holdings or any of its
subsidiaries; or
(b) any law, statute, rule, regulation or interpretation by the SEC
staff is proposed, adopted or enacted, which, in our judgment, might impair
materially our ability to proceed with the exchange offer, or impair
materially our contemplated benefits from the exchange offer; or
(c) any governmental approval has not been obtained, which approval we
shall, in our discretion, deem necessary for the consummation of the
exchange offer as contemplated hereby.
If we determine in our discretion that any of the conditions are not
satisfied, we may:
- refuse to accept any outstanding notes and return all tendered
outstanding notes to the tendering holders;
- extend the exchange offer and retain all outstanding notes tendered prior
to the expiration of the exchange offer, subject, however, to the
holders' rights to withdraw the outstanding notes; or
- waive the unsatisfied conditions and accept all properly tendered
outstanding notes which have not been withdrawn.
We shall keep the exchange offer open for at least 30 days, or longer if
applicable law so requires, including, in connection with any material
modification or waiver of the terms or conditions of the exchange offer that
requires such extension under applicable law, after the date we mail notice of
the exchange offer to outstanding note holders.
EXCHANGE AGENT
United States Trust Company of New York has been appointed as the exchange
agent for this exchange offer. Questions and requests for assistance, requests
for additional copies of this prospectus or of
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the letter of transmittal, and requests for notice of guaranteed delivery should
be directed to the exchange agent, addressed as follows:
<TABLE>
<S> <C> <C>
By Registered or Certified Mail: By Overnight Courier:
United States Trust Company of New York United States Trust Company of New York
P.O. Box 844 770 Broadway, 13th floor
Cooper Station New York, New York 10003
New York, New York 10276-0844 Attn: Corporate Trust Window
Attn: Corporate Trust Services
By Hand: By Facsimile:
United States Trust Company of New York (212) 780-0592
111 Broadway, Lower Level
Corporate Trust Window Confirm by Telephone:
New York, New York 10006 (800)548-6565
</TABLE>
DELIVERY TO AN ADDRESS OTHER THAN THOSE SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
FEES AND EXPENSES
Holdings will bear the expenses of soliciting tenders. The principal
solicitation is being made by mail; however, additional solicitation may be made
by telegraph, telecopy, telephone or in person by officers and regular employees
of Holdings and its affiliates or its agents.
Holdings has not retained any dealer-manager in connection with the
exchange offer and will not make any payments to brokers, dealers, or others
soliciting acceptances of the exchange offer. Holdings, however, will pay the
exchange agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of pocket expenses in connection with the exchange
offer.
Holdings will pay the cash expenses incurred in connection with the
exchange offer. Such expenses include the exchange agent's and the trustee's
fees and expenses, accounting and legal fees, and printing costs, among others.
ACCOUNTING TREATMENT
The registered notes will be recorded at the same carrying value as the
outstanding notes, which is face value, as reflected in Holdings' accounting
records on the date of exchange. Accordingly, Holdings will not recognize any
gain or loss for accounting purposes. The exchange offer expenses will be
expensed over the term of the registered notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
The outstanding notes that are not exchanged for registered notes in
response to the exchange offer will remain restricted securities. Accordingly,
such outstanding notes may be resold only:
- to Holdings, upon redemption thereof or otherwise;
- so long as the outstanding notes are eligible for resale under Rule 144A,
to a person inside the United States whom the seller reasonably believes
is a qualified institutional buyer within the meaning of Rule 144A under
the Securities Act in a transaction meeting the requirements of Rule
144A, in accordance with Rule 144 under the Securities Act, or under
another exemption from the registration requirements of the Securities
Act, and based upon an opinion of counsel reasonably acceptable to us;
- outside the United States to a foreign person in a transaction meeting
the requirements of Regulation S under the Securities Act; or
- under an effective registration statement under the Securities Act.
Any resale of outstanding notes must comply with any applicable securities
laws of any state of the United States.
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DESCRIPTION OF THE NOTES
The registered notes have the same form and terms as the outstanding notes,
which they replace, with two exceptions. First, because the issuance of the
registered notes has been registered under the Securities Act, the registered
notes will not bear legends restricting their transfer. Second, the holders of
registered notes will not be entitled to rights under the registration rights
agreement, since the primary provision of that agreement will terminate when the
exchange offer is consummated. A copy of the Indenture, dated June 26, 1998,
between Holdings and United States Trust Company of New York, as trustee, has
been filed as an exhibit to the exchange offer registration statement of which
this prospectus forms a part.
The following is a summary of the material terms of the Indenture, as
amended. This summary does not include all the provisions of the Indenture, nor
does it include certain terms made a part of the Indenture by the Trust
Indenture Act of 1939, as amended. You can find definitions of certain
capitalized terms used in the following summary under the subheading "-- Certain
Definitions." Certain terms contained in this summary but not capitalized in
this summary or defined under the subheading "--Certain Definitions" are defined
in the Indenture. You should carefully read the Indenture before participating
in the exchange offer.
GENERAL
Methods of Payment
The principal of, premium, if any, and interest on the notes will be
payable, and the notes may be exchanged or transferred, at the office or agency
of SpectraSite in the Borough of Manhattan, The City of New York. The initial
office for transfers is the corporate trust office of the trustee, at 114 West
47th Street, 25th Floor, New York, New York 10036. However, at Holdings' option,
interest payments may be made by check, mailed to the registered holders of the
notes at their registered addresses.
Methods of Issuance
Holdings will issue the registered notes only in fully registered form,
without coupons, in denominations of $1,000 and any integral multiple of $1,000.
No service charge will be made for any registration of a transfer or an exchange
of notes, but SpectraSite may require payment of a sum sufficient to cover any
transfer tax or other similar governmental charge payable in connection with any
such transfer or exchange.
Federal Tax Issues
For United States federal income tax purposes, a significant amount of
original issue discount, taxable as ordinary income, will be recognized by a
registered holder of notes as such discount is amortized from the Issue Date.
However, holders will not receive any payments on the notes until January 15,
2004. For a description of certain tax matters related to an investment in the
notes, see "Certain U.S. Federal Tax Considerations."
TERMS OF THE NOTES
The notes:
- are unsecured, senior obligations of Holdings;
- are subordinated in right of payment to all existing and future Senior
Indebtedness of Holdings;
- are senior in right of payment to any future subordinated Indebtedness of
Holdings;
- mature on July 15, 2008;
- have a maximum aggregate principal amount at maturity of $225.2 million;
and
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- will accrue interest at a rate of 12% per annum, which will be compounded
semi-annually on each semi-annual accrual date, but will not be payable
in cash, except that interest on the Accreted Value of each note as of
July 15, 2003 will continue to accrue at 12% per annum, but will be paid
semi-annually commencing January 15, 2004 and continuing on each July 15
and January 15 thereafter to holders of record at the close of business
on the first day of the month during which the interest payment will be
made; interest to be paid on a 360-day year, twelve 30-day month basis.
REDEMPTION
Terms of Optional Redemption
Prior to July 15, 2001, Holdings may redeem up to 25% of the principal
amount at maturity of the notes at any time and from time to time but only from
the proceeds of Equity Offerings. The redemption price for any such redemption
will be 112% of the Accreted Value of the notes being redeemed, plus accrued and
unpaid interest, if any, to the redemption date, subject to the right of holders
of record on the relevant record date to receive interest due on the relevant
interest payment date. At least 75% of the aggregate principal amount at
maturity of the notes must remain outstanding after each such redemption,
excluding notes held by Holdings or any of its subsidiaries, and each such
redemption must occur within 60 days after the date of closing of the related
Equity Offering.
Between July 15, 2001, and July 15, 2003, Holdings may not redeem the
notes.
Holdings may redeem the notes at any time or from time to time on or after
July 15, 2003. Holdings shall pay accrued and unpaid interest, if any, on the
Accreted Value of the notes being redeemed to the redemption date, subject to
the right of holders of record on the relevant record date to receive interest
due on the relevant interest payment date. For any notes being redeemed in any
period in Column A below, Holdings shall pay a redemption price equal to the
percentage of the Accreted Value of the notes being redeemed set forth opposite
such period in Column B below.
<TABLE>
<CAPTION>
COLUMN A COLUMN B
PERIOD REDEMPTION PRICE
-------- ----------------
<S> <C>
July 15, 2003, through July 14, 2004........................ 106.000%
July 15, 2004, through July 14, 2005........................ 104.000%
July 15, 2005, through July 14, 2006........................ 102.000%
July 15, 2006 and thereafter................................ 100.000%
</TABLE>
Partial Redemption: Selection and Notice
In the case of any partial redemption, the trustee will select the notes
for redemption:
- in compliance with the requirements of the principal national securities
exchange, if any, on which the notes are listed; or,
- if the notes are not so listed, on a pro rata basis, by lot or by such
other method as the trustee in its sole discretion shall deem to be fair
and appropriate. However, no note of $1,000 or less, in original
principal amount, will be redeemed in part.
Holdings will send notice by first class mail at least 30, but not more
than 60, days before the redemption date, to each note holder, to be redeemed at
its registered address. Notes called for redemption become due on the date fixed
for redemption. On and after the redemption date, interest ceases to accrue on
notes, or portions of notes, called for redemption. If any note is to be
redeemed in part only, the notice of redemption relating to such note shall
state the portion of the principal amount thereof to be redeemed. A new note, in
principal amount equal to the unredeemed portion of the partially redeemed note,
will be issued in the name of the holder thereof upon cancellation of the
original note.
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Mandatory Redemption
Holdings will not make mandatory redemption or sinking fund payments with
respect to the notes.
RANKING
The indebtedness evidenced by the notes:
- is unsecured Senior Indebtedness of Holdings;
- will rank ratably in right of payment with all existing and future Senior
Indebtedness of Holdings; and
- will be senior in right of payment to all existing and future
Subordinated Obligations of Holdings.
Also, the notes will be effectively subordinated to all existing and future
Secured Indebtedness of Holdings to the extent of the value of the assets
securing such indebtedness, and will be structurally subordinated to all
existing and future Indebtedness of any of Holdings' subsidiaries.
At December 31, 1998, after giving pro forma effect the Nextel tower
acquisitions and the related financing transactions, Holdings had no
indebtedness outstanding other than the 2008 notes and the 2009 notes, and
Holdings' subsidiaries had approximately $152.7 million of debt and other
liabilities and the ability to borrow at least $350.0 million under the new
credit facility. Although the Indenture contains limitations on the amount of
additional indebtedness which Holdings may incur, under certain circumstances
the amount of such indebtedness could be substantial and, in any case, such
indebtedness may be Senior Indebtedness or Secured Indebtedness. See "-- Certain
Covenants -- Limitation on Indebtedness."
Holdings conducts all of its operations through subsidiaries and,
therefore, Holdings depends upon the cash flow of its subsidiaries to meet its
obligations, including its obligations under the notes. Holdings' subsidiaries
will not be guarantors of the notes and are separate entities, with no
obligation to make payments on the notes, or to make funds available therefor.
Generally, with respect to the assets and earnings of such subsidiaries,
priority will be given to claims of the subsidiaries' creditors, including trade
creditors, secured creditors, creditors holding indebtedness and guarantees
issued by the subsidiaries, and claims of preferred stockholders, if any, of the
subsidiaries over the claims of Holdings' creditors, including holders of our
notes. The notes, therefore, will be effectively subordinated to all
indebtedness, preferred stock, if any, and other liabilities and commitments of
Holdings' subsidiaries. Holdings expects that the provisions of the New Credit
Facility will contain substantial restrictions on the ability of its
subsidiaries to transfer cash or assets to Holdings, by dividend or
distribution. Although the Indenture limits the incurrence of indebtedness and
preferred stock of certain of Holdings' subsidiaries, such limitation is subject
to a number of significant qualifications. Moreover, the Indenture does not
impose any limitation on the subsidiaries' incurrence of liabilities that are
not considered indebtedness or preferred stock under the Indenture. See
"-- Certain Covenants -- Limitation on Indebtedness and Preferred Stock of
Restricted Subsidiaries."
As of the date of the Indenture, all of Holdings' subsidiaries are
restricted subsidiaries, which are any subsidiaries that are not Unrestricted
Subsidiaries. However, under certain circumstances, Holdings may designate
current or future subsidiaries as Unrestricted Subsidiaries, which will not be
subject to many of the restrictive covenants set forth in the Indenture.
CHANGE OF CONTROL
If a Change of Control occurs, each registered holder of notes will have
the right to require Holdings to repurchase all or any part of such holder's
notes, at a purchase price in cash equal to 101% of the Accreted Value as of the
repurchase date, plus accrued and unpaid interest, if any, to the repurchase
date, subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date.
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Within 30 days following any Change of Control, Holdings shall mail a
notice to each holder, with a copy to the trustee, stating:
- that a Change of Control has occurred and that each holder has the right
to require Holdings to purchase such holder's notes at a purchase price
in cash equal to 101% of the Accreted Value as of the repurchase date,
plus accrued and unpaid interest, if any, to the repurchase date, subject
to the right of holders of record on the relevant record date to receive
interest on the relevant interest payment date;
- the circumstances and relevant facts regarding such Change of Control,
including information with respect to pro forma historical income, cash
flow, and capitalization, after giving effect to the Change of Control;
- the repurchase date, which shall be no earlier than 30 days, nor later
than 60 days, from the date such notice is mailed; and
- the instructions Holdings determines, consistent with this covenant, that
a holder must follow in order to have its notes purchased.
The definition of Change of Control includes the phrase all or
substantially all, as used with respect to a sale of assets. The meaning of
substantially all varies according to the facts and circumstances of the subject
transaction. There is no clearly established meaning of substantially all under
New York law, the law governing the Indenture, and the phrase thus is subject to
judicial interpretation. Accordingly, in certain circumstances, there may be
uncertainty in ascertaining whether a particular transaction would involve a
disposition of all or substantially all of the assets of a person, and therefore
it may be unclear whether a Change of Control has occurred.
Holdings will comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations
in connection with the repurchase of notes according to the terms of this
covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, Holdings will comply with
the applicable securities laws and regulations and will not be deemed to have
breached its obligations under this covenant by virtue of its compliance with
the law.
The Change of Control purchase feature is a result of negotiations between
Holdings and the initial purchasers of the outstanding notes. Subject to the
limitations discussed below, Holdings could enter into certain transactions,
including acquisitions, refinancings or other recapitalizations, that would not
constitute a Change of Control under the Indenture, but that could increase the
amount of indebtedness outstanding at such time or otherwise affect Holdings'
capital structure or credit rating. Restrictions on Holdings' ability to incur
additional indebtedness are contained in the covenants described under
"-- Certain Covenants -- Limitation on Indebtedness" and "-- Limitation on
Indebtedness and Preferred Stock of Restricted Subsidiaries." Such restrictions
can be waived only with the consent of the holders of a majority, in principal
amount at maturity, of the notes then outstanding. Except for the limitations
contained in such covenants, however, the Indenture does not contain any
covenants or provisions that afford holders of notes protection in the event of
a highly leveraged transaction.
The New Credit Facility is expected to:
- limit Holdings' access to its subsidiaries' cash flow and, therefore,
restrict Holdings' ability to purchase any notes.
- provide, with respect to Holdings, that the occurrence of certain events
similar to those included in the definition of the term Change of Control
will constitute a default.
In the event that a Change of Control occurs at a time when Holdings's
subsidiaries are prohibited from making distributions to Holdings to allow it to
purchase notes, Holdings could cause its subsidiaries to seek the consent of the
lenders under the New Credit Facility, to allow such distributions, or it could
attempt to refinance the borrowings that contain the prohibition against
distributions. If Holdings does not
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obtain such a consent or repay such borrowings, Holdings will remain prohibited
from purchasing notes. In that case, Holdings' failure to purchase tendered
notes would constitute an Event of Default under the Indenture which would, in
turn, constitute a default under the New Credit Facility.
Future indebtedness of Holdings and its subsidiaries may contain
prohibitions against the occurrence of certain events that would constitute a
Change of Control, or require such indebtedness to be purchased upon a Change of
Control. Moreover, the holders' exercise of their right to require Holdings to
purchase the notes could cause a default under such indebtedness, even if the
Change of Control itself does not cause a default, due to the financial effect
on Holdings of such a notes purchase.
Holdings' ability to pay cash to the holders following the occurrence of a
Change of Control may be limited by Holdings' then existing financial resources,
including its ability to access its subsidiaries' cash flow. See "Risk Factors
- -- Repayment Uncertainty" and "Risk Factors -- Holding Company Structure." There
can be no assurance that sufficient funds will be available when necessary for
Holdings to make any required purchases.
The Indenture provisions relative to Holdings' obligation to make an offer
to repurchase the notes as a result of a Change of Control may be waived or
modified with the written consent of the holders of a majority, in principal
amount at maturity, of the notes.
Holdings will not be required to make an offer, according to the terms of
this section of the Indenture, upon a Change of Control, if a third party, in
compliance with the requirements set forth in the Indenture applicable to
Holdings' Change of Control, makes an offer to purchase, and purchases, all
notes validly tendered and not withdrawn under such offer.
CERTAIN COVENANTS
The Indenture contains covenants including, among others, the following:
Limitation on Indebtedness
1. Holdings cannot have an indebtedness to Adjusted EBITDA Ratio of more than
7.00:1. Holdings may give pro forma effect to the incurrence of indebtedness
and the application of proceeds from such incurrence when determining
compliance with the ratio. Accrual of interest, accretion, or amortization
of original issue discount, and the payment of interest in the form of
additional indebtedness, will not be deemed to be an incurrence of
indebtedness for purposes of this covenant.
2. Despite the limitations described in paragraph (1), and regardless of the
amount of Holdings' outstanding indebtedness, Holdings may incur any or all
of the following indebtedness:
a. Indebtedness of Holdings owing to and held by any restricted subsidiary;
provided, however, that any subsequent issuance or transfer of any
capital stock, or any other event which results in any such restricted
subsidiary ceasing to be a restricted subsidiary, or any subsequent
transfer of any such indebtedness, except to another restricted
subsidiary, will be deemed to constitute Holdings' incurrence of such
indebtedness;
b. Indebtedness represented by the notes;
c. Any of Holdings' indebtedness outstanding on the Issue Date, other than
the indebtedness described in clauses (2) (a) or (b) above;
d. Indebtedness, including capital lease obligations, which Holdings incurs
to finance the acquisition, construction or improvement of fixed or
capital assets, in an aggregate principal amount, not to exceed $5.0
million, at any one time outstanding, together with the amount of any
indebtedness then outstanding and incurred according to the terms of
clause (2)(f) of the "Limitation on Indebtedness and Preferred Stock of
Restricted Subsidiaries" covenant; provided, that such indebtedness is
incurred within 180 days after the date of such acquisition,
construction or
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<PAGE> 88
improvement, and does not exceed the fair market value of such acquired,
constructed or improved assets, as Holdings' Board of Directors
determines in good faith;
e. Refinancing Indebtedness, incurred in respect of any indebtedness
incurred according to the terms of paragraph (1) above or clauses (2)(b)
or (c) above or this clause (2)(e);
f. Indebtedness which is:
- in respect of performance bonds, bankers' acceptances, letters of
credit and surety or appeal bonds provided by Holdings in the ordinary
course of its business, which do not secure other indebtedness; and
- incurred under currency exchange protection agreements and interest
rate protection agreements which, at the time of incurrence, are in
the ordinary course of business; provided, however, that the currency
agreements exchange protection and interest rate protection agreements
are directly related to indebtedness which Holdings is permitted to
incur under the Indenture;
g. Indebtedness represented by guarantees, by Holdings, of indebtedness
which Holdings or any of its Subsidiaries otherwise is permitted to
incur under the Indenture;
h. Indebtedness of any other person, existing at the time such other person
is merged with or into Holdings, and outstanding on, or prior to, the
date on which such person was merged with or into Holdings, other than
indebtedness incurred in connection with, or to provide all, or any
portion, of the funds or credit support utilized to consummate the
transaction, or series of related transactions, as a result of which
such person was merged with or into Holdings; provided, however, that on
the date of such merger and after giving it effect, Holdings would be
permitted to incur at least $1.00 of additional indebtedness according
to the terms of paragraph (1) above;
i. Indebtedness incurred by Holdings' subsidiaries, which the terms of the
Indenture do not otherwise prohibit;
j. incurrence by Holdings of indebtedness not to exceed, at any one time
outstanding, together with the amount of any indebtedness then
outstanding and incurred according to the terms of clause (2)(i) of the
"Limitation on Indebtedness and Preferred Stock of Restricted
Subsidiaries" covenant:
- 1.5
times
- the aggregate Net Cash Proceeds Holdings receives from the issue or
sale of capital stock, other than Disqualified Stock, subsequent to
the Issue Date,
less
- the amount of such Net Cash Proceeds used to make Restricted Payments
according to clause (1)(c)(ii), or applied according to clause
(2)(a)(ii), of the "Limitation on Restricted Payments" covenant;
however, for purposes of calculating the amount in the second bullet
point of clause 2(j) above, the issuance or sale of capital stock to a
Holdings Subsidiary or to an employee stock ownership plan or a trust
established by Holdings or any of its Restricted Subsidiaries shall not
be included; and
k. other indebtedness, in an aggregate principal amount outstanding at any
time, not to exceed $5.0 million, together with the amount of any
indebtedness and preferred stock then outstanding and incurred according
to the terms of clause (2)(j) of the "Limitation on Indebtedness and
Preferred Stock of Restricted Subsidiaries" covenant.
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<PAGE> 89
3. Holdings shall not incur any indebtedness according to the terms of the
foregoing paragraph (2) if it uses the proceeds thereof, directly or
indirectly, to refinance any Subordinated Obligations, unless such new
indebtedness shall:
a. be subordinated to the notes to at least the same extent as such
Subordinated Obligations being refinanced; and
b. have a Stated Maturity that is no earlier than the Stated Maturity of
the Subordinated Obligations being refinanced.
4. For purposes of determining compliance with this covenant:
a. in the event that an item of indebtedness meets the criteria of more
than one of the types of indebtedness described above, Holdings, in its
sole discretion, will classify such indebtedness, and only be required
to include the amount and type of such indebtedness in one of the above
clauses; and
b. an item of indebtedness may be divided and classified into more than one
of the types of indebtedness described above.
Limitation on Indebtedness and Preferred Stock of Restricted Subsidiaries
1. Holdings shall not permit any restricted subsidiary to incur, directly or
indirectly, any indebtedness or preferred stock unless, on the date of, and
after giving effect to, such incurrence and the application of the net
proceeds therefrom, Holdings' indebtedness to Adjusted EBITDA Ratio would be
less than 7.00:1. Accrual of interest, accretion or amortization of original
issue discount and the payment of interest in the form of additional
indebtedness will not be deemed to be an incurrence of indebtedness for
purposes of this covenant.
2. Despite the above paragraph (1), and regardless of the amount of the
restricted subsidiaries' outstanding indebtedness, any restricted subsidiary
may incur any or all of the following indebtedness:
a. Indebtedness incurred under the New Credit Facility, in an aggregate
principal amount outstanding at any time not to exceed the greater of:
i. $50.0 million; and
ii. the product of
- $200,000
times
- the number of Completed Towers on the date of such incurrence, less
the aggregate amount of all proceeds from all Asset Dispositions of
Holdings' Tower Assets that have been applied, since the Issue
Date, to permanently reduce the outstanding amount of such
indebtedness, according to the "Limitation on Sale of Assets and
Subsidiary Stock" covenant;
b. Indebtedness or preferred stock of a restricted subsidiary issued to,
and held by, Holdings or a restricted subsidiary; provided, however,
that any subsequent issuance or transfer of any capital stock which
results in any restricted subsidiary ceasing to be a restricted
subsidiary, or any subsequent transfer of such indebtedness or preferred
stock, other than to Holdings or a restricted subsidiary, shall be
deemed to constitute an incurrence, by Holdings, of such indebtedness or
preferred stock;
c. Indebtedness or preferred stock of a restricted subsidiary incurred and
outstanding on, or prior to, the date on which Holdings acquired such
restricted subsidiary, other than indebtedness or preferred stock
incurred in connection with, or to provide all, or any portion of, the
funds or credit
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support utilized to consummate the transaction, or series of related
transactions, as a result of which such restricted subsidiary became a
restricted subsidiary or Holdings acquired it; provided, however, that
on the date of such acquisition and after giving effect thereto,
Holdings would be permitted to incur at least $1.00 of additional
indebtedness according to the terms of paragraph (1) of the "Limitation
on Indebtedness" covenant above;
d. Indebtedness or preferred stock outstanding on the Issue Date, other
than indebtedness described in clauses (2)(a), (b) or (c) above;
e. Refinancing Indebtedness incurred in respect of indebtedness or
preferred stock referred to in clauses (2)(c) and (d) above or this
clause (e); provided, however, that to the extent such Refinancing
Indebtedness directly or indirectly refinances a subsidiary's
indebtedness or preferred stock described in clause (2)(c) above, only
the subsidiary shall incur such refinancing indebtedness;
f. Indebtedness, including capital lease obligations, which a subsidiary
incurs to finance the acquisition, construction or improvement of fixed
or capital assets, in an aggregate principal amount at any one time
outstanding, not to exceed $5.0 million, together with the amount of any
Indebtedness then outstanding and incurred according to the terms of
clause (2)(d) of the "Limitation on Indebtedness" covenant; provided,
that such subsidiary incurs such indebtedness within 180 days after the
date of such acquisition, construction or improvement, and that such
indebtedness does not exceed the fair market value of such acquired,
constructed or improved assets, as Holdings' Board of Directors
determines in good faith;
g. Indebtedness which is:
i. in respect of performance bonds, bankers' acceptances, letters of
credit and surety or appeal bonds provided in the ordinary course of
its business, which do not secure other Indebtedness; and
ii. incurred under currency exchange protection agreements and interest
rate protection agreements which, at the time of incurrence, are in
the ordinary course of business; provided, however, that the
currency exchange protection agreements and interest rate protection
agreements are directly related to indebtedness which Holdings or
any of its subsidiaries is permitted to incur under the Indenture;
h. Indebtedness represented by guarantees, by a subsidiary, of indebtedness
which Holdings or another subsidiary is otherwise permitted to incur
under the Indenture;
i. A subsidiary's incurrence of indebtedness, not to exceed at any one time
outstanding together with the amount of any indebtedness then
outstanding and incurred according to the terms of clause (2)(j) of the
"Limitation on Indebtedness" covenant:
- 1.5
times
- the aggregate Net Cash Proceeds SpectraSite receives from the issue or
sale of capital stock, other than Disqualified Stock, subsequent to
the Issue Date; however, this amount excludes Net Cash Proceeds from
an issuance or sale to a Holdings subsidiary, to an employee stock
ownership plan or to a trust established by Holdings or any of its
restricted subsidiaries,
less
- the amount of such Net Cash Proceeds used to make Restricted Payments
according to clause (1)(c)(ii) of the "Limitation on Restricted
Payments" covenant, or applied according to clause (2)(a)(ii)of the
"Limitation on Restricted Payments" covenant; and
j. other indebtedness and preferred stock, in an aggregate principal and/or
liquidation amount, not to exceed at any time outstanding, $5.0 million,
less the amount of any indebtedness then outstanding
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<PAGE> 91
and incurred according to the terms of clause (2)(k) of the "Limitation
on Indebtedness" covenant.
3. For purposes of determining compliance with this covenant:
a. in the event that an item of indebtedness meets the criteria of more
than one of the types of indebtedness described above, Holdings, in its
sole discretion, will classify such indebtedness, and only be required
to include the amount and type of such indebtedness in one of the above
clauses; and
b. an item of indebtedness may be divided and classified into more than one
of the types of indebtedness described above.
Holdings will not permit any Unrestricted Subsidiary to incur any
indebtedness other than Non-Recourse Debt.
Limitation on Restricted Payments
1. Holdings will not make, and will not permit any Restricted Subsidiary to
make, directly or indirectly, any Restricted Payment, if at the time
Holdings or the Restricted Subsidiary makes the Restricted Payment:
a. a Default or Event of Default will have occurred and be continuing, or
would result therefrom;
b. Holdings could not incur at least $1.00 of additional Indebtedness
according to the terms of paragraph (1) of the "Limitation on
Indebtedness" covenant; or
c. the aggregate amount of such Restricted Payment and all other Restricted
Payments, which amount, if other than in cash, the Holdings Board of
Directors will determine in good faith, and will evidence such
determination by a Board of Directors resolution, declared or made
subsequent to the Issue Date, would exceed the sum of:
i. the aggregate EBITDA (or, in the event such EBITDA shall be a
deficit, minus such deficit) accrued subsequent to the Issue Date to
the most recent date for which financial information is available to
Holdings, taken as one accounting period, less 1.4 times Consolidated
Interest Expense for the same period;
plus
ii. 100% of the aggregate Net Cash Proceeds, less the aggregate amount
of such Net Cash Proceeds used to incur indebtedness according to
the terms of clause (2)(j) of the "Limitation on Indebtedness"
covenant and clause (2)(i) of the "Limitation on Indebtedness and
Preferred Stock of Restricted Subsidiaries" covenant, plus 70% of
the GAAP purchase accounting valuation of Qualified Proceeds, with
each such valuation calculated as of the sale date of the capital
stock received as consideration therefor, in each case received by
Holdings from the issue or sale of capital stock, other than
Disqualified Stock, subsequent to the Issue Date, other than an
issuance or sale to one of Holdings' subsidiaries, and other than an
issuance or sale to an employee stock ownership plan, or to a trust
established by Holdings or any of its restricted subsidiaries;
plus
iii. the amount by which Holdings' indebtedness is reduced on Holdings'
balance sheet, upon conversion or exchange, other than by a
Restricted Subsidiary, subsequent to the Issue Date of any Holdings
indebtedness which is convertible or exchangeable for Holdings'
capital stock, other than Disqualified Stock, less the amount of
any cash, or the fair value of any other property, distributed by
Holdings upon such conversion or exchange;
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plus
iv. an amount equal to the sum of the net reduction in Investments in
Unrestricted Subsidiaries resulting from dividends, repayments of
loans or advances, or other transfers of assets to Holdings or any
restricted subsidiary from Unrestricted Subsidiaries, plus the
portion, proportionate to Holdings' equity interest in such
subsidiary, of the fair market value of the net assets of an
Unrestricted Subsidiary, at the time such Unrestricted Subsidiary is
designated a restricted subsidiary;
plus
v. dividends and distributions Holdings receives, subsequent to the
Issue Date, from Unrestricted Subsidiaries, to the extent such
dividends and distributions are not otherwise included in calculating
EBITDA;
plus
vi. Net Cash Proceeds Holdings receives, subsequent to the Issue Date,
from Investments that are not Permitted Investments, to the extent
not otherwise included in calculating EBITDA.
The sum in clause (iv) above shall not exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments Holdings or any
restricted subsidiary previously made in such Unrestricted Subsidiary,
which amount was included in the calculation of the amount of Restricted
Payments.
2. The provisions of paragraph (1) of this covenant will not prohibit:
a. any purchase, redemption, defeasance or other acquisition of Holdings'
capital stock or Subordinated Obligations made by exchange for, or out
of the net proceeds of the substantially concurrent sale of, Holdings'
capital stock, other than Disqualified Stock and other than capital
stock issued or sold to a Holdings subsidiary, or an employee stock
ownership plan, or a trust established by Holdings or any of its
subsidiaries; provided, however, that:
i. such purchase, redemption, defeasance or other acquisition will be
excluded in the calculation of the amount of Restricted Payments; and
ii. to the extent applied toward any such purchase, redemption,
defeasance or other acquisition, the Net Cash Proceeds from such
sale will be excluded from clause (1)(c)(ii) above, clause (2)(j) of
the "Limitation on Indebtedness" covenant and clause (2)(i) of the
"Limitation on Indebtedness and Preferred Stock of Restricted
Subsidiaries" covenant;
b. any purchase, redemption, defeasance or other acquisition of
Subordinated Obligations made by exchange for, or out of the net
proceeds of the substantially concurrent sale of, Holdings' Subordinated
Obligations; provided, however, that:
i. the principal amount of such new indebtedness does not exceed the
principal amount of the Subordinated Obligations being so redeemed,
repurchased, acquired or retired for value, plus the amount of any
premium required to be paid under the terms of the instrument
governing the Subordinated Obligations being so redeemed,
repurchased, acquired or retired;
ii. such new indebtedness is subordinated to the notes at least to the
same extent as the Subordinated Obligations so purchased, exchanged,
redeemed, repurchased, acquired or retired for value;
iii. such new indebtedness has a final scheduled maturity date later
than the earlier of the final scheduled maturity date of the
Subordinated Obligations being so redeemed, repurchased, acquired
or retired, and the final scheduled maturity date of the notes; and
iv. such new indebtedness has an Average Life equal to or greater than
the Average Life of the notes;
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Any purchase redemption, defeasance or other acquisition consistent with
clause 2(b) above will be excluded in the calculation of the amount of
Restricted Payments;
c. dividends paid within 60 days after the date of their declaration, if at
such date of declaration such dividend would have complied with this
covenant; and
d. purchases of outstanding shares of SpectraSite's capital stock from
deceased stockholders, in an amount not to exceed $1.0 million in the
aggregate;
Any dividend or purchase consistent with 2(c) and 2(d), respectively,
above will be included in the calculation of Restricted Payments.
The Restricted Payments described in clauses (2)(a), (b) and (d) above shall not
be permitted if at the time of, and after giving effect to, such Restricted
Payments, a default or an Event of Default shall have occurred and be
continuing.
Limitation on Restrictions on Distributions from Restricted Subsidiaries
Holdings will not, and will not permit any restricted subsidiary to,
create, or otherwise cause or permit to exist or become effective, any
consensual encumbrance or restriction on the ability of any restricted
subsidiary to:
1. pay dividends or make any other distributions on its capital stock, to
Holdings or to a restricted subsidiary, or pay any indebtedness or other
obligation owed to Holdings;
2. make any loans or advances to Holdings; or
3. transfer any of its property or assets to Holdings or any restricted
subsidiary, except:
a. any encumbrance or restriction under the New Credit Facility or any
agreement in effect at, or entered into, on the Issue Date;
b. any encumbrance or restriction, with respect to a restricted subsidiary,
under an agreement relating to any indebtedness it incurred on, or prior
to, the date on which Holdings or a restricted subsidiary acquired it,
other than indebtedness incurred as consideration in, or to provide all,
or any portion, of the funds or credit support utilized to consummate
the transaction, or series of related transactions, as a result of which
such restricted subsidiary became a subsidiary, or Holdings or a
restricted subsidiary acquired it, and outstanding on such date;
c. any encumbrance or restriction under an agreement effecting a
Refinancing of indebtedness incurred, under an agreement referred to in
clause (3)(a) or (b) above, or contained in any amendment to an
agreement referred to in clause (3)(a) or (b) above; provided, however,
that the encumbrances and restrictions contained in any such refinancing
agreement or amendment, taken as a whole, with respect to a restricted
subsidiary, are no less favorable to the holders of notes than the
encumbrances and restrictions with respect to such restricted subsidiary
contained in such predecessor agreements, as the Holdings Board of
Directors determines in good faith;
d. in the case of paragraph (3), any encumbrance or restriction that
restricts, in a customary manner, the subletting, assignment or transfer
of any property or asset that is subject to a lease, license or other
contract;
e. in the case of paragraph (3), contained in security agreements or
mortgages securing a restricted subsidiary's indebtedness, to the extent
such encumbrance or restrictions restrict the transfer of the property
subject to such security agreements or mortgages;
f. any restriction with respect to a restricted subsidiary, imposed under
an agreement entered into for the sale or disposition of all or
substantially all of such restricted subsidiary's capital stock or
assets, pending the closing of such sale or disposition; and
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g. customary provisions with respect to the disposition or distribution of
assets or property in joint venture and other similar agreements.
Limitation on Sales of Assets and Subsidiary Stock
1. Holdings will not, and will not permit any restricted subsidiary to,
directly or indirectly, consummate any Asset Disposition unless:
a. Holdings or such restricted subsidiary receives consideration, at the
time of such Asset Disposition, at least equal to the fair market value,
including as to the value of all non-cash consideration, as the Holdings
Board of Directors determines in good faith, of the shares and assets
subject to such Asset Disposition; and
b. except in the case of a Tower Asset Exchange, at least 75% of the
consideration Holdings or such restricted subsidiary receives is in the
form of cash or cash equivalents.
2. Within 365 days after the receipt of any Net Available Cash from an Asset
Disposition, Holdings or the applicable restricted subsidiary may apply such
Net Available Cash to:
a. prepay, repay, redeem or purchase indebtedness, other than Disqualified
Stock, of a Holdings wholly owned subsidiary, provided that the
applicable restricted subsidiary, whether or not a wholly owned
subsidiary, also may prepay, repay, redeem or purchase its own
outstanding Indebtedness, or Senior Indebtedness, in each case other
than indebtedness owed to Holdings or an Affiliate of Holdings;
b. acquire all or substantially all of the assets of an entity engaged in a
Permitted Business;
c. acquire Voting Stock of an entity engaged in a Permitted Business from a
person that is not a Holdings subsidiary; provided, that after giving
effect thereto, Holdings or its restricted subsidiary owns a majority of
such Voting Stock, and such acquisition otherwise is made in accordance
with the Indenture, including, without limitation, the "Limitation on
Restricted Payments" covenant; or
d. make a capital expenditure or acquire other long-term assets that are
used or useful in a Permitted Business.
To the extent of the balance of such Net Available Cash, after application in
accordance with clause (2)(a), (b), (c) or (d) above, Holdings shall make an
offer to the holders to purchase notes according to the terms of, and subject
to, the conditions set forth in paragraph (5) below.
3. Notwithstanding the foregoing provisions, Holdings and its restricted
subsidiaries shall not be required to apply any Net Available Cash in
accordance with this covenant, except to the extent that the aggregate Net
Available Cash from all Asset Dispositions which is not applied in
accordance with this covenant exceeds $2.5 million. Pending application of
Net Available Cash according to this covenant, such Net Available Cash shall
be invested in Permitted Investments.
4. For the purposes of this covenant, the following are deemed to be cash:
a. the transferee's assumption of Holdings' Indebtedness, other than
Holdings' Disqualified Stock, and other than indebtedness that is
subordinated to the notes, or any restricted subsidiary's indebtedness
and the release of Holdings or the restricted subsidiary from all
liability on such indebtedness in connection with the Asset Disposition;
b. securities that Holdings or any restricted subsidiary receives from the
transferee, that Holdings or the restricted subsidiary converts into
cash within 20 days of the applicable Asset Disposition, to the extent
of the cash received; and
c. the transferee's assumption of any of Holdings' or any restricted
subsidiary's liabilities, as shown on Holdings' or such restricted
subsidiary's most recent balance sheet, other than contingent
liabilities and liabilities that are by their terms subordinated to the
notes or any guarantee thereof,
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of any such assets, according to the terms of a customary novation
agreement that releases Holdings or the restricted subsidiary from
further liability.
5. In the event of an Asset Disposition that requires a notes purchase
according to the terms of paragraph (1) of this covenant, Holdings will be
required to purchase notes tendered, in response to Holdings' offer for the
notes, at a purchase price of:
- 100% of their Accreted Value as of the purchase date, without premium,
plus
- accrued and unpaid interest to the purchase date, in accordance with the
procedures, including prorating in the event of oversubscription, set
forth in the Indenture.
If the aggregate purchase price for notes tendered in response to the Offer
is less than the Net Available Cash allotted to the notes purchase,
Holdings may use any remaining Net Available Cash for general corporate
purposes not otherwise prohibited by the Indenture.
If the aggregate purchase price for notes tendered in response to the offer
is greater than the Net Available Cash allotted to the notes purchase, the
trustee will select the notes to be purchased on the basis set forth under
"-- Redemption -- Partial Redemption -- Selection and Notice" above. Upon
completion of any required offer to the holders, the amount of Net
Available Cash will be reset at zero. Holdings shall not be required to
make an offer for notes according to the terms of this covenant if the Net
Available Cash available therefor, after application of the proceeds as
provided in paragraph (2) of this covenant, is less than $5.0 million for
all Asset Dispositions, which lesser amounts shall be carried forward, for
purposes of determining whether an offer is required, with respect to the
Net Available Cash, from any subsequent Asset Disposition.
6. Holdings will comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with a notes repurchase according to the terms of
this covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, Holdings will comply
with the applicable securities laws and regulations and will not be deemed
to have breached its obligations under this covenant by virtue of its
compliance with the law.
7. The provisions of this covenant shall not apply to any transaction that is
permitted under the provisions of the covenant described under "-- Merger
and Consolidation."
Limitation on Transactions with Affiliates
1. Holdings will not, and will not permit any restricted subsidiary to,
directly or indirectly, enter into or conduct any transaction, or series of
transactions, including the purchase, sale, lease or exchange of any
property, employee compensation arrangements, or the rendering of any
service, with any Holdings Affiliate unless:
a. the terms of such transaction, taken as a whole, are no less favorable
to Holdings or such restricted subsidiary, as the case may be, than
those that could be obtained, at the time of such transaction, in
arm's-length dealings with a person who is not an Affiliate;
b. in the event such affiliate transaction involves an aggregate amount in
excess of $1.0 million, the terms of such transaction are set forth in
writing and shall have been approved by a majority of the members of the
Board of Directors having no personal stake in such affiliate
transaction, and such majority determines that the affiliate transaction
satisfies the criteria in clause (1)(a) above; and
c. in the event such affiliate transaction involves an aggregate amount in
excess of $5.0 million, Holdings has received a written opinion from a
nationally recognized independent investment banking firm that such
affiliate transaction is fair to Holdings and its restricted
subsidiaries from a financial point of view.
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2. The provisions of paragraph (1) above shall not prohibit:
a. any Restricted Payment permitted to be made according to the terms of
the "Limitation on Restricted Payments" covenant;
b. any securities issuance, or other payments, awards or grants in cash,
securities or otherwise, made under, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the
Board of Directors, or any arrangements relating thereto;
c. the grant of stock options or similar rights to Holdings employees and
directors, made under plans approved by the Board of Directors;
d. loans or advances to employees, in the ordinary course of business, in
accordance with Holdings' or its restricted subsidiaries' past
practices, but in any event not to exceed $1.0 million in the aggregate
outstanding at any one time;
e. the payment of reasonable fees to directors of Holdings and its
restricted subsidiaries who are not employees of Holdings or its
restricted subsidiaries;
f. any transaction between Holdings and a restricted subsidiary or between
restricted subsidiaries;
g. the issuance or sale of any Holdings capital stock, other than
Disqualified Stock;
h. any transaction, consummated according to the terms of any agreement
described in Holdings' final offering circular dated June 23, 1998, to
which Holdings is a party, in each case as such agreement is in effect
on the Issue Date and without giving any effect to any subsequent
amendments, modifications or alterations thereof; and
i. any transaction:
- contemplated by the Nextel merger agreement;
- contemplated by a credit facility under which an affiliate of Holdings
is a lender, as long as the terms of such a facility are no less
favorable than those that could be obtained in an arm's-length
transaction; or
- between Holdings or any restricted subsidiary and any affiliate of
Holdings involving ordinary course investment banking, commercial
banking or related activities.
Limitation on Liens
Holdings will not, and will not permit any restricted subsidiary to,
directly or indirectly, create, or permit to exist, any Lien on any of its
property or assets, including capital stock, whether owned on the Issue Date or
thereafter acquired, securing any obligation, other than Permitted Liens, unless
effective provision is made contemporaneously to secure the notes equally and
ratably with or, in the case of Subordinated Obligations, on a senior basis to,
such obligation, for so long as the obligation is so secured.
Limitation on Sale or Issuance of Capital Stock of Restricted Subsidiaries
Holdings:
1. will not, and will not permit any restricted subsidiary to, transfer,
convey, sell, lease, or otherwise dispose of any restricted subsidiary's
capital stock, to any person, other than to Holdings or to a wholly owned
subsidiary of Holdings, unless:
a. such transfer, conveyance, sale, lease, or other disposition is of all
of the capital stock of such restricted subsidiary, or a majority of the
issued and outstanding capital stock of the restricted subsidiary;
provided, however, that Holdings' minority equity interest in such
person, after giving effect to any such disposition, shall be deemed to
constitute an Investment, by Holdings, in such person; and
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b. the net cash proceeds from such transfer, conveyance, sale, lease, or
other disposition, are applied in accordance with the "Limitation on
Sales of Assets and Subsidiary Stock" covenant; and
2. will not permit any restricted subsidiary to issue any of its capital stock
to any person, other than to Holdings or a wholly owned subsidiary of
Holdings, and other than shares of its capital stock constituting directors'
qualifying shares or the ownership by foreign nationals of capital stock of
any restricted subsidiary, to the extent necessary or mandated by applicable
law.
Limitation on Sale/Leaseback Transactions
Holdings will not, and will not permit any restricted subsidiary to, enter
into any Sale/Leaseback Transaction with respect to any property unless:
1. Holdings or such restricted subsidiary would be entitled to:
a. incur Indebtedness in an amount equal to the Attributable Indebtedness
with respect to such Sale/ Leaseback Transaction, according to the terms
of the "Limitation on Indebtedness" covenant; and
b. create a Lien on such property securing such Attributable Indebtedness,
without equally and ratably securing the notes, according to the terms
of the "Limitation on Liens" covenant;
2. the net cash proceeds received by Holdings or any restricted subsidiary in
connection with such Sale/ Leaseback Transaction are at least equal to the
fair value of such property, as the Holdings Board of Directors determines
in good faith; and
3. the transfer of such property is permitted by, and Holdings or such
restricted subsidiary applies the proceeds of such transaction in compliance
with, the "Limitation on Sales of Assets and Subsidiary Stock" covenant.
SEC Reports
Notwithstanding that Holdings may not be required to remain subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, Holdings will
file with the SEC, unless the SEC does not permit such filing, and provide the
trustee and note holders with, the annual reports and such information,
documents and other reports which are specified in Sections 13 and 15(d) of the
Exchange Act. Holdings also will comply with the other provisions of the Trust
Indenture Act Section 314(a).
MERGER AND CONSOLIDATION
Holdings will not, in one transaction or a series of transactions,
consolidate with or merge with or into, or convey, transfer, or lease, all or
substantially all its assets to, any person, unless:
1. the resulting, surviving or transferee person, the Successor Issuer, will be
a person organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia, and the Successor
Issuer, if not Holdings, will expressly assume, by supplemental indenture,
executed and delivered to the trustee, in form satisfactory to the trustee,
all Holdings' obligations under the notes and the Indenture;
2. immediately after giving effect to such transaction on a pro forma basis,
and treating any Indebtedness which becomes an obligation of the Successor
Issuer, or any restricted subsidiary, as a result of such transaction, as
having been incurred by the Successor Issuer, or such restricted subsidiary,
at the time of such transaction, no Default or Event of Default will have
occurred and be continuing;
3. except in the case of a merger of Holdings into a wholly owned subsidiary or
a merger Holdings enters into solely for the purpose of reincorporating in
another jurisdiction, immediately after giving effect to such transaction on
a pro forma basis, as if such transaction had occurred at the beginning of
the applicable four quarter period, Holdings, or the person formed by, or
surviving, any such consolidation or merger, if other than Holdings, or to
which such conveyance, transfer, lease or other disposition
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shall have been made, would have been permitted to incur at least $1.00 of
additional indebtedness according to the terms of paragraph (1) of the
"Limitation on Indebtedness" covenant above;
4. Holdings will have delivered to the trustee an Officer's Certificate and an
opinion of counsel, each stating that such consolidation, merger or
transfer, and such supplemental indenture, if any, comply with the
Indenture, as set forth in the Indenture.
The Successor Issuer will succeed to, and be substituted for, and may
exercise every right and power of Holdings, under the Indenture, and the
predecessor issuer, in the case of a conveyance, transfer or lease of all or
substantially all its assets, will be released from the obligations under the
Indenture and the notes, including, without limitation, the obligation to pay
the principal of and interest on the notes.
DEFAULTS
An Event of Default is defined in the Indenture as:
1. a default in any interest payment, when due, on any note, continued for 30
days;
2. a default in the payment of principal, when due, of any note at its Stated
Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise;
3. Holdings' failure to comply with its obligations under "-- Merger and
Consolidation;"
4. Holdings' failure to comply, for 30 days after notice, with any of its
obligations under the covenants described under "-- Change of Control" or
"-- Certain Covenants," in each case, other than a failure to purchase
notes;
5. Holdings' failure to comply, for 60 days after notice, with its other
agreements contained in the Indenture;
6. Holdings' failure, or the failure of any of Holdings' Significant
Subsidiaries, to pay any indebtedness within any applicable grace period,
after final maturity, or the acceleration of any such indebtedness by the
holders thereof, because of a default, if the total amount of such
indebtedness, unpaid or accelerated, exceeds $5.0 million or its foreign
currency equivalent (the cross acceleration provision);
7. certain events of bankruptcy, insolvency or reorganization of Holdings or
any of Holdings' Significant Subsidiaries (the bankruptcy provisions); or
8. any final judgment or decree, for the payment of money in excess of $5.0
million, is rendered against Holdings or any of Holdings' Significant
Subsidiaries, net of any amounts with respect to which a creditworthy
insurance company has acknowledged full liability, subject to any deductible
amounts of less than $5.0 million required to be paid by Holdings in
accordance with the applicable insurance policy, and either:
a. an enforcement proceeding has been commenced by any creditor upon such
judgment or decree; or
b. such judgment or decree remains outstanding for a period of 60 days
following the judgment and is not discharged, waived or stayed within 10
days after notice (the judgment default provision).
The foregoing will constitute Events of Default whatever the reason for any
such Event of Default, and whether it is voluntary or involuntary, or is
effected by operation of law, or under any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental
body.
However, a default under clauses (4), (5) and (8) above will not constitute
an Event of Default until the trustee or the holders of 25%, in aggregate
principal amount at maturity, of the outstanding notes, notify Holdings, as
provided in the Indenture, of the default and Holdings does not cure such
default within the time specified in clauses (4) and (5) above, after it
receives notice.
If an Event of Default occurs and is continuing, the trustee or the holders
of at least 25%, in aggregate principal amount at maturity, of the outstanding
notes, by notice to Holdings, may declare the Accreted Value of, and accrued but
unpaid interest on, all the notes to be due and payable. Upon such a
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declaration, such Accreted Value and interest will be due and payable
immediately. If an Event of Default relating to certain events of bankruptcy,
insolvency or reorganization of Holdings occurs and is continuing, the Accreted
Value of, and accrued interest on, all the notes automatically will become due
and payable immediately, without any declaration or other act on the part of the
trustee or any holders. Under certain circumstances, the holders of a majority,
in aggregate principal amount at maturity, of the outstanding notes may rescind
any such acceleration, with respect to the notes, and its consequences.
Subject to the provisions of the Indenture relating to the duties of the
trustee, in case an Event of Default occurs and is continuing, the trustee will
be under no obligation to exercise any of the rights or powers under the
Indenture, at the request or direction of any of the holders of notes, unless
such holders shall have offered to the trustee reasonable indemnity or security
against any loss, liability or expense. Except to enforce the right to receive
payment of principal, premium, if any, or interest when due, no holder may
pursue any remedy with respect to the Indenture or the notes unless:
- such holder shall have previously given the trustee notice that an Event
of Default is continuing;
- holders of at least 25%, in aggregate principal amount at maturity, of
the outstanding notes shall have requested the trustee to pursue the
remedy;
- such holders shall have offered the trustee reasonable security or
indemnity against any loss, liability or expense;
- the trustee shall not have complied with such request, within 60 days
after the receipt of the request and the offer of security or indemnity;
and
- the holders of a majority, in principal amount at maturity, of the
outstanding notes shall not have given the trustee a direction
inconsistent with such request within such 60-day period.
Subject to certain restrictions, the holders of a majority, in principal
amount at maturity, of the outstanding notes are given the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the trustee, or of exercising any trust or power conferred on the trustee. The
trustee, however, may refuse to follow any direction that conflicts with law or
the Indenture, or that the trustee determines is unduly prejudicial to the
rights of any other holder of notes, or that would involve the trustee in
personal liability.
The Indenture provides that if a Default occurs and is continuing, and is
known to the trustee, the trustee must mail to each holder notice of the
Default, within the earlier of 90 days after it occurs, or 30 days after it is
known to a Trust Officer or written notice of it is received by the trustee.
Except in the case of a default in the payment of principal of, premium, if any,
or interest on any note, the trustee may withhold notice, if and so long as a
committee of its Trust Officers in good faith determines that withholding notice
is not opposed to the interests of the note holders. In addition, Holdings is
required to deliver to the trustee, within 120 days after the end of each fiscal
year, a certificate indicating whether the signers thereof know of any Default
that occurred during the previous year. Holdings also is required to deliver to
the trustee, within 30 days after its knowledge of the occurrence of such event,
written notice of any event which would constitute certain Defaults, their
status, and what action Holdings is taking, or proposes to take, in respect of
such event.
AMENDMENTS AND WAIVERS
Subject to certain exceptions, the Indenture may be amended, and any past
default or compliance with any provisions may be waived, with the consent of the
holders of a majority, in principal amount at maturity, of the notes then
outstanding, including consents obtained in connection with a tender offer or
exchange for the notes. However, without the consent of each holder of an
outstanding note affected, no amendment may, among other things:
- reduce the amount of notes whose holders must consent to an amendment;
- reduce the rate of, or extend the time for, payment of interest on any
note;
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- reduce the principal of, or extend the Stated Maturity of, any note;
- reduce the premium payable upon the redemption of any note, or change the
time at which any note may be redeemed, as described under "-- Optional
Redemption;"
- make any note payable in money other than that stated in the note;
- impair the right of any holder to receive payment of principal of, and
interest on, such holder's notes on or after the due dates therefor, or
to institute suit for the enforcement of any payment on, or with respect
to, such holder's notes; or
- make any change in the amendment provisions which require each holder's
consent, or in the waiver provisions.
Without the consent of any holder, Holdings and the trustee may amend the
Indenture to cure any ambiguity, omission, defect or inconsistency, to provide
for the assumption by a successor corporation of Holdings' obligations under the
Indenture, to provide for uncertificated notes in addition to, or in place of,
certificated notes, provided that the uncertificated notes are issued in
registered form for purposes of Section 163(f) of the Internal Revenue Code, or
in a manner such that the uncertificated notes are as described in Section
163(f)(2)(B) of the Internal Revenue Code, to add guarantees with respect to the
notes, to secure the notes, to add to Holdings' covenants for the benefit of the
note holders, or to surrender any right or power, conferred upon Holdings, to
make any change that does not materially adversely affect the rights of any
holder, and to comply with any requirement of the SEC in connection with the
qualification of the Indenture under the Trust Indenture Act.
The holders' consent is not necessary, under the Indenture, to approve the
particular form of any proposed amendment. It is sufficient if such consent
approves the substance of the proposed amendment.
After an amendment under the Indenture becomes effective, Holdings is
required to mail to the holders a notice briefly describing such amendment.
However, the failure to give such notice to all holders, or any defect therein,
will not impair or affect the validity of the amendment.
TRANSFER AND EXCHANGE
A holder may transfer or exchange notes in accordance with the Indenture.
Upon any transfer or exchange, the registrar and the trustee may require a
holder, among other things, to furnish appropriate endorsements and transfer
documents, and Holdings may require a holder to pay any taxes required by law or
permitted by the Indenture, including any transfer tax or other similar
governmental charge payable in connection therewith. Holdings is not required to
transfer or exchange any note selected for redemption, or to transfer or
exchange any note for a period of 15 days prior to a selection of notes to be
redeemed. The notes will be issued in registered form, and the registered holder
of a note will be treated as the owner of such note for all purposes.
DEFEASANCE
Holdings at any time may terminate all its obligations under the notes and
the Indenture (legal defeasance), except for certain obligations, including:
- those respecting the defeasance trust, and obligations to register the
transfer or exchange of the notes;
- the obligation to replace mutilated, destroyed, lost or stolen notes; and
- maintenance of a registrar and paying agent in respect of the notes.
Holdings at any time may terminate its obligations under:
- the covenants described under "-- Certain Covenants," other than the
covenant described under "Merger and Consolidation";
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- the operation of the cross acceleration provision;
- the bankruptcy provisions with respect to Significant Subsidiaries and
the judgment default provision described under "-- Defaults;" and
- the limitations contained in clause (3) under "-- Merger and
Consolidation" (covenant defeasance).
Holdings may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option. If Holdings exercises its legal
defeasance option, payment of the notes may not be accelerated because of an
Event of Default with respect thereto. If Holdings exercises its covenant
defeasance option, payment of the notes may not be accelerated because of an
Event of Default as specified in clauses (4), (5), (6), (7) with respect to
Significant Subsidiaries only, or (8) under "-- Defaults," or because of
SpectraSite's failure to comply with clause (3) under "-- Merger and
Consolidation."
In order to exercise either defeasance option, Holdings must deposit, or
cause to be deposited, irrevocably in trust (the defeasance trust) with the
trustee, money or U.S. Government Obligations which through the scheduled
payment of principal and interest in respect thereof, in accordance with their
terms, will provide cash at such times and in such amounts as will be sufficient
to pay principal and interest, when due, on all the notes, except lost, stolen
or destroyed notes which have been replaced or repaid, to maturity or
redemption, as the case may be. Holdings must comply with certain other
conditions, including delivery to the trustee of an opinion of counsel to the
effect that the note holders will not recognize income, gain or loss, for
federal income tax purposes, as a result of such deposit and defeasance, and
will be subject to federal income tax on the same amounts, in the same manner,
and at the same times as would have been the case if such deposit and defeasance
had not occurred and, in the case of legal defeasance only, such opinion of
counsel must be based on a ruling of the Internal Revenue Service or other
change in applicable federal income tax law.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No Holdings director, officer, employee, incorporator or stockholder, as
such, shall have any liability for any of Holdings' obligations under the notes
or the Indenture, or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each note holder, by accepting a note,
waives and releases all such liability. This waiver and release are part of the
consideration for issuance of the notes. Such waiver may not be effective to
waive liabilities under the federal or state securities law, and it is the view
of the SEC that such a waiver is against public policy.
CONCERNING THE TRUSTEE
United States Trust Company of New York is the trustee under the Indenture,
and Holdings has appointed it as registrar and paying agent with regard to the
notes.
The holders of a majority, in principal amount at maturity, of the
outstanding notes will have the right to direct the time, method and place of
conducting any proceeding, for exercising any remedy available to the trustee,
subject to certain exceptions. The Indenture provides that if an Event of
Default occurs and is not cured, the trustee will be required, in the exercise
of its power, to use the degree of care of a prudent person in the conduct of
his or her own affairs. Subject to such provisions, the trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request of any note holder, unless such holder shall have offered to the trustee
security and indemnity satisfactory to it, against any loss, liability or
expense, and then only to the extent required by the terms of the Indenture.
GOVERNING LAW
The Indenture provides that it and the notes are governed by, and construed
in accordance with, the laws of the State of New York, without giving effect to
applicable principles of conflicts of law to the extent that the application of
the law of another jurisdiction would be required thereby.
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CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms.
Accreted Value means, as of any date, with respect to each $1,000 principal
amount at maturity of notes:
1. if the specified date is one of the following semi-annual accrual dates, the
Accreted Value will equal the amount set forth opposite such date below:
<TABLE>
<CAPTION>
SEMI-ANNUAL ACCRUAL DATE ACCRETED VALUE
------------------------ --------------
<S> <C>
June 26, 1998.......................................... $ 554.97
January 15, 1999....................................... 591.90
July 15, 1999.......................................... 627.41
January 15, 2000....................................... 665.06
July 15, 2000.......................................... 704.96
January 15, 2001....................................... 747.26
July 15, 2001.......................................... 792.09
January 15, 2002....................................... 839.62
July 15, 2002.......................................... 890.00
January 15, 2003....................................... 943.40
July 15, 2003.......................................... 1,000.00
</TABLE>
2. if the specified date occurs between two semi-annual accrual dates, the
Accreted Value will equal the sum of:
a. the Accreted Value for the semi-annual accrual date immediately
preceding such specified date;
plus
b. an amount equal to the product of
- the Accreted Value for the immediately following semi-annual accrual
date, less the Accreted Value for the immediately preceding semi-annual
accrual date,
times
- a fraction, the numerator of which is the number of days elapsed from the
immediately preceding semi-annual accrual date to the specified date,
using a 360-day year of twelve 30-day months, and the denominator of
which is 180; or
3. if the specified date occurs after the last semi-annual accrual date, the
Accreted Value will equal $1,000.00.
Adjusted EBITDA as of any date of determination, means the sum of:
1. Holdings' EBITDA for the four most recent full fiscal quarters ending prior
to such date, less Holdings' Tower EBITDA for such four-quarter period; plus
2. the product of four times Holdings' Tower EBITDA for the most recent
quarterly period. The Tower EBITDA for the most recent quarterly period
shall be determined on a pro forma basis after giving effect to:
a. all acquisitions or dispositions of assets Holdings and its subsidiaries
make, from the beginning of such quarter through, and including, the
date of determination, including any related financing transactions, as
if the acquisitions and dispositions had occurred at the beginning of
the quarter;
b. any new lease or Site Management Contract Holdings or any restricted
subsidiary enters into in the ordinary course of business, with respect
to Tower Assets, from the beginning of the quarter through, and
including, such date of determination, as if such new lease or Site
Management
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Contract had been signed at the beginning of the quarter, and Holdings
or a restricted subsidiary had received the rent required by the terms
of such lease or Site Management Contract for such quarter during the
quarter;
c. the loss from the beginning of the quarter through, and including, the
date of determination of any lease or Site Management Contract Holdings
or a restricted subsidiary has entered into, with respect to any Tower
Assets, that was in effect on the first day of the quarter, as if the
lease or Site Management Contract had not been in effect during such
quarter, and no rent under the lease had been received during the
quarter; and
d. any rent increases Holdings or any restricted subsidiary receives, from
the beginning of the quarter through, and including, the date of
determination related to leases or Site Management Contracts on Tower
Assets, as if the increased rental rate had been in effect at the
beginning of the quarter and Holdings or a restricted subsidiary had
received the increased amount of rent during such quarter.
For purposes of making the computation referred to above:
i. acquisitions that Holdings or any of its restricted subsidiaries
has made, including through mergers or consolidations, and
including any related financing transactions, during the reference
period, or subsequent to such reference period, and on or prior to
the date of determination, shall be deemed to have occurred on the
first day of the reference period, and EBITDA for the reference
period shall be calculated without giving effect to clause (2) of
the proviso set forth in the definition of Consolidated Net
Income; and
ii. the EBITDA attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of
prior to the date of determination, shall be excluded.
Affiliate of any specified person means any other person, directly or
indirectly, controlling or controlled by, or under direct or indirect common
control with, such specified person. For the purposes of this definition,
control, when used with respect to any person, means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract, or otherwise, and the terms
controlling and controlled have correlative meanings. For purposes of the
covenants in the Indenture, Affiliate shall also mean any beneficial owner of
capital stock representing 10% or more of the total voting power of Holdings'
Voting Stock, on a fully diluted basis, or of rights or warrants to purchase
such capital stock, whether or not currently exercisable, and any person who
would be an Affiliate of any such beneficial owner, according to the first
sentence in this definition.
Asset Disposition means any sale, lease, transfer, or other disposition, or
series of related sales, leases, transfers, or dispositions, by Holdings or any
restricted subsidiary, including any disposition by means of a merger,
consolidation, or similar transaction, of:
1. any shares of a restricted subsidiary's capital stock, other than directors'
qualifying shares, or shares required, by applicable law, to be held by a
Person other than Holdings or a restricted subsidiary;
2. all or substantially all the assets of any of Holdings' or any restricted
subsidiary's division or line of business; or
3. any other of Holdings' or any restricted subsidiary's assets outside of the
ordinary course of business;
other than in the case of clauses (1), (2) and (3) above:
- a disposition by a restricted subsidiary, to Holdings, or by Holdings or
a restricted subsidiary, to a wholly owned subsidiary:
- only for purposes of the covenant described under "-- Certain
Covenants -- Limitation on Sales of Assets and Subsidiary Stock", a
disposition that constitutes a Restricted Payment permitted by the
covenant described under "-- Certain Covenants -- Limitation on
Restricted Payments";
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- a disposition of assets with a fair market value of less than $500,000;
- grants of leases or licenses in the ordinary course of business; and
- disposals of cash equivalents.
Attributable Indebtedness in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value, discounted at the interest
rate borne by the notes, compounded annually, of the total obligations of the
lessee, for rental payments during the remaining term of the lease included in
the Sale/Leaseback Transaction, including any period for which the lease has
been extended.
Average Life means, as of the date of determination, with respect to any
indebtedness or preferred stock, the quotient obtained by dividing:
1. the sum of the product of the numbers of years, from the date of
determination to the dates of each successive scheduled principal payment,
of such indebtedness, or redemption, or similar payment with respect to such
preferred stock, times the amount of such payment;
by
2. the sum of all such payments.
Board of Directors means Holdings' Board of Directors, or any committee
thereof duly authorized to act on behalf of the Board.
Business Day means a day other than a Saturday, Sunday or other day on
which banking institutions in New York State are authorized or required by law
to close.
Change of Control means the occurrence of any of the following events:
1. prior to the first public offering of Holdings common stock, the Permitted
Holders cease to be the beneficial owners, as defined in Exchange Act Rules
13d-3 and 13d-5, directly or indirectly, of a majority, in the aggregate, of
the total voting power of Holdings' Voting Stock, whether as a result of:
- Holdings' issuance of any securities;
- any merger or consolidation of Holdings;
- any liquidation or dissolution of Holdings;
- any direct or indirect transfer of securities, by Holdings or otherwise.
For purposes of this paragraph (1) and paragraph (2) below, the Permitted
Holders shall be deemed to beneficially own any Voting Stock of an entity
(the specified entity) held by any other entity (the parent entity), so long
as the Permitted Holders beneficially own, directly or indirectly, in the
aggregate, a majority of the voting power of the parent entity's Voting
Stock;
2. subsequent to the first public offering of Holdings common stock, any
person, as such term is used in Exchange Act Sections 13(d) and 14(d), other
than one or more Permitted Holders, is or becomes the beneficial owner, as
defined in paragraph (1) above, except that for purposes of this paragraph
(2) such person shall be deemed to have beneficial ownership of all shares
that such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time, directly or indirectly, of
more than 35% of the total voting power of Holdings' Voting Stock; provided,
however, that the Permitted Holders beneficially own, as defined in
paragraph (1) above, directly or indirectly, in the aggregate, a lesser
percentage of the total voting power of Holdings' Voting Stock than such
other person, and do not have the right or ability, by voting power,
contract, or otherwise, to elect, or designate for election, a majority of
the Holdings Board of Directors.
For purposes of this paragraph (2), such other person shall be deemed to
beneficially own any Voting Stock of a specified entity held by a parent
entity, if such other person is the beneficial owner, as defined in this
paragraph (2), directly or indirectly, of more than 35% of the voting power
of the parent entity's Voting Stock, and the Permitted Holders beneficially
own, as defined in paragraph
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(1) above, directly or indirectly, in the aggregate, a lesser percentage of
the voting power of the parent entity's Voting Stock, and do not have the
right or ability, by voting power, contract, or otherwise, to elect, or
designate for election, a majority of the parent entity's board of directors;
3. during any period of two consecutive years, or, in the case this event
occurs within the first two years after the Issue Date, such shorter period
as shall have begun on the Issue Date, individuals who at the beginning of
such period constituted Holdings' Board of Directors, together with any new
directors whose election by Holdings' Board of Directors or whose nomination
for election by Holdings' shareholders was approved by a vote of a majority
of Holdings' directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
Holdings Board of Directors then in office;
4. Holdings' merger or consolidation with or into another person or the merger
of another person with or into Holdings, if Holdings' securities that are
outstanding immediately prior to such transaction and which represent 100%
of the aggregate voting power of Holdings' Voting Stock are changed into or
exchanged for cash, securities or property, unless as a result of such
transaction such securities are changed into or exchanged for, in addition
to any other consideration, securities of the surviving corporation that
represent immediately after such transaction, at least a majority of the
aggregate voting power of the Voting Stock of the surviving corporation; and
5. the sale of all or substantially all of Holdings' assets to another person,
other than a Permitted Holder or a person that is controlled by the
Permitted Holders.
Completed Tower means a wireless transmission tower with, as of any date of
determination:
- at least one anchor tenant that has executed a definitive lease with
Holdings or any of its Restricted Subsidiaries; and
- capacity for at least three tenants.
Consolidated Indebtedness as of any date of determination means, without
duplication:
- the total amount of indebtedness of Holdings and its restricted
subsidiaries;
- the total amount of indebtedness of any other person, to the extent that
such Indebtedness has been guaranteed by Holdings or one or more of its
restricted subsidiaries; and
- the aggregate liquidation value of all of Holdings' Disqualified Stock
and all preferred stock of Holdings' restricted subsidiaries, in each
case determined on a consolidated basis in accordance with GAAP.
Consolidated Interest Expense means, for any period, the total interest
expense of Holdings and its consolidated restricted subsidiaries, plus, to the
extent not included in such total interest expense, and to the extent incurred
by Holdings or its restricted subsidiaries, without duplication:
1. interest expense attributable to capital leases and to leases constituting
part of a Sale/Leaseback Transaction;
2. amortization of debt discount and debt issuance cost;
3. capitalized interest;
4. non-cash interest expense;
5. commissions, discounts, and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing;
6. net costs associated with hedging obligations, including amortization of
fees;
7. preferred stock dividends paid in respect of all of Holdings' and its
subsidiaries' preferred stock, held by persons other than Holdings or a
wholly owned subsidiary of Holdings;
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8. interest incurred in connection with Investments in discontinued operations;
9. interest accruing on any Indebtedness of any other person, to the extent
such indebtedness is guaranteed by, or secured by the assets of, Holdings or
any restricted subsidiary; and
10. the cash contributions to any employee stock ownership plan or similar
trust, to the extent such contributions are used by such plan or trust to
pay interest or fees to any person, other than Holdings, in connection with
indebtedness incurred by such plan or trust.
Consolidated Net Income means, for any period, the net income or loss of
Holdings and its consolidated subsidiaries. The following, however, shall not be
included in such Consolidated Net Income:
1. any net income or loss of any person, other than Holdings, if such person is
not a restricted subsidiary, except that:
a. subject to the exclusion contained in clause (4) below, Holdings' equity
in the net income of any such person, other than an Unrestricted
Subsidiary, for such period, shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such
person during such period, to Holdings or a restricted subsidiary, as a
dividend or other distribution, subject, in the case of a dividend or
other distribution paid to a restricted subsidiary, to the limitations
contained in clause (3) below; and
b. solely for purposes of calculating the Indebtedness to Adjusted EBITDA
Ratio, Holdings' equity in a net loss of any such person, other than an
Unrestricted Subsidiary, for such period, shall be included in
determining such Consolidated Net Income;
2. any net income or loss of any person, acquired by Holdings or a subsidiary,
in a pooling of interests transaction for any period prior to the date of
such acquisition;
3. any restricted subsidiary's net income, if the restricted subsidiary is
subject to restrictions, other than any restrictions contained in the New
Credit Facility, directly or indirectly, on the payment of dividends or the
making of distributions, directly or indirectly, to Holdings, except that:
a. subject to the exclusion contained in clause (4) below, Holdings' equity
in the net income of any such restricted subsidiary for such period
shall be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed by the restricted subsidiary during
such period to Holdings or another restricted subsidiary as a dividend
or other distribution, subject, in the case of a dividend or other
distribution paid to another restricted subsidiary, to the limitation
contained in this clause; and
b. solely for purposes of calculating the Indebtedness to Adjusted EBITDA
Ratio, Holdings' equity in a net loss of any such restricted subsidiary,
for such period, shall be included in determining such Consolidated Net
Income;
4. any gain or loss realized upon the sale or other disposition of any assets
of Holdings, its consolidated subsidiaries, or any other person, including
as a result of any Sale/Leaseback Transaction, which are not sold or
otherwise disposed of in the ordinary course of business, and any gain or
loss realized upon the sale or other disposition of any capital stock of any
person;
5. any Unrestricted Subsidiary's net income or loss, whether or not distributed
to Holdings or one of its subsidiaries;
6. any extraordinary gain or loss; and
7. the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, only for the purposes of the covenant
described under "-- Certain Covenants -- Limitation on Restricted Payments,"
there shall be excluded from Consolidated Net Income any dividends, repayments
of loans or advances, or other transfers of assets, from Unrestricted
Subsidiaries, to Holdings or a restricted subsidiary, to the extent such
dividends, repayments, or transfers increase the
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amount of Restricted Payments permitted under such covenant, according to the
terms of clause (1)(c)(iv) thereof.
Consolidated Tangible Assets means, with respect to Holdings, the total
consolidated tangible assets of Holdings and its Restricted Subsidiaries, as
shown on the most recent internal consolidated balance sheet of Holdings and the
restricted subsidiaries, calculated on a consolidated basis in accordance with
GAAP.
Disqualified Stock means, with respect to any person, any capital stock
which, by its terms, or by the terms of any security into which it is
convertible, or for which it is exchangeable, or upon the happening of any
event:
1. matures or is mandatorily redeemable under a sinking fund obligation or
otherwise;
2. is convertible or exchangeable for indebtedness or Disqualified Stock; or
3. is redeemable at the option of the holder thereof, in whole or in part, in
each case on or prior to the 91st day after the Stated Maturity of the
notes.
Capital stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such person to
repurchase or redeem such capital stock, upon the occurrence of an asset sale or
change of control occurring prior to the 91st day after the Stated Maturity of
the notes, shall not constitute Disqualified Stock, if the asset sale or change
of control provisions applicable to such capital stock are not more favorable to
the holders of such capital stock than the provisions described under "-- Change
of Control," and " -- Certain Covenants -- Limitation on Sales of Assets and
Subsidiary Stock."
EBITDA for any period, means the sum of Consolidated Net Income, plus the
following, to the extent deducted in calculating such Consolidated Net Income:
1. Consolidated Interest Expense;
2. all income tax expense of Holdings and its consolidated restricted
subsidiaries;
3. depreciation expense of Holdings and its consolidated restricted
subsidiaries;
4. amortization expense of Holdings and its consolidated restricted
subsidiaries, excluding amortization expense attributable to a prepaid cash
item that was paid in a prior period;
5. all other non-cash charges of Holdings and its consolidated restricted
subsidiaries, excluding any such non-cash charge to the extent that it
represents an accrual of, or reserve for, cash expenditures in any future
period; and
6. any premium or penalty paid in connection with repurchasing, redeeming,
retiring, defeasing or acquiring any indebtedness prior to maturity, to the
extent deducted in calculating Consolidated Net Income, in each case, for
such period.
Notwithstanding the foregoing, the provision for taxes based on the income
or profits of, and the depreciation and amortization and non-cash charges of, a
restricted subsidiary, shall be added to Consolidated Net Income to compute
EBITDA only to the extent, and in the same proportion, that the net income of
such restricted subsidiary was included in calculating Consolidated Net Income,
and only if a corresponding amount would be permitted, at the date of
determination, to be dividended to Holdings by the restricted subsidiary without
prior approval, that has not been obtained, according to the terms of its
charter and all agreements, instruments, judgments, decrees, orders, statutes,
rules and governmental regulations applicable to such restricted subsidiary or
its stockholders, without in any event giving effect to any restrictions or
limitations contained in the New Credit Facility.
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<PAGE> 108
Equity Offering means a public or private issuance by Holdings of its
common stock for cash.
GAAP means generally accepted accounting principles in the United States of
America as in effect as of the Issue Date, including those set forth in:
1. the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants;
2. statements and pronouncements of the Financial Accounting Standards Board;
3. such other statements by such other entity as approved by a significant
segment of the accounting profession; and
4. the rules and regulations of the SEC governing the inclusion of financial
statements, including pro forma financial statements, in periodic reports
required to be filed under Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins and similar
written statements from the accounting staff of the SEC.
Indebtedness to Adjusted EBITDA Ratio as of any date of determination means
the ratio of:
- Consolidated Indebtedness as of such date;
to
- Adjusted EBITDA.
Investment in any person means any:
- direct or indirect advance or loan, other than advances to customers in
the ordinary course of business that are recorded as accounts receivable
on the balance sheet of such person, or other extension of credit,
including by way of guarantee or similar arrangement,
- capital contribution, by means of any transfer of cash or other property
to others or any payment for property or services for the account or use
of others, or
- any purchase or acquisition of, capital stock, Indebtedness or other
similar instruments issued by such person.
For purposes of the definitions of Unrestricted Subsidiary and Restricted
Payment, and the "Limitation on Restricted Payments" covenant:
1. Investment shall include the portion, proportionate to Holdings' equity
interest in such subsidiary of the fair market value of the net assets of
any of Holdings' subsidiaries at the time that such subsidiary is designated
an Unrestricted Subsidiary; provided, however, that upon a redesignation of
such subsidiary as a restricted subsidiary, Holdings shall be deemed to
continue to have a permanent Investment in an Unrestricted Subsidiary of an
amount, if positive, equal to:
a. Holdings' Investment in such subsidiary at the time of such
redesignation; less
b. the portion, proportionate to Holdings' equity interest in such
subsidiary, of the fair market value of the net assets of the subsidiary
at the time the subsidiary is so re-designated a restricted subsidiary;
and
2. any property transferred to or from an Unrestricted Subsidiary shall be
valued at its fair market value at the time of such transfer, in each case
as the Board of Directors determines in good faith, and evidenced by a Board
of Directors resolution.
Issue Date means the date on which the outstanding notes were originally
issued.
Lien means any mortgage, pledge, security interest, encumbrance, lien, or
charge of any kind, including any conditional sale or other title retention
agreement, or lease in the nature thereof.
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Net Available Cash from an Asset Disposition means cash payments received,
including any cash payments received by way of deferred payment of principal,
under a note or installment receivable or otherwise and proceeds from the sale,
or other disposition, of any securities received as consideration, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring person, of indebtedness or other obligations
relating to such properties or assets, or received in any other non-cash form,
from such Asset Disposition, in each case net of:
1. all legal, title, accounting, investment banking and recording tax expenses,
commissions and other fees and expenses incurred, and all federal, state,
provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP, as a consequence of such Asset Disposition;
2. all payments made on any indebtedness, which is secured by any assets
subject to such Asset Disposition, in accordance with the terms of any Lien
upon, or other security arrangement of any kind with respect to, such
assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of
the proceeds from such Asset Disposition;
3. all distributions and other payments required to be made to minority
interest holders in Restricted Subsidiaries or joint ventures as a result of
such Asset Disposition;
4. the deduction of appropriate amounts to be provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with
the assets disposed of in such Asset Disposition, and retained by Holdings
or any Restricted Subsidiary after such Asset Disposition; and
5. any reserves established in respect of the sales price of such asset for
post-closing adjustments, indemnification purposes or employee termination
expenses.
Net Cash Proceeds, with respect to any issuance or sale of capital stock,
means the cash proceeds of such issuance or sale, net of attorneys' fees,
accountants' fees, printing costs, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees and expenses
actually incurred in connection with such issuance or sale, and net of taxes
paid or payable as a result thereof.
New Credit Facility means that certain credit facility, to be entered into
by Holdings' wholly owned subsidiary, SpectraSite Communications, Inc.,
according to the terms of a commitment letter from Credit Suisse First Boston to
SpectraSite Communications dated December 22, 1997, which has been renewed
through March 31, 1999, including any collateral documents, instruments and
agreements executed in connection therewith; the term New Credit Facility also
shall include any amendments, supplements, modifications, extensions, renewals,
restatements or refundings thereof and any credit facilities that replace,
refund or refinance any part of the loans, other credit facilities or
commitments thereunder, including any such replacement, refunding or refinancing
facility that increases the amount borrowable thereunder or alters the maturity
thereof.
Non-Recourse Debt means indebtedness:
1. as to which neither Holdings nor any restricted subsidiary:
a. provides any guarantee or credit support of any kind, including any
undertaking, guarantee, indemnity, agreement or instrument that would
constitute indebtedness; or
b. is directly or indirectly liable, as a guarantor or otherwise; and
2. as to which no default, including any rights that the holders thereof may
have to take enforcement action against an Unrestricted Subsidiary, would
permit, upon notice, lapse of time or both, any holder of any other of
Holdings' or any restricted subsidiary's indebtedness, to declare a default
under such other indebtedness, or cause the payment thereof to be accelerated
or payable prior to its stated maturity.
Permitted Business means any business Holdings and its restricted
subsidiaries conducted on the Issue Date and any other business related,
ancillary or complementary to any such business.
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Permitted Holders means any or all of Stephen H. Clark, David P. Tomick,
Joe L. Finley, III, Welsh, Carson, Anderson & Stowe VIII, L.P., WCAS Information
Partners, L.P., WCAS Capital Partners III, L.P., their respective general
partners, employees of Welsh, Carson, Anderson & Stowe, CIBC W6 Argosy Merchant
Fund 2, L.L.C., Co-Investment Merchant Fund 3, LLC, Caravelle Investment Fund,
L.L.C., Tower Parent Corp., Whitney Equity Partners, L.P., J.H. Whitney III,
L.P., Whitney Strategic Partners III, L.P., J.H. Whitney Mezzanine Fund, L.P.,
Waller-Sutton Media Partners, L.P., Kitty Hawk Capital Limited Partnership, III,
Kitty Hawk Capital Limited Partnership, IV, Eagle Creek Capital, L.L.C., The
North Carolina Enterprise Fund, L.P., Finley Family Limited Partnership, and
their respective Affiliates.
Permitted Investment means any of Holdings' or a restricted subsidiary's
Investment in:
1. Holdings, a wholly owned subsidiary, or a person which will, upon the making
of such Investment, become a wholly owned subsidiary, but a loan or other
extension of credit by Holdings or a restricted subsidiary, to a restricted
subsidiary that is not a wholly owned subsidiary, also will constitute a
Permitted Investment; and provided, however, that the primary business of
the person in which any such Investment is made is a Permitted Business; and
2. another person if, as a result of such Investment, such other person is
merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, Holdings or a restricted subsidiary;
provided, however, that such person's primary business is a Permitted
Business;
3. Temporary Cash Investments;
4. receivables owing to Holdings or any restricted subsidiary, if created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; provided, however, that such trade
terms may include concessionary trade terms which Holdings or any such
restricted subsidiary deems reasonable under the circumstances;
5. payroll, travel and similar advances to cover matters that are expected, at
the time of such advances, ultimately to be treated as expenses for
accounting purposes, and that are made in the ordinary course of business;
6. loans or advances to employees made in the ordinary course of business,
consistent with the past practices of Holdings or such restricted
subsidiary, but in any event not to exceed $2.0 million in the aggregate
outstanding at any one time;
7. stock, obligations, or securities, received in settlement of debts created
in the ordinary course of business and owing to Holdings or any restricted
subsidiary, or in satisfaction of judgments;
8. any person, to the extent such investment represents the non-cash portion of
the consideration received for an Asset Disposition as permitted according
to the terms of the covenant described under "--Certain
Covenants -- Limitation on Sales of Assets and Subsidiary Stock";
9. Holdings' or any Restricted Subsidiary's capital stock, purchased, redeemed
or otherwise acquired or retired for value from members of Holdings'
management or employees, but in any event not to exceed $500,000 in the
aggregate in any twelve-month period;
10. other Investments in Permitted Businesses not to exceed, at any one time
outstanding, each such Investment being measured as of the date made and
without giving effect to subsequent changes in value, the greater of:
a. $5.0 million; and
b. 5% of Holdings' Consolidated Tangible Assets;
11. any interest rate protection agreement or currency exchange protection
agreement;
12. any acquisition of assets solely in exchange for the issuance of Holdings'
capital stock, other than Disqualified Stock;
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13. prepaid expenses, negotiable instruments held for collection and lease,
utility and workers' compensation, performance and other similar deposits;
and
14. deposits of proceeds from Asset Dispositions with a qualified intermediary,
qualified trustee or similar person for purposes of facilitating a like-kind
exchange made in accordance with the applicable provisions of the Internal
Revenue Code; provided, however, that the making of any Permitted Investment
according to the terms of this clause (14) will not in any manner violate
the covenant described under "-- Certain Covenants -- Limitation on Sales of
Assets and Subsidiary Stock."
Permitted Liens means, with respect to any person:
1. pledges or deposits by such person, under worker's compensation laws,
unemployment insurance laws or similar legislation, or good faith deposits
in connection with bids, tenders, contracts, other than for the payment of
indebtedness, or leases to which such person is a party, or deposits to
secure public or statutory obligations of such person, or deposits or cash
or United States government bonds to secure surety or appeal bonds to which
such person is a party, or deposits as security for contested taxes or
import duties, or for the payment of rent, in each case incurred in the
ordinary course of business;
2. Liens imposed by law, such as carriers' warehousemen's, landlords' and
mechanics' Liens, in each case for sums not yet due, or being contested in
good faith by appropriate proceeding, or judgment Liens not giving rise to
an Event of Default so long as any appropriate legal proceedings which may
have been duly initiated for the review of such judgment shall not have been
finally terminated, or the period within which such proceedings may be
initiated shall not have expired;
3. Liens for property taxes not yet subject to penalties for non-payment, or
which are being contested in good faith by appropriate proceedings;
4. Liens in favor of issuers of surety bonds or letters of credit issued upon
the request of, and for the account of, such person in the ordinary course
of its business;
5. minor survey exceptions, minor encumbrances, easements or reservations of,
or rights of others for, licenses, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or other
restrictions as to the use of real properties, or Liens incidental to the
conduct of the business of such person, or to the ownership of its
properties, which were not incurred in connection with indebtedness and
which do not in the aggregate materially adversely affect the value of said
properties or materially impair their use in the operation of the business
of such person;
6. Liens securing hedging obligations, so long as the related indebtedness is,
and the Indenture permits it to be, secured by a Lien on the same property
securing such hedging obligations;
7. leases and subleases of real property which do not interfere with Holdings'
or any of its Restricted Subsidiaries' ordinary conduct of business, and
which are made on customary and usual terms applicable to similar
properties;
8. Liens existing as of the date on which the notes are originally issued, and
Liens which the Indenture created;
9. Liens created solely for the purpose of securing the payment of all, or a
part of, the purchase price of assets or property acquired or constructed in
the ordinary course of business, after the date on which the notes are
originally issued; provided, however, that:
a. the aggregate principal amount of indebtedness secured by such Liens
shall not exceed the aggregate purchase price of the assets or property
so acquired or constructed;
b. the indebtedness secured by such Liens is indebtedness which the
Indenture otherwise permits to be incurred; and
c. such Liens shall not encumber any other of Holdings' or any of its
restricted subsidiaries' assets or property, and shall attach to such
assets or property within 90 days of the construction or acquisition of
such assets or property;
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10. Liens on a restricted subsidiary's assets or property, existing at the time
such restricted subsidiary became a Holdings subsidiary, and not incurred as
a result of, in connection with, or in anticipation of such restricted
subsidiary becoming a Holdings subsidiary; provided, however, that:
a. any such Lien does not by its terms cover any property or assets after
the time such restricted subsidiary becomes a subsidiary, which were not
covered immediately prior to such transaction;
b. the indebtedness secured by such Liens is indebtedness which the
Indenture otherwise permits to be incurred; and
c. such Liens do not extend to or cover any other property or assets of
Holdings or any of its restricted subsidiaries;
11. Liens securing indebtedness outstanding under the New Credit Facility;
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12. Liens extending, renewing or replacing, in whole or in part, a Lien the
Indenture permits; provided, however, that:
a. such Liens do not extend beyond the property subject to the existing
Lien, and improvements and construction on such property; and
b. the indebtedness the Lien secures may not exceed the indebtedness the
existing Lien secured at the time;
13. Liens incurred in the ordinary course of business, by Holdings or any
restricted subsidiary of Holdings, with respect to obligations that do not
exceed $5.0 million at any one time outstanding, and that:
a. are not incurred in connection with the borrowing of money or the
obtaining of advances of credit, other than trade credit in the ordinary
course of business; and
b. do not, in the aggregate, materially detract from the value of the
property, or materially impair the use thereof in the operation of
business by Holdings or such restricted subsidiary;
14. Liens in favor of Holdings or a wholly owned subsidiary of Holdings;
15. any interest in or title of a lessor to any property subject to a capital
lease obligation the Indenture permits to be incurred;
16. Liens on Unrestricted Subsidiaries' capital stock; and
17. Liens granted under the Security and Subordination Agreement executed in
connection with the Nextel tower acquisition.
Principal of a note means the principal of the note plus the premium, if
any, payable on the note, which is due or overdue or is to become due at the
relevant time.
Qualified Proceeds means assets that are used or useful in, or capital
stock of any person engaged in, a Permitted Business.
Refinancing Indebtedness means indebtedness that refinances any of
Holdings' or any restricted subsidiary's indebtedness existing on the date of
the Indenture, or incurred in compliance with the Indenture, including any of
Holdings' indebtedness that refinances any restricted subsidiary's indebtedness,
and any restricted subsidiary's indebtedness that refinances another restricted
subsidiary's indebtedness, including indebtedness that refinances Refinancing
Indebtedness; provided, however, that:
1. the Refinancing Indebtedness has a Stated Maturity no earlier than the
Stated Maturity of the indebtedness being refinanced;
2. the Refinancing Indebtedness has an Average Life, at the time such
Refinancing Indebtedness is incurred, that is equal to or greater than the
Average Life of the indebtedness being refinanced; and
3. such Refinancing Indebtedness is incurred in an aggregate principal amount,
or if issued with original issue discount, an aggregate issue price, that is
equal to or less than the sum of the aggregate principal amount, or if
issued with original issue discount, the aggregate Accreted Value, then
outstanding or committed, plus fees and expenses, including any premium and
defeasance costs, under the Indebtedness being refinanced; provided,
however, that Refinancing Indebtedness shall not include:
a. any of a subsidiary's indebtedness that refinances any of Holdings'
indebtedness; or
b. any of Holdings' or a subsidiary's indebtedness that refinances an
Unrestricted Subsidiary's indebtedness.
Restricted Payment with respect to any Person means:
1. the declaration or payment of any dividends or any other distributions of
any sort in respect of its capital stock, or similar payment to the direct
or indirect holders of its capital stock, other than dividends or
distributions payable solely in its capital stock, other than Disqualified
Stock, and
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dividends or distributions payable solely to Holdings or a restricted
subsidiary, and other than pro rata dividends or other distributions, made
by a subsidiary that is not a wholly owned subsidiary of Holdings, to
minority stockholders, or owners of an equivalent interest, in the case of a
subsidiary that is an entity other than a corporation;
2. the purchase, redemption or other acquisition or retirement for value of any
of Holdings' capital stock held by any person, or of any of a restricted
subsidiary's capital stock held by any person, other than Holdings or a
restricted subsidiary, including the exercise of any option to exchange any
capital stock, other than into Holdings' capital stock that is not
Disqualified Stock, other than as permitted by clause (9) of the definition
of Permitted Investments;
3. the purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment of, any Subordinated Obligations, other than
the purchase, repurchase or other acquisition of Subordinated Obligations
purchased in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date
of acquisition; or
4. the making of any Investment in any person, other than a Permitted
Investment.
Sale/Leaseback Transaction means an arrangement relating to property now
owned or hereafter acquired, whereby Holdings or a restricted subsidiary
transfers such property to a person, and Holdings or a restricted subsidiary
leases it from such person.
Secured Indebtedness means any of Holdings' indebtedness secured by a Lien.
Senior Indebtedness means:
1. any of Holdings' indebtedness, whether outstanding on the Issue Date or
thereafter incurred; and
2. accrued and unpaid interest, including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization relating to
Holdings, to the extent post-filing interest is allowed in such proceeding,
in respect of:
a. Indebtedness for money Holdings borrowed; and
b. Indebtedness evidenced by notes, debentures, bonds or other similar
instruments which Holdings is responsible or liable to make payment for,
unless, in the case of clauses (1) and (2) above, in the instrument creating or
evidencing the same or under which the same is outstanding, it is provided that
such obligations are subordinate in right of payment to the notes.
Senior Indebtedness shall not include:
- any obligation Holdings has to any subsidiary;
- any liability for federal, state, local or other taxes Holdings owed or
owes;
- any accounts payable or other liability to trade creditors arising in the
ordinary course of business, including guarantees thereof or instruments
evidencing such liabilities;
- any of Holdings' indebtedness, and any accrued and unpaid interest in
respect thereof, which is subordinate or junior in any respect to any
other of Holdings' indebtedness or other obligation; or
- that portion of any indebtedness which, at the time of incurrence, is
incurred in violation of the Indenture.
Significant Subsidiary means any restricted subsidiary that would be a
Significant Subsidiary of Holdings within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
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Site Management Contract means any agreement under which Holdings, or any
of its restricted subsidiaries, has the right to substantially control Tower
Assets and the revenues derived from the rental or use thereof.
Stated Maturity means, with respect to any security, the date specified in
such security as the fixed date on which the payment of principal of such
security is due and payable, including according to any mandatory redemption
provision, but excluding any provision providing for the repurchase of such
security at the holder's option upon the happening of any contingency beyond
Holdings' control, unless such contingency has occurred.
Subordinated Obligation means any of Holdings' indebtedness, whether
outstanding on the Issue Date or thereafter incurred, which is subordinate or
junior in right of payment to the notes according to the terms of a written
agreement.
Temporary Cash Investments means any of the following:
1. any investment in direct obligations of the United States of America or any
agency thereof, or obligations guaranteed by the United States of America or
any agency thereof;
2. investments in time deposit accounts, certificates of deposit and money
market deposits maturing within one year of the date of acquisition thereof,
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country
recognized by the United States of America, having capital, surplus and
undivided profits aggregating in excess of $500 million, or the foreign
currency equivalent thereof, and whose long-term debt is rated A, or such
similar equivalent rating or higher by at least one nationally recognized
statistical rating organization, as defined in Rule 436 under the Securities
Act, or any money market fund sponsored by a registered broker dealer or
mutual fund distributor;
3. repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (1) above, entered into with a
bank, meeting the qualifications described in clause (2) above;
4. investments in commercial paper, maturing not more than 90 days after the
date of acquisition, issued by a corporation, other than a Holdings
Affiliate, organized and in existence under the laws of the United States of
America or any foreign country recognized by the United States of America,
with a rating at the time of investment of at least P-1 according to Moody's
Investors Service, Inc. or at least A-1 according to Standard & Poor's
Ratings Group; and
5. investments in securities with maturities of six months or less from the
date of acquisition, issued or fully guaranteed by any state, commonwealth
or territory of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least A by Standard &
Poor's Ratings Group or A by Moody's Investors Service, Inc.
The Trust Indenture Act means the Trust Indenture Act of 1939 (15 U.S.C.
sections 77aaa-77bbbb) as in effect on the date of the Indenture.
Tower Asset Exchange means any transaction in which Holdings or a
restricted subsidiary exchanges assets for Tower Assets, or Tower Assets and
cash or cash equivalents, where the fair market value, evidenced by a Board of
Directors resolution, set forth in an Officer's Certificate delivered to the
trustee, of the Tower Assets and cash or cash equivalents which Holdings and its
restricted subsidiaries received in such exchange, is at least equal to the fair
market value of the assets disposed in such exchange.
Tower Assets means wireless communication transmission towers and related
assets that are located on the site of a transmission tower.
Tower EBITDA means, for any period, the EBITDA of Holdings and its
restricted subsidiaries for such period that is directly attributable to site
rental revenue or license or management fees, paid to manage, lease or sublease
space on communication sites owned, leased or managed by Holdings (collectively,
site leasing revenues), all determined on a consolidated basis and in accordance
with GAAP.
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Tower EBITDA will not include revenue derived from the sale of assets. In
allocating corporate, general, administrative and other operating expenses that
are not allocated to any particular line of business in Holdings' financial
statements, such expenses shall be allocated to Holdings' site leasing business
in proportion to the percentage of Holdings' total revenues, for the applicable
period, that were site leasing revenues.
Unrestricted Subsidiary means:
1. any Holdings subsidiary that, at the time of determination, shall be
designated an Unrestricted Subsidiary by the Board of Directors in the
manner provided below; and
2. any subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Holdings subsidiary, including any
newly acquired or newly formed Holdings subsidiary, to be an Unrestricted
Subsidiary unless such subsidiary, or any of its subsidiaries, owns any capital
stock or indebtedness of, or owns or holds any Lien on any property of, Holdings
or any other restricted subsidiary, that is not a subsidiary of the subsidiary
to be so designated; provided, however, that either:
a. the subsidiary designated as an Unrestricted Subsidiary has total
consolidated assets of $1,000 or less; or
b. if such subsidiary has consolidated assets greater than $1,000, then
such designation would be permitted under "Limitation on Restricted
Payments."
The Board of Directors may designate any Unrestricted Subsidiary to be a
restricted subsidiary, as long as, immediately after giving effect to such
designation:
- Holdings would have been permitted to incur at least $1.00 of additional
indebtedness according to the terms of paragraph (1) of the "Limitation
on Indebtedness" covenant above; and
- no Default shall have occurred and be continuing. Any such designation by
the Board of Directors shall be evidenced to the trustee by promptly
filing with the trustee a copy of the Board of Directors resolution
giving effect to such designation, and an Officer's Certificate
certifying that such designation complied with the foregoing provisions.
U.S. Government Obligations means direct obligations, or certificates
representing an ownership interest in such obligations, of the United States of
America, including any agency or instrumentality of the United States, for the
payment of which the full faith and credit of the United States of America is
pledged and which are not callable or redeemable at Holdings' option.
Voting Stock of a person means all classes of capital stock or other
interests, including partnership interests, of such person then outstanding and
normally entitled, without regard to the occurrence of any contingency, to vote
in the election of directors, managers, or trustee thereof.
BOOK-ENTRY; DELIVERY AND FORM
The registered notes will be issued in the form of a Global Senior Note.
The Global Senior Note will be deposited with, or on behalf of, the Depository
and registered in the name of the Depository or its nominee. Except as set forth
below, the Global Senior Note may be transferred, in whole and not in part, only
to the Depository or another nominee of the Depository. Investors may hold their
beneficial interests in the Global Senior Note directly through the Depository
if they have an account with the Depository, or indirectly through organizations
which have accounts with the Depository.
Notes that are issued as described below under "-- Certificated Notes" will
be issued in definitive form. Upon the transfer of a Senior Note in definitive
form, such Senior Note will be exchanged for an interest in the Global Senior
Note representing the principal amount at maturity of notes being transferred,
unless the Global Senior Note has previously been exchanged for notes in
definitive form.
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The Depository has advised Holdings as follows: The Depository is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered under the provisions of Section 17A of the Exchange Act. The
Depository was created to hold securities of institutions that have accounts
with the Depository (participants) and to facilitate the clearance and
settlement of securities transactions, among its participants, in such
securities, through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. The Depository's participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Access to the Depository's book-entry system is also available to
others such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, whether directly or
indirectly.
Upon the issuance of the Global Senior Note, the Depository will credit, on
its book-entry registration and transfer system, the principal amount at
maturity of the notes represented by such Global Senior Note, to the accounts of
participants. The accounts to be credited shall be designated by the notes'
Initial Purchasers. Ownership of beneficial interests in the Global Senior Note
will be limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests in the Global Senior Note will
be shown on, and the transfer of those ownership interests will be effected only
through, records maintained by the Depository, with respect to participants'
interest, and such participants, with respect to the owners of beneficial
interests in the Global Senior Note other than participants. The laws of some
jurisdictions may require that certain securities purchasers take physical
delivery of such securities in definitive form. Such limits and laws may impair
the ability to transfer or pledge beneficial interests in the Global Senior
Note.
So long as the Depository, or its nominee, is the registered holder and
owner of the Global Senior Note, the Depository or such nominee, as the case may
be, will be considered the sole legal owner and holder of the related notes for
all purposes of such notes and the Indenture. Except as set forth below, owners
of beneficial interests in the Global Senior Note will not be entitled to have
the notes represented by the Global Senior Note registered in their names, will
not receive or be entitled to receive physical delivery of certificated notes in
definitive form, and will not be considered to be the owners or holders of any
notes under the Global Senior Note. Holdings understands that under existing
industry practice, in the event an owner of a beneficial interest in the Global
Senior Note desires to take any action that the Depository, as the holder of the
Global Senior Note, is entitled to take, the Depository would authorize the
participants to take such action, and the participants would authorize
beneficial owners, owning through such participants, to take such action, or
would otherwise act upon the instructions of beneficial owners owning through
them.
Payment of principal of, and interest on, notes represented by the Global
Senior Note registered in the name of, and held by, the Depository or its
nominee will be made to the Depository, or its nominee, as the case may be, as
the registered owner and holder of the Global Senior Note.
Holdings expects that the Depository, or its nominee, upon receipt of any
payment of principal of, or interest on, the Global Senior Note, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Senior
Note as shown on the records of the Depository or its nominee. Holdings also
expects that payments by participants, to owners of beneficial interests in the
Global Senior Note held through such participants, will be governed by standing
instructions and customary practices, and will be the responsibility of such
participants. Holdings will not have any responsibility or liability for any
aspect of the records relating to, or payments made on account of, beneficial
ownership interests in the Global Senior Note for any Senior Note, or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests, or for any other aspect of the relationship between the
Depository and its participants, or the relationship between such participants
and the owners of beneficial interests in the Global Senior Note owning through
such participants.
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Unless and until it is exchanged in whole or in part for certificated notes
in definitive form, the Global Senior Note may not be transferred, except as a
whole, by the Depository to a nominee of such Depository, or by a nominee of
such Depository to such Depository or another nominee of such Depository.
Although the Depository has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Senior Note among participants
of the Depository, it is under no obligation to perform or continue to perform
such procedures, and such procedures may be discontinued at any time. Neither
the Trustee nor Holdings will have any responsibility for the performance by the
Depository or its participants or indirect participants, of their respective
obligations, under the rules and procedures governing their operations.
CERTIFICATED NOTES
The notes represented by the Global Senior Note are exchangeable for
certificated notes, in definitive form of like tenor as such notes, in
denominations of U.S. $1,000 and integral multiples thereof if:
- the Depository notifies Holdings that it is unwilling or unable to
continue as Depository of the Global Senior Note, or if at any time the
Depository ceases to be a clearing agency registered under the Exchange
Act and a successor Depository is not appointed by Holdings within 90
days;
- Holdings in its discretion at any time determines not to have all of the
notes represented by the Global Senior Note; or
- an Event of Default has occurred and is continuing. Any Senior Note that
is exchangeable according to the terms of the preceding sentence, is
exchangeable for certificated notes, issuable in authorized denominations
and registered in such names as the Depository shall direct. Subject to
the foregoing, the Global Senior Note is not exchangeable, except for a
Global Senior Note of the same aggregate denomination to be registered in
the name of the Depository or its nominee. In addition, such certificates
will bear the legend referred to under "Transfer Restrictions," unless
Holdings determines otherwise in accordance with applicable law, subject,
with respect to such notes, to the provisions of such legend.
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CERTAIN U.S. FEDERAL TAX CONSIDERATIONS
GENERAL
The following is a summary of the material United States federal income,
estate and gift tax consequences of the purchase, ownership and disposition of
the notes, but is not purported to be a complete analysis of all potential tax
effects. This summary is based upon the Internal Revenue Code of 1986, as
amended, existing and proposed regulations promulgated thereunder, published
rulings and court decisions, all as in effect and existing on the date hereof
and all of which are subject to change at any time, which change may be
retroactive or prospective. Unless otherwise specifically noted, this summary
applies only to those persons who hold the notes as capital assets within the
meaning of Section 1221 of the Internal Revenue Code. This discussion assumes
that the notes will be treated as indebtedness for United States federal income
tax purposes.
THIS SUMMARY IS FOR GENERAL INFORMATION ONLY AND DOES NOT ADDRESS THE TAX
CONSEQUENCES TO TAXPAYERS WHO ARE SUBJECT TO SPECIAL RULES, SUCH AS FINANCIAL
INSTITUTIONS, TAX-EXEMPT ORGANIZATIONS, INSURANCE COMPANIES, S CORPORATIONS,
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, BROKER-DEALERS,
TAXPAYERS SUBJECT TO THE ALTERNATIVE MINIMUM TAX AND PERSONS THAT WILL HOLD THE
NOTES AS PART OF A POSITION IN A STRADDLE OR AS PART OF A CONSTRUCTIVE SALE OR A
HEDGING OR CONVERSION TRANSACTION, OR ADDRESS ASPECTS OF FEDERAL TAXATION THAT
MIGHT BE RELEVANT TO A PROSPECTIVE INVESTOR BASED UPON SUCH INVESTOR'S
PARTICULAR TAX SITUATION. THIS SUMMARY DOES NOT ADDRESS ANY TAX CONSEQUENCES
ARISING UNDER ANY STATE, MUNICIPALITY, FOREIGN COUNTRY OR OTHER TAXING
JURISDICTION. PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS
REGARDING THE UNITED STATES FEDERAL TAX CONSEQUENCES OF OWNING AND DISPOSING OF
THE NOTES, INCLUDING THE INVESTOR'S STATUS AS A UNITED STATES HOLDER OR A
NON-UNITED STATES HOLDER, AS WELL AS ANY TAX CONSEQUENCES THAT MAY ARISE UNDER
THE LAWS OF ANY STATE, MUNICIPALITY, FOREIGN COUNTRY OR OTHER TAXING
JURISDICTION.
EFFECT OF EXCHANGE OF OUTSTANDING NOTES FOR REGISTERED NOTES
SpectraSite believes that the exchange of outstanding notes for registered
notes under the registered exchange offer will not be treated as an exchange for
federal income tax purposes because the registered notes will not be considered
to differ materially in kind or extent from the outstanding notes. Rather, the
registered notes received by a holder will be treated as a continuation of the
outstanding notes in the hands of such holder. As a result, holders will not
recognize any taxable gain or loss or any interest income as a result of
exchanging outstanding notes for registered notes under the exchange offer, the
holding period of the registered notes will include the holding period of the
outstanding notes, and the basis of the registered notes will equal the basis of
the outstanding notes immediately before the exchange.
UNITED STATES HOLDERS
GENERAL. The following is a general discussion of certain United States
federal income tax consequences of the ownership and sale or other disposition
of the notes by a beneficial owner that, for United States federal income tax
purposes, is a United States person. For purposes of this discussion, a United
States person means a citizen or individual resident, as defined in Section
7701(b) of the Internal Revenue Code, of the United States; a corporation or
partnership, including any entity treated as a corporation or partnership for
United States federal income tax purposes, created or organized under the laws
of the United States, any State thereof or the District of Columbia unless, in
the case of a partnership, otherwise provided by regulation; an estate the
income of which is subject to United States federal income tax without regard to
its source; or a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of the
trust. Notwithstanding the preceding sentence, certain trusts in existence on
August 20, 1996, and treated as United States persons prior to such date that
elect to continue to be so treated shall also be considered to be United States
persons.
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ORIGINAL ISSUE DISCOUNT. Because the notes were issued at a discount from
their stated redemption price at maturity, the notes have original issue
discount for federal income tax purposes. For federal income tax purposes, the
amount of original issue discount generally equals the excess of the note's
stated redemption price at maturity over its issue price. The note's issue price
is the first price at which a substantial amount of the notes is sold, excluding
sales to bond houses, brokers or similar persons or organizations acting in the
capacity of underwriters or wholesalers. The note's stated redemption price at
maturity is the sum of all cash payments to be made on such note, whether
denominated as principal or interest, other than payments of qualified stated
interest. Qualified stated interest is stated interest that is unconditionally
payable at least annually at a single fixed rate that appropriately takes into
account the length of the interval between payments. Because there will be no
required payment of interest on the notes prior to January 15, 2004, none of the
interest payments on the notes constitute qualified stated interest; and,
accordingly, each note bears original issue discount in an amount equal to the
excess of the sum of its principal amount and all stated interest payments, over
its issue price.
A United States holder is required to include original issue discount in
gross income periodically over the term of a note before receipt of the cash or
other payment attributable to such income, regardless of such holder's method of
tax accounting. The amount to be included for any taxable year is the sum of the
daily portions of original issue discount with respect to the note for each day
during the taxable year or portion of a taxable year during which such holder
holds the note. The daily portion is determined by allocating to each day of any
accrual period within a taxable year a pro rata portion of an amount equal to
the note's adjusted issue price at the beginning of the accrual period
multiplied by the note's yield to maturity. For purposes of computing original
issue discount, SpectraSite will use six-month accrual periods that end on the
days in the calendar year corresponding to the maturity date of the notes and
the date six months prior to such maturity date, with the exception of an
initial short accrual period. A United States holder is permitted to use
different accrual periods; provided that each accrual period is no longer than
one year, and each scheduled payment of interest or principal occurs on either
the first or last day of an accrual period. The adjusted issue price of a note
at the beginning of any accrual period is its issue price increased by the
amount of original issue discount previously includible in the gross income of
the holder and decreased by any payments previously made on the note. The note's
yield to maturity is the discount rate that, when used in computing the present
value of all payments of principal and interest to be made on a note, produces
an amount equal to the issue price of the note. Under these rules, United States
holders are required to include in gross income increasingly greater amounts of
original issue discount in each successive accrual period. Payments of stated
interest on a note will not be separately included in income, but rather will be
treated first as payments of previously accrued original issue discount and then
as payments of principal and, consequently, will reduce a United States holder's
basis in a note as described below under "-- United States Holders -- Sale,
Exchange or Redemption of the Notes."
SpectraSite intends to treat the possibility of an optional redemption, as
described under "Description of the Notes -- Optional Redemption," and a
repurchase made upon a change in control, as described under "Description of the
Notes -- Change of Control," as not affecting the determination of the yield to
maturity of the notes, or giving rise to any additional accrual of original
issue discount or recognition of ordinary income upon the redemption, sale or
exchange of a note.
ACQUISITION PREMIUM. A United States holder that purchases a note for an
amount that is greater than its adjusted issue price as of the purchase date
will be considered to have purchased such note at an acquisition premium. The
amount of original issue discount that such holder must include in its gross
income with respect to such note for any taxable year is generally reduced by
the portion of such acquisition premium properly allocable to such year. The
information reported by SpectraSite to the record holders of the notes on an
annual basis will not account for an offset against original issue discount for
any portion of the acquisition premium. Accordingly, each United States holder
should consult its own tax advisor as to the determination of the acquisition
premium amount and the resulting adjustments to the amount of reportable
original issue discount.
AMORTIZABLE BOND PREMIUM. A United States holder that purchases a note for
an amount in excess of its principal amount will be considered to have purchased
the note at a premium and may elect to
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amortize such premium, using a constant yield method, over the remaining term of
the note, or, if a smaller amortization allowance would result, by computing
such allowance with reference to the amount payable on an earlier call date and
amortizing such allowance over the shorter period to such call date. The amount
amortized in any year will be treated as a reduction of the United States
holder's interest income from the note. Bond premium on a note held by a United
States holder that does not make such an election will decrease the gain or
increase the loss otherwise recognized on disposition of the note. The election
to amortize bond premium on a constant yield method, once made, applies to all
debt obligations held or subsequently acquired by the electing United States
holder on or after the first day of the first taxable year to which the election
applies and may not be revoked without the consent of the Internal Revenue
Service.
MARKET DISCOUNT. If a United States holder purchases, subsequent to its
original issuance, a note for an amount that is less than its revised issue
price as of the purchase date, the amount of the difference generally will be
treated as market discount, unless such difference is less than a specified de
minimis amount. The Internal Revenue Code provides that the revised issue price
of a note equals its issue price plus the amount of original issue discount
includable in the income of all holders for periods prior to the purchase date,
disregarding any deduction for acquisition premium, reduced by the amount of all
prior cash payments on the note. Subject to a de minimis exception, a United
States holder will be required to treat any gain recognized on the sale,
exchange, redemption, retirement or other disposition of the note as ordinary
income to the extent of the accrued market discount that has not previously been
included in income. In addition, the United States holder may be required to
defer, until the maturity date of the note or its earlier disposition in a
taxable transaction, the deduction of all or a portion of the interest expense
on any indebtedness incurred or continued to purchase or carry such note.
Any market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of the note, unless the United
States holder elects to accrue market discount on a constant interest method. A
United States holder of a note may elect to include market discount in income
currently as it accrues, under either the ratable or constant interest method.
This election to include currently, once made, applies to all market discount
obligations acquired in or after the first taxable year to which the election
applies and may not be revoked without the consent of the Internal Revenue
Service. If the United States holder of a note makes such an election, the
foregoing rules with respect to the recognition of ordinary income on sales and
other dispositions of such instruments, and with respect to the deferral of
interest deductions on debt incurred or maintained to purchase or carry such
debt instruments, would not apply.
ELECTION TO TREAT ALL INTEREST AS ORIGINAL ISSUE DISCOUNT. A United States
holder of a note may elect, subject to certain limitations, to include all
interest that accrues on a note in gross income on a constant yield basis. For
purposes of this election, interest includes stated interest, original issue
discount, market discount, de minimis original issue discount, de minimis market
discount and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium. Special rules and limitations apply to taxpayers who make
this election; therefore, United States holders should consult their tax
advisors as to whether they should make this election.
THE AHYDO RULE. The notes constitute applicable high yield discount
obligations (AHYDOs). Accordingly, under Sections 163(e) and 163(i) of the
Internal Revenue Code, SpectraSite is not entitled to deduct original issue
discount that accrues with respect to such notes until amounts attributable to
such original issue discount are paid in cash. In addition, to the extent that
the yield to maturity of the notes exceeds the sum of the applicable federal
rate for the month in which the notes were issued (5.93%) plus 6 percentage
points (the Excess Yield), the disqualified portion of the original issue
discount accruing on the notes will be disallowed permanently and characterized
as a nondeductible dividend with respect to SpectraSite and also will be treated
as a dividend distribution, to the extent of available current and accumulated
earnings and profits, solely for purposes of the dividends received deductions
of Sections 243,
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246 and 246A of the Internal Revenue Code with respect to holders of notes that
are U.S. corporations. The disqualified portion for any accrual period will
equal the product of:
- a percentage determined by dividing the Excess Yield by the yield to
maturity,
times
- the original issue discount for the accrual period.
Subject to otherwise applicable limitations, such a corporate holder will be
entitled to a dividend received deduction with respect to the disqualified
portion if SpectraSite has sufficient current or accumulated earnings and
profits. To the extent that SpectraSite's earnings and profits are insufficient,
any portion of the original issue discount that otherwise would have been
recharacterized as a dividend for purposes of the dividends received deduction
will continue to be treated as ordinary original issue discount income in
accordance with the rules described above under "-- United States
Holders -- Original Issue Discount." Treatment of the notes as AHYDOs will not
disqualify interest or original issue discount with respect to notes from the
portfolio interest exception described below under " -- Foreign
Holders -- Interest;" provided that all applicable requirements for the
exception are otherwise satisfied.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES. Generally, a sale, exchange or
redemption of the notes will result in taxable gain or loss equal to the
difference between the amount of cash or other property received and the United
States holder's adjusted tax basis in the notes. A United States holder's
adjusted tax basis for determining gain or loss on the sale or other disposition
of a note will initially equal the cost of the note to such holder and will be
increased by:
- any amounts included in income as original issue discount, and
- any market discount previously included in income by such holder,
and decreased by:
- any principal and stated interest payments received by such holder, and
- any amortized premium previously deducted from income by such holder.
Except as described above with respect to market discount, such gain or
loss will be capital gain or loss. Capital gain or loss will be long-term gain
or loss if the note is held by the United States holder for more than one year,
otherwise such gain or loss will be short-term.
United States holders that are corporations generally will be taxed on net
capital gains at a maximum rate of 35%. In contrast, United States holders that
are individuals generally will be taxed on net capital gains at a maximum rate
of 39.6% for property held for 12 months or less, and 20% for property held more
than 12 months. Special rules, and generally lower maximum rates, apply for
individuals in lower tax brackets. Any capital losses realized by a United
States holder that is a corporation generally may be used only to offset capital
gains. Any capital losses realized by a United States holder that is an
individual generally may be used only to offset capital gains plus $3,000 of
other income per year.
FOREIGN HOLDERS
The following is a general discussion of certain United States federal
income, estate and gift tax consequences of the ownership and sale or other
disposition of the notes by any beneficial owner of a note that is not a United
States holder. Resident alien individuals are subject to United States federal
income tax with respect to the notes as if they were United States holders.
INTEREST. Under current United States federal income tax law, and subject
to the discussion of backup withholding below, interest, including original
issue discount, paid on the notes to a non-United States holder will not be
subject to the normal 30% United States federal withholding tax; provided that
(i) the interest is "effectively connected with the conduct of a trade or
business in the United States" by the non-United States holder and the
non-United States holder timely furnishes SpectraSite with two duly executed
copies of Internal Revenue Service Form 4224, or any successor form, or (ii) all
of the following conditions of the portfolio interest exception are met: (A) the
non-United States holder does not, actually
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or constructively, own 10% or more of the total combined voting power of all
classes of stock of SpectraSite entitled to vote, (B) the non-United States
holder is not a controlled foreign corporation that is related, directly or
indirectly, to SpectraSite through stock ownership, (C) the non-United States
holder is not a bank receiving interest (including original issue discount)
pursuant to a loan agreement entered into in the ordinary course of its trade or
business, and (D) either (1) the non-United States holder certifies to
SpectraSite or its agent, under penalties of perjury, that it is a non-United
States holder and provides its name and address, or (2) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business, and holds the notes
in such capacity, certifies to SpectraSite or its agent, under penalties of
perjury, that such statement has been received from the beneficial owner of the
notes by it or by any other financial institution between it and the beneficial
owner and furnishes SpectraSite or its agent with a copy thereof. The foregoing
certification may be provided by the non-United States holder on Internal
Revenue Service Form W-8, or any successor form. Such certificate is effective
with respect to payments of interest, including original issue discount, made
after the issuance of the certificate in the calendar year of its issuance and
the two immediately succeeding calendar years.
On October 14, 1997, final regulations were published in the Federal
Register that affect the United States federal income taxation of non-United
States holders. The 1997 regulations are effective for payments after December
31, 1999, regardless of the issue date of the instrument with respect to which
such payments are made, subject to certain transition rules discussed below. The
discussion under this heading and under "-- Backup Withholding Tax and
Information Reporting," below, is not intended to be a complete discussion of
the provisions of the 1997 regulations. Prospective holders of the notes are
urged to consult their tax advisors concerning the tax consequences of their
investment in light of the 1997 regulations.
The 1997 regulations provide documentation procedures designed to simplify
compliance by withholding agents. The 1997 regulations generally do not affect
the documentation rules described above, but add other certification options.
Under one such option, a withholding agent will be allowed to rely on an
intermediary withholding certificate furnished by a qualified intermediary on
behalf of one or more beneficial owners, or other intermediaries, without having
to obtain the beneficial owner certificate described above. Qualified
intermediaries include:
- foreign financial institutions or foreign clearing organizations, other
than a United States branch or United States office of such institution
or organization, or
- foreign branches or offices of United States financial institutions or
foreign branches or offices of United States clearing organizations,
which have entered into withholding agreements with the Internal Revenue
Service.
In addition to certain other requirements, qualified intermediaries must
obtain withholding certificates, such as revised Internal Revenue Service Form
W-8, from each beneficial owner. Under another option, an authorized foreign
agent of a United States withholding agent will be permitted to act on behalf of
the United States withholding agent, including the receipt of withholding
certificates, the payment of amounts of income subject to withholding and the
deposit of tax withheld; provided that certain conditions are met.
For purposes of the certification requirements, the 1997 regulations
generally treat as the beneficial owners of payments on a note those persons
that, under United States federal income tax principles, are the taxpayers with
respect to such payments, rather than persons such as nominees or agents legally
entitled to such payments. In the case of payments to an entity classified as a
foreign partnership under United States tax principles, the partners, rather
than the partnership, generally must provide the required certifications to
qualify for the withholding tax exemption described above, unless the
partnership has entered into a special agreement with the Internal Revenue
Service. A payment to a United States partnership, however, is treated for these
purposes as payment to a United States payee, even if the partnership has one or
more foreign partners. The 1997 regulations provide certain presumptions with
respect to withholding for holders of notes not furnishing the required
certifications to qualify for the
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withholding tax exemption described above. In addition, the 1997 regulations
will replace a number of current tax certification forms, including Internal
Revenue Service Form W-8, with a single, revised Internal Revenue Service Form
W-8, which, in certain circumstances, requires information in addition to that
previously required. Under the 1997 regulations, this revised Form W-8 will
remain valid until the last day of the third calendar year following the year in
which the certificate is signed.
The 1997 regulations provide transition rules concerning existing
certificates, such as Internal Revenue Service Form W-8. Valid withholding
certificates that are held on December 31, 1999 will generally remain valid
until the earlier of December 31, 2000 or the date of their expiration. Existing
certificates that expire in 1999 will not be effective after their expiration.
Certificates dated prior to January 1, 1998 will generally remain valid until
the end of 1998, irrespective of the fact that their validity expires during
1998.
In the event that the interest, including original issue discount, paid on
the notes is effectively connected with the conduct of a trade or business
within the United States of the non-United States holder, the non-United States
holder will generally be taxed on a net income basis (that is, after allowance
for applicable deductions) at the graduated rates that are applicable to United
States holders in essentially the same manner as if the notes were held by a
United States holder, as discussed above. In the case of a non-United States
holder that is a corporation, such income may also be subject to the United
States federal branch profits tax, which is generally imposed on a foreign
corporation upon the deemed repatriation from the United States of effectively
connected earnings and profits, at a 30% rate, unless the rate is reduced or
eliminated by an applicable income tax treaty and the non-United States holder
is a qualified resident of the treaty country.
If the interest on the notes is not effectively connected and does not
qualify for the portfolio interest exception described above in "-- Foreign
Holders -- Interest", then the interest will be subject to United States federal
withholding tax at a flat rate of 30%, or a lower applicable income tax treaty
rate upon delivery of Internal Revenue Service Form 1001, or any successor form,
certifying eligibility for treaty benefits.
GAIN ON SALE OR OTHER DISPOSITION. Subject to special rules applicable to
individuals as described below, a non-United States holder generally will not be
subject to regular United States federal income or withholding tax on gain
recognized on a sale or other disposition of the notes, unless the gain is
effectively connected with the conduct of a trade or business within the United
States of the non-United States holder or of a partnership, trust or estate in
which such non-United States holder is a partner or beneficiary.
Gains realized by a non-United States holder that are effectively connected
with the conduct of a trade or business within the United States of the
non-United States holder generally will be taxed on a net income basis at the
graduated rates that are applicable to United States holders, as described
above, unless exempt by an applicable income tax treaty. In the case of a
non-United States holder that is a corporation, such income may also be subject
to the United States federal branch profits tax, which is generally imposed on a
foreign corporation upon the deemed repatriation from the United States of
effectively connected earnings and profits, at a 30% rate, unless the rate is
reduced or eliminated by an applicable income tax treaty and the non-United
States holder is a qualified resident of the treaty country.
In addition to being subject to the rules described above, an individual
non-United States holder who holds the notes as a capital asset generally will
be subject to tax at a 30% rate on any gain recognized on the sale or other
disposition of such notes if:
- such gain is not effectively connected with the conduct of a trade or
business within the United States of the non-United States holder;
- such individual is present in the United States for 183 days or more in
the taxable year of the sale or other disposition; and
- either (A) has a tax home in the United States, as specially defined for
purposes of the United States federal income tax, or (B) maintains an
office or other fixed place of business in the United
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States and the gain from the sale or other disposition of the notes is
attributable to such office or other fixed place of business.
Individual non-United States holders may also be subject to tax under
provisions of United States federal income tax law applicable to certain United
States expatriates, including certain former long-term residents of the United
States.
Under the 1997 regulations, described above in "-- Foreign
Holders -- Interest", withholding of United States federal income tax may apply
to payments on a taxable sale or other disposition of the notes by a non-United
States holder who does not provide appropriate certification to the withholding
agent with respect to such transaction.
FEDERAL ESTATE AND GIFT TAXES. A note beneficially owned by an individual
who is neither a United States citizen nor a domiciliary of the United States at
the time of death will not be subject to United States federal estate tax as a
result of such individual's death; provided that any interest thereon would have
been eligible for the portfolio interest exception described above in
"-- Foreign Holders -- Interest," if such interest had been received by the
individual at the time of death.
An individual who is not a United States citizen will not be subject to
United States federal gift tax on a transfer of notes, unless such person is a
domiciliary of the United States or such person is subject to provisions of
United States federal gift tax law applicable to certain United States
expatriates, including certain former long-term residents of the United States.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Under current United States federal income tax law, information reporting
requirements apply to interest, including original issue discount, paid to, and
to the proceeds of sales or other dispositions before maturity by, certain
non-corporate persons. In addition, a 31% backup withholding tax applies if a
non-corporate person:
- fails to furnish such person's taxpayer identification number, which, for
an individual, is his or her Social Security Number, to the payor in the
manner required;
- furnishes an incorrect taxpayer identification number and the payor is so
notified by the Internal Revenue Service;
- is notified by the Internal Revenue Service that such person has failed
properly to report payments of interest and dividends; or
- in certain circumstances, fails to certify, under penalties of perjury,
that such person has not been notified by the Internal Revenue Service
that such person is subject to backup withholding for failure properly to
report interest and dividend payments.
Backup withholding does not apply to payments made to certain exempt recipients,
such as corporations and tax-exempt organizations.
In the case of a non-United States holder, under current United States
federal income tax law, backup withholding and information reporting do not
apply to payments of interest, including original issue discount, with respect
to a note, or to payments on the sale or other disposition of a note, if such
holder has provided to SpectraSite or its paying agent the certification
described in clause (ii)(D) of "-- Foreign Holders -- Interest" or has otherwise
established an exemption.
Under current United States federal income tax law, (i) interest payments,
including original issue discount, with respect to a note collected outside the
United States by a foreign office of a custodian, nominee or broker acting on
behalf of a beneficial owner of a note, and (ii) payments on the sale or other
disposition of a note to or through a foreign office of a broker generally are
not subject to backup withholding or information reporting. However, if such
custodian, nominee or broker is a "United States person," as defined in Section
7701(a)(30) of the Internal Revenue Code, a controlled foreign corporation for
United States tax purposes or a foreign person 50% of more of whose gross income
is effectively connected with the conduct of a United States trade or business
for a specified three-year period (a "U.S. Related Person"), such custodian,
nominee or broker may be subject to certain information reporting, but
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not backup withholding, requirements with respect to such payments, unless such
custodian, nominee or broker has in its records documentary evidence that the
beneficial owner is not a United States person and certain conditions are met or
the beneficial owner otherwise establishes an exemption. Backup withholding may
apply to any payment that such custodian, nominee or broker is required to
report if such person has actual knowledge that the payee is a United States
person. Payments to or through the United States office of a broker will be
subject to backup withholding and information reporting unless the holder
certifies, under penalties of perjury, that it is not a United States person or
otherwise establishes an exemption.
The 1997 regulations, described above in "-- Foreign Holders -- Interest,"
modify certain of the certification requirements for backup withholding and
expand the group of U.S. Related Persons. It is possible that SpectraSite or its
paying agent may request new withholding exemption forms from holders of notes
in order to qualify for continued exemption from backup withholding when the
1997 regulations become effective.
Backup withholding tax is not an additional tax. Rather, any amounts
withheld from a payment to a holder of notes under the backup withholding rules
are allowed as a refund or a credit against such holder's United States federal
income tax; provided that the required information is furnished to the Internal
Revenue Service.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives registered notes for its own account
through the exchange offer, where its outstanding notes were acquired by such
broker-dealer as a result of market making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such registered notes. This prospectus, as it may be amended
or supplemented from time to time, may be used by a broker-dealer in connection
with resales of registered notes received in exchange for outstanding notes
where such outstanding notes were acquired as a result of market making or other
trading activities. Until , 1999 (90 days after the commencement of
the exchange offer), all dealers effecting transactions in the registered notes
may be required to deliver a prospectus.
SpectraSite will not receive any proceeds from any sales of the registered
notes by participating broker-dealers. Registered notes received by
participating broker-dealers for their own account through the exchange offer
may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the registered notes or a combination of such methods of resale, at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
participating broker-dealer that resells the registered notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
for the exchange offer states that, by acknowledging that it will deliver, and
by delivering, a prospectus, a participating broker-dealer will not be deemed to
admit that it is an underwriter within the meaning of the Securities Act.
For a period of 180 days after the expiration date, or until all
broker-dealers who exchange outstanding notes which were acquired as a result of
market making activities for registered notes have sold all registered notes
held by them, we will promptly send additional copies of this prospectus and any
amendment or supplement to this prospectus to any broker-dealer that requests
such documents in the letter of transmittal. Holdings has agreed to pay all
expenses incident to the exchange offer. SpectraSite will indemnify the holders
of the registered notes, including any broker-dealers, against certain
liabilities, including liabilities under the Securities Act.
The registered notes will not be listed on any stock exchange. The notes
are designated for trading in The Portal Market.
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LEGAL MATTERS
Dow, Lohnes & Albertson, PLLC, Washington, D.C., will pass upon the
validity of the registered notes.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements for the period from inception (April 25, 1997) to December
31, 1997 and the year ended December 31, 1998 and the consolidated financial
statements of our predecessor, Telesite Services, LLC, for the year ended
December 31, 1996 and for the period from January 1, 1997 to May 12, 1997
included in Amendment No. 3 to our registration statement (Form S-4, No.
333-67043), as set forth in their reports appearing elsewhere herein, and are
included in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Holdings filed a registration statement on Form S-4 with the SEC covering
the registered notes, and this prospectus is part of our registration statement.
For further information on SpectraSite and the notes, you should refer to our
registration statement and its exhibits. This prospectus summarizes material
provisions of contracts and other documents that we refer you to. Since the
prospectus may not contain all the information that you may find important, you
should review the full text of these documents. We have included copies of these
documents as exhibits to our registration statement.
Following the exchange offer, Holdings will file reports with the SEC as
the Exchange Act requires. In addition, the indenture governing the notes
requires that we file Exchange Act reports with the SEC and provide those
reports to the indenture trustee and holders of notes. Our SEC filings are also
available over the Internet at the SEC's web site at http://www.sec.gov. You may
also read and copy any document we file at the SEC's public reference rooms in
Washington, D.C., New York and Chicago. Please call the SEC at 1-800-SEC-0330
for more information on the public reference rooms and their copy charges.
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INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
Report of Independent Auditors.............................. F-2
Consolidated Balance Sheets as of December 31, 1997, and
December 31, 1998......................................... F-3
Consolidated Statements of Operations for the period from
inception (April 25, 1997) to December 31, 1997 and for
the year ended December 31, 1998.......................... F-4
Consolidated Statements of Redeemable Convertible Preferred
Stock and Shareholders' Deficiency........................ F-5
Consolidated Statements of Cash Flows for the period from
inception (April 25, 1997) to December 31, 1997 and for
the year ended December 31, 1998.......................... F-6
Notes to Consolidated Financial Statements.................. F-7
TELESITE SERVICES, LLC
Report of Independent Auditors.............................. F-18
Consolidated Balance Sheet as of December 31, 1996.......... F-19
Consolidated Statements of Operations for the year ended
December 31, 1996 and the period ended May 12, 1997....... F-20
Consolidated Statements of Members' Equity.................. F-21
Consolidated Statements of Cash Flows for the year ended
December 31, 1996 and the period ended May 12, 1997....... F-22
Notes to Consolidated Financial Statements.................. F-23
</TABLE>
F-1
<PAGE> 130
REPORT OF INDEPENDENT AUDITORS
Board of Directors
SpectraSite Holdings, Inc. and Subsidiary
We have audited the accompanying consolidated balance sheets of SpectraSite
Holdings, Inc. (the "Company") and subsidiary as of December 31, 1998 and
December 31, 1997, and the related consolidated statements of operations,
redeemable convertible preferred stock and shareholders' deficiency and cash
flows for the year ended December 31, 1998 and for the period from April 25,
1997 (inception) to December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of SpectraSite
Holdings, Inc. and subsidiary at December 31, 1998 and December 31, 1997, and
the consolidated results of its operations and its cash flows for the year ended
December 31, 1998 and for the period from April 25, 1997 (inception) to December
31, 1997 in conformity with generally accepted accounting principles.
Ernst & Young LLP
February 26, 1999
Raleigh, North Carolina
F-2
<PAGE> 131
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
---------------------------
1997 1998
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 2,234,148 $ 99,548,234
Short-term investments.................................... -- 15,414,048
Accounts receivable....................................... 1,610,039 3,352,970
Prepaid expenses and other................................ 34,019 252,798
----------- ------------
Total current assets........................................ 3,878,206 118,568,050
Property and equipment, net................................. 1,176,032 28,469,017
Goodwill, less accumulated amortization of $278,381 and
$797,501, respectively.................................... 6,791,663 8,165,171
Deposits.................................................... 1,300,000 1,750,000
Investment in affiliate..................................... 336,095 --
Note receivable............................................. -- 272,935
Debt issuance costs, less accumulated amortization of
$244,054.................................................. -- 4,591,733
Other assets................................................ 159,957 129,106
----------- ------------
Total assets................................................ $13,641,953 $161,946,012
=========== ============
LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS'
DEFICIENCY
Current liabilities:
Line of credit............................................ $ 628,561 $ --
Accounts payable.......................................... 1,049,157 1,635,039
Accrued and other expenses................................ 1,005,317 791,408
Current portion of long-term debt......................... 25,404 17,826
----------- ------------
Total current liabilities................................... 2,708,439 2,444,273
Long-term debt, less current portion........................ 19,376 --
Other long-term liabilities................................. -- 223,676
Note payable to shareholder................................. 2,312,000 --
Senior discount notes due 2008, net of unamortized discount
of $92,548,709............................................ -- 132,689,291
----------- ------------
Total liabilities........................................... 5,039,815 135,357,240
Series A redeemable convertible preferred stock, $0.001 par,
3,462,830 shares authorized, 3,462,830 outstanding........ 10,500,000 11,300,000
Series B redeemable convertible preferred stock, $0.001 par,
7,000,000 shares authorized, 7,000,000 outstanding........ -- 29,355,781
Shareholders' deficiency:
Common stock, $0.001 par, 12,000,000 and 20,000,000
authorized, respectively, 931,753 and 956,753 issued
and outstanding, respectively.......................... 932 957
Additional paid-in-capital................................ 260,802 --
Accumulated deficit....................................... (2,159,596) (14,067,966)
----------- ------------
Total shareholders' deficiency.............................. (1,897,862) (14,067,009)
----------- ------------
Total liabilities, redeemable preferred stock and
shareholders' deficiency.................................. $13,641,953 $161,946,012
=========== ============
</TABLE>
See accompanying notes.
F-3
<PAGE> 132
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION YEAR
(APRIL 25, 1997) TO ENDED
DECEMBER 31, DECEMBER 31,
1997 1998
------------------- ------------
<S> <C> <C>
Revenues:
Site acquisition.......................................... $ 5,001,668 $ 8,141,936
Site leasing.............................................. -- 656,191
----------- ------------
Total revenues.............................................. 5,001,668 8,798,127
Cost of operations:
Site acquisition.......................................... 1,119,608 2,492,264
Site leasing (exclusive of depreciation presented
separately below)...................................... -- 298,856
----------- ------------
1,119,608 2,791,120
Selling, general and administrative expenses................ 5,957,042 10,246,081
Depreciation expense........................................ 191,077 711,862
----------- ------------
Operating loss.............................................. (2,266,059) (4,950,936)
Other income (expense):
Equity in earnings of affiliate........................... 204,537 --
Interest income........................................... 121,432 3,568,564
Interest expense.......................................... (163,555) (8,169,576)
Gain on sale of assets.................................... -- 472,594
Other expense............................................. (55,951) --
----------- ------------
106,463 (4,128,418)
----------- ------------
Net loss.................................................... $(2,159,596) $ (9,079,354)
=========== ============
Loss applicable to common shareholders:
Net loss.................................................... $(2,159,596) $ (9,079,354)
Accretion of redemption value of preferred stock............ (500,000) (2,155,781)
----------- ------------
Net loss applicable to common shareholders.................. $(2,659,596) $(11,235,135)
=========== ============
</TABLE>
See accompanying notes.
F-4
<PAGE> 133
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
SHAREHOLDERS' DEFICIENCY
<TABLE>
<CAPTION>
REDEEMABLE CONVERTIBLE PREFERRED STOCK SHAREHOLDERS' DEFICIENCY
--------------------------------------- -------------------------------------------------
ADDITIONAL
COMMON PAID-IN ACCUMULATED
SERIES A SERIES B TOTAL STOCK CAPITAL DEFICIT TOTAL
----------- ----------- ----------- ------ ---------- ------------ ------------
<C> <C> <C> <C> <C> <C> <C> <S>
Balance at April 25, 1997
(inception)............... $ -- $ -- $ -- $ -- $ -- $ -- $ --
Issuance of common
stock................... -- -- -- 932 809,693 -- 810,625
Issuance of warrants...... -- -- -- -- 130,500 130,500
Issuance of preferred
stock................... 10,000,000 -- 10,000,000 -- -- -- --
Stock issuance cost....... -- -- -- -- (179,391) -- (179,391)
Accretion of redemption
value................... 500,000 -- 500,000 -- (500,000) -- (500,000)
Net loss.................. -- -- -- -- -- (2,159,596) (2,159,596)
----------- ----------- ----------- ------ ---------- ------------ ------------
Balance at December 31,
1997...................... 10,500,000 -- 10,500,000 932 260,802 (2,159,596) (1,897,862)
Exercise of warrants...... -- -- -- 150 -- -- 150
Issuance of preferred
stock................... -- 28,000,000 28,000,000 -- -- -- --
Stock issuance costs...... -- -- -- -- (260,802) (173,360) (434,162)
Accretion of redemption
value................... 800,000 1,355,781 2,155,781 -- -- (2,155,781) (2,155,781)
Repurchase of Common
Stock................... -- -- -- (125) -- (499,875) (500,000)
Net loss.................. -- -- -- -- -- (9,079,354) (9,079,354)
----------- ----------- ----------- ------ ---------- ------------ ------------
Balance at December 31,
1998...................... $11,300,000 $29,355,781 $40,655,781 $ 957 $ -- $(14,067,966) $(14,067,009)
=========== =========== =========== ====== ========== ============ ============
</TABLE>
See accompanying notes.
F-5
<PAGE> 134
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
PERIOD FROM INCEPTION
(APRIL 25, 1997) TO YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1998
--------------------- ------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss.................................................. $(2,159,596) $ (9,079,354)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation............................................ 191,077 711,862
Amortization of goodwill and other intangibles.......... 297,785 556,161
Amortization of debt issuance costs..................... -- 244,054
Loss (gain) on sale of assets........................... 60,048 (472,594)
Equity in earnings of affiliate......................... (204,537) --
Amortization of discount -- senior discount notes....... -- 7,688,958
Non-cash charge (Note 1)................................ 869,150 --
Changes in operating assets and liabilities:
Accounts receivable.................................. (288,773) (1,450,531)
Interest receivable on short-term investments........ -- (758,860)
Prepaid expenses and other........................... 136,062 (158,149)
Other assets......................................... -- (6,159)
Accounts payable..................................... 316,674 590,594
Accrued and other expenses........................... 1,005,317 (212,955)
----------- ------------
Net cash provided by (used in) operating activities....... 223,207 (2,346,973)
INVESTING ACTIVITIES
Proceeds from note receivable............................. -- 41,313
Purchases of property and equipment....................... (849,939) (26,597,612)
Distribution from affiliate............................... -- 150,000
Purchases of investments.................................. -- (30,005,188)
Maturities of short-term investments...................... -- 15,350,000
Proceeds from sale of assets.............................. -- 298,575
Repurchase of common stock................................ -- (500,000)
Acquisitions, net of cash acquired........................ (5,028,541) (1,989,048)
Deposits on acquisitions.................................. (1,300,000) (1,750,000)
----------- ------------
Net cash used by investing activities..................... (7,178,480) (45,001,960)
FINANCING ACTIVITIES
Proceeds from issuance of preferred stock................. 10,000,000 28,000,000
Exercise of warrants...................................... -- 150
Stock issuance costs...................................... (179,391) (434,162)
Proceeds from issuance of senior discount notes........... -- 125,000,333
Debt issuance costs....................................... -- (4,835,787)
Net repayments on line of credit.......................... (567,501) (628,561)
Repayment of note to shareholder and other debt........... (63,687) (2,438,954)
----------- ------------
Net cash provided by financing activities................. 9,189,421 144,663,019
----------- ------------
Net increase in cash and cash equivalents................. 2,234,148 97,314,086
Cash and cash equivalents at beginning of period.......... -- 2,234,148
----------- ------------
Cash and cash equivalents at end of period................ $ 2,234,148 $ 99,548,234
=========== ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for interest.................. $ 63,989 $ 216,110
=========== ============
Additional consideration (common stock) for acquisition... $ -- $ 223,676
=========== ============
</TABLE>
See accompanying notes.
F-6
<PAGE> 135
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
FORMATION OF COMPANY
SpectraSite Holdings, Inc. ("Holdings") and its wholly owned subsidiary
SpectraSite Communications, Inc. ("SCI") (collectively referred to as the
"Company" throughout), are principally engaged in providing services to
companies operating in the telecommunications industry including site
development services, transmission tower construction and leasing antenna tower
sites.
Holdings formerly known as Integrated Site Development, Inc. ("ISD"), was
incorporated in the State of Delaware on April 25, 1997. Holdings, on May 12,
1997, issued 850,000 shares of its common stock and common stock warrants for
150,000 shares in exchange for the 850,000 issued and outstanding shares of
common stock and common stock warrants for 150,000 shares of US Towers, Inc.
("UST"). Holdings' chief executive officer was the principal shareholder of UST
prior to this transaction. One of the primary purposes of the exchange of shares
was the hiring of the chief executive officer. Since UST had de minimus assets
and operations, this transaction was compensatory in nature, rather than a
business combination or an asset acquisition. Accordingly, this transaction
resulted in a non-cash compensation charge of $869,150, based on the estimated
fair value of the stock of $.87 per share and the estimated fair value of the
warrants of $.87 per warrant at the date of issuance. The warrants entitled the
holder to the right to purchase 150,000 shares of Holdings common stock at a
price of $0.001 per share, through 2001. In September and October 1998, all of
the warrants were exercised. See Note 4.
On May 12, 1997, Holdings acquired all of the outstanding membership
interests of TeleSite Services, LLC ("TeleSite") and its subsidiary, MetroSite
Management, LLC ("MetroSite"), for consideration including $4,850,000 in cash,
81,753 shares of common stock valued at $71,125 and a $2,312,000 note payable.
Since Holdings had minimal operations prior to this acquisition, TeleSite is
considered Holdings' predecessor for financial reporting purposes. In October
1997, TeleSite was merged into UST, and UST changed its name to SpectraSite
Communications, Inc. The acquisition was accounted for as a purchase in
accordance with the provisions of APB 16 and, accordingly, the results of
operations of TeleSite are included in the consolidated operations of the Issuer
from the date of acquisition.
In connection with the TeleSite acquisition, Holdings will be required to
provide additional consideration of 55,919 shares of its common stock based upon
TeleSite achieving certain operating goals through the end of December 31, 1998,
pursuant to a provision in the TeleSite acquisition agreement. The Company
accounted for the obligation as an additional cost of the acquisition, recording
approximately $224,000 of goodwill and a related long-term liability based upon
the fair value of the Company's common stock at December 31, 1998. The
obligation will be subsequently relieved and $224,000 of additional paid-
in-capital will be recorded when the shares are issued.
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
the Holdings and SCI. All significant intercompany transactions and balances
have been eliminated in consolidation.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
F-7
<PAGE> 136
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
SHORT-TERM INVESTMENTS
At December 31, 1998, the Company's short-term investments consisted of
commercial paper and certificates of deposit with maturities of less than one
year. The carrying amount of these investments approximates market value.
PROPERTY AND EQUIPMENT
Property and equipment, including towers, are stated at cost. The Company
is capitalizing costs incurred in bringing towers to an operational state.
Direct costs related to the development and construction of towers, including
interest, are capitalized and are included in construction in progress.
Approximately $109,700 of interest was capitalized for the year ended December
31, 1998. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets ranging from three to fifteen years.
GOODWILL
The Company has classified as goodwill the cost in excess of fair value of
net assets acquired in purchase transactions. Goodwill is being amortized on a
straight-line basis over fifteen years.
DEBT ISSUANCE COSTS
The Company capitalized costs relating to the issuance of the 12% Senior
Discount Notes Due 2008 (the "Senior Discount Notes") (Note 3). The costs are
amortized using the straight-line method over the term of these notes.
INCOME TAXES
The liability method is used in accounting for income taxes and deferred
tax assets and liabilities are determined based on differences between the
financial reporting and tax basis of assets and liabilities.
FINANCIAL INSTRUMENTS
The carrying amount of cash and cash equivalents and investments
approximates fair value for these instruments. The estimated fair value of the
Senior Discount Notes (see Note 3) is based on the quoted market price in the
private market. Although management is not aware of any factors that would
significantly affect the fair value of amounts, such amounts have not been
comprehensively revalued for purposes of these financial statements since that
date. The estimated fair values of the Company's financial instruments, along
with the carrying amounts of the related assets (liabilities), are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1997 DECEMBER 31, 1998
------------------- ----------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- ------- --------- ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
Cash and cash equivalents.............. $ 2,234 $ 2,234 $ 99,548 $ 99,548
Short-term investments................. -- -- 15,414 15,414
Senior Discount Notes.................. -- -- (132,689) (114,871)
</TABLE>
F-8
<PAGE> 137
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
REVENUE RECOGNITION
Revenue from site acquisition services is recognized when services are
rendered. Revenue from site leasing contracts, which include scheduled rent
increases, are recognized ratably, on a straight-line basis, over the term of
the contracts. To date, a large majority of the Company's revenues have been
generated by providing site acquisition services.
COSTS OF OPERATIONS
Costs of operations for site acquisition services consist of direct costs
incurred to provide the related services.
Costs of operations for site leasing services consist of direct costs
incurred to provide the related services including ground lease cost, tower
maintenance and related real estate taxes. Costs of operations for site leasing
services does not include depreciation expense of the related leased assets.
SIGNIFICANT CONCENTRATIONS
The Company's customer base consists of businesses operating in the
wireless telecommunications industry. The Company's exposure to credit risk
consists primarily of unsecured accounts receivable from these customers. Five
customers accounted for 96.6% of the Company's 1997 revenue. Two customers
accounted for 70.9% of the Company's 1998 revenue. Following is a list of
significant customers:
<TABLE>
<CAPTION>
PERCENT OF REVENUES
FOR THE PERIOD FROM PERCENT OF REVENUES PERCENT OF
APRIL 25, 1997 PERCENT OF ACCOUNTS FOR THE YEAR ACCOUNTS
(INCEPTION) TO RECEIVABLE AT ENDED RECEIVABLE AT
DECEMBER 31, 1997 DECEMBER 31, 1997 DECEMBER 31, 1998 DECEMBER 31, 1998
------------------- ------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Customer 1........... 38.9% 75.0% 46.6% 15.6%
Customer 2........... 18.8% -- -- --
Customer 3........... 14.7% -- -- --
Customer 4........... 13.0% -- -- --
Customer 5........... 11.2% -- -- --
Customer 6........... -- -- 24.3% 45.0%
Customer 7........... -- -- -- 22.7%
</TABLE>
ADVERTISING EXPENSE
The cost of advertising is expensed as incurred, and totaled approximately
$131,000 and $135,000 for the period from April 25, 1997 (inception) to December
31, 1997 and for the year ended December 31, 1998, respectively.
STOCK OPTIONS
The Company has elected under the provisions of Statement of Financial
Accounting Standards No. 123, Accounting for Stock Based Compensation ("SFAS
123") to account for its employee stock options in accordance with Accounting
Principle Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB
25"). Companies that account for stock based compensation arrangements for its
employees under APB No. 25 are required by SFAS 123 to disclose the pro forma
effect on net income (loss) as if the fair value based method prescribed by SFAS
123 had been applied. The Company plans to continue to account for stock based
compensation using the provisions of APB 25 and has adopted the disclosure
requirements of SFAS 123. Under APB 25, no compensation expense has been
recognized for
F-9
<PAGE> 138
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
stock options granted to its employees since the exercise price of the options
has equaled or exceeded the estimated fair value of the underlying stock on the
date of grant. Option grants to advisors and consultants will be accounted for
using the fair value method prescribed by SFAS 123.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In 1998, the Company adopted Statement of Financial Accounting Standards
No. 130, Reporting Comprehensive Income ("SFAS 130"), which establishes
standards for reporting and display of comprehensive income and its components
in a full set of general-purpose financial statements. SFAS 130 only impacts
financial statement presentation as opposed to actual amounts recorded. Other
comprehensive income includes all nonowner changes in equity that are excluded
from net income. This Statement has no financial statement impact for an
enterprise that has no items of other comprehensive income in any period
presented. During the period from inception (April 25, 1997) to December 31,
1997 and during the year ended December 31, 1998, the Company had no items of
other comprehensive income.
In 1998, the Company adopted Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related Information"
("SFAS 131"). SFAS 131 changes the way public companies report segment
information in annual financial statements and also requires those companies to
report selected segment information in interim financial statements to
shareholders. SFAS 131 also establishes standards for related disclosures about
products and services, geographic areas, and major customers. The application of
the new rules did not have a significant impact on the Company's financial
position at December 31, 1998 or its results of operations for the year ended
December 31, 1998 as the Company currently operates in only one segment.
In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS
133"). SFAS 133 requires that derivative instruments be recognized as either
assets or liabilities in the consolidated balance sheet based on their fair
values. Changes in the fair values of such derivative instruments will be
recorded either in results of operations or in other comprehensive income,
depending on the intended use of the derivative instrument. The initial
application of SFAS 133 will be reported as the effect of a change in accounting
principle. SFAS 133 is effective for all fiscal years beginning after June 15,
1999. We will adopt the requirements of SFAS 133 in our 1999 financial
statements. We have not yet determined the effect that the adoption of SFAS 133
will have on our consolidated financial statements.
F-10
<PAGE> 139
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
2. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-----------------------------
1997 1998
------------ -------------
<S> <C> <C>
Towers.................................................... $ 166,568 $24,780,130
Equipment................................................. 465,758 822,604
Furniture and fixtures.................................... 250,408 288,160
Vehicles.................................................. 148,314 173,315
Other..................................................... -- 38,698
---------- -----------
Total..................................................... 1,031,048 26,102,907
Less accumulated depreciation............................. (160,824) (869,911)
---------- -----------
870,224 25,232,996
Construction in progress.................................. 305,808 3,236,021
---------- -----------
Property and equipment, net............................... $1,176,032 $28,469,017
========== ===========
</TABLE>
3. DEBT
12% SENIOR DISCOUNT NOTES DUE 2008
In June 1998, the Company issued $225,238,000 aggregate principal amount at
maturity of Senior Discount Notes with gross proceeds of $125,000,333. The
Senior Discount Notes accrete daily at a rate of 12% per annum, compounded
semiannually, to an aggregate principal amount of $225,238,000 on July 15, 2003.
Cash interest will not accrue on the Senior Discount Notes prior to July 15,
2003. Commencing July 15, 2003, cash interest will accrue and be payable
semiannually in arrears on each January 15 and July 15, commencing January 15,
2004, at a rate of 12% per annum. After July 15, 2003, the Company may redeem
all or a portion of the Senior Discount Notes at specified redemption prices,
plus accrued and unpaid interest, to the applicable redemption date. On one or
more occasions prior to July 15, 2001, the Company may redeem up to 25% of the
aggregate principal amount at maturity of the Senior Discount Notes issued with
the net cash proceeds from one or more equity offerings. The redemption price
would be 112% of the accreted value on the redemption date. The Company is
required to comply with certain covenants under the terms of the Senior Discount
Notes that restrict the Company's ability to incur indebtedness, make certain
payments and issue preferred stock among other things. In the year ended
December 31, 1998, the Company recorded amortization of debt discount of
approximately $7,689,000 related to the Senior Discount Notes as additional
interest expense.
<TABLE>
<S> <C>
Senior Discount Notes....................................... $225,238,000
Unamortized discount........................................ (92,548,709)
------------
Balance at December 31, 1998........................... $132,689,291
============
</TABLE>
LINE OF CREDIT
During 1997, the Company maintained a $1.5 million line of credit with a
bank, which bore interest at prime plus 0.5%. The balance at December 31, 1997
was $628,561. The line of credit was repaid in full in March 1998.
F-11
<PAGE> 140
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
3. DEBT -- (CONTINUED)
OTHER LONG-TERM DEBT
Long-term debt, other than the Senior Discount Notes, consists of the
following:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
----------------------------
1997 1998
------------ -------------
<S> <C> <C>
Installment notes payable to a bank, bearing interest at
rates ranging from 8.75% to 10.2%, maturing from October
1998 to December 1999, monthly payments of principal and
interest, collateralized by vehicles...................... $ 44,780 $ 17,826
-------- ---------
44,780 17,826
Less current portion........................................ (25,404) 17,826
-------- ---------
Long-term debt, less current portion........................ $ 19,376 $ --
======== =========
</TABLE>
BANK CREDIT AGREEMENT
In January 1998, the Company signed a letter of intent with a bank for a
$50.0 million revolving credit facility for the purpose of financing the
construction and/or the acquisition of telecommunication towers for PCS or other
wireless communication services and other permitted acquisitions as defined by
the agreement, contingent upon certain events. In the year ended December 31,
1998 the Company incurred approximately $252,000 in commitment fees related to
the agreement. The agreement expired on December 31, 1998.
4. REDEEMABLE CONVERTIBLE VOTING PREFERRED STOCK AND SHAREHOLDERS' EQUITY
REDEEMABLE CONVERTIBLE VOTING PREFERRED STOCK
The Company's mandatorily redeemable convertible preferred stock consists
of Series A and Series B cumulative redeemable convertible preferred stock,
$.001 par value, 10,462,830 shares authorized in the aggregate and 3,462,830 and
7,000,000 shares issued and outstanding at December 31, 1998, respectively.
Dividends accumulate at a rate of 8% per annum per share and are payable when
declared in cash and are subject to certain restrictions. Voting rights for
preferred stock are equal to the voting rights of the largest number of common
shares into which the preferred stock are convertible. Accumulated dividends for
Series A and B cumulative redeemable preferred stock at December 31, 1998 are
$2,655,781. The Company is accreting the carrying value of the preferred stock
to reflect the accumulating dividends.
Contemporaneously with the closing of an underwritten public offering of
common stock resulting in gross proceeds of at least $30.0 million at a per
share price of $4.47 or greater, the outstanding shares of Series A and Series B
Preferred Stock shall automatically convert to common stock. The Series A and
Series B preferred stock is convertible into common stock based on a share for
share basis and can be adjusted upon the occurrence of certain transactions
defined in the Issuer's articles of incorporation. In December 2008 each share
of Series A and Series B preferred stock shall automatically be redeemed at a
redemption price per share, in cash, equal to 100% of the original issue price
plus unpaid accumulated dividends. The Company has reserved a sufficient number
of its authorized shares of common stock for the purpose of effecting the future
conversion of the preferred stock.
WARRANTS
During September and October, 1998, 150,000 shares of common stock were
issued in connection with the exercise of common stock warrants at a price of
$0.001 per share.
F-12
<PAGE> 141
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
4. REDEEMABLE CONVERTIBLE VOTING PREFERRED STOCK AND SHAREHOLDERS'
EQUITY -- (CONTINUED)
On October 9, 1998, the Company paid a former employee $500,000 under an
agreement to release the Company from any potential claims and to buy 125,000
shares of SpectraSite common stock from the former employee for an agreed upon
price. In addition, the agreement provided that shareholders of SpectraSite
would have an option to purchase the former employee's remaining 37,605 shares
of SpectraSite common stock for the same price per share, provided that the
Company advise the former employee in writing of the exercise of all or any
portion of such option by November 15, 1998. The shares were subsequently
purchased by a shareholder of the Company on February 5, 1999 for an aggregate
purchase price of $150,240.
STOCK OPTIONS
During 1997, the Company adopted a stock option plan which provides for the
purchase of common stock by key employees, directors, advisors and consultants
of the Company. The maximum number of shares for which options may be granted
under the plans shall not exceed 1,817,700 shares. Stock options are granted
under various stock option agreements. Each stock option agreement contains
specific terms. During the period from inception (April 25, 1997) to December
31, 1997 and the year ended December 31, 1998, option grants were solely to
employees.
The options without a performance acceleration feature which were granted
under the terms of the incentive stock option agreement and options granted
under the terms of the non qualified stock option agreement vest and become
exercisable ratably over a four-year period, commencing one year after date of
grant.
The options with a performance acceleration feature which were granted
under the terms of the incentive stock option agreement and the non-qualified
stock option agreement vest and become exercisable upon the seventh anniversary
of the grant date. Vesting, however, can be accelerated upon the achievement of
certain milestones defined in each agreement.
In accordance with SFAS 123, the fair value of each option grant was
determined by using the Black-Scholes option pricing model with the following
weighted average assumptions for the period ended December 31, 1997 and the year
ended December 31, 1998: dividend yield of 0.0%; volatility of .70; risk free
interest rate of 6.0% to 5.0%; and expected option lives of 7 years. Had
compensation cost for the Company's stock options been determined based on the
fair value at the date of grant consistent with the provisions of SFAS 123, the
Company's net loss would have been $2,167,196 for the period ended December 31,
1997 and $9,274,354 for the year ended December 31, 1998.
Option activity under the Company's plans is summarized below:
<TABLE>
<CAPTION>
INCENTIVE STOCK NON QUALIFIED STOCK
OPTION PLAN OPTION PLAN
-------------------- --------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
SHARES PRICE SHARES PRICE
--------- -------- -------- ---------
<S> <C> <C> <C> <C>
Outstanding at beginning of April 25, 1997.... -- -- -- --
Options granted............................... 724,700 $2.89 160,000 $2.89
Options exercised............................. -- -- -- --
Options canceled.............................. -- -- -- --
--------- ----- ------- -----
Outstanding at December 31, 1997.............. 724,700 2.89 160,000 2.89
Options granted............................... 367,000 3.95 475,000 4.00
Options exercised............................. -- -- -- --
Options canceled.............................. (158,800) 2.92 -- --
--------- ----- ------- -----
Outstanding at December 31, 1998.............. 932,900 $3.30 635,000 $3.72
========= ===== ======= =====
</TABLE>
F-13
<PAGE> 142
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
4. REDEEMABLE CONVERTIBLE VOTING PREFERRED STOCK AND SHAREHOLDERS'
EQUITY -- (CONTINUED)
At December 31, 1997, there were no options exercisable under the incentive
stock option plan. At December 31, 1998 there were 185,475 options exercisable
under the incentive stock option plan. There were no options exercisable under
the non-qualified option plan at December 31, 1997 or 1998.
At December 31, 1997 and 1998, the weighted average remaining contractual
life of the incentive stock options outstanding was 8.77 years and 8.90 years,
respectively.
At December 31, 1997 and 1998, the weighted average remaining contractual
life of the non-qualified stock options outstanding was 8.73 years and 9.09
years, respectively.
COMMON STOCK RESERVED FOR FUTURE ISSUANCE
At December 31, 1998 the Company had reserved a total of 12,280,530 of its
authorized 20,000,000 shares of common stock for future issuance as follows:
<TABLE>
<S> <C>
Convertible preferred stock................................. 10,462,830
Outstanding stock options................................... 1,567,900
Possible future issuance under stock option plans........... 249,800
----------
Total....................................................... 12,280,530
==========
</TABLE>
5. LEASES
OPERATING LEASES FROM OTHERS
The Company leases land "ground leases", office space and certain office
equipment under noncancelable operating leases. Ground leases are generally for
terms of five years and are renewable at the option of the Company. Rent expense
was approximately $588,000 and $234,000 for the year ended December 31, 1998 and
for the period from April 25, 1997 (inception) to December 31, 1997,
respectively. The future minimum lease payments for these leases at December 31,
1998 are as follows:
<TABLE>
<S> <C>
1999........................................................ $1,369,027
2000........................................................ 1,221,426
2001........................................................ 1,196,597
2002........................................................ 973,186
2003........................................................ 310,066
----------
Total....................................................... $5,070,302
==========
</TABLE>
ANTENNA SPACE LEASED TO OTHERS
The Company currently leases antenna space on multi-tenant towers to a
variety of wireless service providers under non-cancelable operating leases. The
tenant leases are generally for terms of five years and include options for
renewal. Cost and accumulated depreciation of the leased towers at December 31,
1997, was $167,000 and $3,000, respectively, and at December 31, 1998, was
$24,780,000 and $517,000, respectively.
F-14
<PAGE> 143
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
5. LEASES -- (CONTINUED)
At December 31, 1998, the approximate future minimum rental income under
operating leases that have initial or remaining non-cancelable terms in excess
of one year are as follows:
<TABLE>
<CAPTION>
RENTAL INCOME
-------------
<S> <C>
1999........................................................ $2,074,635
2000........................................................ 2,085,046
2001........................................................ 2,065,295
2002........................................................ 1,963,056
2003........................................................ 1,378,538
----------
Total....................................................... $9,566,570
==========
</TABLE>
6. INCOME TAXES
The Company did not recognize any income tax expense for the period from
April 25, 1997 (inception) to December 31, 1997 and for the year ended December
31, 1998 as the Company incurred a net loss for the periods and the resulting
deferred tax assets were fully reserved.
The components of net deferred taxes at December 31, are as follows:
<TABLE>
<CAPTION>
1997 1998
------------ -------------
<S> <C> <C>
Deferred tax assets:
Tax loss carryforwards.................................. $183,000 $4,057,000
======== ==========
Total gross deferred tax assets......................... 183,000 4,057,000
Valuation allowance..................................... (183,000) (4,057,000)
-------- ----------
Total net deferred tax assets........................... $ -- $ --
======== ==========
</TABLE>
Deferred tax assets result primarily from differences between book and tax
treatment of net operating losses. The Company has a federal net operating loss
carryforward of approximately $2.6 million that begins to expire in the year
2012. Also, the Company has state tax losses of $2.6 million that expire
beginning in 2002. Based on the Company's history of losses to date, management
has provided a valuation allowance to fully offset the deferred assets related
to federal and state net operating loss carryforwards.
7. RELATED PARTY TRANSACTION
In conjunction with the acquisition of TeleSite, the Company issued a
$2,312,000 note payable to a shareholder. In the period from April 25, 1997
(inception) to December 31, 1997 and during the year ended December 31, 1998,
the Company incurred approximately $100,000 and $81,000 of interest expense
related to the note payable to shareholder, respectively. The balance of the
note payable at December 31, 1997 was $2,312,000. In June 1998, the note was
repaid in full.
During the period from April 25, 1997 (inception) to December 31, 1997 and
the year ended December 31, 1998, the Company paid approximately $60,000 and
$120,000 to a related party for management fees.
During the period from April 25, 1997 (inception) to December 31, 1997, the
Company paid approximately $57,000 to a related party for rent expense for an
office facility. In September 1997, the lease with the related party was
terminated.
F-15
<PAGE> 144
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
8. EMPLOYEE BENEFIT PLAN
The Company provides a 401(k) plan for the benefit of all its employees
meeting specified eligibility requirements. The Company's contributions to the
plan are discretionary and totaled approximately $11,000 and $31,000 for the
period from April 25, 1997 (inception) to December 31, 1997 and for the year
ended December 31, 1998, respectively.
9. SALE OF AFFILIATES
In February 1998, the Company entered into an agreement under which it sold
its wholly-owned subsidiary, MetroSite, for $298,575. The Company recognized a
gain on the sale of $257,251.
In May 1998, the Company sold its ownership interest in Communication
Management Specialists, LLC ("CMS") for $375,000, in exchange for a note
receivable bearing interest at 8.5% per annum, payable to the Company over 60
months. The total amount due to the Company at December 31, 1998 is $333,687 of
which the current portion, $60,752, is included in prepaid expenses and other
current assets in the accompanying balance sheet. The Company recognized a gain
on the sale of approximately $189,000. Prior to the sale, the Company's
ownership interest in CMS was accounted for using the equity method.
10. ACQUISITION ACTIVITY
In June 1998, the Company entered into an agreement under which it acquired
all of the membership interests of H&K Investments, LLC for $1,400,000 in a
transaction accounted for as a purchase. The results of operations of H&K are
included in the Company's operations from the date of acquisition. The Company
paid $1,300,000 in cash and recorded notes payable for $100,000 in conjunction
with the acquisition. The outstanding note payable was subsequently paid in
December 1998.
In August 1998, the Company entered into an asset purchase agreement with
Airadigm Communications, Inc. ("Airadigm") for the purchase of 47 towers for
approximately $11,750,000. As of December 31, 1998, 40 towers have been placed
in service and the remaining 7 towers will be placed in service subject to
completion of pending due diligence. Of the total purchase price, $1,750,000
remains in escrow at December 31, 1998 and is recorded as a noncurrent deposit
in the accompanying balance sheet. Under the terms of the agreement, the Company
will lease antenna space on the towers to Airadigm.
In August 1998, the Company entered into an asset purchase agreement with
Amica Wireless Phone Service, Inc. for the purchase of the construction in
progress related to 14 towers for approximately $474,000. The results of
operations of Amica are included in the Company's operations from the date of
acquisition.
In September 1998, the Company acquired all of the outstanding common stock
of GlobalComm, Inc. for $1,988,864 in cash in a transaction accounted for as a
purchase. The results of operations of GlobalComm are included in the Company's
operations from the date of acquisition. The Company recorded approximately
$1,669,000 of goodwill related to the transaction.
The following unaudited pro forma summary presents consolidated results of
operations for the Company as if the GlobalComm and H&K acquisitions had been
consummated as of January 1, 1998. The pro forma information does not
necessarily reflect the actual results that would have been achieved, nor is it
necessarily indicative of future consolidated results for the Company.
<TABLE>
<CAPTION>
(UNAUDITED)
-----------
YEAR ENDED
DECEMBER 31, 1998
-----------------
(IN THOUSANDS OF DOLLARS)
<S> <C>
Net revenues............................................ $11,055
Net loss................................................ (7,965)
</TABLE>
F-16
<PAGE> 145
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
11. YEAR 2000 ISSUE (UNAUDITED)
Many existing computer systems and applications, and other control devices,
use only two digits to identify a year in the date field, without considering
the impact of the upcoming changes in the century. As a result, such systems and
applications could fail or create erroneous results unless corrected so that
they can process data related to the year 2000. The Company relies on its
systems, applications and devices in operating and monitoring all major aspects
of its business, including the financial systems (such as general ledger,
accounts payable and payroll modules), customer services, infrastructure,
embedded computer chips, networks and telecommunications equipment and products.
The Company also relies, directly and indirectly, on external systems of
business enterprises such as customers, suppliers, creditors, financial
organizations and of governmental entities, both domestic and international, for
accurate exchange of data. The Company's current estimate is that the costs
associated with the year 2000 issue, and the consequences of incomplete or
untimely resolution of the year 2000 issue, will not have a material adverse
effect on the results of operations or financial position of the Company in any
given year. However, despite the Company's efforts to address the year 2000
impact on its internal systems, the Company has not fully identified such impact
or whether such impact can be resolved without disruption of its business and
without incurring significant expense. In addition, even if the internal systems
of the Company are not materially affected by the year 2000 issue, the Company
could be affected through disruption in the operation of the enterprises with
which the Company interacts.
12. SUBSEQUENT EVENTS (UNAUDITED)
In February 1999, the Company entered into an agreement to purchase 2,000
communications towers from Nextel Communications, Inc. ("Nextel") for $560.0
million in cash and shares of Series C preferred stock valued at $70.0 million.
As part of the transaction, Nextel has agreed to lease 1,700 additional sites on
the Company's towers as part of Nextel's national deployment.
In connection with the purchase, Nextel will enter into a master lease
agreement to become the anchor tenant on each of the acquired towers and will
also convey to the Company certain third-party co-location site leases
associated with the acquired assets. Nextel will also transfer to the Company
certain non-cancelable ground leases, and the Issuer will assume all operating
and other costs associated with the acquired assets.
The Company plans to use $9.3 million of cash on hand, $150.0 million of
borrowings under a $500.0 million committed credit facility, $200.0 million from
the proceeds of a privately placed high yield debt offering, and $230.7 million
from the sale of new Series C preferred stock, to fund the cash purchase price
and to pay related fees and expenses. As part of the acquisition, Nextel will
receive approximately $70.0 million of SpectraSite Series C preferred stock
resulting in Nextel obtaining an equity position representing approximately 18%
of all the Company's outstanding stock on a fully-diluted basis.
F-17
<PAGE> 146
REPORT OF INDEPENDENT AUDITORS
The Members
TeleSite Services, LLC
We have audited the accompanying consolidated balance sheet of TeleSite
Services, LLC (the "Company") as of December 31, 1996 and the related
consolidated statements of operations and members' equity and cash flows for the
year ended December 31, 1996 and for the period from January 1, 1997 through May
12, 1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of TeleSite
Services, LLC at December 31, 1996 and the consolidated results of its
operations and its cash flows for the year ended December 31, 1996 and for the
period from January 1, 1997 through May 12, 1997, in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
Raleigh, North Carolina
March 27, 1998
F-18
<PAGE> 147
TELESITE SERVICES, LLC
CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1996
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash...................................................... $ 4,854
Accounts receivable:
Trade.................................................. 1,777,611
Other.................................................. 37,107
Prepaid expenses and other................................ 39,964
----------
Total current assets........................................ 1,859,536
Property and equipment, net................................. 931,291
Investment in affiliate..................................... 131,459
----------
Total assets................................................ $2,922,286
==========
LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Line of credit............................................ $ 946,724
Accounts payable.......................................... 688,180
Accrued expenses.......................................... 33,092
Current portion of long-term debt......................... 295,711
----------
Total current liabilities................................... 1,963,707
Long-term debt, less current portion........................ 81,106
----------
Total liabilities........................................... 2,044,813
Members' equity............................................. 877,473
----------
Total liabilities and members' equity....................... $2,922,286
==========
</TABLE>
See accompanying notes.
F-19
<PAGE> 148
TELESITE SERVICES, LLC
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
FOR THE JANUARY 1, 1997
YEAR ENDED TO
DECEMBER 31, 1996 MAY 12, 1997
----------------- ---------------
<S> <C> <C>
Revenues.................................................... $8,840,869 $1,925,985
Costs of operations......................................... 2,254,777 594,683
Selling, general and administrative expenses................ 4,255,840 1,741,856
Depreciation expense........................................ 91,133 55,870
---------- ----------
Operating income (loss)..................................... 2,239,119 (466,424)
Interest expense............................................ (66,505) (35,695)
Equity in earnings (loss) of affiliate...................... 116,459 (1,087)
---------- ----------
Net income (loss)........................................... $2,289,073 $ (503,206)
========== ==========
Pro forma income data (unaudited):
Net income (loss) as reported............................. $2,289,073 $ (503,206)
Pro forma provision for income taxes...................... 892,783 --
---------- ----------
Pro forma net income (loss)............................... $1,396,290 $ (503,206)
========== ==========
</TABLE>
See accompanying notes.
F-20
<PAGE> 149
TELESITE SERVICES, LLC
CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY
<TABLE>
<S> <C>
Members' deficiency at January 1, 1996...................... $ (445,584)
Distributions to members.................................. (966,016)
Net income................................................ 2,289,073
----------
Members' equity at December 31, 1996........................ $ 877,473
Contribution to capital................................... 100
Distributions to members.................................. (211,256)
Net loss.................................................. (503,206)
----------
Members' equity at May 12, 1997............................. $ 163,111
==========
</TABLE>
See accompanying notes.
F-21
<PAGE> 150
TELESITE SERVICES, LLC
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
FOR THE JANUARY 1, 1997
YEAR ENDED TO
DECEMBER 31, 1996 MAY 12, 1997
----------------- ---------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss)........................................... $ 2,289,073 $(503,206)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation.............................................. 91,133 55,870
Equity in (earnings) loss of affiliate.................... (116,459) 1,087
Changes in operating assets and liabilities:
Trade accounts receivable.............................. (1,314,087) 456,345
Other accounts receivable.............................. (34,072) (76,610)
Prepaid expenses and other............................. (35,827) (17,487)
Accounts payable....................................... 197,702 (42,534)
Accrued expenses....................................... 31,568 55,593
----------- ---------
Net cash provided by (used in) operating activities......... 1,109,031 (70,942)
INVESTING ACTIVITIES
Purchases of property and equipment......................... (837,808) (321,788)
Investment in affiliate..................................... (15,000) --
----------- ---------
Net cash used in investing activities....................... (852,808) (321,788)
FINANCING ACTIVITIES
Net proceeds from line of credit............................ 368,724 249,338
Net proceeds from long-term debt............................ 556,391 293,785
Repayment of long-term debt................................. (224,923) --
Proceeds from capital contribution.......................... -- 100
Distribution to members..................................... (966,016) (153,499)
----------- ---------
Net cash (used in) provided by financing activities......... (265,824) 389,724
----------- ---------
Net decrease in cash........................................ (9,601) (3,006)
Cash at beginning of period................................. 14,455 4,854
----------- ---------
Cash at end of period....................................... $ 4,854 $ 1,848
=========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest.................... $ 64,000 $ 30,695
=========== =========
</TABLE>
See accompanying notes.
F-22
<PAGE> 151
TELESITE SERVICES, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
TeleSite Services, LLC (the "Company") was formed on August 1, 1995, for
the purpose of providing site development services, as agent, to companies
operating in the telecommunications industry. TeleSite's clients are located
primarily in the southeastern and south central regions of the United States.
Metrosite Management, LLC ("Metrosite") was formed on February 28, 1997 by
the contribution of $99 by the Company and $1 by a member of the Company for the
99% and 1% ownership of Metrosite, respectively. Metrosite was formed for the
purpose of negotiating agreements with municipalities to lease certain locations
to PCS providers (e.g., water towers, etc.) in return for a percentage of the
monthly rental amounts charged by the municipalities to the PCS providers.
PRINCIPLES OF CONSOLIDATION
The accompanying 1997 consolidated financial statements include the
accounts of TeleSite, LLC and MetroSite Management, LLC from the date of
MetroSite's formation. All significant intercompany transactions and balances
have been eliminated in consolidation. Minority interest related to the
membership interest not owned by the Company is insignificant.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities. Actual
results could differ from those estimates.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed using
straight-line and accelerated methods over the estimated useful lives of the
assets ranging from three to seven years.
REVENUE RECOGNITION
Revenue from projects is recognized when site selection services are
rendered.
COST OF REVENUES
Cost of revenues consist of the direct costs incurred to provide the
related services.
F-23
<PAGE> 152
TELESITE SERVICES, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
SIGNIFICANT CONCENTRATIONS
The Company's customer base consists of companies operating in the
telecommunications industry. The Company's exposure to credit risk consists
primarily of unsecured accounts receivable from these customers. Following is
information concerning revenue and accounts receivable concentrations of the
Company's major customers:
<TABLE>
<CAPTION>
% OF REVENUES
--------------------------------------
PERIOD FROM
JANUARY 1, 1997
YEAR ENDED TO
DECEMBER 31, 1996 MAY 12, 1997
----------------- ------------------
<S> <C> <C>
Customer 1................................... 21% 34%
Customer 2................................... 63% 30%
Customer 3................................... -- 12%
</TABLE>
<TABLE>
<CAPTION>
% OF ACCOUNTS RECEIVABLE AT
--------------------------------------
DECEMBER 31, 1996 MAY 12, 1997
----------------- ------------
<S> <C> <C>
Customer 1................................... 11% 37%
Customer 2................................... 67% 24%
</TABLE>
INVESTMENT IN AFFILIATE
The Company's 33% ownership interest in Communication Management
Specialists, LLC, ("CMS") a company that provides construction management
services to telecommunications companies, is accounted for using the equity
method.
Summary financial information of CMS is as follows:
<TABLE>
<CAPTION>
AS OF AND FOR
THE
PERIOD FROM
AS OF AND FOR THE JANUARY 1, 1997
YEAR ENDED TO
DECEMBER 31, 1996 MAY 12, 1997
----------------- ---------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Current Assets................................ $1,110,500 $810,200
Non-current Assets............................ 16,300 17,800
Current Liabilities........................... 747,400 452,000
Non-current Liabilities....................... -- --
Members' equity............................... 379,400 376,000
Net Sales..................................... 2,404,866 650,000
Gross Profit.................................. 553,164 179,500
Net income.................................... 352,900 (3,300)
</TABLE>
INCOME TAXES
The Company is organized as a limited liability company and is therefore
not subject to income taxes. All taxable income or loss is reported by the
members on their respective income tax returns. Therefore the accompanying
Consolidated Statement of Operations and Members' Equity does not include any
provision for income tax expense.
F-24
<PAGE> 153
TELESITE SERVICES, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
2. PROPERTY AND EQUIPMENT
Property and equipment consists of the following at December 31, 1996:
<TABLE>
<S> <C>
Land........................................................ $ 297,600
Equipment................................................... 304,148
Furniture and fixtures...................................... 143,199
Vehicles.................................................... 200,240
Leasehold improvements...................................... 53,448
Construction in progress.................................... 42,259
----------
Total....................................................... 1,040,894
Less accumulated depreciation............................... (109,603)
----------
Property and equipment, net................................. $ 931,291
==========
</TABLE>
3. LINE OF CREDIT AND LONG-TERM DEBT
The Company has a maximum $1,500,000 line of credit with a bank, with an
outstanding balance of $946,724 at December 31, 1996. The line of credit bears
interest at a variable rate, not to exceed 10.0%, with interest payable monthly
and principal due May 31, 1997. The rate of interest at December 31, 1996 was
8.5%. The line of credit is collateralized by substantially all assets of the
Company.
Long-term debt consisted of the following at December 31, 1996:
<TABLE>
<S> <C>
Note payable to a bank, bearing interest at 8.5%, maturing
April 4, 1997, monthly payments of interest of $1,780,
collateralized by land.................................... $ 250,000
Installment notes payable to a bank, bearing interest at
rates ranging from 8.75% to 10.2%, maturing from October
20, 1998 to December 9, 1999, monthly payments of
principal and interest of $4,614, collateralized by
vehicles.................................................. 126,817
---------
Total....................................................... 376,817
Less current maturities..................................... (295,711)
---------
Long-term debt.............................................. $ 81,106
=========
</TABLE>
Maturities of long-term debt at December 31, 1996 are as follows:
<TABLE>
<CAPTION>
FOR THE
YEAR ENDED
DECEMBER 31, 1996
-----------------
<S> <C>
1997........................................................ $295,711
1998........................................................ 46,815
1999........................................................ 34,291
--------
Total....................................................... $376,817
========
</TABLE>
The Company estimates that the fair value of notes payable approximates the
carrying value based upon its effective current borrowing rate for debt with
similar terms and remaining maturities. Disclosure about fair value of financial
instruments is based upon information available to management as of December 31,
1996.
F-25
<PAGE> 154
TELESITE SERVICES, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
4. RELATED PARTY TRANSACTIONS
The Company is affiliated with other organizations by common ownership
and/or control. During the year ended December 31, 1996 and the period from
January 1, 1997 to May 12, 1997, the Company paid approximately $66,000 and
$22,000, respectively, to an affiliated organization for rent expense.
On May 9, 1997, a member of the Company assumed the Company's construction
line of credit with a bank of $562,135, in exchange for land and construction in
progress with carrying values of $297,600 and $322,292, respectively. The
Company recorded a non-cash shareholder's distribution of $57,757 associated
with this transaction.
5. LEASES
The Company leases office space and certain office equipment under
noncancelable operating leases. The future minimum lease payments under such
leases at December 31, 1996 are as follows:
<TABLE>
<S> <C>
1997........................................................ $164,597
1998........................................................ 136,409
1999........................................................ 93,696
2000........................................................ 66,429
2001........................................................ 27,500
--------
Total....................................................... $488,631
========
</TABLE>
Rent expense under operating leases was approximately $110,000 and $57,000
for the year ended December 31, 1996 and for the period from January 1, 1997 to
May 12, 1997, respectively.
6. EMPLOYEE BENEFIT PLAN
The Company provides a 401(k) plan for the benefit of its employees meeting
specified eligibility requirements. The Company's contributions to the plan are
discretionary and totaled $15,205 in 1996 and $12,342 for the period from
January 1, 1997 to May 12, 1997.
7. PRO FORMA INCOME DATA (UNAUDITED)
The pro forma provision for income taxes is based upon the statutory income
tax rates in effect during the year ended December 31, 1996. No provision was
provided in the period from January 1 to May 12, 1997 due to the net operating
loss.
8. SUBSEQUENT EVENT
On May 12, 1997, 100% of the members' interests of the Company and its
subsidiary, Metrosite, were acquired by SpectraSite Holdings, Inc., a Delaware
corporation.
F-26
<PAGE> 155
- ------------------------------------------------------
- ------------------------------------------------------
No dealer, salesperson or other person is authorized to give any
information or represent anything not contained in this prospectus. You must not
rely on any unauthorized information or representations. This prospectus is an
offer to sell or to buy only the shares offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus is current only as of its date.
------------------------------------
TABLE OF CONTENTS
------------------------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 1
Risk Factors.......................... 8
Use of Proceeds....................... 16
Capitalization........................ 17
The Nextel Tower Acquisition.......... 18
Unaudited Pro Forma Consolidated
Financial Data...................... 22
Selected Historical Financial Data.... 28
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 32
Industry Review....................... 37
Business.............................. 42
Management............................ 53
Certain Transactions.................. 61
Ownership of Capital Stock............ 64
Description of Capital Stock.......... 66
Description of Certain Indebtedness... 68
The Exchange Offer.................... 71
Description of the Notes.............. 80
Certain U.S. Federal Tax
Considerations...................... 116
Plan of Distribution.................. 124
Legal Matters......................... 125
Experts............................... 125
Where You Can Find More Information... 125
Index to Financial Statements......... F-1
</TABLE>
UNTIL , 1999 (90TH DAY AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS
IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
$225,238,000
SPECTRASITE HOLDINGS, INC.
EXCHANGE OFFER FOR
12% SENIOR DISCOUNT NOTES DUE 2008
-------------------------------------
PROSPECTUS
-------------------------------------
[SPECTRASITE LOGO]
, 1999
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 156
[SpectraSite Logo]
Alternate Cover Page
PROSPECTUS
[DATE OF EFFECTIVENESS]
$225,238,000
SPECTRASITE HOLDINGS, INC.
12% SENIOR DISCOUNT NOTES DUE 2008
CIBC Oppenheimer Corp. will use this prospectus in connection with offers
and sales of the notes related to market-making transactions in the
over-the-counter market at negotiated prices related to prevailing market prices
at the time of sale. SpectraSite Holdings, Inc. will not receive any of the
proceeds of such sales. CIBC Oppenheimer Corp. may act as a principle or agent
in such transactions. The closing of the exchange offer, which constituted the
delivery of the registered notes in place of the old notes, occurred on
, 1999. See "Plan of Distribution."
SPECTRASITE:
- - We develop and manage build-to-suit communications tower networks and provide
site acquisition and site management services for major wireless
communications service providers.
- - SpectraSite Holdings, Inc. 8000 Regency Parkway, Suite 570 Cary, North
Carolina 27511 (919) 468-0112
TRADING FORMAT:
- - The PORTAL market, in the over-the-counter market, negotiated transactions or
through a combination of such methods.
THE NOTES:
- - Maturity Date: July 15, 2008.
- - Accretion and Interest: the notes accrete daily at a rate of 12% per year,
compounded semiannually, to an aggregate principal amount of $225,238,000 by
July 15, 2003. Cash interest will begin to accrue on July 15, 2003, and we
will pay cash interest on January 15, 2004 and on each July 15 and January 15
thereafter until maturity.
- - Redemption: We may redeem the notes on or after July 15, 2003. We may redeem
up to 25% of the notes prior to July 15, 2001 with net proceeds from one or
more public equity offerings.
- - Ranking: The notes are general, unsecured obligations of SpectraSite Holdings,
Inc. and:
- rank equally in right of payment to all existing and future senior
indebtedness of Holdings; and
- are effectively subordinated to all existing and future indebtedness and
other liabilities of Holdings' subsidiaries.
THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE [ ].
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
CIBC OPPENHEIMER CORP.
<PAGE> 157
ALTERNATE USE OF PROCEEDS
This prospectus is delivered in connection with the sale of the exchange
notes by CIBC Oppenheimer Corp. in market-making transactions. SpectraSite will
not receive any of the proceeds from such transactions.
<PAGE> 158
ALTERNATE PLAN OF DISTRIBUTION
This prospectus is to be used by CIBC Oppenheimer Corp. in connection with
offers and sales of the notes in market-making transactions in the
over-the-counter market at negotiated prices related to prevailing market prices
at the time of sale. CIBC Oppenheimer Corp. may act as a principal or agent in
such transactions, has no obligation to make a market in the notes and may
discontinue its market-making activities at any time without notice, at its sole
discretion. There is currently no trading market for the 2008 notes. No
assurances can be given as to the development or liquidity of any trading market
for the 2008 notes.
We have agreed to indemnify jointly and severally CIBC Oppenheimer Corp.
against certain liabilities, including liabilities under the Securities Act, or
to contribute to payments that CIBC Oppenheimer Corp. may be required to make in
that regard.
Affiliates of CIBC Oppenheimer Corp. beneficially own approximately %
of Holdings' capital stock on a fully-diluted basis. In addition, Andrew R.
Heyer, a Managing Director of CIBC Oppenheimer Corp., serves on Holdings' board
of directors.
CIBC Oppenheimer Corp. and its affiliates have provided investment banking
and other financial services to us in the past and may do so in the future. In
addition, CIBC Oppenheimer Corp. and an affiliate are lenders and an agent under
our new credit facility and have received customary fees for acting in such
capacities.
<PAGE> 159
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
(the "DGCL") provides that a corporation (in its original certificate of
incorporation or amendment thereto) may eliminate or limit the personal
liability of a director (or certain persons who, pursuant to the provisions of
the certificate of incorporation, exercise of perform duties conferred or
imposed upon directors by the DGCL) to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that such
provisions shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL
(providing for liability of directors for unlawful payment of dividends or
unlawful stock purchases or redemptions) or (iv) for any transaction from which
the director derived an improper personal benefit. The Registrant's Certificate
of Incorporation, as amended, limits the liability of directors thereof to the
extent permitted by Section 102(b)(7) of the DGCL.
Under Section 145 of the DGCL, in general, a corporation may indemnify its
directors, officers, employees or agents against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties to which they may be made parties by reason of their being or
having been directors, officers, employees or agents and shall so indemnify such
persons if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
2.1 Agreement and Plan of Merger, dated as of February 10, 1999,
among Nextel Communications, Inc., Tower Parent Corp., Tower
Merger Vehicle, Inc., Tower Asset Sub Inc., SpectraSite
Holdings, Inc., SpectraSite Communications, Inc. and SHI
Merger Sub, Inc. (the "Nextel Merger Agreement")
2.2 Amendment No. 1 to the Nextel Merger Agreement
*3.1 Certificate of Incorporation of Integrated Site Development
("ISD"), dated and filed as of April 25, 1997
*3.2 Certificate of Amendment of the Certificate of Incorporation
of ISD, dated as of May 11, 1997 (authorizing Series A
Preferred Stock) and filed May 12, 1997
*3.3 Certificate of Amendment of the Certificate of Incorporation
of ISD, dated as of August 14, 1997 (changing name to
SpectraSite Communications, Inc. ("SCI")) and filed August
15, 1997
*3.4 Certificate of Amendment of the Certificate of Incorporation
of SCI, dated and filed as of October 29, 1997 (changing
name to SpectraSite Holdings, Inc. (the "Registrant"))
*3.5 Certificate of Amendment of the Certificate of Incorporation
of the Registrant, dated and filed as of March 23, 1998
(authorizing Series B Preferred Stock)
*3.6 Certificate of Amendment of the Certificate of Incorporation
of the Registrant, dated as of May 29, 1998 and filed June
2, 1998
*3.7 Certificate of Amendment of the Certificate of Incorporation
of the Registrant, dated as of August 18, 1998 and filed
August 19, 1998
*3.8 Bylaws of ISD, dated as of April 25, 1997
3.9 Amended and Restated Certificate of Incorporation of the
Registrant
</TABLE>
II-1
<PAGE> 160
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
*4.1 Indenture, dated as of June 26, 1998, between the Registrant
and United States Trust Company of New York, as trustee
4.2 First Supplemental Indenture, dated as of March 25, 1999
4.3 Indenture, dated as of April 20, 1999, between the
Registrant and United States Trust Company of New York, as
trustee.
*5.1 Opinion of Dow Lohnes & Albertson, PLLC
*10.1 Stock Purchase Agreement (Series A Preferred Stock), dated
as of May 12, 1997, by and among U.S. Towers, Inc. ("UST"),
TeleSite Services, LLC ("TeleSite"), Metrosite Management,
LLC ("Metrosite"), Whitney Equity Partners, L.P. ("Whitney
Equity"), Kitty Hawk Capital Limited Partnership, L.P., III
("Kitty Hawk III"), and ISD
*10.2 Stock Purchase Agreement (Series B Preferred Stock), dated
as of March 23, 1998, by and among the Registrant, Whitney
Equity, J. H. Whitney, III, L.P. ("Whitney III"), Whitney
Strategic Partners III, L.P. ("Whitney Strategic"),
Waller-Sutton Media Partners, L.P. ("Waller-Sutton"), Kitty
Hawk III, Kitty Hawk Capital Limited Partnership, IV ("Kitty
Hawk IV"), Eagle Creek Capital, L.L.C. ("Eagle Creek"), The
North Carolina Enterprise Fund, L.P. ("NCEF"), Finley Family
Limited Partnership ("Finley LP"), William R. Gupton
("Gupton"), Jack W. Jackman ("Jackman") and Alton D. Eckert
("Eckert")
*10.3 First Amendment to Stock Purchase Agreement (Series B
Preferred Stock), dated as of May 29, 1998
*10.4 Second Amendment to Stock Purchase Agreement (Series B
Preferred Stock), dated as of August 27, 1998
10.5 Second Amended and Restated Registration Rights Agreement,
dated as of April 20, 1999, by and among the Registrant,
Whitney Equity, Whitney III, Whitney Strategic,
Waller-Sutton, Kitty Hawk III, Kitty Hawk IV, Eagle Creek,
NCEF, Finley LP, certain affiliates of CIBC Oppenheimer
Corp. (the "CIBC Purchasers"), certain affiliates and
employees of Welsh Carson Anderson & Stowe (the "WCAS
Purchasers"), Tower Parent Corp., Gupton, Eckert, Stephen H.
Clark ("Clark") and David P. Tomick ("Tomick")
10.6 Third Amended and Restated Stockholders' Agreement, dated as
of April 20, 1999, by and among the Registrant, Whitney
Equity, Whitney III, Whitney Strategic, Waller-Sutton, Kitty
Hawk III, Kitty Hawk IV, Eagle Creek, Clark, Tomick, Finely
LP, NCEF, the CIBC Purchasers, the WCAS Purchasers, Tower
Parent Corp., Edward Lutkewich ("Lutkewich"), Jackman,
Eckert, and Gupton
10.7 Employment Agreement with Stephen H. Clark
10.8 Employment Agreement with David P. Tomick
10.9 Employment Agreement with Richard J. Byrne
10.10 Consulting Agreement with Finley & Co.
*10.11 Credit Agreement, dated as of April 20, 1999, by and among
the Registrant, SCI, CIBC Oppenheimer Corp., Credit Suisse
First Boston Corporation and the other parties thereto
*10.12 Membership Interests Purchase Agreement, dated as of
December 31, 1997, by and among SCI, Jeffrey Hawkins, Edwin
Keuck and H&K Investments LLC
*10.13 First Amendment to the Membership Interests Purchase
Agreement, dated May 29, 1998
*10.14 Purchase and Sale Agreement, dated as of February 20, 1998,
by and among the Registrant, Metrosite and Apex Site
Management, L.P.
*10.15 Letter Agreement, dated as of February 6, 1998, by and
between SCI and Whalen
*10.16 Stock Option Plan of the Registrant, effective as of June
24, 1997
10.17 Amendment to Stock Option Plan
</TABLE>
II-2
<PAGE> 161
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
*10.18 Escrow Agreement, dated as of May 12, 1997, by and among
ISD, Finley LP, and Morrison Cohen Singer & Weinstein, LLP
("Morrison Cohen")
*10.19 Option Escrow Agreement, dated as of May 12, 1997, by and
among Whitney LP, Kitty Hawk III and Morrison Cohen
*10.20 Release and Settlement Agreement, dated as of May 12, 1997,
by and among PCX Corporation ("PCX"), NCEF, Kitty Hawk III,
Eckert, Gupton, Jackman, Lutkewich, UST, Long and Clark
*10.21 Stock Restriction Agreement, dated as of May 12, 1997, by
and between ISD and Finley LP
*10.22 Agreement, dated September 15, 1998, by and between Robert
M. Long and the Registrant
*10.23 Asset Purchase Agreement, dated as of August 14, 1998 by and
among Airadigm Communications, Inc. ("Airadigm") and SCI
*10.24 Form of Master Tower Attachment Lease Agreement by and
between Airadigm and SCI
*10.25 Asset Purchase, dated as of August 20, 1998, by and among
Amica Wireless PhoneService, Inc. ("Amica") and SCI
*10.26 Form of Master Design Build Lease Agreement by and between
Amica and SCI
*10.27 Stock Contribution Agreement, dated as of May 12, 1997, by
and among ISD, Clark, Long and UST
*10.28 Membership Interests Contribution Agreement, dated as of May
12, 1997, by and among ISD, Finley, Caroline Finley, Finley
LP, the Central Arkansas Opportunity Foundation, TeleSite
and MetroSite
*10.29 Agreement and Plan of Merger, dated as of October 31, 1997,
by and between UST and SCI
10.30 Preferred Stock Purchase Agreement (Series C Preferred
Stock), dated as of February 10, 1999, by and among
SpectraSite Holdings, Inc., the WCAS Purchasers, the Whitney
Purchasers, the CIBC Purchasers and the Additional
Purchasers.
10.31 First Amendment to Preferred Stock Purchase Agreement
(Series C Preferred Stock)
10.32 Security & Subordination Agreement, dated as of April 20,
1999
10.33 Master Site Commitment Agreement, dated as of April 20, 1999
10.34 Master Site Lease Agreement, dated as of April 20, 1999
12.1 Computation of Ratio of Earnings to Fixed Charges
21.1 Subsidiaries of the Registrant
*23.1 Consent of Dow, Lohnes & Albertson, PLLC (contained in
Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
*25.1 Form T-1 (Statement of Eligibility of Trustee)
27.1 Financial Data Schedule
*99.1 Form of Letter of Transmittal
*99.2 Form of Notice of Guaranteed Delivery
</TABLE>
- ---------------
* Previously filed.
(b) Financial Statement Schedules.
None.
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement;
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
II-3
<PAGE> 162
(b) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrants pursuant to the provisions, or
otherwise, the Registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrants of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrants will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Prior to any public reoffering of the securities registered hereunder
through use of a prospectus which is a part of this registration statement, by
any person or party who is deemed to be an underwriter within the meaning of
Rule 145(c), the issues undertake that such reoffering prospectus will contain
the information called for by the applicable registration form with respect to
the reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
Every prospectus: (i) that is filed pursuant to the immediately preceding
paragraph or (ii) that purports to meet the requirements of Section 10(a)(3) of
the Act and is used in connection with an offering of securities subject to Rule
415, will be filed as a part of an amendment to the registration statement and
will not be used until such amendment is effective, and that, for purposes of
determining any liability under the Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-4
<PAGE> 163
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
SPECTRASITE HOLDINGS, INC. HAS DULY CAUSED THIS AMENDMENT NO. 3 TO THE
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF CARY, STATE OF NORTH CAROLINA, ON APRIL 28,
1999.
SPECTRASITE HOLDINGS, INC.
By: /s/ STEPHEN H. CLARK
------------------------------------
Stephen H. Clark
President, Chief Executive Officer
and Director
SPECTRASITE HOLDINGS, INC., A DELAWARE CORPORATION, AND EACH PERSON WHOSE
SIGNATURE APPEARS BELOW CONSTITUTES AND APPOINTS STEPHEN H. CLARK AND DAVID P.
TOMICK, AND EITHER OF THEM, WITH FULL POWER TO ACT WITHOUT THE OTHERS, SUCH
PERSON'S TRUE AND LAWFUL ATTORNEYS-IN-FACT, WITH FULL POWER OF SUBSTITUTION AND
RESUBSTITUTION, FOR HIM AND IN HIS NAME, PLACE AND STEAD, IN ANY AND ALL
CAPACITIES, TO SIGN THIS REGISTRATION STATEMENT, AND ANY AND ALL AMENDMENTS
THERETO (INCLUDING, WITHOUT LIMITATION, POST-EFFECTIVE AMENDMENTS AND ANY
SUBSEQUENT REGISTRATION STATEMENT FILED PURSUANT TO RULE 462(B) OR RULE 462(D)
UNDER THE SECURITIES ACT OF 1933, AS AMENDED), AND OTHER DOCUMENTS IN CONNECTION
THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION, GRANTING UNTO SAID
ATTORNEYS-IN-FACT, AND EACH OF THEM, FULL POWER AND AUTHORITY TO DO AND PERFORM
EACH AND EVERY ACT AND THING NECESSARY OR DESIRABLE TO BE DONE IN AND ABOUT THE
PREMISES, AS FULLY AND TO ALL INTENTS AND PURPOSES AS HE MIGHT OR COULD DO IN
PERSON, HEREBY RATIFYING AND CONFIRMING ALL THAT SAID ATTORNEYS-IN-FACT, OR
EITHER OF THEM, OR THEIR SUBSTITUTE OR SUBSTITUTES MAY LAWFULLY DO OR CAUSE TO
BE DONE BY VIRTUE HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 3 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES
INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ STEPHEN H. CLARK President, Chief Executive Officer and April
- ------------------------------------------ Director (Principal Executive Officer) 28,
Stephen H. Clark 1999
/s/ DAVID P. TOMICK Executive Vice President, Chief April
- ------------------------------------------ Financial Officer and Secretary 28,
David P. Tomick (Principal Financial Officer) 1999
/s/ CATHY M. ANTEE Controller and Assistant Secretary April
- ------------------------------------------ (Principal Accounting Officer) 28,
Cathy M. Antee 1999
/s/ LAWRENCE B. SORREL Chairman of the Board of Directors April
- ------------------------------------------ 28,
Lawrence B. Sorrel 1999
/s/ TIMOTHY M. DONAHUE Director April
- ------------------------------------------ 28,
Timothy M. Donahue 1999
/s/ ANDREW R. HEYER Director April
- ------------------------------------------ 28,
Andrew R. Heyer 1999
/s/ JAMES R. MATTHEWS Director April
- ------------------------------------------ 28,
James R. Matthews 1999
/s/ THOMAS E. MCINERNEY Director April
- ------------------------------------------ 28,
Thomas E. McInerney 1999
/s/ MICHAEL J. PRICE Director April
- ------------------------------------------ 28,
Michael J. Price 1999
/s/ RUDOLPH E. RUPERT Director April
- ------------------------------------------ 28,
Rudolph E. Rupert 1999
/s/ STEVEN M. SHINDLER Director April
- ------------------------------------------ 28,
Steven M. Shindler 1999
/s/ MICHAEL R. STONE Director April
- ------------------------------------------ 28,
Michael R. Stone 1999
</TABLE>
II-5
<PAGE> 1
EXHIBIT 2.1
================================================================================
AGREEMENT AND PLAN OF MERGER
AMONG
NEXTEL COMMUNICATIONS, INC.,
TOWER PARENT CORP.,
TOWER MERGER VEHICLE, INC.,
TOWER ASSET SUB, INC.,
THE TRANSFERRING SUBSIDIARIES PARTY HERETO,
SPECTRASITE HOLDINGS, INC.,
SPECTRASITE COMMUNICATIONS, INC.,
AND
SHI MERGER SUB, INC.
Dated as of February 10, 1999
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS ......................................................................1
1. DEFINITIONS ............................................................2
2. TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES ......................11
2.1 Transfer by the Transferring Subsidiaries and Parent Co. ....11
2.2 Assumption of Liabilities by Tower Sub ......................13
2.3 Consideration ...............................................14
2.4 Prorations and Post-Closing Adjustments .....................14
2.5 Certain Covenants Regarding Third-Party Consents ............15
2.6 Amendment of Nextel Disclosure Statement ....................15
2.7 Further Assurances. .........................................16
3. TERMS OF THE MERGER ...................................................16
3.1 The Merger ..................................................16
3.2 Terms of the Merger .........................................16
3.3 Contribution of Cash ........................................17
3.4 Repayment of Tower Sub Note .................................17
4. THE CLOSING ...........................................................17
4.1 Closing Date ................................................17
4.2 Closing of the Tower Asset Transfer .........................17
4.3 Deliveries by Tower Aggregator ..............................18
4.4 Deliveries by Nextel, Parent Co., the Transferring
Subsidiaries, and Tower Sub ...............................18
4.5 The Closing .................................................19
5. CONDITIONS TO MERGER CLOSING ..........................................20
5.1 Conditions to the Obligations of All Parties ................20
5.2 Conditions to Obligations of Nextel and Its Subsidiaries ....22
5.3 Conditions to Obligations of Tower Aggregator ...............23
6. REPRESENTATIONS AND WARRANTIES OF NEXTEL ..............................24
6.1 Organization of Nextel ......................................24
6.2 Organization of Nextel's Subsidiaries .......................25
6.3 Authorization of Agreements .................................25
6.4 Compliance with Charter and Other Instruments ...............26
6.5 Tower Sub Common Stock ......................................27
6.6 Merger Sub Common Stock .....................................27
6.7 Litigation ..................................................28
6.8 Employee Benefit Plans ......................................28
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
6.9 Absence of Certain Changes or Events ........................29
6.10 Compliance with Laws .......................................29
6.11 Tower Assets ...............................................30
6.12 Brokers and Finders ........................................32
6.13 Tower Development ..........................................32
7. REPRESENTATIONS AND WARRANTIES OF TOWER AGGREGATOR ....................32
7.1 Organization of Tower Aggregator and Subsidiaries ...........32
7.2 Tower Aggregator Subsidiaries ...............................33
7.3 Authorization of Agreements .................................33
7.4 Compliance with Charter and Other Instruments ...............34
7.5 Capital Stock of Tower Aggregator ...........................34
7.6 Reports and Financial Statements ............................36
7.7 Litigation ..................................................37
7.8 Employee Benefits ...........................................37
7.9 Dealings with Affiliates ....................................37
7.10 Pending Transactions .......................................38
7.11 Absence of Certain Changes or Events .......................38
7.12 Compliance with Laws .......................................39
7.13 Compliance with Contracts ..................................41
7.14 Brokers and Finders ........................................41
8. ADDITIONAL COVENANTS AND AGREEMENTS ...................................41
8.1 Interim Conduct of Business .................................41
8.2 Reasonable Efforts ..........................................42
8.3 Preparation of Registration Statement .......................43
8.4 Access to Information .......................................43
8.5 Confidential Information ....................................44
8.6 Non-Solicitation ............................................44
8.7 HSR Filings .................................................45
8.8 Tax Matters .................................................45
8.9 Amendment of Charter and Bylaws .............................45
8.10 Section 338(h)(10) Election ................................45
8.11 Financial Statements, Reports. .............................46
8.12 Amendment of Preferred Stock Purchase Agreement. ...........47
8.13 Execution of Partner Master Site Lease Agreement. ..........47
9. TERMINATION ...........................................................47
9.1 Termination by Mutual Consent ...............................47
9.2 Termination by Either Nextel or Tower Aggregator ............48
9.3 Effect of Termination and Abandonment .......................48
10. INDEMNIFICATION ......................................................48
10.1 Indemnification Relating to the Agreement ..................48
10.2 Indemnification Procedures .................................50
10.3 Limitation on Indemnity ....................................53
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
10.4 Only Remedies ..............................................53
11. MISCELLANEOUS AND GENERAL ............................................53
11.1 Expenses ...................................................53
11.2 Notices ....................................................54
11.3 Amendments and Waivers .....................................54
11.4 No Assignment ..............................................54
11.5 Entire Agreement ...........................................55
11.6 No Third Party Beneficiaries ...............................55
11.7 Governing Law ..............................................55
11.8 Counterparts ...............................................55
11.9 Knowledge ..................................................55
11.10 Dispute Resolution ........................................55
</TABLE>
iii
<PAGE> 5
EXHIBITS
Exhibit A Additional Tower Payment
Exhibit B Master Site Commitment Agreement
Exhibit C Nextel Master Site Lease Agreement
Exhibit D Registration Rights Agreement
Exhibit E Security and Subordination Agreement
Exhibit F Stockholders' Agreement
Exhibit G-1-A Transferring Subsidiary Deed
Exhibit G-1-B Tower Parent Corp. Deed
Exhibit G-2 Assignment of Lease
Exhibit G-3 Bill of Sale
Exhibit H-1 Amended and Restated Certificate of Incorporation of Tower
Aggregator
Exhibit H-2 Bylaws of Tower Aggregator
Exhibit I Form of Confidentiality Provisions
Exhibit J Tower Aggregator Financial Statements
iv
<PAGE> 6
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement"), dated as of
February 10, 1999, is made by and among Nextel Communications, Inc., a Delaware
corporation ("Nextel"), Tower Parent Corp., a newly formed Delaware corporation
and wholly owned direct Subsidiary of Nextel ("Parent Co."), Tower Merger
Vehicle, Inc., a newly formed Delaware corporation and wholly owned direct
Subsidiary of Parent Co. ("Merger Sub"), Tower Asset Sub, Inc., a newly formed
Delaware corporation and a wholly owned direct Subsidiary of Merger Sub ("Tower
Sub"), the Transferring Subsidiaries (as defined herein), SpectraSite Holdings,
Inc., a Delaware corporation ("Tower Aggregator"), SpectraSite Communications,
Inc., a Delaware corporation and wholly owned direct Subsidiary of Tower
Aggregator ("SCI"), and SHI Merger Sub, Inc., a newly formed Delaware
corporation and wholly owned direct Subsidiary of SCI ("SHI Merger Sub").
RECITALS
A. The parties have entered into this Agreement to set forth
the terms applicable to an overall transaction that contemplates and will result
in (i) the transfer by the Transferring Subsidiaries of the Tower Assets (as
defined herein) and certain liabilities associated therewith to Parent Co. in
exchange for the Parent Co. Notes (as defined herein), (ii) the transfer of the
Tower Assets by Parent Co. to Tower Sub in exchange for the Tower Sub Note (as
defined herein), and (iii) the merger of SHI Merger Sub with and into Merger
Sub, with Merger Sub the Surviving Corporation (as defined herein). The cash and
stock received by Parent Co. in connection with the Merger (as defined herein)
from Tower Aggregator and/or its Subsidiaries will be deemed repayment of the
Tower Sub Note at the Closing (as defined herein).
B. Concurrent with the execution of this Agreement, Tower
Aggregator has entered into a Preferred Stock Purchase Agreement, dated the date
of this Agreement, among Tower Aggregator, Welsh, Carson, Anderson & Stowe VIII,
L.P. and certain affiliated entities and Persons, and the other parties
signatories thereto (the "Preferred Stock Purchase Agreement"), providing for
the issuance of at least $230,000,000 in Tower Aggregator equity.
C. The Boards of Directors of Nextel, Parent Co., Merger Sub,
Tower Sub, the Transferring Subsidiaries, Tower Aggregator, SCI, and SHI Merger
Sub have determined that it is in the best interests of their respective
stockholders to effect the transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants, and agreements contained in this
Agreement, and subject to the terms and conditions set forth herein, the parties
agree as follows:
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1. DEFINITIONS
As used in this Agreement, the capitalized terms below have the
meanings hereinafter specified. Whenever used in this Agreement, any noun or
pronoun will be deemed to include both the singular and plural and to cover all
genders. The name assigned this Agreement and the section captions used herein
are for convenience of reference only and will not affect the interpretation or
construction hereof. Unless otherwise specified, the terms "hereof," "herein"
and similar terms refer to this Agreement as a whole, and references herein to
Sections refer to Sections of this Agreement.
"Action": Any action, suit, claim, arbitration, inquiry,
proceeding, or investigation by or before any Governmental Authority.
"Additional Tower Payment": An amount equal to the price, as set
forth pursuant to Exhibit A, to be paid at Closing for each Additional Tower in
excess of the first 31 Additional Towers.
"Additional Towers": Those Tower Assets at the sites identified in
the Nextel Disclosure Statement (as periodically revised pursuant to Section 2.6
hereof) under the heading "Additional Towers" for which design, planning, and
construction have been completed after the date of this Agreement and before the
Closing Date.
"Adverse Claim": All pending, threatened, or potential claims,
demands, litigation, actions, suits, investigations, proceedings, hearings,
complaints, assessments or judgments, administrative or judicial, at law or in
equity.
"Affiliate": As defined in Rule 12b-2 under the Exchange Act.
"Affiliated Group": Any affiliated group within the meaning of
Code Section 1504(a), or any similar group defined under a similar provision of
state, local, or foreign law, of which any member of the Nextel Group is or was
a member.
"Agreement": As defined in the Preamble.
"Amended and Restated Certificate of Incorporation": The Amended
and Restated Certificate of Incorporation of Tower Aggregator in the form
attached as Exhibit H-1 to be filed immediately prior to the Effective Time.
"Ancillary Agreements": The Registration Rights Agreement, the
Nextel Master Site Lease Agreement, the Master Site Commitment Agreement, the
Security and Subordination Agreement, the Stockholders' Agreement, and the
Preferred Stock Purchase Agreement.
"Asset Transfer and Assumption of Liability Documents": As defined
in Section 2.1(c).
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"Assumed Liabilities": As defined in Section 2.2(a).
"Authorization": Any consent, approval or authorization of,
expiration or termination of any waiting period requirement (including pursuant
to the HSR Act) of, or filing, registration, qualification, declaration, or
designation with or by, any Governmental Authority.
"Beneficiary": A party entitled to indemnification under Section
10.1 hereof.
"Benefit Plans": All compensation and benefit plans, contracts and
arrangements of a Person in effect as of the date hereof, including, without
limitation, all bonus, incentive or deferred compensation, severance pay,
pension, profit sharing, savings and thrift, and medical and life insurance
plans in which any current or former employees, agents, directors, or
independent contractors of such Person, and their dependents, participate.
"Business Condition": The business, properties, operations, and
financial condition of a specified corporation, division, or area of operations.
"Business Day": Any day on which there is trading on the New York
Stock Exchange.
"Certificate of Merger": The certificate of merger with respect to
the merger of SHI Merger Sub with and into Merger Sub, containing the provisions
required by, and executed in accordance with, the appropriate section of the
DGCL.
"Change of Control": The occurrence of any of the following events
with respect to any Person (such Person, the "Target") other than pursuant to
the Merger and the transactions related thereto:
(i) any person (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act) becomes after the date of this Agreement the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of more than 50% of the then outstanding capital
stock of the Target;
(ii) the Target consolidates with, or merges with or into, another
Person or sells, assigns, conveys, transfers, leases, or otherwise
disposes of all or substantially all of its assets to any Person, or any
Person consolidates with, or merges with or into, the Target and, in any
such event, as a result of such transaction, the Persons who were
stockholders of the Target immediately prior to such transaction
thereafter own securities representing less than 51% of the total combined
voting power of the surviving or resulting Person or the Person to whom
such assets are sold;
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(iii) with respect to Tower Aggregator, a majority of its Board of
Directors ceases to be comprised of individuals who are members of the
Board of Directors on the date hereof or individuals whose nomination is
approved by a majority of the foregoing individuals; or
(iv) the Target's Board of Directors approves, or the Target
enters into an agreement providing for, a transaction, event, or
development that constitutes (or would constitute if consummated) a Change
of Control pursuant to any of the foregoing.
"CIBC Purchasers": As defined in the Preferred Stock Purchase
Agreement.
"Claimant": As defined in Section 11.11(c).
"Closing": The consummation of the Merger in which SHI Merger Sub
merges with and into Merger Sub.
"Closing Date": The date on which the Closing occurs.
"Code": The Internal Revenue Code of 1986, as amended, and all
regulations promulgated thereunder, as in effect from time to time.
"Controlled Group Liability": As defined in Section 7.8(a).
"Credit Agreement": As defined in Section 5.1(e).
"DGCL": The Delaware General Corporation Law.
"Dispute": As defined in Section 11.11(a).
"Effective Time": As defined in Section 4.5(c).
"Environmental Laws": All Laws and Orders issued, promulgated,
approved, or entered into, in each case as in effect from time to time, relating
to the protection of the environment or the protection of public health and
safety from environmental concerns.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended, and all regulations promulgated thereunder, as in effect from time to
time.
"ERISA Affiliate": Any trade or business, whether or not
incorporated, that is now or has at any time in the past been treated as a
single employer with a party to this Agreement or any of its Subsidiaries under
Section 414(b) or (c) of the Code and the Treasury Regulations thereunder.
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"Exchange Act": The Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Excluded Assets": As defined in Section 2.1(b).
"Excluded Liabilities": As defined in Section 2.2(a).
"Executives": As defined in Section 11.11(a).
"Existing Stockholders' Agreement": The Second Amended and
Restated Stockholders' Agreement dated as of March 23, 1998 as amended by that
certain First Amendment to Second Amended and Restated Stockholders' Agreement
dated as of May 29, 1998.
"Existing Towers": Those Tower Assets covering the 1969 sites
identified in the Nextel Disclosure Statement under the heading "Existing
Towers" for which design, planning, and construction have been completed as of
the date of this Agreement.
"Financing Transactions": The issuance of debt (with equity) by
the SpectraSite Group pursuant to a new credit facility in an amount not to
exceed $710,000,000, and the issuance and sale, pursuant to the Preferred Stock
Purchase Agreement, of at least $230,000,000 of shares of Tower Aggregator
Series C Preferred Stock to the WCAS Purchasers and the other parties signatory
thereto.
"Governmental Authority": Any government or political subdivision
or department thereof, any governmental or regulatory body, commission, board,
bureau, agency, department, or instrumentality, or any court or arbitrator or
alternative dispute resolution body, in each case whether domestic or foreign,
federal, state, county, or local.
"Hazardous Materials": All hazardous or toxic chemicals, wastes,
substances, or materials, pollutants, contaminants, and petroleum or
petroleum-derived substances including any such materials defined, listed, or
identified as such in any Environmental Laws in effect from time to time.
"HSR Act": The Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnification Notice": As defined in Section 10.2(a)(i).
"Indemnifying Party": A party required to provide indemnification
under Section 10.2 hereof.
"Indenture": As defined in Section 5.1(i).
"Initial Public Offering": The sale by Tower Aggregator of its
Tower Aggregator Common Stock pursuant to a registration statement on Form S-1
or otherwise
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under the Securities Act (other than a registration statement relating solely to
an employee benefit plan or transaction covered by Rule 145 of the Securities
Act).
"Law": Any domestic or foreign, federal, state or local, law,
statute, ordinance, rule, or regulation.
"License": Any license, permit, consent, certificate of
compliance, franchise approval, or other similar authorization granted by any
Governmental Authority (other than licenses granted by the Federal
Communications Commission relating to the use of one or more trunked or
conventional specialized mobile radio communications frequencies or channels or
other radio spectrum, including any such use in providing wireless
communications services or operating analog or digital mobile radio
communications systems).
"Lien": Any mortgage, lien, pledge, security interest, easement,
claim, charge, option, conditional sale or other title retention agreement, or
other legal or equitable encumbrance.
"Losses": As defined in Section 10.1(a).
"Master Site Commitment Agreement": The Master Site Commitment
Agreement among Nextel, the Transferring Subsidiaries, Parent Co., Tower
Aggregator, and Tower Sub to be entered into on the Closing Date, substantially
in the form of Exhibit B hereto, as the same may be amended or modified in
accordance with its terms from time to time.
"Merger": As defined in Section 3.1.
"Merger Sub": As defined in the Preamble.
"Merger Sub Common Stock": As defined in Section 6.6(a).
"Negotiation Period": As defined in Section 11.11(a).
"Nextel": As defined in the Preamble.
"Nextel Disclosure Statement": The disclosure statement dated as
of the date of this Agreement delivered by Nextel and/or Parent Co. to Tower
Aggregator and as updated pursuant to Section 2.6.
"Nextel Finance Company": Nextel Finance Company, a Delaware
corporation and a wholly owned direct Subsidiary of Nextel.
"Nextel Group": As defined in Section 6.2(a).
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"Nextel Master Site Lease Agreement": The Nextel Master Site Lease
Agreement among the Transferring Subsidiaries, Tower Sub, and the Landlord
Parties (as defined therein) to be entered into on the Closing Date,
substantially in the form of Exhibit C hereto, as the same may be amended or
modified in accordance with its terms from time to time.
"Notification and Report": As defined in Section 8.7.
"Officer's Certificate": A certificate signed on behalf of any
entity by its President or any of its Vice Presidents.
"Order": Any judgment, order, injunction, decree, stipulation, or
award entered or rendered by any Governmental Authority.
"Owned Real Property": As defined in Section 6.11(g).
"Parent Co.": As defined in the Preamble.
"Parent Co. Notes": As defined in Section 2.1(a).
"Partner": As defined in Section 8.13.
"Partner Area": As defined in the Master Site Commitment
Agreement.
"Partner Master Site Lease Agreement": The Partner Master Site
Lease Agreement among Parent Co., Partner and its Subsidiaries (individually and
collectively as tenants thereunder), Tower Sub, and the Landlord Parties (as
defined therein) to be entered into on the Closing Date substantially in the
form of the Nextel Master Site Lease Agreement, as the same may be amended or
modified in accordance with its terms from time to time (except that such lease
will only cover Partner Sites, will contain representations and warranties from
Partner and its Subsidiaries substantially similar to those contained in
Sections 6.1, 6.2, 6.3, and 6.4 of this Agreement, and will permit Parent Co.
(in lieu of or in addition to Partner) to exercise certain rights thereunder).
"Partner Sites": As defined in Section 8.13.
"Pending Transactions": Contracts, agreements, proposals, bids,
and other transactions in effect as of the date hereof (but excluding this
Agreement), and identified in Section 7.10 of the Tower Aggregator Disclosure
Statement, to which Tower Aggregator or any of its Subsidiaries have entered
into or agreed, as of the date hereof, to enter into relating to (i) the
acquisition or disposition (by purchase, sale, merger, or otherwise) of assets
similar to the Tower Assets or (ii) the issuance of Tower Aggregator Capital
Stock.
"Permits": As defined in Section 2.1(a)(iii).
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"Permitted Liens": (i) Liens for taxes and assessments or
governmental charges, (ii) levies not at the time due or which are being
contested in good faith by appropriate proceedings, (iii) mechanics',
materialmen's, repairmen's, or other like liens arising in the ordinary course
of business and that are not overdue for a period of more than 30 days, (iv)
liens securing debt for borrowed money of the underlying fee owner where the
Transferring Subsidiary is a lessee, and (v) easements or restrictions and other
similar encumbrances that do not materially detract from the utility or value of
the property subject thereto.
"Person": Any individual or any corporation, company, partnership,
trust, incorporated or unincorporated association, joint venture, or other
entity of any kind, including, without limitation, any pension, profit sharing
or other benefit plan, or trust.
"Post-Closing Period": The time period beginning on and continuing
after the Closing Date.
"Pre-Closing Period": The time period prior to and ending on the
day before the Closing Date.
"Preferred Stock Purchase Agreement": As defined in the Recitals
and as in effect on the date hereof in the form previously delivered to Nextel
or as amended as permitted herein.
"Registration Rights Agreement": The Second Amended and Restated
Registration Rights Agreement to be entered into on the Closing Date, among
Parent Co., Tower Aggregator and the stockholders of Tower Aggregator signatory
thereto substantially in the form of Exhibit D hereto, as the same may be
amended or modified in accordance with its terms from time to time.
"Representatives": As defined in Section 8.6.
"Rules": As defined in Section 11.11(c).
"SCI Commitment Letter": As defined in Section 5.1(j).
"SCI Credit Agreement": As defined in Section 5.1(j).
"Securities Act": The Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SEC": The Securities and Exchange Commission.
"Security and Subordination Agreement": The Security and
Subordination Agreement to be entered into among Parent Co. and/or its
Affiliates and Tower Sub on the Closing Date, substantially in the form of
Exhibit E hereto.
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"Service Contracts": As defined in Section 6.11(f).
"SHI Merger Sub Common Stock": The shares of common stock, par
value $.001 per share, of SHI Merger Sub.
"Site Schedules": As defined in the Nextel Master Site Lease
Agreement.
"Site": As defined in the Master Site Commitment Agreement.
"SpectraSite Group": Tower Aggregator and its Subsidiaries.
"Stockholders' Agreement": The Stockholders' Agreement to be
entered into among the required stockholders of Tower Aggregator at the Closing,
substantially in the form of Exhibit F hereto.
"Stock Options": As defined in Section 7.5(a).
"Strategic Transaction": Any transaction or series of transactions
in which (i) any member of the SpectraSite Group issues debt (other than
currently existing debt or debt incurred in connection with the financing of the
transactions contemplated in this Agreement, including a credit facility (or any
refinancing thereof) in an amount not to exceed $710,000,000, and a $250,000,000
high yield offering), whether through a public or private placement or pursuant
to any other facility, equal to or in excess of $100,000,000; (ii) (A) any
Person purchases or otherwise acquires, directly or indirectly, all or
substantially all of the assets used in the operation of the business of Tower
Aggregator and its Subsidiaries taken as a whole, (B) any Change of Control (as
defined in the Indenture) occurs with respect to Tower Aggregator (other than as
contemplated by the Financing Transactions), or (C) Tower Aggregator effects any
recapitalization of its capital stock or other ownership interests (other than
as contemplated by the Financing Transactions); (iii) any member of the
SpectraSite Group purchases or otherwise acquires, directly or indirectly,
assets, or makes, directly or indirectly, any investment in any other Person, in
which the consideration paid or to be paid in such transaction equals or exceeds
$100,000,000; or (iv) any member of the SpectraSite Group enters into (or agrees
to enter into) one or more agreements or arrangements of any type in which such
Person commits to construct in the aggregate 250 towers or commits to the
construction of towers that will cause such Person to incur capital expenditures
in excess of $100,000,000 in the aggregate.
"Subsidiary": As to any Person, any other Person of which at least
50% of the equity interests are owned, directly or indirectly, by such first
Person.
"Surviving Corporation": As defined in Section 3.1.
"Surviving Corporation Common Stock": The shares of common stock,
par value $.001 per share, of the Surviving Corporation.
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"Taxes": All taxes, charges, fees, levies, or other assessments of
whatever kind or nature, including, without limitation, all net income, gross
income, gross receipts, premium, sales, use, ad valorem, transfer, franchise,
profits, license, withholding, payroll, employment, excise, estimated,
severance, stamp, occupancy, or property taxes, custom duties, fees,
assessments, or charges of any kind whatever (together with any relevant
interest, penalty, or addition to tax) imposed by any Governmental Authority.
"Tenant Leases": As defined in Section 2.1(a)(ii).
"Third Party Agreements": As defined in Section 6.4(d).
"Third Party Claim": As defined in Section 10.2(a)(i).
"Tower Aggregator": As defined in the Preamble.
"Tower Aggregator Bylaws": The bylaws of Tower Aggregator attached
hereto as Exhibit H-2.
"Tower Aggregator Capital Stock": The shares of Tower Aggregator
Common Stock, Tower Aggregator Series A Preferred Stock, Tower Aggregator Series
B Preferred Stock, and Tower Aggregator Series C Preferred Stock.
"Tower Aggregator Common Stock": The common stock, par value $.001
per share, of Tower Aggregator, which shall have the terms substantially as set
forth in the Amended and Restated Certificate of Incorporation of Tower
Aggregator attached hereto as Exhibit H-1.
"Tower Aggregator Disclosure Statement": The disclosure statement
dated as of the date of this Agreement delivered by Tower Aggregator to Nextel.
"Tower Aggregator Financial Statements": As defined in Section
7.6(a).
"Tower Aggregator Series A Preferred Stock": The Series A
Convertible Preferred Stock, par value $.001 per share, of Tower Aggregator,
which shall have the terms substantially as set forth in the Amended and
Restated Certificate of Incorporation of Tower Aggregator attached hereto as
Exhibit H-1.
"Tower Aggregator Series B Preferred Stock": The Series B
Convertible Preferred Stock, par value $.001 per share, of Tower Aggregator,
which shall have the terms substantially as set forth in the Amended and
Restated Certificate of Incorporation of Tower Aggregator attached hereto as
Exhibit H-1.
"Tower Aggregator Series C Preferred Stock": The Series C
Convertible Preferred Stock, par value $.001 per share, of Tower Aggregator,
which shall have the terms substantially as set forth in the Amended and
Restated Certificate of Incorporation of Tower Aggregator attached hereto as
Exhibit H-1.
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"Tower Assets": As defined in Section 2.1(a).
"Tower Sub": As defined in the Preamble.
"Tower Sub Common Stock": As defined in Section 6.5(a).
"Tower Sub Note": As defined in Section 2.1(a).
"Transferred Towers": The Existing Towers and the Additional
Towers to be sold, conveyed, assigned, transferred, and delivered pursuant to
Section 2.1 of this Agreement.
"Transferring Subsidiary": Each of Nextel Communications of the
Mid- Atlantic, Inc., a Delaware corporation, Nextel of California, Inc., a
Delaware corporation, Nextel of New York, Inc., a Delaware corporation, Nextel
South Corp., a Georgia corporation, Nextel of Texas, Inc., a Texas corporation,
and Nextel West Corp., a Delaware corporation, all of which are wholly owned
Subsidiaries of Nextel, and any other entity designated by Nextel in writing as
a Transferring Subsidiary after the date of this Agreement and prior to the
Closing Date.
"WCAS Purchasers": As defined in the Preferred Stock Purchase
Agreement.
"Whitney Purchasers": As defined in the Preferred Stock Purchase
Agreement.
2. TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES
2.1 TRANSFER BY THE TRANSFERRING SUBSIDIARIES AND PARENT CO.
(a) Prior to the Closing, Nextel shall cause the Transferring
Subsidiaries to (subject to obtaining required third party consents and
Authorizations except as otherwise provided herein) sell, convey, assign,
transfer, and deliver to Parent Co., all right, title, and interest in and to
the Tower Assets (defined below) owned or held by a Transferring Subsidiary at
such time in exchange for one or more promissory notes of Parent Co. issued to
the Transferring Subsidiaries (the "Parent Co. Note"). Prior to the Closing, but
subsequent to the transactions described in the prior sentence, Parent Co. shall
(subject to obtaining required third party consents and Authorizations except as
otherwise provided herein) sell, convey, assign, transfer, and deliver to Tower
Sub all right, title, and interest in and to the Tower Assets owned or held by
Parent Co. in exchange for a promissory note of Tower Sub issued to Parent Co.
in the amount equal to the sum of $455,000,000 and the Additional Tower Payment
(the "Tower Sub Note"). "Tower Assets" means, as to each site location listed in
Sections 2.1 and 2.6, respectively, of the Nextel Disclosure Statement under the
captions "Existing Towers" and "Additional Towers" and with the exception of the
Excluded Assets (defined below),
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the tower structure, tower lighting, tower grounding system, fences and, solely
in the case of sites designated as analog sites in Sections 2.1 and 2.6 of the
Nextel Disclosure Statement, shelters and concrete pads. The Tower Assets also
include:
(i) INTERESTS IN REAL PROPERTY. All real property and real
property leasehold interests (including easements and rights of way with
respect to access roads) that are owned or held by a Transferring
Subsidiary at the site location of a Transferred Tower.
(ii) TENANT LEASES. All rights and benefits of any Transferring
Subsidiary in, to, and under all agreements with third parties for the
rent of space with respect to, or that relate exclusively to, a
Transferred Tower (the "Tenant Leases").
(iii) PERMITS. All permits issued by any Governmental Authority
("Permits") that are necessary for, or were otherwise obtained in
connection with, the construction, use, or operation of a Transferred
Tower (other than permits or licenses granted by the Federal
Communications Commission relating to the use of one or more trunked or
conventional specialized mobile radio communications frequencies or
channels or other radio spectrum, including any such use in providing
wireless communications services or operating analog or digital mobile
radio communications systems) issued to or held by any Transferring
Subsidiary, to the extent that such Permits may be assigned.
(iv) DOCUMENTS AND RECORDS. All documents and records in
possession of any Transferring Subsidiary, Nextel or any Subsidiary of
Nextel relating exclusively to a Transferred Tower and copies of the
relevant portions of other books and records that are, in Nextel's
judgment, reasonably related to a Transferred Tower. Notwithstanding the
foregoing, Nextel may retain copies of any and all such documents and
records.
(b) Notwithstanding anything to the contrary contained herein, the
Tower Assets exclude all assets other than those specifically described in
Section 2.1(a), which Excluded Assets include, without limitation, (i) all
wireless communications and electronic equipment owned or leased by any Nextel
Subsidiary or Affiliate or any third party tenant, including base radios and
controllers, all equipment used to connect such equipment with the public
switched telecommunications network and/or with the wireless communications
network operated by Nextel or any of its Subsidiaries or Affiliates or any other
Person, all phone lines, generators, and secondary power supplies, all cells on
wheels, and all shelters except for shelters solely at sites designated as
analog sites in Sections 2.1 and 2.6 of the Nextel Disclosure Statement (whether
or not located at or about the site location of any Transferred Tower) and (ii)
all licenses, permits, consents, certificates of compliance, franchise
approvals, or other similar authorizations relating to the operation of wireless
communication systems and use of radio spectrum,
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and (iii) any real, personal, or mixed property not located on or about the site
location of any Tower Assets and not otherwise described in Section 2.1(a) (the
"Excluded Assets").
(c) The transfer of the Tower Assets by the Transferring
Subsidiaries to Parent Co., and in turn by Parent Co. to Tower Sub, will be
effected by means of the execution by the appropriate Transferring Subsidiary,
Parent Co., and Tower Sub, of instruments of sale, assignment, transfer,
conveyance, and assumption in substantially the forms attached hereto as
Exhibits G-1-A and G-1-B (Deeds, for Owned Real Property), G-2 (Assignment of
Lease, for leased real property), and G-3 (Bill of Sale, for personal property,
including general intangibles) (collectively, the "Asset Transfer and Assumption
of Liability Documents").
2.2 ASSUMPTION OF LIABILITIES BY TOWER SUB.
(a) Subject to the terms and conditions of this Agreement, prior
to the Closing, and conditioned upon the transfer of the Tower Assets as
contemplated by Section 2.1 hereof to Parent Co., and in turn to Tower Sub,
Tower Sub shall assume and agree to perform and discharge all debts,
liabilities, and obligations of the Transferring Subsidiaries arising from and
after the Closing out of and relating to any Tower Asset conveyed or assigned to
Parent Co., and in turn to Tower Sub, pursuant to Section 2.1 hereof (the
"Assumed Liabilities"). The Assumed Liabilities include, without limitation:
(i) LIABILITIES ARISING FROM REAL PROPERTY INTERESTS. All debts,
liabilities, and obligations of the Transferring Subsidiaries arising from
and after (or, where appropriate, to the extent arising from and after)
the Closing out of and relating to the interests in real property
described in Section 2.1(a)(i).
(ii) LIABILITIES ARISING FROM TENANT LEASES. All debts,
liabilities, and obligations of the Transferring Subsidiaries arising from
and after (or, where appropriate, to the extent arising from and after)
the Closing out of and relating to the Tenant Leases described in Section
2.1(a)(ii).
Notwithstanding anything to the contrary contained herein, the Assumed
Liabilities shall not include Excluded Liabilities. "Excluded Liabilities"
include: (i) claims of any nature asserted on or after the Closing Date that
relate (or, where appropriate, to the extent relating) to a condition or state
of facts existing or events occurring prior to the Closing Date and (ii) any
debts, liabilities, or obligations that Nextel is required to indemnify Tower
Aggregator from and against pursuant to the provisions of Section 10.
(b) The assumption by Parent Co., and in turn by Tower Sub, of the
Assumed Liabilities will be effected by means of the execution by Parent Co.,
Tower Sub, and the appropriate Transferring Subsidiary of Asset Transfer and
Assumption of Liability Documents in substantially the forms attached hereto as
Exhibits G-1-A, G-1-B, G-2, and G-3.
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2.3 CONSIDERATION. In consideration of the transfer of the Tower
Assets by the Transferring Subsidiaries to Parent Co., Parent Co. shall, in
addition to the assumption of the Assumed Liabilities by Parent Co., issue to
the Transferring Subsidiaries the Parent Co. Note. In consideration of the
transfer of the Tower Assets by Parent Co. to Tower Sub, Tower Sub shall, in
addition to the assumption of the Assumed Liabilities by Tower Sub, issue to
Parent Co. the Tower Sub Note.
2.4 PRORATIONS AND POST-CLOSING ADJUSTMENTS. (a) Tower Aggregator
and Nextel agree that (i) all current assets and current liabilities arising out
of the Tower Assets prior to the Closing and attributable to the Pre-Closing
Period shall be for the benefit of, or the responsibility of (as the case may
be), the Transferring Subsidiaries and (ii) all current assets and current
liabilities arising out of the Tower Assets after the Closing and attributable
to the Post-Closing Period, except for claims of any nature asserted on or after
the Closing Date that relate to a condition or state of facts existing or events
occurring prior to the Closing Date (such claims shall be retained and
discharged by the Transferring Subsidiaries), shall be for the benefit of, or
the responsibility of (as the case may be), Tower Sub.
(b) Appropriate proration or other apportionment of the current
assets (including, without limitation, advance rental payments made pursuant to
the Tenant Leases and prepaid property taxes) and the current liabilities
(including, without limitation, property taxes, lease payments, and letters of
credit or other instruments guaranteeing any lease payments) relating to the
Tower Assets will be made after the Closing Date. Nextel and the Transferring
Subsidiaries, on the one hand, and Tower Aggregator, the Surviving Corporation,
and Tower Sub, on the other hand, shall cooperate to determine such proration
within 30 days after the Closing Date and settle such proration in cash as
promptly as reasonably practicable, but in no event later than 60 days after the
Closing Date. If Nextel and the Transferring Subsidiaries, on the one hand, and
Tower Aggregator, the Surviving Corporation, and Tower Sub, on the other hand,
are unable to agree on a mutually acceptable proration within such 30-day
period, such proration shall be determined in accordance with the provisions of
Section 11.10. In the event that Nextel or a Transferring Subsidiary fails to
disclose an item of ongoing cost or expense within 30 days after the Closing
Date, Nextel or the Transferring Subsidiary shall provide written notice to the
Surviving Corporation promptly after the discovery of such cost or expense. The
Surviving Corporation shall reimburse the Transferring Subsidiary for the cost
of the item, prorated as provided in this Section 2.4, within 20 days of the
date of the written notice. If the Surviving Corporation fails to so reimburse
the Transferring Subsidiary, the Transferring Subsidiary may terminate the item
that generated the ongoing cost or expense.
(c) To the extent that Nextel or any Transferring Subsidiary
receives cash or other payment in respect of a current asset attributable to the
Post-Closing Period, Nextel or the Transferring Subsidiary (as the case may be)
shall promptly remit such cash or other payment to Tower Sub. To the extent that
Tower Sub receives cash or other payment in respect of a current asset
attributable to the Pre-Closing Period, Tower Sub shall promptly remit such cash
or other payment to Nextel for the benefit of the
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respective Transferring Subsidiary. To the extent Nextel or any Transferring
Subsidiary expends cash with respect to a current liability relating to the
Post-Closing Period, Tower Sub shall reimburse the amount so expended promptly
following demand therefor. To the extent that Tower Sub expends cash with
respect to a current liability relating to the Pre-Closing Period, Nextel or a
Transferring Subsidiary shall reimburse the amount so expended promptly
following demand therefor. Nextel and the Transferring Subsidiaries and Tower
Aggregator and Tower Sub shall cooperate from and after the Closing in settling
the obligations in this Section 2.4 in accordance with the principles set forth
in Section 2.4(a).
2.5 CERTAIN COVENANTS REGARDING THIRD-PARTY CONSENTS. If any
agreement or contract to have been assigned to Parent Co., and in turn to Tower
Sub, pursuant to this Agreement includes conditions or restrictions that
prohibit such assignment without the consent of a third party, and such third
party fails to grant such consent (or such consent is subject to conditions
unacceptable to Nextel and the Transferring Subsidiary in their sole judgment),
then the assignment of such agreement or contract is not required but, in lieu
of such assignment, the assignor shall use reasonable efforts to cause to be
established and maintained such arrangement as may be necessary so that Tower
Sub is placed in substantially the same position (including, without limitation,
as concerns the economic benefits and burdens, and the legal and other rights
and obligations) that Tower Sub would have occupied had such assignment been
made in the absence of such conditions or restrictions. At the request of the
Surviving Corporation, Nextel, the Transferring Subsidiaries, and Parent Co.
shall use reasonable efforts after the Closing to cooperate with Tower Sub to
obtain any such consents that have not been obtained as of the Closing Date.
2.6 AMENDMENT OF NEXTEL DISCLOSURE STATEMENT. From the date 20
days from the date hereof, monthly thereafter until ten days prior to the
Closing Date, and on the date ten days prior to the Closing Date, Nextel shall
amend Section 2.6 of the Nextel Disclosure Statement and deliver such amended
Nextel Disclosure Statement to Tower Aggregator solely so as to include any
Additional Towers completed by Nextel or any Transferring Subsidiary since the
delivery of the Nextel Disclosure Statement or the most recent amendment
thereto, as applicable, identifying the location of such Additional Towers, the
type of tower and the calculation of the Additional Tower Payment therefor as
set forth on Exhibit A, and any matters that might constitute an exception to
the representations and warranties contained in Section 6 hereof solely with
respect to the Additional Towers in such amendment of the Nextel Disclosure
Statement. If any such amendment to the Nextel Disclosure Statement contains
exceptions to the representations and warranties contained in Section 6 hereof
that are unacceptable to Tower Aggregator, Tower Aggregator may, within five
days of the receipt thereof, refuse to accept such amended Nextel Disclosure
Statement insofar as the exceptions reflected therein are unacceptable to Tower
Aggregator, notify Parent Co. of Tower Aggregator's objections to such
Additional Towers as are subject to such unacceptable exceptions, and may refuse
to accept and pay for such Additional Towers as are subject to such unacceptable
exceptions. Any such Additional Towers that Tower Aggregator so refuses to
accept and pay for will not be transferred to Tower Sub, and Nextel or its
Affiliates may hold,
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further develop, or dispose of such Additional Towers free and clear of any
obligation or liability arising or imposed under or pursuant to this Agreement
or any of the Ancillary Agreements.
2.7 FURTHER ASSURANCES. From time to time, as and when requested
by any party hereto, each of Nextel and the Transferring Subsidiaries will (a)
execute and deliver, or cause to be executed and delivered, all such documents
and instruments as may be reasonably necessary to (i) further confirm the
transfer of the Tower Assets as contemplated by the Asset Transfer and
Assumption of Liability Documents, (ii) to release the Liens securing the
obligations of Nextel under the Credit Agreement, and (iii) take such action and
file such documents and instruments as reasonably requested by Tower Aggregator
prior to Closing to qualify each of Merger Sub and Tower Sub as a foreign
corporation, each of which documents and instruments shall be in a form
reasonably acceptable for recording in the jurisdictions at issue, and (b) use
its reasonable efforts to take, or cause to be taken, all such actions
reasonably necessary to confirm the transfer of the Tower Assets and to
effectuate the recordation of such Asset Transfer and Assumption of Liability
Documents and such Lien releases in the appropriate jurisdictions.
3. TERMS OF THE MERGER
3.1 THE MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time, Merger Sub and SHI Merger Sub shall consummate
a merger (the "Merger") in which SHI Merger Sub will be merged with and into
Merger Sub in accordance with the appropriate section of the DGCL, whereupon the
separate existence of SHI Merger Sub will cease, and Merger Sub will be the
surviving corporation (the "Surviving Corporation") and will continue to exist
under and be governed by the DGCL. The effect of the Merger shall be as provided
in this Agreement and in Sections 259 and 261 of the DGCL.
3.2 TERMS OF THE MERGER. (a) The Certificate of Incorporation of
SHI Merger Sub as in effect immediately prior to the Effective Time will be the
Certificate of Incorporation of the Surviving Corporation, until duly amended in
accordance with the terms thereof and of the DGCL.
(b) The Bylaws of SHI Merger Sub in effect at the Effective Time
will be the Bylaws of the Surviving Corporation, until duly amended in
accordance with the terms thereof and of the DGCL.
(c) The directors of SHI Merger Sub will, from and after the
Effective Time, be the directors of the Surviving Corporation, until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and Bylaws.
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(d) The officers of SHI Merger Sub will, from and after the
Effective Time, be the officers of the Surviving Corporation until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and Bylaws.
(e) At the Effective Time, the shares of Merger Sub Common Stock
issued and outstanding immediately prior to the Effective Time, by virtue of the
Merger and without any action on the part of the holders thereof, will be
converted into 14,000,000 shares of Tower Aggregator Series C Preferred Stock,
representing 23.3% of the authorized and outstanding shares of Tower Aggregator
Series C Preferred Stock.
(f) At the Effective Time, each share of SHI Merger Sub Common
Stock immediately prior to the Effective Time shall, from and after the
Effective Time, by virtue of the Merger and without any action on the part of
Tower Aggregator, be converted into one fully paid and nonassessable share of
the common stock, par value $.001 per share, of the Surviving Corporation.
(g) At the Effective Time, the stock transfer books for the shares
of SHI Merger Sub Common Stock will be deemed closed, and no transfer of SHI
Merger Sub Common Stock will thereafter be made or consummated.
3.3 CONTRIBUTION OF CASH. At the Closing, Tower Aggregator and/or
its Subsidiaries shall contribute to Tower Sub cash in a total amount of
$455,000,000 plus the Additional Tower Payment in anticipation of Tower Sub's
repayment of the Tower Sub Note.
3.4 REPAYMENT OF TOWER SUB NOTE. At the Closing and subsequent to
the contribution of cash to Tower Sub as provided in Section 3.3, Tower Sub
shall repay the Tower Sub Note in its entirety.
4. THE CLOSING
4.1 CLOSING DATE. Subject to the terms and conditions of this
Agreement, the Closing will take place at the offices of Jones, Day, Reavis &
Pogue in New York, New York at 10:00 a.m. local time on the fifth Business Day
following the fulfillment of all conditions to Closing (other than those
conditions contemplated to be fulfilled concurrently with the Closing), or at
such other place or time or on such other date as Nextel and Tower Aggregator
may agree or as may be necessary to permit the fulfillment or waiver of the
conditions set forth in Section 5.
4.2 CLOSING OF THE TOWER ASSET TRANSFER. Prior to the Closing and
subject to the terms and conditions of this Agreement, the Transferring
Subsidiaries shall transfer the Tower Assets then owned by them to Parent Co.,
Parent Co. shall transfer the Tower Assets transferred to it from the
Transferring Subsidiaries to Tower Sub, and Tower Sub shall assume the Assumed
Liabilities, such transfer and assumption being
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evidenced by Asset Transfer and Assumption of Liability Documents executed as
required by the Transferring Subsidiaries, Parent Co., and Tower Sub.
4.3 DELIVERIES BY TOWER AGGREGATOR. At the Closing and as of the
date thereof, each of Tower Aggregator, SCI, and SHI Merger Sub shall deliver or
cause to be delivered to Nextel:
(a) its Certificate of Incorporation (and, in the case of Tower
Aggregator, the Amended and Restated Certificate of Incorporation), certified by
the Secretary of State of the state of its incorporation as of a recent date;
(b) a certificate of the Secretary of State of the state of its
incorporation as to its good standing in that state or jurisdiction as of a
recent date;
(c) a certificate dated as of the Closing Date of its Secretary
certifying as to its Bylaws, a true and correct copy of which is attached to
such certificate and which copy, in the case of Tower Aggregator, reflects the
changes to the Bylaws contemplated by the Stockholders' Agreement;
(d) a certificate dated as of the Closing Date of its Secretary
certifying as to the resolutions authorizing this Agreement and the Ancillary
Agreements to which it will be a party and the transactions contemplated hereby
and thereby;
(e) evidence that its stockholders have authorized this Agreement
and the Ancillary Agreements and the transactions contemplated hereby and
thereby including approval of the Amended and Restated Certificate of
Incorporation as contemplated herein, in compliance with applicable law;
(f) an Officer's Certificate, dated as of the Closing Date,
certifying as to the fulfillment of the conditions specified in Sections 5.2(a)
and (b); and
(g) evidence of receipt and effectiveness of consent of the
requisite holders of notes under the Indenture with respect to the transactions
contemplated by this Agreement and the Ancillary Agreements.
4.4 DELIVERIES BY NEXTEL, PARENT CO., THE TRANSFERRING
SUBSIDIARIES, AND TOWER SUB. (a) At the Closing and as of the date thereof, each
of Nextel, Parent Co., the Transferring Subsidiaries, Merger Sub, and Tower Sub
shall deliver or cause to be delivered to Tower Aggregator:
(i) its Certificate of Incorporation, certified by the Secretary
of State of the state in which it is incorporated as of a recent date;
(ii) a certificate of the Secretary of State of the state of its
incorporation as to its good standing in that state or jurisdiction as of
a recent date;
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(iii) a certificate dated as of the Closing Date of its Secretary
certifying as to its Bylaws, a true and correct copy of which is attached
to such certificate;
(iv) a certificate dated as of the Closing Date of its Secretary
certifying as to the resolutions authorizing this Agreement and the
Ancillary Agreements to which it will be a party and the transactions
contemplated hereby and thereby;
(v) evidence that the consent of Nextel's bank lenders with
respect to the transactions contemplated by this Agreement and the
Ancillary Agreements has been obtained, together with documents evidencing
that such lenders have released the Tower Assets from the Liens granted
pursuant to the Credit Agreement and related security agreements; and
(vi) an Officer's Certificate, dated as of the Closing Date,
certifying as to the fulfillment of the conditions specified in Section
5.3(a) and (b).
(b) Prior to the Effective Time, Tower Sub shall deliver or
cause to be delivered to Parent Co. form UCC-1 financing statements covering the
Tower Assets executed by an authorized officer of Tower Sub as contemplated by
the Security and Subordination Agreement.
4.5 THE CLOSING. Subject to the terms and conditions of this
Agreement:
(a) Immediately prior to the Effective Time:
(i) Nextel, the Transferring Subsidiaries and/or their Affiliates,
and Tower Sub and the Landlord Parties (as defined therein) shall execute
the Nextel Master Site Lease Agreement;
(ii) Nextel, the Transferring Subsidiaries, Tower Aggregator, and
Tower Sub shall execute the Master Site Commitment Agreement;
(iii) Parent Co. and/or its Affiliates and Tower Sub shall execute
the Security and Subordination Agreement; and
(iv) Parent Co., Partner and its Subsidiaries, Tower Sub, and the
Landlord Parties (as defined therein) shall execute the Partner Master
Site Lease Agreement.
(b) At the Closing and as of the date thereof:
(i) Parent Co., the WCAS Purchasers, the Whitney Purchasers, the
CIBC Purchasers, and such other stockholders of Tower Aggregator Capital
Stock as are required to amend the Existing Stockholders' Agreement shall
execute the Stockholders' Agreement;
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(ii) Parent Co., Tower Aggregator, the WCAS Purchasers, the
Whitney Purchasers, and the CIBC Purchasers shall execute the Registration
Rights Agreement; and
(iii) The Tower Sub Note shall be repaid by payment to Parent Co.
in immediately available funds via wire transfer to an account designated
by Parent Co. to Tower Aggregator prior to the Closing Date.
(c) The Merger will become effective on the Closing Date at such
time as the Certificate of Merger has been accepted for filing by the Secretary
of State of the State of Delaware (the "Effective Time").
5. CONDITIONS TO MERGER CLOSING
5.1 CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES. The respective
obligations of each party to consummate the transactions contemplated by this
Agreement are subject to the fulfillment at or prior to the Effective Time of
each of the following conditions, any or all of which may be waived in whole or
in part by the party being benefitted thereby, to the extent permitted by
applicable Law:
(a) HSR ACT. Nextel and Tower Aggregator shall have complied in
all material respects with the applicable requirements of the HSR Act, and any
applicable waiting period (including any extension thereof by reason of a
request for additional information) relating to the Notification and Report
shall have expired or been terminated.
(b) NO GOVERNMENTAL ACTION. No Action by any Governmental
Authority shall have been instituted and be pending which imposes or seeks to
impose any remedy, condition, or restriction unacceptable to either Nextel or
Tower Aggregator, in its reasonable judgment.
(c) AUTHORIZATIONS. All (i) Authorizations specified in the Nextel
Disclosure Statement and the Tower Aggregator Disclosure Statement and (ii)
other Authorizations required in connection with the execution and delivery of
this Agreement and the Ancillary Agreements and the performance of the
obligations hereunder and thereunder shall have been made or obtained, in each
case without limitation or restriction, except, in the case of Authorizations
referred to in clause (ii) above, where the failure to have obtained such
Authorizations would not (A) have a material adverse effect on the Tower Assets
taken as a whole, (B) materially impair the ability of any party to perform its
obligations under this Agreement or any of the Ancillary Agreements, or (C) have
a material adverse effect on the Business Condition of the Surviving Corporation
and its Subsidiaries taken as a whole.
(d) NO INJUNCTION. There shall not be in effect any Order
restraining, enjoining, or otherwise preventing consummation of the transactions
contemplated by
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this Agreement or any of the Ancillary Agreements or permitting such
consummation only subject to any condition or restriction unacceptable to either
Nextel or Tower Aggregator, in its reasonable judgment.
(e) NEXTEL BANK CONSENT. All required authorizations, consents, or
approvals of the Lenders required by the Credit Agreement dated as of March 12,
1998, as amended, among Nextel, Nextel Finance Company, and the other parties
thereto (the "Credit Agreement") to permit transfer of the Tower Assets and
consummation of the Merger as contemplated herein, including instruments
reflecting the release of the Liens (but not the recordation of such release) of
the lenders thereunder in and to the Tower Assets, shall have been obtained.
(f) THIRD PARTY CONSENTS. All required authorizations, consents,
or approvals of any third party shall have been obtained, except insofar as the
failure to have obtained such authorizations, consents, or approvals would not
(i) have a material adverse effect on the operations and financial condition of
the Tower Assets taken as a whole, (ii) materially impair the ability of any
party to perform its obligations under this Agreement or any of the Ancillary
Agreements, or (iii) have a material adverse effect on the Business Condition of
the Surviving Corporation and its Subsidiaries taken as a whole.
(g) EXECUTION OF ANCILLARY AGREEMENTS. All requisite parties shall
have executed each of the Ancillary Agreements and each of them shall be in full
force and effect.
(h) SECURITIES LAW EXEMPTION. All actions necessary or desirable
to permit the issuance of shares of Tower Aggregator Capital Stock under Section
4(2) or other applicable exemptions of the Securities Act and the analogous
provisions of any applicable state securities or blue sky laws shall have been
taken and shall have become effective, and none of the parties hereto shall be
subject to an effective or threatened stop order issued or issuable by the
Securities and Exchange Commission or any state securities law administrator.
(i) CONSENTS FROM HOLDERS OF NOTES. Tower Aggregator shall have
obtained all required consents or approvals from the holders of notes issued by
Tower Aggregator pursuant to the Indenture, dated as of June 6, 1998, between
Tower Aggregator and United States Trust Company of New York, as trustee (the
"Indenture"), including, without limitation, the consent to any amendments to,
or waivers of the provisions of, such Indenture required to permit the
transactions contemplated by this Agreement and the Ancillary Agreements and
such other amendments as the parties hereto shall approve, in each case in form
reasonably satisfactory to Tower Aggregator and Nextel. The consents and
approvals in the foregoing sentence shall include a waiver of the change of
control put right contained in such Indenture or, alternatively, Tower
Aggregator shall have obtained a financing commitment reasonably satisfactory to
Tower Aggregator with respect to the ability of Tower Aggregator to pay for any
notes put to it as a result of the transactions contemplated hereby.
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(j) CONSUMMATION OF FINANCING. SCI shall have executed a credit
agreement (the "SCI Credit Agreement") with its lenders in connection with the
transactions contemplated by this Agreement on terms no less favorable to SCI in
any material respect than those set forth in the commitment letter dated January
15, 1999, as amended, delivered to SCI and disclosed by SCI to Parent Co. prior
to the date hereof (the "SCI Commitment Letter"), and SCI and Tower Aggregator
shall have received funds under the SCI Credit Agreement sufficient to satisfy
the condition specified in Section 5.1(l), in each case without waiving any
material condition precedent set forth in the SCI Credit Agreement in such a
manner so as to materially adversely affect SCI or Tower Aggregator; provided,
however, that in no event may Tower Aggregator rely on this condition to refuse
to consummate the Merger if SCI's lenders are willing to execute the SCI Credit
Agreement on terms no less favorable in any material respect than those set
forth in the SCI Commitment Letter and SCI fails or refuses to execute the SCI
Credit Agreement.
(k) CONSUMMATION OF PREFERRED STOCK PURCHASE AGREEMENT AND SCI
CREDIT AGREEMENT. Tower Aggregator and SCI, as appropriate, shall have
consummated the transactions contemplated by and received funds under the
Preferred Stock Purchase Agreement and the SCI Credit Agreement, and Tower
Aggregator shall not have waived any material condition precedent set forth in
the Preferred Stock Purchase Agreement in such a manner so as to materially
adversely affect Tower Aggregator, and Tower Aggregator shall have received at
least $230,000,000 in gross proceeds thereunder.
(l) ADEQUACY OF FUNDS. The funds received by Tower Aggregator and
SCI pursuant to the SCI Credit Agreement and the Preferred Stock Purchase
Agreement, together with the cash on hand of Tower Aggregator, shall be in an
amount sufficient to repay the Tower Sub Note, pay the consideration allocated
to the Master Site Commitment Agreement and pay all fees and expenses incurred
by Tower Aggregator and SCI in connection with the transactions contemplated
hereby.
5.2 CONDITIONS TO OBLIGATIONS OF NEXTEL AND ITS SUBSIDIARIES. The
obligations of Nextel and its Subsidiaries to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or prior to
the Effective Time, of each of the following conditions, any or all of which may
be waived in whole or part by Nextel, to the extent permitted by applicable Law:
(a) REPRESENTATIONS AND WARRANTIES OF TOWER AGGREGATOR TRUE. The
representations and warranties of Tower Aggregator in this Agreement and in the
Preferred Stock Purchase Agreement were true when made and shall be true in all
material respects at the time of the Closing with the same effect as though such
representations and warranties had been made at such time and Tower Aggregator
shall have so certified to Nextel in writing, except for (i) changes resulting
from actions permitted under this Agreement prior to Closing, changes resulting
from the consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements and the consummation of the Financing Transactions on terms
no less favorable in any material respect than those reflected in the SCI
Commitment Letter and
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the Preferred Stock Purchase Agreement and (ii) any representations and
warranties in this Agreement and in the Preferred Stock Purchase Agreement that
speak as of a specific date other than the Closing Date (which need only be
correct as of such date).
(b) PERFORMANCE BY TOWER AGGREGATOR. Tower Aggregator and its
Subsidiaries shall have performed or complied with all agreements and conditions
required herein to be performed or complied with by them prior to or at the time
of the Closing.
(c) NO CHANGE OF CONTROL OF TOWER AGGREGATOR. Tower Aggregator
shall not have undergone a Change of Control to which Nextel has not consented
except as contemplated by this Agreement and the Financing Transactions.
(d) BUSINESS OF TOWER AGGREGATOR AND SUBSIDIARIES. Since September
30, 1998, there shall have been no material adverse change in the Business
Condition of Tower Aggregator and its Subsidiaries taken as a whole.
(e) CONFIDENTIALITY. Each of Stephen H. Clark and David P. Tomick
shall have executed and delivered an agreement containing the confidentiality
provisions substantially in the form attached hereto as Exhibit I.
(f) AMENDED AND RESTATED CERTIFICATE OF INCORPORATION. Tower
Aggregator shall have filed with the Secretary of State of the State of Delaware
(and in each other location, if any, where required by law) its Amended and
Restated Certificate of Incorporation in the form attached hereto as Exhibit H-1
and such Amended and Restated Certificate of Incorporation shall be in full
force and effect.
(g) PARTNER MASTER SITE LEASE AGREEMENT. The Landlord Parties (as
defined therein) shall have executed the Partner Master Site Lease Agreement.
(h) SATISFACTORY BANK CONSENT. The authorizations, consents, or
approvals obtained from the lenders under the Credit Agreement, as contemplated
in Section 5.1(e), shall reflect terms permitting Nextel to utilize the proceeds
received by Parent Co. in connection with the Merger in the development of
Nextel's domestic nationwide digital mobile network, without any reduction of
financing available pursuant to such Credit Agreement, and otherwise shall
reflect terms satisfactory to Nextel in its sole discretion.
5.3 CONDITIONS TO OBLIGATIONS OF TOWER AGGREGATOR. The obligations
of Tower Aggregator to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, at or prior to the Effective Time, of
each of the following conditions, any or all of which may be waived in whole or
in part by Tower Aggregator to the extent permitted by applicable Law:
(a) REPRESENTATIONS AND WARRANTIES OF NEXTEL AND ITS SUBSIDIARIES
TRUE. The representations and warranties of Nextel and its Subsidiaries were
true when
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made and shall be true in all material respects at the time of the Closing with
the same effect as though such representations and warranties had been made at
such time and Nextel shall have so certified to Tower Aggregator in writing,
except for (i) changes resulting from actions permitted under this Agreement
prior to Closing and changes resulting from the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements, (ii) any
representations and warranties that speak as of a specific date other than the
Closing Date (which need only be correct as of such date), and (iii) changes to
the Nextel Disclosure Statement pursuant to Section 2.6 that have not been
identified as unacceptable to Tower Aggregator pursuant to Section 2.6.
(b) PERFORMANCE BY NEXTEL AND ITS SUBSIDIARIES. Nextel and its
Subsidiaries shall have performed or complied with all agreements and conditions
required herein to be performed or complied with by them prior to or at the time
of the Closing.
(c) ASSET TRANSFERS COMPLETE. The transfer of the Tower Assets
from the Transferring Subsidiaries to Parent Co., and in turn by Parent Co. to
Tower Sub, and the assumption of the Assumed Liabilities by Parent Co., and in
turn by Tower Sub, shall have been completed in accordance with the provisions
of Article 2 hereof (taking into account the alternate arrangements to be
instituted in lieu of assignment as contemplated by Section 2.5 if any agreement
or contract to be assigned includes conditions or restrictions that prohibit
such assignment without the consent of a third party and such third party fails
to grant such consent).
(d) NO CHANGE TO TOWER ASSETS. Since September 30, 1998, there
shall have been no material adverse change in the Tower Assets taken as a whole.
(e) PARTNER MASTER SITE LEASE AGREEMENT. Parent Co., Partner and
its Subsidiaries shall have executed the Partner Master Site Lease Agreement or
if Partner and its Subsidiaries shall fail to execute the Partner Master Site
Lease Agreement, the Transferring Subsidiaries shall execute Site Schedules to
the Nextel Master Site Lease Agreement for all Sites in the Partner Area at
which Existing Towers and Additional Towers are located, which Site Schedules
shall be attached to the Nextel Master Site Lease Agreement.
(f) DELIVERY OF 2,000 SITES. At the Closing the Existing Towers
and Additional Towers delivered under this Agreement shall consist of at least
2,000 Sites.
6. REPRESENTATIONS AND WARRANTIES OF NEXTEL
Nextel, the Transferring Subsidiaries, Parent Co., Merger Sub and
Tower Sub hereby jointly and severally represent and warrant to Tower Aggregator
that:
6.1 ORGANIZATION OF NEXTEL. Nextel (a) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and (b) has
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all requisite corporate or other power and authority to own or lease and operate
its properties, to carry on its business as now conducted, to enter into this
Agreement and each of the Ancillary Agreements to which it is a party, to carry
out the provisions of this Agreement and such Ancillary Agreements, and to
consummate the transactions contemplated hereby and thereby.
6.2 ORGANIZATION OF NEXTEL'S SUBSIDIARIES. (a) Each of Parent Co.,
Tower Sub, Merger Sub, and the Transferring Subsidiaries (collectively, together
with Nextel, the "Nextel Group") is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
organization, (b) each of Tower Sub, Merger Sub, and the Transferring
Subsidiaries has all requisite corporate or other power and authority to own or
lease and operate those of the Tower Assets owned or leased by it, to carry on
its business relating to the Tower Assets as now conducted, to enter into this
Agreement and each of the Ancillary Agreements to which it is or will be a
party, to carry out the provisions of this Agreement and, if applicable, the
Ancillary Agreements, and to consummate the transactions contemplated hereby and
thereby and (c) each of Parent Co., Tower Sub, and Merger Sub is a newly formed,
directly (in the case of Parent Co.) or indirectly (in the case of Tower Sub and
Merger Sub) wholly-owned Subsidiary of Nextel and, except for activities
incident to its formation and the transactions contemplated by this Agreement,
has not engaged in any business activities of any type or kind whatsoever and is
not subject to any liabilities or obligations of any nature, except as imposed
under, or expressly contemplated by, this Agreement and the Ancillary
Agreements.
6.3 AUTHORIZATION OF AGREEMENTS. (a) This Agreement and each of
the Ancillary Agreements, and the consummation of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary corporate (and
stockholder) action on the part of each member of the Nextel Group that is or
will be a party thereto.
(b) This Agreement has been duly executed and delivered by duly
authorized officers of each member of the Nextel Group and constitutes a valid
and binding agreement of each member of the Nextel Group, enforceable against
each of them in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other similar
laws of general application that may affect the enforcement of creditors' rights
generally and by general equitable principles.
(c) When executed, each of the Ancillary Agreements will have been
duly executed and delivered by duly authorized officers of each member of the
Nextel Group that is a party thereto and will constitute a valid and binding
agreement of each such member, enforceable against each of them in accordance
with its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws of general application that
may affect the enforcement of creditors' rights generally and by general
equitable principles.
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6.4 COMPLIANCE WITH CHARTER AND OTHER INSTRUMENTS. (a) No member
of the Nextel Group is in violation of any material term of its Certificate of
Incorporation, Bylaws, or other organizational documents.
(b) The execution, delivery, and performance of this Agreement and
the Ancillary Agreements and the consummation of the transactions contemplated
hereby and thereby in accordance with the terms hereof and thereof by Nextel and
its Subsidiaries will not result in any violation of or conflict with,
constitute a default (with or without notice or the lapse of time) under, or
give rise to a right of termination, cancellation, acceleration of, or result in
the imposition of any Lien under, or require any consent (other than such
consents as are listed in Section 6.4(c) of the Nextel Disclosure Statement)
under, any term of (i) the Certificates of Incorporation, Bylaws, or other
organizational documents of any member of the Nextel Group or (ii) any note,
bond, debt instrument, mortgage, indenture, or other agreement or instrument or,
except as set forth in subparagraph (c), any Law or Order by which any member of
the Nextel Group or their respective assets may be bound, except where such
violation, conflict or default, right of termination, cancellation or
acceleration, imposition of a Lien, or failure to obtain such consent,
individually or in the aggregate, would not have a material adverse effect on
(A) the Tower Assets taken as a whole or (B) the ability of any member of the
Nextel Group to perform its obligations under this Agreement or any of the
Ancillary Agreements.
(c) Section 6.4(c) of the Nextel Disclosure Statement lists (i)
all Authorizations that are required to be made, filed, given, or obtained by
any member of the Nextel Group with, to, or from any Governmental Authority in
connection with the transactions contemplated to occur at or prior to the
Closing by this Agreement and the Ancillary Agreements and (ii) all consents,
approvals, and waivers required to be given by, or obtained from, any other
Persons to or by any member of the Nextel Group in connection with the
consummation of the transactions contemplated to occur at or prior to the
Closing by this Agreement and the Ancillary Agreements other than those
Authorizations, consents, approvals, and waivers as to which the failure to
make, file, give, or obtain, individually or in the aggregate, would not have a
material adverse effect (A) on the Tower Assets taken as a whole or (B) the
ability of any member of the Nextel Group to perform its obligations under this
Agreement or any of the Ancillary Agreements. Nextel shall advise Tower
Aggregator in writing, prior to Closing, of such Authorizations, consents,
approvals, and waivers that have been sought but have not been obtained by
Nextel or any Subsidiary of Nextel.
(d) Except as set forth in Section 6.4(d) of the Nextel Disclosure
Statement, each of (i) the real property leases that give the Transferring
Subsidiaries rights in the Tower Assets and (ii) the Tenant Leases (the
instruments described in clauses (i) and (ii) together, the "Third Party
Agreements") permits an assignment by the relevant Transferring Subsidiary to
Parent Co. and in turn by Parent Co. to Tower Sub as contemplated hereby because
Parent Co. and Tower Sub are Affiliates of Nextel. Except as set forth in
Section 6.4(d) of the Nextel Disclosure Statement, none of the Third Party
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Agreements, by its express terms, requires the consent of any party thereto in
connection with the Merger.
6.5 TOWER SUB COMMON STOCK. (a) The authorized capital stock of
Tower Sub consists of 100 shares of Tower Sub Common Stock, $.001 par value (the
"Tower Sub Common Stock"), all of which shares will be issued and outstanding
and owned free and clear of any Liens by Merger Sub immediately prior to the
Effective Time. All of the Tower Sub Common Stock will have been duly authorized
and validly issued, fully paid, and nonassessable.
(b) Except as provided or contemplated in this Agreement or any of
the Ancillary Agreements, there are no:
(i) outstanding options, warrants, conversion rights, or other
rights to acquire, or obligations to issue, shares of Tower Sub Common
Stock or any other equity interests in, or securities convertible into or
exchangeable for, Tower Sub Common Stock;
(ii) agreements restricting the transfer of, or affecting the
rights of any holder of, Tower Sub Common Stock;
(iii) preemptive rights on the part of any holder of any of Tower
Sub Common Stock;
(iv) existing rights with respect to registration under the
Securities Act of any shares of Tower Sub Common Stock; or
(v) voting agreements, voting trusts, proxies or any other
agreements, instruments or understandings with respect to the voting of
any shares of Tower Sub, or the transferability, purchase or redemption of
any Tower Sub Common Stock.
6.6 MERGER SUB COMMON STOCK. (a) The authorized capital stock of
Merger Sub consists of 100 shares of Merger Sub Common Stock, $.001 par value
(the "Merger Sub Common Stock"), all of which shares will be issued and
outstanding and owned free and clear of any Lien by Parent Co. immediately prior
to the Effective Time. All of the Merger Sub Common Stock has been duly
authorized and validly issued, fully paid, and nonassessable.
(b) Except as provided or contemplated in this Agreement or any of
the Ancillary Agreements, there are no:
(i) outstanding options, warrants, conversion rights, or other
rights to acquire, or obligations to issue, shares of Merger Sub Common
Stock or any other equity interests in, or securities convertible into or
exchangeable for, Merger Sub Common Stock;
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(ii) agreements restricting the transfer of, or affecting the
rights of any holder of, Merger Sub Common Stock;
(iii) preemptive rights on the part of any holder of any of Merger
Sub Common Stock;
(iv) existing rights with respect to registration under the
Securities Act of any shares of Merger Sub Common Stock; or
(v) voting agreements, voting trusts, proxies, or any other
agreements, instruments, or understandings with respect to the voting of
any shares of Merger Sub, or the transferability, purchase, or redemption
of any Merger Sub Common Stock.
6.7 LITIGATION. Except as set forth in Section 6.7 of the Nextel
Disclosure Statement, there are no Actions pending or, to the knowledge of
Nextel, threatened against any member of the Nextel Group or any of the Tower
Assets, except Actions that, in the aggregate, are not reasonably expected to
have a material adverse effect on the Tower Assets taken as a whole or on the
ability of any member of the Nextel Group to perform its obligations under this
Agreement and the Ancillary Agreements. There are no Orders pending against any
member of the Nextel Group or any of the Tower Assets except Orders that, in the
aggregate, are not reasonably expected to have a material adverse effect on the
Tower Assets taken as a whole or the ability of any member of the Nextel Group
to perform its obligations under this Agreement or any of the Ancillary
Agreements, or that would prohibit the transactions contemplated by this
Agreement and the Ancillary Agreements.
6.8 EMPLOYEE BENEFIT PLANS. (a) Tower Sub does not currently have,
nor has it had in the past, any employees. Tower Sub has no liabilities or
obligations with respect to, or any Benefit Plan relating to, any employees of
Nextel or any other Person. Merger Sub does not currently have, nor has it had
in the past, any employees. Merger Sub has no liabilities or obligations with
respect to, or any Benefit Plan relating to, any employees of Nextel or any
other Person.
(b) Neither Nextel nor any ERISA Affiliate of Nextel or its
Subsidiaries has, or at any time has had, an obligation to contribute to a
"defined benefit plan" as defined in Section 3(35) of ERISA, a pension plan
subject to the funding standards of Section 302 of ERISA or Section 412 of the
Code, a "multiemployer plan" as defined in Section 3(37) of ERISA or Section
414(f) of the Code or a "multiple employer plan" within the meaning of Section
210(a) of ERISA or Section 413(c) of the Code.
(c) Each group health plan of Nextel has been administered in
material compliance with all applicable Laws.
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6.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Section 6.9 of the Nextel Disclosure Statement, since September 30, 1998, there
has not been any material adverse change in the Tower Assets taken as a whole.
6.10 COMPLIANCE WITH LAWS. (a) The conduct of the business of each
member of the Nextel Group with respect to the Tower Assets complies with all
Laws and Orders applicable thereto, except for violations or failures so to
comply, if any, that would not have a material adverse effect on (i) the Tower
Assets taken as a whole or (ii) the ability of any member of the Nextel Group to
perform its obligations under this Agreement or any of the Ancillary Agreements.
Except as set forth in Section 6.10 of the Nextel Disclosure Statement, as of
the date hereof no member of the Nextel Group has received any communication
(either written or oral) from a Governmental Authority that alleges that any
member of the Nextel Group is not in compliance with, or may be liable under,
any Law or Order other than instances of alleged non-compliance or alleged
liability that are not reasonably expected to have a material adverse effect on
(A) the Tower Assets taken as a whole or (B) the ability of any member of the
Nextel Group to perform its obligations under this Agreement or any of the
Ancillary Agreements.
(b) (i) As of the date hereof, each member of the Nextel Group has
duly secured and possesses all necessary Licenses and Authorizations from,
and has filed all material required registrations, applications, reports,
and other documents with, all Governmental Authorities exercising
jurisdiction over such member, in connection with or with respect to the
Tower Assets except where the failure to have such Licenses or
Authorizations or the failure to make such filings would not reasonably be
expected to have a material adverse effect on (A) the Tower Assets taken
as a whole or (B) the ability of any member of the Nextel Group to perform
its obligations under this Agreement or any of the Ancillary Agreements.
Such Licenses and Authorizations are valid and in full force and effect
without materially adverse conditions except for such conditions as are
generally applicable to all holders of such Licenses and Authorizations.
(ii) No member of the Nextel Group has made any material
misstatements of fact, or omitted to disclose any material fact, to any
Governmental Authority, or taken or failed to take any action, which
misstatements or omissions, actions or failures to act, individually or in
the aggregate, subject any Licenses held by it in connection with or with
respect to the Tower Assets to a risk of revocation or failure to renew.
No member of the Nextel Group is subject to any Order or Action pending
or, to the knowledge of Nextel, threatened, that affects or would
reasonably be expected to affect the validity of any License held by it in
connection with or with respect to the Tower Assets, or result in the
revocation, termination, or adverse modification thereof, or impair the
renewal thereof, except where the invalidity of such Licenses
(individually or in the aggregate) or the revocation, termination, adverse
modification, or
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<PAGE> 35
nonrenewal thereof would not have a material adverse effect (A) on the
Tower Assets taken as a whole or (B) the ability of any member of the
Nextel Group to perform its obligations under this Agreement or any of the
Ancillary Agreements. No member of the Nextel Group has any reason to
believe that any of its Licenses held by it in connection with or with
respect to the Tower Assets will not be renewed in the ordinary course,
except where such nonrenewal (individually or in the aggregate) would not
have a material adverse effect on (A) the Tower Assets taken as a whole or
(B) the ability of any member of the Nextel Group to perform its
obligations under this Agreement or any of the Ancillary Agreements.
(c) No member of the Nextel Group has caused or taken any action
that is reasonably expected to result in, and none of them is subject to, any
material potential liability or obligation under any Environmental Law relating
to (i) the environmental conditions on, under, or about any real property
currently or formerly owned, leased, or operated by any such member, including,
without limitation, any contamination of soil or groundwater at such properties,
or (ii) the past or present use, management, handling, transport, treatment,
generation, storage, or release of any Hazardous Materials by any such member.
6.11 TOWER ASSETS. (a) At Closing the Transferring Subsidiaries
will have delivered to Parent Co. and Parent Co. will have delivered to Tower
Sub (i) good and marketable leasehold title in the real property leasehold
interest referred to in Section 2.1(a)(i) included in the Tower Assets free and
clear of Liens or other title defects, other than Permitted Liens and (ii) good
and marketable fee simple absolute title to the Owned Real Property included in
the Tower Assets free and clear of Liens or other title defects, other than
Permitted Liens and, after the Merger, the Surviving Corporation will receive
all of the Transferring Subsidiaries' (and each other member of the Nextel
Group's, as applicable) rights to and interests in the Third Party Agreements.
The Transferring Subsidiaries have the right and power to transfer, and will
transfer, the Tower Assets to Parent Co., and Parent Co. has the right and power
to transfer, and will transfer the Tower Assets to Tower Sub free and clear of
Liens or other title defects, other than Permitted Liens.
(b) Except as set forth in Section 6.11(b) of the Nextel
Disclosure Statement, neither Nextel nor any Transferring Subsidiary has
received any written notice or communication and has no knowledge of (i) any
pending or contemplated condemnation proceedings, or private purchase in lieu
thereof, affecting or that may affect the Tower Assets or (ii) any proposed or
pending proceeding to change or redefine the zoning classification of any of the
Tower Assets other than such proceedings that would not have a material adverse
effect on (A) the Tower Assets taken as a whole or (B) the ability of any member
of the Nextel Group to perform its obligations under this Agreement or any
Ancillary Agreement.
(c) To Nextel's knowledge the Transferring Subsidiaries are in
compliance with all provisions of (and are not in default under) their contracts
and
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obligations relating to or constituting the Tower Assets, including, without
limitation, the Third Party Agreements. Except as set forth in Section 6.11(c)
of the Nextel Disclosure Statement, to Nextel's knowledge, the Third Party
Agreements (i) are in full force and effect and no default exists thereunder and
no condition exists, which with the passage of time or the giving of notice, or
both, would become a default and (ii) have not been amended, supplemented,
modified, or terminated except where such breach or default, or amendment,
supplement, modification, or termination, individually or in the aggregate,
would not have a material adverse effect on the Tower Assets taken as a whole.
Neither Nextel nor any of the Transferring Subsidiaries has any knowledge of nor
has received any notices or communications charging any non-compliance or
default under the Third Party Agreements that would have a material adverse
effect on (A) the Tower Assets taken as a whole or (B) the ability of any member
of the Nextel Group to perform its obligations under this Agreement or any
Ancillary Agreement.
(d) Except for Tenant Leases and, except pursuant to the terms of
any agreements evidencing real property leasehold interests included in the
Tower Assets, the other parties to such agreements, no Person (other than
Nextel, the Transferring Subsidiaries, Parent Co., or Tower Sub) has or claims
any right of occupancy or possession to any Tower Asset.
(e) Except as set forth in Section 6.11(e) of the Nextel
Disclosure Statement, no brokerage commission or compensation of any kind is due
or will be due in connection with the Tenant Leases (as in effect on the date
hereof) or with respect to any renewals or options contained therein.
(f) Except as set forth in Section 6.11(f) of the Nextel
Disclosure Statement, there are no material service contracts, maintenance
contracts, union contracts, concession agreements, Licenses, agency agreements
or any other written contracts or agreements (collectively, the "Service
Contracts") affecting any of the Tower Assets or the operation thereof, except
for contracts or agreements (oral or written) that are cancelable on no more
than 30 days' notice without penalty. Except as set forth in Section 6.11(f) of
the Nextel Disclosure Statement, Nextel and the Transferring Subsidiaries are
current with respect to the payment of any sums due under the Service Contracts.
(g) Except as set forth in Section 6.11(g) of the Nextel
Disclosure Statement, each parcel of real property that is owned by a
Transferring Subsidiary and that constitutes a part of the Tower Assets (the
"Owned Real Property") is separately assessed for real property tax purposes
and, to the best of Nextel's knowledge, (i) no special assessments have been
issued against any such Owned Real Property and (ii) no certiorari proceedings
are pending with respect to any such assessment. Except as set forth in Section
6.11(g) of the Nextel Disclosure Statement, neither Nextel nor any of the
Transferring Subsidiaries has received any written notice or communications
regarding any pending special assessments against any such Owned Real Property.
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(h) Section 6.11(h) of the Nextel Disclosure Statement sets forth
a complete and accurate list of all Third Party Agreements. There are no
liabilities or obligations of the type that would be required to be reported on
financial statements prepared in accordance with generally accepted accounting
principles, whether absolute, accrued, contingent or otherwise, known or
unknown, that relate to the Tower Assets, except (i) obligations under the Third
Party Agreements and (ii) liabilities and obligations disclosed on the Nextel
Disclosure Statement.
IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT TOWER AGGREGATOR IS ACCEPTING THE
TOWER ASSETS IN "AS IS/WHERE IS" CONDITION WITHOUT ANY REPRESENTATION OR
WARRANTY WHATSOEVER AS TO THE QUALITY, PHYSICAL CONDITION, MERCHANTABILITY, OR
FITNESS FOR USE, PARTICULAR OR OTHERWISE, EXCEPT AS SET FORTH IN THIS SECTION 6.
6.12 BROKERS AND FINDERS. Except for the fees and expenses payable
to BT Alex. Brown Incorporated, which will be the sole obligation of, and paid
by, the Nextel Group, no member of the Nextel Group has employed any investment
banker, broker, finder, consultant, or intermediary that would be entitled to
any investment banking, brokerage, finder's, or similar fee, or commission in
connection with this Agreement or the transactions contemplated hereby.
6.13 TOWER DEVELOPMENT. Except as set forth in Section 6.13 of the
Nextel Disclosure Statement, neither Nextel nor any of its Subsidiaries is a
party to or bound by any agreement or option giving any third party the right to
develop, construct or own communications towers. Neither the execution, delivery
or performance of this Agreement or the Ancillary Agreements, nor the
consummation of the transactions contemplated hereby and thereby, will violate,
conflict with, constitute a default (with or without notice or the lapse of
time) under or give rise to a right of termination, cancellation, or
acceleration of any such agreement or option.
7. REPRESENTATIONS AND WARRANTIES OF TOWER AGGREGATOR
Tower Aggregator, SCI, and SHI Merger Sub hereby jointly and
severally represent and warrant to Nextel, Parent Co., Tower Sub, Merger Sub,
and the Transferring Subsidiaries that:
7.1 ORGANIZATION OF TOWER AGGREGATOR AND SUBSIDIARIES. Each of
Tower Aggregator and its Subsidiaries (a) is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation, (b) is duly qualified as a foreign entity, licensed and in good
standing under the laws of each jurisdiction where its ownership, lease, or
operation of property or the conduct of its business necessitates such
qualification, except to the extent that the failure to do so would not have a
material adverse effect on the Business Condition of Tower Aggregator and its
Subsidiaries taken as a whole, and (c) has all requisite corporate or other
power and authority to own or lease and operate its properties, to carry on its
business as now
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conducted and proposed to be conducted, to enter into this Agreement and each of
the Ancillary Agreements, to carry out the provisions of this Agreement and the
Ancillary Agreements, and to consummate the transactions contemplated hereby and
thereby.
7.2 TOWER AGGREGATOR SUBSIDIARIES. (a) All of the Subsidiaries of
Tower Aggregator are set forth in Section 7.2(a) of the Tower Aggregator
Disclosure Statement. As of the date hereof, each Subsidiary of Tower Aggregator
is a wholly owned Subsidiary thereof and all outstanding shares of capital stock
of each of those Subsidiaries are owned by Tower Aggregator or a direct or
indirect wholly owned Subsidiary of Tower Aggregator, free and clear of all
Adverse Claims and Liens other than those contemplated by the Financing
Transactions.
(b) There are outstanding no options, warrants, or other rights to
acquire, or obligations of any of Tower Aggregator's Subsidiaries to issue
shares of capital stock of any class of, or other equity interests in, or
securities convertible into or exchangeable for capital stock of, any of Tower
Aggregator's Subsidiaries. Except as set forth in Section 7.2(b) of the Tower
Aggregator Disclosure Statement, there are on the date hereof no agreements
restricting the transfer of, or affecting the rights of Tower Aggregator in, the
capital stock of its Subsidiaries.
(c) Except for the shares of capital stock of Tower Aggregator's
Subsidiaries and as provided in this Agreement, Tower Aggregator does not own,
directly or indirectly, any shares of capital stock of, or any other equity
interest in, any Person.
7.3 AUTHORIZATION OF AGREEMENTS. (a) This Agreement, each of the
Ancillary Agreements, and the Amended and Restated Certificate of Incorporation,
and the consummation of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate and stockholder action of Tower
Aggregator and each of its Subsidiaries that is or will be a party thereto.
(b) This Agreement has been duly executed and delivered by duly
authorized officers of each of Tower Aggregator, SCI, and SHI Merger Sub, and
constitutes the valid and binding agreement of each of them, enforceable against
each of them in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other similar
laws of general application that may affect the enforcement of creditors' rights
generally and by general equitable principles.
(c) When executed, each of the Ancillary Agreements will have been
duly executed and delivered by duly authorized officers of each of Tower
Aggregator and its respective Subsidiaries that are parties thereto, and will
constitute the valid and binding agreement of each of them, enforceable against
each of them in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other similar
laws of general application that may affect the enforcement of creditors' rights
generally and by general equitable principles.
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7.4 COMPLIANCE WITH CHARTER AND OTHER INSTRUMENTS. (a) Tower
Aggregator is not in violation of any term of its Certificate of Incorporation,
Bylaws, or other organizational documents.
(b) Except as set forth in Section 7.4(b) of the Tower Aggregator
Disclosure Statement, the execution, delivery, and performance of this Agreement
and the Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby in accordance with the terms hereof and thereof
by Tower Aggregator will not result in any violation of or conflict with,
constitute a default (with or without notice or the lapse of time) under, or
give rise to a right of termination, cancellation, or acceleration of, or a
right to put, or compel a tender offer for, outstanding securities under, or
result in the imposition of any Lien under, or require any consent (other than
such consents as are listed in Section 7.4(c) of the Tower Aggregator Disclosure
Statement) under, any term of (i) the Certificate of Incorporation, Bylaws (as
amended as contemplated by the terms of the Stockholders' Agreement) or other
organizational documents of Tower Aggregator or any of its Subsidiaries or (ii)
any note, bond, debt instrument, mortgage, indenture, or other agreement or
instrument or, except as set forth in subparagraph (c), any Law or Order by
which Tower Aggregator or any of its Subsidiaries or their assets may be bound,
except where such violation, conflict or default, right of termination,
cancellation or acceleration, put or similar right, imposition of a Lien, or
failure to obtain such consent, individually or in the aggregate, would not have
a material adverse effect on (A) the Business Condition of Tower Aggregator and
its Subsidiaries taken as a whole or (B) the ability of Tower Aggregator to
perform its obligations under this Agreement and the Ancillary Agreements.
(c) Section 7.4(c) of the Tower Aggregator Disclosure Statement
lists (i) all Authorizations that are required to be made, filed, given, or
obtained by Tower Aggregator or any of its Subsidiaries with, to, or from any
Governmental Authority in connection with the transactions contemplated to occur
at or prior to the Closing by this Agreement and the Ancillary Agreements and
(ii) all consents, approvals, and waivers required to be given by, or obtained
from, any other Persons to or by Tower Aggregator or any of its Subsidiaries in
connection with the consummation of the transactions contemplated to occur at or
prior to the Closing by this Agreement and the Ancillary Agreements, other than
those Authorizations, consents, approvals, and waivers as to which the failure
to make, file, give, or obtain, individually or in the aggregate, would not have
a material adverse effect on (A) the Business Condition of Tower Aggregator and
its Subsidiaries taken as a whole or (B) the ability of Tower Aggregator to
perform its obligations under this Agreement and the Ancillary Agreements. Tower
Aggregator shall advise Nextel in writing, prior to the Closing, of such
Authorizations, consents, approvals, and waivers that have been sought but have
not been obtained by Tower Aggregator.
7.5 CAPITAL STOCK OF TOWER AGGREGATOR. (a) As of the date hereof
before giving effect to the transactions contemplated hereby, the authorized
capital stock of Tower Aggregator consists of 30,462,830 shares consisting of
(i) 3,462,830 shares of 8% Series A Cumulative Convertible Redeemable Preferred
Stock, all of which shares
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are outstanding, (ii) 7,000,000 shares of 8% Series B Cumulative Convertible
Redeemable Preferred Stock, all of which shares are outstanding, and (iii)
20,000,000 shares of Tower Aggregator Common Stock, of which 1,161,135 shares
are outstanding. As of the date hereof, options (the "Stock Options") to
purchase an aggregate of 1,575,900 shares of Tower Aggregator Common Stock are
outstanding under Tower Aggregator's employee stock option plans. As of the
Closing Date and after giving effect to the amendments to Tower Aggregator's
Certificate of Incorporation reflected in the Amended and Restated Certificate
of Incorporation, the consummation of the transactions contemplated hereby,
including the Preferred Stock Purchase Agreement, and assuming (x) no conversion
of shares of preferred stock prior to the Closing Date, and (y) the purchase by
Stephen H. Clark of 225,000 shares of Tower Aggregator Common Stock and (z) the
issuance of 6,000,000 shares of Tower Aggregator Common Stock in connection with
the SCI Credit Agreement, the authorized capital stock of Tower Aggregator will
consist of 155,599,625 shares, consisting of (i) 3,462,830 shares of Tower
Aggregator Series A Preferred Stock, all of which shares will be outstanding as
of the Closing Date, (ii) 7,000,000 shares of Tower Aggregator Series B
Preferred Stock, all of which shares will be outstanding as of the Closing Date,
(iii) 60,136,795 shares of Tower Aggregator Series C Preferred Stock, all of
which shares will be outstanding as of the Closing Date, and (iv) 85,000,000
shares of Tower Aggregator Common Stock, of which 7,386,135 shares will be
outstanding as of the Closing Date (plus any shares issued pursuant to the
exercise of options and warrants from the date hereof to the Closing Date). Each
of the outstanding shares of Tower Aggregator Capital Stock is or will upon
Closing be duly authorized, validly issued, fully paid, and nonassessable and
free and clear of all Adverse Claims and Liens and all such shares have been or
will upon Closing have been issued in compliance with all applicable securities
laws. As of the Closing Date and after giving effect to the transactions
contemplated hereby, including the Preferred Stock Purchase Agreement, Tower
Aggregator will have no securities of any class reserved for issuance except (i)
3,462,830 shares of Tower Aggregator Common Stock reserved for issuance upon the
conversion of the shares of Tower Aggregator Series A Preferred Stock, 7,000,000
shares of Tower Aggregator Common Stock reserved for issuance upon the
conversion of the shares of Tower Aggregator Series B Preferred Stock C, and
60,136,795 shares of Tower Aggregator Common Stock reserved for issuance upon
the conversion of the shares of Tower Aggregator Series C Preferred Stock, in
each case subject to adjustment pursuant to the Amended and Restated Certificate
of Incorporation, and (ii) an adequate number of shares of Tower Aggregator
Common Stock reserved for issuance pursuant to the exercise of the Stock
Options. Other than rights contained in the Ancillary Agreements, Section 7.5(a)
of the Tower Aggregator Disclosure Statement sets forth all preemptive or
similar rights, supermajority voting rights, or anti-dilutive rights with
respect to the Tower Aggregator Capital Stock.
(b) Except as set forth in the Ancillary Agreements, in Section
7.5(a), or in Section 7.5(b) of the Tower Aggregator Disclosure Statement, there
are no:
(i) outstanding options, warrants, conversion rights, or other
rights to acquire, or obligations to issue, shares of Tower Aggregator
Capital
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Stock or other equity interests in, or securities convertible into or
exchangeable for, Tower Aggregator Capital Stock or other securities of
Tower Aggregator (whether debt, equity, or a combination thereof) or any
contract obligating any Person to issue, transfer, or sell, shares of
Tower Aggregator Capital Stock;
(ii) contracts or undertakings which require or may require Tower
Aggregator to repurchase any Tower Aggregator Capital Stock;
(iii) agreements restricting the transfer of, or affecting the
rights of any holder of, Tower Aggregator Capital Stock; or
(iv) existing rights with respect to registration under the
Securities Act of any shares of Tower Aggregator Capital Stock.
(c) Except as set forth in the Ancillary Agreements and in Section
7.5(c) of the Tower Aggregator Disclosure Statement, neither Tower Aggregator
nor (to the knowledge of Tower Aggregator) any of its stockholders is a party to
any voting agreements, voting trusts, proxies, or any other agreements,
instruments, or understandings with respect to the voting of any shares of the
Tower Aggregator Capital Stock, or the transferability, purchase, or redemption
of any Tower Aggregator Capital Stock.
7.6 REPORTS AND FINANCIAL STATEMENTS. (a) Attached as Exhibit J to
this Agreement are (i) audited consolidated balance sheet, statement of
operations, statement of redeemable convertible preferred stock and
shareholders' deficiency, and statement of cash flows (including in each case
the related notes) of Tower Aggregator and its Subsidiaries as of December 31,
1997, and (ii) an audited consolidated balance sheet, statement of operations,
statement of redeemable convertible preferred stock and shareholders'
deficiency, and statement of cash flows (including in each case the related
notes) of Tower Aggregator and its Subsidiaries for the nine-month period ended
September 30, 1998 (together, the "Tower Aggregator Financial Statements"). Each
of such balance sheets (including the related notes) presents fairly in all
material respects the consolidated financial position of Tower Aggregator as of
the date thereof, and the other related statements (including the related notes)
included therein present fairly in all material respects the consolidated
results of operations and cash flows of Tower Aggregator for the periods or as
of the dates set forth therein, all in conformity with generally accepted
accounting principles consistently applied during the periods involved, except
as otherwise noted therein (subject in the case of interim financial statements
to normal year-end adjustments and the absence of footnotes).
(b) Except and to the extent reflected or reserved against in the
Tower Aggregator Financial Statements or as set forth in Section 7.6(b) of the
Tower Aggregator Disclosure Statements, since September 30, 1998, neither Tower
Aggregator nor any Subsidiary of Tower Aggregator has incurred any material
liabilities or obligations of any nature, whether absolute, accrued, contingent,
or otherwise, and
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whether due or to become due, for the periods covered thereby except for
liabilities and obligations that (i) were incurred in the ordinary course of
business; or (ii) would not be required, under generally accepted accounting
principles applied in a manner consistent with Tower Aggregator's past financial
reporting practices, to be reflected or reserved against in the Tower Aggregator
Financial Statements.
7.7 LITIGATION. Except as set forth in Section 7.7 of the Tower
Aggregator Disclosure Statement, there are no Actions pending or, to the
knowledge of Tower Aggregator, threatened against Tower Aggregator or any of its
Subsidiaries (or any Benefit Plan of any of them), or any property of Tower
Aggregator or any of its Subsidiaries except Actions that, in the aggregate, are
not reasonably expected to have a material adverse effect on (a) the Business
Condition of the Tower Aggregator and its Subsidiaries taken as a whole or (b)
the ability of Tower Aggregator to perform its obligations under this Agreement
and the Ancillary Agreements. There are no Orders pending against Tower
Aggregator or any of its Subsidiaries or any of their properties or businesses
that, individually or in the aggregate, are reasonably expected to have,
individually or in the aggregate, a material adverse effect on the Business
Condition of Tower Aggregator and its Subsidiaries taken as a whole or on the
ability of Tower Aggregator to perform its obligations under this Agreement and
the Ancillary Agreements, or that would prohibit the transactions contemplated
by this Agreement and the Ancillary Agreements.
7.8 EMPLOYEE BENEFITS. (a) To the knowledge of Tower Aggregator,
neither Merger Sub nor any ERISA Affiliate of Merger Sub will succeed to any
material Controlled Group Liability of Tower Aggregator as a result of the
Merger. "Controlled Group Liability" means (a) any and all liabilities to the
Pension Benefit Guaranty Corporation (other than for premium payments), to any
"multiemployer plan," as such term is defined in Section 4001(a)(3) of ERISA, to
any participant or to the Internal Revenue Service, under Title IV of ERISA, (b)
any and all liabilities with respect to withdrawal or partial withdrawal from a
"multiemployer plan," and (c) any and all liabilities arising from violations of
the requirements of (i) Section 302 of ERISA, (ii) Sections 412 and 4971 of the
Code, (iii) the continuation coverage requirements of Section 4980B of the Code,
and (iv) part 7 of subtitle B of Title I of ERISA and Sections 9801 et seq. of
the Code.
(b) Except as set forth in Section 7.8(b) of the Tower Aggregator
Disclosure Statement, the execution, delivery, and performance of this Agreement
and the Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby in accordance with the terms hereof and thereof
by Tower Aggregator will not result in (i) the obligation by Tower Aggregator or
the Surviving Corporation to pay to any Person, any severance benefit or (ii)
the acceleration of vesting of any option, warrant, or other right to acquire
shares of capital stock of any class of Tower Aggregator or any of Tower
Aggregator's Subsidiaries.
7.9 DEALINGS WITH AFFILIATES. Except as set forth in Section 7.9
of the Tower Aggregator Disclosure Statement or pursuant to the Ancillary
Agreements, Tower
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Aggregator is not a party to any material agreement, written or oral, including,
without limitation, any loans or extensions of credit or lease or service
agreements, with, any of its Affiliates or any officer or director of Tower
Aggregator or its Affiliates, or any members of their respective immediate
families.
7.10 PENDING TRANSACTIONS. Each Pending Transaction is identified
in Section 7.10 of the Tower Aggregator Disclosure Statement, and Tower
Aggregator has delivered or made available to Nextel complete copies of all
contracts and other agreements executed in connection with each Pending
Transaction and all amendments, modifications, and supplements thereto. The
consummation by Tower Aggregator and its Subsidiaries of the Pending
Transactions, either individually or in the aggregate, will not have, and would
not be reasonably be expected to have, a material adverse effect on the Business
Condition of Tower Aggregator and its Subsidiaries taken as a whole or on the
ability of Tower Aggregator to perform its obligations under this Agreement or
the Ancillary Agreements.
7.11 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Section 7.11 of the Tower Aggregator Disclosure Statement, as otherwise
contemplated by this Agreement (including the financing of the transactions
contemplated by this Agreement), or as permitted by clause (iv) of the
definition of Strategic Transaction, since September 30, 1998, there has not
been any material adverse change in the Business Condition of Tower Aggregator
and its Subsidiaries taken as a whole, and none of Tower Aggregator and its
Subsidiaries have:
(a) declared, set aside, made, or paid any dividend or other
distribution in respect of its capital stock or purchased or redeemed, directly
or indirectly, any shares of its capital stock;
(b) taken any action, or permitted or suffered to be taken any
action with respect to the following, except for such instances that would not,
individually or in the aggregate, have a material adverse effect on the Business
Condition of Tower Aggregator and its Subsidiaries taken as a whole or on the
ability of Tower Aggregator to perform its obligations under this Agreement or
the Ancillary Agreements:
(A) issued, delivered, or sold, or authorized the issuance,
delivery, or sale of, any shares of its capital stock of any
class, any options, warrants, conversion or other rights to
purchase any such shares or any securities convertible into or
exchangeable for such shares, or issued or authorized the issuance
of any other security in respect of or in lieu of or in
substitution for shares of its capital stock other than pursuant
to the terms of any agreement related to a Pending Transaction as
in effect on the date of this Agreement;
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(B) incurred any indebtedness for borrowed money or
guaranteed any such indebtedness or issued or sold any debt
securities in an aggregate principal amount in excess of
$1,000,000;
(C) acquired any assets or properties having a value in
excess of $1,000,000 or made any commitment to do the same,
whether in one transaction or in a series of transactions other
than pursuant to the terms of any agreement related to a Pending
Transaction as in effect on the date of this Agreement;
(D) amended any of the agreements providing for the Pending
Transactions, or waived any breach thereof, or any condition to
its obligation to close thereunder;
(E) incurred or committed to incur any liability or
obligation (whether absolute, accrued, contingent, or otherwise)
outside of the ordinary course of business or incurred or
committed to incur any capital expenditures, in either case having
a value in excess of $1,000,000, individually or in the aggregate;
or
(F) disposed of any assets or properties having a value in
excess of $1,000,000, whether in one transaction or in a series of
transactions;
(c) entered into or amended any arrangement with any director,
officer, or employee providing for any severance or termination pay as a result
of or in connection with the transactions contemplated by this Agreement;
(d) made any material change in any method of financial accounting
or accounting practice, except for any such change required by reason of a
concurrent change in generally accepted accounting principles; or
(e) entered into any agreement (except such agreements as are
referenced or contemplated in the preceding clauses (a) through (d), this
Agreement or the Ancillary Agreements) with respect to the foregoing.
7.12 COMPLIANCE WITH LAWS. (a) Except as set forth on Section 7.12
of the Tower Aggregator Disclosure Statement, the conduct of the business of
Tower Aggregator complies with all Laws and Orders applicable thereto, except
for violations or failures so to comply, if any, that would not have a material
adverse effect on (i) the Business Condition of Tower Aggregator and its
Subsidiaries taken as a whole or (ii) the ability of Tower Aggregator to perform
its obligations under this Agreement or any of the Ancillary Agreements. None of
Tower Aggregator or any of its Subsidiaries has
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received any written communication from a Governmental Authority that alleges
that Tower Aggregator or any Subsidiary is not in compliance with, or may be
liable under, any such Law or Order other than instances of alleged
non-compliance or alleged liability that would not reasonably be expected to
have a material adverse effect on (A) the Business Condition of Tower Aggregator
and its Subsidiaries taken as a whole or (B) the ability of Tower Aggregator to
perform its obligations under this Agreement or any of the Ancillary Agreements.
(b) (i) Except as set forth in Section 7.12(b) (i) of the Tower
Aggregator Disclosure Statement, as of the date hereof, Tower Aggregator
and its Subsidiaries have duly secured and possess all necessary Licenses
and Authorizations from, and have filed all material required
registrations, applications, reports, and other documents with, all
Governmental Authorities exercising jurisdiction over Tower Aggregator or
any of its Subsidiaries, except where the failure to have such Licenses or
Authorizations or the failure to make such filings would not reasonably be
expected to have a material adverse effect on (A) the Business Condition
of Tower Aggregator and its Subsidiaries taken as a whole or (B) the
ability of Tower Aggregator to perform its obligations under this
Agreement or any of the Ancillary Agreements. Such Licenses and
Authorizations are valid and in full force and effect without materially
adverse conditions except for such conditions as are generally applicable
to all holders of such Licenses and Authorizations.
(ii) Tower Aggregator and its Subsidiaries have not made any
material misstatements of fact, or omitted to disclose any material fact,
to any Governmental Authority, or taken or failed to take any action,
which misstatements or omissions, actions or failures to act, individually
or in the aggregate, subject any Licenses held by it to a risk of
revocation or failure to renew. Neither Tower Aggregator nor any of its
Subsidiaries is subject to any Order or Action pending or, to the
knowledge of Tower Aggregator, threatened, that affects or would
reasonably be expected to affect the validity of any License held by it,
or result in the revocation, termination, or adverse modification thereof,
or impair the renewal thereof, except where the invalidity of such
Licenses (individually or in the aggregate) or the revocation,
termination, adverse modification, or nonrenewal thereof would not have a
material adverse effect on (A) the Business Condition of Tower Aggregator
and its Subsidiaries taken as a whole or (B) the ability of Tower
Aggregator to perform its obligations under this Agreement or any of the
Ancillary Agreements. Neither Tower Aggregator nor any of its Subsidiaries
has any reason to believe that any of its Licenses will not be renewed in
the ordinary course, except where such nonrenewal (individually or in the
aggregate) would not have a material adverse effect on (A) the Business
Condition of Tower Aggregator and its Subsidiaries taken as a whole or (B)
the ability of
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Tower Aggregator to perform its obligations under this Agreement
or any of the Ancillary Agreements.
(c) None of Tower Aggregator or any of its Subsidiaries has caused
or taken any action that is reasonably expected to result in, and none of them
is subject to, any material potential liability or obligation under any
Environmental Law relating to (i) the environmental conditions on, under, or
about any real property currently or formerly owned, leased, or operated by
Tower Aggregator or its Subsidiaries, including, without limitation, any
contamination of soil or groundwater at such properties or (ii) the past or
present use, management, handling, transport, treatment, generation, storage, or
release of any Hazardous Materials by Tower Aggregator or its Subsidiaries.
7.13 COMPLIANCE WITH CONTRACTS. Section 7.13 of the Tower
Aggregator Disclosure Statement contains an accurate and complete listing of all
material contracts, leases, agreements, or understandings, whether written or
oral, to which Tower Aggregator or any of its Subsidiaries are party. Each of
such contracts, leases, agreements, and understandings is in full force and
effect and (a) none of Tower Aggregator or its Subsidiaries or, to the knowledge
of Tower Aggregator and its Subsidiaries, any other party thereto has breached
or is in default thereunder, (b) no event has occurred which, with the passage
of time or the giving of notice, would constitute such a breach or default, (c)
no claim of material default thereunder has been asserted or, to the knowledge
of Tower Aggregator and its Subsidiaries, threatened, and (d) none of Tower
Aggregator or its Subsidiaries or, to the knowledge of Tower Aggregator and its
Subsidiaries, any other party thereto is seeking the renegotiation thereof or
substitute performance thereunder, except where such breach or default, or
attempted renegotiation or substitute performance, individually or in the
aggregate, would not have a material adverse effect on the Business Condition of
Tower Aggregator and its Subsidiaries taken as a whole.
7.14 BROKERS AND FINDERS. Except for the fees and expenses payable
to CIBC Oppenheimer Corp., which will be the sole obligation of, and paid by,
Tower Aggregator, Tower Aggregator has not employed any investment banker,
broker, finder, consultant, or intermediary in connection with the transactions
contemplated by this Agreement which would be entitled to any investment
banking, brokerage, finder's, or similar fee or commission in connection with
this Agreement or the transactions contemplated hereby.
8. ADDITIONAL COVENANTS AND AGREEMENTS
8.1 INTERIM CONDUCT OF BUSINESS. (a) Except as contemplated by
this Agreement or as set forth in the Nextel Disclosure Statement, during the
period from the date of this Agreement until the Closing, Nextel shall cause
each of the Transferring Subsidiaries, Parent Co., Tower Sub, and Merger Sub, to
maintain the Tower Assets as a whole in accordance with its ordinary course of
business, consistent with past practice. None of Nextel, Parent Co., Tower Sub,
Merger Sub, and the Transferring Subsidiaries
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will enter into any transaction in connection with the Tower Assets that would
have a material adverse effect on the Tower Assets taken as a whole or on the
transactions contemplated by this Agreement. Prior to the Closing, neither
Nextel nor the Transferring Subsidiaries nor any of their officers, employees,
representatives, agents, or Affiliates, without the prior consent of Tower
Aggregator, will, directly or indirectly, encourage, solicit, or engage in
discussions or negotiations with any third party concerning any sale,
assignment, conveyance, transfer, lease, or other disposal of substantially all
of the Tower Assets. Nextel will notify Tower Aggregator immediately of any
inquiries or proposals with respect to any such transaction that are received
by, or any such negotiations or discussions that are sought to be initiated
with, Nextel or the Transferring Subsidiaries.
(b) (i) Except as contemplated by this Agreement or as set forth
in Section 8.1 of the Tower Aggregator Disclosure Statement, during the
period from the date of this Agreement until the Closing, Tower Aggregator
shall, and shall cause each of its Subsidiaries to, maintain its business
in accordance with its ordinary course of business, consistent with past
practice. Prior to the Closing, neither Tower Aggregator nor any of its
Subsidiaries nor any of their officers, employees, representatives,
agents, or Affiliates, without the prior consent of Nextel, will, directly
or indirectly, encourage, solicit, or engage in discussions or
negotiations with any third party concerning any merger, consolidation,
sale, assignment, conveyance, transfer, lease, or other disposal of
substantially all of their assets or other transaction that could result
in a Change of Control of Tower Aggregator. Tower Aggregator will notify
Nextel immediately of any inquiries or proposals with respect to any such
transaction that are received by, or any such negotiations or discussions
that are sought to be initiated with, Tower Aggregator or any of its
Subsidiaries.
(ii) Except as contemplated by this Agreement (including the
financing of the transactions contemplated by this Agreement), prior to
the Closing, neither Tower Aggregator nor any of its Subsidiaries may,
without the prior written consent of Nextel, do any act contemplated by
Section 7.11 or enter into any Strategic Transaction.
8.2 REASONABLE EFFORTS. Each member of the Nextel Group and each
member of the SpectraSite Group shall (a) promptly make all filings and use all
reasonable efforts to obtain all Authorizations required under all applicable
Laws with respect to the transactions contemplated hereby and by the Ancillary
Agreements and shall cooperate with each other in all reasonable respects with
respect thereto, (b) use all reasonable efforts to promptly take, or cause to be
taken, all other actions and do, or cause to be done, all other things
necessary, proper, or appropriate to satisfy the conditions set forth in Section
5 and to consummate and make effective the transactions contemplated by this
Agreement and by the Ancillary Agreements on the terms and conditions set forth
herein and therein as soon as practicable (including seeking to remove promptly
any injunction or other legal barrier that may prevent such
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consummation), provided, however, that no party shall be obligated to pay any
sum or agree to any term in each case that is not customary in the circumstances
or is otherwise materially adverse to the interests of such party in its
reasonable discretion in seeking to obtain any consent required hereby, and (c)
not take any action (including, without limitation, effecting or agreeing to
effect or announcing an intention or proposal to effect, any acquisition,
business combination, or other transaction) that would reasonably be expected to
impair the ability of the parties to consummate the transactions contemplated by
this Agreement at the earliest practicable time, including, without limitation,
any action that would impair efforts to secure any required Authorizations for
such transactions (regardless of whether such action would otherwise be
permitted or not prohibited hereunder). Notwithstanding the foregoing, Nextel
and its Subsidiaries and Tower Aggregator and its Subsidiaries may take any
action reasonably necessary or appropriate to consummate any of the transactions
contemplated by this Agreement or any of the Ancillary Agreements, and Nextel
and its Subsidiaries and Tower Aggregator and its Subsidiaries may take any
action reasonably required to comply with any applicable Law or to comply with
or fulfill any contractual obligation of such party (in the case of such
contractual obligations, to the extent in existence as of the date hereof).
Moreover, in connection with any filing or submission required or action to be
taken by Nextel or Tower Aggregator or any of their Subsidiaries to obtain any
Authorization or otherwise to effect the transactions contemplated by this
Agreement and the Ancillary Agreements, neither Nextel nor any of its
Subsidiaries nor Tower Aggregator nor any of its Subsidiaries will be required
to divest or hold separate or otherwise take or commit to take any action that
limits its freedom of action with respect to, or its ability to retain any
material portion of its assets or existing (as of the date hereof) businesses or
product lines.
8.3 PREPARATION OF REGISTRATION STATEMENT. Upon the request of
Tower Aggregator, Nextel shall cooperate in providing Tower Aggregator with such
supplemental information as it may reasonably request in writing with respect to
the Tower Assets or as otherwise required in order to comply with the federal
securities laws in the preparation of (x) Tower Aggregator's Registration
Statement on Form S-1 (or other appropriate form) under the Securities Act in
connection with an Initial Public Offering or (y) a Registration Statement of
Tower Aggregator on Form S-4 (or other appropriate form) under the Securities
Act in connection with an offering of debt or preferred stock.
8.4 ACCESS TO INFORMATION. (a) Upon reasonable notice, Tower
Aggregator shall (and shall cause each of its Subsidiaries to) afford to
officers, employees, counsel, accountants, and other authorized Representatives
of Nextel access, during normal business hours throughout the period prior to
the Effective Time, to its properties, books, and records (including, without
limitation, the work papers of independent accountants) and, during such period,
shall (and shall cause each of its Subsidiaries to) furnish promptly to such
Representatives all information concerning its business, properties, and
personnel as Nextel may reasonably request. No investigation conducted pursuant
to this Section 8.4(a) shall affect or be deemed to modify any of the
representations or warranties made by Tower Aggregator and its Subsidiaries.
Nextel
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agrees that it will not, and will cause its Representatives not to, use any
information obtained pursuant to this Section 8.4(a) for any purpose unrelated
to the consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements.
(b) Upon reasonable notice, Nextel shall (and shall cause each of
its Subsidiaries to) afford to Tower Aggregator and its officers, employees,
counsel, accountants and other authorized Representatives access, during normal
business hours throughout the period prior to the Effective Time, to the books
and records related to the Tower Assets contained in the due diligence room and,
upon request during such period, to the Tower Assets and to such other
information concerning the Tower Assets as Tower Aggregator may reasonably
request. No investigation conducted pursuant to this Section 8.4(b) shall affect
or be deemed to modify any of the representations or warranties made by Nextel
and its Affiliates. Tower Aggregator agrees that it will not, and will cause its
Representatives not to, use any information obtained pursuant to this Section
8.4(b) for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements.
8.5 CONFIDENTIAL INFORMATION. Subject to the requirements of Law,
each party hereto shall keep confidential, and shall cause its officers,
employees, counsel, accountants, and other authorized Representatives of the
other party to keep confidential, all information and documents obtained in
connection with the transactions contemplated by this Agreement and the
Ancillary Agreements except as otherwise consented to by the other parties
hereto or thereto. Nextel and Tower Aggregator shall agree upon the timing and
content of the initial press release to be issued describing the execution of
this Agreement and the Ancillary Agreements, and shall not make any public
announcement thereof prior to reaching such agreement unless required to do so
by applicable Law. To the extent reasonably requested by either party, each
party shall thereafter consult with and provide reasonable cooperation to the
other in connection with the issuance of further press releases or other public
documents describing the transactions contemplated by this Agreement and the
Ancillary Agreements. In the event any party is required to disclose any
additional information or documents pursuant to applicable Law, such party shall
promptly give written notice of such disclosure that is proposed to be made to
the other parties so that the parties can work together to limit the disclosure
to the greatest extent possible and, in the event that any party is legally
compelled to disclose any information, to seek a protective order or other
appropriate remedy or both.
8.6 NON-SOLICITATION. Except for those individuals identified in a
letter from Nextel to Tower Aggregator delivered prior to the closing, from and
after the Closing for a period of one year, neither Tower Aggregator, the
Surviving Corporation nor any of their officers, employees, representatives,
agents, or Affiliates (collectively, the "Representatives") will, without
Nextel's prior written consent, (a) solicit for employment any individual
working with or employed by Nextel or any of its Affiliates, (b) assist in such
hiring by any other Person or business, or (c) encourage any individual to
terminate his or her employment with Nextel or any of its Affiliates or
intentionally disrupt or intentionally attempt to disrupt any business
relationship related to the business of Nextel or its Affiliates; provided,
however, that such consent shall not be required in
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connection with advertisements or solicitations for employees or consultants by
any member of the SpectraSite Group or any of their Representatives through one
or more national, regional, or local publications of general circulation,
national, regional, or local radio or television, or other media directed to the
general public.
8.7 HSR FILINGS. Tower Aggregator and Nextel shall promptly take
all necessary actions to comply with the HSR Act and any other rules or
regulations applicable to the transactions contemplated by this Agreement,
including, without limitation, preparing and filing with, or causing to be
prepared and filed with, the Antitrust Division of the United States Department
of Justice and the Federal Trade Commission a Notification and Report for
Certain Mergers and Acquisitions (the "Notification and Report") promptly
following the date hereof. Tower Aggregator shall pay the filing fees in
connection with the filing of the Notification and Report.
8.8 TAX MATTERS. The Surviving Corporation shall pay and be solely
liable for any stock transfer taxes that may be imposed on the issuance of
Surviving Corporation Capital Stock pursuant to the terms of this Agreement. The
Transferring Subsidiaries shall pay and be solely liable for any and all taxes,
including any interest or penalty, assessed against Nextel or any of its
Subsidiaries (including Tower Sub) as a result of the actions contemplated by
this Agreement to occur prior to the Effective Time, including without
limitation, the transfer of the Tower Assets by the Transferring Subsidiaries to
Parent Co., and in turn by Parent Co. to Tower Sub. In addition, the
Transferring Subsidiaries shall pay and be liable for any and all sales, use,
transfer, excise or other similar taxes that are assessed in connection with the
Merger. The Transferring Subsidiaries, however, shall be entitled to
reimbursement from Tower Aggregator for 50% of such sales, use, transfer, excise
or other similar taxes for which the Transferring Subsidiaries are liable
pursuant to the preceding sentence. Such reimbursement shall be paid by Tower
Aggregator to Parent Co. promptly following demand therefor against written
evidence reasonably satisfactory to Tower Aggregator of the payment by Parent
Co. (or any Subsidiary of Nextel) of such taxes.
8.9 AMENDMENT OF CHARTER AND BYLAWS. Immediately prior to the
Effective Time, Tower Aggregator shall take all necessary action to amend and
file with the Delaware Secretary of State its Amended and Restated Certificate
of Incorporation (and in each other location where filing is required to cause
such Amended and Restated Certificate of Incorporation to become effective) in
the form attached hereto as Exhibit H-1 and shall amend its Bylaws as
contemplated by the terms of the Stockholders' Agreement.
8.10 SECTION 338(h)(10) ELECTION. Nextel and Tower Aggregator
agree that it is their intention that the Merger and acquisition of the stock of
Merger Sub pursuant to the Merger shall be treated for income tax purposes as a
purchase and sale of the Tower Assets. Accordingly, if Tower Aggregator shall so
elect by notice to Nextel delivered within 90 days following the Closing Date,
Nextel and Tower Aggregator will take all actions necessary and appropriate
(including filing such forms, returns, elections and other documents as may be
required) to effect and preserve timely elections under
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section 338(h)(10) of the Code and the Treasury regulations promulgated
thereunder (the "Election") with respect to each of (a) the Merger and
acquisition of the stock of Merger Sub and (b) the acquisition thereby of the
stock of Tower Sub pursuant to the Merger and to file their tax returns on a
basis consistent with such Election. In connection with the Election, prior to
the Closing Date, Nextel and Tower Aggregator will act together in good faith
(i) to determine and agree upon the amount of the "modified adjusted deemed
sales price" (within the meaning of Treas. Reg. Section 1.338(h)(10)-1(f)) of
the Merger Sub and Tower Sub stock and (ii) to agree upon the proper
allocations (the "Allocations") of the "modified adjusted deemed sales price"
among the assets of Merger Sub and Tower Sub, in accordance with section
338(h)(10) of the Code and the Treasury regulations promulgated thereunder.
Nextel and Tower Aggregator agree to file all tax returns consistent with the
agreed upon Allocations and modified adjusted deemed sales price. If, prior to
the Closing Date, the parties are unable to agree upon either (i) the
Allocations or (ii) the amount of the "modified adjusted deemed sales price,"
then, as promptly as practicable following the Closing Date, any matter as to
which the parties are in dispute shall be resolved by a public accounting firm
mutually acceptable to both parties, whose determination shall be binding and
conclusive on the parties. The fees and expenses of such accounting firm shall
be shared equally by Nextel and Tower Aggregator.
8.11 FINANCIAL STATEMENTS, REPORTS. After the Closing and
until the earlier of (x) the date which Parent Co. or its Affiliates holds in
the aggregate less than 5% of the Tower Aggregator Common Stock (assuming
conversion of all outstanding shares of Tower Aggregator preferred stock) or (y)
the completion of an Initial Public Offering by Tower Aggregator, Tower
Aggregator, shall provide to Parent Co.:
(a) within 90 days after the end of each fiscal year of Tower
Aggregator, a consolidated balance sheet of Tower Aggregator and its
Subsidiaries as of the end of such fiscal year and the related consolidated
statements of income, changes in stockholders' equity and cash flows of Tower
Aggregator and its Subsidiaries for the fiscal year then ended, together with
supporting notes thereto, prepared in accordance with generally accepted
accounting principles and accompanied by a report, without qualification as to
scope of audit, by a firm of independent public accountants of recognized
national standing selected by Tower Aggregator;
(b) commencing with the month ending March 31, 1999, within 20 days after
the end of each month in each fiscal year, a consolidated balance sheet of Tower
Aggregator and its Subsidiaries and the related consolidated statement of
income, unaudited but certified by the principal financial officer of Tower
Aggregator, such balance sheets to be as of the end of such month and such
statements of income to be for such month and for the period from the beginning
of the fiscal year to the end of such month, in each case subject to normal
year-end adjustments;
(c) within 20 days prior to the beginning of each fiscal year of Tower
Aggregator (and with respect to any revision thereof, promptly after such
revision has been prepared), an operating budget for Tower Aggregator and its
subsidiaries approved by the Board of Directors of Tower Aggregator, including
projected monthly income
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statements, cash flow statements during such fiscal year and a projected
consolidated balance sheet as of the end of such fiscal year, and each monthly
financial statement furnished pursuant to (b) above shall reflect variances from
such operating budget, as the same may from time to time be revised;
(d) promptly upon filing, copies of all registration statements,
prospectuses, periodic reports, and other documents filed by Tower Aggregator or
any of its Subsidiaries with the Securities and Exchange Commission; and
(e) prompt notice of (x) any event of default under any agreement with
respect to material indebtedness for borrowed money or a material purchase money
obligation, and any event which, upon notice or lapse of time or both, would
constitute such an event of default which would in any such case permit the
holder of such indebtedness or obligation to accelerate the maturity thereof,
and (y) any action, suit or proceeding at law or in equity or by or before any
governmental instrumentality or agency which, if adversely determined, would
have a Material Adverse Effect.
8.12 AMENDMENT OF PREFERRED STOCK PURCHASE AGREEMENT. Prior to the
Closing, Tower Aggregator shall not amend the Preferred Stock Purchase Agreement
in any manner adverse to Parent Co.
8.13 EXECUTION OF PARTNER MASTER SITE LEASE AGREEMENT. If, at or
prior to the Closing, Nextel Partners Operating Corp. ("Partner") and its
Subsidiaries do not execute the Partner Master Site Lease Agreement, the
Transferring Subsidiaries shall execute Site Schedules to the Nextel Master Site
Lease Agreement with respect to all Sites located in the Partner Area ("Partner
Sites") at which Existing Towers and Additional Towers are located, which Site
Schedules shall be attached to the Nextel Master Site Lease Agreement. In such
circumstances, if Partner and its Subsidiaries subsequently execute the Partner
Master Site Lease Agreement, Tower Sub also shall do so (at Nextel's request)
and the Transferring Subsidiaries may assign to Partner the lease of such
Partner Sites (and any other Constructed New Site, Purchased New Site, or other
Qualifying Site (as such terms are defined in the Master Site Commitment
Agreement) located in the Partner Area which is then subject (or required to
become subject) to the Nextel Master Site Lease Agreement). Upon such assignment
(which shall be effected by Partner executing and attaching to the Partner
Master Site Lease Agreement a Site Schedule for each Site so assigned), Tower
Sub (and each of the other Landlord Parties (as defined in the Nextel Master
Site Lease Agreement)) shall release such Transferring Subsidiaries of any
obligations and liabilities under the Nextel Master Site Lease Agreement with
respect to Sites so assigned and shall deliver to Nextel a written agreement,
reasonably satisfactory to Nextel, evidencing such release.
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9. TERMINATION
9.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated and transactions contemplated hereby may be abandoned at any time
prior to the Effective Time, either by the mutual written consent of Nextel and
Tower Aggregator, or by mutual action of their Boards of Directors.
9.2 TERMINATION BY EITHER NEXTEL OR TOWER AGGREGATOR. (a) This
Agreement may be terminated (upon notice from the terminating party to the other
parties) and the transactions contemplated hereby may be abandoned by action of
the Board of Directors of either Nextel or Tower Aggregator if (i) the Merger
will not have been consummated by August 31, 1999, (the right to terminate this
Agreement under this clause (i) will not, however, be available to any party
whose failure to fulfill any obligation under this Agreement has been the cause
of or resulted in the failure of the Merger to occur on or before such date) or
(ii) any Governmental Authority will have issued an Order permanently
restraining, enjoining, or otherwise prohibiting the transactions contemplated
hereby and such Order will have become final and nonappealable.
(b) This Agreement may be terminated (upon five Business Days'
advance notice to the other parties) (i) by Nextel if, since September 30, 1998,
there has been a material adverse change in the Business Condition of Tower
Aggregator and its Subsidiaries taken as a whole or a material uncured breach by
Tower Aggregator of its obligations under this Agreement or (ii) by Tower
Aggregator if since September 30, 1998 there has been a material adverse change
in the Tower Assets taken as a whole or a material uncured breach by Nextel and
the Transferring Subsidiaries of their obligations under this Agreement.
9.3 EFFECT OF TERMINATION AND ABANDONMENT. In the event of
termination of this Agreement and abandonment of the Merger and other
transactions contemplated hereby pursuant to this Section 9 no party hereto (nor
any of its directors or officers) will have any liability or further obligation
to any other party to this Agreement, except as provided in Sections 8.5 and
11.1 hereof and except that nothing herein will relieve any party from liability
for any breach of this Agreement occurring prior to such termination.
10. INDEMNIFICATION
10.1 INDEMNIFICATION RELATING TO THE AGREEMENT. (a) Tower
Aggregator and, after the Merger, the Surviving Corporation shall indemnify
Nextel, Parent Co., and the Transferring Subsidiaries, and each of their
directors, officers, employees, agents, successors, and assigns (together, the
"Nextel Indemnified Parties"), from and against any and all losses, liabilities,
claims, damages (including punitive, consequential or treble damages),
obligations, Liens, assessments, judgments, awards, and fines (including,
without limitation, those arising out of any pending or threatened
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Action, including any settlement or compromise thereof) and any reasonable
out-of-pocket costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses incurred in connection with any pending or
threatened Action) ("Losses") resulting or arising from:
(i) any inaccuracy in or any breach by Tower Aggregator or any of
its Subsidiaries of any of the representations or warranties made by any
of them in this Agreement;
(ii) any failure of Tower Aggregator or any of its Subsidiaries to
comply with, or any non-fulfillment of, any covenant or agreement of Tower
Aggregator or any of its Subsidiaries set forth in this Agreement to be
performed by any of them prior to the Closing;
(iii) any failure of the Surviving Corporation to comply with or
any non-fulfillment of any covenant or agreement of Tower Aggregator or
any of its Subsidiaries or the Surviving Corporation set forth in this
Agreement to be performed by Tower Aggregator or any of its Subsidiaries
or the Surviving Corporation after the Closing; or
(iv) any liabilities or obligations to which Nextel, Parent Co.,
or any of the Transferring Subsidiaries become subject that (A) arise from
the Surviving Corporation's or Tower Sub's failure to satisfy or discharge
any of the Assumed Liabilities in accordance with its terms, including,
without limitation, all obligations coming due for performance after the
Closing under the applicable terms of any contract assumed by Merger Sub
or Tower Sub as contemplated by Section 2 or (B) arise from or relate to
the ownership of the Tower Assets or the operation of any business
relating thereto by the Surviving Corporation or its Subsidiaries from and
after the Closing.
(b) Nextel shall indemnify Tower Aggregator, SCI and, after the
Merger, the Surviving Corporation and their directors, officers, employees,
agents, successors, and assigns (together, the "SpectraSite Indemnified
Parties") from and against all Losses resulting or arising from:
(i) any inaccuracy in or any breach by Nextel, the Transferring
Subsidiaries, or Parent Co. of any of the representations or warranties
made by any of them in this Agreement;
(ii) any failure of Nextel, the Transferring Subsidiaries, or
Parent Co. to comply with, or any non-fulfillment of, any covenant or
agreement set forth in this Agreement to be performed by any of them prior
to the Closing;
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(iii) any failure by Nextel, the Transferring Subsidiaries, or
Parent Co. to comply with, or any non-fulfillment of, any covenant or
agreement of Nextel, the Transferring Subsidiaries, or Parent Co. set
forth in this Agreement to be performed by any of them after the Closing;
(iv) any liabilities, including, without limitation, those for
Taxes, or obligations to which the Surviving Corporation or Tower
Aggregator becomes subject that (A) arise from the failure of any of
Nextel, the Transferring Subsidiaries, or Parent Co. to satisfy or
discharge any of the Excluded Liabilities in accordance with its terms or
(B) arise from or relate to the transfer of the Tower Assets by the
Transferring Subsidiaries to Parent Co. and by Parent Co. to Tower Sub,
ownership of the Tower Assets by the Transferring Subsidiaries or Parent
Co., or the operation of their businesses with respect to the Tower Assets
prior to the Closing; or
(v) any liability for unpaid Taxes, attributable to periods prior
to the Closing, of any member of an Affiliated Group under Treasury
Regulation ss.1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor of a member of the Nextel
Group, or by contract with, or entered into by, any member of the Nextel
Group.
(c) All of the representations and warranties made herein shall
survive the execution and delivery of this Agreement, the consummation of the
Merger, and any investigation by or on behalf of the parties hereto or
termination of this Agreement for a period of 18 months from the Closing Date
provided that the representations and warranties provided in Sections 6.8, 6.10
(as they relate to Environmental Laws), 7.8, and 7.12 (as they relate to
Environmental Laws) shall survive until the expiration of the applicable statute
of limitations or any extension thereof. No claim for indemnification may be
asserted by any party hereto based on any claimed breach of another party's
representations and warranties hereunder unless such indemnification claim is
asserted prior to the end of the survival period of the relevant representation
and warranty.
10.2 INDEMNIFICATION PROCEDURES.
(a) PROCEDURES FOR INDEMNIFICATION OF THIRD PARTY CLAIMS.
(i) If a Beneficiary receives notice or otherwise learns of the
assertion by a Person (including, without limitation, any Governmental
Authority) who is not a party to this Agreement or to the Ancillary
Agreements, of any claim or of the commencement by any such Person of any
Action (a "Third Party Claim") with respect to which an Indemnifying Party
may be obligated to provide indemnification pursuant to Section 10.1 of
this Agreement, such Beneficiary shall give such Indemnifying Party
written notice thereof promptly after becoming aware of such Third Party
Claim. The failure of any Beneficiary to give such prompt notice as
provided in this Section 10.2(a) will not relieve the related Indemnifying
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Party of its obligations under this Section 10, except to the extent that
such Indemnifying Party is materially prejudiced by such failure to give
prompt notice. Such notice will describe the Third Party Claim in
reasonable detail and, if ascertainable, will indicate the amount (or if
necessary, an estimated amount) of the Losses that has been or may be
sustained by such Beneficiary (the "Indemnification Notice").
(ii) An Indemnifying Party may elect to defend or to seek to
settle or compromise, at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Third Party Claim. Within 30 days of
the receipt of the Indemnification Notice from a Beneficiary in accordance
with Section 10.2(a)(i) (or sooner, if the nature of the Third Party Claim
so requires), the Indemnifying Party shall notify the Beneficiary of its
election regarding the assumption of responsibility for defending such
Third Party Claim, which election will specify any reservations or
exceptions. After notice from an Indemnifying Party to a Beneficiary of an
election to assume the defense of a Third Party Claim, such Indemnifying
Party will not be liable to such Beneficiary under this Section 10 for any
legal or other expenses (except expenses approved in advance by the
Indemnifying Party) subsequently incurred by such Beneficiary in
connection with the defense thereof. If, however, in any Beneficiary's
reasonable judgment, a conflict of interest between one or more of such
Beneficiaries and such Indemnifying Party exists in respect of such Third
Party Claim, such Beneficiaries will have the right to employ separate
counsel, who will be entitled to participate in the defense of such
claims, to represent such Beneficiaries at their own expense. If an
Indemnifying Party elects not to assume responsibility for defending a
Third Party Claim, or fails to notify a Beneficiary of its election as
provided in this Section 10.2(a)(ii), such Beneficiary may defend or
(subject to Sections 10.2(a)(iv) and 10.2(a)(v)) seek to compromise or
settle such Third Party Claim at the expense of the Indemnifying Party.
(iii) If an Indemnifying Party chooses to defend or to seek to
compromise or settle any Third Party Claim, the related Beneficiary shall
make available to such Indemnifying Party (in a manner that will not
unreasonably interfere with the conduct of the Beneficiary's business) any
personnel or any books, records or other documents within its control or
which it otherwise has the ability to make available that are necessary or
appropriate for such defense, settlement, or compromise, and shall
otherwise cooperate in the defense, settlement, or compromise of such
Third Party Claim.
(iv) Neither an Indemnifying Party nor a Beneficiary shall consent
to entry of any Order or enter into any settlement of any Third Party
Claim that does not include as an unconditional term thereof the giving by
the Claimant or plaintiff to such Beneficiary, in the case of a consent or
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settlement by an Indemnifying Party, or the Indemnifying Party, in the
case of a consent or settlement by the Beneficiary, of a written release
from all liability in respect of such Third Party Claim.
(v) Notwithstanding anything in this Section 10.2(a) to the
contrary, neither an Indemnifying Party nor a Beneficiary shall, without
the written consent of the other party, (A) settle or compromise or
consent to the entry of any Order with respect to any Action or Third
Party Claim if the effect thereof is to admit any criminal liability by,
or to permit any injunctive relief or other Order providing non-monetary
relief to be entered against, the other party, or (B) notwithstanding the
foregoing clause (A), settle or compromise any claim without the consent
of the other party, which consent will not be unreasonably withheld. If an
Indemnifying Party notifies a Beneficiary in writing of such Indemnifying
Party's desire to settle or compromise a Third Party Claim on the basis
set forth in such notice, and if such settlement or compromise includes as
an unconditional term thereof the giving by the Claimant or plaintiff of a
written release of the Beneficiary from all liability in respect thereof,
and if the Beneficiary promptly notifies the Indemnifying Party in writing
that such Beneficiary declines to accept any such settlement or
compromise, such Beneficiary may continue to contest such Third Party
Claim, free of any participation by such Indemnifying Party, at such
Beneficiary's sole expense. In such event, the obligation of such
Indemnifying Party to such Beneficiary with respect to such Third Party
Claim will be equal to (1) the costs and expenses of such Beneficiary
prior to the date such Indemnifying Party notifies such Beneficiary of the
offer to settle or compromise (to the extent such costs and expenses are
otherwise indemnifiable hereunder) plus (2) the lesser of (x) the amount
of any offer of settlement or compromise which such Beneficiary declined
to accept and (y) the actual out-of-pocket amount such Beneficiary is
obligated to pay subsequent to such date as a result of such Beneficiary's
election to pursue such Third Party Claim.
(vi) In the event of payment by an Indemnifying Party to any
Beneficiary in connection with any Third Party Claim, such Indemnifying
Party will be subrogated to and will stand in the place of such
Beneficiary as to any events or circumstances in respect of which such
Beneficiary may have any right or claim relating to such Third Party Claim
against any Claimant or plaintiff asserting such Third Party Claim or
against any other Person. Such Beneficiary will cooperate with such
Indemnifying Party in a reasonable manner, and at the cost and expense of
such Indemnifying Party, in prosecuting any subrogated right or claim.
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(b) OTHER PROCEDURES FOR INDEMNIFICATION.
(i) Any claim on account of any Losses which do not result from a
Third Party Claim shall be asserted by prompt written notice given by the
Beneficiary to the related Indemnifying Party. Such Indemnifying Party
will have a period of 30 days after the receipt of such notice within
which to respond thereto. If such Indemnifying Party does not respond
within such 30 day period, such Indemnifying Party will be deemed to have
denied responsibility to make payment. If such Indemnifying Party does not
respond within such 30 day period or rejects such claim in whole or in
part, such Beneficiary will be free to pursue such remedies as may be
available to such party under this Agreement and applicable Law.
(ii) If the amount of any Liability will, at any time subsequent
to the payment required by this Agreement, be reduced by recovery,
settlement or otherwise, the amount of such reduction, less any expenses
incurred in connection therewith, must promptly be repaid by the
Beneficiary to the Indemnifying Party.
10.3 LIMITATION ON INDEMNITY.
(a) Notwithstanding anything in this Agreement to the contrary,
claims under Section 10.1(b)(i) (to the extent they are for the inaccuracy in,
or breach of, a representation or warranty made under Section 6.5, 6.6 or 6.12),
Section 10.1(a)(i) (to the extent they are for the inaccuracy in, or breach of,
a representation or warranty made under Sections 7.5 or 7.14), Sections 10.1
(a)(iii) and (iv), and Sections 10.1(b)(iii), (iv), and (v) of this Agreement
are not subject to the provisions of clause (b) of this Section 10.3.
(b) Except as set forth in clause (a) of this Section 10.3, (i) no
Nextel Indemnified Party or SpectraSite Indemnified Party, as the case may be,
is entitled to recover under Sections 10.1(a)(i) and 10.1(b)(i) until the total
amount which the Nextel Indemnified Parties or the SpectraSite Indemnified
Parties, as the case may be, would collectively recover (but for the operation
of this Section 10.3) exceeds $1,000,000 and then may recover only to the extent
of such excess, and (ii) neither the Nextel Indemnified Parties nor the
SpectraSite Indemnified Parties, as the case may be, will be entitled to recover
pursuant to this Section 10 an aggregate amount greater than $75,000,000.
10.4 ONLY REMEDIES. Other than as specifically set forth herein,
the remedies provided in this Section 10 are not cumulative and are the only
remedies to which a Beneficiary is entitled to recover damages from any
Indemnifying Party for any breach of any representation or warranty or any
failure to comply with or any non-fulfillment of any covenant or agreement to be
performed pursuant to this Agreement.
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11. MISCELLANEOUS AND GENERAL
11.1 EXPENSES. Except as specifically set forth in this Agreement
or in any Ancillary Agreement, each party will bear its own expenses, including
the fees and expenses of any attorneys, accountants, investment bankers,
brokers, finders or other intermediaries, or other Persons engaged by it,
incurred in connection with this Agreement and the Ancillary Agreements and the
transactions contemplated hereby and thereby.
11.2 NOTICES. All notices, requests, demands, or other
communications required by or otherwise with respect to this Agreement will be
in writing and will be deemed to have been duly given to any party when
delivered personally (by courier service or otherwise), when delivered by
telecopy and confirmed by return telecopy, or seven days after being mailed by
first-class mail, postage prepaid and return receipt requested in each case to
the applicable addresses set forth below, or to such other address as such party
has designated by notice so given to each other party:
If to Nextel, Parent Co., or any Transferring Subsidiary:
c/o Nextel Communications, Inc.
1505 Farm Credit Drive
McLean, Virginia 22102
Attention: General Counsel
Telecopy: (703) 394-3896
If to Tower Aggregator, Tower Sub, or the Surviving
Corporation:
SpectraSite Holdings, Inc.
8000 Regency Park, Suite 570
Cary, North Carolina 27511
Attention: Mr. Stephen H. Clark
Telecopy: (919) 468-8522
11.3 AMENDMENTS AND WAIVERS. This Agreement may not be amended,
changed, supplemented, waived, or otherwise modified except by an instrument in
writing signed by the party against whom enforcement is sought, and the failure
of any party hereto to exercise any right, power, or remedy provided under this
Agreement or otherwise available in respect hereof at law or in equity, or to
insist upon compliance by any other party hereto with its obligations hereunder
or thereunder, and any custom or practice of the parties at variance with the
terms hereof or thereof, will not constitute a waiver by such party of its right
to exercise any other right, power, or remedy or to demand such compliance.
11.4 NO ASSIGNMENT. This Agreement is binding upon and inure to
the benefit of and is enforceable by the parties and their successors and
assigns. Except as otherwise expressly set forth in this Agreement, neither the
rights nor the obligations of
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any party may be assigned or delegated without the prior written consent of the
other party, except that no such consent is required (a) for any assignment or
delegation by Nextel, Parent Co., or any of the Transferring Subsidiaries to an
Affiliate thereof; or (b) for the assignment by Tower Aggregator, SCI and SHI
Merger Sub to its lenders as contemplated by the Financing Transactions as
collateral security. Anything in this Section to the contrary notwithstanding,
no assignment, delegation, or pledge of this Agreement or any rights or
interests hereunder shall relieve the assignor of any liability or obligation
hereunder.
11.5 ENTIRE AGREEMENT. Except as otherwise provided herein, this
Agreement and the Ancillary Agreements embody the entire agreement and
understanding between the parties relating to the subject matter hereof and
supersede all prior agreements and understandings relating to such subject
matter. There are no representations, warranties, or covenants by the parties
relating to such subject matter other than those expressly set forth in this
Agreement (including the Nextel Disclosure Statement and the Tower Aggregator
Disclosure Statement), the Ancillary Agreements, and any writings expressly
required hereby.
11.6 NO THIRD PARTY BENEFICIARIES. This Agreement is not intended
to be for the benefit of, and will not be enforceable by, any Person not a party
hereto (other than, in the case of the indemnification provisions set forth in
Section 10, each Person entitled to be a Beneficiary) or a permitted assignee or
successor to such party.
11.7 GOVERNING LAW. This Agreement and all disputes hereunder will
be governed by and construed and enforced in accordance with the internal laws
of the State of Delaware, without regard to the principles of conflict of laws
thereof.
11.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original, but all of which
together will constitute one instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto or thereto.
11.9 KNOWLEDGE. The term "knowledge" and any derivatives thereof
when applied to any party to this Agreement will refer only to the actual
knowledge of that party (or, in the case of a corporation, partnership, or other
entity, the actual knowledge of its Executives (and with respect to Nextel and
its Subsidiaries, those Executives substantially involved in the operation or
management of the Tower Assets) and no information known by any other employee,
or any attorney, accountant, or other representative, of such party will be
imputed to that party.
11.10 DISPUTE RESOLUTION. (a) The parties shall attempt in good
faith to resolve any dispute, controversy, or claim ("Dispute") arising out of
or relating to this Agreement promptly by negotiations between representatives
of senior management (the "Executives") who have authority to settle the
Dispute. Any party may give the other parties written notice of any Dispute not
resolved in the normal course of business. Within 20 days after delivery of such
a notice, Executives of the parties involved in the
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Dispute who have authority to settle the Dispute shall meet at a mutually
acceptable time and place, and thereafter as often as they reasonably deem
necessary, to attempt to resolve the Dispute. If any party intends to be
accompanied at a meeting by an attorney, the other involved parties shall be
given at least three Business Days' notice of such intention and may also be
accompanied by an attorney. If the Dispute has not been resolved within 30 days
after such notice, unless extended by the agreement of the parties involved in
the Dispute in writing (the "Negotiation Period"), any party may at any time
within 30 days after the end of the Negotiation Period initiate mediation of the
Dispute in New York, New York, in accordance with the Center for Public
Resources Model Procedure for Mediation of Business Disputes.
(b) If the Dispute has not been resolved within 60 days of the
initiation of mediation, or if no party elects to commence mediation within the
time specified in paragraph (a) above, the Dispute will be subject to
arbitration as provided in Sections 11.11(c) and (d). All negotiations and
mediation pursuant to Sections 11.11(a) and (b) are confidential and will be
treated as compromise and settlement negotiations for purposes of the Federal
Rules of Evidence for United States Courts and comparable state laws.
(c) Upon the expiration of the Negotiation Period or unsuccessful
mediation, any party seeking relief (the "Claimant") may serve a demand for
arbitration in accordance with the Center for Public Resources Non-Administered
Arbitration Rules (the "Rules") in which, in addition to any other requirements
of those Rules, the Claimant states the specific nature of the claimed breach
and the relief sought, and demands a determination by the arbitrators of the
parties' rights together with any relief sought. The place of arbitration will
be New York, New York unless all of the parties to the arbitration otherwise
agree. Three arbitrators will be chosen, and the proceedings conducted, in
accordance with the Rules, except that (i) the parties shall choose three
arbitrators through a self-administered process of striking names from a list of
potential arbitrators and shall not employ the method provided for in the Rules,
(ii) the rules of evidence employed in the federal courts at the time will
apply, and (iii) discovery will be permitted in accordance with the Federal
Rules of Civil Procedure for the United States District Courts. The decision of
the arbitrators will be final and binding on the parties to the maximum extent
permitted under applicable law, and a final judgment may be entered on the award
in any court of competent jurisdiction.
(d) A court of competent jurisdiction, upon application from any
party to the Dispute, may relieve the parties of their duty to arbitrate
Disputes in whole or in part, or may stay any arbitration hereunder in whole or
in part, if ongoing litigation between one or more of the parties and a third
party (or parties) involves issues of fact or law common with those subject to
arbitration hereunder and there exists the possibility of inconsistent judgments
if such relief is not granted.
(e) Each party shall bear its own costs and expenses incurred in
connection with any Dispute, including, without limitation, the fees of its
attorneys,
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unless the arbitrators otherwise decide, in which case such costs and expenses
shall be borne by the parties in the manner determined by the arbitrators.
[The balance of this page is intentionally blank.]
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the parties as of the date first above written.
NEXTEL COMMUNICATIONS, INC. NEXTEL OF TEXAS, INC.
By: /s/ John H. Willmoth By: /s/ Thomas J. Sidman
---------------------------------- ----------------------------
Name: John H. Willmoth Name: Thomas J. Sidman
Title: Vice President Title: Vice President
NEXTEL COMMUNICATIONS OF THE NEXTEL WEST CORP.
MID-ATLANTIC, INC.
By: /s/ Thomas J. Sidman By: /s/ Thomas J. Sidman
---------------------------------- ----------------------------
Name: Thomas J. Sidman Name: Thomas J. Sidman
Title: Vice President Title: Vice President
NEXTEL OF CALIFORNIA, INC. TOWER PARENT CORP.
By: /s/ Thomas J. Sidman By: /s/ Thomas J. Sidman
---------------------------------- ----------------------------
Name: Thomas J. Sidman Name: Thomas J. Sidman
Title: Vice President Title: President
NEXTEL OF NEW YORK, INC. TOWER ASSET SUB, INC.
By: /s/ Thomas J. Sidman By: /s/ Thomas J. Sidman
---------------------------------- ----------------------------
Name: Thomas J. Sidman Name: Thomas J. Sidman
Title: Vice President Title: President
NEXTEL SOUTH CORP. TOWER MERGER VEHICLE,
INC.
By: /s/ Thomas J. Sidman By: /s/ Thomas J. Sidman
---------------------------------- ----------------------------
Name: Thomas J. Sidman Name: Thomas J. Sidman
Title: Vice President Title: President
58
<PAGE> 64
SPECTRASITE HOLDINGS, INC. SPECTRASITE
COMMUNICATIONS, INC.
By: /s/ Stephen H. Clark By: /s/ Stephen H. Clark
---------------------------------- ----------------------------
Name: Stephen H. Clark Name: Stephen H. Clark
Title: President Title: President
SHI MERGER SUB, INC.
By: /s/ Stephen H. Clark
----------------------------------
Name: Stephen H. Clark
Title: President
59
<PAGE> 1
EXHIBIT 2.2
AMENDMENT NO. 1
TO
AGREEMENT AND PLAN OF MERGER
among
NEXTEL COMMUNICATIONS, INC.,
TOWER PARENT CORP.,
TOWER MERGER VEHICLE, INC.,
TOWER ASSET SUB, INC.,
THE TRANSFERRING SUBSIDIARIES PARTY THERETO,
SPECTRASITE HOLDINGS, INC.,
SPECTRASITE COMMUNICATIONS, INC.,
AND
SHI MERGER SUB, INC.
------------------
April 20, 1999
------------------
<PAGE> 2
AMENDMENT NO. 1 TO
AGREEMENT AND PLAN OF MERGER
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER (this "Amendment"),
dated as of April 20, 1999, by and among Nextel Communications, Inc., a
Delaware corporation, Tower Parent Corp., a Delaware corporation Tower Merger
Vehicle, Inc., a Delaware corporation, Tower Asset Sub, Inc., a Delaware
corporation, Nextel Communications of the Mid-Atlantic, Inc., a Delaware
corporation, Nextel of California, Inc., a Delaware corporation, Nextel of New
York, Inc., a Delaware corporation, Nextel South Corp., a Georgia corporation,
Nextel of Texas, Inc., a Texas corporation, Nextel West Corp., a Delaware
corporation, SpectraSite Holdings, Inc., a Delaware corporation, SpectraSite
Communications, Inc., a Delaware corporation, and SHI Merger Sub, Inc., a
Delaware corporation.
A. On February 10, 1999, the parties hereto entered into the
Agreement and Plan of Merger (the "Initial Agreement") that is being amended
hereby;
B. Section 2.1 of the Initial Agreement provides that the
Transferring Subsidiaries shall transfer to Parent Co. and Parent Co. shall
transfer to Tower Sub the Tower Assets;
C. the definition of Tower Assets set forth in the Initial
Agreement refers to certain site locations listed in Sections 2.1 and 2.6 of
the Nextel Disclosure Statement;
D. the parties to the Initial Agreement desire to amend Section 2.1
of the Nextel Disclosure Statement to delete certain site locations listed
thereon;
E. the parties to the Initial Agreement further desire to amend
certain provisions of the Initial Agreement to provide for an additional
purchaser of Series C Preferred Stock;
<PAGE> 3
2
NOW THEREFORE, the parties to the Initial Agreement mutually agree
as follows:
1. Definitions. Capitalized terms used herein and not otherwise
defined have the same meanings attributed to them in the Initial Agreement.
2. Amendments to Section 1 of the Initial Agreement.
(a) The definition of "Amended and Restated Certificate of
Incorporation" in Section 1 is hereby amended by deleting the definition of
"Amended and Restated Certificate of Incorporation" and inserting in its place
the following:
"Amended and Restated Certificate of Incorporation": The Amended
and Restated Certificate of Incorporation of Tower
Aggregator in the form attached as Exhibit H-1 (to be filed
immediately prior to the Effective Time), except that Exhibit
H-1 is hereby amended as follows: (i) the number
"155,599,625" in clause THIRD (a)(ii) is replaced by the
number "165,749,625"; (ii) the number "85,000,000" in clause
THIRD (a)(ii)(x) is replaced by the number "95,000,000";
(iii) the number "70,599,625" in clause THIRD (a)(ii)(y) is
replaced by the number "70,749,625"; (iv) the number
"60,136,795" in clause THIRD (a)(ii)(y) is replaced by the
number "60,286,795"; the number "155,599,625" in clause SIXTH
is replaced by the number "165,749,625"; (v) the phrase
"Eighty Five Million (85,000,000)" in clause SIXTH is
replaced by the number "95,000,000"; (vi) the phrase "Seventy
Million, Five Hundred Ninety-Nine Thousand Six Hundered
Twenty-Five (70,599,625)" in clause SIXTH is replaced by the
number "70,749,625"; and (vii) the phrase "Sixty Million One
Hundred Thirty-Six Thousand Seven Hundred Ninety-Five
(60,136,795)" in clause SIXTH is replaced by the number
"60,286,795".
(b) The definition of "Strategic Transaction" in Section 1 is
hereby amended by deleting the number "$250,000,000" therein and inserting in
its place the number "$340,003,656".
3. Amendment to Section 2.1 of the Nextel Disclosure Statement.
Section 2.1 of the Nextel Disclosure Statement is hereby amended by deleting
the tower site locations listed on Attachment A hereto.
<PAGE> 4
3
4. Amendment to Section 7.5(a) of the Initial Agreement. Section
7.5(a) of the Initial Agreement is hereby amended as follows:
(a) in the third sentence therof, deleting the number
"155,599,625" and inserting in its place the number "165,749,625";
(b) in the third sentence thereof, deleting the number
"60,136,795" and inserting in its place the number "60,286,795";
(c) in the third sentence thereof, deleting the number
"85,000,000" and inserting in its place the number "95,000,000";
(d) in the third sentence thereof, deleting the number
"7,386,135" and inserting in its place the number "7,436,135"; and
(e) in the fifth sentence thereof, deleting the number
"60,136,795" and inserting in its place the number "60,286,795".
5. Governing Law. This Amendment and all disputes hereunder will
be governed by and construed and enforced in accordance with the internal laws
of the State of Delaware, without regard to the principles of conflict of laws
thereof.
6. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7. Continuing Effect. Except as expressly amended by this
Amendment, the Initial Agreement (including, without limitation, Section 5.3(f)
thereof) shall continue in full force and effect in accordance with the terms
thereof.
8. No Presumption Against Drafter. Each of the parties hereto
has jointly participated in the negotiation and drafting of this Amendment. In
the event of any ambiguity or a question of intent or interpretation arises,
this Amendment shall be construed as if drafted jointly by all of the parties
hereto and no presumptions or
<PAGE> 5
4
burdens of proof shall arise favoring any party by virtue of the authorship of
any of the provisions of this Amendment.
[The balance of this page was intentionally left blank]
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be signed by their respective duly authorized officers as of the date first
above written.
<TABLE>
<CAPTION>
NEXTEL COMMUNICATIONS, INC. NEXTEL OF TEXAS, INC.
<S> <C>
By: /s/ THOMAS J. SIDMAN By: /s/ THOMAS J. SIDMAN
------------------------------ ------------------------------
Name: Thomas J. Sidman Name: Thomas J. Sidman
Title: Vice President and General Counsel Title: Vice President
NEXTEL COMMUNICATIONS OF THE NEXTEL WEST CORP.
MID-ATLANTIC, INC.
By: /s/ THOMAS J. SIDMAN By: /s/ THOMAS J. SIDMAN
------------------------------ ------------------------------
Name: Thomas J. Sidman Name: Thomas J. Sidman
Title: Vice President Title: Vice President
NEXTEL OF CALIFORNIA, INC. TOWER PARENT CORP.
By: /s/ THOMAS J. SIDMAN By: /s/ THOMAS J. SIDMAN
------------------------------ ------------------------------
Name: Thomas J. Sidman Name: Thomas J. Sidman
Title: Vice President Title: President
NEXTEL OF NEW YORK, INC. TOWER ASSET SUB, INC.
By: /s/ THOMAS J. SIDMAN By: /s/ THOMAS J. SIDMAN
------------------------------ ------------------------------
Name: Thomas J. Sidman Name: Thomas J. Sidman
Title: Vice President Title: President
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
NEXTEL SOUTH CORP. TOWER MERGER VEHICLE, INC.
<S> <C>
By: /s/ THOMAS J. SIDMAN By: /s/ THOMAS J. SIDMAN
------------------------------ ------------------------------
Name: Thomas J. Sidman Name: Thomas J. Sidman
Title: Vice President Title: President
SPECTRASITE HOLDINGS, INC. SPECTRASITE COMMUNICATIONS, INC.
By: /s/ DAVID P. TOMICK By: /s/ DAVID P. TOMICK
------------------------------ ------------------------------
Name: David P. Tomick Name: David P. Tomick
Title: Chief Financial Officer Title: Chief Financial Officer
SHI MERGER SUB, INC.
By: /s/ DAVID P. TOMICK
------------------------------
Name: David P. Tomick
Title: Chief Financial Officer
</TABLE>
<PAGE> 1
EXHIBIT 3.9
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
SPECTRASITE HOLDINGS, INC.
SPECTRASITE HOLDINGS, INC., a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"), hereby certifies
as follows:
FIRST: The name of the Corporation is SpectraSite Holdings, Inc.
The Corporation was originally incorporated under the name "Integrated Site
Development, Inc." and the original Certificate of Incorporation of the
Corporation was filed with the Secretary of State of Delaware on April 25,
1997.
SECOND: This Amended and Restated Certificate of Incorporation
restates and integrates and further amends the provisions of the Certificate of
Incorporation of the Corporation as heretofore amended and was duly adopted by
written consent of the holders of at least 75% of the outstanding shares
entitled to vote thereon, after first having been declared advisable by the
Board of Directors of the Corporation, all in accordance with the provisions of
Sections 242 and 245 of the Delaware General Corporation Law.
THIRD: The amendments to the Certificate of Incorporation of the
Corporation effected by this Certificate are as follows:
(a) to change the authorized capital stock of the Corporation from
(i) 30,462,830 shares, divided into (x) 20,000,000 shares of Common
Stock, $0.001 par value per share, and (y) 10,462,830 shares of Preferred
Stock, $0.001 par value per share, consisting of 3,462,830 shares of 8%
Series A Cumulative Convertible Redeemable Preferred Stock ("Original
Series A Preferred Stock") and 7,000,000 shares of 8% Series B Cumulative
Convertible Redeemable Preferred Stock ("Original Series B Preferred
Stock"), to (ii) 165,749,625 shares, divided into (x) 95,000,000 shares
of Common Stock, $0.001 par value per share, and (y) 70,749,625 shares of
Preferred Stock, $0.001 par value per share, consisting of 3,462,830
shares of Series A Convertible Preferred Stock, 7,000,000 shares of
Series B Convertible Preferred Stock and 60,286,795 shares of Series C
Convertible Preferred Stock;
(b) to reclassify each share of Original Series A Preferred Stock
into one (1) share of Series A Convertible Preferred Stock, $0.001 par
value, and to reclassify each share of Original Series B Preferred Stock
into one (1) share of Series B Convertible Preferred Stock, $0.001 par
value; and
<PAGE> 2
(c) to extinguish the Company's obligation to redeem the Original
Series A Preferred Stock and the Original Series B Preferred Stock and
any obligation of the Corporation with respect to any accrued and unpaid
dividends on the Original Series A Preferred Stock and the Original
Series B Preferred Stock.
FOURTH: Effective upon the filing of this Restated Certificate of
Incorporation with the Secretary of State of the State of Delaware (the
"Effective Time"):
(a) each share of Original Series A Preferred Stock issued and
outstanding at the Effective Time shall be reclassified as one (1) share
of Series A Convertible Preferred Stock, $0.001 par value, of the
Corporation;
(b) each share of Original Series B Preferred Stock issued and
outstanding at the Effective Time shall be reclassified as one (1) share
of Series B Convertible Preferred Stock, $0.001 par value, of the
Corporation; and
(c) any and all obligations of the Corporation with respect to any
accrued and unpaid dividends on the shares of Original Series A Preferred
Stock and Original Series B Preferred Stock as of the Effective Time
shall be extinguished.
FIFTH: The capital of the Corporation will not be reduced under,
or by reason of, the foregoing amendment and restatement of the Certificate of
Incorporation of the Corporation.
SIXTH: The text of the Amended and Restated Certificate of
Incorporation of the Corporation, as heretofore amended, is hereby restated and
further amended to read in its entirety as follows:
"1. The name of the corporation is SpectraSite Holdings,
Inc. (the "Corporation").
2. The address of the registered office of the Corporation in
the State of Delaware is 1013 Centre Road, Wilmington, County of New
Castle, Delaware 19805. The name of the Corporation=s registered agent at
such address is Corporation Service Company.
3. The purpose for which the Corporation is organized is to
engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
4.1 AUTHORIZED SHARES. The total number of shares of capital
stock which the Corporation shall have authority to issue is 165,749,625
shares, divided into Ninety-Five Million (95,000,000) shares of Common
Stock, $0.001 par value per share
<PAGE> 3
("Common Stock"), and Seventy Million, Seven Hundred Forty-Nine Thousand
Six Hundred Twenty-Five (70,749,625) shares of Preferred Stock, $0.001
par value per share (the "Preferred Stock"). The Preferred Stock shall
have three series: Series A Convertible Preferred Stock ("Series A
Preferred Stock"), consisting of Three Million Four Hundred Sixty-Two
Thousand Eight Hundred Thirty (3,462,830) shares; Series B Convertible
Preferred Stock ("Series B Preferred Stock"), consisting of Seven Million
(7,000,000) shares; and Series C Convertible Preferred Stock ("Series C
Preferred Stock"), consisting of Sixty Million Two Hundred Eighty-Six
Thousand Seven Hundred Ninety-Five (60,286,795) shares. As used herein,
the term "PREFERRED STOCK" means the Series A Preferred Stock, the Series
B Preferred Stock and the Series C Preferred Stock, share-for-share alike
and without distinction as to class or series, except as otherwise set
forth herein or as the context otherwise requires.
4.2 DIVIDENDS AND DISTRIBUTIONS. The Preferred Stock shall,
with respect to dividend rights and rights on liquidation, dissolution,
or winding up, rank senior to the Common Stock and any other series or
class of the Corporation's Common Stock, preferred stock or other capital
stock, now or hereafter authorized.
4A.1 DIVIDEND AND DISTRIBUTIONS; PREFERRED STOCK.
A. Dividends. The holders of Preferred Stock shall not be
entitled to receive dividends; provided, however, that when, as and if
the Board of Directors of the Corporation (the ABoard") declares and pays
a dividend on the Common Stock (other than a dividend payable solely in
shares of Common Stock) out of funds legally available therefor ("Legally
Available Funds"), the Corporation shall, at the same time, declare and
pay to each holder of Preferred Stock a dividend equal to the dividend
that would have been payable to such holder if the shares of Preferred
Stock held by such holder had been converted into Common Stock on the
date of determination of holders of Common Stock entitled to receive such
dividend.
B. Record Date. The Board may fix a record date (each a
"Dividend Payment Record Date") for the determination of holders of
shares of Preferred Stock entitled to receive payment of the dividends
payable pursuant to Paragraph 4A.1(A), which record date shall not be
more than 60 days nor less than 10 days prior to the date on which any
such dividend is paid (each such date, a "Dividend Payment Date").
C. Payment. All declared and unpaid dividends on Preferred
Stock shall be payable in cash upon the occurrence of a liquidation,
dissolution or winding up of the Corporation, either voluntary or
involuntary (each such occurrence hereinafter referred to as a "Liquidity
Event").
D. Dividends Pro Rata. All dividends paid with respect to
shares of Preferred Stock shall be paid pro rata to the holders entitled
thereto based upon the
<PAGE> 4
number of shares of Common Stock into which such shares of Preferred
Stock are convertible on the Dividend Payment Record Date. If the Legally
Available Funds are insufficient for the payment of the entire amount of
cash dividends payable at any time, such funds shall be allocated pro
rata for the payment of dividends with respect to the shares of Preferred
Stock based upon the number of shares of Common Stock into which such
shares of Preferred Stock are convertible on the Dividend Payment Record
Date.
E. Certain Restrictions.
(i) Cash dividends on the Preferred Stock may not be
declared, paid or set apart for payment if (a) the Corporation is
not solvent or would be rendered insolvent thereby or (b) the terms
and provisions of any law or agreement of the Corporation,
including any agreement relating to its indebtedness, specifically
prohibit such declaration, payment or setting apart for payment or
provide that such declaration, payment or setting apart for payment
would constitute a violation or breach thereof or a default
thereunder.
(ii) Until all dividends declared and payable on shares of
Preferred Stock have been or are concurrently paid in full, the
Corporation shall not pay cash dividends on, or redeem, purchase or
otherwise acquire for consideration, any shares of Common Stock or
other shares of capital stock, except with the prior written
consent of holders of seventy-five percent (75%) of the outstanding
shares of the Preferred Stock voting as a single class.
(iii) The Corporation shall not permit any Subsidiary (as
defined hereinafter) of the Corporation, or cause any other person,
to make any distribution with respect to, or purchase or otherwise
acquire for consideration, any shares of capital stock of the
Corporation unless the Corporation could make such distribution or
purchase or otherwise acquire such shares at such time and such
manner. The term "Subsidiary" shall mean, with respect to any
person, a corporation or other entity (i) of which 50% or more of
the voting power of the voting equity securities or equity interest
is owned, directly or indirectly, by such person or (ii) with
respect to which such person, directly or indirectly, has the power
to elect a majority of the Board of Directors or similar governing
body, or otherwise direct the management or operations thereof.
4A.2 CONVERSION.
A. Upon the closing of one or more firm commitment
underwritten public offerings of Common Stock pursuant to one or more
effective registration statements under the Securities Act of 1933, as
amended, which offering or offerings yield aggregate net proceeds to the
Corporation of not less than $150,000,000 at an average per share price
of not less than $8.00 (subject to appropriate adjustments for any
dividends,
<PAGE> 5
subdivisions, combinations or reclassifications of Common Stock) (a
"Qualified IPO"), each then outstanding share of Series A Preferred
Stock, Series B Preferred Stock and Series C Preferred Stock shall be
automatically converted into one or more shares of Common Stock, as the
case may be, calculated by multiplying the number of shares of the Series
A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock
to be so converted by the applicable conversion rate (the"Conversion
Rate") as then in effect. For purposes hereof, the Conversion Rate shall
be determined by dividing the applicable Liquidation Preference per share
by the applicable Conversion Price per share. For purposes hereof:
(i) the applicable "Liquidation Preference" shall mean the
sum of (A) (x) an amount equal to $2.89 per share for each of the
then outstanding shares of Series A Preferred Stock, (y) an amount
equal to $4.00 per share for each of the then outstanding shares of
Series B Preferred Stock and (z) an amount equal to $5.00 per share
for each of the then outstanding shares of Series C Preferred
Stock, plus (B) upon the occurrence of a Liquidity Event, an amount
equal to all declared and unpaid dividends on such Preferred Stock,
if any; and
(ii) the applicable "Conversion Price" per share shall be an
amount equal to $2.89, in the case of the Series A Preferred Stock,
$4.00, in the case of the Series B Preferred Stock, and $5.00 in
the case of the Series C Preferred Stock, in each case subject to
adjustment from time to time as provided herein.
At any time prior to the closing of a Qualified IPO, and
subject to and upon compliance with the provisions of this paragraph, the
holder of any shares of the Preferred Stock shall have the right, at its
option, to convert, at the applicable Conversion Rate, all or any portion
of its shares of the Series A Preferred Stock, Series B Preferred Stock
and Series C Preferred Stock into one or more shares of Common Stock, in
each case by surrendering the shares to be converted, in the manner
provided below.
Notwithstanding the foregoing or Paragraph 4A.2(H), unless
permitted under applicable law (as determined by the affected holder of
Preferred Stock), if shares of Preferred Stock owned by any person
subject to the provisions of the Bank Holding Company Act of 1956, as
amended (the "BHC Act") (such person is referred to herein as a
"Regulated Entity") are converted into shares of Common Stock
representing more than 5% of the total issued and outstanding shares of
Common Stock (including shares of Common Stock held by affiliates (as
defined in the BHC Act) of the Regulated Entity, those shares that
represent the excess over the 5% limit shall be non-voting Common Stock
so long as such shares continue to be held by a Regulated Entity or its
affiliates (as defined in the BHC Act), such shares of non-voting Common
Stock shall not be included in determining whether the requisite
percentage of shares has consented to, approved, adopted or taken any
action and shall in all other respects be equivalent to all other
outstanding shares of Common Stock; provided that such shares shall not
be non-voting
<PAGE> 6
on matters that significantly and adversely affect the rights or
preferences of the Common Stock as determined by such Regulated Entity.
Any Preferred Stock or Common Stock that is non-voting pursuant to
paragraph 4A.2, 4A.4 or 4B.1 while held by a Regulated Entity shall
become voting upon transfer to a non-Regulated Entity.
B. (i) In order to exercise its conversion right, the holder
of the shares of Preferred Stock to be converted shall surrender
the certificate representing such share to the conversion agent
(which may be the Corporation itself), with a notice of election to
convert, duly completed and signed, at the principal office of the
conversion agent. Unless the shares issuable upon conversion are to
be issued in the same name as the name in which the share of such
Preferred Stock is registered, each share surrendered for
conversion shall be accompanied by instruments of transfer duly
executed by the holder or his duly authorized attorney. If the
Corporation fails to designate a conversion agent, the conversion
agent shall be the Corporation.
(ii) As promptly as practicable after the surrender by a
holder of the certificates for shares of the Preferred Stock and in
any event within five business days after such surrender, the
Corporation shall issue and deliver to the person for whose account
such Preferred Stock was surrendered, or to its nominee or nominees
(subject to compliance with applicable stockholders= agreements and
other applicable agreements restricting transfer), a certificate or
certificates for the number of full shares of Common Stock or other
securities issuable upon the conversion of those shares and any
fractional interest in respect of a share of Common Stock or other
security arising upon the conversion shall be settled as provided
below. In the event that a holder of Preferred Stock converts less
than all of the shares of such Preferred Stock evidenced by the
certificate(s) surrendered by such holder, the Corporation shall,
simultaneously with the issuance of certificates for the shares of
Common Stock, issue and deliver to such holder (or in accordance
with the instructions of such holder) a new certificate for the
balance of the shares of such Preferred Stock not so converted.
(iii) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which all
of the precedent conditions shall have been satisfied, and the
person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of
record of the shares of Common Stock or other securities
represented by those certificates at such time on such date, and
such conversion shall be at the applicable Conversion Price in
effect at such time, unless the stock transfer books of the
Corporation shall be closed on that date, in which event such
person or persons shall be deemed to have become such holder or
holders of record at the close of business
<PAGE> 7
on the next succeeding day on which such stock transfer books are
open, and such conversion shall be at the applicable Conversion
Price in effect on the date such transfer books are open. All
shares of Common Stock delivered upon conversion of Preferred Stock
will upon delivery in accordance with the provisions hereof be duly
and validly issued and fully paid and nonassessable, free of all
liens and charges and not subject to any preemptive rights. Upon
the surrender of certificates representing shares of the Preferred
Stock to be converted, the shares shall no longer be deemed to be
outstanding and all rights of a holder with respect to the shares
surrendered for conversion shall immediately terminate except the
right to receive the Common Stock or other securities, cash or
other assets as herein provided.
C. No fractional shares or securities representing fractional
shares of Common Stock shall be issued upon conversion of the Preferred
Stock. Any fractional interest in a share of Common Stock resulting from
conversion of a share of Preferred Stock shall be paid in cash (computed
to the nearest cent) equal to such fraction multiplied by the Current
Market Price (as defined in Subparagraph 4A.2D(vii) below). If more than
one certificate representing the Series A Preferred Stock, Series B
Preferred Stock or Series C Preferred Stock shall be surrendered for
conversion at one time by the same holder, the number of full shares
issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of such Preferred Stock so surrendered.
D. The applicable Conversion Price in respect of the Series A
Preferred Stock, the Series B Preferred Stock and the Series C Preferred
Stock shall be subject to adjustment as follows if any of the events
listed below occur after the date hereof and prior to the conversion of
each share of the Preferred Stock.
(i) In case the Corporation shall (a) pay a dividend or make
a distribution on its Common Stock in shares of its Common Stock,
(b) subdivide or reclassify its outstanding Common Stock into a
greater number of shares, or (c) combine or reclassify its
outstanding Common Stock into a smaller number of shares, the
applicable Conversion Price in effect immediately prior to such
event shall be adjusted so that the holder of any share of the
Series A Preferred Stock, Series B Preferred Stock or Series C
Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock of the
Corporation which it would have owned or have been entitled to
receive after the happening of such event had the share of such
Preferred Stock been converted immediately prior to the happening
of such event. An adjustment made pursuant to this paragraph shall
become effective immediately after the record date in the case of a
dividend or distribution and shall become effective on the
effective date in the case of subdivision, combination or
reclassification. If any dividend or
<PAGE> 8
distribution is not paid or made, the applicable Conversion Price
then in effect shall be appropriately readjusted.
(ii) In case the Corporation shall (a) sell or issue shares
of its Common Stock, (b) issue rights, options or warrants to
subscribe for or purchase shares of Common Stock or (c) issue or
sell other rights for the purchase of shares of Common Stock or
securities convertible into or exchangeable into shares of Common
Stock, in the case of one or more of the events described in the
immediately preceding clauses (a), (b) and (c) (collectively, the
"Securities"), at a price per share less than either the Current
Market Price or the applicable Conversion Price on the date the
Corporation fixes the offering price of such Securities, then in
each such case the applicable Conversion Price in effect
immediately prior to the issuance of such Securities shall be
adjusted so that it shall equal the price determined by multiplying
the applicable Conversion Price in effect immediately prior to the
date of issuance of the Securities by a fraction the numerator of
which shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of the Securities plus the number
of shares of Common Stock which the aggregate consideration
received for the issuance of the Securities would purchase at the
Applicable Price (as defined below), and the denominator of which
shall be the number of shares of Common Stock outstanding
immediately after the issuance of the Securities (after giving
effect to the full exercise, conversion or exchange, as applicable,
of such Securities). The term "Applicable Price" shall mean the
greater of the Current Market Price or the Conversion Price. The
adjustment provided for in this Subparagraph 4A.2(D)(ii) shall be
made successively whenever any Securities are issued (provided,
however, that no further adjustments in the applicable Conversion
Price shall be made upon the subsequent exercise, conversion or
exchange, as applicable, of such Securities pursuant to the
original terms of such Securities) and shall become effective
immediately, except as provided in Subparagraph 4A.2(D)(v) below
after such issuance. In determining whether any Securities entitle
the holders thereof to subscribe for or purchase shares of Common
Stock at less than the Current Market Price or the applicable
Conversion Price, and in determining the aggregate offering price
of the shares of Common Stock so offered, there shall be taken into
account any consideration received by the Corporation for such
Securities, any consideration required to be paid upon the
exercise, conversion or exchange, as applicable, of such Securities
and the value of all such consideration (if other than cash) shall
be determined by the Board (whose determination, if made in good
faith, shall be conclusive). If any or all of such Securities are
not so issued or expire or terminate without having been exercised,
converted or exchanged, the applicable Conversion Price then in
effect shall be appropriately readjusted to the Conversion Price
which would then be in effect had the adjustments made upon the
issuance of such Securities been made upon the basis of only the
number of shares of Common Stock delivered pursuant to Securities
<PAGE> 9
actually exercised, converted or exchanged. For purposes of this
Subparagraph 4A.2(D)(ii), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury
of the Corporation or by any Subsidiary of the Corporation.
(iii) In case the Corporation shall distribute to all holders
of its Common Stock any shares of capital stock of the Corporation
(other than Common Stock) or evidences of indebtedness or cash or
other assets (excluding regular cash dividends or distributions
paid from retained earnings of the Corporation and dividends or
distributions referred to in Subparagraph 4A.2(D)(i) above) or
rights, options or warrants to subscribe for or purchase any of its
securities (excluding those referred to in Subparagraph 4A.2(D)(ii)
above), then, in each such case, the applicable Conversion Price
shall be adjusted so that it shall equal the price determined by
multiplying the applicable Conversion Price in effect immediately
prior to the date of the distribution by a fraction the numerator
of which shall be the applicable Conversion Price less the then
fair market value (as determined by the Board, whose determination,
if made in good faith, shall be conclusive) of the portion of the
capital stock, cash or assets or evidences of indebtedness so
distributed, or of the subscription rights, options or warrants so
distributed, with respect to one share of Common Stock, and the
denominator of which shall be the applicable Conversion Price in
effect immediately prior to the date of the distribution. Such
adjustment shall be made whenever any such distribution is made,
and shall become effective retroactive to the record date for the
determination of stockholders entitled to receive such
distribution. If any such distribution is not made or if any or all
of such rights, options or warrants expire or terminate without
having been exercised, the applicable Conversion Price then in
effect shall be appropriately readjusted.
(iv) Notwithstanding the foregoing, the provisions of this
paragraph shall not apply to the issuance of: (a) shares of Common
Stock or stock options issued in connection with, or pursuant to,
any option plan or other employee benefit plan or arrangement
approved by the Board of Directors of the Corporation; (b) shares
of Common Stock issuable upon conversion of the Preferred Stock;
(c) shares issued to a holder of Preferred Stock which are
attributable solely to any adjustments made pursuant to this
Section 4A.(D); (d) capital stock issued as a dividend on the
Preferred Stock or in connection with a subdivision or combination
of the Preferred Stock; and (e) any shares of capital stock or any
warrant (or shares of capital stock of the Corporation issued upon
the exercise of such warrant) issued in connection with any debt
financing provided to the Corporation and approved by the Board of
Directors, including, without limitation, any shares issued
pursuant to the credit agreement and related agreements and
instruments as contemplated by the commitment letter and related
term sheet, dated as of January 15, 1999, as amended, providing for
a credit
<PAGE> 10
facility of up to $710 million in favor of the Company and its
Affiliates and (f) any warrant (or shares of capital stock issued
upon the exercise of such warrant) issued in connection with a
merger, acquisition, joint venture or strategic alliance of the
Corporation approved by the Board of Directors of the Corporation.
The term "Affiliate" shall have the meaning assigned to that term
in Regulation 12b-2 promulgated under the Securities Exchange Act
of 1934, as amended.
(v) No adjustment in the applicable Conversion Price shall be
required unless such adjustment would require a change of at least
1% in such Conversion Price; provided, however, that any
adjustments which by reason of this paragraph are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment; and provided, further, that adjustment shall
be required and made in accordance with the provisions of this
paragraph 4A.2(D) (other than this Subparagraph 4A.2(D)(v)) not
later than such time as may be required in order to preserve the
tax-free nature of a distribution to the holders of shares of
Common Stock. All calculations shall be made to the nearest cent or
to the nearest one hundredth of a share.
(vi) Whenever the applicable Conversion Price or Conversion
Rate is adjusted as herein provided, the Corporation shall promptly
prepare an officers certificate setting forth such Conversion Price
and Conversion Rate after the adjustment and setting forth a brief
statement of the facts requiring the adjustment, which certificate
shall be conclusive evidence of the correctness of the adjustment,
and, if the Corporation has appointed a conversion agent, shall
promptly file such certificate with the conversion agent. Promptly
thereafter, the Corporation shall prepare a notice of the
adjustment of such Conversion Price and Conversion Rate setting
forth such Conversion Price and Conversion Rate and the date on
which the adjustment becomes effective and shall mail the notice of
such adjustment of the applicable Conversion Price and Conversion
Rate (together with a copy of the officers certificate setting
forth the facts requiring such adjustment) to the holder of each
share of the Preferred Stock at such holder=s last address as shown
on the stock books of the Corporation.
(vii) For the purpose of any computation under any provision
relating to the Preferred Stock, the "Current Market Price" per
share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of Common Stock for the 10
consecutive trading days commencing 15 trading days before such
date. If on any such date the shares of Common Stock are not listed
or admitted for trading on any national securities exchange or
quoted by Nasdaq or a similar service, the Current Market Price for
the Common Stock shall be the fair market value of the Common Stock
on such date as determined in good faith by a committee of
disinterested members of the Board of Directors of the
<PAGE> 11
Corporation (or the Board of Directors if there are no
disinterested members) based on a written opinion of an independent
investment banking firm of nationally recognized stature.
(viii) The Corporation will not, by amendment of its Restated
Certificate of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other action, avoid or seek to avoid the
observance or performance of any term of this Restated Certificate
of Incorporation, but will at all times in good faith assist in
carrying out of all such terms and in taking of all such action as
may be necessary or appropriate in order to protect the rights of
the holders of Series A Preferred Stock, Series B Preferred Stock
and Series C Preferred Stock against dilution or other impairment.
Without limiting the generality of the foregoing, the Corporation,
(a) will not increase the par value of any shares of stock
receivable on the conversion of the Preferred Stock, (b) will at
all times reserve and keep available the maximum number of its
authorized shares of Common Stock, free from all preemptive rights
therein, which will be sufficient to permit the full conversion of
the Preferred Stock, and (c) will take such action as may be
necessary or appropriate in order that all shares of Common Stock
as may be issued pursuant to the conversion of the Preferred Stock
will, upon issuance, be duly and validly issued, fully paid and
nonassessable, and free from all taxes, liens and charges with
respect to the issue thereof.
E. In case at any time prior to the conversion of all of the
Preferred Stock:
(i) the Corporation shall authorize the granting to all the
holders of Common Stock of rights to subscribe for or purchase any
shares of stock of any class or of any other rights; or
(ii) there shall be any reclassification of the Common Stock
of the Corporation (other than a subdivision or combination of its
outstanding Common Stock); or
(iii) there shall be any capital reorganization by the
Corporation; or
(iv) there shall be a consolidation or merger involving the
Corporation or sale of all or substantially all of the
Corporation's property and assets (except a merger or other
reorganization in which the Corporation shall be the surviving
corporation and in which the rights and privileges of the
Corporation=s capital stock shall remain unchanged or a
consolidation, merger or sale with a wholly-owned Subsidiary); or
<PAGE> 12
(v) there shall be voluntary or involuntary dissolution,
liquidation and winding up by the Corporation or dividend or
distribution to holders of Common Stock (other than the
Corporation's customary cash and stock dividends); or
(vi) any other event described in Subparagraph 4A.2(D);
then in any one or more of said cases, the Corporation shall cause to be
delivered to the holder(s) of Preferred Stock, at the earliest
practicable time (and, in any event, not less than 15 days before any
record date or the date set for definitive action), notice of the date on
which the books of the Corporation shall close or a record shall be taken
for such dividend, distribution or subscription rights or such
reorganization, sale, consolidation, merger, dissolution, liquidation or
winding up shall take place, as the case may be. Such notice shall also
set forth such facts as shall indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the
applicable Conversion Price and the kind and amount of the shares of
stock and other securities and property deliverable upon conversion of
the Preferred Stock. Such notice shall also specify the date, if known,
as of which the holders of record of the Common Stock shall participate
in said dividend, distribution or subscription rights or shall be
entitled to exchange their shares of the Common Stock for securities or
other property (including cash) deliverable upon such reorganization,
sale, consolidation, merger, dissolution, liquidation or winding up, as
the case may be.
F. (i) The Corporation shall at all times reserve and keep
available, out of the aggregate of its authorized but unissued
shares of Common Stock, for the purpose of effecting conversions of
the Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of the
Preferred Stock not theretofore converted. For purposes of this
paragraph, the number of shares of Common Stock which shall be
deliverable upon conversion of all of the outstanding shares of the
Preferred Stock shall be computed as if, at the time of
computation, all of the outstanding shares were held by a single
holder. The Corporation shall from time to time, in accordance with
the laws of the jurisdiction of its incorporation, increase the
authorized amount of its Common Stock if at any time the number of
shares of Common Stock remaining unissued shall not be sufficient
to permit the conversion of all the then outstanding shares of the
Preferred Stock.
(ii) Before taking any action which would cause an adjustment
reducing the applicable Conversion Price below the then par value
(if any) of the shares of Common Stock deliverable upon conversion
of the Series A Preferred Stock, Series B Preferred Stock or Series
C Preferred Stock, the Corporation will take any corporate action
which may be necessary in order that the Corporation may validly
and legally issue fully paid and nonassessable shares of Common
Stock at the adjusted applicable Conversion Price.
<PAGE> 13
G. Except where registration is requested in a name other
than the name of the registered holder, the Corporation will pay any and
all documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Common Stock on conversion
of the Preferred Stock pursuant hereto.
H. In case of any reclassification or change of outstanding
shares of Common Stock (other than a change in par value, or as a result
of a subdivision or combination), or in case of any consolidation of the
Corporation with, or merger of the Corporation with or into, any other
entity that results in a reclassification, change, conversion, exchange
or cancellation of outstanding shares of Common Stock or any sale or
transfer of all or substantially all of the assets of the Corporation,
each holder of shares of Series A Preferred Stock, Series B Preferred
Stock or Series C Preferred Stock then outstanding shall have the right
thereafter to convert the shares of such Preferred Stock held by the
holder into the kind and amount of securities, cash and other property
which the holder would have been entitled to receive upon such
reclassification, change, consolidation, merger, sale or transfer if the
holder had held the Common Stock immediately prior to the
reclassification, change, consolidation, merger, sale or transfer.
4A.3 STATUS ON CONVERSION.
Shares of Preferred Stock that are converted into shares of
Common Stock as provided herein or are otherwise redeemed by the Company
shall not be reissued.
4A.4 VOTING RIGHTS OF THE PREFERRED STOCK.
The shares of the Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock shall be voted with the
shares of the Common Stock at any annual or special meeting of
stockholders of the Corporation, or the holders of such shares of the
Preferred Stock may act by written consent in the same manner as holders
of the Common Stock, upon the following basis:
(i) each holder of shares of Series A Preferred Stock, Series
B Preferred Stock and Series C Preferred Stock shall be entitled to
such number of votes for the Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock held by such holder on
the record date fixed for such meeting, or on the effective date of
such written consent, as shall be equal to the largest number of
whole shares of Common Stock into which all of such holder=s shares
of Series A Preferred Stock, Series B Preferred Stock and Series C
Preferred Stock are convertible immediately after the close of
business on the record date fixed for such meeting or the effective
date of such written consent; and
<PAGE> 14
(ii) if a Regulated Entity owns shares of Series C Preferred
Stock that represent (i) in the case of matters voted on pursuant
to this Section 4A.4, more than 5% of the total number of votes
(based upon total issued and outstanding shares of Common Stock,
Series A Preferred Stock, Series B Preferred Stock and Series C
Preferred Stock) or (ii) in the case of matters voted on pursuant
to Section 4A.6 (other than matters voted on pursuant to clause
(ii)(A) or (iii) thereof), more than 5% of the total issued and
outstanding Preferred Stock, those shares that represent the excess
over the 5% limit shall be non-voting and shall not be included in
determining whether the requisite percentage of shares has
consented to, approved, adopted or taken any action; provided that
such shares shall not be non-voting on matters that significantly
and adversely affect the rights or preference of the Preferred
Stock as determined by such Regulated Entity. Any Preferred Stock
or Common Stock that is non-voting pursuant to paragraph 4A.2 or
4A.4 while held by a Regulated Entity shall become voting upon
transfer to a non-Regulated Entity. For purposes of determining
whether the applicable 5% limit has been exceeded, shares held by
any person shall be aggregated with shares held by affiliates (as
defined in the BHC Act) of such person.
4A.5 LIQUIDATION, DISSOLUTION OR WINDING UP; EFFECT UPON
PREFERRED STOCK.
A. In the event of any liquidation, dissolution or winding up
of the Corporation, either voluntary or involuntary, before any
distribution or payment to holders of Common Stock or other capital stock
(other than the Preferred Stock), the holders of shares of Preferred
Stock shall be entitled to be paid an amount equal to the applicable
Liquidation Preference per share, with respect to each share of Preferred
Stock.
B. If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation available for distribution to
the holders of Preferred Stock shall be insufficient to permit payment in
full to such holders of the sums which such holders are entitled to
receive in such case, then all of the assets available for distribution
to holders of the Preferred Stock shall be distributed among and paid to
such holders ratably in proportion to the amounts that would be payable
to such holders if such assets were sufficient to permit payment in full.
After payment in full of the Liquidation Preference for the Preferred
Stock, any assets available for distribution shall be distributed to the
holders of the Common Stock and the Preferred Stock shall not be entitled
to any further participation in the remaining assets of the Corporation.
C. A consolidation or merger of the Corporation resulting in
the holders of the issued and outstanding voting securities of the
Corporation immediately prior to such transaction owning or controlling a
majority of the voting securities of the continuing or surviving entity
immediately following such transaction shall not be
<PAGE> 15
deemed to be a liquidation, dissolution or winding up of the Corporation
for purposes of this paragraph 4A.5.
4A.6 RESTRICTIONS.
For so long as any shares of Preferred Stock shall remain
outstanding, except where the vote or written consent of the holders of a
greater number of shares of the Corporation is required by law or by this
Amended and Restated Certificate of Incorporation and in addition to any
other vote required by law, without the prior consent of the holders of
60% of the outstanding shares of Preferred Stock voting as a single class
given in person or by proxy, either in writing or at a special meeting
called for that purpose, at which meeting the holders of the outstanding
shares of Preferred Stock shall vote separately as a class (considering,
for these purposes, that each holder of Preferred Stock shall have that
number of votes as shall be equal to the largest number of whole shares
of Common Stock into which all of such holder=s shares of Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock
are convertible immediately after the close of business on the record
date fixed for such meeting or the effective date of such written
consent):
(i) The Corporation will not (A) create or authorize the
creation of any additional class of shares of stock unless the same
ranks junior to the Preferred Stock as to dividends and the
distribution of assets on the liquidation, dissolution or winding
up of the Corporation, or (B) increase the authorized amount of the
Preferred Stock or (C) increase the authorized amount of any
additional class of shares of stock unless the same ranks junior to
the Preferred Stock as to dividends and the distribution of assets
on the liquidation, dissolution or winding up of the Corporation or
(D) create or authorize any obligation or security convertible into
shares of Preferred Stock or into shares of any other class of
stock unless the same ranks junior to the Preferred Stock as to
dividends and the distribution of assets on the liquidation,
dissolution or winding up of the Corporation, whether any such
creation or authorization or increase shall be by means of
amendment of this Amended and Restated Certificate of Incorporation
or by merger, consolidation or otherwise;
(ii) The Corporation will not consent to (A) any liquidation,
dissolution or winding up of the Corporation or (B) consolidate or
merge into or with any other corporation or corporations or sell or
transfer all or substantially all its assets;
(iii) The Corporation will not amend, alter or repeal the
Corporation's Amended and Restated Certificate of Incorporation or
By-laws in any manner that (A) adversely affects the respective
preferences, qualifications, special or relative rights or
privileges of the Preferred Stock or (B) which in any manner
adversely affects the Common Stock or the holders thereof;
provided, however, any
<PAGE> 16
amendment, alteration or repeal of the Corporation's Amended and
Restated Certificate of Incorporation or By-laws that adversely
affects the preferences, qualifications, special or relative rights
or privileges of any series of Preferred Stock and does not affect
the other series of Preferred Stock in a substantially similar
manner shall require the prior consent of the holders of a majority
of the outstanding shares of the affected series of Preferred
Stock.
4A.7 NOTICES.
Except as otherwise expressly provided, whenever in this
Section 4A notices or other communications are required to be made,
delivered or otherwise given to holders of shares of the Preferred Stock,
the notice or other communication shall be made in writing and shall be
by registered or certified first class mail, return receipt requested,
telecopier, courier service or personal delivery, addressed to the
persons shown on the books of the Corporation as such holders at the
addresses as they appear in the books of the Corporation, as of a record
date or dates determined in accordance with the Corporation=s Amended and
Restated Certificate of Incorporation and By-laws and applicable law, as
in effect from time to time. All such notices and communications shall be
deemed to have been duly given: when delivered by hand, if personally
delivered; when delivered by courier, if delivered by commercial
overnight courier service; five business days after being deposited in
the U.S. mail, postage prepaid, if mailed; and when receipt is
acknowledged, if telecopied.
4A.8 MISCELLANEOUS.
A. Except as may otherwise be required by law, the shares of
the Preferred Stock shall not have any designations, preferences,
limitations or relative rights other than those specifically set forth in
this Section 4A (as such may be amended from time to time) and in any
other provision of the Restated Certificate of Incorporation.
B. If any right, preference or limitation of the Preferred
Stock set forth herein (as amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule or law or
public policy, all other rights, preferences and limitations set forth in
this Section 4A (as so amended) which can be given effect without the
invalid, unlawful or unenforceable right, preference or limitation herein
set forth shall be deemed dependant upon any other such right, preference
or limitation unless so expressed herein.
C. Notwithstanding any other provision contained in this
Amended and Restated Certificate of Incorporation, if a holder of any
Series C Preferred Stock is a Regulated Entity, such holder and its
affiliates (as defined in the BHC Act), on an aggregate basis, may
transfer such Series C Preferred Stock only under the following
circumstances: (i) to the Corporation; (ii) to the public in a public
offering; (iii) in a
<PAGE> 17
disposition pursuant to Rule 144 or Rule 144A under the Securities Act of
1933, as amended, where no single purchaser receives from such holder and
its affiliates (as defined in the BHC Act) convertible securities or
warrants covering more than 2% of any class of the Corporation's voting
securities; (iv) in a single transaction to an independent third party
that already owns or has negotiated to purchase at least a majority of
the Common Stock or Preferred Stock (without regard to the transfer of
such Series C Preferred Stock by such Regulated Entity); (v) in a
transfer to an affiliate (as defined in the BHC Act) of such Regulated
Entity or to another Regulated Entity; or (vi) in any method of transfer
permitted by the Federal Reserve, as determined by the Regulated Entity.
If any Regulated Entity provides notice to the Corporation that such
Regulated Entity has determined in its sole discretion that applicable
U.S. federal banking laws no longer require that the Series C Preferred
Stock held by such Regulated Entity be subject to all or any part of the
preceding sentence, upon receipt of such notice by the Corporation, the
Series C Preferred Stock held by such Regulated Entity shall no longer be
subject to those provisions of the preceding sentence identified in such
notice.
4B.1 COMMON STOCK.
Except as otherwise required by law or as otherwise provided
herein, each share of Common Stock shall have identical powers,
preferences, qualifications, limitations and other rights.
A. Voting Rights. Each holder of Common Stock shall be
entitled to one vote for each share of Common Stock held of record on all
matters on which stockholders generally are entitled to vote and to all
other rights, powers and privileges of stockholders under Delaware law.
The shares of Common Stock shall be divided into two classes, which shall
be identical in all respects except that one class shall be non-voting.
Any shares of Common Stock held by a Regulated Entity in excess of 5% of
the total issued and outstanding Common Stock shall be non-voting (as
provided in Section 4A.2), until such shares are transferred to an entity
not subject to such restrictions under the BHC Act.
B. Dividends. Subject to all of the rights of any class of
stock ranking senior to the Common Stock as to dividends, dividends may
be paid upon the Common Stock when, as and if declared by the Board out
of funds and other assets legally available for the payment of dividends.
C. Liquidation, Dissolution or Winding Up. Upon the
dissolution, liquidation or winding up of the Corporation, after any
preferential amounts to be distributed to the holders of the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and
any other class or series of stock having a preference over the Common
Stock then outstanding have been paid or declared and funds sufficient
for the payment thereof in full set apart for payment, the holders of the
Common Stock shall be
<PAGE> 18
entitled to participate ratably in all the remaining assets of the
Corporation available for distribution to its stockholders.
D. Notwithstanding any other provision contained in this
Amended and Restated Certificate of Incorporation, if a holder of any
Common Stock is a Regulated Entity, such holder and its affiliates (as
defined in the BHC Act), on an aggregate basis, may transfer such Common
Stock only under the following circumstances: (i) to the Corporation;
(ii) to the public in a public offering; (iii) in a disposition pursuant
to Rule 144 or Rule 144A under the Securities Act of 1933, as amended,
where no single purchaser receives from such holder and its affiliates
(as defined in the BHC Act) convertible securities or warrants covering
more than 2% of any class of the Corporation's voting securities; (iv) in
a single transaction to an independent third party that already owns or
has negotiated to purchase at least a majority of the Common Stock
(without regard to the transfer of such Common Stock by such Regulated
Entity); (v) in a transfer to an affiliate (as defined in the BHC Act) of
such Regulated Entity or to another Regulated Entity; or (vi) in any
method of transfer permitted by the Federal Reserve, as determined by the
Regulated Entity. If any Regulated Entity provides notice to the
Corporation that such Regulated Entity has determined in its sole
discretion that applicable U.S. federal banking laws no longer require
that the Common Stock held by such Regulated Entity be subject to all or
any part of the preceding sentence, upon receipt of such notice by the
Corporation, the Common Stock held by such Regulated Entity shall no
longer be subject to those provisions of the preceding sentence
identified in such notice.
5. Except pursuant to and on the terms and conditions set
forth in the Third Amended and Restated Stockholders' Agreement, dated as
of April 20, 1999 by and among the Company and the stockholders signatory
thereto (as to certain antidilutive rights) or as otherwise expressly
authorized by the Board in writing, no holder of any of the shares of any
class or series of stock or of options, warrants or other rights to
purchase shares of any class or series of stock or of other securities of
the Corporation shall have any preemptive rights to purchase or subscribe
for any unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series, or
bonds, certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock of the Corporation of any
class or series, but any such unissued stock, additional authorized issue
of shares of any class or series of stock or securities convertible into
or exchangeable for stock, or carrying any right to purchase stock, may
be issued and disposed of pursuant to resolution of the Board (subject to
any such express written authorization of the Board) to such persons,
firms, corporations or associations, whether such holders or others, and
upon such terms as may be deemed advisable by the Board in the exercise
of its sole discretion.
<PAGE> 19
6. The number of directors of the Corporation may be fixed by
the By-laws.
7. The Board of Directors of the Corporation shall have the
power to adopt, amend or repeal the By-laws of the Corporation but, in
the event of any conflict or inconsistency between such By-laws and this
Amended and Restated Certificate of Incorporation, the latter shall
govern.
8. Elections of directors may be, but shall not be required
to be, by written ballot.
9. The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware, or any successor
provision, indemnify any and all persons whom it shall have power to
indemnify under said section from and against any and all of the
expenses, liabilities and other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled
under any By-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his or her official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors
and administrators of such person.
No director of the Corporation shall have personal liability
arising out of an action whether by or in the right of the Corporation or
otherwise for monetary damages for breach of fiduciary duty as a director;
provided, however, that the foregoing shall not limit or eliminate the
liability of a director (i) for any breach of such director=s duty of loyalty
to the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the General Corporation Law of Delaware or any
successor provision, (iv) for any transaction from which such director derived
an improper personal benefit, or (v) acts or omissions occurring prior to the
date of the effectiveness of this provision.
Furthermore, notwithstanding the foregoing provision, in the
event that the General Corporation Law of Delaware is amended or enacted
to permit further limitation or elimination of the personal liability of
the director, the personal liability of the Corporation=s directors shall
be limited or eliminated to the fullest extent permitted by the
applicable law.
This provision shall not affect any provision permitted under the General
Corporation Law of Delaware in the Amended and Restated Certificate of
Incorporation, By-laws or contract or resolution of the Corporation
indemnifying or agreeing to indemnify a director against personal
liability. Any repeal or modification of this provision shall not
adversely
<PAGE> 20
affect any limitation hereunder on the personal liability of the director
with respect to acts or omissions occurring prior to such repeal or
modification."
SEVENTH: The amendment effected herein was authorized by the
consent in writing, setting forth the action so taken, signed by the holders of
at least 75% of the outstanding shares entitled to vote thereon, and due notice
so taken has been given to those shareholders who have not consented in writing
pursuant to Sections 222 and 242 of the Delaware General Corporation Law.
<PAGE> 21
IN WITNESS WHEREOF, SPECTRASITE HOLDINGS, INC. has caused this
certificate to be signed by Stephen H. Clark, its President, who hereby
acknowledges under penalties of perjury that the facts herein stated are true
and that this certificate is his act and deed, this 19 day of April 1999.
SPECTRASITE HOLDINGS, INC.
By: /s/ STEPHEN H. CLARK
-----------------------------
Stephen H. Clark
President and Chief Executive Officer
<PAGE> 1
EXHIBIT 4.2
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
March 25, 1999, between SpectraSite Holdings, Inc., a Delaware corporation (the
"Issuer"), and United States Trust Company of New York, a national banking
association, as trustee (the "Trustee").
WITNESSETH:
WHEREAS, the Issuer and the Trustee entered into an Indenture, dated as
of June 26, 1998 (the "Indenture"), with respect to the Issuer's 12% Senior
Discount Notes Due 2008 (the "Notes");
WHEREAS, on February 10, 1999, the Issuer entered into an Agreement and
Plan of Merger (the "Merger Agreement") among Nextel Communications, Inc., a
Delaware corporation ("Nextel"), Tower Parent Corp., a Delaware corporation
that is wholly owned by Nextel, Tower Merger Vehicle, Inc., a newly formed
Delaware corporation and a wholly owned direct subsidiary of Tower Parent Corp.
("Merger Sub"), Tower Asset Sub, Inc., a newly formed Delaware corporation and
a wholly owned direct subsidiary of Merger Sub, certain transferring
subsidiaries of Nextel, SpectraSite Communications, Inc., a Delaware
corporation and a wholly owned direct subsidiary of the Issuer ("SCI"), and SHI
Merger Sub, Inc., a newly formed Delaware corporation and a wholly owned direct
subsidiary of SCI ("SHI Merger Sub"), which provides for the merger of SHI
Merger Sub with and into Merger Sub, with Merger Sub thereby becoming a wholly
owned direct subsidiary of SCI;
WHEREAS, in order to consummate the transactions contemplated by the
Merger Agreement and as a condition to closing the merger of SHI Merger Sub
with and into Merger Sub, the Issuer has solicited consents from the Holders of
the Notes through a Consent Solicitation Statement, dated as of March 17, 1999,
to certain amendments to the Indenture (the "Proposed Amendments"), which
Proposed Amendments are reflected in this Supplemental Indenture;
WHEREAS, in accordance with Section 9.2 of the Indenture, the Issuer has
received the written consent of the Holders of at least a majority in principal
amount at maturity of the Notes outstanding to the Proposed Amendments;
WHEREAS, all things necessary to make this Supplemental Indenture a valid
supplement to the Indenture according to its terms and the terms of the
Indenture have been done;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Certain Terms Defined in the Indenture. All capitalized terms
used herein without definition herein shall have the meanings ascribed thereto
in the Indenture.
<PAGE> 2
SECTION 2. Amendments to the Indenture. Subject to Section 4 hereof, the
Indenture is hereby amended as follows:
(a) The following definitions are added to Section 1.1 of the Indenture
in proper alphabetical order:
"Nextel" means Nextel Communications, Inc., a Delaware corporation.
"Nextel Merger Agreement" means the Agreement and Plan of Merger, dated
as of February 10, 1999, among the Issuer, Nextel, Tower Parent Corp., a
Delaware corporation, Tower Merger Vehicle, Inc., a Delaware corporation, Tower
Asset Sub, Inc., a Delaware corporation, certain transferring subsidiaries of
Nextel, SpectraSite Communications, Inc., a Delaware corporation, and SHI
Merger Sub, Inc., a Delaware corporation, as amended, modified or supplemented
from time to time.
"Series C Purchase Agreement" means the Preferred Stock Purchase
Agreement, dated as of February 10, 1999, among SpectraSite and the several
purchasers named therein, as amended, modified or supplemented from time to
time.
(b) The definition of "Permitted Holders" in Section 1.1 of the Indenture
is replaced in its entirety with the following:
"Permitted Holders" means any or all of Stephen H. Clark, David P.
Tomick, Joe L. Finley, Welsh, Carson, Anderson & Stowe VIII, L.P., WCAS
Information Partners, L.P., WCAS Capital Partners III, L.P., their respective
general partners, employees of Welsh, Carson, Anderson & Stowe, CIBC WG Argosy
Merchant Fund 2, L.L.C., Co-Investment Merchant Fund 3, LLC, Caravelle
Investment Fund, L.L.C., Tower Parent Corp., Whitney Equity Partners, L.P.,
J.H. Whitney III, L.P., Whitney Strategic Partners III, L.P., J.H. Whitney
Mezzanine Fund, L.P., Waller-Sutton Media Partners, L.P., Kitty Hawk Capital
Limited Partnership, III, Kitty Hawk Capital Limited Partnership, IV, Eagle
Creek Capital, L.L.C., The North Carolina Enterprise Fund, L.P., Finley Family
Limited Partnership and their respective Affiliates.
(c) The definition of "Permitted Lien" in Section 1.1 of the Indenture is
replaced in its entirety with the following:
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Indebtedness) or leases
to which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits or cash or United States government bonds
to secure surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, in
each case incurred in the ordinary course of business; (b) Liens imposed by law,
such as carriers', warehousemen's, landlords' and mechanics' Liens, in each case
for sums not yet due or being contested in good faith by
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<PAGE> 3
appropriate proceeding, or judgment Liens not giving rise to an Event of
Default so long as any appropriate legal proceedings which may have been duly
initiated for the review of such judgment shall not have been finally
terminated or the period within which such proceedings may be initiated shall
not have expired; (c) Liens for property taxes not yet subject to penalties for
non-payment or which are being contested in good faith by appropriate
proceedings; (d) Liens in favor of issuers of surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person in the
ordinary course of its business; (e) minor survey exceptions, minor
encumbrances, easements or reservations of, or rights of others for, licenses,
rights of way, sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning or other restrictions as to the use of real
properties or liens incidental to the conduct of the business of such Person or
to the ownership of its properties which were not incurred in connection with
Indebtedness and which do not in the aggregate materially adversely affect the
value of said properties or materially impair their use in the operation of the
business of such Person; (f) Liens securing Hedging Obligations so long as the
related Indebtedness is, and is permitted to be under the Indenture, secured by
a Lien on the same property securing such Hedging Obligations; (g) leases and
subleases of real property which do not interfere with the ordinary conduct of
the business of the Issuer or any of its Restricted Subsidiaries, and which are
made on customary and usual terms applicable to similar properties; (h) Liens
existing as of the date on which the Notes are originally issued and Liens
created by the Indenture; (i) Liens created solely for the purpose of securing
the payment of all or a part of the purchase price of assets or property
acquired or constructed in the ordinary course of business after the date on
which the Notes are originally issued; provided, however, that (A) the
aggregate principal amount of Indebtedness secured by such Liens shall not
exceed the aggregate purchase price of the assets or property so acquired or
constructed, (B) the Indebtedness secured by such Liens shall have otherwise
been permitted to be issued under the Indenture and (C) such Liens shall not
encumber any other assets or property of the Issuer or any of its Restricted
Subsidiaries and shall attach to such assets or property within 90 days of the
construction or acquisition of such assets or property; (j) Liens on the assets
or property of a Restricted Subsidiary of the Issuer existing at the time such
Restricted Subsidiary became a Subsidiary of the Issuer and not incurred as a
result of (or in connection with or in anticipation of) such Restricted
Subsidiary becoming a Subsidiary of the Issuer; provided, however, that (A) any
such Lien does not by its terms cover any property or assets after the time
such Restricted Subsidiary becomes a Subsidiary which were not covered
immediately prior to such transaction, (B) the incurrence of the Indebtedness
secured by such Lien shall have otherwise been permitted to be issued under the
Indenture, and (C) such Liens do not extend to or cover any other property or
assets of the Issuer or any of its Restricted Subsidiaries; (k) Liens securing
Indebtedness outstanding under the New Credit Facility; (l) Liens extending,
renewing or replacing in whole or in part a Lien permitted by the Indenture;
provided, however, that (A) such Liens do not extend beyond the property
subject to the existing Lien and improvements and construction on such property
and (B) the Indebtedness secured by the Lien may not exceed the Indebtedness
secured at the time by the existing Lien; (m) Liens Incurred in the ordinary
course of business by the Issuer or any Restricted Subsidiary of the Issuer
with respect to obligations that do not exceed $5.0 million at any one time
outstanding and that (i) are not Incurred in connection with the borrowing of
money or the obtaining of advances of credit (other than trade credit in the
ordinary course of business) and (ii) do not in the aggregate materially
detract from the value of the property or materially impair the use thereof in
the operation of business by the
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<PAGE> 4
Issuer or such Restricted Subsidiary; (n) Liens in favor of the Issuer or a
Wholly Owned Subsidiary; (o) any interest in or title of a lessor to any
property subject to Capitalized Lease Obligations permitted to be Incurred
under this Indenture; (p) Liens on the Capital Stock of Unrestricted
Subsidiaries; and (q) the Liens to be granted pursuant to the terms of the
Security and Subordination Agreement, as amended, modified or supplemented from
time to time, to be entered into pursuant to the terms of the Nextel Merger
Agreement.
(d) Section 4.3(b) of the Indenture is replaced in its entirety with the
following:
Notwithstanding Section 4.3(a) and regardless of the amount of
outstanding Indebtedness of the Issuer, the Issuer may Incur any or all of the
following Indebtedness: (i) Indebtedness of the Issuer owing to and held by any
Restricted Subsidiary; provided, however, that any subsequent issuance or
transfer of any Capital Stock or any other event which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent
transfer of any such Indebtedness (except to another Restricted Subsidiary)
will be deemed, in each case, to constitute the Incurrence of such Indebtedness
by the Issuer; (ii) Indebtedness represented by the Notes and the Exchange
Notes; (iii) Indebtedness of the Issuer (other than the Indebtedness described
in clauses (i) or (ii) above) outstanding on the Issue Date; (iv) Indebtedness
(including Capitalized Lease Obligations) of the Issuer Incurred to finance the
acquisition, construction or improvement of fixed or capital assets in an
aggregate principal amount at any one time outstanding not to exceed $5.0
million (together with the amount of any Indebtedness then outstanding and
Incurred pursuant to clause (b)(vi) of Section 4.4); provided, that such
Indebtedness is Incurred within 180 days after the date of such acquisition,
construction or improvement and does not exceed the fair market value of such
acquired, constructed or improved assets, as determined in good faith by the
Board of Directors of the Issuer; (v) Refinancing Indebtedness Incurred in
respect of any Indebtedness Incurred pursuant to paragraph (a) or pursuant to
clause (ii), (iii) or this clause (v); (vi) Indebtedness (A) in respect of
performance bonds, bankers' acceptances, letters of credit and surety or appeal
bonds provided by the Issuer in the ordinary course of its business and which
do not secure other Indebtedness and (B) under Currency Agreements and Interest
Rate Agreements Incurred which, at the time of Incurrence, is in the ordinary
course of business; provided, however, that, in the case of Currency Agreements
and Interest Rate Agreements, such Currency Agreements and Interest Rate
Agreements are directly related to Indebtedness permitted to be Incurred by the
Issuer pursuant to this Indenture; (vii) Indebtedness represented by Guarantees
by the Issuer of Indebtedness otherwise permitted to be Incurred pursuant to
this Indenture; (viii) Indebtedness of any other Person existing at the time
such other Person is merged with or into the Issuer outstanding on or prior to
the date on which such Person was merged with or into the Issuer (other than
Indebtedness Incurred in connection with, or to provide all or any portion of
the funds or credit support utilized to consummate, the transaction or series
of related transactions pursuant to which such Person was merged with or into
the Issuer); provided, however, that on the date of such merger and after
giving effect thereto, the Issuer would have been permitted to incur at least
$1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.3;
(ix) Indebtedness Incurred by the Issuer's Subsidiaries not otherwise
prohibited by the terms of this Indenture; (x)
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<PAGE> 5
the Incurrence by the Issuer of Indebtedness not to exceed, at any one time
outstanding (together with the amount of any Indebtedness then outstanding and
Incurred pursuant to clause (b)(ix) of Section 4.4), 1.5 times the aggregate
Net Cash Proceeds received by the Issuer from the issue or sale of Capital
Stock (other than Disqualified Stock) subsequent to the Issue Date (other than
an issuance or sale to a Subsidiary of the Issuer and other than an issuance or
sale to an employee stock ownership plan or to a trust established by the
Issuer or any of its Restricted Subsidiaries), less the amount of such Net Cash
Proceeds used to make Restricted Payments pursuant to clause 3(B) of paragraph
(a) of Section 4.5 or applied pursuant to clause (i)(B) of paragraph (b) of
Section 4.5; provided, however, that for an issuance of Capital Stock prior to
the issuance and sale of Capital Stock under the Series C Purchase Agreement in
conjunction with the closing of the Nextel Merger Agreement, immediately prior
to the consummation of such issuance or sale of Capital Stock (other than the
issuance and sale contemplated under the Series C Purchase Agreement), the
Issuer would have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to paragraph (a) of this Section 4.3; (xi) Indebtedness
of the Issuer Incurred to finance a portion of the cash consideration to be
paid under the Nextel Merger Agreement, provided that the proceeds of any such
Indebtedness shall be held in an escrow account to secure such Indebtedness
until the closing of the Nextel Merger Agreement or until such time as the
Issuer could Incur such Indebtedness under the Indenture and (xii) other
Indebtedness in an aggregate principal amount outstanding at any time not to
exceed $5.0 million (together with the amount of any Indebtedness and Preferred
Stock then outstanding and Incurred pursuant to clause (b)(xi) of Section 4.4).
(e) Section 4.4(b) of the Indenture is replaced in its entirety with the
following:
Notwithstanding Section 4.4(a) and regardless of the amount of
outstanding Indebtedness of the Restricted Subsidiaries, any Restricted
Subsidiary may Incur any or all of the following Indebtedness: (i) Indebtedness
Incurred under the New Credit Facility in an aggregate principal amount
outstanding at any time not to exceed the greater of (A) $50.0 million and (B)
the product of (x) $200,000 and (y) the number of Completed Towers on the date
of such Incurrence, less the aggregate amount of all proceeds from all Asset
Dispositions of Tower Assets of the Issuer that have been applied since the
Issue Date to permanently reduce the outstanding amount of such Indebtedness
pursuant to Section 4.7; (ii) Indebtedness or Preferred Stock of a Restricted
Subsidiary issued to and held by the Issuer or a Restricted Subsidiary;
provided, however, that any subsequent issuance or transfer of any Capital
Stock which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any subsequent transfer of such Indebtedness or
Preferred Stock (other than to the Company or a Restricted Subsidiary) shall be
deemed, in each case, to constitute the Incurrence of such Indebtedness or
Preferred Stock by the issuer thereof; (iii) Indebtedness or Preferred Stock of
a Restricted Subsidiary Incurred and outstanding on or prior to the date on
which such Restricted Subsidiary was acquired by the Issuer (other than
Indebtedness or Preferred Stock Incurred in connection with, or to provide all
or any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the Issuer);
provided, however, that on the date of such acquisition and after giving effect
thereto, the Issuer would have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to paragraph (a) of Section 4.3; (iv)
Indebtedness or Preferred Stock
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<PAGE> 6
outstanding on the Issue Date (other than Indebtedness described in clauses
(i), (ii) or (iii) of this paragraph); (v) Refinancing Indebtedness Incurred in
respect of Indebtedness or Preferred Stock referred to in clauses (iii) or (iv)
of this paragraph or this clause (v); provided, however, that to the extent
such Refinancing Indebtedness directly or indirectly Refinances Indebtedness or
Preferred Stock of a Subsidiary described in clause (iii), such Refinancing
Indebtedness shall be Incurred only by such Subsidiary; (vi) Indebtedness
(including Capitalized Lease Obligations) Incurred to finance the acquisition,
construction or improvement of fixed or capital assets in an aggregate
principal amount at any one time outstanding not to exceed $5.0 million
(together with the amount of any Indebtedness then outstanding and Incurred
pursuant to clause (b)(iv) of Section 4.3); provided, that such Indebtedness is
Incurred within 180 days after the date of such acquisition, construction or
improvement and does not exceed the fair market value of such acquired,
constructed or improved assets, as determined in good faith by the Board of
Directors of the Issuer; (vii) Indebtedness (A) in respect of performance
bonds, bankers' acceptances, letters of credit and surety or appeal bonds
provided in the ordinary course of its business and which do not secure other
Indebtedness and (B) under Currency Agreements and Interest Rate Agreements
Incurred which, at the time of Incurrence, is in the ordinary course of
business; provided, however, that, in the case of Currency Agreements and
Interest Rate Agreements, such Currency Agreements and Interest Rate Agreements
are directly related to Indebtedness permitted to be Incurred pursuant to this
Indenture; (viii) Indebtedness represented by Guarantees of Indebtedness
otherwise permitted to be Incurred pursuant to this Indenture; (ix) the
Incurrence of Indebtedness not to exceed, at any one time outstanding (together
with the amount of any Indebtedness then outstanding and Incurred pursuant to
clause (b)(x) of Section 4.3), 1.5 times the aggregate Net Cash Proceeds
received by the Issuer from the issue or sale of Capital Stock (other than
Disqualified Stock) subsequent to the Issue Date (other than an issuance or
sale to a Subsidiary of the Issuer and other than an issuance or sale to an
employee stock ownership plan or to a trust established by the Issuer or any of
its Restricted Subsidiaries), less the amount of such Net Cash Proceeds used to
make Restricted Payments pursuant to clause 3(B) of paragraph (a) of Section
4.5 or applied pursuant to clause (i)(B) of paragraph (b) of Section 4.5;
provided, however, that for an issuance of Capital Stock prior to the issuance
and sale of Capital Stock under the Series C Purchase Agreement in conjunction
with the closing of the Nextel Merger Agreement, immediately prior to the
consummation of such issuance or sale of Capital Stock (other than the issuance
and sale contemplated under the Series C Purchase Agreement), the Issuer would
have been permitted to incur at least $1.00 of additional Indebtedness pursuant
to paragraph (a) of Section 4.3; (x) Indebtedness of the Issuer Incurred to
finance a portion of the cash consideration to be paid under the Nextel Merger
Agreement, provided that the proceeds of any such Indebtedness shall be held in
an escrow account to secure such Indebtedness until the closing of the Nextel
Merger Agreement or until such time as the Issuer could Incur such Indebtedness
under the Indenture and (xi) other Indebtedness and Preferred Stock in an
aggregate principal and/or liquidation amount outstanding at any time not to
exceed $5.0 million (less the amount of any Indebtedness then outstanding and
Incurred pursuant to clause (b)(xii) of Section 4.3).
(f) Section 4.8(b) of the Indenture is replaced in its entirety with the
following:
The provisions of paragraph (a) of this Section 4.8 shall not prohibit (i)
any Restricted
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<PAGE> 7
Payment permitted to be made pursuant to Section 4.5, (ii) any issuance of
securities, or other payments, awards or grants in cash, securities or
otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors, or any
arrangements relating thereto, (iii) the grant of stock options or similar
rights to employees and directors of the Issuer pursuant to plans approved by
the Board of Directors, (iv) loans or advances to employees in the ordinary
course of business in accordance with the past practices of the Issuer or its
Restricted Subsidiaries, but in any event not to exceed $1.0 million in the
aggregate outstanding at any one time, (v) the payment of reasonable fees to
directors of the Issuer and its Restricted Subsidiaries who are not employees
of the Issuer or its Restricted Subsidiaries, (vi) any transaction between the
Issuer and a Restricted Subsidiary or between Restricted Subsidiaries, (vii)
the issuance or sale of any Capital Stock (other than Disqualified Stock) of
the Issuer, (viii) any transaction consummated pursuant to the terms of any
agreement described in the Offering Circular to which the Issuer is a party, in
each case as such agreement is in effect on the Issue Date and without giving
any effect to any subsequent amendments, modifications or alterations thereof,
and (ix) any transaction (A) contemplated by the Nextel Merger Agreement, (B)
contemplated by a credit facility on substantially the terms set forth in the
commitment letter dated January 15, 1999, as amended, between SpectraSite
Communications, Inc., as the borrower, and Canadian Imperial Bank of Commerce,
CIBC Oppenheimer Corp. and Credit Suisse First Boston Corporation, pursuant to
which any Affiliate of the Issuer is a lender, provided that the terms and
conditions of such credit facility, taken as a whole, are no less favorable to
the Restricted Subsidiary that is a party thereto than those that could be
obtained at the time of such transaction in arm's-length dealings with a Person
who is not such an Affiliate or (C) between the Issuer or any Restricted
Subsidiary and any Affiliate of the Issuer involving ordinary course investment
banking, commercial banking or related activities.
SECTION 3. Waiver. Each Holder waives any contravention of any provision
of the Indenture (including, but not limited to, the Incurrence of Indebtedness
owing to Nextel by a subsidiary of Nextel being acquired by the Company as part
of consummation of the merger contemplated by the Nextel Merger Agreement) and
any Default arising out of the consummation of the transactions described in
the Issuer's Consent Solicitation Statement dated March 17, 1999 (as amended or
supplemented), and consents to the rescission of the Proposed Amendments by the
Company if the Transactions are not consummated.
SECTION 4. Rescission. If the closing contemplated by the Nextel Merger
Agreement has not been consummated by September 30, 1999, this Supplemental
Indenture shall be automatically rescinded without any further action by the
Issuer or the Trustee and shall be of no force or effect. The Issuer shall
notify the Trustee in writing promptly following the consummation of the
closing under the Nextel Merger Agreement.
SECTION 5. Governing Law. The laws of the State of New York shall
govern this Supplemental Indenture (without regard to the choice of law
provisions thereof).
SECTION 6. Counterparts. This Supplemental Indenture may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures
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thereto and hereto were upon the same instrument.
SECTION 7. Ratification. Except as expressly amended hereby, each
provision of the Indenture shall remain in full force and effect, and, as
amended hereby, the Indenture is in all respects agreed to, ratified and
confirmed by each of the Issuer and the Trustee.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
SPECTRASITE HOLDINGS, INC.
By: /s/ DAVID P. TOMICK
---------------------------------
Name: DAVID P. TOMICK
-------------------------------
Title: CHIEF FINANCIAL OFFICER
------------------------------
UNITED STATES TRUST COMPANY OF NEW
YORK, as Trustee
By: /s/ MARGARET M. CIESMELEWSKI
---------------------------------
Name: MARGARET M. CIESMELEWSKI
-------------------------------
Title: ASSISTANT VICE PRESIDENT
------------------------------
<PAGE> 1
EXHIBIT 4.3
================================================================================
SPECTRASITE HOLDINGS, INC.
as Issuer
and
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
INDENTURE
Dated as of April 20, 1999
11 1/4% Senior Discount Notes due 2009
================================================================================
<PAGE> 2
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
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SECTION 1.1. Definitions.........................................................1
SECTION 1.2. Other Definitions..................................................22
SECTION 1.3. Incorporation by Reference of Trust
Indenture Act.................................................22
SECTION 1.4. Rules of Construction..............................................23
SECTION 1.5. One Class of Notes.................................................23
ARTICLE II
THE NOTES
SECTION 2.1. Form and Dating....................................................24
SECTION 2.2. Execution and Authentication.......................................24
SECTION 2.3. Registrar and Paying Agent.........................................24
SECTION 2.4. Paying Agent to Hold Money in Trust................................25
SECTION 2.5. Noteholder Lists...................................................25
SECTION 2.6. [Intentionally Omitted]............................................26
SECTION 2.7. Replacement Notes..................................................26
SECTION 2.8. Outstanding Notes..................................................26
SECTION 2.9. Temporary Notes....................................................26
SECTION 2.10. Cancellation.......................................................27
SECTION 2.11. Defaulted Interest.................................................27
SECTION 2.12. CUSIP Numbers......................................................27
ARTICLE III
REDEMPTION
SECTION 3.1. Notices to Trustee.................................................28
SECTION 3.2. Selection of Notes to Be Redeemed..................................28
SECTION 3.3. Notice of Redemption...............................................28
SECTION 3.4. Effect of Notice of Redemption.....................................29
SECTION 3.5. Deposit of Redemption Price........................................29
SECTION 3.6. Notes Redeemed in Part.............................................30
ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Notes...................................................30
SECTION 4.2. SEC Reports........................................................31
SECTION 4.3. Limitation on Indebtedness.........................................31
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SECTION 4.4. Limitation on Indebtedness and Preferred
Stock of Restricted Subsidiaries..............................33
SECTION 4.5. Limitation on Restricted Payments..................................35
SECTION 4.6. Limitation on Restrictions on Distributions from Restricted
Subsidiaries..................................................37
SECTION 4.7. Limitation on Sale of Assets and
Subsidiary Stock..............................................37
SECTION 4.8. Limitation on Transactions with Affiliates.........................41
SECTION 4.9. Change of Control..................................................42
SECTION 4.10. Limitation on Sale or Issuance of Capital
Stock of Restricted Subsidiaries..............................43
SECTION 4.11. Limitation on Liens................................................44
SECTION 4.12. Limitation on Sale/Leaseback Transactions..........................44
SECTION 4.13. Compliance with Laws...............................................44
SECTION 4.14. Compliance Certificate.............................................44
SECTION 4.15. Further Instruments and Acts.......................................45
SECTION 4.16. Maintenance of Office or Agency....................................45
SECTION 4.17. Corporate Existence................................................45
SECTION 4.18. Payment of Taxes and Other Claims..................................45
SECTION 4.19. Maintenance of Properties and Insurance............................46
ARTICLE V
SUCCESSOR ISSUER
SECTION 5.1. When the Issuer May Merge or Transfer
Assets........................................................46
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default..................................................47
SECTION 6.2. Acceleration.......................................................50
SECTION 6.3. Other Remedies.....................................................50
SECTION 6.4. Waiver of Past Defaults............................................50
SECTION 6.5. Control by Majority................................................51
SECTION 6.6. Limitation on Suits................................................51
SECTION 6.7. Rights of Holders to Receive Payment...............................51
SECTION 6.8. Collection Suit by Trustee.........................................52
SECTION 6.9. Trustee May File Proofs of Claim...................................52
SECTION 6.10. Priorities.........................................................52
SECTION 6.11. Undertaking for Costs..............................................53
SECTION 6.12. Waiver of Stay or Extension Laws...................................53
ARTICLE VII
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TRUSTEE
<S> <C> <C>
SECTION 7.1. Duties of Trustee..................................................53
SECTION 7.2. Rights of Trustee..................................................54
SECTION 7.3. Individual Rights of Trustee.......................................55
SECTION 7.4. Trustee's Disclaimer...............................................55
SECTION 7.5. Notice of Defaults.................................................56
SECTION 7.6. Reports by Trustee to Holders......................................56
SECTION 7.7. Compensation and Indemnity.........................................56
SECTION 7.8. Replacement of Trustee.............................................57
SECTION 7.9. Successor Trustee by Merger........................................58
SECTION 7.10. Eligibility; Disqualification......................................58
SECTION 7.11. Preferential Collection of Claims Against
Issuer........................................................59
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1. Discharge of Liability on Notes; Defeasance........................59
SECTION 8.2. Conditions to Defeasance...........................................60
SECTION 8.3. Application of Trust Money.........................................61
SECTION 8.4. Repayment to Issuer................................................62
SECTION 8.5. Indemnity for Government Obligations...............................62
SECTION 8.6. Reinstatement......................................................62
ARTICLE IX
AMENDMENTS
SECTION 9.1. Without Consent of Holders.........................................63
SECTION 9.2. With Consent of Holders............................................63
SECTION 9.3. Compliance with Trust Indenture Act................................64
SECTION 9.4. Revocation and Effect of Consents and
Waivers.......................................................64
SECTION 9.5. Notation on or Exchange of Notes...................................65
SECTION 9.6. Trustee to Sign Amendments.........................................65
SECTION 9.7. Payment for Consent................................................65
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Trust Indenture Act Controls.......................................66
SECTION 10.2. Notices............................................................66
SECTION 10.3. Communication by Holders with Other Holders........................67
SECTION 10.4. Certificate and Opinion as to Conditions
Precedent.....................................................67
</TABLE>
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<TABLE>
<CAPTION>
Page
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<S> <C> <C>
SECTION 10.5. Statements Required in Certificate or
Opinion.......................................................67
SECTION 10.6. When Notes Disregarded.............................................67
SECTION 10.7. Rules by Trustee, Paying Agent and
Registrar.....................................................68
SECTION 10.8. Legal Holidays.....................................................68
SECTION 10.9. Governing Law......................................................68
SECTION 10.10. No Recourse Against Others.........................................68
SECTION 10.11. Successors.........................................................68
SECTION 10.12. Multiple Originals.................................................68
SECTION 10.13. Variable Provisions................................................69
SECTION 10.14. Qualification of Indenture.........................................69
SECTION 10.15. Table of Contents; Headings........................................69
SECTION 10.16. Severability.......................................................69
</TABLE>
Rule 144A/Regulation S Appendix
Exhibit 1 to Appendix - Form of Initial Note
Exhibit A - Form of Exchange Note and Private Exchange Note
-5-
<PAGE> 6
INDENTURE, dated as of April 20, 1999, between SPECTRASITE HOLDINGS,
INC., a Delaware corporation (as further defined below, the "Issuer"), and
UNITED STATES TRUST COMPANY OF NEW YORK, a bank and trust company organized
under New York banking law, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Issuer's $586,800,000
aggregate principal amount at maturity 11 1/4% Senior Discount Notes due 2009
(the "Initial Notes") and, if and when issued in exchange for Initial Notes as
provided in the Registration Rights Agreement (as defined in the Appendix
hereto), the Issuer's Series B 11 1/4% Senior Discount Notes due 2009 (the
"Exchange Notes") and, if and when issued pursuant to a private exchange for
Initial Notes, the Issuer's Series C 11 1/4% Senior Discount Notes Due 2009 (the
"Private Exchange Notes," together with the Initial Notes and the Exchange
Notes, the "Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
"Accreted Value" means an amount per $1,000 principal amount at
maturity of the Notes that is equal to (a) as of any date prior to April 15,
2004, the sum of (x) the initial offering price of each Note and (y) the portion
of the excess of the principal amount at maturity of each Note over such initial
offering price which shall have been amortized through such date, such amount to
be so amortized on a daily basis and compounded semi-annually on each April 15
and October 15 at the rate of 11 1/4% per annum from the Issue Date through the
date of determination computed on the basis of a 360-day year of twelve 30-day
months, and (b) as of any date after April 15, 2004, $1,000.
"Adjusted EBITDA" as of any date of determination means the sum of
(i) the EBITDA of the Issuer for the four most recent full fiscal quarters
ending prior to such date, less the Issuer's Tower EBITDA for such four-quarter
period, plus (ii) the product of four times the Issuer's Tower EBITDA for the
most recent quarterly period, which Tower EBITDA for the most recent quarterly
period shall be determined on a pro forma basis after giving effect to (A) all
acquisitions or dispositions of assets made by the Issuer and its Subsidiaries
from the beginning of such quarter through and including such date of
determination (including any related financing transactions) as if such
acquisitions and dispositions had occurred at the beginning of such quarter, (B)
any new lease or Site Management Contract entered into by the Issuer or any
Restricted Subsidiary in the ordinary course of business with respect to Tower
Assets from the beginning of such quarter through and including such date
<PAGE> 7
-7-
of determination as if such new lease or Site Management Contract had been
signed at the beginning of such quarter and the rent required by the terms of
such lease or Site Management Contract for such quarter had been received by the
Issuer or a Restricted Subsidiary during such quarter, (C) the loss from the
beginning of such quarter through and including such date of determination of
any lease or Site Management Contract of the Issuer or a Restricted Subsidiary
with respect to any Tower Assets that was in effect on the first day of such
quarter as if such lease or Site Management Contract had not been in effect
during such quarter and no rent under such lease had been received during such
quarter and (D) any rent increases received by the Issuer or any Restricted
Subsidiary from the beginning of such quarter through and including such date of
determination related to leases or Site Management Contracts on Tower Assets as
if such increased rental rate had been in effect at the beginning of such
quarter and such increased amount of rent had been received by the Issuer or a
Restricted Subsidiary during such quarter. For purposes of making the
computation referred to above, (1) acquisitions that have been made by the
Issuer or any of its Restricted Subsidiaries, including through mergers or
consolidations and including any related financing transactions, during the
reference period or subsequent to such reference period and on or prior to the
date of determination shall be deemed to have occurred on the first day of the
reference period and EBITDA for such reference period shall be calculated
without giving effect to clause (ii) of the proviso set forth in the definition
of Consolidated Net Income, and (2) the EBITDA attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the date of determination shall be excluded.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of the covenants in this Indenture, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 10% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Issuer or of rights
or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Issuer or any Restricted Subsidiary, including any disposition by means of a
merger, consolidation or similar transaction (each referred to for the purposes
of this definition as a "disposition"), of (i) any shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares or
<PAGE> 8
-8-
shares required by applicable law to be held by a Person other than the Issuer
or a Restricted Subsidiary), (ii) all or substantially all the assets of any
division or line of business of the Issuer or any Restricted Subsidiary or (iii)
any other assets of the Issuer or any Restricted Subsidiary outside of the
ordinary course of business of the Issuer or such Restricted Subsidiary (other
than, in the case of (i), (ii) and (iii) above, (u) a disposition by a
Restricted Subsidiary to the Issuer or by the Issuer or a Restricted Subsidiary
to a Wholly Owned Subsidiary, (v) for purposes of Section 4.7 only, a
disposition that constitutes a Restricted Payment permitted by Section 4.5, (w)
a disposition of assets with a fair market value of less than $1.0 million (x)
any transaction not prohibited by Section 4.5 or that constitutes a Permitted
Investment, (y) grants of leases or licenses in the ordinary course of business,
and (z) disposals of cash equivalents).
"Attributable Indebtedness" in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the present value
(discounted at the interest rate borne by the Notes, compounded annually) of the
total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing (i)
the sum of the product of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Board of Directors" means the Board of Directors of the Issuer or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means a day other than a Saturday, Sunday or other day
on which banking institutions in New York State are authorized or required by
law to close.
"Capitalized Lease Obligation" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
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.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interests in (however
<PAGE> 9
-9-
designated) equity of such Person, including any Preferred Stock, but excluding
any debt securities convertible into such equity.
"Change of Control" means the occurrence of any of the following
events:
prior to the first public offering of common stock of the Issuer, the
Permitted Holders cease to be the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a
majority in the aggregate of the total voting power of the Voting Stock of
the Issuer, whether as a result of issuance of securities of the Issuer,
any merger, consolidation, liquidation or dissolution of the Issuer, any
direct or indirect transfer of securities by the Issuer or otherwise (for
purposes of this clause (i) and clause (ii) below, the Permitted Holders
shall be deemed to beneficially own any Voting Stock of an entity (the
"specified entity") held by any other entity (the "parent entity") so long
as the Permitted Holders beneficially own (as so defined), directly or
indirectly, in the aggregate a majority of the voting power of the Voting
Stock of the parent entity);
subsequent to the first public offering of common stock of the Issuer, any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act), other than one or more Permitted Holders, is or becomes the
beneficial owner (as defined in clause (i) above, except that for purposes
of this clause (ii) such person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 35% of the total voting power
of the Voting Stock of the Issuer; provided, however, that the Permitted
Holders "beneficially own" (as defined in clause (i) above) directly or
indirectly, in the aggregate a lesser percentage of the total voting power
of the Voting Stock of the Issuer than such other Person and do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of the Issuer
(for the purposes of this clause (ii), such other person shall be deemed
to beneficially own any Voting Stock of a specified entity held by a
parent entity, if such other person is the beneficial owner (as defined in
this clause (ii)), directly or indirectly, of more than 35% of the voting
power of the Voting Stock of such parent entity and the Permitted Holders
"beneficially own" (as defined in clause (i) above), directly or
indirectly, in the aggregate a lesser percentage of the total voting power
of the Voting Stock of such parent entity than such other Person, and do
not have the right or ability by voting power, contract or otherwise to
elect or designate for election a majority of the board of directors of
such parent entity);
during any period of two consecutive years (or, in the case this event
occurs within the first two years after the Issue Date, such shorter
period as shall have begun on the
<PAGE> 10
-10-
Issue Date), individuals who at the beginning of such period constituted
the Board of Directors of the Issuer (together with any new directors
whose election by such Board of Directors or whose nomination for election
by the shareholders of the Issuer was approved by a vote of a majority of
the directors of the Issuer then still in office who were either directors
at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Issuer then in office;
the merger or consolidation of the Issuer with or into another Person or
the merger of another Person with or into the Issuer, or the sale of all
or substantially all the assets of the Issuer to another Person (other
than a Permitted Holder or a Person that is controlled by the Permitted
Holders), and, in the case of any such merger or consolidation, the
securities of the Issuer that are outstanding immediately prior to such
transaction and which represent 100% of the aggregate voting power of the
Voting Stock of the Issuer are changed into or exchanged for cash,
securities or property, unless pursuant to such transaction such
securities are changed into or exchanged for, in addition to any other
consideration, securities of the surviving corporation that represent
immediately after such transaction, at least a majority of the aggregate
voting power of the Voting Stock of the surviving corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Completed Tower" means a wireless transmission tower with, as of any
date of determination, (i) at least one anchor tenant that has executed a
definitive lease with the Issuer or any of its Restricted Subsidiaries and (ii)
capacity for at least three tenants.
"Consolidated Indebtedness" as of any date of determination means
(without duplication) (i) the total amount of Indebtedness of the Issuer and its
Restricted Subsidiaries, (ii) the total amount of Indebtedness of any other
Person, to the extent that such Indebtedness has been Guaranteed by the Issuer
or one or more of its Restricted Subsidiaries, (iii) the aggregate liquidation
value of all Disqualified Stock of the Issuer and all preferred stock of
Restricted Subsidiaries of the Issuer not owned by the Issuer or a Restricted
Subsidiary, in each case, determined on a consolidated basis in accordance with
GAAP.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Issuer and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Issuer or its Restricted Subsidiaries, without
duplication, (i) interest expense attributable to capital leases and to leases
constituting part of a Sale/Leaseback Transaction, (ii) amortization of debt
discount and debt issuance cost, (iii) capitalized interest, (iv) non-cash
interest expense, (v) commissions, discounts and other fees and charges owed
with respect to letters of credit and
<PAGE> 11
-11-
bankers' acceptance financing, (vi) net costs associated with Hedging
Obligations (including amortization of fees), (vii) Preferred Stock dividends
paid in respect of all Preferred Stock of the Issuer and its Subsidiaries held
by Persons other than the Issuer or a Wholly Owned Subsidiary, (viii) interest
incurred in connection with Investments in discontinued operations, (ix)
interest accruing on any Indebtedness of any other Person to the extent such
Indebtedness is Guaranteed by (or secured by the assets of) the Issuer or any
Restricted Subsidiary and (x) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the Issuer)
in connection with Indebtedness Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net income
(loss) of the Issuer and its consolidated Subsidiaries; provided, however, that
there shall not be included in such Consolidated Net Income:
any net income (loss) of any Person (other than the Issuer) if such Person
is not a Restricted Subsidiary, except that (A) subject to the exclusion
contained in (iv) below, the Issuer's equity in the net income of any such
Person for such period shall be included in such Consolidated Net Income
up to the aggregate amount of cash actually distributed by such Person
during such period to the Issuer or a Restricted Subsidiary as a dividend
or other distribution (subject, in the case of a dividend or other
distribution paid to a Restricted Subsidiary, to the limitations contained
in clause (iii) below) and (B) solely for purposes of calculating the
Indebtedness to Adjusted EBITDA Ratio, the Issuer's equity in a net loss
of any such Person (other than an Unrestricted Subsidiary) for such period
shall be included in determining such Consolidated Net Income,
any net income (loss) of any Person acquired by the Issuer or a Subsidiary
in a pooling of interests transaction for any period prior to the date of
such acquisition,
any net income of any Restricted Subsidiary if such Restricted Subsidiary
is subject to restrictions (other than any restrictions permitted in
Section 4.6), directly or indirectly, on the payment of dividends or the
making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Issuer, except that (A) subject to the exclusion
contained in clause (iv) below the Issuer's equity in the net income of
any such Restricted Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Restricted Subsidiary during such period to the Issuer
or another Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution paid to another
Restricted Subsidiary, to the limitation contained in this clause) and (B)
solely for purposes of calculating the Indebtedness to Adjusted EBITDA
Ratio, the Issuer's equity in a net loss of any such Restricted Subsidiary
for such period shall be
<PAGE> 12
-12-
included in determining such Consolidated Net Income,
any gain or loss realized upon the sale or other disposition of any assets
of the Issuer, its consolidated Subsidiaries or any other Person
(including pursuant to any Sale/Leaseback Transaction) which is not sold
or otherwise disposed of in the ordinary course of business and any gain
or loss realized upon the sale or other disposition of any Capital Stock
of any Person,
any net income or loss of any Unrestricted Subsidiary, unless distributed
to the Issuer or one of its Subsidiaries,
any extraordinary gain or loss, and
the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of Section 4.5 only, there shall
be excluded from Consolidated Net Income any dividends, repayments of loans or
advances or other transfers of assets from Unrestricted Subsidiaries to the
Issuer or a Restricted Subsidiary to the extent such dividends, repayments or
transfers increase the amount of Restricted Payments permitted under such
covenant pursuant to clause (a)(3)(D) thereof.
"Consolidated Tangible Assets" means, with respect to the Issuer, the
total consolidated tangible assets of the Issuer and its Restricted
Subsidiaries, as shown on the most recent internal consolidated balance sheet of
the Issuer and such Restricted Subsidiaries calculated on a consolidated basis
in accordance with GAAP.
"Credit Facility" means any debt or credit facility or commercial
paper facility providing for revolving credit loans, term loans, accounts
receivable financing (including through the sale of accounts receivable to such
lenders or to special purpose entities formed to borrow from such lenders
against such accounts receivable) or letters of credit, in each case, as
amended, restated, supplemented, extended, modified, renewed, refunded, replaced
or refinanced in whole or in part from time to time, including any such
amendment, restatement, supplement, extension, modification, renewal, refunding,
replacement or refinancing that increases the amount borrowable thereunder or
alters the maturity thereof.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values as to which such
Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
<PAGE> 13
-13-
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise, (ii) is convertible or exchangeable at the option of the holder
thereof for Indebtedness or Disqualified Stock or (iii) is redeemable at the
option of the holder thereof, in whole or in part, in each case on or prior to
the 91st day after the Stated Maturity of the Notes; provided, however, that any
Capital Stock that would not constitute Disqualified Stock but for provisions
thereof giving holders thereof the right to require such Person to repurchase or
redeem such Capital Stock upon the occurrence of an "asset sale" or "change of
control" occurring prior to the 91st day after the Stated Maturity of the Notes
shall not constitute Disqualified Stock if the "asset sale" or "change of
control" provisions applicable to such Capital Stock are not materially more
favorable taken as a whole to the holders of such Capital Stock than the
provisions described under Section 4.9 and Section 4.7.
"EBITDA" for any period means the sum of Consolidated Net Income,
plus the following to the extent deducted in calculating such Consolidated Net
Income: (a) Consolidated Interest Expense, (b) all income tax expense of the
Issuer and its consolidated Restricted Subsidiaries, (c) depreciation expense of
the Issuer and its consolidated Restricted Subsidiaries, (d) amortization
expense of the Issuer and its consolidated Restricted Subsidiaries (excluding
amortization expense attributable to a prepaid cash item that was paid in a
prior period), (e) all other non-cash charges of the Issuer and its consolidated
Restricted Subsidiaries (excluding any such non-cash charge to the extent that
it represents an accrual of or reserve for cash expenditures in any future
period), and (f) any premium or penalty paid in connection with repurchasing,
redeeming, retiring, defeasing or acquiring any Indebtedness prior to maturity
to the extent deducted in calculating Consolidated Net Income, in each case for
such period. Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization and non-cash charges
of, a Restricted Subsidiary shall be added to the Consolidated Net Income to
compute EBITDA only to the extent (and in the same proportion) that the net
income of such Restricted Subsidiary was included in calculating Consolidated
Net Income and only if a corresponding amount would be permitted at the date of
determination to be paid to the Issuer in the form of a dividend by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders, without in any event giving effect to
any restrictions or limitations permitted in Section 4.6.
"Equity Offering" means a public or private issuance by the Issuer of
common stock of the Issuer for cash.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
<PAGE> 14
-14-
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in (i) the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation of such Person (whether arising by virtue
of partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hedging Obligations" of any Person means the actual obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary unless such Indebtedness or
Capital Stock is repaid or redeemed on the date such Person becomes a
Subsidiary. The term "Incurrence" when used as a noun shall have a correlative
meaning.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
the principal in respect of (A) indebtedness of such Person for money
borrowed and
<PAGE> 15
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(B) indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which such Person is responsible or liable,
including, in each case, any premium on such indebtedness to the extent
such premium has become due and payable;
all Capitalized Lease Obligations of such Person and all Attributable Debt
in respect of Sale/Leaseback Transactions entered into by such Person;
all obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations of such Person and all
obligations of such Person under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course of
business);
all obligations of such Person for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction (other
than obligations with respect to letters of credit and other contingent
liabilities (but only to the extent such contingent liabilities are not
reflected as liabilities on the consolidated balance sheet of such Person)
securing obligations (other than obligations described in clauses (i)
through (iii) above) entered into in the ordinary course of business of
such Person to the extent such letters of credit are not drawn upon or, if
and to the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following payment on the letter of credit);
the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of such Person, the liquidation preference
with respect to, any Preferred Stock (but excluding, in each case, any
accrued dividends);
all obligations of the type referred to in clauses (i) through (v) of
other Persons and all dividends of other Persons for the payment of which,
in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
all obligations of the type referred to in clauses (i) through (vi) of
other Persons secured by any Lien on any property or asset of such Person
(whether or not such obligation is assumed by such Person), the amount of
such obligation being deemed to be the lesser of the value of such
property or assets or the amount of the obligation so secured; and
to the extent not otherwise included in this definition, Hedging
Obligations of such Person.
<PAGE> 16
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The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above or the
accreted value thereof, in the case of Indebtedness issued with original issue
discount, and the maximum liability, upon the occurrence of the contingency
giving rise to the obligation, of any contingent obligations at such date.
"Indebtedness to Adjusted EBITDA Ratio" as of any date of
determination means the ratio of (i) Consolidated Indebtedness as of such date
to (ii) Adjusted EBITDA.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in interest rates as to which such Person is party or a
beneficiary.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers, lessees or licensees in the ordinary course
of business that are recorded as accounts receivable on the balance sheet of
such Person) or other extension of credit (including by way of Guarantee or
similar arrangement) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by such Person. For purposes of
the definitions of "Unrestricted Subsidiary" and "Restricted Payment" and
Section 4.5, (i) "Investment" shall include the portion (proportionate to the
Issuer's equity interest in such Subsidiary) of the fair market value of the net
assets of any Subsidiary of the Issuer at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be
deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary equal to an amount (if positive) equal to (x) the Issuer's
"Investment" in such Subsidiary at the time of such redesignation less (y) the
portion (proportionate to the Issuer's equity interest in such Subsidiary) of
the fair market value of the net assets of such Subsidiary at the time that such
Subsidiary is so re-designated a Restricted Subsidiary; and (ii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer, in each case as determined in good
faith by the Board of Directors and evidenced by a resolution of such Board of
Directors.
"Issue Date" means the date on which the Notes are originally issued.
<PAGE> 17
-17-
"Legal Holiday" has the meaning ascribed in Section 10.8.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise and proceeds
from the sale or other disposition of any securities received as consideration,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to such properties or assets or received in any other non
cash form) therefrom, in each case net of (i) all legal, title, accounting,
investment banking and recording tax expenses, commissions and other fees and
expenses incurred, and all Federal, state, provincial, foreign and local taxes
required to be paid or accrued as a liability under GAAP, as a consequence of
such Asset Disposition, (ii) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon or other security arrangement of any kind with respect to
such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of the
proceeds from such Asset Disposition, (iii) all distributions and other payments
required to be made to minority interest holders in Restricted Subsidiaries or
joint ventures as a result of such Asset Disposition, (iv) the deduction of
appropriate amounts to be provided by the seller as a reserve, in accordance
with GAAP, against any liabilities associated with the assets disposed of in
such Asset Disposition and retained by the Issuer or any Restricted Subsidiary
after such Asset Disposition, and (v) any reserves established in respect of the
sales price of such asset for post-closing adjustments, indemnification purposes
or employee termination expenses.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, printing costs, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees and expenses
actually incurred in connection with such issuance or sale and net of taxes paid
or payable as a result thereof.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Issuer nor any Restricted Subsidiary (a) provides any Guarantee or credit
support of any kind (including any undertaking, Guarantee, indemnity, agreement
or instrument that would constitute Indebtedness) or (b) is directly or
indirectly liable (as a guarantor or otherwise) and (ii) no default with respect
to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Issuer or any Restricted Subsidiary
<PAGE> 18
-18-
to declare a default under such other Indebtedness or cause the payment thereof
to be accelerated or payable prior to its stated maturity.
"Offering Memorandum" means the Offering Memorandum dated April 13,
1999 relating to the Initial Notes; provided that after the issuance of Exchange
Notes, all references herein to "Offering Memorandum" shall be deemed references
to the prospectus contained in the registration statement relating to the
Exchange Notes.
"Officer" means the Chairman of the Board, the President, the Chief
Executive Officer, any Vice President, the Chief Financial Officer, the
Treasurer or the Secretary of the Issuer, as applicable.
"Officer's Certificate" means a certificate signed by any Officer.
"Opinion of Counsel" means a written opinion that meets the
requirements of Section 10.5 hereof from Dow, Lohnes & Albertson, PLLC, or any
other legal counsel who is reasonably acceptable to the Trustee. The counsel may
be an employee of or counsel to the Issuer or the Trustee.
"Permitted Business" means any business conducted by the Issuer and
its Restricted Subsidiaries on the Issue Date and any other business related,
ancillary or complementary to any such business.
"Permitted Holders" means any or all of Stephen H. Clark, David P.
Tomick, Joe L. Finley, Welsh, Carson, Anderson & Stowe, VIII, L.P., WCAS
Information Partners, L.P., WCAS Capital Partners III, L.P., their respective
general partners, employees of Welsh, Carson, Anderson & Stowe, CIBC WG Argosy
Merchant Fund 2, L.L.C., Co-Investment Merchant Fund 3, LLC, Caravelle
Investment Fund, L.L.C., Tower Parent Corp., Whitney Equity Partners, L.P., J.H.
Whitney III, L.P., Whitney Strategic Partners III, L.P., J.H. Whitney Mezzanine
Fund, L.P., Waller-Sutton Media Partners, L.P., Kitty Hawk Capital Limited
Partnership, III, Kitty Hawk Capital Limited Partnership, IV, Eagle Creek
Capital, L.L.C., The North Carolina Enterprise Fund, L.P., Finley Family Limited
Partnership, and their respective Affiliates.
"Permitted Investment" means an Investment by the Issuer or any
Restricted Subsidiary in (i) the Issuer, a Wholly Owned Subsidiary or a Person
which will, upon the making of such Investment, become a Wholly Owned
Subsidiary; provided, however, that a loan or other extension of credit by the
Issuer or a Restricted Subsidiary to a Restricted Subsidiary that is not a
Wholly Owned Subsidiary also will constitute a "Permitted Investment"; and
provided further, however, that a Permitted Business is the primary business of
the Person in which any such Investment is made; (ii) another Person if as a
result of such
<PAGE> 19
-19-
Investment such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all its assets to, the Issuer or a
Restricted Subsidiary; provided, however, that such Person's primary business is
a Permitted Business; (iii) Temporary Cash Investments; (iv) receivables owing
to the Issuer or any Restricted Subsidiary, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; provided, however, that such trade terms may include such
concessionary trade terms as the Issuer or any such Restricted Subsidiary deems
reasonable under the circumstances; (v) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the ordinary
course of business; (vi) loans or advances to employees made in the ordinary
course of business consistent with past practice of the Issuer or such
Restricted Subsidiary, but in any event not to exceed $2.0 million in the
aggregate outstanding at any one time; (vii) stock, obligations or securities
received in settlement of debts created in the ordinary course of business and
owing to the Issuer or any Restricted Subsidiary or in satisfaction of
judgments; (viii) any Person to the extent such investment represents the
non-cash portion of the consideration received for an Asset Disposition as
permitted pursuant to Section 4.7; (ix) Capital Stock of the Issuer or any
Restricted Subsidiary purchased, redeemed or otherwise acquired or retired for
value from members of the Issuer's management or employees, but in any event not
to exceed $2.0 million in the aggregate in any twelve-month period; (x) other
Investments in Permitted Businesses not to exceed, at any one time outstanding
(each such Investment being measured as of the date made and without giving
effect to subsequent changes in value), the greater of (x) $10.0 million and
7.5% of the Issuer's Consolidated Tangible Assets; (xi) any Interest Rate
Agreement or Currency Agreement; (xii) any acquisition of assets solely in
exchange for the issuance of Capital Stock (other than Disqualified Stock) of
the Issuer; (xiii) prepaid expenses, negotiable instruments held for collection
and lease, utility and workers' compensation, performance and other similar
deposits; (xiv) deposits of proceeds from Asset Dispositions with a "qualified
intermediary," "qualified trustee" or similar person for purposes of
facilitating a "like-kind" exchange made in accordance with the applicable
provisions of the Internal Revenue Code of 1986, as amended; provided, however,
that the making of any Permitted Investment pursuant to this clause (xiv) will
not in any manner violate Section 4.7; and (xv) Investments made out of the Net
Cash Proceeds or Qualified Proceeds of the issuance or sale, other than to a
Subsidiary of the Issuer, of Capital Stock of the Issuer, other than
Disqualified Stock, to the extent that such Net Cash Proceeds or Qualified
Proceeds have not been applied to make a Restricted Payment or to effect other
transactions pursuant to Section 4.5 or to the extent such Net Cash Proceeds or
Qualified Proceeds have not been used to Incur Indebtedness.
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under worker's compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for
<PAGE> 20
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the payment of Indebtedness) or leases to which such Person is a party, or
deposits to secure public or statutory obligations of such Person or deposits or
cash or United States government bonds to secure surety or appeal bonds to which
such Person is a party, or deposits as security for contested taxes or import
duties or for the payment of rent, in each case incurred in the ordinary course
of business; (b) Liens imposed by law, such as carriers', warehousemen's,
landlords' and mechanics' Liens, in each case for sums not yet due or being
contested in good faith by appropriate proceeding, or judgment Liens not giving
rise to an Event of Default so long as any appropriate legal proceedings which
may have been duly initiated for the review of such judgment shall not have been
finally terminated or the period within which such proceedings may be initiated
shall not have expired; (c) Liens for property taxes not yet subject to
penalties for non-payment or which are being contested in good faith by
appropriate proceedings; (d) Liens in favor of issuers of surety bonds or
letters of credit issued pursuant to the request of and for the account of such
Person in the ordinary course of its business; (e) minor survey exceptions,
minor encumbrances, easements or reservations of, or rights of others for,
licenses, rights of way, sewers, electric lines, telegraph and telephone lines
and other similar purposes, or zoning or other restrictions as to the use of
real properties or liens incidental to the conduct of the business of such
Person or to the ownership of its properties which were not incurred in
connection with Indebtedness and which do not in the aggregate materially
adversely affect the value of said properties or materially impair their use in
the operation of the business of such Person; (f) Liens securing Hedging
Obligations so long as the related Indebtedness is, and is permitted to be under
this Indenture, secured by a Lien on the same property securing such Hedging
Obligations; (g) leases and subleases of real property which do not interfere
with the ordinary conduct of the business of the Issuer or any of its Restricted
Subsidiaries, and which are made on customary and usual terms applicable to
similar properties, and Liens securing the obligations (other than Indebtedness)
of the Issuer or any of its Restricted Subsidiaries under any such leases and
subleases of real property; (h) Liens existing as of the date on which the Notes
are originally issued and Liens created by this Indenture; (i) Liens created
solely for the purpose of securing the payment of all or a part of the purchase
price of assets or property acquired or constructed in the ordinary course of
business after the date on which the Notes are originally issued; provided,
however, that (A) the Indebtedness secured by such Liens shall have otherwise
been permitted to be issued under this Indenture and (B) such Liens shall not
encumber any other assets or property of the Issuer or any of its Restricted
Subsidiaries; (j) Liens on the assets or property of a Restricted Subsidiary of
the Issuer existing at the time such Restricted Subsidiary became a Subsidiary
of the Issuer and not incurred as a result of (or in connection with or in
anticipation of) such Restricted Subsidiary becoming a Subsidiary of the Issuer;
provided, however, that (A) any such Lien does not by its terms cover any
property or assets after the time such Restricted Subsidiary becomes a
Subsidiary which were not covered immediately prior to such transaction, (B) the
Incurrence of the Indebtedness secured by such Lien shall have otherwise been
permitted to be issued under this Indenture, and (C) such Liens do not extend to
or cover
<PAGE> 21
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any other property or assets of the Issuer or any of its Restricted
Subsidiaries; (k) Liens securing Indebtedness outstanding under a Credit
Facility and any other Liens securing Indebtedness permitted under this
Indenture to be Incurred by a Restricted Subsidiary; (l) Liens extending,
renewing or replacing in whole or in part a Lien permitted by this Indenture;
provided, however, that (A) such Liens do not extend beyond the property subject
to the existing Lien and improvements and construction on such property and (B)
the Indebtedness secured by the Lien may not exceed the Indebtedness secured at
the time by the existing Lien; (m) Liens Incurred in the ordinary course of
business by the Issuer or any Restricted Subsidiary of the Issuer with respect
to obligations that do not exceed $10.0 million at any one time outstanding and
that (i) are not Incurred in connection with the borrowing of money or the
obtaining of advances of credit (other than trade credit in the ordinary course
of business) and (ii) do not in the aggregate materially detract from the value
of the property or materially impair the use thereof in the operation of
business by the Issuer or such Restricted Subsidiary; (n) Liens in favor of the
Issuer or a Wholly Owned Subsidiary; (o) any interest in or title of a lessor to
any property subject to a Capitalized Lease Obligation permitted to be Incurred
under this Indenture; (p) Liens on the Capital Stock of Unrestricted
Subsidiaries; and (q) the Liens to be granted pursuant to the terms of the
security and subordination agreement, as amended, modified or supplemented from
time to time, to be entered into pursuant to the terms of the agreement and plan
of merger, dated as of February 10, 1999, among the Issuer, SpectraSite
Communications, Inc., SHI Merger Sub, Inc., Nextel Communications, Inc. and
certain of its subsidiaries.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
"Principal" of a Note means the principal of the Note plus the
premium, if any, payable on the Note which is due or overdue or is to become due
at the relevant time.
"Qualified Proceeds" means assets that are used or useful in, or
Capital Stock of any Person engaged in, a Permitted Business.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, purchase, defease or retire, or to
issue other Indebtedness in exchange or replacement for, such indebtedness.
"Refinanced" and
<PAGE> 22
-22-
"Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Issuer or any Restricted Subsidiary existing on the date of
this Indenture or Incurred in compliance with this Indenture (including
Indebtedness of the Issuer that Refinances Indebtedness of any Restricted
Subsidiary and Indebtedness of any Restricted Subsidiary that Refinances
Indebtedness of another Restricted Subsidiary) including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that (i) the Refinancing
Indebtedness has a Stated Maturity no earlier than the earlier of the Stated
Maturity of the Notes and the Stated Maturity of the Indebtedness being
Refinanced, (ii) the Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or greater than the
Average Life of the Notes and (iii) such Refinancing Indebtedness is Incurred in
an aggregate principal amount (or if issued with original issue discount, an
aggregate issue price) that is equal to or less than the sum of the aggregate
principal amount (or if issued with original issue discount, the aggregate
accreted value) then outstanding or committed (plus fees and expenses, including
any premium and defeasance costs) under the Indebtedness being Refinanced;
provided further, however, that Refinancing Indebtedness shall not include (x)
Indebtedness of a Subsidiary that Refinances Indebtedness of the Issuer or (y)
Indebtedness of the Issuer or a Subsidiary that refinances Indebtedness of an
Unrestricted Subsidiary.
"Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock or similar payment to the direct or indirect
holders of its Capital Stock in respect thereof (other than dividends or
distributions payable solely in its Capital Stock (other than Disqualified
Stock) and dividends or distributions payable solely to the Issuer or a
Restricted Subsidiary, and other than pro rata dividends or other distributions
made by a Subsidiary that is not a Wholly Owned Subsidiary to minority
stockholders (or owners of an equivalent interest in the case of a Subsidiary
that is an entity other than a corporation)), (ii) the purchase, redemption or
other acquisition or retirement for value of any Capital Stock of the Issuer
held by any Person or of any Capital Stock of a Restricted Subsidiary held by
any Person (other than the Issuer or a Restricted Subsidiary), other than the
exercise by the Issuer of any option to convert or exchange any Capital Stock
into Indebtedness so long as such Indebtedness is permitted to be Incurred as of
the date of such exercise pursuant to this Indenture, and other than as
permitted by clause (ix) of the definition of "Permitted Investments"; (iii) the
purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value, prior to scheduled maturity, scheduled repayment or scheduled sinking
fund payment of any Subordinated Obligations (other than the purchase,
repurchase or other acquisition of Subordinated Obligations purchased in
anticipation of satisfying a sinking fund obligation, principal installment or
final maturity, in each case due within one year of the date of
<PAGE> 23
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acquisition); or (iv) the making of any Investment in any Person (other than a
Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Issuer other than
an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Issuer or a Restricted
Subsidiary transfers such property to a Person and the Issuer or a Restricted
Subsidiary leases it from such Person.
"SEC" means the U.S. Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Issuer secured
by a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Semi-Annual Accrual Date" has the meaning set forth in the
definition of the term "Accreted Value."
"Senior Indebtedness" means (i) Indebtedness of the Issuer, whether
outstanding on the Issue Date or thereafter Incurred, and (ii) accrued and
unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Issuer to the
extent post-filing interest is allowed in such proceeding) in respect of (A)
indebtedness of the Issuer for money borrowed and (B) indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment of which
the Issuer is responsible or liable unless, in the case of (i) and (ii), in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligations are subordinate in right of
payment to the Notes; provided, however, that Senior Indebtedness shall not
include (1) any obligation of the Issuer to any Subsidiary, (2) any liability
for Federal, state, local or other taxes owed or owing by the Issuer, (3) any
accounts payable or other liability to trade creditors arising in the ordinary
course of business (including guarantees thereof or instruments evidencing such
liabilities), (4) any Indebtedness of the Issuer (and any accrued and unpaid
interest respect thereof) which is subordinate or junior in any respect to any
other Indebtedness or other obligation of the Issuer, (5) that portion of any
Indebtedness which at the time of Incurrence is Incurred in violation of this
Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that would
be a "Significant Subsidiary" of the Issuer within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.
<PAGE> 24
-24-
"Site Management Contract" means any agreement pursuant to which the
Issuer or any of its Restricted Subsidiaries has the right to substantially
control Tower Assets and the revenues derived from the rental or use thereof.
"Specified Date" has the meaning set forth in the definition of the
term "Accreted Value."
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subordinated Obligation" means any Indebtedness of the Issuer
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Notes pursuant to a written
agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following: (i) any
investment in direct obligations of the United States of America or any agency
thereof or obligations Guaranteed by the United States of America or any agency
thereof, (ii) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within one year of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws of
the United States of America, any state thereof or any foreign country
recognized by the United States of America having capital, surplus and undivided
profits aggregating in excess of $500.0 million (or the foreign currency
equivalent thereof) and whose long-term debt is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act) or any
money market fund sponsored by a registered broker dealer or mutual fund
distributor, (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above, (iv)
investments in commercial paper, maturing not more than 90 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the
<PAGE> 25
-25-
Issuer) organized and in existence under the laws of the United States of
America or any foreign country recognized by the United States of America with a
rating at the time as of which any investment therein is made of "P-1" (or
higher) according to Moody's Investors Service, Inc. or "A-1" (or higher)
according to Standard & Poor's Ratings Group, and (v) investments in securities
with maturities of six months or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority thereof, and rated
at least "A" by Standard & Poor's Ratings Group or "A" by Moody's Investors
Service, Inc.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture.
"Tower Asset Exchange" means any transaction in which the Issuer or a
Restricted Subsidiary exchanges assets for Tower Assets or Tower Assets and cash
or cash equivalents where the fair market value (evidenced by a resolution of
the Board of Directors set forth in an Officer's Certificate delivered to the
Trustee) of the Tower Assets and cash or cash equivalents received by the Issuer
and its Restricted Subsidiaries in such exchange is at least equal to the fair
market value of the assets disposed in such exchange.
"Tower Assets" means wireless communication transmission towers and
related assets that are located on the site of a transmission tower.
"Tower EBITDA" means, for any period, the EBITDA of the Issuer and
its Restricted Subsidiaries for such period that is directly attributable to
site rental revenue, license or management fees paid to manage, lease or
sublease space on communication sites owned, leased or managed by the Issuer
(collectively, "site leasing revenues"), all determined on a consolidated basis
and in accordance with GAAP. Tower EBITDA will not include revenue derived from
the sale of assets. In allocating, corporate, general, administrative and other
operating expenses that are not allocated to any particular line of business in
the financial statements of the Issuer, such expenses shall be allocated to the
Issuer's site leasing business in proportion to the percentage of the Issuer's
total revenues for the applicable period that were site leasing revenues.
"Trust Officer" means any trust officer, assistant vice president, or
vice president of the Trustee assigned by the Trustee to administer this
Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means such successor.
"2008 Notes" means the Issuer's 12% Senior Discount Notes Due 2008.
<PAGE> 26
-26-
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Issuer that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Issuer (including any newly acquired or newly formed Subsidiary of the
Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Issuer or any other Restricted Subsidiary of the
Issuer that is not a Subsidiary of the Subsidiary to be so designated; provided,
however, that either (A) the Subsidiary to be so designated has total
consolidated assets of $1,000 or less or (B) if such Subsidiary has consolidated
assets greater than $1,000, then such designation would be permitted under
Section 4.5. The Board of Directors may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; provided, however, that (a) immediately after giving
effect to such designation no Default shall have occurred and be continuing and
(b) such designation shall be deemed to be an Incurrence of Indebtedness by a
Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if such Indebtedness is
permitted under this Indenture. Any such designation by the Board of Directors
shall be evidenced to the Trustee by promptly filing with the Trustee a copy of
the Board Resolution giving effect to such designation and an Officer's
Certificate certifying that such designation complied with the foregoing
provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or
other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustee thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the Issuer
all the Capital Stock of which (other than directors' qualifying shares) is
owned by the Issuer or another Wholly Owned Subsidiary.
SECTION 1.2. Other Definitions.
<PAGE> 27
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<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
---- -------
<S> <C>
"Affiliate Transaction"....................................... 4.8
"Appendix".................................................... 2.1
"Authenticating Agent"........................................ 2.2
"Bankruptcy Law".............................................. 6.1
"covenant defeasance option".................................. 8.1(b)
"Custodian"................................................... 6.1
"Event of Default"............................................ 6.1
"legal defeasance option"..................................... 8.1(b)
"Offer" ...................................................... 4.7(b)
"Offer Amount"................................................ 4.7(b)
"Offer Period"................................................ 4.7(b)
"Paying Agent"................................................ 2.3
"Purchase Date"............................................... 4.7(b)
"Registrar"................................................... 2.3
"Successor Issuer"............................................ 5.1
</TABLE>
SECTION 1.3. Incorporation by Reference of Trust Indenture Act. The
mandatory provisions of the TIA are incorporated by reference in and made a part
of this Indenture. The following TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. Unless the context otherwise
requires:
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(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) except as otherwise expressly provided, the principal amount of
any noninterest bearing or other discount security at any date shall be
the principal amount thereof that would be shown on a balance sheet of the
issuer dated such date prepared in accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation preference of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater; and
(9) except as otherwise expressly provided, all references to the
date the Notes were originally issued shall refer to the date the Initial
Notes were originally issued.
SECTION 1.5. One Class of Notes. The Initial Notes, the Private
Exchange Notes and the Exchange Notes shall vote and consent together on all
matters as one class and none of the Initial Notes, the Private Exchange Notes
or the Exchange Notes shall have the right to vote or consent as a separate
class on any matter.
ARTICLE II
THE NOTES
SECTION 2.1. Form and Dating. Certain provisions relating to the
Initial Notes, the Private Exchange Notes and the Exchange Notes are set forth
in the Rule 144A/Regulation S Appendix attached hereto (the "Appendix"), which
is hereby incorporated
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in and expressly made a part of this Indenture. The Initial Notes and the
Trustee's certificate of authentication thereof shall be substantially in the
form of Exhibit 1 to the Appendix, which is hereby incorporated in and expressly
made a part of this Indenture. The Exchange Notes, the Private Exchange Notes
and the Trustee's certificate of authentication thereof shall be substantially
in the form of Exhibit A, which is hereby incorporated by reference and
expressly made a part of this Indenture. The Notes may have notations, legends
or endorsements required by law, rule of any securities exchange or
over-the-counter market on which such Notes are then listed or quoted, or usage,
in addition to those set forth on the Appendix and Exhibit A. The Issuer and the
Trustee shall approve the forms of the Notes and any notation, endorsement or
legend on them. Each Note shall be dated the date of its authentication. The
terms of the Notes set forth in the Appendix and Exhibit A are part of the terms
of this Indenture and, to the extent applicable, the Issuer and the Trustee, by
their execution and delivery of this Indenture, expressly agree to be bound by
such terms.
SECTION 2.2. Execution and Authentication. Two Officers shall sign
the Notes for the Issuer by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized signatory of the
Trustee manually authenticates the Note. The signature of the Trustee on a Note
shall be conclusive evidence that such Note has been duly and validly
authenticated and issued under this Indenture.
The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Issuer to authenticate the Notes. Unless limited by
the terms of such appointment, any such Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.
SECTION 2.3. Registrar and Paying Agent. The Issuer shall (i) appoint
an agent (the "Registrar") who shall maintain an office or agency where Notes
may be presented for registration of transfer or for exchange and (ii) an agent
(the "Paying Agent") who shall maintain an office or agency where Notes may be
presented for payment. The Registrar shall keep a register of the Notes and of
their transfer and exchange. The Issuer may have one or more co-registrars and
one or more additional paying agents. The term "Paying Agent" includes any such
additional paying agent.
In the event the Issuer shall retain any Person not a party to this
Indenture as an agent hereunder, the Issuer shall enter into an appropriate
agency agreement with any Registrar, Paying Agent or co-registrar not a party to
this Indenture, which shall incorporate
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the terms of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such agent. The Issuer shall notify the Trustee of the
name and address of each such agent. If the Issuer fails to maintain a Registrar
or Paying Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.7. The Issuer or any of
its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent.
The Issuer initially appoints the Trustee as Registrar and Paying
Agent for the Notes.
SECTION 2.4. Paying Agent to Hold Money in Trust. By at least 11:00
a.m. (New York City time) on the date on which any principal or interest on any
Note is due and payable, the Issuer shall deposit with the Paying Agent a sum
sufficient to pay such principal or interest when due. The Issuer shall require
each Paying Agent (other than the Trustee) to agree in writing that such Paying
Agent shall hold in trust for the benefit of Noteholders or the Trustee all
money held by such Paying Agent for the payment of principal or interest on the
Notes and shall notify the Trustee of any default by the Issuer in making any
such payment. If the Issuer or a Subsidiary acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate trust
fund. The Issuer at any time may require a Paying Agent (other than the Trustee)
to pay all money held by it to the Trustee and to account for any funds
disbursed by such Paying Agent. Upon complying with this Section, the Paying
Agent (if other than the Issuer or a Subsidiary) shall have no further liability
for the money delivered to the Trustee. Upon any bankruptcy, reorganization or
similar proceeding with respect to the Issuer, the Trustee shall serve as Paying
Agent for the Notes.
SECTION 2.5. Noteholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Noteholders. If the Trustee or any Paying Agent is
not the Registrar, the Issuer shall cause the Registrar to furnish to the
Trustee or any such Paying Agent, in writing at least five Business Days before
each interest payment date and at such other times as the Trustee or any such
Paying Agent may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of Noteholders.
SECTION 2.6. [Intentionally Omitted]
SECTION 2.7. Replacement Notes. If a mutilated Note is surrendered to
the Trustee or if the Holder of a Note shall provide the Issuer and the Trustee
with evidence to their satisfaction that the Note has been lost, destroyed or
wrongfully taken, the Issuer shall issue and the Trustee shall authenticate a
replacement Note if the requirements of Section 8-405 of the Uniform Commercial
Code are met and the Holder satisfies any other reasonable requirements of the
Trustee. If required by the Trustee or the Issuer, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Issuer and the Trustee to
protect the
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Issuer, the Trustee, the Paying Agent, the Registrar and any co-registrar from
any loss which any of them may suffer if a Note is replaced. The Issuer and the
Trustee may charge the Holder for their expenses in replacing a Note, including
reasonable fees and expenses of counsel. Every replacement Note is an additional
obligation of the Issuer.
SECTION 2.8. Outstanding Notes. Notes outstanding at any time are all
Notes authenticated by the Trustee except for those canceled, those delivered
for cancellation and those described in this Section 2.8 as not outstanding. A
Note does not cease to be outstanding because the Issuer or an Affiliate of the
Issuer holds the Note.
If a Note is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee and the Issuer receive proof satisfactory to them
that the replaced Note is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Notes (or
portions thereof) to be redeemed or maturing, as the case may be, and the Paying
Agent is not prohibited from paying such money to the Noteholders on that date
pursuant to the terms of this Indenture, then on and after that date such Notes
(or portions thereof) cease to be outstanding and interest on them ceases to
accrue.
SECTION 2.9. Temporary Notes. Until definitive Notes are ready for
delivery, the Issuer may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Issuer considers appropriate for temporary
Notes. Without unreasonable delay, the Issuer shall prepare and the Trustee
shall authenticate definitive Notes. After the preparation of definitive Notes,
the temporary Notes shall be exchangeable for definitive Notes upon surrender of
the temporary Notes at any office or agency maintained by the Issuer for that
purpose and such exchange shall be without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Notes, the Issuer shall execute,
and the Trustee shall authenticate and deliver in exchange therefor, one or more
definitive Notes representing an equal principal amount of Notes. Until so
exchanged, the Holder of temporary Notes shall in all respects be entitled to
the same benefits under this Indenture as a Holder of definitive Notes.
SECTION 2.10. Cancellation. The Issuer at any time may deliver Notes
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee for cancellation any Notes surrendered to them for
registration of transfer or exchange or payment. The Trustee shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Notes surrendered for registration of transfer or exchange, payment
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or cancellation and deliver a certificate of such destruction to the Issuer
unless the Issuer directs the Trustee to deliver canceled Notes to the Issuer.
The Issuer may not issue new Notes to replace Notes it has redeemed, paid or
delivered to the Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the Issuer defaults in a payment
of interest on the Notes, the Issuer shall pay defaulted interest (plus interest
on such defaulted interest to the extent lawful) at the rate specified therefor
in the Notes in any lawful manner. The Issuer may pay the defaulted interest to
the Persons who are Noteholders on a subsequent special record date. The Issuer
shall fix or cause to be fixed (or upon the Issuer's failure to do so the
Trustee shall fix) any such special record date and payment date to the
reasonable satisfaction of the Trustee which specified record date shall not be
less than 10 days prior to the payment date for such defaulted interest and
shall promptly mail or cause to be mailed to each Noteholder a notice that
states the special record date, the payment date and the amount of defaulted
interest to be paid. The Issuer shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date of
the proposed payment, and at the same time the Issuer shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such defaulted interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when so deposited to be held in trust for the benefit of the Person
entitled to such defaulted interest as provided in this Section 2.11.
SECTION 2.12. CUSIP Numbers. The Issuer in issuing the Notes may use
"CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers.
ARTICLE III
REDEMPTION
SECTION 3.1. Notices to Trustee. If the Issuer elects to redeem Notes
pursuant to paragraph 5 of the Notes (Exhibit 1 to the Appendix), it shall
notify the Trustee and the Paying Agent in writing of the redemption date and
the principal amount at maturity of Notes to be redeemed and the redemption
price.
The Issuer shall give each notice to the Trustee and the Paying Agent
provided for in this Section at least 60 days before the redemption date unless
the Trustee and the
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Paying Agent consent to a shorter period. Such notice shall be accompanied by an
Officer's Certificate from the Issuer to the effect that such redemption will
comply with the conditions herein. The record date relating to such redemption
shall be selected by the Issuer and set forth in the related notice given to the
Trustee and the Paying Agent, which record date shall be not less than 15 days
prior to the date selected for redemption by the Issuer.
SECTION 3.2. Selection of Notes to Be Redeemed. In the case of any
partial redemption, selection of the Notes for redemption will be made by the
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed, or, if the Notes are not so
listed, on a pro rata basis, by lot or by such other method as the Trustee in
its sole discretion shall deem to be fair and appropriate, although no Note of
$1,000 in original principal amount or less will be redeemed in part. Provisions
of this Indenture that apply to Notes called for redemption also apply to
portions of Notes called for redemption. Upon request of the Issuer, the Trustee
shall notify the Issuer of the Notes or portions of Notes to be redeemed.
SECTION 3.3. Notice of Redemption. At least 30 days but not more than
60 days before a date for redemption of Notes, the Trustee at the expense of the
Issuer shall mail a notice of redemption by first-class mail to each Holder of
Notes to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price plus accrued and unpaid
interest, if any;
(5) if fewer than all the outstanding Notes are to be redeemed, the
identification and principal amounts of the particular Notes to be
redeemed;
(6) that, unless the Issuer defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Notes (or portion
thereof) called for redemption ceases to accrue on and after the
redemption date;
(7) the CUSIP number, if any, printed on the Notes being redeemed;
and
(8) that no representation is made as to the correctness or accuracy
of the
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CUSIP number, if any, listed in such notice or printed on the Notes.
The Trustee shall give the notice of redemption in the Issuer's name
and at the Issuer's expense. In such event, the Issuer shall provide the Trustee
with the information required by this Section 3.3.
SECTION 3.4. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption shall become due and payable
on the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Notes shall be paid at the redemption price
stated in the notice, plus accrued and unpaid interest, if any, to the
redemption date; provided that the Issuer shall have deposited the redemption
price with the Paying Agent or the Trustee on or before 11:00 a.m. (New York
City time) on the date of redemption; provided, further, that if the redemption
date is after a regular record date and on or prior to the interest payment
date, the accrued and unpaid interest shall be payable to the Noteholder of the
redeemed Notes registered on the relevant record date. Failure to give notice or
any defect in the notice to any Holder shall not affect the validity of the
notice to any other Holder.
SECTION 3.5. Deposit of Redemption Price. By at least 11:00 a.m. (New
York City time) on the date on which any principal of or interest on any Note is
due and payable, the Issuer shall deposit with the Paying Agent (or, if the
Issuer or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued and unpaid interest,
if any, on all Notes to be redeemed on that date other than Notes or portions of
Notes called for redemption which are owned by the Issuer or a Subsidiary and
have been delivered by the Issuer or such Subsidiary to the Trustee for
cancellation.
If the Issuer complies with the preceding paragraph, then, unless the
Issuer defaults in the payment of such redemption price, the Notes shall cease
to accrete and interest on the Notes to be redeemed will cease to accrue on and
after the applicable redemption date, whether or not such Notes are presented
for payment.
SECTION 3.6. Notes Redeemed in Part. Upon surrender of a Note that is
redeemed in part, the Issuer shall execute and the Trustee shall authenticate
for the Holder (at the Issuer's expense) a new Note equal in a principal amount
at maturity to the unredeemed portion of the Note surrendered.
ARTICLE IV
COVENANTS
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SECTION 4.1. Payment of Notes. The Issuer shall promptly pay the
principal of and interest on the Notes on the dates and in the manner provided
in the Notes and in this Indenture. Principal and interest shall be considered
paid on the date due if on or before 11:00 a.m. (New York City time) on such
date the Trustee or the Paying Agent holds (or, if the Issuer or a Subsidiary is
the Paying Agent, the segregated account or separate trust fund maintained by
the Issuer or such Subsidiary pursuant to Section 2.4) in accordance with this
Indenture money sufficient to pay all principal and interest then due and the
Trustee or the Paying Agent (or, if the Issuer or a Subsidiary is the Paying
Agent, the Issuer or such Subsidiary), as the case may be, is not prohibited
from paying such money to the Noteholders on that date pursuant to the terms of
this Indenture.
The Issuer shall pay interest on overdue principal at the rate
specified therefor in the Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful as provided in
Section 2.11.
Notwithstanding anything to the contrary contained in this Indenture,
the Issuer or the Paying Agent may, to the extent it is required to do so by
law, deduct or withhold income or other similar taxes imposed by the United
States of America or other domestic or foreign taxing authorities from principal
or interest payments hereunder.
SECTION 4.2. SEC Reports. Notwithstanding that the Issuer may not be
required to remain subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, the Issuer will file with the SEC (unless the SEC does not
permit such filing) and provide the Trustee and Noteholders with the annual
reports and such information, documents and other reports which are specified in
Sections 13 and 15(d) of the Exchange Act. The Issuer also will comply with the
other provisions of TIA Section 314(a).
SECTION 4.3. Limitation on Indebtedness. (a) The Issuer will not
Incur, directly or indirectly, any Indebtedness unless, on the date of such
Incurrence and after giving effect to such Incurrence and the application of the
proceeds therefrom, the Indebtedness to Adjusted EBITDA Ratio of the Issuer
would be less than 7.00:1. Accrual of interest, accretion or amortization of
original issue discount and the payment of interest in the form of additional
Indebtedness will not be deemed to be an Incurrence of Indebtedness for purposes
of this covenant.
(b) Notwithstanding the foregoing paragraph (a) and regardless of the
amount of outstanding Indebtedness of the Issuer, the Issuer may Incur any or
all of the following Indebtedness: (i) Indebtedness of the Issuer owing to and
held by any Restricted Subsidiary; provided, however, that any subsequent
issuance or transfer of any Capital Stock or any other event which results in
any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of any such Indebtedness (except to another Restricted
Subsidiary)
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will be deemed, in each case, to constitute the Incurrence of such Indebtedness
by the Issuer; (ii) Indebtedness represented by the Notes and the Exchange
Notes; (iii) Indebtedness of the Issuer (other than the Indebtedness described
in clauses (i) or (ii) above) outstanding on the Issue Date; (iv) Indebtedness
(including Capitalized Lease Obligations) of the Issuer Incurred to finance the
acquisition, construction or improvement of fixed or capital assets in an
aggregate principal amount at any one time outstanding not to exceed the greater
of (x) $10.0 million and (y) an amount equal to 3% of the Issuer's Consolidated
Tangible Assets (together with the amount of any Indebtedness then outstanding
and Incurred pursuant to clause (b)(vi) of Section 4.4); provided, that such
Indebtedness is Incurred within 180 days after the date of such acquisition,
construction or improvement and does not exceed the fair market value of such
acquired, constructed or improved assets, as determined in good faith by the
Board of Directors of the Issuer; (v) Refinancing Indebtedness Incurred in
respect of any Indebtedness Incurred pursuant to paragraph (a) or pursuant to
clause (ii), (iii) or this clause (v); (vi) Indebtedness (A) in respect of
performance bonds, bankers' acceptances, letters of credit and surety or appeal
bonds provided by the Issuer in the ordinary course of its business and which do
not secure other Indebtedness and (B) under Currency Agreements and Interest
Rate Agreements Incurred which, at the time of Incurrence, is in the ordinary
course of business; provided, however, that, in the case of Currency Agreements
and Interest Rate Agreements, such Currency Agreements and Interest Rate
Agreements are directly related to Indebtedness permitted to be Incurred by the
Issuer pursuant to this Indenture; (vii) Indebtedness represented by Guarantees
by the Issuer of Indebtedness otherwise permitted to be Incurred pursuant to
this Indenture; (viii) Indebtedness of any other Person existing at the time
such other Person is merged with or into the Issuer outstanding on or prior to
the date on which such Person was merged with or into the Issuer (other than
Indebtedness Incurred in connection with, or to provide all or any portion of
the funds or credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Person was merged with or into the
Issuer); provided, however, that on the date of such merger and after giving
effect thereto either (x) the Issuer would be permitted to incur at least $1.00
of additional Indebtedness pursuant to paragraph (a) of this Section 4.3 or (y)
the Issuer would have an Indebtedness to Adjusted EBITDA Ratio immediately after
giving effect to such merger no greater than the Indebtedness to Adjusted EBITDA
Ratio immediately prior to such merger; (ix) Indebtedness Incurred by the
Issuer's Subsidiaries not otherwise prohibited by the terms of this Indenture;
(x) the Incurrence by the Issuer of Indebtedness not to exceed, at any one time
outstanding (together with the amount of any Indebtedness then outstanding and
Incurred pursuant to clause (b)(ix) of Section 4.4), 1.5 times the sum of 100%
of the aggregate Net Cash Proceeds and 50% of the non-cash proceeds received by
the Issuer from the issue or sale of Capital Stock (other than Disqualified
Stock) subsequent to the first day of the quarter in which the Issue Date occurs
(other than an issuance or sale to a Subsidiary of the Issuer and other than an
issuance or sale to an employee stock ownership plan or to a trust established
by the Issuer or any of its Restricted Subsidiaries), less the aggregate amount
of such Net Cash
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Proceeds used to make Restricted Payments pursuant to clause 3(B) of paragraph
(a) of Section 4.5 or applied pursuant to clause (i)(B) of paragraph (b) of
Section 4.5; and (xi) other Indebtedness in an aggregate principal amount
outstanding at any time not to exceed $15.0 million (together with the amount of
any Indebtedness and Preferred Stock then outstanding and Incurred pursuant to
clause (b)(x) of Section 4.4).
(c) Notwithstanding the foregoing, the Issuer shall not Incur any
Indebtedness pursuant to the foregoing paragraph (b) of this Section 4.3 if the
proceeds thereof are used, directly or indirectly, to Refinance any Subordinated
Obligations unless such new Indebtedness shall (i) be subordinated to the Notes
to at least the same extent as such Subordinated Obligations being Refinanced
and (ii) have a Stated Maturity that is no earlier than the earlier of the
Stated Maturity of the Notes or the Stated Maturity of the Subordinated
Obligations being Refinanced.
(d) For purposes of determining compliance with this Section 4.3, (i)
in the event that an item of Indebtedness meets the criteria of more than one of
the types of Indebtedness described above, the Issuer, in its sole discretion,
will classify such item of Indebtedness and only be required to include the
amount and type of such Indebtedness in one of the above clauses of this Section
4.3 and (ii) an item of Indebtedness may be divided and classified in more than
one of the types of Indebtedness described in this Section 4.3.
SECTION 4.4. Limitation on Indebtedness and Preferred Stock of
Restricted Subsidiaries. (a) The Issuer shall not permit any Restricted
Subsidiary to Incur, directly or indirectly, any Indebtedness or Preferred Stock
unless, on the date of such Incurrence and after giving effect to such
Incurrence and the application of the net proceeds therefrom, the Indebtedness
to Adjusted EBITDA Ratio of the Issuer would be less than 7.00:1. Accrual of
interest, accretion or amortization of original issue discount and the payment
of interest in the form of additional Indebtedness will not be deemed to be an
Incurrence of Indebtedness for purposes of this covenant.
(b) Notwithstanding the foregoing paragraph (a) and regardless of the
amount of outstanding Indebtedness of the Restricted Subsidiaries, any
Restricted Subsidiary may Incur any or all of the following Indebtedness: (i)
Indebtedness Incurred under Credit Facilities in an aggregate principal amount
outstanding at any time not to exceed the product of (x) $200,000 and (y) the
number of Completed Towers on the date of such Incurrence; (ii) Indebtedness or
Preferred Stock of a Restricted Subsidiary issued to and held by the Issuer or a
Restricted Subsidiary; provided, however, that any subsequent issuance or
transfer of any Capital Stock which results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of such
Indebtedness or Preferred Stock (other than to the Company or a Restricted
Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such
Indebtedness or Preferred Stock by the issuer thereof; (iii) Indebtedness or
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Preferred Stock of a Restricted Subsidiary Incurred and outstanding on or prior
to the date on which such Restricted Subsidiary was acquired by the Issuer and
Indebtedness or Preferred Stock of an entity merged into a Restricted Subsidiary
(other than, in either case, Indebtedness or Preferred Stock Incurred in
connection with, or to provide all or any portion of the funds or credit support
utilized to consummate, the transaction or series of related transactions
pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or
was acquired by the Issuer or such entity was merged into such Restricted
Subsidiary); provided, however, that on the date of such acquisition or merger
and after giving effect thereto, either (x) the Issuer would have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to paragraph (a) of
Section 4.3 or (y) the Issuer would have had an Indebtedness to Adjusted EBITDA
Ratio immediately after giving effect to such merger or acquisition no greater
than the Indebtedness to Adjusted EBITDA Ratio immediately prior to such
transaction; (iv) Indebtedness or Preferred Stock outstanding on the Issue Date
(other than Indebtedness described in clauses (i), (ii) or (iii) of this
paragraph); (v) Refinancing Indebtedness Incurred in respect of Indebtedness or
Preferred Stock referred to in clauses (iii) or (iv) of this paragraph or this
clause (v); provided, however, that to the extent such Refinancing Indebtedness
directly or indirectly Refinances Indebtedness or Preferred Stock of a
Subsidiary described in clause (iii), such Refinancing Indebtedness shall be
Incurred only by such Subsidiary; (vi) Indebtedness (including Capitalized Lease
Obligations) Incurred to finance the acquisition, construction or improvement of
fixed or capital assets in an aggregate principal amount at any one time
outstanding not to exceed the greater of (x) $10.0 million and (y) an amount
equal to 3% of the Issuer's Consolidated Tangible Assets (together with the
amount of any Indebtedness then outstanding and Incurred pursuant to clause
(b)(iv) of Section 4.3); provided, that such Indebtedness is Incurred within 180
days after the date of such acquisition, construction or improvement and does
not exceed the fair market value of such acquired, constructed or improved
assets, as determined in good faith by the Board of Directors of the Issuer;
(vii) Indebtedness (A) in respect of performance bonds, bankers' acceptances,
letters of credit and surety or appeal bonds provided in the ordinary course of
its business and which do not secure other Indebtedness and (B) under Currency
Agreements and Interest Rate Agreements Incurred which, at the time of
Incurrence, is in the ordinary course of business; provided, however, that, in
the case of Currency Agreements and Interest Rate Agreements, such Currency
Agreements and Interest Rate Agreements are directly related to Indebtedness
permitted to be Incurred pursuant to this Indenture; (viii) Indebtedness
represented by Guarantees of Indebtedness otherwise permitted to be Incurred
pursuant to this Indenture; (ix) the Incurrence of Indebtedness not to exceed,
at any one time outstanding (together with the amount of any Indebtedness then
outstanding and Incurred pursuant to clause (b)(x) of Section 4.3), 1.5 times
the sum of 100% of the aggregate Net Cash Proceeds and 50% of the non-cash
proceeds received by the Issuer from the issue or sale of Capital Stock (other
than Disqualified Stock) subsequent to the first day of the quarter in which the
Issue Date occurs (other than an issuance or sale to a Subsidiary of the Issuer
and other than
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an issuance or sale to an employee stock ownership plan or to a trust
established by the Issuer or any of its Restricted Subsidiaries), less the
amount of such Net Cash Proceeds used to make Restricted Payments pursuant
clause 3(B) of paragraph (a) of Section 4.5 or applied pursuant to clause (i)(B)
of paragraph (b) of Section 4.5; and (x) other Indebtedness and Preferred Stock
in an aggregate principal and/or liquidation amount outstanding at any time not
to exceed $15.0 million (less the amount of any Indebtedness then outstanding
and Incurred pursuant to clause (b)(xi) of Section 4.3).
(c) For purposes of determining compliance with this Section 4.4, (i)
in the event that an item of Indebtedness meets the criteria of more than one of
the types of Indebtedness described above, the Issuer, in its sole discretion,
will classify such item of Indebtedness and only be required to include the
amount and type of such Indebtedness in one of the above clauses of this Section
4.4 and (ii) an item of Indebtedness may be divided and classified in more than
one of the types of Indebtedness described in this Section 4.4.
The Issuer will not permit any Unrestricted Subsidiary to Incur any
Indebtedness other than Non-Recourse Debt.
SECTION 4.5. Limitation on Restricted Payments. (a) The Issuer will
not, and will not permit any Restricted Subsidiary, directly or indirectly, to
make any Restricted Payment if at the time the Issuer or such Restricted
Subsidiary makes such Restricted Payment: (1) a Default or Event of Default will
have occurred and be continuing (or would result therefrom); (2) the Issuer
could not Incur at least $1.00 of additional Indebtedness under paragraph (a) of
Section 4.3; or (3) the aggregate amount of such Restricted Payment and all
other Restricted Payments (the amount so expended, if other than in cash, to be
determined in good faith by the Board of Directors of the Issuer, whose
determination will be evidenced by a resolution of such Board of Directors)
declared or made subsequent to the Issue Date would exceed the sum of: (A) (x)
the aggregate EBITDA (or, in the event such EBITDA shall be a deficit, minus
such deficit) accrued subsequent to the Issue Date to the most recent date for
which financial information is available to the Issuer, taken as one accounting
period, (y) less 1.4 times Consolidated Interest Expense for the same period;
(B) (x) 100% of the aggregate Net Cash Proceeds (less the aggregate amount of
such Net Cash Proceeds used to Incur Indebtedness pursuant to clause (b)(x) of
Section 4.3 and clause (b)(ix) of Section 4.4) and (y) 70% of the GAAP purchase
accounting valuation of Qualified Proceeds (with each such valuation calculated
as of the sale date of the Capital Stock received as consideration therefor), in
each case received by the Issuer from the issue or sale of Capital Stock (other
than Disqualified Stock) subsequent to the first day of the quarter in which the
Issue Date occurs (other than an issuance or sale to a Subsidiary of the Issuer
and other than an issuance or sale to an employee stock ownership plan or to a
trust established by the Issuer or any of its Restricted Subsidiaries); (C) the
amount by which Indebtedness of the Issuer is reduced on the Issuer's balance
sheet upon the conversion or exchange (other than by a Restricted Subsidiary)
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subsequent to the Issue Date of any Indebtedness of the Issuer convertible or
exchangeable for Capital Stock (other than Disqualified Stock) of the Issuer
(less the amount of any cash, or the fair value of any other property,
distributed by the Issuer upon such conversion or exchange); (D) an amount equal
to the sum of (i) the net reduction in Investments in Unrestricted Subsidiaries
resulting from dividends, repayments of loans or advances or other transfers of
assets to the Issuer or any Restricted Subsidiary from Unrestricted Subsidiaries
and (ii) the portion (proportionate to the Issuer's equity interest in such
Subsidiary) of the fair market value of the net assets of an Unrestricted
Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted
Subsidiary; provided, that the foregoing sum shall not exceed, in the case of
any Unrestricted Subsidiary, the amount of Investments previously made by the
Issuer or any Restricted Subsidiary in such Unrestricted Subsidiary, which
amount was included in the calculation of the amount of Restricted Payments; (E)
dividends and distributions received by the Issuer subsequent to the Issue Date
from Unrestricted Subsidiaries, to the extent such dividends and distributions
are not otherwise included in calculating EBITDA; and (F) Net Cash Proceeds
received by the Issuer subsequent to the Issue Date from Investments that are
not Permitted Investments, to the extent not otherwise included in calculating
EBITDA.
(b) The provisions of the foregoing paragraph (a) of this Section 4.5
will not prohibit: (i) any purchase, redemption, defeasance or other acquisition
of Capital Stock of the Issuer or Subordinated Obligations made by exchange for,
or out of the net proceeds of the substantially concurrent sale of, Capital
Stock of the Issuer (other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary of the Issuer or an employee stock ownership plan
or to a trust established by the Issuer or any of its Subsidiaries); provided,
however, that (A) such purchase, redemption, defeasance or other acquisition
will be excluded in the calculation of the amount of Restricted Payments and (B)
to the extent applied toward any such purchase, redemption, defeasance or other
acquisition, the Net Cash Proceeds from such sale will be excluded from clause
(3)(B) of paragraph (a) of this Section 4.5, clause (b)(x) of Section 4.3 and
clause (b)(ix) of Section 4.4; (ii) any purchase, redemption, defeasance or
other acquisition of Subordinated Obligations made by exchange for, or out of
the net proceeds of the substantially concurrent sale of, Subordinated
Obligations of the Issuer; provided, however, that (A) the principal amount of
such new Indebtedness does not exceed the principal amount of the Subordinated
Obligations being so redeemed, repurchased, acquired or retired for value (plus
the amount of any premium required to be paid under the terms of the instrument
governing the Subordinated Obligations being so redeemed, repurchased, acquired
or retired), (B) such new Indebtedness is subordinated to the Notes at least to
the same extent as such Subordinated Obligations so purchased, exchanged,
redeemed, repurchased, acquired or retired for value, (C) such new Indebtedness
has a final scheduled maturity date later than the earlier of the final
scheduled maturity date of the Subordinated Obligations being so redeemed,
repurchased, acquired or retired and the final scheduled maturity date of the
Notes and (D) such new Indebtedness has an Average Life equal to or
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greater than the Average Life of the Notes; provided further, however, that such
purchase, redemption, defeasance or other acquisition will be excluded in the
calculation of the amount of Restricted Payments; (iii) dividends paid within 60
days after the date of declaration thereof if at such date of declaration such
dividend would have complied with this covenant; provided, however, that the
amount of such dividend will be included in the calculation of the amount of
Restricted Payments; and (iv) purchases of outstanding shares of the Issuer's
capital stock from former employees in an amount not to exceed $5.0 million in
the aggregate; provided, however, that such purchases will be included in the
calculation of the amount of Restricted Payments; provided, however, that, at
the time of, and after giving effect to, any Restricted Payment permitted by
clauses (i), (ii) and (iv), no Default or Event of Default shall have occurred
and be continuing.
SECTION 4.6. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Issuer will not, and will not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become effective
any consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock to the Issuer or a Restricted Subsidiary or pay any Indebtedness or other
obligation owed to the Issuer, (ii) make any loans or advances to the Issuer or
(iii) transfer any of its property or assets to the Issuer or any Restricted
Subsidiary, except: (1) any encumbrance or restriction pursuant to a Credit
Facility or any agreement in effect at or entered into on the Issue Date; (2)
any encumbrance or restriction with respect to a Restricted Subsidiary pursuant
to an agreement relating to any Indebtedness Incurred by such Restricted
Subsidiary on or prior to the date on which such Restricted Subsidiary was
acquired by the Issuer or a Restricted Subsidiary (other than Indebtedness
Incurred as consideration in, or to provide all or any portion of the funds or
credit support utilized to consummate the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Subsidiary or
was acquired by the Issuer or a Restricted Subsidiary) and outstanding on such
date; (3) any encumbrance or restriction pursuant to an agreement effecting a
Refinancing of Indebtedness Incurred pursuant to an agreement referred to in
clause (1) or (2) of this Section 4.6 or contained in any amendment to an
agreement referred to in clause (1) or (2) of this Section 4.6; provided,
however, that the encumbrances and restrictions with respect to such Restricted
Subsidiary contained in any such refinancing agreement or amendment taken as a
whole are no less favorable to the Noteholders than the encumbrances and
restrictions with respect to such Restricted Subsidiary contained in such
predecessor agreements as determined in good faith by the Board of Directors of
the Issuer; (4) in the case of clause (iii), any encumbrance or restriction that
restricts in a customary manner the subletting, assignment or transfer of any
property or asset that is subject to a lease, license or other contract; (5) in
the case of clause (iii), contained in security agreements or mortgages securing
Indebtedness of a Restricted Subsidiary to the extent such encumbrance or
restrictions restrict the transfer of the property subject to such security
agreements or
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mortgages; (6) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition; and (7) customary provisions
with respect to the disposition or distribution of assets or property in joint
venture and other similar agreements.
SECTION 4.7. Limitation on Sale of Assets and Subsidiary Stock. (a)
The Issuer will not, and will not permit any Restricted Subsidiary to, directly
or indirectly, consummate any Asset Disposition unless (i) the Issuer or such
Restricted Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the fair market value (including as to the value
of all non cash consideration), as determined in good faith by the Board of
Directors of the Issuer of the shares and assets subject to such Asset
Disposition and (ii) except in the case of a Tower Asset Exchange, at least 75%
of the consideration thereof received by the Issuer or such Restricted
Subsidiary is in the form of cash or cash equivalents.
Within 365 days after the receipt of any Net Available Cash from an
Asset Disposition, the Issuer or the applicable Restricted Subsidiary may apply
such Net Available Cash to: (A) prepay, repay, redeem or purchase Indebtedness
(other than Disqualified Stock) of a Wholly Owned Subsidiary (provided, that the
applicable Restricted Subsidiary also may prepay, repay, redeem or purchase its
own outstanding Indebtedness) or Senior Indebtedness (in each case other than
Indebtedness owed to the Issuer or an Affiliate of the Issuer); (B) make an
offer with respect to the 2008 Notes to the extent required in the indenture
governing the 2008 Notes; (C) acquire all or substantially all of the assets of
an entity engaged in a Permitted Business; (D) acquire Voting Stock of an entity
engaged in a Permitted Business from a Person that is not a Subsidiary of the
Issuer; provided, that (x) after giving effect thereto, the Issuer or its
Restricted Subsidiary owns a majority of such Voting Stock and (y) such
acquisition is otherwise made in accordance with this Indenture, including,
without limitation, Section 4.5; or (E) make a capital expenditure or acquire
other long-term assets that are used or useful in a Permitted Business. To the
extent of the balance of such Net Available Cash after application in accordance
with clauses (A), (B), (C), (D) or (E), the Issuer shall make an Offer (as
defined in Section 4.7(b)) to Holders of the Notes to purchase Notes pursuant to
and subject to the conditions set forth in paragraph (b) of this Section 4.7.
Notwithstanding the foregoing provisions, the Issuer and its
Restricted Subsidiaries shall not be required to apply any Net Available Cash in
accordance herewith except to the extent that the aggregate Net Available Cash
from all Asset Dispositions which are not applied in accordance with this
covenant exceeds $10.0 million. Pending application of Net Available Cash
pursuant to this covenant, such Net Available Cash shall be invested in
Permitted Investments.
For the purposes of this Section 4.7(a), the following are deemed to
be cash:
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(x) the assumption by the transferee of Indebtedness of the Issuer (other than
Disqualified Stock of the Issuer and other than Indebtedness that is
subordinated to the Notes) or Indebtedness of any Restricted Subsidiary and the
release of the Issuer or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition; (y) securities received
by the Issuer or any Restricted Subsidiary from the transferee that are
converted by the Issuer or such Restricted Subsidiary into cash within 20 days
of the applicable Asset Disposition (to the extent of the cash received); and
(z) any liabilities (as shown on the Issuer's or such Restricted Subsidiary's
most recent balance sheet) of the Issuer or any Restricted Subsidiary (other
than contingent liabilities and liabilities that are by their terms subordinated
to the Notes or any guarantee thereof) that are assumed by the transferee of any
such assets pursuant to a customary novation agreement that releases the Issuer
or any such Restricted Subsidiary from further liability.
(b) In the event of an Asset Disposition that requires the purchase
of Notes pursuant to paragraph (a) of this Section 4.7, the Issuer will be
required to purchase Notes tendered pursuant to an offer by the Issuer for the
Notes (the "Offer") at a purchase price of 100% of their Accreted Value as of
the date of purchase (without premium) plus accrued and unpaid interest to the
date of purchase in accordance with the procedures (including prorating in the
event of oversubscription) set forth in this Indenture. If the aggregate
purchase price of Notes tendered pursuant to the Offer is less than the Net
Available Cash allotted to the purchase of the Notes, the Issuer may use any
remaining Net Available Cash for general corporate purposes not otherwise
prohibited by this Indenture. If the aggregate purchase price of Notes tendered
pursuant to the Offer is greater than the Net Available Cash allotted to the
purchase of the Notes, the Trustee will select the Notes to be purchased on the
basis set forth in paragraph (c) of this Section 4.7. Upon completion of any
required Offer to the holders of the Notes, the amount of Net Available Cash
will be reset at zero. The Issuer shall not be required to make an Offer for
Notes pursuant to this Section 4.7 if the Net Available Cash available therefor
(after application of the proceeds as provided in the second paragraph of
Section 4.7(a)) are less than $10.0 million for all Asset Dispositions (which
lesser amounts shall be carried forward for purposes of determining whether an
Offer is required with respect to the Net Available Cash from any subsequent
Asset Disposition).
(c) (1) Promptly, and in any event within 30 days after the Issuer
becomes obligated to make an Offer, the Issuer shall be obligated to deliver to
the Trustee and send, by first-class mail to each Holder, at the address
appearing in the security register, a written notice stating that the Holder may
elect to have his Notes purchased by the Issuer either in whole or in part
(subject to prorationing as hereinafter described in the event the Offer is
oversubscribed) in integral multiples of $1,000 of principal amount at maturity,
at the applicable purchase price. The notice shall specify a purchase date not
less than 30 days nor more than 60 days after the date of such notice (the
"Purchase Date") and shall contain all
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instructions and materials necessary to tender Notes pursuant to the Offer.
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided below, the Issuer shall deliver to the
Trustee an Officer's Certificate as to (i) the amount of the Offer (the "Offer
Amount"), (ii) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to which such Offer is being made and (iii) the compliance
of such allocation with the provisions of Section 4.7(a). Upon the expiration of
the period for which the Offer remains open (the "Offer Period"), the Issuer
shall deliver to the Trustee for cancellation the Notes or portions thereof
which have been properly tendered to and are to be accepted by the Issuer. Not
later than 11:00 a.m. (New York City time) on the Purchase Date, the Issuer
shall irrevocably deposit with the Trustee or with a paying agent (or, if the
Issuer is acting as Paying Agent, segregate and hold in trust) an amount in cash
sufficient to pay the Offer Amount for all Notes properly tendered to, not
withdrawn from and accepted by the Issuer. The Trustee shall, on the Purchase
Date, mail or deliver payment to each tendering Holder in the amount of the
purchase price.
(3) Holders electing to have a Note purchased will be required to
surrender the Note, together with all necessary endorsements and other
appropriate materials duly completed, to the Issuer at the address specified in
the notice at least three Business Days prior to the Purchase Date. Holders will
be entitled to withdraw their election in whole or in part if the Trustee or the
Issuer receives not later than one Business Day prior to the Purchase Date, a
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note (which shall be $1,000 in principal amount at
maturity or an integral multiple thereof) which was delivered for purchase by
the Holder, the aggregate principal amount at maturity of such Note (if any)
that remains subject to the original notice of the Offer and that has been or
will be delivered for purchase by the Issuer and a statement that such Holder is
withdrawing his election to have such Note purchased. If at the expiration of
the Offer Period the aggregate principal amount at maturity of Notes surrendered
by Holders exceeds the Offer Amount, the Trustee shall select the Notes to be
purchased in accordance with the provisions of Section 3.2 (with such
adjustments as may be deemed appropriate by the Trustee so that only securities
in denominations of $1,000 principal amount at maturity, or integral multiples
thereof, shall be purchased). Holders whose Notes are purchased only in part
will be issued new Notes equal in principal amount at maturity to the
unpurchased portion of the Notes surrendered.
(4) A Note shall be deemed to have been accepted for purchase at the
time the Trustee, directly or through an agent, mails or delivers payment
therefor to the surrendering Holder.
(d) The Issuer will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection
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with the repurchase of Notes pursuant to this covenant. To the extent that the
provisions of any securities laws or regulations conflict with provisions of
this covenant, the Issuer will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under this
covenant by virtue thereof.
(e) The provisions of this Section 4.7 shall not apply to any
transaction that is permitted under the provisions of Section 5.1.
SECTION 4.8. Limitation on Transactions with Affiliates. (a) The
Issuer will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, enter into or conduct any transaction or series of transactions
(including the purchase, sale, lease or exchange of any property, employee
compensation arrangements or the rendering of any service) with any Affiliate of
the Issuer (an "Affiliate Transaction") unless (i) the terms of such
transaction, taken as a whole, are no less favorable to the Issuer or such
Restricted Subsidiary, as the case may be, than those that could be obtained at
the time of such transaction in arm's-length dealings with a Person who is not
such an Affiliate; (ii) in the event such Affiliate Transaction involves an
aggregate amount in excess of $5.0 million, the terms of such transaction are
set forth in writing and shall have been approved by a majority of the members
of the Board of Directors having no personal stake in such Affiliate Transaction
(and such majority determines that such Affiliate Transaction satisfies the
criteria in clause (i) above) and (iii) in the event such Affiliate Transaction
involves an aggregate amount in excess of $10.0 million, the Issuer has received
a written opinion from a nationally recognized independent investment banking
firm that such Affiliate Transaction is fair to the Issuer and its Restricted
Subsidiaries from a financial point of view.
(b) The provisions of paragraph (a) of this Section 4.8 shall not
prohibit (i) any Restricted Payment permitted to be made pursuant to Section
4.5, (ii) any issuance of securities, or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Board of
Directors, or any arrangements relating thereto, (iii) the grant of a stock
options or similar rights to employees and directors of the Issuer pursuant to
plans approved by the Board of Directors, (iv) loans or advances to employees in
the ordinary course of business in accordance with the past practices of the
Issuer or its Restricted Subsidiaries, but in any event not to exceed $5.0
million in the aggregate outstanding at any one time, (v) the payment of
reasonable fees to directors of the Issuer and its Restricted Subsidiaries who
are not employees of the Issuer or its Restricted Subsidiaries, (vi) any
transaction between the Issuer and a Restricted Subsidiary or between Restricted
Subsidiaries, (vii) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Issuer, (viii) any transaction consummated pursuant
to the terms of any agreement described in the Offering Memorandum to which the
Issuer is a party, in each case as such agreement is in effect on the Issue Date
and giving effect to any subsequent supplements, amendments, modifications or
alterations
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thereof that are approved by the disinterested members of the Issuer's Board of
Directors, (ix) any transaction in the ordinary course of business between the
Issuer or any Restricted Subsidiary and any Affiliate of the Issuer relating to
the acquisition, management, construction, leasing or licensing of Tower Assets,
provided, however, that such transaction is on terms that are no less favorable,
taken as a whole, to the Issuer or the relevant Restricted Subsidiary than those
that could have been obtained in a comparable transaction by the Issuer or such
Restricted Subsidiary with an unrelated Person or is otherwise on terms that,
taken as a whole, the Issuer has determined to be fair to the Issuer or the
relevant Restricted Subsidiary) and (x) any transaction between the Issuer or
any of its Restricted Subsidiaries and any of its Affiliates involving ordinary
course investment banking, commercial banking or related activities.
SECTION 4.9. Change of Control. (a) Upon the occurrence of a Change
of Control, each Holder shall have the right to require that the Issuer
repurchase all or any part of such Holder's Notes at a purchase price in cash
equal to 101% of the Accreted Value thereof as of the date of repurchase, plus
accrued and unpaid interest, if any, to the date of repurchase, in accordance
with the terms contemplated in Section 4.9(b).
(b) (i) Within 30 days following any Change of Control, the Issuer
shall mail a notice to each Holder at its registered address with a copy to the
Trustee stating:
(1) that a Change of Control has occurred and that such Holder has
the right to require the Issuer to purchase such Holder's Notes in
denominations of $1,000 principal amount at maturity or any integral
multiple thereof at a purchase price in cash equal to 101% of the Accreted
Value thereof as of the date of repurchase, plus accrued and unpaid
interest, if any, to the date of repurchase;
(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical
income, cash flow and capitalization after giving effect to such Change of
Control);
(3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Issuer, consistent with this
Section 4.9, that a Holder must follow in order to have its Notes
purchased by the Issuer.
(c) Holders electing to have a Note purchased will be required to
surrender the Note, together with all necessary endorsements and other
appropriate materials duly completed, to the Issuer at the address specified in
the notice at least three Business Days prior to the purchase date. Holders will
be entitled to withdraw their election if the Trustee or
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the Issuer receives not later than one Business Day prior to the purchase date,
a facsimile transmission or letter setting forth the name of the Holder, the
principal amount at maturity of the Note which was delivered for purchase by the
Holder as to which such notice of withdrawal is being submitted and a statement
that such Holder is withdrawing his election to have such Note purchased.
(d) On the purchase date, all Notes purchased by the Issuer under
this Section 4.9 shall be delivered to the Trustee for cancellation, and the
Issuer shall pay the purchase price, including premium, if any, plus accrued and
unpaid interest, if any, to the Holders entitled thereto.
(e) The Issuer will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 4.9. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.9, the Issuer will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this Section 4.9 by virtue thereof.
(f) The Issuer will not be required to make an offer pursuant to this
Section 4.9 upon a Change of Control if a third party, in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Indenture applicable to a Change of Control made by the Issuer, makes an offer
to purchase and purchases all Notes validly tendered and not withdrawn under
such offer.
(g) Notwithstanding the occurrence of a Change of Control, the Issuer
shall not be obligated to repurchase the Notes or otherwise comply with this
Section 4.9 if the Issuer has irrevocably elected to redeem all the Notes in
accordance with Article III; provided that the Issuer does not default in its
redemption obligations pursuant to such election.
SECTION 4.10. Limitation on Sale or Issuance of Capital Stock of
Restricted Subsidiaries. The Issuer (i) will not, and will not permit any
Restricted Subsidiary of the Issuer to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any Restricted Subsidiary to any
Person (other than to the Issuer or a Wholly Owned Subsidiary), unless (a) such
transfer, conveyance, sale, lease or other disposition is of (x) all of the
Capital Stock of such Restricted Subsidiary or (y) a majority of the issued and
outstanding Capital Stock of such Restricted Subsidiary; provided, however, that
the Issuer's minority equity interest in such Person after giving effect to any
such disposition shall be deemed to constitute an Investment by the Issuer in
such Person; and (b) the net cash proceeds from such transfer, conveyance, sale,
lease or other disposition are applied in accordance with Section 4.7 and (ii)
will not permit any Restricted Subsidiary to issue any of its Capital Stock
(other than, to the extent necessary or mandated by applicable law, shares of
its Capital Stock constituting
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directors' qualifying shares or the ownership by foreign nationals of Capital
Stock of any Restricted Subsidiary) to any Person other than to the Issuer or a
Wholly Owned Subsidiary.
SECTION 4.11. Limitation on Liens. The Issuer will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, create or permit to
exist any Lien on any of its property or assets (including Capital Stock),
whether owned on the Issue Date or thereafter acquired, securing any obligation,
other than Permitted Liens, unless contemporaneously therewith effective
provision is made to secure the Notes equally and ratably with (or on a senior
basis to, in the case of Subordinated Obligations) such obligation for so long
as such obligation is so secured.
SECTION 4.12. Limitation on Sale/Leaseback Transactions. The Issuer
will not, and will not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless (i) the Issuer or
such Restricted Subsidiary would be entitled to (A) Incur Indebtedness in an
amount equal to the Attributable Indebtedness with respect to such
Sale/Leaseback Transaction pursuant to Section 4.3 and (B) create a Lien on such
property securing such Attributable Indebtedness without equally and ratably
securing the Notes pursuant to Section 4.11, (ii) the net cash proceeds received
by the Issuer or any Restricted Subsidiary in connection with such
Sale/Leaseback Transaction are at least equal to the fair value (as determined
in good faith by the Board of Directors of the Issuer) of such property and
(iii) the transfer of such property is permitted by, and the Issuer or such
Restricted Subsidiary applies the proceeds of such transaction in compliance
with, Section 4.7.
SECTION 4.13. Compliance with Laws. The Issuer shall comply, and
shall cause each of its Restricted Subsidiaries to comply, with all applicable
statutes, rules, regulations, orders and restrictions of the United States of
America, all states and municipalities thereof, and of any governmental
department, commission, board, regulatory authority, bureau, agency and
instrumentality of the foregoing, in respect of the conduct of their respective
businesses and the ownership of their respective properties, except for such
noncompliances as are not in the aggregate reasonably likely to have a material
adverse effect on the financial condition or results of operations of the Issuer
and its Subsidiaries, taken as a whole.
SECTION 4.14. Compliance Certificate. The Issuer shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Issuer an
Officer's Certificate signed by the chief executive officer, the chief financial
officer or the chief accounting officer stating that in the course of the
performance by the signer of his duties as an Officer of the Issuer he would
normally have knowledge of any Default or Event of Default and whether or not
the signers know of any Default or Event of Default that occurred during such
period. If he does, the certificate shall describe the Default or Event of
Default, its status and what
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action the Issuer is taking or proposes to take with respect thereto. The Issuer
also shall comply with TIA Section 314(a)(4).
SECTION 4.15. Further Instruments and Acts. Upon reasonable request
of the Trustee, the Issuer will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.16. Maintenance of Office or Agency. The Issuer shall
maintain the office or agency required under Section 2.3. The Issuer shall give
prior written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Issuer shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 10.2.
SECTION 4.17. Corporate Existence. Except as otherwise permitted by
Article V and Section 4.9, the Issuer shall do or cause to be done, at its own
cost and expense, all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or limited
liability company existence of each of its Significant Subsidiaries in
accordance with the respective organizational documents of each such Subsidiary
and the material rights (charter and statutory) and franchises of the Issuer and
each such Subsidiary; provided, however, that the Issuer shall not be required
to preserve, with respect to itself, any material right or franchise and, with
respect to any of its Significant Subsidiaries, any such existence, material
right or franchise, if the Board of Directors of the Issuer shall determine in
good faith (such determination to be evidenced by a board resolution), that the
preservation thereof is no longer desirable in the conduct of the business of
the Issuer and the Subsidiaries, taken as a whole.
SECTION 4.18. Payment of Taxes and Other Claims. The Issuer shall pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and additions to taxes)
levied or imposed upon it or any of its Restricted Subsidiaries or properties of
it or any of its Restricted Subsidiaries and (ii) all lawful claims for labor,
materials and supplies that, if unpaid, might by law become a Lien upon the
property of it or any of its Restricted Subsidiaries; provided, however, that
the Issuer shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted for which adequate reserves, to the extent
required under GAAP, have been taken.
SECTION 4.19. Maintenance of Properties and Insurance. (a) The Issuer
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shall, and shall cause each of its Significant Subsidiaries to, maintain its
material properties in good working order and condition (subject to ordinary
wear and tear) and make or cause to be made all necessary repairs, renewals,
replacements, additions, betterments and improvements thereto and actively
conduct and carry on its business, all as in the reasonable judgment of the
Issuer is necessary so that the business carried on by Issuer and its
Significant Subsidiaries may be actively conducted; provided, however, that
nothing in this Section 4.19 shall prevent the Issuer or any of its Subsidiaries
from discontinuing the operation and maintenance of any of its properties, if
such discontinuance is, in the good faith judgment of the Issuer or the
Subsidiary, as the case may be, desirable in the conduct of their respective
businesses and is not disadvantageous in any material respect to the Holders.
(b) The Issuer shall provide or cause to be provided, for itself and
each of its Significant Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good faith
judgment of the Issuer, are adequate and appropriate for the conduct of the
business of the Issuer and such Subsidiaries in a prudent manner, with reputable
insurers or with the government of the United States of America, any state
thereof or any agency or instrumentality of such governments, in such amounts,
with such deductibles, and by such methods as shall be customary, in the good
faith judgment of the Issuer, for companies similarly situated in the industry.
ARTICLE V
SUCCESSOR ISSUER
SECTION 5.1. When the Issuer May Merge or Transfer Assets. The Issuer
will not consolidate with or merge with or into, or convey, transfer or lease,
in one transaction or a series of transactions, all or substantially all its
assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Issuer") will be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia
and the Successor Issuer (if not the Issuer) will expressly assume, by
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Issuer under the
Notes and this Indenture;
(ii) immediately after giving effect to such transaction on a pro
forma basis (and treating any Indebtedness which becomes an obligation of
the Successor Issuer or any Restricted Subsidiary as a result of such
transaction as having been Incurred by the Successor Issuer or such
Restricted Subsidiary at the time of such transaction), no Default or
Event of Default will have occurred and be continuing;
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(iii) except (A) in the case of a merger of the Issuer into a Wholly
Owned Subsidiary, (B) a merger entered into solely for the purpose of
reincorporating the Issuer in another jurisdiction or (C) a merger the
Issuer enters into solely for the purpose of forming a holding company to
hold all of the outstanding capital stock of the Issuer, immediately after
giving effect to such transaction on a pro forma basis as if such
transaction had occurred at the beginning of the applicable four quarter
period, the Issuer or the Person formed by or surviving any such
consolidation or merger (if other than the Issuer), or to which such
conveyance, transfer, lease or other disposition shall have been made,
either (x) would have been permitted to incur at least $1.00 of additional
Indebtedness under Section 4.3(a) or (y) would have had an Indebtedness to
Adjusted EBITDA Ratio immediately after giving effect to such
consolidation, merger, conveyance, transfer, lease or other disposition no
greater than the Indebtedness to Adjusted EBITDA Ratio immediately prior
to such transaction; and
(iv) the Issuer will have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture, as set forth in this Indenture.
The Successor Issuer will succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture, but the
predecessor Issuer in the case of a conveyance, transfer or lease of all its
assets or substantially all its assets will be released from the obligations
under this Indenture and the Notes, including without limitation the obligation
to pay the principal of and interest on the Notes.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default. An "Event of Default" occurs if:
(1) the Issuer defaults in any payment of interest on any Note when
the same becomes due and payable, and such default continues for a period
of 30 days;
(2) the Issuer defaults in the payment of the principal of any Note
when the same becomes due and payable at its Stated Maturity, upon
optional or mandatory redemption, upon required repurchase, upon
declaration or otherwise;
(3) the Issuer fails to comply with its obligations under Article V;
(4) the Issuer fails to comply with Section 4.2, 4.3, 4.4, 4.5, 4.6,
4.7, 4.8,
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4.9, 4.10, 4.11 or 4.12 (other than a failure to purchase Notes when
required pursuant to Section 4.7 or 4.9, which failure shall constitute an
Event of Default under Section 6.1(2)) and such failure continues for 30
days after the notice specified below;
(5) the Issuer fails to comply with any of its agreements in the
Notes or this Indenture (other than those referred to in (1), (2), (3) or
(4) above) and such failure continues for 60 days after the notice
specified below;
(6) the Issuer or any Significant Subsidiary of the Issuer fails to
pay any Indebtedness within any applicable grace period provided in such
Indebtedness after final maturity or the acceleration of any such
Indebtedness by the holders thereof because of a default if the total
amount of such Indebtedness unpaid or accelerated exceeds $10.0 million or
its foreign currency equivalent at the time;
(7) the Issuer or a Significant Subsidiary of the Issuer pursuant to
or within the meaning of any Bankruptcy Law:
commences a voluntary case;
consents to the entry of an order for relief against it in an
involuntary case in which it is the debtor;
consents to the appointment of a Custodian of it or for any
substantial part of its property; or
makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
is for relief against the Issuer or any Significant Subsidiary of
the Issuer in an involuntary case;
appoints a Custodian of the Issuer or any Significant Subsidiary
or for any substantial part of its property of the Issuer or any
Significant Subsidiary; or
orders the winding up or liquidation of the Issuer or any
Significant Subsidiary of the Issuer
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(or any similar relief is granted under any foreign laws) and the order,
decree or relief remains unstayed and in effect for 90 days; or
(9) any final judgment or decree for the payment of money in excess
of $10.0 million (net of any amounts with respect to which a creditworthy
insurance company has acknowledged full liability (subject to any
deductible amounts of less than $10.0 million required to be paid by the
Issuer or the Significant Subsidiary of the Issuer in accordance with the
applicable insurance policy)) is rendered against the Issuer or any
Significant Subsidiary of the Issuer and either (A) an enforcement
proceeding has been commenced by any creditor upon such judgment or decree
or (B) such judgment or decree remains unpaid and outstanding for a
period of 60 days following such judgment and is not discharged, waived or
stayed within 10 days after notice.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4), (5) and (9) of this Section 6.1 is not an
Event of Default until the Trustee by notice to the Issuer or the Holders of at
least 25% in aggregate principal amount of the outstanding Notes by notice to
the Issuer give notice of the Default and the Issuer does not cure such Default
within the time specified in said clause (4), (5) or (9) after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
The Issuer shall deliver to the Trustee, within 30 days after it
obtains knowledge of the occurrence thereof, written notice in the form of an
Officer's Certificate of any Event of Default under clause (6) of this Section
6.1 and any event which with the giving of notice or the lapse of time would
become an Event of Default under clause (4), (5) or (9) of this Section 6.1 and
what action the Issuer is taking or proposes to take with respect thereto.
SECTION 6.2. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.1(7) or (8) with respect to the Issuer)
occurs and is continuing, the Trustee by notice to the Issuer, or the Holders of
at least 25% in aggregate principal amount at maturity of the outstanding Notes
by notice to the Issuer, may declare the Accreted Value of and accrued but
unpaid interest on all the Notes to be due and payable. Upon such a
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declaration, such Accreted Value and interest shall be due and payable
immediately. If an Event of Default specified in Section 6.1(7) or (8) with
respect to the Issuer occurs and is continuing, the Accreted Value of and
accrued interest on all the Notes shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holders. The Holders of a majority in aggregate principal amount at maturity
of the outstanding Notes by notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration and the Trustee has been paid all amounts due to it pursuant to
Section 7.7. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of Accreted Value of or interest on the Notes or to enforce the performance of
any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are, to the extent
permitted by law, cumulative.
SECTION 6.4. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount at maturity of the Notes then outstanding by notice
to the Trustee may waive any past or existing Default and its consequences
except (i) a Default in the payment of the principal of or interest on a Note or
(ii) a Default in respect of a provision that under Section 9.2 cannot be
amended without the consent of each Noteholder affected. When a Default is
waived, it is deemed cured, and any Event of Default arising therefrom shall be
deemed to have been cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.
SECTION 6.5. Control by Majority. Upon provision of reasonable
indemnity to the Trustee satisfactory to the Trustee, the Holders of a majority
in aggregate principal amount of the Notes then outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee, which may rely on opinions of counsel, may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section 7.1,
that the Trustee determines is unduly prejudicial to the rights of other
Noteholders or would involve the Trustee in personal liability; provided,
however, that the
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Trustee may take any other action deemed proper by the Trustee that is not
inconsistent with such direction.
SECTION 6.6. Limitation on Suits. A Holder may not pursue any remedy
with respect to this Indenture or the Notes unless:
(i) the Holder gives to the Trustee previous written notice stating
that an Event of Default is continuing;
(ii) the Holders of at least 25% in aggregate principal amount at
maturity of the Notes then outstanding make a written request to the
Trustee to pursue the remedy;
(iii) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(v) the Holders of a majority in aggregate principal amount of the
Notes then outstanding do not give the Trustee a direction inconsistent
with such request within such 60-day period.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 6.7. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of the Accreted Value of and interest on the Notes held by such Holder,
on or after the respective due dates expressed in the Notes, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Issuer for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.7.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Noteholders allowed
in any judicial proceedings relative to the Issuer, its creditors or its
property and shall be entitled and empowered to
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collect, receive and distribute any money or other securities or property
payable or deliverable on any such claims and to distribute the same, and,
unless prohibited by law or applicable regulations, may vote on behalf of the
Holders in any election of a trustee in bankruptcy or other Person performing
similar functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Noteholders for amounts due and unpaid on the Notes for
Accreted Value and interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Notes for
Accreted Value and interest, respectively; and
THIRD: to the Issuer or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 6.10. At least 15 days before such record
date, the Issuer shall mail to each Noteholder and the Trustee a notice that
states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7 or a suit
by Holders of more than 10% in aggregate principal amount of the outstanding
Notes.
SECTION 6.12. Waiver of Stay or Extension Laws. The Issuer (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or
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at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and shall not hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE VII
TRUSTEE
SECTION 7.1. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and the TIA and no
implied covenants or obligations shall be read into this Indenture against
the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.1;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to
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Section 6.5.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.1.
(e) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(f) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.1 and to the provisions of the TIA.
SECTION 7.2. Rights of Trustee. (a) The Trustee may rely upon, and
shall be fully protected from acting or refraining from acting, on any document
believed by it to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may request
an Officer's Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officer's Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
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(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(g) The Trustee shall not be charged with knowledge of any Default or
Event of Default with respect to the Notes unless either (1) a Trust Officer
shall have actual knowledge of such Default or Event of Default or (2) written
notice of such Default or Event of Default shall have been given to the Trustee
by the Issuer or by any Holder of the Notes.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuer or its respective Affiliates with the same
rights it would have if it were not Trustee. Any Paying Agent, Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Issuer's use of
the proceeds from the Notes, and it shall not be responsible for any statement
of the Issuer in this Indenture or in any document issued in connection with the
sale of the Notes or in the Notes other than the Trustee's certificate of
authentication.
SECTION 7.5. Notice of Defaults. If a Default or an Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee must
mail to each Noteholder notice of the Default within the earlier of 90 days
after it occurs or 30 days after it is known to a Trust Officer or written
notice of it is received by the Trustee. Except in the case of a Default in
payment of principal of, premium (if any) or interest on any Note, the Trustee
may withhold notice if and so long as a committee of its Trust Officers in good
faith determines that withholding notice is not opposed to the interests of
Noteholders.
SECTION 7.6. Reports by Trustee to Holders. As promptly as
practicable after each January 15 beginning with the January 15 following the
date of this Indenture, and in any event prior to March 15 in each year, the
Trustee shall mail to each Noteholder a brief report dated as of such January 15
that complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b). The Trustee shall promptly deliver to the Issuer a copy of any
report it delivers to Holders pursuant to this Section 7.6.
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Trustee with the SEC and each stock exchange (if any) on which
the Notes are listed. The
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Issuer agrees to notify promptly the Trustee whenever the Notes become listed on
any stock exchange and of any delisting thereof.
SECTION 7.7. Compensation and Indemnity. The Issuer shall pay to the
Trustee from time to time such compensation for its services as the Issuer and
the Trustee shall from time to time agree in writing. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuer shall reimburse the Trustee upon request for all reasonable
fees and expenses, including out-of-pocket expenses, incurred or made by it in
connection with the performance of its duties hereunder, including costs of
collection, in addition to such compensation for its services, except any such
expense, disbursement or advance as may arise from its negligence, wilful
misconduct or bad faith, unless the Trustee shall have complied with the
applicable standard of care required by the TIA. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Trustee shall provide
the Issuer reasonable notice of any expenditure not in the ordinary course of
business; provided that prior approval by the Issuer of any such expenditure
shall not be a requirement for the making of such expenditure nor for
reimbursement by the Issuer thereof. The Issuer shall indemnify each of the
Trustee and any predecessor Trustees against any and all loss, damage, claim,
liability or expense (including reasonable attorneys' fees and expenses) (other
than taxes applicable to the Trustee's compensation hereunder) incurred by it in
connection with the acceptance or administration of this trust and the
performance of its duties hereunder. The Trustee shall notify the Issuer
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Issuer shall not relieve the Issuer of its obligations hereunder.
The Issuer shall defend the claim and the Trustee may have separate counsel, and
the Issuer will pay the reasonable fees and expenses of such counsel. The Issuer
need not reimburse any expense or indemnify against any loss, liability or
expense incurred by the Trustee through the Trustee's own wilful misconduct,
negligence or bad faith, unless the Trustee shall have complied with the
applicable standard of care required by the TIA.
To secure the Issuer's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Notes.
The Issuer's payment obligations pursuant to this Section 7.7 shall
survive the resignation or removal of the Trustee and discharge of this
Indenture. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.1(7) or (8) with respect to the Issuer, the expenses are
intended to constitute expenses of administration under the Bankruptcy Law,
provided, however, that this shall not affect the Trustee's rights as set forth
in the preceding paragraph or Section 6.10.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at any
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time with 30 days notice to the Issuer. The Holders of a majority in principal
amount of the Notes then outstanding, may remove the Trustee with 30 days notice
to the Trustee and the Issuer and may appoint a successor Trustee. The Issuer
shall remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Trustee
or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Issuer or by the Holders of
a majority in principal amount of the Notes and such Holders do not reasonably
promptly appoint a successor Trustee, or if a vacancy exists in the office of
Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Issuer shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Thereupon the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Noteholders. The retiring Trustee shall promptly transfer all property held by
it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.7.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
SECTION 7.9. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee, provided that such corporation shall
be eligible under this Article VII and TIA Section 3.10(a).
In case at the time such successor or successors by merger,
conversion or
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consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor to the
Trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certificate
of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Issuer are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Issuer. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1. Discharge of Liability on Notes; Defeasance. (a) When
(i) the Issuer delivers to the Trustee all outstanding Notes (other than Notes
replaced pursuant to Section 2.7) for cancellation or (ii) all outstanding Notes
have become due and payable, whether at maturity or as a result of the mailing
of a notice of redemption pursuant to Article III hereof or the Notes will
become due and payable at their Stated Maturity within 91 days, or the Notes are
to be called for redemption within 91 days under arrangements satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the name,
and at the expense, of the Issuer, and, in each case of this clause (ii), the
Issuer irrevocably deposits or causes to be deposited with the Trustee funds
sufficient to pay at maturity or upon redemption all outstanding Notes,
including interest thereon to maturity or such redemption date (other than Notes
replaced pursuant to Section 2.7), and if in either case the Issuer pays all
other sums payable hereunder by the Issuer, then this Indenture shall, subject
to Section 8.1(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Issuer accompanied
by an Officer's Certificate and an Opinion of
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Counsel from the Issuer that all conditions precedent provided herein for
relating to satisfaction and discharge of this Indenture have been complied with
and at the cost and expense of the Issuer.
(b) Subject to Sections 8.1(c) and 8.2, the Issuer at any time may
terminate (i) all of its obligations under the Notes and this Indenture ("legal
defeasance option") or (ii) its obligations under Sections 4.2, 4.3, 4.4, 4.5,
4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.14, 4.18 and 4.19 and the operation of
Sections 6.1(6), 6.1(7) (but only with respect to a Significant Subsidiary),
6.1(8) (but only with respect to a Significant Subsidiary), 6.1(9) and 5.1(iii)
("covenant defeasance option"). The Issuer may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.
If the Issuer exercises its legal defeasance option, payment of the
Notes may not be accelerated because of an Event of Default. If the Issuer
exercises its covenant defeasance option, payment of the Notes may not be
accelerated because of an Event of Default specified in Section 6.1(4), 6.1(5),
6.1(6), 6.1(7) (but only with respect to a Significant Subsidiary), 6.1(8) (but
only with respect to a Significant Subsidiary), 6.1(9), 6.1(10) or because of
the failure of the Issuer to comply with Section 5.1(iii).
Upon satisfaction of the conditions set forth herein and upon request
of the Issuer, the Trustee shall acknowledge in writing the discharge of those
obligations that the Issuer terminates.
(c) Notwithstanding clauses (a) and (b) above, the Issuer's
obligations in Sections 2.3, 2.4, 2.5, 2.7, 4.1, 4.13, 4.15, 4.16, 4.17, 7.7,
7.8, 8.4, 8.5 and 8.6 shall survive until the Notes have been paid in full.
Thereafter, the Issuer's obligations in Sections 7.7, 8.4 and 8.5 shall survive.
SECTION 8.2. Conditions to Defeasance. The Issuer may exercise its
legal defeasance option or its covenant defeasance option only if:
(i) the Issuer irrevocably deposits or causes to be deposited in
trust with the Trustee money or U.S. Government Obligations which through
the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide cash at such times and in such
amounts as will be sufficient to pay principal and interest when due on
all outstanding Notes (except Notes replaced pursuant to Section 2.7) to
maturity or redemption, as the case may be;
(ii) the Issuer delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S.
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Government Obligations plus any deposited money without investment
will provide cash at such times and in such amounts as will be sufficient
to pay principal and interest when due on all outstanding Notes (except
Notes replaced pursuant to Section 2.7) to maturity or redemption, as the
case may be;
(iii) 91 days pass after the deposit is made and during the 91-day
period no Default specified in Section 6.1(7) or (8) with respect to the
Issuer occurs which is continuing at the end of the period;
(iv) the deposit does not constitute a default under any other
material agreement binding on the Issuer;
(v) the Issuer delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Company Act of 1940;
(vi) in the case of the legal defeasance option, the Issuer shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Issuer has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of this Indenture there
has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Noteholders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such deposit
and defeasance had not occurred;
(vii) in the case of the covenant defeasance option, the Issuer shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Noteholders will not recognize income, gain or loss for federal income tax
purposes as a result of such covenant defeasance and will be subject to
federal income tax on the same amounts and in the same manner and at the
same times as would have been the case if such deposit and covenant
defeasance had not occurred; and
(viii) the Issuer delivers to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent to
the defeasance and discharge of the Notes as contemplated by this Article
VIII have been complied with.
Before or after a deposit, the Issuer may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article III.
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SECTION 8.3. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article VIII. It shall apply the deposited money and the money from U.S.
Government Obligations either directly or through the Paying Agent as the
Trustee may determine and in accordance with this Indenture to the payment of
principal of and interest on the Notes.
SECTION 8.4. Repayment to Issuer. The Trustee and the Paying Agent
shall promptly turn over to the Issuer upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Issuer upon written request any money held by them
for the payment of principal or interest that remains unclaimed for one year
after such principal and interest have become due and payable, and, thereafter,
Noteholders entitled to the money must look to the Issuer for payment as general
creditors.
SECTION 8.5. Indemnity for Government Obligations. The Issuer shall
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations other than any such
tax, fee or other charge which by law is for the account of the Holders of the
defeased Notes; provided that the Trustee shall be entitled to charge any such
tax, fee or other charge to such Holder's account.
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article VIII by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Issuer's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to this Article VIII until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with this Article VIII; provided, however, that, (a) if the Issuer
has made any payment of interest on or principal of any Notes following the
reinstatement of their obligations, the Issuer shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent and (b) unless
otherwise required by any legal proceeding or any order or judgment of any court
or governmental authority, the Trustee or Paying Agent shall return all such
money and U.S. Government Obligations to the Issuer promptly after receiving a
written request therefor at any time, if such reinstatement of the Issuer's
obligations has occurred and continues to be in effect.
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ARTICLE IX
AMENDMENTS
SECTION 9.1. Without Consent of Holders. The Issuer and the Trustee
may amend this Indenture or the Notes without notice to or consent of any
Noteholder:
(i) to cure any ambiguity, omission, defect or inconsistency;
(ii) to comply with Article V;
(iii) to provide for uncertificated Notes in addition to or in place
of certificated Notes (provided, however, that the uncertificated Notes
are issued in registered form for purposes of Section 163(f) of the Code
or in a manner such that the uncertificated Notes are as described in
Section 163(f)(2)(B) of the Code);
(iv) to add Guarantees with respect to the Notes;
(v) to secure the Notes;
(vi) to add to the covenants of the Issuer for the benefit of the
Noteholders or to surrender any right or power herein conferred upon the
Issuer;
(vii) to make any change that does not materially and adversely
affect the rights of any Noteholder; and
(viii) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA.
After an amendment under this Section 9.1 becomes effective, the
Issuer shall mail to Noteholders a notice briefly describing such amendment. The
failure to give such notice to all Noteholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.1.
SECTION 9.2. With Consent of Holders. The Issuer and the Trustee may
amend this Indenture or the Notes without notice to any Noteholder but with the
written consent of the Holders of at least a majority in principal amount at
maturity of the Notes then outstanding (including consents obtained in
connection with a tender offer or exchange for Notes). However, without the
consent of each Noteholder of an outstanding Note affected, an amendment may
not:
(i) reduce the amount of Notes whose Holders must consent to an
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amendment;
(ii) reduce the rate of or extend the time for payment of interest on
any Note;
(iii) reduce the principal of or extend the Stated Maturity of any
Note;
(iv) reduce the premium payable upon the redemption of any Note or
change the time at which any Note may be redeemed in accordance with
Article III;
(v) make any Note payable in money other than that stated in the
Note;
(vi) impair the right of any Holder to receive payment of principal
of and interest on such Holder's Notes on or after the due dates therefor
or to institute suit for the enforcement of any payment on or with respect
to such Holder's Notes; or
(vii) make any change in this second sentence of Section 9.2.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.2 becomes effective, the
Issuer shall mail to Noteholders a notice briefly describing such amendment. The
failure to give such notice to all Noteholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.2.
SECTION 9.3. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Notes shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers. A consent
to an amendment or a waiver by a Holder of a Note shall bind the Holder and
every subsequent Holder of that Note or portion of the Note that evidences the
same debt as the consenting Holder's Note, even if notation of the consent or
waiver is not made on the Note. After an amendment or waiver becomes effective,
it shall bind every Noteholder.
The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Noteholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
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take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.5. Notation on or Exchange of Notes. If an amendment
changes the terms of a Note, the Trustee may require the Holder of the Note to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Note regarding the changed terms and return it to the Holder. Alternatively, if
the Issuer or the Trustee so determine, the Issuer in exchange for the Note
shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms. Failure to make the appropriate notation or to issue a new Note
shall not affect the validity of such amendment.
SECTION 9.6. Trustee to Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
materially and adversely affect the rights, duties, liabilities or immunities of
the Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.1) shall be fully
protected in relying upon, in addition to the documents required by Section
10.4, an Officer's Certificate and an Opinion of Counsel stating that such
amendment complies with the provisions of this Article IX.
SECTION 9.7. Payment for Consent. Neither the Issuer nor any
affiliate of the Issuer shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for, or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Notes unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement; provided, however, that Holders who do not consent, waive
or agree to amend this Indenture in the time frame set forth in such
solicitation documents shall not be entitled to any consideration offered for
timely consent, waiver or amendment, even if the consent, waiver or amendment is
agreed to by sufficient Holders to approve such consent, waiver or amendment to
this Indenture.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control.
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SECTION 10.2. Notices. Any notice or communication shall be in
writing and delivered in person, transmitted by facsimile machine, or mailed by
first-class mail or overnight air courier guaranteeing next day delivery
addressed as follows:
if to the Issuer:
SpectraSite Holdings, Inc.
8000 Regency Parkway, Suite 570
Cary, North Carolina 27511
Attention: Chief Financial Officer
if to the Trustee:
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036-1532
Attention: Corporate Trust Administration
The Issuer or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to
the Noteholder at the Noteholder's address as it appears on the registration
books of the Registrar and shall be sufficiently given if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
Except for a notice to the Trustee, which is deemed given only when received,
and except as otherwise provided in this Indenture, if a notice or communication
is mailed in the manner provided above, it is duly given, whether or not the
addressee receives it.
SECTION 10.3. Communication by Holders with Other Holders.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Issuer, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 10.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuer to the Trustee to take or refrain
from taking any action under this Indenture, the Issuer shall furnish to the
Trustee:
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(i) an Officer's Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signer,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 10.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(i) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 10.6. When Notes Disregarded. In determining whether the
Holders of the required principal amount of Notes have concurred in any
direction, waiver or consent, Notes owned by the Issuer or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which a Trust Officer of the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Notes outstanding at the time
shall be considered in any such determination.
SECTION 10.7. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or at a meeting of Noteholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 10.8. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday
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or a day on which banking institutions are not required to be open in the State
of New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period. If a regular record date is a Legal
Holiday, the record date shall not be affected.
SECTION 10.9. Governing Law. THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 10.10. No Recourse Against Others. No director, officer,
employee, incorporator or stockholder of the Issuer, as such, shall have any
liability for any obligations of the Issuer under the Notes, this Indenture or
for any claim based on, in respect of, or by reason of such obligations or their
creation. Each Holder of Notes by accepting a Note waives and releases all such
liability. This waiver and release are part of the consideration for issuance of
the Notes.
SECTION 10.11. Successors. All agreements of the Issuer in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors.
SECTION 10.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 10.13. Variable Provisions. The Issuer initially appoints the
Trustee as Paying Agent and Registrar and custodian with respect to any Global
Notes.
SECTION 10.14. Qualification of Indenture. The Issuer shall qualify
this Indenture under the TIA in accordance with the terms and conditions of the
Registration Rights Agreement (as defined in the Appendix hereto) and shall pay
all reasonable costs and expenses (including attorneys' fees for the Issuer, the
Trustee and the Holders) incurred in connection therewith, including, but not
limited to, costs and expenses of qualification of this Indenture and the Notes.
The Trustee shall be entitled to receive from the Issuer any such Officer's
Certificates, Opinions of Counsel or other documentation as it may reasonably
request in connection with any such qualification of this Indenture under the
TIA.
SECTION 10.15. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted
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for convenience of reference only, are not intended to be considered a part
hereof and shall not modify or restrict any of the terms or provisions hereof.
SECTION 10.16. Severability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed
as of the date first written above.
SPECTRASITE HOLDINGS, INC.
By: /s/ David P. Tomick
Name: David P. Tomick
Title: Chief Financial Officer
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By: /s/ Margaret M. Ciesmelenski
Name: Margaret M. Ciesmelenski
Title: Assistant Vice President
<PAGE> 74
RULE 144A/REGULATION S APPENDIX
INSTITUTIONAL BUYERS
PURSUANT TO RULE 144A AND TO CERTAIN PERSONS IN OFFSHORE
TRANSACTIONS IN RELIANCE ON REGULATION S.
PROVISIONS RELATING TO INITIAL NOTES,
PRIVATE EXCHANGE NOTES AND EXCHANGE NOTES
1. Definitions.
1.1. Definitions. For the purposes of this Appendix the following
terms shall have the meanings indicated below:
"Depositary" means The Depository Trust Company, its nominees and
their respective successors and assigns.
"Exchange Notes" means the 11 1/4% Senior Discount Notes due 2009 to
be issued pursuant to this Indenture in connection with a Registered Exchange
Offer pursuant to the Registration Rights Agreement.
"Initial Purchasers" means Credit Suisse First Boston Corporation,
Lehman Brothers Inc. and CIBC Oppenheimer Corp.
"Initial Notes" means the 11 1/4% Senior Discount Notes due 2009,
issued under this Indenture on or about the date hereof.
"Notes" means the Initial Notes, the Exchange Notes and the Private
Exchange Notes, treated as a single class.
"Notes Custodian" means the custodian with respect to a Global Note
(as appointed by the Depositary), or any successor person thereto and shall
initially be the Trustee.
"Private Exchange" means the offer by the Issuer, pursuant to the
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in exchange for the Initial Notes held by the Initial
Purchaser as part of its initial distribution, a like aggregate principal amount
at maturity of Private Exchange Notes.
"Private Exchange Notes" means the 11 1/4% Senior Discount Notes due
2009,
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if any, to be issued pursuant to this Indenture to the Initial Purchasers in a
Private Exchange.
"Purchase Agreement" means the Purchase Agreement dated April 13,
1999, among the Issuer and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registered Exchange Offer" means the offer by the Issuer, pursuant
to the Registration Rights Agreement, to certain Holders of Initial Notes, to
issue and deliver to such Holders, in exchange for the Initial Notes, a like
aggregate principal amount of Exchange Notes registered under the Securities
Act.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of April 20, 1999 among the Issuer and the Initial
Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933,
as amended.
"Shelf Registration Statement" means the registration statement
issued by the Issuer, in connection with the offer and sale of Initial Notes or
Private Exchange Notes, pursuant to Section 2 of the Registration Rights
Agreement.
"Transfer Restricted Notes" means Notes that bear or are required to
bear the legend set forth in Section 2.3(b) hereof.
1.2. Other Definitions
<TABLE>
<CAPTION>
Defined in
Term Section
----- -------
<S> <C>
"Agent Members"................................. 2.1(b)
"Global Note"................................... 2.1(a)
</TABLE>
2. The Notes.
2.1. Form and Dating. The Initial Notes are being offered and sold by
the Issuer pursuant to the Purchase Agreement.
(a) Global Notes. Initial Notes offered and sold to a QIB in reliance
on
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Rule 144A or in reliance on Regulation S, in each case as provided in the
Purchase Agreement, shall be issued initially in the form of one or more
permanent global Notes in definitive, fully registered form without interest
coupons with the global securities legend and restricted securities legend set
forth in Exhibit 1 hereto (each, a "Global Note"), which shall be deposited on
behalf of the purchasers of the Initial Notes represented thereby with the
Trustee as custodian for the Depositary (or with such other custodian as the
Depositary may direct), and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by the Issuer and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the Global
Notes may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee as hereinafter
provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Note deposited with or on behalf of the Depositary.
The Issuer shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global Notes
that (i) shall be registered in the name of the Depositary for such Global Note
or Global Notes or in the name of the nominee of such Depositary and (ii) shall
be delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions or held by the Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depositary or by the Trustee as the custodian of the
Depositary or under such Global Note, and the Depositary may be treated by the
Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute
owner of such Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of
the Issuer or the Trustee from giving effect to any written certification, proxy
or other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices of such
Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Note.
(c) Certificated Notes. Except as provided in this Section 2.1 or
Section 2.3 or 2.4, owners of beneficial interests in Global Notes will not be
entitled to receive physical delivery of certificated Notes.
2.2. Authentication. The Trustee shall authenticate and deliver: (1)
Initial Notes for original issue in an aggregate principal amount at maturity of
U.S. $586,800,000 and (2) Exchange Notes or Private Exchange Notes for issue
only in a Registered Exchange Offer or a Private Exchange, respectively,
pursuant to the Registration Rights Agreement, for
<PAGE> 77
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a like principal amount at maturity of Initial Notes, in each case upon a
written order of the Issuer signed by two Officers or by an Officer and either
an Assistant Treasurer or an Assistant Secretary of the Issuer. Such order shall
specify the amount of the Notes to be authenticated and the date on which the
original issue of Notes is to be authenticated and whether the Notes are to be
Initial Notes, Exchange Notes or Private Exchange Notes. The aggregate principal
amount at maturity of Notes outstanding at any time may not exceed U.S.
$586,800,000 except as provided in Section 2.7 of this Indenture.
2.3. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. (i) The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depositary therefor. A transferor of a beneficial interest in a Global Note
shall deliver to the Registrar a written order given in accordance with the
Depositary's procedures containing information regarding the participant account
of the Depositary to be credited with a beneficial interest in the Global Note.
The Registrar shall, in accordance with such instructions instruct the
Depositary to credit to the account of the Person specified in such instructions
a beneficial interest in the Global Note and to debit the account of the Person
making the transfer of the beneficial interest in the Global Note being
transferred.
(ii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary of another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(iii) In the event that a Global Note is exchanged for Notes in
definitive registered form pursuant to Section 2.4 of this Appendix or Section
2.9 of this Indenture prior to the consummation of a Registered Exchange Offer
or the effectiveness of a Shelf Registration Statement with respect to such
Notes, such Notes may be exchanged only in accordance with such procedures as
are substantially consistent with the provisions of this Section 2.3 (including
the certification requirements set forth on the reverse of the Initial Notes
intended to ensure that such transfers comply with Rule 144A or Regulation S, as
the case may be) and such other procedures as may from time to time be adopted
by the Issuer.
(b) Legend. (i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Note certificate evidencing the Global Notes (and all Notes
issued in exchange therefor or in substitution thereof) shall bear a legend in
substantially the following form:
<PAGE> 78
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"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF, THE HOLDER AGREES THAT (1) IT WILL NOT PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER
OF THE ORIGINAL ISSUANCE OF THIS NOTE AND THE LAST DATE ON WHICH ISSUER,
OR ANY AFFILIATE OF ISSUER, WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR
OF THIS NOTE), RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO
HOLDINGS OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR
(7) OF RULE 501 UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER,
FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (2) WILL GIVE TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE PRIOR
TO THE RESALE RESTRICTION TERMINATION DATE, IF THE PROPOSED TRANSFER IS
BEING MADE PURSUANT TO CLAUSE (C) OR (E) ABOVE, PRIOR TO SUCH TRANSFER,
THE HOLDER WILL BE REQUIRED TO FURNISH TO THE TRUSTEE AND ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS ANY OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO
<PAGE> 79
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THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT."
(ii) Upon any sale or transfer of a Transfer Restricted Note
(including any Transfer Restricted Note represented by a Global Note) pursuant
to Rule 144 under the Securities Act, in the case of any Transfer Restricted
Note that is represented by a Global Note, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Note for a certificated Note that
does not bear the legend set forth above and rescind any restriction on the
transfer of such Transfer Restricted Note, if the Holder certifies in writing to
the Registrar that its request for such exchange was made in reliance on Rule
144 (such certification to be in the form set forth on the reverse of the Note).
(iii) After a transfer of any Initial Securities or Private Exchange
Securities during the period of the effectiveness of and pursuant to a Shelf
Registration Statement with respect to such Initial Securities or Private
Exchange Securities, as the case may be, all requirements pertaining to legends
on such Initial Securities or such Private Exchange Notes will cease to apply,
but the requirements requiring such Initial Notes or such Private Exchange Notes
issued to certain Holders be issued in global form will continue to apply, and
Initial Notes or Private Exchange Notes in global form without legends will be
available to the transferee of the Holder of such Initial Notes or Private
Exchange Notes upon exchange of such transferring Holder's Initial Notes or
Private Exchange Notes or directions to transfer such Holder's interest in the
Global Note, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Notes pursuant to which Holders of such Initial Notes are
offered Exchange Notes in exchange for their Initial Notes, all requirements
pertaining to such Initial Notes that Initial Notes issued to certain Holders be
issued in global form will continue to apply and Initial Notes in global form
with the restricted securities legend set forth in Exhibit 1 hereto will be
available to Holders of such Initial Notes that do not exchange their Initial
Notes, and Exchange Notes in global form without the restriction securities
legend will be available to Holders that exchange such Initial Notes in such
Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Notes pursuant to which Holders of such Initial Notes are offered
Private Exchange Notes in exchange for their Initial Notes, all requirements
pertaining to such Initial Notes that Initial Notes issued to certain Holders be
issued in global form will still apply, and Private Exchange Notes in global
form with the restricted securities legend set forth in Exhibit 1 hereto will be
available to Holders that exchange such Initial Notes in such Private Exchange.
<PAGE> 80
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(c) Cancellation or Adjustment of Global Note. At such time as all
beneficial interests in a Global Note have either been exchanged for
certificated Notes, redeemed, repurchased or canceled, such Global Note shall be
returned to the Depositary for cancellation or retained and canceled by the
Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Note is exchanged for certificated Notes, redeemed, repurchased or
canceled, the principal amount of Notes represented by such Global Note shall be
reduced and an adjustment shall be made on the books and records of the Trustee
(if it is then the Notes Custodian for such Global Note) with respect to such
Global Note, by the Trustee or the Notes Custodian, to reflect such reduction.
(d) Obligations with Respect to Transfers and Exchanges of Notes. (i)
To permit registrations of transfers and exchanges, the Issuer shall execute and
the Trustee shall authenticate certificated Notes and Global Notes at the
Registrar's or any co-registrar's request, subject to terms and conditions of
this Indenture.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
transfer tax, assessments, or similar governmental charge payable in connection
therewith (other than any such transfer taxes, assessments or similar
governmental charge payable upon exchange or transfer pursuant to Sections 3.6,
4.7, 4.9 and Section 9.5 of this Indenture).
(iii) The Registrar or any co-registrar shall not be required to
register the transfer of or exchange of (a) any certificated Note selected for
redemption in whole or in part pursuant to Article III of this Indenture, except
the unredeemed portion of any certificated Note being redeemed in part, or (b)
any Note for a period beginning 15 Business Days before the mailing of a notice
of an offer to repurchase or redeem Notes or 15 Business Days before an interest
payment date.
(iv) Prior to the due presentation for registration of transfer of
any Note, the Issuer, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Note is registered as
the absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note is overdue, and none of the Issuer, the Trustee, the
Paying Agent, the Registrar or any co-registrar shall be affected by notice to
the contrary.
(v) All Notes issued upon any transfer or exchange pursuant to the
terms of this Indenture shall evidence the same debt and shall be entitled to
the same benefits under this Indenture as the Notes surrendered upon such
transfer or exchange.
(e) No Obligation of the Trustee or the Issuer. (i) The Trustee and
the Issuer shall have no responsibility or obligation to any beneficial owner of
a Global Note, a
<PAGE> 81
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member of, or a participant in the Depositary or other Person with respect to
the accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Notes or with respect to the delivery to any participant, member, beneficial
owner or other Person (other than the Depositary) of any notice (including any
notice of redemption) or the payment of any amount, under or with respect to
such Notes. All notices and communications to be given to the Holders and all
payments to be made to Holders under the Notes shall be given or made only to or
upon the order of the registered Holders (which shall be the Depositary or its
nominee in the case of a Global Note). The rights of beneficial owners in any
Global Note shall be exercised only through the Depositary subject to the
applicable rules and procedures of the Depositary. The Trustee and the Issuer
may rely and shall be fully protected in relying upon information furnished by
the Depositary with respect to its members, participants and any beneficial
owners.
(ii) The Trustee and the Issuer shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Note (including any transfers between or among
Depositary participants, members or beneficial owners in any Global Note) other
than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
2.4. Certificated Notes. (a) A Global Note deposited with the
Depositary or with the Trustee as custodian for the Depositary pursuant to
Section 2.1 shall be transferred to the beneficial owners thereof in the form of
certificated Notes in an aggregate principal amount at maturity equal to the
principal amount at maturity of such Global Note, in exchange for such Global
Note, only if such transfer complies with Section 2.3 and (i) the Depositary
notifies the Issuer that it is unwilling or unable to continue as Depositary for
such Global Note or if at any time such Depositary ceases to be a "clearing
agency" registered under the Exchange Act and a successor depositary is not
appointed by the Issuer within 90 days of such notice, or (ii) an Event of
Default has occurred and is continuing or (iii) the Issuer, in its sole
discretion, notifies the Trustee in writing that it elects to cause the issuance
of certificated Notes under this Indenture.
(b) Any Global Note that is transferable to the beneficial owners
thereof pursuant to this Section shall be surrendered by the Depositary to the
Trustee, to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Note, an equal aggregate principal amount at
maturity of certificated Initial Notes of authorized denominations. Any portion
of a Global Note transferred pursuant to this Section shall be
<PAGE> 82
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executed, authenticated and delivered only in denominations of $1,000 and any
integral multiple thereof and registered in such names as the Depositary shall
direct. Any certificated Initial Note delivered in exchange for an interest in
the Global Note shall, except as otherwise provided by Section 2.3(d), bear the
restricted securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Note may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent
Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a), the Issuer will promptly make available to the Trustee a
reasonable supply of certificated Notes in definitive, fully registered form
without interest coupons.
<PAGE> 83
EXHIBIT 1
TO RULE 144A/REGULATION S
APPENDIX
[FORM OF FACE OF INITIAL NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEES, AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES
THAT (1) IT WILL NOT PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION
DATE") THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS NOTE
AND THE LAST DATE ON WHICH ISSUER, OR ANY AFFILIATE OF ISSUER, WAS THE OWNER OF
THIS NOTE (OR ANY
<PAGE> 84
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PREDECESSOR OF THIS NOTE), RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO
ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A
U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), (D) OUTSIDE
THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER
THE SECURITIES ACT, (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (2) WILL GIVE TO EACH PERSON
TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE, IF THE PROPOSED TRANSFER IS BEING MADE PURSUANT TO
CLAUSE (C) OR (E) ABOVE, PRIOR TO SUCH TRANSFER, THE HOLDER WILL BE REQUIRED TO
FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS ANY OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM OR IN A TRANSACTION NOT
SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
[Original Issue Discount Legend]
THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR PURPOSES OF
SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986,
AS AMENDED, THE ISSUE PRICE OF THIS NOTE IS $579.42 OF ITS PRINCIPAL AMOUNT AT
MATURITY, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $420.58 PER $1,000 OF
PRINCIPAL AMOUNT AT MATURITY, THE ISSUE DATE IS APRIL 20, 1999 AND THE YIELD TO
MATURITY IS 11 1/4%.
<PAGE> 85
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SPECTRASITE HOLDINGS, INC.
No. Principal Amount at Maturity $
--- -------------
CUSIP NO.
---------
11 1/4% Senior Discount Note due 2009
SpectraSite Holdings, Inc., a Delaware corporation, promises to pay
to __________, or registered assigns, the principal sum of ____________________
Dollars on April 15, 2009.
Interest Payment Dates: April 15 and October 15.
Record Dates: April 1 and October 1.
Additional provisions of this Note are set forth on the other side of
this Note.
Dated: SPECTRASITE HOLDINGS, INC.
By:
By:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Notes referred to in the Indenture.
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
By:
Authorized Signatory
<PAGE> 86
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[FORM OF REVERSE SIDE OF INITIAL NOTE]
(Reverse of Note)
11 1/4% Senior Discount Note due 2009
1. Interest
SpectraSite Holdings, Inc., a Delaware corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called the "Issuer"), promises to pay interest on the principal
amount of this Note at the rate per annum shown above; provided, however, that
if a Registration Default (as defined in the Registration Rights Agreement)
occurs, additional cash interest will accrue on this Note at a rate of 0.50% per
annum from and including the date on which any such Registration Default shall
occur to but excluding the date on which all Registration Defaults have been
cured, calculated on the Accreted Value of this Note as of the date on which
such interest is payable; provided, however, that in no event shall the
aggregate amount of such additional interest exceed 0.50% per annum. Such
interest is payable in addition to any other interest payable from time to time
with respect to this Note. The Trustee will not be deemed to have notice of a
Registration Default until it shall have received actual notice of such
Registration Default.
Until April 15, 2004, the Notes will accrue at a rate of 11 1/4% per
annum and be compounded semi-annually on each Semi-Annual Accrual Date with
respect to the Notes, but, except as described herein, will not be payable in
cash. Interest on the Accreted Value of each Note as of April 15, 2004 will
accrue at the same rate but will be paid semi-annually commencing October 15,
2004, to Holders of record at the close of business on the April 1 or October 1
immediately preceding the interest payment date of April 15 and October 15 of
each year. The Issuer shall pay interest on overdue principal at 1% per annum in
excess of the rate borne by the Notes to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment
By at least 11:00 a.m. (New York City time) on the date on which any
principal of or interest on any Note is due and payable, the Issuer shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal and/or interest. The Issuer will pay interest (except defaulted
interest) to the Persons who are registered Holders of Notes at the close of
business on the April 1 or October 1 next preceding the interest payment date
even if Notes are cancelled, repurchased or redeemed after the record date and
on or before the interest payment date. Holders must surrender Notes to a Paying
<PAGE> 87
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Agent to collect principal payments. The Issuer will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Issuer may pay principal and
interest by check payable in such money. It may mail an interest check to a
Holder's registered address.
3. Paying Agent and Registrar
Initially, United States Trust Company of New York, a national
banking association (the "Trustee"), will act as Paying Agent and Registrar. The
Issuer may appoint and change any Paying Agent, Registrar or co-registrar
without notice to any Noteholder. The Issuer or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent.
4. Indenture
The Issuer issued the Notes under an Indenture dated as of April 20,
1999 (as it may be amended or supplemented from time to time in accordance with
the terms thereof, the "Indenture"), between the Issuer and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"TIA"). Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture. The Notes are subject to all such terms, and
Noteholders are referred to the Indenture and the TIA for a statement of those
terms.
The Notes are unsecured senior obligations of the Issuer limited to
$586,800,000 aggregate principal amount at maturity (subject to Section 2.7 of
the Indenture), all of which are being offered on the Issue Date.
This Note is one of the Initial Notes referred to in the Indenture.
The Notes include the Initial Notes and any Private Exchange Notes and Exchange
Notes issued in exchange for the Initial Notes pursuant to the Indenture and the
Registration Rights Agreement. The Initial Notes, the Private Exchange Notes and
the Exchange Notes are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the Incurrence of
Indebtedness by the Issuer and its Restricted Subsidiaries, the payment of
dividends and other distributions on the Capital Stock of the Issuer and its
Restricted Subsidiaries, the purchase or redemption of Capital Stock of the
Issuer and Capital Stock of such Restricted Subsidiaries, certain purchases or
redemptions of Subordinated Obligations, the sale or transfer of assets and
Capital Stock of Restricted Subsidiaries, the issuance or sale of Capital Stock
of Restricted Subsidiaries, the investments of the Issuer and its Subsidiaries
and transactions with Affiliates. In addition, the Indenture limits the ability
of the Issuer and its Restricted Subsidiaries to restrict distributions and
dividends from
<PAGE> 88
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Restricted Subsidiaries.
5. Redemption
Except as set forth in the following paragraph, the Notes will not be
redeemable at the option of the Issuer prior to April 15, 2004. Thereafter, the
Notes will be redeemable, at the Issuer's option, in whole or in part, at any
time or from time to time, upon not less than 30 nor more than 60 days' prior
notice mailed by first-class mail to each Holder's registered address, at the
following redemption prices (expressed as a percentage of the Accreted Value),
plus accrued and unpaid interest, if any, on such Accreted Value to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on April 15 of the years set
forth below:
<TABLE>
<CAPTION>
Period Redemption Price
------ ----------------
<S> <C>
2004...................................... 105.625%
2005...................................... 103.750%
2006...................................... 101.875%
2007 and thereafter....................... 100.000%
</TABLE>
In addition, at any time and from time to time prior to April 15,
2002, the Issuer may redeem in the aggregate up to 35% of the aggregate
principal amount at maturity of the Notes with the proceeds of one or more
Equity Offerings, at a redemption price (expressed as a percentage of the
Accreted Value thereof) of 111.25% plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided, however, that at least 65% of the aggregate principal amount at
maturity of the Notes must remain outstanding after each such redemption
(excluding Notes held by the Issuer or any of its Subsidiaries); provided
further, that such redemption shall occur within 90 days of the date of closing
of such Equity Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date by first-class mail to each Holder of
Notes to be redeemed at his registered address. Notes in denominations of
principal amount larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on
the redemption date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on and after such
date interest
<PAGE> 89
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ceases to accrue on such Notes (or such portions thereof) called
for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Notes will have the right to
cause the Issuer to repurchase all or any part of the Notes of such Holder at a
repurchase price equal to 101% of the Accreted Value thereof as of the date of
repurchase, plus accrued and unpaid interest, if any, to the date of repurchase
as provided in, and subject to the terms of, the Indenture.
8. Registration Rights
The Issuer is party to a Registration Rights Agreement, dated as of
April 20, 1999, among the Issuer, CIBC Oppenheimer Corp., Credit Suisse First
Boston Corporation, Morgan Stanley & Co. Incorprated, BancBoston Robertson
Stephens Inc. and TD Securities (USA) Inc. pursuant to which it is obligated to
pay Additional Interest (as defined therein) upon the occurrence of certain
Registration Defaults (as defined therein).
9. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of
principal amount of $1,000 and whole multiples of $1,000. A Holder may register,
transfer or exchange Notes in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange (i)
any Notes selected for redemption (except, in the case of a Note to be redeemed
in part, the portion of the Note not to be redeemed) for a period beginning 15
business days before a selection of Notes to be redeemed and ending on the date
of such selection or (ii) any Notes for a period beginning 15 business days
before an interest payment date and ending on such interest payment date.
10. Persons Deemed Owners
The registered holder of this Note may be treated as the owner of it
for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for one year after the date of payment of principal and interest, the Trustee or
Paying Agent shall pay the money back to the Issuer at its request unless an
abandoned property law designates another Person. After any such payment,
Holders entitled to the money must look only to the
<PAGE> 90
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Issuer and not to the Trustee for payment.
12. Defeasance
Subject to certain conditions set forth in the Indenture, the Issuer
at any time may terminate some or all of its obligations under the Notes and the
Indenture if the Issuer deposits with the Trustee money or U.S. Government
Obligations for the payment of principal of and interest on the Notes to
redemption or maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount at maturity of the outstanding Notes and
(ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount at maturity of
the outstanding Notes. Subject to certain exceptions set forth in the Indenture,
without the consent of any Noteholder, the Issuer and the Trustee may amend the
Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency,
or to comply with Article V of the Indenture, or to provide for uncertificated
Notes in addition to or in place of certificated Notes, or to add guarantees
with respect to the Notes or to secure the Notes, or to add additional covenants
of or surrender rights and powers conferred on the Issuer, or to make any change
that does not materially and adversely affect the rights of any Noteholder, or
to comply with any request of the SEC in connection with qualifying the
Indenture under the Act.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) a default in any
payment of interest on any Note when due, continued for 30 days, (ii) a default
in the payment of principal of any Note when due at its Stated Maturity, upon
optional or mandatory redemption, upon required repurchase, upon declaration or
otherwise, (iii) the failure by the Issuer to comply with its obligations under
Article V of the Indenture, (iv) the failure by the Issuer to comply for 30 days
after notice with any of its obligations under the covenants described under
Section 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11 or 4.12 of the
Indenture (in each case, other than a failure to purchase Notes), (v) the
failure by the Issuer to comply for 60 days after notice with its other
agreements contained in the Indenture, (vi) the failure by the Issuer or any
Significant Subsidiary of the Issuer to pay any Indebtedness within any
applicable grace period after final maturity or the acceleration of any such
Indebtedness by the holders thereof because of a default if the total amount of
such Indebtedness unpaid or accelerated exceeds $10.0 million or its foreign
currency equivalent, (vii) certain events of bankruptcy, insolvency or
reorganization of the Issuer or any Significant Subsidiary of the
<PAGE> 91
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Issuer or (viii) any final judgment or decree for the payment of money in excess
of $10.0 million (net of any amounts with respect to which a creditworthy
insurance company has acknowledged full liability (subject to any deductible
amounts of less than $10.0 million required to be paid by the Issuer or the
Significant Subsidiary of the Issuer in accordance with the applicable insurance
policy)) is rendered against the Issuer or any Significant Subsidiary of the
Issuer and either (A) an enforcement proceeding has been commenced by any
creditor upon such judgment or decree or (B) such judgment or decree remains
unpaid and outstanding for a period of 60 days following such judgment and is
not discharged, waived or stayed within 10 days after notice. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes may declare all the Notes to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Notes being due and payable immediately upon
the occurrence of such Events of Default.
Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Noteholders notice of any continuing Default or Event of Default
(except a Default or Event of Default in payment of Principal or interest) if it
determines that withholding notice is not opposed to their interest.
15. Trustee Dealings with the Issuer
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with and collect
obligations owed to it by the Issuer or its Affiliates and may otherwise deal
with the Issuer or its Affiliates with the same rights it would have if it were
not Trustee.
16. No Recourse Against Others
No director, officer, employee, incorporator or stockholder of the
Issuer, as such, shall have any liability for any obligations of the Issuer
under the Notes, the Indenture or for any claim based on, in respect of, or by
reason of such obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. This waiver and release are part
of the consideration for issuance of the Notes.
17. Authentication
This Note shall not be valid until an authorized signatory of the
Trustee (or an
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authenticating agent acting on its behalf) manually signs the certificate of
authentication on the other side of this Note.
18. Abbreviations
Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Issuer has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
20. GOVERNING LAW
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
The Issuer will furnish to any Noteholder upon written request and
without charge to the Noteholder a copy of the Indenture which has in it the
text of this Note in larger type. Requests may be made to: SpectraSite Holdings,
Inc., 8000 Regency Parkway, Suite 570, Cary, North Carolina 27511, Attention:
Chief Financial Officer.
<PAGE> 93
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint
agent to transfer this Note on the books of the Issuer. The agent may substitute
another to act for him.
Date: Your Signature:
Sign exactly as your name appears on
the other side of this Note.
Signature Guarantee:
(Signature must be guaranteed by a participant in a
recognized Signature Guarantee Medallion Program or other
signature guarantor program reasonably acceptable to the
Trustee)
In connection with any transfer or exchange of any of the Notes evidenced by
this certificate occurring prior to the date that is two years after the later
of the date of original issuance of such Notes and the last date, if any, on
which such Notes were owned by the Issuer or any Affiliate of the Issuer, the
undersigned confirms that such Notes are being transferred:
CHECK ONE BOX BELOW:
(1) to the Issuer; or
(2) pursuant to an effective registration statement under the
Securities Act of 1933; or
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(3) inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and
in compliance with Rule 144A under the Securities Act of 1933; or
(4) outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance with
Rule 904 under the Securities Act of 1933; or
(5) pursuant to another available exemption from registration provided
by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any Person other than the
registered holder thereof; provided, however, that if box (4) or (5) is checked,
the Trustee may require, prior to registering any such transfer of the Notes,
such legal opinions, certifications and other information as the Issuer has
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended, such as the exemption
provided by Rule 144 under such Act.
Date: Your Signature:
Sign exactly as your name appears on
the other side of this Note.
Signature Guarantee:
(Signature must be guaranteed by a participant in a
recognized Signature Guarantee Medallion Program or other
signature guarantor program reasonably acceptable to the
Trustee)
<PAGE> 95
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TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Issuer as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Date:
NOTICE: To be executed by an
executive officer
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer
pursuant to Section 4.7 or 4.9 of the Indenture, check the appropriate box:
Section 4.7
Section 4.9
If you want to elect to have only part of this Note purchased by
the Issuer pursuant to Section 4.7 or 4.9 of the Indenture, state the amount you
elect to have purchased (must be integral multiple of $1,000): $_______________
<PAGE> 96
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[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
<TABLE>
<S> <C> <C> <C> <C>
Principal Amount
Amount of decrease in Amount of increase in at Maturity of this
Principal Amount at Principal Amount at Global Note Signature of authorized
Maturity of this Global Maturity of this Global following such officer of Trustee or
Date of Exchange Note Note decrease or increase Notes Custodian
</TABLE>
<PAGE> 97
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EXHIBIT A
[FORM OF FACE OF EXCHANGE NOTE
[OR PRIVATE EXCHANGE NOTE]]
1
2 [If the Security is a Private Exchange Security issued in a Private
Exchange to an Initial Purchaser holding an unsold portion of its initial
allotment, add the Restricted Securities Legend from Exhibit 1 to Appendix A
and replace the Assignment Form included in such Exhibit 1.]
- ----------------
(1) [If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit
1 captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL SECURITY."]
(2) [If the Security is a Private Exchange Security issued in a Private
Exchange to an Initial Purchaser holding an unsold portion of its initial
allotment, add the Restricted Securities Legend from Exhibit 1 to Appendix
A and replace the Assignment Form included in such Exhibit 1.]
<PAGE> 98
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2
3 [Add the Original Issue Discount Legend from Exhibit 1 to Appendix A.]
- ----------------
(3) [Add the Original Issue Discount Legend from Exhibit 1 to Appendix A.]
<PAGE> 99
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3
SPECTRASITE HOLDINGS INC.
No. Principal Amount at Maturity $
--- -----------
CUSIP NO.
--------
11 1/4% Senior Discount Note Due 2009
SpectraSite Holdings, Inc., a Delaware corporation, promises to pay
to ________ _______, or registered assigns, the principal sum of
___________________ Dollars on April 15, 2009.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1.
Additional provisions of this Note are set forth on the other side
of this Note.
Dated: SPECTRASITE HOLDINGS, INC.
By:
By:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Notes
referred to in the Indenture.
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
By:
<PAGE> 100
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Authorized Signatory
<PAGE> 101
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[FORM OF REVERSE SIDE OF EXCHANGE NOTE
[OR PRIVATE EXCHANGE NOTE]]
11 1/4% Senior Discount Note due 2009
1. Interest
SpectraSite Holdings, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Issuer"), promises to pay interest on the
principal amount of this Note at the rate per annum shown above[; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, additional cash interest will accrue on this Note at a rate
of 0.50% per annum from and including the date on which any such Registration
Default shall occur to but excluding the date on which all Registration Defaults
have been cured, calculated on the Accreted Value of this Note as of the date on
which such interest is payable; provided, however, that in no event shall the
aggregate amount of such additional interest exceed 0.50% per annum. Such
interest is payable in addition to any other interest payable from time to time
with respect to this Note. The Trustee will not be deemed to have notice of a
Registration Default until it shall have received actual notice of such
Registration Default].4
Insert if at the time of issuance of the Exchange Security or Private
Exchange Security (as the case may be) neither the Registered Exchange Offer has
been consummated nor a Shelf Registration Statement has been declared effective
in accordance with the Registration Rights Agreement.
- --------------
4 Insert if at the time of issuance of the Exchange Security or Private
Exchange Security (as the case may be) neither the Registered Exchange Offer has
been consummated nor a Shelf Registration Statement has been declared effective
in accordance with the Registration Rights Agreement.
<PAGE> 102
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4
Until April 15, 2004, the Notes will accrue at a rate of 11 1/4%
per annum and be compounded semi-annually on each Semi-Annual Accrual Date with
respect to the Notes, but, except as described herein, will not be payable in
cash. Interest on the Accreted Value of each Note as of April 15, 2004 will
accrue at the same rate but will be paid semi-annually commencing October 15,
2004, to Holders of record at the close of business on the April 1 or October 1
immediately preceding the interest payment date of April 15 and October 15 of
each year. The Issuer shall pay interest on overdue principal at 1% per annum in
excess of the rate borne by the Notes to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment
By at least 11:00 a.m. (New York City time) on the date on which
any principal of or interest on any Note is due and payable, the Issuer shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal and/or interest. The Issuer will pay interest (except defaulted
interest) to the Persons who are registered Holders of Notes at the close of
business on the April 1 or October 1 next preceding the interest payment date
even if Notes are cancelled, repurchased or redeemed after the record date and
on or before the interest payment date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Issuer will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Issuer may pay principal and
interest by check payable in such money. It may mail an interest check to a
Holder's registered address.
3. Paying Agent and Registrar
Initially, United States Trust Company of New York, a national
banking association (the "Trustee"), will act as Paying Agent and Registrar. The
Issuer may appoint and change any Paying Agent, Registrar or co-registrar
without notice to any Noteholder. The Issuer or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent.
4. Indenture
The Issuer issued the Notes under an Indenture dated as of April
20, 1999 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), between the Issuer and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture
<PAGE> 103
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(the "TIA"). Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Indenture. The Notes are subject to all such
terms, and Noteholders are referred to the Indenture and the TIA for a statement
of those terms.
The Notes are unsecured senior obligations of the Issuer limited to
$586,800,000 aggregate principal amount at maturity (subject to Section 2.7 of
the Indenture), all of which are being offered on the Issue Date.
This Note is one of the Exchange Notes referred to in the
Indenture. The Notes include the Initial Notes and any Private Exchange Notes
and Exchange Notes issued in exchange for the Initial Notes pursuant to the
Indenture and the Registration Rights Agreement. The Initial Notes, the Private
Exchange Notes and the Exchange Notes are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on the
Incurrence of Indebtedness by the Issuer and its Restricted Subsidiaries, the
payment of dividends and other distributions on the Capital Stock of the Issuer
and its Restricted Subsidiaries, the purchase or redemption of Capital Stock of
the Issuer and Capital Stock of such Restricted Subsidiaries, certain purchases
or redemptions of Subordinated Obligations, the sale or transfer of assets and
Capital Stock of Restricted Subsidiaries, the issuance or sale of Capital Stock
of Restricted Subsidiaries, the investments of the Issuer and its Subsidiaries
and transactions with Affiliates. In addition, the Indenture limits the ability
of the Issuer and its Restricted Subsidiaries to restrict distributions and
dividends from Restricted Subsidiaries.
5. Redemption
Except as set forth in the following paragraph, the Notes will not
be redeemable at the option of the Issuer prior to April 15, 2004. Thereafter,
the Notes will be redeemable, at the Issuer's option, in whole or in part, at
any time or from time to time, upon not less than 30 nor more than 60 days'
prior notice mailed by first-class mail to each Holder's registered address, at
the following redemption prices (expressed as a percentage of the Accreted
Value), plus accrued and unpaid interest, if any, on such Accreted Value to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on April 15 of the years set
forth below:
<TABLE>
<CAPTION>
Period Redemption Price
- ------ ----------------
<C> <C>
2004.................................... 105.625%
2005.................................... 103.750%
2006.................................... 101.875%
2007 and thereafter..................... 100.000%
</TABLE>
<PAGE> 104
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In addition, at any time and from time to time prior to April 15,
2002, the Issuer may redeem in the aggregate up to 35% of the aggregate
principal amount at maturity of the Notes with the proceeds of one or more
Equity Offerings, at a redemption price (expressed as a percentage of the
Accreted Value thereof) of 111.25% plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided, however, that at least 65% of the aggregate principal amount at
maturity of the Notes must remain outstanding after each such redemption
(excluding Notes held by the Issuer or any of its Subsidiaries); provided
further, that such redemption shall occur within 90 days of the date of closing
of such Equity Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date by first-class mail to each Holder of
Notes to be redeemed at his registered address. Notes in denominations of
principal amount larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on
the redemption date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on and after such
date interest ceases to accrue on such Notes (or such portions thereof) called
for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Notes will have the right
to cause the Issuer to repurchase all or any part of the Notes of such Holder at
a repurchase price equal to 101% of the Accreted Value thereof as of the date of
repurchase, plus accrued and unpaid interest, if any, to the date of repurchase
as provided in, and subject to the terms of, the Indenture.
8. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations
of principal amount of $1,000 and whole multiples of $1,000. A Holder may
register, transfer or exchange Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange (i) any Notes selected for redemption (except, in the case of a Note
to be redeemed in part, the portion of the Note not to be redeemed) for a period
beginning 15 business days before a selection of Notes to be redeemed and ending
on the date of such
<PAGE> 105
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selection or (ii) any Notes for a period beginning 15 business days before an
interest payment date and ending on suchinterest payment date.
9. Persons Deemed Owners
The registered holder of this Note may be treated as the owner of
it for all purposes.
10. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for one year after the date of payment of principal and interest, the Trustee or
Paying Agent shall pay the money back to the Issuer at its request unless an
abandoned property law designates another Person. After any such payment,
Holders entitled to the money must look only to the Issuer and not to the
Trustee for payment.
11. Defeasance
Subject to certain conditions set forth in the Indenture, the
Issuer at any time may terminate some or all of its obligations under the Notes
and the Indenture if the Issuer deposits with the Trustee money or U.S.
Government Obligations for the payment of principal of and interest on the Notes
to redemption or maturity, as the case may be.
12. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount at maturity of the outstanding Notes and
(ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount at maturity of
the outstanding Notes. Subject to certain exceptions set forth in the Indenture,
without the consent of any Noteholder, the Issuer and the Trustee may amend the
Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency,
or to comply with Article V of the Indenture, or to provide for uncertificated
Notes in addition to or in place of certificated Notes, or to add guarantees
with respect to the Notes or to secure the Notes, or to add additional covenants
of or surrender rights and powers conferred on the Issuer, or to make any change
that does not materially and adversely affect the rights of any Noteholder, or
to comply with any request of the SEC in connection with qualifying the
Indenture under the Act.
13. Defaults and Remedies
Under the Indenture, Events of Default include (i) a default in any
payment of
<PAGE> 106
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interest on any Note when due, continued for 30 days, (ii) a default in the
payment of principal of any Note when due at its Stated Maturity, upon optional
or mandatory redemption, upon required repurchase, upon declaration or
otherwise, (iii) the failure by the Issuer to comply with its obligations under
Article V of the Indenture, (iv) the failure by the Issuer to comply for 30 days
after notice with any of its obligations under the covenants described under
Section 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11 or 4.12 of the
Indenture (in each case, other than a failure to purchase Notes), (v) the
failure by the Issuer to comply for 60 days after notice with its other
agreements contained in the Indenture, (vi) the failure by the Issuer or any
Significant Subsidiary of the Issuer to pay any Indebtedness within any
applicable grace period after final maturity or the acceleration of any such
Indebtedness by the holders thereof because of a default if the total amount of
such Indebtedness unpaid or accelerated exceeds $10.0 million or its foreign
currency equivalent, (vii) certain events of bankruptcy, insolvency or
reorganization of the Issuer or any Significant Subsidiary of the Issuer or
(viii) any final judgment or decree for the payment of money in excess of $10.0
million (net of any amounts with respect to which a creditworthy insurance
company has acknowledged full liability (subject to any deductible amounts of
less than $10.0 million required to be paid by the Issuer or the Significant
Subsidiary of the Issuer in accordance with the applicable insurance policy)) is
rendered against the Issuer or any Significant Subsidiary of the Issuer and
either (A) an enforcement proceeding has been commenced by any creditor upon
such judgment or decree or (B) such judgment or decree remains unpaid and
outstanding for a period of 60 days following such judgment and is not
discharged, waived or stayed within 10 days after notice. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes may declare all the Notes to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Notes being due and payable immediately upon
the occurrence of such Events of Default.
Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Noteholders notice of any continuing Default or Event of Default
(except a Default or Event of Default in payment of Principal or interest) if it
determines that withholding notice is not opposed to their interest.
14. Trustee Dealings with the Issuer
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with and collect
obligations owed to it by the Issuer or its Affiliates and may otherwise deal
with the Issuer or its Affiliates with the same rights it would have if it
<PAGE> 107
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were not Trustee.
15. No Recourse Against Others
No director, officer, employee, incorporator or stockholder of the
Issuer, as such, shall have any liability for any obligations of the Issuer
under the Notes, the Indenture or for any claim based on, in respect of, or by
reason of such obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. This waiver and release are part
of the consideration for issuance of the Notes.
16. Authentication
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Note.
17. Abbreviations
Customary abbreviations may be used in the name of a Noteholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
18. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Issuer has caused CUSIP numbers
to be printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. GOVERNING LAW
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Issuer will furnish to any Noteholder upon written request and
without charge to the Noteholder a copy of the Indenture which has in it the
text of this Note in larger
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type. Requests may be made to: SpectraSite Holdings, Inc., 8000 Regency Parkway,
Suite 570, Cary, North Carolina 27511, Attention: Chief Financial Officer.
<PAGE> 109
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint
agent to transfer this Note on the books of the Issuer. The agent may
substitute another to act for him.
Date: Your Signature:
Sign exactly as your name appears.
on the other side of this Note.
Signature Guarantee:
(Signature must be guaranteed by a participant in a
recognized Signature Guarantee Medallion Program or other
signature guarantor program reasonably
acceptable to the Trustee)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer
pursuant to Section 4.7 or 4.9 of the Indenture, check the appropriate box:
Section 4.7
Section 4.9
If you want to elect to have only part of this Note purchased by
the Issuer pursuant to Section 4.7 or 4.9 of the Indenture, state the amount you
elect to have purchased
<PAGE> 110
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(must be integral multiple of $1,000): $_______________
<PAGE> 1
EXHIBIT 10.5
SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
April 20, 1999
To the several persons listed
in Schedules I, II, III and IV attached hereto:
Ladies and Gentlemen:
This will confirm that (a) with respect to the several individuals and
entities named as purchasers in the Preferred Stock Purchase Agreement, dated as
of February 10, 1999 (as amended, the "Purchase Agreement"), among SpectraSite
Holdings, Inc., a Delaware corporation (the "Company"), certain purchasers named
in Schedule I hereto (the "WCAS Purchasers"), certain purchasers named in
Schedule II hereto (the "Whitney Purchasers"), certain purchasers named in
Schedule III hereto (the "CIBC Purchasers") and certain purchasers named in
Schedule IV hereto (the "Additional Purchasers" and collectively with the WCAS
Purchasers, the Whitney Purchasers and the CIBC Purchasers, the "Purchasers"),
in consideration of the purchase by certain Purchasers on the date hereof of an
aggregate 46,286,795 shares of Series C Preferred Stock, par value $0.001 per
share, of the Company (the "Series C Preferred Stock"), and the acquisition by
certain Purchasers on the date hereof of an aggregate of 2,000,000 shares of
common stock, par value $0.001 per share (the "Common Stock"), pursuant to the
credit agreement and related agreements and instruments as contemplated by the
commitment letter and related term sheet, dated as of January 15, 1999, as
amended, providing for a credit facility of up to $710 million in favor of the
Company and its Affiliates (as defined in the Stockholders' Agreement), (b) with
respect to Tower Parent Corp., a Delaware corporation and a wholly-owned direct
subsidiary of Nextel Communications, Inc. ("TPC"), in consideration of the
acquisition by TPC of an aggregate 14,000,000 shares of Series C Preferred Stock
pursuant to the terms of that certain Agreement and Plan of Merger, dated as of
February 10, 1999 (as amended, the "Merger Agreement"), among TPC, Nextel
Communications, Inc., Tower Merger Vehicle, Inc., Tower Asset Sub, Inc., the
Company, SpectraSite Communications, Inc., SHI Merger Sub, Inc. and other
parties signatories thereto, and (c) with respect to the several stockholders of
the Company listed in Schedule IV hereto, in consideration of the entry by them
into the Third Amended and Restated Stockholders' Agreement, dated as of the
date hereof (the "Stockholders' Agreement"), among them, the Company, the
Purchasers and TPC, and as an inducement to them to consummate the transactions
contemplated by the Purchase Agreement, the Merger Agreement and the
Stockholders' Agreement, the Company hereby covenants and agrees with each of
you, and with each subsequent holder of Restricted Stock (as such term is
defined herein), and with each holder of Management Stock (as hereinafter
defined), as follows:
1. Certain Definitions. As used herein, the following terms shall have
the following respective meanings:
<PAGE> 2
"Commission" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act.
"Common Stock" means the Common Stock, par value $.001 per share, of the
Company, as constituted as of the date of this Agreement, subject to adjustment
pursuant to the provisions of Section 10 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Institutional Investors" shall mean the WCAS Purchasers, the Whitney
Purchasers, the CIBC Purchasers, Waller-Sutton Media Partners, L.P., Kitty Hawk
Capital Limited Partnership, III, Kitty Hawk Capital Limited Partnership, IV,
Eagle Creek Capital, LLC and North Carolina Enterprise Fund, L.P., and their
respective successors and assigns.
"Management Stock" means the shares of Common Stock held by Stephen H.
Clark, David P. Tomick, Richard Byrne and the Finley Family Limited Partnership,
in each case, the certificates for which are required to bear the legend set
forth in Section 2 hereof.
"Management Stockholders" shall mean Stephen H. Clark, David P. Tomick,
Richard Byrne and the Finley Family, L.P., and each of their successors and
assigns.
"Preferred Stock" shall mean the Company's Series A Preferred Stock, par
value $0.001 per share, the Company's Series B Preferred Stock, par value $0.001
per share, and the Company's Series C Preferred Stock, par value $0.001 per
share.
"Registration Expenses" means the expenses so described in Section 8
hereof.
"Restricted Stock" means the shares of (i) Common Stock (other than
Management Stock), (ii) Preferred Stock, or (iii) Common Stock into which shares
of Preferred Stock are convertible, in each case, the certificates for which are
required to bear the legend set forth in Section 2 hereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" means the expenses so described in Section 8 hereof.
2. Restrictive Legend. Each certificate representing the Common Stock,
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<PAGE> 3
Preferred Stock and each certificate issued upon exchange, adjustment or
transfer thereof, other than in a public sale or as otherwise permitted by the
last paragraph of Section 3 hereof, shall be stamped or otherwise imprinted with
a legend substantially in the following form:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 NOR UNDER APPLICABLE STATE SECURITIES LAWS,
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY
HAVE BEEN REGISTERED UNDER SUCH LAWS OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE."
3. Notice of Proposed Transfer. Prior to any proposed transfer of any
Restricted Stock or Management Stock, as the case may be (other than in a
registered offering as contemplated by Sections 4, 5 or 6 hereof), the holder
thereof shall give written notice to the Company of its intention to effect such
transfer. Each such notice shall describe the manner of the proposed transfer
and, if requested by the Company, shall be accompanied by an opinion of counsel
reasonably satisfactory to the Company to the effect that the proposed transfer
may be effected without registration under the Securities Act, whereupon,
subject to the terms of the Stockholders' Agreement, such holder shall be
entitled to transfer such securities in accordance with the terms of its notice;
provided, however, that no such opinion shall be required if such notice shall
cover a distribution by a holder of Restricted Stock that is a partnership or
limited liability company to a partner or member of such holder if such
distribution is made after the expiration of the holding period specified with
respect thereto in Rule 144(d)(1) under the Securities Act, pro rata in
accordance with the respective partnership or limited liability company
agreement of such Purchaser without payment of additional consideration therefor
by such partners or members. Each certificate for Restricted Stock or Management
Stock, as the case may be, transferred as above provided shall bear the legend
set forth in Section 2, unless (i) such transfer is in accordance with the
provisions of Rule 144 (or any other rule permitting public sale without
registration under the Securities Act) or (ii) the opinion of counsel referred
to above is to the further effect that the transferee and any subsequent
transferee (other than an Affiliate of the Company) would be entitled to
transfer such securities in a public sale without registration under the
Securities Act.
If at any time after an initial public offering of the Common Stock, any
holder of Restricted Stock or Management Stock shall intend to sell such
securities publicly (if permitted by Section 2 of the Stockholders' Agreement
and other than in a registered offering as contemplated by Sections 4, 5 or 6
hereof) or to distribute such securities in a manner that is likely to result in
sales into the public market, such holder shall give notice of such intention to
the Company, each Institutional Investor and TPC and shall refrain from
effecting any such sale or distribution for a period of five days. If other
holders shall have given notice of a similar intention at any time prior to the
end of such five day period, the holders of Restricted Stock or Management Stock
expressing such intention shall endeavor, subject to the provisions of the
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<PAGE> 4
securities laws, to effect such sales or distributions in a manner that will not
adversely disrupt or otherwise adversely affect the market for the Common Stock.
Such holders shall agree that, to the extent practicable, they will sell their
securities through a single broker or market maker over a sufficient period of
time to permit an orderly disposition of such securities. Any such sales shall
be made proportionately based on the number of shares to be sold by each holder
or on such other basis as the holders may agree. Any holder of Restricted Stock
or Management Stock that intends to make a distribution of its shares shall
coordinate the timing and the magnitude of such distribution with the
distributions or sales of other holders in order to avoid adversely disrupting
the public market for the Common Stock. The holders of a majority of the shares
to be sold or distributed may require that all holders seeking to sell or
distribute shares dispose of such shares only by means of a registered public
offering pursuant to Sections 4, 5 or 6 hereof; provided that the amount of
securities proposed to be sold shall equal or exceed $50 million (without regard
to the stockholder percentage threshold set forth in Section 4).
The foregoing restrictions on transferability of Restricted Stock and
Management Stock shall terminate as to any particular shares of Restricted Stock
or Management Stock when such shares shall have been effectively registered
under the Securities Act and sold or otherwise disposed of in accordance with
the intended method of disposition by the seller or sellers thereof set forth in
the registration statement concerning such shares. In addition, the agreements
and restrictions contained in the immediately preceding paragraph shall
terminate (i) as to any holder of Restricted Stock or Management Stock, at such
time as such holder owns less than 5% of the Company's outstanding capital stock
and (ii) as to all holders of Restricted Stock and Management Stock, at such
time as the number of shares of Common Stock in the hands of the public exceeds
the number of shares of Restricted Stock and Management Stock. Whenever a holder
of Restricted Stock or Management Stock is able to provide a written opinion of
counsel to the Company (and its counsel) to the effect that the provisions of
Rule 144(k) of the Securities Act are available to such holder without
limitation, such holder of Restricted Stock or Management Stock shall be
entitled to receive from the Company, without expense, a new certificate not
bearing the restrictive legend set forth in Section 2.
4. Required Registration.
(a) At any time following the earliest of (A) the eighteen month
anniversary of an initial public offering effected prior to the second
anniversary of the date hereof, (B) 180 days after an initial public offering
effected on or after the second anniversary of the date hereof, and (C) the
third anniversary of the date hereof, and subject to the terms of Section 2 of
the Stockholders' Agreement, the holders of Restricted Stock constituting at
least 25% of the Restricted Stock outstanding at such time may request the
Company to register under the Securities Act all or any portion of the
Restricted Stock held by such requesting holder or holders for sale in the
manner specified in such notice; provided, however, that the only securities
which the Company shall be required to register pursuant hereto shall be shares
of Common Stock. For
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<PAGE> 5
the purposes of calculating the holdings of outstanding Restricted Stock by
holders of Preferred Stock for purposes of this Section 4(a) and Section 13(d),
holders of Preferred Stock shall be treated as the holders of the number of
shares of Common Stock then issuable upon conversion of such Preferred Stock.
The Company shall have no obligation to effect a registration under this Section
4 unless the aggregate offering price of the securities requested to be sold
pursuant to such registration is, in the good faith judgment of the Company,
expected to be equal to or greater than $50 million.
(b) Promptly following receipt of any notice under this Section 4, the
Company shall immediately give written notice to any holders of Restricted Stock
from whom notice has not been received, and shall file and use its reasonable
best efforts to have declared effective a registration statement under the
Securities Act, for public sale in accordance with the method of disposition
specified in such notice from such requesting holders the number of shares of
Restricted Stock specified in such notice (and in any notices received from
other such holders of Restricted Stock within 20 days after their receipt of
such notice from the Company). If such method of disposition shall be an
underwritten public offering, the Company may designate the managing underwriter
of such offering which shall be a firm of recognized national standing, subject
to the approval of the selling holders of a majority of the Restricted Stock
included in the offering, which approval shall not be unreasonably withheld. The
number of shares of Restricted Stock to be included in such an underwriting may
be reduced (pro rata among all of the requesting holders based on the number of
shares requested by each holder to be included) if and to the extent that the
managing underwriter shall be of the opinion that such inclusion would adversely
affect the marketing of the securities to be sold therein. Notwithstanding
anything to the contrary contained herein, the obligation of the Company under
this Section 4 shall be deemed satisfied only when a registration statement
covering all shares of Restricted Stock specified in notices received as
aforesaid, for sale in accordance with the method of disposition specified by
the requesting holder, shall have become effective and, if such method of
disposition is a firm commitment underwritten public offering, all such shares
shall have been sold pursuant thereto.
(c) Each of the Company and holders of Management Stock, shall be
entitled to include in any registration statement referred to in this Section 4
for which the method of distribution is an underwritten public offering, for
sale in accordance with the method of disposition specified by the requesting
holders, shares of Common Stock to be sold by the Company for its own account,
or such other stockholders, as the case may be, except to the extent that, in
the opinion of the managing underwriter, such inclusion would adversely affect
the marketing of the Restricted Stock to be sold. Except as provided in this
paragraph (c), the Company will not effect any other registration of its Common
Stock, whether for its own account or that of other holders, from the date of
receipt of a notice from requesting holders pursuant to this Section 4 until the
completion of the period of distribution of the registration contemplated
thereby.
(d) Notwithstanding anything to the contrary contained herein, the
Company
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<PAGE> 6
shall be obligated to register Restricted Stock pursuant to this Section 4 on
three occasions only.
5. Form S-3 Registration.
(a) If, at any time when Form S-3 is available for such registration and
subject to the terms of Section 2 of the Stockholders' Agreement, the Company
shall receive from any Institutional Investor or TPC a written request that the
Company effect a registration on Form S-3 of any of such holder's Restricted
Stock, the Company will promptly give written notice of the proposed
registration to all other holders of Restricted Stock, and, as soon as
practicable, effect such registration and all such related qualifications and
compliances as may be reasonably requested and as would permit or facilitate the
sale and distribution of all Restricted Stock as are specified in such request
and any written requests of other holders given within 20 days after receipt of
such notice. The Company shall have no obligation to effect a registration under
this Section 5 unless the aggregate offering price of the securities requested
to be sold pursuant to such registration is, in the good faith judgment of the
Company, expected to be equal to or greater than $10 million. If such
registration shall be an underwritten public offering, the Company may designate
the managing underwriter of such offering which shall be a firm of recognized
national standing, subject to the approval of the selling holders of a majority
of the Restricted Stock included in the offering, which approval shall not be
unreasonably withheld. The number of shares of Restricted Stock to be included
in such an underwriting may be reduced (pro rata among all of the requesting
holders based on the number of shares owned by each requesting holder) if and to
the extent that the managing underwriter shall be of the opinion that such
inclusion would adversely affect the marketing of the securities to be sold
therein.
(b) Registrations effected pursuant to this Section 5 shall not be
counted as requests for registration pursuant to Section 4. The Company shall
not be obligated to effect more than one registration pursuant to this Section 5
in any six month period.
6. Incidental Registration. Subject to the terms of Section 2 of the
Stockholders' Agreement, if the Company at any time (other than pursuant to
Section 4 or 5 hereof) proposes to register any of its Common Stock under the
Securities Act for sale to the public, whether for its own account or for the
account of other security holders or both (except with respect to registration
statements on Form S-4 or S-8 or another form not available for registering the
Restricted Stock for sale to the public), it will give written notice at such
time to all holders of outstanding Restricted Stock and Management Stock of its
intention to do so. Upon the written request of any such holder, given within 20
days after receipt of any such notice by the Company, to register any of its
Restricted Stock or Management Stock or both, as the case may be (which request
shall state the intended method of disposition thereof), the Company will use
its reasonable best efforts to cause the Restricted Stock or Management Stock or
both, as the case may be, as to which registration shall have been so requested
to be included in the securities to be covered by the registration statement
proposed to be filed by the Company, all to the extent requisite to permit the
sale or other disposition by the holder (in accordance with its written request)
of such Restricted Stock or Management Stock, as the case may be, so registered;
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provided that nothing herein shall prevent the Company from abandoning or
delaying such registration at any time. In the event that any registration
pursuant to this Section 6 shall be, in whole or in part, an underwritten public
offering of Common Stock, any request by a holder pursuant to this Section 6 to
register Restricted Stock or Management Stock, as the case may be, shall specify
that either (i) such Restricted Stock or Management Stock, as the case may be,
is to be included in the underwriting on the same terms and conditions as the
shares of Common Stock otherwise being sold through underwriters under such
registration or (ii) such Restricted Stock or Management Stock, as the case may
be, is to be sold in the open market without any underwriting, on terms and
conditions comparable to those normally applicable to offerings of common stock
in reasonably similar circumstances. The number of shares of Restricted Stock or
Management Stock or both, as the case may be, to be included in such an
underwriting may be reduced if and to the extent that the managing underwriter
shall be of the opinion that such inclusion would adversely affect the marketing
of the securities to be sold by the Company therein or by holders of Restricted
Stock. In such event, the Company shall include in such registration (subject to
the rights of any persons pursuant to the Old Registration Rights Agreement (as
defined herein)) (i) first, the securities the Company proposes to sell, (ii)
second, the Restricted Stock requested to be included in such registration, pro
rata among the holders thereof participating in such registration based upon the
number of shares owned by each such holder, (iii) third, the Management Stock
requested to be included in such registration, pro rata among the holders
thereof participating in such registration based upon the number of shares
requested by such holder, and (iv) fourth, other securities requested to be
included in such registration by persons other than holders of Restricted Stock
or Management Stock.
Notwithstanding anything to the contrary contained in this Section 6, in
the event that there is a firm commitment underwritten public offering of
securities of the Company pursuant to a registration covering Restricted Stock
or Management Stock or both, as the case may be, and a holder of Restricted
Stock or Management Stock, as the case may be, does not elect to sell his shares
to the underwriters of the Company's securities in connection with such
offering, such holder shall refrain from selling such shares or securities
convertible into or exchangeable for such shares, so registered pursuant to this
Section 6 during the period of distribution of the Company's securities by such
underwriters and the period in which the underwriting syndicate participates in
the after market; provided, however, that such holder shall, in any event, be
entitled to sell its shares commencing on the 181st day after the effective date
of such registration statement.
7. Registration Procedures. If and whenever the Company is required by
the provisions of Section 4, 5 or 6 hereof to use its best efforts to effect the
registration of any of the Restricted Stock or Management Stock or both, as the
case may be, under the Securities Act, the Company will, as expeditiously as
possible:
(a) prepare (and afford counsel for the selling holders reasonable
opportunity
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<PAGE> 8
to review and comment thereon) and file with the Commission a registration
statement (which, in the case of an underwritten public offering pursuant to
Section 4 hereof, shall be on Form S-1 or another form of general applicability
satisfactory to the managing underwriter selected as therein provided) with
respect to such securities and use its best efforts to cause such registration
statement to become and remain effective for the period of the distribution
contemplated thereby (determined as hereinafter provided);
(b) prepare (and afford counsel for the selling holders reasonable
opportunity to review and comment thereon) and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for the period specified in paragraph (a) above and as
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement in accordance with the
sellers' intended method of disposition set forth in such registration statement
for such period;
(c) furnish to each seller and to each underwriter such number of copies
of the registration statement and the prospectus included therein (including
each preliminary prospectus) as such persons may reasonably request in order to
facilitate the public sale or other disposition of the securities covered by
such registration statement;
(d) use its best efforts to register or qualify the securities covered by
such registration statement under the securities or blue sky laws of such
jurisdictions as the sellers of such securities or, in the case of an
underwritten public offering, the managing underwriter, shall reasonably request
(provided that the Company will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to so
qualify but for this paragraph (d), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any
jurisdiction);
(e) immediately notify each seller under such registration statement and
each underwriter, at any time when a prospectus relating thereto is required to
be delivered under the Securities Act, of the happening of any event as a result
of which the prospectus contained in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
(f) use its reasonable best efforts (if the offering is underwritten) to
furnish, at the request of any seller, on the date that Restricted Stock or
Management Stock or both, as the case may be, is delivered to the underwriters
for sale pursuant to such registration: (i) an opinion of counsel representing
the Company for the purposes of such registration, addressed to the underwriters
and to such seller and dated such date, stating that such registration statement
has become effective under the Securities Act and that (A) to the best knowledge
of such counsel, no stop order suspending the effectiveness thereof has been
issued and no proceedings for that purpose have been instituted or are pending
or contemplated under the Securities Act, (B) the
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registration statement, the related prospectus, and each amendment or supplement
thereof, comply as to form in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the Commission
thereunder (except that such counsel need express no opinion as to financial
statements, the notes thereto, and the financial schedules and other financial
and statistical data contained therein) and (C) to such other effects as may
reasonably be requested by counsel for the underwriters or by such seller or its
counsel, and (ii) a letter dated such date from the independent public
accountants retained by the Company, addressed to the underwriters, stating that
they are independent public accountants within the meaning of the Securities Act
and that, in the opinion of such accountants, the financial statements of the
Company included in the registration statement or the prospectus, or any
amendment or supplement thereof, comply as to form in all material respects with
the applicable accounting requirements of the Securities Act, and such letter
shall additionally cover such other financial matters (including information as
to the period ending no more than five business days prior to the date of such
letter) with respect to the registration in respect of which such letter is
being given as such underwriters or seller may reasonably request; and
(g) make available for inspection by each seller, any underwriter
participating in any distribution pursuant to such registration statement, and
any attorney, accountant or other agent retained by such seller or underwriter,
all financial and other records, pertinent corporate documents and properties of
the Company, and cause the Company's officers, directors and employees to supply
all information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement and permit
such seller, attorney, accountant or agent to participate in the preparation of
such registration statement.
For purposes of paragraphs (a) and (b) above and of Section 4(c) hereof, the
period of distribution of Restricted Stock or Management Stock or both, as the
case may be, in a firm commitment underwritten public offering shall be deemed
to extend until each underwriter has completed the distribution of all
securities purchased by it, which period shall in no circumstances exceed six
months after the effective date of the related registration statement, and the
period of distribution of securities in any other registration shall be deemed
to extend until the earlier of the sale of all securities covered thereby or six
months after the effective date thereof.
In connection with each registration hereunder, the selling holders of
Restricted Stock and Management Stock, if applicable, will furnish to the
Company in writing such information with respect to themselves and the proposed
distribution by them as shall be reasonably necessary in order to assure
compliance with federal and applicable state securities laws. The Company shall
be under no obligation to register for any registration pursuant to this
Agreement the shares of Restricted Stock or Management Stock of any holder
unless such holder provides the information requested in accordance with the
preceding sentence within 20 days
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<PAGE> 10
following receipt of the Company's request for such information.
In connection with each registration pursuant to Sections 4, 5 and 6
hereof covering an underwritten public offering, the Company and all holders of
Restricted Stock or Management Stock participating in such registration agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between major
underwriters and companies of the Company's size and investment stature,
provided, however, that such agreement shall not contain any such provision
applicable to the Company which is inconsistent with the provisions hereof and
provided, further, however, that the time and place of the closing under said
agreement shall be as mutually agreed upon among the Company, such managing
underwriter and the selling holders of Restricted Stock and Management Stock, if
applicable.
8. Expenses. All expenses incurred by the Company in complying with
Sections 4, 5 and 6 hereof, including without limitation all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees of the National Association
of Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars and fees and expenses of one counsel for the sellers of Restricted
Stock and one counsel for the sellers of Management Stock, but excluding any
Selling Expenses, are herein called "Registration Expenses". All underwriting
discounts and selling commissions applicable to the sale of Restricted Stock or
Management Stock or both, as the case may be, are herein called "Selling
Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement filed pursuant to Section 4, 5 or 6 hereof. All Selling
Expenses in connection with any registration statement filed pursuant to Section
4, 5 or 6 hereof shall be borne by the participating sellers in proportion to
the number of shares sold by each, or by such persons other than the Company
(except to the extent the Company shall be a seller) as they may agree.
9. Indemnification. In the event of a registration of any of the
Restricted Stock or Management Stock or both, as the case may be, under the
Securities Act pursuant to Section 4, 5 or 6 hereof, the Company will indemnify
and hold harmless each seller of such securities thereunder and each underwriter
of such securities thereunder and each other person, if any, who controls such
seller or underwriter within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which such seller
or underwriter or controlling person may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such Restricted Stock or Management Stock or both, as the
case may be, was registered under the Securities Act pursuant to Section 4, 5 or
6, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement
10
<PAGE> 11
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each such seller, each
such underwriter and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, in each case, as
such expenses are incurred; provided, however, that the Company will not be
liable in any such case if and to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with
information furnished by such seller, such underwriter or such controlling
person in writing specifically for use in such registration statement or
prospectus.
In the event of a registration of any of the Restricted Stock or
Management Stock or both, as the case may be, under the Securities Act pursuant
to Section 4, 5 or 6 hereof, each seller of such Restricted Stock or Management
Stock, as the case may be, thereunder, severally and not jointly, will indemnify
and hold harmless the Company and each person, if any, who controls the Company
within the meaning of the Securities Act, each officer of the Company who signs
the registration statement, each director of the Company, each underwriter and
each person who controls any underwriter within the meaning of the Securities
Act, against all losses, claims, damages or liabilities, joint or several, to
which the Company or such officer or director or underwriter or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which such
securities was registered under the Securities Act pursuant to Section 4, 5 or
6, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that such seller will be liable
hereunder in any such case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such, furnished
in writing to the Company by such seller specifically for use in such
registration statement or prospectus; provided, further, however, that the
liability of each seller hereunder shall be limited to the proceeds (net of
underwriting discounts and commissions) received by such seller from the sale of
Restricted Stock or Management Stock, as the case may be, covered by such
registration statement.
Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which
11
<PAGE> 12
it may have to any indemnified party other than under this Section 9. In case
any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in and, to the extent it shall wish, to
assume and undertake the defense thereof with counsel satisfactory to such
indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under this Section 9 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; provided,
however, that, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party, or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, the indemnified party shall have the
right to select a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the right
to retain its own counsel in any such action, but the fees and disbursements of
such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party shall have failed to retain counsel for the indemnified
person as aforesaid or (ii) the indemnifying party and such indemnified party
shall have mutually agreed to the retention of such counsel. It is understood
that the indemnifying party shall not, in connection with any action or related
actions in the same jurisdiction, be liable for the fees and disbursements of
more than one separate firm qualified in such jurisdiction to act as counsel for
the indemnified party. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
If the indemnification provided for in the first two paragraphs of this
Section 9 is unavailable or insufficient to hold harmless an indemnified party
under such paragraphs in respect of any losses, claims, damages or liabilities
or actions in respect thereof referred to therein, then each indemnifying party
shall in lieu of indemnifying such indemnified party contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or actions in such proportion as appropriate to reflect the
relative fault of the Company, on the one hand, and the underwriters and the
sellers of such Restricted Stock or Management Stock, as the case may be, on the
other, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or actions as well as any other relevant
equitable considerations, including the failure to give any notice under the
third paragraph of this Section 9. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact relates to information
12
<PAGE> 13
supplied by the Company, on the one hand, or the underwriters and the sellers of
such securities on the other, and to the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and each of you agree that it would not be just and
equitable if contributions pursuant to this paragraph were determined by pro
rata allocation (even if all of the sellers of such Restricted Stock or
Management Stock, as the case may be, were treated as one entity for such
purpose) or by any other method of allocation which did not take account of the
equitable considerations referred to above in this paragraph. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or action in respect thereof, referred to above in this paragraph,
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this paragraph, the sellers
of such Restricted Stock or Management Stock, as the case may be, shall not be
required to contribute any amount in excess of the amount, if any, by which the
total price at which the Common Stock sold by each of them was offered to the
public exceeds the amount of any damages which they would have otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission. No person guilty of fraudulent misrepresentations (within the meaning
of Section 11(f) of the Securities Act), shall be entitled to contribution from
any person who is not guilty of such fraudulent misrepresentation.
The indemnification of underwriters provided for in this Section 9 shall
be on such other terms and conditions as are at the time customary and
reasonably required by such underwriters.
10. Changes in Common Stock. If, and as often as, there are any changes
in the Common Stock by way of stock split, stock dividend, combination or
reclassification, or through merger, consolidation, reorganization or
recapitalization (including a merger or consolidation in which the holders of
Common Stock receive securities of an acquiror or its parent), or by any other
means, appropriate adjustment shall be made in the provisions hereof, as may be
required, so that the rights and privileges granted hereby shall continue with
respect to the Common Stock as so changed.
11. Representations and Warranties of the Company. The Company represents
and warrants to you as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and
will not violate any provision of law, any order of any court or other
agency of government, the Certificate of Incorporation or By-laws of the
Company, or any provision of any indenture, agreement or other instrument
to which it or any of its properties or assets is bound, or conflict with,
result in a breach of or constitute (with due notice or lapse of time or
both) a default under any such indenture, agreement or other instrument, or
result
13
<PAGE> 14
in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to considerations of
public policy in the case of the indemnification provisions hereof.
12. Rule 144 Reporting. The Company agrees with you as follows:
(a) The Company shall make and keep public information available, as
Those terms are understood and defined in Rule 144 under the Securities
Act, at all times from and after the date it is first required to do so
(and without regard to whether or not it is required to do so at any time
from and after such date, the Company will file with the Commission such
periodic and other reports as an issuer of securities that is a reporting
company, as those terms are understood and defined in the Exchange Act,
would be required to file with the Commission in compliance with such
Exchange Act, unless the Commission refuses to accept such materials for
filing).
(b) The Company shall file with the Commission in a timely manner all
reports and other documents as the Commission may prescribe under Section
13(a) or 15(d) of the Exchange Act at any time after the Company is subject
to such reporting requirements of the Exchange Act.
(c) The Company shall furnish to such holder of Restricted Stock
forthwith upon request (i) a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 (at any time from
and after the date it first becomes subject to such reporting requirements)
and of the Securities Act and the Exchange Act (whether or not at such time
it is subject to such reporting requirements), (ii) a copy of the most
recent annual or quarterly report of the Company, and (iii) such other
reports and documents so filed as a holder may reasonably request to avail
itself of any rule or regulation of the Commission allowing a holder of
Restricted Stock to sell any such securities without registration.
13. Miscellaneous.
(a) Notwithstanding anything herein to the contrary, the Company may
defer the filing of a registration statement with respect to any
registration required by Section 4 or 5 for a reasonable period of time not
in excess of 90 calendar days (the "Deferral Period") if the Company's
Board of Directors determines, in its reasonable business judgment, that
such registration and offering could materially interfere with bona fide
financing or acquisition plans of the Company or would require disclosure
of information, the premature disclosure of which could, in the Board's
reasonable
14
<PAGE> 15
judgment, materially and adversely affect the Company. If the Board of
Directors of the Company makes such determination, the Company shall give
written notice (the "Deferral Notice") of such determination to the
stockholders requesting registration; provided, that, the Company may
exercise its right to delay a registration requested under Section 4 or 5
hereunder only once in any twelve-month period. The Company shall notify
the stockholders requesting registration of the expiration of the Deferral
Period and shall cause the registration statement with respect to the
requested registration to be filed on the fifth business day following the
expiration of the Deferral Period (the "Withdrawal Period") (or, if
registration on such date is not practicable, as promptly as possible
thereafter) unless, prior to the expiration of the Withdrawal Period, the
stockholders requesting registration holding a majority of the shares
requested to be included in such registration, by written notice to the
Company, withdraw the request made, in which case, such request made shall
not count as a requested registration under Section 4 or 5, as the case may
be.
(b) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so
expressed or not. Without limiting the generality of the foregoing, the
registration rights conferred herein on the holders of Restricted Stock and
Management Stock shall inure to the benefit of any and all subsequent
holders from time to time of the Restricted Stock and Management Stock,
respectively, for so long as the certificates representing the Restricted
Stock or Management Stock, as the case may be, shall be required to bear
the legend specified in Section 2 hereof.
(c) All notices, requests, consents and other communications hereunder
shall be in writing and shall be mailed by first class registered mail,
postage prepaid, addressed as follows:
if to the Company, to it at
SpectraSite Holdings, Inc.
8000 Regency Parkway, Suite 570
Cary, North Carolina 27511
Attention: President
with a copy to:
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, N.W.
Suite 800
15
<PAGE> 16
Washington, D.C. 20036
Attention: John T. Byrnes, Jr.
if to any holder of Restricted Stock or Management Stock, at the address
as set forth under such holder's name in Schedule I hereto;
if to any subsequent holder of Restricted Stock or Management Stock, to
such holder at such address as may have been furnished to the Company in writing
by such holder;
with a copy (if to a holder of Restricted Stock affiliated with Welsh,
Carson, Anderson & Stowe) to:
Reboul, MacMurray, Hewitt,
Maynard & Kristol
45 Rockefeller Plaza
New York, New York 10111
Attention: Robert A. Schwed, Esq.
with a copy (if to a holder of Restricted Stock affiliated with J. H.
Whitney & Co.) to:
Morrison Cohen Singer & Weinstein, LLP
750 Lexington Avenue
New York, New York 10022
Attention: David A. Scherl, Esq.
with a copy (if to a holder of Restricted Stock affiliated with the CIBC
Purchasers) to:
CIBC Oppenheimer Corp.
425 Lexington Avenue
New York, New York 10017
Attention: Jay Levine
and a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Roger Meltzer, Esq.
or, in any case, at such other address or addresses as shall have been
furnished in writing
16
<PAGE> 17
to the Company (in the case of a holder of Restricted Stock or Management Stock)
or to the holders of Restricted Stock or Management Stock (in the case of the
Company).
(d) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW OF SUCH STATE.
(e) This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof. This Agreement amends and restates
and supersedes in its entirety the Amended and Restated Registration Rights
Agreement, dated as of March 23, 1998 (the "Old Registration Rights
Agreement"), for all parties hereto and thereto, except that if and to the
extent a party to such Old Registration Rights Agreement is not a party
hereto, such agreement shall remain in effect unamended as to such person.
This Agreement may not be modified or amended except in writing signed by
the Company and the holders of not less than 60% of the voting power of the
Restricted Stock and Management Stock then outstanding (assuming for this
purpose that all shares of Preferred Stock have been converted into shares
of Common Stock and excluding for this purpose any limitations on voting
power affecting entities regulated by the Bank Holding Company Act of 1956,
as amended); provided, however, that any modification or amendment that
adversely affects the rights or privileges of any holder of Restricted
Stock or Management Stock and does not affect the other holders of
Restricted Stock or Management Stock in a substantially similar manner
shall require the prior consent of such adversely affected holder; and
further provided that any modification or amendment to or affecting
Sections 5 and 12 shall require the prior consent of a majority in interest
of the WCAS Purchasers, the Whitney Purchasers, the CIBC Purchasers and
TPC, so long as such party (or its permitted successors and assigns) owns
at least 5% of the outstanding shares of Restricted Stock.
(f) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(g) Headings of articles, sections and paragraphs of this Agreement are
inserted for convenience of reference only and shall not affect the
interpretation or be deemed to constitute a part hereof.
17
<PAGE> 18
Please indicate your acceptance of the foregoing by signing and returning
the enclosed counterpart of this letter, whereupon this letter (herein sometimes
called "this Agreement") shall be a binding agreement between the Company and
you.
Very truly yours,
SPECTRASITE HOLDINGS, INC.
By:/s/ DAVID P. TOMICK
------------------------
Name: David P. Tomick
Title: Chief Financial Officer
AGREED TO AND ACCEPTED
as of the date first
above written.
WELSH, CARSON, ANDERSON & STOWE VIII, L.P.
By WCAS VIII Associates, L.L.C., General Partner
By /s/ LAURA VAN BUREN
---------------------------
Managing Member
WCAS CAPITAL PARTNERS III, L.P.
By WCAS CP III Associates, L.L.C., General Partner
By /s/ LAURA VAN BUREN
---------------------------
Managing Member
WCAS INFORMATION PARTNERS, L.P.
By /s/ LAURA VAN BUREN
---------------------------
General Partner
Attorney-in-Fact
18
<PAGE> 19
/s/ KENNETH MELKUS
- ------------------------------
KENNETH MELKUS
Patrick J. Welsh
Russell L. Carson
Bruce K. Anderson
Andrew M. Paul
Thomas E. McInerney
Laura VanBuren
Robert A. Minicucci
Anthony J. de Nicola
Paul B. Queally
Lawrence B. Sorrel
Priscilla A. Newman
Rudolph E. Rupert
D. Scott Mackesy
By /s/ LAURA M. VAN BUREN
---------------------------------
Laura M. Van Buren
Individually and
as Attorney-in-fact
TRUST U/A DATED 11/26/84 FBO
ERIC WELSH
By: /s/ CAROL ANN WELSH
---------------------------
Carol Ann Welsh
Trustee
TRUST U/A DATED 11/26/84 FBO
RANDALL WELSH
By: /s/ CAROL ANN WELSH
---------------------------
Carol Ann Welsh
Trustee
19
<PAGE> 20
TRUST U/A DATED 11/26/84 FBO
JENNIFER WELSH
By: /s/ CAROL ANN WELSH
---------------------------
Carol Ann Welsh
Trustee
TOWER PARENT CORP.
By:/s/ THOMAS J. SIDMAN
---------------------------
Name: Thomas J. Sidman
Title:
CIBC WG ARGOSY MERCHANT FUND 2, L.L.C.
By: /s/ DEAN C. KEHLER
---------------------------
Name: Dean C. Kehler
Title: Managing Director
CO-INVESTMENT MERCHANT FUND 3, LLC
By: /s/ DEAN C. KEHLER
---------------------------
Name: Dean C. Kehler
Title: Managing Director
20
<PAGE> 21
CARAVELLE INVESTMENT FUND, L.L.C.
By: Caravelle Advisors, L.L.C.,
As its Investment Manager and
Attorney-in-Fact
By: /s/ DAVID MILLISON
---------------------------
Name: David Millison
Title: Managing Director
WHITNEY EQUITY PARTNERS, L.P.
By: Whitney Equity Partners, LLC,
Its General Partner
By: /s/ DANIEL J. O'BRIEN
---------------------------
Name: Daniel J. O'Brien
Title: A Managing Member
J. H. WHITNEY III, L.P.
By: J. H. Whitney Equity Partners III, L.L.C.,
Its General Partner
By /s/ DANIEL J. O'BRIEN
---------------------------
Name: Daniel J. O'Brien
Title: A Managing Member
WHITNEY STRATEGIC PARTNERS III, L.P.
By: J. H. Whitney Equity Partners III L.L.C.,
Its General Partner
By /s/ DANIEL J. O'BRIEN
---------------------------
Name: Daniel J. O'Brien
Title: A Managing Member
21
<PAGE> 22
WHITNEY MEZZANINE MANAGEMENT COMPANY, L.L.C.
By: Whitney Holdings, LLC,
Member
By /s/ DANIEL J. O'BRIEN
---------------------------
Name: Daniel J. O'Brien
Title: Managing Director
WALLER SUTTON MEDIA PARTNERS, L.P.
By: Waller Sutton Media Partners, LLC
Its General Partner
By /s/ ANDREW J. ARMSTRONG, JR.
------------------------------
Name: Andrew J. Armstrong, Jr.
Title: Vice President
KITTY HAWK CAPITAL LIMITED PARTNERSHIP, III
By: Kitty Hawk Partners Limited Partnership, III
Its General Partner
By: /s/ W. CHRIS HEGELE
---------------------------
Name: W. Chris Hegele
Title: General Partner
KITTY HAWK CAPITAL LIMITED PARTNERSHIP, IV
By: Kitty Hawk Partners LLC, IV
Its General Partner
By: /s/ W. CHRIS HEGELE
---------------------------
Name: W. Chris Hegele
Title: General Partner
22
<PAGE> 23
EAGLE CREEK CAPITAL, LLC
By: /s/ SUSAN RASINSKI
---------------------------
Name: Susan Rasinski
Title: Managing Partner
/s/ STEPHEN H. CLARK
- ---------------------------
STEPHEN H. CLARK
/s/ DAVID P. TOMICK
- ---------------------------
DAVID P. TOMICK
FINLEY FAMILY LIMITED PARTNERSHIP
By: /s/ BUD FINLEY
---------------------------
Name: Bud Finley
Title: Managing General Partner
THE NORTH CAROLINA ENTERPRISE FUND, L.P.
By: The North Carolina Enterprise Corporation,
Its General Partner
By: /s/ CHARLES T. CLOSSON
---------------------------
Name: Charles T. Closson
Title: President
23
<PAGE> 24
/s/ EDWARD J. LUTKEWICH
- ---------------------------
EDWARD J. LUTKEWICH
/s/ JACK W. JACKMAN
- ---------------------------
JACK W. JACKMAN
/s/ ALTON D. ECKERT
- ---------------------------
ALTON D. ECKERT
/s/ WILLIAM R. GUPTON
- ---------------------------
WILLIAM R. GUPTON
THE PRICE FAMILY LIMITED PARTNERSHIP
By: /s/ MICHAEL J. PRICE
---------------------------
Michael J. Price
General Partner
BENAKE LP
By: /s/ LYNN FORESTER
---------------------------
Lynn Forester
General Partner
/s/ RICHARD BYRNE
- ---------------------------
RICHARD BYRNE
24
<PAGE> 25
SCHEDULE I
Name and Address of Purchaser
Welsh, Carson, Anderson
& Stowe VIII, L.P.
WCAS Capital Partners III, L.P.
WCAS Information Partners, L.P.
Patrick J. Welsh
Russell L. Carson
Bruce K. Anderson
Andrew M. Paul
Thomas E. McInerney
Laura VanBuren
Robert A. Minicucci
Anthony J. de Nicola
Paul B. Queally
Lawrence B. Sorrel
D. Scott Mackesy
Priscilla A. Newman
Rudolph E. Rupert
Kenneth Melkus
Trust U/A Dated 11/26/84 FBO Eric Welsh
Trust U/A Dated 11/26/84 FBO Randall Welsh
Trust U/A Dated 11/26/84 FBO Jennifer Welsh
<PAGE> 26
c/o Welsh, Carson, Anderson & Stowe
320 Park Avenue
Suite 2500
New York, New York 10022
Telecopy: (212) 893-9566
Attention: Lawrence B. Sorrel
26
<PAGE> 27
SCHEDULE II
Whitney Purchasers
Name and Address of Purchaser
Whitney Equity Partners, L.P.
c/o J. H. Whitney & Co.
177 Broad Street
Stamford, CT 06901
J. H. Whitney III, L.P.
c/o J. H. Whitney & Co.
177 Broad Street
Stamford, CT 06901
Whitney Strategic Partners III, L.P.
c/o J. H. Whitney & Co.
177 Broad Street
Stamford, CT 06901
Whitney Mezzanine Management Company, L.L.C.
c/o J. H. Whitney & Co.
177 Broad Street
Stamford, CT 06901
27
<PAGE> 28
SCHEDULE III
CIBC Purchasers
Name and Address of Purchaser
CIBC WG Argosy Merchant Fund 2, L.L.C.
Co-Investment Merchant Fund 3, LLC
Caravelle Investment Fund, L.L.C.
c/o CIBC Oppenheimer Corp.
425 Lexington Avenue
New York, New York 10017
Attention: Jay Levine
28
<PAGE> 29
SCHEDULE IV
Additional Purchasers
Name and Address of Purchaser
Tower Parent Corp.
c/o Nextel Communications, Inc.
1505 Farm Credit Drive
McLean, Virginia 22102
Attention: General Counsel
Waller-Sutton Media Partners, L.P.
30 Rockefeller Plaza
Suite 4350
New York, New York 10112
Kitty Hawk Capital Limited Partnership, III
2700 Coltsgate Road
Suite 202
Charlotte, North Carolina 28211
Kitty Hawk Capital Limited Partnership, IV
2700 Coltsgate Road
Suite 202
Charlotte, North Carolina 28211
Eagle Creek Capital, LLC
2300 Carillon Point
Kirkland, Washington 98033
North Carolina Enterprise Fund, L.P.
3600 Glenwood Avenue
Suite 107
Raleigh, North Carolina 27612
Stephen H. Clark
SpectraSite Communications, Inc.
8000 Regency Parkway
Suite 570
29
<PAGE> 30
Cary, North Carolina 27511
David P. Tomick
SpectraSite Communications, Inc.
8000 Regency Parkway
Suite 570
Cary, North Carolina 27511
Finley Family Limited Partnership
11 Corporate Hill Drive
Little Rock, Arkansas 72205
Edward J. Lutkewich
PCX Corporation
8343-A Hwy 70E
Clayton, North Carolina 27520
Jack W. Jackman
PCX Corporation
8343-A Hwy 70E
Clayton, North Carolina 27520
Alton D. Eckert
PCX Corporation
8343-A Hwy 70E
Clayton, North Carolina 27520
William R. Gupton
PCX Corporation
8343-A Hwy 70E
Clayton, North Carolina 27520
The Price Family Limited Partnership
7 Heaton Court
Closter, New Jersey 07624
Benake LP
116 East 65th Street
New York, New York 10021
Richard Byrne
SpectraSite Communications, Inc.
30
<PAGE> 31
8000 Regency Parkway, Suite 570
Cary, North Carolina 27511
31
<PAGE> 1
EXHIBIT 10.6
THIRD AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
THIRD AMENDED AND RESTATED STOCKHOLDERS AGREEMENT, dated as of April 20,
1999 (the "Agreement"), by and among SPECTRASITE HOLDINGS, INC., a Delaware
corporation (the "Company"), the WELSH, CARSON, ANDERSON & STOWE PURCHASERS
named in Schedule I hereto (the "WCAS Purchasers"), TOWER PARENT CORP., a
Delaware corporation and a wholly-owned direct subsidiary of NEXTEL
COMMUNICATIONS, INC., a Delaware corporation ("TPC"), CIBC WG ARGOSY MERCHANT
FUND 2, L.L.C., a Delaware limited liability company ("CIBC II"), CO-INVESTMENT
MERCHANT FUND 3, LLC, a Delaware limited liability company ("CIBC III"),
CARAVELLE INVESTMENT FUND, L.L.C., a Delaware limited liability company
("Caravelle" and together with CIBC II and CIBC III, the "CIBC Purchasers"),
WHITNEY EQUITY PARTNERS, L.P., a Delaware limited partnership ("JHW II"), J. H.
WHITNEY III, L.P., a Delaware limited partnership ("JHW III"), WHITNEY STRATEGIC
PARTNERS III, L.P., a Delaware limited partnership ("JHW Strategic III"),
WHITNEY MEZZANINE MANAGEMENT COMPANY, L.L.C., a Delaware limited liability
company ("JHW Mezzanine" and together with JHW II, JHW III and JHW Strategic
III, the "Whitney Purchasers"), WALLER-SUTTON MEDIA PARTNERS, L.P., a Delaware
limited partnership ("Waller"), KITTY HAWK CAPITAL LIMITED PARTNERSHIP, III, a
Delaware limited partnership ("Kitty Hawk III"), KITTY HAWK CAPITAL LIMITED
PARTNERSHIP, IV, a Delaware limited partnership ("Kitty Hawk IV"), EAGLE CREEK
CAPITAL, LLC, a Washington limited liability company ("Eagle Creek"), STEPHEN H.
CLARK ("Clark"), DAVID P. TOMICK ("Tomick"), FINLEY FAMILY LIMITED PARTNERSHIP,
an Arkansas limited partnership ("Finley LP"), THE NORTH CAROLINA ENTERPRISE
FUND, L.P., a North Carolina limited partnership ("NCEF"), EDWARD J. LUTKEWICH
("Lutkewich"), JACK W. JACKMAN ("Jackman"), ALTON D. ECKERT ("Eckert"), WILLIAM
R. GUPTON ("Gupton"), THE PRICE FAMILY LIMITED PARTNERSHIP ("Price LP"), BENAKE
LP ("Benake") and RICHARD BYRNE ("Byrne"). The WCAS Purchasers, TPC, the CIBC
Purchasers, the Whitney Purchasers, Waller, Kitty Hawk III, Kitty Hawk IV, Eagle
Creek, Clark, Tomick, Finley LP, NCEF, Lutkewich, Jackman, Eckert, Gupton, Price
LP, Benake and Byrne are herein sometimes referred to collectively as the
"Stockholders" and each individually as a "Stockholder."
WHEREAS, pursuant to the terms of that certain Preferred Stock Purchase
Agreement, dated as of February 10, 1999 (as amended, the "Purchase Agreement"),
by and among the Company, the WCAS Purchasers, certain of the Whitney
Purchasers, the CIBC Purchasers and the other parties signatory thereto, the
WCAS Purchasers acquired an aggregate of 31,000,000 shares of Series C Preferred
Stock, par value $0.001 per share (the "Series C Preferred Stock"), of the
Company, JHW III acquired an aggregate of 3,905,882 shares
<PAGE> 2
of Series C Preferred Stock, JHW Strategic III acquired an aggregate of 94,118
shares of Series C Preferred Stock, the CIBC Purchasers acquired an aggregate of
10,000,000 shares of Series C Preferred Stock and certain other purchasers
acquired an aggregate of 1,286,795 shares of Series C Preferred Stock;
WHEREAS, pursuant to the credit agreement and related agreements and
instruments as contemplated by the commitment letter and related term sheet,
dated as of January 15, 1999, as amended, providing for a credit facility (the
"Credit Facility") of up to $710 million in favor of the Company and its
Affiliates, certain WCAS Purchasers, Whitney Purchasers and CIBC Purchasers
acquired an aggregate of 2,000,000 shares of Common Stock, par value $0.001 per
share (the "Common Stock") of the Company;
WHEREAS, in connection therewith, pursuant to the terms of that certain
Agreement and Plan of Merger, dated as of February 10, 1999 (as amended, the
"Merger Agreement"), among Nextel Communications, Inc., TPC, Tower Merger
Vehicle, Inc., Tower Asset Sub, Inc., SpectraSite Holdings, Inc., SpectraSite
Communications, Inc., SHI Merger Sub, Inc., and the other parties signatory
thereto, TPC acquired 14,000,000 shares of Series C Preferred Stock of the
Company;
WHEREAS, the Company and each of the Stockholders other than the WCAS
Purchasers, TPC and the CIBC Purchasers executed and delivered that certain
Second Amended and Restated Stockholders' Agreement dated as of March 23, 1998,
as amended by that certain First Amendment to Second Amended and Restated
Stockholders' Agreement dated as of May 29, 1998, the "Second Amended
Stockholders Agreement") setting forth certain arrangements among themselves
with respect to the governance of the Company and the other matters set forth
herein; and
WHEREAS, pursuant to Section 15 of the Second Amended Stockholders'
Agreement, the Company and the Stockholders desire to amend and restate such
Second Amended Stockholders' Agreement in its entirety, as more particularly set
forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
SECTION 1. Voting Agreement.
(a) From and after the Closing Date (as defined in the Purchase
Agreement), at each annual or special stockholders meeting called for the
election of directors, and whenever the stockholders of the Company act by
written consent with respect to the election of directors, each Stockholder
agrees to vote or otherwise give such Stockholder's consent in respect of all
shares of the capital stock of the Company (whether now or hereafter acquired)
owned by such Stockholder, and take all other appropriate action, and the
Company shall take all necessary and desirable actions within its control, in
order to cause:
(i) an amendment to the Bylaws of the Company to provide that the
authorized number of directors on the Board of Directors of the Company
(the "Board")
<PAGE> 3
to be established at nine persons, or at the request of the holders of a
majority of the Series C Preferred Stock then held by the WCAS Purchasers,
to increase the size of the Board, up to a maximum of 15 persons;
(ii) the election to the Board of:
a) such number of directors as shall constitute a majority of the
Board designated by a majority of the Series C Preferred Stock then held
by the WCAS Purchasers (the "WCAS Designees"); provided, however, that
upon the earlier to occur of (1) the date on which the WCAS Purchasers
shall hold less than 30% of the outstanding Capital Stock of the Company
and (2) the second anniversary of an IPO, such number of directors shall
decrease to the greater of (A) three and (B) the WCAS Purchasers'
proportional share of the total number of directors based on the
aggregate number of shares owned by the WCAS Purchasers on any such date;
b) two directors designated by TPC (the "TPC Designees");
c) two directors designated by the holders of a majority of the
shares of the Preferred Stock then held by the Whitney Purchasers (the
"Whitney Designees");
d) one director designated by the holders of a majority of the
shares of Series C Preferred Stock then held by the CIBC Purchasers (the
"CIBC Designee"); provided, that, if the CIBC Purchasers determine that
applicable banking laws prohibit them from designating a representative
to the Board, a representative of the CIBC Purchasers shall be entitled
to attend as an observer all meetings of the Board and any committee
thereof and to receive all notices, information and other materials
distributed to members of the Board or any such committee at the same
time and in the same manner as so distributed; and
e) the Chief Executive Officer of the Company (initially Stephen
H. Clark);
all of which persons shall hold office, subject to their earlier removal
in accordance with clause (iii) below, the By-laws of the Company and
applicable corporate law, until their respective successors shall have
been elected and shall have qualified;
(iii) the removal from the Board (with or without cause) of any director
elected in accordance with subpart a), b), c) or d) of clause (ii) above
upon the written request of the Stockholders that designated such director;
and
(iv) upon any vacancy in the Board as a result of any individual
designated as provided in clause (ii) above ceasing to be a member of the
Board, whether by resignation or otherwise, the election to the Board as
promptly as possible of an individual designated by the Stockholders that
designated such individual (or, in the case of a director specified
<PAGE> 4
in subpart e) of clause (ii) above, an individual meeting such
qualifications).
(b) Each Stockholder agrees to use its best efforts to cause its
designees to the Board to vote or otherwise give such Director's consent to:
(i) the creation and maintenance of a Compensation Committee of the
Board consisting of three directors, two of whom shall be WCAS Designees
and one of whom shall be a Whitney Designee, which Compensation Committee
shall approve all grants of stock options to employees of the Company, all
increases in compensation and all annual bonuses granted to officers of the
Company and all other employee benefits (including, without limitation,
vacation policy, benefit plans, company automobiles and insurance) granted
to officers of the Company, and shall have such other duties and
responsibilities as the Board of Directors may from time to time determine;
(ii) the creation and maintenance of an Audit Committee of the Board of
Directors, consisting of three directors, at least one of whom shall be a
WCAS Designee and one of whom shall be a Whitney Designee, which Audit
Committee shall review and approve the financial statements of the Company
as audited by the Company's independent certified public accountants, and
shall have such other duties and responsibilities as the Board of Directors
may from time to time determine;
(iii) the creation and maintenance of such other committees as the Board
shall from time to time deem appropriate, consisting of at least two
directors, at least one of whom shall be a WCAS Designee and one of whom
shall be a Whitney Designee, which committees shall have such duties and
responsibilities as the Board may from time to time determine; and
(iv) the election of Lawrence B. Sorrel (or such other person as may be
designated by the WCAS Purchasers) as Chairman of the Board of Directors.
(c) For as long as TPC shall be entitled to designate directors
pursuant to this Section 1, a representative of TPC shall be entitled to attend
as an observer all meetings of committees of the Board of Directors and to
receive all notices, information or other materials distributed to the members
of any such committee at the same time and in the same manner as so distributed.
(d) No Stockholder shall grant any proxy or enter into or agree to be
bound by any voting trust with respect to shares of Capital Stock held by it,
nor shall any Stockholder enter into any stockholder agreement or arrangement of
any kind with respect to shares of Capital Stock held by it, which conflicts or
is inconsistent in any manner with the provisions of this Agreement.
(e) No limitation on the voting or consent rights of Regulated Entities
(as defined in the Amended and Restated Certificate of Incorporation) shall
affect the voting or
<PAGE> 5
consent rights of any party under this Agreement.
SECTION 2. Restrictions on Transfers. In addition to the other
restrictions set forth herein, each Stockholder (other than the WCAS Purchasers)
hereby agrees that such Stockholder shall not sell or in any other way, directly
or indirectly, transfer, assign, distribute or otherwise dispose of any shares
of Capital Stock or any securities exercisable for or convertible into shares of
Capital Stock (whether now owned or hereafter acquired) then held by such
Stockholder except:
(i) any transfer made with the prior written consent of (A) the holders
of a majority in interest of the shares of Series C Preferred Stock then
held by the WCAS Purchasers or (B) the holders of at least 60% of the
aggregate shares of Capital Stock held by the Whitney Purchasers, the CIBC
Purchasers and TPC, so long as in each such case such consent applies to
all Stockholders on a pro rata basis or involves securities having a value
less than $2,000,000 as to any single transfer and $5,000,000 in the
aggregate for all transfers made by any Stockholder and its Affiliates on a
cumulative basis;
(ii) any transfer by any individual Stockholder to the spouse or lineal
descendants of such Stockholder, including without limitation any transfer
by bequest or devise, or to a trust or trusts for the benefit of such
Stockholder or any of the foregoing;
(iii) any transfer of shares of Capital Stock pursuant to Section 3 or 4
hereof;
(iv) any transfer by any institutional Stockholder to an Affiliate of
such Stockholder or any partner or retired partner, the estate and family
members of any such partner or retired partner and of his or her spouse,
and any trusts for the benefit of any of the foregoing persons; or
(v) any transfer by TPC to any Affiliate of such Stockholder or a
pledge by TPC of its shares to secure its obligations under a secured
credit facility;
provided, in the case of a transfer pursuant to clause (i), (ii), (iv) or (v)
above, that any such transferee that is not already a party to this Agreement
shall agree in writing to be bound by, and to comply with, all provisions of
this Agreement as though such transferee were a Stockholder. The restrictions
set forth in this Section 2 shall terminate upon the earlier to occur of (x) the
sale, transfer or other disposition (including a distribution by a partnership
or limited liability company to its partners or members) by the WCAS Purchasers
of at least 50% of the shares of Capital Stock held by the WCAS Purchasers on
the date hereof and (y) two years from the date hereof, unless the Company
completes an IPO within two years of the date hereof, in which case the
restrictions above shall terminate on the earlier to occur of (1) 18 months
after the closing date of the IPO and (2) three years from the date hereof. If
the Company completes an IPO following the second anniversary of the date
hereof, the Stockholders agree that the above transfer restrictions shall be
reinstated upon the closing date of such IPO and thereafter shall remain in
effect for a period of 180 days following the closing date of the IPO. In either
case, following the termination of such transfer restrictions 18 months or 180
days after the IPO, as the case may be, the transfers of any shares held by any
Stockholders who hold at least 5% of the
<PAGE> 6
outstanding Capital Stock of the Company shall continue to be subject to the
coordinated distribution requirements contained in Section 3 of the Second
Amended and Restated Registration Rights Agreement dated as of the date hereof,
as such agreement may be amended from time to time (the "Registration Rights
Agreement"). Anything herein to the contrary notwithstanding, if the
underwriters of an IPO shall require a longer lock-up period than otherwise
provided in this Section 2, each Stockholder shall enter into a lock-up
agreement for such period with the underwriters, provided that (i) the lock-up
agreement shall be binding on the executive officers of the Company and all
holders of more than 5% of the Company's outstanding Capital Stock and (ii) any
exceptions made by the underwriters to the provisions of the lock-up agreement
shall apply equally to all Stockholders. For purposes of this Agreement, the
term "IPO" shall mean the consummation of one or more firm commitment public
offerings by the Company of its Common Stock underwritten by a major bracket
underwriter having an average offering price of at least $8.00 per share
(subject to appropriate adjustments in the event of a stock split, stock
dividend, combination or other reclassification) and aggregate net proceeds to
the Company of at least $150 million.
SECTION 3. Tag-Along Rights.
(a) If a WCAS Purchaser or group of WCAS Purchasers (for purposes of
this Section 3, a "Selling Stockholder") wishes to directly or indirectly sell,
transfer or otherwise dispose of all or any portion of the shares of Capital
Stock held by him, her or it at any time (including by any distribution or
transfer by any WCAS Purchaser that is a limited partnership or a limited
liability company to its limited partners or members), then such Selling
Stockholder shall promptly deliver a notice (an "Offering Notice") to the
Company in writing of the proposed transfer, specifying the number of such
shares of Capital Stock to be transferred by such Selling Stockholder (such
specified shares, the "Offered Shares"), the name of the proposed purchaser or
purchasers, the proposed purchase price per share, the proposed date of
transfer, the payment terms and all other material terms and conditions thereof.
In the event that the terms and/or conditions set forth in the Offering Notice
are thereafter amended in any respect, the Selling Stockholder shall also give
written notice (an "Amended Notice") of the amended terms and conditions of the
proposed transaction to the Company. Upon its receipt of any Offering Notice or
Amended Notice, the Company shall promptly, but in all events within three
business days of its receipt thereof, forward copies thereof to each of the
other Stockholders (collectively, the "Other Stockholders"). The Selling
Stockholder shall provide such additional information with respect to the
proposed transfer as may be reasonably requested by the Company or the Other
Stockholders.
(b) Each Other Stockholder shall have the right and option, exercisable
upon written notice to the Company and the Selling Stockholder within 15
business days after receipt by such Other Stockholder of the Offering Notice,
or, if later, within 10 business days after receipt by such Other Stockholder of
the most recent Amended Notice, to participate in the proposed transfer of
shares by the Selling Stockholder to the proposed purchaser on the same terms
and conditions as the Selling Stockholder (such participation right being
hereinafter referred to as a "tag-along" right); provided that no Other
Stockholder shall be required to make any representations or warranties or
covenants, or bear any liability, with respect to any Other Stockholder or with
respect to the Company or the Company's business other than such Other
<PAGE> 7
Stockholder's pro rata share (based on the number of shares of Capital Stock to
be transferred) of any indemnity obligations for representations and warranties
regarding the Company or its business (to the extent the WCAS Purchaser or group
of WCAS Purchasers is or are subject to substantively identical indemnification
obligations). Each Other Stockholder may participate in such transfer with
respect to all or any part of that number of shares of Capital Stock which is
equal to the product obtained by multiplying (i) the number of Offered Shares by
(ii) a fraction, the numerator of which is the number of shares of Capital Stock
at the time owned by such Other Stockholder and the denominator of which is the
aggregate number of shares of Capital Stock then owned by the Stockholders;
except that in the event the proposed transfer to a third party is a
distribution by a WCAS Purchaser to its partners, each Other Stockholder is not
entitled to participate in such transfer, but may without restriction pursuant
to either this Agreement (including, without limitation, Sections 2 and 6
hereof) or the Registration Rights Agreement (including, without limitation,
Section 3 thereof), sell, distribute or otherwise transfer all or any part of
that number of shares of Capital Stock which is equal to the product obtained by
multiplying the number of shares held by such Other Stockholder by a fraction,
the numerator of which is the number of shares of Capital Stock proposed to be
distributed by such WCAS Purchaser and the denominator of which is the total
number of shares of Capital Stock owned by all WCAS Purchasers; provided,
however, that such Stockholders who have elected to tag-along (the "Tag-Along
Stockholders") shall have the right to sell to the proposed purchaser all or any
part of the shares (the "Unsold Shares") not sold by Stockholders not electing
to tag-along which is equal to the product obtained by multiplying (i) the
number of Unsold Shares by (ii) a fraction, the numerator of which is the number
of shares of Capital Stock then owned by such Stockholder and the denominator of
which is the aggregate number of shares owned by the Tag-Along Stockholders and
the WCAS Purchasers. Any Other Stockholder that has not notified the Selling
Stockholder and the Company of its intent to exercise its tag-along rights
within, as applicable, 15 business days after receipt by such Other
Stockholder(s) of the Offering Notice or 10 business days after receipt by such
Other Stockholder(s) of the most recent Amended Notice shall be deemed to have
elected not to exercise such rights with respect to the transaction contemplated
by such Offering Notice or Amended Notice, as the case may be (regardless of
their election pursuant to the Offering Notice or any prior Amended Notice
relating to such transaction), but only if, as applicable, such Offering Notice
or such Amended Notice sets forth the provisions of this sentence.
(c) Any Other Stockholder participating in the proposed disposition
shall deliver to the Company, as agent for such Other Stockholder, for transfer
to the proposed acquiror one or more certificates, properly endorsed for
transfer and with all stock transfer taxes paid and stamps affixed, which
represent the number of shares of Capital Stock that such Other Stockholder
elects to dispose of pursuant to paragraph (b) above. The consummation of such
proposed disposition shall be subject to the sole discretion of the Selling
Stockholder, who shall have no liability or obligation whatsoever to any Other
Stockholder participating therein other than to obtain for such Other
Stockholder the same terms and conditions as those set forth in the Offering
Notice (or most recent Amended Notice, as the case may be). Upon the
consummation of any such sale, the Company (i) shall transfer to the acquiror a
stock certificate or certificates representing the number of shares of Capital
Stock to be disposed of by any Other Stockholders and (ii) shall promptly
thereafter remit to each such Other Stockholder (a) that portion of the proceeds
of the disposition to which such Other Stockholder is entitled by reason of such
<PAGE> 8
participation and (b) a stock certificate representing any balance of shares of
Capital Stock that were not so disposed of (or all shares of Capital Stock, in
the event the proposed disposition is not consummated).
SECTION 4. Drag-Along Rights. In the event that any of the WCAS
Purchasers or the Company receives a bona fide offer from a third party not
affiliated with any WCAS Purchaser to purchase at least 80% of the outstanding
shares of Capital Stock of the Company and a majority in interest of the WCAS
Purchasers desires to accept such offer, such WCAS Purchasers shall have the
right to require all (but not less than all) of the Stockholders to sell all (or
such lesser percentage as may be necessary to achieve recapitalization
accounting treatment, but in no event less than 80%) of the shares of Capital
Stock (together with any options or warrants to acquire Capital Stock) then held
by them (including all or the same percentage of all shares, options and
warrants held by such WCAS Purchasers) on the following terms:
(i) such sale shall only be a sale for cash or marketable securities
and all expenses of the transaction, including, without limitation, legal,
accounting and investment banking fees and expenses, shall be borne by the
Company (for purposes of this paragraph, "marketable securities" shall mean
equity securities that are actively traded on a national securities
exchange located in the United States or on the Nasdaq Stock Market that
are part of an issue with a pre-transaction public capitalization in excess
of $1.0 billion and that may be freely traded without any restriction under
contract, law or otherwise, including, without limitation, any restriction
as to volume on such exchange or the Nasdaq Stock Market immediately
following receipt thereof or at any time thereafter by each Stockholder);
(ii) the proceeds from such sale (and, in the case of a sale of less
than all of the outstanding shares of Capital Stock of the Company, the
number of shares to be sold by each Stockholder) shall be allocated among
the Stockholders on a pro rata basis, based on the number of shares of
Capital Stock (treating all "in the money" options and warrants as the
number of shares of Capital Stock issuable upon the exercise thereof, less
such number of shares of Capital Stock the aggregate fair market value of
which (based on the value attributed in such sale) would be required to pay
the aggregate exercise price therefor, and treating any shares of
convertible Preferred Stock or debt of the Company on an "as-converted"
basis) then held by each Stockholder;
(iii) not less than 20 days prior to the closing date of such sale, such
WCAS Purchasers shall notify each of the other Stockholders in writing of
such sale, the terms thereof and the closing date thereof, and shall
provide additional written notification promptly upon any amendment or
modification to any thereof, all of which terms shall apply equally to all
Stockholders except that no Other Stockholder shall be required to make any
representations, warranties or covenants, or bear any liability, with
respect to the Company or the Company's business or with respect to any
other Stockholder;
<PAGE> 9
(iv) at the closing of such sale, each of the Stockholders shall deliver
certificates evidencing the Capital Stock, options and warrants then held
by it and to be sold in such sale, duly endorsed for transfer or
accompanied by stock powers executed in blank, against payment of the
purchase price therefor by wire transfer to the account or accounts
specified by such Stockholder; and
(v) the Other Stockholders shall not be obligated to participate in
such sale if all of the WCAS Purchasers shall not have concurrently sold
all or the same percentage of their shares of Capital Stock, options and/or
warrants to be sold by them in connection with such sale.
SECTION 5. Preemptive Rights.
(a) The Company hereby grants to each of the WCAS Purchasers, the
Whitney Purchasers, the CIBC Purchasers and TPC the right to purchase such
Stockholder's Proportionate Percentage (as hereinafter defined) of any future
Eligible Offering (as hereinafter defined). For the purposes of this Section 5,
the following terms shall have the meanings set forth below:
"Proportionate Percentage" means, with respect to any Stockholder as of
any date, the result (expressed as a percentage) obtained by dividing (i)
the number of shares of Common Stock owned by such Stockholder as of such
date by (ii) the total number of shares of Common Stock outstanding as of
such date, in each case assuming all shares of Capital Stock convertible
into Common Stock have been so converted.
"Eligible Offering" means an offer by the Company to sell to any person
or persons (including any of the Stockholders) for cash, any equity
securities of the Company, or any security convertible into or exchangeable
for, or carrying rights or options to purchase, equity securities of the
Company, other than an offering by the Company:
(i) of shares of Common Stock of the Company ("Common Stock") or
options to purchase shares of Common Stock in connection with or pursuant
to any stock option or stock purchase plan approved by the Board of
Directors of the Company to full-time employees, officers, directors,
consultants and/or advisors to the Company or its subsidiaries; or
(ii) of shares of Common Stock in an underwritten public offering
(a "Public Offering") registered under the Securities Act or pursuant to
a Rule 144A offering under the Securities Act; or
(iii) of shares of Series C Preferred Stock issued to TPC pursuant
to the Merger Agreement, shares of Series C Preferred Stock issued to the
Purchasers under the Purchase Agreement, up to an aggregate of 6,000,000
shares of Common Stock issued in connection with the funding of the
Tranche C Credit Facility and up to an aggregate of 100,000 shares of
Common Stock or options to purchase Common Stock to Michael J. Price.
<PAGE> 10
(b) The Company shall, before issuing any securities pursuant to an
Eligible Offering, give written notice thereof to each Stockholder that is
entitled to preemptive rights hereunder. Such notice shall specify the security
or securities the Company proposes to issue, the proposed date of issuance, the
consideration that the Company intends to receive therefor and all other
material terms and conditions of such proposed issuance. For a period of 15 days
following the date of such notice, each such Stockholder shall be entitled, by
written notice to the Company, to elect to purchase all or any part of such
Stockholder's Proportionate Percentage of the securities being sold in the
Eligible Offering; provided, however, that if two or more securities shall be
proposed to be sold as a "unit" in an Eligible Offering, any such election must
relate to such unit of securities. To the extent that elections pursuant to this
Section 5(b) shall not be made with respect to any securities included in an
Eligible Offering within such 15-day period, then the Company shall first
re-offer to Stockholders who have elected to purchase such Stockholders'
Proportionate Percentage the right to purchase any part of the securities not
purchased by other Stockholders (the "Remaining Shares") pursuant to this
Section 5 which is equal to the product obtained by multiplying (i) the number
of Remaining Shares by (ii) a fraction, the numerator of which is the number of
shares of Capital Stock then owned by such Stockholder and the denominator of
which is the aggregate number of shares owned by the Stockholders who have
elected to purchase their full Proportionate Percentage of the securities of the
type included in such Eligible Offering pursuant to this Section 5 for an
additional 10-day period and to the extent that there are securities that have
not been purchased pursuant to this Section 5, then the Company may issue such
securities, but only for consideration not less than, and otherwise on no less
favorable terms to the Company than, those set forth in the Company's notice and
only within 60 days after the end of such additional 10-day period. In the event
that any such offer is accepted by any such Stockholder or Stockholders, the
Company shall sell to such Stockholder or Stockholders, and such Stockholder or
Stockholders shall purchase from the Company, for the consideration and on the
terms set forth in the notice as aforesaid, the securities that such Stockholder
or Stockholders shall have elected to purchase.
SECTION 6. Right of First Offer.
(a) If any Stockholder (other than a WCAS Purchaser) (for purposes of
this Section 6, a "Seller") desires to sell, exchange or in any other manner
dispose of (other than transfers made pursuant to Section 3 or Section 4 hereof)
any shares of Capital Stock held by it (or any options or warrants to acquire
such Capital Stock or any securities convertible into or exchangeable for shares
of Capital Stock of the Company), then such Seller shall give to the Company a
written notice (a "Notice of Desire to Sell") which shall set forth in
reasonable detail the class and number of shares of Capital Stock or other
securities which it desires to sell, the per share price and may set forth, if
the Seller so chooses to specify, any other terms and conditions of the desired
disposition. The Company shall deliver such Notice of Desire to Sell to each of
the other Stockholders promptly upon receipt thereof. A Seller may deliver a
Notice of Desire to Sell whether or not such Seller has received an offer from a
third party to purchase such shares of Capital Stock.
(b) The Company shall have the first right and option to elect to
purchase at the price specified in the Notice of Desire to Sell, and otherwise
on the terms and conditions specified in the Notice of Desire to Sell to the
extent so specified (collectively, the "Offer Terms") all or
<PAGE> 11
part of the subject securities. In the event the Company shall elect to purchase
all or part of the subject securities, the Company shall so notify the Seller
within 10 business days after the date of receipt of the Notice of Desire to
Sell. Any such election shall be made by written notice (an "Offer Notice") to
the Seller.
(c) In the event that the Company elects not to purchase all of the
subject securities, the other Stockholders (other than the WCAS Purchasers)
shall then have the right to purchase on the Offer Terms the number of shares of
Capital Stock which is equal to the product obtained by multiplying (A) the
aggregate number of shares of Capital Stock covered by such Notice of Desire to
Sell that the Company has not agreed to purchase by (B) a fraction, the
numerator of which is the number of shares of Capital Stock at the time owned by
the Stockholder and the denominator of which is the number of shares of Capital
Stock at the time held by all other Stockholders (other than the WCAS
Purchasers). Any Stockholder electing to purchase all or a portion of its pro
rata share of the offered securities (each, a "Purchasing Stockholder") shall so
notify the Company and the Seller by delivering an Offer Notice within 10
business days after the date of receipt of the Notice of Desire to Sell.
(d) In the event the Company elects not to purchase all of the subject
securities and the other Stockholders have not elected to purchase their full
pro rata shares of the offered securities, the WCAS Purchasers shall have the
right, exercisable upon delivery by the WCAS Purchasers of an Offer Notice to
the Seller within 15 business days after receipt of any Notice of Desire to
Sell, to offer to purchase on the Offer Terms any or all remaining shares of
Capital Stock proposed to be sold by the Seller at a purchase price equal to the
proposed purchase price specified in the Notice of Desire to Sell. In the event
that more than one WCAS Purchaser exercises its right to offer to purchase
pursuant to this paragraph (d), the allocation among such WCAS Purchasers of any
shares actually sold pursuant to this paragraph (d) shall be as agreed by such
WCAS Purchasers.
(e) Each Offer Notice shall state the number of shares to be purchased
by the purchasers delivering such Offer Notice and that the purchaser will
purchase such shares within 45 days thereafter (or such longer period as is
necessary to obtain any necessary consents or approvals or to otherwise comply
with applicable law but in any event no longer than 90 days).
(f) If the Company or any Stockholder delivers, within the periods
specified above, an Offer Notice with respect to Capital Stock that is the
subject of the Notice of Desire to Sell, the Seller shall be entitled to sell
such Capital Stock to the Company and/or such Purchasing Stockholders, as the
case may be, on the Offer Terms within the 45-day period specified above (or
such longer period as is necessary to obtain any necessary consents or approvals
or to otherwise comply with applicable law but in any event no longer than 90
days). Following the periods specified in above, the Seller may (subject to any
other applicable restrictions hereunder) transfer such Capital Stock to any
third party; provided that, if an Offer Notice with respect to all of such
shares of Capital Stock was delivered within the periods specified above, the
Seller may not sell such shares to such third party on material terms which are
more favorable, in the aggregate, to such third party than the material terms
set forth in the Company Notice of Election or the Offer Terms. Any such sale
with respect to which definitive documentation is not entered into within 60
days after the expiration of the period specified in paragraph (b) above, or
which is not
<PAGE> 12
consummated within 60 days of the execution of such definitive documentation (or
such longer period as is necessary to obtain any necessary consents or approvals
or to otherwise comply with applicable law but in any event no longer than 90
days) shall again be subject to the requirements of this Section 6.
(g) Anything herein to the contrary notwithstanding, and subject to any
other applicable restrictions hereunder, no right of first offer hereunder shall
apply with respect to (i) a transfer by a Stockholder pursuant to clause (ii),
(iv) or (v) of Section 2; provided, however, that any such transferee that is
not already a party to this Agreement shall agree in writing to be bound by, and
to comply with, all provisions of this Agreement as though such transferee were
a Stockholder, (ii) any distribution or transfer by a Stockholder that is a
partnership to its partners or a limited liability company to its members;
provided, however, that any such transferee that is not already a party to this
Agreement shall agree in writing to be bound by, and to comply with, all
provisions of this Agreement as though such transferee were a Stockholder, (iii)
any transfer by a Stockholder to the public pursuant to an offering registered
under the Securities Act or sold in compliance with Rule 144 under the
Securities Act and (iv) any transfer by a Stockholder pursuant to Section 3 or
Section 4.
SECTION 7. Restrictions.
(a) While this Agreement is in effect, in addition to any other vote of
stockholders that may be required by law or by the Amended and Restated
Certificate of Incorporation of the Company, the Company shall not:
(i) without the consent of the holders of at least 57% of the Series C
Preferred Stock (without consideration of the grant of proxies provided for
in Section 8 hereof), amend, alter or repeal its Amended and Restated
Certificate of Incorporation or its By-laws in any manner that adversely
affects the respective rights, preferences or voting power of the Common
Stock or the Series C Preferred Stock, or the rights of such Stockholders
hereunder;
(ii) without the consent of a majority of the disinterested members of
the Company's Board of Directors, enter into, or permit any of its
subsidiaries to enter into, any transaction with (w) any of its or any
subsidiary's officers, directors or employees; (x) any person related by
blood or marriage to any such person; (y) any entity in which any such
person owns any beneficial interest; or (z) any stockholder of the Company
that owns, either individually or collectively with all stockholders
Affiliated with such stockholder, at least 25% of the outstanding Capital
Stock of the Company (or any Affiliate of any such stockholder); provided,
however, that this clause (ii) shall not apply to (A) normal employment
arrangements, benefit programs and employee incentive option programs on
reasonable terms, (B) any transaction with a director of the Company (or an
Affiliate of such director) that is approved by the Board of Directors of
the Company in accordance with the provisions of Section 144(a)(1) of the
Delaware General Corporation
<PAGE> 13
Law, (C) customer transactions in the ordinary course of business for fair
market value on terms comparable to those offered to third parties, (D) the
transactions contemplated by the Registration Rights Agreement, (E)
repurchases of Capital Stock of the Company from employees of the Company
not to exceed $500,000 in any twelve-month period, (F) the transactions
contemplated by the Nextel Master Site Lease Agreement, the Partner Master
Site Lease Agreement and the Master Site Commitment Agreement, each entered
into by the Company and certain Affiliates of Nextel Communications, Inc.,
(G) the transactions contemplated by the Purchase Agreement as in effect on
February 10, 1999 or (H) subject to clause (iii) below, the transactions
contemplated by the Credit Facility or any amendment or modification
thereto; or
(iii) without the consent of a majority of the disinterested members of
the Company's Board of Directors, at any time prior to the second
anniversary of the date hereof (x) permit or cause the borrower under the
Credit Facility to prepay or refinance the Tranche C portion of such
facility with the proceeds of any debt financing on terms that are, on an
overall basis, more burdensome to such borrower (as determined by such
majority of the disinterested members of the Board in their reasonable
judgment exercised in good faith) than the terms of the Tranche C (other
than in connection with the prepayment or refinancing of the entire Credit
Facility or a Change of Control transaction (as defined herein)) or (y)
enter into, or permit any of its subsidiaries to enter into, any agreement
with any Stockholder or Affiliate thereof to provide debt financing to the
Company or any of its subsidiaries (other than as contemplated by the
Credit Facilities) unless the opportunity to provide such financing is
offered to all other Stockholders holding more than 5% of the Company's
outstanding Capital Stock on a pro rata basis based on their ownership of
Capital Stock (without consideration of the grant of proxies provided for
in Section 8 hereof); provided, however, that the provisions of this clause
(iii) shall terminate if at any time TPC or any of its Affiliates shall
hold any portion of the Tranche C portion of the Credit Facility.
(b) For a period of one year from the date hereof, in addition to any
other vote of stockholders that may be required by law or by the Amended and
Restated Certificate of Incorporation of the Company, the Company shall not,
without the consent of TPC, enter into any agreement for the sale or transfer of
all or substantially all of the assets of the Company or any merger,
consolidation or other transaction that would result in the transfer, directly
or indirectly, of more than 50% of the then outstanding Capital Stock of the
Company to holders who are not Stockholders (a "Change of Control Transaction").
(c) Until the earliest to occur of (i) the completion of an IPO, (ii)
the occurrence of the End Date (as such term is defined in the Master Site
Commitment Agreement contemplated by the Merger Agreement) and (iii) the third
anniversary of the date hereof, in addition to any other vote of stockholders
that may be required by law or by the Amended and Restated Certificate of
Incorporation of the Company, the Company shall not, without the consent of TPC:
(i) acquire the assets or outstanding capital stock of any
corporation or other entity, whether in a single transaction or
series of related transactions,
<PAGE> 14
for an aggregate consideration in excess of $100 million or enter
into any build to suit tower commitment program for any party other
than TPC involving in excess of 250 towers, unless, in either such
case, the Company has, in the reasonable judgment of its Board of
Directors, obtained financing commitments sufficient to accomplish
such transaction or program without materially impairing the
Company's ability to fulfill its obligations under the Master Site
Commitment Agreement; or
(ii) enter into any agreement which would result in a Change of
Control Transaction with a provider of wireless communications
services having in excess of 2 million subscribers, or a
controlling or controlled Affiliate of such provider.
(d) Without the consent of at least 80% of each outstanding class or
series of Preferred Stock of the Company, the Company shall not redeem (i) any
shares of any class or series of Preferred Stock unless such redemption is
conducted pro rata among all outstanding classes or series of Preferred Stock,
or (ii) any shares of Common Stock (except for repurchases of Common Stock from
employees of the Company not to exceed $500,000 in any twelve-month period).
SECTION 8. Proxies. With respect to any and all matters submitted to a
vote or consent of the Company's stockholders, TPC, the Whitney Purchasers and
the CIBC Purchasers hereby severally grant to Welsh, Carson, Anderson & Stowe
VIII, L.P. ("WCAS VIII") or its designee a proxy to vote or consent with respect
to an aggregate number of shares of Series C Preferred Stock then held by such
Stockholders (the "Proxy Shares") such that, when added to the shares of Capital
Stock then held by the WCAS Purchasers, the WCAS Purchasers shall have the right
to vote or consent with respect to 51% of the outstanding voting Capital Stock.
The proxy of each of TPC, the Whitney Purchasers and the CIBC Purchasers shall
cover such Stockholders' proportionate share of the total Proxy Shares based on
the relative number of shares of Series C Preferred Stock then held by such
Stockholders and each of such Stockholders agrees not to transfer shares of
Series C Preferred Stock that are Proxy Shares, pursuant to Sections 2, 3, 4 or
6 (A) except to any other person required to become a party hereto in connection
with such transfer (in which case such Proxy Shares shall remain subject to this
Section 8) or (B) unless such Stockholder (or group of Stockholders) then owns
no shares of Series C Preferred Stock other than Proxy Shares. The proxies
granted hereby shall be subject to the voting agreements contained in Section 1,
shall be irrevocable and shall be deemed coupled with an interest, provided that
such proxies shall expire and the obligation of TPC, the Whitney Purchasers and
the CIBC Purchasers to grant such proxies hereunder shall terminate upon the
earliest to occur of (i) the consummation of an IPO, (ii) the date on which the
WCAS Purchasers shall hold less then 30% of the outstanding Capital Stock of the
Company and (iii) with respect to any Stockholder or group of Stockholders, the
transfer by such Stockholder or group of Stockholders of the Proxy Shares then
held by it (other than to any person required to become a party hereto) as
contemplated by Section 2, 3, 4 or 6, but, in the case of this clause (iii),
only with respect to the Proxy Shares so transferred. If requested by WCAS VIII
or its designee at any time, each of TPC, the Whitney Purchasers and the CIBC
Purchasers shall execute and deliver a separate instrument to evidence the
proxies granted hereby.
<PAGE> 15
SECTION 9. Legend on Stock Certificates. Each certificate representing
shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock or
Series C Preferred Stock owned by any Stockholder shall conspicuously bear the
following legend until such time as the shares represented thereby are no longer
subject to the provisions hereof:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A STOCKHOLDERS' AGREEMENT, DATED AS OF APRIL __, 1999,
AS THE SAME MAY BE AMENDED, AMONG THE COMPANY AND THE OTHER PARTIES
THERETO. COPIES MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE
HOLDER OF RECORD OF THIS CERTIFICATE TO THE COMPANY."
The Company covenants that it shall keep a copy of this Agreement on file
at the address listed in Section 17 for the purpose of furnishing copies to the
holders of record of shares of Common Stock and Preferred Stock.
SECTION 10. Duration of Agreement. (a) This Agreement (other than the
provisions of Sections 1, 2, 3, 5, 6 and 8) shall terminate upon the earlier to
occur of (i) the tenth anniversary of the date hereof and (ii) the consummation
of (x) an IPO or (y) the sale, transfer or other disposition (including a
distribution by a partnership to its partners) by the WCAS Purchasers of at
least 50% of the shares of Capital Stock held by the WCAS Purchasers on the date
hereof.
(b) The respective rights granted to the WCAS Purchasers, the Whitney
Purchasers, the CIBC Purchasers and TPC pursuant to Section 1 shall terminate as
to any such group of Purchasers on the earlier to occur of (i) the sale,
transfer or other disposition (including a distribution by a partnership to its
partners or a limited liability company to its members) by such Purchasers of at
least 50% of the shares of Capital Stock held by such Purchasers on the date
hereof and (ii) the ownership of Capital Stock held by such Purchasers shall
fall below 8% of the outstanding Capital Stock of the Company.
(c) Unless terminated earlier as to any Stockholders as provided above,
the provisions of Section 1 shall terminate on the earlier to occur of (i) the
tenth anniversary of the date hereof and (ii) the fifth anniversary of an IPO.
(d) The provisions of Section 3 shall terminate upon the termination of
Section 2, and the provisions of Section 2 shall terminate as provided therein.
(e) The provisions of Section 5 shall terminate upon consummation of an
IPO.
(f) The provisions of Section 6 shall terminate on the earlier to occur
of (i) the consummation of an IPO and (ii) the third anniversary of the date
hereof.
<PAGE> 16
(g) The provisions of Section 8 shall terminate as provided therein.
SECTION 11. Representations and Warranties by the Stockholders. Each
Stockholder, severally and not jointly, represents and warrants to the Company
and the other Stockholders as follows:
(a) The execution, delivery and performance of this Agreement by such
Stockholder will not violate any provision of applicable law, any order of any
court or other agency of government, or any provision of any indenture,
agreement or other instrument to which such Stockholder or any of his, her or
its properties or assets is bound, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument.
(b) This Agreement has been duly executed and delivered by such
Stockholder, and when executed by the other parties hereto will constitute the
legal, valid and binding obligation of such Stockholder, enforceable in
accordance with its terms.
(c) The shares of Capital Stock listed opposite the name of such
Stockholder on Schedule I hereof constitute all the shares of Capital Stock of
the Company owned by such Stockholder as of the date hereof (after giving effect
to the consummation of the transactions contemplated by the Preferred Stock
Purchase Agreement).
SECTION 12. Representations and Warranties by the Company. The Company
hereby represents and warrants to the Stockholders as follows:
(a) The execution, delivery and performance of this Agreement by the
Company will not violate any provision of applicable law, any order of any court
or other agency of government, or any provision of any indenture, agreement or
other instrument to which the Company or any of its properties or assets is
bound, or conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any such indenture, agreement or other
instrument.
(b) This Agreement has been duly executed and delivered by the Company,
and when executed by the other parties hereto will constitute the legal, valid
and binding obligation of the Company, enforceable in accordance with its terms.
SECTION 13. Headings. Headings of articles, sections and paragraphs of
this Agreement are inserted for convenience of reference only and shall not
affect the interpretation or be deemed to constitute a part hereof.
SECTION 14. Severability. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein shall, for any reason, be held to be invalid, illegal or unenforceable,
such illegality, invalidity or unenforceability shall not affect any other
provisions of this Agreement.
SECTION 15. Benefits of Agreement. Nothing expressed by or mentioned in
this
<PAGE> 17
Agreement is intended or shall be construed to give any person other than the
parties hereto and their respective successors and permitted assigns any legal
or equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of the
parties hereto and their respective successors and permitted assigns.
Notwithstanding anything in this Section 15 to the contrary, subject to
compliance with the terms of this Agreement, each Stockholder shall have the
right to assign its interests hereunder in whole or in part to any transferee of
the Capital Stock of the Company held by such Stockholder in compliance with
this Agreement; provided, however, that such transferee shall agree in writing
with the parties hereto to be bound by, and to comply with, all applicable
provisions of this Agreement and to be deemed to be a Stockholder for purposes
of this Agreement (it being understood that for purposes of this Agreement any
Affiliate of any WCAS Purchaser, Whitney Purchaser or CIBC Purchaser shall be
deemed to be such a Purchaser); provided, further, however, that whether or not
such transferee is assigned any interest hereunder, any transferee of a
Stockholder shall agree in writing with the parties hereto to be bound by, and
to comply with, all applicable provisions of this Agreement and to be deemed to
be a Stockholder for purposes of this Agreement in the manner provided above so
long as such transferee is, with respect to the transferring Stockholder, a
transferee of the type specified in clause (i), (ii), (iv) or (v) of Section 2.
Any Stockholder may assign to any of its Affiliates which are also Stockholders
all or any part of its tag-along rights with respect to a particular proposed
sale pursuant to Section 3 or its rights to purchase securities pursuant to
Section 5; provided the aggregate number of shares of Capital Stock to which
such rights apply with respect to all such affiliated Stockholders, taken as a
whole, shall not be increased thereby. Except as expressly permitted hereby,
each party's rights and obligations under this Agreement shall not be subject to
assignment or delegation by any party hereto, and any attempted assignment or
delegation in violation hereof shall be null and void ab initio.
SECTION 16. Notice of Transfer. To the extent that any Stockholder shall
transfer any shares of Capital Stock, notice of which transfer is not otherwise
required to be delivered to the Stockholders hereunder, such Stockholder shall,
within three days following consummation of such transfer, deliver notice
thereof to the Company and the other Stockholders; provided, however, that no
such notice shall be required to be delivered to the other Stockholders unless
the aggregate number of shares of Capital Stock transferred by such Stockholder
and its Affiliates since the date of the last notice delivered by such
Stockholder pursuant to this Section 16 exceeds 1% of the outstanding Capital
Stock of the Company.
SECTION 17. Notices. Any notice or other communications required or
permitted hereunder shall be deemed to be sufficient and received if contained
in a written instrument delivered in person or by courier or duly sent by first
class certified or registered mail, postage prepaid, or by facsimile addressed
to such party at the address or facsimile number set forth below:
(1) if to the Company, to it at:
8000 Regency Parkway, Suite 570
Cary, North Carolina 27511
<PAGE> 18
Telecopy Number: (919) 468-8522
Attention: Chief Executive Officer
with a copy to:
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
Telecopy Number: (202) 776-2222
Attention: John T. Byrnes, Jr.
(2) if to any Stockholder, to the address of such Stockholder appearing
in Schedule I hereto;
or, in any case, at such other address or facsimile number as shall have been
furnished in writing by such party to the other parties hereto. All such
notices, requests, consents and other communications shall be deemed to have
been received (a) in the case of personal or courier delivery, on the date of
such delivery, (b) in the case of mailing, on the fifth business day following
the date of such mailing and (c) in the case of facsimile, when received.
SECTION 18. Entire Agreement; Modification. This Agreement (including the
Schedules hereto) constitutes the entire agreement of the parties with respect
to the subject matter hereof (without limiting the foregoing, the Second Amended
Stockholders' Agreement is hereby superseded in its entirety) and may not be
amended or modified except by an instrument in writing signed by the Company and
holders of at least 60% of the voting power of the Capital Stock held by
Stockholders (excluding for this purpose any limitations on voting power
affecting entities regulated by the Bank Holding Company Act of 1956, as
amended); provided, however, that, without the consent of a majority in interest
of the Whitney Purchasers, the CIBC Purchasers or TPC, to the extent any such
Stockholders shall be adversely affected thereby, no such amendment or
modification shall (i) limit or restrict the right of any such Stockholders to
designate members of the Board pursuant to Section 1, (ii) make more restrictive
the transfer limitations contained in Section 2, or (iii) limit or restrict any
rights of such Stockholders under Section 3 or Section 5 and provided, further
that any modification or amendment that adversely affects the rights or
privileges of any Stockholder and does not affect the other Stockholders in a
substantially similar manner shall require the prior consent of such adversely
affected holder. Any waiver of any provision of this Agreement must be in a
writing signed by the party against whom enforcement of such waiver is sought.
For purposes of this Agreement, holders of Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock shall be entitled to such number of
votes as shall be equal to the largest number of whole shares of Common Stock
into which all of such holder's shares of Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock are convertible at the time of any
such vote (without regard to any voting restrictions under the Bank Holding
Company Act of 1956, as amended).
SECTION 19. Covenants Bind Successors and Assigns. All the covenants,
stipulations, promises and agreements contained in this Agreement by or on
behalf of any party
<PAGE> 19
shall bind its successors and permitted assigns, whether so expressed or not.
SECTION 20. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
SECTION 21. Changes in Capital Stock. If, and as often as, there are any
changes in the Capital Stock by way of stock split, stock dividend, combination
or reclassification, or through merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof as may be required so that the rights and privileges
granted hereby shall continue with respect to the Common Stock and Preferred
Stock as so changed.
SECTION 22. Specific Performance. Each party hereto agrees that a remedy
at law for any breach or threatened breach by such party of this Agreement would
be inadequate and therefore agrees that any other party hereto shall be entitled
to specific performance of this Agreement in addition to any other available
rights and remedies in case of any such breach or threatened breach.
SECTION 23. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
ENFORCEABLE UNDER, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE.
SECTION 24. Cooperation. Each Stockholder agrees to take all necessary
action (to the extent not adverse to the interests of such Stockholder) to amend
this Agreement, the Company's Amended and Restated Certificate of Incorporation
and related documents (i) if such amendment is necessary to permit the CIBC
Purchasers to comply with applicable banking laws and regulations or (ii) if all
or part of any provision of any such agreement that was required to permit the
CIBC Purchasers to comply with applicable banking laws and regulations is no
longer required because of a change in applicable banking laws or regulations or
an interpretation, ruling or other action by the applicable bank regulatory
authority.
SECTION 25. Certain Definitions. For purposes of this Agreement, the
following terms shall be defined as provided below:
"Affiliate" means, with respect to any specified person, any other person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person.
"Capital Stock" means, with respect to the Company, any and all shares,
interests, participations, rights in or other equivalents (however
designated) of the Company's capital stock, and any rights (other than debt
securities convertible into capital stock), warrants or options
exchangeable for or convertible into such capital stock. The percentage of
Capital Stock held by a Stockholder for purposes of this Agreement shall be
<PAGE> 20
determined based on the percentage of Common Stock that would be held by
such Stockholder upon conversion of all shares of Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock.
SECTION 26. Covenants Regarding Senior Management Shares. The Company
covenants and agrees that, until the termination of this Agreement, all shares
of Capital Stock of the Company held by the Company's President, Chief Financial
Officer and Executive Vice President (who on the date hereof are Stephen H.
Clark, David P. Tomick and Richard Byrne, respectively, shall be subject to all
applicable provisions of this Agreement and that, in connection with the
appointment of any successor to any such person in such position, the Company
shall require such successor person to become a party to this Agreement.
<PAGE> 21
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as a sealed instrument, all as of the day and year first above
written.
SPECTRASITE HOLDINGS, INC.
By /s/ DAVID P. TOMICK
---------------------------------
Name: David P. Tomick
Title: Chief Financial Officer
WELSH, CARSON, ANDERSON & STOWE VIII, L.P.
By WCAS VIII Associates, L.L.C.,
General Partner
By /s/ LAURA VAN BUREN
---------------------------------
Managing Member
WCAS CAPITAL PARTNERS III, L.P.
By WCAS CP III Associates, L.L.C.,
General Partner
By /s/ LAURA VAN BUREN
---------------------------------
Managing Member
WCAS INFORMATION PARTNERS, L.P.
By /s/ LAURA VAN BUREN
---------------------------------
General Partner
Attorney-in-Fact
<PAGE> 22
/s/ KENNETH MELKUS
-------------------------------
KENNETH MELKUS
Patrick J. Welsh
Russell L. Carson
Bruce K. Anderson
Andrew M. Paul
Thomas E. McInerney
Laura VanBuren
Robert A. Minicucci
Anthony J. de Nicola
Paul B. Queally
Lawrence B. Sorrel
Priscilla A. Newman
Rudolph E. Rupert
D. Scott Mackesy
By /s/ LAURA M. VANBUREN
---------------------------------
Laura M. VanBuren
Individually and
as Attorney-in-fact
TRUST U/A DATED 11/26/84
FBO ERIC WELSH
By /s/ CAROL ANN WELSH
---------------------------------
Carol Ann Welsh
Trustee
TRUST U/A DATED 11/26/84
FBO RANDALL WELSH
By /s/ CAROL ANN WELSH
---------------------------------
Carol Ann Welsh
Trustee
TRUST U/A DATED 11/26/84
FBO JENNIFER WELSH
<PAGE> 23
By /s/ CAROL ANN WELSH
---------------------------------
Carol Ann Welsh
Trustee
TOWER PARENT CORP.
By: /s/ THOMAS J. SIDMAN
--------------------------------
Name:
Title:
CIBC WG ARGOSY MERCHANT FUND 2, L.L.C.
By: /s/ DEAN C. KEHLER
--------------------------------
Name: Dean C. Kehler
Title: Managing Director
CO-INVESTMENT MERCHANT FUND 3, LLC
By: /s/ DEAN C. KEHLER
--------------------------------
Name: Dean C. Kehler
Title: Managing Director
CARAVELLE INVESTMENT FUND, L.L.C.
By: Caravelle Advisors, L.L.C.,
As its Investment Manager and
Attorney-in-Fact
By: /s/ DAVID MILLISON
---------------------------------
Name: David Millison
Title: Managing Director
WHITNEY EQUITY PARTNERS, L.P.
By: Whitney Equity Partners, LLC
<PAGE> 24
Its General Partner
By: /s/ MICHAEL STONE
--------------------------------
Name: Michael Stone
Title: A Managing Member
J. H. WHITNEY III, L.P.
By: J. H. Whitney Equity Partners III, LLC
Its General Partner
By /s/ DANIEL J. O'BRIEN
---------------------------------
Name: Daniel J. O'Brien
Title: A Managing Member
WHITNEY STRATEGIC PARTNERS III, L.P.
By: J. H. Whitney Equity
Partners III L.L.C.,
Its General Partner
By /s/ DANIEL J. O'BRIEN
---------------------------------
Name: Daniel J. O'Brien
Title: A Managing Member
WHITNEY MEZZANINE MANAGEMENT COMPANY,
L.L.C.
By: Whitney Holdings, LLC,
Member
By /s/ DANIEL J. O'BRIEN
---------------------------------
Name: Daniel J. O'Brien
Title: Managing Member
WALLER SUTTON MEDIA PARTNERS, L.P.
By: Waller Sutton Media Partners, LLC
<PAGE> 25
Its General Partner
By /s/ ANDREW J. ARMSTRONG, JR.
---------------------------------
Name: Andrew J. Armstrong, Jr.
Title: Vice President
KITTY HAWK CAPITAL LIMITED
PARTNERSHIP, III
By: Kitty Hawk Partners Limited
Partnership, III
Its General Partner
By: /s/ W. CHRIS HEGELE
--------------------------------
Name: W. Chris Hegele
Title: General Partner
KITTY HAWK CAPITAL LIMITED PARTNERSHIP, IV
By: Kitty Hawk Partners LLC, IV
Its General Partner
By: /s/ W. CHRIS HEGELE
--------------------------------
Name: W. Chris Hegele
Title: Managing Member
EAGLE CREEK CAPITAL, LLC
By: /s/ SUSAN RASINSKI
--------------------------------
Name: Susan Rasinski
Title: Managing Partner, Eagle Creek
Capital
/s/ STEPHEN H. CLARK
---------------------------------
STEPHEN H. CLARK
<PAGE> 26
/s/ DAVID P. TOMICK
---------------------------------
DAVID P. TOMICK
FINLEY FAMILY LIMITED PARTNERSHIP
By: /s/ JOE L. BUD FINLEY
--------------------------------
Name: Joe L. Bud Finley
Title: Managing General Partner
THE NORTH CAROLINA ENTERPRISE FUND, L.P.
By: The North Carolina Enterprise
Corporation,
Its General Partner
By: /s/ CHARLES T. CLOSSON
--------------------------------
Name: Charles T. Closson
Title: President
/s/ EDWARD J. LUTKEWICH
---------------------------------
EDWARD J. LUTKEWICH
/s/ JACK W. JACKMAN
---------------------------------
JACK W. JACKMAN
/s/ ALTON D. ECKERT
---------------------------------
ALTON D. ECKERT
<PAGE> 27
/s/ WILLIAM R. GUPTON
---------------------------------
WILLIAM R. GUPTON
THE PRICE FAMILY LIMITED PARTNERSHIP
By /s/ MICHAEL J. PRICE
-------------------------------
Michael J. Price
General Partner
BENAKE LP
By: /s/ LYNN FORESTER
------------------------------
Lynn Forester
General Partner
/s/ RICHARD BYRNE
---------------------------------
RICHARD BYRNE
<PAGE> 1
EXHIBIT 10.7
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of April 20, 1999, by and between
SPECTRASITE HOLDINGS, INC., a Delaware corporation (the "Company"), and STEPHEN
H. CLARK (the "Employee").
W I T N E S S E T H:
WHEREAS the Company desires to induce the Employee to enter into
employment with the Company for the period provided in this Agreement, and the
Employee is willing to accept such employment with the Company on a full-time
basis, all in accordance with the terms and conditions set forth below;
NOW, THEREFORE, for and in consideration of the premises hereof and the
mutual covenants contained herein, the parties hereto hereby covenant and agree
as follows:
1. Employment. (a) The Company hereby agrees to employ the Employee, and
the Employee hereby agrees to accept such employment with the Company, beginning
on the date hereof and continuing for the period set forth in Section 2 hereof,
all upon the terms and conditions hereinafter set forth.
(b) The Employee affirms and represents that as of the commencement of
his employment by the Company on the date hereof he is under no obligation to
any former employer or other party which is in any way inconsistent with, or
which imposes any restriction upon, the Employee's acceptance of employment
hereunder with the Company, the employment of the Employee by the Company, or
the Employee's undertakings under this Agreement.
2. Term of Employment. (a) Unless earlier terminated as provided in this
Agreement, the term of the Employee's employment under this Agreement shall be
for a period beginning on the date hereof and ending on the fifth anniversary of
the date hereof (the "Initial Term").
(b) The term of the Employee's employment under this Agreement shall be
automatically renewed for additional one-year terms (each a "Renewal Term") upon
the expiration of the Initial Term or any Renewal Term unless the Company or the
Employee delivers to the other, at least one year prior to the expiration of the
Initial Term or the then current Renewal Term, as the case may be, a written
notice specifying that the term of the
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<PAGE> 2
Employee's employment will not be renewed at the end of the Initial Term or such
Renewal term, as the case may be. The period from the date hereof until the
fifth anniversary of said date or, in the event that the Employee's employment
hereunder is earlier terminated as provided herein or renewed as provided in
this Section 2(b), such shorter or longer period, as the case may be, is
hereinafter called the "Employment Term".
3. Duties. The Employee shall be employed as the Chief Executive Officer
of the Company, shall faithfully and competently perform such duties as inhere
in such position and as are specified in the By-laws of the Company and shall
also perform and discharge such other executive employment duties and
responsibilities as the Board of Directors of the Company shall from time to
time determine. The Employee shall perform his duties principally at the offices
of the Company in Cary, North Carolina, with such travel to such other locations
from time to time as the Board of Directors of the Company may reasonably
prescribe. Except as may otherwise be approved in advance by the Board of
Directors of the Company, and except during vacation periods and reasonable
periods of absence due to sickness, personal injury or other disability, the
Employee shall devote his full business time throughout the Employment Term to
the services required of him hereunder. The Employee shall render his business
services exclusively to the Company and its subsidiaries during the Employment
Term and shall use his best efforts, judgment and energy to improve and advance
the business and interests of the Company and its subsidiaries in a manner
consistent with the duties of his position. Nothing contained in this Section 3
shall preclude the Employee from performing services for charitable or
not-for-profit community organizations, provided that such activities do not
interfere with the Employee's performance of his duties and responsibilities
under this Agreement.
4. Salary and Bonus. (a) Salary. As compensation for the performance by
the Employee of the services to be performed by the Employee hereunder during
the Employment Term, the Company shall pay the Employee a base salary at the
annual rate of Two Hundred Twenty-Five Thousand Dollars ($225,000) (said amount,
together with any increases thereto as may be determined from time to time by
the Board of Directors of the Company in its sole discretion, being hereinafter
referred to as "Salary"). Any Salary payable hereunder shall be paid in regular
intervals in accordance with the Company's payroll practices from time to time
in effect.
(b) Bonus. The Employee shall be eligible to receive bonus compensation
from the Company in respect of each fiscal year (or portion thereof) occurring
during the Employment Term in accordance with the Company's management bonus
plan as in effect from time to time (pro rated for any portion of a fiscal year
occurring during the Employment Term), in each case as may be determined by the
Board of Directors of the Company in its sole discretion on the basis of
performance-based criteria to be established from time to time by the Board of
Directors in its sole discretion.
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<PAGE> 3
5. Other Benefits; Company Stock. (a) General. During the
Employment Term, the Employee shall:
(i) be eligible to participate in employee fringe benefits and
pension and/or profit sharing plans that may be provided by the Company
for its senior executive employees in accordance with the provisions of
any such plans, as the same may be in effect from time to time;
(ii) be eligible to participate in any medical and health plans or
other employee welfare benefit plans that may be provided by the Company
for its senior executive employees in accordance with the provisions of
any such plans, as the same may be in effect from time to time;
(iii) be entitled to the number of paid vacation days in each
calendar year determined by the Company from time to time for its senior
executive officers, provided that such number of paid vacation days in
each calendar year shall not be less than twenty work days (four calendar
weeks); the Employee shall also be entitled to all paid holidays given by
the Company to its senior executive officers;
(iv) be eligible for consideration by the Board of Directors of
the Company for awards of stock options under any stock option plan which
may be established by the Company for its and its subsidiaries' key
employees, the amount, if any, of shares for which options may be granted
to Employee to be in the sole discretion of the Board of Directors of the
Company;
(v) be entitled to sick leave, sick pay and disability benefits in
accordance with any Company policy that may be applicable to senior
executive employees from time to time; and
(vi) be entitled to reimbursement for all reasonable and necessary
out-of-pocket business expenses incurred by the Employee in the
performance of his duties hereunder in accordance with the Company's
normal policies from time to time in effect (including, without
limitation, relocation expenses).
(b) Options. Simultaneously with the execution and delivery of
this Agreement by the parties hereto, the Company has granted the Employee
options (the "New Options") to purchase 775,000 shares of Common Stock, $.001
par value, of the Company at a purchase price of $5.00 per share, which options
shall vest in twenty percent increments over a five-year period with the first
twenty percent vesting on April 20, 2000, all as provided in the Option
Agreement
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<PAGE> 4
of even date herewith between the Company and the Employee. Such New Options
shall be in addition to any other options previously granted to the Employee by
the Company (the "Original Options" and, collectively with the New Options, the
"Options"). The Company shall cause the Original Options to vest 100% in the
event that the Company terminates the Employee's employment hereunder other than
pursuant to clause (iii) of Section 7(a) below.
6. Confidential Information. The Employee hereby covenants,
agrees and acknowledges as follows:
(a) The Employee has and will have access to and will
participate in the development of or be acquainted with confidential or
proprietary information and trade secrets related to the business of
the Company and any present or future subsidiaries or affiliates of the
Company (collectively with the Company, the "Companies"), including but
not limited to (i) customer lists; claims histories, adjustments and
settlements and related records and compilations of information; the
identity, lists or descriptions of any new customers, referral sources
or organizations; financial statements; cost reports or other financial
information; contract proposals or bidding information; business plans;
training and operations methods and manuals; personnel records;
software programs; reports and correspondence; and management systems,
policies or procedures, including related forms and manuals; (ii)
information pertaining to future developments such as future marketing
or acquisition plans or ideas, and potential new business locations;
(iii) confidential or non-public information relating to business
operations and strategic plans of third parties with which the
Companies have or may be assessing commercial arrangements, including,
without limitation, site build and deployment plans and schedules,
search ring and site locations or potential locations, actual or
projected wireless system subscribers and capital expenditures and
operating cost information ("Third Party Information") and (iv) all
other tangible and intangible property, which are used in the business
and operations of the Companies but not made public. The information
and trade secrets relating to the business of the Companies described
hereinabove (including Third Party Information) in this paragraph (a)
are hereinafter referred to collectively as the "Confidential
Information", provided that the term Confidential Information shall not
include any information (x) that is or becomes generally publicly
available (other than as a result of violation of this Agreement by the
Employee), (y) that the Employee receives on a nonconfidential basis
from a source (other than the Companies or their representatives) or,
in the case of Third Party Information, from a source (other than the
Companies, the third parties to which such information relates or their
respective representatives) that is not known by him to be bound by an
obligation of secrecy or confidentiality to any of the Companies (or
such third parties, in the case of Third Party Information) or (z) that
was in the possession of
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<PAGE> 5
the Employee prior to disclosure by the Companies (or such third parties,
in the case of Third Party Information).
(b) The Employee shall not disclose, use or make known for his or
another's benefit any Confidential Information or use such Confidential
Information in any way except as is in the best interests of the
Companies in the performance of the Employee's duties under this
Agreement. The Employee may disclose Confidential Information when
required by a third party and applicable law or judicial process, but
only after providing immediate notice to the Company at any third party's
request for such information, which notice shall include the Employee's
intent with respect to such request.
(c) The Employee acknowledges and agrees that a remedy at law for
any breach or threatened breach of the provisions of this Section 6 would
be inadequate and, there fore, agrees that the Companies shall be
entitled to injunctive relief in addition to any other available rights
and remedies in case of any such breach or threatened breach by the
Employee (and the Employee hereby waives any requirement that any of the
Companies provide a bond or other security in connection with the
issuance of any such injunction); provided, however, that nothing
contained herein shall be construed as prohibiting the Companies from
pursuing any other rights and remedies available for any such breach or
threatened breach.
(d) The Employee agrees that upon termination of his employment
with the Company for any reason, the Employee shall forthwith return to
the Company all Confidential Information in whatever form maintained
(including, without limitation, computer discs and other electronic
media).
(e) The obligations of the Employee under this Section 6 shall,
except as otherwise provided herein, survive the termination of the
Employment Term and the expiration or termination of this Agreement.
(f) Without limiting the generality of Section 10 hereof, the
Employee hereby expressly agrees that the foregoing provisions of this
Section 6 shall be binding upon the Employee's heirs, successors and
legal representatives.
(g) The Employee hereby expressly acknowledges that the foregoing
provisions of this Section 6, insofar as they relate to Third Party
Information provided by or concerning Nextel Communications, Inc. or any
of its Affiliates (other that the Companies, Nextel Communications, Inc.
and such Affiliates (the "Nextel Beneficiaries")) are intended to be
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<PAGE> 6
for the express benefit of the Nextel Beneficiaries and may be enforced
by the Nextel Beneficiaries by the same means and with the same effect as
if such Nextel Beneficiaries were the Company and signatory parties to
this Agreement.
7. Termination. (a) The Employee's employment hereunder shall
be terminated upon the occurrence of any of the following:
(i) death of the Employee;
(ii) the Employee's inability to perform his duties on account
of disability or incapacity for a period of one hundred eighty (180) or
more days, whether or not consecutive, within any period of twelve (12)
consecutive months;
(iii) the Company giving written notice, at any time, to the
Employee that the Employee's employment is being terminated "for cause"
(as defined below);
(iv) the Company giving written notice, at any time, to the
Employee that the Employee's employment is being terminated other than
pursuant to clause (i), (ii) or (iii) above; or
(v) the Employee terminates his employment hereunder for any
reason whatsoever (whether by reason of retirement, resignation or
otherwise).
The following actions, failures and events by or affecting the
Employee shall constitute "cause" for termination within the meaning of clause
(iii) above: (A) a conviction of the Employee of, or the entering of a plea of
nolo contendere by the Employee with respect to, a felony, (B) dependence on, or
habitual abuse of, controlled substances or alcohol (in the case of alcohol
abuse, that has a material adverse affect on Employee's performance of his
obligations under this Agreement) or acts of dishonesty by the Employee that are
materially detrimental to one or more of the Companies, (C) wilful misconduct by
the Employee that materially damages the business of one or more of the
Companies, (D) gross negligence by the Employee in the performance of, or wilful
disregard by the Employee of, his material obligations under this Agreement or
otherwise relating to his employment, which gross negligence or wilful disregard
continues unremedied for a period of fifteen (15) days after written notice
thereof to the Employee or (E) failure by the Employee to obey the reasonable
and lawful orders and policies of the Board of Directors that are material to
and consistent with the provisions of this Agreement (provided that, in the case
of an indictment described in clause (A) above, and in the case of clauses (B),
(C) and (E) above, the Employee shall have received written notice of such
proposed termination (which notice shall state the Sections of this Agreement
pursuant to which such termination is being effected and a description of the
facts supporting such termination) and
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<PAGE> 7
a reasonable opportunity (together with the Employee's counsel) to discuss the
matter with the Board of Directors of the Company, followed by a notice that the
Board of Directors of the Company adheres to its position).
(b) In the event that the Employee's employment terminates
pursuant to clause (i) or (ii) of Section 7(a) above or is terminated by the
Company pursuant to clause (iv) of Section 7(a) above, whether during the
Initial Term or during any Renewal Term pursuant to Section 2(b) above, then (i)
during the period beginning on the date of such termination and ending on the
last day of the Applicable Period (as defined in Section 9(a)), the Company
shall pay to the Employee, as severance pay or liquidated damages or both,
monthly payments equal to one-twelfth of (x) the rate per annum of his Salary at
the time of such termination plus (y) the average annualized bonus the Employee
was paid by the Company for the fiscal years during the term of this Agreement
ending prior to the date of such termination, provided, however, that no such
payments shall be required to be made if the Employee fails to comply with his
obligations under Section 9 below; (ii) the Company shall continue to provide
the Employee with the health insurance benefits provided to other employees of
the Company (including employer contributions) from the date of such termination
until the earlier to occur of (x) the last day of the Applicable Period or (y)
the date upon which the Employee becomes eligible for coverage under the health
insurance plan of another employer and (iii) the Options held by the Employee
that are vested as of the date of such termination shall continue to be
exercisable by the Employee until the earlier to occur of (x) the last day of
the Applicable Period or (y) the expiration of the ten year term of such
Options.
(c) Notwithstanding anything to the contrary expressed or
implied herein, except as required by applicable law and except as set forth in
Section 7(b) above, the Company (and its affiliates) shall not be obligated to
make any payments to the Employee or on his behalf of whatever kind or nature by
reason of the Employee's cessation of employment (including, without limitation,
by reason of termination of the Employee's employment by the Company's for
"cause"), other than (i) such amounts, if any, of his Salary as shall have
accrued and remained unpaid as of the date of said cessation and (ii) such other
amounts, if any, which may be then otherwise payable to the Employee pursuant to
the terms of the Company's benefits plans.
(d) No interest shall accrue on or be paid with respect to any
portion of any payments hereunder.
8. Non-Assignability. (a) Neither this Agreement nor any right
or interest hereunder shall be assignable by the Employee or his beneficiaries
or legal representatives without the Company's prior written consent; provided,
however, that nothing in this Section 8(a) shall preclude the Employee from
designating a beneficiary to receive any benefit payable hereunder upon his
death or incapacity.
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<PAGE> 8
(b) Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment, levy or similar process or to assignment by operation of law, and
any attempt, voluntary or involuntary, to effect any such action shall be null,
void and of no effect.
9. Restrictive Covenants.
(a) Competition. During the Employment Term and during the
Applicable Period (as defined below), the Employee will not directly or
indirectly (as a director, officer, executive employee, manager, consultant,
independent contractor, advisor or otherwise) engage in competition with, or own
any interest in, perform any services for, participate in or be connected with
any business or organization which engages in competition with any of the
Companies within the meaning of Section 9(d), provided, however, that the
provisions of this Section 9(a) shall not be deemed to prohibit the Employee's
ownership of not more than two percent (2%) of the total shares of all classes
of stock outstanding of any publicly held company, or ownership, whether through
direct or indirect stock holdings or otherwise, of one percent (1%) or more of
any other business. For purposes of this Agreement, the "Applicable Period"
shall mean the twenty-four (24) month period following the termination of the
Employee's employment hereunder for any reason whatsoever.
(b) Non-Solicitation. During the Employment Term and during
the Applicable Period, the Employee will not directly or indirectly induce or
attempt to induce any management employee of any of the Companies to leave the
employ of the Company or such subsidiary or affiliate, or in any way interfere
with the relationship between any of the Companies and any employee thereof.
(c) Non-Interference. During the Employment Term and during
the Applicable Period, the Employee will not directly or indirectly hire,
engage, send any work to, place orders with, or in any manner be associated with
any supplier, contractor, subcontractor or other business relation of any of the
Companies if such action would be known by him to have a material adverse effect
on the business, assets or financial condition of any of the Companies or
materially interfere with the relationship between any such person or entity and
any of the Companies.
(d) Certain Definitions.
(i) For purposes of this Section 9, a person or entity
(including, without limitation, the Employee) shall be deemed to be a
competitor of one or more of the
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<PAGE> 9
Companies, or a person or entity (including, without limitation, the
Employee) shall be deemed to be engaging in competition with one or more
of the Companies, if such person or entity engages in the business of
acquiring or constructing towers for telecom carriers or operators or
engaging in any other business engaged in by the Companies at the time of
termination of the Employee's employment with the Company, in either case
in the geographic region encompassing the service areas in which any of
the Companies conduct, or had an established plan to begin conducting,
their businesses at the time of termination of the Employee's employment
with the Company.
(ii) For purposes of this Section 9, no corporation or entity
that may be deemed to be an affiliate of the Companies solely by reason
of its being controlled by, or under common control with, Welsh, Carson,
Anderson & Stowe VIII, L.P. or any of their respective affiliates other
than the Companies, will be deemed to be an affiliate of the Companies.
(e) Certain Representations of the Employee. In connection
with the foregoing provisions of this Section 9, the Employee represents that
his experience, capabilities and circumstances are such that such provisions
will not prevent him from earning a livelihood. The Employee further agrees that
the limitations set forth in this Section 9 (including, without limitation, time
and territorial limitations) are reasonable and properly required for the
adequate protection of the current and future businesses of the Companies. It is
understood and agreed that the covenants made by the Employee in this Section 9
(and in Section 6 hereof) shall survive the expiration or termination of this
Agreement.
(f) Injunctive Relief. The Employee acknowledges and agrees
that a remedy at law for any breach or threatened breach of the provisions of
Section 9 hereof would be inadequate and, therefore, agrees that the Company and
any of its subsidiaries or affiliates shall be entitled to injunctive relief in
addition to any other available rights and remedies in cases of any such breach
or threatened breach (and the Employee hereby waives any requirement that any of
the Companies provide a bond or other security in connection with the issuance
of any such injunction); provided, however, that nothing contained herein shall
be construed as prohibiting the Company or any of its affiliates from pursuing
any other rights and remedies available for any such breach or threatened
breach.
10. Binding Effect. Without limiting or diminishing the effect
of the provisions affecting assignment of this Agreement, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, successors, legal representatives and assigns and, as set
forth in Section 6(g) hereof, shall inure to the benefit of the Nextel
Beneficiaries.
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<PAGE> 10
11. Notices. All notices which are required or may be given
pursuant to the terms of this Agreement shall be in writing and shall be
sufficient in all respects if given in writing and (i) delivered personally,
(ii) mailed by certified or registered mail, return receipt requested and
postage prepaid, (iii) sent via a nationally recognized overnight courier or
(iv) sent via facsimile confirmed in writing to the recipient, if to the Company
at the Company's principal place of business, and if to the Employee, at his
home address most recently filed with the Company, or to such other address or
addresses as either party shall have designated in writing to the other party
hereto, provided, however, that any notice sent by certified or registered mail
shall be deemed delivered on the date of delivery as evidenced by the return
receipt.
12. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
13. Severability. The Employee agrees that in the event that
any court of competent jurisdiction shall finally hold that any provision of
Section 6 or 9 hereof is void or constitutes an unreasonable restriction against
the Employee, the provisions of such Section 6 or 9 shall not be rendered void
but shall apply with respect to such extent as such court may judicially
determine constitutes a reasonable restriction under the circumstances. If any
part of this Agreement other than Section 6 or 9 is held by a court of competent
jurisdiction to be invalid, illegible or incapable of being enforced in whole or
in part by reason of any rule of law or public policy, such part shall be deemed
to be severed from the remainder of this Agreement for the purpose only of the
particular legal proceedings in question and all other covenants and provisions
of this Agreement shall in every other respect continue in full force and effect
and no covenant or provision shall be deemed dependent upon any other covenant
or provision.
14. Waiver. Failure to insist upon strict compliance with any
of the terms, covenants or conditions hereof shall not be deemed a waiver of
such term, covenant or condition, nor shall any waiver or relinquishment of any
right or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
15. Arbitration. With the exception of any dispute regarding
the Employee's compliance with the provisions of Sections 6 and 9 above, any
dispute relating to or arising out of the provisions of this Agreement shall be
decided by arbitration in Cary, North Carolina, in accordance with the Expedited
Arbitration Rules of the American Arbitration Association then obtaining, unless
the parties mutually agree otherwise in a writing signed by both parties. This
undertaking to arbitrate shall be specifically enforceable. The decision
rendered by the arbitrator will be final and judgment may be entered upon it in
accordance with appropriate laws in any court having jurisdiction thereof. Each
of the parties shall pay his or its own legal fees associated with such
arbitration.
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<PAGE> 11
16. Entire Agreement; Modifications. This Agreement
constitutes the entire and final expression of the agreement of the parties with
respect to the subject matter hereof and supersedes all prior agreements, oral
and written, between the parties hereto with respect to the subject matter
hereof. This Agreement may be modified or amended only by an instrument in
writing signed by both parties hereto.
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<PAGE> 12
17. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Employee have duly
executed and delivered this Agreement as of the day and year first above
written.
SPECTRASITE HOLDINGS, INC.
By /s/ DAVID P. TOMICK
--------------------------------
Name:
Title: Chief Financial Officer
/s/ STEPHEN H. CLARK
--------------------------------
Stephen H. Clark
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<PAGE> 1
EXHIBIT 10.8
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of April 20, 1999, by and between
SPECTRASITE HOLDINGS, INC., a Delaware corporation (the "Company"), and DAVID P.
TOMICK (the "Employee").
W I T N E S S E T H:
WHEREAS the Company desires to induce the Employee to enter into
employment with the Company for the period provided in this Agreement, and the
Employee is willing to accept such employment with the Company on a full-time
basis, all in accordance with the terms and conditions set forth below;
NOW, THEREFORE, for and in consideration of the premises hereof and the
mutual covenants contained herein, the parties hereto hereby covenant and agree
as follows:
1. Employment. (a) The Company hereby agrees to employ the Employee, and
the Employee hereby agrees to accept such employment with the Company, beginning
on the date hereof and continuing for the period set forth in Section 2 hereof,
all upon the terms and conditions hereinafter set forth.
(b) The Employee affirms and represents that as of the commencement of
his employment by the Company on the date hereof he is under no obligation to
any former employer or other party which is in any way inconsistent with, or
which imposes any restriction upon, the Employee's acceptance of employment
hereunder with the Company, the employment of the Employee by the Company, or
the Employee's undertakings under this Agreement.
2. Term of Employment. (a) Unless earlier terminated as provided in this
Agreement, the term of the Employee's employment under this Agreement shall be
for a period beginning on the date hereof and ending on the fifth anniversary of
the date hereof (the "Initial Term").
(b) The term of the Employee's employment under this Agreement shall be
automatically renewed for additional one-year terms (each a "Renewal Term") upon
the expiration of the Initial Term or any Renewal Term unless the Company or the
Employee delivers to the other, at least one year prior to the expiration of the
Initial Term or the then current Renewal Term, as the case may be, a written
notice specifying that the term of the
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<PAGE> 2
Employee's employment will not be renewed at the end of the Initial Term or such
Renewal term, as the case may be. The period from the date hereof until the
fifth anniversary of said date or, in the event that the Employee's employment
hereunder is earlier terminated as provided herein or renewed as provided in
this Section 2(b), such shorter or longer period, as the case may be, is
hereinafter called the "Employment Term".
3. Duties. The Employee shall be employed as Chief Financial Officer of
the Company, shall faithfully and competently perform such duties as inhere in
such position and as are specified in the By-laws of the Company and shall also
perform and discharge such other executive employment duties and
responsibilities as the Board of Directors of the Company shall from time to
time determine. The Employee shall perform his duties principally at the offices
of the Company in Cary, North Carolina, with such travel to such other locations
from time to time as the Board of Directors of the Company may reasonably
prescribe. Except as may otherwise be approved in advance by the Board of
Directors of the Company, and except during vacation periods and reasonable
periods of absence due to sickness, personal injury or other disability, the
Employee shall devote his full business time throughout the Employment Term to
the services required of him hereunder. The Employee shall render his business
services exclusively to the Company and its subsidiaries during the Employment
Term and shall use his best efforts, judgment and energy to improve and advance
the business and interests of the Company and its subsidiaries in a manner
consistent with the duties of his position. Nothing contained in this Section 3
shall preclude the Employee from performing services for charitable or
not-for-profit community organizations, provided that such activities do not
interfere with the Employee's performance of his duties and responsibilities
under this Agreement.
4. Salary and Bonus. (a) Salary. As compensation for the performance by
the Employee of the services to be performed by the Employee hereunder during
the Employment Term, the Company shall pay the Employee a base salary at the
annual rate of Two Hundred Thousand Dollars ($200,000) (said amount, together
with any increases thereto as may be determined from time to time by the Board
of Directors of the Company in its sole discretion, being hereinafter referred
to as "Salary"). Any Salary payable hereunder shall be paid in regular intervals
in accordance with the Company's payroll practices from time to time in effect.
(b) Bonus. The Employee shall be eligible to receive bonus compensation
from the Company in respect of each fiscal year (or portion thereof) occurring
during the Employment Term in accordance with the Company's management bonus
plan as in effect from time to time (pro rated for any portion of a fiscal year
occurring during the Employment Term), in each case as may be determined by the
Board of Directors of the Company in its sole discretion on the basis of
performance-based criteria to be established from time to time by the Board of
Directors in its sole discretion.
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<PAGE> 3
5. Other Benefits; Company Stock. (a) General. During the
Employment Term, the Employee shall:
(i) be eligible to participate in employee fringe benefits and
pension and/or profit sharing plans that may be provided by the Company
for its senior executive employees in accordance with the provisions of
any such plans, as the same may be in effect from time to time;
(ii) be eligible to participate in any medical and health plans or
other employee welfare benefit plans that may be provided by the Company
for its senior executive employees in accordance with the provisions of
any such plans, as the same may be in effect from time to time;
(iii) be entitled to the number of paid vacation days in each
calendar year determined by the Company from time to time for its senior
executive officers, provided that such number of paid vacation days in
each calendar year shall not be less than twenty work days (four calendar
weeks); the Employee shall also be entitled to all paid holidays given by
the Company to its senior executive officers;
(iv) be eligible for consideration by the Board of Directors of
the Company for awards of stock options under any stock option plan which
may be established by the Company for its and its subsidiaries' key
employees, the amount, if any, of shares for which options may be granted
to Employee to be in the sole discretion of the Board of Directors of the
Company;
(v) be entitled to sick leave, sick pay and disability benefits in
accordance with any Company policy that may be applicable to senior
executive employees from time to time; and
(vi) be entitled to reimbursement for all reasonable and necessary
out-of-pocket business expenses incurred by the Employee in the
performance of his duties hereunder in accordance with the Company's
normal policies from time to time in effect (including, without
limitation, relocation expenses).
(b) Options. Simultaneously with the execution and delivery of
this Agreement by the parties hereto, the Company has granted the Employee
options (the "New Options") to purchase 225,000 shares of Common Stock, $.001
par value, of the Company at a purchase price of $5.00 per share, which options
shall vest in twenty percent increments over a five-year period with the first
twenty percent vesting on April 20, 2000, all as provided in the Option
Agreement of even date herewith between the Company and the Employee. Such New
Options shall be in
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<PAGE> 4
addition to any other options previously granted to the Employee by the Company
(the "Original Options" and, collectively with the New Options, the "Options").
The Company shall cause the Original Options to vest 100% in the event that the
Company terminates the Employee's employment hereunder other than pursuant to
clause (iii) of Section 7(a) below.
6. Confidential Information. The Employee hereby covenants,
agrees and acknowledges as follows:
(a) The Employee has and will have access to and will
participate in the development of or be acquainted with confidential or
proprietary information and trade secrets related to the business of
the Company and any present or future subsidiaries or affiliates of the
Company (collectively with the Company, the "Companies"), including but
not limited to (i) customer lists; claims histories, adjustments and
settlements and related records and compilations of information; the
identity, lists or descriptions of any new customers, referral sources
or organizations; financial statements; cost reports or other financial
information; contract proposals or bidding information; business plans;
training and operations methods and manuals; personnel records;
software programs; reports and correspondence; and management systems,
policies or procedures, including related forms and manuals; (ii)
information pertaining to future developments such as future marketing
or acquisition plans or ideas, and potential new business locations;
(iii) confidential or non-public information relating to business
operations and strategic plans of third parties with which the
Companies have or may be assessing commercial arrangements, including,
without limitation, site build and deployment plans and schedules,
search ring and site locations or potential locations, actual or
projected wireless system subscribers and capital expenditures and
operating cost information ("Third Party Information") and (iv) all
other tangible and intangible property, which are used in the business
and operations of the Companies but not made public. The information
and trade secrets relating to the business of the Companies described
hereinabove (including Third Party Information) in this paragraph (a)
are hereinafter referred to collectively as the "Confidential
Information", provided that the term Confidential Information shall not
include any information (x) that is or becomes generally publicly
available (other than as a result of violation of this Agreement by the
Employee), (y) that the Employee receives on a nonconfidential basis
from a source (other than the Companies or their representatives) or,
in the case of Third Party Information, from a source (other than the
Companies, the third parties to which such information relates or their
respective representatives) that is not known by him to be bound by an
obligation of secrecy or confidentiality to any of the Companies (or
such third parties, in the case of Third Party Information) or (z) that
was in the possession of the Employee prior to disclosure by the
Companies (or such third parties, in the case of
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<PAGE> 5
Third Party Information).
(b) The Employee shall not disclose, use or make known for his or
another's benefit any Confidential Information or use such Confidential
Information in any way except as is in the best interests of the Companies in
the performance of the Employee's duties under this Agreement. The Employee may
disclose Confidential Information when required by a third party and applicable
law or judicial process, but only after providing immediate notice to the
Company at any third party's request for such information, which notice shall
include the Employee's intent with respect to such request.
(c) The Employee acknowledges and agrees that a remedy at law for any
breach or threatened breach of the provisions of this Section 6 would be
inadequate and, there fore, agrees that the Companies shall be entitled to
injunctive relief in addition to any other available rights and remedies in case
of any such breach or threatened breach by the Employee (and the Employee hereby
waives any requirement that any of the Companies provide a bond or other
security in connection with the issuance of any such injunction); provided,
however, that nothing contained herein shall be construed as prohibiting the
Companies from pursuing any other rights and remedies available for any such
breach or threatened breach.
(d) The Employee agrees that upon termination of his employment with the
Company for any reason, the Employee shall forthwith return to the Company all
Confidential Information in whatever form maintained (including, without
limitation, computer discs and other electronic media).
(e) The obligations of the Employee under this Section 6 shall, except as
otherwise provided herein, survive the termination of the Employment Term and
the expiration or termination of this Agreement.
(f) Without limiting the generality of Section 10 hereof, the Employee
hereby expressly agrees that the foregoing provisions of this Section 6 shall be
binding upon the Employee's heirs, successors and legal representatives.
(g) The Employee hereby expressly acknowledges that the foregoing
provisions of this Section 6, insofar as they relate to Third Party Information
provided by or concerning Nextel Communications, Inc. or any of its Affiliates
(other that the Companies, Nextel Communications, Inc. and such Affiliates (the
"Nextel Beneficiaries")) are intended to be for the express benefit of the
Nextel Beneficiaries and may be enforced by the Nextel Beneficiaries by the same
means and with the same effect as if such Nextel Beneficiaries
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<PAGE> 6
were the Company and signatory parties to this Agreement.
7. Termination. (a) The Employee's employment hereunder shall
be terminated upon the occurrence of any of the following:
(i) death of the Employee;
(ii) the Employee's inability to perform his duties on account
of disability or incapacity for a period of one hundred eighty (180) or
more days, whether or not consecutive, within any period of twelve (12)
consecutive months;
(iii) the Company giving written notice, at any time, to the
Employee that the Employee's employment is being terminated "for cause"
(as defined below);
(iv) the Company giving written notice, at any time, to the
Employee that the Employee's employment is being terminated other than
pursuant to clause (i), (ii) or (iii) above; or
(v) the Employee terminates his employment hereunder for any
reason whatsoever (whether by reason of retirement, resignation or
otherwise).
The following actions, failures and events by or affecting the
Employee shall constitute "cause" for termination within the meaning of clause
(iii) above: (A) a conviction of the Employee of, or the entering of a plea of
nolo contendere by the Employee with respect to, a felony, (B) dependence on, or
habitual abuse of, controlled substances or alcohol (in the case of alcohol
abuse, that has a material adverse affect on Employee's performance of his
obligations under this Agreement) or acts of dishonesty by the Employee that are
materially detrimental to one or more of the Companies, (C) wilful misconduct by
the Employee that materially damages the business of one or more of the
Companies, (D) gross negligence by the Employee in the performance of, or wilful
disregard by the Employee of, his material obligations under this Agreement or
otherwise relating to his employment, which gross negligence or wilful disregard
continues unremedied for a period of fifteen (15) days after written notice
thereof to the Employee or (E) failure by the Employee to obey the reasonable
and lawful orders and policies of the Board of Directors that are material to
and consistent with the provisions of this Agreement (provided that, in the case
of an indictment described in clause (A) above, and in the case of clauses (B),
(C) and (E) above, the Employee shall have received written notice of such
proposed termination (which notice shall state the Sections of this Agreement
pursuant to which such termination is being effected and a description of the
facts supporting such termination) and a reasonable opportunity (together with
the Employee's counsel) to discuss the matter with the Board of Directors of the
Company, followed by a notice that the Board of Directors of the
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<PAGE> 7
Company adheres to its position).
(b) In the event that the Employee's employment terminates pursuant to
clause (i) or (ii) of Section 7(a) above or is terminated by the Company
pursuant to clause (iv) of Section 7(a) above, whether during the Initial Term
or during any Renewal Term pursuant to Section 2(b) above, then (i) during the
period beginning on the date of such termination and ending on the last day of
the Applicable Period (as defined in Section 9(a)), the Company shall pay to the
Employee, as severance pay or liquidated damages or both, monthly payments equal
to one-twelfth of (x) the rate per annum of his Salary at the time of such
termination plus (y) the average annualized bonus the Employee was paid by the
Company for the fiscal years during the term of this Agreement ending prior to
the date of such termination, provided, however, that no such payments shall be
required to be made if the Employee fails to comply with his obligations under
Section 9 below; (ii) the Company shall continue to provide the Employee with
the health insurance benefits provided to other employees of the Company
(including employer contributions) from the date of such termination until the
earlier to occur of (x) the last day of the Applicable Period or (y) the date
upon which the Employee becomes eligible for coverage under the health insurance
plan of another employer and (iii) the Options held by the Employee that are
vested as of the date of such termination shall continue to be exercisable by
the Employee until the earlier to occur of (x) the last day of the Applicable
Period or (y) the expiration of the ten year term of such Options.
(c) Notwithstanding anything to the contrary expressed or implied herein,
except as required by applicable law and except as set forth in Section 7(b)
above, the Company (and its affiliates) shall not be obligated to make any
payments to the Employee or on his behalf of whatever kind or nature by reason
of the Employee's cessation of employment (including, without limitation, by
reason of termination of the Employee's employment by the Company's for
"cause"), other than (i) such amounts, if any, of his Salary as shall have
accrued and remained unpaid as of the date of said cessation and (ii) such other
amounts, if any, which may be then otherwise payable to the Employee pursuant to
the terms of the Company's benefits plans.
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<PAGE> 8
(d) No interest shall accrue on or be paid with respect to any portion of
any payments hereunder.
8. Non-Assignability. (a) Neither this Agreement nor any right or
interest hereunder shall be assignable by the Employee or his beneficiaries or
legal representatives without the Company's prior written consent; provided,
however, that nothing in this Section 8(a) shall preclude the Employee from
designating a beneficiary to receive any benefit payable hereunder upon his
death or incapacity.
(b) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment, levy or similar process or to assignment by operation of law, and
any attempt, voluntary or involuntary, to effect any such action shall be null,
void and of no effect.
9. Restrictive Covenants.
(a) Competition. During the Employment Term and during the Applicable
Period (as defined below), the Employee will not directly or indirectly (as a
director, officer, executive employee, manager, consultant, independent
contractor, advisor or otherwise) engage in competition with, or own any
interest in, perform any services for, participate in or be connected with any
business or organization which engages in competition with any of the Companies
within the meaning of Section 9(d), provided, however, that the provisions of
this Section 9(a) shall not be deemed to prohibit the Employee's ownership of
not more than two percent (2%) of the total shares of all classes of stock
outstanding of any publicly held company, or ownership, whether through direct
or indirect stock holdings or otherwise, of one percent (1%) or more of any
other business. For purposes of this Agreement, the "Applicable Period" shall
mean the twenty-four (24) month period following the termination of the
Employee's employment hereunder for any reason whatsoever.
(b) Non-Solicitation. During the Employment Term and during the
Applicable Period, the Employee will not directly or indirectly induce or
attempt to induce any management employee of any of the Companies to leave the
employ of the Company or such subsidiary or affiliate, or in any way interfere
with the relationship between any of the Companies and any employee thereof.
(c) Non-Interference. During the Employment Term and during the
Applicable Period, the Employee will not directly or indirectly hire, engage,
send any work to, place orders with, or in any manner be associated with any
supplier, contractor, subcontractor or other business relation of any of the
Companies if such action would be known by him to have a
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<PAGE> 9
material adverse effect on the business, assets or financial condition of any of
the Companies or materially interfere with the relationship between any such
person or entity and any of the Companies.
(d) Certain Definitions.
(i) For purposes of this Section 9, a person or entity (including,
without limitation, the Employee) shall be deemed to be a competitor of
one or more of the Companies, or a person or entity (including, without
limitation, the Employee) shall be deemed to be engaging in competition
with one or more of the Companies, if such person or entity engages in
the business of acquiring or constructing towers for telecom carriers or
operators or engaging in any other business engaged in by the Companies
at the time of termination of the Employee's employment with the Company,
in either case in the geographic region encompassing the service areas in
which any of the Companies conduct, or had an established plan to begin
conducting, their businesses at the time of termination of the Employee's
employment with the Company.
(ii) For purposes of this Section 9, no corporation or entity that
may be deemed to be an affiliate of the Companies solely by reason of its
being controlled by, or under common control with, Welsh, Carson,
Anderson & Stowe VIII, L.P. or any of their respective affiliates other
than the Companies, will be deemed to be an affiliate of the Companies.
(e) Certain Representations of the Employee. In connection with
the foregoing provisions of this Section 9, the Employee represents that his
experience, capabilities and circumstances are such that such provisions will
not prevent him from earning a livelihood. The Employee further agrees that the
limitations set forth in this Section 9 (including, without limitation, time and
territorial limitations) are reasonable and properly required for the adequate
protection of the current and future businesses of the Companies. It is
understood and agreed that the covenants made by the Employee in this Section 9
(and in Section 6 hereof) shall survive the expiration or termination of this
Agreement.
(f) Injunctive Relief. The Employee acknowledges and agrees
that a remedy at law for any breach or threatened breach of the provisions of
Section 9 hereof would be inadequate and, therefore, agrees that the Company and
any of its subsidiaries or affiliates shall be entitled to injunctive relief in
addition to any other available rights and remedies in cases of any such breach
or threatened breach (and the Employee hereby waives any requirement that any of
the Companies provide a bond or other security in connection with the issuance
of any such injunction); provided, however, that nothing contained herein shall
be construed as prohibiting the Company or any of its affiliates from pursuing
any other rights and remedies available for
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<PAGE> 10
any such breach or threatened breach.
10. Binding Effect. Without limiting or diminishing the effect of the
provisions affecting assignment of this Agreement, this Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, successors, legal representatives and assigns and, as set forth in
Section 6(g) hereof, shall inure to the benefit of the Nextel Beneficiaries.
11. Notices. All notices which are required or may be given pursuant to
the terms of this Agreement shall be in writing and shall be sufficient in all
respects if given in writing and (i) delivered personally, (ii) mailed by
certified or registered mail, return receipt requested and postage prepaid,
(iii) sent via a nationally recognized overnight courier or (iv) sent via
facsimile confirmed in writing to the recipient, if to the Company at the
Company's principal place of business, and if to the Employee, at his home
address most recently filed with the Company, or to such other address or
addresses as either party shall have designated in writing to the other party
hereto, provided, however, that any notice sent by certified or registered mail
shall be deemed delivered on the date of delivery as evidenced by the return
receipt.
12. Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
13. Severability. The Employee agrees that in the event that any court of
competent jurisdiction shall finally hold that any provision of Section 6 or 9
hereof is void or constitutes an unreasonable restriction against the Employee,
the provisions of such Section 6 or 9 shall not be rendered void but shall apply
with respect to such extent as such court may judicially determine constitutes a
reasonable restriction under the circumstances. If any part of this Agreement
other than Section 6 or 9 is held by a court of competent jurisdiction to be
invalid, illegible or incapable of being enforced in whole or in part by reason
of any rule of law or public policy, such part shall be deemed to be severed
from the remainder of this Agreement for the purpose only of the particular
legal proceedings in question and all other covenants and provisions of this
Agreement shall in every other respect continue in full force and effect and no
covenant or provision shall be deemed dependent upon any other covenant or
provision.
14. Waiver. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.
15. Arbitration. With the exception of any dispute regarding the
Employee's compliance with the provisions of Sections 6 and 9 above, any dispute
relating to or arising out of the provisions of this Agreement shall be decided
by arbitration in Cary, North Carolina, in
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<PAGE> 11
accordance with the Expedited Arbitration Rules of the American Arbitration
Association then obtaining, unless the parties mutually agree otherwise in a
writing signed by both parties. This undertaking to arbitrate shall be
specifically enforceable. The decision rendered by the arbitrator will be final
and judgment may be entered upon it in accordance with appropriate laws in any
court having jurisdiction thereof. Each of the parties shall pay his or its own
legal fees associated with such arbitration.
16. Entire Agreement; Modifications. This Agreement constitutes the
entire and final expression of the agreement of the parties with respect to the
subject matter hereof and supersedes all prior agreements, oral and written,
between the parties hereto with respect to the subject matter hereof. This
Agreement may be modified or amended only by an instrument in writing signed by
both parties hereto.
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<PAGE> 12
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Employee have duly executed and
delivered this Agreement as of the day and year first above written.
SPECTRASITE HOLDINGS, INC.
By /s/ STEPHEN H. CLARK
---------------------------------
Name: Stephen H. Clark
Title: Chief Executive Officer
/s/ DAVID P. TOMICK
---------------------------------
David P. Tomick
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<PAGE> 1
EXHIBIT 10.9
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of April 20, 1999, by and between
SPECTRASITE HOLDINGS, INC., a Delaware corporation (the "Company"), and RICHARD
J. BYRNE (the "Employee").
W I T N E S S E T H:
WHEREAS the Company desires to induce the Employee to enter into
employment with the Company for the period provided in this Agreement, and the
Employee is willing to accept such employment with the Company on a full-time
basis, all in accordance with the terms and conditions set forth below;
NOW, THEREFORE, for and in consideration of the premises hereof and the
mutual covenants contained herein, the parties hereto hereby covenant and agree
as follows:
1. Employment. (a) The Company hereby agrees to employ the Employee, and
the Employee hereby agrees to accept such employment with the Company, beginning
on a date of the Employee's choosing within thirty (30) days of the date hereof
(the "Effective Date") and continuing for the period set forth in Section 2
hereof, all upon the terms and conditions hereinafter set forth.
(b) The Employee affirms and represents that as of the commencement of
his employment by the Company on the Effective Date he will be under no
obligation to any former employer or other party which is in any way
inconsistent with, or which imposes any restriction upon, the Employee's
acceptance of employment hereunder with the Company, the employment of the
Employee by the Company, or the Employee's undertakings under this Agreement.
2. Term of Employment. (a) Unless earlier terminated as provided in this
Agreement, the term of the Employee's employment under this Agreement shall be
for a period beginning on the Effective Date and ending on the fifth anniversary
of the Effective Date (the "Initial Term").
(b) The term of the Employee's employment under this Agreement shall be
automatically renewed for additional one-year terms (each a "Renewal Term") upon
the expiration of the Initial Term or any Renewal Term unless the Company or the
Employee delivers to the other, at least one year prior to the expiration of the
Initial Term or the then current Renewal Term, as the case may be, a written
notice specifying that the term of the Employee's employment will not be renewed
at the end of the Initial Term or such Renewal term, as the case may be. The
period from the Effective Date until the fifth anniversary of said date or, in
the event that the Employee's employment hereunder is earlier terminated as
provided herein
<PAGE> 2
or renewed as provided in this Section 2(b), such shorter or longer period, as
the case may be, is hereinafter called the "Employment Term".
3. Duties. The Employee shall be employed as Executive Vice President
Business Development of the Company, shall faithfully and competently perform
such duties as inhere in such position and as are specified in the By-laws of
the Company and shall also perform and discharge such other executive employment
duties and responsibilities as the Board of Directors of the Company shall from
time to time determine. The Employee shall perform his duties principally at the
offices of the Company in Cary, North Carolina, with such travel to such other
locations from time to time as the Board of Directors of the Company may
reasonably prescribe. Except as may otherwise be approved in advance by the
Board of Directors of the Company, and except during vacation periods and
reasonable periods of absence due to sickness, personal injury or other
disability, the Employee shall devote his full business time throughout the
Employment Term to the services required of him hereunder. The Employee shall
render his business services exclusively to the Company and its subsidiaries
during the Employment Term and shall use his best efforts, judgment and energy
to improve and advance the business and interests of the Company and its
subsidiaries in a manner consistent with the duties of his position. Nothing
contained in this Section 3 shall preclude the Employee from performing services
for charitable or not-for-profit community organizations, provided that such
activities do not interfere with the Employee's performance of his duties and
responsibilities under this Agreement.
4. Salary and Bonus. (a) Salary. As compensation for the performance by
the Employee of the services to be performed by the Employee hereunder during
the Employment Term, the Company shall pay the Employee a base salary at the
annual rate of One Hundred Seventy-Five Thousand Dollars ($175,000) (said
amount, together with any increases thereto as may be determined from time to
time by the Board of Directors of the Company in its sole discretion, being
hereinafter referred to as "Salary"). Any Salary payable hereunder shall be paid
in regular intervals in accordance with the Company's payroll practices from
time to time in effect.
(b) Bonus. The Employee shall be eligible to receive bonus compensation
from the Company in respect of each fiscal year (or portion thereof) occurring
during the Employment Term in accordance with the Company's management bonus
plan as in effect from time to time, in each case as may be determined by the
Board of Directors of the Company in its sole discretion on the basis of
performance-based criteria to be established from time to time by the Board of
Directors in its sole discretion. Such bonus amount with respect to any fiscal
year is expected to be up to 40% of the Employee's annual Salary if the Company
achieves its plan approved by the Board of Directors of the Company for such
fiscal year. Any bonus payable under this Section 3(b) shall be pro-rated for
any portion of a fiscal year occurring during the
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<PAGE> 3
Employment Term, provided that there shall be no proration for the 1999 fiscal
year but the amount of the bonus for 1999 shall be offset by the amount of the
bonus (if any) which the Employee receives from Nextel Communications, Inc. or
its affiliates in connection with the Employee's services thereto for the period
from January 1, 1999 through the Effective Date).
5. Other Benefits; Company Stock. (a) General. During the
Employment Term, the Employee shall:
(i) be eligible to participate in employee fringe benefits and
pension and/or profit sharing plans that may be provided by the Company
for its senior executive employees in accordance with the provisions of
any such plans, as the same may be in effect from time to time;
(ii) be eligible to participate in any medical and health plans or
other employee welfare benefit plans that may be provided by the Company
for its senior executive employees in accordance with the provisions of
any such plans, as the same may be in effect from time to time;
(iii) be entitled to the number of paid vacation days in each
calendar year determined by the Company from time to time for its senior
executive officers, provided that such number of paid vacation days in
each calendar year shall not be less than twenty work days (four calendar
weeks); the Employee shall also be entitled to all paid holidays given by
the Company to its senior executive officers;
(iv) be eligible for consideration by the Board of Directors of
the Company for awards of stock options under any stock option plan which
may be established by the Company for its and its subsidiaries' key
employees, the amount, if any, of shares for which options may be granted
to Employee to be in the sole discretion of the Board of Directors of the
Company;
(v) be entitled to sick leave, sick pay and disability benefits in
accordance with any Company policy that may be applicable to senior
executive employees from time to time;
(vi) be entitled to use of an automobile provided by the Company,
which shall be a Jeep Grand Cherokee or an automobile which the Employee
and the Company agree is equivalent to a Jeep Grand Cherokee; and
(vii) be entitled to reimbursement for all reasonable and
necessary out-of-pocket business expenses incurred by the Employee in the
performance of his duties hereunder in accordance with the Company's
normal policies from time to time in effect
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<PAGE> 4
(including, without limitation, relocation expenses).
(b) Options. Simultaneously with the execution and delivery of
this Agreement by the parties hereto, the Company has granted the Employee
options (the "Options") to purchase 200,000 shares of Common Stock, $.001 par
value, of the Company at a purchase price of $5.00 per share, which options
shall vest in twenty percent increments over a five-year period with the first
twenty percent vesting on April 20, 2000, all as provided in the Option
Agreement of even date herewith between the Company and the Employee. The
Company shall cause all of the Options to vest 100% in the event that the
Company terminates the Employee's employment hereunder other than pursuant to
clause (iii) of Section 7(a) below.
6. Confidential Information. The Employee hereby covenants, agrees
and acknowledges as follows:
(a) The Employee has and will have access to and will participate
in the development of or be acquainted with confidential or proprietary
information and trade secrets related to the business of the Company and
any present or future subsidiaries or affiliates of the Company
(collectively with the Company, the "Companies"), including but not
limited to (i) customer lists; claims histories, adjustments and
settlements and related records and compilations of information; the
identity, lists or descriptions of any new customers, referral sources or
organizations; financial statements; cost reports or other financial
information; contract proposals or bidding information; business plans;
training and operations methods and manuals; personnel records; software
programs; reports and correspondence; and management systems, policies or
procedures, including related forms and manuals; (ii) information
pertaining to future developments such as future marketing or acquisition
plans or ideas, and potential new business locations; (iii) confidential
or non-public information relating to business operations and strategic
plans of third parties with which the Companies have or may be assessing
commercial arrangements, including, without limitation, site build and
deployment plans and schedules, search ring and site locations or
potential locations, actual or projected wireless system subscribers and
capital expenditures and operating cost information ("Third Party
Information") and (iv) all other tangible and intangible property, which
are used in the business and operations of the Companies but not made
public. The information and trade secrets relating to the business of the
Companies described hereinabove (including Third Party Information) in
this paragraph (a) are hereinafter referred to collectively as the
"Confidential Information", provided that the term Confidential
Information shall not include any information (x) that is or becomes
generally publicly available (other than as a result of violation of this
Agreement by the Employee), (y) that the Employee receives on a
nonconfidential basis from a source (other than the Companies or their
representatives) or, in the case of Third Party
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<PAGE> 5
Information, from a source (other than the Companies, the third parties to which
such information relates or their respective representatives) that is not known
by him to be bound by an obligation of secrecy or confidentiality to any of the
Companies (or such third parties, in the case of Third Party Information) or (z)
that was in the possession of the Employee prior to disclosure by the Companies
(or such third parties, in the case of Third Party Information).
(b) The Employee shall not disclose, use or make known for his or
another's benefit any Confidential Information or use such Confidential
Information in any way except as is in the best interests of the Companies in
the performance of the Employee's duties under this Agreement. The Employee may
disclose Confidential Information when required by a third party and applicable
law or judicial process, but only after providing immediate notice to the
Company at any third party's request for such information, which notice shall
include the Employee's intent with respect to such request.
(c) The Employee acknowledges and agrees that a remedy at law for any
breach or threatened breach of the provisions of this Section 6 would be
inadequate and, there fore, agrees that the Companies shall be entitled to
injunctive relief in addition to any other available rights and remedies in case
of any such breach or threatened breach by the Employee (and the Employee hereby
waives any requirement that any of the Companies provide a bond or other
security in connection with the issuance of any such injunction); provided,
however, that nothing contained herein shall be construed as prohibiting the
Companies from pursuing any other rights and remedies available for any such
breach or threatened breach.
(d) The Employee agrees that upon termination of his employment with the
Company for any reason, the Employee shall forthwith return to the Company all
Confidential Information in whatever form maintained (including, without
limitation, computer discs and other electronic media).
(e) The obligations of the Employee under this Section 6 shall, except as
otherwise provided herein, survive the termination of the Employment Term and
the expiration or termination of this Agreement.
(f) Without limiting the generality of Section 10 hereof, the Employee
hereby expressly agrees that the foregoing provisions of this Section 6 shall be
binding upon the Employee's heirs, successors and legal representatives.
(g) The Employee hereby expressly acknowledges that the foregoing
provisions of this Section 6, insofar as they relate to Third Party Information
provided by or concerning
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<PAGE> 6
Nextel Communications, Inc. or any of its Affiliates (other that the
Companies, Nextel Communications, Inc. and such Affiliates (the "Nextel
Beneficiaries")) are intended to be for the express benefit of the Nextel
Beneficiaries and may be enforced by the Nextel Beneficiaries by the same
means and with the same effect as if such Nextel Beneficiaries were the
Company and signatory parties to this Agreement.
7. Termination. (a) The Employee's employment hereunder shall
be terminated upon the occurrence of any of the following:
(i) death of the Employee;
(ii) the Employee's inability to perform his duties on account
of disability or incapacity for a period of one hundred eighty (180) or
more days, whether or not consecutive, within any period of twelve (12)
consecutive months;
(iii) the Company giving written notice, at any time, to the
Employee that the Employee's employment is being terminated "for cause"
(as defined below);
(iv) the Company giving written notice, at any time, to the
Employee that the Employee's employment is being terminated other than
pursuant to clause (i), (ii) or (iii) above; or
(v) the Employee terminates his employment hereunder for any
reason whatsoever (whether by reason of retirement, resignation or
otherwise).
The following actions, failures and events by or affecting the
Employee shall constitute "cause" for termination within the meaning of clause
(iii) above: (A) a conviction of the Employee of, or the entering of a plea of
nolo contendere by the Employee with respect to, a felony, (B) dependence on, or
habitual abuse of, controlled substances or alcohol (in the case of alcohol
abuse, that has a material adverse affect on Employee's performance of his
obligations under this Agreement) or acts of dishonesty by the Employee that are
materially detrimental to one or more of the Companies, (C) wilful misconduct by
the Employee that materially damages the business of one or more of the
Companies, (D) gross negligence by the Employee in the performance of, or wilful
disregard by the Employee of, his material obligations under this Agreement or
otherwise relating to his employment, which gross negligence or wilful disregard
continues unremedied for a period of fifteen (15) days after written notice
thereof to the Employee or (E) failure by the Employee to obey the reasonable
and lawful orders and policies of the Board of Directors that are material to
and consistent with the provisions of this Agreement (provided that, in the case
of an indictment described in clause (A) above, and in the case of clauses (B),
(C) and (E) above, the Employee shall have received written notice of such
proposed termination (which notice shall state the Sections of this Agreement
pursuant to which
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<PAGE> 7
such termination is being effected and a description of the facts supporting
such termination) and a reasonable opportunity (together with the Employee's
counsel) to discuss the matter with the Board of Directors of the Company,
followed by a notice that the Board of Directors of the Company adheres to its
position).
(b) In the event that the Employee's employment terminates pursuant to
clause (i) or (ii) of Section 7(a) above or is terminated by the Company
pursuant to clause (iv) of Section 7(a) above, whether during the Initial Term
or during any Renewal Term pursuant to Section 2(b) above, then (i) during the
period beginning on the date of such termination and ending on the last day of
the Applicable Period (as defined in Section 9(a)), the Company shall pay to the
Employee, as severance pay or liquidated damages or both, monthly payments equal
to one-twelfth of (x) the rate per annum of his Salary at the time of such
termination plus (y) the average annualized bonus the Employee was paid by the
Company for the fiscal years during the term of this Agreement ending prior to
the date of such termination, provided, however, that no such payments shall be
required to be made if the Employee fails to comply with his obligations under
Section 9 below; (ii) the Company shall continue to provide the Employee with
the health insurance benefits provided to other employees of the Company
(including employer contributions) from the date of such termination until the
earlier to occur of (x) the last day of the Applicable Period or (y) the date
upon which the Employee becomes eligible for coverage under the health insurance
plan of another employer and (iii) the Options held by the Employee that are
vested as of the date of such termination shall continue to be exercisable by
the Employee until the earlier to occur of (x) the last day of the Applicable
Period or (y) the expiration of the ten year term of such Options.
(c) Notwithstanding anything to the contrary expressed or implied herein,
except as required by applicable law and except as set forth in Section 7(b)
above, the Company (and its affiliates) shall not be obligated to make any
payments to the Employee or on his behalf of whatever kind or nature by reason
of the Employee's cessation of employment (including, without limitation, by
reason of termination of the Employee's employment by the Company's for
"cause"), other than (i) such amounts, if any, of his Salary as shall have
accrued and remained unpaid as of the date of said cessation and (ii) such other
amounts, if any, which may be then otherwise payable to the Employee pursuant to
the terms of the Company's benefits plans.
(d) No interest shall accrue on or be paid with respect to any portion of
any payments hereunder.
8. Non-Assignability. (a) Neither this Agreement nor any right or
interest hereunder shall be assignable by the Employee or his beneficiaries or
legal representatives without the Company's prior written consent; provided,
however, that nothing in this Section 8(a) shall preclude the Employee from
designating a beneficiary to receive any benefit payable hereunder upon his
death or incapacity.
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<PAGE> 8
(b) Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment, levy or similar process or to assignment by operation of law, and
any attempt, voluntary or involuntary, to effect any such action shall be null,
void and of no effect.
9. Restrictive Covenants.
(a) Competition. During the Employment Term and during the
Applicable Period (as defined below), the Employee will not directly or
indirectly (as a director, officer, executive employee, manager, consultant,
independent contractor, advisor or otherwise) engage in competition with, or own
any interest in, perform any services for, participate in or be connected with
any business or organization which engages in competition with any of the
Companies within the meaning of Section 9(d), provided, however, that the
provisions of this Section 9(a) shall not be deemed to prohibit the Employee's
ownership of not more than two percent (2%) of the total shares of all classes
of stock outstanding of any publicly held company, or ownership, whether through
direct or indirect stock holdings or otherwise, of one percent (1%) or more of
any other business. For purposes of this Agreement, the "Applicable Period"
shall mean the twenty-four (24) month period following the termination of the
Employee's employment hereunder for any reason whatsoever.
(b) Non-Solicitation. During the Employment Term and during the
Applicable Period, the Employee will not directly or indirectly induce or
attempt to induce any management employee of any of the Companies to leave the
employ of the Company or such subsidiary or affiliate, or in any way interfere
with the relationship between any of the Companies and any employee thereof.
(c) Non-Interference. During the Employment Term and during the
Applicable Period, the Employee will not directly or indirectly hire, engage,
send any work to, place orders with, or in any manner be associated with any
supplier, contractor, subcontractor or other business relation of any of the
Companies if such action would be known by him to have a material adverse effect
on the business, assets or financial condition of any of the Companies or
materially interfere with the relationship between any such person or entity and
any of the Companies.
(d) Certain Definitions.
(i) For purposes of this Section 9, a person or entity (including,
without limitation, the Employee) shall be deemed to be a competitor of
one or more of the Companies, or a person or entity (including, without
limitation, the Employee) shall be
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<PAGE> 9
deemed to be engaging in competition with one or more of the Companies,
if such person or entity engages in the business of acquiring or
constructing towers for telecom carriers or operators or engaging in any
other business engaged in by the Companies at the time of termination of
the Employee's employment with the Company, in either case in the
geographic region encompassing the service areas in which any of the
Companies conduct, or had an established plan to begin conducting, their
businesses at the time of termination of the Employee's employment with
the Company.
(ii) For purposes of this Section 9, no corporation or entity that
may be deemed to be an affiliate of the Companies solely by reason of its
being controlled by, or under common control with, Welsh, Carson,
Anderson & Stowe VIII, L.P. or any of their respective affiliates other
than the Companies, will be deemed to be an affiliate of the Companies.
(e) Certain Representations of the Employee. In connection with
the foregoing provisions of this Section 9, the Employee represents that his
experience, capabilities and circumstances are such that such provisions will
not prevent him from earning a livelihood. The Employee further agrees that the
limitations set forth in this Section 9 (including, without limitation, time and
territorial limitations) are reasonable and properly required for the adequate
protection of the current and future businesses of the Companies. It is
understood and agreed that the covenants made by the Employee in this Section 9
(and in Section 6 hereof) shall survive the expiration or termination of this
Agreement.
(f) Injunctive Relief. The Employee acknowledges and agrees
that a remedy at law for any breach or threatened breach of the provisions of
Section 9 hereof would be inadequate and, therefore, agrees that the Company and
any of its subsidiaries or affiliates shall be entitled to injunctive relief in
addition to any other available rights and remedies in cases of any such breach
or threatened breach (and the Employee hereby waives any requirement that any of
the Companies provide a bond or other security in connection with the issuance
of any such injunction); provided, however, that nothing contained herein shall
be construed as prohibiting the Company or any of its affiliates from pursuing
any other rights and remedies available for any such breach or threatened
breach.
10. Purchase of Common Stock. (a) Restricted Stock. On or
prior to April 20, 1999, Employee shall be offered for purchase 50,000 shares of
Common Stock of the Company, in accordance with the terms and conditions of that
certain Restricted Stock Purchase Agreement dated April 20, 1999, by and between
the Company and the Employee. Within thirty (30) days of his purchase of such
shares, the Employee shall file an election with the Internal Revenue Service
("IRS") pursuant to Section 83(b) of the Internal Revenue Code to include in his
gross income for 1999 the excess of the fair market value of such shares over
the Ten Cents ($0.10) per share "Purchase Price" he paid for such shares under
the Restricted Stock Purchase Agreement
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<PAGE> 10
(the "Discount"). The fair market value of the shares shall be determined by an
independent valuation company retained by the Company, and the Company shall pay
all expenses of such appraisal. At the time the Employee purchases such shares,
the Company shall pay to the Employee, subject to withholding for income and
payroll taxes, a bonus equal to eighty-two percent (82%) of the Discount to help
offset the Employee's tax liability for the amount of the Discount (the
"Gross-Up").
(b) Indemnity. The Company shall indemnify and hold the Employee
harmless, on an after-tax basis, from and against any additional income or
payroll taxes, as well as any interest or penalties applicable thereto
(collectively, the "Taxes"), which the Employee may be required to pay if it is
determined that the Discount was greater than that intitially determined by the
independent valuation company retained by the Company. In the event that the IRS
or any state or local taxing authority ("Taxing Authority") shall dispute the
fair market value of the shares purchased by the Employee pursuant to the
Restricted Stock Purchase Agreement and assert that the Discount was greater
than that intitially determined by the independent valuation company retained by
the Company, then the Employee shall notify the Company of such claim by the
Taxing Authority within ten (10) days of receiving such notice from the Taxing
Authority. If the amount of the indemnity payment under this Section 10(b) is
determined to be Twenty Thousand Dollars ($20,000) or less, then the Employee,
in his sole discretion, shall have the right to require that the Company make
such payment (without further need to follow the procedure described below) and
the Employee shall release the Company from further liability under this Section
10(b).
If, within thirty (30) days of receiving the Employee's notice of
such claim by a Taxing Authority, the Company gives the Employee written notice
that it desires to contest such claim (and the Employee has not released the
Company from its liability under this Section 10(b)), the Employee shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim;
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order effectively to
contest such claim; and
(iv) permit the Company to participate in any proceedings relating to
such claim.
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<PAGE> 11
The Company shall control all proceedings taken in connection with any
contest of the Taxes with a Taxing Authority and, at its sole option, may (A)
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the Taxing Authority in respect of such claim, (B) direct the
Employee to pay the Taxes claimed and sue for a refund, or (C) contest the claim
in any permissible manner, and the Employee agrees to prosecute such contest to
a final determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Employee harmless,
on an after-tax basis, from any Taxes incurred by the Employee on the Company's
payment of the Employee's costs and expenses hereunder. If the Company directs
the Employee to pay such claim and sue for a refund, the Company shall advance
the amount of such payment to the Employee on an interest-free basis and shall
indemnify and hold the Employee harmless, on an after-tax basis, from and
against any Taxes imposed with respect to such advance (including with respect
to any income imputed in connection with such advance). If the Company directs
the Employee to contest the claim, then any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Employee
with respect to which such contested amount is claimed to be due shall be
limited solely to such contested amount.
11. Moving Principal Residence. (a) Moving Expenses. Upon proper
substantiation and documentation by the Employee, the Company shall reimburse
the Employee for reasonable expenses associated with moving his principal
residence from Virginia to the vicinity of Cary, North Carolina, in accordance
with the Company's Moving and Relocation Policy, provided that the $75,000
expense limit in such policy shall be replaced by a limit of $50,000. In no
event shall the Employer reimburse any such expenses incurred beyond December
31, 1999.
(b) Relocation Bonus. Within three (3) business days of the date the
Company receives notice from the Employee that he has consummated the purchase
of the Employee's principal residence in the vicinity of Cary, North Carolina,
the Company shall pay to the Employee a bonus of Forty Thousand Dollars
($40,000), subject to applicable withholding. This bonus shall be paid in
addition to and notwithstanding the reimbursement of the Employee's moving
expenses under Section 11(b).
12. Binding Effect. Without limiting or diminishing the effect of the
provisions affecting assignment of this Agreement, this Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, successors, legal representatives and assigns and, as set forth in
Section 6(g) hereof, shall inure to the benefit of the Nextel Beneficiaries.
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<PAGE> 12
13. Notices. All notices which are required or may be given pursuant to
the terms of this Agreement shall be in writing and shall be sufficient in all
respects if given in writing and (i) delivered personally, (ii) mailed by
certified or registered mail, return receipt requested and postage prepaid,
(iii) sent via a nationally recognized overnight courier or (iv) sent via
facsimile confirmed in writing to the recipient, if to the Company at the
Company's principal place of business, and if to the Employee, at his home
address most recently filed with the Company, or to such other address or
addresses as either party shall have designated in writing to the other party
hereto, provided, however, that any notice sent by certified or registered mail
shall be deemed delivered on the date of delivery as evidenced by the return
receipt.
14. Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. Severability. The Employee agrees that in the event that any court of
competent jurisdiction shall finally hold that any provision of Section 6 or 9
hereof is void or constitutes an unreasonable restriction against the Employee,
the provisions of such Section 6 or 9 shall not be rendered void but shall apply
with respect to such extent as such court may judicially determine constitutes a
reasonable restriction under the circumstances. If any part of this Agreement
other than Section 6 or 9 is held by a court of competent jurisdiction to be
invalid, illegible or incapable of being enforced in whole or in part by reason
of any rule of law or public policy, such part shall be deemed to be severed
from the remainder of this Agreement for the purpose only of the particular
legal proceedings in question and all other covenants and provisions of this
Agreement shall in every other respect continue in full force and effect and no
covenant or provision shall be deemed dependent upon any other covenant or
provision.
16. Waiver. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.
17. Arbitration. With the exception of any dispute regarding the
Employee's compliance with the provisions of Sections 6 and 9 above, any dispute
relating to or arising out of the provisions of this Agreement shall be decided
by arbitration in Cary, North Carolina, in accordance with the Expedited
Arbitration Rules of the American Arbitration Association then obtaining, unless
the parties mutually agree otherwise in a writing signed by both parties. This
undertaking to arbitrate shall be specifically enforceable. The decision
rendered by the arbitrator will be final and judgment may be entered upon it in
accordance with appropriate laws in any court having jurisdiction thereof. Each
of the parties shall pay his or its own legal fees associated with such
arbitration.
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<PAGE> 13
18. Entire Agreement; Modifications. This Agreement constitutes the
entire and final expression of the agreement of the parties with respect to the
subject matter hereof and supersedes all prior agreements, oral and written,
between the parties hereto with respect to the subject matter hereof. This
Agreement may be modified or amended only by an instrument in writing signed by
both parties hereto.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Employee have duly executed and
delivered this Agreement as of the day and year first above written.
SPECTRASITE HOLDINGS, INC.
By /s/ Stephen H. Clark
--------------------------------
Name: Stephen H. Clark
Title: Chief Executive Officer
/s/ Richard J. Byrne
--------------------------------
Richard J. Byrne
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<PAGE> 1
EXHIBIT 10.10
CONSULTING AGREEMENT
THIS AGREEMENT made as of January 1, 1999 (the "Effective Date"), by and
between SpectraSite Communications, Inc., a Delaware corporation (the
"Company"), and Finley & Company, Inc., an Arkansas corporation (the
"Consultant").
WHEREAS, the Company desires to obtain, on a part-time basis, the
services of Consultant, and the benefits of the Consultant's expertise;
WHEREAS, Consultant desires to provide part-time consultation services to
the Company;
WHEREAS, Consultant acknowledges and agrees that in connection with
providing consultation services as set forth herein, it is beneficial and
necessary to receive from the Company technical and business information,
including trade secrets and other proprietary information of the Company; and
WHEREAS, this Agreement is necessary for the protection of the Company's
legitimate and protectable business interests in its customers, accounts,
prospects, proprietary and confidential information.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
herein contained, and other good and valuable consideration, including the
disclosure of proprietary and confidential information to the Consultant, the
parties hereto, intending legally to be bound, hereby agree as follows:
1. OBLIGATIONS OF CONSULTANT. Consultant will provide general business and
strategic consulting to the Company for not less than fifty (50) hours
per month during the "Term," as defined herein, at such times to be
determined by Consultant and the Company.
2. CONFIDENTIALITY.
(a) Consultant acknowledges that, in and as a result of this
Agreement, he will be making use of, acquiring and/or adding to
"Proprietary Information" (as defined herein) of a special and
unique nature and value. Consultant covenants and agrees that he
shall not, except with the prior written consent of the Board of
Directors of the Company or in connection with providing services
to the Company pursuant to this Agreement, at any time during or
following the expiration or termination of this Agreement with the
Company, directly or indirectly, divulge, use, reveal, report,
publish, transfer or disclose, for any purpose whatsoever, any
Proprietary Information which has been obtained by or disclosed to
Consultant as a result of his providing services under this
Agreement.
(b) For purposes of this Agreement, the term "Proprietary Information"
shall mean all of the following materials and information (whether
or not reduced to
<PAGE> 2
writing and whether or not patentable or protectable by copyright) which
Consultant receives, receives access to, conceives of or develops, in
whole or in part, as a direct or indirect result of his providing
services to the Company as set forth in this Agreement, or through the
use of any of the Company's facilities or resources:
i. Discoveries, concepts and ideas, whether or not
patentable or protectable by copyright, including,
without limitation, the nature and results of
research and development activities, technical
information on product performance and reliability,
processes, formulas, techniques, "know-how," source
codes, object codes, designs, drawings and
specifications; and
ii. Any manufactured products or components thereof
and related goods or systems thereof and any and all
future products developed or derived therefrom; and
iii. Trade secrets, production processes, marketing
techniques, software programs, marketing plans,
formulae, data, mailing lists, purchasing
information, price lists, pricing policies, quoting
procedures, financial information, customer and
prospect names and requirements, customer data,
customer site information, pricing strategies and
other materials or information relating to the manner
in which the Company does business; and
iv. Any other materials or information related to the
business or activities of the Company which are not
generally known to others engaged in similar
businesses or activities; and
v. Any other materials or information that has been
created, discovered or developed, or otherwise become
known to the Company which has commercial value in
the business in which the Company is engaged; and
vi. All ideas which are derived from or relate to
Consultant's access to or knowledge of any of the
above-enumerated materials and information.
Failure to mark any of the Proprietary Information as confidential shall not
affect its status as Proprietary Information under the terms of this Agreement.
2
<PAGE> 3
(c) The aforementioned obligation of confidentiality and
non-disclosure shall not apply when:
i. Public Domain. The Proprietary Information disclosed to
Consultant was in the public domain at the time of
disclosure, or at any time after disclosure has become a
part of the public domain by publication or otherwise
through sources other than Consultant, directly or
indirectly, and without fault on the part of Consultant in
failing to keep such information confidential; or
ii. Requirement of Law or Order. Disclosure is required by law
or court order, provided Consultant gives the Company as
much prior written notice of any such disclosure as is
reasonably possible; or
iii. Agreement. Disclosure is made with the prior written
agreement of the Board of Directors of the Company; or
iv. Third Party Disclosure. The Proprietary Information is
lawfully disclosed to Consultant after the expiration or
termination of this Agreement by a third party who is under
no obligation of confidentiality to the Company with
respect to such information; or
v. Independent Development. Such information is independently
developed by Consultant after the expiration or termination
of his Agreement with the Company, as demonstrated by
written records of Consultant which are contemporaneously
maintained.
3. INVENTIONS
(a) Consultant hereby assigns to the Company all of Consultant's
right, title and interest in any idea (whether or not patentable
or protectable by copyright), invention, development or design,
conceived or developed in whole or in part, or in which Consultant
may have aided development, while providing services to the
Company, including, without limitation, any Proprietary
Information. If any one or more of the aforementioned are deemed
in any way to fall within the definition of "work made for hire"
as such term is defined in 17 U.S.C. Section 101, such work shall
be considered "work made for hire," and the copyright of which
shall be owned solely by, or assigned or transferred completely
and exclusively to, the Company. Consultant agrees to execute all
documents and other instruments and
3
<PAGE> 4
to do all other things reasonably requested by the Company (both
during and after termination of this Agreement) in order to more
fully vest in the Company all ownership rights in those items
thereby transferred by Consultant to the Company. Consultant
further agrees to disclose immediately to the Company all
Proprietary Information conceived of or developed in whole or in
part by it by during the Term while providing services to the
Company and to assign to the Company any right, title or interest
it may have in such Proprietary Information.
(b) Notwithstanding anything in this Agreement to the contrary, the
obligation of Consultant to assign or offer to assign its rights
in an invention to the Company shall not extend or apply to an
invention that Consultant developed without using the Company's
equipment, supplies, facility or trade secret information unless
such invention:
vi. relates to the Company's business or actual or demonstrably
anticipated research or development; or
vii. results from any services provided by Consultant for the
Company.
(c) Consultant shall bear the burden of proof in establishing that its
invention qualifies for exclusion under Section 3(b). With respect
to Section 3(b) it is agreed and acknowledged that during the
Term, the Company may enter other lines of business, which are
related or unrelated to its current lines of business, in which
case this Agreement covers such new lines of business.
(d) Consultant hereby represents and warrants that Consultant has
fully disclosed to the Company on Exhibit A hereto any idea,
invention, improvement or other equipment or technology related to
the products and services offered by the Company ("Inventions or
Improvements") not covered in Section 3(a) above which, prior to
the date of this Agreement, Consultant conceived of or developed,
wholly or in part, and in which Consultant has any right, title or
proprietary interest and which are directly related to the
Company's business, but which has not been published or filed with
the United States Patent or Copyright offices or assigned or
transferred to the Company, and which Consultant desires to remove
from the operation of this Agreement. If there is no such list on
Exhibit A, Consultant represents that Consultant has made no such
Inventions or Improvements at the time of signing this Agreement
or Consultant hereby assigns such Inventions or Improvements to
the Company.
4. COVENANT NOT TO COMPETE It is recognized and understood by the parties
hereto that Consultant, through its association with the Company, shall
acquire and have access
4
<PAGE> 5
to a considerable amount of knowledge and goodwill with respect to the
business of the Company, which knowledge and goodwill is extremely
valuable to the Company and which would be extremely detrimental to the
Company if used by Consultant to compete with the Company. It is,
therefore, understood and agreed by the parties hereto that, because of
the nature of the business of the Company, it is necessary to afford fair
protection to the Company from such unfair competition by Consultant.
Consequently, as a material inducement to the Company to obtain the
services of Consultant, Consultant covenants and agrees to the following:
(a) that at any time during the Term and for a period of three (3)
years following the expiration or termination of this Agreement,
Consultant will not, directly or indirectly, with or through any
family member or former director, officer or employee of the
Company, or acting alone or as a director, employee, agent,
consultant, member of a partnership, firm, corporation or other
entity or as a holder of or investor in 5% or more of any security
of any class of any corporation or other business entity:
i. perform or provide services for any customer of the Company
which are the same or substantially similar to the services
performed or provided by Consultant for such customers on
behalf of the Company during the Term; or
ii. interfere with, or seek to interfere with, the relationship
between the Company and any of the following: (a) any of
the employees of the Company; (b) any of the customers of
the Company then existing or existing at any time during
the Term; or (c) any of the suppliers of the Company then
existing or existing at any time during the Term; or
iii. perform or provide services for any Competing Business (as
hereinafter defined) in the United States which are the
same or substantially similar to the services performed or
provided to the Company by Consultant during the Term.
"Competing Business" means any person, firm or corporation
related to wireless communications site acquisition, tower
development and ownership, site management, co-location
marketing, project management, and site maintenance then
being actively pursued or reasonably anticipated to be
pursued by the Company at any time during the Term. With
respect to the covenant contained in this Section
4(a)(iii), it is acknowledged by Consultant that the
Company's competitors are located throughout the United
States, and that unfair competition can be prevented only
by enforcing this specific covenant on a basis throughout
the United States.
5
<PAGE> 6
5. REASONABLENESS OF RESTRICTIONS
(a) Consultant has carefully read and considered the provisions of
Sections 2 through 4 hereof (and has had the full opportunity to
obtain advice of counsel with respect thereto) and, having done
so, agrees that the restrictions set forth therein are fair and
reasonable and are reasonably required for the protection of the
interests of the Company, its officers, directors, stockholders,
investors, and employees. Consultant further acknowledges that the
nature of the Company's products and services are such that its
natural market is throughout the United States. Accordingly,
Consultant agrees that the length of time, geographic area and any
other restrictions contained in this Agreement are reasonable to
protect the legitimate interests of the Company and do not
unfairly restrict or penalize Consultant.
(b) In the event that, notwithstanding the foregoing, any part of the
covenants set forth in Sections 2 through 4 hereof shall be held
to be invalid and unenforceable, the court so deciding shall
interpret such provisions in a manner so as to enforce them to the
fullest extent of the law.
6. REMEDIES Consultant understands and agrees that the Company will suffer
irreparable harm in the event that Consultant breaches any of his
obligations under this Agreement and that monetary damages will be
inadequate to compensate the Company for such breach. Accordingly,
Consultant agrees that, in the event of a breach or threatened breach by
Consultant of any of the provisions of this Agreement, the Company, in
addition to and not in limitation of any other rights, remedies or
damages available to the Company at law or in equity, shall be entitled
to a permanent injunction in order to prevent or to restrain any such
breach by Consultant, or by Consultant's partners, agents,
representatives, servants, employers, employees and/or any and all
persons directly or indirectly acting for or with Consultant. This
remedy, however, shall be cumulative and in addition to any other
remedies the Company may have, Consultant hereby agrees to indemnify,
defend and hold harmless the Company, its officers, directors, employees,
agents and shareholders, from and against any and all third party claims,
actions, proceedings, liabilities or losses including without limitation
reasonable attorneys fees, arising from and based on (i) Consultant's
negligence or intentional misconduct, or (ii) the infringement of the
intellectual property rights of a third party by Consultant.
7. SURVIVAL OF COVENANTS The provisions and covenants set forth in Sections
2 through 6 of this Agreement shall survive the termination of this
Agreement.
8. OBLIGATIONS OF COMPANY
6
<PAGE> 7
(a) Company will make its existing facilities, and support
services available to Consultant in performing this
Agreement.
(b) Company will provide Consultant office space and part-time
secretarial services.
(c) In consideration of the services provided under this
Agreement, the Company will pay Consultant Nine Thousand
Dollars ($9,000.00) per month during the Term.
(d) Company will reimburse Consultant for reasonable expenses
incurred by Consultant in performing consulting services
under this Agreement, upon presentation by Consultant, from
time to time, of a detailed and itemized account of such
expenses, evidenced by appropriate documentation.
Notwithstanding the foregoing, all expenses greater than
$150.00 must be approved in advance by the Company.
9. TERM AND TERMINATION
(a) Unless earlier terminated as provided herein, the initial
term of this Agreement will begin on the Effective Date and
will terminate on May 31, 1999. This Agreement will
automatically renew on a monthly basis unless either party
gives written notice to the other of its intent not to
renew this Agreement at least fifteen (15) days prior to
the expiration of the initial term or the then current
renewal term. The initial term of this Agreement and all
renewal terms of this Agreement are referred to as the
"Term."
(b) Any modification of this Agreement must be in writing and
signed by the parties.
10. NATURE OF RELATIONSHIP
(a) The Company will have no control or direction over the
services provided by Consultant and Consultant will perform
services hereunder as an independent contractor.
(b) No employer-employee relationship is created by this
Agreement and Consultant will not have any claim against
Company for any vacation pay, sick leave, retirement or
Social Security benefits, workers' compensation,
disability, unemployment insurance benefits, or any other
employee benefits.
(c) Consultant shall have no authority to bind the Company or
to incur obligations or liabilities or act in the name of
or on behalf of the Company.
7
<PAGE> 8
(d) Consultant shall not assign this Agreement and will not delegate
his obligations hereunder without the prior written consent of the
Company.
11. ENTIRE AGREEMENT
This Agreement and the Exhibit hereto sets forth the entire agreement and
understanding between the parties with respect to the subject matter hereof, and
no representations, promises, agreements or understandings, written or oral, not
herein contained shall be of any force or effect. No change or modification
hereof shall be valid or binding unless the same is in writing and signed by the
parties against whom said waiver is sought to be enforced; moreover, no valid
waiver of any other provision of this Agreement at any time shall be deemed a
waiver of any other provision of this Agreement at such time nor will it be
deemed a valid waiver of such provision at any other time.
12. GOVERNING LAW
The validity, construction, interpretation and enforceability of this
Agreement, and the capacity of the parties shall be determined and governed by
the laws of the State of North Carolina without reference to the choice of law
provisions of such laws.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the Effective Date.
SPECTRASITE COMMUNICATIONS, INC.
By: David P. Tomick
--------------------------------
Title:
-----------------------------
FINLEY & COMPANY, INC.
By: Joe L. Bud Finley
--------------------------------
Title:
-----------------------------
8
<PAGE> 9
9
<PAGE> 10
EXHIBIT A
Ideas, Inventions, Etc. Not Covered by Section 4
None.
10
<PAGE> 1
EXHIBIT 10.17
FIRST AMENDMENT
OF SPECTRASITE HOLDINGS, INC.
STOCK OPTION PLAN
THIS FIRST AMENDMENT of SpectraSite Holdings, Inc. Stock Option is dated
and effective February __, 1999.
WHEREAS, the Board of Directors of SpectraSite Holdings, Inc. (the
"Company") has adopted and the stockholders of the Company have approved the
SpectraSite Holdings, Inc. Stock Option Plan (the "Plan"); and
WHEREAS, the Board of Directors and the stockholders of the Company have
approved an amendment to the Plan to increase the maximum number of options
available for grant under the Plan from 1,817,700 to 4,500,000.
NOW, THEREFORE, the Plan is hereby amended as follows:
1. The second sentence of Paragraph 4 of the Plan shall be deleted in its
entirety and the following substituted in lieu thereof:
"The maximum number of shares of Stock which may be issued under the
Plan shall be Four Million Five Hundred Thousand (4,500,000) shares.
2. Except as herein amended, the terms and provisions of the Plan shall
remain in full force and effect as originally adopted and approved.
IN WITNESS WHEREOF, the undersigned hereby certifies that this First
Amendment was duly adopted by the Board of Directors and a majority of the
stockholders of the Company on the __ day of February, 1999.
SPECTRASITE HOLDINGS
By: /s/ Stephen H. Clark
-------------------------
Stephen H. Clark
President
ATTEST:
By: /s/ David P. Tomick
------------------------
David P. Tomick, Secretary
<PAGE> 1
EXHIBIT 10.30
================================================================================
PREFERRED STOCK PURCHASE AGREEMENT
Among
SPECTRASITE HOLDINGS, INC.
and
THE SEVERAL PURCHASERS NAMED
IN SCHEDULES I, II, III AND IV HERETO
Dated as of February 10, 1999
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
I. PURCHASE AND SALE OF PREFERRED STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.01. Issuance and Sale of the Shares to the Purchasers. . . . . . . . . . . . . . . . . . . . . . . . . . 2
-------------------------------------------------
SECTION 1.02. Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
------------
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.01. Organization and Qualification; Power and Authority. . . . . . . . . . . . . . . . . . . . . . . . . 2
---------------------------------------------------
SECTION 2.02. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
------------
SECTION 2.03. Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
--------------
SECTION 2.04. Authorization of Agreements, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
--------------------------------
SECTION 2.05. Validity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
--------
SECTION 2.06. Governmental Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
----------------------
SECTION 2.07. Financial Statements, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-------------------------
SECTION 2.08. Absence of Certain Changes or Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
------------------------------------
SECTION 2.09. Actions Pending. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
---------------
SECTION 2.10. Intellectual Property Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
----------------------------
SECTION 2.11. Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-------------
SECTION 2.12. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-----
SECTION 2.13. Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
-------------------
SECTION 2.14. Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
----------------------
SECTION 2.15. Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
---------------------
SECTION 2.16. Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
---------
SECTION 2.17. Offering of the Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
--------------------------
SECTION 2.18. Related Party Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
--------------------------
SECTION 2.19. Accuracy of Representations and Warranties in the Merger
---------------------------------------------------------
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
---------
SECTION 2.20. Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-------
SECTION 2.21. Condition of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-------------------
SECTION 2.22. Knowledge of the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
------------------------
SECTION 2.23. Title to Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-------------------
III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.01. Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-------------
SECTION 3.02. Validity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
--------
SECTION 3.03. Investment Representations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
--------------------------
SECTION 3.04. Governmental Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
----------------------
SECTION 3.05. Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-------
SECTION 3.06. Actions Pending. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
---------------
IV. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.01. Conduct of the Company's Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
---------------------------------
SECTION 4.02. Financial Statements, Reports, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
----------------------------------
SECTION 4.03. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
---------------
SECTION 4.04. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
------------------
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
V. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.01. Conditions Precedent to the Obligations of the Purchasers. . . . . . . . . . . . . . . . . . . . . 20
---------------------------------------------------------
SECTION 5.02. Conditions Precedent to the Obligations of the Company. . . . . . . . . . . . . . . . . . . . . . . 23
------------------------------------------------------
VI. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.01. Termination by the Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
--------------------------
SECTION 6.02. Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
---------------------
VII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.01. Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
-------------
SECTION 7.02. Survival of Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
----------------------
SECTION 7.03. Parties in Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
-------------------
SECTION 7.04. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
-------
SECTION 7.05. Entire Agreement; Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
----------------------------
SECTION 7.06. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
------------
SECTION 7.07. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
-------------
SECTION 7.08. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
--------
SECTION 7.09. Jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
------------
SECTION 7.10. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
------------
</TABLE>
ii
<PAGE> 4
INDEX TO EXHIBITS AND SCHEDULES
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
A Form of Amended and Restated Certificate of Incorporation
B Form of Stockholders' Agreement
C Form of Registration Rights Agreement
D Opinion of Counsel to the Company
E Executive Compensation Term Sheet
<CAPTION>
Schedules Description
- --------- -----------
<S> <C>
I WCAS Purchasers
II Whitney Purchasers
III CIBC Purchasers
IV Additional Purchasers
2.02 Subsidiaries
2.03 Options and Warrants
2.07 Certain Liabilities
2.08 Certain Changes or Events
2.09 Litigation
2.12 Tax Matters
2.14 Employee Benefit Plans
2.15 Environmental Matters
2.16 Material Contracts
2.18 Related Party Transactions
2.22 Title to Properties
2.23 Knowledge of the Company
</TABLE>
iii
<PAGE> 5
PREFERRED STOCK PURCHASE AGREEMENT
PREFERRED STOCK PURCHASE AGREEMENT, dated as of February 10,
1999, among Spectrasite Holdings, Inc., a Delaware corporation (the "Company"),
the several Purchasers named in Schedule I hereto (each a "WCAS Purchaser" and
collectively, the "WCAS Purchasers"), the several purchasers named in Schedule
II hereto (each a "Whitney Purchaser" and collectively, the "Whitney
Purchasers"), the several purchasers named in Schedule III hereto (each a "CIBC
Purchaser" and collectively, the "CIBC Purchasers") and the several persons
named in Schedule IV hereto (each an "Additional Purchaser" and collectively,
the "Additional Purchasers"). The WCAS Purchasers, the Whitney Purchasers, the
CIBC Purchasers and the Additional Purchasers are sometimes referred to herein
collectively as the "Purchasers."
WHEREAS, the Company desires to sell to the Purchasers, and
the several Purchasers desire to purchase from the Company, on the terms and
subject to the conditions set forth herein, an aggregate 46,136,795 shares (the
"Shares") of Series C Convertible Preferred Stock, $0.001 par value ("Series C
Preferred Stock"), of the Company, at a purchase price of $5.00 per share; and
WHEREAS, the Company has agreed, as a condition to the
obligation of the Purchasers to purchase the Shares, that contemporaneously
with the closing of the purchase and sale of the Shares, (i) the Company shall
amend and restate its Certificate of Incorporation by filing an Amended and
Restated Certificate of Incorporation of the Company in substantially the form
attached hereto as Exhibit A (the "Amended and Restated Certificate of
Incorporation") with the Secretary of State of the State of Delaware, (ii) the
Company and its subsidiaries shall consummate the merger and related
transactions (the "Nextel Transactions") contemplated by the Agreement and Plan
of Merger, dated as of February 10, 1999 (the "Merger Agreement"), among the
Company, Nextel Communications, Inc. ("Nextel"), Spectrasite Communications,
Inc., a wholly owned subsidiary of the Company ("SCI"), and the other parties
named therein and (iii) the Company, SCI and their respective subsidiaries
shall enter into a Credit Agreement and related agreements and instruments as
contemplated by the commitment letter (the "Commitment Letter") and related
term sheet, dated as of January 15, 1999, as amended (the "Credit Documents"),
providing for a credit facility of up to $710 million in favor of SCI and its
affiliates, and in connection therewith, the Company shall use a portion of the
proceeds from the sale of the Shares to discharge certain obligations as
contemplated by the Merger Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree as follows:
<PAGE> 6
I.
PURCHASE AND SALE OF PREFERRED STOCK
SECTION 1.01. Issuance and Sale of the Shares to the
Purchasers.
(a) Subject to the terms and conditions set forth herein,
on the Closing Date (as hereinafter defined) the Company shall issue, sell and
deliver to the Purchasers, and each such Purchaser, acting severally and not
jointly, shall purchase from the Company, the number of shares of Series C
Preferred Stock set forth opposite the name of such Purchaser on Schedule I,
Schedule II, Schedule III or Schedule IV, as the case may be, under the heading
"Number of Shares of Series C Preferred Stock," for a purchase price of $5.00
per share. On the Closing Date, the Company shall issue a certificate or
certificates in definitive form, registered in the name of each Purchaser,
representing the number of Shares purchased by such Purchaser.
(b) As payment in full for the shares of Series C
Preferred Stock being purchased by it hereunder, and against delivery of the
certificate or certificates therefor as aforesaid, on the Closing Date each
Purchaser, acting severally and not jointly, shall transfer, by wire transfer
of immediately available funds to an account designated by the Company, the
amount set forth opposite the name of such Purchaser on Schedule I, Schedule
II, Schedule III or Schedule IV, as the case may be, under the heading
"Aggregate Purchase Price."
SECTION 1.02. Closing Date. The issuance, sale and delivery
of the Shares contemplated by Section 1.01 (the "Closing") shall take place at
the offices of Reboul, MacMurray, Hewitt, Maynard & Kristol, 45 Rockefeller
Plaza, New York, New York, as soon as practicable after the satisfaction or
waiver of each of the conditions to the obligations of the parties set forth in
Article V hereof, or at such date and time as may be mutually agreed upon among
the parties hereto (such date and time of the Closing being herein called the
"Closing Date").
II.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers as
follows:
SECTION 2.01. Organization and Qualification; Power and
Authority. The Company is a corporation validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to own or lease and operate its properties and assets and to
carry on its business as it is now being conducted. The Company is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction in which the character of its properties owned or leased or
the nature of its activities makes such qualification necessary, except where
the failure to be so qualified would not have a material
2
<PAGE> 7
adverse effect on the properties, assets, financial condition, operating
results or business of the Company and its subsidiaries, taken as a whole and
after giving effect to the Nextel Transactions (a "Material Adverse Effect").
The Company has the corporate power and authority to execute, deliver and
perform all of its obligations hereunder and under each of the Ancillary
Agreements (as hereinafter defined).
SECTION 2.02. Subsidiaries.
(a) Schedule 2.02 hereto includes a complete and accurate
list of each subsidiary of the Company, indicating its jurisdiction of
incorporation or organization, each jurisdiction in which such subsidiary is
qualified to do business as a foreign entity, its capital or equity structure
(including all authorized and outstanding shares), and the nature and level of
ownership in such subsidiary by the Company, any other subsidiary of the
Company or any other person.
(b) Each subsidiary of the Company is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to own or lease and operate its properties and assets and to carry on
its business as it is now being conducted. Each subsidiary of the Company is
duly qualified as a foreign corporation to do business and is in good standing
in each jurisdiction in which the character of its properties owned or leased
or the nature of its activities makes such qualification necessary, except
where the failure to be so qualified would not have a Material Adverse Effect.
All the outstanding shares of capital stock of the Company's subsidiaries are
duly authorized, validly issued, fully paid and nonassessable and, except as
set forth on Schedule 2.02, are owned by the Company or by a wholly-owned
subsidiary of the Company free and clear of any liens, claims, charges,
restrictions, rights of others, security interests, prior assignments or other
encumbrances of any nature whatsoever (collectively, "Claims"), and there are
no proxies, voting or transfer agreements or understandings outstanding with
respect to any such shares.
(c) Except as set forth on Schedule 2.02, neither the
Company nor any of its subsidiaries owns of record or beneficially, directly or
indirectly, (i) any shares of outstanding capital stock or securities
convertible into capital stock of any other corporation or (ii) any
participating interest in any partnership, joint venture or other non-corporate
business enterprise.
(d) For purposes of this Agreement, "subsidiary" means,
with respect to any party, any corporation, partnership, limited liability
company or other business entity a majority of whose outstanding equity
interests entitled to vote for directors (or other persons performing
substantially similar functions) is at the time owned by such party and/or one
or more of its subsidiaries.
SECTION 2.03. Capitalization.
(a) As of the date hereof, before giving effect to the
transactions contemplated hereby, the authorized capital stock of the Company
consists of 30,462,830 shares, consisting of 20,000,000 shares of Common Stock,
$0.001 par value ("Common Stock"), and 10,462,830
3
<PAGE> 8
shares of Preferred Stock, $0.001 par value, consisting of 3,462,830 shares of
8% Series A Cumulative Convertible Redeemable Preferred Stock ("Original Series
A Preferred Stock") and 7,000,000 shares of 8% Series B Cumulative Convertible
Redeemable Preferred Stock ("Original Series B Preferred Stock"). As of the
date hereof, 1,161,135 shares of Common Stock, 3,462,830 shares of Original
Series A Preferred Stock and 7,000,000 shares of Original Series B Preferred
Stock are issued and outstanding, all of which shares were duly authorized and
validly issued and are fully paid and nonassessable.
(b) As of the date hereof, options (the "Employee Stock
Options") to purchase an aggregate 1,575,900 shares of Common Stock are
outstanding under the Company's employee stock option plan (the "Company Stock
Plan"). Schedule 2.03 hereto sets forth a complete and accurate list of all
outstanding Employee Stock Options held by current or former employees
(including a vesting schedule and the exercise price of each option grant).
Except as set forth on Schedule 2.03, there are no preemptive rights, options,
warrants or similar rights granted by the Company in respect of shares of
capital stock of the Company or any other agreements to which the Company is a
party providing for the issuance or sale by it of any securities. Except as
set forth on Schedule 2.03, there are no outstanding debt securities or other
instruments issued by the Company or to which the Company or any affiliate
thereof or, to the Knowledge of the Company (as such phrase is defined in
Section 2.23 hereof), any other person or entity is a party, which entitle the
holders thereof to vote or to direct or otherwise restrict the vote of the
holders of Common Stock or which are convertible into or exchangeable for
voting securities of the Company.
(c) Except as set forth on Schedule 2.03 or as otherwise
provided in this Agreement or the Stockholders' Agreement (as defined below),
neither the Company nor any affiliate thereof, nor, to the Knowledge of the
Company, any stockholder of the Company is a party to any voting trust, voting
agreement, proxy or similar agreement with respect to shares of capital stock
of the Company. Except as set forth on Schedule 2.03, there are no shares of
capital stock of the Company reserved for issuance.
(d) Except as set forth on Schedule 2.03, neither the
Company nor any of its subsidiaries has any obligation (contingent or other) to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof.
(e) Immediately after the Closing, the authorized capital
stock of the Company will consist of 155,599,625 shares, consisting of
85,000,000 shares of Common Stock, and 70,599,625 shares of Preferred Stock,
$0.001 par value, consisting of 3,462,830 shares of Series A Convertible
Preferred Stock ("Series A Preferred Stock"), 7,000,000 shares of Series B
Convertible Preferred Stock ("Series B Preferred Stock") and 60,136,795 shares
of Series C Preferred Stock. Immediately after the Closing, after giving
effect to the Nextel Transactions and assuming (y) no conversion of such shares
prior to the Closing Date, and (z) the purchase by Stephen H. Clark of 225,000
shares of Common Stock, 1,386,135 shares of Common Stock (plus any shares
issued pursuant to the exercise of options and warrants and not including up to
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<PAGE> 9
6,000,000 shares of Common Stock issued in connection with the Credit
Documents), 3,462,830 shares of Series A Preferred Stock, 7,000,000 shares of
Series B Preferred Stock and 60,136,795 shares of Series C Preferred Stock will
be issued and outstanding, all of which shares (i) will have been duly
authorized and validly issued and (ii) will be fully paid and nonassessable
and, in the case of the shares of Series C Preferred Stock issued hereunder,
held of record by the Purchasers in the amounts set forth opposite the name of
such Purchasers on Schedule I, Schedule II, Schedule III and Schedule IV
hereto, as applicable, under the heading "Number of Shares of Series C
Preferred Stock." In addition, immediately after the Closing there will be
(i) 3,462,830 shares of Common Stock reserved for issuance by the Company upon
the conversion of Series A Preferred Stock, (ii) 7,000,000 shares of Common
Stock reserved for issuance by the Company upon the conversion of Series B
Preferred Stock, (iii) 60,136,795 shares of Common Stock reserved for issuance
by the Company upon the conversion of Series C Preferred Stock (subject, in the
case of clauses (i), (ii) and (iii), to adjustment pursuant to the Amended and
Restated Certificate of Incorporation), and (iv) 4,100,000 shares of Common
Stock reserved for issuance pursuant to the exercise of stock options issuable
in accordance with the terms of the Company Stock Plan. Schedule 2.03 hereto
sets forth a list of options proposed to be granted on or following the
Closing, to certain executives of the Company pursuant to the Company Stock
Plan, which plan will be amended prior to the Closing.
SECTION 2.04. Authorization of Agreements, Etc.
(a) Each of (i) the execution and filing of the Amended
and Restated Certificate of Incorporation in substantially the form attached
hereto as Exhibit A, (ii) the execution and delivery by the Company of this
Agreement, the Third Amended and Restated Stockholders' Agreement in
substantially the form attached hereto as Exhibit B (the "Stockholders'
Agreement") and the Second Amended and Restated Registration Rights Agreement
in substantially the form attached hereto as Exhibit C (the "Registration
Rights Agreement," and collectively with the Amended and Restated Certificate
of Incorporation and the Stockholders Agreement, the "Ancillary Agreements"),
(iii) the performance by the Company of its obligations hereunder and under
each of the Ancillary Agreements, (iv) the issuance, sale and delivery by the
Company of the Shares, (v) the issuance and delivery of the shares of Common
Stock of the Company issuable upon conversion of the Shares (the "Conversion
Shares" and, collectively with the Shares, the "Securities"), and (vi) the
performance by the Company of the transactions contemplated by the Merger
Agreement have been duly authorized by all requisite corporate and stockholder
action and will not (x) violate any provision of law, any order of any court or
other agency of government, the Certificate of Incorporation or By-laws of the
Company, or any provision of any material indenture, agreement or other
instrument to which the Company or any of its properties or assets is bound;
(y) conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any such material indenture, agreement
or other instrument; or (z) result in the creation or imposition of any Claims
in favor of any third person upon any of the assets of the Company, except as
contemplated by the Ancillary Agreements or the Merger Agreement.
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(b) Except as set forth on Schedule 2.04, the issuance,
sale and delivery of the Shares to the Purchasers hereunder are not subject to
any preemptive rights of stockholders of the Company (or any such preemptive
rights have been validly waived or exercised by all applicable parties) or to
any right of first refusal or other similar right in favor of any person.
(c) The Conversion Shares have been duly authorized by
the Company and, when issued upon conversion of the Shares in accordance with
the Amended and Restated Certificate of Incorporation, will be validly issued,
fully paid and nonassessable shares of Common Stock. The issuance and delivery
of the Conversion Shares to the Purchasers hereunder upon conversion of the
Shares are not subject to any preemptive rights of stockholders of the Company
(or any such preemptive rights have been validly waived or exercised by all
applicable parties) or to any right of first refusal or other similar right in
favor of any person.
SECTION 2.05. Validity. This Agreement has been duly
executed and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other laws relating to or affecting
the enforcement of creditors' rights generally or by general principles of
equity. Each of the Ancillary Agreements, when executed and delivered by the
Company as provided in this Agreement, will constitute the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other laws relating to or affecting
the enforcement of creditors' rights generally or by general principles of
equity.
SECTION 2.06. Governmental Approvals. Subject to the
accuracy of the representations and warranties of the Purchasers set forth in
Article III hereof, no registration or filing with, or consent or approval of,
or other action by, any Federal, state or other governmental agency or
instrumentality is or will be necessary for the valid execution, delivery and
performance by the Company of this Agreement and the Ancillary Agreements, the
issuance, sale and delivery of the Shares or, upon conversion thereof, the
issuance and delivery by the Company of the Conversion Shares, or the
consummation by the Company of the transactions contemplated thereby or by the
Merger Agreement, other than (i) compliance with the requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (ii) such filings with and approvals of the FCC and the FAA and any
state office or regulatory body as may be necessary in connection with the
consummation of the Nextel Transactions, (iii) as set forth on Schedule 2.06
and (iv) with respect to the Merger Agreement, those that the failure to obtain
or make would not have a Material Adverse Effect.
SECTION 2.07. Financial Statements, Etc.
(a) The Company has furnished to the Purchasers: (i) the
audited consolidated balance sheet of the Company and its subsidiaries as of
September 30, 1998 and the related consolidated statements of operations,
stockholders' equity and cash flows for the nine-month period then ended,
certified by Ernst & Young LLP, the independent certified public accountants
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retained by the Company, and (ii) the unaudited consolidated balance sheet of
the Company and its subsidiaries as of December 31, 1998 (the "Balance Sheet"),
and the related consolidated statements of operations and cash flows for the
twelve months then ended, certified by the principal financial officer of the
Company. All such financial statements (including any related schedules and/or
notes) have been prepared in accordance with generally accepted accounting
principles in the United States ("GAAP") consistently applied and consistent
with prior periods, (i) except that such interim statements are subject to
year-end audit adjustments (which consist of normal recurring accruals) and do
not contain certain footnote disclosures, and (ii) except as otherwise
disclosed in such financial statements (including the schedules or footnotes
thereto). Such balance sheets fairly present in all material respects the
consolidated financial position of the Company and its subsidiaries as of their
respective dates, and such statements of operations, stockholders' equity and
cash flows fairly present in all material respects the consolidated results of
operations of the Company and its subsidiaries for the respective periods then
ended.
(b) Except as and to the extent (i) reflected on the
Balance Sheet, (ii) incurred since September 30, 1998 in the ordinary course of
business consistent with past practice or (iii) set forth on Schedule 2.07
hereto, neither the Company nor any of its subsidiaries has any liabilities or
obligations of any kind or nature, whether known or unknown, secured or
unsecured, absolute, accrued, contingent or otherwise, and whether due or to
become due, that would be required to be reflected on a balance sheet, or the
notes thereto, prepared in accordance with GAAP. Since September 30, 1998,
neither the Company nor any of its subsidiaries has suffered any adverse change
in its properties, assets, financial condition, operating results or business
that has had, or would reasonably be expected to have, a Material Adverse
Effect.
SECTION 2.08. Absence of Certain Changes or Events. Except
as set forth on Schedule 2.08 hereto and except as otherwise expressly
contemplated by this Agreement or in connection with the Nextel Transactions or
the transactions contemplated by the Credit Documents, since September 30,
1998, neither the Company nor any of its subsidiaries has:
(i) issued any stock, bonds or other corporate securities
(including stock options), other than upon the exercise of any options
or warrants listed on Schedule 2.03;
(ii) borrowed or refinanced any amount or incurred any
material liabilities (absolute or contingent), other than revolving
credit facility borrowings and trade payables incurred in the ordinary
course of business consistent with past practice;
(iii) discharged or satisfied any material Claim or
incurred or paid any obligation or liability (absolute or contingent)
other than liabilities shown on the Balance Sheet and liabilities
incurred since the date of the Balance Sheet, the discharge,
satisfaction or incurrence of which would not have, individually or in
the aggregate, a Material Adverse Effect;
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(iv) declared or made any payment or distribution to
stockholders, or purchased or redeemed any shares of its capital stock
or other securities (other than repurchases from former employees) in
excess of $50,000;
(v) except in the ordinary course of business mortgaged,
pledged or subjected to lien any of its assets, tangible or
intangible, other than liens for current real property taxes not yet
due and payable;
(vi) sold, assigned or transferred any of its material
tangible assets, or canceled any material debts or Claim, except in
the ordinary course of business consistent with past practice;
(vii) sold, assigned or transferred any material
Intellectual Property Rights (as hereinafter defined) or other
intangible assets, except in the ordinary course of business
consistent with past practice;
(viii) waived any rights of substantial value, other than in
the ordinary course of business consistent with past practice;
(ix) other than in the ordinary course of business
consistent with past practice or as required by the terms of any
written agreements disclosed to the Purchaser, made any material
increase in the compensation (including, without limitation, the rate
of commissions) payable to, or any payment of a material cash bonus
to, any director, officer, employee of, or consultant or agent to, the
Company or any of its subsidiaries or any other material change in the
terms or conditions of any employment relationship;
(x) announced any plan or legally binding commitment to
create any employee benefit plan, program or arrangement or to amend
or modify in any material respect any existing employee benefit plan,
program or arrangement;
(xi) eliminated the vesting conditions or otherwise
accelerated the payment of any compensation, including any stock
options;
(xii) (A) utilized accounting principles different from
those used in the preparation of the financial statements referred to
in Section 2.07, (B) changed in any manner its method of maintaining
its books of account and records from such methods as in effect on
September 30, 1998 or (C) accelerated the booking of revenues or
deferred the booking of expenses, except in any such case to the
extent required by GAAP; or
(xiii) except in connection with this Agreement, the Merger
Agreement and the Credit Documents and the transactions contemplated
hereby and thereby, entered into any agreement, letter of intent or
similar undertaking to take any of the actions listed in clauses (i)
through (xii) above.
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SECTION 2.09. Actions Pending. Except as set forth on
Schedule 2.09 hereto, there is no action, suit, investigation or proceeding
pending or, to the Knowledge of the Company, threatened against the Company or
any of its subsidiaries, or any of their respective properties or rights,
before any court or by or before any governmental body or arbitration board or
tribunal that, if resolved adversely to the Company or any such subsidiary,
would reasonably be expected to have a Material Adverse Effect or that in any
manner challenges or seeks to prevent, enjoin, alter or materially delay the
consummation of the transactions contemplated hereby or by the Merger Agreement
or any of the Ancillary Agreements.
SECTION 2.10. Intellectual Property Rights.
(a) Except as set forth on Schedule 2.10 hereto, the
Company and its subsidiaries own, free and clear of all Claims, and have the
right to use, sell, license or dispose of, or otherwise have sufficient rights
to use, such material patents, copyrights, trademarks, service marks, and
applications and registrations therefor, and trade names, trade secrets,
customer lists, proprietary technology processes and formulae, source code,
object code, data bases, know-how, inventions, other confidential and
proprietary information, and other intellectual property rights as are
necessary to permit the Company and its subsidiaries to carry on their business
as currently conducted, except for failures to own free and clear or have the
exclusive rights to use or otherwise have sufficient rights to use as would not
have, individually or in the aggregate, a Material Adverse Effect
(collectively, the "Intellectual Property Rights"). Schedule 2.10 sets forth
all registered patents, copyrights, trademarks and service marks of the Company
and its subsidiaries included in the Intellectual Property Rights, all of which
are in full force and effect, except as set forth on Schedule 2.10 or except
where the failure to be in full force or effect would not have a Material
Adverse Effect. Except as set forth on Schedule 2.10, neither the Company nor
any of its subsidiaries (i) has licensed or granted to anyone rights of any
nature to use any Intellectual Property Rights that would limit the exercise of
such Intellectual Property Rights by the Company or any of its subsidiaries in
competition with such licensee or grantee if such licensee or grantee were to
use such Intellectual Property Rights in direct or potential competition with
the Company or any of its subsidiaries or that would limit the Company or any
of its subsidiaries from using, selling, licensing or disposing of the
Intellectual Property Rights in any market or geographic region and (ii) is
obligated to pay royalties, fees, Taxes (as defined herein) or other payments
to anyone for use of any of the Intellectual Property Rights exceeding
$1,000,000 on an annualized basis. To the Knowledge of the Company, there
exists no infringement by any third party of any of the Intellectual Property
Rights that would have a Material Adverse Effect and there is no pending or, to
the Knowledge of the Company, threatened claim or litigation against the
Company or any of its subsidiaries contesting its use of any of the
Intellectual Property Rights, asserting the misuse of any of the Intellectual
Property Rights, or asserting the violation of any rights of a third party,
nor, to the Knowledge of the Company, is there any reasonable basis for any
such claim, where, in any such case, such infringement, claim or litigation
would have a Material Adverse Effect.
(b) All copyrightable works, inventions and know-how
conceived by employees or independent contractors of the Company or any of its
subsidiaries within the scope
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of their employment or retention, as the case may be, and related to the
business of the Company or any of its subsidiaries were and are "works for
hire," or, if they were or are not, then all right, title, and interest therein
were transferred and assigned to, or vested in, the Company or one of its
subsidiaries, except where the failure to be "works for hire" or to have been
so transferred, assigned or vested would not have a Material Adverse Effect.
SECTION 2.11. Labor Matters. Except as set forth on Schedule
2.11, neither the Company nor any of its subsidiaries is a party to any
collective bargaining or union agreement, and no such agreement is applicable
to any employees of the Company or any of its subsidiaries. There are no
pending material controversies, labor union grievances or unfair labor practice
or labor arbitration proceedings between the Company or any of its subsidiaries
and any of its employees or groups of employees. To the Knowledge of the
Company, there are no labor unions or other organizations representing or
purporting to represent any employees of the Company or any of its subsidiaries
and there are not any organizational efforts currently being made or threatened
involving any of such employees. The Company and its subsidiaries are in
compliance with all laws and regulations or other legal or contractual
requirements regarding the terms and conditions of employment of employees,
former employees or prospective employees or other labor related matters,
including, without limitation, laws, rules, regulations, orders, rulings,
conciliation agreements, decrees, judgments and awards relating to wages,
hours, the payment of social security and similar taxes, equal employment
opportunity, employment discrimination, fair labor standards, occupational
health and safety, wrongful discharge or violation of the personal rights of
employees, former employees or prospective employees, except for any of the
foregoing that would not have, individually or in the aggregate, a Material
Adverse Effect. Neither the Company nor any of its subsidiaries is liable to
any material extent for any arrears of wages or any taxes or penalties for
failure to comply with any of the foregoing.
SECTION 2.12. Taxes.
(a) Except as set forth on Schedule 2.12 hereto, the
Company and each of its subsidiaries have duly and timely filed or caused to be
filed (or, in the case of the most recently ended taxable year with respect to
each applicable Tax, requests for an extension have been filed for) all
federal, state and material local and foreign Tax returns, reports, estimates
and information and other statements and returns (collectively, "Tax Returns")
required to be filed by or on behalf of the Company or any such subsidiary
pursuant to any applicable Federal, state, local or foreign tax laws for all
years and periods for which such Tax Returns have become due. All such Tax
Returns (including all informational Tax Returns) were correct in all material
respects as filed and correctly reflect, in all material respects, any Tax or
Taxes required to be paid or collected by the Company or any of its
subsidiaries, and all amounts shown as owing on such Tax Returns have been
paid. The Company has delivered or made available to the Purchasers true,
correct and complete copies of all Tax Returns described above with respect to
the Company's fiscal year ended December 31, 1997.
(b) For purposes of this Agreement, "Tax" (and with
correlative meaning, "Taxes" and "Taxing") shall mean (A) any net income,
alternative or add-on minimum tax, gross
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income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, license, withholding on amounts paid to or by the Company
or any of its affiliates, payroll, employment, excise, severance, stamp,
occupation, premium, property, environmental or windfall profit taxes, custom
duties or other taxes, governmental fees or other like assessments or charges
of any kind whatsoever, together with any interest or any penalty, addition to
tax or additional amount imposed by any governmental authority responsible for
the imposition of any such taxes (domestic or foreign); (B) liability of the
Company or any of its subsidiaries for the payment of any amounts of the type
described in (A) as a result of being a member of any affiliated, consolidated,
combined or unitary group, or being a party to any agreement or arrangement
whereby liability of the Company or any of its subsidiaries for payments of
such amounts was determined or taken into account with reference to the
liability of any other person for any period (or portion thereof) ending on or
before the Closing Date; and (C) liability of the Company or any of its
subsidiaries with respect to the payment of any amounts described in (A) as a
result of any express or implied obligation to indemnify any other person.
(c) The Company and each of its subsidiaries have
established, consistent with past practice and in accordance with GAAP, an
adequate reserve on the Balance Sheet for the payment of all material unpaid
Taxes of the Company and its subsidiaries with respect to any taxable period
(or portion thereof) ending on or before the date of such Balance Sheet (or
otherwise relating or attributable to periods up to and including such date).
The consolidated balance sheet of the Company and its subsidiaries as of
December 31, 1998 referred to in Section 2.07 hereof reflects deferred tax
provisions to the extent required by GAAP.
(d) Except as set forth on Schedule 2.12 and with such
other exceptions as would not, individually or in the aggregate, have a
Material Adverse Effect, (A) none of the Company or any of its subsidiaries is
delinquent in the payment of any Taxes; (B) no extensions of time have been
granted to the Company or any of its subsidiaries to file any Tax Return
required by applicable law to be filed by or on behalf of the Company or any of
its subsidiaries prior to or on the Closing Date, which have expired, or will
expire, on or before the Closing Date without such Tax Return having been
filed; (C) no deficiency or adjustment for any Taxes has been proposed,
asserted or assessed against the Company or any of its subsidiaries and no
Federal, state, local or foreign audits or other administrative proceedings or
court proceedings are pending with regard to any such Taxes; and (D) no waiver
or consent extending any statute of limitations for the assessment or
collection of any Taxes, which waiver or consent remains in effect, has been
executed by or on behalf of the Company or any of its subsidiaries, nor are any
requests for such waivers or consents pending.
(e) Neither the Company nor any of its subsidiaries has
made any payment(s), is obligated to make any payment(s) or is a party to any
agreement that could obligate it to make any payment(s) that would constitute
compensation in excess of the limitation on deductibility set forth in Section
162(m) of the Code.
(f) The Company and its subsidiaries have withheld (and
timely paid to the appropriate Taxing authority) proper and accurate amounts
for all periods through the date hereof
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in compliance, in all material respects, with all Tax withholding provisions of
applicable federal, state, local and foreign laws (including, without
limitation, social security and employment tax withholding for all types of
compensation, and withholding Tax on dividends, interest, royalties and similar
income earned by nonresident aliens and foreign corporations and withholding of
Tax on disposition of United States real property interests).
SECTION 2.13. Compliance with Law. Except as disclosed on
Schedule 2.13 hereto, neither the Company nor any of its subsidiaries is in
default under any order of any court, governmental authority or arbitration
board or tribunal or under any laws, ordinances, governmental rules or
regulations to which the Company or any of such subsidiaries is subject, except
for such defaults that would not have, individually or in the aggregate, a
Material Adverse Effect. Neither the Company nor any of its subsidiaries has
failed to obtain any licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its properties or to the conduct
of its business, except where the failure to obtain such license, permit,
franchise or other governmental authorization would not reasonably be expected
to have a Material Adverse Effect. Except as set forth on Schedule 2.13,
neither the Company nor any of its subsidiaries will be required, as a result
of the consummation of the Nextel Transactions, to obtain or renew any
licenses, permits, franchises or other governmental authorizations necessary to
the ownership of the properties of the Company or any of its subsidiaries or to
the conduct of their business after the Closing Date, other than where the
failure to obtain or renew any such license, permit, franchise or other
government authorization would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect.
SECTION 2.14. Employee Benefit Plans.
(a) Schedule 2.14 hereto sets forth a complete and
accurate list of each plan, program, arrangement or agreement that is an
employment, consulting or deferred compensation agreement, or an executive
compensation, incentive bonus or other bonus, employee pension, profit-sharing,
savings, retirement, stock option, stock purchase, severance pay, life, health,
disability or accident insurance plan, or vacation or other employee benefit
plan, program, arrangement or agreement covering current or former employees of
the Company or any of its subsidiaries (collectively, "Plans"), including,
without limitation, each employee benefit plan (as defined under Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")).
(b) The Company and each of its subsidiaries have
complied, and currently are in compliance, in all material respects with all
laws and regulations applicable to the Plans, including, without limitation,
ERISA and the Code.
(c) Neither the Company nor any of its subsidiaries has,
within the last six years, maintained, adopted or established, contributed to
or been required to contribute to, or otherwise participated in or been
required to participate in, any employee benefit plan or other program or
arrangement subject to Title IV of ERISA (including, without limitation, a
"multi-employer plan" (as defined in Section 3(37) of ERISA), a multiple
employer plan (as defined in
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Section 210 of ERISA) and a defined benefit plan (as defined in Section 3(35)
of ERISA), and neither the Company nor any of its subsidiaries has incurred or
will incur any material liability as a result of its maintenance, adoption or
establishment of, contribution to, other participation in, or its being
required to contribute to or otherwise participate in, any such plan, program
or arrangement at any time prior to the Closing Date.
(d) Except as set forth on Schedule 2.14, neither the
Company nor any of its subsidiaries provides or may be required to provide and
no Plan, other than a Plan that is an employee pension benefit plan (within the
meaning of Section 3(2)(A) of ERISA), provides or may be required to provide
benefits, including, without limitation, death, health or medical benefits
(whether or not insured), with respect to current or former employees of the
Company or any of its subsidiaries beyond their retirement or other termination
of service with the Company or its subsidiaries (other than (A) coverage
mandated by applicable law, (B) deferred compensation benefits accrued as
liabilities on the books of the Company or its subsidiaries, or (C) benefits
the full cost of which is borne by the current or former employee (or his or
her beneficiary)). No Plan entitles any employee or former employee of the
Company or any of its subsidiaries to receive medical benefits that cannot be
modified or terminated by the Company or such subsidiaries at any time without
the consent of any person (except as provided by generally applicable
legislation).
(e) Except as set forth on Schedule 2.14, neither the
transactions contemplated hereby nor by the Merger Agreement will result in (i)
any portion of any amount paid or payable by the Company to a "disqualified
individual" (within the meaning of Section 280G(c) of the Code and the
regulations promulgated thereunder), whether paid or payable in cash,
securities of the Company or otherwise and whether considered alone or in
conjunction with any other amount paid or payable to such a "disqualified
individual", being an "excess parachute payment" within the meaning of Section
280G(b)(1) of the Code and the regulations promulgated thereunder, (ii) any
employee of the Company or any of its subsidiaries being entitled to severance
pay, unemployment compensation, or any other payment, (iii) an acceleration of
the time of payment or vesting, or an increase in the amount, of compensation
due to any such employee or former employee or (iv) any prohibited transaction
described in Section 406 of ERISA or Section 4975 of the Code for which an
exemption is not available.
(f) Neither the Company nor any of its subsidiaries has
incurred or expects to incur any liability with respect to any Plan under ERISA
(including, without limitation, Title I or Title IV thereof, other than
liability for premiums due to the Pension Benefit Guaranty Corporation), the
Code or other applicable law, that has not been satisfied in full or been
accrued on the Company's most recent audited financial statements pending full
satisfaction, and no event has occurred, and there exists no condition or set
of circumstances, that would result in the imposition of any material liability
under ERISA, the Code or other applicable law with respect to any Plan.
SECTION 2.15. Environmental Matters. The Company and its
subsidiaries have complied with all applicable Federal, state, local or foreign
statutes, ordinances, orders, judgments, rulings or regulations relating to
environmental pollution or to environmental
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regulation or control, except where any such failure to so comply would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Neither the Company or any of its subsidiaries, nor any of
their respective officers, employees, representatives or agents, nor, to the
Knowledge of the Company, any other person, has treated, stored, processed,
discharged, spilled, or otherwise disposed of any substance defined as
hazardous or toxic by any applicable Federal, state, local or foreign law,
rule, regulation, order or directive, or any waste or by-product thereof, at
any real property or any other facility owned, leased or used by the Company or
any of its subsidiaries, in violation of any applicable statutes, regulations,
ordinances or directives of any governmental authority or court, except for any
such violations that would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. To the Knowledge of the Company,
no employee or other person has ever made a claim or demand against the Company
or any of its subsidiaries based on alleged damage to health caused by any such
hazardous or toxic substance or by any waste or by-product thereof, except for
any such claims or demands that would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Except as set
forth on Schedule 2.15 hereto, neither the Company nor any of its subsidiaries
has been charged by any governmental authority with improperly using, handling,
storing, discharging or disposing of any such hazardous or toxic substance or
waste or by-product thereof or with causing or permitting any pollution of any
body of water, except for any such instances that would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
SECTION 2.16. Contracts.
(a) The Company has made available to the Purchasers
complete and accurate copies of all outstanding contracts, intellectual
property licenses, leases, agreements and arrangements material to the Company
and its subsidiaries, taken as a whole ("Material Contracts"). Except as set
forth on Schedule 2.16 hereto, to the Knowledge of the Company, all of such
Material Contracts are valid, binding and enforceable in accordance with their
terms (assuming the other parties thereto are bound) and are in full force and
effect, except where any such invalidity or failure to be binding, enforceable
or in full force and effect would not have, individually or in the aggregate, a
Material Adverse Effect. Except as set forth on Schedule 2.16, the Company is
not and, to the Knowledge of the Company, no other party to any such Material
Contract is in material default thereunder, and no event has occurred which,
with or without the lapse of time or the giving of notice or both, would
constitute a material default thereunder, except for defaults as would not
have, individually, or in the aggregate, a Material Adverse Effect. Except as
set forth on Schedule 2.16, since September 30, 1998 neither the Company nor
any of its subsidiaries has had any Material Contracts terminated prior to the
expiration date thereof or has been notified in writing by any third party of
its intention to terminate a Material Contract prior to the expiration date
thereof (and, to the Knowledge of the Company, no third party has notified the
Company or any of its subsidiaries in writing that it would, in the event of
the consummation of the transactions contemplated hereby or by the Merger
Agreement, terminate such Material Contract).
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(b) Except as set forth on Schedule 2.16 and except for
contracts that may be canceled by the Company or any of its subsidiaries within
30 days without any material penalty, there are no contracts to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound which: (i) contain change of control provisions
granting to another party or other parties thereto the right to terminate such
agreements or take other action adverse to the Company or such subsidiary upon
or following a change of control, which termination or adverse action would
have, individually or in the aggregate, a Material Adverse Effect; (ii) grant
to any third party a right of first refusal or any other similar right to
acquire any subsidiary or division of the Company or any material segment of
its business or assets; or (iii) purport to limit the Company from providing
any service in any jurisdiction, whether under the Company name or otherwise,
or grant any exclusive geographic, segment or rights to any third party, except
where the existence of which would not have, either individually or in the
aggregate, a Material Adverse Effect.
SECTION 2.17. Offering of the Securities. Neither the
Company nor any person authorized or employed by the Company as agent, broker,
dealer or otherwise in connection with the offering or sale of the Shares or
any similar securities of the Company has offered any such securities for sale
to, or solicited any offers to buy any such securities from, or otherwise
approached or negotiated with respect thereto with, any person or persons under
circumstances that involved the use of any form of general advertising or
solicitation as such terms are defined in Regulation D of the Securities Act;
and, assuming the accuracy of the representations and warranties of the
Purchasers set forth in Article III hereof, neither the Company nor any person
acting on the Company's behalf has taken or will take any action (including,
without limitation, any offer, issuance or sale of any securities of the
Company under circumstances that might require the integration of such
transactions with the sale of the Shares under the Securities Act or the rules
and regulations of the SEC thereunder) that would subject the offering,
issuance or sale of the Shares to the Purchasers to the registration provisions
of the Securities Act.
SECTION 2.18. Related Party Transactions. Except as set
forth on Schedule 2.18 hereto or except as contemplated hereby or by the Merger
Agreement, there are no existing material arrangements or proposed material
transactions between the Company or any of its subsidiaries and (i) any
officer, director or stockholder of the Company or any member of the immediate
family of any of the foregoing persons (such officers, directors and family
members being hereinafter individually referred to as a "Related Party") or
(ii) any business (corporate or otherwise) which a Related Party owns, directly
or indirectly, or in which a Related Party has an ownership interest.
SECTION 2.19. Accuracy of Representations and Warranties in
the Merger Agreement. The representations and warranties of the Company, SCI
and SHI Merger Sub (as defined in the Merger Agreement) contained in Article 7
of the Merger Agreement are true and correct in all material respects as of the
date hereof and will be true and correct in all material respects as of the
Closing Date.
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SECTION 2.20. Brokers. Except as set forth on Schedule 2.20,
all negotiations relative to this Agreement and the transactions contemplated
hereby have been carried on by the Company directly with the Purchasers without
the intervention of any other person on behalf of the Company in such manner as
to give rise to any valid claim by any other person against the Purchasers for
a finder's fee, brokerage commission or similar payment.
SECTION 2.21. Condition of Assets. The tangible personal
property, real property, fixtures and equipment used by the Company and its
subsidiaries in the conduct of their business are in good operating condition
(reasonable wear and tear excepted) and are suitable for the purposes for which
they are currently being used, with such exceptions as would not, individually
or in the aggregate, have a Material Adverse Effect.
SECTION 2.22. Title to Properties. Except as set forth on
Schedule 2.22, the Company and/or each of its Subsidiaries has good record
title in fee simple to, or holds interests as lessee under leases in full force
and effect in, all real property, real property fixtures and towers reflected
on the financial statements referred to in Section 2.07 or used in connection
with its business.
SECTION 2.23. Knowledge of the Company. For purposes of this
Agreement, "Knowledge of the Company" shall mean the actual knowledge of the
persons listed on Schedule 2.23 hereto, after reasonable inquiry of the persons
that report to such persons.
III.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser, severally and not jointly, represents and
warrants to the Company as follows:
SECTION 3.01. Authorization. The execution, delivery and
performance by such Purchaser of this Agreement and each of the Ancillary
Agreements to which such Purchaser is a party, and the purchase and receipt by
such Purchaser of the Shares being acquired by it hereunder, have been duly
authorized by all requisite action on the part of such Purchaser, and will not
(x) violate any provision of law, any order of any court or other agency of
government, the charter or other governing documents of such Purchaser, or any
provision of any indenture, agreement or other instrument by which such
Purchaser or any of such Purchaser's properties or assets are bound; (y)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any such indenture, agreement or other
instrument; or (z) result in any Claim upon any of the properties or assets of
such Purchaser.
SECTION 3.02. Validity. This Agreement has been duly
executed and delivered by such Purchaser and constitutes the legal, valid and
binding obligation of such Purchaser,
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enforceable against such Purchaser in accordance with its terms. Each of the
Ancillary Agreements to which such Purchaser is a party, when executed and
delivered in accordance with this Agreement, will constitute the legal, valid
and binding obligation of such Purchaser, enforceable against such Purchaser in
accordance with its terms.
SECTION 3.03. Investment Representations.
(a) Such Purchaser is acquiring the Shares being
purchased by such Purchaser hereunder for such Purchaser's own account, for
investment, and not with a view toward the resale or distribution thereof.
(b) Such Purchaser understands that such Purchaser must
bear the economic risk of such Purchaser's investment for an indefinite period
of time because the Securities are not registered under the Securities Act of
1933, as amended (the "Securities Act"), or any applicable state securities
laws, and may not be resold unless subsequently registered under the Securities
Act and such other laws or unless an exemption from such registration is
available. Such Purchaser also understands that, except as provided in the
Registration Rights Agreement, it is not contemplated that any registration
will be made under the Securities Act or that the Company will take steps which
will make the provisions of Rule 144 under the Securities Act available to
permit resale of the Securities. Such Purchaser understands and agrees that,
subject to the terms and conditions contained in the Registration Rights
Agreement, it may only pledge, transfer, convey or otherwise dispose of any of
the Securities in compliance with the Securities Act and applicable state
securities laws, as then in effect.
(c) Such Purchaser is able to fend for himself, herself
or itself, as the case may be, in the transactions contemplated by this
Agreement and such Purchaser has the ability to bear the economic risks of the
investment in the Shares being purchased hereunder and, upon conversion
thereof, the Conversion Shares, for an indefinite period of time. Such
Purchaser further acknowledges that such Purchaser has had the opportunity to
ask questions of, and receive answers from, officers of the Company with
respect to the business and financial condition of the Company and the terms
and conditions of the offering of the Shares and to obtain additional
information necessary to verify such information or can acquire it without
unreasonable effort or expense.
(d) Such Purchaser has such knowledge and experience in
financial and business matters that such Purchaser is capable of evaluating the
merits and risks of its investment in the Shares. Such Purchaser further
represents that such Purchaser is an "accredited investor" as such term is
defined in Rule 501 of Regulation D under the Securities Act with respect to
its purchase of the Shares, and that any such Purchaser that is a limited
partnership has not been formed solely for the purpose of purchasing the
Shares.
(e) If such Purchaser is a limited partnership, such
Purchaser represents that it has been organized and is existing as a limited
partnership under the laws of the State of Delaware.
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SECTION 3.04. Governmental Approvals. Except for any
required filings under the HSR Act or pursuant to Federal or state banking
laws, no registration or filing with, or consent or approval of, or other
action by, any Federal, state or other governmental agency or instrumentality
is or will be necessary by the Purchasers for the valid execution, delivery and
performance of this Agreement and each of the Ancillary Agreements to which
such Purchaser is a party.
SECTION 3.05. Brokers. Except as set forth on Schedule 3.05
hereto, all negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by such Purchaser directly with the
Company, without the intervention of any other person on behalf of such
Purchaser in such manner as to give rise to any valid claim by any other person
against the Company or the other Purchasers for a finder's fee, brokerage
commission or similar payment.
SECTION 3.06. Actions Pending. Except as set forth on
Schedule 3.06 hereto, there is no action, suit, investigation or proceeding
pending or, to the knowledge of such Purchaser, threatened against such
Purchaser that in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the consummation of the transactions contemplated hereby or by
the Merger Agreement or any of the Ancillary Agreements or that could
reasonably be expected to have a material adverse effect on such Purchaser's
ability to perform its obligations hereunder.
IV.
COVENANTS
SECTION 4.01. Conduct of the Company's Business.
(a) During the period from the date of this Agreement to
the Closing Date, the Company will, and will cause SCI and the Company's other
subsidiaries to, conduct their respective businesses and operations according
to the ordinary course of their businesses consistent with past practice and
the Company will, and will cause SCI and the Company's other subsidiaries to,
use their reasonable best efforts (A) to preserve their relationships with
business partners, suppliers, employees and customers and (B) to maintain the
contracts, agreements, commitments or understandings with customers that are
material to their businesses in full force and effect in accordance with their
terms up to and following the Closing Date. Without limiting the generality of
the foregoing, except as otherwise contemplated by this Agreement, the Merger
Agreement or the Credit Documents or as required by law, prior to the Closing
Date, without the prior written consent of a majority in interest of the
Purchasers (determined on the basis of amounts to be invested in the Company
pursuant to this Agreement), the Company will not (and will not permit SCI or
any other subsidiary of the Company to) do any of the things listed in clauses
(i) through (xiii) of Section 2.08 above.
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(b) Between the date of this Agreement and the Closing
Date, the Company will afford the representatives of the Purchasers reasonable
access upon reasonable notice during normal business hours to the offices,
facilities, books and records of the Company and its subsidiaries and the
opportunity to discuss the affairs of the Company and its subsidiaries with
officers and employees of the Company and its subsidiaries familiar therewith.
Such activities shall be performed, so far as is reasonably possible, in such a
manner as to avoid disruption of normal operations.
SECTION 4.02. Financial Statements, Reports, Etc. Except as
set forth below, so long as the Purchasers hold in the aggregate not less than
25% of the Shares originally issued pursuant to this Agreement (treating each
Purchaser holding Conversion Shares as holding the number of Shares from which
such Conversion Shares have been converted), the Company shall furnish to each
Purchaser holding not less than 1,000,000 Shares (determined as described in
the preceding parenthetical):
(a) within 90 days after the end of each fiscal year of
the Company, a consolidated balance sheet of the Company and its
subsidiaries as of the end of such fiscal year and the related
consolidated statements of income, changes in stockholders' equity and
cash flows of the Company and its subsidiaries for the fiscal year
then ended, together with supporting notes thereto, prepared in
accordance with generally accepted accounting principles and
accompanied by a report, without qualification as to scope of audit,
by a firm of independent public accountants of recognized national
standing selected by the Company and reasonably acceptable to the
Purchasers;
(b) commencing with the month ending March 31, 1999,
within 20 days after the end of each month in each fiscal year, a
consolidated balance sheet of the Company and its subsidiaries and the
related consolidated statement of income, unaudited but certified by
the principal financial officer of the Company, such balance sheets to
be as of the end of such month and such statements of income to be for
such month and for the period from the beginning of the fiscal year to
the end of such month, in each case subject to normal year-end
adjustments and a qualitative discussion of material events affecting
the Company;
(c) within 20 days prior to the beginning of each fiscal
year of the Company (and with respect to any revision thereof,
promptly after such revision has been prepared), an operating budget
for the Company and its subsidiaries to the extent approved by the
Board of Directors of the Company, including projected monthly income
statements, cash flow statements during such fiscal year and a
projected consolidated balance sheet as of the end of such fiscal
year, and each monthly financial statement furnished pursuant to (b)
above shall reflect variances from such operating budget, as the same
may from time to time be revised;
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(d) promptly upon filing, copies of all registration
statements, prospectuses, periodic reports and other documents filed
by the Company or any of its subsidiaries with the Securities and
Exchange Commission;
(e) prompt notice of (x) any event of default under any
agreement with respect to material indebtedness for borrowed money or
a material purchase money obligation, and any event which, upon notice
or lapse of time or both, would constitute such an event of default
which would in any such case permit the holder of such indebtedness or
obligation to accelerate the maturity thereof, and (y) any action,
suit or proceeding at law or in equity or by or before any
governmental instrumentality or agency which, if adversely determined,
would have a Material Adverse Effect; and
(f) promptly, from time to time, such other information
regarding the operations, business, affairs and financial condition or
prospects of the Company or any subsidiary as the Purchasers may
reasonably request.
The provisions of paragraphs (a) through (f) of this Section 4.02 shall
terminate and be of no further force or effect at such time as the Company
shall have completed a firm commitment underwritten public offering of its
Common Stock.
SECTION 4.03. Use of Proceeds. The proceeds arising from the
sale of the Shares shall be used to provide financing to SCI in connection with
the consummation of the transactions contemplated by the Merger Agreement.
SECTION 4.04. Further Assurances. Subject to the terms and
conditions herein provided, (i) each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective as promptly as practicable the transactions contemplated by this
Agreement and the Ancillary Agreements, and (ii) the Company agrees to use its
reasonable best efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective as promptly as practicable the transactions contemplated by the
Merger Agreement and the Credit Documents, in each case including, without
limitation, using all reasonable efforts to obtain all necessary waivers,
consents and approvals and to effect all necessary registrations and filings.
V.
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Obligations of the
Purchasers. The obligations of the Purchasers hereunder are, at their option,
subject to the satisfaction, on or before the Closing Date, of the following
conditions:
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(a) Representations and Warranties to be True and
Correct. The representations and warranties of the Company contained in this
Agreement shall be true and correct in all material respects on the Closing
Date, with the same force and effect as though such representations and
warranties had been made on and as of such date, except to the extent any such
representation or warranty is expressly stated as of a specified earlier date
or dates, in which case such representation or warranty shall be true and
correct in all material respects as of such earlier specified date or dates and
except for changes resulting from actions permitted under this Agreement prior
to Closing and changes resulting from the consummation of the transactions
contemplated by this Agreement and the Nextel Transactions, and the Company
shall have so certified to the Purchasers in writing.
(b) Performance. The Company shall have performed and
complied in all material respects with all agreements and conditions contained
herein required to be performed or complied with by it prior to or on the
Closing Date, and the Company shall have so certified to the Purchasers in
writing.
(c) All Proceedings to be Satisfactory. All corporate
and other proceedings to be taken by the Company and all waivers and consents
to be obtained by the Company in connection with the transactions contemplated
hereby shall have been taken or obtained by the Company and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
Purchasers and their counsel, except with respect to any waiver or consent
required to be obtained pursuant to the Merger Agreement, where the failure to
obtain such waiver or consent would not have a Material Adverse Effect.
(d) Supporting Documents. On or prior to the Closing
Date the Purchasers and their counsel shall have received copies of the
following supporting documents:
(i) copies of (1) the Amended and Restated Certificate of
Incorporation of the Company, including all amendments thereto,
certified as of a recent date by the Secretary of State of the State
of Delaware and (2) a certificate of said Secretary, dated as of a
recent date, as to the due incorporation and good standing of the
Company, and listing all documents relating to the Company on file
with said official; and
(ii) a certificate of the Secretary or an Assistant
Secretary of the Company, dated the Closing Date and certifying (1)
that attached thereto is a true and complete copy of the By-laws of
the Company as in effect on the date of such certification and at all
times since May 12, 1997; (2) that attached thereto is a true and
complete copy of resolutions adopted by the Board of Directors of the
Company authorizing the execution, delivery and performance of this
Agreement and the Ancillary Agreements, the issuance, sale and
delivery of the Shares and the reservation, issuance and delivery of
the Conversion Shares and the performance of the transactions
contemplated by the Merger Agreement, and that all such resolutions
are still in full force and effect and are all the resolutions adopted
in connection with the transactions contemplated by this Agreement;
(3) that the Amended and Restated Certificate of Incorporation of the
Company has been duly filed with the
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Secretary of State of the State of Delaware and is in full force and
effect; and (4) as to the incumbency and specimen signature of each
officer of the Company executing this Agreement, the Ancillary
Agreements, the stock certificates representing the Shares and any
certificate or instrument furnished pursuant hereto, and a
certification by another officer of the Company as to the incumbency
and signature of the officer signing the certificate referred to in
this paragraph (ii).
All such documents shall be reasonably satisfactory in form and substance to
the Purchasers and their counsel.
(e) Opinion of Counsel. The Purchasers shall have
received from counsel for the Company an opinion dated the Closing Date,
substantially in the form of Exhibit D attached hereto.
(f) Consents. The Company and each other party to the
Merger Agreement shall have obtained all consents and shall have made all
filings required to be obtained or made by such party pursuant to Sections
5.1(a), (c), (e), (f) and (i) of the Merger Agreement, in particular, the
Company shall have obtained the consent from the holders of notes issued by the
Company pursuant to the Indenture, dated as of June 6, 1998, between the
Company and United States Trust Company of New York as trustee, including a
waiver of the change of control put contained in such Indenture with respect to
the transactions contemplated hereby, or, in the alternative, that the Company
shall have obtained a financing commitment reasonably satisfactory to the
Purchasers covering the ability of the Company to pay for any notes put to the
Company as a result of the transactions contemplated hereby. Without limiting
the generality of the foregoing, all applicable waiting periods under the HSR
Act with respect to the transactions contemplated hereby and by the Merger
Agreement shall have expired or been terminated.
(g) Legal Proceedings. No preliminary or permanent
injunction or other order, decree or ruling issued by any court of competent
jurisdiction nor any statute, rule, regulation or order entered, promulgated or
enacted by any governmental, regulatory or administrative agency or authority,
or national securities exchange shall be in effect that would prevent the
consummation of the transactions contemplated by this Agreement, the Merger
Agreement or the Credit Documents.
(h) Ancillary Agreements. Each of the Ancillary
Agreements shall have been executed and delivered by each party thereto, and
the same shall be in full force and effect. The Amended and Restated
Certificate of Incorporation shall have been duly adopted by the Company by all
necessary action of its Board of Directors and stockholders, shall have been
duly filed with the Secretary of State of the State of Delaware and shall have
become legally effective.
(i) Merger Agreement and Credit Documents. The merger
and all other transactions contemplated by the Merger Agreement to be
consummated simultaneously with the Closing hereunder shall have been
consummated substantially in accordance with the terms thereof and the Company,
SCI and their respective subsidiaries shall have consummated the
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transactions contemplated by the Credit Documents substantially in accordance
with the terms thereof, in each case without waiving any material condition
precedent to such merger or other transactions set forth in the Merger
Agreement or the Credit Documents.
(j) Option Waiver. The Company shall have obtained the
waiver of holders of 85% of the options outstanding under the Company Stock
Plan so that the consummation of the transactions contemplated herein does not
constitute a "change of control" under the Employee Stock Options.
(k) The Company and each of Stephen H. Clark, David P.
Tomick and Richard Byrne shall have executed and delivered employment
agreements substantially in accordance with the term sheet attached as Exhibit
E hereto.
SECTION 5.02. Conditions Precedent to the Obligations of the
Company. The obligations of the Company hereunder are, at its option, subject
to the satisfaction, on or before the Closing Date, of the following
conditions:
(a) Representations and Warranties to be True and
Correct. The representations and warranties of the Purchasers contained in
this Agreement shall be true and correct in all material respects on the
Closing Date, with the same effect as though such representations and
warranties had been made on and as of such date.
(b) Performance. The Purchasers shall have performed and
complied in all material respects with all agreements and conditions contained
herein required to be performed or complied with by them prior to or on the
Closing Date.
(c) All Proceedings to Be Satisfactory. All proceedings
to be taken by the Purchasers and all waivers and consents to be obtained by
the Purchasers in connection with the transactions contemplated hereby shall
have been taken or obtained by the Purchasers and all documents incident
thereto shall be satisfactory in form and substance to the Company and its
counsel.
(d) Consents. All applicable waiting periods under the
HSR Act with respect to the transactions contemplated hereby and by the Merger
Agreement shall have expired or been terminated.
(e) Legal Proceedings. No preliminary or permanent
injunction or other order, decree or ruling issued by any court of competent
jurisdiction nor any statute, rule, regulation or order entered, promulgated or
enacted by any governmental, regulatory or administrative agency or authority,
or national securities exchange shall be in effect that would prevent the
consummation of the transactions contemplated by this Agreement, the Merger
Agreement or the Credit Documents.
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(f) Ancillary Agreements. Each of the Ancillary
Agreements shall have been executed and delivered by each party thereto, and
the same shall be in full force and effect.
(g) Merger Agreement and Credit Documents. The Nextel
Transactions shall have been consummated substantially in accordance with the
terms thereof and the Company, SCI and their respective subsidiaries shall have
consummated the transactions contemplated by the Credit Documents substantially
in accordance with the terms thereof.
VI.
TERMINATION
SECTION 6.01. Termination by the Parties. This Agreement may
be terminated and the transactions contemplated hereby may be abandoned at any
time prior to the Closing Date:
(a) by mutual consent of a majority in interest of the
WCAS Purchasers, the Whitney Purchasers and the CIBC Purchasers and
the Company; or
(b) by the Company or by a majority in interest of the
WCAS Purchasers, if the transactions contemplated hereby have not been
consummated within one year of the date hereof, unless the failure to
consummate such transactions results from a breach of any covenant of
the party seeking to terminate this Agreement; provided that the
Whitney Purchasers and the CIBC Purchasers may terminate their
respective obligations pursuant to this Agreement if the Closing does
not occur on or before June 30, 1999 (unless the failure to consummate
such transaction results from a breach of any covenant by the party
seeking to terminate its obligation), in which case the WCAS
Purchasers (assuming the Agreement has not otherwise been terminated)
shall assume, subject to the terms and conditions hereof, the
obligation to purchase any Shares not to be purchased by the Whitney
Purchasers and/or the CIBC Purchasers; or
(c) by (i) the Company or (ii) by a majority in interest
of the WCAS Purchasers, if the Merger Agreement is terminated pursuant
to Article 9 thereof; provided that the Whitney Purchasers and the
CIBC Purchasers may terminate their respective obligations pursuant to
this Agreement if the Merger Agreement is terminated pursuant to
Article 9 thereof, in which case the WCAS Purchasers (assuming the
Agreement has not otherwise been terminated) shall assume, subject to
the terms and conditions hereof, the obligation to purchase any Shares
not to be purchased by the Whitney Purchasers and/or the CIBC
Purchasers.
SECTION 6.02. Effect of Termination. In the event of the
termination of this Agreement and the abandonment of the transactions
contemplated hereby pursuant to this Article VI, this Agreement shall
thereafter become void and have no effect, and no party hereto shall have
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any liability to any other party hereto, except as provided in Section 7.01
hereof, and except that nothing shall relieve any party from liability for
any breach of any covenant of this Agreement.
VII.
MISCELLANEOUS
SECTION 7.01. Expenses, Etc.
(a) In the event that the transactions contemplated
hereby are consummated, the Company shall reimburse the WCAS Purchasers or pay
on their behalf all reasonable fees and expenses incurred by them in connection
with the negotiation and preparation of this Agreement and the related
documents and agreements (including subsequent amendments and waivers relating
hereto or to the Ancillary Agreements) contemplated hereby, including (without
limitation) reasonable fees and expenses of Reboul, MacMurray, Hewitt, Maynard
& Kristol, accountants and consultants, filing fees payable pursuant to the HSR
Act (which filing fees shall be advanced by the Company whether or not the
transactions contemplated hereby are consummated) and stamp, stock issuance and
other similar taxes payable in respect of the issuance of the Securities.
(b) The Company covenants and agrees that, in the event
that any WCAS Purchaser is required to make a filing under the HSR Act in
connection with any transaction to which the Company is a party (other than in
connection with the issuance of the Securities), the Company will pay the
reasonable fees and expenses of such WCAS Purchaser's counsel in preparing such
filing, together with all filing fees.
(c) On the Closing Date, the Company shall pay
transaction fees of $3,975,000 to WCA Management Corporation, $675,000 to J.H.
Whitney & Co. and $1,125,000 to CIBC Oppenheimer Corp. by wire transfer of
immediately available funds to the account designated by such entities.
SECTION 7.02. Survival of Agreements. All covenants,
agreements, representations and warranties made herein shall survive the
Closing, notwithstanding any investigation made at any time by or on behalf of
any party hereto. All statements contained in any certificate or other
instrument delivered by the Company hereunder shall be deemed to constitute
representations and warranties made by the Company.
SECTION 7.03. Parties in Interest. All covenants and
agreements contained in this Agreement by or on behalf of any party hereto
shall bind and inure to the benefit of the respective successors and assigns of
such party hereto whether so expressed or not.
SECTION 7.04. Notices. Any notice or other communications
required or permitted hereunder shall be deemed to be sufficient if contained
in a written instrument delivered
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<PAGE> 30
in person or duly sent by first class certified mail, postage prepaid, by
nationally recognized overnight courier, or by telecopy addressed to such party
at the address or telecopy number set forth below or such other address or
telecopy number as may hereafter be designated in writing by the addressee to
the addressor listing all parties:
if to the Company, to:
SpectraSite Holdings, Inc.
8000 Regency Park, Suite 570
Cary, North Carolina 27511
Attention: Mr. Stephen H. Clark
Telecopy: (919) 468-8522
with a copy to:
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
Attention: John T. Byrnes, Jr.
Telecopy: (202) 776-2222
if to any Purchaser (with the exception of the Whitney Purchasers and
the CIBC Purchasers), to it at its address set forth on Schedule I or
Schedule IV hereto, as the case may be, with a copy to:
Reboul, MacMurray, Hewitt, Maynard & Kristol
45 Rockefeller Plaza
New York, New York 10111
Attention: Robert A. Schwed, Esq.
Telecopy Number: (212) 841-5725
if to any Whitney Purchaser, to it at the address set forth on
Schedule II hereto, with a copy to:
Morrison Cohen Singer & Weinstein, LLP
750 Lexington Avenue
New York, New York 10022
Attention: David A. Scherl, Esq.
Telecopy Number: (212) 735-8708
if to any CIBC Purchaser, to it at the address set forth on Schedule
III hereto, with a copy to:
26
<PAGE> 31
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Roger Meltzer, Esq.
or, in any case, at such other address or addresses as shall have been
furnished in writing by such party to the other parties hereto. All such
notices, requests, consents and other communications shall be deemed to have
been received (a) in the case of personal delivery, on the date of such
delivery, (b) in the case of mailing, on the fifth business day following the
date of such mailing, (c) in the case of delivery by overnight courier, on the
business day following the date of delivery to such courier, and (d) in the
case of telecopy, when received.
SECTION 7.05. Entire Agreement; Assignment. This Agreement
(including the Schedules and Exhibits hereto) constitutes the entire agreement
of the parties with respect to the subject matter hereof and may not be amended
or modified nor any provisions waived except in a writing signed by the Company
and a majority in interest (determined on the basis of amounts to be invested
in the Company pursuant to this Agreement) of each of the WCAS Purchasers, the
Whitney Purchasers and the CIBC Purchasers. This Agreement shall not be
assigned by operation of law or otherwise without the consent of the other
parties hereto.
SECTION 7.06. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS LAW OF SUCH STATE.
SECTION 7.08. Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
SECTION 7.09. Jurisdiction. Each party to this Agreement
hereby irrevocably agrees that any legal action or proceeding arising out of or
relating to this Agreement or the transactions contemplated herein may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York and hereby expressly submits to
the personal jurisdiction and venue of such courts for the purposes therein and
expressly waives any claim of improper venue and any claim that such courts are
an inconvenient forum. Each party hereby irrevocably consents to the service
of process of any of the aforementioned courts in any such suit, action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to its address as provided in Section 7.04, such service to be
effective 10 days after mailing.
SECTION 7.10. Severability. If any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable in
27
<PAGE> 32
any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions hereof
shall not be in any way impaired, unless the provisions held invalid, illegal
or unenforceable shall substantially impair the benefits of the remaining
provisions hereof.
28
<PAGE> 33
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
IN WITNESS WHEREOF, the Company and the Purchasers have
executed this Agreement as of the day and year first above written.
SPECTRASITE HOLDINGS, INC.
By /s/ DAVID P. TOMICK
---------------------------------
Name:
Title:
WELSH, CARSON, ANDERSON & STOWE VIII, L.P.
By WCAS VIII Associates, L.L.C.,
General Partner
By /s/ LAURA M. VANBUREN
---------------------------------
Managing Member
WCAS INFORMATION PARTNERS, L.P.
By /s/ LAURA M. VANBUREN
---------------------------------
General Partner
Attorney-in-Fact
Patrick J. Welsh
Russell L. Carson
Bruce K. Anderson
Andrew M. Paul
Thomas E. McInerney
Laura M. VanBuren
Robert A. Minicucci
Anthony J. de Nicola
Paul B. Queally
Lawrence B. Sorrel
D. Scott Mackesy
Priscilla A. Newman
Rudolph E. Rupert
By /s/ LAURA M. VANBUREN
---------------------------------
Laura M. VanBuren
Individually and
as Attorney-in-Fact
29
<PAGE> 34
J. H. WHITNEY III, L.P.
By: J. H. Whitney Equity Partners III, L.L.C.,
its General Partner
By /s/ MICHAEL T. STONE
----------------------------------
A Managing Member
WHITNEY STRATEGIC PARTNERS III, L.P.
By: J. H. Whitney Equity Partners III, L.L.C.,
its General Partner
By /s/ MICHAEL T. STONE
----------------------------------
A Managing Member
CIBC WG ARGOSY MERCHANT FUND 2, L.L.C.
By /s/ DEAN C. KEHLER
----------------------------------
CO-INVESTMENT MERCHANT FUND 3, LLC
By /s/ DEAN C. KEHLER
----------------------------------
30
<PAGE> 35
THE NORTH CAROLINA ENTERPRISE FUND, L.P.
By: The North Carolina Enterprise Corporation,
Its General Partner
By: /s/ CHARLES T. CLOSSON
----------------------------------
Name: Charles T. Closson
Title: President & CEO
WALLER-SUTTON MEDIA PARTNERS, L.P.
By: Waller Sutton Media Partners, LLC
By: /s/ ANDREW J. ARMSTRONG, JR.
----------------------------------
Name: Andrew J. Armstrong, Jr.
Title: Vice President
KITTY HAWK CAPITAL LIMITED PARTNERSHIP,IV
By: Kitty Hawk Partners LLC, IV
By: /s/ W. CHRIS HEGELE
----------------------------------
Name: W. Chris Hegele
Title: Managing Member
FINLEY FAMILY LIMITED PARTNERSHIP
By: /s/ JOE L. BUD FINLEY
----------------------------------
Name: Joe L. Bud Finley
Title: General Partner
EAGLE CREEK CAPITAL, L.L.C.
By: /s/ SUSAN L. RASINSKI
----------------------------------
Name: Susan L. Rasinski
Title: Manager
31
<PAGE> 36
/s/ DAVID P. TOMICK
-------------------------------------
DAVID P. TOMICK
/s/ JACK JACKMAN
-------------------------------------
JACK JACKMAN
/s/ ALTON ECKERT
-------------------------------------
ALTON ECKERT
/s/ WILLIAM GUPTON
-------------------------------------
WILLIAM GUPTON
32
<PAGE> 1
EXHIBIT 10.31
- -------------------------------------------------------------------------------
FIRST AMENDMENT TO PREFERRED STOCK PURCHASE AGREEMENT
among
SPECTRASITE HOLDINGS,INC.
and
THE SEVERAL PURCHASERS NAMED IN SCHEDULES I, II,
III AND IV HERETO
Dated as of April 20, 1999
Amending the Preferred Stock Purchase Agreement
Dated as of February 10, 1999 Among
SpectraSite Holdings, Inc. and
Certain of the Purchasers Named in Said
Schedules I, II, III and IV
- -------------------------------------------------------------------------------
<PAGE> 2
FIRST AMENDMENT TO PREFERRED STOCK PURCHASE AGREEMENT
FIRST AMENDMENT TO PREFERRED STOCK PURCHASE AGREEMENT dated as of
April 20, 1999 (the "Amendment") among SpectraSite Holdings, Inc., a Delaware
corporation (the "Company"), and the several purchasers named in Schedules I,
II, III and IV hereto (such purchasers being sometimes hereinafter called
individually a "Purchaser" and collectively the "Purchasers"), amending the
Preferred Stock Purchase Agreement dated as of February 10, 1999 (the "Original
Agreement") among the Company and the several purchasers named in Schedules I,
II, III and IV thereto (collectively, the "Original Purchasers"). Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Original Agreement.
WHEREAS pursuant to the terms of the Original Agreement, the
Company agreed to issue and sell to the Original Purchasers an aggregate
46,136,795 shares of Series C Convertible Preferred Stock, $.001 par value (the
"Series C Preferred Stock"), of the Company; and
WHEREAS the Company and the Original Purchasers desire to increase
the number of shares of Series C Preferred Stock being sold on the Closing Date
to 46,286,795 shares of Series C Preferred Stock and to add certain Purchasers
as parties to the Purchase Agreement; and
WHEREAS the Purchasers, severally, wish to purchase the shares of
Series C Preferred Stock being purchased by them hereunder, all on the terms
and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
I.
PURCHASE AND SALE OF PREFERRED STOCK
SECTION 1.01 Issuance, Sale and Delivery of the Shares to the
Purchasers. (a) As provided in Section 1.01 of the Original Agreement, subject
to the terms and conditions set forth in the Original Agreement, on the Closing
Date the Company shall issue, sell and deliver to the Purchasers, and each such
Purchaser, acting severally and not jointly, shall purchase from the Company,
the number of shares of Series C Preferred Stock set forth opposite the name of
such Purchaser on Schedule I, Schedule II, Schedule III or Schedule IV hereto,
as the case may be, under the heading "Number of Shares of Series C Preferred
Stock," for a purchase price of $5.00 per share. On the Closing Date, the
Company shall issue a certificate or certificates in definitive form,
registered in the name of each Purchaser, representing the number of Shares
purchased by
<PAGE> 3
such Purchaser.
(b) As payment in full for the shares of Series C Preferred Stock
being purchased by each Purchaser hereunder, and against delivery of the
certificate or certificates therefor as aforesaid, on the Closing Date each
Purchaser, acting severally and not jointly, shall transfer, by wire transfer
of immediately available funds to an account designated by the Company, the
amount set forth opposite the name of such Purchaser on Schedule I, Schedule
II, Schedule III or Schedule IV hereto, as the case may be, under the caption
"Aggregate Purchase Price".
SECTION 1.02 Consents and Acknowledgments. (a) Each Original
Purchaser hereby (i) consents to the increase in the number of shares of Series
C Preferred Stock being sold on the Closing Date from 46,136,795 shares of
Series C Preferred Stock to 46,286,795 shares of Series C Preferred Stock, (ii)
acknowledges and agrees to the allocation of the shares of Series C Preferred
Stock among the Purchasers as set forth in Schedules I, II, III and IV hereto
and (iii) agrees that each Purchaser other than the Original Purchasers (each a
"New Purchaser" and collectively the "New Purchasers") shall, upon execution of
this Amendment, become a party to the Original Agreement, as modified and
amended by this Amendment. Each New Purchaser hereby agrees that such New
Purchaser shall become a party to the Original Agreement, as modified and
amended by this Amendment, upon execution of this Agreement as aforesaid.
(b) Each Purchaser hereby waives any preemptive rights it may have,
whether under the existing Amended and Restated Certificate of Incorporation of
the Company, the Second Amended and Restated Stockholders Agreement, or
otherwise, to purchase any shares of the Company's capital stock (other than
its right to purchase the shares of Series C Preferred Stock that it is
purchasing pursuant to the Original Agreement as amended hereby) that it may
have as a result of the issuance and sale of Series C Preferred Stock pursuant
to the Original Agreement as amended hereby or pursuant to the Merger Agreement
or as a result of the conversion of any such shares to shares of Common Stock
of the Company.
(c) The Company and each Original Purchaser agree that the
Stockholders Agreement, Registration Rights Agreement and the Amended and
Restated Certificate of Incorporation of the Company, each in the form attached
to the Original Agreement, be amended as necessary to reflect the increase in
the number of shares of Series C Preferred Stock and the addition of the New
Purchasers. On the Closing Date, each of the Purchasers will execute and deliver
the Stockholders Agreement and the Registration Rights Agreement as so amended.
(d) The Company and each Original Purchaser hereby agree that the
Original Agreement shall be deemed modified and amended to the extent required
to give effect to the matters described in Section 1.02(a) and (b) above.
SECTION 1.03 Additional Amendment. Section 7.01(c) of the Original
3
<PAGE> 4
Agreement is hereby amended to read in its entirety as follows:
"(c) On the Closing Date, the Company shall pay transaction fees
of $3,975,000 to WCA Management Corporation, $675,000 to J. H. Whitney & Co.,
$1,012,500 to CIBC WG Argosy Merchant Fund 2, L.L.C. and $112,500 to
Co-Investment Merchant Fund 3, LLC by wire transfer of immediately available
funds to the account designated by such entities."
II.
CERTAIN REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Changes to the Company's Representations and Warranties
in Article II of the Original Agreement. Section 2.03(e) of the Original
Agreement is hereby amended to read in its entirety as follows:
"(e) Immediately after the Closing, the authorized capital stock of
the Company will consist of 165,749,625 shares, consisting of 95,000,000 shares
of Common Stock, and 70,749,625 shares of Preferred Stock, $0.001 par value,
consisting of 3,462,830 shares of Series A Convertible Preferred Stock ("Series
A Preferred Stock"), 7,000,000 shares of Series B Convertible Preferred Stock
("Series B Preferred Stock") and 60,286,795 shares of Series C Preferred Stock.
Immediately after the Closing, after giving effect to the Nextel Transactions
and assuming (y) no conversion of such shares prior to the Closing Date, and (z)
the purchase by Stephen H. Clark of 225,000 shares of Common Stock, 3,436,135
shares of Common Stock (plus any shares issued pursuant to the exercise of
options and warrants), 3,462,830 shares of Series A Preferred Stock, 7,000,000
shares of Series B Preferred Stock and 60,286,795 shares of Series C Preferred
Stock will be issued and outstanding, all of which shares (i) will have been
duly authorized and validly issued and (ii) will be fully paid and nonassessable
and, in the case of the shares of Series C Preferred Stock issued hereunder,
held of record by the Purchasers in the amounts set forth opposite the name of
such Purchasers on Schedule I, Schedule II, Schedule III and Schedule IV hereto,
as applicable, under the heading "Number of Shares of Series C Preferred Stock."
In addition, immediately after the Closing there will be (i) 3,462,830 shares of
Common Stock reserved for issuance by the Company upon the conversion of Series
A Preferred Stock, (ii) 7,000,000 shares of Common Stock reserved for issuance
by the Company upon the conversion of Series B Preferred Stock, (iii) 60,286,795
shares of Common Stock reserved for issuance by the Company upon the conversion
of Series C Preferred Stock (subject, in the case of clauses (i), (ii) and
(iii), to adjustment pursuant to the Amended and Restated Certificate of
Incorporation), and (iv) 4,100,000 shares of Common Stock reserved for issuance
pursuant to the exercise of stock options issuable in accordance with the terms
of the Company Stock Plan. Schedule 2.03 hereto sets forth a list of options
proposed to be granted on or following the Closing, to certain executives of the
Company pursuant to the Company Stock Plan, which plan will be amended prior to
the Closing."
4
<PAGE> 5
III.
MISCELLANEOUS
SECTION 3.01 Entire Agreement; Modifications. This Amendment and the
Original Agreement, as modified and amended hereby, constitute the entire
agreement of the parties with respect to the subject matter hereof and may not
be amended or modified nor any provisions waived except in a writing signed by
the Company and a majority in interest (determined on the basis of amounts to be
invested in the Company pursuant to the Original Agreement, as amended by this
Amendment) of each of the WCAS Purchasers, the Whitney Purchasers and the CIBC
Purchasers. This Agreement shall not be assigned by operation of law or
otherwise without the consent of the other parties hereto.
SECTION 3.02 Effect of Amendment. Except as expressly provided in
this Amendment, nothing herein shall affect or be deemed to affect any
provisions of the Original Agreement, and except only to the extent that they
may be varied hereby, all of the terms of the Original Agreement shall remain
unchanged and in full force and effect.
SECTION 3.03 Counterparts. This Amendment may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 3.04 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
5
<PAGE> 6
IN WITNESS WHEREOF, the Company and the Purchasers have executed
this Amendment as of the day and year first above written.
SPECTRASITE HOLDINGS, INC.
By /s/ David P. Tomick
----------------------------
Name: David P. Tomick
Title: Chief Financial Officer
WELSH, CARSON, ANDERSON & STOWE VIII, L.P.
By WCAS VIII Associates, L.L.C.,
General Partner
By /s/ Laura VanBuren
---------------------------
Managing Member
WCAS INFORMATION PARTNERS, L.P.
By /s/ Laura VanBuren
--------------------------
General Partner
/s/ Kenneth Melkus
-----------------------------------
KENNETH MELKUS
6
<PAGE> 7
Patrick J. Welsh
Russell L. Carson
Bruce K. Anderson
Andrew M. Paul
Thomas E. McInerney
Laura M. VanBuren
Robert A. Minicucci
Anthony J. de Nicola
Paul B. Queally
Lawrence B. Sorrel
D. Scott Mackesy
Priscilla A. Newman
Rudolph E. Rupert
By /s/ Laura M. VanBuren
-------------------------------
Laura M. VanBuren
Individually and
as Attorney-in-Fact
TRUST U/A DATED 11/26/84
FBO ERIC WELSH
By /s/ Carol Ann Welsh
-------------------------------
Carol Ann Welsh
Trustee
TRUST U/A DATED 11/26/84
FBO RANDALL WELSH
By /s/ Carol Ann Welsh
-------------------------------
Carol Ann Welsh
Trustee
7
<PAGE> 8
TRUST U/A DATED 11/26/84
FBO JENNIFER WELSH
By /s/ Carol Ann Welsh
--------------------------------
Carol Ann Welsh
Trustee
J. H. WHITNEY III, L.P.
By: J. H. Whitney Equity Partners III, L.L.C., its
General Partner
By /s/ Michael Stone
--------------------------------
A Managing Member
WHITNEY STRATEGIC PARTNERS III, L.P.
By: J. H. Whitney Equity Partners III, L.L.C., its
General Partner
By /s/ Michael Stone
--------------------------------
A Managing Member
CIBC WG ARGOSY MERCHANT FUND 2, L.L.C.
By /s/ Dean C. Kehler
--------------------------------
Managing Director
CO-INVESTMENT MERCHANT FUND 3, LLC
By /s/ Dean C. Kehler
--------------------------------
Managing Director
8
<PAGE> 9
THE NORTH CAROLINA ENTERPRISE FUND, L.P.
By: The North Carolina Enterprise Corporation,
Its General Partner
By /s/ Nancy P. Owens
------------------------------------------
Name: Nancy P. Owens
Title: Senior Vice President
WALLER-SUTTON MEDIA PARTNERS, L.P.
By: Waller Sutton Media Partners, LLC
By /s/ Andrew J. Armstrong, Jr.
------------------------------------------
Name: Andrew J. Armstrong, Jr.
Title: Vice President
KITTY HAWK CAPITAL LIMITED PARTNERSHIP, IV
By: Kitty Hawk Partners LLC, IV
By /s/ W. Chris Hegele
------------------------------------------
Name: W. Chris Hegele
Title: Managing Member
FINLEY FAMILY LIMITED PARTNERSHIP
By /s/ Joe L. Bud Finley
------------------------------------------
Name: Joe L. Bud Finley
Title: Managing General Partner
9
<PAGE> 10
EAGLE CREEK CAPITAL, L.L.C.
By /s/ Susan Rasinski
------------------------------------------
Name: Susan Rasinski
Title: Managing Partner
/s/ David P. Tomick
------------------------------------------
DAVID P. TOMICK
/s/ Jack Jackman
------------------------------------------
JACK JACKMAN
/s/ Alton Eckert
------------------------------------------
ALTON ECKERT
/s/ William Gupton
------------------------------------------
WILLIAM GUPTON
THE PRICE FAMILY LIMITED PARTNERSHIP
By: /s/ Michael J. Price
------------------------------------------
Michael J. Price
General Partner
BENAKE LP
By: /s/ Lynn Forester
------------------------------------------
Lynn Forester
General Partner
10
<PAGE> 1
EXHIBIT 10.32
===============================================================================
SECURITY AND SUBORDINATION AGREEMENT
AMONG
TOWER ASSET SUB, INC.
as Assignor
THE OTHER ASSIGNORS NAMED HEREIN
as Assignors
AND
TOWER PARENT CORP.
as Secured Party
Dated as of April 20, 1999
===============================================================================
<PAGE> 2
SECURITY AND SUBORDINATION AGREEMENT
This Security and Subordination Agreement, dated as of April 20,
1999 (as amended, modified, or supplemented from time to time, this
"Agreement"), is made by and among Tower Asset Sub, Inc., a Delaware
corporation ("Tower Sub"), each other person becoming a Subsidiary of Tower Sub
and an assignor hereunder as provided for herein (collectively with Tower Sub,
the "Assignors," and each an "Assignor"), and Tower Parent Corp., a Delaware
corporation ("Parent Co.," together with its successors and assigns, the
"Secured Party") for and on behalf of Nextel Communications of Mid-Atlantic,
Inc., a Delaware corporation, Nextel of California, Inc., a Delaware
corporation, Nextel of New York, Inc., a Delaware corporation, Nextel South
Corp., a Georgia corporation, Nextel of Texas, Inc., a Texas corporation, and
Nextel West Corp., a Delaware corporation, all of which are wholly owned
Subsidiaries of Nextel Communications, Inc., a Delaware corporation ("Nextel"),
and any other entity designated by Nextel in writing as a Transferring
Subsidiary after the date of the Merger Agreement and prior to the Closing Date
(collectively, excluding Nextel, the "Transferring Subsidiaries").
RECITALS
A. This Agreement is made pursuant to the Agreement and Plan of
Merger, dated as of February 10, 1999 (herein, as amended or otherwise modified
from time to time, the "Merger Agreement"), among Nextel, the Secured Party,
Tower Merger Vehicle, Inc., a Delaware corporation ("Merger Sub"), the
Transferring Subsidiaries party thereto, SpectraSite Holdings, Inc., a Delaware
corporation ("Tower Aggregator"), SpectraSite Communications, Inc., a Delaware
corporation, and SHI Merger Sub, Inc., a Delaware corporation ("SHI Merger
Sub"), pursuant to which, among other things, (a) the Transferring Subsidiaries
are transferring certain Tower Assets (as hereinafter defined) to Parent Co.,
which will in turn transfer all of such Tower Assets to Tower Sub and (b) SHI
Merger Sub will be merged with and into Merger Sub (the "Merger"), with Merger
Sub being the surviving corporation of such Merger. After the Merger, Tower Sub
will be an indirect, wholly-owned subsidiary of Tower Aggregator.
B. Tower Sub and the Transferring Subsidiaries are parties to a
Master Site Lease Agreement (the "Nextel Master Site Lease Agreement") , Tower
Sub, Parent Co., and Partner (as defined herein) are or may become parties to a
Partner Master Site Lease Agreement (the "Partner Master Site Lease Agreement")
and Tower Aggregator, Tower Sub, Nextel and the Transferring Subsidiaries are
parties to a Master Site Commitment Agreement (the "Master Site Commitment
Agreement"), pursuant to which Tower Assets (in addition to those transferred
pursuant to the Merger Agreement) will be constructed or acquired by Tower Sub
or another Assignor.
C. At the date of execution and delivery hereof, Tower Sub has no
Subsidiaries and Tower Sub is the only Assignor party hereto. Subsequent to the
date hereof, in the event that Tower Sub has any Subsidiary, to which any
existing or future Tower Assets or
1
<PAGE> 3
any portion thereof are sold, assigned, conveyed or otherwise transferred,
pursuant to the Nextel Master Site Lease Agreement, the Partner Master Site
Lease Agreement (if executed) or the Master Site Commitment Agreement, each
such Subsidiary will join in this Agreement as an Assignor hereunder as
provided for herein.
D. It is a condition precedent to the Closing under the Merger
Agreement that Tower Sub and any other Assignors shall have executed and
delivered this Agreement to the Secured Party.
E. Tower Sub, as the only Assignor hereunder on the date hereof,
desires to execute this Agreement to satisfy the condition described in the
preceding paragraph.
NOW, THEREFORE, in consideration of the benefits accruing to Tower
Sub and which may in the future accrue to each additional Assignor (if any)
pursuant to the transactions described in the recitals, the receipt and
sufficiency of which are hereby acknowledged, Tower Sub and each additional
Assignor (if any) by means of the joinder arrangement provided for herein
hereby makes the following representations and warranties and hereby covenants
and agrees as follows:
1. DEFINITIONS
As used in this Agreement, the capitalized terms below have the
meanings hereinafter specified. Other capitalized terms used herein and not
defined shall have the meanings set forth in the Merger Agreement. Whenever
used in this Agreement, any noun or pronoun will be deemed to include both the
singular and plural and to cover all genders. The name assigned this Agreement
and the section captions used herein are for convenience of reference only and
will not affect the interpretation or construction hereof. Unless otherwise
specified, the terms "hereof," "herein" and similar terms refer to this
Agreement as a whole, and references herein to Sections refer to Sections of
this Agreement.
"Agreement" has the meaning specified in the Preamble of this
Agreement.
"Assignor" has the meaning specified in the Preamble of this
Agreement.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy," as amended from time to time, and any successor statute or
statutes.
"Bankruptcy Event" means (i) the commencement by any Assignor of a
voluntary case concerning itself under the Bankruptcy Code, (ii) the
commencement of an involuntary case against an Assignor which petition is not
controverted within 10 days or not dismissed within 60 days after the
commencement of the case, (iii) a custodian (as defined in the Bankruptcy Code)
is appointed for, or takes charge of, all or substantially all of the property
of any Assignor or any Assignor commences any other proceedings under any
reorganization arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency, or liquidation or similar law of any jurisdiction or there is
commenced against any Assignor any such proceeding which remains undismissed
for a period of 60 days, (iv) any order of relief or other order approving of
any such case or proceeding is entered, (v) any Assignor is adjudicated
insolvent or bankrupt, (vi) any Assignor
2
<PAGE> 4
suffers the appointment of a custodian or the like for it or any substantial
portion of its property to continue undischarged or unstayed for a period of 60
days, (vii) any Assignor makes a general assignment for the benefit of its
creditors, (viii) any Assignor shall fail to pay or state that it shall be
unable to pay its debts as they become due, (ix) any Assignor shall call a
meeting of its creditors with a view to arranging a composition or adjustment
of its debts, (x) any Assignor shall, by any act or failure to act, consent to,
approve of or acquiesce in any of the foregoing, or (xi) any corporate action
is taken by any Assignor for the purpose of effecting any of the foregoing.
"Beneficiaries" means the Secured Party and each Affiliate (other
than the Surviving Corporation) of the Secured Party who is a Transferring
Subsidiary having rights under the Master Site Lease Agreement and, if Partner
executes the Partner Master Site Lease Agreement, Partner.
"Business Day" means any day on which there is trading on the New
York Stock Exchange or which constitutes a business day pursuant to the
Intercreditor Agreement.
"Chattel Paper" has the meaning assigned that term under the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Collateral" has the meaning provided in Section 2.1 of this
Agreement.
"Contract Rights" means all rights of Tower Sub or any other
Assignor (including, without limitation, all rights to payment) under each
Contract.
"Contracts" has the meaning assigned that term under the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Documents" has the meaning assigned that term under the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Equipment" means any "equipment," as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by Tower Sub or any Assignor and, in any event,
shall include, but shall not be limited to, all machinery, equipment,
furnishings and fixtures now or hereafter owned by Tower Sub or any Assignor
and any and all additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Event of Default" means the occurrence of (i) any material default
or event of default of any covenant or agreement by Tower Sub or any Assignor
under the Nextel Master Site Lease Agreement or under the Partner Master Site
Lease Agreement, not cured within any grace or cure period provided therein,
(ii) any noncompliance (other than by the Secured Party or any of its
Transferring Subsidiaries) with Sections 6.2 of this Agreement, (iii) any
Bankruptcy Event with respect to Tower Sub or any Assignor, or (iv) any event of
default that results in an acceleration of the Senior Secured Obligations.
<PAGE> 5
"General Intangibles" has the meaning assigned that term under the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Goods" has the meaning assigned that term under the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" has the meaning assigned that term under the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Intercreditor Agreement" has the meaning provided in Section 6.1
of this Agreement.
"Lien" means any mortgage, lien, pledge, security interest,
easement, claim, charge, option, conditional sale or other title retention
agreement or other legal or equitable encumbrance.
"Master Site Commitment Agreement" has the meaning specified in
Recital B of this Agreement.
"Merger" has the meaning provided in Recital A of this Agreement.
"Merger Agreement" has the meaning provided in Recital A of this
Agreement.
"Nextel Master Site Lease Agreement" has the meaning specified in
Recital A of this Agreement.
"Obligations" means (i) the obligations of Tower Sub under the
Nextel Master Site Lease Agreement and/or the Partner Master Site Lease
Agreement and all other obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due) of
each Assignor to the Secured Party or any of the Beneficiaries, whether now
existing or hereafter incurred, under, arising out of or in connection with the
Nextel Master Site Lease Agreement and/or the Partner Master Site Lease
Agreement and the due performance and compliance by each Assignor with all of
the terms, conditions, agreements, representations, and warranties contained
therein; (ii) any and all sums advanced by the Secured Party or the Transferring
Subsidiaries in order to preserve the Collateral or preserve its security
interest in the Collateral; and (iii) in the event of any proceeding for the
collection or enforcement of any obligation, or liabilities of Tower Sub or any
Assignor referred to in clause (i) above, after an Event of Default shall have
occurred and be continuing, the reasonable expenses of re-taking, curing,
maintaining, restoring, holding, preparing for sale or lease, selling or
otherwise disposing of or realizing on the Collateral, or of any exercise by the
Secured Party of its rights or remedies hereunder or under applicable law,
together with reasonable attorneys' fees and court costs.
"Partner" means Nextel Partners Operating Corp., a Delaware
corporation and its permitted successors and assigns under the terms of the
Partner Master Site Lease Agreement.
"Partner Master Site Lease Agreement" has the meaning provided in
Recital B of this Agreement.
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<PAGE> 6
"Permits" means, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority
or agency.
"Permitted Liens" means (i) Liens for taxes and assessments or
governmental charges, (ii) levies not at the time due or which are being
contested in good faith by appropriate proceedings, (iii) mechanics',
materialmen's, repairmen's or other like liens arising in the ordinary course
of business and which are not overdue for a period of more than 30 days or are
being contested in good faith, (iv) Liens securing debt for borrowed money of
the underlying fee owner when Tower Sub or the Assignor is a lessee of
Property, (v) easements or restrictions and other similar encumbrances that do
not materially detract from the utility or value of the property subject
thereof, (vi) Liens securing Senior Secured Obligations, and (vii) leasehold
interests granted to tenants in connection with the lease of space on the Tower
Assets.
"Proceeds" has the meaning assigned that term under the Uniform
Commercial Code as in effect in the State of New York on the date hereof or
under other relevant law and, in any event, shall include, but not be limited
to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Secured Party or an Assignor from time to time with respect to
any of the Collateral, (ii) any and all payments (in any form whatsoever) made
or due and payable to an Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Property" means interests in the real property which comprise or
constitute part of the Tower Assets or on which any of the Tower Assets are
located.
"Secured Party" has the meaning specified in the Preamble of this
Agreement.
"Senior Lender" means each holder, at any time, of any Senior
Secured Obligations.
"Senior Secured Obligations" means, with respect to Tower Sub or any
Assignor, (i) any indebtedness or other obligations (including, without
limitation, obligations which, but for the automatic stay under Section 362(a)
of the Bankruptcy Code, would become due and any expenses recoverable under such
credit facilities) now or hereafter owed by such Assignor to any Person under
any revolving or term loan credit facility or any other facility for borrowed
money, letters of credit or bankers acceptance, or any obligation evidenced by
bonds, debenture, notes or similar obligations, or any guarantees of any of the
foregoing, which indebtedness or obligation is secured by the Collateral in
whole or in part; (ii) any and all sums advanced by a Senior Lender in order to
preserve the Collateral securing such Senior Secured Obligations or preserve its
security interest therein; and (iii) in the event of any proceeding for the
collection or enforcement of any obligation, or liabilities of Tower Sub or any
Assignor referred to in clause (i) above, after an event of default in respect
of such Senior Secured Obligations shall have occurred and be continuing, the
reasonable expenses of re-taking, curing, maintaining, restoring, holding,
preparing for sale or lease, selling or otherwise disposing of or realizing on
the Collateral securing such Senior Secured Obligations, or of any exercise by a
Senior Lender
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<PAGE> 7
of its rights or remedies under any agreement or applicable law in respect of
Senior Secured Obligations, together with reasonable attorney's fees and court
costs; provided, however, that Senior Secured Obligations will not include any
indebtedness or other obligations which are by the terms thereof expressly
subordinated to the Obligations.
"Tower Assets" means (i) communications tower or monopole
structures ("Tower Structures"), tower lighting, grounding systems and fencing,
(ii) all real property and real property leasehold interests (including
easements and rights of way with respect to access roads) that are owned or
held by Tower Sub or any Assignor at the site locations of the Tower
Structures, (iii) all Permits that are necessary for, or were otherwise
obtained in connection with, the construction, use, or operation of a Tower
Structure, and (iv) all documents and records in possession of Tower Sub or any
Assignor relating to the foregoing, provided that such term does not include
Communication Equipment (as defined in the Master Site Commitment Agreement).
2. SECURITY INTERESTS
2.1 GRANT OF SECURITY INTERESTS. As security for the prompt and
complete performance when due of all of the Obligations, Tower Sub and each
Assignor does hereby sell, assign and transfer unto the Secured Party (for
itself and on behalf of the other Beneficiaries), and does hereby grant to the
Secured Party (for itself and on behalf of the other Beneficiaries) a
continuing security interest in, all of the right, title and interest of Tower
Sub and such Assignor in, to and under the assets described in items (i) - (v)
below that constitute part of the Tower Assets acquired by Tower Sub or any
other Assignor pursuant to the Merger Agreement or constructed or acquired by
Tower Sub or any other Assignor pursuant to the Master Site Commitment
Agreement, whether now existing or hereafter from time to time acquired
(collectively, the "Collateral"):
(i) all Contracts (other than those Contracts in respect of which
the grant of a security interest by Tower Sub or an Assignor in favor of
the Secured Party would result in a default by the Assignor thereunder;
provided, however, that Tower Sub and each Assignor shall use
commercially reasonable efforts to obtain the consent of the parties to
the Contracts referred to in this Section 2.1(i) to the Lien in favor of
the Secured Party contemplated and granted by this Agreement), together
with all Contract Rights arising thereunder,
(ii) all Equipment,
(iii) all Permits,
(iv) all other Goods, General Intangibles, Chattel Paper,
Documents and Instruments, and
(v) all Proceeds and products of any and all of the foregoing.
(vi) The security interest of the Secured Party under this Agreement
extends to all Collateral of the kind which is the subject of this
Agreement which Tower Sub or any
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<PAGE> 8
Assignor may acquire at any time during the continuation of this
Agreement and any transfer, purchase, conveyance or assignment by Tower
Sub or any Assignor of the Tower Assets which constitute the Collateral
shall be subject to the lien and security interest of Secured Party
provided for herein.
3. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Tower Sub and each Assignor represents, warrants and covenants,
which representations, warranties and covenants shall survive execution and
delivery of this Agreement, as follows:
3.1 SUBSIDIARY ASSIGNORS; JOINDER AGREEMENT. Each Assignor shall be
and remain at all times for the duration of this Agreement a wholly owned
Subsidiary of Tower Sub. At the time each Assignor becomes a wholly owned
Subsidiary of Tower Sub and obtains any right, title or interest in, to or
under the Collateral or any part thereof, then Tower Sub and such Assignor
shall promptly notify the Secured Party thereof and Assignor shall become a
party to this Agreement by execution of a Joinder Agreement in substantially
the form of Schedule 2 hereto and deliver the Joinder Agreement with supporting
resolutions, incumbency certificates, corporate formation and organizational
documentation as the Secured Party may reasonably request. Each Assignor shall
also execute and deliver all financing statements, filings, registrations and
recordings necessary in the opinion of Secured Party to comply with the
requirements of Section 4.3 hereof.
3.2 NECESSARY FILINGS. Assuming (a) the filing in the appropriate
filing offices of those UCC-1 financing statements listed on Schedule 1 hereto
and (b) the completion of those other actions listed on Schedule 1 hereto, all
filings, registrations, and recordings and actions necessary or appropriate to
create, preserve, protect and perfect the security interest granted by Tower
Sub and any such Assignor to the Secured Party hereby in respect of the
Collateral have been accomplished and the security interest granted to the
Secured Party pursuant to this Agreement in and to the Collateral constitutes a
perfected security interest therein and is entitled to all the rights,
priorities and benefits afforded by the Uniform Commercial Code or other
relevant law as enacted in any relevant jurisdiction to perfected security
interests.
3.3 NO LIENS. Tower Sub and each Assignor is, and as to Collateral
acquired by it from time to time after the date hereof Tower Sub or such
Assignor will be, the owner of all Collateral free from any Lien, security
interest, encumbrance or other right, title or interest of any person (other
than as permitted by Section 3.4 or other Permitted Liens) and Tower Sub and
such Assignor shall defend the Collateral against all claims and demands of all
persons at any time claiming the same or any interest therein adverse to the
Secured Party.
3.4 OTHER FINANCING STATEMENTS. There is no financing statement (or
similar statement or instrument of registration under the law of any
jurisdiction) securing obligations of Tower Sub or any Assignor covering or
purporting to cover any interest of any kind in the Collateral except as
disclosed on Annex A hereto and so long as any of the Master Site Commitment
Agreement, the Nextel Master Site Lease Agreement and the Partner Master Site
Lease Agreement remains in effect, Tower Sub and each Assignor will not execute
or authorize
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to be filed in any public office any financing statement (or similar statement
or instrument of registration under the law of any jurisdiction) or statements
relating to the Collateral, except financing statements filed or to be filed in
respect of or covering the security interests (i) granted hereby by Tower Sub
or by such Assignor or (ii) granted by an Assignor in respect of any Permitted
Liens.
3.5 CHIEF EXECUTIVE OFFICE, ETC.; RECORDS. The chief executive
office of Tower Sub and each Assignor is located at the address indicated on
Annex B hereto. Tower Sub and each Assignor will not move its chief executive
office except to such new location as Tower Sub or such Assignor may establish
in accordance with the last sentence of this Section 3.5. The originals of all
documents evidencing all Contract Rights in respect of the Collateral of Tower
Sub or such Assignor are, and will continue to be, kept at such chief executive
office, or at such new locations as Tower Sub or such Assignor may establish in
accordance with the last sentence of this Section 3.5. Tower Sub or any
Assignor shall not establish new locations for such offices until (i) it shall
have given to the Secured Party not less than 30 days' prior written notice (or
such lesser notice as shall be acceptable to the Secured Party in the case of a
new record location to be established in connection with newly acquired
Contracts) of its intention so to do, clearly describing such new location and
providing such other information in connection therewith as the Secured Party
may reasonably request, and (ii) with respect to such new location, it shall
have taken all action, satisfactory to the Secured Party, to maintain the
security interest of the Secured Party in the Collateral intended to be granted
hereby at all times fully perfected and in full force and effect.
3.6 LOCATION OF EQUIPMENT. All Equipment in respect of the
Collateral held on the date hereof by Tower Sub and each Assignor is located at
one of the locations shown on Annex C attached hereto. Tower Sub and each
Assignor agrees that all Equipment in respect of the Collateral now held or
subsequently acquired by it shall be kept at (or shall be in transport to or
from) any one of the locations shown on Annex C hereto, or such new location as
Tower Sub and such Assignor may establish in accordance with the last sentence
of this Section 3.6. Tower Sub and any Assignor may establish a new location
for Equipment in respect of the Collateral only if it shall have given to the
Secured Party not less than 30 days' prior written notice of its intention so
to do, clearly describing such new location and providing such other
information in connection therewith as the Secured Party may reasonably
request, and with respect to such new location, it shall have taken all action
reasonably satisfactory to the Secured Party to maintain the security interest
of the Secured Party in the Collateral intended to be granted hereby at all
times in fully perfected and in full force and effect.
3.7 RECOURSE. This Agreement is made with full recourse to Tower
Sub and the relevant Assignor and pursuant to and upon all the warranties,
representations, covenants, and agreements on the part of Tower Sub and each
such Assignor contained in this Agreement, in the Nextel Master Site Lease
Agreement or in the Partner Master Site Lease Agreement and otherwise made in
writing by Tower Sub and each such Assignor in connection herewith or
therewith.
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<PAGE> 10
4. PROVISIONS CONCERNING COLLATERAL
4.1 MAINTENANCE OF RECORDS. Tower Sub and each Assignor will keep
and maintain at its own cost and expense satisfactory and complete records of
the Collateral, including, but not limited to, the originals of all
documentation (including each Contract constituting Collateral, but subject to
the requirements of the Senior Lenders) with respect thereto, records of all
payments received, all credits granted thereon and all other dealings
therewith, and Tower Sub and each such Assignor will make the same available to
the Secured Party for inspection, at the Secured Party's own cost and expense,
at any and all reasonable times during normal business hours upon demand and
upon reasonable advance notice.
4.2 PROTECTION OF SECURED PARTY'S SECURITY. Except for the grant of
Permitted Liens, Tower Sub and each Assignor will not do anything or take any
action to impair the rights of the Secured Party in the Collateral.
4.3 FINANCING STATEMENTS. Tower Sub and each Assignor agrees to
sign and deliver to the Secured Party such financing statements, in form
acceptable to the Secured Party, as the Secured Party may from time to time
reasonably request or as are necessary or desirable in the opinion of the
Secured Party to establish and maintain a valid and enforceable security
interest in the Collateral as provided herein and the other rights and security
contemplated hereby all in accordance with the Uniform Commercial Code as
enacted in any and all relevant jurisdictions or any other relevant law. Tower
Sub and each Assignor will pay any applicable filing fees and related expenses.
Tower Sub and each Assignor authorizes the Secured Party to file any such
financing statements without the signature of Tower Sub or such Assignor.
4.4 FURTHER ACTIONS. Subject to the rights of holders of Permitted
Liens, Tower Sub and each Assignor will, at its own expense, make, execute,
endorse, acknowledge, file and/or deliver to the Secured Party from time to
time such lists, descriptions and designations of its Collateral, warehouse
receipts, receipts in the nature of warehouse receipts, bills of lading,
documents of title, vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to the Collateral and other property or rights covered by the
security interest hereby granted, which the Secured Party deems reasonably
appropriate or advisable to perfect, preserve or protect its security interest
in the Collateral.
5. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
5.1 REMEDIES; OBTAINING THE COLLATERAL UPON DEFAULT. Tower Sub and
each Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, subject to any mandatory requirements
of applicable law then in effect, the Secured Party, in addition to any rights
now or hereafter existing under applicable law, shall have all rights as a
secured creditor under the Uniform Commercial Code in all relevant
jurisdictions and may, except as otherwise provided in Section 6 hereof:
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(i) personally, or by agents or attorneys, immediately retake
possession of the Collateral or any part thereof, from Tower Sub or such
Assignor or any other person who then has possession of any part thereof
with or without notice or process of law, and for that purpose may enter
upon Tower Sub's or such Assignor's premises where any of the Collateral
is located and assume operation of the assets constituting the Collateral
or remove the same and use in connection with such removal any and all
services, supplies, aids and other facilities of Tower Sub or such
Assignor;
(ii) instruct the obligor or obligors on any agreement, instrument
or other obligation constituting the Collateral to make any payment
required by the terms of such instrument or agreement directly to the
Secured Party; or
(iii) sell, assign or otherwise liquidate, or direct such Assignor
to sell, assign or otherwise liquidate, any or all of the Collateral or
any part thereof, and direct that the proceeds therefrom be paid directly
to the Secured Party or otherwise take possession of the proceeds of any
such sale or liquidation, it being understood and agreed that to the
extent such Assignor receives any proceeds from the sale or liquidation
of the Collateral, that such proceeds shall be held in trust by such
Assignor for the benefit of the Secured Party;
it being further understood that Tower Sub's and such Assignor's obligation so
to deliver the Collateral (and possession of the sites and communication towers
where such Collateral is located) is of the essence of this Agreement and that,
accordingly, upon application to a court of equity having jurisdiction, the
Secured Party shall be entitled to a decree requiring specific performance by
the Assignor of said obligation.
5.2 REMEDIES; DISPOSITION OF THE COLLATERAL. Upon the occurrence
and continuance of an Event of Default, any Collateral repossessed by the
Secured Party pursuant to Section 5.1 and any other Collateral (whether or not
so repossessed by the Secured Party), except as otherwise provided in Section 6
hereof, may be sold, assigned, leased or otherwise disposed of under one or
more contracts or as an entirety, and without the necessity of gathering at the
place of sale of the property to be sold, and in such manner, at such time or
times, at such place or places and on such terms as may, in compliance with any
mandatory requirements of applicable law, be commercially reasonable. Any of
the Collateral may be sold, leased or otherwise disposed of in any public or
private sale or other proceeding. The Secured Party shall give Tower Sub or the
Assignor at least 10 days' prior written notice of any such private disposition
specifying the time of such proposed disposition and the intended sale price or
other consideration, and shall be subject, for the 10 days' after the giving of
such notice, to the right of Tower Sub or the relevant Assignor or any nominee
to acquire the Collateral involved at a price or for such other consideration
at least equal to such intended sale price or other consideration so specified.
The Secured Party shall give Tower Sub or the Assignor at least 10 days' prior
written notice of any such public disposition specifying the time and place of
such proposed sale and, in the absence of applicable requirements of law, shall
be by public auction (which may, at the Secured Party's option, be subject to
reserve), after publication of notice of such auction not less than 10 days
prior thereto in two newspapers in general circulation in the city where such
Collateral is located. To the extent permitted by any such requirement of law,
the Secured Party on behalf of the Beneficiaries may bid for and become the
purchaser of the Collateral or any item thereof, offered for sale in accordance
with this Section without accountability to Tower
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Sub or the relevant Assignor. If, under mandatory requirements of applicable
law, the Secured Party is required to make disposition of the Collateral within
a period of time which does not permit the giving of notice to Tower Sub or the
Assignor as specified, the Secured Party need give Tower Sub or the relevant
Assignor only such notice of disposition as shall be reasonably practicable in
view of such mandatory requirements of applicable law.
5.3 WAIVER OF CLAIMS. Except as otherwise provided in this
Agreement, TOWER SUB AND EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE SECURED
PARTY'S TAKING POSSESSION OR THE SECURED PARTY'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH TOWER SUB OR
THE ASSIGNOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE
UNITED STATES OR OF ANY STATE, and Tower Sub and each Assignor hereby further
waives, to the extent permitted by law:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the Secured Party's gross
negligence or wilful misconduct;
(ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Secured
Party's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and Tower Sub and
each Assignor, for itself and all who may claim under it, insofar as it
or they now or hereafter lawfully may, hereby waives the benefit of all
such laws.
Any sale of, or the grant of options to purchase, or any other realization
upon, any Collateral shall operate to divest all right, title, interest, claim
and demand, either at law or in equity, of Tower Sub or the relevant Assignor
therein and thereto, and shall be a perpetual bar both at law and in equity
against Tower Sub and the relevant Assignor and against any and all persons
claiming or attempting to claim the Collateral so sold, optioned or realized
upon, or any part thereof, from, through and under Tower Sub or the relevant
Assignor.
5.4 APPLICATION OF PROCEEDS. (a) Subject to Section 6, the proceeds
of any Collateral obtained pursuant to Section 5.1 or disposed of pursuant to
Section 5.2 shall be used to satisfy such of the outstanding Obligations as are
monetary Obligations.
(b) It is understood that Tower Sub and the Assignors shall remain
jointly and severally liable to the extent of any deficiency between (x) the
amount of the proceeds of the Collateral applied as provided in Section 5.4(a)
and (y) the aggregate outstanding amount of such of the Obligations as are
monetary Obligations.
5.5 REMEDIES CUMULATIVE. Each and every right, power and
remedy hereby specifically given to the Secured Party shall be in addition to
every other right, power and
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remedy specifically given under this Agreement, the Master Site
Commitment Agreement, the Partner Master Site Lease Agreement or the Nextel
Master Site Lease Agreement or now or hereafter existing at law or in equity,
or by statute and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time or
simultaneously and as often and in such order as may be deemed expedient by the
Secured Party or any Beneficiary entitled to exercise such right, power or
remedy. All such rights, powers and remedies shall be cumulative and the
exercise or the beginning of exercise of one shall not be deemed a waiver of
the right to exercise of any other or others. No delay or omission of the
Secured Party or any Beneficiary in the exercise any such right, power or
remedy and no renewal or extension of any of the Obligations shall impair any
such right, power or remedy or shall be construed to be a waiver of any default
or Event of Default or an acquiescence therein. In the event that the Secured
Party shall bring any suit to enforce any of its rights hereunder and shall be
entitled to judgment, then in such suit the Secured Party may recover
reasonable expenses, including attorneys' fees, and the amounts thereof shall
be included in such judgment.
5.6 SECURED PARTY TO ACT ON BEHALF OF TRANSFERRING SUBSIDIARIES.
The Transferring Subsidiaries and Partner agree by their acceptance of the
benefits hereof that this Agreement may be enforced on their behalf only by the
action of the Secured Party.
6. SUBORDINATION
6.1 SUBORDINATION. Subject to the rights of quiet enjoyment as
enjoyed by the Beneficiaries and certain set off rights of the Secured Party
and/or the Beneficiaries, the rights of first refusal on the communication
tower sites under the Nextel Master Site Lease Agreement and the Partner Master
Site Lease Agreement in favor of Secured Party or the Transferring
Subsidiaries, and the remaining provisions of this Section 6, so long as any
Senior Secured Obligations are outstanding, the rights of the Secured Party
with respect to any of the Collateral shall at all times be wholly subordinate
and junior to the Senior Secured Obligations, all to the extent set forth in
that certain Intercreditor and Subordination Agreement dated as of even date
herewith, between the Secured Party and the Senior Lenders as the same may be
amended from time to time (the "Intercreditor Agreement"). Upon the request of
Tower Sub or any other Assignor, the Secured Party shall enter into any other
intercreditor or subordination agreement with any Senior Lender or Senior
Lenders so long as the terms of any such agreement are not more onerous in the
aggregate to the Secured Party than those contained in the Intercreditor
Agreement.
6.2 NON-DISTURBANCE. Subject to the terms of the Intercreditor
Agreement, if any action or proceeding is commenced by any Senior Lender for
foreclosure on any item of Collateral, then any sale of Collateral in such
action or proceeding shall be made expressly subject to the rights of the
Secured Party and of the relevant Beneficiaries under the Subordination,
Non-Disturbance and Attornment Agreement in the form attached as Exhibit C to
the Nextel Master Site Lease Agreement or the Partner Master Site Lease
Agreement, as appropriate.
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7. MISCELLANEOUS
7.1 NOTICES. All notices and other communications hereunder shall
be in writing and shall be delivered or mailed by first class mail, postage
prepaid, addressed:
(i) if to Tower Sub or any Assignor at:
Tower Asset Sub, Inc.
8000 Regency Parkway, Suite 570
Cary, NC 27511
Attn: Stephen H. Clark
Fax: (919) 468-8522
and (ii) if to the Secured Party, at:
Nextel Communications, Inc.
1505 Farm Credit Drive
McLean, VA 22102
Attn: General Counsel
Fax: (703) 394-3896
or at such other address as shall have been furnished in writing by any person
described above to the party required to give notice hereunder.
7.2 WAIVER; AMENDMENT. (a) None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by Tower Sub, each Assignor and the
Secured Party.
(b) No delay on the part of the Secured Party in exercising any of
its rights, remedies, powers and privileges hereunder or partial or single
exercise thereof, shall constitute a waiver thereof. No notice to or demand on
Tower Sub or any Assignor in any case shall entitle it to any other or further
notice or demand in similar or other circumstances or constitute a waiver of
any of the rights of the Secured Party hereunder to any other or further action
in any circumstances without notice or demand.
7.3 OBLIGATIONS ABSOLUTE. The obligations of Tower Sub and each
Assignor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation:
(i) any renewal, extension, amendment or modification of, or
addition or supplement to or deletion from the Merger Agreement, the
Master Site Commitment Agreement, the Partner Master Site Lease
Agreement, or the Nextel Master Site Lease Agreement or any other
instrument or agreement referred to therein, or any assignment or
transfer of any thereof;
13
<PAGE> 15
(ii) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such agreement or instrument or this
Agreement except as expressly provided in such renewal, extension,
amendment, modification, addition, supplement, assignment or transfer;
(iii) any furnishing of any additional security to the Secured
Party or its assignee or any acceptance thereof or any release of any
security by the Secured Party or its assignee;
(iv) any limitation on any person's liability or obligations under
any such instrument or agreement or any invalidity or unenforceability,
in whole or in part, of any such instrument or agreement or any term
thereof; or
(v) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
Tower Sub or an Assignor or any Subsidiary of Tower Sub or an Assignor,
or any action taken with respect to this Agreement by any trustee or
receiver, or by any court, in any such proceeding, whether or not Tower
Sub or an Assignor shall have notice or knowledge of any of the
foregoing.
7.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
Tower Sub and each Assignor and its successors and assigns and shall inure to
the benefit of the Secured Party and its successors and assigns, but neither
Tower Sub nor any Assignor may transfer or assign any or all of its rights or
obligations hereunder without the written consent of the Secured Party. All
agreements, statements, representations and warranties made by Tower Sub and
each Assignor herein or in any certificate or other instrument delivered by
Tower Sub or such Assignor or on its behalf under this Agreement shall be
considered to have been relied upon by the Transferring Subsidiaries and shall
survive the execution and delivery of this Agreement regardless of any
investigation made by the Transferring Subsidiaries on their behalf.
7.5 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
7.6 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT
OF LAWS THEREOF EXCEPT TO THE EXTENT THAT THE LAW OF ANOTHER JURISDICTION IS
MANDATORY.
7.7 DUTIES OF TOWER SUB AND THE ASSIGNORS. It is expressly agreed,
anything herein contained to the contrary notwithstanding, that Tower Sub and
each Assignor shall remain liable to perform all of the obligations, if any,
assumed by it with respect to the Collateral and the Secured Party shall not
have any obligations or liabilities with respect to any Collateral by reason of
or arising out of this Agreement, nor shall the Secured Party be required or
obligated in
14
<PAGE> 16
any manner to perform or fulfill any of the obligations of Tower Sub or any
Assignor under or with respect to any Collateral.
7.8 TERMINATION; RELEASE. After the termination of the Nextel
Master Site Lease Agreement in its entirety and when no obligations of Tower
Sub and the other Assignors are outstanding thereunder, this Agreement shall
terminate, and the Secured Party, at the request and expense of Tower Sub and
the other Assignors, will execute and deliver to Tower Sub or the relevant
Assignor a proper instrument or instruments (including Uniform Commercial Code
termination statements on form UCC-3) acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to
the relevant Assignor (without recourse and without any representation or
warranty) such of the Collateral as may be in the possession of the Secured
Party and as has not theretofore been sold or otherwise applied or released
pursuant to this Agreement.
8. WAIVER OF JURY TRIAL
Each Assignor and the Secured Party each hereby irrevocably waives
all right to a trial by jury in any action, proceeding or counterclaim arising
out of or relating to this Agreement or the transactions contemplated hereby.
15
<PAGE> 17
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the parties as of the date first above written.
TOWER ASSET SUB, INC., for itself and each
Assignor
By: /s/ THOMAS J. SIDMAN
--------------------------------
Thomas J. Sidman, President
TOWER PARENT CORP.
as Secured Party
By: /s/ THOMAS J. SIDMAN
---------------------------------
Thomas J. Sidman, Vice President
16
<PAGE> 1
EXHIBIT 10.33
- ------------------------------------------------------------------------------
MASTER SITE LEASE AGREEMENT
BETWEEN
NEXTEL OF NEW YORK, INC.,
NEXTEL COMMUNICATIONS OF THE MID-ATLANTIC, INC.,
NEXTEL SOUTH CORP.,
NEXTEL OF TEXAS, INC.,
NEXTEL WEST CORP.,
AND NEXTEL OF CALIFORNIA, INC.
AND
TOWER ASSET SUB, INC. AND
LANDLORD PARTIES AS DEFINED HEREIN
Dated as of _______ __, 1999
- ------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
PAGE
- -----
<TABLE>
<CAPTION>
RECITALS1
<S> <C>
1. Incorporation of Recitals; Definitions5
2. Master Lease5
3. Premises6
4. Use6
5. Term6
6. Rent7
7. Facilities; Utilities; Access9
8. Interference11
9. RF Compliance12
10. Taxes13
11. Waiver of Liens13
12. Termination13
13. Destruction or Condemnation14
14. Insurance14
15. Waiver of Subrogation15
16. Assignment and Subletting16
17. Warranties; Quiet Enjoyment17
18. Installations, Replacements, Maintenance and Repairs18
19. Right of First Refusal20
20. Hazardous Substances21
21. Indemnity22
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
22. Tower Marking and Lighting Requirements22
23. Estoppels/SNDAS23
24. Prime Lease23
25. Conduct of Landlord24
26. Tests and Contingencies24
27. Default; Remedies; Dispute Resolution25
28. Miscellaneous27
</TABLE>
<TABLE>
<S> <C>
Exhibits A-1 Site Schedule
A-2 Site Schedule (Microwave)
Exhibit B Estoppel Certificate
Exhibit C Subordination, Non-Disturbance and Attornment Agreement
Exhibit D Memorandum of Agreement
</TABLE>
<PAGE> 4
MASTER SITE LEASE AGREEMENT
This Master Site Lease Agreement ("Lease") is entered into as of the
_____ day of April, 1999 (the "Closing Date"), between Nextel of New York,
Inc., a Delaware corporation, Nextel Communications of the Mid-Atlantic, Inc.,
a Delaware corporation, Nextel South Corp., a Georgia corporation, Nextel of
Texas, Inc., a Texas corporation, Nextel West Corp., a Delaware corporation and
Nextel of California, Inc., a Delaware corporation, each d/b/a Nextel
Communications (hereafter individually or collectively, as the context may
require, "Tenant"), and Tower Asset Sub, Inc., a Delaware corporation ("Tower
Sub") (together with its successors and assigns and the Landlord Parties
described herein, in each case individually or collectively, as the context may
require, "Landlord").
RECITALS
A. Tenant is licensed by the Federal Communications Commission ("FCC")
to construct and operate communications systems, including specialized mobile
radio ("SMR"), throughout the United States.
B. Nextel Communications, Inc., a Delaware corporation ("Nextel"),
Tower Parent Corp., a Delaware corporation ("Parent Co."), Tower Merger
Vehicle, Inc., a Delaware corporation ("Merger Sub"), Tower Sub, SpectraSite
Holdings, Inc., a Delaware corporation ("Tower Aggregator") SpectraSite
Communications, Inc., a Delaware corporation ("SCI"), and SHI Merger Sub, Inc.,
a Delaware corporation ("SHI Merger Sub") are parties to a certain Agreement
and Plan of Merger dated as of February 10, 1999, as amended (the "Merger
Agreement"). The Merger Agreement contemplates, among other things, that (i)
prior to the merger of SHI Merger Sub with and into Merger Sub (the "Merger"),
Tenant will transfer to Parent Co. and Parent Co. will, in turn, transfer to
Tower Sub, certain towers and other improvements (defined as "Existing Towers"
and "Additional Towers" in the Merger Agreement), and (ii) from time to time
after the consummation of the Merger (the "Closing"), certain Affiliates (as
hereinafter defined) of Nextel will sell, transfer or assign to Tower Sub
certain towers and other improvements, the construction of which is completed
after the Closing by or for Tenant or to which Tenant otherwise acquires rights
after the Closing (such additional towers and other improvements are defined as
or are otherwise deemed to be "Purchased New Sites" and "Constructed New Sites"
in, and such transfers and assignments will be undertaken pursuant to, the
terms of that certain Master Site Commitment Agreement dated as of the Closing
Date (the "Master Site Commitment Agreement")). The Existing Towers, the
Additional Towers, the Purchased New Sites, and the Constructed New Sites are
collectively referred to herein as the "Towers Package," and the various
transactions in which Tower Sub or its successors and assigns acquire any
portion or all of the Towers Package are referred to herein as the "Towers
Transactions." "Affiliate" shall have the meaning set forth in Rule 12(b)-2
under the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
<PAGE> 5
C. It is the intent of the parties to this Lease that this Lease sets
forth the monthly rental rate and related adjustment procedures set forth in
Section 6 of this Lease, the terms relating to the payment of Rent set forth in
Section 6 of this Lease, the terms relating to the payment of taxes set forth
in Section 10 of this Lease, the terms relating to the procurement and
maintenance of insurance coverage set forth in Section 14 of this Lease and the
terms relating to the monthly rates for installation of microwave antennas and
other additional equipment set forth in Section 6 of this Lease (such terms
being collectively referred to herein as the "Economic Terms") and all the
other terms and conditions (all of the terms and conditions contained in the
body of this Lease, but excluding all Economic Terms, herein called the
"Substantive Terms and Conditions") that are applicable to each relevant
Tenant's (including, as appropriate, such Tenant's successors and permitted
assigns) lease and/or sublease of platform space on the towers and the right to
use and/or benefit from other improvements included within the Towers Package
(including any related interests in real property contained in such Towers
Package, on which such towers and other improvements are situated or which
otherwise benefit or provide access to such towers and other improvements; such
related interests in real property, with reference to any particular tower,
individually an "Existing Site" and collectively the "Existing Sites").
D. The parties also intend that, with respect to each relevant
Tenant's (including as appropriate, such Tenant's successors and permitted
assigns) lease and/or sublease of platform space on towers and of space on
other communications sites (such as, by way of example and not limitation,
rooftops and water tanks) and the right to use and/or benefit from other
improvements (including related interests in real property of a nature
comparable or equivalent to the Existing Sites and the Landlord Sites, as
hereinafter defined) pursuant to leases, licenses, co-location or other similar
agreements (collectively, "Pre-existing Agreements") that either are (i) in
effect on the date hereof between such Tenant and Tower Aggregator (or any
controlled Affiliate of Tower Aggregator) or (ii) in effect on the date hereof
or are hereafter entered into, in either case between such Tenant and any third
party other than Tower Aggregator (or any controlled Affiliate of Tower
Aggregator) which, subsequent to the date on which the relevant Pre-existing
Agreement(s) are entered into, becomes one of the Landlord Parties hereunder
(individually a "Pre-existing Site" and collectively, "Pre-existing Sites"),
the Economic Terms relating to Pre-existing Sites will continue, but this Lease
shall be deemed to set forth all of the Substantive Terms and Conditions
applicable to Pre-existing Sites and shall replace and supersede in their
entirety all contrary, conflicting or inconsistent terms and conditions now or
hereafter in force or effect.
E. Finally, the parties intend that this Lease set forth the Economic
Terms and the Substantive Terms and Conditions that shall be applicable to each
relevant Tenant's (including, as appropriate, such Tenant's successors and
permitted assigns) lease and/or sublease of platform space on towers and of
space on other communications sites (such as, by way of example and not of
limitation, rooftops and water tanks) and the right to use and/or benefit from
other improvements (including related interests in real property of a nature
comparable or equivalent to the Sites) now owned or hereafter acquired (other
than the Existing Sites and the Pre-existing Sites), at any location in the
United States (including Alaska, Hawaii, Puerto Rico and all other United
States territories, possessions and protectorates), by Landlord, any successor
in interest to Landlord, or any controlled Affiliate of Landlord (the "Landlord
Parties") (individually a
<PAGE> 6
"Landlord Site" and collectively, "Landlord Sites"). The Existing Sites,
Pre-existing Sites and Landlord Sites are sometimes referred to individually in
this Lease as a "Site" and collectively as the "Sites."
F. As further consideration for the sale, transfer, assignment and
Merger, Landlord and Tenant have agreed to stagger the initial terms of this
Lease as it relates to the Existing Sites (other than those relating to
Constructed New Sites and Purchased New Sites).
G. Landlord and Tenant have agreed to execute and deliver Site
Schedules for each Existing Site, each Pre-existing Site and each Landlord Site
described in the foregoing recitals, which shall be attached to and made a part
of this Lease, with each such Site to be subject to the terms and conditions
hereinafter set forth in this Lease.
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. INCORPORATION OF RECITALS; DEFINITIONS. Each of the foregoing recitals is
incorporated and made a part of this Lease as if restated in its entirety
herein. Whenever used in this Lease, any noun or pronoun will be deemed to
include both the singular and plural and to cover all genders. Unless otherwise
specified, the terms "hereof", "herein" and similar terms refer to this Lease
as a whole, and references to sections or paragraphs refer to sections or
paragraphs of this Lease.
2. MASTER LEASE. (a) This Lease sets forth the Substantive Terms and
Conditions upon which a portion of each Existing Site, each Pre-existing Site
and (subject to Subparagraph 2(b) hereof) each Landlord Site is leased or
licensed by Landlord to Tenant and the Economic Terms upon which a portion of
each Existing Site and Landlord Site is leased or licensed by Landlord to
Tenant. For purposes of this Lease, the term "lease" shall mean lease,
sublease, license or sublicense, as the context may require for any Site. The
parties shall execute and attach hereto one or more, as applicable, "Site
Schedules" in the forms set forth on Exhibits A-1 and A-2 (Microwave) which are
incorporated herein by this reference for each Existing Site, each Pre-existing
Site and (subject to Subparagraph 2(b) hereof) each Landlord Site subject to
this Lease. The terms and conditions of this Lease shall govern and control in
the event of a discrepancy or inconsistency with the terms and conditions of
any Site Schedule. Site-specific terms which apply only to a particular Site
shall be set forth on the Site Schedule.
(b) Landlord and Tenant have agreed that any Landlord Site now or
hereafter owned or controlled by Landlord or any controlled Affiliate of Tower
Aggregator shall, subject to the provisions of Section 2.5(c) of the Master
Site Commitment Agreement, be made available for lease by Landlord or any
controlled Affiliate of Tower Aggregator to Tenant. Landlord shall, no less
frequently than every thirty (30) days, notify Tenant in writing of all
Landlord Sites owned or controlled by Landlord or any controlled Affiliate of
Tower Aggregator, as well as each such Landlord Site's latitude, longitude,
available capacity, available ground space and any other pertinent information
available to Landlord or any controlled Affiliate of Tower Aggregator, with
such list and information to be in a form reasonably acceptable to Tenant.
Landlord shall
<PAGE> 7
use best efforts to make capacity and/or space available on any Landlord Site
desired by Tenant subject to the available capacity and space of such Landlord
Site. Tenant shall have the right, to be exercised by providing notice to
Landlord, to lease any such Landlord Site on the Substantive Terms and
Conditions and Economic Terms set forth in this Lease, whereupon the parties
shall execute and attach hereto a Site Schedule for such Landlord Site.
3. PREMISES. Landlord either owns, leases or licenses (or in the future will
own, lease or license) the Sites and the improvements thereon, which
improvements may include, without limitation, buildings, water tanks, poles and
tower structures (the "Antenna Sites"). If Landlord leases or licenses any
Site, Landlord shall provide Tenant upon request with a copy of Landlord's
lease or license and all amendments or modifications thereto (the "Prime
Lease"), which will be attached to each affected Site Schedule as Exhibit 4. If
required by the terms of the Prime Lease, Landlord shall use best efforts to
obtain the written consent of the prime landlord or licensor to this Lease and
the relevant Site Schedule which shall include specifically the consent to
Tenant's rights pursuant to Section 16 of this Lease; provided, however, that
the Landlord shall have no obligation to obtain the written consent of the
prime landlord or licensor with respect to any Site transferred under and
pursuant to the Merger Agreement. If Landlord shall fail to obtain such
required written consent of the prime landlord or licensor for any Sites other
than Sites being transferred under and pursuant to the Merger Agreement at
Closing, then Tenant shall not be obligated to enter into a Site Schedule for
such Site. Upon execution of each Site Schedule (but subject to Section 28(m)
of this Lease) and subject to the terms and conditions of this Lease and the
Site Schedule, Landlord hereby leases to Tenant, and Tenant leases from
Landlord, space on each Site as more particularly described in each Site
Schedule and space on the related Antenna Site (collectively, the "Premises")
and grants Tenant the right, subject to the rights of existing tenants, to
install and maintain transmission and utility wires, poles, cables, conduits
and pipes on each Site including over, under or along a right-of-way extending
from the nearest public right-of-way to the Premises; said Premises and
right-of-way for access being substantially as described in Exhibits 1 and 2
annexed to each individual Site Schedule. For all Existing Sites included in
the Towers Package for which Tenant has provided the Site Acquisition Work (as
defined in the Master Site Commitment Agreement) Tenant agrees that whatever
description of the Premises and access thereto is provided by Tenant in
connection with Tenant's transfer and assignment of such Existing Sites to
Landlord (or its predecessor in interest) shall be the description utilized in
the Site Schedules for such Existing Sites.
4. USE. The Premises may be used by Tenant for any activity in connection
with the provision of communications services subject to the terms, covenants
and conditions of this Lease.
5. TERM.
(a) The term ("Term") of Tenant's right to use any Site shall be five (5)
years commencing on the date specified in the Site Schedule ("Commencement
Date"), and terminating on the fifth anniversary of the Commencement Date except
that the initial term for the Existing Sites (other than those relating to the
Purchased New Sites and the Constructed New Sites) shall be divided as equally
as possible into five (5), six (6), seven (7) and eight (8) years, unless
earlier terminated by Tenant as set forth herein, which Term shall be specified
in the Site
<PAGE> 8
Schedules. Unless the Tenant is then in default beyond all applicable notice
and cure periods, Tenant shall have the right to extend the Term of its rights
to each Site for five (5) successive five (5) year periods ("Renewal Terms") on
the same terms and conditions as set forth herein or such shorter term as may
be provided in any Prime Lease. The right to use a Site shall automatically be
extended for each successive Renewal Term unless Tenant notifies Landlord of
its intention not to renew prior to commencement of the succeeding Renewal
Term. If the Prime Lease is extended, the number of Renewal Terms hereunder
shall automatically be increased to correspond with the maximum term, including
options, available under the Prime Lease.
(b) Subject to the term of the Prime Lease, Tenant may elect, upon
expiration of the final Renewal Term set forth above, to further extend the
term of its right to use any Site on the same terms and conditions set forth
herein.
(c) Subject to the provisions of Section 24 hereof, if Tenant shall
hold possession of the Premises after the expiration or earlier termination of
the Term or any Renewal Term or pending negotiation of an extension, Tenant's
right to use such Premises shall automatically without notice become a
month-to-month lease on the same terms and conditions set forth herein, and
Tenant's possession hereunder a month-to-month tenancy.
(d) Tenant shall have the right, which shall be expressly limited to
one time per Site Schedule per Term, to trade or exchange the Term of any
particular Site for the Term of another Site, upon written notice to Landlord,
which written notice shall specify with particularity which Site expiration
dates and Sites are being exchanged, and which notice shall constitute an
amendment to the two affected Site Schedules. For example, during the initial
Term, Tenant may elect to exchange the expiration date of a Site having an
eight (8) year Term with the expiration date of another Site having a five (5)
year Term, but may not thereafter initiate another exchange or trade of
expiration dates for such Sites until after the end of the then-current Terms
as to such Sites.
(e) This Lease shall remain in effect until expiration or termination
of Tenant's right to use all Sites made available pursuant to this Lease.
6. RENT. (a) Within 15 days of the Commencement Date for each Site (other
than a Pre-existing Site) subject to this Lease at any time, and on the first
day of each month thereafter, Tenant shall pay to Landlord as rent One Thousand
Six Hundred and 00/100 Dollars ($1,600.00) per month ("Rent") for each Existing
Tower, each Additional Tower, each Constructed New Site, each Purchased New
Site, and each Landlord Site, in consideration of Landlord's covenants and
obligations set forth in this Lease and Landlord's agreement to lease and
demise to Tenant space on the Antenna Sites on the Premises that is sufficient
for the installation and operation of the following or equivalent items:
-- Twelve (12) panel antenna array.
-- Two (2) GPS units: one (1) operational and one (1) backup,
with 1/2" coax to each unit. GPS units must have an
unobstructed view of the sky.
-- Three (3) Tower Top Amplifiers (TTA). Each TTA
will have two(2) runs of 7/8" coax. TTA
locations also require one (1) additional run
of 7/8" coax for use as a
<PAGE> 9
test line.
-- Each antenna will have 1 5/8" coax runs. Antennas will have
twenty (20) foot vertical antenna separation between antenna
mounts.
-- One air conditioned shelter not to exceed 10' x 20'; together
with adequate pad space.
-- One standby generator; together with adequate pad or shelter
space for same.
Rent for any fractional month at the beginning or at the end of a Term or
Renewal Term shall be prorated. On each annual anniversary of each Commencement
Date, the Rent shall be increased by three percent (3%) over the preceding
year's Rent amount. Rent shall be payable to Landlord at SpectraSite
Communications, Inc., SpectraSite Communications, Inc., P.O. Box 751760,
Charlotte, NC 28275-1760, Attention: Accounts Receivable.
(b) Provided that additional capacity is or can be made available at
the Premises and subject to the rights of existing tenants to space on the
Site, Tenant shall have the right, at its sole option, to lease additional
space on the Premises that is sufficient to permit Tenant to add one or more
additional sets of Tenant Facilities (defined in Section 7(a)) or equivalent.
If Tenant shall exercise its option to add additional sets of Tenant Facilities
on any Site pursuant to this subparagraph, Landlord and Tenant shall execute a
new Site Schedule for each such additional Tenant Facilities, which shall be
governed by the terms of this Lease as applied to such Site Schedule. For each
new additional Site Schedule executed for additional Tenant Facilities on a
Merger Site (as defined in the Master Site Commitment Agreement), Tenant shall
pay to Landlord as rent an amount equal to $1,600.00 per month, increased by
three percent (3%) for each anniversary of the Closing Date (as defined in the
Merger Agreement) which shall have passed prior to the Commencement Date of
such new Site Schedule. For each new additional Site Schedule executed for
additional Tenant Facilities on a Constructed New Site or Purchased New Site,
Tenant shall pay to Landlord as rent the amount of $1,600.00 per month,
increased by three percent (3%) for each anniversary of the Commencement Date
of the original Site Schedule for such Constructed New Site or Purchased New
Site. Any additional rent or payments payable under new additional Site
Schedules executed pursuant to this subparagraph 6(b) shall be deemed to be
"Rent" for all purposes of this Lease, including without limitation the terms
of this Lease providing that Rent shall be increased by three percent (3%) on
each anniversary of each Commencement Date. The determination of whether
additional capacity exists to accommodate the installation of one or more sets
of additional Tenant Facilities shall be made by Landlord in Landlord's
reasonable discretion and shall include a consideration of strutural and
wind-loading capacity of the tower including the then existing installations on
the tower and any equipment which may be installed on the tower in the future
pursuant to a binding agreement that has been entered into by Landlord. If
additional capacity can be made available by modifying or reinforcing the
existing tower structure, Tenant shall have the right to make such
modifications or reinforcements at its cost and expense, provided such
modifications or reinforcements comply with all applicable laws, are consistent
with the recommendations of any structural analysis or report undertaken for
such tower and do not interfere with the Tenant Facilities of other tenants or
the operation thereof.
<PAGE> 10
(c) In addition, provided that additional capacity is or can be made
available at the Premises, Tenant shall have the right, at its sole option and
expense, to install microwave antennas for a monthly rental payment of One and
50/100 Dollars ($1.50) per linear foot per microwave antenna mounting height,
using standard microwave cabling, plus (i) $0 for antenna dishes less than or
equal to two (2) feet in diameter, (ii) $100 for antenna dishes more than two
(2) feet but less than or equal to four (4) feet in diameter, (iii) $200 for
antenna dishes more than four (4) feet but less than or equal to six (6) feet
in diameter, and (iv) $300 for antenna dishes more than six (6) feet in
diameter. All grid dishes must contain de-icers and all dishes larger than two
(2) feet in diameter must contain a radome cover. Installations above 250 feet
are subject to Landlord's reasonable review and approval. The parties shall
execute a new Site Schedule in the form set forth on Exhibit A-2 if any of the
foregoing equipment is placed on a Site. Any additional rent or payments
payable under a new Site Schedule executed pursuant to this subparagraph 6(c)
shall be deemed to be "Rent" for all purposes of this Lease, including without
limitation the terms of this Lease providing that Rent shall be increased by
three percent (3%) on each anniversary of each Commencement Date.
(d) The foregoing Rent provisions shall not apply to the Pre-existing
Sites for the duration of the then current term of the Pre-existing Agreement,
but all other Substantive Terms and Conditions of this Lease shall apply,
including, without limitation, the right to add additional Tenant Facilities as
set forth in subparagraphs (b) and (c) above. To the extent that any
Pre-existing Agreement contains terms with respect to microwave antennas that
are inconsistent with subparagraph (c), however, the terms of such Pre-existing
Agreement shall govern and shall be described with specificity in the Site
Schedule for such Pre-existing Site. Any existing agreements or contracts
between Landlord and Tenant relating to any Pre-existing Site, other than such
Pre-existing Agreements which are hereby amended and restated and made subject
to this Lease by the execution of each Site Schedule, and any inconsistent
terms (other than the Economic Terms) contained in the Pre-existing Agreements
(except as otherwise preserved herein) are hereby expressly agreed to be null,
void and of no further force and effect.
7. FACILITIES; UTILITIES; ACCESS.
(a) Tenant has the right, subject to the terms and provisions of the
Prime Lease and governmental regulations and approvals, to erect, maintain and
operate on each Premises radio communications facilities, including without
limitation utility lines, transmission lines, air conditioned equipment
shelter(s), electronic equipment, radio transmitting and receiving antennas and
supporting equipment and structures thereto, including poles, cables, conduits,
and pipes over, under or along a right-of-way across the Site from the nearest
public right-of-way, and other accessories appropriate to the successful and
secure operation of its communications facilities all as more particularly
described in Section 6 and on Exhibits 1 and 2 to each Site Schedule
(collectively, the "Tenant Facilities") and Tenant shall be entitled to replace
any thereof from time to time provided that the replacement equipment is no
larger than the original tenant facilities, places no additional structural or
wind load on the tower and requires no additional space other than the
Premises. Tenant shall be responsible for all costs and expenses associated
with the purchase, installation, shipping, maintenance and repair of the Tenant
Facilities. In connection therewith, Tenant has the right to do all work
necessary to prepare, maintain and alter
<PAGE> 11
the Premises for Tenant's business operations and to install transmission lines
connecting the antennas to the transmitters and receivers. Title to the Tenant
Facilities shall be held by Tenant, and Landlord access to the Tenant
Facilities shall be restricted in any manner that Tenant, in its reasonable
discretion, deems appropriate. All Tenant Facilities shall remain Tenant's
personal property and are not fixtures. Tenant has the right to remove all
Tenant Facilities on or before the expiration or earlier termination of any
Term.
(b) Tenant shall have the right to draw electricity and other
utilities from the existing utilities on each Site or obtain separate utility
service from any utility company that will provide service to the Site.
Tenant's utilities shall be separately metered, and Tenant shall only be
responsible for those utility bills rendered directly to Tenant by the
servicing utility company. Tenant shall be permitted to install and operate a
standby power generator on the Premises, subject to prime landlord approval and
governmental regulations and required approvals, for Tenant's exclusive use.
(c) In the event that T-1 or other comparable transmission service for
the connection of the Tenant Facilities to Tenant's communications network is
unavailable at a Site, Tenant shall have the right to install on a temporary
basis at such Site microwave antennas and related cabling and equipment
("Temporary Microwave Facilities") in lieu of such T-1 or comparable
transmission lines. The parties shall execute a Site Schedule in the form of
Exhibit A-2 for the Temporary Microwave Facilities, provided however that such
Site Schedule shall be for a term of twelve (12) months, terminable by Tenant
during such twelve-month period upon ten (10) days written notice to Landlord
following connection of a T-1 or comparable transmission service to such Site.
Upon the expiration of the foregoing twelve-month period, or any earlier
termination of a Site Schedule for Temporary Microwave Facilities, Tenant shall
have the right to convert the applicable Site Schedule to a full five (5) year
term pursuant to Section 6(c) above by written notice to Landlord. In the event
Tenant shall convert a Site Schedule for Temporary Microwave Facilities, such
converted Site Schedule shall thereafter be governed by Section 6(c) hereof. If
Tenant shall fail to convert any Site Schedule for Temporary Microwave
Facilities, then the same shall expire, and be null and void from and after the
date of expiration.
(d) Unless expressly limited by the terms of a Prime Lease, which
terms must be identified and described on each affected Site Schedule, Tenant,
Tenant's employees, agents, subcontractors, lenders and invitees shall have
access to the Premises without notice to Landlord twenty-four (24) hours a day,
seven (7) days a week, at no charge. Landlord grants to Tenant, and its agents,
employees, contractors, guests and invitees, a non-exclusive right and easement
for pedestrian and vehicular ingress and egress.
(e) Unless otherwise specified in the applicable Site Schedule,
Landlord shall maintain all access roadways from the nearest public roadway to
the Premises in a manner sufficient to allow pedestrian and vehicular access at
all times under normal weather conditions. Landlord shall be responsible for
maintaining and repairing such roadway, at its sole expense.
(f) Landlord acknowledges that the Rent does not include the transport
of signals or the interconnection by Landlord or any third party with Tenant's
communications network.
<PAGE> 12
(g) All construction, installations and operations in connection with
this Lease by Tenant shall meet with all applicable rules and regulations of
the FCC, FAA (as hereinafter defined) and all applicable codes and regulations
of the city, county, and state concerned. Landlord assumes no responsibility
for the licensing, operation and maintenance of the Tenant Facilities. Tenant
has the responsibility of carrying out the terms of Tenant's FCC license with
respect to tower light observation and notification to the FAA if those
requirements as imposed on Tenant are in excess of those required of Landlord.
Tenant covenants that the equipment and the construction, installation,
maintenance and operation thereof shall not damage the Premises or improvements
or interfere with the use of the Site by Landlord or any tenant whose
operations at the Site pre-date the Commencement Date.
8. INTERFERENCE.
(a) Landlord shall operate each Premises in a manner that will not
cause interference to the Tenant Facilities, and Landlord shall not interfere
with any current or future uses or frequencies employed or to be employed by
Tenant at the Premises. Tenant shall operate its Tenant Facilities at each Site
in a manner that will not cause interference to the lawful operation of
communications equipment of tenants at each such Site which pre-date the
installation of the Tenant Facilities. For purposes of this Section 8 and
Section 9 hereof, Tenant shall be deemed to be the initial tenant operating at
each Constructed New Site and Purchased New Site, regardless of the actual date
of installation of the Tenant Facilities at each such Site.
(b) Landlord shall not permit itself or its other lessees or licensees
to install equipment on the Premises, or property contiguous thereto owned or
controlled by Landlord, if such equipment will cause interference with Tenant's
operations. Tenant shall not install equipment on Premises, or property
contiguous thereto owned or controlled by Landlord, if such equipment will
cause interference with the lawful communications operations of tenants at each
such Site which pre-date the installation of the Tenant Facilities. Landlord
shall and shall require its other lessees or licensees to participate
diligently and in good faith to resolve any interference that affects Tenant.
Subject to Section 8(e), in the event interference occurs, Landlord shall
immediately take all action necessary to eliminate such interference.
(c) Landlord shall comply at all times with FCC and Federal Aviation
Administration ("FAA") regulations, including registration of towers with the
FCC where applicable. Landlord shall be liable to Tenant for any unauthorized
use of the Premises.
(d) Subject to Section 8(e), in the event Landlord fails to remedy
interference caused by the operation of equipment owned by Landlord or other
lessees or licensees within forty-eight (48) hours after receipt by Landlord of
written notice from Tenant describing the existence of material interference,
and in cases of non-material interference, within thirty (30) days of the date
of the receipt of notice from Tenant of the existence of such non-material
interference or Landlord otherwise fails to comply with this Section 8, Tenant
may pursue all remedies available at law and in equity, including, without
limitation, termination of this Lease but solely as it relates to the affected
Site.
(e) Tenant shall operate the Tenant Facilities in compliance with the
Communications
<PAGE> 13
Act of 1934, as amended (the "Communications Act") and all requirements and
regulations of the FCC and FAA and to the extent that the Tenant Facilities
experience interference from the operation of equipment owned by Landlord or
other licensees because the Tenant Facilities do not comply with the
requirements and regulations of the FCC, FAA, or any other applicable laws,
rules or regulations, Landlord shall have no obligation to remedy such
interference. Tenant shall at no cost or expense to Tenant cooperate with
Landlord's efforts to resolve any interference with the operation of the Tenant
Facilities.
(f) Tenant agrees to install Tenant Facilities of types and radio
frequencies which will not cause interference to authorized communications
operations being conducted from the Site by Landlord or other occupants of the
Site which are in place as of the Commencement Date. In the event the Tenant
Facilities causes such interference, Tenant will take all steps necessary to
correct and eliminate the interference. If such interference is material and
cannot be eliminated within forty-eight (48) hours after receipt by Tenant of
written notice from Landlord describing the existence of material interference,
and in other cases, if such interference is not material, within thirty (30)
days of the date of the receipt of notice of the existence of the interference,
Tenant shall temporarily disconnect the electric power and shut down the Tenant
Facilities (except for intermittent operation for the purpose of testing, after
performing maintenance, repair, modification, replacement, or other action
taken for the purpose of correcting such interference) until such interference
is corrected. If such interference is not timely corrected after receipt of
written notice as aforesaid, then Landlord may pursue all remedies available at
law and in equity, including, without limitation, termination of this Lease,
but solely as it relates to the affected Site, and Tenant agrees to remove the
Tenant Facilities from such Premises.
9. RF COMPLIANCE.
(a) Landlord shall be solely responsible for ensuring that operations
at each Site do not exceed the radiated power density maximum permissible
exposure ("MPE") limits for workers and the general public specified by the
FCC. Landlord shall at all times operate the Antenna Sites in a manner that
will not cause the Premises to exceed the MPE specified by the FCC.
(b) Landlord shall not permit itself, its lessees or licensees to
install new or replacement equipment on the Premises, or property contiguous
thereto owned or controlled by Landlord, if such equipment is likely to cause
the Premises to exceed the MPE limits for that location. In the event excess
radiated power densities occur, Landlord agrees to take, or to cause any
subsequent lessee or licensee whose use of the Premises results in the FCC
specified MPE limits being exceeded to promptly take, all mitigation action
necessary to eliminate such excess radiated power densities within thirty (30)
days. In the event Landlord fails to comply with this Section 9, Tenant may, in
its sole option, terminate this Lease but in each case only to the extent it
relates to the applicable Site and/or pursue any other remedies available at
law or in equity, including injunctive relief.
10. TAXES. If personal property taxes are assessed on any Premises, Tenant
shall pay any portion of such taxes directly attributable to the Tenant
Facilities. Tenant shall also be solely responsible for the payment of any
taxes, levies, assessments and other charges imposed
<PAGE> 14
including franchise and similar taxes imposed upon the business conducted by
Tenant. Tenant shall pay any sales or similar taxes imposed upon the payment or
receipt of Rent hereunder. Landlord shall pay all other taxes, levies,
assessments, deferred taxes, and other charges imposed on each Site by any
governmental authority. The foregoing terms of this Section 10 shall not apply
to any Pre-existing Site to the extent that the Pre-existing Agreement contains
terms that are inconsistent with this Section 10 (which inconsistent terms
shall govern and shall be described with specificity in the Site Schedule for
such Pre-existing Site). Landlord shall provide Tenant with documentation
reasonably acceptable to Tenant to substantiate the allocation of taxes to the
Tenant Facilities.
11. WAIVER OF LIENS.
(a) Landlord waives any lien rights it may have concerning the Tenant
Facilities which are deemed Tenant's personal property and not fixtures, and
Tenant has the right to remove the same at any time without Landlord's consent.
Landlord waives any lien rights it may have in any items constituting Affiliate
Collateral, as defined below, which are deemed personal property of Tenant's
appropriate Affiliates and are not fixtures, and the appropriate Affiliate has
the right to remove the same at any time without Landlord's consent.
(b) Landlord acknowledges that Tenant has entered into a financing
arrangement including promissory notes and financial and security agreements
for the financing of the Tenant Facilities (the "Collateral") with a third
party financing entity (and may in the future enter into additional financing
arrangements with other financing entities) and may enter into sale/leaseback
or other similar arrangements with Affiliates of Tenant who may become
sub-tenants with respect to certain of the Sites and may install items
equivalent to the Tenant Facilities at such Sites, which in turn may be subject
to financing and security agreement terms similar to those applicable to Tenant
(such items collectively, "Affiliate Collateral"). In connection therewith,
Landlord (i) consents to the installation of the Collateral and the Affiliate
Collateral; (ii) disclaims any interest in the Collateral and the Affiliate
Collateral, as fixtures or otherwise; and (iii) agrees that the Collateral and
the Affiliate Collateral shall be exempt from execution, foreclosure, sale,
levy, attachment, or distress for any Rent due or to become due and that such
Collateral and the Affiliate Collateral may be removed by Tenant or its
Affiliates, as appropriate, at any time without recourse to legal proceedings.
12. TERMINATION. Tenant may terminate this Lease and the related Site
Schedule with respect to any Site, in its sole discretion, without further
liability to Landlord on thirty (30) days prior written notice as follows: (i)
upon failure to obtain or maintain any license, permit or other approval
necessary for construction and operation of the Tenant Facilities after
reasonable efforts by Tenant to obtain or maintain such license, permit or
other approval, or (ii) if Tenant is unable to occupy or utilize the Premises
due to an action of the FCC which is not the result of any action of Tenant,
including without limitation, the take-back of a license, channel or change in
frequency. Termination with respect to any affected Site(s) hereunder shall not
limit any rights or remedies available to Landlord or Tenant at law or in
equity.
<PAGE> 15
13. DESTRUCTION OR CONDEMNATION. If the Premises or Tenant Facilities are
damaged (but only if such damage, in the reasonable judgment of the Tenant,
adversely affects the Tenant's business operations), destroyed, condemned or
transferred in lieu of condemnation, Tenant may elect to terminate this Lease
and the related Site Schedule with respect to the affected Site as of the date
of the damage, destruction, condemnation or transfer in lieu of condemnation
unless Landlord repairs or reconstructs the Antenna Site on such affected Site
or on real property with the same coordinates to a condition that is suitable
to allow the installation of the Tenant Facilities within sixty (60) days of
the date of the destruction, condemnation or transfer. Rent accruing under the
Site Schedule shall be abated during that period in which the Site is being
repaired, rebuilt or reconstructed on a Site which has been damaged, destroyed,
condemned or transferred in lieu of condemnation. If Tenant chooses not to
terminate this Lease and the related Site Schedule with respect to the affected
Site, Rent shall be reduced or abated in proportion to the actual reduction or
abatement of use of the Premises and the duration thereof. Tenant shall have
the right, at its option, to locate and operate a "cell on wheels" or
comparable backup system on any affected Site during the pendency of any
repairs or reconstruction; provided, however, that, any such action by Tenant
shall not unreasonably interfere with Landlord's repairs or reconstruction.
Nothing herein shall be construed to preclude Tenant from prosecuting any claim
directly against the condemning authority for loss of business, loss of
goodwill, moving expenses, damage to, and cost of removal of, the Tenant
Facilities and other personal property belonging to Tenant.
14. INSURANCE.
(a) Landlord, at Landlord's sole cost and expense, shall procure and
maintain on each Site at all times: (i) "All Risk" property insurance covering
the full replacement cost of the Antenna Site provided by a Tower Aggregator
self-insurance program, and (ii) comprehensive general liability insurance,
including coverage for bodily injury, property damage, and contractual
liability, with a combined single limit of at least One Million Dollars
($1,000,000) per occurrence, and (iii) excess/umbrella coverage of $1,000,000.
Such insurance shall insure, on an occurrence basis, against liability of
Landlord, its employees, representatives, contractors and agents arising out of
or in connection with the use, management, occupancy or maintenance of each
Site.
(b) Tenant, at Tenant's sole cost and expense, shall procure and
maintain on the Premises at all times comprehensive general liability
insurance, including coverage for bodily injury, property damage and
contractual liability, with a combined single limit of at least One Million
Dollars ($1,000,000) per occurrence. Such insurance shall insure, on an
occurrence basis, against liability of Tenant, its employees, representatives,
contractors and agents arising out of or in connection with the use,
management, occupancy or maintenance of the Premises.
(c) Each party shall be named as an additional insured as its
interests may appear, on the other's policies of comprehensive general
liability insurance pertaining to each Site or Premises, and each policy shall
provide for thirty (30) days' written notice of termination or cancellation of
the policy. Upon request, each party shall provide to the other evidence of the
<PAGE> 16
required insurance coverage by an insurance company reasonably acceptable to
the other party. Neither Landlord nor Tenant shall engage in any actions that
would impair or contravene the other party's insurance policy or policies
covering the Premises. Each party shall increase the amount of insurance
coverage set forth above to such amounts and to include such categories as the
other party deems reasonably necessary from time to time to protect its
interests.
(d) The foregoing terms shall not apply to any Pre-existing Site to
the extent that the Pre-existing Agreement relating to such Pre-existing Site
contains terms with respect the maintenance of insurance coverage that are
inconsistent with this Section 14, in which case the terms of such Pre-existing
Agreement shall govern, which inconsistent terms shall be described with
specificity in the Site Schedule for such Pre-existing Site.
15. WAIVER OF SUBROGATION.
(a) Landlord releases Tenant and Tenant's respective principals,
employees, representatives, contractors, and agents from any claims for damage
to any person or to any Site or any portion thereof caused by, or that result
from, risks insured against (or required to be insured against) under any
insurance policies carried by Landlord (including self-insurance coverage by
Landlord or its Affiliates) and in force (or required to be in force) at the
time of any such damage. Landlord shall cause each insurance policy (except for
workmen's compensation policies) obtained to provide that the insurance company
waives all right of recovery by way of subrogation against Tenant in connection
with any damage covered by Landlord's policy. Tenant shall not be liable to
Landlord for any damage caused by fire or any of the risks insured against (or
required to be insured against) under any insurance policy required by Section
14.
(b) Tenant releases Landlord and Landlord's respective principals,
employees, representatives, contractors, and agents from any claims for damage
to any person or to any Site or any portion thereof caused by, or that result
from, risks insured against (or required to be insured against) under any
insurance policies carried by Tenant and in force (or required to be in force)
at the time of any such damage. Tenant shall cause each insurance policy
(except for workmen's compensation policies) obtained to provide that the
insurance company waives all right of recovery by way of subrogation against
Landlord in connection with any damage covered by Tenant's policy. Landlord
shall not be liable to Tenant for any damage caused by fire or any of the risks
insured against (or required to be insured against) under any insurance policy
required by Section 14.
16. ASSIGNMENT AND SUBLETTING.
(a) Except for any assignment, mortgage, pledge, hypothecation, or
transfer to Tower Aggregator or a wholly-owned subsidiary of Tower Aggregator
or to an entity party to a credit facility with Landlord or an Affiliate of
Landlord, Landlord may not assign, or otherwise transfer all or any part of its
interest in this Lease without the prior written consent of Tenant, which
consent will not be unreasonably withheld; provided, however, that the
foregoing shall not prohibit a Change of Control (as defined in the Merger
Agreement) of Tower Aggregator. Any such assignment shall be subject to the
assignee assuming in writing in a form acceptable to Tenant all of Landlord's
obligations herein. Notwithstanding the foregoing, this Lease shall be
<PAGE> 17
subordinate and inferior to any presently existing or future mortgage which
encumbers the Premises, to the extent and as set forth in the Security and
Subordination Agreement (as defined in and attached to the Merger Agreement).
(b) Except for any assignment, mortgage, pledge, hypothecation, or
transfer to an Affiliate of Tenant, any entity in which Tenant has taken an
equity position, any entity acquiring fifty-one percent (51%) or more of the
outstanding stock or assets of Tenant, or to an entity party to a credit
facility with Tenant or an Affiliate of Tenant, Tenant may not assign,
mortgage, pledge, hypothecate or otherwise transfer, without Landlord's
consent, its interest in this Lease as a whole or with respect to any Site,
subject to any financing entity's interest as set forth in Section 11 above.
Except as set forth in the first sentence of this subparagraph, Tenant may
assign all or a portion of its interests hereunder only upon Landlord's written
consent, which consent shall not be withheld or delayed if Tenant's proposed
assignee agrees in writing to be bound by this Lease and maintains at the time
of such assignment, as demonstrated by current financial statements provided to
Landlord, a financial position reasonably demonstrating the ability of such
assignee to meet and perform the obligations of Tenant hereunder through the
unexpired balance of the Term (or delivers to Landlord a full guaranty of such
obligations by a guarantor that so demonstrates such a financial position). Any
purported assignment by Tenant in violation of the terms of this Lease shall be
void. Tenant may sublease all or any portion of its interest in this Lease with
respect to any Site without consent.
(c) Tenant shall not be released from any of its obligations or
liabilities hereunder in connection with any assignment, mortgage, pledge,
hypothecation or transfer of all or a portion of its interests in this Lease
unless Tenant's assignee agrees in writing to be bound by this Lease and
maintains at the time of such assignment, as demonstrated by current financial
statements provided to Landlord, a financial position demonstrating in
Landlord's reasonable judgment the ability of such assignee to meet and perform
the obligations of Tenant hereunder as it relates to the interests so assigned,
mortgaged, pledged, hypothecated or transferred through the unexpired balance
of the Term (or delivers to Landlord a full guaranty of such obligations by a
guarantor that so demonstrates, in Landlord's reasonable judgment, such a
financial position), and in such event Tenant shall be released from such
obligation or liability. Landlord shall, upon request of Tenant, confirm in
writing such release of liability. Tenant shall not be released from any of its
obligations or liabilities hereunder in connection with any sublease of all or
any portion of its interest in this Lease.
(d) In the event of an assignment by Landlord by operation of law
under Title 11 of the United States Code, or any state bankruptcy or insolvency
law and Tenant elects not to terminate, or is prohibited by law from
terminating, this Lease and the related Site Schedules as a whole or with
respect to any Site, the assignee shall provide Tenant with adequate assurance
of future performance of all of the terms, conditions and covenants of this
Lease and the related Site Schedules, which shall include, but which shall not
be limited to, assumption of all the terms, covenants and conditions of this
Lease and the related Site Schedules as a whole or with respect to the affected
Sites by the assignee and the making by the assignee of the following express
covenants to Tenant:
(i) that assignment of the Lease and the related Site Schedules as
a whole or
<PAGE> 18
with respect to the affected Sites and assumption by the assignee will not
cause a violation or breach of any provision in any Prime Lease or any other
lease, license, financing agreement or operating agreement relating to the
Sites; and
(ii) that such assignment and assumption by the assignee will not
disrupt or impair operation of the Tenant Facilities or any items constituting
Affiliate Collateral.
(iii) that such assignee's obligations will be secured on terms
substantially equivalent to those contemplated by the Security and
Subordination Agreement.
17. WARRANTIES; QUIET ENJOYMENT.
(a) Landlord represents and warrants that Landlord has not dealt with
nor is any brokerage commission due to any broker in connection with this
Lease.
(b) Landlord warrants that each of the Landlord Parties is duly
organized/formed, validly existing and in good standing, and has full right,
power, and authority to make and perform this Lease and bind itself and each of
the Landlord Parties through the party or parties set forth as signatory of
Landlord and the Landlord Parties set forth below.
(c) Landlord warrants that its execution and performance of this Lease
does not and will not violate or conflict with or result in the breach of any
of the terms, conditions or duties or obligations to which Landlord is bound to
any third party.
(d) Landlord covenants and agrees with Tenant that upon paying the Rent
and performing its obligations hereunder, Tenant may peacefully and quietly
enjoy the Premises. Landlord shall indemnify and hold Tenant harmless from any
and all claims on Tenant's leasehold interest that arise after the date hereof
and for which Nextel or an Affiliate of Nextel (other than Tower Aggregator or
any Landlord Parties) is not responsible pursuant to the Merger Agreement,
Master Site Commitment Agreement, or Purchase Agreement executed pursuant to
the Master Site Commitment Agreement.
18. INSTALLATIONS, REPLACEMENTS, MAINTENANCE AND REPAIRS.
(a) Prior to Tenant's modifying or installing any equipment on any
Antenna Site (not including the original installation of Tenant Facilities, any
modification or installation mandated to bring the Site or Tenant Facilities
into compliance with applicable laws or governmental regulations, or the mere
replacement of existing equipment), Tenant, at Landlord's request shall have
conducted, at no expense to Landlord and through a professional engineer
approved by both Landlord and Tenant, and licensed in the state in which the
Site is located, an analysis which details the effect of such equipment on the
Antenna Site and Landlord's operations. A written proposal for rectification of
all problems found in the analysis shall be presented to Landlord for approval.
Upon Landlord's approval of such proposal, which approval shall not be
unreasonably withheld, Tenant shall be obligated, at no expense to Landlord, to
address all problems and potential problems to Landlord's reasonable
satisfaction. In no event shall Landlord be required
<PAGE> 19
to pay any amount, perform any work, suffer any disruption in service to its
other tenants or assume any liability as a result of Tenant's installing or
replacing equipment on the Antenna Site or Site. Landlord's consent shall not
be construed as an acknowledgment of the sufficiency of the analysis or
proposed rectification, and Tenant shall remain fully liable for any loss
incurred by Landlord or other tenants as a result of the addition or
modification of equipment on the Antenna Site or Site. All such work shall be
performed in good and workmanlike manner in compliance with all laws, codes,
rules and regulations.
(b) Landlord shall not be obligated to consider any modification or
installation of equipment which would adversely affect or interfere with
Landlord or other tenant's operations. No equipment shall be installed on any
Antenna Site or Site by Tenant nor shall any construction pertaining to the
addition or modification of equipment commence until Landlord has approved the
construction, installation, grounding plans, contractors and subcontractors in
writing. Reasonable changes requested by Landlord shall be incorporated into
the plans. Tenant shall not alter any plans previously approved by Landlord
without Landlord's written consent.
(c) Tenant shall be responsible for all maintenance of and repairs to
the Tenant Facilities at Tenant's sole cost and expense. All other maintenance
and repairs to the Antenna Sites and each Site shall be the responsibility of
Landlord.
(d) Landlord, its agents, contractors, employees, and other lessees and
licensees shall exercise extreme care at all times to protect Tenant's
Facilities. In the event Tenant's Facilities are damaged or disturbed by the
acts or omissions of Landlord, its agents, contractors, employees, or other
lessees and licensees, Landlord shall reimburse Tenant for all reasonable costs
incurred by Tenant in repairing the damage and restoring service, regardless of
the cause of the damage or disruption.
(e) Tenant shall give Landlord prior written notice of any major
leasehold improvement work on any Antenna Site or Site, and Landlord's consent
or cooperation shall not be deemed to relieve Tenant, its agents, contractors
or employees from liability for any damage to Landlord's or other tenant's
equipment.
(f) Should Landlord fail to make repairs for which Landlord is
responsible pursuant to the terms of this Lease within a thirty (30) day period
following receipt of written notice from Tenant, Tenant shall have the right to
make such repairs and correct such damage, and all sums so advanced by Tenant,
together with interest computed at a rate of 12% per annum, shall be, at
Tenant's sole option and in any combination of cash or credit that Tenant
elects, paid to Tenant by Landlord within ten (10) days of Tenant's demand
therefor or credited in whole or in part, towards future installments of Rent.
(g) In the event that any mechanic's lien is filed against any Antenna
Site or Site by a contractor hired by the Tenant, the Tenant shall, at its
expense, discharge the same within thirty
<PAGE> 20
(30) days after the date of Tenant's receipt of written notice of the filing
thereof. In the event Tenant shall fail to discharge such mechanic's lien,
Landlord, at its option, in addition to all other rights and remedies available
to it, may bond or pay said lien or claim without inquiring into the validity
thereof, and all sums so advanced by Landlord, together with interest computed
at a rate of 12% per annum, shall be paid to Landlord by Tenant within ten (10)
days of Landlord's demand thereof.
(h) In the event that any mechanic's lien is filed against any Antenna
Site or Site by a contractor not hired by Tenant, Landlord shall, at its
expense, discharge the same within thirty (30) days after the date of
Landlord's receipt of written notice of the filing thereof. In the event
Landlord shall fail to discharge such mechanic's lien, Tenant, at its option,
in addition to all other rights and remedies available to it, may bond or pay
said lien or claim without inquiring into the validity thereof, and all sums so
advanced by Tenant, together with interest computed at a rate of 12% per annum,
shall be, at Tenant's sole option and in any combination of cash or credit that
Tenant elects, paid to Tenant by Landlord, within ten (10) days of Tenant's
demand thereof or credited, in whole or in part, towards future installments of
Rent.
(i) Tenant may, from time to time, elect to replace, substitute,
relocate or otherwise modify its equipment on the Antenna Sites, provided that
the replacements, substitutions, relocations and/or other modifications are
consistent with the Communications Act and the rules and regulations of the FCC
and FAA, do not exceed the structural and wind loading capacity of the original
approved installation or the design capacity of the tower at the relevant
height, whichever is greater, do not cause interference with the authorized
operations of any then existing occupants of the Site, and do not exceed the
original size of the Premises. If after giving effect to Tenant's addition or
alteration, Tenant's altered use of the tower exceeds the then existing
structural or wind loading capacity of the tower, the Tenant may add or alter
the antennas mounted only after first obtaining the prior written consent of
Landlord, which consent shall not be unreasonably withheld or delayed by
Landlord. Such replacement, substitution, relocation or modification shall be
at Tenant's sole expense, and will not result in any adjustment to the Rent
except as set forth in Subsection 6(b) and 6(c). Notwithstanding the foregoing,
Landlord shall bear the cost of any replacement, substitution, relocation or
modification performed by Tenant as an accommodation to Landlord.
(j) Following the installation of Tenant's equipment on the tower and
Site, Tenant shall provide Landlord with post-construction field drawings
satisfactory to Landlord highlighting any field changes made during
installation and verifying the antennas' RAD centers.
19. RIGHT OF FIRST REFUSAL.
(a) Tenant acknowledges that it may desire to relocate its or its
Affiliates' communications equipment on the Antenna Sites from time to time
during the Term or Renewal Term. In an effort to cooperate with and accommodate
Tenant, Landlord agrees (except with respect to Landlord Sites) to give to
Tenant the right of first refusal to relocate its or its Affiliates'
communications equipment on each of the applicable Antenna Sites within ten
(10) feet of the relocation height specified in the Site Schedule (the
"Relocation Height"), provided that any such
<PAGE> 21
relocation shall be subject to the terms and conditions of paragraph 18(i) of
this Lease regarding structural loading, wind loading and interference. Upon
Tenant's receipt of written notice from Landlord that it has received a bona
fide offer from a prospective tenant desiring to locate at Tenant's Relocation
Height on any Antenna Site (other than a Landlord Site), Tenant shall have ten
(10) working days (the "Response Period") to determine, in its sole discretion,
whether it desires to occupy the Relocation Height, and to advise Landlord, in
writing, of its decision. During the Response Period, Landlord shall be
prohibited from leasing space on the applicable Antenna Site at the Relocation
Height to any other party, unless and until Tenant has notified Landlord in
writing that Tenant does not desire to relocate its or its Affiliates'
equipment or lease space on such Antenna Site at the Relocation Height. If
Tenant elects to relocate its or its Affiliates' equipment on such Antenna Site
it shall so notify Landlord in writing within the Response Period and Tenant
shall thereafter relocate its or its Affiliates' communications equipment
within sixty (60) days from the date of written notice thereof to Landlord.
(b) Landlord and Tenant hereby agree that in no event shall the
relocation of Tenant's or its Affiliates' equipment pursuant to Subparagraph
19(a) above affect, alter, modify or otherwise change any of the terms or
conditions of this Lease or the applicable Site Schedule.
(c) Tower Sub hereby grants to each Tenant a personal, non-assignable
right of first refusal to acquire the Antenna Sites acquired by Landlord
pursuant to the Merger Agreement or acquired or constructed by Landlord
pursuant to the terms of the Master Site Commitment Agreement upon a subsequent
sale or assignment to an entity that is not an Affiliate of Tower Aggregator,
or in the event of insolvency or bankruptcy, whether voluntary or involuntary,
of Landlord; provided, however, that the foregoing right of first refusal shall
not apply to a sale of the capital stock or all or substantially all of the
assets of Landlord, Tower Aggregator or SCI or to any foreclosure sale,
exercise of power of sale, or assignment by deed in lieu of foreclosure. If, at
any time, the Landlord wishes to transfer any Antenna Sites in a transaction
that is subject to the right of first refusal granted in the preceding
sentence, the Landlord shall first offer to sell such Antenna Sites to the
Tenant. The Landlord shall send written notice of the offer (the "Offer
Notice") to the Tenant, which Offer Notice shall state that the Landlord
proposes to effect a transfer of Antenna Sites (and shall include a list of the
location and type of such Antenna Sites) and set forth the terms and conditions
of the offer. Upon receipt of such Offer Notice, Tenant shall be entitled to
purchase all, but not less than all, of the offered Antenna Sites upon the
terms and conditions set forth in the Offer Notice. The right of first offer
shall be exercisable by delivery of written notice of exercise (the "Exercise
Notice") to Landlord within thirty (30) days after receipt of the Offer Notice.
If the Tenant shall fail to respond to the Landlord within such thirty-day
period, such failure shall be regarded a rejection of the offer by the Tenant.
The closing of any purchase of the Antenna Sites by the Tenant under this
section 19(c) shall be held at the principal office of the Landlord on or
before the 30th day following delivery to the Landlord by the Tenant of its
Exercise Notice (or such later time as may be necessary to comply with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act")), or at such other time and place as the parties to the transaction may
agree. Notwithstanding anything to the contrary contained in this section
19(c), if the Tenant does not purchase all of the offered Antenna Sites within
the period specified above, the Landlord may transfer to any third party buyer,
all or a portion of the relevant Antenna Sites for a purchase price that is no
lower
<PAGE> 22
than one hundred percent (or the relevant pro-rata percentage thereof if less
than all of the Antenna Sites are being sold) of that stated in the Offer
Notice; provided, however, that such transfer is bona fide and made not later
than 180 days from (i) the date of the rejection of the Landlord's offer, if it
is rejected, or the failure to consummate and purchase, if the Landlord's offer
is not rejected, and (ii) the date which is ten days after the expiration or
waiver of any applicable waiting period to such proposed transfer pursuant to
the HSR Act.
(d) In the event of transfer of any Antenna Sites to one or more third
party buyers during the Term hereof, (i) such transfer shall be subject to all
the terms of this Lease and all applicable Site Schedules, including, without
limitation, the Security and Subordination Agreement, (ii) the buyer(s) shall
expressly assume the Lease and the related Site Schedules, and shall deliver
one or more subordination, non-disturbance and attornment agreements to
confirm, inter alia, Tenant's rights to quiet enjoyment, and (iii) Landlord
shall remain liable for any breaches or violation by the successor landlord
under the Lease.
20. HAZARDOUS SUBSTANCES.
(a) Landlord represents, warrants and agrees that Landlord will not and
will not permit any third party to use, generate, store or dispose of any
Hazardous Material on, under, about or within any Site in violation of any law
or regulation. Landlord shall defend, indemnify, and hold harmless Tenant and
Tenant's partners, affiliates, agents, contractors, and employees against any
and all losses, liabilities, claims and/or costs (including reasonable
attorneys' fees and costs) arising from any breach of any representation,
warranty or agreement contained in this Subparagraph 20(a) and for which Nextel
or an Affiliate of Nextel (other than Tower Aggregator or Landlord Parties) is
not responsible pursuant to the Merger Agreement, Master Site Commitment
Agreement or Purchase Agreement executed pursuant to the Master Site Commitment
Agreement.
(b) Tenant represents, warrants and agrees that Tenant will not and
will not permit any third party to use, generate, store or dispose of any
Hazardous Material on, under, about or within any Site in violation of any law
or regulation. Tenant shall defend, indemnify, and hold harmless Landlord and
Landlord's partners, affiliates, agents, contractors, and employees and any
other person or entity which leases space at the Site from Landlord against any
and all losses, liabilities, claims and/or costs (including reasonable
attorneys' fees and costs) arising from any breach of any representation,
warranty or agreement contained in this Subparagraph 20(b).
(c) This Section 20 shall survive the termination of this Lease.
21. INDEMNITY.
(a) Landlord shall indemnify and hold Tenant, its subsidiaries,
affiliates, officers, directors, agents, employees, and contractors harmless
from all claims, actions, damages, liabilities, and expenses (including
attorneys' fees and costs, and expenses of defense) arising or
<PAGE> 23
alleged to arise from the acts or omissions of Landlord or Landlord's agents,
employees, licensees, invitees, contractors or other lessees or licensees
occurring in or about any Site. In the event that Tenant, its subsidiaries,
affiliates, officers, directors, agents, employees or contractors shall be made
a party to any litigation commenced by or against Landlord (other than between
Landlord and Tenant), then Landlord shall protect and hold the same harmless
and shall pay all reasonable costs, expenses and attorneys' fees incurred or
paid in connection with such litigation.
(b) Tenant shall indemnify and hold Landlord, its subsidiaries,
affiliates, officers, directors, agents, employees, and contractors harmless
from all claims, actions, damages, liabilities, and expenses (including
attorneys' fees and costs, and expenses of defense) arising or alleged to arise
from the acts or omissions of Tenant or Tenant's agents, employees, licensees,
invitees, contractors or other lessees or licensees occurring in or about any
Site. In the event that Landlord, its subsidiaries, affiliates, officers,
directors, agents, employees or contractors shall be made a party to any
litigation commenced by or against Tenant (other than between Landlord and
Tenant), then Tenant shall protect and hold the same harmless and shall pay all
reasonable costs, expenses and attorneys' fees incurred or paid in connection
with such litigation.
(c) This Section 21 shall survive termination of this Lease.
22. TOWER MARKING AND LIGHTING REQUIREMENTS.
(a) Landlord shall be responsible for compliance with all FAA and FCC
tower marking and lighting requirements, and all costs associated therewith.
Landlord shall indemnify and hold Tenant harmless from any fines or other
liabilities caused by Landlord's failure to comply with such requirements.
Should Tenant be cited by either the FAA or the FCC because any tower or other
structure which is subject to this Agreement is not in compliance, Landlord
shall cure the conditions of noncompliance within the time frame allowed by the
citing agency. Should Landlord fail to cure the conditions of noncompliance
within the time frame allowed by the citing agency, Tenant may either terminate
this Lease with respect to the affected Site, effective immediately upon notice
to Landlord, or proceed to cure the conditions of noncompliance at Landlord's
expense, which amounts, together with interest, shall be at Tenant's sole
option and in any combination of cash or credit that Tenant elects, paid to
Tenant by Landlord within ten (10) days of Tenant's demand therefor or
credited, in whole or in part, towards future installments of Rent. Landlord
shall copy Tenant on all amendments or changes to FCC or FAA records on any
Antenna Sites.
(b) Tenant shall be permitted to bridge-in to any automatic lighting
alarm system installed or to be installed on the Antenna Sites to permit a
parallel alarm or, at Tenant's sole option, to install a second alarm.
23. ESTOPPELS/SNDAS.
(a) Each party agrees that it will, upon written request by the other
party, execute and deliver in favor of the requesting party and/or the
requesting party's present or future lenders, an Estoppel Certificate in the
form attached hereto and made a part hereof as Exhibit B.
(b) Tenant agrees that it will, upon written request by Landlord,
execute and deliver a
<PAGE> 24
Subordination, Non-Disturbance and Attornment Agreement with respect to each
Site substantially in the form attached hereto and made a part hereof as
Exhibit C.
24. PRIME LEASE.
(a) Landlord shall comply with all obligations imposed on Landlord by
each Prime Lease at Sites where Tenant has Tenant Facilities including the
obligation to make all payments due thereunder. Tenant shall have the right, at
its option and after giving Landlord prior written notice and a cure period of
seven days from delivery of such notice (or such shorter period as may be
required to prevent termination of the Prime Lease), in addition to all other
rights and remedies available to it, to cure any default of Landlord under any
Prime Lease and all sums so advanced by Tenant, together with interest computed
at a rate of 12% per annum, shall be, at Tenant's sole option and in any
combination of cash or credit that Tenant elects, paid to Tenant by Landlord
within ten (10) days of Tenant's demand therefor or credited, in whole or in
part, towards future installments of Rent.
(b) Landlord shall not voluntarily terminate any Prime Lease at Sites
where Tenant has Tenant Facilities without Tenant's prior written consent. Any
termination, either with or without cause, of a Prime Lease without Tenant's
consent shall be a material breach as to the affected Site, and Tenant may
pursue all available remedies at law or in equity.
(c) Should Landlord desire to terminate a Prime Lease prior to
expiration of all renewal terms provided therein, Landlord shall give Tenant
written notice of such intention no less than six (6) months prior to the end
of the then current term or renewal term of the Prime Lease. Subject to the
rights of the Prime Lease landlord, Tenant shall at all times have the right of
first refusal to an assignment of the Prime Lease should Landlord desire to
terminate. If Tenant is entitled to and does elect to exercise its option,
Landlord shall promptly execute all documents necessary to effect the
assignment of the Prime Lease and all applicable third-party leases and/or
subleases. In such case Tenant shall have the right to purchase the Tower and
any other of Landlord's improvements on the Site for an amount equal to the
replacement cost of the Tower and such improvements, less reasonable wear and
tear.
(d) Except as herein otherwise expressly provided, or except as the
terms of the Prime Lease may be in conflict with or inconsistent with the terms
herein provided, all of the terms, covenants and provisions in the Prime Lease
are hereby incorporated into and made a part of this Agreement as if fully set
forth herein; the Landlord herein being substituted for the Landlord named in
the Prime Lease, and the Tenant herein being substituted for the Tenant named
in the Prime Lease. Notwithstanding anything to the contrary contained in this
Agreement, this Agreement and all of Tenant's rights and obligations hereunder
are inferior to the Prime Lease.
25. CONDUCT OF LANDLORD.
(a) Landlord warrants, represents, covenants, and agrees that, in
connection with its operation of each Site, Landlord shall (i) except as
provided in Section 10, pay before delinquency (except to the extent being
contested in good faith by appropriate proceedings diligently pursued), any and
all taxes, assessments and public charges levied, assessed or
<PAGE> 25
imposed upon Landlord's business, Landlord's interest in the Site or upon
Landlord's fixtures or equipment on the Site; (ii) procure, maintain and pay
for all licenses and permits it is required to have and maintain under federal,
state or local statutes or ordinances with respect to each Site, and use its
best efforts at all times to avoid any adverse effect to the Tenant Facilities
and/or the Affiliate Collateral, as appropriate, or Tenant's (or any Affiliate
sub-tenant's) business operations on the Site including, but not limited to,
the payment when due of all such license fees, permit fees, and charges of a
similar nature for the conduct by Landlord or any subtenant or licensee of any
business or undertaking authorized hereunder to be conducted on or from the
Site; (iii) observe at all times the terms of the Prime Lease and all rules and
regulations promulgated by the prime lessor and/or owner of the land at any
time and from time to time relating to or affecting the Site or the Tenant
Facilities and/or the Affiliate Collateral, as appropriate, or Tenant's (or any
Affiliate sub-tenant's) business operations, including, without limitation,
rules and regulations relating to vehicles, use of facilities, and the storage
and removal of trash and garbage; and (iv) comply with and observe all
restrictive covenants which affect or are applicable to each Site.
(b) Landlord shall at all times, and at no cost to Tenant, be
responsible for keeping each Site secure, orderly, neat, safe, clean, and free
from rubbish.
26. TESTS AND CONTINGENCIES. The contingencies set forth in this Section 26
shall apply only to Landlord Sites. For such Landlord Sites that Landlord and
Landlord Parties are required to make available to Tenant pursuant to
Subparagraph 2(b) hereof, and that Tenant, at its sole option, may elect to
lease, the following contingencies shall apply:
(a) Landlord acknowledges that Tenant's ability to use any Premises is
contingent upon its suitability for Tenant's intended use from both an economic
and a technical engineering basis and Tenant's ability to obtain any and all
governmental licenses, permits, approvals or other relief required or deemed
necessary or appropriate by Tenant for such use (the "Governmental Approvals")
and any other consents required for Tenant's use of such Premises by twelve
(12) months from the date of the Site Schedule; provided that Tenant shall have
the right, without obligation, to appeal any denial of any such Governmental
Approval and the date for obtaining Governmental Approvals shall be extended
until such time as a final non-appealable decision is rendered.
(b) Tenant may, at its expense, within ninety (90) days from the date
of any Site Schedule relating to the relevant Landlord Site order a title
search and/or survey of the Landlord Site or the Premises which is a part
thereof to determine if there are any conditions, liens, easements,
restrictions, encroachments, overlaps or other rights or grants which interfere
with Tenant's use and enjoyment of the Premises. If a survey is performed, it
shall become part of the Site Schedule. In the event of any inconsistency
between the Site Schedule and the survey, Landlord shall make such amendments
to the Site Schedule and adjustments in the location of the Premises as shall
be reasonably necessary for Tenant's use and satisfactory to Tenant. If the
title search or the survey discloses any matters which interfere with Tenant's
use and enjoyment of the Premises, Landlord shall use reasonable efforts to
cure such defects within sixty (60) days,
<PAGE> 26
at Landlord's sole cost and expense; provided that, the cost and expense for
any title or survey work shall be borne by Tenant. Tenant may obtain title
insurance on its interest in the Premises. Landlord shall cooperate by
executing documentation required by the title insurance company.
(c) Tenant is permitted, at its option, to obtain within ninety (90)
days after the date of any Site Schedule relating to a Landlord Site, at
Tenant's expense, satisfactory soil boring, percolation or other tests or
reports of such Premises as are deemed appropriate by Tenant to determine the
physical characteristics and conditions thereof. Any such tests or reports
shall indicate, to Tenant's reasonable satisfaction, that such Premises are
suitable for Tenant's use.
(d) If any of the contingencies of this Section 26 are not satisfied
within any applicable time period or waived by Tenant in writing, Tenant shall
have the right, without obligation, to terminate this Lease and the related
Site Schedule with respect to the affected Landlord Site and render it null and
void from and after the date of termination.
27. DEFAULT; REMEDIES; DISPUTE RESOLUTION.
(a) If any party to this Lease breaches or fails to perform any of its
covenants or obligations contained in this Lease as to any Site, the
non-breaching party may, but shall be under no obligation to, notify the
breaching party of the breach or non-performance, by written notice which
details with specificity the breach or failure. The defaulting party shall have
a period of sixty (60) days from receipt of the default notice within which to
cure such breach or non-performance of a non-monetary covenant, or if the
nature of the non-monetary default is such that a cure cannot be effectuated
within sixty (60) days, to begin such cure and to continue with diligence until
completion provided that the grace period for any monetary default is ten (10)
days from receipt of notice. If the defaulting party fails to so cure or
commence to cure as aforesaid, the non-defaulting party may, by written notice
to the defaulting party, terminate the defaulting party's rights under this
Lease, but only as to the affected Site. If the defaulting party cures any such
breach or non-performance prior to receipt of a termination notice as to the
affected Site, then such breach or non-performance shall be deemed cured,
notwithstanding expiration of the cure period.
(b) Each party's obligations under this Lease is unique. If any party
should fail to perform its obligations under this Lease, the parties
acknowledge that it would not be possible to measure adequately the resulting
damages; accordingly, the other parties, in addition to any other available
rights or remedies, shall be entitled to specific performance of its rights
under this Lease, and the parties expressly waive the defense that damages will
be adequate.
(c) If this Lease is terminated under the provisions of Section 27(a)
with respect to any Site by reason of default hereunder on the part of Tenant,
Tenant shall pay to Landlord as damages a lump sum equal to the present value
(using as a discount rate for such calculation the then-current rate of
interest applicable to Treasury Notes maturing on or about the end of the
applicable Term) of the unearned Rent which would have been payable by Tenant
during the balance of the applicable Term for such Site, had this Lease not so
terminated as to such Site, payable upon the date of termination. Landlord
shall have the duty to mitigate damages payable by Tenant under this subsection
(c); provided, however, that Tenant shall be entitled only to a
<PAGE> 27
credit for any amounts actually received by Landlord for re-letting the
Premises previously occupied by Tenant, and Landlord shall not be required to
attempt to re-let the Premises until all additional platforms on the tower are
leased, licensed or otherwise occupied.
(d) Notwithstanding anything to the contrary contained in the
foregoing, in the event Tenant is in default in respect of the payment of Rent
with respect to more than ten percent (10%) of the Sites covered by this Lease
at the time of such default, and if such default shall remain uncured thirty
(30) days after written notice of cross default ("Cross Default Notice"),
Landlord may, at its option, terminate this Lease forthwith with respect to all
of the Sites then covered hereby. Any Cross Default Notice given by Landlord
shall (i) identify the Sites for which Tenant is in default in respect of the
payment of Rent and (ii) set forth the amount of Rent past due for each Site so
identified. Cross Default Notice shall be given in accordance with the terms of
Section 28(d), provided that Landlord shall deliver additional copies of any
Cross Default Notice to each of the following addresses: (A) Nextel
Communications, Inc., 1505 Farm Credit Drive, McLean, Virginia 22102, Attn:
General Counsel; and (B) Jones Day, Reavis & Pogue, 2300 Trammell Crow Center,
2001 Ross Ave., Dallas, TX 75201, Attn: Kathleen McLaurin. Tenant may from time
to time designate any other address for Cross Default Notice by written notice
to Landlord. Failure of the Landlord to comply with the terms of this
subparagraph (d) for the providing of Cross Default Notice shall render any
such non-complying notice ineffective.
(e) If any Rent, additional charges or damages payable hereunder by
Tenant to Landlord are not paid within five (5) days after the due date
therefor, the same shall bear interest at the rate of one percent (1%) per
month.
(f) The parties shall attempt in good faith to resolve any dispute,
controversy or claim ("Dispute") arising out of or relating to this Lease or
any of the Sites promptly by negotiations between representatives of senior
management ("Executives") who have authority to settle the Dispute. Any party
may give the other parties written notice of any Dispute not resolved in the
normal course of business. Within 20 days after delivery of such a notice,
Executives of the parties involved in the Dispute who have authority to settle
the Dispute shall meet at a mutually acceptable time and place, and thereafter
as often as they reasonably deem necessary, to attempt to resolve the Dispute.
If any party intends to be accompanied at a meeting by an attorney, the other
involved parties shall be given at least three Business Days' notice of such
intention and may also be accompanied by an attorney. If the Dispute has not
been resolved within 30 days after such notice, unless extended by the
agreement of the parties involved in the Dispute in writing (the "Negotiation
Period"), any party may at any time within the 30 days after the end of the
Negotiation Period initiate mediation of the Dispute in New York, New York in
accordance with the Center for Public Resources Model Procedure for Mediation
of Business Disputes.
(g) If the Dispute has not been resolved within 60 days of the
initiation of mediation, or if no party elects to commence mediation within the
time specified in subparagraph (f) above, the Dispute will be subject to
arbitration as provided in Subparagraphs 27(h) and (i). All negotiations and
mediation pursuant to Subparagraphs 27(f) and (g) are confidential and will be
treated as compromise and settlement negotiations for purposes of the Federal
Rules of Evidence for United States Courts and comparable state rules.
<PAGE> 28
(h) Upon the expiration of the Negotiation Period, any party seeking
relief (the "Claimant") may serve a demand for arbitration in accordance with
the Center for Public Resources Non-Administered Arbitration Rules (the
"Rules") in which, in addition to any other requirements of those Rules, the
Claimant states the specific nature of the claimed breach and the relief
sought, and demands a determination by the arbitrators of the parties' rights
together with any relief sought. The place of arbitration will be New York, New
York unless all of the parties to the arbitration otherwise agree. Three
arbitrators will be chosen, and the proceedings conducted, in accordance with
the Rules, except that (i) the parties shall choose three arbitrators through a
self-administered process of striking names from a list of potential
arbitrators and shall not employ the method provided for in the Rules, (ii) the
rules and evidence employed in the federal courts at the time will apply, and
(iii) discovery will be permitted in accordance with the Federal Rules of Civil
Procedure for the United States District Courts. The decision of the
arbitrators will be final and binding on the parties to the maximum extent
permitted under applicable law, and a final judgment may be entered on the
award in any court of competent jurisdiction.
(i) A court of competent jurisdiction, upon application from any party
to the Dispute, may relieve the parties of their duty to arbitrate Disputes in
whole or in part, or may stay any arbitration hereunder in whole or in part, if
ongoing litigation between one or more of the parties and a third party (or
parties) involves issues of fact or law common with those subject to
arbitration hereunder and there exists the possibility of inconsistent
judgments if such relief is not granted.
(j) Each party shall bear its own costs and expenses incurred in
connection with any Dispute, including, without limitation, the fees of its
attorneys, unless the arbitrators otherwise decide, in which case such costs
and expenses shall be borne by the parties in the manner determined by the
arbitrators.
28. MISCELLANEOUS.
(a) Any amendments to this Lease (including any changes to a Site
Schedule) must be in writing and executed by all affected parties.
(b) If any provision of this Lease is invalid or unenforceable with
respect to any party, the remainder of this Lease or the application of such
provision to other Sites or persons other than those as to whom it is held
invalid or unenforceable, shall not be affected and each provision of this
Lease shall be valid and enforceable to the fullest extent permitted by law.
(c) The terms and conditions of this Lease and each Site Schedule as it
relates to a Site shall run with the Site and shall be binding on and inure to
the benefit of the successors and permitted assignees of the respective
parties.
(d) Subject to the requirements of Section 27(d), any notice or demand
required to be given herein shall be made by certified or registered mail,
return receipt requested, or reliable overnight courier to the address of the
respective parties set forth below:
<PAGE> 29
<TABLE>
<S> <C>
Landlord: SpectraSite Communications, Inc Tenant:
8000 Regency Park [As designated in each Site Schedule]
Cary, NC 27511
Attn: Contracts Manager
With a copy to:
SpectraSite Communications, Inc. Nextel Communications, Inc.
8000 Regency Park 1505 Farm Credit Drive
Cary, NC 27511 McLean, Virginia 22102
Attn: General Counsel Attn: Legal Department,
Contracts Manager
</TABLE>
Any notice given by Tenant to Landlord regarding this Lease or any Site
Schedule shall also be given to the address set forth below:
CIBC Oppenheimer Corp.
425 Lexington Avenue
New York, New York 10017
Attn: Deborah Strek
With an additional copy to:
Chris Molen, Esq.
Paul, Hastings, Janofsky & Walker, LLP
600 Peachtree Street, NE
Suite 2400
Atlanta, Georgia 30308
provided, however that any failure on Tenant's part to provide such notice
shall not constitute a breach or default hereunder or give rise to any claim by
Landlord. Landlord or Tenant may from time to time designate any other address
for this purpose by written notice to the other party. All notices hereunder
shall be deemed received upon actual receipt.
(e) This Lease shall be governed and construed in accordance with the
laws of the Commonwealth of Virginia, without reference to its conflicts of
laws principles. Notwithstanding the foregoing, to the extent that the law of
the state in which the affected Site is located is mandatory rather than
permissive for the issue in question (such as, by way of example only, with
respect to possession), the laws of the state in which the Site is located
shall govern. Should any provision of this Lease require judicial
interpretation, Landlord hereby agrees and stipulates that the court
interpreting or considering same shall not apply the presumption that the terms
hereof shall be more strictly construed against a party by reason of any rule
or conclusion that a document should be construed more strictly against the
party who itself or through its
<PAGE> 30
agents prepared the same, it being agreed that all parties hereto have
participated in the preparation of this Lease and that each party had full
opportunity to consult legal counsel of its choice before the execution of this
Lease.
(f) Landlord acknowledges that a Memorandum of Agreement in the form
annexed hereto as Exhibit D may be recorded by Tenant in the official records
of the city or county where each Site is located.
(g) In any case where approval or consent of one party is required,
requested or otherwise to be given under this Lease, such party shall not
unreasonably delay or withhold its approval or consent. In any case where one
party is required by the terms of the Lease to use "best efforts", "diligent
efforts," "reasonable efforts" or "reasonable best efforts" to obtain the
approval or consent of a third party or to cure or remedy any non-compliance,
such requirement shall not be interpreted to obligate such party to pay money
or otherwise make a financial concession in order to obtain such approval,
consent, cure or remedy.
(h) The Site Schedules and all exhibits and appendices annexed hereto
form material parts of this Lease.
(i) This Lease and any Site Schedules and any amendments to any of them
may be executed in duplicate counterparts, each of which shall be deemed an
original.
(j) Failure or delay on the part of any party to exercise any right,
power or privilege hereunder shall not operate as a waiver thereof. No
provision of this Lease or any Site Schedule shall be deemed waived except in a
writing signed by the affected parties.
(k) Headings are for convenient reference only and in no way define or
limit the interpretation or construction of the terms and conditions of this
Lease or any Site Schedule.
(l) The relationship of the parties created hereby is and will at all
times remain that of landlord and tenant. Nothing in this Lease shall be
construed to create the relationship of partners, joint venturers,
employer/employee or member of any joint enterprise by or between Landlord and
Tenant. No use of the Premises, however extended, or payment of any Rent, fees,
costs or other charges under this Lease will create or vest in either party any
ownership rights of any nature in the other party.
(m) Notwithstanding anything to the contrary herein, the parties
acknowledge and agree that each Site Schedule for all Sites being transferred
under and pursuant to the Merger Agreement at Closing and all Pre-Existing
Sites shall be valid, binding and enforceable without the necessity of
execution of such individual Site Schedules upon completion of the terms of
each Site Schedule and delivery of the same at Closing in accordance with the
Lease. Site Schedules for all other Sites shall be executed by the applicable
Landlord and Tenant. The parties shall execute and deliver such further
instruments and do such further acts and things as may be required to carry out
the intent and purposes of this Lease. The parties further acknowledge and
agree that the Site Schedules for all Sites being transferred under and
pursuant to the Merger Agreement at Closing and all Pre-Existing Sites to be
delivered at Closing
<PAGE> 31
pursuant to this subparagraph (m) shall be valid, binding and enforceable
without attachment of the actual exhibits thereto, it being the intention of
the parties that all the items identified as exhibits to said Site Schedules
shall remain in those certain binders which contain said items, all to be
delivered to Landlord in connection with Closing (there being one binder per
Site).
(n) LANDLORD SHALL NOT BE RESPONSIBLE FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES INCURRED BY TENANT RESULTING FROM TENANT'S USE OR
TENANT'S INABILITY TO USE THE ANTENNA SITE OR THE PREMISES. TENANT SHALL NOT BE
RESPONSIBLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES INCURRED BY LANDLORD
RESULTING FROM LANDLORD'S USE OR LANDLORD'S INABILITY TO USE LANDLORD'S TOWER
OR THE PREMISES.
(o) Landlord agrees to include provisions substantially similar to
Paragraphs 8 (Interference) and 9 (RF Compliance) hereof in all leases or
licenses executed by Landlord for space at any Site on which Tenant leases
space following the Commencement Date for such Site.
[The remainder of this page is intentionally left blank.]
<PAGE> 32
IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first above written.
<TABLE>
<CAPTION>
LANDLORD: TENANT:
Tower Asset Sub, Inc. Nextel of New York, Inc.,
a Delaware corporation. a Delaware corporation
<S> <C>
By: /s/ Richard J. Bryne By: /s/ Richard J. Byrne
----------------------------- ------------------------
Title: Title:
----------------------------- ------------------------
Date: Date:
----------------------------- ------------------------
Tax ID#: 54-1908850
SpectraSite Communications, Inc.
a Delaware corporation Nextel Communications of the
Mid-Atlantic, Inc., a Delaware corporation
By: /s/ David P. Tomick By: /s/ Richard Byrne
----------------------------- ------------------------
Title: Title:
----------------------------- ------------------------
Date: Date:
----------------------------- ------------------------
Tax ID#:
-----------------------------
Nextel South Corp.,
a Georgia corporation
By: /s/ Richard J. Byrne
------------------------
Title:
------------------------
Date:
------------------------
</TABLE>
<PAGE> 33
Nextel of Texas, Inc.,
a Texas corporation
By: /s/ Richard J. Byrne
---------------------------
Title:
---------------------------
Date:
---------------------------
Nextel West Corporation,
a Delaware corporation
By: /s/ Richard J. Byrne
---------------------------
Title:
---------------------------
Date:
---------------------------
Nextel of California, Inc.,
a Delaware corporation
By: /s/ Richard J. Byrne
---------------------------
Title:
---------------------------
Date:
---------------------------
<PAGE> 34
MASTER SITE LEASE AGREEMENT
EXHIBIT A-1Site No. __________
SITE SCHEDULE
to the Master Site Lease Agreement ("Lease") between the operating
communications subsidiaries of Nextel Communications, Inc., each d/b/a Nextel
Communications, collectively ("Tenant"), and Tower Asset Sub, Inc., its
successors and assigns and the Landlord Parties, as defined in the Lease
("Landlord").
1. Site No./Name:
2. Existing Site:______; Pre-existing Site:______; or Landlord Site:_______.
3. Name of Landlord:
4. Name of Tenant:
5. Site Address: (street address and legal description - attach metes and
bounds description)
6. Site Latitude and Longitude:
7. Commencement Date:
8. Expiration Date of Current Term - (Pre-existing Sites only):
9. Monthly Rent: $1,600 or $_________ (the amount due pursuant to the
Pre-existing Agreement).
Escalation/adjustment provision (Pre-existing Sites only):
Additional rent for additional equipment (Pre-existing Sites only):
10. Term: Initial Term of 5 ___ 6___ 7 ___ 8 ___ years.
Renewals: _______ of _______ years each.
11. Site Landlord-Owned: ______ or Landlord-Leased/Licensed: ______. If
leased or licensed, Term of Prime Lease:
12. Special Access Requirements:
13. Relocation Height: from ____ AGL to ____ AGL.
14. Taxes requirements (Pre-existing Sites only):
<PAGE> 35
15. Insurance requirements (Pre-existing Sites only):
16. Landlord Contact for Emergency:
17. Tenant Contact for Emergency:
18. Tenant's Address for Notice Purposes:
19. The execution hereof by the parties shall serve as an acknowledgment and
notice that for all Sites other than those Sites being transferred under
and pursuant to the Merger Agreement at Closing, the Landlord has
obtained any consents or approvals required under the Prime Lease to the
assignment, subletting, transfer or encumbrance of this interest in the
Premises, as contemplated by the Lease.
Landlord:
By:
Title:
Tenant:
By:
Title:
Date: _________________
Attachments: Exhibit 1A: Antenna Attachment Data
Sheet (New Sites and Landlord
Sites commencing after closing)
Exhibit 1B: Tower Profile Drawing Showing Antenna/Dish
Locations
Exhibit 2: Proposed Site Layout and Right of Way to the
Premises
Exhibit 3: Existing Liens, Rights of Way, Easements and
Mortgages
Exhibit 4: Prime Lease (if applicable)
<PAGE> 36
EXHIBIT 1.A.
ANTENNA ATTACHMENT DATA SHEET
RETURN THIS DATA SHEET TO: (E-MAIL IS PREFERRED)
<TABLE>
<S> <C>
SPECTRASITE COMMUNICATIONS, INC.
8000 REGENCY PARKWAY, SUITE 570 E-MAIL: [email protected]
CARY, NC 27511 OFFICE: (919) 468-0112
ATTN: COLLOCATION MANAGEMENT FAX: (919) 468-8522
</TABLE>
APPLICANT INFORMATION
<TABLE>
<CAPTION>
Tower Owner: SpectraSite Communications Tenant Applicant:
<S> <C>
Site Name: Site Name:
Site Number: Site Number:
Date (to be filled in by SpectraSite): Contact Name:
Contact Number:
Contact Address:
Contact e-mail:
</TABLE>
<PAGE> 37
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
SPECTRASITE TOWER INFORMATION
- -----------------------------------------------------------------------------------------
<S> <C>
Latitude: Existing Structure
Type:
- -----------------------------------------------------------------------------------------
Longitude: Existing
Structure Height:
- -----------------------------------------------------------------------------------------
Site Address:
- -----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
ANTENNAS
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
V1 V2 V3 OTHER
- -----------------------------------------------------------------------------------------
Desired Rad Center (Feet AGL)
- -----------------------------------------------------------------------------------------
Antenna Quantity
- -----------------------------------------------------------------------------------------
Antenna Manufacturer
- -----------------------------------------------------------------------------------------
Antenna Model (Attach Spec Sheet)
- -----------------------------------------------------------------------------------------
Weight (per antenna)
- -----------------------------------------------------------------------------------------
Antenna Dimensions
- -----------------------------------------------------------------------------------------
ERP (watts)
- -----------------------------------------------------------------------------------------
Antenna Gain
- -----------------------------------------------------------------------------------------
Orientation/Azimuth
- -----------------------------------------------------------------------------------------
Mechanical Tilt
- -----------------------------------------------------------------------------------------
Channels
- -----------------------------------------------------------------------------------------
Tower Mount Dimensions
- -----------------------------------------------------------------------------------------
Tower Mount Weight
- -----------------------------------------------------------------------------------------
Tower Mount Mounting Height
- -----------------------------------------------------------------------------------------
Transmit Frequency
- -----------------------------------------------------------------------------------------
Receive Frequency
- -----------------------------------------------------------------------------------------
Number of Coax Cables (PER
ANTENNA)
- -----------------------------------------------------------------------------------------
Diameter of Coax Cables
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
RF Contact Name/Number
- -----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- -----------------------------------------------------------------------------------------
POWER REQUIREMENTS
- -----------------------------------------------------------------------------------------
<S> <C>
AC Power Required Voltage and Total Amperage
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Construction Contact
Name/Number:
- -----------------------------------------------------------------------------------------
</TABLE>
<PAGE> 38
MASTER SITE LEASE AGREEMENT
EXHIBIT A-2 SITE NO. _________
SITE SCHEDULE
(MICROWAVE)
to the Master Site Lease Agreement ("Lease") between the operating
communications subsidiaries of Nextel Communications, Inc., each d/b/a Nextel
Communications, collectively ("Tenant"), and Tower Asset Sub, Inc., its
successors and assigns and the Landlord Parties, as defined in the Lease
("Landlord").
1. Site No./Name:
2. Existing Site: _______; Pre-existing Site: _______; or Landlord Site:
__________.
3. Name of Landlord:
4. Name of Tenant:
5. Site Address: (street address and legal description - attach metes and
bounds description)
6. Site Latitude and Longitude:
7. Commencement Date:
8. Expiration Date of Current Term - (Pre-existing Sites only):
9. Monthly Rent: $__________ ($1.50/linear foot of cabling) + $___________
($100/4' diameter dishes; $200/6' diameter dishes; $300/8'
diameter dishes) or $_______ (the amount due pursuant to the
Pre-existing Agreement).
Escalation/adjustment provision (Pre-existing Sites only): Additional
rent for additional equipment (Pre-existing Sites only):
10. Term: Initial Term of 5 ___ 6___ 7 ___ 8 ___ years.
Renewals: _______ of _______ years each.
11. Site Landlord-Owned: ______ or Landlord-Leased/Licensed: ______.
If leased or licensed, Term of Prime Lease:
12. Special Access Requirements:
13. Relocation Height: from ____ AGL to ____ AGL.
<PAGE> 39
14. Taxes requirements (Pre-existing Sites only):
15. Insurance requirements (Pre-existing Sites only):
16. Landlord Contact for Emergency:
17. Tenant Contact for Emergency:
18. Tenant's Address for Notice Purposes:
19. The execution hereof by the parties shall serve as an acknowledgment and
notice that for all Sites other than those Sites being transferred under
and pursuant to the Merger Agreement at Closing, the Landlord has
obtained any consents or approvals required under the Prime Lease to the
assignment, subletting, transfer or encumbrance of this interest in the
Premises, as contemplated by the Lease.
Landlord:
By:
Title:
Tenant:
By:
Title:
Date: _________________
<TABLE>
<S> <C>
Attachments: Exhibit 1A: Antenna Attachment Data Sheet (New Sites and Landlord
Sites, commencing after closing)
Exhibit 1B: Tower Profile Drawing Showing Antenna/Dish Locations
Exhibit 2: Proposed Site Layout and Right of Way to the Premises
Exhibit 3: Existing Liens, Rights of Way, Easements and Mortgages
Exhibit 4: Prime Lease (if applicable)
</TABLE>
<PAGE> 40
EXHIBIT 1.A.
ANTENNA ATTACHMENT DATA SHEET
RETURN THIS DATA SHEET TO: (E-MAIL IS PREFERRED)
<TABLE>
<S> <C>
SPECTRASITE COMMUNICATIONS, INC.
8000 REGENCY PARKWAY, SUITE 570 E-MAIL: [email protected]
CARY, NC 27511 OFFICE: (919) 468-0112
ATTN: COLLOCATION MANAGEMENT FAX: (919) 468-8522
</TABLE>
APPLICANT INFORMATION
<TABLE>
<S> <C>
Tower Owner: SpectraSite Communications Tenant Applicant:
Site Name: Site Name:
Site Number: Site Number:
Date (to be filled in by SpectraSite): Contact Name:
Contact Number:
Contact Address:
Contact e-mail:
</TABLE>
<PAGE> 41
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
SPECTRASITE TOWER INFORMATION
- -----------------------------------------------------------------------------------------
<S> <C>
Latitude: Existing Structure
Type:
- -----------------------------------------------------------------------------------------
Longitude: Existing Structure
Height:
- -----------------------------------------------------------------------------------------
Site Address:
- -----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
ANTENNAS
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
V1 V2 V3 OTHER
Desired Rad Center (Feet AGL)
- -----------------------------------------------------------------------------------------
Antenna Quantity
- -----------------------------------------------------------------------------------------
Antenna Manufacturer
- -----------------------------------------------------------------------------------------
Antenna Model (Attach Spec
Sheet)
- -----------------------------------------------------------------------------------------
Weight (per antenna)
- -----------------------------------------------------------------------------------------
Antenna Dimensions
- -----------------------------------------------------------------------------------------
ERP (watts)
- -----------------------------------------------------------------------------------------
Antenna Gain
- -----------------------------------------------------------------------------------------
Orientation/Azimuth
- -----------------------------------------------------------------------------------------
Mechanical Tilt
- -----------------------------------------------------------------------------------------
Channels
- -----------------------------------------------------------------------------------------
Tower Mount Dimensions
- -----------------------------------------------------------------------------------------
Tower Mount Weight
- -----------------------------------------------------------------------------------------
Tower Mount Mounting Height
- -----------------------------------------------------------------------------------------
Transmit Frequency
- -----------------------------------------------------------------------------------------
Receive Frequency
- -----------------------------------------------------------------------------------------
Number of Coax Cables (PER
ANTENNA)
- -----------------------------------------------------------------------------------------
Diameter of Coax Cables
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
RF Contact Name/Number
- -----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
POWER REQUIREMENTS
- -----------------------------------------------------------------------------------------
<S> <C>
AC Power Required Voltage and Total Amperage
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Construction Contact
Name/Number:
- -----------------------------------------------------------------------------------------
</TABLE>
<PAGE> 42
Site Schedule
Exhibit 4
Prime Lease
<PAGE> 43
MASTER SITE LEASE AGREEMENT
EXHIBIT B SITE NO. ________
ESTOPPEL CERTIFICATE
The undersigned does hereby represent and warrant as follows:
1. The undersigned, is the Landlord/Tenant under a Site Schedule dated
_______, _____ for Site No. _____ (the "Site Schedule") entered into
pursuant to the Master Site Lease Agreement dated ___________________,
1999 (the "Lease") between the operating communications subsidiaries of
Nextel Communications, Inc. and Tower Asset Sub, Inc., its successor and
assigns and the Landlord Parties defined in the Lease.
2. The Landlord/Tenant under the Site Schedule is: _______________.
3. Neither the Lease nor the Site Schedule has been modified, changed or
amended (except for the addition or revision of other Site Schedules)
except as listed on Exhibit A hereto, and a true and correct copy of any
such modification, change or amendment is attached hereto.
4. The Lease and the Site Schedule (each as modified, if modified) are in
full force and effect.
5. The monthly rent currently being paid is $______ per month. No rentals
are accrued and unpaid under the Site Schedule. Taxes, insurance,
maintenance, and any other applicable charges due under the Site Schedule
have been paid through_____________. No prepayments of rentals due under
the Site Schedule have been made.
6. The initial term of the Site Schedule commenced on_______, _____ and is
scheduled to expire on_______, _____. There is no option to renew or
extend the term of the Site Schedule, except as set forth in the Lease.
7. No default or event that with the passage of time or notice would
constitute a default on the part of the undersigned exists under the Site
Schedule, to the undersigned's knowledge.
8. The undersigned has not assigned, sublet, transferred, hypothecated or
otherwise disposed of its interest in the Lease as it relates to the Site
Schedule and/or the Premises, or any part thereof, [except for the
assignment of a collateral interest by Tenant to its lenders, as more
particularly described in Section 11 of the Lease].
9. To the undersigned's knowledge, the undersigned has no defense to its
obligations under
<PAGE> 44
the Lease and will assert no setoff, claim or counterclaim except as may
be expressly provided for in the Lease.
10. The agreements contained herein shall be binding upon and inure to the
benefit of the respective heirs, administrators, executors, legal
representatives, successors and assigns of Landlord and Tenant, and their
respective lenders.
11. The party signing this Estoppel Certificate is authorized to execute same
on behalf of the undersigned.
IN WITNESS WHEREOF, The undersigned has caused this Estoppel Certificate to be
executed by its duly authorized representative on ______________________,
______.
LANDLORD/TENANT:
By:
Its:
<PAGE> 45
MASTER SITE LEASE AGREEMENT
EXHIBIT C SITE NO.___________
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
("Agreement"), made and entered into as of ________, 1999, by and among
Canadian Imperial Bank of Commerce, as Collateral Agent for the Administrative
Agent, the Lenders and the Tranche C Lenders, all as defined in the
Intercreditor and Subordination Agreement by and among the parties to this
Agreement and SpectraSite Communications, Inc. as Borrower and [other
subsidiaries of Borrower] (the "Intercreditor Agreement") (hereinafter called
"Lender"), Tower Asset Sub, Inc., a Delaware corporation and the Landlord
Parties (as defined in the Lease (hereinafter individually or collectively as
the context may require, "Landlord") and Nextel of New York, Inc., Nextel
Communications of the Mid-Atlantic, Inc., Nextel South Corp., Nextel of Texas,
Inc., Nextel West Corp. and Nextel of California, Inc., each, d/b/a Nextel
Communications, (hereinafter individually or collectively, as the context may
require, "Tenant").
WITNESSETH:
WHEREAS, Lender has made or intends to make a loan or loans (the "Loan")
to or for the benefit of Landlord secured by, among other things, fee simple
and leasehold interests in certain real property and all improvements thereon
and appurtenances thereto owned by Landlord (individually, a C and
collectively the "Sites"); and
WHEREAS, Lender may require the Loan to be secured by a mortgage and
security agreement (the "Mortgage") on one or more Sites; and
WHEREAS, Landlord and Tenant have entered into certain site schedules
(each, a "Site Schedule") pursuant to a certain Master Site Lease Agreement (as
amended from time to time, the "Lease") with respect to the portions of each
Site and the improvements thereon leased by Tenant (the "Premises") all as more
particularly set forth in each Site Schedule; and
WHEREAS, Landlord has assigned or is to assign, pursuant to the Mortgage
and documents related thereto, all of its right, title and interest in the
Lease and some or all of the Site Schedules related thereto and the rents
payable thereunder to Lender as security, inter alia, for the performance of
its obligations made in connection with the Loan;
NOW, THEREFORE, in consideration of the mutual promises and covenants of
the parties hereto, and of other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto do
mutually covenant and agree as follows:
<PAGE> 46
1. Non-Disturbance. So long as Tenant is not in default (after the
expiration of all periods afforded to Tenant during which Tenant has the right
to cure any default) under the Lease with respect to any Site, Tenant shall
not, by reason of foreclosure of the Mortgage, acceptance of a deed in lieu of
foreclosure, or the exercise of any remedy provided in the Mortgage, be
disturbed in Tenant's use, occupancy and quiet enjoyment of the Premises during
the term of the Lease as it relates to the Site Schedule or any extension
thereof set forth in the Site Schedule, and Tenant shall have the right to
exercise all renewal terms set forth in each Site Schedule. For purposes of
this Agreement, a "foreclosure" shall include (but be not limited to) a
judicial foreclosure proceeding, the exercise of a power of sale, a sheriff's
or trustee's sale under power of sale and any other transfer of the Landlord's
interest in the Site under peril of foreclosure, including, without limitation,
an assignment or sale in lieu of foreclosure and any Acquiring Party
(hereinafter defined) shall take subject to the terms of the Lease as it
relates to the affected Sites.
2. Subordination
(a) The Lease and the Site Schedules shall be subject and
subordinate in all respects to the lien and terms of the Mortgage, to any and
all advances to be made thereunder and to all renewals, modifications,
consolidations, replacements and extensions thereof. Lender agrees and
acknowledges that nothing in the Intercreditor Agreement shall negate or
preclude the exercise of Tenant's rights to any benefits afforded under this
Agreement.
(b) Tenant warrants and represents that it has not subordinated
the Lease or the Site Schedules or any of its rights to possession under the
Lease or the Site Schedules to any lien, mortgage, deed of trust or deed to
secure debt prior to the date hereof, except as set forth in Section 3 hereof.
3. Lender Acknowledgement
(a) Lender acknowledges that Tenant has entered into a financing
arrangement including promissory notes and financial and security arrangements
for the financing of the Tenant Facilities (as defined in the Lease,
hereinafter the "Collateral") with a third party financing entity (and may in
the future enter into additional financing arrangements with other financing
entities) and may enter into sale/leaseback or other similar arrangements with
Affiliates (as defined in the Lease) of Tenant who may become sub-tenants with
respect to certain of the Sites and may install items equivalent to the Tenant
Facilities (as defined in the Lease) at such Sites, which in turn may be
subject to financing and security agreement terms similar to those applicable
to Tenant (such items collectively, "Affiliate Collateral"). In connection
therewith, Lender (i) consents to the installation of the Collateral and the
Affiliate Collateral; (ii) disclaims any interest in the Collateral and the
Affiliate Collateral, as fixtures or otherwise; and (iii) agrees that the
Collateral and the Affiliate Collateral shall be exempt from execution,
foreclosure, sale, levy, attachment, or distress for any Rent (as defined in
the Lease) due or to become due, and that such Collateral and Affiliate
Collateral may be removed by Tenant or its Affiliates, as appropriate, at any
time without recourse to legal proceedings, subject to the terms of the Lease.
<PAGE> 47
(b) Lender further acknowledges that Tenant has assigned its
rights in and to the Collateral and under the Lease as collateral security for
the aforesaid financing arrangements, and may in the future enter into
additional financing arrangements.
4. Attornment. At the election of such Acquiring Party, Tenant agrees
to attorn to, accept and recognize any person or entity which acquires a Site
through a foreclosure (an AAcquiring Party") as the landlord under the Lease
for the then remaining balance of the term of the relevant Site Schedule, and
any extensions thereof as made pursuant to the Lease; provided, however, the
Lease at such time shall be effective between Tenant and such Acquiring Party
only to the extent that the same relates to the Site. The foregoing provision
shall be self-operative and shall not require the execution of any further
instrument or agreement by Tenant as a condition to its effectiveness. Tenant
agrees, however, to execute and deliver, at any time and from time to time,
upon the request of the Lender or any Acquiring Party any reasonable instrument
which may be necessary or appropriate to evidence such attornment, including,
without limitation, a new lease substantially similar in terms to the Lease but
covering only the Site.
5. No Liability. Notwithstanding anything to the contrary contained
herein or in the Lease, it is specifically understood and agreed that neither
the Lender, any receiver nor any Acquiring Party shall be:
(a) liable for any act, omission, negligence or default of any
prior landlord; provided, however, that any Acquiring Party shall be liable and
responsible for the performance of all covenants and obligations of Landlord
under the Lease accruing from and after the date that it takes title to any
Site; or
(b) except as set forth in (a) above, liable for any failure of
any prior landlord to construct any improvements; or
(c) subject to any offsets, credits, claims or defenses which
Tenant might have against any prior landlord except as provided in the Lease;
or
(d) bound by any rent or additional rent which is payable on a
monthly basis and which Tenant might have paid for more than one (1) month in
advance to any prior landlord; or
(e) bound by any cancellation, surrender, amendment or
modification of the Lease (provided, however, that any Acquiring Party shall be
bound by each amendment and modification that is in effect at the time such
Acquiring Party takes title to any Site) or release of Landlord from liability
thereunder not expressly consented to in writing by Lender or otherwise
permitted by the Mortgage in each instance provided, however, that Landlord may
obtain additional Sites pursuant to that certain Master Site Commitment
Agreement (which will be evidenced by new Site Schedules to the Lease) and
provided further that this subsection (e) shall not apply to any amendment or
modification that is not adverse to Lender or to cumulative cancellations or
surrenders of up to 10% of the Site Schedules then in effect under the Lease.
<PAGE> 48
(f) liable to Tenant hereunder or under the terms of the Lease
beyond its interest in the Site; or
(g) liable under the Lease except as the same relates to the
Site (not liable under the Lease with respect to any site other than the Site).
Notwithstanding the foregoing, Tenant reserves its rights to any and all claims
or causes of action against such prior landlord for prior losses or damages
relating to the Site and against the successor landlord for all losses or
damages arising or relating to the Site from and after the date that such
successor landlord takes title to the Site.
6. Rent. Tenant has notice that the rents and all other sums due
thereunder relating to the Site have been assigned to Lender as security for
the Loan secured by the Mortgage. In the event Lender notifies Tenant of the
occurrence of a default under the Mortgage and demands that Tenant pay its
rents and all other sums due or to become due relating to the Site under the
Lease directly to Lender, Tenant shall honor such demand and pay its rent and
all other sums due relating to the applicable Site under the Lease directly to
Lender or as otherwise authorized in writing by Lender. Landlord hereby
irrevocably authorizes Tenant to make the foregoing payments to Lender upon
such notice and demand and payments so made by Tenant to Lender shall be
conclusively deemed, as between Tenant and Landlord, to have been made to
Landlord under the Lease.
7. Lender to Receive Notices. Landlord shall notify Lender promptly
following notice from Tenant of any actual or alleged default by Landlord under
the Lease relating to any Site which would entitle Tenant to cancel the Lease
as to such Site, and Tenant agrees that, notwithstanding any provisions of the
Lease to the contrary, no notice of cancellation thereof shall be effective
unless Lender shall have received notice of default giving rise to such
cancellation and shall have failed within thirty (30) days after receipt of
such notice to cure such default, or if such default cannot be cured within
thirty (30) days, shall have failed within sixty (60) days after receipt of
such notice to commence and diligently pursue any action necessary to cure such
default and shall have accomplished such cure by the expiration of such sixty
(60) day period, provided, however, that no notice shall be required hereunder
to the extent that the cancellation of the Lease as it relates to individual
Site Schedules, together with all previous and contemporaneous cancellations,
constitutes less than 10% of all Sites then subject to the Lease.
8. Notices. All notices or other written communications hereunder
shall be deemed to have been properly given (i) upon delivery, if delivered in
person with receipt acknowledged by the recipient thereof, (ii) one (1)
Business Day (hereinafter defined) after having been deposited for overnight
delivery with any reputable overnight courier service, or (iii) three (3)
Business Days after having been deposited in any post office or mail depository
regularly maintained by the U.S. Postal Service and sent by registered or
certified mail, postage prepaid, return receipt requested, addressed to the
receiving party at its address set forth above, and:
If to Tenant:
---------------------------
---------------------------
---------------------------
<PAGE> 49
<TABLE>
<S> <C>
---------------------------
and
If to Landlord:
---------------------------
---------------------------
---------------------------
---------------------------
and
If to Lender:
---------------------------
---------------------------
---------------------------
---------------------------
</TABLE>
or addressed as such party may from time to time designate by written notice to
the other parties. For purposes of this Paragraph 7, the term "Business Day"
shall mean any day other than Saturday, Sunday or any other day on which banks
are required or authorized to close in New York, New York.
Any party by notice to the other may designate additional or different
addresses for subsequent notices or communications.
9. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
This Agreement shall also bind and inure to the benefit of any subsequent
mortgagee or holder of other security instrument with respect to the Lease as
it relates to any Site Schedule or any part to refinance the Loan, and in such
event, all references herein to Lender shall also refer to such mortgagee or
holder, and all references to the Mortgage shall also refer to such mortgage or
security instrument.
10. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
11. Amendment. This Agreement may not be changed, amended or modified
in any manner other than by an agreement in writing specifically referring to
this Agreement and executed by the parties hereto.
12. Counterparts. This Agreement may be executed in counterparts, each
being deemed an original and all being deemed one and the same.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
LENDER:
[Lender]
<PAGE> 50
(SEAL)
<TABLE>
<S> <C>
Attest: By:
--------------------------- --------------------------
Name: Name:
-----------------------------
Title: Title:
----------------------------
LANDLORD:
[Landlord]
By:
--------------------------
Name:
Title:
TENANT:
[Tenant]
By:
--------------------------
Title:
</TABLE>
[Note: Site specific forms appropriate to the applicable jurisdiction to be
provided as required]
<PAGE> 51
MASTER SITE LEASE AGREEMENT
EXHIBIT D SITE NO.______________
MEMORANDUM OF AGREEMENT
CLERK: Please return this document to:___________________
This Memorandum of Agreement is entered into on this ____ day of
________________, ______, by and between ___________________________, a
________________ corporation, with an office at
____________________________________, (hereinafter referred to as "Landlord")
and ________________________, a __________ Corporation with an office at
________________ ____________________________________, (hereinafter referred to
as "Tenant").
1. Landlord and Tenant entered into a Site Schedule pursuant to a Master
Site Lease Agreement ("Agreement") on the ____ day of ____________
______, for the purpose of installing, operating and maintaining a radio
communications facility and other improvements. All of the foregoing are
set forth in the Agreement.
2. The term of the Agreement as it relates to the Site Schedule is for ____
(__) years commencing on _________________, ______ ("Commencement Date"),
and terminating on the ________ anniversary of the Commencement Date with
______ (____) successive ____ (____) year options to renew.
3. The Land which is the subject of the Agreement as it relates to the Site
Schedule is described in Exhibit A annexed hereto. The portion of the
Land being leased to Tenant (the "Premises") is described in Exhibit B
annexed hereto.
IN WITNESS WHEREOF, the parties have executed this Memorandum of Agreement as
of the day and year first above written.
<TABLE>
<CAPTION>
Landlord Tenant
- --------------------------------- --------------------------------
<S> <C>
By: By:
-------------------------- -------------------------
Date: Date:
-------------------------- -------------------------
Title: Title:
-------------------------- -------------------------
</TABLE>
<PAGE> 52
STATE OF ________________________
COUNTY OF ______________________
On ____________________, before me, _________________________, Notary Public,
personally appeared ____________________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the instrument,
the person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
________________________________ (SEAL)
Notary Public
My commission expires: _______________________
STATE OF _____________________________
COUNTY OF ___________________________
On ____________________, before me, _________________________, Notary Public,
personally appeared ____________________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the instrument,
the person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
________________________________ (SEAL)
Notary Public
My commission expires: _______________________________
<PAGE> 1
EXHIBIT 10.34
================================================================================
MASTER SITE COMMITMENT AGREEMENT
BETWEEN
NEXTEL COMMUNICATIONS, INC.,
NEXTEL OF NEW YORK, INC.,
NEXTEL COMMUNICATIONS OF THE MID-ATLANTIC, INC.,
NEXTEL SOUTH CORP.,
NEXTEL OF TEXAS, INC.,
NEXTEL WEST CORP.,
NEXTEL OF CALIFORNIA, INC.,
TOWER PARENT CORP.,
SPECTRASITE HOLDINGS, INC.,
AND
TOWER ASSET SUB, INC.
Dated as of April ___, 1999
================================================================================
<PAGE> 2
MASTER SITE COMMITMENT AGREEMENT
THIS MASTER SITE COMMITMENT AGREEMENT (this "Agreement") is
made as of the ___ day of April, 1999, by and among Nextel Communications, Inc.
a Delaware corporation ("Nextel") (a party hereto solely for the purposes of
Section 2.1(a) hereof), Nextel of New York, Inc., a Delaware corporation,
Nextel of California, Inc., a Delaware corporation, Nextel of Texas, Inc., a
Texas corporation, Nextel South Corp., a Georgia corporation, Nextel West
Corp., a Delaware corporation, Nextel Communications of the Mid-Atlantic, Inc.,
a Delaware corporation, and any other subsidiary or controlled Affiliate of
Nextel designated by Nextel as a Transferring Subsidiary in accordance with
Section 2.1 (individually a "Transferring Subsidiary" and collectively the
"Transferring Subsidiaries"), Tower Parent Corp., a Delaware corporation
("Parent Co.") (a party hereto solely for the purposes of Section 2.4 hereof),
SpectraSite Holdings, Inc., a Delaware corporation ("Tower Aggregator") (a
party hereto solely for the purposes of Section 2.5(c) hereof), and Tower Asset
Sub, Inc., a Delaware corporation ("Tower Sub").
RECITALS
A. Nextel, the Transferring Subsidiaries, Parent Co., a
wholly owned subsidiary of Nextel, Tower Merger Vehicle, Inc., a Delaware
corporation and wholly owned subsidiary of Parent Co. ("Merger Sub"), Tower
Sub, Tower Aggregator, SpectraSite Communications, Inc., a Delaware corporation
and wholly owned subsidiary of Tower Aggregator ("SCI"), and SHI Merger Sub,
Inc., a Delaware corporation and wholly owned subsidiary of SCI ("SHI Merger
Sub") are all parties to an Agreement and Plan of Merger dated as of February
10, 1999, as amended (the "Merger Agreement"). The Merger Agreement provides
for (i) the transfer of certain Tower Assets (as hereinafter defined) located
at the Merger Sites (as hereinafter defined) by the Transferring Subsidiaries
to Parent Co. and the further transfer of those Tower Assets from Parent Co. to
Tower Sub and (ii) the merger (the "Merger") of SHI Merger Sub with and into
Merger Sub, with Merger Sub the surviving corporation of the Merger. In
connection with the Merger, all of the issued and outstanding shares of stock
of Merger Sub will be converted into certain shares of preferred stock of Tower
Aggregator and cash as contemplated by the Merger Agreement, and SCI will
become the sole stockholder of Merger Sub. As a consequence of the Merger,
Tower Sub will become a wholly owned indirect subsidiary of Tower Aggregator.
B. In connection with the Merger, the applicable parties
are concurrently herewith entering into the Nextel Master Site Lease Agreement
(as hereinafter defined) pursuant to which Tower Sub will lease to the
Transferring Subsidiaries (as hereinafter defined) certain
<PAGE> 3
sites and related wireless communications tower or other transmission space and
related equipment, including the Merger Sites transferred indirectly by the
Transferring Subsidiaries to Tower Sub in accordance with the terms of the
Merger Agreement. The Nextel Master Site Lease Agreement shall from time to
time be supplemented with Site Schedules (as therein defined) to provide for
the lease of (i) certain additional sites owned or acquired by Tower Aggregator
and/or its Subsidiaries; (ii) the Constructed New Sites (as hereinafter
defined); and (iii) the Purchased New Sites (as hereinafter defined).
C. Under the terms of this Agreement, the parties shall
enter into an arrangement pursuant to which the Transferring Subsidiaries shall
offer Tower Sub certain opportunities relating to the construction or purchase
of additional communications sites which shall then be leased by the
Transferring Subsidiaries under the terms of the Nextel Master Site Lease
Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
covenants hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1.1 DEFINED TERMS.
The following terms as used in this Agreement will have their
respective meanings indicated below:
"Actual New Sites" has the meaning set forth in Section
2.1(b).
"Affiliate" has the meaning ascribed to that term in Rule
12b-2 under the Securities Exchange Act of 1934, as amended.
"Agreement" has the meaning set forth in the Preamble.
"Alternate Equipment" has the meaning set forth in Section
2.5.
"Ancillary Agreements" means the Merger Agreement and all
other Ancillary Agreements as defined in the Merger Agreement other than this
Agreement.
"Architectural and Engineering Work" or "A&E" means, with
respect to each New Site, taking all of the following actions in compliance
with all applicable laws: (i) obtaining a geotechnical exploration report
which provides information about the site, and its subsurface conditions, and
provides general foundation recommendations for the proposed tower, (ii)
providing a professional engineer sealed tower foundation design for the site,
(iii) providing construction inspection and materials testing services during
construction of tower foundations, (iv) providing field testing and laboratory
reports of documented electrical resistance to ground for use by the electrical
engineer in designing the electrical grounding system, (v) preparing all
<PAGE> 4
necessary construction plans and drawings and (vi) providing field inspection
services.
"Carryover Amount" has the meaning set forth in Section
2.1(b).
"Claimant" has the meaning set forth in Section 3.15(c).
"Closing" has the meaning set forth in Section 3.3(a).
"Committed New Sites" has the meaning set forth in Section
2.1(d).
"Communications Act" means the Communications Act of 1934, as
amended.
"Communication Equipment" means wireless communication
receivers, transmitters, other antenna devices, and related equipment.
"Completion Notice" has the meaning set forth in Section
2.5(a).
"Constructed New Site" has the meaning set forth in Section
2.2(a).
"Construction Approvals" means all necessary approvals from
applicable governmental authorities relating to Site acquisition and
development, including, without limitation, building and FAA permits, zoning
approvals, and FCC approvals (if any).
"Construction Failure" has the meaning set forth in Section
2.3(f).
"Construction Period" has the meaning set forth in Section
2.3(a).
"Construction Schedule" has the meaning set forth in Section
2.3(a).
"Decline to Fund Notice" has the meaning set forth in Section
2.1(d).
"Defaulted New Sites" has the meaning set forth in 2.1(d).
"Deferred New Sites" has the meaning set forth in Section
2.1(d).
"Deferred Purchase Date" has the meaning set forth in Section
2.1(d).
"Dispute" has the meaning set forth in Section 3.15(a).
"End Date" has the meaning set forth in Section 2.6.
"Excluded Site" has the meaning set forth in Section 2.2(b).
"Executives" has the meaning set forth in Section 3.15(a).
<PAGE> 5
"Exercise Notice" has the meaning set forth in Section 3.4.
"Expected Build Territory" has the meaning set forth in
Section 2.1(b).
"FAA" means the Federal Aviation Administration.
"FCC" means the Federal Communications Commission.
"Final Approvals" means all Construction Approvals, together
with other necessary approvals from applicable governmental authorities, in
each case which are (i) not subject to an active appeal or challenge (in an
appropriate proceeding before the relevant reviewing or appellate body) and
(ii) has not been subject to such an active appeal or challenge for a period of
at least 60 days (or, if a shorter period is expressly prescribed by applicable
law, such shorter period), relating to the occupancy and use of a Site by a
Transferring Subsidiary, including, without limitation, a certificate of
occupancy, if required.
"Force Majeure" means, with respect to any party, any of the
following events: delays in zoning or permitting (other than delays resulting
from or occasioned by such party's pursuit of any modifications or supplements
to the zoning and permitting completed by the other party prior to delivery of
a Second Notice), strikes, lockouts, labor disputes, embargoes, flood,
earthquake, storm, dust storm, lightning, fire, and any other weather
conditions that prevent (according to the tower construction industry's
standard of prudence) construction for any calendar day(s) in excess of the
four "weather days" set forth in each Construction Schedule, epidemic, acts of
God, war, national emergency, civil disturbance or disobedience, riot,
sabotage, terrorism, threats of sabotage or terrorism, restraint by court order
or order of public authority, delays caused by or attributable to the actions
of the other party or any of its Subsidiaries or controlled Affiliates or the
failure of the other party to timely perform any action required by this
Agreement to be performed by such other party, and similar occurrences beyond
the reasonable control of such party, and such nonperformance shall be excused
for the period of time any such Force Majeure causes such nonperformance.
"HSR Act" has the meaning set forth in Section 3.4.
"Initial Notice" has the meaning set forth in Section 2.2(b).
"JVA" has the meaning set forth in Section 2.1(a).
"Measurement Period" has the meaning set forth in Section
2.1(d).
"Merger" has the meaning set forth in Recital A.
"Merger Agreement" has the meaning set forth in Recital A to
this Agreement.
<PAGE> 6
"Merger Sites" means the owned real estate or leasehold
interests, as applicable, and the communications towers or monopoles located
thereon, including the Tower Assets (but excluding any Communication Equipment)
associated therewith, described in the Merger Agreement and transferred to
Tower Sub at or prior to the closing of the Merger.
"Merger Sub" has the meaning set forth in Recital A.
"Minimum Purchase Commitment" has the meaning set forth in
Section 2.1(d).
"Minimum Specifications" has the meaning set forth in Section
2.2(c).
"Negotiation Period" has the meaning set forth in Section
3.15(a).
"New Sites" means all locations in the Territory for the
construction of new communications towers or monopoles for use by any
Transferring Subsidiary (including Tower Assets, but excluding any
Communication Equipment associated therewith) other than Merger Sites, and in
each case on which a Transferring Subsidiary would become a tenant (on terms
consistent with those set forth in the Nextel Master Site Lease Agreement).
"Nextel" has the meaning set forth in the Preamble.
"Nextel Master Site Lease Agreement" means the Nextel Master
Site Lease Agreement dated as of the date hereof, among Tower Sub, Landlord
Parties (as defined therein), and the Transferring Subsidiaries pursuant to
which the Merger Sites, and each other Site that either is or is deemed to be a
Constructed New Site or a Purchased New Site hereunder are leased by a
Transferring Subsidiary from Tower Sub.
"NonQualified Site" has the meaning set forth in Section
2.2(c).
"Offer Notice" has the meaning set forth in Section 3.4.
"Offeror" has the meaning set forth in Section 3.4.
"Owner's Title Policy" means an owner's policy of title
insurance which insures either the fee simple title or the leasehold interest
being conveyed in a Site, subject only to the Permitted Exceptions.
"Parent Co." has the meaning set forth in the Preamble.
"Partner" means Nextel Partners Operating Corp., a Delaware
corporation and any one or more of the direct or indirect subsidiaries of
Nextel Partners, Inc., a Delaware corporation, or any other entity in which it
has a direct or indirect equity or other equivalent ownership interest.
"Partner Area" means the "Territory" as defined in the JVA.
<PAGE> 7
"Permitted Exceptions" means as to any Site (i) title
encumbrances or exceptions set forth in the title commitment which do not
materially and adversely affect the intended use of the Site, such as, by way
of example and not of limitation, utility easements, and (ii) standard
preprinted exceptions to be set out in the Owner's Title Policy; and (iii) any
title encumbrances or exceptions identified in the title report delivered to
Tower Sub as part of the Second Notice.
"Person" means any individual, corporation, partnership,
limited liability company, firm, joint venture, association, joint stock
company, trust, unincorporated organization, governmental or regulatory body or
other entity.
"Preexisting Contract" means any agreement or commitment
(other than this Agreement) with any Person for the construction or sale of any
New Site within the Territory, to which either Nextel or any Transferring
Subsidiary is a party as of February 10, 1999, without giving effect to any
subsequent amendment or modification thereof, and which agreement or commitment
is listed in Section 6.13 of the Nextel Disclosure Statement to the Merger
Agreement.
"Proposed Tower Sub Co-location Site" has the meaning set
forth in Section 3.1(c).
"Purchase Agreement" means the agreement, substantially in the
form attached as SCHEDULE 8, pursuant to which a Transferring Subsidiary will
convey a Purchased New Site to Tower Sub.
"Purchased New Site" has the meaning set forth in Section
2.2(a).
"Qualifying Sites" has the meaning set forth in Section 2.6.
"Rules" has the meaning set forth in Section 3.15(c).
"SCI" has the meaning set forth in Recital A.
"SHI Merger Sub" has the meaning set forth in Recital A.
"Second Notice" has the meaning set forth in Section 2.2(b).
"Section 2.2(a) Notice" has the meaning set forth in Section
2.4.
"Site" means, individually, a Merger Site, a Site Under
Construction, a Constructed New Site, or a Purchased New Site.
<PAGE> 8
"Site Acquisition Work" means, with respect to each New Site,
taking all of the following actions in compliance with all applicable laws and
paying all costs associated therewith: (i) obtaining ownership of or leasehold
right to real property, together with such related or appurtenant real property
rights, as may be required for the construction on such real property of Tower
Assets and for the installation, operation and maintenance of Communication
Equipment pursuant to ownership documents, options or options and lease
agreements and related documents (provided that payment of rent under any such
lease agreements shall be the obligation of the applicable Transferring
Subsidiary for any Purchased New Site until the sale of same), complying with
Section 2.2(b), where applicable, after identifying potential sites within each
search ring, (ii) obtaining from a qualified surveyor a recent (i.e. prepared
or updated no more than six months prior to (x) the Second Notice, if any,
given by a Transferring Subsidiary to Tower Sub with respect thereto or (y) the
receipt of Construction Approvals, if no Second Notice is given) ground survey
depicting the boundaries and areas of the Site location, all easements, rights
of way and other matters affecting title thereto, any improvements thereon,
applicable setback lines, if any, information regarding flood plain location
and any encroachments affecting the Site, and stake out of same, (iii)
obtaining any necessary utility and access easements and all necessary consents
from the underlying owner or prime landlord, (iv) obtaining all FAA and FCC
approvals (if any) needed to construct Tower Assets on such Site, (v) preparing
all zoning drawings and obtaining all zoning approvals or designations
necessary to construct and operate Tower Assets on such Site, including
participation in all hearings and meetings necessary to accomplish same, and
all legal costs incurred in procuring such zoning approvals, (vi) obtaining an
environmental transaction screening (as defined by the American Society of
Testing and Materials) of such Site and a related report, which report shall be
addressed to the Transferring Subsidiary and Tower Sub, together with a Phase I
environmental site assessment and any follow up tests and remediation that may
be required and a National Environmental Policy Act assessment, (vii)
obtaining a title commitment or abstract for each New Site current within six
months of the Second Notice (if any), curing any title defects or objections
pertaining to such New Site and providing a title insurance policy, when
requested by Transferring Subsidiary, and (viii) recording documents as
reasonably required to evidence ownership or leasehold rights in and to such
New Site.
"Site Agreement" means a lease agreement or option agreement,
by and between Tower Sub (or, if a Transferring Subsidiary is performing or has
designated another party to perform Site Acquisition Work, by such Transferring
Subsidiary and assignable to Tower Sub), as lessee (or optionee), and certain
lessors (or optionors), for rights to certain portions of the lessor's or
optionor's land for the construction thereon of Tower Assets and installation
of Communication Equipment.
"Site Goal" has the meaning set forth in Section 3.3(a).
"Site Schedule" has the meaning set forth in the Nextel Master
Site Lease Agreement.
"Sites Under Construction" means sites under construction by
or on behalf of the Transferring Subsidiaries upon the consummation of the
Merger (such Sites Under Construction to become Purchased New Sites under this
Agreement).
<PAGE> 9
"Successor Entity" has the meaning set forth in Section 3.16.
"Tenant Facilities" has the meaning set forth in the Nextel
Master Site Lease Agreement.
"Term" has the meaning set forth in Section 3.2.
"Territory" means the United States of America.
"Third Party Site" has the meaning set forth in Section
3.1(c).
"Tower Aggregator" has the meaning set forth in the Preamble.
"Tower Assets" means a communications tower or monopole
structure, tower lighting, tower grounding system and fencing (and, as to
analog sites only, the shelter and concrete pad, if any), but does not include
Communication Equipment.
"Tower Sub" has the meaning set forth in the Preamble.
"Transferring Subsidiary" has the meaning set forth in the
Preamble.
Terms may be defined above in either their singular or plural
form, but may also be used in this Agreement in their other form not expressly
defined above.
1.2 CONSIDERATION.
As consideration for the rights to (a) purchase the Purchased
New Sites and construct the Constructed New Sites, (b) at the Transferring
Subsidiaries' option, provide Site Acquisition Work, construction services
and/or additional construction services as set forth on SCHEDULE 7, and lease
all New Sites, together with Proposed Tower Sub Co-location Sites that become
Qualifying Sites hereunder, to the Transferring Subsidiaries (including such
New Sites and Proposed Tower Sub Co-location Sites that become Qualifying Sites
hereunder as are located in the Partner Area), Tower Sub shall pay to the
Transferring Subsidiaries or their designees, concurrently with execution of
this Agreement, the sum of $105,000,000.00. The parties agree and acknowledge
that, if any of them seek damages by reason of any breach or violation of this
Agreement, such sum is not intended to constitute or represent either a minimum
required or a maximum permitted amount for purposes of any damage award, nor is
such sum intended to be accorded any relevance in determining what damage
award, if any, would be appropriate to remedy any particular violation or
breach hereof.
2. CONSTRUCTION AND PURCHASE OF NEW SITES
2.1 NEW SITES.
<PAGE> 10
(a) From and after the date hereof and until the End Date, each of
Nextel and the Transferring Subsidiaries agrees that neither they nor any of
their subsidiaries or controlled Affiliates shall contract with a third party
(including any Affiliate) for the construction of a New Site in the Territory,
without first complying with the provisions of this Article 2, except for any
New Site subject to a Preexisting Contract. Prior to the date of this
Agreement, each of Nextel and the Transferring Subsidiaries has provided Tower
Aggregator copies of all Preexisting Contracts. Nextel will designate as a
Transferring Subsidiary its subsidiaries or controlled Affiliates that propose
to (ix) construct Tower Assets at a New Site in the Territory or (x) acquire
Tower Assets located in the Territory and upon such designation, Nextel shall
cause such subsidiary or controlled Affiliate to become a party to, and bound
by, this Agreement. In addition, Nextel agrees that all New Sites to be
constructed in the Partner Area pursuant to and in accordance with Section 6.9
of the Joint Venture Agreement between Nextel WIP Corp., Nextel Partners, Inc.
and Nextel Partners Operating Corp. dated as of January 29, 1998 (as in effect
on February 10, 1999, and as subsequently amended in accordance with the next
sentence, the "JVA") shall be Purchased New Sites or Constructed New Sites for
all purposes of this Agreement. Nextel will not permit its subsidiary that is
a signatory party to the JVA to enter into any amendment, waiver, or
modification of the JVA that would be adverse to Tower Sub or Tower Aggregator,
or which would prevent, limit, or restrict the Transferring Subsidiaries from
performing their obligations under this Agreement, including, without
limitation, any amendment or modification of the JVA that would permit any
Person other than Nextel or any Transferring Subsidiary to construct New Sites
for Partner in the Partner Area during the Term without first obtaining the
written consent of Tower Sub thereto. The Parties hereto agree and acknowledge
that, in the event of any conflict between the terms of this Agreement and the
terms of Section 6.9 of the JVA, the latter shall be controlling. Nextel
represents and warrants that: (i) it has delivered to Tower Aggregator a true
and correct copy of the JVA as executed on January 29, 1999 and as in effect on
February 10, 1999, and (ii) other than the JVA and the Preexisting Contracts,
neither Nextel nor any of its Subsidiaries or controlled Affiliates is a party
to any agreement with any third party (including Partner or any Affiliates of
Nextel) (x) for the construction of any New Sites in the Partner Area, (y) that
would limit, restrict or conflict with Nextel's rights to construct New Sites
in the Partner Area, or (z) that would limit, restrict or conflict with
Nextel's agreement to treat all New Sites constructed in the Partner Area as
contemplated under this Agreement.
(b) Notwithstanding anything to the contrary contained herein, the
Transferring Subsidiaries shall have the right to locate any New Site within or
outside the Expected Build Territory (as defined below), and Tower Sub shall
not be required to construct or purchase any Discretionary Location Sites (as
defined below) except for such Discretionary Location Sites that Tower Sub
elects to construct or purchase as provided in this Section 2.1(b). As to any
calendar year (beginning with 1999), the parties agree that: (xi) the "Expected
Build Territory" shall be the areas shown in blue or in white on the map
attached as Exhibit A hereto (and whether any particular site, as identified by
latitude and longitude, is within or outside the Expected Build Territory may
be determined by reference to an electronic file which plots any identified
site with reference to the map, which file has been made available to the
parties to this Agreement), as
<PAGE> 11
such Exhibit A may be modified by mutual agreement of the Transferring
Subsidiaries and Tower Sub as a result of the annual review process described
in Section 2.1(c); (xii) the "Discretionary Location Sites" shall be those New
Sites to be located outside the Expected Build Territory during the relevant
calendar year that exceed the sum of (x) that number of New Sites that is 10%
(rounded to the nearest whole number) of the total number of New Sites expected
to be made available for construction or purchase by Tower Sub hereunder during
such calendar year plus (y) the Carryover Amount (as defined below) from prior
years, if any; provided, however, that Tower Sub shall not be obligated to
construct or purchase more than an aggregate of 170 Discretionary Location
Sites (excluding all Committed Discretionary Sites (as defined below)) during
the period beginning on the date hereof and concluding on the End Date; and
(xiii) the "Carryover Amount" shall be the number obtained by (A) subtracting
from (x) a number that is equal to 10% of the number of New Sites actually
constructed by or for the Transferring Subsidiaries hereunder during such
calendar year ("Actual New Sites") (y) the number of such Actual New Sites that
are located outside the Expected Build Territory for such calendar year;
provided that (1) the result of subtracting the number in clause (y) from the
number in clause (x) shall be rounded to the nearest integer and (2) if such
result is less than zero, it shall be deemed to be zero; and (B) adding to the
number derived in clause A the cumulative number of New Sites that constituted
the Carryover Amount for any prior calendar years. Until the End Date, the
Transferring Subsidiaries shall make available to Tower Sub for construction or
purchase all New Sites (including all Discretionary Location Sites), and Tower
Sub will in good faith consider whether it wishes to purchase or construct each
such New Site that is a Discretionary Location Site, and shall provide a
written response indicating whether it elects to purchase or construct each
such Discretionary Location Site within ten days of such Discretionary Location
Site being made available, or shall be deemed to have irrevocably elected not
to purchase or construct such Discretionary Location Site. If Tower Sub elects
to purchase or construct a Discretionary Location Site, it shall then be either
a Constructed New Site or a Purchased New Site hereunder, as applicable, and
shall be purchased and sold in compliance with Section 2.3 or Section 2.4
hereof, as appropriate. Any Discretionary Location Site which any Transferring
Subsidiary desires to have constructed or purchased but which Tower Sub does
not elect to construct or purchase in accordance with this subparagraph may be
constructed, further developed, held and/or transferred by the applicable
Transferring Subsidiary or any other controlled Affiliate of Nextel, free and
clear of any and all obligations and liabilities under or pursuant to this
Agreement or any of the Ancillary Agreements; provided, however, that such a
Discretionary Location Site shall not be a Qualifying Site (as defined in
Section 2.6). Until the End Date, the Transferring Subsidiaries shall make
available all New Sites in the Territory to Tower Sub except as otherwise
permitted pursuant to or under a Preexisting Contract.
(c) The Transferring Subsidiaries establish and revise their
digital wireless system deployment plans in their respective markets on an
ongoing basis with the primary goals of maximizing revenue and customer growth.
These plans include the deployment of additional transmitter sites in existing
markets to enhance system capacity or quality of system performance, the
deployment of such sites in contiguous areas to expand existing market coverage
areas to meet customer expectations and/or meet competition, and the deployment
of sites in new markets to expand the footprint of the digital network
(including Partners' proposed expansion of the Nextel network in smaller
markets located in the Partner Area). Such plans also contemplate logical
expansions of the coverage footprint to include highway corridors that
<PAGE> 12
connect existing and planned markets.
The deployment plan for 1999 has been developed in a manner
consistent with such business plans based on information currently known to the
Transferring Subsidiaries, and based on the overall strategic plans, direction
and orientation for Nextel's U.S. digital mobile network business currently in
place. The Transferring Subsidiaries do not expect that their future
deployment plans will be developed or implemented in a manner that is
materially different than the manner in which such plans have been developed
and implemented with respect to 1998 and 1999. However, the parties
acknowledge that the business and operating strategies of the Transferring
Subsidiaries are totally within the discretion of the Transferring Subsidiaries
and that changes in such strategies may significantly alter deployment plans.
Accordingly, the Transferring Subsidiaries do not have any obligation to Tower
Aggregator as to the manner in which future deployment and implementation plans
are developed.
Until the End Date occurs, the Transferring Subsidiaries and
Tower Sub agree to meet on an annual basis during the months of November or
December to discuss Nextel's tower build plan for the coming calendar year and
to establish an estimated number of New Sites to be constructed and/or
purchased during such calendar year (and, for each such meeting held prior to
the third anniversary hereof, the maximum number of New Sites to be constructed
and/or purchased in the coming Measurement Period as contemplated in Section
2.1(d) below). Such estimated number will be used for purposes of establishing
the numbers in subparagraph 2.1(b).
At each annual meeting contemplated above, the parties will
attempt to mutually agree on a new maximum number of New Sites to be
constructed and/or purchased for the coming calendar year (and, as contemplated
below, the maximum number of New Sites to be constructed and/or purchased in
the coming Measurement Period). If the parties mutually agree on a new maximum
number of New Sites for any Measurement Period, such number will replace the
number set forth in subparagraph 2.1(d) below for such Measurement Period. For
any Measurement Period as to which the parties do not agree on a new number,
the number set forth in subparagraph 2.1(d) below will control.
At such annual meetings, in addition to the build/deployment
plan for the coming calendar year (and, if relevant, Measurement Period), the
parties agree to discuss any deviations or significant variations in costs
noted by any party between the fixed prices or fees for various items or
categories set forth on SCHEDULE 2 to this Agreement and the actual costs
incurred, using the agreed-upon assumption that each fixed price or fee amount
is to represent the actual cost for that item or category plus 10%, on an
average basis. Any fixed price or fee line item which the parties mutually
agree does not accurately reflect the average actual cost plus 10% will be
adjusted by amendment to this Agreement.
(d) Notwithstanding anything to the contrary contained herein,
Tower Sub shall not be obligated under this Agreement to construct or purchase
more than an aggregate of 566 New Sites (as such number may be adjusted
pursuant to Section 2.1(c) and this Section 2.1(d)) during each of the calendar
years 1999, 2000 and 2001 (each such calendar year, a "Measurement Period").
As to each Measurement Period, 566 New Sites or such adjusted number derived in
accordance with Section 2.1(c), as appropriate, is referred to as the "Minimum
Purchase
<PAGE> 13
Commitment" for such Measurement Period. In the event the Transferring
Subsidiaries and Tower Sub deliver Second Notices during any Measurement Period
that contemplate that Tower Sub will be required to construct or purchase more
than the applicable Minimum Purchase Commitment during any such Measurement
Period, and Tower Sub either fails to respond within ten days of receipt or
delivery of the Second Notices or indicates in writing that it will not fund
the construction of or purchase all or a portion of such excess New Sites (a
"Decline to Fund Notice") during the relevant Measurement Period, any such
excess New Sites that the Transferring Subsidiaries elect to construct during
such relevant Measurement Period shall be constructed by Tower Sub or, at the
election of the Transferring Subsidiaries, constructed as they may indicate,
but in either such case such excess New Sites shall be constructed at the
expense of such Transferring Subsidiaries. If construction of any such excess
New Site is completed not more than three months before the end of such
relevant Measurement Period, Tower Sub will be obligated to purchase and will
purchase all of such completed excess New Sites on the first day of the next
Measurement Period or, in the case of the third Measurement Period, the day
after the last day thereof (the "Deferred Purchase Date"), unless (i) the
purchase of any such excess New Site would result in Tower Sub purchasing more
than the applicable Minimum Purchase Commitment during such next Measurement
Period or (ii) the End Date has occurred prior to the time such purchase is
required to be consummated (such excess New Sites as are required to be
purchased, the "Deferred New Sites"). In all other cases Tower Sub will have
the right, but not the obligation, to specify in its Decline to Fund Notice
that it irrevocably commits to purchase any or all of such excess New Sites not
later than the 90th day after construction thereof is completed (such excess
New Sites that Tower Sub so commits to purchase, the "Committed New Sites")).
The Transferring Subsidiaries hereby covenant and agree that (A) the Deferred
New Sites shall be retained by the Transferring Subsidiaries until the Deferred
Purchase Date, when they shall be sold to Tower Sub and (B) each Committed New
Site shall be retained by the Transferring Subsidiaries until the 90th day
after construction thereof has been completed (or such earlier date on which
Tower Sub elects to purchase such Committed New Site), when it will be sold to
Tower Sub. The Transferring Subsidiaries and Tower Sub agree that each
Deferred New Site and Committed New Site purchased and sold as contemplated in
the preceding sentence shall be a Purchased New Site hereunder, shall be
purchased and sold in compliance with Section 2.4 of this Agreement and shall
reduce the applicable Minimum Purchase Commitment for the Measurement Period
immediately following the Measurement Period in which such New Site became a
Deferred New Site or a Committed New Site, as the case may be. All excess New
Sites that are neither Deferred New Sites or Committed New Sites (and, without
limiting any other rights or remedies of the Transferring Subsidiaries
hereunder, any Deferred New Site or Committed New Site that Tower Sub is
obligated, but fails or refuses, to buy, as provided above; such New Sites, the
"Defaulted New Sites") may be further developed, transferred or retained by the
Transferring Subsidiaries free and clear of any and all obligations or
liabilities under or pursuant to this Agreement or any of the Ancillary
Agreements, and each Deferred New Site and Committed New Sites (including any
constituting Defaulted New Sites) also shall be deemed a Purchased New Site
that is also a Qualifying Site.
For example, if the Transferring Subsidiaries request Tower
Sub to construct 600
<PAGE> 14
New Sites during the first Measurement Period and Tower Sub only agrees to fund
construction of 580 New Sites, the Transferring Subsidiaries (if they elect to
construct all 20 of such excess New Sites during the first Measurement Period)
shall bear the expense for the construction (whether by Tower Sub or otherwise
as specified by the Transferring Subsidiaries) of the 20 New Sites for which
Tower Sub declined to fund construction. Accordingly, if such 20 New Sites
constructed at the expense of the Transferring Subsidiaries were completed
within 90 days of the end of the first Measurement Period, all 20 of such New
Sites would be sold to Tower Sub as Purchased New Sites under this Agreement on
the first day of the second Measurement Period, and the Minimum Purchase
Commitment, i.e., the maximum number of New Sites that Tower Sub will be
obligated to construct or purchase at its own expense - during the second
Measurement Period would be reduced from 566 to 546 (subject to the parties
reaching mutual agreement, pursuant to Section 2.1(c), on a different number of
New Sites being the Minimum Purchase Commitment for such second Measurement
Period).
2.2 IDENTIFICATION OF SITE LOCATIONS.
(a) During the Term, before constructing or causing the
construction of any Tower Assets at any New Site for a Transferring
Subsidiary's own account and ownership or lease by such Transferring Subsidiary
(other than a New Site subject to a Preexisting Contract), such Transferring
Subsidiary will notify Tower Sub of the proposed New Site and inform Tower Sub
whether it wishes to have Tower Sub purchase (in which case the New Site will
be a "Purchased New Site") or construct (in which case the New Site will be a
"Constructed New Site") Tower Assets at such New Site according to the
remaining terms of this Article 2. Notwithstanding the foregoing, all Sites
Under Construction shall be Purchased New Sites hereunder. Within ten days of
the date hereof, the Transferring Subsidiaries shall notify Tower Sub of all
Sites Under Construction and provide the information set forth in Schedule 1
with respect to such Sites Under Construction.
(b) In connection with the development during the Term of each New
Site in the Territory, a Transferring Subsidiary shall provide Tower Sub, in
writing, the information set forth on SCHEDULE 1. The notice given in
accordance with this Section 2.2(b) is referred to as the "Initial Notice".
Upon receipt of the Initial Notice, Tower Sub shall have ten days to notify the
Transferring Subsidiary that the communication tower to be constructed on the
Site shall, if applicable zoning approvals can be obtained, be constructed at a
height to be specified by Tower Sub that shall be no less than the height
indicated in the Initial Notice. If the Initial Notice identifies the New Site
as a Constructed New Site, the Transferring Subsidiary shall also notify Tower
Sub as to whether such Transferring Subsidiary (including any third party
designated by such Transferring Subsidiary) or Tower Sub shall complete the
Site Acquisition Work. The fixed fee schedule for Site Acquisition Work, and
the fixed fee schedule for Architectural and Engineering Work, for any New Site
is set forth in SCHEDULE 2. The parties agree that if Tower Sub is requested
to perform Site Acquisition Work and thereafter Transferring Subsidiary elects
not to proceed with such Site, Transferring Subsidiary will pay Tower Sub the
applicable fee for Site Acquisition Work set forth on SCHEDULE 2.
Notwithstanding the foregoing, any costs incurred in the site acquisition
process as a result of undertaking an activity that would be considered
extraordinary in connection with site acquisition, such as, by way of example
and not of limitation, costs of balloon tests and EMF experts, shall not be
part of the fixed fee otherwise
<PAGE> 15
due for Site Acquisition Work. Such costs and the need to incur same shall be
discussed between the parties in advance of such expenses being incurred, when
possible. Such costs shall be passed through at actual cost and paid in
accordance with Section 2.5(b) or as a part of the purchase price for each
Purchased New Site. The parties further agree that if Transferring Subsidiary
requests that Tower Sub construct such Site, Tower Sub will also provide A&E
for such Site (other than Sites where A&E is covered by a Preexisting
Contract). If the Transferring Subsidiary elects to perform the Site
Acquisition Work, it shall acquire the Site using such instruments of title or
lease agreements as meet with the prior approval of Tower Sub, which approval
shall not be unreasonably withheld or delayed by Tower Sub, and which shall be
deemed granted if no response is received within ten days of receipt by Tower
Sub of the proposed Site Agreement. Transferring Subsidiary shall perform such
due diligence investigations of said Sites as may reasonably be required by
Tower Sub. If the due diligence investigation of any Site discloses
information that would result in a breach of the representations and warranties
of the Purchase Agreement with respect to such Site, Tower Sub may notify the
Transferring Subsidiary of Tower Sub's election to refuse to construct or
purchase such Site (and a failure to respond within ten days of receipt of the
due diligence information shall be deemed a refusal to construct or purchase)
in which case such Site may be held, further developed and/or transferred by
the Transferring Subsidiaries or any other controlled Affiliate of Nextel free
and clear of any and all obligations and liabilities under or pursuant to this
Agreement or the Ancillary Agreements and such Site shall not be a Qualifying
Site (an "Excluded Site"). For any Site other than an Excluded Site, following
its completion of such work and the execution of a Site Agreement with respect
thereto, the Transferring Subsidiary shall provide Tower Sub notice of the
Transferring Subsidiary's completion of Site Acquisition Work, together with
the information set forth on SCHEDULE 3 (the "Second Notice") that is
applicable to such Site. In instances in which Site Acquisition Work is to be
performed by Tower Sub, following Tower Sub's completion of such work and the
execution of a Site Agreement with respect thereto, Tower Sub shall provide the
appropriate Transferring Subsidiary notice of Tower Sub's completion of Site
Acquisition Work, together with a Second Notice containing the information set
forth on SCHEDULE 3 that is applicable to such Site. Delivery of a Second
Notice by Transferring Subsidiary or Tower Sub will result in a binding
commitment of each of the Transferring Subsidiary and Tower Sub to enter into a
Site Schedule for such Site. Within five business days following its receipt
of such Second Notice, the Transferring Subsidiary shall notify Tower Sub of
the Tenant Facilities to be installed thereon by the Transferring Subsidiary.
(c) To qualify as a Constructed New Site or a Purchased New Site
hereunder, a New Site must meet the standards and minimum specifications set
forth on SCHEDULE 4 (the "Minimum Specifications") and be constructed pursuant
to the applicable terms of all related Construction Approvals and otherwise in
material compliance with all applicable laws, provided, however, that any New
Site which does not meet the Minimum Specifications but which has been jointly
agreed to prior to construction by Tower Sub and the Transferring Subsidiary
shall nonetheless qualify as a Constructed New Site or Purchased New Site, as
applicable. Within five business days after the receipt or delivery, as
applicable, of a Second Notice with respect to a Site
<PAGE> 16
that does not satisfy each of the Minimum Specifications (a "NonQualified
Site"), Tower Sub shall provide the Transferring Subsidiary written notice of
Tower Sub's desire to (i) construct, own, and operate Tower Assets at the Site,
if the Transferring Subsidiary has proposed such NonQualified Site to be a
Constructed New Site; (ii) purchase the Tower Assets at the Site, if the
Transferring Subsidiary has proposed such NonQualified Site to be a Purchased
New Site following the development and construction thereof by Transferring
Subsidiary; or (iii) waive without condition any and all rights granted
hereunder with respect to such NonQualified Site, including, without
limitation, its rights to develop, construct, or purchase such Site. Tower Sub
shall be deemed to have elected the waiver described in clause (iii) if it does
not provide the Transferring Subsidiary with written notice of Tower Sub's
desire to construct or purchase such NonQualified Site, within such five
business day period described in the preceding sentence. If Tower Sub makes an
election under clause (i) or (ii) of this Section 2.2(c), such NonQualified
Site will be a Constructed New Site or Purchased New Site for all purposes
hereunder, notwithstanding the failure of such Site to meet the Minimum
Specifications. If, however, Tower Sub elects (or is deemed to have elected)
the waiver described in clause (iii) of this Section 2.2(c), such NonQualified
Site will not be deemed to be a Constructed New Site or Purchased New Site
hereunder and such Site shall not be a Qualifying Site (NonQualified Sites that
are subject to a waiver described in clause (iii) of this Section 2.2(c) being
referred to as "Released Sites"), and each such Released Site may be held,
further developed and/or transferred by the Transferring Subsidiaries or any
other controlled Affiliate of Nextel free and clear of any and all obligations
and liabilities under or pursuant to this Agreement or the Ancillary
Agreements.
2.3 CONSTRUCTED NEW SITES
(a) Tower Sub shall construct each Constructed New Site according
to the Minimum Specifications and such construction shall be completed by Tower
Sub as quickly as commercially reasonable but in any event within the
Construction Period defined herein. The term "Construction Period" means the 60
day construction period established in the schedule set forth on SCHEDULE 5
(the "Construction Schedule") beginning, (i) in the case of a Constructed New
Site in connection with which a Transferring Subsidiary has opted to perform
Site Acquisition Work, on the later of the date of delivery of the Second
Notice or receipt of a building permit; or (ii) in the case of a Constructed
New Site in connection with which a Transferring Subsidiary has opted to have
Tower Sub perform Site Acquisition Work, on the date all Construction Approvals
have been received. In each case, the Construction Period may be extended by
reason of an event of Force Majeure, to the extent such Force Majeure is a
direct cause of the construction delay, or by mutual agreement of the parties.
Notwithstanding the foregoing, in the case of Constructed New Sites with
respect to which Tower Sub is responsible for performing Site Acquisition Work,
in the event that the Transferring Subsidiary reasonably determines that Tower
Sub is not diligently pursuing the completion of Site Acquisition Work, the
Transferring Subsidiary shall have the right on 20 days written notice, to
assume from Tower Sub responsibility for Site Acquisition Work with respect to
such Site and to either reclassify such Site as a Purchased New Site or,
following completion of Site Acquisition Work, to submit a Second Notice to
Tower Sub and retain the designation of such Site as a Constructed New Site.
If, however, Tower Sub cures or otherwise remedies the alleged deficiencies in
pursuing the completion of the Site Acquisition Work within the notice period
given to Tower Sub, the
<PAGE> 17
Transferring Subsidiary shall not be entitled to thereafter assume
responsibility for the Site Acquisition Work.
(b) Construction of a Constructed New Site by Tower Sub shall
fulfill the Minimum Specifications unless waived by the Transferring Subsidiary
and shall include: (i) all A&E; (ii) if necessary, construction of an access
road suitable for pedestrian and vehicular ingress and egress; and (iii) the
construction of a communication tower complete with tower grounding system,
fencing, and tower lighting (as necessary). Completion of construction shall
be certified by all governmental agencies required to give regulatory
certification and shall be subject to acceptance by the Transferring
Subsidiary, which acceptance will not be unreasonably withheld. Acceptance by
the Transferring Subsidiary shall be upon written notice from the Transferring
Subsidiary to Tower Sub that the Constructed New Site meets the Minimum
Specifications and the specifications set forth in the Second Notice. The
Transferring Subsidiary shall be permitted to designate representatives to have
supervised access to the construction site to review construction progress,
including, without limitation, grounding, utility runs and easements, shelter
location, and antenna platform. The Transferring Subsidiary shall give written
notice to Tower Sub of any construction defect at the time the Transferring
Subsidiary becomes aware of such defect. Upon completion of the Constructed
New Site, Tower Sub shall give the Transferring Subsidiary written notice of
completion, which shall include the information set forth on SCHEDULE 6A. The
Transferring Subsidiary shall have ten calendar days thereafter to give its
written acceptance or objections to construction, which objections shall be
limited to those not previously waived. In addition to the foregoing, if
requested by the Transferring Subsidiary, Tower Sub shall provide the services
set forth on SCHEDULE 7 on each Constructed New Site at the rates and on the
terms to be agreed to by the parties.
(c) As to each Constructed New Site, the Transferring Subsidiary
and Tower Sub shall execute a Site Schedule to the Nextel Master Site Lease
Agreement reflecting a Commencement Date (as defined in the Nextel Master Site
Lease Agreement) which is the earlier of the date of completion of construction
or the date of installation of the Tenant Facilities.
(d) [Reserved]
(e) In the event Tower Sub fails to complete construction of a
Constructed New Site within the Construction Period described above, then, a
Transferring Subsidiary shall have the right to recover from Tower Sub, and
Tower Sub shall, promptly following notice from the Transferring Subsidiary,
deliver to the Transferring Subsidiary the sum of $500.00 per day (not to
exceed $10,000.00 in the aggregate for each Site that is not constructed
according to schedule) subject to any delays caused by an event of Force
Majeure; provided, however, that the amount of such penalty sum paid by Tower
Sub hereunder with respect to a particular delayed Site shall offset, dollar
for dollar (but not below zero) the additional $5,000 payment that would
otherwise be payable by Tower Sub with respect to such Site pursuant to Section
2.3(f) below.
<PAGE> 18
(f) In the event Tower Sub fails to (i) complete the installation
of the Tower foundation for a Constructed New Site in accordance with the
Construction Schedule; (ii) complete the construction of a Constructed New Site
within the applicable period set forth in the Construction Schedule; or (iii)
otherwise fails in any material respect to perform its obligations hereunder
with respect to a Constructed New Site (any of the foregoing, a "Construction
Failure"), a Transferring Subsidiary may elect, at its sole option, on notice
to Tower Sub and subject to the cure right hereinafter described, to assume
control of the construction of such Constructed New Site. If the Transferring
Subsidiary wishes to exercise its right to assume control of the construction
of such Constructed New Site, it shall notify Tower Sub in writing and Tower
Sub shall have ten business days from such Notice to effectuate a cure. If
such cure is not effectuated within such ten business day period, promptly
following written notice with respect thereto, Tower Sub shall permit the
Transferring Subsidiary to assume control of, and complete construction of,
such Constructed New Site, and Tower Sub shall be responsible for all costs,
including overtime and all other expenses incurred in completing construction
of such Site as rapidly as possible, without any cap or restriction, but
subject to invoices to substantiate such costs, together with an additional
payment of $5,000, subject to offset as provided pursuant to Section 2.3(e)
above (such $5,000 amount, as reduced by offset where applicable, the "Penalty
Sum"). Upon completion, Tower Sub shall be deemed to have purchased all
improvements to such Constructed New Site completed by the Transferring
Subsidiary in exchange for the payment of all amounts contemplated by the
preceding sentence and such site will be a Constructed New Site and a
Qualifying Site.
(g) The payment provisions set forth in Sections 2.3(e) and (f)
are intended as the sole and exclusive liquidated damages for failure to
complete construction of a Constructed New Site within the Construction Period
(as contemplated by Section 2.3(e)) or a Construction Failure (as contemplated
by Section 2.3(f)) and, upon the receipt by the Transferring Subsidiaries of
payment in full of all amounts due pursuant to Sections 2.3(e) and 2.3(f), as
applicable, shall preclude any other remedy or recovery against Tower
Aggregator, Tower Sub, or any of their controlled Affiliates for or by reason
of any such failure, provided, however, that nothing in this Section 2.3(g)
shall limit or restrict Nextel's or the Transferring Subsidiaries' termination
rights pursuant to Section 3.2(c)(iii).
2.4 PURCHASED NEW SITES. If the Initial Notice identifies a New
Site as a "Purchased New Site" or if the Site is identified as a Site Under
Construction in the Notice provided pursuant to Section 2.2(a) (the "Section
2.2(a) Notice") and is, therefore, a Purchased New Site, the Transferring
Subsidiary that provided such Initial Notice or Section 2.2(a) Notice, as
applicable, may, but shall be under no obligation to, complete the development
and construction of such New Site or Site Under Construction. If the
Transferring Subsidiary elects to complete such development and to construct
such Site it shall, following its completion of Site Acquisition Work, provide
Tower Sub notice of its completion of such Site Acquisition Work, together with
a Second Notice containing the information set forth on SCHEDULE 3 that is
applicable to such Site and an identification of the Tenant Facilities to be
installed thereon by the Transferring Subsidiary. On notice to Tower Sub from
a Transferring Subsidiary of such Transferring Subsidiary's completion of any
Purchased New Site (including with such notice the information set forth on
SCHEDULE 6B), the parties, including Parent Co., shall execute a Purchase
Agreement in substantially the form set forth on SCHEDULE 8 providing for the
purchase and sale of such Site,
<PAGE> 19
for a purchase price equal to the amount set forth on SCHEDULE 2, provided,
that if Parent Co. or Transferring Subsidiary is unable to make the
representations and warranties provided in the Purchase Agreement (or can only
make such representations and warranties by making disclosures in Schedules to
the Purchase Agreement that are not acceptable to Tower Sub, in its reasonable
determination) with respect to any Purchased New Site, Tower Sub may refuse to
purchase such Purchased New Site by providing written notice of such election
(including a brief summary of the reasons therefor) within five business days
of receipt of the applicable Schedules and such Purchased New Site will not
constitute a Qualifying Site, and the Transferring Subsidiaries or any other
controlled Affiliate of Nextel may further develop, hold or transfer any such
site that Tower Sub refuses to purchase, free and clear of any and all
obligations and liabilities under or pursuant to this Agreement or the
Ancillary Agreements. Closing on each completed Purchased New Site will occur
on a date to be mutually agreed by the parties within fifteen days after the
last business day of the month following the completion date, provided,
however, that, at Transferring Subsidiary's sole option, such closing date may
be advanced if necessary to achieve any of the Site Goal obligations set forth
in Section 3.3. Concurrently with the closing of the purchase and sale of each
Purchased New Site, Transferring Subsidiary will transfer such Purchased New
Site to Parent Co., Parent Co. will transfer such Purchased New Site to Tower
Sub and the appropriate Transferring Subsidiary and Tower Sub shall execute a
Site Schedule to the Nextel Master Site Lease Agreement reflecting such
completed Purchased New Site, all as further detailed in Section 2.5 hereof and
a Commencement Date that is the date of such closing. Concurrently therewith,
Parent Co. and the Transferring Subsidiary shall cause the applicable Site
Agreement, options, permits, zoning approvals, and other relevant Site
development items to be assigned to Tower Sub free and clear of all liens and
security interests (subject to Permitted Exceptions).
2.5 LEASED SPACE.
(a) Tower Sub shall notify the appropriate Transferring Subsidiary
15 days prior to the then anticipated completion of each Constructed New Site
(including the information set forth on SCHEDULE 6A; provided, however, that
the certificate of occupancy or equivalent permit will be provided when
required) and the appropriate Transferring Subsidiary shall notify Tower Sub 15
days prior to the then anticipated completion of each Purchased New Site
(including the information set forth on SCHEDULE 6B; provided, however, that
the certificate of occupancy or equivalent permit will be provided when
required (each, a "Completion Notice") and, (i) within five days after receipt
of such Completion Notice from Tower Sub or (ii) concurrently with the delivery
of its Completion Notice to Tower Sub, the appropriate Transferring Subsidiary
shall notify Tower Sub of the number of antennas (or lines) on the constructed
tower and the location thereon that such Transferring Subsidiary desires to
install equipment and of the associated space that the Transferring Subsidiary
will require for equipment shelters. If a Transferring Subsidiary designates
antennas (or lines) or a height of the installation, that is different than
that set forth in the Second Notice or response to a Second Notice provided by
Tower Sub (the "Alternate Equipment"), Tower Sub shall allow the Transferring
Subsidiary to use such other or additional space on and in the Tower Assets as
is necessary to operate the Alternate Equipment, subject to available capacity
and space, on the terms and conditions set forth in the Nextel Master Site
Lease Agreement.
<PAGE> 20
(b) Upon the execution of the applicable Site Schedule to the
Nextel Master Site Lease Agreement reflecting the inclusion of each Constructed
New Site and upon closing as to each Purchased New Site, Tower Sub shall pay to
the appropriate Transferring Subsidiary an amount equal to the fixed fee for
the Site Acquisition Work set forth on SCHEDULE 2, for all Constructed New
Sites and Purchased New Sites for which Transferring Subsidiary has performed
(or has arranged for a party other than Tower Sub to perform) the Site
Acquisition Work. The Transferring Subsidiary shall indemnify and hold Tower
Sub harmless for any payment demands by contractors or other persons performing
services in connection with the Site Acquisition Work and, if applicable, with
respect to Purchased New Sites, A&E, performed by or arranged (with parties
other than Tower Sub) through the Transferring Subsidiary.
(c) In addition to the Merger Sites, Sites Under Construction,
Constructed New Sites, and Purchased New Sites, Tower Sub or the relevant
Subsidiary or controlled Affiliate of Tower Aggregator shall, upon the request
of a Transferring Subsidiary, enter into Site Schedules to the Nextel Master
Site Lease Agreement, at lease rates determined in accordance with the rental
rates specified therein, and subject only to space availability, for space
requested by the Transferring Subsidiary on any communications sites or towers
currently owned, or hereafter acquired, by Tower Aggregator or any Subsidiary
or controlled Affiliate of Tower Aggregator in the Territory and such a Site
will be a Qualifying Site. Tower Aggregator shall cause its Subsidiaries and
controlled Affiliates to take such action as shall reasonably be required to
enable Tower Sub to comply with its obligations under this Section 2.5.
2.6 END DATE. For purposes hereof, the "End Date" shall be the
earlier of (a) the fifth anniversary hereof or (b) the date on which the sum of
the number of all Constructed New Sites (including any Constructed New Site
that fails to satisfy the Minimum Specifications but which has been accepted by
the appropriate Transferring Subsidiary), Purchased New Sites, including
Purchased New Sites which are Sites Under Construction (including Purchased New
Sites that fail to satisfy the Minimum Specifications but which have been
agreed to by Tower Sub), and all Proposed Tower Sub Co-location Sites as to
which a Site Schedule is delivered, equals or exceeds 1700 in the aggregate,
with such sum being calculated for all such Sites for which a Site Schedule has
been delivered by the applicable Transferring Subsidiary and as to which the
Commencement Date has occurred, plus (without double counting) all Sites
otherwise deemed to be Qualifying Sites under Sections 2.1(d), 2.4, this
Section 2.6, and 3.1(c) hereof (all such Sites described in this clause (b)
collectively referred to as "Qualifying Sites"). A Constructed New Site, with
respect to which a Transferring Subsidiary has exercised its rights under
Section 2.3(f), shall be deemed a "Constructed New Site" and a "Qualifying
Site," notwithstanding that a Site Schedule to the Nextel Master Site Lease
Agreement may not have been executed with respect thereto. The obligations of
the parties hereto as set forth in Section 2.1(a) hereof shall terminate on the
End Date. Notwithstanding the occurrence of the End Date, all applicable
financial obligations of the parties under the terms hereof shall continue
until paid in full and, subject to such payment, shall in all circumstances
terminate on the sixth anniversary hereof.
3. MISCELLANEOUS TERMS
3.1 CO-LOCATION.
<PAGE> 21
(a) Prior to executing any lease for space on any Site with a
Person who owns or has access to other communication sites (including without
limitation communications towers or monopoles), Tower Sub shall propose for
inclusion in such lease a requirement that such Person grant to the
Transferring Subsidiaries the right, for each Site that Tower Sub makes
available to such Person, to locate the Transferring Subsidiaries' equipment at
one other site that such Person owns or has access to. Such proposal shall
provide that the Transferring Subsidiaries' right to use any other site made
available by the other Person shall be on commercially reasonable terms and
shall be subject to space availability at such site. The only obligation of
Tower Sub pursuant to this Section 3.1(a) shall be the obligation to make such
proposal in good faith and Tower Sub is under no obligation to negotiate such
proposal on Transferring Subsidiaries' behalf or in any way deliver the
agreement of such Person to such proposal.
(b) The Transferring Subsidiaries shall be permitted to disclose
to any other Person the potential for co-location at any Site, subject to space
availability, upon the execution of Tower Sub's standard commercial lease (at
market rates), and further provided that the proposed installation shall not
exceed the structural and wind-loading capacity of the tower and the proposed
equipment does not cause interference with any then existing occupants of the
tower. At the request of a Transferring Subsidiary, Tower Sub shall negotiate
in good faith with any such other Person identified by such Transferring
Subsidiary.
(c) If, following submission of an Initial Notice identifying a
Constructed New Site or a Purchased New Site with respect to which a
Transferring Subsidiary has requested that Tower Sub be responsible for the
performance of Site Acquisition Work, Tower Sub identifies a communication site
owned by it or an Affiliate controlled by Tower Aggregator (a "Proposed Tower
Sub Co-location Site") or by a third party (a "Third Party Site"), which meets
the Minimum Requirements and specifications of such Initial Notice and is
available for co-location of Transferring Subsidiary Communication Equipment,
Tower Sub shall so notify such Transferring Subsidiary. If such Transferring
Subsidiary enters into a Site Schedule pursuant to the Nextel Master Site Lease
Agreement pursuant to which such Transferring Subsidiary agrees to lease space
on a Proposed Tower Sub Co-location Site, such Site shall be deemed to be a
Qualifying Site. The appropriate Transferring Subsidiary shall pay to Tower
Sub the fixed fee for Site Acquisition Work for Co-location Sites as set forth
on SCHEDULE 2 in the event that such Transferring Subsidiary leases space on a
Third Party Site. Tower Sub shall indemnify and hold Nextel and the
Transferring Subsidiaries harmless for any payment demands by contractors and
other persons hired by Tower Sub to perform services in connection with the
Site Acquisition Work for Third Party Sites and Proposed Tower Sub Co-location
Sites.
3.2 TERMINATION.
(a) This Agreement shall be effective as of the date hereof and,
subject to the last sentence of Section 2.6, shall continue in effect until the
End Date, unless earlier terminated as provided herein (the "Term").
(b) Tower Sub may terminate this Agreement prior to the end of the
Term by written notice given to Nextel upon the occurrence of either of the
following events:
<PAGE> 22
(i) the insolvency of Nextel or a Transferring
Subsidiary, suffering or committing any act of insolvency, or
the inability of Nextel or a Transferring Subsidiary to pay
its debts when due; or
(ii) Nextel's or a Transferring Subsidiary's liquidation,
whether voluntarily or involuntarily, or the appointment for
it of a receiver or liquidator.
(c) Nextel, on behalf of the Transferring Subsidiaries, may
terminate this Agreement prior to the end of the Term by written notice given
to Tower Sub upon the occurrence of any of the following events:
(i) the insolvency of Tower Aggregator or Tower Sub,
suffering or committing any act of insolvency, or the
inability of Tower Aggregator or Tower Sub to pay its debts
when due;
(ii) Tower Aggregator's or Tower Sub's liquidation,
whether voluntarily or involuntarily, or the appointment for
it of a receiver or liquidator; or
(iii) at or after the end of any calendar year, the
Transferring Subsidiaries have, with respect to such calendar
year, exercised their rights to recover the penalty payment
described under Section 2.3(e) and/or elected to take over
construction of a Constructed New Site under Section 2.3(f),
for more than 10% of the total number of Constructed New Sites
during such calendar year.
(d) Either Tower Sub or any Transferring Subsidiary may terminate
this Agreement in the event the other party is in breach of an obligation to
pay money or is in breach of a material nonmonetary obligation under this
Agreement (unless the breach is waived by the non-breaching party) and fails to
cure such breach (i) in the case of breach of an obligation to pay money,
within ten days after written notice has been served on the breaching party by
the non-breaching party indicating the nature of the breach or purported breach
and the dollar amount due, or (ii) in the case of a material nonmonetary breach
that remains uncured, (x) for 30 days after written notice of the breach, or
(y) if cure is not possible within such 30 day period, for 45 days after
written notice of the breach, provided, the breaching party continues to
exercise reasonable diligence in effectuating a cure; provided, further, that a
Transferring Subsidiary may not terminate this Agreement under this Section
3.2(d)(ii) if such Transferring Subsidiary is relying upon the occurrence of
the events specified in Section 3.2(c)(iii) (which is intended to be the
exclusive termination provision in connection with the occurrence of such
events). In each case, the written notice must expressly specify the nature of
the breach or purported breach and the non-breaching party's intention to
terminate this Agreement if the breach is not timely cured. No termination
pursuant to this Section 3.2(d) shall take effect until a formal notice of
termination has been delivered in writing to the party committing such breach
or purported breach after the expiration of the applicable ten, 30 or 45 day
period as provided above, and then only if cure of such breach or purported
breach has not been effectuated prior to the tenth day
<PAGE> 23
following delivery of such formal notice of termination.
(e) The termination of this Agreement shall not discharge, affect,
or otherwise modify the rights and obligations of the parties under this
Agreement which, by their terms and/or express intent, may require or
contemplate performance subsequent to any such termination, including, without
limitation, with respect to the completion of construction or sale and purchase
of any Constructed New Sites or Purchased New Sites for which Final Approvals,
the execution of Site Schedules, and/or closing of such purchase and sale
remain outstanding. In the event that this Agreement is terminated, all rights
and obligations of the Transferring Subsidiaries and Tower Sub set forth in the
executed Nextel Master Site Lease Agreement shall remain in full force and
effect, as provided therein.
(f) In the event that this Agreement is terminated, the
terminating party's right to pursue all legal (and equitable) remedies for
breach of contract and damages (and specific performance) accruing or occurring
prior to the effective date of such termination shall survive such termination
unimpaired, except as provided and limited by the provisions of Sections
2.3(e), 2.3(f), 2.3(g), 3.2 (e), 3.3 (b), and 3.3 (c) of this Agreement.
3.3 MINIMUM TOWER COMMITMENT.
(a) Beginning on the first day of the 37th month following closing
of the Merger (the "Closing") and ending on the first day of the 72nd month
following the Closing, if the Transferring Subsidiaries have not made available
to Tower Sub at least the Cumulative Qualifying Site Goal according to the
schedule set forth below ("Site Goal"), the Transferring Subsidiaries will pay,
as liquidated damages in accordance with Section 3.3(c), a monthly amount to
Tower Sub based on the shortfall from the Site Goal for that particular month.
The Site Goal for the 37th through 72nd month following
Closing will be as follows:
<TABLE>
<CAPTION>
Month(s) Cumulative Qualifying Site Goal
-------- -------------------------------
<S> <C>
37th through 48th 900
49th through 60th 1300
61st through 72nd 1700
</TABLE>
(b) The liquidated damages payment in accordance with Section
3.3(c), if any, for each month will be equal to the shortfall from the Site
Goal (e.g. in month 37, 900 minus actual number of Qualifying Sites multiplied
by $1,600). In no event will the Transferring Subsidiaries have any other
obligation or damages as a result of failing to meet the Site Goal or minimum
commitment except as set forth in subparagraph (c) below. Notwithstanding the
foregoing, to the extent any such shortfall results from Force Majeure with
respect to any proposed Sites, the assessment and payment of such liquidated
damages with respect to such proposed Sites shall be suspended for the duration
of the period of time when any such Force Majeure prevents or prohibits any
such proposed Site from being a Qualifying Site.
<PAGE> 24
(c) The provisions set forth in this Section 3.3 are intended as
sole and exclusive liquidated damages for failure to achieve the Site Goal and,
upon the receipt by Tower Sub of payment in full of all amounts due pursuant to
this Section 3.3, shall preclude any other remedy or recovery against Nextel,
any Transferring Subsidiary, any other controlled Affiliate of Nextel or
Partner for or by reason of the denial to Tower Sub of the opportunity to
construct and/or to purchase, and to lease to the Transferring Subsidiaries, to
satisfy the Site Goals, except in the event of breach of the obligation to
provide to Tower Sub the exclusive opportunity to construct and/or purchase the
New Sites until the End Date, all subject to the terms and conditions set forth
herein, in which event Tower Aggregator and Tower Sub may pursue any damages
that may be suffered by Tower Aggregator and Tower Sub as a result of such
breach of the exclusivity obligation described in Section 2.1.
3.4 RIGHT OF FIRST REFUSAL. The Transferring Subsidiaries hereby
grant to Tower Sub, during the Term of this Agreement, a personal and
non-assignable right of first refusal to acquire any communications towers or
monopoles acquired by such entities or any of their or Nextel's controlled
Affiliates in the Territory after the date hereof upon a subsequent sale or
assignment thereof to an entity that is not an Affiliate of Nextel, provided,
however, that the foregoing right of first refusal shall not apply to (a) a
sale of the capital stock or all or substantially all of the assets of Nextel
or (b) any Site or related Tower Assets which are released from any and all
obligations and liabilities under or pursuant to this Agreement and the
Ancillary Agreements, as provided herein. If, at any time, Nextel or any
Transferring Subsidiary (for purposes of this Section 3.4, the "Offeror")
wishes to transfer any communications towers or monopoles in a transaction that
is subject to the right of first refusal granted in the preceding sentence,
such communications towers or monopoles shall first be offered to Tower Sub.
The Offeror shall send written notice of the offer (the "Offer Notice") to
Tower Sub, which Offer Notice shall state that the Offeror proposes to effect a
transfer of communications towers or monopoles (and shall include a list of the
location and type of such communications towers or monopoles) and set forth the
terms and conditions of the offer. Upon receipt of such Offer Notice, Tower
Sub shall be entitled to purchase all, but not less than all, of the offered
communications towers and monopoles upon the terms and conditions set forth in
the Offer Notice. The right of first offer shall be exercisable by delivery of
irrevocable written notice of exercise (the "Exercise Notice") by Tower Sub to
Offeror within 30 days after receipt of the Offer Notice. If Tower Sub shall
fail to respond to Offeror within such 30 day period, such failure shall be
regarded as a decision not to deliver an Exercise Notice, and a waiver of the
rights of first refusal as to the transaction described in the relevant Offer
Notice, by Tower Sub. The closing of any purchase of such communications
towers or monopoles by Tower Sub pursuant to an Exercise Notice timely
delivered under this Section 3.4 shall be held at the principal office of the
Offeror on or before the 30th day following delivery to the Offeror by Tower
Sub of its Exercise Notice (or such later time as may be necessary to comply
with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act")), or at such other time and place as the parties to the transaction
may agree. Notwithstanding anything to the contrary contained in this Section
3.4, if Tower Sub does not timely deliver an Exercise Notice, or, if delivered
timely, fails to consummate the relevant purchase transaction as to all of the
relevant offered communications towers or monopoles within the period specified
above, the Offeror may transfer to any third party buyer all or a portion of
the relevant communications
<PAGE> 25
towers or monopoles for a purchase price that is no lower than one hundred
percent (or the relevant pro-rata percentage thereof if less than all of the
communications towers or monopoles are being sold) of that stated in the Offer
Notice; provided, however that such transfer is bona fide and made not later
than (i) 120 days from the date of the relevant Offer Notice and (ii) the date
which is ten days after the expiration or waiver of any applicable waiting
period pursuant to the HSR Act as to any such transaction with a third party
that is subject to the notice and filing requirements of the HSR Act.
3.5 NOTICES. All notices and other communications among the
parties shall be in writing and shall be deemed to have been duly given when
(c) delivered in person, or (d) five days after posting in the United States
mail having been sent registered or certified mail return receipt requested, or
(e) delivered by a reputable overnight delivery service, addressed as follows:
Notices to Nextel or any Transferring Subsidiary shall be
addressed as follows:
c/o Nextel Communications, Inc.
1505 Farm Credit Drive
Suite 100
McLean, Virginia 22102
Attn: Contracts Administrator
with a copy to:
Nextel Communications, Inc.
1505 Farm Credit Drive
Suite 100
McLean, Virginia 22102
Attn: General Counsel
Notices to Tower Aggregator or Tower Sub shall be addressed as
follows:
SpectraSite Communications, Inc.
8000 Regency Park
Cary, NC 27511
Attn: Contracts Management
and
SpectraSite Communications, Inc.
8000 Regency Park
Cary, NC 27511
Attn: General Counsel
<PAGE> 26
Any party may, from time to time, change its address for Notices by providing
the other parties with prior written Notice in the manner set forth above.
3.6 CONSTRUCTION OF AGREEMENT. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware except to
the extent the laws of the jurisdictions where property is located govern.
This Agreement, together with the Merger Agreement, the Nextel Master Site
Lease Agreement, the Security and Subordination Agreement and any Purchase
Agreement, embodies the entire agreement and understanding among each of the
Transferring Subsidiaries, Parent Co., Nextel, Tower Aggregator, and Tower Sub
with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings among any Transferring
Subsidiary, Parent Co., Nextel, Tower Aggregator, and Tower Sub, oral or
written, relative to the subject matter of this Agreement.
3.7 WAIVERS; MODIFICATIONS. No waiver or modification of any
provisions of this Agreement shall be effective against a party hereto unless
it is set forth in a writing signed by each party. No waiver of any breach of
any provision of this Agreement shall be deemed a waiver of any other breach of
the same provision or of any other provision hereof, unless expressly so stated
in the writing setting forth such waiver.
3.8 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. No party hereto may make any assignment of this Agreement or any
of its rights or interests herein without the prior written consent of the
other; provided, however, that any party hereto may (a) assign this Agreement
or any of its rights or interests hereunder to any Affiliate, or, (b)
collaterally assign, mortgage, pledge, hypothecate, or otherwise collaterally
transfer without consent its interest in this Agreement to any financing entity
or agent on behalf of any financing entity, to whom a party hereto or any
Affiliate (i) has obligations for borrowed money or in respect of guaranties
thereof, (ii) has obligations evidenced by bonds, debentures, notes, or similar
instruments, or (iii) has obligations under or with respect to letters of
credit, bankers acceptances and similar facilities, or in respect of guaranties
thereof. Anything in this Section to the contrary notwithstanding, no
assignment, delegation, or pledge of this Agreement or any rights or interests
hereunder shall relieve the assignor of any liability or obligation hereunder.
The parties hereby agree that no Person not a party to this Agreement shall
have any rights or be entitled to any benefits under this Agreement.
3.9 INTERPRETATION. The headings in this Agreement are for
reference only and shall not affect the interpretation of this Agreement.
Whenever the context requires, words used in the singular shall be construed to
include the plural and vice versa, and pronouns of any gender shall be deemed
to include and designate the masculine, feminine or neuter gender. Unless
otherwise stated, references to Sections or Schedules refer to the Sections of
and Schedules to this Agreement.
3.10 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
<PAGE> 27
3.11 CONFIDENTIALITY. Except as otherwise required by law, the
parties hereto shall keep confidential the specific terms and provisions of
this Agreement including, without limitation, all Exhibits and Schedules
hereto. All press releases or other public communications of any nature
whatsoever relating to the transactions contemplated by this Agreement, and the
method of the release for publication thereof, shall be subject to the mutual
prior approval of Nextel and Tower Aggregator, which approval shall not be
unreasonably withheld. In the event any party is required by law to disclose
any term of this Agreement, it shall notify the other parties and the parties
shall cooperate to obtain (to the extent practicable) confidential treatment
for the matters disclosed.
3.12 REMEDIES. Each party's obligation under this Agreement is
unique. Except as expressly provided in the case of the payment of liquidated
damages pursuant to (a) Section 3.3(c) by reason of the failure to achieve Site
Goals as contemplated therein, or (b) Section 2.3(g) by reason of the failure
to complete construction of a Constructed New Site within the Construction
Period or by reason of a Construction Failure as contemplated therein, if any
party should fail to perform its respective obligations under this Agreement,
the parties acknowledge that it would not be possible to measure adequately the
resulting damages, and accordingly, the other party or parties, in addition to
any other available rights or remedies provided herein, shall be entitled to
specific performance of its or their rights under this Agreement, and the
parties expressly waive the defense that damages will be adequate.
3.13 ATTORNEYS' FEES. The prevailing party in any legal or
equitable action shall be entitled to recover its attorneys fees and expenses
in addition to any other damages or other remedy.
3.14 SURVIVAL. This Agreement shall survive the Closing as to any
given Merger Site but shall terminate as set forth in Section 3.2.
3.15 DISPUTE RESOLUTION.
(a) The parties shall attempt in good faith to resolve any
dispute, controversy, or claim ("Dispute") arising out of or relating to this
Agreement promptly by negotiations between representatives of senior management
(the "Executives") who have authority to settle the Dispute. Any party may
give the other parties written notice of any Dispute not resolved in the normal
course of business. Within 20 days after delivery of such a notice, Executives
of the parties involved in the Dispute who have authority to settle the Dispute
shall meet at a mutually acceptable time and place, and thereafter as often as
they reasonably deem necessary, to attempt to resolve the Dispute. If any
party intends to be accompanied at a meeting by an attorney, the other involved
parties shall be given at least three business days' notice of such intention
and may also be accompanied by an attorney. If the Dispute has not been
resolved within 30 days after such notice, unless extended by the agreement of
the parties involved in the Dispute in writing (the "Negotiation Period"), any
party may at any time within 30 days after the end of the Negotiation Period
initiate mediation of the Dispute in New York, New York, in accordance with the
Center for Public Resources Model Procedure for Mediation of Business Disputes.
(b) If the Dispute has not been resolved within 60 days of the
initiation of mediation,
<PAGE> 28
or if no party elects to commence mediation within the time specified in
paragraph (a) above, the Dispute will be subject to arbitration as provided in
Sections 3.15(c) and (d). All negotiations and mediation pursuant to Sections
3.15(a) and (b) are confidential and will be treated as compromise and
settlement negotiations for purposes of the Federal Rules of Evidence for
United States Courts and comparable state laws.
(c) Upon the expiration of the Negotiation Period or unsuccessful
mediation, any party seeking relief (the "Claimant") may serve a demand for
arbitration in accordance with the Center for Public Resources Non-Administered
Arbitration Rules (the "Rules") in which, in addition to any other requirements
of those Rules, the Claimant states the specific nature of the claimed breach
and the relief sought, and demands a determination by the arbitrators of the
parties' rights together with any relief sought. The place of arbitration will
be New York, New York unless all of the parties to the arbitration otherwise
agree. Three arbitrators will be chosen, and the proceedings conducted, in
accordance with the Rules, except that (i) the parties shall choose three
arbitrators through a self-administered process of striking names from a list
of potential arbitrators and shall not employ the method provided for in the
Rules, (ii) the rules of evidence employed in the federal courts at the time
will apply, and (iii) discovery will be permitted in accordance with the
Federal Rules of Civil Procedure for the United States District Courts. The
decision of the arbitrators will be final and binding on the parties to the
maximum extent permitted under applicable law, and a final judgment may be
entered on the award in any court of competent jurisdiction.
(d) A court of competent jurisdiction, upon application from any
party to the Dispute, may relieve the parties of their duty to arbitrate
Disputes in whole or in part, or may stay any arbitration hereunder in whole or
in part, if ongoing litigation between one or more of the parties and a third
party (or parties) involves issues of fact or law common with those subject to
arbitration hereunder and there exists the possibility of inconsistent
judgments if such relief is not granted.
(e) Each party shall bear its own costs and expenses incurred in
connection with any Dispute, including, without limitation, the fees of its
attorneys, unless the arbitrators otherwise decide, in which case such costs
and expenses shall be borne by the parties in the manner determined by the
arbitrators.
[The balance of this page is intentionally blank.]
<PAGE> 29
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
NEXTEL COMMUNICATIONS, INC. NEXTEL COMMUNICATIONS OF THE
MID-ATLANTIC, INC.
By: /s/ THOMAS J. SIDMAN By: /s/ GLENN F. SPIVAK
-------------------------- ------------------------------
Name: Thomas J. Sidman Name: Glenn F. Spivak
----------------------- ----------------------------
Title: Title:
------------------------ -----------------------------
NEXTEL OF CALIFORNIA, INC. NEXTEL OF NEW YORK, INC.
By: /s/ RICHARD J. BYRNE By: /s/ GLENN F. SPIVAK
-------------------------- ------------------------------
Name: Richard J. Byrne Name: Glenn F. Spivak
----------------------- ----------------------------
Title: Title:
------------------------ -----------------------------
NEXTEL OF TEXAS, INC. SPECTRASITE HOLDINGS, INC.
By: /s/ RICHARD J. BYRNE By: /s/ DAVID P. TOMICK
-------------------------- ------------------------------
Name: Richard J. Byrne Name: David P. Tomick
----------------------- ----------------------------
Title: Title:
------------------------ -----------------------------
NEXTEL SOUTH CORP. TOWER ASSET SUB, INC.
By: /s/ RICHARD J. BYRNE By: /s/ GLENN F. SPIVAK
-------------------------- ------------------------------
Name: Richard J. Byrne Name: Glenn F. Spivak
----------------------- ----------------------------
Title: Title:
------------------------ -----------------------------
NEXTEL WEST CORP. TOWER PARENT CORP.
By: /s/ RICHARD J. BYRNE By: /s/ GLENN F. SPIVAK
-------------------------- ------------------------------
Name: Richard J. Byrne Name: Glenn F. Spivak
----------------------- ----------------------------
Title: Title:
------------------------ -----------------------------
<PAGE> 1
Exhibit 12.1
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
TeleSite Services, LLC
-----------------------------
(predecessor) SpectraSite Combined SpectraSite
----------------------------- ------------ --------- ------------
Year ended January 1 - April 25 - Year ended Year ended
December 31, May 12, December 31, December 31, December 31,
1996 1997 1997 1997 1998
----------------------------- ------------ ------------- ------------
FIXED CHARGES (dollars in thousands)
<S> <C> <C> <C> <C> <C>
Consolidated pretax income
(loss) from continuing
operations 2,289 (503) (2,160) (2,663) (9,079)
Interest 67 36 164 200 237
Net amortization of debt
discount and debt
issuance costs - - - - 7,933
Interest portion of rental
expense 36 19 77 96 196
----------- ---------- ------------ --------- -----------
Earnings 2,392 (448) (1,919) (2,367) (713)
Interest 67 36 164 200 237
Net amortization of debt
discount and debt
issuance costs - - - - 7,933
Interest portion of rental
expense 36 19 77 96 196
----------- ---------- ------------ --------- -----------
Fixed Charges 103 55 241 296 8,366
----------- ---------- ------------ --------- -----------
Ratio of earnings to fixed
charges 23.2 - - - -
=========== ========== ============ ========= ===========
Insufficient earnings
to cover fixed charges - $ 503 $ 2,160 $ 2,663 $ 9,079
=========== ========== ============ ========= ===========
</TABLE>
<PAGE> 1
Exhibit 21
Subsidiaries of SpectraSite Holdings, Inc.
SpectraSite Communications, Inc. Delaware
Tower Merger Vehicle, Inc. Delaware
Tower Asset Sub , Inc. Delaware
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated February 26, 1999 in Amendment 3 to the Registration
Statement (Form S-4; file no. 333-67043) of SpectraSite Holdings, Inc., for the
offer to exchange its 12% Senior Notes due 2008, with respect to the
consolidated financial statements of SpectraSite Holdings, Inc. as of December
31, 1997 and 1998 and for the period from inception (April 25, 1997) to
December 31, 1997 and for the year ended December 31, 1998 and our report dated
March 27, 1998, with respect to the consolidated financial statements of the
Company's predecessor, TeleSite Services, LLC, as of December 31, 1996 and for
the year ended December 31, 1996 and the period from January 1, 1997 to May 12,
1997.
/s/ Ernst & Young LLP
Raleigh, North Carolina
April 28, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
AUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 1998 AND FOR THE PERIOD FROM APRIL 25, 1997 (INCEPTION) TO
DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 APR-25-1997
<PERIOD-END> DEC-31-1998 DEC-31-1997
<CASH> 99,548,234 2,234,148
<SECURITIES> 15,414,048 0
<RECEIVABLES> 3,352,970 1,610,039
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 118,568,050 3,878,206
<PP&E> 29,338,928 1,336,856
<DEPRECIATION> 869,911 160,824
<TOTAL-ASSETS> 161,946,012 13,641,953
<CURRENT-LIABILITIES> 2,708,439 2,708,439
<BONDS> 0 0
40,655,781 10,500,000
0 0
<COMMON> 957 932
<OTHER-SE> (14,067,966) (2,159,596)
<TOTAL-LIABILITY-AND-EQUITY> 161,946,012 13,641,953
<SALES> 0 0
<TOTAL-REVENUES> 8,798,127 5,001,668
<CGS> 0 0
<TOTAL-COSTS> 2,791,120 1,119,608
<OTHER-EXPENSES> 10,957,943 6,148,119
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 8,169,576 163,555
<INCOME-PRETAX> (9,079,354) (2,159,596)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (9,079,354) (2,159,596)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (9,079,354) (2,159,596)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
