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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 16, 2001
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
4899
(PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER)
56-2027322
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
100 REGENCY FOREST DRIVE
SUITE 400
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.
100 REGENCY FOREST DRIVE
SUITE 400
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. [ ]
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS PROPOSED MAXIMUM AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED OFFERING PRICE REGISTRATION FEE(1)
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12 1/2% Senior Notes Due 2010................... $200,000,000 $50,000
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(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(f) of the Securities Act.
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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 ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL SECURITIES AND IS NOT SOLICITING
OFFERS TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR
SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JANUARY 16, 2001
PROSPECTUS
[SPECTRASITE LOGO]
SPECTRASITE HOLDINGS, INC.
$200,000,000 12 1/2% SENIOR NOTES DUE 2010
OFFER TO EXCHANGE SERIES B 12 1/2% SENIOR NOTES DUE 2010 FOR ANY AND ALL
OUTSTANDING 12 1/2% SENIOR NOTES DUE 2010.
TERMS OF EXCHANGE OFFER
- Expires 5:00 p.m., New York City time, , 2001, 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 United States 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 9.
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.
The date of this prospectus is , 2001
<PAGE> 3
TABLE OF CONTENTS
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Summary................................ 2
Risk Factors........................... 9
Use of Proceeds........................ 18
Ratio of Earnings to Fixed Charges..... 18
Capitalization......................... 19
The Exchange Offer..................... 20
Description of the Notes............... 29
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Certain United States Federal Tax
Considerations....................... 65
Plan of Distribution................... 74
Legal Matters.......................... 75
Experts................................ 75
Where You Can Find More Information.... 75
Information Incorporated by
Reference............................ 76
</TABLE>
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In this prospectus, Holdings refers to SpectraSite Holdings, Inc., and
SpectraSite, we, us and our refer to SpectraSite Holdings, Inc., its wholly
owned subsidiaries and all predecessor entities collectively, unless the context
requires otherwise. The term outstanding notes refers to our 12 1/2% senior
notes due 2010 which were issued in a transaction exempt from registration under
the Securities Act of 1933, the term registered notes refers to our 12 1/2%
senior notes due 2010 which have been registered under the Securities Act
pursuant to a registration statement of which this prospectus is a part, and the
terms notes and new notes refer to the outstanding notes and the registered
notes collectively, unless the context requires otherwise. The term 2010 notes
refers to our 10 3/4% senior notes due 2010 and our 12 7/8% senior discount
notes due 2010 collectively. The term common stock refers to the common stock,
par value $.001 per share, of Holdings.
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This prospectus does not constitute an offer to sell, or a solicitation of
an offer to buy, any note offered hereby by any person in any jurisdiction in
which it is unlawful for such person to make an offer or solicitation. Neither
the delivery of this prospectus nor any sale made hereunder shall under any
circumstances imply that there has been no change in the affairs of our company
or its subsidiaries or that the information set forth herein is correct as of
any date subsequent to the date hereof.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including information incorporated by reference in this
prospectus, contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act
of 1934, including statements concerning possible or assumed future results of
operations of SpectraSite and those preceded by, followed by or that include the
words may, will, should, could, expects, plans, anticipates, believes,
estimates, predicts, potential or continue or the negative of such terms and
other comparable terminology. You should understand that the factors described
below, in addition to those discussed elsewhere in this document, could affect
our future results and could cause those results to differ materially from those
expressed in such forward-looking statements. These factors include:
- material adverse changes in economic conditions in the markets we serve;
- future regulatory actions and conditions in our operating areas;
- competition from others in the communications tower industry;
- the integration of our operations with those of businesses or assets we
have acquired or may acquire in the future and the realization of the
expected benefits; and
- other risks and uncertainties as may be detailed from time to time in our
public announcements and Securities and Exchange Commission filings.
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SUMMARY
This summary highlights some of the information contained elsewhere in this
prospectus. This summary is not complete and does not contain all of the
information that you should consider before tendering your outstanding notes.
You should read the entire prospectus carefully, including the "Risk Factors"
and the financial statements, which are incorporated into this prospectus by
reference. See "Where You Can Find More Information."
SPECTRASITE
OVERVIEW
We are one of the leading providers of outsourced antenna site and network
services to the wireless communications and broadcast industries in North
America and Europe. Our businesses include the ownership and leasing of antenna
sites on towers, managing rooftop and in-building telecommunications access on
commercial real estate, network planning and deployment, and construction of
towers and related wireless facilities. Our customers are leading wireless
communications providers and broadcasters, including Nextel Communications, SBC
Wireless, Sprint PCS, AT&T Wireless, AirTouch Communications, Teligent, WinStar
Communications, Cox Broadcasting, Clear Channel Communications and Paxson
Communications. As of September 30, 2000, and after giving effect to all pending
transactions, we will own or manage over 20,000 sites, including 8,132 towers,
primarily in the top 100 markets in the United States and with major
metropolitan market clusters in Los Angeles, Chicago, San Francisco,
Philadelphia, Detroit and Dallas. We also own 50% of SpectraSite-Transco
Communications Ltd., a joint venture with Lattice Group plc, the former arm of
BG Group plc, the company that operates Britain's natural gas distribution
network. As of September 30, 2000, the joint venture owned 707 towers and 1,500
sites and has the option to construct towers on an additional 30,000 potential
sites in the United Kingdom.
SpectraSite Holdings, Inc. is a Delaware corporation. Our principal
executive offices are located at 100 Regency Forest Drive, Suite 400, Cary,
North Carolina 27511, and our telephone number at that address is (919)
468-0112. Our World Wide Web site address is http://www.spectrasite.com. The
information in our website is not part of this prospectus.
RECENT DEVELOPMENTS
On August 25, 2000, we entered into an agreement to acquire leasehold and
subleasehold interests in approximately 3,900 wireless communications towers
from affiliates of SBC Communications, which we collectively refer to as SBC, in
exchange for $982.7 million in cash and approximately 14.3 million shares of our
common stock, subject to adjustment, valued at $325.0 million. We will manage,
maintain and lease available space on the SBC towers, and we will have the right
to co-locate tenants on the towers. SBC is an anchor tenant on all of the towers
and will pay us a monthly fee per tower of $1,400, subject to an annual
adjustment. In addition, we have entered into a five-year exclusive
build-to-suit agreement with SBC under which we will develop and construct
substantially all of SBC's new towers during the term of the agreement.
The SBC transaction will close in stages, with a final closing expected in
the first half of 2002. At each closing, we will make a pro rata payment of cash
and stock to SBC for the actual towers subleased. At the initial closing on
December 14, 2000, we acquired subleasehold interests in 739 towers for
consideration consisting of approximately $175.0 million in cash and
approximately 2.5 million shares of common stock.
In connection with the SBC tower transaction, we received a commitment from
Canadian Imperial Bank of Commerce, CIBC World Markets Corp., Credit Suisse
First Boston Corporation, Bank of Montreal, Chicago Branch and Toronto Dominion
(Texas), Inc. to provide approximately $1.1 billion of a contemplated $1.2
billion credit facility pursuant to an amended and restated credit agreement. We
anticipate we will amend and restate our existing credit facility during the
first quarter of 2001.
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We acquired from AirTouch subleasehold interests in 107 wireless towers for
approximately $38.5 million in cash on August 15, 2000, 38 wireless towers on
October 10, 2000 for approximately $13.7 million in cash, 53 wireless towers on
November 15, 2000 for approximately $19.1 million in cash and 35 wireless towers
on December 15, 2000 for approximately $12.6 million in cash. We expect to
acquire leasehold and subleasehold interests in an additional 197 towers from
AirTouch in periodic closings through February 2001.
On November 20, 2000, Trimaran Fund II, L.L.C. and certain other investors
participating in the Trimaran investment program, which we collectively refer to
as the Trimaran group, purchased 4.0 million shares of common stock at a price
of $18.75 per share in a private placement exempt from the registration
requirements of the Securities Act of 1933. In addition, the Trimaran group
received warrants to purchase an additional 1.5 million shares of common stock.
On November 20, 2000, we issued $200.0 million aggregate principal amount
of 6 3/4% senior convertible notes due 2010. Each note is convertible into
common stock at any time on or before November 15, 2010 at a conversion price of
$21.5625 per share, subject to adjustment if certain events affecting our common
stock occur. After November 20, 2003, we may redeem all or a portion of the
convertible notes at specified prices, plus accrued interest.
On December 8, 2000, we acquired the United States assets and operations of
U.S. RealTel, Inc., an international provider of rooftop and in-building
telecommunications access, for approximately $16.5 million in cash.
On December 20, 2000, we issued $200.0 million aggregate principal amount
of 12 1/2% senior notes due 2010.
For other recent developments regarding SpectraSite, we refer you to our
most recent and future filings under the Securities Exchange Act of 1934.
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SUMMARY OF THE EXCHANGE OFFER
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Registration Rights Agreement............. You have the right to exchange your outstanding 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 of
Holdings' Series B 12 1/2% senior notes due 2010, which
have been registered under the Securities Act, for each
$1,000 principal amount of Holdings' outstanding 12 1/2%
senior notes due 2010, which were issued in December
2000 in a private offering.
In order to be exchanged, an outstanding note must be
properly tendered and accepted. We will exchange all
notes validly tendered and not validly withdrawn.
As of the date of this prospectus, there is $200,000,000
aggregate principal amount of new 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 a broker-dealer receives registered notes for its own
account in exchange for outstanding notes which were
acquired by that broker-dealer as a result of
market-making or other trading activities, then that
broker-dealer 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 notes as
determined on , 2001.
Expiration Date........................... The exchange offer will expire at 5:00 p.m., New York
City time, , 2001 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;
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- any Securities and Exchange Commission rule,
regulation or interpretation materially impairs the
exchange offer; or
- we have not obtained any necessary governmental
approvals with respect to the exchange offer.
Procedures for Tendering Outstanding
Notes................................... Each holder of outstanding 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 the documentation
listed above and your outstanding 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 notes in this manner, you
will be representing, among other things, that you meet
the three requirements set forth under "-- Resales"
above.
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
restrictions on transfer. Accordingly, the liquidity of
the market for such outstanding notes could be adversely
affected.
Special Procedures for Beneficial
Owners.................................. If you beneficially own outstanding 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 the 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 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 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 notes at
any time prior to 5:00 p.m., New York City time, on
, 2001.
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Certain United States 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 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 notes, and the same indenture will govern both the registered notes
and the outstanding notes.
Registered Notes...................... Series B 12 1/2% senior notes due
2010 of SpectraSite Holdings, Inc.
Maturity.............................. November 15, 2010
Interest.............................. 12 1/2% per annum, payable
semi-annually in arrears on May 15
and November 15, commencing May 15,
2001.
Security and Ranking.................. The registered notes will not be
secured by any collateral. The
registered notes will effectively
rank below all of our secured debt
and the debt and other liabilities of
our subsidiaries. The registered
notes will rank ratably with our
other senior unsecured debt,
including our 12% senior discount
notes due 2008, our 11 1/4% senior
discount notes due 2009, our 12 7/8%
senior discount notes due 2010, our
10 3/4% senior notes due 2010 and our
6 3/4% senior convertible notes due
2010.
As of September 30, 2000, after
giving effect to the convertible
notes offering and the offering of
the outstanding notes, Holdings would
have had approximately $1.5 billion
of debt outstanding (none of which
was secured or subordinate) and our
subsidiaries would have had $201.9
million of debt and other liabilities
outstanding and the ability to borrow
an additional $300.0 million of
secured debt under our credit
facility, subject to certain
conditions.
Optional Redemption................... Except in the case of certain equity
offerings by us, we cannot redeem the
notes until November 15, 2005. At any
time, which may be more than once,
after that date, we may redeem some
or all of the notes at certain
specified prices, plus accrued
interest.
At any time, which may be more than
once, before November 15, 2003, we
can choose to buy back up to 35% of
the notes with money that we raise in
one or more public equity offerings,
as long as:
- we pay 112.5% of the principal
amount of the notes bought, plus
interest;
- we buy the notes back within 60
days of completing the equity
offering; and
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- at least 65% of the notes
originally issued remain
outstanding afterwards.
Change of Control..................... If we experience a change of control,
we must give holders of the notes the
opportunity to sell us their notes at
101% of the principal amount of the
notes, plus accrued interest, if any.
We might not be able to pay you the
required price for notes you present
to us at the time of a change of
control, because:
- we might not have enough funds at
that time; or
- the terms of our senior debt may
prevent us from paying.
Certain Covenants..................... The indenture governing the notes
will limit what we may do. The
provisions of the indenture will
limit our ability to:
- incur more debt;
- pay dividends and make
distributions;
- issue stock of subsidiaries;
- make certain investments;
- repurchase stock;
- create liens;
- enter into transactions with
affiliates;
- enter into sale-leaseback
transactions;
- merge or consolidate; and
- transfer and sell assets.
These covenants are subject to a
number of important exceptions.
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 The
Depository Trust Company, which we
refer to as 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 the registered notes
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 registered notes involves a high degree of risk. You
should consider carefully the risks and uncertainties described below and the
other information in this prospectus, including the financial statements and
related notes, before making an investment decision regarding the registered
notes. While these are the risks and uncertainties we believe are most important
for you to consider, you should know that they are not the only risks or
uncertainties facing us or which may adversely affect our business. If any of
the following risks or uncertainties actually occurs, our business, financial
condition or results of operations would likely suffer.
WE MAY ENCOUNTER DIFFICULTIES IN INTEGRATING ACQUISITIONS WITH OUR OPERATIONS,
WHICH COULD LIMIT OUR REVENUE GROWTH AND OUR ABILITY TO ACHIEVE OR SUSTAIN
PROFITABILITY.
Acquiring additional tower assets and complementary businesses is an
integral part of our business strategy. We may not be able to realize the
expected benefits of past or future acquisitions or identify suitable
acquisition candidates. Our ability to complete future acquisitions will depend
on a number of factors, some of which are beyond our control, including the
attractiveness of acquisition prices and the negotiation of acceptable
definitive acquisition agreements. In addition, the process of integrating
acquired operations into our existing operations may result in unforeseen
operating difficulties, divert managerial attention or require significant
financial resources that could otherwise be used for existing tower construction
and network deployment contracts. Future acquisitions also may require us to
incur additional indebtedness and contingent liabilities, which could have a
material adverse effect on our business, financial condition or results of
operations.
WE ARE NOT PROFITABLE AND EXPECT TO CONTINUE TO INCUR LOSSES.
We incurred net losses of $98.4 million and $111.8 million for the year
ended December 31, 1999 and the nine months ended September 30, 2000,
respectively. Our losses are principally due to significant depreciation,
amortization and interest expense. We have not achieved profitability and expect
to continue to incur losses for the foreseeable future.
WE HAVE SUBSTANTIAL INDEBTEDNESS, AND SERVICING OUR INDEBTEDNESS COULD REDUCE
FUNDS AVAILABLE TO GROW OUR BUSINESS.
We are, and will continue to be, highly leveraged. As of September 30,
2000, we had total consolidated indebtedness of approximately $1.3 billion, and
after giving effect to the convertible notes offering and the offering of the
new notes, our total consolidated indebtedness would be approximately $1.7
billion. Our high level of indebtedness could interfere with our ability to
grow. For example, it could:
- 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;
- 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.
Our ability to generate sufficient cash flow from operations to pay
principal of, and interest on, our indebtedness is uncertain. In particular, we
may not meet our anticipated revenue growth and operating expense targets, and
as a result, our future debt service obligations could exceed cash available to
us. Further, we may not be able to refinance any of our indebtedness on
commercially reasonable terms or at all.
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HOLDINGS IS A HOLDING COMPANY AND ITS ONLY SOURCE OF CASH TO PAY INTEREST ON,
AND THE PRINCIPAL OF, THE 2008 NOTES, THE 2009 NOTES, THE 2010 NOTES, THE
CONVERTIBLE NOTES AND THE NEW 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 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, its 12% senior discount notes due 2008, its 11 1/4% senior
discount notes due 2009, its 12 7/8% senior discount notes due 2010, its 10 3/4%
senior notes due 2010, its 6 3/4% senior convertible notes due 2010 and the new
notes is distributions with respect to its ownership interest in its
subsidiaries from the earnings and cash flow generated by those subsidiaries. We
currently expect that Holdings' subsidiaries will retain and use available
earnings and cash flow to support their operations, including to service their
respective debt obligations. We cannot assure you that the subsidiaries will
generate sufficient earnings and cash flow to pay dividends or distributions to
Holdings or that applicable state law and contractual restrictions, including
negative covenants contained in the debt instruments of Holdings' subsidiaries,
will permit such dividends or distributions.
Our credit facility prohibits, subject to certain limited exceptions,
dividends or other distributions by Holdings' subsidiaries to Holdings. However,
the credit facility permits distributions to Holdings in an amount sufficient to
pay scheduled interest payments on the 2008 notes commencing in 2003, the 2009
notes commencing in 2004, the 2010 senior discount notes commencing in 2005, the
10 3/4% senior notes commencing in 2000, the convertible notes commencing in
2001 and the new notes commencing in 2001, provided that there is no default or
event of default outstanding under the credit facility, including under the
financial maintenance tests the credit facility sets forth. We expect our
amended and restated credit facility will include similar limitations. If
Holdings' subsidiaries are unable to make distributions to Holdings, we will
have to pursue other alternatives to make the scheduled interest payments, which
may include refinancing the credit facility or seeking other sources of debt or
equity capital. We cannot assure you that we would be able to secure sources of
capital on terms acceptable to us or at all.
YOUR RIGHT TO RECEIVE PAYMENTS ON THE NEW NOTES IS EFFECTIVELY JUNIOR TO CERTAIN
EXISTING INDEBTEDNESS AND ALL FUTURE BORROWINGS OF HOLDINGS' SUBSIDIARIES.
The 2008 notes, the 2009 notes, the 2010 notes, the convertible notes and
the new notes rank equally in right of payment. Holdings' subsidiaries are not
guarantors of the 2008 notes, the 2009 notes, the 2010 notes, the convertible
notes or the new notes. As a result, all indebtedness of Holdings' subsidiaries,
including any borrowings under the credit facility and other liabilities, will
be structurally senior to the new notes. At September 30, 2000, Holdings'
subsidiaries had $281.5 million of debt and other liabilities and the ability to
borrow $300.0 million under our credit facility, all of which will be
structurally senior in right of payment to the 2008 notes, the 2009 notes, the
2010 notes, the convertible notes and the new notes.
In addition, Holdings' subsidiaries will be permitted, under the terms of
the indentures governing the 2008 notes, the 2009 notes, the 2010 notes, the
convertible notes and the new notes, to incur certain additional indebtedness
that may restrict or prohibit the subsidiaries from making distributions, paying
dividends or making loans to Holdings and to guarantee other indebtedness of
Holdings without guaranteeing the new notes. 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 the proceedings. Only
after the applicable subsidiaries' creditors are fully paid would any remaining
value of the subsidiaries' assets be available to Holdings or its creditors,
including the note holders.
REPAYMENT OF THE PRINCIPAL OF THE 2008 NOTES, THE 2009 NOTES, THE 2010 NOTES,
THE CONVERTIBLE NOTES AND THE NEW 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 2008
notes, the 2009 notes, the 2010 notes, the convertible notes and the new notes,
or to redeem or repurchase the notes upon a change of
10
<PAGE> 13
control as defined in the indentures governing the notes, we will be required to
adopt one or more alternatives, such as refinancing our indebtedness or selling
our equity securities or the equity securities or assets of our subsidiaries. We
cannot assure you that we could effect any of the foregoing alternatives on
terms satisfactory to us, that any of the foregoing alternatives would enable us
to pay the principal of the notes or that any of such alternatives would be
permitted by the terms of the indentures governing the 2008 notes, the 2009
notes, the 2010 notes, the convertible notes or the new notes or any other debt
instruments then in effect.
OUR BUSINESS DEPENDS ON THE DEMAND FOR WIRELESS COMMUNICATIONS SITES AND OUR
ABILITY TO SECURE CO-LOCATION TENANTS.
Our business depends on demand for communications sites from wireless
service providers, which, in turn, depends on the demand for wireless services.
A reduction in demand for communications sites or increased competition for
co-location tenants could have a material adverse effect on our business,
financial condition or results of operations. In particular, the success of our
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. The extent to which
wireless service providers lease communications sites on our towers depends on
the level of demand for wireless services, the financial condition and access to
capital of those providers, the strategy of providers with respect to owning or
leasing communications sites, government licensing of communications licenses,
changes in telecommunications regulations, the characteristics of each company's
technology, and geographic terrain.
A SIGNIFICANT PORTION OF OUR REVENUES AND TOWER CONSTRUCTION ACTIVITY CURRENTLY
DEPENDS ON NEXTEL AND IS EXPECTED TO COME FROM SBC.
Nextel accounts for a significant portion of our total revenues. Nextel
represented approximately 35% and 24% of our revenues for the year ended
December 31, 1999 and for the nine months ended September 30, 2000,
respectively. Following the final closing of the SBC tower transaction, SBC will
pay us approximately $65.5 million each year as the anchor tenant on the 3,900
subleased towers. If Nextel or SBC were to suffer financial difficulties or if
Nextel or SBC were unwilling or unable to perform its obligations under its
arrangements with us, our business, financial condition or results of operations
could be materially and adversely affected.
Nextel agreed to lease 1,700 additional sites on our towers as part of its
national service deployment, and as of September 30, 2000, they had leased 1,068
of those sites. We have entered into a five-year build-to-suit agreement with
SBC for an estimated 800 new towers. Under the terms of our agreements with
Nextel and SBC, we are required to construct or purchase agreed upon numbers of
qualified towers at specified times and at specified prices. Our failure to
construct or purchase the towers as agreed could result in the cancellation of
our right to construct or purchase additional towers under these agreements.
Such a 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.
Under our agreements with Nextel and SBC, subject to limited exceptions, we
will be required to construct new towers in locations to be determined by Nextel
and SBC. These towers may have limited appeal to other providers of wireless
communications services, which may limit our opportunities to attract additional
tenants, which, in turn, could have a material adverse effect on our business,
financial condition or results of operations.
WE MAY BE UNABLE TO INCREASE OUR CONSTRUCTION ACTIVITIES OR TO ACQUIRE TOWERS AS
CONTEMPLATED BY OUR GROWTH STRATEGY.
Our growth strategy depends on our ability to construct, acquire and
operate towers as wireless service providers expand their tower network
infrastructure. Regulatory and other barriers could adversely affect our ability
to construct towers in accordance with the requirements of our customers, and,
as a result, we may be subject to penalties and forfeiture provisions under our
anchor tenant leases. Our ability to
11
<PAGE> 14
construct new towers may be affected by a number of factors beyond our control,
including zoning and local permitting requirements, FAA considerations, FCC
tower registration procedures, 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.
Our expansion plans call for a significant increase in construction
activity. We may not be able to overcome the barriers to new construction, and
we may not complete the number of towers planned for construction. Our failure
to complete the necessary construction could have a material adverse effect on
our business, financial condition or results of operations.
We compete for tower acquisition opportunities with wireless service
providers, broadcasters, site developers and other independent tower owners and
operators, and we expect competition to increase. Increased competition for
acquisitions may result in fewer acquisition opportunities and higher
acquisition prices. We regularly explore acquisition opportunities; however, we
may have trouble identifying towers or tower companies to acquire in the future.
WE COMPETE WITH COMPANIES THAT MAY HAVE GREATER FINANCIAL RESOURCES.
If we are unable to successfully compete, our business will suffer. 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 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;
- other independent tower operators;
- site acquisition companies which acquire antenna space on existing
towers for wireless service providers, manage new tower construction and
provide site acquisition services; and
- owners of non-tower antenna sites, including rooftops, water towers and
other alternate structures.
Wireless service providers that own and operate their own towers generally
are substantially larger and have substantially greater financial resources than
SpectraSite. For example, AT&T Wireless and Sprint PCS own and operate their own
tower networks.
We compete for acquisition, new tower construction and network development
opportunities primarily with other independent tower companies and site
construction firms. Some of these competitors may have greater financial
resources than SpectraSite.
RAPID GROWTH COULD STRAIN OR DIVERT OUR MANAGEMENT TEAM AND WILL INCREASE OUR
OPERATING EXPENSES.
Implementation of our business strategy 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. Our failure to manage growth or unexpected
difficulties encountered during our expansion could have a material adverse
effect on our business, financial condition or results of operations. The
pursuit and integration of acquisitions, investments, joint ventures and
strategic alliances will require substantial attention from our senior
management, which will limit the amount of time they have available to devote to
existing operations.
WE ANTICIPATE SIGNIFICANT CAPITAL EXPENDITURES AND MAY NEED ADDITIONAL FINANCING
WHICH MAY NOT BE AVAILABLE.
Our current plans call for significant capital expenditures during 2001 for
the construction and acquisition of communication sites, primarily towers,
including the subleased towers from SBC. We had approximately $300.0 million
available under our existing $500.0 million credit facility as of September 30,
12
<PAGE> 15
2000. We have received a commitment for approximately $1.1 billion of a
contemplated $1.2 billion amended and restated credit facility. As of September
30, 2000, we had $418.9 million of cash and cash equivalents. However, we may
need additional sources of debt or equity capital in the future. Additional
financing may not be available or may be restricted by the terms of the credit
facility and the indentures governing our outstanding notes.
COMPETING TECHNOLOGIES AND OTHER ALTERNATIVES COULD REDUCE THE DEMAND FOR OUR
SERVICES.
Most types of wireless and broadcast services currently require
ground-based network facilities, including communications sites for transmission
and reception. The development and growth of communications technologies which
do not require ground-based sites or other alternatives could reduce the demand
for space on our towers.
In particular, the emergence of new technologies that do not require
terrestrial antenna sites and that can be substituted for those that do, could
have a negative impact on our operations. For example, the growth in delivery of
video services by direct broadcast satellite or the development of signal
combining technologies, which allow one communications antenna to service two
different transmission frequencies, could reduce the demand for tower-based
broadcast transmissions and antenna space. In addition, the FCC has granted
license applications for several low-earth orbiting satellite systems that are
intended to provide mobile voice and data services. Two systems had been
offering commercial service; however, one had to terminate operations because of
bankruptcy, although it recently announced it had been sold to new owners and
planned to resume operations, focusing in large part on the provision of service
to government and defense industry customers. In addition, the FCC has issued
licenses for several low-earth orbiting satellite systems that are solely
intended to provide data services, and one of those systems is operational and
another is expected to offer competitive service soon. Although these systems
are highly capital-intensive and have only begun to be tested, mobile satellite
systems could compete with land-based wireless communications systems, thereby
reducing the demand for the infrastructure services we provide. Reduced demand
for ground-based antenna sites could have a material adverse effect on our
business, financial condition or results of operations.
In addition, wireless service providers frequently enter into agreements
with competitors allowing them to utilize one another's wireless communications
facilities to accommodate customers who are out of range of their home
providers' services. These roaming agreements may be viewed by wireless service
providers as a superior alternative to leasing space for their own antennas on
communications sites we own. The proliferation of these roaming agreements could
have a material adverse effect on our business, financial condition or results
of operations.
A SMALL NUMBER OF STOCKHOLDERS BENEFICIALLY OWN A SUBSTANTIAL AMOUNT OF OUR
COMMON STOCK AND COULD SIGNIFICANTLY AFFECT MATTERS REQUIRING A SHAREHOLDER
VOTE.
Affiliates of Welsh, Carson, Anderson & Stowe own 32.4 million shares, or
23.4%, of our common stock as of September 30, 2000. After giving effect to the
issuance of approximately 14.3 million shares to SBC and 4.0 million shares to
the Trimaran group, affiliates of Welsh, Carson will own 20.7% of our
outstanding common stock. This ownership allows Welsh, Carson to exert
significant influence over the management and policies of SpectraSite. In
addition, Welsh, Carson and certain other Holdings stockholders have a right to
board representation under a stockholders' agreement. Welsh, Carson and the
other parties to the stockholders' agreement may have interests that are
different from yours. See "Description of Capital Stock--Stockholders'
Agreement."
OUR BUSINESS DEPENDS ON OUR KEY PERSONNEL.
Our future success depends to a significant extent on the continued
services of our Chief Executive Officer, Stephen H. Clark, our Chief Operating
Officer, Timothy G. Biltz, our Chief Financial Officer, David P. Tomick, our
Executive Vice President -- Wireless Tower Group, Richard J. Byrne, and our
Executive Vice President -- Construction Operations, Calvin J. Payne. Although
each of these officers
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<PAGE> 16
other than Mr. Biltz has an employment agreement with Holdings, the loss of any
of these key employees would likely have a significantly detrimental effect on
our business.
OUR OPERATIONS REQUIRE COMPLIANCE WITH AND APPROVAL FROM FEDERAL AND STATE
REGULATORY AUTHORITIES.
We are 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. Failure to comply
with applicable requirements may lead to civil penalties and tort liability.
These regulations control siting, marking, and lighting of towers and may,
depending on the characteristics of the tower, require registration of tower
facilities with the FCC. Wireless communications devices operating on towers are
separately regulated and independently authorized by the FCC based upon the
particular frequency used and the services being provided. Any proposals to
construct new communications sites or modify existing communications sites that
could affect air traffic must be reviewed by the FAA to ensure that the
proposals will not present a hazard to aviation. Tower owners may have an
obligation to paint their towers 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. We
generally indemnify our customers against any failure by us to comply with
applicable standards.
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, these regulations increase the costs associated with new
tower construction. Existing regulatory policies may adversely affect the timing
or cost of new tower construction, and additional regulations may be adopted
that will increase these delays or result in additional costs to SpectraSite.
These factors 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 October 2000, the FCC adopted rules and policies related to
telecommunications service providers' access to rooftops, other rights-of-way
and conduits in multi-tenant buildings. The FCC prohibited telecommunications
carriers in commercial settings from entering into new exclusive contracts with
building owners, including contracts that effectively restrict premises owners
or their agents from permitting access to other telecommunications service
providers. The FCC also established procedures to ensure that the demarcation
point in buildings, which marks the end of the incumbent local exchange
carrier's control over on-premises wiring and the beginning of the customer's or
building owner's control, will be at the "minimum point of entry" to the
structure rather than further inside the premises. In addition, the FCC
determined that, under the Communications Act, utilities, including local
exchange carriers, will be required to afford telecommunications carriers and
cable service providers reasonable and nondiscriminatory access to conduits and
rights-of-way in customer buildings, to the extent such conduits and
rights-of-way are owned or controlled by the utility. Finally, the FCC amended
its existing rules to give building tenants the same ability to place on their
balconies small satellite dishes for receiving telecommunications and other
fixed wireless signals that they currently have for receiving video services.
In the same October 2000 decision, the FCC sought comment on a number of
related issues, including whether the prohibition on exclusive contracts should
be extended to residential buildings; whether it should be broadened to prohibit
preferences other than exclusive access, such as exclusive marketing or landlord
bonuses for tenants; whether the FCC should prohibit carriers from enforcing
exclusive access provisions in existing contracts for commercial or residential
multi-tenant buildings; and whether the agency has authority to prohibit local
exchange carriers from providing services to multi-tenant buildings where the
owners maintain policies unreasonably preventing competing carriers from gaining
access to potential customers within the building. Federal legislation
addressing the building access issue had also been pending before the FCC
decision was adopted. We cannot predict with certainty which
14
<PAGE> 17
of the FCC's proposals or the remaining legislative initiatives will be adopted,
and, if they are, the effect they will have on our business.
As part of the Westower merger, we acquired operations in Canada. As a
result, we are subject to regulation in Canada. If we pursue additional
international opportunities, we will be subject to regulation in additional
foreign jurisdictions. In addition, our customers also may become subject to new
regulatory policies which may adversely affect the demand for communications
sites.
WE GENERALLY LEASE THE LAND UNDER OUR TOWERS AND MAY NOT BE ABLE TO MAINTAIN
THESE LEASES.
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. A loss of these interests, including losses
arising from the bankruptcy of one or more of our significant lessors, would
interfere with our ability to conduct our business and generate revenues. Our
ability to protect our rights against persons claiming superior rights in towers
depends on our ability to:
- 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, recover under title
warranties given by tower sellers, which warranties often terminate
after the expiration of a specific period, typically one to three years;
and
- recover under title covenants from landlords contained in lease
agreements.
WE ARE SUBJECT TO ENVIRONMENTAL LAWS THAT IMPOSE LIABILITY WITHOUT REGARD TO
FAULT.
Our operations are subject to federal, state, provincial, local, and
foreign environmental laws and regulations regarding the use, storage, disposal,
emission, release and remediation of hazardous and nonhazardous substances,
materials or wastes. Under these laws, we could be held strictly, as well as
jointly and severally, liable for the investigation and 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 currently have no material
liability under applicable environmental laws, the costs of complying with
existing or future environmental laws, investigating and remediating any
contaminated real property and resolving any related liability could have a
material adverse effect on our business, financial condition or results of
operations.
The FCC requires tower owners who are subject to the agency's antenna
structure registration program to comply at the time of registration with
federal environmental rules that may restrict the siting of towers. Under these
rules, tower owners are required initially to identify whether proposed sites
are in environmentally sensitive locations. If so, the tower owners must prepare
and file environmental assessments, which must be reviewed by the FCC staff
prior to registration and construction of the particular towers.
OUR TOWERS MAY BE DAMAGED BY NATURAL DISASTERS.
Our towers are subject to risks associated with natural disasters such as
ice and wind storms, 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.
PERCEIVED HEALTH RISKS OF RADIO FREQUENCY EMISSIONS COULD IMPACT OUR BUSINESS.
The wireless service providers that utilize our towers are subject to FCC
requirements and other guidelines relating to radio frequency emissions. FCC
safety guidelines apply to all emitters of radio frequency emissions, including
cellular and personal communications service hand-held telephones that were
authorized by the FCC after August 1, 1996. The potential connection between
radio frequency
15
<PAGE> 18
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, our tenants and possibly
we could face 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, we cannot
assure you that these claims will not arise in the future.
BECAUSE THE NOTES ARE ISSUED AT A DISCOUNT, U.S. HOLDERS OF THE NOTES WILL BE
SUBJECT TO SPECIAL INCOME INCLUSION RULES FOR TAX PURPOSES.
The new notes are issued at a discount from their principal amount, which
is referred to as original issue discount. As a result, if you are a U.S. Holder
of the new notes, you generally will be required to include amounts in gross
income for United States federal income tax purposes in advance of receipt of
the cash payments to which such income is attributable. See "Certain United
States Federal Tax Considerations" for a more detailed discussion.
If a bankruptcy case is commenced by or against us under the U.S.
Bankruptcy Code after the issuance of the new notes, your claim as a holder of
the new notes with respect to the principal amount thereof may be limited to an
amount equal to the sum of (i) the initial issue price, and (ii) that portion of
the original issue discount that is not deemed to constitute unmatured interest
for purposes of the U.S. Bankruptcy Code. Any original issue discount that was
not amortized as of any such bankruptcy filing would constitute unmatured
interest.
THERE WILL BE NO PUBLIC TRADING MARKET FOR THE REGISTERED NOTES, AND YOUR
ABILITY TO SELL YOUR REGISTERED NOTES IS LIMITED.
The registered notes will be registered under the Securities Act, but will
constitute a new issue of securities with no established trading market, and:
- any market that may develop may not be liquid;
- the registered note holders may not be able to sell their notes; or
- the registered note holders may not be able to sell their notes at a
favorable price. 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 registered notes are designated for trading among qualified
institutional buyers in The Portal(SM) Market. We understand that CIBC World
Markets Corp. presently intends to make a market in the new notes. However, they
are not obligated to do so, and any market-making activity with respect to the
notes may be discontinued at any time without notice. In addition, this
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. No
active trading market may exist for the registered notes and any trading market
which does develop may not be liquid.
YOU WILL BE SUBJECT TO TRANSFER RESTRICTIONS IF YOU FAIL TO EXCHANGE YOUR
OUTSTANDING NOTES.
Outstanding notes that are not tendered or are tendered but not accepted
will, following the completion of the exchange offer, continue to be subject to
existing restrictions on transfer, and, upon completion of the exchange offer,
registration rights with respect to the outstanding 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 notes
are tendered and accepted in the exchange offer, the trading market for
untendered and tendered but unaccepted outstanding notes could be adversely
affected.
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<PAGE> 19
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 notes, a properly completed and duly executed letter
of transmittal and all other required documents. Therefore, if you want to
tender your outstanding 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 notes for exchange.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
Holdings' certificate of incorporation provides that directors of Holdings
will not be personally liable to Holdings or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability: (1)
for any breach of the director's duty of loyalty to Holdings or its
stockholders; (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (3) under a provision of
Delaware law relating to unlawful payment of dividend or unlawful stock purchase
or redemption of stock; or (4) for any transaction from which the director
derives an improper personal benefit. As a result of this provision, Holdings
and its stockholders may be unable to obtain monetary damages from a director
for breach of his or her duty of care.
Our bylaws provide for the indemnification of directors, officers,
employees and agents and any person who is or was serving at the request of
Holdings as a director, officer, partner, trustee, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise and
any person who was or is serving at the request of Holdings as a trustee or
administrator under an employee benefit plan to the fullest extent authorized
by, and subject to the conditions set forth in, the Delaware General Corporation
Law against all expenses and liabilities. The indemnification provided under the
bylaws includes the right to be paid by Holdings the expenses in advance of any
proceeding for which indemnification may be had in advance of its final
disposition.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling Holdings
pursuant to the foregoing provisions, we have been informed that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
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<PAGE> 20
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 of like
original principal amount. Outstanding notes received in the exchange offer will
be cancelled.
The net proceeds to SpectraSite from the original issuance of the
outstanding notes was approximately $190.2 million. We will use these proceeds
for general corporate purposes, including capital expenditures, and to fund, in
part, the acquisition of leasehold and subleasehold interests in tower assets
from SBC. See "Summary -- Recent Developments."
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SPECTRASITE
TELESITE (PREDECESSOR) SPECTRASITE -----------------------------------
------------------------- ------------ NINE MONTHS
JANUARY 1, APRIL 25, TELESITE & YEAR ENDED ENDED
YEAR ENDED 1997- 1997- SPECTRASITE DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, MAY 12, DECEMBER 31, COMBINED --------------- -----------------
1996 1997 1997 1997 1998 1999 1999 2000
------------ ---------- ------------ ----------- ---- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges...... 23.2x -- -- -- -- -- -- --
Amount by which
earnings were not
sufficient to cover
fixed charges (in
millions).......... -- $ .5 $3.9 $4.4 $9.2 $97.8 $67.1 $110.3
</TABLE>
The ratio of earnings to fixed charges is computed by dividing income
before taxes and fixed charges other than capitalized interest by fixed charges.
Fixed charges consist of interest charges, amortization of debt expense and
discount related to indebtedness, whether expensed or capitalized, and that
portion of rental expense SpectraSite believed to be representative of interest
(estimated to be one-third of such expense). For all periods other than the year
ended December 31, 1996, earnings were not sufficient to cover fixed charges.
18
<PAGE> 21
CAPITALIZATION
The following table sets forth our cash and capitalization as of September
30, 2000:
- on an actual basis; and
- on an as adjusted basis to give effect to: (1) the issuance of $200.0
million aggregate principal amount of 12 1/2 senior notes due 2010; (2)
the issuance of $200.0 million aggregate principal amount of 6 3/4%
senior convertible notes due 2010; (3) the issuance of 4,000,000 shares
of common stock to the Trimaran group; and (4) the payment of
approximately $982.7 million in cash and the issuance of 14,291,997
shares of common stock to SBC in exchange for the sublease of 3,900
communications towers.
Since the SBC tower transaction will close in stages, with a final closing
expected in the first half of 2002, we may seek additional or alternative
sources of equity or debt financing in the public or private market to fund the
cash portion of the consideration we pay to SBC. This information should be read
in conjunction with our financial statements and related notes which are
incorporated in this prospectus by reference.
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 2000
-------------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents................................... $ 418,880 $ --
========== ==========
Long-term debt:
Credit facility(a)........................................ $ 200,000 $ 305,157
10 3/4% senior notes due 2010............................. 200,000 200,000
12 1/2% senior notes due 2010............................. -- 200,000
6 3/4% senior convertible notes due 2010.................. -- 200,000
12% senior discount notes due 2008........................ 162,664 162,664
11 1/4% senior discount notes due 2009.................... 398,299 398,299
12 7/8% senior discount notes due 2010.................... 320,998 320,998
Other debt................................................ 1,885 1,885
---------- ----------
Total long-term debt................................... 1,283,846 1,789,003
---------- ----------
Shareholders' equity:
Common stock, $0.001 par value, 300,000,000 shares
authorized, 138,075,309 shares outstanding, actual and
156,367,306 shares outstanding, as adjusted............ 138 156
Additional paid-in capital................................ 1,357,864 1,757,846
Accumulated other comprehensive income.................... 23,747 23,747
Accumulated deficit....................................... (224,305) (224,305)
---------- ----------
Total shareholders' equity............................. 1,157,444 1,557,444
---------- ----------
Total capitalization................................. $2,441,290 3,346,447
========== ==========
</TABLE>
---------------
(a) As of September 30, 2000, we had approximately $300.0 million available
under our existing credit facility. In connection with the SBC tower
transaction, we received a commitment of approximately $1.1 billion pursuant
to an amended and restated credit facility which we anticipate will provide
up to $1.2 billion of borrowing capacity. We expect to amend and restate our
credit facility in the first quarter of 2001.
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<PAGE> 22
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
Holdings originally sold the outstanding notes to CIBC World Markets Corp.
This initial purchaser subsequently placed the outstanding notes with:
- qualified institutional buyers in reliance on Rule 144A under the
Securities Act of 1933; 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
purchaser, as a condition to its 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 Securities and Exchange Commission. 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 this exchange offer, the
holder of an outstanding note will receive a registered note having an original
principal amount equal to that of the tendered outstanding note.
Based upon interpretations by the Securities and Exchange Commission 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). We believe 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 Securities and Exchange Commission 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. We do not
assume or indemnify you against any such liability.
As the above mentioned no-action letters 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 SpectraSite 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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<PAGE> 23
- 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 Securities and Exchange Commission staff do not permit Holdings to effect
this exchange offer, or if for any other reason the exchange offer is not
consummated by June 20, 2001 SpectraSite will:
- use reasonable best efforts to 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 the shelf registration statement
continuously effective until the expiration of the period referred to in
Rule 144(k) with respect to the outstanding notes or such shorter period
that will terminate when all of the outstanding notes covered by the
shelf registration statement have been sold under the shelf registration
statement.
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 use reasonable best efforts to complete the exchange offer or
file and cause to be declared effective a shelf registration statement on or
prior to June 20, 2001. In the event that by June 20, 2001 neither the exchange
offer is consummated nor the shelf registration statement is declared effective,
the interest rate on the outstanding notes will increase by 0.50% per annum
until the exchange offer is consummated or a shelf registration statement is
declared effective. The sole remedy available to the outstanding note holders
will be the immediate assessment of this additional cash interest on the
outstanding notes, whether or not cash interest is then payable on the
outstanding notes under the indentures. All interest payable because a
registration default occurred will be payable to the outstanding notes holders
in cash on each May 15 and November 15, commencing on November 15, 2001, until
the exchange offer is completed or the shelf registration statement is declared
effective. After the date on which the exchange offer is completed or the shelf
registration statement is declared effective, the interest rate on the cash
notes will revert to 12 1/2% per year.
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
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<PAGE> 24
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.
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 principal amount of registered notes in
exchange for each $1,000 principal amount 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, $200,000,000 aggregate original
principal amount of notes were outstanding. We have fixed the close of business
on , 2001 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 Securities and Exchange Commission 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 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."
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<PAGE> 25
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
We shall keep the exchange offer open for at least 20 business 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 , 2001, 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 of outstanding notes prior to 11:00 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.
DTC has authorized DTC participants that hold outstanding notes on behalf
of beneficial owners of the outstanding notes 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
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<PAGE> 26
- 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 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
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<PAGE> 27
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 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.
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,
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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 ,
2001; 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
- 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 re-tendered. 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 re-tender properly withdrawn
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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
Securities and Exchange Commission 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 reasonable 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 20 business 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 the letter of transmittal, and
requests for notice of guaranteed delivery should be directed to the exchange
agent, addressed as follows:
<TABLE>
<S> <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.
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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 or in a transaction meeting the requirements of Rule
144A;
- 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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<PAGE> 31
DESCRIPTION OF THE NOTES
The following is a summary of the material terms of the indenture governing
the new notes. 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.
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 office of the trustee, at 30 Broad Street, 14th
Floor, New York, New York 10004-2304. 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 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 Holdings 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.
Subject to the covenants described below under "-- Certain Covenants,"
Holdings may issue additional notes under the indenture. Any additional notes
issued under the indenture will be treated as the same class of notes initially
issued under the indenture.
TERMS OF THE NOTES
The notes:
- are unsecured, senior obligations of Holdings;
- will rank equally with our other Senior Indebtedness (including the 2008
notes, the 2009 notes, the 2010 notes and the convertible notes);
- are effectively subordinated in right of payment to all existing and
future secured Indebtedness of Holdings and all obligations, including
trade payables, of its subsidiaries;
- are senior in right of payment to any future subordinated Indebtedness
of Holdings; and
- mature on November 15, 2010.
The notes will accrue interest from the issue date, payable each May 15 and
November 15, commencing May 15, 2001. Interest will be computed on the basis of
a 360-day year, consisting of twelve 30-day months.
REDEMPTION
TERMS OF OPTIONAL REDEMPTION
Prior to November 15, 2003, Holdings may redeem up to 35% of the principal
amount 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 112.5%
of the principal amount of the notes being redeemed, plus accrued and unpaid
interest, if any, to the redemption date. At least 65% of the principal amount
of the notes originally issued (excluding notes held by Holdings or any of its
subsidiaries) must remain outstanding after each such redemption, and each such
redemption must occur within 90 days after the date of closing of the related
Equity Offering.
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<PAGE> 32
Holdings may redeem the notes at any time or from time to time on or after
November 15, 2005. Holdings shall pay accrued and unpaid interest, if any, on
the principal amount of the notes being redeemed to the redemption date. For any
notes being redeemed in any twelve-month period beginning on November 15 of the
years indicated in Column A below, Holdings shall pay a redemption price equal
to the percentage of the principal amount 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>
2005........................................................ 106.250 %
2006........................................................ 104.167 %
2007........................................................ 102.083 %
2008 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. 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.
RANKING
The Indebtedness evidenced by the notes:
- is unsecured Indebtedness of Holdings;
- will rank ratably in right of payment with all existing and future
unsecured Senior Indebtedness of Holdings;
- will be senior in right of payment to all existing and future
Subordinated Obligations of Holdings;
- will be effectively subordinated to all obligations, including trade
payables, of its subsidiaries; and
- will be equal in right of payment with the 2008 notes, the 2009 notes,
the 2010 notes and the convertible notes.
In addition, 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 and other liabilities of any of Holdings' subsidiaries.
At September 30, 2000, after giving effect to the convertible notes
offering and the offering of the new notes, Holdings would have had no
Indebtedness outstanding other than the new notes, the 2008 notes, the 2009
notes, the 2010 notes and the convertible notes, and Holdings' subsidiaries
would have had $201.9 million of debt and other liabilities and the ability to
borrow at least $300.0 million under the credit facility, subject to certain
conditions. Although the indenture contains limitations on the amount of
additional Indebtedness which Holdings and its subsidiaries 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,"
"-- Certain Covenants -- Limitation on Indebtedness and Preferred Stock of
Restricted Subsidiaries," and "Risk Factors -- We have substantial indebtedness,
and servicing our indebtedness could reduce funds available to grow our
business."
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<PAGE> 33
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 the
notes. The notes, therefore, will be effectively subordinated to all
Indebtedness, preferred stock, if any, and other liabilities and commitments of
Holdings' subsidiaries. The provisions of our credit facility contain
substantial restrictions on the ability of our subsidiaries to transfer cash or
assets to Holdings, by dividend or distribution. These restrictions can be
changed without the consent of note holders. 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 and does not restrict Holdings' subsidiaries
from guaranteeing other debt of Holdings. See "-- Certain
Covenants -- Limitation on Indebtedness and Preferred Stock of Restricted
Subsidiaries" and "Risk Factors -- Holdings is a holding company and its only
source of cash to pay interest on, and the principal of, the 2008 notes, the
2009 notes, the 2010 notes, the convertible notes and the new notes is
distributions from our subsidiaries."
As of the date of the indenture, all of Holdings' subsidiaries, other than
SpectraSite International, Inc., are Restricted 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 principal amount as of
the repurchase date, plus accrued and unpaid interest, if any, to the repurchase
date.
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 principal amount as of the repurchase date
plus accrued and unpaid interest, if any, to the repurchase 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 about 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
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<PAGE> 34
pursuant to 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 indenture's 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 of the notes.
Holdings will not be required to make an offer, pursuant to 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 shall 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 Holdings would be equal to or
less 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 be deemed not 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 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 an
incurrence of such Indebtedness by Holdings that is not permitted
by this clause (a);
b. Indebtedness represented by the notes issued on the Issue Date;
c. Any of Holdings' Indebtedness outstanding on the Issue Date;
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,
together with the amount of any Indebtedness then outstanding and
incurred pursuant to clause (2)(f) of the "-- Limitation on
Indebtedness and Preferred Stock of Restricted Subsidiaries"
covenant; not to exceed the greater of:
- $25.0 million and
- an amount equal to 7.5% of Holdings' Consolidated Tangible
Assets, at any one time outstanding;
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 Holdings' Board of Directors determines in good
faith;
e. Refinancing Indebtedness, incurred in respect of any Indebtedness
incurred pursuant to paragraph (1) above, clauses (2)(b) or (c)
above or this clause (2)(e);
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<PAGE> 35
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 by Holdings under currency exchange protection
agreements and interest rate protection agreements which, at the
time of incurrence, are in the ordinary course of its business;
provided, however, that the currency exchange protection
agreements and interest rate protection agreements are directly
related to Indebtedness which Holdings is permitted to incur
pursuant to the indenture;
g. Indebtedness represented by guarantees, by Holdings, of
Indebtedness which any of Holdings' Restricted Subsidiaries
otherwise is permitted to incur pursuant to 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, pursuant to which such person was merged with or
into Holdings; provided, however, that on the date of such merger
and after giving it effect, Holdings either (x) would be permitted
to incur at least $1.00 of additional Indebtedness pursuant to
paragraph (1) above or (y) would have had 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;
i. Indebtedness not to exceed, at any one time outstanding, together
with the amount of any Indebtedness then outstanding and incurred
pursuant to clause (2)(i) of the "-- Limitation on Indebtedness
and Preferred Stock of Restricted Subsidiaries" covenant, 2.0
times:
- the sum of 100% of the aggregate Net Cash Proceeds and 50% of
the non-cash proceeds Holdings receives from the issue or sale
of its capital stock, other than Disqualified Stock, subsequent
to July 1, 1999, other than an issuance or sale to a Holdings
subsidiary or to an employee stock ownership plan or a trust
established by Holdings or any of its Restricted Subsidiaries,
less
- the aggregate amount of such Net Cash Proceeds used to make
Restricted Payments pursuant to clause (1)(c)(ii), or applied
pursuant to clause (2)(a)(ii), of the "-- Limitation on
Restricted Payments" covenant;
j. other Indebtedness, in an aggregate principal amount outstanding
at any time, not to exceed $25.0 million, together with the amount
of any Indebtedness and preferred stock then outstanding and
incurred pursuant to clause (2)(j) of the "-- Limitation on
Indebtedness and Preferred Stock of Restricted Subsidiaries"
covenant;
k. Indebtedness incurred by Holdings' subsidiaries in compliance with
the "-- Limitation on Indebtedness and Preferred Stock of
Restricted Subsidiaries" covenant;
l. Indebtedness incurred under Credit Facilities, in an aggregate
principal amount outstanding at any time, together with the amount
of any Indebtedness then outstanding and incurred under clause
(2)(a) of the "-- Limitation on Indebtedness and Preferred Stock
of Restricted Subsidiaries" covenant, not to exceed the sum of:
- the product of $200,000 times the number of Completed Towers on
the date of such incurrence; and
- the product of $1,000,000 times the number of Completed
Broadcast Towers on the date of such incurrence; provided that
the amount of such Indebtedness does not exceed 25% of the cost
of acquiring or constructing such Completed Broadcast Towers;
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<PAGE> 36
m. Indebtedness representing the deferred payment of the purchase
price for any entity that is engaged in a Permitted Business and
that becomes a Restricted Subsidiary or the acquisition of any
assets constituting a business or line of business, as determined
by the Board of Directors, that is a Permitted Business, not to
exceed at any one time outstanding, together with any Indebtedness
then outstanding and incurred pursuant to clause 2(k) of the
"-- Limitation on Indebtedness and Preferred Stock of Restricted
Subsidiaries" covenant, 50% of the purchase price for the related
entity or business so acquired; provided, however, that after
giving effect to such acquisition and all Indebtedness incurred in
connection therewith, Holdings either (x) would be able to incur
at least $1.00 of additional Indebtedness under the "-- Limitation
on Indebtedness" covenant or (y) would have an Indebtedness to
Adjusted EBITDA Ratio no greater than prior to such transaction;
and
n. Permitted Acquisition Indebtedness.
3. Holdings shall not incur any Indebtedness pursuant to 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 earlier of the
Stated Maturity of the notes or 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 (and may from time
to time reclassify) 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, the Indebtedness to Adjusted EBITDA Ratio
of Holdings would be equal to or 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 be deemed not
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 Credit Facilities, in an aggregate
principal amount outstanding at any time, together with the amount
of any Indebtedness then outstanding and incurred under clause
(2)(l) of the "-- Limitation on Indebtedness" covenant, not to
exceed the sum of (x) the product of $200,000 times the number of
Completed Towers on the date of such incurrence and (y) the
product of $1,000,000 times the number of Completed Broadcast
Towers on the date of such incurrence; provided that the amount of
such Indebtedness does not exceed 25% of the cost of acquiring or
constructing such Completed Broadcast Towers;
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 such Restricted Subsidiary ceasing to be a
Restricted Subsidiary, or any subsequent transfer of such
Indebtedness or preferred stock, other than to
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<PAGE> 37
Holdings or a Restricted Subsidiary, shall be deemed to constitute an
incurrence of such Indebtedness or preferred stock by the issuer of
such preferred stock or Indebtedness;
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, 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
Holdings acquired it or such entity was merged into such
Restricted Subsidiary; provided, however, that on the date of such
acquisition or merger and after giving it effect, Holdings either
(x) would be permitted to incur at least $1.00 of additional
Indebtedness pursuant to paragraph (1) of the "-- Limitation on
Indebtedness" covenant or (y) would have 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;
d. Indebtedness or preferred stock outstanding on the Issue Date;
e. Refinancing Indebtedness incurred in respect of Indebtedness or
preferred stock referred to in paragraph (1) above or clauses
(2)(c) and (d) above or this clause (e); provided that
Indebtedness of Holdings may not be refinanced pursuant to this
clause (e);
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, together with the amount of
any Indebtedness then outstanding and incurred pursuant to clause
(2)(d) of the "-- Limitation on Indebtedness" covenant, not to
exceed the greater of (x) $25.0 million and (y) an amount equal to
7.5% of Holdings' Consolidated Tangible Assets; provided, that
such subsidiary incurs such Indebtedness within 180 days after the
date of such acquisition, construction or improvement, and that
the issue price of such Indebtedness does not exceed the fair
market value of such acquired, constructed or improved assets, as
determined in good faith by Holdings' Board of Directors;
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 pursuant to the indenture;
h. Indebtedness represented by guarantees, by a subsidiary, of
Indebtedness which Holdings or another subsidiary is otherwise
permitted to incur pursuant to the indenture; provided that any
subsidiary which guarantees the 2008 notes, the 2009 notes, the
2010 notes or the convertible notes will guarantee the new notes
on substantially similar terms;
i. Indebtedness, not to exceed at any one time outstanding together
with the amount of any Indebtedness then outstanding and incurred
pursuant to clause (2)(i) of the "-- Limitation on Indebtedness"
covenant, 2.0 times:
- the sum of 100% of the aggregate Net Cash Proceeds and 50% of
the non-cash proceeds Holdings receives from the issue or sale
of its capital stock, other than Disqualified Stock, subsequent
to July 1, 1999, other than an issuance or sale to a Holdings
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<PAGE> 38
subsidiary or 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 pursuant to clause (1)(c)(ii) of the "-- Limitation on
Restricted Payments" covenant, or applied pursuant to clause
(2)(a)(ii)of the "-- Limitation on Restricted Payments"
covenant;
j. other Indebtedness and preferred stock, in an aggregate principal
and/or liquidation amount, not to exceed at any time outstanding,
$25.0 million, less the amount of any indebtedness then
outstanding and incurred pursuant to clause (2)(j) of the
"-- Limitation on Indebtedness" covenant;
k. Indebtedness representing the deferred payment of the purchase
price for any entity that is engaged in a Permitted Business and
that becomes a Restricted Subsidiary or the acquisition of any
assets constituting a business or line of business, as determined
by the Board of Directors, that is a Permitted Business, not to
exceed at any one time outstanding, together with any Indebtedness
then outstanding and incurred pursuant to clause 2(m) of the "--
Limitation on Indebtedness" covenant, 50% of the purchase price
for the related entity or business so acquired; provided, however,
that after giving effect to such acquisition and all Indebtedness
incurred in connection therewith, Holdings either (x) would be
able to incur at least $1.00 of additional Indebtedness under the
"-- Limitation on Indebtedness" covenant or (y) would have an
Indebtedness to Adjusted EBITDA Ratio no greater than prior to
such transaction; and
l. Permitted Acquisition Indebtedness.
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 (and may from time
to time reclassify) 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.
4. 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. except with respect to making an Investment, Holdings could not
incur at least $1.00 of additional Indebtedness under 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,
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 (whether positive or negative) accrued
subsequent to July 1, 1999 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
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<PAGE> 39
ii. 100% of the aggregate Net Cash Proceeds, less the aggregate
amount of such Net Cash Proceeds used to incur Indebtedness pursuant
to clause (2)(i) 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 July 1, 1999, 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 March 15, 2000 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; 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
March 15, 2000, 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 March
15, 2000, 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)(i) of the
"-- Limitation on Indebtedness" covenant and clause (2)(i) of the
"-- Limitation on Indebtedness and Preferred Stock of Restricted
Subsidiaries" covenant;
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<PAGE> 40
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;
iv. such new Indebtedness has an Average Life equal to or
greater than the lesser of the Average Life of the Indebtedness being
so redeemed, repurchased, acquired or retired and the Average Life of
the notes; and
v. any purchase, redemption, defeasance or other acquisition
made pursuant to this clause 2(b) 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 Holding's capital stock from
former employees, in an amount not to exceed $5.0 million in the
aggregate.
Any dividend or purchase made pursuant to (2)(c) or 2(d), 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.
The amount of any Investment shall be measured on the date made and shall
not give effect to subsequent changes in value.
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 pursuant to a Credit Facility or
any agreement in effect on the Issue Date;
b. any encumbrance or restriction, with respect to a Restricted
Subsidiary, pursuant to an agreement relating to any Indebtedness
or capital stock that it incurred or issued on, or prior to, the
date on which Holdings or a Restricted Subsidiary acquired it,
other than Indebtedness or capital stock incurred or issued as
consideration for, or to provide 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 Holdings or a Restricted
Subsidiary acquired it, and outstanding on such date;
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c. any encumbrance or restriction pursuant to an agreement effecting
a refinancing of Indebtedness incurred, pursuant to an agreement
referred to in clause (a) or (b) above, or contained in any
amendment to an agreement referred to in clause (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 the notes than the encumbrances and
restrictions with respect to such Restricted Subsidiary contained
in such predecessor agreements, as determined by Holdings' Board
of Directors 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 or such 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
pursuant to 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;
g. customary provisions with respect to the disposition or
distribution of assets or property in joint venture and other
similar agreements; and
h. restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business; provided that the Board of Directors determines in good
faith that such restrictions will not have a material adverse
impact on Holdings' ability to make payments on the notes.
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 Restricted Subsidiary of Holdings,
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 Holdings or an Affiliate of Holdings;
b. make an offer with respect to the 2008 notes, the 2009 notes, the
2010 notes or the convertible notes to the extent required in the
indentures governing the 2008 notes, the 2009 notes, the 2010
notes and the convertible notes, respectively;
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 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
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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 clause (2)(a), (b), (c), (d), or (e)
above, Holdings shall make an offer to the holders to purchase notes
pursuant to, and subject to, the conditions set forth 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 $10.0 million. Pending
application of Net Available Cash pursuant 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 other than 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, pursuant to a customary
novation agreement that releases Holdings or the Restricted
Subsidiary from further liability.
5. In the event of an Asset Disposition that requires an offer to purchase
notes pursuant to paragraph (2) of this covenant, Holdings will be
required to purchase notes tendered, pursuant to Holdings' offer for
the notes, at a purchase price of:
- 100% of their principal amount 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 pursuant 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 pursuant 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 pursuant to 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 $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.
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 pursuant to 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.
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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 $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 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 $10.0 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.
2. The provisions of paragraph (1) above shall not prohibit:
a. any Restricted Payment permitted to be made pursuant to the
"-- Limitation on Restricted Payments" covenant;
b. any securities issuance, 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;
c. the grant of stock options or similar rights to Holdings'
employees and directors, pursuant to 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;
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 pursuant to the terms of any
agreement described in Holdings' Form 10-K for the year ended
December 31, 1999, or Holdings' Forms 10-Q or Forms 8-K filed
prior to the Issue Date, including the exhibits and documents
included or incorporated by reference therein, giving effect to
any subsequent supplements, amendments, modifications or
alterations thereof that are approved by the disinterested members
of Holdings' Board of Directors;
i. any transaction in the ordinary course of business between
Holdings or any Restricted Subsidiary and any Affiliate of
Holdings relating to the acquisition, management, construction,
leasing or licensing of towers, provided, however, that such
transaction is on terms that are no less favorable, taken as a
whole, to Holdings or the relevant Restricted Subsidiary than
those that could have been obtained in a comparable transaction by
Holdings or such Restricted Subsidiary with an unrelated person or
is otherwise on terms that, taken as a
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whole, Holdings has determined to be fair to Holdings or the relevant
Restricted Subsidiary; and
j. any transaction between Holdings or any of its Restricted
Subsidiaries and any of its Affiliates 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, other than
Permitted Liens, on any of its property or assets, including capital stock,
whether owned on the Issue Date or thereafter acquired, securing any obligation,
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 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, and will not permit any Restricted Subsidiary to
issue any of its capital stock to any person, other than to Holdings or a
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, unless in either case:
a. Holdings' and its Restricted Subsidiaries' minority equity
interest in such person, after giving effect to any such
disposition, would be permitted under the "-- Limitation on
Restricted Payments" covenant; and
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.
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,
pursuant to the "-- Limitation on Indebtedness" covenant; and
b. create a Lien on such property securing such Attributable
Indebtedness, without equally and ratably securing the notes,
pursuant to 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 determined by Holdings' Board of
Directors 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.
SECURITIES AND EXCHANGE COMMISSION 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 Securities and Exchange Commission, unless the Securities and
Exchange Commission 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, including Section 314(a),
of the Trust Indenture Act.
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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 of 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 of 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 (A) in the case of a merger of Holdings into a Wholly Owned
Subsidiary, (B) a merger Holdings enters into solely for the purpose of
reincorporating in another jurisdiction, or (C) a merger Holdings
enters into solely for the purpose of forming a holding company to hold
all of the outstanding capital stock of Holdings 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 shall have been made,
either (x) would have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to paragraph (1) of the "-- Limitation
on Indebtedness" covenant above 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
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 of 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;"
5. Holdings' failure to comply, for 60 days after notice, with its other
agreements contained in the notes or 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 $10.0
million or its foreign currency equivalent (the cross acceleration
provision);
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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
$10.0 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 $10.0 million required to be
paid by Holdings or such Significant Subsidiary 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 pursuant to 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, 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), (5) and (8) 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, of the outstanding notes, by
notice to Holdings, may declare the principal amount of, and accrued but unpaid
interest on, all the notes to be due and payable. Upon such a declaration, such
principal amount 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 principal amount 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, 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, 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, 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, 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
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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, 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;
- 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 "Terms of
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, in the good faith opinion of Holdings' Board of
Directors, materially adversely affect the rights of any holder, and to comply
with any requirement of the Securities and Exchange Commission 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.
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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";
- 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 such 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 holders of such notes 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.
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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 for 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, 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.
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.
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
quarter. The Tower EBITDA for the most recent quarter 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 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,
during the period beginning on the first day of the quarter and
ending on 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.
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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.
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 another Restricted Subsidiary:
- a disposition that constitutes a Restricted Payment permitted by the
covenant described under "-- Limitation on Restricted Payments";
- a disposition of assets with a fair market value of less than $5.0
million;
- any transaction not prohibited by the covenant under "-- Limitation on
Restricted Payments" or that constitutes a Permitted Investment;
- 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;
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.
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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. 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 Exchange Act Rules 13d-3 and 13d-5,
except that for purposes of this paragraph (1) 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, 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 (1), (a) 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,
directly or indirectly, of more than 35% of the voting power of the
parent entity's Voting Stock, and the Permitted Holders beneficially
own, directly or indirectly, in the aggregate, a lesser percentage of
the total voting power of the parent entity's 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 parent entity's board of directors, and (b) the Permitted Holders
shall be deemed to beneficially own any Voting Stock of an entity held
by any other 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. 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;
3. 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
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; and
4. 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 Broadcast Tower means a communications tower of at least 500
feet, other than a Completed Tower, with, as of the date of any determination:
- at least one broadcast tenant that has executed a definitive lease or
Site Management Contract with Holdings or any of its Restricted
Subsidiaries; and
- capacity for at least one other tenant.
Completed Tower means a communications transmission tower with, as of any
date of determination:
- at least one anchor tenant that has executed a definitive lease or Site
Management Contract with Holdings or any of its Restricted Subsidiaries;
and
- capacity for at least three tenants.
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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 not owned
by Holdings 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 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;
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, subject to the
exclusion contained in clause (4) below, Holdings' 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 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;
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 permitted in the
"-- Limitations on Restrictions on Distributions from Restricted
Subsidiaries" covenant, 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
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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 pursuant to 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, except to the extent
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 amount of Restricted Payments
permitted under such covenant, pursuant to 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.
Credit Facility means any debt or credit facility, 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, or other non-convertible debt
securities or other form of debt financing, 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 amendment, restatement,
supplement, extension, modification, renewal, refunding, replacement or
refinancing that increases the amount borrowable under any such facility or
alters the maturity of any such facility.
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 pursuant to a sinking fund
obligation or otherwise;
2. is convertible or exchangeable at the option of the holder 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 materially more
favorable taken as a whole to the holders of such capital stock than the
provisions described under "-- Change of Control" and "-- Limitation on Sales of
Assets and Subsidiary Stock."
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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 paid to Holdings in the form of a dividend by the
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 the "-- Limitations on Restrictions
on Distributions from Restricted Subsidiaries" covenant.
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 Securities and Exchange Commission
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 Securities and Exchange
Commission.
Indebtedness means, with respect to any person on any date of
determination, without duplication:
1. the principal in respect of:
a. indebtedness of such person for money borrowed; and
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;
2. all capital lease obligations of such person, and all Attributable Debt
in respect of Sale/Leaseback Transactions entered into by such person;
3. 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
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retention agreement, but excluding trade accounts payable, arising in
the ordinary course of business;
4. 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 (1) through (3) 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;
5. 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;
6. all obligations of the type referred to in clauses (1) through (5)
above, 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;
7. all obligations of the type referred to in clauses (1) through (6)
above, 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
8. to the extent not otherwise included in this definition, hedging
obligations of such person.
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 of such Indebtedness 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:
- Consolidated Indebtedness as of such date; to
- Adjusted EBITDA.
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 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
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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 notes are 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.
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,
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.
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 Acquisition Indebtedness means Indebtedness or acquired debt in
aggregate principal amount not to exceed $50.0 million at any one time
outstanding, incurred or assumed in connection with the acquisition of an entity
that is engaged in a Permitted Business and that becomes a Restricted Subsidiary
or the acquisition of any assets constituting a business or line of business, as
determined by the Board of Directors, that is a Permitted Business or incurred
by such entity or the owner of such assets and outstanding on the date of such
acquisition.
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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.
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 any of Holdings' or a Restricted Subsidiary's
Investment in:
1. Holdings, a Restricted Subsidiary, or a person which will, upon the
making of such Investment, become a Restricted Subsidiary;
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 or pursuant
to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of a debtor;
8. any person, to the extent such investment represents the non-cash
portion of the consideration received for an Asset Disposition as
permitted pursuant to 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 $2.0
million in the aggregate in any twelve-month period;
10. other Investments in Permitted Businesses not to exceed, at any one
time outstanding, the sum of $10.0 million and 10% of Holdings'
Consolidated Tangible Assets;
11. any interest rate protection agreement or currency exchange protection
agreement;
12. any acquisition of assets, to the extent the consideration therefor
consists of Holdings' capital stock, other than Disqualified Stock;
13. prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other
similar deposits;
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
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applicable provisions of the Internal Revenue Code; provided, however,
that the making of any Permitted Investment pursuant to this clause
(14) will not in any manner violate the covenant described under
"-- Limitation on Sales of Assets and Subsidiary Stock";
15. Investments in an amount not to exceed the Net Cash Proceeds or
Qualified Proceeds of the issuance or sale, other than to a subsidiary
of Holdings, of Capital Stock of Holdings, 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 the covenant "-- Certain
Covenants -- Limitation on Restricted Payments" or to the extent such
Net Cash Proceeds or Qualified Proceeds have not been used to Incur
Indebtedness; and
16. Other Investments not to exceed, at any one time outstanding, $75.0
million.
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 proceedings, 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
pursuant to the request of, and for the account of, such person in the
ordinary course of its business;
5. survey exceptions, 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 Liens securing the obligations, other than Indebtedness,
of Holdings or any of its Restricted Subsidiaries under any such
leases and subleases of real property;
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 Indebtedness secured by such Liens is Indebtedness which the
indenture otherwise permits to be incurred; and
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b. such Liens shall not encumber any other of Holdings' or any of
its Restricted Subsidiaries' assets or property;
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 a Credit Facility and
any other Liens securing Indebtedness permitted under the indenture to
be incurred by a Restricted Subsidiary;
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 $25.0 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 Restricted 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;
17. the Liens granted pursuant to the terms of the Security and
Subordination Agreement, as amended, modified or supplemented from
time to time, entered into pursuant to the terms of the Agreement and
Plan of Merger, dated as of February 10, 1999, among Holdings,
SpectraSite Communications Inc., SHI Merger Sub, Inc., Nextel and
certain of its subsidiaries;
18. Liens, rights of set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a depository or other
financial institution;
19. Liens on property subject to capital leases to the extent the related
capitalized lease obligation is permitted to be Incurred under the
"-- Limitation on Indebtedness" and "-- Limitation on Indebtedness and
Preferred Stock of Restricted Subsidiaries" covenants;
20. Liens on property of the Issuer or a Restricted Subsidiary at the time
the Issuer or Restricted Subsidiary acquired the property, including
any acquisition by means of a merger or consolidation with or into the
Issuer or any Restricted Subsidiary; provided, however, that such
Liens are not created, incurred or assumed in connection with, or in
contemplation of, such
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acquisition, provided, further, however, that such Liens may not
extend to any other property owned by the Issuer or any Restricted
Subsidiary; and
21. Liens on government securities that secure Indebtedness, to the extent
that such government securities are purchased with the proceeds of
such Indebtedness.
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
earlier of the Stated Maturity of the notes and 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 lesser of the Average Life of the Indebtedness being refinanced and
the Average Life of the notes; 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 (a)
dividends or distributions payable solely in its capital stock, other
than Disqualified Stock, (b) dividends or distributions payable solely
to Holdings or a Restricted Subsidiary, and (c) 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, other than the exercise by
Holdings 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 under the indenture, and 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.
Restricted Subsidiary means any subsidiary of Holdings that is not an
Unrestricted Subsidiary.
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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 pursuant to 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 Securities and Exchange Commission.
Site Management Contract means any agreement pursuant to 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 pursuant 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 pursuant to 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 $500.0 million,
or the foreign currency equivalent thereof, and whose
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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 270 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 one year 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.
sec.sec. 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), 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 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. 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. SpectraSite International, Inc. and any other 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 Holdings 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."
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The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary, as long as:
- immediately after giving effect to such designation no default shall
have occurred and be continuing; and
- 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 the 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 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.
Wholly Owned Subsidiary means a Restricted Subsidiary of Holdings, of which
Holdings, or another Wholly Owned Subsidiary, owns all the capital stock, other
than directors' qualifying shares, of such Restricted Subsidiary.
BOOK-ENTRY; DELIVERY AND FORM
Registered notes initially will be represented by one or more notes in
registered, global form without interest coupons. The registered global notes
will be deposited upon issuance with the trustee as custodian for DTC in New
York, New York, and registered in the name of DTC or its nominee, in each case
for credit to an account of a direct or indirect participant as described below.
Except as set forth below, the registered global notes may be transferred,
in whole but not in part, only to another nominee of DTC or to a successor of
DTC or its nominee. Beneficial interests in the registered global notes may not
be exchanged for registered new notes in certificated form except in the limited
circumstances described below. See "-- Exchange of Book-Entry Notes for
Certificated Notes." In addition, transfer of beneficial interests in the
registered global notes will be subject to the applicable rules and procedures
of DTC and its direct or indirect participants (including, if applicable, those
of Euroclear and Clearstream, Luxembourg), which may change from time to time.
DEPOSITORY PROCEDURES
DTC has advised SpectraSite that DTC is a limited-purpose trust company
created to hold securities for its participating organizations and to facilitate
the clearance and settlement of transactions in those securities between the
participants through electronic book-entry changes in accounts of the
participants. The participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations. Access
to DTC's system is also available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. Persons who are
not participants may beneficially own securities held by or on behalf of DTC
only through the participants or the indirect participants. The ownership
interest and transfer of ownership interest of each actual purchaser of each
security held by or on behalf of DTC are recorded on the records of the
participants and the indirect participants.
DTC has also advised SpectraSite that pursuant to procedures established by
it, (i) upon deposit of the registered global notes, DTC will credit the
accounts of participants designated by the initial purchasers with portions of
the principal amount of the registered global notes and (ii) ownership of such
interests in the registered global notes will be shown on, and the transfer of
ownership thereof will be effected only through, records maintained by DTC (with
respect to the participants) or by the participants
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and the indirect participants (with respect to other owners of beneficial
interests in the registered global notes).
Investors in the registered global notes may hold their interests therein
directly through DTC, if they are participants in such system, or indirectly
through organizations (including Euroclear and Clearstream, Luxembourg) which
are participants in such system. Investors in the Regulation S global note must
initially hold their interests therein through Euroclear or Clearstream,
Luxembourg, if they are accountholders in such systems, or indirectly through
organizations which are accountholders in such systems. After the expiration of
the Restricted Period (but not earlier), investors may also hold interests in
the Regulation S global note through organizations other than Euroclear and
Clearstream, Luxembourg that are participants in the DTC system. Euroclear and
Clearstream, Luxembourg will hold interests in the Regulation S global note on
behalf of their participants through their respective depositories, which in
turn will hold such interests in the Regulation S global note customers'
securities accounts in their respective names on the books of DTC. The Chase
Manhattan Bank, Brussels office, will initially act as depository for Euroclear,
and Citibank, N.A., will initially act as depository for Clearstream,
Luxembourg. All interests in a registered global note, including those held
through Euroclear or Clearstream, Luxembourg, may be subject to the procedures
and requirements of DTC. Those interests held through Euroclear or Clearstream,
Luxembourg may also be subject to the procedures and requirements of such
system.
The laws of some states require that certain persons take physical delivery
in definitive form of securities that they own. Consequently, the ability to
transfer beneficial interests in a registered global note to such persons may be
limited to that extent. Because DTC can act only on behalf of the participants,
which in turn act on behalf of the indirect participants and certain banks, the
ability of a person having beneficial interests in a registered global note to
pledge such interests to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of such interests, may be affected
by the lack of a physical certificate evidencing such interests.
EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE REGISTERED GLOBAL
NOTES WILL NOT HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL
DELIVERY OF NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED
OWNERS OR HOLDERS THEREOF UNDER THE INDENTURES FOR ANY PURPOSE.
Payments in respect of the principal of (and premium, if any) and interest
on a registered global note registered in the name of DTC or its nominee will be
payable to DTC or its nominee in its capacity as the registered holder under the
indentures. Under the terms of the indentures, Holdings and United States Trust
Company of New York, as trustee, will treat the persons in whose names the
notes, including the registered global notes, are registered as the owners
thereof for the purpose of receiving such payments and for any and all other
purposes whatsoever. Consequently, none of Holdings, the trustee, nor any agent
of Holdings or the trustee has or will have any responsibility or liability for
(i) any aspect or accuracy of DTC's records or any participant's or indirect
participant's records relating to the beneficial ownership or (ii) any other
matter relating to the actions and practices of DTC or any of the participants
or the indirect participants.
DTC has advised SpectraSite that its current practice, upon receipt of any
payment in respect of securities such as the new notes (including principal and
interest), is to credit the accounts of the relevant participants with the
payment on the payment date, in amounts proportionate to their respective
holdings in principal amount of beneficial interests in the relevant security as
shown on the records of DTC. Payments by the participants and the indirect
participants to the beneficial owners of new notes will be governed by standing
instructions and customary practices and will not be the responsibility of DTC,
the trustee or SpectraSite. Neither SpectraSite nor the trustee will be liable
for any delay by DTC or any of the participants in identifying the beneficial
owners of the new notes, and SpectraSite and the trustee may conclusively rely
on and will be protected in relying on instructions from DTC or its nominee as
the registered owner of the registered global notes for all purposes.
Except for trades involving only Euroclear and Clearstream, Luxembourg
participants, interests in the registered global notes will trade in DTC's
same-day funds settlement system and secondary market trading activity in such
interests will therefore settle in immediately available funds, subject in all
cases to the rules and procedures of DTC and the participants.
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Transfers between participants in DTC will be effected in accordance with
DTC's procedures and will be settled in same-day funds. Transfers between
account holders in Euroclear and Clearstream, Luxembourg will be effected in the
ordinary way in accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the new
notes described herein, cross-market transfers between the account holders in
DTC, on the one hand, and directly or indirectly through Euroclear or
Clearstream, Luxembourg account holders, on the other hand, will be effected
through DTC in accordance with DTC's rules on behalf of Euroclear or
Clearstream, Luxembourg, as the case may be, by its respective depository;
however, such cross-market transactions will require delivery of instructions to
Euroclear or Clearstream, Luxembourg, as the case may be, by the counterparty in
such system in accordance with the rules and procedures and within the
established deadlines (Brussels time) of such system. Euroclear or Clearstream,
Luxembourg, as the case may be, will, if the transaction meets its settlement
requirements, deliver instructions to its respective depository to take action
to effect final settlement on its behalf by delivering or receiving interests in
the relevant registered global note in DTC, and making or receiving payment in
accordance with normal procedures for same-day funds settlement applicable to
DTC. Euroclear and Clearstream, Luxembourg account holders may not deliver
instructions directly to the depositories for Euroclear or Clearstream,
Luxembourg.
Because of time zone differences, the securities account of a Euroclear or
Clearstream, Luxembourg account holder purchasing an interest in a registered
global note from an account holder in DTC will be credited, and any such
crediting will be reported to the relevant Euroclear or Clearstream, Luxembourg
participant, during the securities settlement processing day (which must be a
business day for Euroclear or Clearstream, Luxembourg) immediately following the
settlement date of DTC. Cash received in Euroclear or Clearstream, Luxembourg as
a result of sales of interests in a registered global note by or through a
Euroclear or Clearstream, Luxembourg account holder to a participant in DTC will
be received with value on the settlement date of DTC but will be available in
the relevant Euroclear or Clearstream, Luxembourg cash account only as of the
business day for Euroclear or Clearstream, Luxembourg following DTC's settlement
date.
DTC has advised SpectraSite that it will take any action permitted to be
taken by a holder of new notes only at the direction of one or more participants
to whose account with DTC interests in the registered global notes are credited
and only in respect of such portion of the aggregate principal amount at
maturity of the new notes as to which such participant or participants has or
have given such direction. However, if any of the events described under
"-- Exchange of Book Entry Notes for Certificated Notes" occurs, DTC reserves
the right to exchange the registered global notes for registered new notes in
certificated form and to distribute such registered new notes to its
participants.
The information in the section concerning DTC, Euroclear and Clearstream,
Luxembourg and their book-entry systems has been obtained from sources that
SpectraSite believes to be reliable, but SpectraSite takes no responsibility for
the accuracy thereof.
Although DTC, Euroclear and Clearstream, Luxembourg have agreed to the
foregoing procedures to facilitate transfers of interests in the registered
global note among account holders in DTC and account holders of Euroclear and
Clearstream, Luxembourg, they are under no obligation to perform or to continue
to perform such procedures, and such procedures may be discontinued at any time.
None of SpectraSite or the trustee, nor any agent of SpectraSite or the trustee
will have any responsibility for the performance by DTC, Euroclear or
Clearstream, Luxembourg or their respective participants, indirect participants
or account holders of their respective obligations under the rules and
procedures governing their operations.
EXCHANGE OF BOOK-ENTRY NOTES FOR CERTIFICATED NOTES
The registered global notes are exchangeable for definitive notes in
registered certificated form if (i) DTC (x) notifies SpectraSite that it is
unwilling or unable to continue as depository for the registered global notes
and SpectraSite thereupon fails to appoint a successor depository or (y) has
ceased to be a clearing agency registered under the Exchange Act, (ii)
SpectraSite, at its option, notifies the trustee in writing that it elects to
cause the issuance of the registered new notes in certificated form or (iii)
there
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shall have occurred and be continuing a default or an event of default with
respect to the new notes. In all cases, registered certificated new notes
delivered in exchange for any registered global note or beneficial interests
therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of DTC (in accordance with its
customary procedures).
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CERTAIN UNITED STATES 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 new 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. There can be no assurance that the Internal Revenue
Service will not take views contrary to those summarized below, and no ruling
from the Internal Revenue Service has been or will be sought by us. Unless
otherwise specifically noted, this summary applies only to those persons that
purchased the new notes for cash and hold them as capital assets within the
meaning of Section 1221 of the Internal Revenue Code. We intend to treat the new
notes as indebtedness for United States federal income tax purposes, and the
following discussion assumes that such treatment will be respected.
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, HOLDERS WHOSE FUNCTIONAL
CURRENCY IS NOT THE U.S. DOLLAR AND PERSONS THAT WILL HOLD THE NEW NOTES AS PART
OF A POSITION IN A STRADDLE OR AS PART OF A CONSTRUCTIVE SALE OR A HEDGING,
CONVERSION OR OTHER INTEGRATED TRANSACTION, OR ADDRESS ASPECTS OF UNITED STATES
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. WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR REGARDING THE
UNITED STATES FEDERAL TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF
THE NEW NOTES, INCLUDING YOUR STATUS AS A U.S. HOLDER OR A NON-U.S. HOLDER (AS
DEFINED BELOW), AS WELL AS ANY TAX CONSEQUENCES THAT MAY ARISE UNDER THE LAWS OF
ANY STATE, MUNICIPALITY, FOREIGN COUNTRY OR OTHER TAXING JURISDICTION.
A U.S. Holder means a beneficial owner of a new note that, for United
States federal income tax purposes, is:
<TABLE>
<S> <C>
(i) a citizen or individual resident, as defined in Section
7701(b) of the Internal Revenue Code, of the United States;
(ii) 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, Treasury
regulations provide otherwise);
(iii) an estate, the income of which is subject to United States
federal income tax without regard to its source; or
(iv) 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.
</TABLE>
Notwithstanding the preceding sentence, certain trusts in existence on August
20, 1996, and treated as U.S. Holders prior to such date, may elect to continue
to be treated as U.S. Holders. A Non-U.S. Holder means a beneficial owner of a
new note that is not a U.S. Holder.
If a partnership holds a new note, the tax treatment of the partner
generally will depend upon the status of the partner and the activities of the
partnership. Partners of partnerships holding new notes should consult their tax
advisors regarding the United States federal tax consequences of purchasing,
owning and disposing of the new notes.
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EFFECT OF EXCHANGE OF OUTSTANDING NOTES FOR REGISTERED NOTES
The exchange of outstanding notes for registered notes under the registered
exchange offer will not be treated as an exchange for United States 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.
U.S. HOLDERS
Original Issue Discount. Because the new notes are being issued at a
discount from their stated redemption price at maturity, they will have original
issue discount for United States federal income tax purposes and, subject to the
discussion regarding de minimis original issue discount below, each holder will
be required to include in income (regardless of whether such holder is a cash or
accrual basis taxpayer) in each taxable year, in advance of the receipt of
corresponding cash payments on such notes, that portion of the original issue
discount, computed on a constant yield basis as described below, attributable to
each day during such year on which the holder held the notes. The amount of
original issue discount generally will equal the excess of a new note's stated
redemption price at maturity over its issue price. A new note's issue price will
be the first price at which a substantial amount of the new notes is sold,
excluding sales to bond houses, brokers or similar persons or organizations
acting in the capacity of underwriters or wholesalers. A new note's stated
redemption price at maturity will be 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 in cash or property (other than debt instruments of the
issuer) at least annually at a single fixed rate that appropriately takes into
account the length of the interval between payments. Accordingly, cash payments
on the new notes will constitute qualified stated interest, and each new note
will bear original issue discount in an amount equal to the excess of its
principal amount over its issue price.
A U.S. Holder of a note will be required to include original issue discount
in gross income (as ordinary interest income) periodically over the term of the
new 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 new note for each day during the taxable year or
portion of a taxable year during which such holder holds such new note. However,
if the amount of original issue discount determined as described above is de
minimis original issue discount then the notes will be treated as if there is no
original issue discount. The notes will have de minimis original issue discount
if the total amount thereof is less than the product of (a) 0.25% (b) the number
of full years from the issue date to the maturity date of the note and (c) the
stated redemption price at maturity. Holders of notes issued with de minimis
original issue discount generally must include the de minimis original issue
discount in income at the time payments (other than qualified stated interest)
on the notes are made in proportion to the amount paid. Any amount of de minimis
original issue discount included in income will generally be treated as capital
gain.
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 such new
note's adjusted issue price at the beginning of the accrual period multiplied by
its yield to maturity. For purposes of computing original issue discount, we
will use six-month accrual periods that end on the days in the calendar year
corresponding to the maturity date of the new notes and the date six months
prior to such maturity date, with the exception of an initial short accrual
period. A U.S. Holder is permitted to use different accrual periods; provided,
however, 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 new note at the beginning of any
accrual period is its issue price increased by the aggregate amount of original
issue discount previously includible in the gross income of the holder
(disregarding any reduction on account of any acquisition premium, described
below) and decreased by any payments of non-qualified stated interest
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previously made on the new note. A new 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 thereon, produces an amount equal to the issue price of
such new note.
Under these rules, U.S. Holders are required to include in gross income
increasingly greater amounts of original issue discount in each successive
accrual period. A holder's tax basis in the notes will be increased by any
amounts of original issue discount included in income by such holder, and will
be decreased by any payments received by such holder with respect to the notes,
other than payments of qualified stated interest. The amount of original issue
discount allocable to an initial short accrual period may be computed using any
reasonable method if all other accrual periods, other than a final short accrual
period, are of equal length. The amount of original issue discount allocable to
the final accrual period at maturity of the note will be the difference between
(i) the amount payable at maturity of the note, and (ii) the note's adjusted
issue price as of the beginning of the final accrual period. Any payments of
non-qualified stated interest on a new note will not be separately included in
income, but rather will be treated first as payments of previously accrued and
unpaid original issue discount and then as payments of principal. Consequently,
such payments will reduce a U.S. Holder's basis in such new note, as described
below under "-- U.S. Holders -- Sale, Exchange or Redemption of the new notes."
Payments of qualified stated interest on the new notes will generally be taxable
to a U.S. Holder as ordinary interest income at the time such payments are
received or accrued, in accordance with such holder's regular method of
accounting.
We do not intend to treat the possibility of:
<TABLE>
<S> <C>
(i) an optional redemption, as described under "Description of
new notes -- Redemption;"
(ii) a repurchase pursuant to a Change in Control, as described
under "Description of new notes -- Change of Control;" and
(iii) the additional interest that will accrue on the new notes as
a result of our failure to cause the new notes to be
registered under the Securities Act, as described under
"Description of new notes -- Registration Rights"
</TABLE>
as affecting the determination of the yield to maturity of the new notes, or as
giving rise to any additional accrual of original issue discount or recognition
of ordinary income upon the redemption, sale or exchange of a new note. In the
unlikely event that the interest rate on the new notes is increased, then such
increased interest may be treated as increasing the amount of original issue
discount on the new notes.
We will provide certain information to the Internal Revenue Service, and
will furnish annually to record U.S. Holders of the new notes, information with
respect to the original issue discount accruing during the taxable year at
issue. This information is based on the adjusted issue price of the new notes as
if the U.S. Holder were the original holder of the instrument who purchased it
at the original purchase price.
Acquisition Premium. A U.S. Holder that purchases a new note for an amount
that is greater than its adjusted issue price but equal to or less than the sum
of all such note amounts payable on such note after the purchase date (other
than payments of qualified stated interest) will be considered to have purchased
such new note at an acquisition premium. Under the acquisition premium rules of
the Internal Revenue Code and the Treasury Regulations thereunder, the daily
portion of original issue discount which such holder must include in its gross
income with respect to such note for any taxable year will be reduced by an
amount equal to the original issue discount multiplied by a fraction, the
numerator of which is the amount of such acquisition premium and the denominator
of which is the original issue discount remaining for the period from the date
the note was purchased to its maturity date. The information that we report to
the record holders of the new notes on an annual basis will not account for an
offset against original issue discount for any portion of any acquisition
premium. Accordingly, each U.S. Holder should consult its tax advisor as to the
determination of the acquisition premium amount and the resulting adjustments to
the amount of reportable original issue discount.
Acquisition Bond Premium. A U.S. Holder that purchases a new note for an
amount in excess of its stated redemption price at maturity will be considered
to have purchased such new note at a premium and
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may elect to amortize such premium, using a constant yield method, over the
remaining term of such new 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 U.S. Holder's interest income from such new note. A note holder that elects
to amortize such premium must reduce its tax basis in the note by the amount of
the premium amortized during its holding period. Bond premium on a new note held
by a U.S. Holder that does not make such an election will decrease the gain or
increase the loss otherwise recognized on disposition of such new 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 U.S.
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 U.S. Holder purchases a new note, subsequent to its
original issuance, 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 new
note equals its issue price plus the amount of original issue discount
includible 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 of non-qualified stated interest, on such new note.
The U.S. Holder will be required to treat any principal payment on, or any
gain recognized on the sale, exchange, redemption, retirement or other
disposition of, such a new note, as ordinary income to the extent of any accrued
market discount that has not previously been included in income and treated as
having accrued on such new note at the time of such payment or disposition. If a
U.S. Holder disposes of such new note in a nontaxable transaction (other than as
provided in Sections 1276(c) and (d) of the Internal Revenue Code), such holder
must include as ordinary income the accrued market discount as if such holder
had disposed of such new note in a taxable transaction at the note's fair market
value. In addition, the U.S. Holder may be required to defer, until the maturity
date of a new note or its earlier disposition (including a nontaxable
transaction other than as provided in Sections 1276(c) and (d)), the deduction
of all or a portion of the interest expense on any indebtedness incurred or
continued to purchase or carry such new note.
Any market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of a new note, unless the U.S.
Holder elects to accrue market discount on a constant interest method. A U.S.
Holder 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 U.S. Holder
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 continued to
purchase or carry such debt instruments, would not apply.
Election to Treat All Interest as Original Issue Discount. A U.S. Holder
may elect, subject to certain limitations, to include all interest that accrues
on a new 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, U.S. Holders should consult their tax advisors as to
whether they should make this election.
The AHYDO Rule. The new notes will constitute applicable high yield
discount obligations, also referred to as AHYDOs, if:
<TABLE>
<S> <C> <C>
(i) their yield to maturity is equal to or greater than the sum
of the relevant applicable federal rate for the month in
which the new notes are issued, plus 5 percentage points;
and
(ii) they bear significant original issue discount.
</TABLE>
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For December, 2000, the long-term applicable federal rate is 5.89%, based
on semi-annual compounding.
The new notes will bear significant original issued discount for this
purpose if, as of the close of any accrual period ending more than five years
after issuance, the total amount of income includible by holders with respect
thereto exceeds the sum of:
- the total amount of stated interest paid on the new notes before the
close of such accrual period; and
- the product of the issue price of the new notes and their yield to
maturity.
If the new notes constitute AHYDOs, then pursuant to Sections 163(e) and
163(i) of the Internal Revenue Code, we will not be entitled to deduct original
issue discount that accrues with respect thereto until amounts attributable to
such original issue discount are paid in cash.
Furthermore, to the extent that the yield to maturity of the new notes
exceeds the sum of the relevant applicable federal rate for the month in which
they are issued plus 6 percentage points (the Excess Yield), we will be
permanently prohibited from deducting a portion of the original issue discount
accruing on the new notes. Instead, this disqualified portion will be
characterized as a nondeductible dividend paid by us and will be treated as a
dividend distribution, to the extent of available current and accumulated
earnings and profits, solely for purposes of the dividend received deduction of
Sections 243, 246 and 246A of the Internal Revenue Code with respect to holders
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; and
- the original issue discount for the accrual period at issue.
Subject to otherwise applicable limitations, a corporate U.S. Holder will be
entitled to a dividend received deduction with respect to the disqualified
portion of the accrued original issue discount if we have sufficient current or
accumulated earnings and profits. To the extent that our 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 dividend
received deduction will continue to be treated as ordinary original issue
discount income in accordance with the rules described above under "Original
Issue Discount."
Sale, Exchange or Redemption of the new notes. Generally, a sale,
exchange, redemption or other disposition of the new notes will result in
taxable gain or loss equal to the difference between the amount of cash plus the
fair market value of other property received (other than amounts representing
accrued and unpaid interest, which are taxed as interest income described above)
and the U.S. Holder's adjusted tax basis in the new notes. A U.S. Holder's
adjusted tax basis for determining gain or loss on the sale or other disposition
of a new note will initially equal the cost of such new note to such holder and
will be increased by:
- any amounts included in income as original issue discount by such
holder; and
- any market discount previously included in income by such holder,
and decreased by:
- any principal and non-qualified 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 new note is held by the U.S. Holder for more than one year,
otherwise such gain or loss will be short-term.
U.S. Holders that are corporations generally will be taxed on net capital
gains at a maximum rate of 35%. In contrast, non-corporate U.S. Holders
(including individuals) generally will be taxed on net short-term capital gains
at a maximum rate of 39.6% for property held for 12 months or less, and 20% for
net long-term capital gains. Special rules, and generally lower maximum rates,
apply to non-corporate U.S. Holders in lower tax brackets and to individuals who
have held, for more than 5 years, capital assets
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acquired or deemed to have been acquired after December 31, 2000. Any capital
losses realized by a U.S. Holder that is a corporation generally may be used
only to offset capital gains. Any capital losses realized by a U.S. Holder that
is an individual generally may be used only to offset capital gains plus $3,000
of other income per year.
NON-U.S. 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 new notes to a Non-U.S. Holder will not be subject
to the normal 30% United States federal withholding tax if:
<TABLE>
<S> <C>
(i) the interest is effectively connected with the conduct of a
trade or business in the United States by the Non-U.S.
Holder or of a partnership, trust or estate in which such
Non-U.S. Holder is a partner or beneficiary, we or our
paying agent receive a timely furnished and properly
completed Internal Revenue Service Form W-8ECI, or any
successor form, duly executed under penalties of perjury; or
(ii) all of the following conditions of the portfolio interest
exception are met:
</TABLE>
(A) the Non-U.S. Holder does not, actually or constructively, own 10%
or more of the total combined voting power of all classes of our
stock entitled to vote,
(B) the Non-U.S. Holder is not a controlled foreign corporation that
is related, directly or indirectly, to us through stock
ownership,
(C) the Non-U.S. Holder is not a bank receiving interest pursuant to
a loan agreement entered into in the ordinary course of its trade
or business, and
(D) either (1) the Non-U.S. Holder timely certifies to us or our
paying agent, under penalties of perjury, that such holder is a
Non-U.S. 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 new notes in such
capacity timely certifies to us or our paying agent, under
penalties of perjury, that such statement has been received from
the beneficial owner of the new notes by such organization, or by
any other financial institution between such organization and the
beneficial owner, and furnishes us or our paying agent with a
copy thereof. The foregoing certification may be provided by the
Non-U.S. Holder on a properly completed Internal Revenue Service
Form W-8BEN or W-8IMY, as applicable, or any successor forms,
duly executed under penalties of perjury. 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.
If interest paid on the new notes, including original issue discount, is
effectively connected with the conduct, by the Non-U.S. Holder or a partnership,
trust or estate in which such Non-U.S. Holder is a partner or beneficiary, of a
business within the United States, and if a tax treaty applies, is attributable
to a permanent establishment maintained in the United States by the Non-U.S.
Holder, then such interest will generally be taxed on a net income basis, that
is, after allowance for applicable deductions, at the graduated rates that are
applicable to U.S. Holders in essentially the same manner as notes held by U.S.
Holders as discussed above, but would be exempt from withholding tax if
certification requirements are met. In the case of a Non-U.S. 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-U.S. Holder is a qualified resident of
the treaty country.
If the interest on the new notes is not effectively connected with the
conduct of a trade or business within the United States and does not qualify for
the portfolio interest exception described above, 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 timely delivery of a properly
completed Internal Revenue Service
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Form W-8BEN, or any successor form, duly executed under penalties of perjury, to
us or our paying agent certifying eligibility for the lower treaty rate.
On October 14, 1997, final regulations were published that govern
information reporting and certification procedures regarding withholding and
backup withholding on certain amounts paid to Non-U.S. Holders. The 1997
regulations are effective for payments made after December 31, 2000, regardless
of the issue date of the instrument with respect to which such payments are
made, subject to certain transition rules. The 1997 regulations provide
documentation procedures designed to simplify compliance by withholding agents.
They generally do not alter the treatment of Non-U.S. Holders, described above,
but change certification procedures and forms and clarify and modify payor
reliance standards. For purposes of the certification requirements, the 1997
regulations generally treat as the beneficial owners of payments on the new
notes 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 federal income
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. In contrast, a payment to a United States
partnership is treated for these purposes as payment to a U.S. Holder, even if
the partnership has one or more foreign partners. 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. We urge you to consult your own tax advisor concerning the tax
consequences of your proposed investment in light of the 1997 regulations.
Gain on Sale or Other Disposition. A Non-U.S. 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 new notes (other than amounts
attributable to accrued but unpaid qualified stated interest or original issue
discount, which may be subject to the rules described above regarding interest),
unless:
(a) the gain is effectively connected with the conduct of a trade or
business within the United States of the Non-U.S. Holder or of a
partnership, trust or estate in which such Non-U.S. Holder is a
partner or beneficiary and the Non-U.S. Holder cannot claim an
exemption under an applicable income tax treaty; or
(b) the Non-U.S. Holder is an individual that:
<TABLE>
<S> <C>
(i) is present in the United States for 183 days or more in the
taxable year of the sale or other disposition, and
(ii) 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 States and the gain from the sale
or other disposition of the new notes is attributable to
such office or other fixed place of business.
</TABLE>
Non-U.S. Holders who are individuals may also be subject to tax pursuant to
provisions of United States federal income tax law applicable to certain United
States expatriates, including certain former long-term residents of the United
States.
Gains realized by a Non-U.S. Holder that are effectively connected with the
conduct of a trade or business within the United States of a Non-U.S. Holder, or
a partnership, trust or estate in which such Non-U.S. Holder is a partner or
beneficiary, generally will be taxed on a net income basis at the graduated
rates that are applicable to U.S. Holders, as described above, unless exempt by
an applicable income tax treaty. In the case of a Non-U.S. 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-U.S. Holder is a qualified resident of
the treaty country.
Under the 1997 regulations, described above in "-- Non-U.S.
Holders -- Interest," withholding of United States federal income tax may apply
to payments on a taxable sale or other disposition of the new
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notes by a Non-U.S. Holder who does not provide appropriate certification to the
withholding agent with respect to such transaction.
Federal Estate and Gift Taxes. New notes 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, however, that any
interest thereon would have been eligible for the portfolio interest exception
described above in "-- Non-U.S. 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 the new 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 paid to, and to the proceeds of sales or other
dispositions of the new notes before maturity by, certain U.S. Holders. In
addition, a 31% backup withholding tax applies to a non-corporate U.S. Holder if
such person:
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<S> <C>
(i) 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;
(ii) furnishes an incorrect taxpayer identification number, and
the payor is so notified by the Internal Revenue Service;
(iii) is notified by the Internal Revenue Service that such person
has failed properly to report payments of interest or
dividends; or
(iv) in certain circumstances, fails to certify, under penalties
of perjury, that such person has furnished a correct
taxpayer identification number and has not been notified by
the Internal Revenue Service that such person is subject to
backup withholding for failure properly to report interest
or dividend payments.
</TABLE>
Backup withholding does not apply to payments made to certain exempt U.S.
Holders, such as corporations and tax-exempt organizations.
In the case of a Non-U.S. Holder, under current United States federal
income tax law, backup withholding does not apply to payments of interest,
including original issue discount, with respect to the new notes, or to payments
of proceeds on the sale or other disposition of the new notes, if such holder
has provided to us or our paying agent the certification described in clause
(ii)(D) of "-- Non-U.S. Holders -- Interest" or has otherwise established an
exemption (provided that neither we nor our paying agent have actual knowledge
or, after December 31, 2000, reason to know that the holder is a U.S. Holder or
that the conditions of any other exemption are not in fact satisfied).
We must annually report to the Internal Revenue Service and to each
Non-U.S. Holder any interest, including original issue discount, that is subject
to withholding or that is exempt from withholding. Copies of these information
returns may also be made available to the tax authorities of the country in
which the Non-U.S. Holder resides.
Under current United States federal income tax law, neither backup
withholding nor information reporting generally applies to payments of proceeds
on the sale or other disposition of the new notes to or through a foreign office
of a foreign broker that is not a U.S. related person. For this purpose, a U.S.
related person means a controlled foreign corporation for United States federal
income tax purposes or a foreign person 50% or more of whose gross income is
effectively connected with the conduct of a trade or business within the United
States for a specified three-year period or with respect to payments made after
December 31, 2000, a foreign partnership with certain connections to the United
States, currently subject to certain information reporting requirements, but not
back-up withholding, unless the payee is an exempt recipient or the broker has
evidence in its records that the payee is a Non-U.S. Holder
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<PAGE> 75
and no actual knowledge, or, after December 31, 2000, reason to know, that such
evidence is false and certain other conditions are met.
If payments of proceeds on the sale or other disposition of the new notes
were made to or through the foreign office of a broker that is a United States
person, as defined in Section 7701(a)(30) of the Internal Revenue Code, or a
U.S. related person, such broker may be subject to certain information
reporting, but not backup withholding, requirements with respect to such
payments, unless such 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 broker is required to report if such person
has actual knowledge or, after December 31, 2000, has reason to know, that the
payee is a United States person.
Payments of proceeds on the sale or other disposition of the new notes to
or through the United States office of a U.S. or foreign 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; provided, however, that the broker does not have
actual knowledge or, after December 31, 2000, has reason to know, that the payee
is a United States person or that the conditions of the exemption are, in fact,
not satisfied.
The 1997 regulations, described above in "-- Non-U.S. Holders -- Interest,"
modify certain of the certification requirements for backup withholding and
expand the group of U.S. related persons. It is possible that we or our paying
agent may request new withholding exemption forms from holders of the new 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 the new notes under the backup
withholding rules are allowed as a refund or a credit against such holder's
United States federal income tax; provided, however, that the required
information is furnished to the Internal Revenue Service.
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<PAGE> 76
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 , 2001, 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
outstanding and registered notes are designated for trading in The Portal
Market.
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<PAGE> 77
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 years ended December 31, 1998 and 1999 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 this registration statement, as set forth in their reports
incorporated by reference herein, and are included in reliance upon such reports
given upon the authority of such firm as experts in accounting and auditing.
Westower's consolidated financial statements as of September 30, 1998 and
for the seven months then ended and Summit's financial statements as of
September 30, 1998 and for the nine months then ended included in the Current
Report on Form 8-K dated August 18, 2000 have been incorporated by reference in
this prospectus in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
Westower's consolidated financial statements as of February 28, 1997 and
February 28, 1998 and for the three years ended February 28, 1998 and Cord's
financial statements as of June 30, 1997 and 1998 and for the two years ended
June 30, 1998 have been incorporated by reference in this prospectus in reliance
on the report of Moss Adams LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
The financial statements of MJA Communications Corp. as of December 31,
1996 and December 31, 1997 and for the three years ended December 31, 1997, have
been consolidated with those of Westower and incorporated by reference in this
prospectus in reliance on the report of Lamn, Krielow, Dytrych & Darling,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The financial statements of Summit Communications LLC as of December 31,
1997 and for the period from inception, May 24, 1997, to December 31, 1997 have
been incorporated by reference in this prospectus in reliance on the report of
Shearer, Taylor & Co., P.A., independent accountants, given on the authority of
said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
Holdings is subject to the informational requirements of the Securities
Exchange Act of 1934 and files reports, proxy statements and other information
with the Securities and Exchange Commission. In addition, the indentures
governing Holdings' outstanding notes require that we file Exchange Act reports
with the Securities and Exchange Commission and provide those reports to the
indenture trustee and holders of notes. Our Securities and Exchange Commission
filings are available over the Internet at the Commission's web site at
http://www.sec.gov. You may also read and copy any document we file at the
public reference rooms the Securities and Exchange Commission maintains at 450
Fifth Street, N.W., Washington, D.C.; 13th Floor, Seven World Trade Center, New
York, New York; and Suite 1400, Northwestern Atrium Center 500 West Madison
Street, Chicago, Illinois or obtain copies of such materials by mail. Please
call the SEC at 1-800-SEC-0330 for more information on the public reference
rooms and their copy charges, as well as the Public Reference Section's charges
for mailing copies of the documents Holdings has filed.
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<PAGE> 78
INFORMATION INCORPORATED BY REFERENCE
Holdings has filed the following documents with the Securities and Exchange
Commission. Securities and Exchange Commission rules permit Holdings to
incorporate these filings by reference into this prospectus. By incorporating
our Securities and Exchange Commission filings by reference they are made a part
of this prospectus.
- Annual Report on Form 10-K for the year ended December 31, 1999;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 2000;
- Quarterly Report on Form 10-Q for the quarter ended June 30, 2000;
- Quarterly Report on Form 10-Q for the quarter ended September 30, 2000;
- Form 8-K dated December 30, 1999 and filed January 21, 2000;
- Form 8-K dated March 6, 2000 and filed March 10, 2000;
- Form 8-K dated April 12, 2000 and filed April 18, 2000;
- Form 8-K dated June 6, 2000 and filed June 21, 2000;
- Form 8-K dated and filed August 18, 2000;
- Form 8-K dated August 25, 2000 and filed August 31, 2000;
- Form 8-K/A dated August 25, 2000 and filed November 17, 2000;
- Form 8-K dated November 20, 2000 and filed November 22, 2000; and
- Form 8-K/A dated December 15, 2000 and filed December 18, 2000.
All documents which Holdings will file with the Securities and Exchange
Commission, under the terms of Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, after the date of this prospectus and prior to
the termination of any offering of securities offered by this prospectus shall
be deemed to be incorporated by reference in, and to be a part of, this
prospectus from the date such documents are filed. Holdings' Securities and
Exchange Commission file number for Securities Exchange Act documents is
0-27217. Holdings will provide without charge, to any person, including any
beneficial owner, who receives a copy of this prospectus and the accompanying
prospectus supplement, upon such recipient's written or oral request, a copy of
any document this prospectus incorporates by reference, other than exhibits to
such incorporated documents, unless such exhibits are specifically incorporated
by reference in such incorporated document. Requests should be directed to:
David P. Tomick
Executive Vice President and Chief Financial Officer
SpectraSite Holdings, Inc.
100 Regency Forest Drive
Suite 400
Cary, North Carolina 27511
Telephone: (919) 468-0112
Any statement contained in this prospectus or in a document incorporated
in, or deemed to be incorporated by reference to, this prospectus shall be
deemed to be modified or superseded, for purposes of this prospectus, to the
extent that a statement contained in:
- the prospectus;
- the accompanying prospectus supplement; or
- any other subsequently filed document which also is incorporated in, or
is deemed to be incorporated by reference to, this prospectus;
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
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[SPECTRASITE LOGO]
<PAGE> 80
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 or 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.
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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. (the "Registrant"), SpectraSite
Communications, Inc. and SHI Merger Sub, Inc. (the "Nextel
Merger Agreement"). Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67043.
2.2 Amendment No. 1 to the Nextel Merger Agreement. Incorporated
by reference to the corresponding exhibit to the
registration statement on Form S-4 of the Registrant, file
no. 333-67043.
2.3 Agreement and Plan of Merger among Westower Corporation, the
Registrant and W. Acquisition Corp., dated as of May 15,
1999. Incorporated by reference to the corresponding exhibit
to the registration statement on Form S-4 of the Registrant,
file no. 333-67043.
2.4 Merger Agreement and Plan of Reorganization, dated as of
November 24, 1999, among the Registrant, Apex Merger Sub,
Inc. and Apex Site Management Holdings, Inc. (the "Apex
Merger Agreement"). Incorporated by reference to the
corresponding exhibit to the Registrant's registration
statement on Form S-1; file no. 333-93873.
2.5 Agreement to Sublease, dated as of February 16, 2000, by and
between AirTouch Communications, Inc. and the other parties
named therein as Sublessors, California Tower, Inc. and the
Registrant. Incorporated by reference to exhibit no. 2.9 to
the Registrant's Form 10-K for the year ended December 31,
1999.
</TABLE>
II-1
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<TABLE>
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EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
2.6 Joint Venture Shareholders' Agreement, dated as of April 13,
2000, by and among SpectraSite International, Inc., Transco
Telecommunications Asset Development Company Limited and
EVER 1267 Limited. Incorporated by reference to exhibit no.
2.2 of the Registrant's report on Form 8-K filed on April
18, 2000.
2.7 Agreement to Sublease, dated as of August 25, 2000, by and
among SBC Wireless, Inc. and certain of its affiliates, the
Registrant, and Southern Towers, Inc. (the "SBC Agreement").
Incorporated by reference to exhibit no. 10.1 to the
Registrant's Form 8-K dated August 25, 2000 and filed August
31, 2000.
2.8 Amendment No. 1 to the SBC Agreement. Incorporated by
reference to exhibit no. 2.8 to the registration statement
on Form S-3 of the Registrant, file no. 333-45728.
3.1 Second Amended and Restated Certificate of Incorporation of
the Registrant. Incorporated by reference to exhibit no. 3.1
to the amended registration statement on Form 8-A/A of the
Registrant, filed on December 12, 2000.
3.2 Amended Bylaws of SpectraSite Holdings, Inc. Incorporated by
reference to exhibit no. 3.8 to the registration statement
on Form S-1 of the Registrant, file no. 333-93873.
4.1 Indenture, dated as of June 26, 1998, between the Registrant
and United States Trust Company of New York, as trustee.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67043.
4.2 First Supplemental Indenture, dated as of March 25, 1999,
between the Registrant and United States Trust Company of
New York, as trustee. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67043.
4.3 Second Supplemental Indenture, dated as of June 6, 2000,
between the Registrant and United States Trust Company of
New York, as trustee. Incorporated by reference to exhibit
no. 4.1 of the Registrant's report on Form 8-K, dated June
6, 2000 and filed June 21, 2000.
4.4 Indenture, dated as of April 20, 1999, between the
Registrant and United States Trust Company of New York, as
trustee. Incorporated by reference to exhibit no. 4.3 to the
registration statement on Form S-4 of the Registrant, file
no. 333-67043.
4.5 Indenture, dated as of March 15, 2000, between the
Registrant and United States Trust Company of New York, as
trustee. (10 3/4% senior notes) Incorporated by reference to
exhibit no. 4.4 of the registration statement on Form S-4 of
the Registrant, file no. 333-35094.
4.6 Indenture, dated as of March 15, 2000, between the
Registrant and United States Trust Company of New York, as
trustee. (12 7/8% senior notes) Incorporated by reference to
exhibit no. 4.5 of the Registrant's registration statement
on Form S-4, file no. 333-35094.
4.7 Indenture, dated as of November 20, 2000, between
SpectraSite Holdings, Inc. and United States Trust Company
of New York, as trustee. Incorporated by reference to
exhibit 4.1 of the Registrant's report on Form 8-K, dated
November 20, 2000 and filed November 22, 2000.
4.8 Indenture, dated as of December 20, 2000, between the
Registrant and United States Trust Company of New York, as
trustee. Incorporated by reference to exhibit no. 4.17 to
the registration statement on Form S-3 of the Registrant,
file no. 333-45728.
4.9 Second Amended and Restated Registration Rights Agreement,
dated as of April 20, 1999. Incorporated by reference to
exhibit no. 10.5 to the registration statement on Form S-4
of the Registrant, file no. 333-67043.
4.10 Joinder Agreement to SpectraSite Restated Registration
Rights Agreement, dated January 5, 2000. Incorporated by
reference to exhibit no. 10.36 to the Registrant's
registration statement on Form S-1, file no. 333-93873.
4.11 Consent and Agreement to SBCW Registration Rights and
Amendment to Second Amended and Restated Registration Rights
Agreement. Incorporated by reference to exhibit 4.10 to the
amended registration statement on Form 8-A/A of the
Registrant, filed on December 12, 2000.
</TABLE>
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<TABLE>
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EXHIBIT
NUMBER DESCRIPTION
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<C> <S>
4.12 Registration Rights Agreement, dated as of November 20,
2000, among SpectraSite Holdings, Inc. and Trimaran Fund II,
L.L.C., Trimaran Capital, L.L.C., Trimaran Parallel Fund II,
L.P., CIBC Employee Private Equity Fund (Trimaran) Partners
and CIBC World Markets Ireland Limited. Incorporated by
reference to exhibit 4.4 of the Registrant's report on Form
8-K, dated November 20, 2000 and filed November 22, 2000.
4.13 Joinder Agreement to the Second Amended and Restated
Registration Rights Agreement, dated as of December 14,
2000. Incorporated by reference to exhibit no. 4.12 to the
registration statement on Form S-3 of the Registrant, file
no. 333-45728.
4.14 Third Amended and Restated Stockholders' Agreement, dated as
of April 20, 1999. Incorporated by reference to exhibit no.
10.6 to the registration statement on Form S-4 of the
Registrant, file no. 333-67043.
4.15 Amendment No. 1 to the Third Amended and Restated
Stockholders' Agreement, dated as of November 20, 2000.
Incorporated by reference to exhibit 4.6 of the Registrant's
report on Form 8-K, dated November 20, 2000 and filed
November 22, 2000.
4.16 Amendment No. 2 to the Third Amended and Restated
Stockholders' Agreement, dated as of December 14, 2000.
Incorporated by reference to exhibit no. 4.16 to the
registration statement on Form S-3 of the Registrant, file
no. 333-45728.
4.17 Warrant Agreement, dated as of November 20, 2000, between
SpectraSite Holdings, Inc. and First Union National Bank, as
Warrant Agent. Incorporated by reference to exhibit 4.5 of
the Registrant's report on Form 8-K, dated November 20, 2000
and filed November 22, 2000.
4.18 Registration Rights Agreement, dated as of December 20,
2000, among the Registrant and CIBC World Markets Corp., as
placement agent for the Registrant's 12 1/2% senior notes
due 2010.
5.1 Opinion of Dow Lohnes & Albertson, PLLC.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Dow, Lohnes & Albertson, PLLC (contained in
Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of PricewaterhouseCoopers LLP.
23.4 Consent of Moss Adams LLP.
23.5 Consent of Lamn, Krielow, Dytrych & Co. (formerly, Lamn,
Krielow, Dytrych & Darling).
23.6 Consent of Shearer, Taylor & Co., P.A.
24.1 Powers of Attorney (see pages II-5 and II-6 of this
registration statement).
25.1 Form T-1 for indenture governing the 12 1/2% notes
(Statement of Eligibility of Trustee).
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
</TABLE>
(b) Reports on Form 8-K filed during the quarter ended December 31, 2000:
Form 8-K/A dated August 25, 2000 and filed November 17, 2000;
Form 8-K dated November 20, 2000 and filed November 22, 2000; and
Form 8-K/A dated December 15, 2000 and filed December 18, 2000.
ITEM 22. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions of the Registrant's certificate of
incorporation and its bylaws, or otherwise, the Registrant has 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 Registrant 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
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Registrant 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.
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;
(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;
(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;
provided, however, that paragraphs (1)(a) and (1)(b) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
2. That, for the purpose of determining any liability under the Securities
Act of 1933, 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.
4. That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in this registration statement 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.
5. That, for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1)or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
6. 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.
7. 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
SpectraSite Holdings, Inc. certifies that it has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cary, State of North Carolina, on January 16, 2001.
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
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ STEPHEN H. CLARK President, Chief Executive Officer January 16, 2001
----------------------------------- and
STEPHEN H. CLARK Director (Principal Executive
Officer)
/s/ DAVID P. TOMICK Executive Vice President and January 16, 2001
----------------------------------- Chief Financial Officer (Principal
DAVID P. TOMICK Financial Officer)
/s/ CALVIN J. PAYNE Executive Vice President -- Design January 16, 2001
----------------------------------- and
CALVIN J. PAYNE Construction and Director
/s/ DANIEL I. HUNT Vice President -- Finance and January 16, 2001
----------------------------------- Administration
DANIEL I. HUNT (Principal Accounting Officer)
</TABLE>
II-5
<PAGE> 85
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ LAWRENCE B. SORREL Chairman of the Board of Directors January 16, 2001
-----------------------------------
LAWRENCE B. SORREL
/s/ JAMES R. MATTHEWS Director January 16, 2001
-----------------------------------
JAMES R. MATTHEWS
/s/ THOMAS E. MCINERNEY Director January 16, 2001
-----------------------------------
THOMAS E. MCINERNEY
/s/ TIMOTHY M. DONAHUE Director January 16, 2001
-----------------------------------
TIMOTHY M. DONAHUE
/s/ MICHAEL J. PRICE Director January 16, 2001
-----------------------------------
MICHAEL J. PRICE
/s/ MICHAEL R. STONE Director January 16, 2001
-----------------------------------
MICHAEL R. STONE
/s/ RUDOLPH E. RUPERT Director January 16, 2001
-----------------------------------
RUDOLPH E. RUPERT
/s/ STEVEN M. SHINDLER Director January 16, 2001
-----------------------------------
STEVEN M. SHINDLER
</TABLE>
II-6
<PAGE> 86
EXHIBIT INDEX
<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. (the "Registrant"), SpectraSite
Communications, Inc. and SHI Merger Sub, Inc. (the "Nextel
Merger Agreement"). Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67043.
2.2 Amendment No. 1 to the Nextel Merger Agreement. Incorporated
by reference to the corresponding exhibit to the
registration statement on Form S-4 of the Registrant, file
no. 333-67043.
2.3 Agreement and Plan of Merger among Westower Corporation, the
Registrant and W. Acquisition Corp., dated as of May 15,
1999. Incorporated by reference to the corresponding exhibit
to the registration statement on Form S-4 of the Registrant,
file no. 333-67043.
2.4 Merger Agreement and Plan of Reorganization, dated as of
November 24, 1999, among the Registrant, Apex Merger Sub,
Inc. and Apex Site Management Holdings, Inc. (the "Apex
Merger Agreement"). Incorporated by reference to the
corresponding exhibit to the Registrant's registration
statement on Form S-1; file no. 333-93873.
2.5 Agreement to Sublease, dated as of February 16, 2000, by and
between AirTouch Communications, Inc. and the other parties
named therein as Sublessors, California Tower, Inc. and the
Registrant. Incorporated by reference to exhibit no. 2.9 to
the Registrant's Form 10-K for the year ended December 31,
1999.
2.6 Joint Venture Shareholders' Agreement, dated as of April 13,
2000, by and among SpectraSite International, Inc., Transco
Telecommunications Asset Development Company Limited and
EVER 1267 Limited. Incorporated by reference to exhibit no.
2.2 of the Registrant's report on Form 8-K filed on April
18, 2000.
2.7 Agreement to Sublease, dated as of August 25, 2000, by and
among SBC Wireless, Inc. and certain of its affiliates, the
Registrant, and Southern Towers, Inc. (the "SBC Agreement").
Incorporated by reference to exhibit no. 10.1 to the
Registrant's Form 8-K dated August 25, 2000 and filed August
31, 2000.
2.8 Amendment No. 1 to the SBC Agreement. Incorporated by
reference to exhibit no. 2.8 to the registration statement
on Form S-3 of the Registrant, file no. 333-45728.
3.1 Second Amended and Restated Certificate of Incorporation of
the Registrant. Incorporated by reference to exhibit no. 3.1
to the amended registration statement on Form 8-A/A of the
Registrant, filed on December 12, 2000.
3.2 Amended Bylaws of SpectraSite Holdings, Inc. Incorporated by
reference to exhibit no. 3.8 to the registration statement
on Form S-1 of the Registrant, file no. 333-93873.
4.1 Indenture, dated as of June 26, 1998, between the Registrant
and United States Trust Company of New York, as trustee.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67043.
4.2 First Supplemental Indenture, dated as of March 25, 1999,
between the Registrant and United States Trust Company of
New York, as trustee. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67043.
4.3 Second Supplemental Indenture, dated as of June 6, 2000,
between the Registrant and United States Trust Company of
New York, as trustee. Incorporated by reference to exhibit
no. 4.1 of the Registrant's report on Form 8-K, dated June
6, 2000 and filed June 21, 2000.
4.4 Indenture, dated as of April 20, 1999, between the
Registrant and United States Trust Company of New York, as
trustee. Incorporated by reference to exhibit no. 4.3 to the
registration statement on Form S-4 of the Registrant, file
no. 333-67043.
4.5 Indenture, dated as of March 15, 2000, between the
Registrant and United States Trust Company of New York, as
trustee. (10 3/4% senior notes) Incorporated by reference to
exhibit no. 4.4 of the registration statement on Form S-4 of
the Registrant, file no. 333-35094.
4.6 Indenture, dated as of March 15, 2000, between the
Registrant and United States Trust Company of New York, as
trustee. (12 7/8% senior notes) Incorporated by reference to
exhibit no. 4.5 of the Registrant's registration statement
on Form S-4, file no. 333-35094.
</TABLE>
<PAGE> 87
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.7 Indenture, dated as of November 20, 2000, between
SpectraSite Holdings, Inc. and United States Trust Company
of New York, as trustee. Incorporated by reference to
exhibit 4.1 of the Registrant's report on Form 8-K, dated
November 20, 2000 and filed November 22, 2000.
4.8 Indenture, dated as of December 20, 2000, between the
Registrant and United States Trust Company of New York, as
trustee. Incorporated by reference to exhibit no. 4.17 to
the registration statement on Form S-3 of the Registrant,
file no. 333-45728.
4.9 Second Amended and Restated Registration Rights Agreement,
dated as of April 20, 1999. Incorporated by reference to
exhibit no. 10.5 to the registration statement on Form S-4
of the Registrant, file no. 333-67043.
4.10 Joinder Agreement to SpectraSite Restated Registration
Rights Agreement, dated January 5, 2000. Incorporated by
reference to exhibit no. 10.36 to the Registrant's
registration statement on Form S-1, file no. 333-93873.
4.11 Consent and Agreement to SBCW Registration Rights and
Amendment to Second Amended and Restated Registration Rights
Agreement. Incorporated by reference to exhibit 4.10 to the
amended registration statement on Form 8-A/A of the
Registrant, filed on December 12, 2000.
4.12 Registration Rights Agreement, dated as of November 20,
2000, among SpectraSite Holdings, Inc. and Trimaran Fund II,
L.L.C., Trimaran Capital, L.L.C., Trimaran Parallel Fund II,
L.P., CIBC Employee Private Equity Fund (Trimaran) Partners
and CIBC World Markets Ireland Limited. Incorporated by
reference to exhibit 4.4 of the Registrant's report on Form
8-K, dated November 20, 2000 and filed November 22, 2000.
4.13 Joinder Agreement to the Second Amended and Restated
Registration Rights Agreement, dated as of December 14,
2000. Incorporated by reference to exhibit no. 4.12 to the
registration statement on Form S-3 of the Registrant, file
no. 333-45728.
4.14 Third Amended and Restated Stockholders' Agreement, dated as
of April 20, 1999. Incorporated by reference to exhibit no.
10.6 to the registration statement on Form S-4 of the
Registrant, file no. 333-67043.
4.15 Amendment No. 1 to the Third Amended and Restated
Stockholders' Agreement, dated as of November 20, 2000.
Incorporated by reference to exhibit 4.6 of the Registrant's
report on Form 8-K, dated November 20, 2000 and filed
November 22, 2000.
4.16 Amendment No. 2 to the Third Amended and Restated
Stockholders' Agreement, dated as of December 14, 2000.
Incorporated by reference to exhibit no. 4.16 to the
registration statement on Form S-3 of the Registrant, file
no. 333-45728.
4.17 Warrant Agreement, dated as of November 20, 2000, between
SpectraSite Holdings, Inc. and First Union National Bank, as
Warrant Agent. Incorporated by reference to exhibit 4.5 of
the Registrant's report on Form 8-K, dated November 20, 2000
and filed November 22, 2000.
4.18 Registration Rights Agreement, dated as of December 20,
2000, among the Registrant and CIBC World Markets Corp., as
placement agent for the Registrant's 12 1/2% senior notes
due 2010.
5.1 Opinion of Dow Lohnes & Albertson, PLLC.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Dow, Lohnes & Albertson, PLLC (contained in
Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of PricewaterhouseCoopers LLP.
23.4 Consent of Moss Adams LLP.
23.5 Consent of Lamn, Krielow, Dytrych & Co. (formerly, Lamn,
Krielow, Dytrych & Darling).
23.6 Consent of Shearer, Taylor & Co., P.A.
24.1 Powers of Attorney (see pages II-5 and II-6 of this
registration statement).
25.1 Form T-1 for the indenture governing the 12 1/2% senior
notes (Statement of Eligibility of Trustee).
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
</TABLE>
